What the F*ck is Going On With the Economy?

Gas prices aside, what the hell is happening?

Our financial institutions are failing at an alarming rate and the stock market is reacting (negatively). We're in a recession now and the next stop is a depression. Government bailouts in the past month or two have cost the taxpayers over $800 billion in the last two months alone.

Who is to blame for this mess? What needs to be done to fix it?

Feel free to add yout 2¢.

Although through my financial advisor, I invest small amounts in the Stock market, I know little about it's inner workings. I let him do all that. These companies folding up or going under are certainly "big" names, and athough I don't know specifis, I do hear an "alarm" going off. I think the general public may not even realize how serious this could be. Most average people like myself, know of Wall St. but few understand the system. That being said, I am worried. Is this a stock market crash???? You know like 1929??? Or, is the potential there?

Who's fault? I don't know. Is it the mortgate companies who perhaps gave loans to anyone by stretching the rules and/or lying???? It seems to be where this started no?

One thought that comes to my mind is, "and they want to invest my socil security in the stock market?" With the bang up job the powers that be are doing now, I'll say no thank you.

I look forward to reading others' responses to see if most are alarmed as I am. I'm sure I'll learn a lot. At this point though, I don't know how or who can fix it.

TIS

The sad truth is that the housing boom that we enjoyed was, no pun intended, a house of cards. People who couldn't afford homes were given interest-only mortgages so that, on paper, they could afford them. Or, people leveraged equity (again, that existed on paper) in their permanent homes to speculate in other real estate markets. Then, when the prices started to plummet, they were unable to sell either home quickly enough and/or for enough money to pay off the loans, and that's when the foreclosures started.

These financial institutions invested heavily in real estate, be it the stock of homebuilders or in mortgages, and now those investments are nearly worthless. Therefore, their "assets" are also nearly worthless and they can't meet their payments.

The other thing to remember, TIS, is that maybe you don't THINK you have much invested in the stock market, but you do. Your pension plan, your money market, your 401K, your long term CD, your bonds, they're all invested. And that's why the volume of trading is so high, and why the fluctuations are really NOT the cause of alarm. In October of 1987, known as Black Monday, the Dow dropped over 500 points, but the volume of shares traded was so much lower than it is today. The Dow Jones average then was probably around 2,000. The Dow was down almost 500 yesterday, but it still closed at almost 11,000. So while the numbers are still frightening, the percentages are completely different.

In addition, you have rising costs of food, energy and fuel, three staples, which has caused a downturn in the money being circulated. Also, many businesses are reluctant to raise prices because they fear it will drive away customers, so they're breaking even or operating at a loss just to keep the doors open. For example, I read today that General Mills saw a nice upturn in sales because people are eating home more. However, because their costs have increased so greatly, despite the fact that sales rose, their profits still fell.

Who can fix it? Time. What goes up must come down. The economy has crests and troughs. Right now we're in a trough. And eventually, although it may take years, it will go back up. And then banks will once again open their purses and make unwise lending decisions. It happens.

The economy is wonderful, I have 7 (I think) houses to prove it!

Like SB said, the main problem is leverage. In the last five years, everyone - banks, corporations, individuals - borrowed too much.

Think of the following situation: a person buys a house by putting down a 5% deposit and borrows the rest. Imagine that the house value declines by 10% or 20% and for whatever reason, he has to sell his house (maybe he lost his job and can't afford it anymore?). That guy is screwed, right?

That is what is happening today. Banks borrowed money to invest in mortgage-backed securities, among other securities. As the housing market tanked, these securities went down in value and became less liquid (meaning no one wanted to buy these securities, so the banks couldn't raise any money from selling). Not able to sell these assets, banks tried borrowing from other banks, but banks with any excess cash stopped lending to other banks because they were worried about their own liquidity. Being unable to sell these assets or borrow from other banks, the troubled bank has to turn to the government - first, borrowing from the discount window and in the extreme, you'll see the Mac/Mae/Bear Stearns bailouts. This problem affects corporations as well because if banks aren't willing to lend to each other, they sure aren't willing to lend to corporations (unless the interest rate is so high that it's an offer they can't refuse). High borrowing costs for corporations affects employees who'll see smaller raises and a higher probability of unemployment.

For the system to be righted again, these companies need to write-off these assets to their true value (which is hard to do because these assets are complicated and hard to value), pay off their debts and institute rules to prevent problems in the future (e.g. increase the reserve requirements, stop relying so much on the ratings agencies, etc...)

As for the individual investor, I believe the best thing to do right now is to not panic. Do not sell all your assets and put it under your mattress. Over the course of decades, the long-run return of the stock market is approximately 7% to 10%. The market has always shown that it will right itself. Although it may take a little longer this time, it will do so again.

Thanks for the explanations, SB and DB! I wasn't in panic mode, but really HATE seeing all those red numbers in my (very small and modest) portfolio! Looks like some are bouncing back a little bit today, but it's like 1 step forward, 10 steps back!

Too much money going overseas.

I also hate those red numbers. You gotta wonder if there is a full blown Depression on the horizon. This time, its gonna be worse then the 1929 one, as there is more money going around.

One has only to look at the movie "Wall St", and the Michael Douglas character told us that "Greed is Good". For who, the CEOs? As SB said, create a "house of cards" and make people believe they can play. Soon histeria (greed) takes over. Remember the dot-com craze of the Clinton era? Companies founded on a promise and investors cashing in. Hey Big Daddy Bush, instead of looking for those WMD you should've been checking on the banks, investment companies and oil boys. Oops, you're one of them, nevermind.

Didn't the stock market go up today as much as it went down yesterday? I don't know much about this stuff but perhaps it'll go back up as quickly as it went down.

The whole reason for the government bailout was to help the market. I hope it does exactly that.

Doubtful. It will surely go back up, but there's too much uncertainess with the economy for it to make a quick, complete recovery now.

But it is worth noting that the stock market had the biggest single day gain since 2002. We'll see what happens tomorrow and next week. I'm very interested.

So from many replies here, what goes up, must come down and basically "don't worry." Yet, from listening to the news on this story, it's a complete mess and it sure seems like there is cause to worry or why is this even a story? If all of us keep our money invested, and nobody worries, it'll be ok??? I don't know.


TIS

I'm worried that the real biggies (Bank of America and now Citibank) are buying up all the failed institutions. Bank of America bought up Merrill Lynch and Citibank is considering a buyout of WAMU. That's all fine and dandy, but remember - the big banks are also buying the other institutions' debts. If the big banks falter we can all kiss our assets goodbye.

Did anyone watch the Daily Show yesterday?

Regarding the stock market turmoil:

Jon Stewart opens with the line (loosely) "Great news everybody...we own an Insurance company." And it only cost 85 million dollars.
Ah yes, I guess it's good to joke....that did make me laugh though.


TIS

That'd be $85 BILLION.

That makes it 1,000 times funnier.

I couldn't remember if it was million/billion What's a few dollars more?

Btw, one thing I've learned about some of these financial institutions that have gone under. AND, not that I come anywhere close to having this kind of money, I'll pass it on. I hear that those who have a large amount of money in banks, might want to keep no more than $100,000 in one bank. Usually, I understand, they insure and/or will let you withdraw only that amount, should the bank go under.

TIS

That's right - the FDIC insures an individual bank account up to $100,000. If you have $150,000 in your account, you MIGHT want to spread it between two different banks.

Whether you should worry or not depends on your status in life, TIS. If you are near retirement age or have recently retired, and your pension fund just took a big hit, you may need to keep working. If your 35, and will be investing and adding to that pension fund for another 30 years, then don't sweat it. You'll probably go through many more of these cycles before retirement.

That's right SB. Also, your stage in life should determine the allocation of your portfolio. The closer you get to retirement age, the more conservative your portfolio should be.

The news stories on the stock market is exactly like the news stories during hurricanes - sensationalized and designed to draw you in. To be sure, we are going through a pretty historic decline in the market (notwithstanding yesterday's increase and this morning's increase) and I think we still have a few painful days ahead, but once again, the long-term view must be taken.

Gloomy times!

Although its not nice to see the economy suffer and people losing their jobs,it's hard to feel to much sympathy for some of the banker types whoo have been earning mega bucks for years whilst fleecing the likes of us!

Ya mean like the big coporate boss who got £22million a year whos now crying the blues.

He would be a good example yes!

They are saying now that the Stock Market will only make "ends meet" when investing. Gone are the days when people used to make a killing. I find this very depressing, and as for the fact that nowadays you have to do illegitimate things to make some real money. Its been going for years that working for a living never actually gets you anywhere.
I read that everyday, there are a million people worldwide trying to get rich, but only a handfull actually get anywhere. Proof is everywhere that people are trying to make an extra buck. Ya gotta know someone who is "wheeling and dealing", selling duty free cigarettes?

That's alright --

this thing's gotta happen every five years or so -- ten years -- helps to get rid of the bad blood.

Sicilian Babe and Don Sicilia are spot on and both answers summarise the UK situation as well. It's such a general question that I doubt even collectively we'd cover all the areas but here's my angle:

Due to a little aquisition that's going through, I actually work for what will be the largest bank in the UK (currently the only UK bank within the top ten of the worlds safest banks). I only have experience with personal banks rather than investment banks (Lehman Bros) though.

A couple of years ago, whilst working in the mortage end of the bank (within a sales retention team), I wondered why we weren't offering the best deals in the market. Why were we passing on the buy to let, 100% (and more frightingly 110%) mortgages, or higher risk borrowing that so many banks were eager to gain? It made my job harder, knowing someone was leaving the bank to chase a better rate with Northern Rock (now nationalised to prevent it going bust).

Instead we took a prudent approach, and right now it's paying off.

I can't speak for the US, but within the UK the safest banks will only invest (read mortgage lending) money that is deposited within their bank by customers.

The trouble is, with some banks (particularly Northern Rock), is that they lend money that they don't have. They raise the funds by selling the debt on to the wholesale money market (for example Lehman Brothers). So now as those funds are not available as credit is tightening, these type of banks find they're short of funds.

Luckily my work are not too exposed to the Lehman Brothers crash - but there's plenty of others within the UK that are, and obviously it's affecting the US.

Individuals have to take a lot of responsibility for themselves as well. Anyone taking out a mortgage for more than 95% of the value of the property are taking an incredible risk. These products became very popular only 3 or 4 years ago. Although you'd be lucky to find one now. To expand of Don Sicilia's point, if you take a £100k mortgage on a property worth £100k (a 100% mortgage - loan to value is equal), and that property's value decreases by 10%, so it's now worth £90k. If you're ever in a situation where you're getting reposessed (maybe interest rates are increasing or inflation is increasing - you can't meet the payments. Both of these situations are prominent in the UK which i'll get to in a second), suddenly you've paid back the £90k the property is worth - but you're also in a position where you're liable for an additional £10k to pay the rest of the borrowing.

So, interest rates:

Again, can't speak for the US or Federal Reserve but the Bank of England are in the unenviable position of trying to curb inflation, yet get the economy back on track. To keep it simple, let's attribute inflation to the cost of oil increasing. We have very little, maybe no control over that, so traditionally when inflation is increasing the Bank of England would increase interest rates to stop public spending (this works as the cost of borrowing goes up - less people likely to borrow, and also the benefits of saving increases). If people aren't buying, producers cannot keep costs high and thus decrease them to curb inflation.

But this method hinders the economy - businesses certainly suffer. Also no one can get on the property ladder and mortgage borrowers find themselves paying more. To boost the economy, the Bank of England would reduce interest rates. But to do this would raise inflation through the roof.

With the current economic climate, the Bank of England can't afford to either raise interest rates (to curb inflation) or lower them (to boost the economy). It is literally being stuck between a rock and a hard place.

I think I was sober when I started this post, I can now say I'm not. This must be my longest ever post. Sorry to bore everyone, but I'm nuts about this sort of thing.

There will always be opportunities to make a killing in the market. My God, the market was below 1,000 in 1981; look where it is now and where it has been. The Dow is just one measure of the stocks viability, and therefore, the economy's. Keep in mind that the Dow is only an average of 30 stocks. Ours is a $15 trillion economy. That is economic power.

I know the stocks on the Dow has reached over 300 points on one day, but the next it could drop over 400. Its all too up and down to make many thousands. If I seem a tad unknowledgeable about the Wall St market , then thats because I'm British and I do not know too much about the markets worldwide. I tried to break into the markets last year, but thing after thing kept happening and I thought "f**k it, whats the point", I still havn't invested. Even a case of the "Bear Market" happened which means that my investment at the time of starting up would have lost all its profit. I was born in the wrong time and I've missed my chance, while those investors were celebrating heavy gains in the 80's, I wasn't even 10.
Theres now too much unpredictibilty and uncertainty, especially after this damm C C and trusting institutions that you havn't yet invested in yet seems a tad too much.

Just out of curiosity, here is apparently the case made in an op-ed by Robert Reich, Obama's financial advisor:

What Wall Street Should Do To Get Its Blank Check

The frame has been set, the die cast. Treasury Secretary Hank Paulson, presumably representing the Bush administration but indirectly representing Wall Street, and Fed Chief Ben Bernanke, want a blank check from Congress for $700 billion or possibly a trillion dollars or more to take bad debt off Wall Street's balance sheets. Never before in the history of American capitalism has so much been asked of so many for (at least in the first instance) so few.

Put yourself in the shoes of a member of Congress, including our two presidential candidates. The Treasury Secretary and Fed Chair have told you this is necessary to save the economy. If you don't agree, you risk a meltdown of the entire global financial system. Your own constituents' savings could go down with it. An election is six weeks away. Besides, in the last two days of trading, since rumors spread that the Treasury and the Fed were planning something of this sort, stock prices revived.

Now - quick -- what do you do? You have no choice but to say yes.

But you might also set some conditions on Wall Street.

The public doesn't like a blank check. They think this whole bailout idea is nuts. They see fat cats on Wall Street who have raked in zillions for years, now extorting in effect $2,000 to $5,000 from every American family to make up for their own nonfeasance, malfeasance, greed, and just plain stupidity. Wall Street's request for a blank check comes at the same time most of the public is worried about their jobs and declining wages, and having enough money to pay for gas and food and health insurance, meet their car payments and mortgage payments, and save for their retirement and childrens' college education. And so the public is asking: Why should Wall Street get bailed out by me when I'm getting screwed?

So if you are a member of Congress, you just might be in a position to demand from Wall Street certain conditions in return for the blank check.

My five nominees:

1. The government (i.e. taxpayers) gets an equity stake in every Wall Street financial company proportional to the amount of bad debt that company shoves onto the public. So when and if Wall Street shares rise, taxpayers are rewarded for accepting so much risk.

2. Wall Street executives and directors of Wall Street firms relinquish their current stock options and this year's other forms of compensation, and agree to future compensation linked to a rolling five-year average of firm profitability. Why should taxpayers feather their already amply-feathered nests?

3. All Wall Street executives immediately cease making campaign contributions to any candidate for public office in this election cycle or next, all Wall Street PACs be closed, and Wall Street lobbyists curtail their activities unless specifically asked for information by policymakers. Why should taxpayers finance Wall Street's outsized political power - especially when that power is being exercised to get favorable terms from taxpayers?

4. Wall Street firms agree to comply with new regulations over disclosure, capital requirements, conflicts of interest, and market manipulation. The regulations will emerge in ninety days from a bi-partisan working group, to be convened immediately. After all, inadequate regulation and lack of oversight got us into this mess.

5. Wall Street agrees to give bankruptcy judges the authority to modify the terms of primary mortgages, so homeowners have a fighting chance to keep their homes. Why should distressed homeowners lose their homes when Wall Streeters receive taxpayer money that helps them keep their fancy ones?

Wall Streeters may not like these conditions. Well, you should tell them that the public doesn't like the idea of bailing out Wall Street. So if Wall Street doesn't accept these conditions, it doesn't get the blank check.

http://tpmcafe.talkingpointsmemo.com/2008/09/21/what_wall_street_should_do_to/index.php

If any posters here know of any fat cats who are crying cos of this mess, then tell us. Its your duty as the citizen there you were.

I'm trying to figure out what this means.

It means if you know of any greedy bank managers or people higher up, tell us, we'll love to ask them a few questions!

And by "us" who do you mean?

The angry citizens.shareholders/taxpayers,

I see

Are you annoyed? None of us here, on this forum, want to see wages go down and taxes go up. I'm gonna state something now that I've read on another forum, you won't like it: It has been predicted that in Feb 2009, the US will collapse and merge with Canada and Mexico. The new currency will be the Amero. Some people believed it while one was actually shouting, "Troll". Its looking likely that in Jan, there will be a 1 trillion dollar loss in 1 week.

No, I am not annoyed, I just am being observant

I heard that the currency will be called Tamco. Any truth to it?

That's exactly what's going on here in the U.S., Turi. A few months ago, the "stagflation" word was being thrown around but with oil coming down since July (save for today's spike), the inflation hawks have been quieted. With that said, I bet we're in for more inflation pain in the coming quarters.

I'm glad some banks are a bit more risk averse as opposed to Charles Prince III, the former CEO of Citigroup. A quote from him in 2007 (before he was replaced): "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to dance. We're still dancing."

Really? Gosh! I've never really liked the USA but this new country thing seems like really exciting ya knowz.

Damn... everything's back into the shitter already!

The only thing I have that's been going up during all this shit is my USAA Precious Metals and Minerals (USAGX) fund... UP 7.88% today! Doesn't make up for the rest, though.

Long term, baby!! That's what you have to keep in mind. Panic over the short term is what leads to financial market fluctuations. Realistically, what did the Dow do. It sounds frightening when the Dow goes up and down by the hundreds, but the actual percentage is small. That's what the media doesn't report.

Well, McCain released his "bailout proposal" at that bullshit Photo-Op summit yesterday...

The McCain Plan: "Fewer Regulations, More Corporate Tax Breaks"

http://www.politico.com/news/stories/0908/13918_Page2.html

"In the long run we are all dead."

Douchebag better appreciate that one

Add WAMU to the institutions down the crapper. JP Morgan just took them over in a firesale.

Another one bites the dust...

I wonder whos next, I'm starting to worry.

Loves me so Keynes... Good one, DMC!

I'm impressed SB. From what I've read, most Board posters don't have quite the grasp you apparently have of the Dow Jones or the American economy generally. Despite the economy's ups and downs over the decades, the Dow Jones has returned enormous rewards for market investors. In 1981, the Dow was under 1,000. Today, it's over 11,000. Kudos SB.

Lessons learned....I hope. Of all the bailout proposals, I hope the Feds really squeeze the greedy CEOs/Bosses on their personal parachutes.

For example, have them do yard work for anyone whose pension went down the shitter.

Don't hold your breath on that.

Thank you for your kind words, Olivant. If I was going to retire next month, though, and my 401K just went down the crapper (as they all pretty much have), my response may not have been so calm and far-sighted.

While we are all concerned and perplexed about the 700 Billion for the mortgage bailout, the government boys and girls were passing legislation to fund $650 billion to loan automakers and open the gates for off shore drilling in the Pacific and Atlantic. Do you think we've been set up with this gas price thing? I feel the need for a big scoop of KY.

It's a $600 billion appropriation to continue funding government activities through early FY 2009 of which only $25 billion is in the form of loan guarantees to automakers.

A New Hampshire newspaper editorial gave their response to the recent economic crisis:

Suspension

"We have decided to suspend our editorial activities today so we can adequately ponder the implications of the economic bailout program."

http://www.sentinelsource.com/articles/2008/09/27/opinion/sentinel_editorial/free/id_324828.txt

WaMu's CEO: Bagging $13.65 million in 18 days?

In short order, the shareholders of Washington Mutual (NYSE: WM) have lost billions. A tier-1 private equity investor, TPG, has lost $1.3 billion on the company. And, unfortunately, thousands of WaMu employees have lost their jobs.

However, there are some winners. For example, there are the short sellers. JP Morgan (NYSE: JPM) is also likely to do well since the firm bought WaMu's assets for a mere $1.9 billion.

But there appears to be yet another interesting beneficiary: Alan Fishman. He is WaMu's CEO, who took the top job 18 days ago.

As should be no surprise, he signed a juicy contract: a $7.5 million signing bonus and a lump-sum payment for severance that comes to $6.15 million. In other words, if he leaves the company, he'll walk away with $13.65 million.

That's a pretty good deal in light of the fact that WaMu is the biggest bank collapse ever.

Moreover, I suppose it is yet further evidence of why Americans have low regard for the financial system. And despite huge bailouts, it's probably a good bet that little will change.

http://www.bloggingstocks.com/2008/09/27/wamus-ceo-bagging-13-65-million-in-18-days/print/

The Dow is taking a dive today.

The House voted down the bailout bill.... looks like the market is gonna take a BIG hit today.

This thing is happening all over the world: In Belgium 2 of the 3 biggest banks lost 23% and 30% of stock market value, the worst in 12 years.

This after the news that the governments of Belgium, The Netherlands and Luxemburg bought 11 billion worth of shares to aide those 2 banks.

I just saw that the Central Bank (in Europe) is doubling the amount of cash available to all banks.

The Dow Jones is now down 650 points with about 40 minutes before trading ends today.

I'm glad we look at things long-term or else I'll be really, really ill right now... instead of just really ill.

Many of the Democrats and Republicans who voted against it were those facing re-election and received enormous numbers of calls from their constituents pleading with them to not vote for the bill. People have lost site of what is at risk; standing on ideology largely communicated as nothing more than spin.

We are not bailing out Wall Street fat cats. We are doing what is necessary to keep our economy from imploding and hurting millions of Americans.

What SHOULD be done and what IS being done are often two vastly different things. Today is a perfect example.

The market has rebounded somewhat in the last 20 minutes but looks like it will still close about 600 points down.

People think it's just about BAD banks. But if something isn't done, good companies can't get loans and will layoff. Good companies with NO mortgage issues (Honda, Caterpillar) are paying usuarious rates for cash, and that market FROZE a couple weeks back. And the only stop has been the promise of this plan. No lending, means they can't make payroll and will have to layoff.


Come on people, think of the big pic. And, yes, monkey must be flying out of my butt because I'm with Bush on this one!!

This bi-partisan shit MUST stop!! The finger pointing and name calling is total bullshit. We have more important things to worry about.

The Dow is now down 738 points.

I'm really afraid of a panic now.

778

Fuck...

You know what? Let the economy implode, fuck it. I've been poor all my life, I've lived without running water and electricity, we'll all be fine. I don't want to bail out banks because they made predatory loans and bad decisions! No one has bailed me out. No one has bailed out the struggling families and small businesses. Fuck banks.

Long, you need to do some homework. Few people on this Board understand the financial threads that weave their way through the US economy that originate on Wall Street.

Misery loves company. You're poor? You're poor as you define it. It can be alot worse. Try homeless without any electricity and water on the horizon. That will be what alot of Americans (alot of them) will experience if credit dries up, if people are afraid to invest in capital creation or business expansion. You ought to talk to someone who lived through the Depression. There aren't many left anymore, so hurry.

