More fun news: Layoffs

[Louis]

Well, the news is out for my division, 5% of the head count, or about 3500 people over the next year. Supposedly it will happen through attrition, retirement, and so on, but if 5% later becomes 10% you never know.

Brave souls that they are, the bosses sent out the news to our work e-mail addresses tonight (Friday night) at 8 PM. It just so happens that I was working later than usual so I got the message before leaving.

L

[Blue Jays]

Buy a Serotta, spread the wealth, and keep the economy chuggin' is the best you can do!
Seriously, best of luck.

[Ray]

Yeah, hang in there. I lived through a layoff once - I kept my job but that period of knowing for a couple of months that a lot of people wouldn't and not knowing who was on the block brought out the worst in everyone. That was despite the folks I worked for handling it about as well as I can ever imagine a situation like that being handled. If they truly can keep it to attrition and retirements, consider yourselves blessed. If not, good luck.

-Ray

[A.L.Breguet]

I hear you. My employer is, I believe, making a real effort to avoid across the board layoffs. We may have to accept reduced hours, but if I can keep my job, that's fine. Virtually all of our competitors have made cuts, and the industry in general is suffering.
Like almost everyone else, I guess.

[Peter P.]

The frightening thing is, I'm hearing TOO MANY stories in my circle of friends and family of layoffs, wage reductions, etc.

Just last night I received a call from a former coworker at a company I was laid off from in 1991. Shortly after I was hired there in 1985 I became his mentor, mechanic, and coach in the cycling department. We've remained friends ever since.

Now, after 29 years in the company, he was part of a lay-off of about 30 of 250 people. At least they treated him right. His severance was 2 weeks salary for every year of service-he's covered until March 2010! He called me last night excited about all the time he'll be able to train (he's 65) the health club he joined, his new goals. His cloud had a silver lining.

The American economy is falling apart at the seams and we STILL haven't seen the bottom yet.

[gomez308]

My company just layed off about half of the employees in GA. About 25 people. It's not a lot, compared to some in the news. It hurts, though, when it's folks you know.

[CNY rider]

I watch Bloomberg every morning and the numbers of layoffs they talk about are mind-numbing.
I mean when a bank, or a manufacturing company lays off 10,000 people, I just have trouble comprehending that.
What actually happens to all those folks? Their families, their kids, their dreams? In a contracting economy where do you find 10,000 new jobs? How many end up having to relocate and change the entire course of their lives?
Maybe it's harder for me to understand because health care is relatively economically insensitive and I've never had to ponder what an involuntary layoff would be like.
My heart truly goes out to folks caught in a squeeze now.

[1centaur]

How many end up having to relocate and change the entire course of their lives?

A serious answer is: too few. I have noticed this ever since I was a kid. Economists speak blithely of job creation on a national level, but an unwillingness to move, whether due to familiarity or inability to break the family ties, really creates pockets of Depression that have enduring consequences. Coal miners, steel workers, auto workers...the list goes on. That's one of the challenges of the notion of taxpayer-funded job training for the unemployed - the jobs must not only be trained for but exist locally. That may not be best for society.

[mcteague]

I work for a large health care IT department, that supports hospitals and health care clinics, and they have decided to out source all IT staff. They say about 200 jobs are being "affected" and approx. 135 positions will be staying. So, ala "Office Space", we all have to interview for our jobs. As my job is actually at one of the hospitals I think I will stay but you never know. Most of the servers are moving to Texas so the guys that support them will most likely be out of a job. Tough times indeed.

Tim McTeague

[CNY rider]

A serious answer is: too few. I have noticed this ever since I was a kid. Economists speak blithely of job creation on a national level, but an unwillingness to move, whether due to familiarity or inability to break the family ties, really creates pockets of Depression that have enduring consequences. Coal miners, steel workers, auto workers...the list goes on. That's one of the challenges of the notion of taxpayer-funded job training for the unemployed - the jobs must not only be trained for but exist locally. That may not be best for society.


Heavy, my friend.
Very heavy.

[rePhil]

I have had one layoff experience. Still haunts me as it was my dream job. Mine went like this.Company jet lands, our dept head who I had one face to face with in 3 years hands me my packet.That was it. My partner and I brought over 60 years experience to the company. No hard feelings, it's only business the jackass said as he offered his handshake.
I had some hints, and my wife and I prepared as best we could. Eliminated all debt. That hurt as I had to sell off stock to finish paying for two childrens college. There went my Richard Sachs.
Living modestly has been our saving grace.

[BumbleBeeDave]

I've been there for four months. I'm sure there are plenty of other forum members who are also in the club and just haven't mentioned it. Losing your job is not usually something people want to brag about. I'm kind of the opposite because I have a big mouth anyway ("What?!? He DOES?!?" they're all saying to themselves :rolleyes: ) and I want every person possible to know I'm looking. You literally never know who or where the vital piece of info to get the next job may come from.

