"The Worst Is Yet to Come"

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Aaron Task

Yahoo Finance

May 15, 2009

The green shoots story took a bit of hit this week between data on April retail sales, weekly jobless claims and foreclosures. But the whole concept of the economy finding its footing was "preposterous" to begin with, says Howard Davidowitz, chairman of Davidowitz & Associates.
"We're in a complete mess and the consumer is smart enough to know it," says Davidowitz, whose firm does consulting for the retail industry. "If the consumer isn't petrified, he or she is a damn fool."

Davidowitz, who is nothing if not opinionated (and colorful), paints a very grim picture: "The worst is yet to come with consumers and banks," he says. "This country is going into a 10-year decline. Living standards will never be the same."

This outlook is based on the following main points:

With the unemployment rate rising into double digits - and that's not counting the millions of "underemployed" Americans - consumers are hitting the breaks, which is having a huge impact, given consumer spending accounts for about 70% of economic activity.

Rising unemployment and the $8 trillion negative wealth effect of housing mean more Americans will default on not just mortgages but student loans and auto loans and credit card debt.

More consumer loan defaults will hit banks, which are also threatened by what Davidowitz calls a "depression" in commercial real estate, noting the recent bankruptcy of General Growth Properties and distressed sales by Developers Diversified and other REITs.

As for all the hullabaloo about the stress tests, he says they were a sham and part of a "con game to get private money to finance these institutions because [Treasury] can't get more money from Congress. It's the ‘greater fool' theory."

"We're now in Barack Obama's world where money goes into the most inefficient parts of the economy and we're bailing everyone out," says Daviowitz, who opposes bailouts for financials and automakers alike. "The bailout money is in the sewer and gone."

Young Gay Men in Atlanta. "WHAT"

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I was leaving the community farmers market this morning when I came upon 4 gay guys walking and talking. The traffic was moving slow from some reason. (Oh that's right I live in Atlanta) One of the young cats from the side walk says Hey, Hey do you eat booty. He and his crew then walked off laughing. My first reaction was to do what Andre 3000 said you should do on the Aquemini album “Grab them by the neck, throw him against the wall say bitch don’t you every disrespect me never not at all. This didn’t apply because I was in the car. However, “My Belief” I’m not one who believes you are born gay I believe it’s a choice and more so, a DEMONIC spirit men and women have to fight and not give into. I’m also one who believes we are losing our male & female youth to this CHOICE lifestyle because we as Christians don’t speak up “not beat up or bash up” when the moment presents itself. Today for the sake of these 4 youngsters and me it presented itself. At the next light I caught up with the guys again and asked The Comedian “he had to be joking” if he knew me. He smiled and said NO in his neck breaking style! I said the following:

The way you greeted me a few moments ago was neither cool nor appropriate. I don’t know where you’re from or how you were raised, but those types of comments can get you seriously hurt when addressing a MAN. (They all stop smiling after this comment) Your lifestyle is your choice, but don’t you think for one minute that I’m going to sit idly by and let you disgrace our gender! Do we have an understanding? (He says, thank you. Peace and Hair Grease)

Ladies and Gentlemen we’ve got to do better by the kids in our community. We’ve allowed the media, our Government and Schools to tell us how to raise our kids. We’ve stopped being responsible elders to our youth and become fulltime slaves to our jobs. We’ve giving someone else the power to rock the cradle and the hand that rocks the cradle rules the nation. We say we can’t be there, because we have to work. But when the fruit turns out crazy we don’t want to look at the source or the “TREE” that produced the fruit. The next time you see a child out of order and you don’t say anything, know you are as much at fault as their parent.

“Semper Fi”