Overview: Most everyone knows it’s a jungle out there for the U.S. economy, but how does this recession measure up to the last one we went through in 2001?
ChangeWave’s latest corporate quarterly survey shows the U.S. economy caught in the clutches of a recession far deeper and more painful than that of 2001 – with alarmingly low 4th Quarter sales projections, abysmal visibility, a deteriorating job market and a severe pullback in capital spending.
The survey was conducted November 20-December 1, 2008 and a total of 3,029 U.S. respondents participated.
Highlights:
4th Quarter 2008 Performance: A whopping one-in-two respondents (51%) project that their company sales will come in Below Plan for 4th Quarter 2008 – 16-pts worse than the previous quarter. Only 11% say their company sales will come in Above Plan – a 7-pt decrease.
As the following chart shows, these 4th Quarter (Dec ’08) corporate sales projections are the worst ever recorded in a ChangeWave survey dating back to the depths of the 2001 recession.
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seldom_seen wrote:If this really is a recession it could be a bad one. Most recessions last about 3 months. This one seems like it could drag on for 4 or 5 [s]months[/s] decades?
vision-master wrote:If this really is a recession it could be a bad one. Most recessions last about 3 months. This one seems like it could drag on for 4 or 5 [s]months[/s] decades?[/quote]
vtsnowedin wrote:Maybe only one decade but that will be more than enough.vision-master wrote:If this really is a recession it could be a bad one. Most recessions last about 3 months. This one seems like it could drag on for 4 or 5 [s]months[/s] decades?[/quote]
It irks me when all these analyst compare this collapse with the GD or some more recent recession. None of these prior events had a housing bubble created by government regulation or 57 trillion of credit default swaps purchased against risk not owned by the bettor or thirty years of credit card abuse and cheap oil. No one has a clue how deep this will go as no one has ever seen this set of conditions before.
biofuel13 wrote:The numbers she was given set the quotas even higher than last year. HIGHER!!
No one who maintains sanity would set higher sales goals for 09 than 08. Even the most mainstream economists are now calling for one of the deepest recessions ever.
It is now crystal clear to me that the executives of the company are both A) Insane and B) obviously trying to run the company into the ground. Why else would they be setting sales expectations higher this year?
biofuel13 wrote:It is now crystal clear to me that the executives of the company are both A) Insane and B) obviously trying to run the company into the ground. Why else would they be setting sales expectations higher this year?
How so? If the majority of it ends up paid back, either via selling off the assets of the institution they loaned to, or getting paid back, the only inflationary pressure is from the difference in interest rates on the loans provided the companies use it to do more than just cover their balance sheets, what they can't recoup if an institution fails, and the amount they just give away.Armageddon wrote:Sure looks like a deflationary depression to me. Hard to imagine considering the amount of money they are printing.
Professor Membrane wrote: Not now son, I'm making ... TOAST!
yesplease wrote:How so? If the majority of it ends up paid back, either via selling off the assets of the institution they loaned to, or getting paid back, the only inflationary pressure is from the difference in interest rates on the loans provided the companies use it to do more than just cover their balance sheets, what they can't recoup if an institution fails, and the amount they just give away.Armageddon wrote:Sure looks like a deflationary depression to me. Hard to imagine considering the amount of money they are printing.
Other companies interested in their assets. There was someone to acquire Merrill Lynch, BofA. Barclays was there to buy up LB at a bargain basement price. Etc...ReverseEngineer wrote:Selling it off to WHO? Who are you going to sell off overpriced McMansions to? Who are you going to sell off failing companies to?
There are a few likely reasons. For one, if Toyota bought out GM they would be the largest automaker in the U.S. and the world hands down. Antitrust law would have a thing or two to say about that. They also may not be able to buy GM for pennies on the dollar unless GM actually goes bankrupt. If GM still has a potential lifeline w/ the federal government they probably won't allow themselves to be bought at bargain basement prices. Lastly, Toyota, and others, are probably afraid of backlash similar to the anti-import stuff of the 80s, which resulted in tariffs and hurt market share. They'll take what they can get but they've already felt first hand what happens if they outperform domestics too much.ReverseEngineer wrote:If Toyota was Flush, why wouldn't they just buy GM for pennies on the dollar?
That is not correct. Toyota, while hurting like everyone else, compared to previous quarters is still profitable. Unlike the domestic automakers, who risk bankruptcy.ReverseEngineer wrote:Because Toyota is losing money ALSO, just not so fast as GM.
This is incorrect as well. While assets may decrease in price during a deflationary period, they still have value. A business may have liabilities associated w/ assets, which would reduce the value of the business, and when the liabilities become too great it's seized and liquidated to pay for it's liabilities, but that doesn't mean it has nothing but liabilities. The government will lose however much they lose based on the unfavorable interest on loans, bankruptcies of companies who don't have enough capital to cover said loans, and flat out give-aways, but that still doesn't mean we'll see in trillions in loses. Only time will tell in that aspect.ReverseEngineer wrote:You aren't buying assets here, you are buying further liabilities. The whole idea the Goobermint will recoup losses here at some later date by reselling what they are buying now is ludicrous.
Professor Membrane wrote: Not now son, I'm making ... TOAST!
yesplease wrote:Only time will tell in that aspect.
biofuel13 wrote: The numbers she was given set the quotas even higher than last year. HIGHER!!
No one who maintains sanity would set higher sales goals for 09 than 08. Even the most mainstream economists are now calling for one of the deepest recessions ever.
It is now crystal clear to me that the executives of the company are both A) Insane and B) obviously trying to run the company into the ground.
biofuel13 wrote: Why else would they be setting sales expectations higher this year?
Edit: By the way the company is not some mom and pop shop, we work for a very high ranking Fortune 500 company.
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