It's gonna get a lot worse before it gets better.

BBD

[Ahneida Ride]

We have an economic system of creating 'money" outa nothing at will
to pay for the 3 big W's. Warfare, Welfare, and Waste.

The party can only last so long and then stuff hits the fan.
:cool:

[WickedWheels]

We should all get together to help turn this economy around. My solution: go to your local bike shop (or mine) and buy a bike or two.

[saab2000]

We should all get together to help turn this economy around. My solution: go to your local bike shop (or mine) and buy a bike or two.

With what money? Most Americans have more liabilities than assets. Just spending more money that doesn't exist is going to solve nothing in the long term

[djg]

We should all get together to help turn this economy around. My solution: go to your local bike shop (or mine) and buy a bike or two.

Yeah, that'll do it. Actually if we can organize 500 cyclists to buy three [anything] each, with [cash or credit], then GDP will soar by no amount worth measuring, lending conditions will change by no measurable amount, federal and state tax revenues will fail to notice, and zero new jobs will be created (unless we all buy the stuff at the same shop, in which case they might need new people for just as long as it takes to get our purchases together and delivered).

If you have the funds for a new bike, and really want one, then go for it -- what the heck. But as far as the larger economy is concerned, everybody on this board, collectively, does not matter. If you have 5 million dollars sitting around that you'd like to spend this year, then you can matter locally (near you or not). Give it to Doctors without Borders and they'll treat quite a few people who would otherwise go untreated. Give it to America's Second Harvest and they'll feed people. Give it all to your LBS and they'll be happy and treat you real nice and maybe keep a few more folks employed -- maybe even open a second location. But as far as the nation is concerned, it's chump change. Be productive, spend and save responsibly, remember that marginal differences in charity really matter to somebody, and Sauve qui peut.

[WickedWheels]

Yeah, that'll do it. Actually if we can organize 500 cyclists to buy three [anything] each, with [cash or credit], then GDP will soar by no amount worth measuring, lending conditions will change by no measurable amount, federal and state tax revenues will fail to notice, and zero new jobs will be created (unless we all buy the stuff at the same shop, in which case they might need new people for just as long as it takes to get our purchases together and delivered).

If you have the funds for a new bike, and really want one, then go for it -- what the heck. But as far as the larger economy is concerned, everybody on this board, collectively, does not matter. If you have 5 million dollars sitting around that you'd like to spend this year, then you can matter locally (near you or not). Give it to Doctors without Borders and they'll treat quite a few people who would otherwise go untreated. Give it to America's Second Harvest and they'll feed people. Give it all to your LBS and they'll be happy and treat you real nice and maybe keep a few more folks employed -- maybe even open a second location. But as far as the nation is concerned, it's chump change. Be productive, spend and save responsibly, remember that marginal differences in charity really matter to somebody, and Sauve qui peut.

I think the worst thing about this economy is that it killed people's sense of humor.

[BumbleBeeDave]

I think the worst thing about this economy is that it killed people's sense of humor.

. . . just not about this. Far too many people acting with far too much greed and opportunism for far too long. Now the rest of us are somehow expected to bail them out. I do my best to live responsibly--within my means--and I feel pretty lucky that those "means" enabled me to keep a roof over my head and take care of my family. I didn't buy a home unless I knew I could pay for it. I have only one credit card and don't put something on that one unless the money is there too pay for it. I regularly have something deducted and put into savings and investments--or at least I did when I had a job. And I try to teach my daughter the same thing. My parents did the same thing before they passed on. I just didn't realize their wisdom until now, when I've been laid off and I'm lucky enough to have some money in the bank to tide me over.

Now millions of people have not done the things listed above and just pretended the gravy would just keep dropping from the sky forever. Now they can't pay for their homes, their credit cards, or their big cars, and they haven't been putting a GD thing into their savings--and they want me to help bail them out with more money created out of nothing (Ahneida's RIGHT!) that, when you think about it, is going to do nothing but put off the problem onto a future generation.

So what's to laugh about? Put some old Carol Burnett reruns on and I'll laugh my arse off. But I'm not seeing much to laugh at in our present situation.

BBD

[93legendti]

Here's a joke:

The President's "urgent" Pork Package has $650 million for coupons for cable box conversions. "Change"!! Heck, I'm rolling on the floor at the moment!

[Joellogicman]

A serious answer is: too few. I have noticed this ever since I was a kid. Economists speak blithely of job creation on a national level, but an unwillingness to move, whether due to familiarity or inability to break the family ties, really creates pockets of Depression that have enduring consequences. Coal miners, steel workers, auto workers...the list goes on. That's one of the challenges of the notion of taxpayer-funded job training for the unemployed - the jobs must not only be trained for but exist locally. That may not be best for society.

For the last 50 years or so, economic relocation usually means people moving from the Atlantic Seaboard and Upper Midwest to the Southwest.

