Second Quarter … A real Pig.

Be careful who you listen to about the economic recovery. This bad party is far from over and the latest distraction is the Swine Flu. What remains to be seen is just how big a player this pig is going to be. It is dramatically effecting the earnings of the transportation and entertainment sectors, which includes cruise ships, hotels, airlines, restaurants and will have a chilling effect on those wholesalers that supply these companies (food, power and fuel, etc..) During the “Bird Flu” scare that hit Toronto, Canada (a few years ago) – tourism dropped by more than 30% in a month.
On the good side, this should reduce our over all fuel consumption and therefore increase our total fuel stores. Look for higher than expected fuel inventories when reported in May and June. By all rights this should reduce the cost of fuel at the pump and free up some cash flow for the consumer.
Food retailers that also sell cold remedies, anti-bacterial cleaners and prescription drugs will benefit from public concern and fear. If this Viral out break increases in severity people will begin stockpiling and hoarding in earnest.
We’re still waiting for the commercial real estate default numbers, which can only be horrible, and banks are about to begin a new wave of foreclosures. The Auto industry is about to add thousands to the unemployment lines so look for June’s unemployment numbers to hit 10%.
This economy is not recovering… yet. It has just taken a breath of hot air before it exhales once again. It’s truly a shame that the administration and the US Congress didn’t take an ounce of ethics and morality with each dollar they took from our children, our grandchildren and their children after them. Worse yet are the cocky, arrogant and greedy corporate executives with their “key employees” and plump Boards of Directors that have no qualms about lining each others pockets and gorging on the money feast.
One can only hope that they all choke on it.

~ by executivechaos on May 2, 2009.