Remember the housing boom and the rallying cry, “this time it’s different” and of course smart people knew the bubble was just about to burst because the world via media was saturated with pure real estate mania but a funny thing has happened.  We’ve now reached “doom and gloom” mania all over the place.  Almost every website I visit has some sort of doom and gloom “Survivalist” newsletter, book, article or link to “surviving” the next apocalyptic depression.

Let me be clear about a few things:

1. There are some huge fundamental structural problems with the US economy which still need to be solved.

2. There are huge liabilities that need to be dealt with such as pensions, social security, medicaid/medicare, et al.

As bad as things are, they are going to be obviously worse in Europe, Asia, South America and anywhere in Africa.   Let’s take a look at just a few articles that have come out this week.

First up, this article in the Chicago Sun Times with the headline,

‘Doomsday is here for the state of Illinois’

How does that headline grab you?  Oh no!  Doom and Gloom!  The article reads,

To become solvent, the state must enact the largest tax-increase package in Illinois history, whack another $2 billion from already starved government programs and wrest major financial concessions from the state’s unionized work force, a nonpartisan government watchdog contends.

Next up, we have this article from the UK’s Observer, it starts with this headline,

“Americans stock up to be ready for end of the world”

The article reads,

Tess Pennington, 33, is a mother of three children, and lives in the sprawling outskirts of Houston, Texas. But she is not taking the happy safety of her suburban existence lightly.

Like a growing army of fellow Americans, Pennington is learning how to grow her own food, has stored emergency rations in her home and is taking courses on treating sickness with medicinal herbs.

There are tons of articles pointing out bankruptcies, commercial real estate problems, sovereign defaults and other rigmarole.   Check out this article on the “gloom and doom” in breakfast sales:

Fast-food breakfast sales decline as fewer head to work

The nation’s high unemployment rate has thrown millions of people out of work, scared shoppers away from stores and threatened the economic recovery. Now it’s taking a bite out of breakfast.

Breakfast sales had grown at a ravenous pace during the boom years as busy workers scarfed down sausage biscuits on the way to the office, fueling a $57 billion business and accounting for as much as a quarter of sales at some fast-food chains. Chains opened earlier and expanded their morning menus to accommodate the traffic as lunch and dinner sales flatlined.

Do you remember this classic bubble top?

Bubble Top

2005

Life, like bubbles, is a pendulum that swings BOTH ways.   I’ve been looking for this moment since this post in October 2008 and it’s almost here.   The more the media pumps gloom and doom articles the more I know we’re close to the absolute bottom.   Given the 20% inflation pricing in the energy markets, I’d say we’re gearing up for the roaring teen’s  and roaring twenties (2013 – 2025) and this teenage economy has raging hormones!    Don’t be a fool and jump the gun, cautious optimism is now warranted!