From a pure jobs perspective it made sense. But from an overall cost perspective, I wonder. The older population centers had built up infrastructure and ready access to water. The desert Southwest had neither. As people moved west in their millions, government spending on roads, sewerage, schools, and most importantly huge water projects followed. The cost continues to build, as many of the great dams are nearing the end of their planned lives and aquifers are beginning to be tapped out.

Arguably the government could have spent less refurbishing old industrial centers than creating brand new ones. Of course government spending on the former is usually labeled socialism while the latter called good planning.

The Germans have managed to do a pretty good job at this. Not sure why we can't.

[WickedWheels]

Here's a joke:

The President's "urgent" Pork Package has $650 million for coupons for cable box conversions. "Change"!! Heck, I'm rolling on the floor at the moment!

That is funny!

[CNY rider]

That is funny!

Yeah my two infant daughters, who, along with their future offspring will get to pay for everything from the Iraq war, to the bank bailouts and the TV boxes are sitting here just laughing their asses off about it. :butt:

[djg]

I think the worst thing about this economy is that it killed people's sense of humor.

Well, I can laugh about all sorts of things, but when people start a thread about friends and family getting laid off and wondering how to make ends meet, it seemed to me the wrong time for a certain sort of joke. The sad thing is that your joke proposal is not really different from something many people say without irony -- gosh, if a bunch of us would just run out and buy some stuff with money we might or might not have then everything would be o.k.

Sorry to be a drag. Sometimes it's the audience. Sometimes it's the joke. Sometimes it's the teller. Sometimes timing. Who knows what went wrong?

[dannyg1]

Here's a joke:

The President's "urgent" Pork Package has $650 million for coupons for cable box conversions. "Change"!! Heck, I'm rolling on the floor at the moment!

As compared to the last one? You remember the one with the 850 billion for banks to buy other banks and in turn, raise CC rates on _good customers to 22% and beyond, shut out lending to _good businesses and generally run away with it?

No arms, no legs. Now we roll.

Now that's a GD joke!

[csm]

not sure it does any good to cry about it; might as well laugh.
we are getting exactly the government we deserve. did anybody REALLY think there would be much substantive difference? seriously?

we laid 35 end of last year; and 4 more Friday. I have to go to the main office for next week. I guess it's good that they told me to get a flight that left next Friday.

[Flat Out]

not sure it does any good to cry about it; might as well laugh.
we are getting exactly the government we deserve. did anybody REALLY think there would be much substantive difference? seriously?

Good stuff. The guys been in office less than two weeks. Sorry that ain't quick enough for ya, boss.

Sorry about your layoffs.

[Sandy]

I often think about the massive layoffs and the devastation they do, not so much as a statistic about the economy, but to the individual and the family involved- the fear and hopeless feelings that must occur, as one loses their job and must face the continued reality of fixed financial responsibilities- mortgage payments,food,utilities,healthcare, insurance, transportation, school, taxes,..Clearly many people have not saved enough, been prudent enough to make wise financial decisions, have extended themselves well beyond their financial means, but consider how many men and women have abruptly lost their job, through no fault of their own. Greatly lower consumer and business consumption and demand, deepening financial crisis, worst January for Dow and S&P ever- decreasing personal equity even more, steepest decline in Gross Domestic Product since 1982, alarming increase in unemployment,...,continued decrease in US automotive sales, continued foreclosures and inability of many to pay existing mortgages on time, lower comparative company earnings reports and forecasts for 2009 and beyond....Bottom line is that a vast number of people have lost their jobs for reasons totally unrelated to their performance. It is scarey and sad. In addition, the Government has not seemed capable of effectively changing the massive momentum to the downside.

I didn't vote for President Obama, but at this point in time, to focus blame and/or to criticize the wrongs and/or point out inadequacies of either or both parties doesn't help at all, but will only cause a greater division of people, which will probably occur anyway because of the existing economic reality. There are systemic problems that exist. Most all of us are feeling such in some manner. Some have been layed off. Many more will be. These people clearly must have remarkable emotional and financial concerns. I genuinely feel sorry for them, no matter how they got there.


Sandy

[A.L.Breguet]

I still like bikes.

[paczki]

I still like bikes.

I love 'em, especially the riding part. Just finished two hours on the trainer. Bliss. :banana:

[jlyon]

It was bliss today. 53 miles in 60 degree weahter and enough sun to get a sunburn. Texas can be great in the winter.

[DukeHorn]

60 mile ride today on the Peninsula--68 degrees and sunny

Then I got to read the following "logic"

“On Main Street, ‘bonus’ sounds like a gift,” he said. “But it’s part of the compensation structure of Wall Street. Say I’m a banker and I created $30 million. I should get a part of that.”

Funny thing is this Wall Streeter doesn't address when you lose 15 billion dollars in a quarter, what part of "that" should you get?

