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Friday, January 04, 2008

Whoops, Someone's Bubble Just Got Punctured

I will not name names, but economists discussing jobs as being strong and a source of economic growth just keep looking stupider and stupider. Employment. For what it's worth, the idea that services are going to be a very weak sector for jobs in 2008 keeps building evidence.

The NACM December services index took a staggering 2.3 drop related to lower sales and lower collections. The retail/wholesale sector is starving, and now the ability of businesses and consumers to increase their spending is collapsing month by month. The industry does not have the ability to pass along increasing costs so it must cut spending.

More later today or tomorrow when I get the Chief situated.

The question is not whether the Fed drops 50 bps, but whether it drops 75 bps. I think it does not have the guts and sense to go with 75 bps, but a cut of that magnitude is warranted. From here on in the slide is greased.

It's a heck of a note if you are looking for a job.

Comments:
Greased, I am afraid, to land us in a rerun of the 70s, only maybe without Disco and the Fonz to distract us.

Waiting at the bottom: stagflation.
 
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Hope things are well.

I let the care taker for my dad go, and took their place. Survival wages in the race for the bottom.


The good side is that I can be with my dad in his last years, and give him better care and attention. But it is like fighting over scraps to survive with other unfortunates.
 
With the relief of tension the exhaustion is setting in. I really do feel as if I could sleep for a week.
 
The Fed, if it finally gets what's going on, may very well lower before the next meeting at the end of January.

If the Fed is still stuck in thinking this is a liquidity problem and not a full fledged solvency and credit crunch crisis, then whey wait until their meeting and perhaps fiddle while Rome burns and lower by another quarter.

Fed funds futures are starting to lean toward 50 bps, so we'll just have to wait and see.
 
Best wishes for a better New Year for you and the Chief... and for me too.

I became a new unemployment statistic the middle of December; our company was bought out by an east-coast company, so my mountain-states programming job is gone. I had thought I could easily get a new job at about 75% of my former salary; things would be tight but I could manage until I prove myself and get an increase. I suppose that's still possible; but the ads I see are showing pay rates about 50%. How am I going to pay my mortgage now? I am trying so hard not to be terrified...
 
Anon - try for a government job before they're all gone. I'm sorry - genuinely sorry.

Information is being relatively badly hit. A lot of IT jobs were related to finance, so the good trend of the last few years has been capped and undercut.

If you have to let the house go, do so. It is actually a good time to go for a DIL or short-sale for a reason such as unemployment.
 
Dear anonymous: You have a right to be terrified. If it's anything like the tech bust, it could be ugly indeed. My advice (based on almost 13 months out of work during that) is that you need to cut back to absolutely bare bones, starting right now. Turn off your cable, yes shut it down now. Cut back to a single phone. Get rid of any other things that you thought you absolutely had to have. If you get a severance, my advice (and I wish I'd done it at the time) is stock up on bulk food. You can stretch your unemployment a lot farther if you have just buy a few things fresh to supplement.

In fact, it's not a bad idea for most folks to think in terms of downsizing their lifestyle, unless they've been frugal and have money socked away. Vader, you may find that the years you have with your dad are worth more than whatever money you sacrifice. That's how I feel about getting rid of our house and moving to the place we're buying from our friends. Money is just not a good substitute for friends and family.
 
Vader, I don't know what to think about your situation. On the one hand, it probably is time for you to slow down, and it is good that you can spend time with your Dad. But don't give up on the job search, okay?
 
Three years ago I was watching the house prices go up and up and realized that a crash was coming. My wife and I sold our new home for a profit and paid cash for a modest trailer out in the country. We also paid off most of our debt at the same time. Our friends said we were nuts.

I'm feeling better about that decision this week. That and the year's worth of non-perishables I have in my pantry and storage shed.

I think some service businesses will do okay, though. I used to be a mid-level I.T. guy. Now I run a PC repair business in rural Canada. I'm not getting rich, but I do earn enough to live comfortably on, and to be able to sock a bit of $$$ away into savings.

I hope I weather the coming recession comfortably, but I'm sure I'll survive.

My congrats on the good news with The Chief. For what it's worth, I've been living with a crap heart for 39 years now, and you'd be amazed what kind of health problems can be overcome by a good attitude.
 
No, that's true. I know it personally since I have had some major health problems. There's such a thing as thinking yourself down. A positive attitude won't prevent accidents and ill health, but it sure does help to ameliorate the effects.

I like to cook, so bulk food buying makes sense to me. But for many people who don't cook at all, that type of shopping is a foreign concept.
 
digiteyesed, I did the same thing, only we didn't make enough on the house to pay off all debt. Sometimes it pays to be nuts.
 
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