You're probably going to get shanked when when the anarchists strike tomorrow.

Real nice attitude there Longneck but since you have children(I'm assuming, yeah I know what they say about assumptions)you might want to rethink your attitude.

Now I'm not saying that the banks are completely blameless here, but at the same time blame also goes to the idiotic citizens who took out these outrageous loans, in the first place. People need to pay better attention to their finances, if they would then they would not be going after loans they can't pay back. And thus the banks wouldn't have made those loans in the first place.

But hell most of the blame goes to the freakin democrats in the first place.

Why?

Hell, last I checked, 60+ Democrats and 1/3rd of the GOPers voted against the bill.

They both fucked up.

Really, I'm in mood for partisan politicking today after that bullshit this afternoon, which was done simply to stick it to the other side...

Does the Financial Crisis Threaten Your Job?

In his testimony last week, the Federal Reserve chairman, Ben Bernanke, warned that the sharp rise in the cost of short-term credit, and the corresponding difficulty that companies and individuals face if they want to obtain a loan, pose “a direct threat to economic growth.” Just as important for most Americans is the threat to their jobs. What does the credit crunch mean for job growth? Is your job in jeopardy?

As I explain below, this financial crisis is likely to threaten middle- and upper-income jobs to a greater extent than has been the case in past recessions.

There is little doubt that the crisis has already hurt job growth. The unemployment rate has climbed from 5.1 percent when Bear Stearns was taken over by JPMorgan Chase with the Fed’s help in March 2008 to 6.1 percent last month. And the unemployment rate is likely to rise further — and remain high for a considerable period after the financial crisis subsides and economic growth resumes.

Obviously, jobs in the banking, finance, construction and residential real estate sectors will take a direct hit because the problem started with a bubble in home prices. But the damage is likely to spread to other sectors. Industries that rely on customers who use credit to buy their goods are especially vulnerable. Thus jobs in durable goods manufacturing — such as autos, heavy household appliances and business equipment — are likely to be hit hard.

Historically, most downturns have hit the least-skilled the hardest, as employers hold on to workers with unique skills who would be expensive to replace. This downturn, however, is likely to be more democratic than the norm because of the severity of the credit crunch. Research indicates that employers hire relatively more skilled workers when they invest in new plant and equipment, especially high-tech information and computing equipment (the so-called “capital-skill complementarity” hypothesis). If funds for investment are not available because of the financial crisis, however, companies will hire fewer skilled workers.

Consistent with this prediction, initial signs indicate that the employment shock has been felt more by college graduates than by those with a high school degree or less. The seasonally adjusted share of college graduates who are employed fell by 1.6 percentage points from March to August 2008, while the share of high school graduates and high school dropouts employed rose by 0.6 and 0.2 percentage points, respectively. (See chart below.)

What does this mean for you? Even in the best of times the United States labor market is highly volatile, with millions of jobs being created and destroyed each month. But just because your job may have been safe in past downturns does not mean it will be secure this time. Key questions you should ask are: Does your company need investment funds to upgrade plant and equipment to compete with other companies? Do your customers rely mainly on credit to buy your product or service? Do you do business with companies that are hard hit by the financial crisis? If your answers to these questions are yes, your job is more likely to be at risk.

http://economix.blogs.nytimes.com/2008/09/29/does-the-financial-crisis-threaten-your-job/

Here's the Roll Call of the vote today:

Democrats backed the bailout by 140 - 95 votes, or roughly 60% - 40%

Republicans opposed it by 133 to 65, or 67% - 33%.

So that is what, 40% of the Democratic Party revolting at Pelosi, and 66% of the GOP revolting at Bush.

This is crap.

Amen.

$3.47 for a 5lb bag of potatoes

$1 for a DVD.

And 100% are simply revolting.

Senate passes the bill.

Well, time to get ready for the big crash...

Now I expect it'll pass, but how can you possibly know that now. I am supposedly watching it live and they are expecting an announcement, but I haven't heard them announce it yet. What's up with that? You ruined the ending.

Seriously, they haven't announced it passed yet.


TIS

I watched it pass on CSPAN. It's live @ the Senate and Congress.

It's fun for us history loving dorks.

And now Rep. Jesse Jackson Jr., a major Obama supporter, is claiming that the next possible President is why the bailout bill finally passed.

and I think BULLSHIT.

I guess Obama gave him a good deal to spout such nonsense today?

"I won't cut your daddy's nuts off for his comments against me earlier this year."

Okay, so the Senate passed the rescue bill. But I'm not sure that it will pass the House.

I'm keeping my fingers crossed for the opening bell tomorrow morning.

What the fuck? They added tax cuts along with it? Yeah, that'll help, not like the government needs that money or anything. It's only an extra 100 Billion...

I guess it depends on how many in the House are up for re-election huh?

I'm thinking it will. Too many were in shell shock I think, the first time around. I think there will be some opposed of course, but it will pass.

Then again, they thought it would pass the first time too.

TIS

The Dow is already down 184 points. Geez, Louise. When is it going to stop??

"Buy land AJ, cause God ain't making any more of it."

Who are you, Lex Luthor?

Nah, I thought I remembered Tony Soprano telling that to his son, but it's the truth. I realize that NOTHING is absolutely recession proof, but as a landlord you can pretty much always make a profitable living, as long as you're fair with your tenants.

In the long run, if you're not greedy, real estate will always make you money. But the truth is, too many people make a nice profit, then get greedy and start to leverage things they truly don't own in order to make even more money. If you buy something that you can afford to hold onto in lean times, then you are bound to make a profit, even if it's down the road. And if you are in some sort of position to buy anything right now, do it. I can't imagine, with the credit crunch the way it is, that the Prime is going anywhere.

I'm keeping my fingers crossed it doesn't pass the house, but there are too many helmet-toting folks in the Senate last night for me to think the House has any less.

Aw fuck, I agreed with JJ on something. I'm doomed.

Better advice, you'll never get. Buy, baby, buy!

Grab my hand, we'll jump together!

The Bill passed. I guess time will tell if it's a good deal for America.

I'm so glad they raised the insured FDIC amount to 250K. That will really help me and my bank account that was -$500 a week ago.

Wait, no, it won't. Not a bad idea though if you have enough money for it to matter.

I lost about 20% so far on one mutual fund, but luckily I invested in "natural resources", and that fund paid about 30% last year. I still lost a little, but it should go back up again long before I plan on touching any of it.

Time to start stuffing our cash in a mattress. This is going to be a pretty fucked up ride.

The FDIC amount desperately needed to be raised to protect payroll accounts and the like. Even a small business, say a construction company that has highly skilled laborers who make big hourly wages, can have a 6 figure payroll.

Of course, with taxes now sure to rise, most of those companies will have to lay off those laborers. Should be fun.

Taxes are going to rise no matter who gets elected - and it's going to be at every level. When governments had a surplus a few years ago, they squandered them on "gifts" to their constituents. We had one local guy who put some statues in his backyard and got money from his local legislator for a "museum". Now that there are huge budget shortfalls, taxes are going to be raised. And just wait for this winter when energy costs are sky-high. The schools will threaten to either raise taxes or freeze your kids all winter.

Taxes aren't going to rise if Obama is elected.

Patrick told me so.

The DOW is down -500, under 10,000.

Wow. That's got to be the first time in YEARS. Just wow.

It's too frightening to turn on the TV or radio any more.

At this point, I just won't look at my balances until things go back up. Luckily I'm not relying on any of my investments for my retirement, etc. I'm pretty much in the market for the fun of it.

Well, like I said in an earlier post, if you happen to be young enough, then you really don't have a huge problem. It's all on paper anyway. But if you happen to be contemplating retirement, then you could very well be screwed.

I know, I spent the morning thumbing through news and blogs and it is all doom and gloom.

I should have either just stayed in bed or concentrated on my fun job, as long as I have one!

My coworkers and I were discussing the economy at lunch. Being in commercial real estate, we have not felt the same tremors as those in the residential market UNTIL now. The credit crunch has now hit us as well. And I don't think we're going to see the light at the end of the tunnel for some time.

One of the guys said, "I don't remember the economy being this bad EVER," and I said that I did because my husband and I both lost our jobs during the last recession, me in Februrary of 1991 and he in January of 1992. As long as you're employed, even if you have to stretch your dollars, at least you have dollars to stretch.

I remember! 1992 is the year I went to graduate school and lived on $450 a month while going to UC Berkeley (which was an expensive place even back then, $400 barely covered rent, scholarships covered tuition). The youngish can do that, but most families now don't have that option.

Down 780 and we still have more than an hour to go before the market closes.

On the bright side, it's probably a great time to buy property. I'm just wondering if that time is NOW or in a few months from now...?

Good luck getting a mortgage now, if your credit score is below 740.

I'm gonna make them an offer they can't refuse

Is that how you get dates as well?

A certified check for $1,000?

However bad it gets, just hold. If youve already lost your shirt, it makes no difference. If you sell low and it goes back up you'll really feel bad!

I'd say the worst is yet to come, but DT has a point. I'd wait to sell but I'd also wait to buy.

The market recovered nicely in the last hour. It's still down quite a bit, but it looks like it MAY finish near 10,000.

I wouldn't make any large purchases now.... there's still too much uncertainty in the economy now. Once it takes an upturn (and it will), you'll still be able to get a bargain before the prices on big items rise again.

There's still plenty of opportunity for short/put options in the market. I don't think the market will begin settling until the election is over and the rescue dollars have had time to filter through the economy which is months away. Also, the FY 09 federal budget is stil operating on continuing resolutions, so the final appropriartions bills will help the markets also.

I'm going to take financial advice from someone who can't even manage a fantasy football team??

No, I want to BUY low so when it goes back up I'll feel really good!

I'd hope not, has JL tried giving you advice or something?

LETTERS TO THE EDITOR

Goes to show there are still some intelligent people left in New Jersey...a hopelessly BLUE State.

From the Bergen Record:

The truth of the financial "crisis" rests with the government, not Wall Street or Main Street. We, the taxpayers, the investors, the hard-working citizens, are the victims of the government playing in the mortgage market.

In 1977, the Carter administration believed that there needed to be more mortgages. With the aid of "government-sponsored" companies - the Federal National Mortgage Corp. and the Federal Home Mortgage Corp. - U.S. banks were "induced" to make more money available in the housing market through a program called the Community Investment Act. In the late 1990's, the Clinton adminisatration escalated this program, easing qualifications for mortgages that Fannie Mae and Freddie Mac would buy. In 2003, the Bush administration tried to regulate Fannie and Freddie, but was rebuked by Democratic Sens. Christopher Dodd of CT and Charles Schumer of NY - and - Democratic Rep. Barney Frank of MA.

These men are the real reasons we have a financial crisis today, not President Bush and not Republican presidential candidate Sen. John McCain.

The truth is in the facts and history of the government interfering with the capital markets and the greed and political interests not of investment firms, but of some members of Congress. I hate a bailout, but we have been left with no choice. But let us be clear. We are not bailing out companies whose investors - us - are losing value each day or out neighbors who have lost their jobs. We are bailing out the Democratic Party that brought us this mess.

William Lang
Westwood, NJ

Mr. Lang hit the nail on the head.

Okay Apple. Digest this.

The 108th Congress that you cite above was controlled by Republican: 51 Senate Republicans and 48 Democrats, and 229 House Republicans and 206 Democrats.

The Republicans gained control of the Congress in 1994. Let's take alook at its political make-up during the 105th Congress - 1997-1998: in the Senate 55 Republicans and 45 Democrats; in the House 228 Republicans and 206 Democrats.

Mr. Lang must be an idiot. If President Bush wanted to tighten regulations, and his party had the majority in the House, why didn't the Republicans just outvote those darned Democrats and do it?? Oh, because they were afraid of a rebuke!! Oh, no!! Not another rebuke!!! Puh-leeze.

First of all, it's the Community Reinvestment Act (CRA), and, yes, it was passed in 1977. If Mr. Lang is going to discredit it, at least he could get its name right.

It's purpose was to make sure that loans were available to all segments of a community and to eliminate such discriminatory credit practices as requiring borrowers of a certain race to come up with higher down payments, and redlining. Redlining is when a bank will literally draw a line around a neighborhood and refuse to lend within the "redlined" area. It works hand in hand with the Fair Housing Act, which makes sure that nobody is denied housing based on sex or race, etc.

CRA in no way, shape or form recommends sub-prime lending. If a community has a non-profit affordable housing advocacy group, and a bank sponsors and attends a seminar given by that group, that would comply with CRA. If a government agency provides low-interest loans within the community, and the bank provides support to that agency, that complies with CRA. If a housing advocacy group offers a class for first-time home buyers, and a bank underwrites the cost of everyone's tuition, that counts for CRA. In addition, a bank must show that it does not discriminate against any applicants. That's all they have to do regarding CRA, and direct lending isn't necessarily even a piece of it.

Although many would like to point a finger at such programs as the cause for the current fiscal crisis, they were put in place to make sure that the same credit was made available to everyone and that credit decisions were fair and balanced.

Very good SB. I would also add that banks and other lenders are in control of to whom they lend money.

1) The Republicans didn't need a single Democratic vote to get stricter regulations for Fannie and Freddie. You certainly can't blame the minority party for failing to enact a law that the majority allegedly favored.

2) This economic crisis is FAR MORE complicated than increased mortgage failure rates at Fannie and Freddie. Some of it is caused by our overall debt to finance a war in Iraq and other issues and secondary markets that are completely unregulated (which fault can be laid DIRECTLY at the foot of the Republicans). And Bankruptcy reform is part to blame (which Democrats do share the blame for, I'll give you that).

Blaming this enormous economic clusterf**k on Fannie and Freddie and just the Democrats is simply stupid and naive.

I previously talked about the difficulty in maintaining inflation at a managable rate and boosting the economy. It's now clear with some of the worlds central banks slashing interest rates that inflation will have to take a back seat.

I can't speak for the rest of the world but the fact that the Bank of England cut interest rates by 1/2% is massive news. As far as I was aware the Federal Reserve has made that move a few times in the last year or so, but working for a bank I've been following BOE interest rates for years and have never seen a change bigger than a 1/4%. And it was voted for a day before when they're supposed to, in line with the other major central banks. Quite unprecedented in my short adult lifetime.

The Bank of England usually pegs inflations, right Turi? I can see why you're surprised then. I wonder if rate cuts will do anything when there is an inherent problem with confidence in lending. When does it/did we go from a yield problem to one of irrational (or maybe rational) fear?

We had our sales meeting this morning. Being in a suburban real estate market, most of our clients are small-to-mid-sized companies. Those are precisely the ones that are hurting for cash. Their business is down, and the banks have dried up. We all agreed this morning that once the uncertainty of the election is over, things may improve a bit, but that it's going to be a very bumpy road for the next month.

The cut in interest rates may not affect liquidity that much and it is liquidity that we need right now.

Hey, the market closed down only 189 points today. The crisis must be over.

About the only good thing is that oil prices continues to drop too.

What's the price today Lou?

It was down to $88 and change, the last time I looked.

Thanks Lou

Halloween 2008

Hahah, that's brilliant Mignon.

And hopefully eggs will be too expensive for us to feel the repercussions of the angry kids.

Pegs inflation? I'm not entireley sure of the phrase, but the BOE have a target of 2% for inflation, which is now currently running well over 4% and will undoubtedley go over the 5% mark in the next few weeks due to the recent rate decrease.

Little over 10 years ago the then Chancellor of the Exchequor Gordon Brown decided that the BOE should be run seperately to the Government. The BOE then had an independent panel to decide on in the interest rate to keep the economy in check. There was only one real stipulation - that if inflation rises over the 2% mark, the Governer of the BOE then had to address the reasons why in writing to the Prime Minister. It doesn't sound like much, but it was serious business when inflation first topped 2%.

Until the start of this credit crisis last year, not one letter had to be drafted. Rates were incredibly stable, with only a few steady increases and decreases (never more than by 0.25%) over the 10 years. My experience is that the BOE do not like moving the rates unless absolutely necessary, they like to play it steady and generally prefer a 'wait and see' attitude.

Oh and "one more thing" (I've got my Columbo head on).

Yes, hopefully the rate cuts will increase confidence in lending. But more importantly here just yesterday, a proposal by the UK Government has been to plow £50b back to the UK banks, thus raising liquidity (I don't know if the US are doing anything similar). This is hoped to increase confidence in lending between the banks. If this happens the rate at which the banks borrow off each other (the Libor rate) should decrease. If these decreases happen, the savings are then passed onto borrowers.

The reason why this rate is more important is to do with mortgages. Tracker and Variable rates are generally determined by the BOE base rate, these customers will benefit from the recent rate decrease (so long as the banks pass on the savings). However, fixed rates are determined by the libor rate. The £50b introduced back to banks needs to decrease the libor rate, otherwise the exercise could be pointless. It's quite topical over here that the big bank executives are earning rediculously incredible bonuses (considering the climate) and the public fear that this money will just go to the fat cats pockets. However, it's a strong Government stipulation that this doesn't happen.

Fingers crossed anyway.

Turi,
I love reading your posts. First of all, you're so knowledgeable. Secondly, I love getting a different perspective of the whole mess.

What I meant by "pegs inflation" is that they target it, which it looks likes they do.

Here in the U.S., besides the rate cut, there's talk that the Fed lend directly to corporations. The fear is that the rate cut will induce borrowing by banks, but instead of passing the new funds to consumers (and each other), they just hoard the money to shore up their own liquidity.

Dow down another 100 points right now. I feel like it's never going to stop. I heard a prediction yesterday that "bottom" could be about 7500.

Hahah, thanks. I worry that I don't make any sense. But I'm such a loser for getting so involved with it all. I haven't worked with mortgages for 15 months (I've since moved to Deceased and now in Business Banking), never had a mortgage or plan to get one for a long time - however I still follow the markets.

One day i'll be boring you about wills, probate and the difference between the US's Trustees verses the UK's Trustees and Executors.

What are mortgage rates in the UK?? Here in the US, you can still get rates in the 6-6.5% range. However, if you have a credit score of less than 700, you can forget about getting any credit.

Oh yes and one thing I forgot to mention is that our £50b bail out package (named by the media) means that the Government will effectively become shareholders of the recipient companies. If dividends then become payable, the Government then has first rights over them. This is with the view that eventually the Government will reclaim their money and that no more banks will become nationalised.

Is that similar to how the Fed will invest?

For banks, I believe it's similar. In fact, I think they cite the UK deal as the model. As for the direct lending to corporations, I haven't seen enough detail to know, but I doubt the US will take an equity stake in non-financial firms.

If you shop around and are happy to pay a fee of around £1000 (which in most cases gets added to the mortgage) you may get something like a 5.89%. Two years ago I could have offered a 4.99% with only a £500 fee and the difference on a £150,000 mortgage would approximitely be £90/month.

I'll spare you all with how a 5.89% with £1000 is more expensive than a 6.19 with no fee over 2 years.

Long term v. short term. Long term, it's always better to take the lowest rate, even if there are fees up front. In the US, we have points added to the mortgage that lower the rate. Those points are tax-deductible. If you are financing a home and plan on it being a long-term financing, then pay the fees to get the better rate.

The Wall Street Journal Prime just dropped to 4.5%, down a half a point. If you have an adjustable rate loan that's tied to prime, then you're rate's going down!

It apparently finished 678 points down. The DJ is now at 8,579... next stop 8,000 (and the way things have been going lately that could be less than one week).

I suspect it'll continue to go lower, but not for long. Then there'll be a big buying spree (greed will win out and speculators will step in looking for bargains).

I'm fortunate that I have many investing years ahead of me. This market is like buying stocks on sale. I have purchased some defensive stock plays which yield good dividends at remarkable prices. I feel really bad for the retirees or soon-to-be retiring workforce whose portfolios have been crushed.

The market regained nearly all of its value in December 1987, two months after the big October crash. I suspect it may take longer this time around, but things will bounce back. I saw a headline that GM's stock today plummeted to its lowest value since 1950.

It's all cyclical. Remember that the Dow was under 1,000 when Reagan was sworn in and hit 14,000 earlier this year. America is big ,really big. We've got over 300 million people, a 15 trillion dollar economy, and financial positions all over the world. if you don't need the money any time soon, just hang in there.

GM is under $5 a share, goombah. It's frightening.

As olivant said, though, if you can, hang in there. It will rebound. It may take longer than anyone expects, and things may get a lot worse before they get better, but they will.

I'm going to predict that after the bailout starts actually making payments in a few weeks, and the election is over, things will rebound in a big way.

B-U-Y

SB - I was thinking the election will have some positive effect on the economy, too. Whether it is short or long-term remains to be seen. I think this is going to be a bad economy well into next year, but hopefully we've hit the bottom.

This situation reminds me of one of my favorite John Lennon songs:
"Nobody told me there would be days like these
Strange days indeed
Most peculiar, mama"

Maybe David Blaine can make it better. Didn't we get this way by illusion, sleight of hand, deceit and diversion?

I'll be the first to admit I know little about Wall Street. Yet, from what I have been hearing, I do believe it is more serious than a lot of people might think. There is no easy fix, purchasing homes and getting loans in general is going to be rough. We see it already with job losses, food prices.

I was listening to a Public Radio station the other day and they were taking calls from everywhere. Let's see if I remember this correctly. Some guy who lived in Boston and owned a car dealership (have no idea what kind of dealership) called. He said that his customers are having a hard time getting loans. He told of one lady who had "good" credit (not excellent but good with no credit card debt, etc). He figured she'd qualify easily.

He said that the loan company called him and told him that thy'd give that lady the loan IF in the event that they had to reposssess the car, the owner of the dealership would pay the first $1,800 of the loan. He said in the 20 some years he'd been in the business, he never heard of such a thing.

TIS, it's mostly about liquidity. Banks lend to banks witht he Federal Reserve at the top of the pyrimid. If banks don't lend to banks, then liquidity stops. That's what's happening: market to market credit is very limited and may be drying up. Thus peole get laid off and expansion plans are suspended.

The lease on my car ends on October 30th. I've been in and out of several dealerships in the past week, looking at different makes or models. There isn't one dealership that hasn't called me at least three times since my visit. The GM dealer, who I've politely told that I'll be turning in my Buick and NOT getting another GM, called me three times yesterday alone. Thank God for Caller ID. The salesperson at the Nissan dealership told me that they normally sell 300 cars per month. Last month, they barely broke 100. And, as you said, the cost and availability of financing is through the roof. Only Honda and Toyota have decent lease deals. The dealerships are dying.

I read many car dealers were essentially telling anybody with less than great credit that 30% downpayment would be required. I can't imagine too many low-to-middle income families have that kind of extra cash in these times.

