Quite a contrast to 2001 when layoffs were viewed as evil. They started with cutting expenses and then turned to a flood of layoffs in October that year. Now they're starting with big layoffs and asking questions later. But who R they cutting? These places shed most of their staff in 2002 and never rehired. They must be getting rid of the cockroaches. _________________ People first, then things, then dollars.
Posted: Tue Jan 15, 2008 2:49 pm Post subject: Re: Let the layoffs begin
Mortgages go bad, derivatives go bad, mortgage banks go under (over 200 last I looked at the Implod-o-meter), Netbank goes under, Citibank propped by Arabs and Chinese, layoffs begin.
Okay, got that. Now what? Oil is pushing $100, and there are dire warnings from a lot of analysts, but no specifics that I've seen. With all the brainpower here, can we figure out what's next? Is this the start of the spiral down, feeding on itself?
I'd expect a lot more layoffs as retail shrinks-Holiday sales were poor. Anyone?
Posted: Tue Jan 15, 2008 3:42 pm Post subject: Re: Let the layoffs begin
Central banks have not yet exhausted themselves creating money. This little fear of recession/depression will spur central bank and fiscal expansion beyond your wildest dreams, and I expect you've got some wild ideas along that line. It will be made to appear to help some, but the reality is that the descent has begun. Financial Sense dot com expects momentum to pick up next year and burst into full scale depression in 2010.
They've more knowledge and credibility than me so I'll take that as good enough. _________________ Who is John Galt?
Joined: Sep 25, 2004 Posts: 4015 Location: Boston, MA
Posted: Tue Jan 15, 2008 4:19 pm Post subject: Re: Let the layoffs begin
And yet there are around 150 million employed Americans...
Kind of makes the million or two laid off seem statistically insignificant.
Don't get me wrong we are either in a recession this quarter or are about to enter one.
But don't kid yourself. We aren't going to see roving hordes of starving suburbanites.
Even during the Great Depression (which is FAR worse than we are likely to see in the next couple of years), real incomes "only" declined by about 30%. An absolute disaster when real incomes were so low to begin with.
But in today's America, it means living like the average resident of Hong Kong or Singapore, not like the Ingalls family on their little house in the prairie.
Kind of puts it in a different light, no?
_________________ "www.peakoil.com is the Myspace of the Apocalypse."
Joined: May 18, 2006 Posts: 2384 Location: Minneapolis, MN
Posted: Tue Jan 15, 2008 7:43 pm Post subject: Re: Let the layoffs begin
Quote:
Even during the Great Depression (which is FAR worse than we are likely to see in the next couple of years), real incomes "only" declined by about 30%. An absolute disaster when real incomes were so low to begin with.
Real incomes dropped to ZERO for many without those FDR programs. Guess we can go back to them days.......... We don't know what a hard life is.
Posted: Wed Jan 16, 2008 8:34 am Post subject: Re: Let the layoffs begin
The difference, Tyler, is that today's money is all debt. There is no intrinsic value in any currency. When debt begins to evaporate, as it has with the bursting of the housing bubble, nothing, certainly not more debt, will restore real value. The end is not in doubt, the only question is which will come first, deflation or hyper-inflation. You'll find proponents on both sides. Those who guess right will attempt to maintain the fiction of an industrial society; peak oil will assure that end as well. _________________ Who is John Galt?
Posted: Wed Jan 16, 2008 9:42 am Post subject: Re: Let the layoffs begin
Hmm, 'bursting of the housing bubble' has made my dollars worth more; I can buy 20% more house today than in 2006 with the same dollars. Looks like deflation to me, as the same dollar is now backed by more house, which last I checked was real value.
Does it really need saying? Adam Smith proved over 200 years ago that metals such as gold and silver have no more intrinsic value than anything else people want that is scarce. If you bought gold in 1980 then you had to watch as more and more money was created, inflation drove up the price of everything, but not the value of your gold, which collapsed from over $840/oz in 1980 to $260/oz in 2000.
Posted: Wed Jan 16, 2008 10:33 am Post subject: Re: Let the layoffs begin
Lonesnark,
Though many argue gold is an inflation hedge, I've been more convinced that gold is a deflation hedge for the very reasons you point out. In the 70s recession, gold goes up. Gold does down over the next 20 years when the economy is booming.
This guy is in the deflationist camp has argued the same, that gold will do better in a deflation bc it is seen as money:
Posted: Wed Jan 16, 2008 12:53 pm Post subject: Re: Let the layoffs begin
Ah yes, Adam Smith, who appropriated economic ideals from dozens of dead and living economist to create such an unreadable treatise that it just had to be revolutionary. His "invisible hand" was premised on the idea that people, free to act in their own self-interest, would result in the best economy for all. That was the basis for the later appearing capitalism that, in the short run, is the most powerful economic system we humans have ever devised. In the long run it's a complete disaster... guess where we are today.
Inflation or deflation can be argued well from both sides and to the way I see it, to no avail. Gold has always been a store of value so you should have some no matter what. However, what comes after what comes next is more important to me. How will we structure the next economic system when the cold war's victor comes crashing down? _________________ Who is John Galt?
Posted: Wed Jan 16, 2008 4:11 pm Post subject: Re: Let the layoffs begin
What I said had nothing to do with capitalism, all I referenced was his work on monetary history stands for itself and has not been questioned since.
Quote:
How will we structure the next economic system when the cold war's victor comes crashing down?
I would not like to speculate about the potential events of the 22nd century. I would much prefer to limit any discussions to the 21st century, which is a bit more precient.
