This weekend was filled with many news stories. In the USA, Dillard’s had a final fire sale on all the fire sale merchandise they couldn’t sell for near nothing during Christmas... An ultimate and sure-fire-final fire sale should follow next week, and the final, super-duper last final fire sale the weekend following. There was a snowboarding event for the X Games on ESPN, the NFL Pro Bowl and another loss (say goodbye to the Top-25) for Duke. In addition to this, in some suburban neighborhood, a newly purchased Lexus rolled—Alloy rims and all—financed by a subprime auto loan, into an already highly leveraged (figuratively and literally) house(hold).
… and about 100 people died in Egypt in an attempt to overthrow the current political heads…
I bet that Lexus is really nice. Navigation package that is pre-loaded to find a Starbucks with voice command. 0 – 60 in the same amount of time McDonalds pushes another soy, fat-patty and fries out the window. Leather seats that are better than sex. More DVD Players that the local sports bar. All the bells and whistles… I bet it really top of the line!
… And oil prices bubbled higher in anticipation that the Egyptian riots would spread to the rest of the Middle East…
Duke losing is crazy. The NFC made the AFC look like a middle school Jr. Varsity team. Shawn White is killa sick… KILLA! Guy can fly. The snowmobile cross was crazy!
… Over 10,000 Egyptian citizens rallied in Cairo in an attempt to take their country back after 30 years of control by Mubarak. The military is the only force between the people and the country. There is more unrest in the entire Middle East at this moment that there is in any other part of the world. There is an anticipated 1 million person march planned to overthrow Mubarak.
Is this viral episode of unrest the straw that will break the oil-dependent camel lover’s back? If you don’t know who’s back that is, it is the same country, which during one of the largest geo-political event in the last decade, didn’t skip a beat to watch the Pro Bowl and didn’t miss a sale on cardigan sweaters at 70% off. The machine that is the USA—the back of that machine is of course the US economy.
The Egyptian riots have a huge—Bigfoot on Steroids-- chance of being that crushing, back-breaking straw. If control is not regained in Egypt, this crisis will spread to many other Middle Eastern countries. I am guessing their citizens are gathering for similar rioting conditions to overthrow similar hated government officials. If this sickness in Egypt is not contained and the chaos spreads across the Middle East, oil production will be affected and oil prices will spike very quickly—sending crude prices to $100? $120? $140 a barrel? Regardless of the spike in price, there is little life left in the stimulus-shimulus US recovery and any further commodity spike will send the US into another recession (look up 2008 if you doubt this). If the ‘fear’ of inflation reaches the consumer, the little spending money Americans have left will be forced to be used to fill up the Escalade instead of buying Hannah Montana watches at JC Penny. People will 100% stop shopping and companies will not have an ‘answer’ to spiking costs that cannot be passed onto the customer.
Of course this may not happen. Egyptian military officials may overthrow Mubarak on Monday night or Tuesday morning and it will be sunshine and cookies for Egyptians and the Middle East (picture that ha ha). Temperatures may cool across the entire Middle East and political pressures may subside, sending oil prices back to reasonable levels.
But the straw will come… either from Egypt, European sovereign debt, China deflating, global real estate collapsing, banking failures or something else… and it may not be this Monday, or next Monday, or 16 Monday’s from now… but the straw is coming and the fragile back of the US economy will be broken... It is just a matter of time.
R&R Jan 31, 2011