I'm not mentioning this to get into another political debate. But does anybody else worry that the U.S. might suffer the same fate as the U.S.S.R., when the latter collapsed in the early 90s? I have been frightened of this scenario occurring in the U.S. since Katrina. Particularly because Katrina was preceded by the economic disaster after 9/11, along with the enorumous cost of the Iraq War. And what is one big common factor that the Soviets and U.S. had? We were fighthing bin Laden and Afghanistan. He essentially bled the Soviets to death economically. I think it is obvious that is one of his goals against our country too. I think our capitalistic society is more able to fight back than a communist state, but it is still worriesome.

Granted, the mortgage mess and the credit worries are not related to the wars or bin Laden. But I get the feeling he's laughing somewhere right now at the mess we are in, which he was partly responsible for creating. It's fairly obvious that the billions we have sunk into Iraq a) could have helped rebuild New Orleans, b) been reinvested into better energy plans, c) used in improving our existing infrastructure. What's done is done, we cannot change it. But I sometimes fear that we have played right into the same trap the Soviets did against bin Laden.

Another tidbit I learned, that most here probably know. Credit card companies could lower your credit limit as well. You know all the "junk" mail we get listing our credit card conditions, etc? Well pay attention because it could be notifying you that your limit has dropped from one amount to another.

I paid off credit cards years ago (thank God) and was determined not to use them again if at all possible. Now, when I travel or buy on-line I'll use them, BUT pay them off right away when I get the bill.

Oh, another thing, home equity loans too....the mortgage company (or whoever) can suddently notify you that your line of credit is not as much as you think it is.

You all probably know this, but just in case.

TIS

I did hear about the credit cards, but didn't know about Home Equity lines. Ridiculous. I guess they feel that if you have a $200,000 line and have consistently only used $100,000 of it, that's credit that could be made available to others? Or is it because they want to reduce their risk that you'll grab the $200,000, pay off other stuff, and then stop paying???

The Market has only been open for a few minutes, and the DOW is already down another 700. Under 8,000.

Fox News 10/10/2008

11:30AM

Crude Continues to Fall off a Cliff

Evidence of global recession fears were most obvious in the price of crude oil, which briefly plunged below $80 a barrel to its lowest level of the year. However, crude prices recovered along with the equities markets, recently down $5.93 to $80.66 a barrel.

Oil has been on an incredible rollercoaster ride in 2008, soaring to $147 a barrel in July before collapsing and turning negative on the year. Crude has been under intense pressure from both the strengthening U.S. dollar and simple supply and demand. Recession fears have forced the energy market to price in significantly lower global demand.

It's only down 350 points now. It's recovered half of today's loss.

The crisis is over!!!

Just wait until the OPEC countries vote to slow down production (causing an "artificial" shortage in which prices will rise again).

Yeah, that's only a matter of time.

Just in time for winter.

I know. My boy is all grown up and the authority on the subject!

How much do you wanna bet that prices will go back up after the election?

The Soviet Union collapsed for a combination of reasons. One important one was the refusal of the international community to value the Ruble as a legitimate currency. Thus, the SU had to accumulate cash to pay its bills, much of it in dollars which at the time so many other national governments were competing for. They were also forced to trade in commodities. Overall, there were significant limits placed on the SU's ability to conduct business. Of course, there was little or no middle class in the SU across which to spur productivity and consumption. There is no parallel with what's going on in the US now. As I posted elsewhere, this Nation's economic power is tremendous and cyclical downturns attended by specific events are inevitable, but will be absorbed.

Oh god, I wouldn't go that far. I'm so worried that I'm going to turn into one of those city folk, get married, have 2.4 kids, worry about the "wenus" (think Chandler in Friends), and start going out for coffees rather than beers.

And the day I'm an authority on any subject is the day the economy is booming - not for a long time yet.

Its all going down to hell.

Let's keep this all in perspective. During the great depression the Dow lost 89% of its peak value. Unemployment reached as high as 25% and settled back to about 18% just before WWII. Most US banks either closed or restricted savings withdrawls and loan activities.

Keep in mind that at the time there was no SEC, no unemployment insurance, and no Social Security. More importantly, the Federal Reserve saw itself as a much more conservative entity that actually contracted the money supply at a time when it should have been expanding it.

So, for anyone considering comparability of the current economic woes with the Depression - overall, there is none.

Wow, what a nice comeback -- the DOW's up over 700 today!

Looks like the buyers stepped up to bat today... The Dow is currently up about 750 with about 15 minutes before closing. Most of the other world markets (earlier today) also reported big gains.

Well, it's only Monday.

Wish I was a buyer last Friday...

Hindsight is always 20/20.

Almost everyone I've spoken to in the past week has taken a HUGE hit in their finances (retirement funds, etc.).

It looks like the Dow MAY close up over 800.

Don't get too excited.

During the Depression, the Dow dropped from 248 to 41 and ended the 30s at 150. However, during the decade it plunged 52.7% in 1931 and 32.8% in 1937. But it rose 66.7% in 1933 and 38.5% in 1935, but was under 100 again in 1938. Volatility, yes.

The Dow is gonna close down about 730 points. Between yesterday and today, most of Monday's BIG gain has been eaten up.

It looks like the scenario in olivant's history lesson is going to ring true, at least in the short term.

I have no doubt of that... the next month will be very volatile.

We have a popular department store here called "Mervyns" (I think it's just out West) and I read they are closing 70 some of their 170 stores.

Also, just today, I heard that Circuit City, to avoid filing Chapter one, is closing many of their stores as well, laying off hundreds (maybe thousands) of employees.



TIS

The Nikkei index fell 10% overnight. Get ready for the DOW to go into the toilet later today.

And this would be different from every other day HOW???

Well, it was actually up yesterday.

Get ready for another fun day on Wall Street:

AP

Wall Street set for plunge on recession fears
Dow index futures down 550 points, maximum allowed price change

NEW YORK - Wall Street headed for another precipitous drop Friday as fears of a punishing global recession stirred panic among investors and sent world financial markets into a tailspin. The Dow Jones industrial average futures were down 550 points, the maximum allowed price change.

The increasingly grim outlook convinced investors that the world economy is headed for a long and severe downturn despite a raft of government rescue efforts aimed at pulling the financial system from the brink. Fearing more carnage in equity markets, big hedge funds and other institutional investors have been pulling out their money in a bid to reduce risk and raise cash.

Adding to the anxiety has been a barrage of worrisome corporate earnings and pessimistic fourth-quarter outlooks —indicating that the tremors caused by the global credit crisis may have not even begun to be felt.

News from overseas added to investors’ anguish. In Japan, shares of Sony sank more than 14 percent after it slashed its earnings forecast for the fiscal year. In Germany, Daimler’s stock dropped 11.4 percent in morning trading after it reported lower third-quarter earnings and abandoned its 2008 profit and revenue guidance.

Ahead of the market’s open, Dow Jones industrial average futures fell the maximum allowed limit of 550, or 6.27 percent, to 8,224. That triggered circuit breakers that automatically freeze selling.

On Thursday, the Dow rose 172 points as investors went looking for bargains after two days of selling. Analysts have predicted that trading will remain volatile for the foreseeable future while investors test whether or not the market has hit a bottom.

The Standard & Poor’s 500 index futures was down 60.00, or 6.56, to 855.20, and the Nasdaq 100 index futures was down 77.75, or 6.20 percent, to 1,175.75.

Financial markets overseas were also down sharply.

Japan’s Nikkei stock average fell 9.60 percent. Britain’s FTSE 100 was down 5.95 percent, Germany’s DAX index was down 9.38 percent, and France’s CAC-40 was down 7.35 percent.

NEW STOCK MARKET TERMS

CEO --Chief Embezzlement Officer.

CFO-- Corporate Fraud Officer.

BULL MARKET -- A random market movement causing an investor to mistake himself for a financial genius.

BEAR MARKET -- A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.

VALUE INVESTING -- The art of buying low and selling lower.

P/E RATIO -- The percentage of investors wetting their pants as the market keeps crashing.

BROKER -- What my broker has made me.

STANDARD & POOR -- Your life in a nutshell.

STOCK ANALYST -- Idiot who just downgraded your stock.

STOCK SPLIT -- When your ex-wife and her lawyer split your assets equally between themselves.

FINANCIAL PLANNER -- A guy whose phone has been disconnected.

MARKET CORRECTION -- The day after you buy stocks.

CASH FLOW -- The movement your money makes as it disappears down the toilet.

YAHOO -- What you yell after selling it to some poor sucker for $240 per share.

WINDOWS -- What you jump out of when you're the sucker who bought Yahoo @ $240 per share.

INSTITUTIONAL INVESTOR -- Past year investor who's now locked up in a nuthouse.

PROFIT -- An archaic word no longer in use.

Mig, you forgot one:

GEORGE W. BUSH -- The cause of this list.

Among others.

Heard today that one business that has seen an increase since this economy "crash" is.....McDonald's. It would be the cheap option for those who want to "get out" and can't afford much. Or, if you just like McDonalds. I haven't had a burger/fries in a long time. It sounds pretty good to me actually....I prefer Carls' Jr. though for fast food burger.



TIS

Being a vegetarian limits my choice ridiculously. I've never been to a McDonald's

A vegetarian? How would of thunk we had something in common.

Spoken from a die hard steak lover, I'm guessing your grocery bills are less, since meat is probably what "I" spend most money on in groceries. My daughter to is a veggie and when she's here for dinner, I feel like the poor kid just isn't eating a complete meal. I'm sorry, but I would just shrivel up and die if I had to live without meat in my diet. To each his own. No offense, but I'm glad I'm not you guys.


TIS

This vegetarian just completed her second marathon, in the top third. So I'm not shriveling or dying just yet!

The trick is to go to the reduced aisles where the meat's sell by date expires on the day or day after. Take it home and freeze it. I've got a freezer full of reduced meat & bread and just stock up on frozen veg which is cheap anyway.

Eating is my favourite thing ever. I refuse to give it up.

Hi Turi, it's so nice to see you back here. I miss your humor.


Wow, I heard that places like Walmart, Circuit City (I know i's closing up, but still) re selling laptops for $299 or a little more. That's quite a deal no?



TIS

True.

And the big thing we need to worry about is deflation. The cost of things dropping, because no one has money to buy anything. That would bring on a 10 year depression.

A terrible day on Wall Street.

Dow plunges nearly 430 to fall below 8,000 mark

New York

Wall Street hit levels not seen since 2003 on Wednesday, with the Dow Jones industrial average plunging below the 8,000 mark amid a dour economic outlook from the Federal Reserve and worries over the fate of Detroit's three automakers.

A cascade of selling occurred in the final minutes of the session as investors yanked money out of the market. For many, the real fear is that the recession might be even more protracted if Capitol Hill is unable to bail out the troubled auto industry.

Investors also scoured economic data that included minutes from the last meeting of the Federal Reserve in which policymakers lowered projections for economic activity this year and next. Economic worries caused across-the-board selling, with financial stocks particularly hard hit.

The S&P 500, widely considered the broadest snapshot of corporate America, slipped 52.54 points, or 6.12 percent, to 806.58; and the Dow gave up 427.47 points, or 5.07 percent, to 7,997.28. Both closed at their lowest levels since March 2003, and are rapidly approaching the lows of the 2000 to 2002 bear market.

The financial crisis has already wiped out $6.69 trillion of value from the S&P 500 since its October 2007 high, and many fear more is to come. Stocks have traded with high volatility in the past few months, with the major indexes soaring only to plunge an hour later as the market searches for a bottom.

"I don't know what the catalyst is going to be where we turn the corner and people start buying stocks wholeheartedly again," said Jon Biele, head of capital markets at Cowen & Co. "People got out of the way. The financial situation hasn't changed."

The selling on the New York Stock Exchange was staggering — only 158 companies that trade there finished the day positive while 2,943 declined. Volume again was light, a symptom of the market's recent volatility, with 1.63 million shares exchanging hands by the close.

Other major indexes were also clobbered. The technology-heavy Nasdaq composite index fell 96.85 points, or 6.53 percent, to 1,386.42. The Russell 2000 index of smaller companies gave up 35.13, or 7.85 percent, to 412.38.

Investors were rattled on prospects that General Motors Corp., Ford Motor Co., and Chrysler LLC might not get a $25 billion rescue package before Congress quits for the year. The heads of those companies told lawmakers that time is running out, and that if one of them collapsed it would have a disastrous impact on the already battered economy.

Congressional Democrats have proposed using part of the $700 billion financial bailout package to pump into the ailing auto industry, but Republicans oppose such an approach. Treasury Secretary Henry Paulson has already shot down such an idea.

Senate Majority Leader Harry Reid of Nevada was hopeful of a deal in the "next day or two." He still hoped Paulson would step in if Congress can't usher through a deal.

Ford shares, which traded as high as $8.79 in the past year, plunged 42 cents, or 25 percent, to $1.26. GM, a stock worth $29.95 in the past 52-weeks, fell 30 cents, or 9.7 percent, to $2.79.

The testimony in Washington only heightened fears on New York trading floors that the current recession might significantly deepen. Investors were discouraged by the Federal Reserve's sharply lowered projection for economic activity this year and next.

In the minutes from its last rate-setting meeting in October released Wednesday, the Fed signaled additional interest rate reductions may be needed to help combat the worst financial crisis to jolt the country in more than a half-century. The Fed predicts that with the economy forecast to lose traction or maybe jolt into reverse, unemployment will move higher.

The uncertainty was evident after the government released two separate reports on consumer prices and new-home construction, more evidence that the economy remains in flux.

According to the Labor Department's Consumer Price Index, consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount. While lower prices might be good for the consumer, they can hurt corporate profits. Lower prices also raise the threat of deflation, a prolonged bout of falling prices.

Meanwhile, a government report on the housing sector showed that the industry's severe correction continues. The Commerce Department reported that construction of new homes plunged 4.5 percent last month to the lowest level on government records.

Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades. The expectation is that easing inflation pressures will give the Federal Reserve room to cut interest rates further, but that gave little solace to investors.

Stocks have been trading erratically for several weeks as the market tries to gauge the direction of the economy. Analysts expect the volatility to continue.

There has been relentless selling since Election Day, driving the S&P 500 down about 20 percent. For the year, the Dow is now down 39.71 percent, while the S&P has fallen 45.07 percent, and the Nasdaq is down 47.7 percent.

Volatility in the stock market has kept demand for Treasury bonds high. The yield on the benchmark 10-year Treasury note fell to 3.41 percent from 3.53 percent on Tuesday.

The stock market's big drop also influenced oil prices. Light, sweet crude fell 77 cents to settle at $53.62 a barrel on the New York Mercantile Exchange, about where prices were in January of 2007.

In Asian trading, Japan's Nikkei index fell 0.66 percent, and Hong Kong's Hang Seng Index fell 0.77 percent. In European trading, Britain's FTSE 100 fell 4.82 percent, Germany's DAX index fell 4.92 percent, and France's CAC-40 fell 4.03 percent.

I wonder if this has anything to do with Pepsi laying off 3000+, Citigroup and their 52,000 layoffs and the Motown Three about to declare bankruptcy?? Plus, the idiots in Washington dithering around with a different plan each day for the bailout money.

The MTA layed off 1,500 today, also.

And my county can't pass a budget because the County Exec had the nerve to request that the county employees implement a copay on their prescriptions which are currently FREE!! FREE!!!

Oh, wah, wah, wah. Let's not save the county a million bucks while you have job security no matter how poorly you do your job! And benefits for life! Because you don't want to make a nominal COPAY, when so many people don't even have health insurance!

The freaking NERVE.

My daughter hears the same whine from her teachers union.

A real sign of the times...headline in the Atlantic City Press: "Casino earnings tumble: Gross operating profits plunge 23% in traditionally strong quarter (summer)." The article goes on to say that profits were ONLY $318 mil compared to $412 mil for the same period last year. Even the Borgata has laid off people. There are 11 casinos in A.C. and a few of them are really hurting. Besides the economy, they are blaming legalized slots in PA and the smoking ban, which has now been lifted.

You got to know when to hold 'em, know when to fold 'em.

I got a couple e-mails from Southwest Airline with Vegas New Year's Eve air/hotel deals. The prices really are not bad compared to past years. You can tell the economy sucks when Vegas is trying o book for New Year's Eve, this late in the year.


TIS

Citigroup is planning on selling itself??

It was on the news... try reading some of it instead of trying to find out if Paul Bennett is alive or not.

Check out the link below (I assume you know how to read):

CITIGROUP FOR SALE? - CLICK HERE

I don't know how to read!

SC, I saw that about Citigroup. But didn't they also just buy Wachovia? Or did they lose out to Wells Fargo? It's so hard to keep track!

The news is just awful. I felt fairly certain that the Dow would stay over 8,000, and it closed yesterday barely over 7,500. I really hope we have hit bottom, but who knows??

No surprise there.... you just know how to copy other's words.

With the largest (or second largest) nation's bank stock dropping by 50% it's a particularly scary and uneasy market now. The auto bailout failure also doesn't help.

It should be interesting to see what the market does today.

You know, coming from Michigan, I had many family/friends working for the Auto industry (factory mostly). It's been years, and I've lost track of who works where, and many are probably retired now. I surely don't want to see thousands more lose their jobs and I am not necessarily against this bailout, BUT the more I hear the more I do blame the auto industry CEOs and their greed and/or poor management, or whatever.

I do think the must come up with a "plan" as Pelosi said. How can we just hand over money if nothing will change. What's sad is these companies have known and been urged to, for a long time now, work on alternative fuel ideas and they haven't.

I am no expert on the inner makings of these companies, but shouldn't they high-ups (or whomever) take the responsiblity? Or seriously, what if they did file bankruptcy, could they do that and then try to get back on their feet? Like I say, I'm no expert on this, but wondering. It's just a a shame that the average harding working, Blue Collar Joes lose their jobs because of their greed no?


TIS

That's what it usually comes down to, TIS. Corporate greed. As Gecko said, Greed is good, to an extent. There's nothing wrong with making a tidy profit. As a matter of fact, profit's a wonderful thing. Honest profit.

The CEOs of the Motown Three went to Washington to beg for money. There was a local news reporter who said that all three arrived in separate private jets. Yes, because that's the message you want to send when you're asking for a hand-out. "Oh, no billions for me?? Well, let me just hop on my private jet and fly back to break the news to the guy who dyes the tail-lights red."

The way these once-great companies have been ruined is truly disgusting. The biggest fear with their bankruptcy is what happens to the workers who have a massive amount of their pension funds invested in company stock. Otherwise, I wouldn't give a damn.

In my opinion, the autos shouldn't be bailed out. The execs say it's the financial crisis that's hurting them. That's true, but their number one problem is that they make cars that no one wants to buy. It's as simple as that. You have to let them fail. They must get out of their onerous contracts with the UAW and right-size their capacity. Companies don't fire people because they go into bankrupcty - they fire people because their business model doesn't work and there isn't enough demand to feed their supply.

You are 100% right, DS. I drove a Buick, and it was my 3rd GM. It was not an inexpensive car by any means. It had 46,000 miles on it when I turned it in. I had replaced 6 tires on the car. I had it aligned, it had never been in an accident, and I had the tires rotated every other oil change. The buttons on the radio had chipped paint, the leather on the seats was cheap. The housing on one of the fog lights was broken. When you moved the front seats forward, you could see the housing for the power seats from the back of the car if you bent down. Oh, and it handled like crap. My husband referred to it as the sow on wheels. And even though it was supposed to get 28 mpg on the highway, in all the four years I leased it, I never got more than 17.5 overall.

I leased GMs because I thought that they were decent cars. The Rendezvous, which I had before this one, had heat that didn't work. The fan would blow like crazy, but the it would take forever for it to get warm. GM even sent someone from the factory to try and fix it, and paid for a rental car for me while they worked on it. They never were able to fix it. Their solution? Shrug their shoulders and give it back.

GMAC used to offer incentives to keep their GM customers, letting you out of leases early if you leased another car. With the current credit crunch, plus the fact that they got hosed on residuals for all their giant SUVS, they're now out of the leasing business. They had nothing to offer me.

I couldn't wait to dump it and get my nice Honda Accord.

An editorial in our local paper suggested that Exxon (and other oil profiteers) bailout the auto companies, since it's their gas hogs that have contributed to Exxons obscene profits.

McDonald's will start selling healthy food before that ever happens.

The Dow recovered nicely today!

At least it's back over 8,000 again.

I don't know how accurate this is, but my daughter just sent me this via e-mail, showing stores that will be closing. I thought I'd pass it on. I do know of some of these closings, but didn't realize how many more there are.


TIS



Before you get your loved ones gift cards or if you have any already - ready this e-mail please


Stores that are planning to close after
Christmas are still selling the cards through the holidays even though
the cards will be worthless January 1. There is no law preventing them
from doing this. On the contrary, it is referred to as 'Bankrupcy
Planning). Below is a partial list of stores that you need to be
cautious about.

Circuit City (filed Chapter 11)
Ann Taylor- 117 stores nationwide closing
Lane Bryant, Fashion Bug ,and Catherine's to close 150 stores
nationwide
Eddie Bauer to close stores 27 stores and more after January
Cache will close all stores
Talbots closing down specialty stores J. Jill closing all stores (owned by Talbots)
Pacific Sunwear (also owned by Talbots)
GAP closing 85 stores
Footlocker closing 140 stores mo re to close after January
Wickes Furniture closing down
Levitz closing down remaining stores
Bombay closing remaining stores
Zales closing down 82 stores and 105 after January
Whitehall closing all stores
Piercing Pagoda closing all stores
Disney closing 98 stores and will close more after January.
Home Depot closing 15 stores 1 in NJ ( New Brunswick )
Macys to close 9 stores after January
Linens and Things closing all stores
Movie Galley Closing all stores
Pep Boys Closing 33 stores
Sprint/Nextel closing 133 stores
JC Penney closing a number of stores after January
Ethan Allen closing down 12 stores.
Wilson Leather closing down all stores
Sharper Image closing down all stor~s
K B Toys closing 356 stores
Loews to close down some stores
Dillard's to close some stores

TIS, the list is scary. As much as I would love to get cheap stuff during holidays, this is the scary face of recession.

Some of the list is not so shocking, like maybe Wickes or Pacific Sunwear, where they are more I don't know, specialty type stores. But, J.C. Penny and Pep Boys (Big here in SoCal) really surprise me. Pennys is everywhere it seems and use to be a major department store.


TIS

Snopes: "Mixture of Accurate, Innacurate and Outdated Information"

http://www.snopes.com/politics/business/storeclosings.asp

You can find specifics there, after the email examples...

Also, even if a chain closes SOME of its stores, it doesn't necessarily mean much. Stores will often up new stores and close others as demographics change. Also, through mergers and acquisitions, stores find themselves with duplication of effort. When Filenes and Macy's merged, many stores closed because Filene's and Macy's were often in the same mall, or at least had stores so close to one another that they couldn't possibly do enough sales to sustain two locations.

That said, it is still a damn scary list.

We may need the Ragman back.

Do any of you think that this economy crisis is much much worse than most think? I read a story from Bloomberg news today (for some reason I can't copy/paste the link) indicating we are very close to a depression but no one is saying so.