[rounder]

I was layed off a little over 10 years ago. Thr company experienced hard times and it was humiliating. I temped and sent out resumes. For awhile (two years) , my average week was to fly out and leave monday and return friday. It was tough (hard on the family). These days, things are a lot better. But, who knows with today's economy. Amyway, best wishes and hope that eveyone here does well.

[csm]

Good stuff. The guys been in office less than two weeks. Sorry that ain't quick enough for ya, boss.

Sorry about your layoffs.

certainly lots of hope in those two weeks.

[Peter P.]

With what money? Most Americans have more liabilities than assets. Just spending more money that doesn't exist is going to solve nothing in the long term

And that's the point, thank you very much, Saab2000. They want people to SPEND to stimulate the economy, but nobody has any money. In fact, they NEVER had any money to begin with, and were buying on credit or were over leveraged. And all those years were cries of "Americans have a negative savings rate" and we should be saving more, but if we did save more then the economy wouldn't grow. What is this, Catch 22?! And the phony buying that was going on artificially inflated the economy. Now we get the BIG adjustment. Boo hoo.

As my mother would say; "You made your own bed, now lie in it."

[Louis]

As my mother would say; "You made your own bed, now lie in it."

Unfortunately, it's not just the folks responsible for the mess that are being harmed. Lots of people who did not participate in "making the bed" are now having to lie in it.

Unless you believe in some sort of collective guilt, this doesn't really fit the situation.

Louis

[ti_boi]

Yep....if you timed things right...you might be ready for this one...but it is far more complex and worldwide in scope than the ones that I lived through.

I did 12 years in the tech bubble...right in the heart of it.

Took a wonderful fallback (actually dream job) in a local school district 6 years ago...and never looked back. Now I watch with amazement as people rant about how they are being robbed....by public employees...but it seems like sour grapes....as private industry guts their ranks. Typical.

[sloji]

This is a time of opportunity; alienated from your family and wish it was different, well pretty soon you'll all be living in the same house just to survive! Want to get green consider it done because soon they'll come take your Porsche away and you'll get to ride your bike everywhere. I see our carbon footprint being reduced even now. The funny thing about this is people will be happier with less and you won't have to take that to the bank. War is going to become more diffucult too, for everyone, with less air transport and less shipping the terrorists are going to have a hard time transporting **** and because we won't produce as many weapons they'll become more scarce and soon they'll lose their reason to attack us and we them...who will
have the time or money.

This depression is a good thing, forces people to look at their values and contemplate rather than consume...yah, reduce the fat.

[RPS]

The only thing I can find laughable about this human suffering is that if we go back about a year in this forum, there were some who wished for it if that was the only way to achieve their agenda. At the time I remember thinking how can anyone be that callous? :confused:

I wish I could ask them if it feels differently now that it is affecting real people, probably many they know. I think it is easy to be an idealist when you haven’t suffered yourself or seen others close to you go through the pain of losing almost everything -- their home, way of life, etc. -- but experiencing despair first-hand can have a funny way of changing priorities.

Maybe that’s why so many idealists tend to be young. Reading about hard times is just not quite the same as going through them yourself.

Good luck to all and let’s hope it doesn’t last.

Rick

P.S. – BTW, layoffs are everywhere. I stopped by my local bike shop yesterday to buy a new threadless headset and the place had closed. And the Texas economy is doing better than most.

[Ray]

Unfortunately, it's not just the folks responsible for the mess that are being harmed. Lots of people who did not participate in "making the bed" are now having to lie in it.

Unless you believe in some sort of collective guilt, this doesn't really fit the situation.

Louis
I look at it a bit differently. Yeah, not EVERYone acted irresponsibly either on the lendor or lendee side - I suspect that was a relatively small minority of people.

BUT (and its a big but)

Just about EVERYone benefited from the temporary suspension of gravity that resulted. Insane lending practices and insane borrowing practices put all sort of people in home that were worth waaaaaay more than they could afford. This artificial demand drove prices way the hell up for EVERYone in lots of real estate markets. Seeing this, LOTS of people borrowed against what they saw as permanent equity to finance a lifestyle that they couldn't afford. And made decisions about their futures based on an assumed value of that home. Similarly, all of this borrowing and consuming obviously inflated the ENTIRE economy. More goods, more services, more money.

I assume I was pretty close to a perfect citizen in the sense that I didn't buy over my head (I actually downsized to eliminate debt) and didn't finance any sort of fancy lifestyle based on home equity. BUT, my retirement funds did VERY VERY well on the backs of this false economic growth. And my business benefited from the development and other economic activity fueled by this false economic growth. So I did very well during these boom years just like almost everyone else did. So I don't feel like much of a victim for losing a lot of equity from my stock-based mutual funds or having less equity in my condo than I thought we had (although we do still own it pretty much free and clear, so its less of an issue). You ride the roller coaster up - you have to ride it back down too. A few people manage to get off of roller coasters at the top, but not many.

