No surprise newspapers are struggling for cash! Someone is about 2 years too late: http://articles.latimes.com/2009/mar/20/opinion/oe-felch20

Take a look at this chart.

The party is over, most of that debt simply can not be repaid. Junk sub prime debt was the final crescendo, not the cause of the credit crises. As time goes on each level of debt becomes more difficult to service right down to the good stuff. The math just stops working.

Who holds the debt? Your local bank, money market fund, your state’s retirement pension, and so on.

The only real “solution” involves moving the liabilities to the government, a.k.a everyone. Instead of having your bank account balance go to zero over night or your retirement account dropping in value by 90%, your pay off period will be stretched over a matter of decades (what does this look like?)

I’ve been busy. Too many details to go over now.

Here are a few things I’m seeing — many publishers are waiting in line to get wiped out.. Ad rates are down everywhere. Publishing companies both online and offline are laying off lots of people and going bankrupt.

The best prediction I can make is those with the least overhead survive. Each time a competitor bites the dust that frees up more of attention that can be driven to your own properties. Armed with a generic domain name a single person can now establish niche dominance (hint, you can’t build all that content on your own.)

On the fundamental economic level things have taken a turn for the worst. The whole model that relied on credit growth is dead. The global credit super cycle did collapse. At this point, there is no turning back. What we are dealing with is tens of trillions of dollars, not 2 or 3. My guess is that real estate prices and the US stock market could very well be headed to 1980s levels. The implications to the lower & middle class will be devastating. A large chunk of the upper class will be joining them. I can’t even begin to describe how politically destabilizing this will be for the developing world.

It is a fair assessment to say in recent years savings & investment have been confused with consumption. Baby boomer retirement savings were actually just financing the extravagant lifestyles of a select group who cashed out as others bought in. Now they won’t be retiring.

Again, my suggestions remain: kill your long term liabilities and hold on to cash. If you are positioned to benefit from a down turn (my company is) hire good people.

There still is money to be made out there. The people who do well during a downturn are the ones who cash in big during the next bubble.