And, on a personal level, it IS affecting my job. Myself and another girl in my office do more or less the same job(we split it). She has been out on disabiliy now nearly all school year and I have had to handle the full load. We all got a letter from the district saying we should "expect" bigger work loads and that they are not hiring for the most part. I have come to the conclusion that they are not even going to attempt to replace this girl. This was more or less confirmed by the Principal (in so many words) who politely told me the same thing. I don't mind working hard at all, but I am only one person and can do only so much and I am pissed!!
I don't mind telling you that I am ready to pull my hair out. Friday was he worse (and busiest) day for me ever.

Even our wonderful Governor told everyone (the schools) to expect many more cuts in not only programs but employees. Thus perhaps (for me anyway)the upside......which is, the possibility of the "golden handshake" in which the district offers long term individuals a package to early retirement enabling them to cut jobs and if they rehire will rehire will less wages and fewer benefits. Not good for anyone else I'm afraid, but I'd jump at an offer. Rumor has it, that they might offer it this year. God, I hope so, cause baby I am soooooooooo there. In any case, next school year will be my last unless I just can't take the bullishit anymore and leave before this year is up. I'm ready!

TIS

It's always worse. Unemployment next month will top 7% and I predict 9% next year. Of course, there are also the underemployed - those who would like to work full-time, but can't find such jobs.

As far as a depresson goes, keep in mind that in the 30s the unemployment rate exceeded 25%. I don't think we'll get much above 9%. So, no depression.

I read a great definition of the difference between a recession and a depression.

If your neighbor is out of work, it's a recession. If you lose your job, it's a depression.

Woolworths,the famous chain of shops,99 years old is going down the tubes with the loss of 800 shops and 30,000 jobs

This sucks big style!

Administrators are trying to find a buyer but it looks grim. In the meantime the ailing shops are having a half price "everything must go" sale. Their shops are apparently being overwhelmed with bargain hunters fighting over half priced pieces of junk.

I find it distasteful that people are fighting over stuff whilst knowing that a lot of people are possibly going to lose their jobs

Office Depot looks like it is headed down.

Woolworths was a wonderful store that was very popular here in the US at one time. I don't know if there are any still open here. Didn't they start the "five and dime" concept??

I do TIS. My accounts receivable are WAY down...nobody can pay, and nobody can get credit. Home values here are in the tank and local vendors with whom I have dealt for more than a decade are now asking me if can pay cash instead of being on a 30 day charge cycle.

I think they did, Babe. Remember when Cross County had TWO Woolworths? The one closer to Gimbels had the lunch counter.

Woolworth closed US operations eleven years ago. They still operate overseas, but the UK stores are in big trouble.

The 5 & 10 Cent store pretty much gave way to shopping makks starting in the late 50's. Woolworth's and Kress are the two I remember, and you actuly could go in there and get stuff for a nickel or a dime. Most of them, as I recal also had lunch counters (I believe one of the first sit ins in the civil rights movement was at a Woolworth's counter in North Carolina).

Basically as Main Streets in small towns disappeared so did the five and dimes.

At least OC will survive!

Because that's a good thing?

Not to mention the other recession proof industry

And here I thought the initials stood for Orange County!

Actually, it stands for oxygen compromised, which is what they told Lompac's parents when he was born.

I was making a valid point.

I was oxygen compromised, and premature. Thanks for stating what we already knew. You've done society a real favour!

I say invest in cheese, and/or, cheese related products. Why? When's the last time you used cheese?

Exactly.

Ferro

Indeed they are TB

Still no buyer in sight either.

2 or 3 of my wife's friends work there also.

Sad times!

Former Nasdaq chair charged with fraud
Dec. 12: Bernard Madoff, a longtime fixture on Wall Street, was arrested and charged with allegedly running a $50 billion Ponzi scheme.

NBC's David Faber reports that financial funds, wealthy investors and charities are among the investors who were duped by Bernard Madoff's massive Ponzi scam.

Deborah Coltin learned yesterday morning that the $8 million foundation she has led for a decade, which supported a wide range of Jewish programs on the north shore of Massachusetts, did not actually exist.

The foundation had invested its endowment with Bernard L. Madoff, a storied name on Wall Street. Every year, Madoff paid out several hundred thousand dollars to the foundation. But on Thursday, Madoff was charged with securities fraud after confessing to his sons that his business was a Ponzi scheme, according to a complaint filed by the Securities and Exchange Commission. The returns paid to investors came from money invested by other people. And there was almost nothing left.

It may be the largest fraud in the history of Wall Street, authorities said. Madoff is charged with stealing as much as $50 billion, in part to cover a pattern of massive losses, even as he cultivated a reputation as a financial mastermind and prominent philanthropist.

Two points:

This happened in America.

Its connected to the stock market.

You made two STATEMENTS. What is your point?

I had a great plan to invest in Swiss cheese. Then I realized it had too many holes in it.

(both the plan and the cheese)

My point is that I am in neither!!

Whos cutting back on the spending?

We've had our own budget crisis here in California too. Now, eveidently, our Governor is asking State employees to take two days off a month without pay.

SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger on Friday ordered a state hiring freeze and payroll cuts to conserve cash as California struggles to deal with a $42 billion budget deficit.

The governor issued an executive order that requires state agencies to reduce payroll by 10 percent, which could lead to massive layoffs. He also ordered the state's 235,000 employees to take two days off a month without pay, starting Feb. 1.

Schwarzenegger also issued an executive order calling lawmakers back into session to deal with the budget for the third time in two months. On Thursday he announced he would veto an $18 billion Democratic deficit-cutting package that he said didn't do enough to address the financial crisis.

In a letter to state workers, Schwarzenegger said California must take emergency steps that will require sacrifices from everyone.

"It is imperative that state government look inside itself and be part of the solution," the governor wrote. "We simply have no other choice."

Union officials said they were considering filing a lawsuit to prevent job losses.

"We definitely think we have grounds for filing an unfair labor charge," said Jim Herron Zamora, a spokesman for the Service Employees International Union, Local 1000, the largest state employee union. "Our contract doesn't allow him to do this."

Running out of money
Officials warn that the state will run out of cash in February unless Schwarzenegger and lawmakers can reach a deal to close the budget gap with spending cuts, revenue increases or a combination of both.

Schwarzenegger ordered all state employees to take two days off a month without pay or take a similar salary cut to achieve $1.3 billion in savings through the next fiscal year.

On top of that, the governor directed agencies that get their money from the state's largest budget account, the general fund, to achieve a 10 percent payroll savings. Officials said that could lead to an undetermined number of layoffs.

Department of Personnel Administration spokeswoman Lynelle Jolley said any workers who lose their jobs as a result of the order could seek employment at other state departments that use special state funds.

"We're hoping we can do this with the least number of layoffs possible but the goal is to address this imminent cash crisis," Jolley said.

Lawmakers adjourned for the holidays Thursday after Democrats pushed through a package of spending cuts and tax increases using a creative maneuver to bypass Republican opposition.

Schwarzenegger's decision to veto the package left Democratic leaders scrambling to save their plan. They argued that it met some of his demands for speeding up public works projects and selling surplus state property.

Looking for a deal
Assembly Speaker Karen Bass, D-Los Angeles, said it was "mind-boggling" that the governor would throw away a package that begins tackling the state's fiscal problems because it didn't contain exactly what he wanted.

"It's like a child telling Santa if you don't bring every single item on the list, then stay out of my chimney," Bass said. "I am hoping that the governor over these next few days will really reconsider saying he will veto the budget."

Bass and Senate President Pro Tem Darrell Steinberg, D-Sacramento, said they would remain at the Capitol to negotiate with the governor or his staff, but would not call the other 118 lawmakers back until a deal could be reached.

Under the governor's special session declaration, lawmakers have 45 days to send the governor bills that address the budget crisis. If they fail to do so, the Legislature may not act on other bills.

The governor had sought what he said was assistance for homeowners facing foreclosure, broad authority to relax environmental regulation on public works projects and more toll roads. Democrats allowed only partial waivers for a limited number of road projects and for certain state properties up for sale.

Additionally, Schwarzenegger requested deeper cuts than Democrats were willing to offer, such as reductions in welfare and senior assistance programs, greater flexibility to reduce school spending, and the elimination of two of 14 state employee holidays.

Environmental advocates also questioned why the governor would toss aside the only deficit-cutting legislation to reach his desk since he declared a fiscal emergency on Nov. 5. Paul Mason, deputy director of the Sierra Club in California, suggested that by demanding environmental exemptions, the governor was betraying his public image as a crusader against global warming.

TIS



California Economy

Is the whole world going down the toilet?

Mind you i was Christmas shopping today and i have never,ever seen the shops so busy. It was like they are giving the stuff away!

And guess what. When things are back to normal, the whole financial mess will start again. Buying things so cheap means that when prices stabilise no one will go to the shops because they all have what is on sale.

No, it really doesn't. You really don't think anything through and I've never heard anything so silly in my life. Think how many stores sell perishable goods, or goods where technology advances render previous 'new' stuff as outdated within months. What about businesses in the travel or fashion industry, or even entertainment industry. Providing the right economic forces (enough disposable income, healthy inflation rate - the componants of a growing economy) are in place, people will still buy. There will never be a situation where everybody has everything (because they bought it on sale) and so they wont buy anything again.

Sorry mate, but us Brits have a different attitude then the states that you live in.

You replied to a fellow Brit.

I was going to buy a sweater today for Mr. Babe for Christmas, but I gave him one six Christmases ago, so I think he's still good.

Head of Fund Invested in Madoff Said to Commit Suicide

1) In no way did I raise anything to do with attitudes.

2) Economic rules may have differences between countries but the points I've made I'd apply to 99% or Western societies.

3) I'm as British as a Yorkshire Pudding and a weekend of binge drinking. I've never been to the States, though I'd like to.

It's better to keep quiet and let everyone think you're stupid, rather than to speak and let everyone know you are.

I guess it was one of those sale items.

And that wasn't needed at all.

I'm feeling very Simon Cowell today. You'll benefit in the the long run.

You mean I'll makes millions?!

Haha. Merry Christmas fella.

It will be a very Merry Christmas next year for me.

I spat my coffee out reading that also

I thought Turi was from the States.

Fair enough!

California is in bad financial shape. I see it in the schools, home sales (we are one of the worse states in depreciation in value.) It's in such bad that it is possible that those who are suppose to get tax refunds this year may get an I.O.U. instead. I always get a tax refund and this ticks me off. Now if there were a time I owed and couldn't pay my taxes, would they accept an IOU? Unbelieveable

Gee, I'm sure glad we got rid of Gray Davis and put Arnie in. He fixed everything.


TIS




California Economy

Because I'm self-employed, I usually end up paying, or at least breaking even. I haven't gotten a refund in years, but I sure as hell wouldn't be happy about an IOU. I certainly doubt that the government would have taken one from me!

Btw, anyone else have Time Warner Cable? My bill went up over $6.00. I knew it was going to go up but damn!!!! I guess I should check other companies.


TIS

Just about all cable providers have raised their prices. Unless you have a promo rate you should see about a 4-7% rise in rates. For the most part they are passing along their increased costs.

BTW - Obama is trying to delay the transition to digital broadcasting scheduled to take effect on February 17th. Even after all the advance warning, many people are still not prepared for it.

I feel sorry for my parents. They are older and get confused easily. They did have a "regular" tv (not cable tv) with a remote. Actually none of my family in Michigan has cable tv. My brother tells me that they are having problems trying to figure out the new box. I am guessing it's like a cable box(I've had cable for years so this doesn't affect me).Anyway, they called someone for help, but it was to take a couple days before he could get to them.


TIS

My MIL can't get cable where she lives, so she has satellite on two TVs. She keeps a small TV in the kitchen to watch the news while she cooks dinner and now she has to get the stupid box for it. It's ridiculous.

And out of the chaos of the economic crisis, I arise - one of my towns richest w****rs!

I just read that Macy's is closing 11 stores in 9 states, and estimate that mean the loss of 960 jobs.

Macy's is one of the worst chains. We have two within 10 minutes of my house. Their merchandise is always a mess. Sometimes you have to actually leap across items piling up on the floor. You can't find a register that actually has a person behind it, and forget about getting any assistance in the fitting rooms.

And then they wonder why some stores are "underperforming".

I don't understand why the Government is doing this. I have to get one of those boxes for my Son's tv cuz we don't have the satellite on his tv.

The box is not a bad thing. I have it in my office. You get 2 to 4 times as many channels, and they come in crystal clear. You just need a halfway decent UHF antenna.

I havent even seen this box, but hear it's like a cable box. I've had cable for so many years now I can imagine what it was like to not have it. None of my family have cable and it is new to thm. I'm sure most people will end up liking it (especially like you say, you get more channels) in the end.

Remember rabbit ears? Does anyone use those anymore? What a pain in the butt adjusting it so you'd get a clear picture. Talk about the dark ages.

TIS

I used those up to a few years ago...

Oh yea? Well, I guess ot quite the dark ages then. I guess it depends on where you live. If I were to say rabbit ears to my daughters, I'm almost positive they wouldn't have a clue what I was talking about.

TIS

Nissan,the local car plant in our region,a massive employer and recent manafacturing powerhouse has announced 1200 job losses this week as the worldwide car industry continues to go down the toilet!

I know a lot of people who work at Nissan and now have to worry about their jobs!

Sad,worrying times

Unemployment is at 7.2%. I predicted that it would hit 9% this year. Now I think it will exceed even that. One thing to keep in mind about the unemployment rate is that it only reflects those who are looking for a job. Many people get discouraged and drop out of the hunt. They are not counted.

Apparently the porn industry is seeking a $5 Billion government bailout because of slower sales. Are you kidding me???!! Is this not getting a bit out of hand (so to speak) ??

Aah, but they are the Hustler people. The Vivid and Zero Tolerance ones are doing just fine.

Land of Leather have gone in the UK now!

Awwww.

Why the sarcasm Lompac?

Thats people losing their jobs again,people with families to look after and mortgages to pay....

Why did you bother to come back Lompac?

I read in a newspaper that 30,000 people have lost there jobs already in the UK in 2009..

I said awww not ahhh.

No sarcasm there at all.

Me had shares in that company.

Of course you did..

See there ya go again....

How do yo know anything about what I get up to?

I took them out just under a year before it collapsed.

I am claiming to have lost nothing, so get off your high horse.

Nearly 2 million jobless in the UK.

I say we look towards India and take back those telecom roles that the darks took.

Lompac is on vacation now... racism won't be tolerated here.

Thank you.

WHOOO HOO

At least that was good news...

Billions-of-Taxpayer-Dollars-Flushed-Down

In a rare bit of good news,a US windfarm company are going to open up along the banks of the river Tyne here in Newcastle on the sites of the old abandoned shipyards!

Could employ up to a thousand people in the long run

Wouldn't that be lovely?? It's just more doom and gloom over here. Our two biggest pharmaceutical companies are merging and they predict 15,000 layoffs due to the consolidation!!

Yes, SB,doom and gloom everywhere unfortuneately.....

Caterpillar Tractor Co. announced 20,000 layoffs and a department of Home Depot is closing all together, losing 7,000 jobs.

IBM is laying off 3,000 people, too.

It's getting pretty scary.

Both my daughter and my niece are looking for jobs. Back in 1992, my husband lost his job. Even though there was fierce competition for jobs, places WERE hiring!! However, this past Saturday, there were all of about 5 or 6 jobs in the paper. And the weekend is when they usually have the most ads!!!

Add this one: Corning slashes up to 4,900 jobs to cut costs

I just don't get how these companies can feel good about themselves. Just because they are making fewer profits (but still profiting from their business) they need to make 1000s of people suffer just to help their stock price?

I'm not very business-minded so maybe I'm oversimplifying things... but to me it's disgraceful.

I'm going to school for business. The higher I go the crookeder it gets.

It's not an oversimplification to realize that a company's fiduciary responsibility is to those who have invested inthe company. In addition, a company has to remain competitive and there's not much left to affect that beyond labor and materials.

I read somewhere on the net that the porn industry wants a bailout from the Government. That is sad.

Massive walkouts today in support of a comapany that was bringing in foreign workers.

Yep! They sure have that fiduciary responsibility to their investors!

Oh, and let's not forget that some of these companies must remain competitive by cutting jobs and labor costs because after their $400,000.00 junkets and half million dollar bonuses for the executives, there's not much left to affect!

Interesting article on the evening news last night. The media have been accused of making the credit crunch worse than it actually is. Whilst there is no doubt we are in a terrible world-wide recession the media mentioning it constantly is apparently making it worse.

They may have a point. This week we have had our bad weather over here. The news covered it along the lines of "after the credit crunch comes bad weather". When there is some good news it is reported "despite the credit crunch an old chap managed to win the lottery".

Of course the recession is the biggest news going and all these media types want to win their awards i guess

Jay Leno had a good joke last night about this CEO pay cap.

"Some of the CEOs just don't get it" he said. "That's $500,000 a month right?"



TIS

I am reading that many of these CEO's are looking for (as we speak most likely) and will find loopholes. Can you imagine how they are scrambling?


TIS

What a bunch of blood suckers.

Thank you!!

Ah, to have to scrape by on "only" $500,000 a year. Sigh. We all have to make our sacrifices.

Yogi brings up an excellent point. The endless media reports about this company going bankrupt or that one laying off 5,000 people just sends people into MORE of a panic, which causes them to spend even less, which makes the economy even worse. It becomes a self-fulfilling prophecy.

What is the media supposed to do? Not report what is going on?

There's many ways, whether it be bonuses, dividends, changing a job title, whatever.


So this is from my area...
4.732 applicants for 125 jobs

http://blogs.post-trib.com/street/2009/02/4732_applicants_for_125_jobs.html

The solution is easy....any compensation or remuneration above $500,000 will be txed at 99.9%
And also no loans that are not collateralized by pre-existing assets.

No, but it's all in the interpretation. There was an article about car sales in my paper, and how all the companies had HUGE downward trends. Then, at the very end of the article, there were a few lines that both Hyundai and Subaru had sales go UP.

Why wasn't THAT the focus of the article, or at least the headline??

The only way to beat the recession:

See your geeting back to your old self..

Do you even know what a recession is..

Its obvious that you don't!!

The President stated that compensation would be capped at $500k annually. Now, compensation is comnpensation; it's not just one's paycheck.

Just seen it on the news. The latest victim of the recession?

Charity shops

But it not as simple as it seems. In these tough times charity shops are doing a roaring trade,however nobody is donating anything any more so the supply and demand is unbalanced.

The TV cameras were in some shop down south and it was full of posh,stiff upper lipped,crusty Englishmen and women. no wonder they are rich and posh if they do all their shopping in a charity shop?

The cheek of them?

Well the one job help place I've been going to is pretty damn useless but I went to a different one today that's more of a job placement service and I'm hopeful that will work out.

What is the obsession I see everyday where people go on about saving money?

Why do you think, Dipshit?

Good luck with the job LN. Things are bad everywhere. I hear even Vegas is suffering. I'm getting all kinds of junk mail/deals. They say business has taken a big slide. Who can afford gambling right?


TIS

I just saw that the Dow is under 7,000 for the first time since 1997!!

It's really the NASDAQ and S&P declines that are scary since they are the broader indexes. They were both down again 4-5%. The only silver lining is that anyone holding declining stocks could have sold last year and used the capital loss to reduce their income tax. Still, I'm predicting 10% unemployment this year.

The financial problems did not make the first story on our news last night. That was saved for a story about binge drinking and how the Uk is the worst nation in the world!

So not only are our finances going down the toilet,we are all hopeless alcoholics as well

How bad is the economy of Camden, NJ? Well, they can’t tell. “An auditor says Camden municipal records are in such a mess that the city’s financial health cannot be determined.” – Atlantic City Press. The article goes on to say that this is the third year in a row. Things got so bad that the state took over some functions. The “state-appointed chief operating officer said the problems show a lack of leadership in the city’s Finance Department (no kidding!). But in true political fashion, “City Councilman Gilbert Wilson says the blame belongs to the state because it has oversight of Camden.”

New Jersey. Gotta Love It.

Hey Yogi, what's the "legal" drinking age in the UK?

Its 18 MC.

Some supermarkets try to enforce an over 21 age for anyone buying spirits,but if you want to buy a pint in a pub its 18.

Of course everyone i knew and grew up with (including myself) were in the pubs at 15/16....

Just lost a listing because "nothing has been happening" and another broker came by and claimed that he could do a better job. Gee, do you think it could have something to do with the fact that the economy has SUCKED??

That sucks SB. What makes that other broker think that he can do a better job?

He doesn't care if he can or not, he just wants the business.

Exactly!!! And he probably cut his commission, too. Although why anyone wants listings right now is beyond me. They cost money to advertise, get a sign, take photos, put it on all the websites, do mailings and so on. And then all the client does is complain that you're not bringing anyone. Perhaps it's because nobody is LOOKING.

How fucking sad is this :


Bidding For Homes

I feel bad for the working person who lost their home because they were laid off or had a medical catastrophe. However, the idiot who over-leveraged their home to buy 2nd properties or that took variable rate mortgages that soared and they can't sell and/or meet their payments? Not so much.

Look, it's devastating to lose your home. For almost everyone, it's your single largest asset. However, a fool and his money are soon parted, as they say, and I would bet that most people who lost their houses, lost them through imprudence.

The UK interest rate is now down to 0.5%

Never been so low. I have said it before in here but will say it again, such a low rate is awful for people with savings but my mortgage payments have dropped nearly by a quarter,monthly!

Still,i can sympathise with people losing their homes,no matter what the reasons. There is a lot of that going on onver here as well

I read an opinion piece in our local newspaper the other day that said the high number of foreclosures in Florida were primarily due to speculators (house flippers) who were given interest only loans with no down payments. They couldn't flip so they walked away without losing hardly any money. Now the banks were stuck with houses they didn't want and can't unload.

My father-in-law died last year. He had a house in Florida. We can't get rid of it. At one time it was appraised at $250,000. It was listed at $125,000 and is now down to $80,000.

I heard the other day on the news that the lowest priced homes are in Detroit Michigan, with the average home is $16,000. That's hard to believe I know, but that's what they reported.

As I've stated before, my place (and the entire area) has dropped in value significantly in the past year or two.

TIS

The Dow closed up three days in a row!! It's a miracle!!

It's true. It does seem like a miracle! Good stuff.

Absolutey true MC. I personally know 2 people who were doing this and even tried to get me to go in with them on one last year. One of them stuck his bank with 3 houses and the other guy stuck the bank with one.



A friend that I used to work with sold his home on Staten Island and went down to Florida. He bought a home that was built two years ago that originally sold for $350,000, for only $155,000!

