Where is the US economy headed?

I hate to bring yall back, kicking and screaming, back to the mundane subject at hand: economics.
This is for you, Tak.
One of my employees, Andy, was telling me about the Japanese company, Sony.
For the 1st time ever they are cutting employees (5000?). Toyota may follow. Sony, which had great success with on-line game playing (Playstation) has seen sales plummet.
Andy heard a story on BBC. The gist was that young workers in Japan have no problem jumping from company to company as the opportunity arises. But people our age in Japan were brought up to believe that when you went to work for a company after college, you would be there until you retired.
That notion is now unravelling for folks in their 50's or early 60's.

microsoft is a first time ever as well, with 5 k out the door, a good chunk of them this week.

This is such a horrible number I don't know where to begin

one percent a month increase in unemployment is a depression number

for CI who called me an idiot for saying in sep that unemployment would hit 9% by the end of the year.....I win

hawkeye, Please cut and paste to this thread where I called you an idiot because of your prediction of our unemployment rate.

I agree, greed, or a better term, self interest, is always present, but what allows this to go awry is to take away the consequences of irresponsibility or unchecked greed, that being when banks could make tons of questionable loans because they knew they could bundle them and sell them to entities like Fannie and Freddie. This is much like a person being given a blank checkbook and told that whatever they buy, they can then sell at a profit, without regard that whatever they purchase is worth what they paid. So gazillions of bad loans were made, then sold, but when a few start to fail, it acts as a domino effect, because when the demand for property began to drop, it in turn dropped the price on other properties, and fed the process of more defaults, more properties for sale, and even lower values. And because a large portion of properties were being bought and sold by speculators instead of residents of those properties, those speculators had no qualms in walking away from an overpriced loan amount on a property with a plunging value.

I therefore lay this at the feet of the government, for the most part, because although people act out of self interest, or greed, the fear and consequences of failure as dictated by the free market normally provide enough checks and balances to the system to keep it reasonably solvent. However, if you inject a factor into the market that takes away consequences, you then can unleash the law of unintended consequences. With Fannie and Freddie involved in a tremendous portion of homes, literally trillions, this is no small problem, and I am amazed that the crooks are going scot free. The government is tremendously corrupt at this point, and not upholding the consitution. It is bordering on national suicide, not just this issue, but others. And the exact thing that the government did wrong, they continue to do more of in an effort to fix the problem. This is criminal, and there seems nobody around to stop them. And Obama is hell bent on pedal to the metal, more of the same nonsense. His attitude is, I won, and nobody can stop me.

The Clinton scapegoat -- this goes back to Nixon and Reagan, at least here in Orange County as I've always had friends or acquaintances and customers who were in the real estate business. I knew what they would do with loan applications from a moderate income buyers to a multi-millionaire buyer -- several got in legal troubles doing it, one left the country. It became much worse during Reagan until the recession, which the reason is obvious, and, true, no better or worse during Clinton when the economy was in an upswing and real estate began to do well. It's the local governments that looked the other way for one reason or another, at least until a few got caught. One was a city manager who resigned after a secret deal to get a large parcel of harbor-side commercial property sold and rezoned. The Bank of Newport failed because of shady real estate deals. I rubbed elbows with these people and even a shower still left a remnant of the stink. Needless to say, I no longer associate with any of those people, one of them a very close friend who just donated the pipe organ to the new OC Center of the Performing Arts.

okie has a one-track mind; he blames everything gone wrong to all the democratic presidents, or during those periods. He seems to understand a little about greed, but doesn't have the capability to see the big picture.

What happened ci. was this---on a giant spending spree people forget about one of the oldest scientific laws: what goes up must come down. It's gravity, or better, centre of gravity. It's not rocket science.

We all participated in the spree. Even the poor got mobile phones, big TV, DVDs and a load of other junk besides and went running to Nursie screaming like a stuck pig everytime they cut their finger on the electric can opener.

Our usually staid banks got sucked into Wall Street wizardry with numbers and speed. And it was a pyramid. A Ponzi.

We loved it. We watched TV programmes and read articles about how the fat cat bonuses were spent in a blitz of conspicuous consumption. There's a bloke from the back streets of Leeds with an open-neck shirt costing a grand sat in a mansion with his charming wife waving his arms over artworks and an ex-hod carrier leading a Grand National winner in. Look at you--flying and cruising round the world with de-luxe service and you're more or less a wanker.

It was great. That's why they got the bonuses just like footballers do when they are winning. We can all win. And we did.

So the plan now is to disconnect, unscramble, our nice banks from the Brains and give them back to Ploddie. And the Wall Street Wizards are set on unravelling it as they are the only ones who understand it.

And more bonuses for meeting targets measured by the decibel level of our squeals. We all know the sticking plaster has to come off and Nursie goes at a rate the ouches lead her to think is fast enough for her eardrums and compassion to take.

So I predict a slowish, fairly long-drawn out period of low to medium suffering mitigated by certain distractions of one sort or another, an ace sex scandal say. One that will make the Monica affair look like taking tea at the Vicarage.

It is a privilege of a democracy that we are allowed to bleat as Girl Guides are said to bleat when they get lost in a snowstorm.

From what I can understand Mr Clinton's repeal of the Glass-Steagall Act of 1933 was instrumental in forging the intimate links between the Brains and the Ploddies. I presume he was unaware that the latter would be putty in the hands of the former who probably licked their chops at the prospect. He did have a tendency to over-rate the lower middle class or at the least pretend to.