So, yeah, this crash is happening based on actions that I didn't take. I'm tempted to be pissed at all of the irresponsible people who caused it. But, OTOH, the bubble that I was living in was also caused by actions that I didn't take. So I can't be too pissed that it popped. If I'd been brilliant, I'd have ridden to the top and then gotten off and bet on it all going downhill. But I'm not. So I played the conservative bets and I'm probably worth just about exactly what I should be worth. I can tighten my belt a lot more easily than a lot of people, so I will. And I hope to hell that the folks in worse shape than I am pull through it without too much pain and suffering. The people who gambled the most won the most and then lost the most. The rest of us are just along for the ride.

-Ray

[Ray]

The only thing I can find laughable about this human suffering is that if we go back about a year in this forum, there were some who wished for it if that was the only way to achieve their agenda. At the time I remember thinking how can anyone be that callous? :confused:
Rick, you can probably do a search and find all sorts of incriminating evidence, but I remember the discussions a bit differently. I've been assuming for years that the level of prosperity in the west generally and the US specifically was unsustainable. If I assume its unsustainable, that means I assume its going to come down. My argument has always been for policies that anticipate this and result in as soft a landing as possible. I may well be one of the people you're referring to, but I've never thought that a crash was inevitable or a good thing in any way. Just that a lowering standard of living was gonna happen and I was interested in what was the best way to manage it to result in the LEAST suffering possible. You may not have been referring to anything I wrote specifically, but I suspect I was generally putting forth positions you might have seen that way. If I've misinterpreted your intent AGAIN, I apologize in advance!

In a bubble economy, nobody is ever popular who walks around with a "gravity" sigh on their backs. But gravity always asserts itself. The question is whether you've flown too close to the sun and, if you have, whether you have a decent parachute. I've been a parachute advocate. I hate to see the level of suffering that I'm afraid a lot of people are already experiencing and many more surely will experience. If it results in some good things down the road, that's a small silver lining - I'd like to think that with more rational policies we could get to that silver lining without these storm clouds. But I don't think human nature works that way.

Enough mixing of metaphors. Its a nice day for a change. I'm gonna go enjoy it.

-Ray

[93legendti]

The only thing I can find laughable about this human suffering is that if we go back about a year in this forum, there were some who wished for it if that was the only way to achieve their agenda. At the time I remember thinking how can anyone be that callous? :confused:

...Good luck to all and let’s hope it doesn’t last.

Rick...

My recollection echoes yours.

[ti_boi]

My recollection echoes yours.


Predictable. In fact we saw it coming and knew the reasons why. It was the light at the end of the tunnel. And it was the train. No one wishes for misery to achieve anything. We simply know the difference between right and wrong.


And yet the MISERY is nothing new for the lower classes...yet when it begins to affect the rich....then we have a problem. TYPICAL! (again) :crap:

[Ray]

My recollection echoes yours.
A good number of folks decry bailouts and governmental intervention of all sorts because they don't think its philosophically right for government to take those actions and might make things worse in the long run. Some equate such actions to socialism and find it unfair to those who have done nothing wrong and prospered. And claim that its not SUPPOSED to be fair and people should sink or swim on their own. That's a political / philosophical position that I disagree with, but hadn't accused anyone of being callous.

But when those who took big risks (both borrowers and lenders) are having terrible fallout and most of the rest of us who have also benefited from the same bubble (albeit to a lesser extent) are also feeling the sting, those of us who have advocated more governmental intervention to prevent this very level of suffering (and worse) are accused of being "callous"? I can see you thinking that its wrong or fuzzy headed or well intentioned but ill-conceived. But callous? Pardon me, but I'm confused. The free market did this. Governmental has been complicit (both parties - I'm not trying to be partisan here), but it was ultimately our own desires to live beyond our means that caused the problems. By free market reasoning, this is the RIGHT outcome and people SHOULD suffer. I'm not unsympathetic to that argument, but I think we should cushion the fall for the people at the bottom for whom its not just a reduction in standard of living but is also an existential crisis.

And, Adam, showing people pictures of beautiful bicycles when they've SPECIFICALLY asked you not to....now, THAT sir, is callous!

-Ray

[norman neville]

Predictable. In fact we saw it coming and knew the reasons why. It was the light at the end of the tunnel. And it was the train. No one wishes for misery to achieve anything. We simply know the difference between right and wrong.


And yet the MISERY is nothing new for the lower classes...yet when it begins to affect the rich....then we have a problem. TYPICAL! (again) :crap:

mega-dittoes.

one fun little factoid in this mcf (first word mongolian, second cluster) was highlited by certified genius dr. p krugman last week: this mess sux around the world, but the usa will have an unprecedented health care crisis on top of it all as millions of people lose their access to health care over the next few years. fun stuff. i hope your kids don't go to school with any of those lucky duckies.

at times i wonder if 'this is it'? probably not, but something eventually will crack the society wide open and the suffering will bubble up periously close to the serotta forum demo. but this probably isn't it. it never is. until it is. but not this time.

despite the obfuscation permeating our culture, the answers to this crisis are simple--not easy, but simple--and utterly impossible given our current mentality, so we, no they, will suffer disproportionately and we may suffer a bit and some will suffer not at all.

but, as usual, anybody who thinks the answers aren't out there...