The real estate laws allow such craziness. We may complain about too much regulation in this part of the country, but at times like this, I'm grateful. There were people during the 2002-2006 time period that made a LOT of money down there, by doing absolutely nothing. They would buy a pre-construction home, hang on to the contract a few months, and then sell it to someone at a profit. Sometimes that contract would be flipped several times. And guess what?? The builder goes bankrupt, the place NEVER gets built, and the last guy holding it is the one who gets screwed.

When you sign off on a purchase offer down in Florida, that's considered your purchase contract. Around here, that would just be considered a "meeting of the minds" and then it would go to the lawyer. Not in Florida. Also, the closing is handled by a title company! It's definitely different from what I'm used to in real estate.

AIG bonuses should outrage Detroiters

In Bailout Nation, employment contracts matter -- or they don't.

cont...

http://www.detnews.com/apps/pbcs.dll/article?AID=/20090317/OPINION03/903170373/1330/OPINION0320

These bonuses are an absolute disgrace. If the government controls a majority of the company, then why can't they put a stop to them???

Babe, the media has been replete with statements that the bonuses are the result of contracts. New ownership does not void a contract.

PITTSBURGH (AP) - Caterpillar Inc. on Tuesday announced plans to lay off more than 2,400 employees at five plants in Illinois, Indiana and Georgia as the heavy equipment maker continues to cut costs amid the global economic downturn.

Caterpillar, the world's largest maker of mining and construction equipment, has seen its sales wither as the sluggish world economy and credit crisis weaken demand for its products, used to build everything from houses to highways. The company had expanded dramatically in recent years, helped by a building boom in developing countries.

On the other hand,

WASHINGTON (AP) - Housing construction posted a surprisingly large increase in February, bolstered by strength in all parts of the country except the West.
The Commerce Department reported Tuesday that construction of new homes and apartments jumped 22.2 percent in February compared with January, pushing total activity to a seasonally adjusted annual rate of 583,000 units.

While the surge in housing construction was far better than the continued decline economists had expected, experts viewed the rebound as a temporary gain given all the problems the housing industry still faces.

Seems like Saladbar and myself missed the discussion about AIG and these bonuses and hve been having one ourselves over in another topic. So I'll take the liberty to post what both she and I have discussed in order to keep this discussion about AIG, the bailout and these bonuses in one thread :



Yes, you're 100% correct. The government was indeed incredibly stupid.


As far as the amounts of the bonuses being legaly fixed, I understand that but don't agree with it and I'll tell you why. I worked in the financial world for over 23 years. For many of those years I, along with others were given bonuses as part of our pay package. While legally the benefit of a set amount or a percantage figure may have been agreed upon between my employer and myself, my receiving the legally agreed upon bonus was based on a number of factors such as performance, merit, quarterly prfotis, etc. In other words I had to do what I was hired to do and my job performance had to be a contributing factor in the profit and success of the company.
If I did not perform for the company, produce for the company or contribute to the success of the company, there was no bonus. And if by chance (thank God it never happened) I was not fiscally responsible or did not use due dilligence in making financial decisions that could affect not only the bottom line of my company, but the satisfaction of the client / investors, not only would I be out my bonus, but I would be out on my ass!
And if the actions that I took or the financial decisions that I made were not in compliance with the laws, regualtions and guidelines of the official governing bodies that oversaw the business that I was in, I could have easily been held LEGALLY responsible! So in my opinion, this "legally binding bonus" stuff that these companies and executives are spewing out is bullshit. It's all a bunch of legal spin.

What I don't agree with here is that even though these bonuses may have been legally binding, most of those receiving these bonuses were major contributors in the downfall and decline of these companies! Many of these employees/executives of these failing companies seem to think that they are entitled to these bonuses simply because they worked for the company. How about holding those who are in a position to collect these bonuses accountable for the fall of the companies that they work for? A fall that was a direct result of their negligence and greed?

Earlier in this thread someone said that I sounded angry and bitter. Know what? Come to think of it I am angry and bitter! I am angry and bitter on behalf of the honest and hard working people of this country who are getting it right up the ass because our elected representatives in congress have chosen to just throw OUR hard earned tax money at these companies and their executives without carefully looking over what went wrong with those companies and who in those companies was responsible for their downfall. Our government IS indeed just as negligent as many of these corporations and banks that we are bailing out!

Unfortunately, the initial stimulus package was a bit rushed, and that's not necessarily a criticism. The Dow was in freefall, everything was hitting the fan at once (Bear Sterns, Wachovia, WaMu, Citi, AIG) and the government was looking to instill confidence in their ability to handle a crisis. Confidence is critical at a time like this. Quite often, a recession is a self-fulfilling prophecy, so it was incredibly important for the government to be perceived as being in control and able to handle the crisis. Therefore, they passed a package hastily without enough attention to the details.

Olivant, if I'm owed a commission from a landlord, and the building is sold to someone else, I assure you that I am not necessarily going to be paid by the new owner, even though he's going to reap the rewards of my labor. New ownership doesn't necessarily assume the responsibilities or agreements of the former owner.

Yes, the executives should give them back, or use it to pay back creditors, or whatever else might be perceived as a better use for the money. It's disgraceful.

Babe, the contractual obligation you refer to would be between you and the landlord. The sale of the property is governed not only by contractual terms but by state law (and in some cases federal law). Your recourse is the landlord. AIG was not sold to anyone; the federal government is a lien holder of it. The Federal Reserve Act only allows the Fed to make loans. To provide collateral for the loan, AIG gave the Fed an equity position in the company and agreed to some other forms of federal control. But the bonus agreements are with AIG, not with the equity holders. If AIG fails to comply with their contractual obligations, the contractee has legal recourse which should be cut and dried.

SB, I was watching several lawyers discuss the legal aspects of this so called contractual obligation claim by AIG to pay out these bonuses.

According to these lawyers the bailout money was money given that is supposed to be paid back by AIG. A government loan. So in a sense, the federal government has become a creditor to AIG. AIG now has an obligation to pay back the federal government. Being that they have an obligation to pay back the money given to them by the federal government, it is possible that a legal case can be made asking that contracts to pay executive bonuses be rendered worthless. There is even a good possibility that the payments made to executives thus far could even be declared invalid as a fraudulent attempt to evade payment obligations to the creditor aka the federal government.

Then they explained, looking at it from AIG's side, that AIG has every right to persue every legal business strategy to challenge any attempt by the government to have them cease paying out any more bonuses.

In a nutshell, the point that these lawyers were trying to make is that there is nothing that is cut and dry in this case. Lawyers from both sides can try to come up with any and every kind of legal spin that they see fit to try and litigate this case. They went on to point out that if this case is litigated it will become a case that is tied up in court for quite some time because it can and will be a precedent setting case that will have a historic precedent setting outcome.

And as one lawyer pointed out, the bottom line is that while trying to save the taxpayers money by attempting to stop AIG from dishing out this bailout money in the form of bonuses, it will probably cost the taxpayers millions of dollars in legal fees trying to do so.

It's almost as if we are in a lose lose situation here.

In my opinion, before the government threw any money at these financial institutions, our representatives in Congress should have done with AIG, Citibank, etc. something similar to what they did with the auto industry: told them that if they wanted the government to bail them out with government loans then they first would have to sit down with the unions and that both sides would have to make some concessions, provide some givebacks, and show the government that they have done so.

I find the whole legal arguments of all of this very confusing. I too heard that there is no legal way to stop these bonuses. One person (sorry don't know which show) suggested taxing AIG on these bonuses. Don't know if that' possible either. It makes me sick and it sure as hell is making AIG look like the crooks that they are. Then too, the fact that the American people own something like 80 per cent of this company should mean something no? Not that you or I would have any pull I guess.


TIS

Well, the people who receive the bonuses will be paying taxes on them, that's for sure. If you're making millions, you're paying lots of taxes.

Don't be so sure about that! If you're making millions, there are usually creative loopholes that are there specifically for those making millions. And you can be sure that in this economic downfall that these people who are going to receive these bonuses will be claiming massive losses in their portfolios and will try and offset the taxes that they owe.


Besides, even if they pay 50% in taxes on the bonuses that they receive, it still leaves us, as taxpayers 50% in the hole. If a $500,000 bonus is given to them from our bailout money, and they wind up paying $250,000 in taxes on it, bottom line is we're still out $250,000.

This is really just outrageous. It's really becoming more and more of a fucking mess. And the sad thing is that companies like AIG see and know this and this is why they are basically telling us to go and fuck ourselves.

Yes, pretty much. They are because they can, and that's a terrible, terrible thing.

March 17 (Bloomberg) -- MGM Mirage, the casino operator controlled by billionaire Kirk Kerkorian, said auditors questioned its ability to stay in business as the company won a two-month bank reprieve to restructure its debts.

Auditors raised “substantial doubt” about MGM Mirage’s ability to continue, the largest casino owner on the Las Vegas Strip said today in a regulatory filing. The company also reported a $1.15 billion fourth-quarter loss after writing down properties because of shrinking gambling revenue.

The auditor’s comments increase the likelihood MGM Mirage will seek bankruptcy protection from creditors. Banks granted waivers on the $7 billion bank-loan facility until May 15. The company said on March 3 it was in talks to avert a potential breach of covenants.

Can't say I'm shocked. Vegas is now feeling the pinch. Not only that, when I was in Vegas last year, I walked thru th Mirage and it lost the new and "neat" look at use to have. It didn't seem well maintained.

Now is a great time to get Vegas deals. I'm always getting e-mails, flights/rooms are very reasonable. However, even still, you need money to gamble, and that can be expensive.


TIS

You're not kidding TIS. About two or three weeks ago I got an offer, from THE WYNN, 5 days 4 nights including RT airfare for $479 PP!!!!


One of my neighbors works for a company that puts together and hosts conventions in the Javits Center and the Las Vegas Convention Center. He told me a few weeks ago he went out there to supervise the preparation of a Convention. He said that the tables in almost every hotel that he went into were empty and many sections in various casinos were completely closed. To top it off the conventioneers were complaining that for the first time in years many of them did absolutely no business whatsoever.

It's pretty sad.

Smaller local gambling dens are probably doing a little better with people gambling money they can't afford to lose.

For whatever reason, I am not getting good deals on Vegas from Dallas. Probably because I am going on a weekend. All the flight "deals" give me a timing where I would essentially not utilize a sunday or something like that. If you are willing to fly on any date, the deals are good.

Given that the travel industry has been hit fairly hard with all of this, I've still had trouble getting decent airfares. I've been trying to get down to Florida, and anything in the vicinity of a holiday is ridiculous. Where are all these deals???

SB,

It probably depends on where in Florida you go. I would think there'd be good deals (or at least there should be). Last year when I had to fly back to MI because my brother had a stroke, prices were sky high. Normally I'd pay about 350 -400 round trip (that's even high, but Grand Rapids, MI isn't exactly a tourist stop) BUT, they quoted me....over $1,000 I told the airline my circumstances, they asked if I wanted the "emergency" fare. I had to give them my brother's name, the hospital and address and she cut the fare in half to $550 or so. NOW, I checked and a regular fare is back to normal, 400ish. NY from CA is around 300 or less round trip.


TIS

Considering where I live, I can fly out of Newburgh, White Plains, Newark, JFK or LaGuardia. To get where I want to in Florida, I can fly into Ft. Lauderdale, Miami, or, if I was pushing it a bit, West Palm. I can't find anything around Easter/Passover for less than about $500, and that's one of the cheaper ones. However, the week BEFORE Passover, I can do Newark to Fort Lauderdale on Continental for $178. Unfortunately, that's not when the girls are home from school, so it doesn't do me much good.

There's your answer. You're looking to go down on which is one of the biggest travel holidays to Florida of the year. You have Easter, Passover and Spring Break. All three basically rolled into one. Did you try Jet Blue out of Kennedy?


TIS, The Excalibur Hotel currently has an offer in April that includes4 nights and 5 days, from New York to Las Vegas RT for $340.00 PP!

And the Mandalay Bay has the same deal for $458.00 PP!!

Maybe we can write congress and ask them for some bailout money for our trip! And then if we lose any money at the tables, we can ask them for some more! Not really any different than what some of these executives are doing, right?

What time do you want to meet by the Mandalay Pool for some Blue Drinks?

I have tried every possible permutation of the airports listed in my previous post. What they'll do is give you a cheap airfare going down if you leave say the Tuesday after Easter, but then when you try to fly home, you get screwed on the return fare. I don't mind paying a little bit more to travel over a holiday, but 3 or 4 TIMES more?? Really? Do they have to be so blatant about screwing their customers during a high-demand week??

I understand that the law of supply and demand applies here, but c'mon! If it's normally $200 and they want to charge me $300, I could probably live with that. But $500 or even $700 and $800, as I've seen on some sites??? That's just ridiculous.

SB, exactly the same situation I am in. If I fly back from Vegas to Dallas on a Sunday evening (thus utilizing a holiday), the fare is around $440 round-trip. Now instead, I am leaving Vegas on a saturday morning, flying to Phoenix, AZ, visiting grand Canyon and then flying from Phoenix to Dallas on the Sunday evening. This costs me only $356 for this mulit-leg travel!!

Hey, why not get some extra mileage out of it!! That sounds like you're working the system, and why not??

I recieved this email today. I thought it fits in this thread.

This was written by a construction worker in Fort McMurray .

Read on . . ..

I work, they pay me. I pay my taxes, and the government distributes my taxes as it sees fit. In order to earn that pay check, I work on a rig site for a Fort McMurray construction project. At any time I am required to pass a random urine test, with which I have no problem. HOWEVER, what I do have a problem with is the distribution of my taxes to people who don't have to pass a urine test... Shouldn't one have to pass a urine test to get a welfare check because I have to pass one to earn it for them? Understand - I have no problem with helping people get back on their feet. I do on the other hand have a problem with helping someone sit on their ass, drink beer and smoke dope. Could you imagine how much money this country would save if people had to pass a urine test to get a public assistance check? If you agree, please pass this along, or simply delete if you don't. Hope you will pass it along though, because something has to change in this country.

So if someone who gets welfare, Section 8 housing and/or food stamps fails a urine test, should we allow their children to go homeless and hungry? I mean, I would imagine their meals are sort of hit and miss as it is, as is the idea that someone actually is caring for them.

It sounds like a nice idea in a perfect world, but alas it's NOT a perfect world.

SB, Do you want your hard earned tax dollars to go to someone who is healthy and can work if they want to but choose not to because it is easier for them to sit on their lazy ass and get paid for it rather then actually go to work and earn a pay check?

Simple solution. If a parent fails a urine test their children get placed in foster care.

I just finished watching the Testimony given by the AIG CEO, and let me tell you that many of those who questioned this man are nothing more than a bunch of granstanding hypocrites!

While I am not defending AIG and their practices in any way, at the same time those who are supposed to be representing us sat there on national television today and made it look as though they were outraged that AIG went and gave out these bonuses using the bailout money that was given to them. Many of these grandstanding politicians are the same politicians who quietly removed a measure that was included in the original stimulus package that restricted AIG from handing out bonuses with the bailout money. This is outrageous! It all makes sense because when they revised the first bill, it was done in those infamous late night over the weekend meetings where several in congress, who wound up voting against the revised package, were denied their request to read the modified bill before they voted on it!

Members of the house, the senate and the White House met to revise the original bill and they are the ones responsible for removing that restriction!

Our representatives are just as guilty of doing this to us as are the CEOs and executives of these companies!

Scum sucking turds.

I'm not saying the the bailout was necessarily the wrong move -- if the government not intervened, AIG would cease to exist, and several of its counterparties would have gone down too, and probably several of their counterparties, and more and more and more. In light of that the bonuses are trivial.

Just that if the government is going to hold an 80% stake in AIG they should have much better oversight in place to oversee how company is going to spend the money.

The emotional crap about these bonuses is staggering. They were either lawful (these bonuses were in the contracts before AIG took the bailout/our money) in which case we should grumble and shut up, or they were unlawful (bailout plan agreed to by AIG's management included some means of altering the contracts they already had with their employees) in which case law enforcement should have their day.

The bonuses are such a small percentage of the bailouts, we are really just moaning about typical wall street ethics and gov mismanagement. If I were President Saladbar I would just put this up to the execs:

1) receive your bonus and go through the most thorough investigation/audit possible to ensure that nothing illegal was involved in this crash and have your names all published fully so we can follow your asses for the rest of your life.

2) give up the bonus and forgo the audit and move forward with righting the ship and concentrate on the future. We won't publish names.

In the case of AIG, I'm not certain that I agree with you. If I'm correct we've given, in total, $180 Million to AIG. In turn AIG has already given out somewhere around $165 Million in bonuses and plans to give out more.

But regardless, the bottom line is that our government did not use due dilligence in handing out money to this company. They did NOT do their homework before throwing this money at them. There was no fiscal responsibility here on the part of our representatives.

Lazy ass?? Do you really think that the vast majority of people who receive public assistance are sitting home on their lazy asses? Do you understand how ridiculously poverty-stricken someone has to be to even qualify?? Federal poverty levels are ridiculously low and haven't been adjusted properly in YEARS.

Maybe you see a lot of lazy ass people where you live, but the people I know who are on public assistance would give their eye teeth for a job. They swallow their pride only for the sake of their children. I'm sure there are drunks and drug addicts who are on public assistance, just as there are working ones, too.

And if a few bad apples happen to fall into the barrel, I don't want to make it any more difficult for people to buy food for their children.

Let's say we put this ingenious plan to work. Who is going to oversee it?? Who is going to pay for thousands and thousands of urine tests? Who is going to enforce it? When is it done?? Weekly? Monthly? Is it random? Is it only for the ones who have children? What if the father's an alcoholic, but the mother's not? Should the children be taken away from their mother if the father fails a drug test? What happens next? How long do you keep the children from their parents? Until they go to rehab?

Who conducts these tests? Is it local government? Does that mean that local governments would hire more people? If so, who pays for it? Do my taxes go up even MORE??

It's rhetoric, pure and simple. Throw a stupid idea out there, and don't think of the follow-through.

Our government has totally screwed up this AIG bailout. When GM came begging for money they were told to go back and make a deal with the Unions to CHANGE THE CONTRACT and reduce their benefits. The same deal was not presented to AIG. The blame lies with the congress, most of whom did not even read the bills that passed, the Bush Admistration for engineering the AIG bailout and the Obama administion for not catching this in time and stopping it.

Time for the citizens to consider a tax revolt. If by April 15 2010 the number of returns filed drops 75% perhaps they'll get the message.

You old hippie, you.

Att-i-ca! Att-i-ca!

Prediction: If this doesn't die down by Monday, the Secretary of the Treasury will "resigna stating the rukus over him is too much of a distraction in these difficult times and that for the sake of the country he is moving aside. Obama will "reluctantly" accept the resignation, and appoint Larry Summers as acting Secretary pending his confirmation. He will avoid the problems he would have previously faced with Congress who won't have the stomach for a fight.

Until we stop providing billions of dollars in no-bid contracts to corporations, billions to bankers who made poor investments, trillions on unnecessary wars, I see the pittance we spend on the poor as a non-issue.

When I had my daughter we were just barely getting by. The Col. wasn't making much back then. We tried to get food stamps but they said we made to much. They told us if we had another baby and sell the juck car we had we would qualify. I got so pissed off I told that lady I'm not gonna have another baby just to get your damn food stamps left and slammed the door.

Excellent points SB

While I do see and understand the sincerity in Mignon's concerns, and share the outrage that she feels at those who are taking advantage and manipulating the system, at the same time I also know that we have to look at the big picture and realize that we cannot just arbitrarily punish the majority of people who legitimately depend on these federal programs to feed their families and their children.

Do we need to tweak and fix the welfare / federal subsidary systems that we have? Absolutely! But it has to be done the right way in order not to hurt the vast majority of people who's lives depend on these public assistance programs.

So did you get a job?

Mig, I'll bet it didn't happen quite that way. You were probably informed of eligibility criteria and the person who provided you with that info simply informed you further that if you had an additonal family member that would satisfy the income eligibility criteria, right?

There's so much anecdotal and incorrect information flowing around out there about welfare. I echo other posters comments aboutit. In Texas, a family of 4 will receive about $400 in food stamps based on $1,000 monthly gross income, no vehicle or other household revenue, and assets under $1,000. The monthly cash benefit would be about $225 One can only be on welfare for up to 60 months, must be registered for work, and even a mother of small children must accept work after 24 months. I guess emoting over these things is to be expected. But having correct information may mitigate that emotion.

Yes I did and I hated it.

I'm not heartless. I don't want innocent children to go hungry. I know that there are people who need help and assistance. I just hope something can be done that people won't be able to take advantage and manipulate the system one day. But that will probably never happen.

I don't believe that I said or implied, anywhere in my post, that you were heartless! As a matter of fact Mig, I specifically said that I understood that you were being sincere with your concerns AND I even went on to say that I share your outrage at those who are taking advantage of the system!






So are you saying that you would have taken the public assistance instead of taking a job had they deemed you elidgable for the public assistance?

I tried to get some kind of health coverage through the state a few years ago and they told my then fiancee and I that if she was pregnant I might qualify.

I know you didn't DC.



We didn't want welfare all we wanted was a few food stamps to help us get by. Everything worked out.

And would you have gone to apply for them if you were going to be drug-tested on a weekly basis? Because, as you said, the process is a difficult one as it is. To add one more indignity to it is just one too many, IMO.

But as SaladBar stated, drug-testing welfare recipients is the least of our worries. When our government spends billions bailing out the private sector and trillions on a war that was based on false intelligence, giving food stamps to someone who likes their beer is not making it to the top of my list of problems.

On the other hand, the Dow was down, but only slightly, and the DJIA is still up almost 1,000 points since it's low of 6469. It's something, anyway.

Here's another way the economy situation is screwing the average, hard-working homeowner like me. Two years ago I moved to South Jersey from a NYC suburb (goodbye SB). I bought a bigger house than I needed, but it cost less than the house I sold, so I made a little money. We all know how the real estate business went. My timing has never been good. So now my mortgage company-Wells Fargo- sends me an offer to refinance for free. Well I don't qualify. They appraised my house at 15% less than what I bought it for. I have a big mortgage, so my loan to value is 92.5% and it has to be 80%. I don't qualify for a conventional refinance either. All I want to do is lower my monthly payments, so I have more money to pump back into the economy.

Then I thought about my Homerowners Insurance. If the value of my house went down, how about the value of my insurance. No such luck. It's gone up 5% each of the past two years and I quote, "Coverage for your home has been increased by 5% to more adequately reflect the cost to rebuild your home."

Dear MC, please bend over so we can screw you more easily. Thank you for tipping your ass upward in the submissive posture.

That's what you get for leaving me without having dinner and drinks first.

15 AIG employees have agreed to give back their bonuses totally 50 million (out of 165 million). I saw yesterday that there was bus tours to some of these peoples' homes protesting. Anyway, it's a start. Market soared today too I hear.


TIS


Link

TIS, the Dow closed up just shy of 500 points!! WOO HOO!!!

I don't understand what's makes it fluctuate up and down like that.