So the centre of gravity shifted towards the bottom of the pyramid and, as we all know, that's when the music stops. Only the taxpayer can pay unless he transfers it all to the kids in the form of promissary notes which fall due when he's dead.

And regulators generally come from that class from which the Chief Justice hails and the Brains come from the Darwinian melting pot. Like footballers it is not who they are but what they are. I saw a Brains say the he dived onto his console as soon as the second plane hit the tower. Not for him wringing his hands in stunned shock and disbelief.

Matron, at the schools I've been at, yanked the plaster off and if you so much as flinched she impugned your masculinty. At six.

It's quite simple.

rjb wrote :


that is what many professionals still do in canada - and not just the young ones .
in many professions there is a shortage of qualified people . they are often approached by "recruiters" and being made offers that are hard to refuse .


that was certainly true when we came to canada in the 1950's . i spent most of my working life with one company (and haven't regretted it) .

who started the trend of "fast turnover" in the employment sector is hard to say , but there is no doubt that many companies lay off people very quickly .

i just read in a canadian business magazine that many companies are now beginning to regret having laid off people too quickly . they are realizing - some to their surprise - that those people they let go have found new jobs and have no interest going back to the former employer .

i guess it's an old trueism : if the employer wants "loyal" employees , the employer better be "loyal " to the employees too - even when things get a little difficult .

another item i also picked up : some of the large canadian auditing companies are finding that their business has slowed down . instead of laying off staff , they are offering shorter a work-week at lower pay and sabbaticals for employees that want to just have some time off or upgrade their qualifications .

if employers and employees work together they can sometimes come up with innovative ideas that can be of benefit to both .
(i'm sure you know that , rjb . you can probably tell us how it can be done) .
hbg

Clinton was building up large surpluses so as to handle the horde of baby boomers claiming social security and Medicare. Bush wasted all of that and doubled the debt. How are we going to handle those claims?

we are going to reduce the benefit and then means test it. If you don't need it you don't get it. The idea was to amp the economy up on leverage in order to pay the claims that boomers will make, and the scheme collapsed. The only thing to do now is cut the pay out.

Next, they will be means testing our bank accounts, if we don't need it, they take it. ci, your accounts should be first, after all, you want to help your country, you want to be patriotic, as Biden might say, right?

I do not ignore the fact that Republicans participated, but the government is largely at fault. A little of this may have happened without government, but it was highly exaggerated in my opinion, due to the fact that banks knew they could sell marginal loans to Fannie and Freddie, so it was in there interests to go pedal to the metal on loans, and face it, Dodd and Frank are examples of policy makers that wanted homes to be made affordable to every citizen, no matter how unqualified or unable to meet the loan requirements. Why these jokers have not been thrown out of Washington on their ear is a mystery to me. They are con men, and should be gone by now. I also think Chris Cox really flubbed up, and should have been kicked out long ago as well. We need to clean house, and the Democrats are the bulk of the problem, not all of it, but face it, liberal policies brought us to this.

Pertinent to this, although Fannie and Freddie are not responsible for more than just a portion, the portion that they did falsely affect, in terms of inflated values, also inflated all other properties being handled in the market, which ultimately affected the entire property market. Otherwise legitimately handled transactions became overvalued as well, and also ultimately suffer from the factors that are not properly governed by free market principles. The same thing would happen in any industry whereby the government subsidizes an unrealistic practice or price of a product and ends up running something into the ground, it ends up ruining the entire industry sector.

How do you come up with your ignorant posts? Do you get help from somebody or are they imagined all by yourself?

okie still can't grasp the big picture; that many of the biggest banks and finance companies also purchased and sold those mortgage instruments that got them into this financial crisis.

The houses market seems to be really down: a villa in Florida, which costed $13.75 million in 2004 was sold on November 10, 2008 for $100. By a certain Mr. Richard Fuld.

Then let them go broke. But instead the government, again what I was talking about as government meddling into the market, is bailing them out, so what does one expect but more irresponsibility. Fannie and Freddie is one big example, ci, and I guess you are too blindly partisan to admit it? I guess you love Barney and Dodd too much? The same guys that said no problem a couple of years or so ago when Republicans suggested more oversight was needed. They said everything was fine. It was probably too late then, but that shows how blind they are, and how uselss they are, they should have gone home long ago and got a real job instead of spending our tax money.

Now, the stupidity of the government and Obama is stupifying. Obama says no more earmark pork, what a dolt. His entire stimulus package is totally pork, the biggest pile of pork ever dreamed of by any politician ever, is this guy one big piece of work or what?

What do you base that on? O has not said that, and I don't recall that being said by any of his people. That seems to me to be a sure way to kill-off support for the entitlement programs. An essential strength of them is that all have a basic right to the benefits relative to their contributions.

From a moral point, I agree with you. But the economist inside me is scared to do that, because it could cause the partial collapse of our economy, and that would be a Bad Thing.

Do you know what 'pork' is? It's spending projects members of congress send back home. Is that what Obama is doing?

Cycloptichorn

okie, By letting them go broke, what do you think will be the consequence? Do you really understand how any economy works? Without credit, all the economies of the world will come to a standstill. Do you understand how much business the credit card industry creates? Do you know how the majority who buy homes, cars, and big ticket items buy them? Do you?

i wonder how okie might react IF he had some money saved in a bank account .
the bank goes bust AND the FDIC declares : `sorry , we are broke ! nice knowing you ! ` .
(btw that is not an impossible scenario - the FDIC does not sit on a sack of money , ready to pay on short notice).
hbg