[ti_boi]

mega-dittoes.

one fun little factoid in this mcf (first word mongolian, second cluster) was highlited by certified genius dr. p krugman last week: this mess sux around the world, but the usa will have an unprecedented health care crisis on top of it all as millions of people lose their access to health care over the next few years. fun stuff. i hope your kids don't go to school with any of those lucky duckies.

at times i wonder if 'this is it'? probably not, but something eventually will crack the society wide open and the suffering will bubble up periously close to the serotta forum demo. but this probably isn't it. it never is. until it is. but not this time.

despite the obfuscation permeating our culture, the answers to this crisis are simple--not easy, but simple--and utterly impossible given our current mentality, so we, no they, will suffer disproportionately and we may suffer a bit and some will suffer not at all.

but, as usual, anybody who thinks the answers aren't out there...


Our next "big issue" if there are not enough is going to be currency....

Sovereign defaults occur when currencies implode.

History tells us that this leads to civic unrest and eventually revolution.

The great race to devaluation/debasement has begun --

[1centaur]

Do currencies implode under deflation or inflation? Just trying to line up my investment bets.

[Louis]

History tells us that this leads to civic unrest and eventually revolution.

The end of the world - all because some poor suckers didn't realize that "variable" meant that their mortgage payments might also go up. Incredible.

Somehow I don't think it was quite that simple.

[ti_boi]

The end of the world - all because some poor suckers didn't realize that "variable" meant that their mortgage payments might also go up. Incredible.

Somehow I don't think it was quite that simple.

If you want to see what this scenario looks like....check out the Argentine privatization of debt....

http://www.youtube.com/watch?v=rH6_i8zuffs&feature=channel_page

[RPS]

You may not have been referring to anything I wrote specifically, but I suspect I was generally putting forth positions you might have seen that way. If I've misinterpreted your intent AGAIN, I apologize in advance!Ray, I was not referring to you or your posts at all. Rather, I was recalling many instances in various threads where some took positions regarding social/energy/transportation policies that indicated to me a lack of caring for the affect they would have on the economy; and hence fellow Americans -- not to mention people of the world in general. It’s not to say that their “bigger picture” reasoning may not have been valid, but their cavalier “let’s do it anyway because we should and screw the cost because we are Americans and should be able to afford it” seemed a little raw to me. Naïve too.


Regarding political differences – yes, I do disagree with you regarding most things that promote socialism, but not because I don’t want to help people just as you do, but rather because I believe socialism does more harm than good in the long run. IMO it creates too much social inefficiency that hurts us in the long run.

I oppose socialism to help people, not to hurt them. You seem to think the very opposite which is fine. I’d like to think we disagree on the means, not the objectives.

[Louis]

It's fascinating how back in the 50's through the 80's Communism was the scary monster under the bed. Now that that threat has gone the way of the dodo it seems that Socialism is the concern du jour.

Not that I'm a huge optimist or anything, (in fact often the opposite) but I don't think we're giving this country enough credit (OK, maybe a poor choice of words). As a whole I think the system and the people who make the country work are more resilient than the Cassandras might believe.

I hope he succeeds.

Louis

[Ray]

Ray, I was not referring to you or your posts at all. Rather, I was recalling many instances in various threads where some took positions regarding social/energy/transportation policies that indicated to me a lack of caring for the affect they would have on the economy; and hence fellow Americans -- not to mention people of the world in general. It’s not to say that their “bigger picture” reasoning may not have been valid, but their cavalier “let’s do it anyway because we should and screw the cost because we are Americans and should be able to afford it” seemed a little raw to me. Naïve too.

I oppose socialism to help people, not to hurt them. You seem to think the very opposite which is fine. I’d like to think we disagree on the means, not the objectives.
I agree that we agree on the objectives and disagree on the means (and what constitutes socialism :cool: ). I've always assumed as much.

But I *WAS* one of the people advocating the energy/transportation policies you speak of. So, lemme explain. When oil prices seemed to the chink in the armor before the credit crisis took center stage, I anticipated a worsening of that situation (and still do, once this problem eases up, if it does) and was advocating a change in policies with the INTENT of getting ahead of an impending crisis and beginning the adjustment to a future of much higher oil prices by creating incentives to change behavior (and energy sources) before that situation would turn into a crisis. Again, you might reasonably disagree with the means, but I don't see the suggestion as callous. I saw (and see) it as attempting to begin a transition that would allow us to avoid catastrophic pain later. Again, those of us taking that position might have been right about the means and we might have been wrong, but it was to avoid catastrophic situation, not to revel in the inevitable short term (and I believe less severe) pains of a transition to more sustainable energy.