I just heard on Rachel Maddow that Bernard Madoff is responsible for one of the e-mail scams from another country. Know what I mean? The ones that has some rich guy or lady, from Nigeria (or another foreign country) wants to transfer funds to your bank account. Anybody else heart this? She even had a copy of the e-mail I think I probably received one too. I get at least 12 a day it seems.


TIS

Buying and selling.

Don't get too excited. It will probably be down 300 tomorrow.

And it's that kind of negative attitude that has ruined the economy. C'mon, JL. Enjoy the moment, whether it's short-lived or the start of a trend (I prefer the latter).

Shall we takes bets on whether the Dow finishes over/under -300 today?

I'm in. In some respects I'm an eternal optimist, so I'll say at least another day of "over". Wait, we're not betting a million dollars or house deeds or anything like that right?

Do I have to say how much over? I don't really know nuttin' about nuttin' when it comes to such preciseness.



TIS

Well, it's down almost 70!! Thanks for the jinx, JL!

Don't blame me. ...And it's bouncing back right now.

California raised local sales tax to 9 per cent.

Okay, a few cents doesn't seem like much, but in this economy, many will feel the crunch. Supposedly this is temporary and due to end in 2011 or 12. We'll see.


"Starting Wednesday, California's sales tax will rise to six percent, bringing the average local sales tax rate to almost nine percent -- one of the highest in the nation."


Tax Increase


TIS

I heard on the radio this morning that the acting CEO of Freddie Mac was found dead in his VA home, probably a suicide.

In Baltimore, a man rented out a hotel room, then shot his family and killed himself. He was supposedly almost $500,000 in debt.

Although there have been glimmers of improvement in the economy, I think we will see more and more of this in the months to come.

You will also see more and more people breaking into other people's homes.

Somewhere, there are piles of cash waiting to buy out everything once deflation hits. I don't see anything getting better right now.

While the economy seems to be turning around a bit, and the forecast is not all gloom and doom like it was last fall, I think the stories like the Freddie Mac CEO and private citizens in massive debt will continue. The stress of being in massive debt is terrible, but not worth killing oneself or loved ones over. But it's obvious that crimes related to the economic crisis will continue for some time. Very sad.

This morning I read that the man who killed his family in Baltimore "may" have been in debt, which means that he also "may" have been just a sick fuck who beat and then suffocated his family before killing himself.

Being in real estate, I have to tell you that I couldn't believe how bad things were. I could go WEEKS without a voice mail, and if it wasn't for Spam, I wouldn't have gotten any emails either. I have noticed a surge in activity. While many of the calls and showings are with bottom-feeders looking to snap up a bargain from a desperate seller, at least the phone's ringing again. I actually even had a bidding war on one of my listings!

Although I sell only commercial real estate, which is very, very different from residential, a resurgence in consumer confidence is what it often takes. I think that part of this recession is in people's minds. They're afraid to spend.

You're right Babe. People are being cautious. Of course, even if they are willing to spend, overall there's less disposable cash with which to spend. I still maintain that unemployment will hit 10% this year and that will further drain disposable income. We already know that GM is planning a 9 week holiday for its employees. The impact of that is going to be significant.

The state of NJ has an 99 month housing surplus (not exactly sure what that means, but it doesn't sound good). The shore towns in Cape May county are the worst. Avalon, which is an high-end summer resort town has the highest at 120 month. I guess that means at the rate people are buying homes, it would take 10 years to buy all the homes that are for sale in Avalon.

It's already at 8 or 9, so 10% is no big prediction.

I stated in January that the unemployment rate would exceed 9% in 2009. At the time the unemployment rate was 7.2%. It's currently 8.5%, not 8% or 9%.

Long, you ought to stick to criticizing predictions about the Colts - including your own.

I heard on the radio that GM will still be paying the emplyees even though they are out of work for 9 weeks. I don't know if this is true or not.

Workers will receive 70%-80% of their regular pay. That will be significant. However, there's no guarantee that they will be recalled. Thus, they may cut back on spending, put off credit purchases, etc.

It's 8.5%, not 8 or 9. Very good. Take your self righteous attitude and stick it up your ass.

The UK had our budget this week where the government basically told us we would be in recession longer than they predicted and our economy will be in debt for the next 30 years or something like that. We now look forward to tax hikes and cuts in public spending,at least until i retire,whereupon they will probably try to rob me of my pension

Bastards!!!

Foul language and expressions - the refuge of the unintelligent mind.

But maybe you can be forgiven since you support an NFL team with declining prospects and an aging quarterback.

I own a gift shop and obviously things like that, gifts are often the first to go.....sales are down around 30%. It started around October for me... right before the election and the big banks failing...and just progressed into winter and now spring has seen a slight improvement here at least. I'm hoping people will want to buy a little something in my store instead of taking a trip overseas or something....I am optimistic that in a short time things will be better. We also have our regulars who come in for our teas ~ Irish and British teas are the best! After they try them, they won't go back to American brands.....

California is hit hard too. We are having an increase in sales tax here supposedly for only 3 years. Yea right. Also, our license tab renewal fees are going up too. Just what we all need in the sucky economy.



TIS

Angela Marie, I remember when you announced you were opening (or had) a gift shop. I hope things turn around for you and for everybody.

What is the sales tax rate in CA now? Do they tax food too? Here in Tenn its 9.5 % and Food is 8%. (Each county varies a little bit). They also tax clothes here....9.5 %

thanks a bunch. Its been hard, I tried getting a part time job for awhile but it wore me out. I was ok through the holidays and then things started piling up the last couple months. My family is helping me out at this point, but they can't forever..... I think it will turn around soon. I'm really optimistic. I mean people shouldn't buy what they can't afford, but the economy needs to get back on track...

Angela Marie, Do you have employees working for you or are you the sole owner/employee? Must be a lot of responsibility running your own business, big or small. I give you credit.


TIS

Well, I cut it down to just one occassional helper every other Saturday. One person can usually handle it unless there is a festival. But we're open 6 1/2 days per week so I kind of need a day "away" to recharge or I get cabin fever and its not pretty, so one of my friends is helping out when she can. I really really really want a vacation!!! Just 3 or 4 days at the beach would work wonders!

It's so hard to own your own business. It's wonderful to be your own boss, but the responsibility can be overwhelming, and you're often the only one burdening it all.

I do see encouraging signs of the turn-around you're referring to, Angela. I think we have seen bottom, and the months ahead should be much better.

I feel for you! I am a pick-up and deliver truck driver and I have made some good friends on my route over the years. In the past 6-8 months I no longer get pickups at some places because they have gone out of business. It's the furniture business' I have seen get hit the hardest, but I imagine gift shop's are on the same plane. I wish you the best of luck!

Jobless rate hits 9.4 percent in May; layoffs slow
Jobless rate jumps to 9.4 percent in May, even as layoffs slow to 345,000
Jeannine Aversa, AP Economics Writer
On Friday June 5, 2009, 3:41 pm EDT

WASHINGTON (AP) -- With companies in no mood to hire, the unemployment rate jumped to 9.4 percent in May, the highest in more than 25 years. But the pace of layoffs eased, with employers cutting 345,000 jobs, the fewest since September.

The much smaller-than-expected reduction in payroll jobs, reported by the Labor Department on Friday, adds to evidence that the recession is loosening its hold on the country. It marked the fourth straight month that the pace of layoffs slowed.

What a wonderful world it would be.

Don't know much about algebra
Don't know what a slide rule is for.

I saw a demo of the new XBOX 360.
The future looks scary. Put me in box now.

I'm laid off. The last day I worked was Nov.26th. They took my health and dental insurance on Nov.30th and they didn't send me a letter in the mail until March saying that they cancelled my benefits and it stated that I could pay $284 a month for COBRA or whatever. I'll pass.lol. I'll get a new job once I get my new car.

The Dow finished over 10,000 for the first time in over a year!! WOO HOO!!!

So when are my IRAs going to get back to where they should be?....instead of 35% lower than they were three years ago.

Hey, it's two days in a row now!! This could be a trend!

This is the time of year when companies report their annual earnings, making market surges common, but uncertainty has loomed for months about the market reaching the 'psychological' 10,000 mark - a level it first reached in 1999. It's worth noting that this year's national GDP is 14 trillion compared to 10 trillion a decade ago, signaling substantial growth in 10 years. This growth is however offset by debt and borrowing--which has DOUBLED since '99--and when adjusted for inflation, the market is down about 10% over the decade.

Any growth is overshadowed perhaps though by the unstable future of the dollar, as this rebound could be a 'V' shaped recovery in which 'reflation' turns into inflation. There's a lot of rumbling on 'The Floor' right now amongst brokers about various limitations and taxes imposed by the Obama administration that hinder activity and trade, i.e short-sale limitations and other regulations. But the era of 'supply-side economics' vs. 'Keynesian economics' is over, as Wall Street undoubtably supported this President and his 'Keynesian' market theories. We're still recovering from the housing and credit bubble created by the 20 year Greenspan era.

However, if/when America approves a nationalized health care system, it's likely that the upper-level tax rates for investors and businesses will increase from 35 to 40 percent, which could deter companies from investing in new business growth and job creation.

Jobs report shows economic rebound may be stalling

By CHRISTOPHER S. RUGABER (AP)

WASHINGTON — A weak June jobs report offered the latest evidence that the economic recovery is slowing.

Employers cut 125,000 jobs last month, the most since October, the Labor Department said Friday. The loss was driven by the end of 225,000 temporary census jobs. Businesses added a net total of 83,000 workers, the sixth straight month of private-sector job gains but not enough to speed up the recovery.

Unemployment dropped to 9.5 percent — the lowest level since July 2009 — from 9.7 percent. But the reason for the decline was more than 650,000 people gave up on their job searches and left the labor force. People who are no longer looking for work aren't counted as unemployed.

The latest figures suggest businesses are still slow to hire amid a weak economic recovery. Many economists were hoping to see more private-sector job growth, which would fuel the economy by boosting consumers' ability to spend.

"It could have been worse, but it wasn't good," said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic forecasting firm. "It's adding to the evidence that growth has slowed."

People left the work force "because they think there's nothing out there," he added.

In a separate report, factory orders fell by 1.4 percent in May, the Commerce Department said. It was the first decline after nine months of gains and the biggest drop since March 2009.

The reports follow a slew of data and developments this week that point to slower growth in the months ahead.

In May, home sales plunged and construction spending dropped after a popular homebuyers' tax credit expired on April 30. Consumer confidence has fallen sharply. The European debt crisis has sent U.S. financial markets downward, lowering household wealth. And more than a million jobless Americans have been cut off from unemployment benefits after Congress adjourned for a weeklong Independence Day recess without extending federal aid.

President Barack Obama said the economy is moving in the right direction, but not quickly enough. He seized on the latest data to push for more government stimulus — including the extension of jobless benefits — to aid the recovery.

"We're not headed there fast enough for a lot of Americans," Obama said. "We're not headed there fast enough for me, either."

The disappointing jobs report added to investors' concerns about the economy. The Dow Jones industrial average fell 97 points in midday trading.

The unemployment rate and payroll figures can sometimes move in different directions because they are calculated from different surveys. The jobless rate is derived from a survey of households, while the payroll calculation is drawn from a separate survey of businesses.

The nation still has 7.9 million fewer private payroll jobs than it did when the recession began. The private sector has added an average of 98,000 jobs per month since the beginning of the year. At that rate, it would take nearly seven years to regain the jobs lost during the recession.

It takes about 100,000 new jobs a month to keep up with population growth. The economy needs to create jobs at least twice that pace to quickly bring down the jobless rate.

All told, 14.6 million people were looking for work in June. Counting those who have given up their job searches and those who are working part time but would prefer full-time work, the underemployment rate edged down to 16.5 percent from 16.6 percent in May.

Manufacturers, which have been a key source of job growth in the recovery, are hiring fewer people. Factories added 9,000 jobs in June, down from 32,000 in May and the lowest gain this year.

The leisure and hospitality industries, temporary staffing agencies, and education and health services providers also added jobs. Retailers, construction firms and financial service providers cut payrolls.

Private employers added only 33,000 jobs in May, the department said, below an earlier estimate of 41,000. April private-sector payrolls were revised up to show a total gain of 241,000 jobs, higher than the earlier estimate of 218,000.

The Census Bureau added more than 400,000 workers in May to assist with the 2010 employment count, but most of those jobs lasted only six to eight weeks. Economists expect that census layoffs will impact the payroll data for several more months, but not by nearly as much.

The average work week shortened to 34.1 hours from 34.2, the government said, a disappointing drop after three months of gains. Hourly wages also fell by two pennies to $22.53. The declines mean workers earned less money in the last month.

In addition, the drop in hours is a bad sign because employers are likely to cut hours for their current workers before reducing payrolls.

The employment report comes after Congress adjourned Thursday for the weeklong Independence Day recess without extending jobless aid. That has already left 1.3 million people without benefits. Senate Republicans blocked the extension, citing concerns over the federal deficit. That total number of Americans cut off from benefits could grow to 3.3 million by the end of this month if the impasse isn't resolved when Congress returns.

Copyright © 2010 The Associated Press. All rights reserved.

I'm almost convinced that it's going to take tax cuts to get things moving in the right direction. If the Congress doesn't estend the current federal tax rates by the end of the year, I think we're in for more of the same in 2011.

I can't figure out what is going on. We seem to take three steps forward and two steps back. The Dow was up, home sales were up, and then nothing. Our office is so dead that my boss changed the 4th to a 4 day weekend. Every broker I speak to says the same thing - dead, dead, dead. Nobody's moving, so none of us are making any money. I feel bad for the residential brokers. It's been bad for them for even longer.

As I've said, I think some companies are taking advantage of the economy and forcing their workers to do more with less because they're afraid of losing their jobs.

I like Krugman a lot and not just because his politics somewhat align with my own. If you ever have seen him on television he has a diffident deer-in-the-headlights style and querulous verbal tone which is pretty much at odds with his much more aggressive sardonic written style. In a world full of people that are sure that they are among the smartest people in a given room, Krugman is one of the few who would be justified in thinking so. Lately his annoyance with what he views as dumb policies has become much sharper and more apparent.

Punishing the Jobless
By PAUL KRUGMAN
There was a time when everyone took it for granted that unemployment insurance, which normally terminates after 26 weeks, would be extended in times of persistent joblessness. It was, most people agreed, the decent thing to do.

But that was then. Today, American workers face the worst job market since the Great Depression, with five job seekers for every job opening, with the average spell of unemployment now at 35 weeks. Yet the Senate went home for the holiday weekend without extending benefits. How was that possible?

The answer is that we’re facing a coalition of the heartless, the clueless and the confused. Nothing can be done about the first group, and probably not much about the second. But maybe it’s possible to clear up some of the confusion.

By the heartless, I mean Republicans who have made the cynical calculation that blocking anything President Obama tries to do — including, or perhaps especially, anything that might alleviate the nation’s economic pain — improves their chances in the midterm elections. Don’t pretend to be shocked: you know they’re out there, and make up a large share of the G.O.P. caucus.

By the clueless I mean people like Sharron Angle, the Republican candidate for senator from Nevada, who has repeatedly insisted that the unemployed are deliberately choosing to stay jobless, so that they can keep collecting benefits. A sample remark: “You can make more money on unemployment than you can going down and getting one of those jobs that is an honest job but it doesn’t pay as much. We’ve put in so much entitlement into our government that we really have spoiled our citizenry.”

Now, I don’t have the impression that unemployed Americans are spoiled; desperate seems more like it. One doubts, however, that any amount of evidence could change Ms. Angle’s view of the world — and there are, unfortunately, a lot of people in our political class just like her.

But there are also, one hopes, at least a few political players who are honestly misinformed about what unemployment benefits do — who believe, for example, that Senator Jon Kyl, Republican of Arizona, was making sense when he declared that extending benefits would make unemployment worse, because “continuing to pay people unemployment compensation is a disincentive for them to seek new work.” So let’s talk about why that belief is dead wrong.

Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well.

But it’s an effect that is completely irrelevant to our current situation. When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.

Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.

But won’t extending unemployment benefits worsen the budget deficit? Yes, slightly — but as I and others have been arguing at length, penny-pinching in the midst of a severely depressed economy is no way to deal with our long-run budget problems. And penny-pinching at the expense of the unemployed is cruel as well as misguided.

So, is there any chance that these arguments will get through? Not, I fear, to Republicans: “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, in this case, his hope of retaking Congress — “depends upon his not understanding it.” But there are also centrist Democrats who have bought into the arguments against helping the unemployed. It’s up to them to step back, realize that they have been misled — and do the right thing by passing extended benefits.

*********************************************************
A quick note on David Brooks’s column today. I have no idea what he’s talking about when he says,
"The Demand Siders don’t have a good explanation for the past two years"

Funny, I thought we had a perfectly good explanation: severe downturn in demand from the financial crisis, and a stimulus which we warned from the beginning wasn’t nearly big enough. And as I’ve been trying to point out, events have strongly confirmed a demand-side view of the world.
But there’s something else in David’s column, which I see a lot: the argument that because a lot of important people believe something, it must make sense:

"Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?"

Yes, I am. It’s called looking at the evidence. I’ve looked hard at the arguments the Pain Caucus is making, the evidence that supposedly supports their case — and there’s no there there.
And you just have to wonder how it’s possible to have lived through the last ten years and still imagine that because a lot of Serious People believe something, you should believe it too. Iraq? Housing bubble? Inflation? (It’s worth remembering that Trichet actually raised rates in June 2008, because he believed that inflation — not the financial crisis — was the big threat facing Europe.)
The moral I’ve taken from recent years isn’t Be Humble — it’s Question Authority. And you should too.
Krugman Link

Despite weak consumer demand and other variables, more and more I believe that the only thing that will get us out of this mess is tax cuts across the board. So, Obama needs to state his support for extension of the 2001 and 2003 tax cuts. That's the only thing that may spur investment and hiring and, consequently, increase demand.

Wall St. has created a new list of brands that may disappear [in 2011], which includes:

Readers Digest, Kia Motors, Dollar Thrifty, Zale, Blockbuster, T-Mobile, BP, RadioShack, Merrill Lynch and Moody's.

Several of those deserve to disappear, especially Blockbuster and Radio Shack. Ignoring threats from competition like Netflix and Best Buy, they continued to overcharge their customers and treat them like crap.

Blockbuster came in, drove the little guys out of the market, became arrogant, refused to change when they desperately needed to, and now are in dire straits.

Tough.

Some of these closings are a sign of the times, don't you think? Reader's Digest has been around forever, but with modern technology (i.e. internet)people get their info on-line. I use to subscribe the the daily newspaper until a number of years ago when I got a computer. I use to buy the tv guide weekly until cable tv showed all the listings.

Oh, and remember when getting a job at a post office would be more or less a guaranteed good job with great benefits? Even more "ancient" sounding, I have a cousin who retired from the phone company a few years back. She was a telephone operater for 30 years. Another dying profession.

Truth is, some of these jobs simply won't be back and/or if they stay around they'll be downsized considerably, all in the name of progress I guess. Times they are a-changing.

TIS

Things are tough all over. I know some people that are very close to me that are in the same position. Some of them have been all along trying very hard to find work; others not so much. It's frustrating because I can definitely understand the impulse to tell grown people (especially men, is that sexist?? ) to find a job but on the other hand there simply aren't the jobs to be had. And there's a good argument that cutting benefits at this point will make it worse for the entire economy.


CINCINNATI (Reuters) – Deborah Coleman lost her unemployment benefits in April, and now fears for millions of others if the Senate does not extend aid for the jobless.

"It's too late for me now," she said, fighting back tears at the Freestore Foodbank in the low-income Over-the-Rhine district near downtown Cincinnati. "But it will be terrible for the people who'll lose their benefits if Congress does nothing."

For nearly two years, Coleman says she has filed an average of 30 job applications a day, but remains jobless.

"People keep telling me there are jobs out there, but I haven't been able to find them."

Coleman, 58, a former manager at a telecommunications firm, said the only jobs she found were over the Ohio state line in Kentucky, but she cannot reach them because her car has been repossessed and there is no bus service to those areas.

After her $300 a week benefits ran out, Freestore Foodbank brokered emergency 90-day support in June for rent. Once that runs out, her future is uncertain.

"I've lost everything and I don't know what will happen to me," she said.
Hard Times Unemployment

Lilo, It's heartbreaking to read such stories. Since real estate is so slow, I've been sending out resumes for the last year. I've had only three interviews. I've only been offered one of those jobs, and it paid $12 an hour. As a former VP, I felt a tad overqualified for that one. Luckily, I still make some money in real estate, although my income has easily been cut by 40%, but at least I have an income. Also, I'm not the only one in my family working, thank goodness.

I don't what to tell people when they can't find work. One of my clients pointed out his fork lift operator. He told me that the guy was the husband of their bookkeeper and a former bigwig from Bear Sterns. Since the Wall Street Meltdown, he has been unable to find a full-time job.

I was at Starbucks up in Bronxville this morning. The "barista" told me that more and more middle-aged people are applying for jobs for little more than minimum wage. But they offer a very good health plan.

Also, this summer, my son, who is 14 and my youngest, started his first job at Pathmark. I was picking him up the other night and started bullshitting with the night manager. He told me that actual fights inside the bottle redemption room are becoming almost commonplace. Sadly, people are fighting, literally, over nickels and dimes. And while beverage sales are no higher this summer than any other summer, bottle and can returns are up like 300 PERCENT. Meaning that people who never recycled before are doing it to put an extra dollar or two in their shopping kitty.

Signs of the times .

PB, we put our recycling out at the curb on Thursday nights. Before the town shows up to take it, people are going through it and taking the bottles that can be returned. It's a little freakish to see people essentially going through your curbside containers.

I live in a condo in a nice area. We have the large trash bins for each building. When I lived in a home, we had to separate bottles/papers but not here for some reason. There are signs by trash bins saying there is a $100 fine for anyone going thru the dumpster. Our association encourages us to call security should we see it occur.

A couple weeks ago I was bringing a bag of trash to the dumpster and what do I see? Literally, legs (upside down) coming out of the dumpster. Somebody was going thr the trash. Turned out it was a woman and when she saw/heard me coming she quickly stood upright and kept saying "I'm sorry mam, I'm sorry." She immediately left. I can't tell you how surprised I was to see this and yet I couldn't bring myself to call security. There is just something so pathetic and sad seeing someone literally going thru your garbage.

TIS

These aren't homeless people, TIS. They're actually quite organized. They pull up in a decent-looking station wagon with various containers in the back and sort out the bottles. Now that NY has a deposit on water bottles as well, they're income went up significantly!

SB, when I lived in Suffern (NY for you outsiders), we had a local guy on one of those motorized wheelchair-scooters who would go around the neighborhood in the wee hours of the morning collecting cans from our recycle bins. One morning he woke me up when he spilled his big plastic bag of cans in front of my house.

