I wanted to start today’s post with a brief set of articles that I found with just a quick search of the recent headlines. I think that our most important information comes through alternative sources but the tone of the mainstream news is indicative of the underlying trend that I’ve been discussing with you here. I’ve linked just 5 articles concerning the coming change in the Fed’s policy surrounding their various interest rates, there are dozens more if you care to do a little poking around for yourself… It’s apparent that they are easing all of us up to the idea of these rate increases coming in the next few months. Take a look and then read today’s post following the links…

 

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The following link is to a San Francisco Chronicle article on the coming Mortgage rate increases -

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/02/15/MNSP1BVILP.DTL

 

 

 

An MSNBC article on the state of home values in 143 markets as tracked by Zillow…

http://www.msnbc.msn.com/id/35335957/ns/business-real_estate/

 

 

 

Article from Bloomberg again stating that the fed interest rates are going to be going upward in the near future.

http://www.bloomberg.com/apps/news?pid=20601087&sid=afLtoLSxKSKc&pos=1

 

 

The LA Times is expecting an increase of 4 million foreclosures this year…

http://www.latimes.com/business/la-fi-mortgage-mods17-2010feb17,0,7573498.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+(L.A.+Times+-+Business)

 

 

The NY Times says that the many are worried that the fed rate changes will be the final straw for real estate!

http://www.nytimes.com/2010/02/15/business/15housing.html?pagewanted=1&source=patrick.net

 

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Look familiar?

 

   So? Future looks bright huh… Seriously, it does appear that the interest rates about to be increased rumor has some validity to it… We’ll just have to wait and see what happens, I told you I feel blessed to live in interesting times!

 

   The other day I was grumbling about the similarities between the soup lines of yester-year and the politically correct version we are seeing today. Along those same lines, I was thinking about the people in the photo I attached to that same post… The free coffee and doughnuts were for the “Unemployed”, right?

 

   Why were there places setup like that? Was it because there were masses of unemployed workers out looking for jobs? I think that it was. I remember seeing pictures of the road signs telling the unemployed to keep walking and that there were no jobs available… I haven’t seen anything like that around here yet but what comes next in this charade of normalcy?

 

   Let’s not argue about what the actual unemployment figures are, we can all agree that they’re large. We have so many that the government can’t continue to carry them all indefinitely. Eventually we will see the available benefit extensions come to an end. This will force both men and women to start hitting the streets in earnest, actually seeking employment. Not to say that they haven’t been looking for work but lets face it as long as that check keeps coming in the mail, many people are happy to keep their butts parked on the sofa and just wait-n-see what happens.

 

   I have had my ear to the ground for many months trying to follow what the job market is looking like. I’ve heard all the same stories that you have… Starbucks coffee posts an opening for an entry-level barista position and has several hundred applicants… Retail opportunities are few and far between and layoffs are continuing at many of the big companies we have in the greater Pacific Northwest region.  

 

   I feel fortunate to still have my business hanging on in this real estate market so I can’t speak about un-employement, first hand. However, unless the job market is completely, like 180 degrees off from the reports we’re all hearing, many of these job hunters will come up empty handed… What will they do then?

 

   I for one have found that I can do a lot more of the office work than I have previously done and therefore will delay any hiring for quite a while, even after we see an improvement in the real estate business. If that indeed does happen at some point in the future. So where are all the new jobs going to come from? Are these folks going to be able to stay in their homes while they search for these elusive jobs? I’m not sure that the old standby of living in ones automobile is even a sure thing anymore… Many people haven’t owned a car in a long time, at least in the sense that it’s not going to be repossessed by the bank due to non-performance on the loan.

 

   Where does this leave us? I suspect that we might again see the unemployed hitting the roads looking for whatever work they might find. During the depression men would follow the harvest and do the migratory farm work… Wait, I thought the undocumented workers had that industry all hemmed up as work that Americans would not do? I wonder if that will still be the case when the home finally gets foreclosed on and the options get real thin? I know I’d pick apples before I’d let my family go hungry and I’d be willing to work harder than the next guy if that secured me a picker position. The free-market will set the wage for this work and with a lot of competition for these and every other job, wages will certainly be going down. Again, I would like someone to show me where I’m wrong in my assumptions?

 

   One thing that I heard the other day about a government agency that is adding to their employment roles… Anyone able to guess which agency this might be?? It was the IRS… Care to guess what this means… More audits, too many good Americans playing tax cheat, I guess! I have no doubt that this up-tick in auditors will be to get out and beat the bushes looking for the funds to keep paying for government bail-outs of the special companies that are to big to fail… May I make a prediction, it won’t be just the bushes that take a beating at the hands of these auditors!

 

   On one hand, these economic times create an atmosphere of dedicated hard working employees that aren’t eager to loose their jobs. In addition to that we see plenty of evidence that employers will be offering lower wages for any positions that they are able to provide. It appears that the economic indicators are still pointing South with more people going to be laid-off and those still working making less than they did previously. Top all of this off with an energized tax enforcement squad on patrol for both those employees and their employers, we see a self perpetuating decline that will only be gaining speed…

 

 

As we see all of this unfolding, we have to ask ourselves – Now what?

 

Prepper