For example, given 20-20 hindsight, I'd have preferred if the government had gotten much more aggressive about regulating the kinds of financial credit instruments that allowed this bubble to get as big as it did before it popped (instead of turning a blind eye or worse in order to encourage home ownership). That would have caused more short term pain since fewer people would have been able to afford houses (or afford much lesser houses), real estate prices would have stayed lower, people wouldn't have borrowed as much against their houses or bought as much stuff, the economy would have been more sluggish, etc. But it would have prevented this big bubble and the big collapse we're now struggling mightily to avoid. IOW, I think we should have traded off some short term pain to avoid catastrophic events down the road, which we're seeing some version of now. That was the same approach I was advocating on energy/transportation.

That's why I took exception to the use of "callous". We can disagree all day about what will actually WORK, but I don't assume your intentions are anything other than good. And mine aren't (and weren't) either.

-Ray

[Peter P.]

For example, given 20-20 hindsight, I'd have preferred if the government had gotten much more aggressive about regulating the kinds of financial credit instruments that allowed this bubble to get as big as it did before it popped (instead of turning a blind eye or worse in order to encourage home ownership). That would have caused more short term pain since fewer people would have been able to afford houses (or afford much lesser houses), real estate prices would have stayed lower,...
-Ray

The real source of the problem is house prices have long ceased to be affordable by the middle class. Strategies were rationalized to enable the middle class to continue to afford a house: first it was the dual income family, then the housing market swallowed up the second income. Then it was the ARM with which there is guilt on both sides of the equation. In the meantime, people failed to recognized that house prices were going away from us. And I hate to be cold about this but, it also seems the middle class thought it was a RIGHT to have children and STILL afford a house. In my mind it seems more people than not have children to the limits of their income and then are left scratching their heads saying, "Why don't I have enough money?" It looks like having children, in some skewed way, is really something only the rich can afford. The middle class has GOT to start making some cold decisions such as, how many kids can I have and still afford a house?

Another irony is, those that managed to pay off their houses now take REVERSE MORTGAGES so they can continue to live in them because they never really had enough savings to retire properly. So effectively, something you THOUGHT you owned you never really owned because you're borrowing against it, only to have to sell it when you die to pay the bank back. The banks win either way!

[RPS]

But I *WAS* one of the people advocating the energy/transportation policies you speak of. .......snipped........

That's why I took exception to the use of "callous". We can disagree all day about what will actually WORK, but I don't assume your intentions are anything other than good. And mine aren't (and weren't) either.

-RayI can’t say it any clearer than I wasn’t referring or thinking about you or your posts.

Besides, there is a big-@$$ difference between expecting an economic downturn and planning accordingly, and “WISHING” it happens to drive people into poverty so that they are forced into giving up their gas-guzzling and polluting SUVs, McMansions, etc……..

I just can’t relate to anyone actively wishing Americans suffer economically. Can you?

Some did, and I’m now wondering how they feel that their wish came true. Beyond that I’m confused why you keep thinking I called you callous. :confused:

[BumbleBeeDave]

And I hate to be cold about this but, it also seems the middle class thought it was a RIGHT to have children and STILL afford a house

So many Americans--way too many now--think it's their RIGHT to have so many things--way too many things. Whether it's a bigger car or a bigger house or more glamorous vacation, or a SECOND house . . . it goes on and on. Every parent wants to have their children to have it better than they did. That's the essence of the so-called "American Dream." But now the children have also signed onto that mindset and they fully expect to have it better than their parents did no matter what the cost. Americans have been the richest in the world for so long and that formed a culture of expectation that everyone signed onto because it meant the gravy train just kept on chuggin' on into Main Street Station USA.

And so many industries, companies, and institutions in our society have used that culture of expectation and entitlement to make a quick profit at the expense of, well, everything. Now the economic pigeons are coming home to roost and everyone is trying to find someone else to blame. You know that old Saying, "Power corrupts, and absolute power corrupts absolutely?" Well, I can't get over it's running through my head again and again with one modification that seems to describe our American culture right now just about perfectly . . . "Economic power corrupts, and absolute economic power corrupts absolutely." The US has been the richest country in the world ever since the end of WW2 and it's rotted us from within.

I hate to seem like I'm using it as a crutch, but this song from the Eagles seems to really put it all together for me . . .

