For some reason the fact that a wave of bankruptcies is going to take down Linens N' Things is oddly frightening. I'm not that disturbed the shuttering of Zales diamond dealers, or Sharper Image...but...there's just something about Linens N' Things going down that makes me nervous.
I can't say that I had any particular affinity for the store, or that I even really shopped there...but those are the types of stores that make up the landscape of American Suburbia. Forget the anti-corporatist, anti-consumerist bent for just a moment...because for better or worse, that's what our communities look like all over the country. The idea of big, empty and isolated Big Box stores, dead shopping centers, and empty spaces in malls is...eesh.
Let me just sum up off the top of my head:
- Oil is hovering around $100 a barrel. In 2000, it was $22. And when oil prices go up, the price of everything goes up. Every one of those big rigs will be paying 5 times as much to drive across country. Every boat in our extraordinarily liberalized trade patterns will experienced skyrocketing energy prices. The cost of fertilizer (manufactured from natural gas) goes up, and thus the price of corn, grain, rice, soy, and all crops experience increased costs. The cost of grain needed to feed animals for meat goes up then too. And then we're back full circle when the food needs to be transported. Food riots have begun in the developing world. We are now facing a food crisis.
- So lets meander slightly from oil, and look to our own transportation and city planning. The entire infrastructure of America after 1950 was premised on oil costs being cheaper than water. So we built highways, roads, and made it the American dream to all own our own houses, and all drive our own cars to get anywhere. We took advantage of the low costs of oil to expand our economies to seek greater efficiencies within and outside of our borders. It doesn't make sense to ship a T-shirt from China to South Carolina...unless of course oil is 20 bucks a barrel. (I don't mean any of this as a condemnation...it's just sorta scary now looking back and seeing the hole we've dug.) So this is our way of life.
- But now there's another problem. These houses are starting to disappear. Low to moderate income families are beginning to be swallowed alive by mortgages they can't afford, and defaults are sweeping across the country. The suburbs are beginning to lose their shimmer...and they may even grow into slums as the cities have begun to reattract the propertied classes. (The link is to an article in the Atlantic dissecting the implication sof the sub-prime crisis on suburban communities which I thought was...well, lets just say very worth reading, if slightly gloomy.)
- (I'm not sure how I got here...I was just going to write like 5 sentences of all the things going wrong at once...and now I'm paragraphs deep.)
- So in the midst of this oil turmoil (heh) shaking the very foundation of our economy, a wave of losses hits the investment banks. JP Morgan, UBS, Citi, Wachovia, Bank of America. The Titans of the Financial System, that is to say, the entirety of our financial system...suddenly have no idea what's going on, what's going to happen, and how to stop it. Chain reactions begin to whiplash across the financial system. Then one of the largest investment banks in the world suddenly decides to implode, losing 10 billion dollars in 6 hours. Bear Stearns, having almost a perfect 85-year history, suddenly disappears. (Note: As these banks wrote down their assets, they had to get money from somewhere to stay alive. Guess where they got lots of that from? Yep. China. Now having direct state-ownership over a large swath of Wall Street.)
- And it's spreading. Maybe it will stop. Maybe it won't. But oil prices remain high. Food prices remain high. The effects of the subprime meltdown continue to unwind with new losses everyday. (GE? UPS?)
- And now, Linens N' Things is probably going to file for bankruptcy.
P.S. - I'll buy a beer for anyone who actually made it this far. And actually read that garbage. Not just this sentence.
10 comments:
I read it all.
I saw that Atlantic Article--quite interesting. I think there is (and has been) a larger move to the urban environment by our generation--and this will be exacerbated by the oil issues.
On the other hand, here is something interesting I found:
The price of a gallon of milk costs the same as a gallon of oil. Oil needs to be researched and located. Then it needs to be extracted from deep in the earth. Then it needs to be loaded onto tankers and shipped halfway around the world. Then it needs to be refined in multibillion dolllar refineries. Then it needs to be shipped to the gas station. Then you need to buy it. And everyone takes a cut along the way. So you tell me: isn't it ridiculous that oil only costs $3 a gallon. It should cost much more!
DA
i've got a book for you to read when exams are done.
j
DA: So now I owe you a beer and dinner, most likely in NYC, where it will all cost 5 times as much. That's crazy though...I don't understand how it's possible that it could be that cheap after so much work. I mean, if we were to process and just suck water out of the ocean and put it through that process...how much would that cost?
J: what book?
a geologist right out of school with a B.S. or M.S. can get a $90,000 starting salary at an oil company. those salaries go up to $160,000 depending on higher degrees and time spent at the company.
i'll tell you when you're older.
j
I'll take my beer now that you've sufficiently scared the bejesus out of me. I didn't even know I had bejesus in me.
Sarah: What do other people make in geology? Is that the highest?
Mh: For some reason I don't believe you, but I won't question your honesty. So yes, I'll buy you a beer.
I thought my posts were too boring for you?
yeah...that's pretty much the highest, especially for people just starting out with a B.S. or M.S. Some old professors and established environmental consulting people probably make somewhere around 70-90,000, but starting out teaching or consulting is more like 40,000-50,000 i'd say.
What if you save a small mountain town from utter destruction by a volcano?
yeah...the observatory people don't make that much i don't think...maybe the usgs ones do, but nobody makes as much as exploration geologists (oil).
Post a Comment