First sign of economic recovery

That's wonderful, Amy!

I hope we continue to hear such happy stories.

Amy, that's fabulous news!

Sadly, it might not be helping the 19,000 Anglo American announced today that they'll be laying off, the 47,000 GM will be laying off over the year, and the additional 5,000 Goodyear Tire will be laying off (on top of 4,000 2H08)....all of these announced just this week...

Laurie

I heard this morning that they expect the total layoffs announced in Feb. to be ~70,000

But that is great news for your friend, Amy! I'm sure there are hundreds more who are also finally getting on the right track too.

At Earl's company, unfortunately one of their HVAC techs almost cut off his finger this morning and had to be rushed to the hospital. Thank goodness for Workman's Comp insurance. The bad side has an upside - they're going to hire another tech now. And hopefully by the time their current tech is healed they will be able to bring him back on with the workload picking up. But still, it's good news for whoever they are hiring soon.

I worked for a Workers Comp place for 20 years. I would say the hurt tech pretty much has to be taken back when he is healed. If there isn't enough money to pay both it will be the new tech that has to go.

It's good to hear one bright spot of cheer in the middle of all these bleak reports.

Congrats to your friend! I have been trying to get a state or federal job for years, so many it's time to reapply for everything. Around here, it's pretty much "who you know", not what you can do. Maybe things will change around here.

It's great that your friend got the job, Amy. Things are getting bad around here, and I keep having visions of Stuttgart going the way of Flint, Michigan. Most of the major car abd parts producers are on short hours, and the smaller companies are dismissing people left and right. Trainees/apprentices aren't being kept on. Hewlitt-Packard stated yesterday that it's laying off twice as many people as announced a few weeks ago. Two years ago companies were recruiting engineers overeas, and now experts are predicting that 20,000 engineers will lose their jobs this year.

Tricia, you're right, it may get worse. I don't know which car manufacturers are producing there, but the production cutback announcements just keep coming. It is now predicted that China is going to purchase more cars in 2009 than the U.S.!

Heidi - as of Feb 20, according to Forbes, the total U.S. layoff announcements total 117,000: that includes the 47,000 GM and 5,000 Goodyear layoffs I mentioned in my first post, but it does not include the 19,000 announced by Anglo American. http://www.forbes.com/2009/02/05/feb...09layoffs.html

And Tricia, to your concerns about HP and the tech sector... these are global numbers, and they break them down by company and country. But since the end of August 2008, over 300,000 have been laid off in the tech sector: http://www.techcrunch.com/2009/02/17...rge-to-300000/

Laurie

I think the company that i work for is going to be having another round of layoffs soon. My name might be on the list, I hope not, but I have made peace with the possibility that it might. They have been sending people home on every shift for the past couple of weeks

Congrats on your friend finding a job!

Sadly, I think a lot more jobs will still be lost before it's all said and done.

Would you be impressed if I said I know of a place that has a sign out advertising for production welders?

I graduated from college in 1974. When our economy gets as bad as it was in 1982, it will still be quite a ways from what it was in 1974. I've seen worse.

I have to agree with mrblanche. At least in this part of the country, it's not as bad as it's been .... 1982 comes to mind first; in 1974 I was working but not paying much attention to economics. I don't know if this means things aren't as bad as the press makes it out to be, or if it's just that it hasn't hit full-force yet here. But my own observation is that people here are still working and spending money, I see very few foreclosed homes for sale and the smaller local and regional banks are lending. There have been some layoffs but nothing too bad.

This is still a long, long, loooooooooooooong way from getting anywhere near The Great Depression.

OK, so I'm a doom-and-gloomer, but don't forget... the stock market crashed in 1929 and the soup kitchens weren't up until 1931/1932.

There is still a long way to go.

Laurie

Ya know, I gotta say one thing ... you said your husband forecasted this thing would go to 7500 (DJIA) and at the time I thought, no way. Well.......WAY.

(sorry, I can't emulate Valley Girl upper glottal shrill up-inflection in text)

But.......the 1929 stock market crash didn't really have all that much to do with the Great Depression. There was actually a pretty strong rally into the early 1930's. It was just one factor among many; with others having more effect, IMO. Therefore, drawing correlations between the Great Depression and current times based on this market debacle are finding correlations where only one out of many exists so far. I'm not saying it won't happen; I'm not saying it couldn't happen; I'm just saying that forecasting that it WILL happen based on the 1929 stock market crash and The Great Depression is just finding something in tea leaves that haven't yet been brewed.

But I am concerned about us repeating the mistakes of the past. There isn't anyone in any position of authority and power any more who remembers those days.

