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One
key measure of global economic
health is how much freight – raw materials and manufactured goods – is being shipped
around the world and in the United States. In July
of this year the Balctic Dry Index, a measure of
the price to pay for the movement of raw materials by sea, hit a record breaking low and signaled a steep decline
in global manufacturing and consumption.
This
was a key indicator for where the economy was headed
on a global scale.
Just
a few months later we’ve received
confirmation of this trend from
FedEx, one of the largest
shipping companies in the world.
Yes, Americans
are still shopping, but they
aren’t shopping at the same pace they were five years ago. Their
jobs have been eliminated, wages
reduced and credit has
been restricted. FedEx’s
latest earnings report is proof positive of this:
Earnings for the first quarter were below our expectations as weak global
economic conditions dampened
revenue growth, drove
a shift by our customers
to our deferred services
and outpaced our near-term ability to reduce FedEx Express operating costs to match demand levels.
Source:
FedEx
Demand for FedEx
services is down overall
for a variety of reasons,
including less retail consumption in an already struggling economy and a customer shift to
cheaper shipping methods.
As
a result of weakening earnings, profits and customer demand for their services, FedEx has been forced to implement internal cost-cutting measures, and as you may have already guessed that means staff layoffs:
Fedex,
the global delivery company,
said Wednesday it was planning to cut “several thousand” people from its workforce via a voluntary departure program beginning early next year.
Company chairman Fred Smith said at an investment
conference in Memphis, Tennessee, that the cuts would come in the company’s
Fedex Express global express delivery service, and
in the US unit, Fedex Services.
The
cuts are part of a plan to
boost profits by $1.7 billion by 2016, mainly through intensified cost reductions.
They also
come in the wake of the company’s
warnings that its
business is being hit by
the global economic slowdown.
Source:
France 24 via What Really
Happened?
While official unemployment
reports attempt to make
the case for an economic and jobs recovery, the fact of the matter is that
Americans are being laid
off across the country in just
about every key industry,
and as ridiculous and unbelievable
as it may sound, this may
just be the beginning.
Earlier this week we learned
that Darden Restaurants
(the parent company of Olive Garden and Red Lobster) will be laying off workers citing the economy, as well as government regulation, namely Obamacare going into effect in
2013.
Prominent CEOs around the country see the writing on the wall, as do many political and financial insiders such as financier
George Soros who warned earlier
this year that even the best-case
scenario will be painful:
I
am not here to cheer you up.
The
situation is about as serious
and difficult as I’ve
experienced in my career.
…
We are facing
an extremely difficult
time, comparable in many ways
to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed
world, which threatens to
put us in a decade of more
stagnation, or worse.
The
best-case scenario is a deflationary
environment. The worst-case
scenario is a collapse of the financial
system.
Plan
on the worst-case.
The
collapse of the American way of life is happening before our eyes. It’s
been at least four years since this recession
began, and we may have a much longer road ahead of us. The Great Depression
was an event that spanned at least ten years, followed by five years of global war.
We’re looking
at a series of events that may
last not for 18 months (like
typical recessions do) or
a few years, but perhaps
a decades-long decline that destroys the wealth and stability of the United States of America.
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