Posted: Thu Jan 17, 2008 8:37 am Post subject: Re: Let the layoffs begin
mark wrote:
Ah yes, Adam Smith, who appropriated economic ideals from dozens of dead and living economist to create such an unreadable treatise that it just had to be revolutionary. His "invisible hand" was premised on the idea that people, free to act in their own self-interest, would result in the best economy for all. That was the basis for the later appearing capitalism that, in the short run, is the most powerful economic system we humans have ever devised. In the long run it's a complete disaster... guess where we are today.
Inflation or deflation can be argued well from both sides and to the way I see it, to no avail. Gold has always been a store of value so you should have some no matter what. However, what comes after what comes next is more important to me. How will we structure the next economic system when the cold war's victor comes crashing down?
Well, what capitalism has given us - I really perfer the term market economy - is ever higher living standards that at any point in History. If I can I will dig-out the statistics from The Economist, but even Africa's living standards have risen by fourfold since the 19th century.
As far as financial innovation is concerned we are seeing fewer and fewer recessions much less depressions that used to be quite cyclical. And those are usually much shallower and shorter in duration. That we have to argue whether we are technically in a recession or simply growing below trend is testiment to how the business cycle has largely been tamed.
With 300 million Americans - and another 300 million Europeans - a few thousand job losses really do not add up to much (unless it is your job of course). In America when the jobless rate 'climbs' to 5% from historical lows you really cannot complain. France - especially the under 25s - would love to have an unemployment rate of 'just' 5%.
And what, interest rates rose to 5.25% p.a., only to be cut back to 4.25% as soon as a problem arose? Come one, gimme a break! Where is the double digit inflation and interest rates to match? Call me when we get to 20% inflation.
Financial crises can happen in stable economies precisely because they become too stable and volatility and interest rates fall. This encourages investors to take on more risk in search of yield as well as consumers to spend too much and take on too much debt. It is called living-up to and beyond your means and it is not a failure of the market. More like a personal shortcoming. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Thu Jan 17, 2008 9:55 am Post subject: Re: Let the layoffs begin
patience wrote:
MrBill, Those personal shortcomings have reached some monumental proportions these days, from what I see in the beginning of this unwinding.
No doubt! I never said it was perfect. But heck we give people a free education and they sleep through it. We give them subsidized medical care and they still smoke, over-eat and do too little sport. We give them the chance to do something with their lives, but they watch TV instead. What are you going to do? I think people are generally good, but some simply cannot handle debt on a personal level. Just like some cannot handle their liquor. But I still prefer a system that allows everyone to try, and some to fail, then a system where someone else makes decisions about my future and place in society. I prefer the 80/20 Rule to the 99/1 outcome. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Thu Jan 17, 2008 2:16 pm Post subject: Re: Let the layoffs begin
Mr bill, you’re the last person I want to get into an economic argument with. If, as appears from your post, you’re a successful trader, I applaud you; it was an endeavor in which I failed. However… here are some thoughts on what we’ve done.
There is no doubt that capitalism (market economy) is the best economic model we’ve yet developed – for the winners. I am fortunate to have been born in the US at the leading edge of the baby boom generation so my own experience has been as benefactor of this system. The cost of a successful capitalist economy, at least the one we’ve developed here in the US, has been pushed off onto people who inhabit less developed countries. From the banana plantations to the south, the rubber plantations to the east and any oil rich country the world over, the people have suffered while the rich got richer and corrupt or corruptible politicians sold out their people. The west has taken and taken and most of us have no idea how much damage and suffering we’ve inflicted on the rest of world’s population. Our politicians have correctly read the American psyche and know that we no longer, if ever, want the truth. Feed us more of the illusion and we’ll elect you president. Tell us the truth (Ron Paul) and you’ll be excluded from “serious” debate. The reason for that is a topic in itself.
But now the have-nots want what we have and the bad news is that there aren't enough natural resources for everyone on the planet to live the life we westerners have taken for granted. The resource wars have just begun.
Fear plays the trump card when self interest is idealized. Selfish interest must eventually supplant self interest in a climate where the elemental fear that all humans are born with is not mitigated. Our first experiment with a market economy is about to bite the dust, following shortly on the heels of that other major system, communism. I fear capitalism will engender the same response we gave the fall of communism, that it doesn’t work and must be discarded. We’re setting ourselves up here for what James Howard Kunstler calls “a cornporn dictator.” No one wins if that happens.
It’s not the system that’s at fault, it’s the people. Even a king in a command economy would work well for most people if the people running it were conscious. The problem is people, or more accurately, the quality of the people making the decisions. But, that’s not where the blame will be placed for failing economies the world over; we’ll go through another, seemingly endless, cycle of hardship, war, destruction and rebuilding; only to confront the same problem again and again.
I could go on and on but you get the idea. Capitalism is not the culprit here but the capitalist is. Self interest likewise is not the culprit, only recognition that without solving the problem of fear we’ll continue to get the same results.
People will get it, eventually, just not any time soon. _________________ Who is John Galt?
Posted: Thu Jan 17, 2008 3:54 pm Post subject: Re: Let the layoffs begin
mark, in 1800 everyone the world over was desperately poor.
As of 2000 a billion of us have escaped desperate poverty and are now rich. Meanwhile, most of us are still desperately poor. So, who is exploiting whom?
What you fail to realize is that wealth cannot be stollen. The west is not rich because others are poor; the west is rich because the west is rich. As I understand it, if the rest of the world joined us in prosperity those living in the west would become even richer, as technology and productivity (the source of wealth) enjoy positive feedbacks.
Think back: A rich Japan brought Americans cheap fuel efficient cars. A rich South Korea brought Americans cheap electronics. A rich China is bringing Americans cheap consumer goods. What good has ever come from poverty stricken Africa? Nothing we would not still have with a rich Africa.
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