No, I agree - I/we don't think this is the Great Depression either. My only point was that these things - whatever form they take - often take a long time to play out. "Wall Street" remembers the tech bubble bursting in 2001, and despite the terrorist attack, within a year or two we were back to "life as usual," at least economically. This is very, very, different, and while the world agrees about that now, what the outcome will be is (and will continue to be) hotly debated.

The stock market crash didn't have all that much to do with this deep recession (or depression) either in the same sense: it isn't creating the recession (or depression) either: it is reflecting the loss of confidence in the balance sheets of banks which we learned were artificially inflated due to do bad investments (in mortgage and credit derivatives) with bad mortgage problems underlying the structure.

Tim, here's another "no way" for you. Gary's been saying that Citi and BofA are probably insolvent (that you probably believe now) - and that once we've broken (actually the number was 7400), next stop will be 5800, and he thinks we'll go there. Unlike last year when he wasn't sure we'd bust 7400 in 2008: now he does believe we'll bust down to 5800 this year. He thinks that before this is all over - meaning before the market turns ahead of an economic turn in 2010 or 2011 - that it's a high probability that we actually hit Dow 3800 (it might be 3500, sorry, I'm not sure which). There are a lot of caveats to that one, and they have to do with earnings, dividends, levels of the S&P 500 and the Wilshire 5000, but this time he's not alone out there in this thinking. The saddest thing is he thinks it may take even longer to play out than that.

The earnings season is almost over... and it is the first time on record that the S&P 500 have reported negative earnings. EVER. It is the 6th quarter of negative growth - but the first ever quarter of negative earnings. The last time there were 6 quarters of negative earnings in a row was 1951 to 1952. And in all likelihood we're heading for 7 quarters of negative growth. We can look around and say "this isn't as bad as 1982," or "this isn't as bad as 197X,"... but give it another few quarters... or another year... or another two years... especially as the stocks in the S&P 500 have cut dividend payments in the first quarter of this year by $16.6 billion. Dividend reductions in the 4th quarter of 2008 were $15.9 billion. So it's not just market values that are being wiped out, it's not just paper losses - this is going to affect a LOT of retired people.

He does NOT think we'll see 20% unemployment - but we're already mid-teens on underemployment, a more important number (in his opinion) in today's world. He's saying it but not in print on it yet - but he won't be surprised if we DO see soup kitchens again sometime in 2010.

Part of the problems in the 30s were the protectionist attitudes. The problem now is the opposite - the interconnection of world economies. China now has in excess of 20 million migrant laborers unemployed. Back in the day - even in the recession of the 70s - we were an industrial economy, and the fall of the dollar helped improve exports. Now the fall of the dollar doesn't help create jobs here. You're right - this is NOTHING like what we saw during the Great Depression or the recession of the 70s or the 80s. This is much more akin to what Japan faced in its land value bubble burst/deflationary situation of the 1990s - only we've taken the rest of the world down with us. Take a look at the Nikkei. It took Japan a decade to recover economically, and the Nikkei is close to making new lows - 15 years after its peak. The world governments are taking action that Japan alone didn't or couldn't... but improving the consumer balance sheets is not likely something done within just 2-3 years. Hope we're wrong (again).

Laurie

They're practically penny stocks. I sold my BOA stock a couple years ago for a nice profit, not because I saw this coming, but because I just couldn't stand their arrogant attitude toward their smaller customers. If any business deserves to go out of business, it's probably these megabanks, but even so, I don't wish it on them because of the economic dislocation that might cause, and the people that would be out of work.

I REALLY should have shut my eyes when I saw this sentence coming up.

A lot of that is accounting methodology though, isn't it? Taking impairment charges and so forth? In such a case, it could actually be a good thing because it'll make future earnings reports look better by comparison.

That's the worst part; they have no time to recoup. If I was in my 20's or 30's and if I had the money, I'd be buying stocks left and right now. I didn't have the money when I was that young, as I suppose is the case with most.

Part of the problem, yes, but I'm concerned with the talk or resurrecting the former problem as a solution to the current problem. Two mistakes don't make a correction.

390 of the 500 have reported 4Q08 earnings. So far, S&P earnings, on an as-reported basis, are at a loss of $10.44 per share. If you remove the financial stocks, the loss is "just" $2.35 a share. If you measure it by the operating earnings - which are before charges - but also before normal interest and finance charges and taxes - the number's not negative (excluding financials), but is still down 62% Y/Y.

Those are lots of "ifs" and how often has the government gotten all their "ifs" lined up in a row?

I am totally impressed! I would be even more impressed if that sign was in Ohio.