Who is getting a raise? I know I haven't gotten one in quite awhile, yet my taxes go up, my gas goes up, groceries, wine, etc. Somebody must be getting a raise to cause the increase in prices. Is this too simple?

Since we bought our house in 1996, our taxes have more than doubled. Gasoline has almost tripled. Let's not forget utilities!

I recently landed a job with the Wells Fargo personal banking and loan under writing team. I was a finance major in college and I'm not particularly worried about my spot in the company, but with this economy you just never know how long you'll stay in the same place...wish me luck.

Good luck to you Ice. I don't bank at WF but both my mortgage and I have a car thru WF. No complaints thus far.


TIS

It is really rough out there for many people.

Frustration and Despair as Job Search Drags On
By MICHAEL LUO
CARLISLE, Ky. — In her well-thumbed, leather-bound Bible, Terri Sadler recently highlighted in bright pink a passage in the Gospel of Matthew. In it, Jesus urges his followers not to “worry about tomorrow, for tomorrow will worry about itself.”

But Ms. Sadler’s tightening throat and halting breath when she tries to read the words aloud make it clear that she is having trouble mustering enough faith to follow them.

Ms. Sadler, who lost her job at an automotive parts plant in October 2008, learned last month that her unemployment insurance had been cut off. She is one of an estimated 2.1 million Americans whose benefits have expired and who are waiting for an end to an impasse that has lasted months in the Senate over extending the payments once more to the long-term unemployed.

Times have changed politically, however, and opposition is growing in Washington and abroad to deficit-bloating government spending, even for those who are hurting.

For Ms. Sadler, and many like her, each passing day has become an excruciating countdown of debts and deadlines.

“I’m basically applying for everything, trying to get something,” said Ms. Sadler, 52, who since early June has not received an unemployment check, which used to be about $388 a week before taxes. “If I don’t, I’m going to lose everything. I’m not going to have a roof over my head. I’m just going to have to walk away with what I have on my back, and my dog.”

She is down to $44 in her purse and a quarter-tank of gas. She says she has exhausted the help of family and friends.

Members of her tiny Baptist church just up the road from her cramped mobile home pooled their money on Sunday to come up with her car payment and insurance. A county ministerial association paid her water bill. A nonprofit organization covered her last two electric bills.

A notepad on her refrigerator lists the other outstanding bills: $102 cellphone, $79 cable and Internet, which she relies on for job-hunting; $15 for her credit card; and $30 for an end table she had bought on layaway. Not listed was $275 for her rent this month, which she still owes.

Every morning, after Ms. Sadler takes her dog out and turns on the coffee maker, she switches on the television to C-Span. Then she cracks open her laptop to resume a job hunt that has become frantic.

But as she has run low on money, her search has also become increasingly circumscribed. She used to drive to drop off résumés with businesses; now she is mostly limited to scanning online listings.
.....
more at
Frustration as Job Search Drags On

Ben Stein says you're a loser if you can't find a job. And he also seems to thinks that people in the Midwest should be used to recessions. Maybe because we're losers....




For one, it has hit the people closest to me the hardest. Until now, I never had a friend who was truly in financial extremis from a recession. When recessions happened, they happened to people in Ohio or Illinois or Michigan.

(snip)

The people who have been laid off and cannot find work are generally people with poor work habits and poor personalities. I say “generally” because there are exceptions. But in general, as I survey the ranks of those who are unemployed, I see people who have overbearing and unpleasant personalities and/or who do not know how to do a day’s work. They are people who create either little utility or negative utility on the job. Again, there are powerful exceptions and I know some, but when employers are looking to lay off, they lay off the least productive or the most negative. To assure that a worker is not one of them, he should learn how to work and how to get along — not always easy.

Stein's Column

Reaction to Stein

My Son and Daughter live in VA a couple weeks ago they both got a raise. He got 2 bucks and she got 1 buck. Also he got a 1300.00 bonus and she got a 1500.00.

Ben Stein is a pretentious, overeducated ass. No wonder Ferris Bueller cut his class .

Thanks Mig, now I know who's to blame!

How stupid! What kind of "survey" could he have possibly conducted?

He pulled a survey out of his behind...
I know a few people who don't have jobs that aren't possibly doing all that I think they could be doing. But I know many more that are busting their *** every day to try to find work. There's no way I could make broad negative generalizations about the unemployed. I think people do that just to protect their ego and say it couldn't happen to me or anyone truly deserving.

Many company's have trimmed the fat out of their work force.
Got rid of the extra people, cut out the dead wood workers and forced those left to work harder and smarter to keep their jobs. Yes, if you fear for your job then you either do better or out you go. No whip needed. Fear is the new whip.
The excuse was things are so bad...we have to cut back.

BUT ( there is always a but)

Company profits are up and in some cases soaring...the same ones that have cut those jobs. They will not replace those people, the jobs are gone swallowed up by corporate greed.

so of course things aren't turning around as fast as the Government would like. The faster it does the better they look and peoples fear wills go away.


And lets talk about those jobs that have come out. Most are being offered at less pay then they were paying before, and often without the same benefits that were packaged before.

and just look at those other jobs out there that just pay a little bit more then min. wage...why work at all people say.



Pop said that in the coffee shop this morning he over heard two middle aged guys wearing shorts and tea shirts with saddles ...toasting each other...They signed the bill...we are good for another 99 weeks- hahaha

I think the extension is only good to November.

From The Business Insider

Editor's note: Michael Snyder is editor of theeconomiccollapseblog.com

The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.

The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.

So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.

Here are the statistics to prove it:

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don't contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.

Giant Sucking Sound

The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

What do most Americans have to offer in the marketplace other than their labor? Not much. The truth is that most Americans are absolutely dependent on someone else giving them a job. But today, U.S. workers are "less attractive" than ever. Compared to the rest of the world, American workers are extremely expensive, and the government keeps passing more rules and regulations seemingly on a monthly basis that makes it even more difficult to conduct business in the United States.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of "chronically unemployed" is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can't raise a family on what you make flipping burgers at McDonald's or on what you bring in from greeting customers down at the local Wal-Mart.

The truth is that the middle class in America is dying -- and once it is gone it will be incredibly difficult to rebuild.

Middle Class Being Wiped Out

I do not ever foresee myself being unable to find work for 99 weeks. But of course I'm sure that most of the people in that situation would have said the same thing. It does make a person a bit humble. It also makes a person save more money and check his own emergency funds/plan. The US is not supposed to work this way.



BRATTLEBORO, Vt. — Facing eviction from her Tennessee apartment after several months of unpaid rent, Alexandra Jarrin packed up whatever she could fit into her two-door coupe recently and drove out of town.

Ms. Jarrin, 49, wound up at a motel here, putting down $260 she had managed to scrape together from friends and from selling her living room set, enough for a weeklong stay. It was essentially all the money she had left after her unemployment benefits expired in March. Now she is facing a previously unimaginable situation for a woman who, not that long ago, had a corporate job near New York City and was enrolled in a graduate business school, whose sticker is still emblazoned on her back windshield.

“Barring a miracle, I’m going to be in my car,” she said.
Ms. Jarrin is part of a hard-luck group of jobless Americans whose members have taken to calling themselves “99ers,” because they have exhausted the maximum 99 weeks of unemployment insurance benefits that they can claim.

For them, the resolution recently of the lengthy Senate impasse over extending jobless benefits was no balm. The measure renewed two federal programs that extended jobless benefits in this recession beyond the traditional 26 weeks to anywhere from 60 to 99 weeks, depending on the state’s unemployment rate. But many jobless have now exceeded those limits. They are adjusting to a new, harsh reality with no income.

In June, with long-term unemployment at record levels, about 1.4 million people were out of work for 99 weeks or more, according to the Bureau of Labor Statistics. Not all of them received unemployment benefits, but for many of those who did, the modest payments were a lifeline that enabled them to maintain at least a veneer of normalcy, keeping a roof over their heads, putting gas in their cars, paying electric and phone bills.

Without the checks, many like Ms. Jarrin, who lost her job as director of client services at a small technology company in March 2008, are beginning to tumble over the economic cliff. The last vestiges of their former working-class or middle-class lives are gone; it is inescapable now that they are indigent.

Ms. Jarrin said she wept as she drove away from her old life last month, wondering if she would ever be able to reclaim it.
“At one point, I thought, you know, what if I turned the wheel in my car and wrecked my car?” she said.

Nevertheless, the political appetite to help people like Ms. Jarrin appears limited. Over the last few months, 99ers have tried to organize to press Congress to provide an additional tier of unemployment insurance. But the political potency of fears about the skyrocketing deficit has drowned them out. The notion that unemployment benefits discourage recipients from finding work has also crept into Republican arguments against extensions. As a result, the plight of 99ers was notably absent from the recent debate in the Senate.

Senator Debbie Stabenow, Democrat of Michigan, is now working on a bill to help those in the group, a spokesman, Miguel Ayala, said, but the chances of providing them with additional weeks of benefits seem dim.

“It’s going to be extremely hard to pass,” said Andrew Stettner, deputy director of the National Employment Law Project. “We barely got 60 votes to keep 99 weeks, so it’s even harder to get more.”

Other ways of helping the long-term jobless might have a better shot of succeeding, Mr. Stettner said, like a temporary jobs program or assistance for emergency needs.

Ms. Jarrin ping-pongs between resolve and despair. She received her last unemployment check in the third week of March, putting her among the first wave of 99ers. Her two checking accounts now show negative balances (she has overdrafts on both). Her cellphone has been ringing incessantly with calls from the financing company for her car loan. Her vehicle is on the verge of being repossessed.

It is a sickening plummet, considering that she was earning $56,000 a year in her old job, enjoyed vacationing in places like Mexico and the Caribbean, and had started business school in 2008 at Iona College.

Ms. Jarrin had scrabbled for her foothold in the middle class. She graduated from college late in life, in 2003, attending classes while working full time. She used to believe that education would be her ticket to prosperity, but is now bitter about what it has gotten her.

“I owe $92,000 for an education which is basically worthless,” she said.

Last year she moved to Brentwood, Tenn., south of Nashville, in search of work. After initially trying to finish her M.B.A. program remotely, she dropped out because of the stress from her sinking finances. She has applied for everything from minimum-wage jobs to director positions.

She should have been evicted from her two-bedroom apartment several months ago, but the process was delayed when flooding gripped middle Tennessee in May. In mid-July, a judge finally gave her 10 days to vacate.

Helped by some gas cards donated by a church, she decided to return to this quiet New England town, where she had spent most of her adult life. She figured the health care safety net was better, as well as the job market.

She contacted a local shelter but learned there was a waiting list. Welfare is not an option, because she does not have young children. She says none of her three adult sons are in a position to help her.

A friend wired her $200 while she was driving from Tennessee, enabling her to check into a motel along the way and helping to pay for her stay here. But Ms. Jarrin doubts that much more charity is coming.

“The only help I’m going to get is from myself,” she said. “I’m going to have to take care of me. That has to be through a job.”

So, in her drab motel room, Ms. Jarrin has been spending her days surfing the Internet, applying for jobs.

Lining the shelves underneath the television are her food supplies: rice and noodles that Ms. Jarrin mixes with water in the motel’s ice bucket and heats up in a microwave; peanut butter and jelly; a loaf of white bread.

Ms. Jarrin still has food stamps, which she qualified for in Tennessee. But she is required to report her move, which will cut them off, so she will have to reapply in Vermont.

She has been struggling with new obstacles, like what to do when an address is required in online applications. She is worried about what will happen when her cellphone is finally cut off, because then any calls to the number she sent out with her résumés will disappear into a netherworld.

The news, however, has not been all bad. She had her first face-to-face interview in more than a year, for a coordinator position at a nonprofit drop-in center, on Monday.

And last Thursday, she got her first miracle, when an old friend from New York sent by overnight mail $300 in cash, enough for another week in purgatory.

99 Weeks Later Article

I understand that the workers who are out of work for a long amounts of time are consider dead workers. No one wants to hire people who have not worked in two years. So if they sit and take all their "99 weeks" then they are less likely to be hired by a company.

Add that second set of "99 weeks" and you are dead to most companies. No on wants a worker who hasn't worked in almost FOUR YEARS! Not for any real important placement anyway.

There are to many "fresh" people to pick from as they say. Things move so quickly now that if you stay out of the workforce for that long a time you are not current,

Reminds you of women who want to re-enter the market after raising their families, only to be shuffled back to low end jobs. Things change so fast that you have to stay current!

It's a sense of hopelessness and helplessness that I can't imagine. Even in the early 1990s, when the last recession hit us, you were still able to patch together a living, even if it meant working two or three part-time jobs. Now, you can't even find those. I've never seen anything like this. And with the huge percentage of income that people need to dedicate to housing, too many are only a paycheck or two away from being homeless. No wonder the recovery has stalled. Everyone's scared to death.

Like one man said.

The passing of this next "99 weeks" deal is nothing but a payoff to keep the masses from rising up and revolting!

In another life when I was a financial advisor we used to tell people to get at least 6 months of expenses saved before they even thought about doing anything else investment wise.

Now I think I'd tell folks to have at least 18mths to two years of expenses socked away in low risk readily accessible accounts.

That story sort of hit home for me because I have an older relative that's going through a similar situation. It's a thin line between trying to help out financially and so on and between getting frustrated and telling them to find a **** job. But there just aren't a lot of jobs out there. It's a paradox. Ultimately everyone has to make their own way in the world yet at the same time to an extent we are our brother's or sister's keeper.

From day one of my professional career, I saved and invested money. At the time my wife and I were supporting my daughter and 5 stepkids. My wife was working at a mental health facility. We drove a 64 Chevy decorated with rust stains and had to have the engine replaced at one time and at another point couldn't afford to replace the thermostat so we had no heat in the car for at least one winter. Everybody has their own story of woe, but sometimes there are circumstances that result from bad decisions, lack of presence of mind, failure to anticipate variables, or just the slings and arrows of outrageous fortune. We provide our fellow Americans with a good deal of help; beyond that I don't know what we can do or should do.

Outsourcing Lawyers
Lawyers moving to India Article

NOIDA, India — As an assistant attorney general for New York State, Christopher Wheeler used to spend most of his time arguing in courtrooms in New York City.

Today, he works in a sprawling, unfinished planned suburb of New Delhi, where office buildings are sprouting from empty lots and dirt roads are fringed with fresh juice stalls and construction rubble. At Pangea3, a legal outsourcing firm, Mr. Wheeler manages a team of 110 Indian lawyers who do the grunt work traditionally assigned to young lawyers in the United States — at a fraction of the cost.

India’s legal outsourcing industry has grown in recent years from an experimental endeavor to a small but mainstream part of the global business of law. Cash-conscious Wall Street banks, mining giants, insurance firms and industrial conglomerates are hiring lawyers in India for document review, due diligence, contract management and more.

Now, to win new clients and take on more sophisticated work, legal outsourcing firms in India are actively recruiting experienced lawyers from the West. And American and British lawyers — who might once have turned up their noses at the idea of moving to India, or harbored an outright hostility to outsourcing legal work in principle — are re-evaluating the sector.

The number of legal outsourcing companies in India has mushroomed to more than 140 at the end of 2009, from 40 in 2005, according to Valuenotes, a consulting firm in Pune, India. Revenue at India’s legal outsourcing firms is expected to grow to $440 million this year, up 38 percent from 2008, and should surpass $1 billion by 2014, Valuenotes estimates.

“This is not a blip, this is a big historical movement,” said David B. Wilkins, director of Harvard Law School’s program on the legal profession. “There is an increasing pressure by clients to reduce costs and increase efficiency,” he added, and with companies already familiar with outsourcing tasks like information technology work to India, legal services is a natural next step.

So far, the number of Western lawyers moving to outsourcing companies could be called more of a trickle than a flood. But that may change, as more business flows out of traditional law firms and into India. Compensation for top managers at legal outsourcing firms is competitive with salaries at midsize law firms outside of major metropolitan areas of the United States, executives in the industry say. Living costs are much lower in India, and often, there is the added allure of stock in the outsourcing company.
.....

America is in for a long decline.

"And we was like the Roman Empire... America was like the Roman Empire."

"It was once."

Could well be. There is a lot of anger out there.

I remember taking a freshman speech class in college. This was 1977. My professor, Dr. Schwartz, told us very matter-of-factly, that in America, the rich would get richer, and the poor would get poorer, until there was blood in the streets.

It's 33 years later and I can't help but think of that statement whenever I see the look of anger and hate among the urban poor. It's scary. They feel they have nothing to lose, and I really can't say that I blame them.

It's more than the urban poor. I notice people everywhere are tense, easy to lose their cool, and just plain hostile.

My husband was recently in Chennai to visit with a company that his outsources to, and he was shocked. He described it as a collision of the ancient and the future. As they walked through the office building, they passed tons of cubicles, each with a different company logo, obviously the American companies that have hired them.

Americans are stupid. We allowed companies to send our manufacturing jobs overseas, but we didn't care because those were "dirty" jobs. However, we have been losing white collar, six figure jobs by the thousands. At this rate, the economy will never recover. Those jobs can't be replaced.

But SB, isn't it a businessman's right to maximize the return on his investment by minimizing costs?

And isn't it short-sighted of that same businessperson to cut costs to the point where it adds to a poor economy? Who will be left to buy the goods or services that the company produces??

This is not a recovery
This Is Not a Recovery
By PAUL KRUGMAN
What will Ben Bernanke, the Fed chairman, say in his big speech Friday in Jackson Hole, Wyo.? Will he hint at new steps to boost the economy? Stay tuned.

But we can safely predict what he and other officials will say about where we are right now: that the economy is continuing to recover, albeit more slowly than they would like. Unfortunately, that’s not true: this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact.

The small sliver of truth in claims of continuing recovery is the fact that G.D.P. is still rising: we’re not in a classic recession, in which everything goes down. But so what?

The important question is whether growth is fast enough to bring down sky-high unemployment. We need about 2.5 percent growth just to keep unemployment from rising, and much faster growth to bring it significantly down. Yet growth is currently running somewhere between 1 and 2 percent, with a good chance that it will slow even further in the months ahead. Will the economy actually enter a double dip, with G.D.P. shrinking? Who cares? If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative.

All of this is obvious. Yet policy makers are in denial...

Economist N. Gregory Mankiew who writes many of the textbooks used in business school curriculum mentioned today that investment tax credits would have HUGE short term impacts on the economy and I can't believe team Obama isn't embracing this yet.

Probably because it doesn't work.
Seriously though Mankiw is more honest than some of his fellow neoconomists but we had eight years of following their suggestions to a T and that landed us where we are today. Mankiw, Hubbard, Lindsey and other assorted right wing economists are discussed in the 2005 book "Neoconomy" by Daniel Altman, which proved to be quite prescient. I am reading that book now and perhaps will review it at some point.

Bottom line is that "free market" supply side economics has been tried and failed. But it was quite successful at increasing wealth for the rich and increasing job "flexibility" for the rest of the nation.

http://www.slate.com/id/2100251
http://delong.typepad.com/sdj/2006/06/brer_furman_and.html

Unemployment rises slightly in August to 9.6%

By Don Lee, Los Angeles Times

Reporting from Washington — The nation's jobless rate worsened slightly last month, edging up to 9.6% from 9.5% in July, the government said Friday in a report that had little for workers to cheer about this Labor Day weekend.

Overall, the American economy lost 54,000 net jobs in August as another 114,000 temporary census workers were dismissed from the federal government's payrolls. Aside from the staffing changes at the Census Bureau, which has been trimming jobs added earlier in the year for the decennial population count, private-sector employers added a modest 67,000 jobs over the month.

The nation's manufacturers, which had been growing all year and leading the weak jobs recovery, fell back in August, cutting 27,000 from their payrolls. Budget-strapped state governments shed another 14,000 jobs.

The healthcare sector added 28,000 jobs in August, and construction employment was up 19,000, although about half of that was due to the return of workers on strike in July. The temporary-help industry, considered a precursor to broader hiring, also rebounded, increasing staffing by 17,000 last month.

The Labor Department also revised up the private-sector hiring in June and July, saying businesses added 168,000 in those two months instead of 102,000 estimated earlier. Even so, by any measure, those numbers are small and not nearly enough to begin to bring down the unemployment rate, which is expected to climb in the coming months.

Nearly 15 million workers were counted as jobless last month. Including people too discouraged to look for work and the nearly 9 million workers who have little choice but to work part-time, the rate of the nation's unemployed and underemployed stood at 16.7% last month, up from 16.5% in July.

"The small amount of job gains during the past few months not only reflects the response to slow output growth, but also a lack of confidence going forward," said Bart van Ark, chief economist at the Conference Board, a business research group based in New York. "The economy as a whole has been weakened by a dismal housing market and slow consumption, which especially hamper small- and medium-sized enterprises."

William Dunkelberg, chief economist for the National Federation of Independent Business, said that his group's monthly survey of small employers showed that most firms made little change to employment in August. He said 11% of the respondents reported that they had increased employment by an average of 2.3 employees, but 13% reduced their workforces by an average of 3.5 workers.

"Job creation still has not crossed the zero line in the small-business sector," he said.

don.lee@latimes.com
Copyright © 2010, Los Angeles Times

Dont worry everyone. Obamas stimulus package will kick in soon. LOL.

ds

The dems have controlled congress since 2006.

The dems have controlled congress since 2006. Throw the bums out.

ds

Only since January, 2007.

Clinton followed their suggestions in 1997 when the Republican Senate initiated the pro growth capital gains tax cut and this led to the boom of the late 90's. It's a common misconception that Clinton' tax hikes in the early 90's led to the later boom but this theory has been proven inadequate. The economy boomed in the late 90's in large part due to the Republican initiated tax cuts and remained so until Sept 11 2001.

That wasn't the case at all. The 1997 tax cut wasn't initiated by Republicans but by Clinton. It wasn't signed until August of 1997 and most of it didn't go into effect until 1998. It started out in the spring of 97 as Clinton's bill -Middle Class Bill of rights- and was ultimately supported by Democrats (164-41 in the House and 37-8 in the Senate)

The deficits had already been declining since 1993, which given Clinton tax policy, should not have been happening according to right wing economic models. By 1997 the deficit was almost gone.

There was a boom throughout the nineties, not just post 1998. I don't see how anyone could argue that. The facts are otherwise. I know that Clinton left a bad taste in some conservative mouths (pun definitely intended ) but we can't change history because some folks didn't like him.

Who created the 1990's surplus?

In that 1997 bill was the child tax credit which was opposed by Republicans, increased tax free rules for certain savings accounts, exemption on capital gain taxation on primary residence for up to $500K and other things which were aimed primarily at the middle class, not the rich.

Much of this logic was included in the recent 2009 American Recovery and Reinvestment Act which was of course bitterly opposed by Republicans. Why? Because of politics.

"Today, the top federal income-tax rate for ordinary income is 35 percent, meaning that earned income is taxed at a rate 2-1/3 times higher than income from capital gains. That’s simply unfair. There is no good reason for wealth to be taxed at a lower rate than work."
http://www.ctj.org/pdf/regcg.pdf

Your grasp for revisionist history is astounding, Frank .