I turn on the tube and what do I see
A whole lotta people cryin' 'Don't blame me'
They point their crooked little fingers at everybody else
Spend all their time feelin' sorry for themselves
Victim of this, victim of that
Your momma's too thin; your daddy's too fat

Get over it
Get over it
All this whinin' and cryin' and pitchin' a fit
Get over it, get over it

You say you haven't been the same since you had your little crash
But you might feel better if I gave you some cash
The more I think about it, Old Billy was right
Let's kill all the lawyers, kill 'em tonight
You don't want to work, you want to live like a king
But the big, bad world doesn't owe you a thing

Get over it
Get over it
If you don't want to play, then you might as well split
Get over it, Get over it

It's like going to confession every time I hear you speak
You're makin' the most of your losin' streak
Some call it sick, but I call it weak

You drag it around like a ball and chain
You wallow in the guilt; you wallow in the pain
You wave it like a flag, you wear it like a crown
Got your mind in the gutter, bringin' everybody down
Complain about the present and blame it on the past
I'd like to find your inner child and kick its little ass

Get over it
Get over it
All this bitchin' and moanin' and pitchin' a fit
Get over it, get over it

Get over it
Get over it
It's gotta stop sometime, so why don't you quit
Get over it, get over it

"Get Over It"
From the album Hell Freezes Over (1994)

[Ray]

Besides, there is a big-@$$ difference between expecting an economic downturn and planning accordingly, and “WISHING” it happens to drive people into poverty so that they are forced into giving up their gas-guzzling and polluting SUVs, McMansions, etc……..

I just can’t relate to anyone actively wishing Americans suffer economically. Can you?

Some did, and I’m now wondering how they feel that their wish came true. Beyond that I’m confused why you keep thinking I called you callous. :confused:
I wasn't assuming you were calling ME callous directly, but I did think you were calling some of the policies I was advocating callous. So, I appreciate the distinction.

And, no, I can't relate to anyone actively wishing Americans suffer economically either. As we've both said, we're both after the same basic outcome, we just see different ways of getting there. And, for what its worth, every time I make some dire, pessimistic, projection about the future, I always try to remember to say that I hope to hell I'm wrong about all of this! If there is, in fact, a way for people to continue to live a very nice lifestyle, I'm all in favor. I just haven't thought it was sustainable for quite a while now.

-Ray

[1centaur]

Then it was the ARM with which there is guilt on both sides of the equation.

Just to make a minor point, but I have always had ARMs and have never felt guilt. That's of course because I analyzed both my means and interest rates, and the mortgage itself, and understood that I would be saving thousands of dollars over a short period by using an ARM, which is exactly what I did. I knew I could afford the lifetime cap if I needed to. Now I look at rates and the potential for rebound inflation, and if Obama allows everyone to refi with a 4.5% fixed I will hit that offer.

To your larger point, house prices clearly moved away from reasonable affordability over a period of years as second incomes raised the means and the relative value of manual (common) labor diminished versus mental labor (uncommon) (liberal economists like to say this is related to the decline of unions; I'd say it was unions that diminished the value of American labor, unintentionally). There was no adjustment of the American dream as that occurred - we worked harder, longer, got more education and used new financial techniques and global wealth pools, along with government encouragement/policy, to keep the dream alive, but now we've hit the wall. With less financing, a less educated populace to the extent illegal immigrants blend into the average and schools teach less monetizable subjects, and ever more restrictive zoning we will be cutting off the single family home dream for the next generations (or making that dream a condo). With lower savings occurring via home ownership (notably a 5x leveraged bet that tended to pay off without much risk for generations during the American century) most folks will either have to save via investment (unleveraged) or rely on extracting money in their old age from the rich and/or young people. I'll leave it to your imaginations which is more likely.

[happycampyer]

The real source of the problem is house prices have long ceased to be affordable by the middle class. Strategies were rationalized to enable the middle class to continue to afford a house: first it was the dual income family, then the housing market swallowed up the second income. Then it was the ARM with which there is guilt on both sides of the equation. In the meantime, people failed to recognized that house prices were going away from us. And I hate to be cold about this but, it also seems the middle class thought it was a RIGHT to have children and STILL afford a house. In my mind it seems more people than not have children to the limits of their income and then are left scratching their heads saying, "Why don't I have enough money?" It looks like having children, in some skewed way, is really something only the rich can afford. The middle class has GOT to start making some cold decisions such as, how many kids can I have and still afford a house?

Another irony is, those that managed to pay off their houses now take REVERSE MORTGAGES so they can continue to live in them because they never really had enough savings to retire properly. So effectively, something you THOUGHT you owned you never really owned because you're borrowing against it, only to have to sell it when you die to pay the bank back. The banks win either way!I agree with you up until the punchline—that banks win either way. If someone has plowed their life savings paying off the mortgage on a house and, in retirement, have no (or insufficient) retirement savings, the traditional solution is to sell the house, invest the proceeds and scale back (rent, etc.). I doubt that I would ever go for a reverse mortgage myself, but I don't see it as some evil plot for banks to offer them. It will be interesting to see what the appetite is for banks to offer them after what's happened to the housing market. I wouldn't be surprised if reverse mortgages are among the troubled assets that banks are sitting on.