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.

Awesome story on Markus — http://www.inc.com/magazine/20090101/and-the-money-comes-rolling-in.html

Given the lengths of the recent blog posts, may be I should downgrade to twitter?

Great post by veteran domainer Rick Schwartz: “Whatever has happened in 2008 really won’t even begin to manifest itself until 2009. The fallout of all this has not hit yet. It will.” (investment bankers may feel differently)

Have goals for 2009? As always, I set mine about a month back.

There are a few different posts about carpel tunnel and ergonomics here.

I have been using a laptop keyboard for the past week, minimal problems. The difference? An Aeron chair. The difference is incredible.

Stocks, bonds, real estate; don’t count on it. The best investment for 2009 is people.

I wrote about hiring employees last year. Its a pretty damn good thing to do irregardless of the economy. The difference is today high quality workers are being shed along with the low quality ones. As Google restrains hiring and the investment banks continue layoffs, you can bet it is getting easier to find highly skilled and experienced technical workers.

Downward price pressures (deflationary for now) mean better for cheaper. Not growing your company? Then this is a great time to clean out the underperformers and replace them with new hires. You can keep your costs constrained while increasing company performance. Hell, one really good programmer can automate & replace the jobs of 10 lazy workers.

In the past few weeks I’ve seen some pretty impressive resumes. My standards and expectations have dramatically increased, and so should yours.

As for a follow up on my “Killer Investment with a 100% ROI” from May 2007, I would say my return has been substantially more than that. In retrospect, the idea of putting that money to work in any traditional investment would have been absolute lunacy.

Aaron Wall has a great post summarizing some of the recent problems in the advertising industry for publishers.

I saw this one coming, which was why I flipped my focus from selling inventory (as a publisher) to buying is (as an advertiser.) I guess I should change the name of this blog.

Many in the online advertising side have business models involving selling overpriced garbage to their customers. One of my friends recently dealt with a major US bank’s online advertising campaign. Every question he asked them — what sites are your ads being shown on, which banner ads convert the best — resulted in the answer, “we have no idea.”

Here is why you should pay attention as a publisher. If you think things are bad for you, they may be worse for ad networks and agencies you deal with. Aaron highlighted a story over at Techcrunch — “Glam blames the economy and extends payment terms from 60 or 90 to 120 days.” If I heard that from any company I dealt with, I’d assume they were at risk of going bankrupt and count on never being paid.

As I pointed out previously this is no time to close up shop. Most of the decline in ad inventory prices may be from advertisers ignoring their ROI. That means better and smarter deals on inventory for now. Are you a publisher? Great time to expand your community base through advertising. Running an ecommerce site relying on Google’s free traffic? Start learning the ins and outs of performance advertising.

Recently I have been hearing stories about people having big problems with their American Express accounts. No, not from flagrant spenders but from people who are capable, and at times do, pay their balances daily. A story today from the AP says that American Express wants $3.5 billion of bailout money, presumably to stay afloat.

To be fair to American Express these people do spend large amounts of money. Having more than a few red flags raised is completely expected. However, these individuals were asked to do basically impossible things to keep their accounts — despite American Express owing them money. That is right, in the process of trying to keep their accounts active (two specific and unique individuals in this case), they over paid their balances by very significant sums.

One party was able to keep their American Express account open after a great deal of work above and beyond what should be required. The story as I heard it was American Express basically said, we are kicking you out, and that individual proceeded to contact as many people as possible while faxing American Express literally every page of financial documents they had.

Based on that story, it leads me to suspect part of American Express’s problem is internal. A combination of layoff threats along with an ever increasing workload created by defaulting clients appears to have caused a precipitous drop off in American Express’s employee quality.

This paints a very grim picture for American Express’s future. Their high processing fees cost businesses money. Many will not accept AMEX if they don’t have to. At the same time, big spending limits along with excessive rewards motivate business owners to run all of their businesses expenses through their AMEX cards.

Would there be any rational reason for American Express to shed highly solvent customers right now? From what I see externally, my opinion is either it is a hell hole to work for right now or they are getting close to going under. May be both.

This past summer’s advice: Its a great time to get a good deal on a car.

Today’s advice: Save your money.

Markets are self-reinforcing on the upside and down. Unfortunately this one has a very real problem. Right now the world’s central bankers are trying to put back together all the pieces of a very complex puzzle. There is a big problem, the puzzle had moving and unsustainable parts. Many of these parts regulators are working towards ensuring “never happen again.” Instead of a happy solution I suspect we are going to end up with a frankenstein.

The credit super cycle requires increasing amounts of credit not only to grow but to sustain itself. Consumers leverage their consumption. Businessmen and analysts make projections based on that consumption and they themselves use leverage to match it. The leverage and its influences permeate everywhere and are self reinforcing.

If you think that some government official can fix it, I suggest you study more.