I'm a Democrat who didn't even like the Clintons from Day One, but give me a break. There might be some evidence that the economic downturn started during the second half of Clinton's second term, but there's no denying the fact that the deficit that Clinton inherited in '92 (when I voted against him), was all but gone by late '96 (when I voted for him).

They were indeed GOP initiated but of course Clinton gets credit b/c he was in office. Since when are capital gains tax cuts a Democratic strategy? That's why the current capital gains tax cuts were initiated by Bush and will expire at the end of this year because Obama will NOT be renewing them??

"Only a few weeks before the 1997 act was finally approved, Clinton promised that he would never sign anything like the unfair, budget-busting tax bills then pending in Congress...that promise turned out to be an empty one." Source

It seems likely, though admittedly less certain, that the Clinton tax increases in 1993, while not derailing the economy as many had forecast at the time, did indeed slow the recovery compared to what the economy could have achieved. We were coming out of the 90-91 recession that had been preceded by 8 straight periods of economic growth and so strong economic expansion was expected, but that expansion would, could have been even higher without the Clinton tax hikes.

The economy should have cooled in 1997 but it didn't thanks to Republican tax cuts. As far as evidence for the 'real boom' occuring in the later portion of the decade: The economy averaged 4.2 percent real growth per year from 1997 to 2000--a full percentage point higher than during the expansion following the 1993 tax hike. Employment increased by another 11.5 million jobs, which is roughly comparable to the job growth in the preceding four-year period. Real wages, however, grew at 6.5 percent, which is much stronger than the 0.8 percent growth of the preceding period. Finally, total market capitalization of the S&P 500 rose an astounding 95 percent. The period from 1997 to 2000 forms the memory of the booming 1990s, and it followed the passage of tax relief that was originally opposed by President Clinton.

Again, it's the other way around. It was a Republican-led Congress that passed a tax-relief and deficit-reduction bill that was resisted but ultimately signed by President Clinton. The bill among other things lowered the top capital gains tax rate from 28 percent to 20 percent and created a new $500 child tax credit.

"Only a few weeks before the 1997 act was finally approved, Clinton promised that he would never sign anything like the unfair, budget-busting tax bills then pending in Congress...that promise turned out to be an empty one." Source

It was President Clinton that ushered through Congress a large package of tax increases, which included the following: An increase in the individual income tax rate to 36 percent and a 10 percent surcharge for the highest earners, thereby effectively creating a top rate of 39.6 percent.


There's a reason that ultra conservatives like Sam Walton voted for Clinton and it wasn't b/c they share the same home state of Arkansas; Clinton is a brilliant man who supported business and REAL economic growth.

But you have to go back and look at the advantageous historical circumstances that were prevelant when Clinton took office: The end of the Cold War brought a new sense of hope and greater certainty to the global economy. The price of energy was astoundingly low, with oil prices dropping to about $11 per barrel and averaging under $20 per barrel compared to prices above $90 per barrel today. The Federal Reserve had finally succeeded in establishing a significant degree of price stability, with inflation averaging less than 2 percent during the Clinton Administration. And, of course, a tremendous set of new productivity-enhancing technologies involving information technologies and the World Wide Web burst on the scene.

AGain, in 1997, at a time when the expansion was well along and economic growth should have slowed, Congress passed a modest net tax cut. The economy grew by a full percentage point-per-year faster over his second term than over Clinton's first term.

FN, you appear to be arguing that anything that was good that happened under Clinton either had nothing to do with Clinton's policies, could have been even better if Republican policies were followed, or was actually the result of previous Republican administrations.

The 1993 Clinton tax policies were anathema to Republicans at the time. They hated them and said so loudly. They all predicted doom and gloom, rising deficits, higher interest rates, and basically the end of Western civilization as we knew it. And yet the exact opposite happened.

Usually when reality doesn't fit with a theory that means the theory needs adjusting.

If Clinton detractors want to argue that Clinton's achievements ( performance of economy under Clinton) must be measured against what would have happened if their advice had been followed, then to be consistent they must sign on to Obama's current argument that things would have been even worse if the stimulus hadn't been done. However it's rare that you see Republicans do that. When it comes to Obama they're not interested in measuring actuals against hypotheticals.

Actual GDP growth rates for US
http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=USD
http://www.bea.gov/national/index.htm#gdp

If you want to argue that tax cuts are in and of themselves stimulative, you would have to explain why despite greater tax cuts and associated deregulation, we have had such poor economic growth under the second President Bush where Republicans had the Senate, House and Presidency and had free reign to put their theories into practice. The evidence was in on that which is why we have President Obama today. Time will tell what sort of job he does. But I don't think you can give Republicans credit for the good years of the 1990's.

http://latest-newsonline.com/business-an...the-real-story/

FN, you've got to wean yourself from the Hertiage Foundation and other conservative thinktanks. There are a huge amount of variables that can affect the national economy and its components. Specifically, I've always observed that, given a lower capital gains tax, investors will tend to leave their investments in place long term and, thus, not circulating through the economy. Of course, a robust economy depends on circulation.

Do you consider this nation's system of University business colleges to be conservative think-tanks? If so I'd have to question your motives. I'm talking about strict quantitative economic analysis that is unpartial and unbiased. I see your point about circulation so then why not promote business expansion and growth instead of simply raising taxes which inevitably results in a redistribution of wealth to the poor who in many cases will simply squander it away.

Ole Billy did a great job of balancing the budget but as I noted above the economy improved a point per year in the later 90's after the Republican tax cuts took hold in 97 offseting Clinton's tax hikes of '93. We can raise taxes on the rich and give it to the poor, or we can continue to reinvest the money in the largest economy in the world and help us ALL. The economy was already set to boom at the turn of the internet age and there's nothing to indicate that tax hikes help anyone.

September 11th and the literal destruction of our financial center. No matter who or what was responsible for the boom of the 90's (in both the first AND second half of the decade) the data I presented above shows clearly the nation would have continued on a path of economic prosperity until that fateful day in September.

This is a great discussion and I don't have a political axe to grind but those who insist that President Obama inherited an economic 'mess' from Bush and that Bush is responsible for the bank bail-outs need to consider some other factors:

-It was Clinton in 1999 who signed into law the Gramm-Leach-Bliley Act which repealed the Glass-Steagall Act of 1933. The "Glass-Steagall was passed by Congress to prohibit banks from owning full-service brokerage firms and vice versa so investment banking activities, such as underwriting corporate or municipal securities, couldn’t be called into question and also to insulate bank depositors from the risks of a stock market collapse such as the one that precipitated the Great Depression." The repeal allowed Commercial and investment banks to consolidate and created much of the subprime lending that is now hitting the fan. Republicans in Congress fought against its repeal, but lobbyist from the banking industry managed to "convince" Democrats that the repeal would be in the Country's best interest. Now we are seeing the results of the Democrat economic policy.

-Those who assign culpability to Bush concerning the housing problem should keep in the mind that the whole thing started because there were more homes than there were people buying homes, and the people who bought mortgages for their home knew they weren't going to be able to pay them, which then caused foreclosures and now they want to resell them...

-As far as the auto crisis being pinned on Bush it's worth considering that the "Big Three" US auto makers' problems are a result of bad labor contracts, lousy products and incredibly incompetent management. A combination of all of those factors and a few more likely contributed to this mess.

-Obama inheriting two 'endless' wars is another topic for another day but surprise surprise the Obama administation has no intentions of pulling out of Afghanistan.

Point being: I'm a fiscal conservative but a social liberal and I agree with olivant that both sides make mistakes and the best solution is for dissenters to come together because only then will a true discourse produce viable sustained solutions.

BTW any investors looking to making a quick profit before Christmas invest in GOLD. Analysts on ALL sides see a continual increase in the value of gold well into next year.

I never said that, Frank. I even suggested that there's some evidence that the economic downturn began during the latter half of Slick Willie's second term.

Now I'm no Dubya apologist (I still think the man is borderline retarded), but he's not responsible for everything that's wrong with this country today. Iran is on him. They didn't attack us, and frankly I'm tired of playing Big Brother to the rest of the world when they're going to resent us anyway. But the seeds of the recession were probably already taking root when Dubya was sworn in, so he should get a little slack there.

Truth be told, every President inherits one kind of mess or another.

Tech Sector Slow to hire

This is a relatively long article so I won't reprint the whole thing here but since I work in this arena it was of interest to me. I could have told people this ten years ago. In fact I DID say something similar to my bosses. And so did just about every other American worker whose bonus didn't depend on how much of his team he outsourced..

But economists who follow highly skilled employment say that some of the most prominent companies that laid off workers during the recession, like I.B.M., are expanding their work forces abroad.

“Certainly a lot of these I.T. services firms plus the core software firms like Oracle are globalizing their work, or, as they put it, ‘rebalancing’ their work forces,” says Ronil Hira, an assistant professor of public policy at the Rochester Institute of Technology.

“There’s been this assumption that there’s a global hierarchy of work, that all the high-end service work, knowledge work, R.&D. work would stay in U.S., and that all the lower-end work would be transferred to emerging markets,” said Hal Salzman, a public policy professor at Rutgers and a senior faculty fellow at Heldrich Center for Workforce Development.

“That hierarchy has been upset, to say the least,” he said. “More and more of the innovation is coming out of the emerging markets, as part of this bottom-up push.”

The narrative is familiar to Ms. Mann, the unemployed software engineer. She said her employer, International Gaming Technology, initially told her office that it was opening a branch in China to work with the company’s casino clients in Macau and Australia.

She said she was told that the new branch would be tailoring products to local needs and doing some back-office work. But a year later it absorbed all the operations once performed by the Corvallis staff. International Gaming Technology, based in Reno, Nev., did not respond to repeated requests for comment.

**********

Well, I consider myself a fiscal conservative but a social libertarian as well, and the fact of the matter is that this economy is actually up 26% since the start of the Obama presidency. This despite just a 39% approval rating of his handling of the economy.

Why team Obama is not choosing to run on this is beyond me, but I think it has something to do with what some members of this board have noted as Obama's tendancy to stay in 'campaign mode'. Of course, the Obamaites also spent $850 billion to create 3 million jobs (roughly $300,000 per job) and that's not helping anyone. But he still has plenty of time to get the jobs market turned around and if he does, even if it's not exactly what conservatives want, I'd still vote for him b/c I know he's going to install more social legislation than any conservative will.

Obama's tax cut proposals are getting very little talk this week as well, and I think he's proposing them simply so conservatives will shut the hell up for a while. But don't forget that WALL STREET voted for this president in majority accepting the fact the economy needed more 'Keynesian' ideas and less pure free market economics. The left will say the policies are not Keynesian enough as they are hindered by right wing opposition, and the right alternatively says they're entirely too Keynesian, but that's all typical political fodder.

But anyone who says this President is too liberal in terms of fiscal policy should remember the old Warren Buffett adage, who always claimed that his secretary paid a higher percentage of her income in taxes than he did. And it's true, despite the accusations of Socialism that have been hurled at this administration the fact remains that Obama has not taken steps to abolish the estate tax (though it was in his right to do so), mutual fund fees remain untaxed for traders (big $$$ for Wall Street), and yes; the simple fact of the matter is that secretaries are often taxed at higher rates than their millionaire bosses!

But why would Obama raise taxes on the rich?! He is RICH! It's like basketball 'great' Charles Barkley said to his grandmother, who was upset at the fact that Chuck voted for Bush Sr. back in the day. To which Barkley replied: Grandma, of course I'm a Republican, I'm rich!

Tonight on The Kudlow Report they posed the question:"Is it fair for the guy making 40,000 a year to pay the same percentage in income tax as the guy making $400,000 year!?" I just don't know.

I remember a scene from "The West Wing", when Rob Lowe's character is talking about the fact that at his last job, he made hundreds of thousands per year. He was taxed at six times the national average; however, the fire department didn't come to his house six times faster, the water doesn't run from his tap six times colder, etc. He said that he paid his share and the share of six others. The vast majority of federal income taxes are paid by the highest wage earners.

WEll...the Obama made it official today, if you make 250+ a year your taxes are going up and if you make over a million your taxes are astronomically going up. Why should the middle class worry about tax increases on millionaires?? Because they're the employers in this country. FYI big corporations are no longer the primary business owners in this nation it's small business owners.

Btw the estate tax will rise from 0 to 55% next year

For someone working in the White House, he sure should know better. It is local property and sales taxes that support fire departments. Unlike federal income taxes, they are not progressive. If his water was provided by local government, it is probably funded through an enterprise fund that derives its revenue from utility rates which are universally applied per gallon.

Thank you, Captain Literal. The point is that he was taxed at six times the average and he wasn't receiving six times the services. It was an example so portray how a small percentage of the population pays the vast majority of the federal income taxes.

And, by the way, chances are that the higher income earners within a municipality pay more property taxes, as they probably own a property assessed at a higher value. Still, the fire department arrives at the same speed to the $200,000 house as it does to the $800,000 house in the same municipality. Actually, it probably comes faster to the lower value house, as a higher priced home is probably located further from the noisy firehouse.

Edit: Here's the exact quote, by the way, if anyone's interested:

I left Gage Whitney making $400,000 a year, which means I paid 27 times the national average in income tax. I paid my fair share, and the fair share of 26 other people. And I’m happy to, ‘cause that’s the only way it’s gonna work. And it’s in my best interest that everybody be able to go to schools and drive on roads. But I don’t get 27 votes on Election Day. The fire department doesn’t come to my house 27 times faster and the water doesn’t come out of my faucet 27 times hotter. The top one percent of wage earners in this country pay for 22 percent of this country. Let’s not call them names while they’re doing it, is all I’m saying.

The problem with these discussions is that both sides tend to shade things to their POV. Not surprising, that's human nature.

It's true that the income tax system is progressive. There are some very good reasons for that. Primarily this is because of the declining marginal utility of income. It's also true however that the Social Security tax is regressive along with such excise taxes on gasoline, tobacco, and alcohol, as well as local (flat) state income taxes, property taxes.

When you add it all up and then add in the fact that the truly rich receive more of their "income" in different (and lower taxed ) forms that W-2 folks, it not clear that our complete tax system (state, local, federal) is as progressive as we might wish it were.

Why was there not an explosion of demand and hiring during the years that the Bush tax cuts were in force?

Why was there not an explosion of demand, investment and hiring this year when the estate tax is zero?

Less than 2% of tax returns reporting small business income are filed by individuals or couples in the top two income brackets. 98% of small business owners will be unaffected by the reversion back to Clinton era top personal income rates.

Debunking Tax Cut Myths

This war is absolutely draining the treasury. Every dime of the trillion dollars spent so far is borrowed. So it's not accurate to say we're spending money on the war, when really we're borrowing every second of the day to finance this war. REally it's the 'windfall' costs that haven't yet been accounted for that's caused so much hesitancy in all the markets and helping to freeze hiring.

In addition to the factors I mentioned above, all of the markets are quagmired right now because of the literally THOUSANDS of regulatory costs that are set to take place under the Obama administration. Hiring markets, financial markets, housing markets, all of them are stagnant right now in anticipation of these astronomical rises in regulatory costs i.e universal healthcare program to name one of hundreds.

The problem is that taxpayers who make say 6 figures a year already pay so much in taxes as is when compared to the rest of the population.

Everywhere you hear stories of people who make say 500 thousand a year talking about how it's not worth the time to try and make more because it will simply be seized in taxes, and this was in the supposedly conservative Bush adminstration I'm talking about, the problem is even more compounded now when you add to this all of the regulatory costs that are set to be inacted by the Obama administration.

Small businesses face an annual regulatory cost of $7647 per employee and you can bet this number is about to go through the roof. I can have my accountant at your bedside in 20 minutes to show you line-by-line the increased regulatory costs facing my business if you'd like. ;))

Uh, ok. Lemme get this straight. You're blaming the wars in Iraq and Afghanistan for hurting the economy even though the people that lied us into war in Iraq and said Afghanistan would be a cakewalk are the EXACT SAME people who said that tax cuts for the rich would be the best way to stimulate the economy, the wars would pay for themselves without any tax increases, and tax cuts would not raise the deficit. Fool me once and all that. The people-i.e liberals- who were against the tax cuts and the wars and pointed out that the deficit would rise immensely were right; the neocons were wrong.



Again, Obama has only been around for just under two years. You would have to show why lower estate and income taxes didn't produce the growth that the right-wingers said they would. What the change in tax policies did do very effectively was increase the income and wealth at the top end and increase the level of poverty in the country and increase what's euphemistically referred to as "job flexibility". Wages and growth remained stagnant even as corporate profits increased dramatically. Returning top marginal rates to Clinton era levels isn't going to kill the economy. This debate was already held in 1993. We have the evidence.



I do happen to make six figures a year and I am not concerned about a modest increase in taxes-primarily because I am not yet in that top 2%. But even if I were I wouldn't be concerned about going from 36% to 39%. The problem with this economy is simply not something which can be solved via supply side bromides. The problem is lack of demand. Per CBO, tax cuts for high earners are the least effective way to stimulate the economy. Just about every reputable economist also concedes that point. The middle class and working class are what drives the economy. If these people don't have secure jobs and good wages, things stagnate.

Nobody LIKES paying taxes. It has been my experience that the more some people make, the more they complain. But their complaints are not in and of themselves evidence that a progressive income tax system is a bad idea. But as shown, the overwhelming majority of small business owners will be unaffected by reversion to older tax rates.

Tax cuts for high earners are also one of the most effective ways to increase the deficit but usually all the deficit hawks grow rather silent about that. Supply side tax cuts and excessive deregulation of financial markets played a significant role in bringing us to the brink of disaster. Now is certainly not the time to repeat past mistakes. Even someone as right-wing as Greenspan says those tax cuts should expire.

So while the decision on whether to extend the tax cuts will have a lasting impact on the deficit and on how the nation’s tax burden is distributed, economists and tax experts say it is unlikely to offer much immediate relief for high unemployment and sluggish growth.

“It may have some small impact along the margins, but firms don’t hire based on tax breaks; they hire based on demand,” said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center. “So a lot of the tax breaks are likely to be rewarding people and companies for what they were going to do anyway.”

Tax Cuts: Good Politics , Poor Stimulus

Well, you'll have to forgive me as I stopped reading your post at "the people that lied us into war in Iraq and said Afghanistan..." After a weekend of watching 9-11 documentaries and memorials I've little forbearance for such comments. We'll have to continue our chess match another time..

Iraq had nothing to do with 9-11, FN.

Yeah, well, we hung the bastard anyway and I won't lose a wink of sleep over it. But I guess in your mind Saddam Hussein was correct when he said in 2002 that the tyrant of our era is Zionism and America; that he was perfectly justified to call for the destruction of America about 500 times throughout his 'presidency'; and that the 1,000 plus Al Queda members in Iraq were seperate from the ones who flew the planes into the towers??

Right. And those terrorists who seized the Moscow theatre resulting in the deaths of over 200 people one year after 911? They operated in a vacuum completely seperate from the Middle East and places like Iraq and received their financing from where, the Moon?? And the hundreds of other Islamic terrorist attacks carried out throughout the world over the past 30 years, not a dime came from Iraq, huh? And I guess there's not thousands of terrorist nut-jobs being given safe-haven in Iraq at this very moment. Mmm hmm, sure.

I realize you always have to get the last word in, so I'll eagerly await your response. And I don't expect you to lose that historical chip on your shoulder that resonates in almost every post you make but it might help if you did.

I agree that most of what you've written about Saddam Hussein is true. However, why did the first President Bush not finish the job back in 1991? General Schwarzkopf all but got down on his hands and knees and begged him to let him do so. So, why didn't he? Would the attacks on September 11th been derailed if he had??

I agree, Babe. But we, as Democrats, really can't go there, because the same can be said for Bill Clinton and bin Laden.

If Clinton took him out back in the '90s, when he was CLEARLY within our reach, would 9/11 have happened anyway?

Who knows?

Chances are, another hatemonger might have pulled it off anyway. Maybe. Maybe not.

I don't know, I got a little emotional there but my point about the economy stands.

I've said this before, yes, the attack on the Cole, etc. were all precursors of the horror to come. However, I believe there were two reasons:

1. We were too fat and happy to make waves. It was a time of unparalleled prosperity for many, and we honestly didn't care.

2. Now, with 20/20 hindsight, we can say this. But could anyone really envision that madmen would fly commercial jets into buildings? I know that my first thought after hearing that a plane had flown into the World Trade Center was that it was a small plane that accidentally flew into the tower.

Keep in mind that the US led the invasion of Iraq in 1991 under at least two UN Resolutions and the limitations they placed on the extent of the invasion. You should also keep in mind that President Bush and the members of his administration stated that the toppling of the Hussein regime would have led to other problems in the regime not the least of which would have been with what to replace the Hussein regime.

[quote=olivantYou should also keep in mind that President Bush and the members of his administration stated that the toppling of the Hussein regime would have led to other problems in the regime not the least of which would have been with what to replace the Hussein regime. [/quote]

Which is something we've discovered, isn't it?

I can only take responsibility for or respond to what I wrote, not to hypothetical "bad thoughts" that you think I have. What you're doing here is constructing a straw man and responding to things I did not write. It's a logical fallacy.

I don't know why you seem to lose it anytime people disagree with you but it happens, deal with it. Not everyone sees the world as you do or as I do. I'm okay with that. People ought to be able to disagree honestly without being disagreeable. However as the saying goes, everyone is entitled to their own opinion but not their own facts.

Neither Iraq nor Saddam Hussein had any ties to 9-11. None.
None of the hijackers were Iraqis. Not a single one. Most of them were Saudis. The actual attack was planned in Afghanistan and Germany. Hussein had no nuclear weapons, no biological weapons, no chemical weapons. Iraq was not attacking or threatening to attack the United States.

That the statement of these facts causes you to go off the deep end is unfortunate. Conflating the evil of the 9-11 attack with the evil of Saddam Hussein is a rhetorical trick used by the Bush Administration to gin up support for a war on Iraq.
Iraq had no ties to Al-Quaeda. Al-Quaeda was not in Iraq until after the US invasion. The Iraq war cost the US over 4000 dead, 31000 wounded, and at least $700 billion. At least 100,000 Iraqis were killed and over 2 million are refugees. I don't think those were positive outcomes.

Unsurprisingly when the same people who assured the American people of all the exact opposite of the facts on Iraq come back and tell the American people that certain economic policies are the only way to go, I think people should question their motives and demand proof. Silly me.



Hmm. I don't know about any "historical chip on my shoulder". I am inclined to think you are constructing another straw man. My posts today were about double entendre radio ads from the seventies, the futility of Lions football and old school soul. Perhaps you can explain the ominous undertones involved in those?
But in the meantime I'll post what and when I want to post and you can do the same.

I have no more desire to beat dead horses than anyone else here. But if someone says 2+2 =5 I might respond to that.