From the article: "He also said the first quarter U.S. gross domestic product number will be a "misleading" number in that it may not reflect the economy was in a recession in the first three months of the year."
Right on the heels of this from Colin Twiggs: "...I would prefer to stop publishing the model, as I believe it failed to adequately predict the current recession in a relatively low interest rate environment: the 2007 reading should have reached as high as 80%...."
Rob Dawg, yeah, "plummeting" is kind of how it feels with some of the numbers in March. I still think December will be considered the official beginning of the recession, but maybe January.
Similar to Feldstein - I've felt the effects of this recession would linger - whether or not the official recession lingers - mostly because housing is usually an engine of recovery from a recession, and this time housing will be disappointing for some time.
Each of the participants in the FOMC meeting--including the Federal Reserve Board members and all the Reserve Bank presidents--will, as in the past, provide projections for the growth of real gross domestic product (GDP), the unemployment rate, and core inflation (that is, inflation excluding the prices of food and energy items). In addition, participants will now provide their projections for overall inflation. Both overall and core inflation will continue to be based on the price index for personal consumption expenditures (PCE).5
5: Participants will no longer provide projections for the growth of nominal GDP. These now seem relatively less useful to the public, given participants' projections for real GDP growth and overall inflation.
See also: "birth death" model to "estimate" job creation; BLS admits it is faulty in transition periods.
By the way, NBER does not consider GDP alone as indicative of recession. They look into a variety of indicators. So their definition of recession (i.e the official definition) is not "two quarters of negative GDP")
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential structures, state and local government spending, and equipment and software that were largely offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in inventory investment and decelerations in exports, in federal government spending, and in PCE that were partly offset by a downturn in imports.
Inflation: In January the core PCE index rose 2.5 percent y/y, well above the Feds
target rate of one to two percent. Inflation in the New York Area continues to trail the
nation.The January headline and core inflation rates were 3.7 and 2.1 percent.
Technical Note
Gross Domestic Product and Corporate Profits
Fourth Quarter of 2007 (Final)
March 27, 2008
As a result of largely offsetting revisions to inventory investment and PCE for services,
real GDP growth in the fourth quarter was unrevised at 0.6 percent (annual rate).
Profits from current production decreased $52.9 billion, or 3.3 percent (quarterly rate), in
the fourth quarter, compared with a decrease of $20.5 billion, or 1.2 percent, in the third.
Anyone care to defend the BLS employment (payroll) numbers? The birth-death adjustment for March was blasted by Ritholz, and with good reason it seems -- The Big Picture
CR writes: ...Similar to Feldstein - I've felt the effects of this recession would linger - whether or not the official recession lingers - mostly because housing is usually an engine of recovery from a recession, and this time housing will be disappointing for some time.
There is a glimmer that our "jobless recovery" might be followed by a "working recession." With trade imbalances and the housing bust we might just get back to making and growing things. We've lost a generation of real engineers to financial engineering but we tend to forget we are still a manufacturing and resource blessed nation. Once we stop trying to financially engineer our way out we can literally pave our way back. For instance I foresee an opportunity starting August 25th for the US to embark on a massive new commitment to revitalizing our infrastructure. I'm sure Dryfly can see the impending opportunities in farming for the world. And should oil persist at these levels there is no nation in better shape to lead in renewable and sustainable energy technology.
It ain't all bad but I'm afraid we will have to fall down before picking ourselves up. In that I am wishing for a quick transition especially since everything we've done as economic policy has served to delay and thus deepen and lengthen the period of pain.
Yawn. Market will continue to rally, as the market is forward looking and can see that any recession (even if we are in one) will eventually end. Please note this does not work in reverse - i.e. when the economy is booming - the market can see forward that the market will just continue to expand at an increasing rate.
GDP per capita began contracting in the fourth quarter of 2007. Why is there is there so much emphasis on GDP in isolation, when the population is clearly growing about 1% a year?
DOW will continue to rally past the bad news until around May. Around May, I expect more bad economy news will force the analyst to realize that the recession will continue and impact corporate earnings. Plus, there is way too much money betting against the market right now which limits the downsize. The shorts will have to be reduced before you see an actual downturn.
NBER, CR, Krugman: all calling a long recession, all good analysts, none of them industry whores. Based on that, and what I see around me, there's no real argument left to argue.
just take the average volume and average share price and do the math.
you bet the stock market averages can float with 30 plus billion a day, played the RIGHT way.
yes there is a PPT team...and the roster of players on the team is expanding.
just wait till obama or clinton get in and then the fat cats, having exchanged their risk for the taxpayers pull the rug out from under and blame the new white house administration.
San Mateo Daily Journal
\t
Investment firms tap Fed for billions
By Jeannine Aversa
WASHINGTON Big Wall Street investment companies are stepping up their borrowing a bit from the Federal Reserves unprecedented emergency lending program.
The Federal Reserve reported Thursday that those firms averaged $38.1 billion in daily borrowing over the past week from the new lending program. That compared with $32.9 billion in the previous week and $13.4 billion in the first week the lending facility opened.
The program, which began on March 17, is part of the Feds effort to aid the financial system.
The Fed, for the first time, agreed to let big investment houses temporarily get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, will continue for at least six months. It was the broadest use of the Feds lending authority since the 1930s.
I just checked both marketwatch and bloomberg headlines and saw no mention of Feldstein comments. Yet a couple of weeks ago some "hoo?" (Bove) makes a call that the financial crisis is over and he gets big play and the markets rally smartly.
The real engineers are still around. There's a lot of us out here who have been hungering for something "real" to do.
Investing in our own ability to create would be the best thing America could do right now. Quit expecting the financial geniuses and Harvard MBAs to run things and turn companies back over to the engineers.
Of course this should have happened 20 years ago, but better late than never.
"just wait till obama or clinton get in and then the fat cats, having exchanged their risk for the taxpayers pull the rug out from under and blame the new white house administration.
Anyone catch this last observation from SEC guidelines from John Mauldin's latest newsletter? Unbelievable: This is guidance from our govt...
Fair value assumes the exchange of assets or liabilities in orderly transactions.
Under SFAS 157, it is appropriate for you to consider actual market prices, or observable
inputs, even when the market is less liquid than historical market volumes, unless those
prices are the result of a forced liquidation or distress sale. Only when actual market
prices, or relevant observable inputs, are not available is it appropriate for you to use
unobservable inputs which reflect your assumptions of what market participants would
use in pricing the asset or liability.
(The full letter is at Corporation Finance: Sample Letter Sent to Public Companies on MD&A Disclosure Regarding the Application of SFAS 157 (Fair Value Measurements) (March 2008) .)
So, now banks can simply say that the low market prices for assets they hold on
their books are actually due to a forced liquidation or distress sale and dont reflect what
we believe is the true value of the asset. Therefore we are going to give it a better price
based on our models, experience, judgment or whatever. In todays Continuing Crisis,
nearly every type of debt and its price can be classified as a forced liquidation or
distressed sale.
Does this make the asset any better? Of course not. But it buys time for the bank
to raise capital or make enough profits to eventually take whatever losses they must. And
who knows, maybe they will get lucky and the price actually rises?
Does anybody really believe that the US can stay out of a deep, prolonged recession with sustained oil prices of over $100 a barrel?
If you had polled the broad economist community just a few years back...you would have found the great majority forecasting a recession if oil was to ever breach $60 a barrel for any period of time.
We're sustaining $100 and moving back to record highs....
Peak oil forecasters/doomdayers are gaining daily credibility, IMO.
"The real engineers are still around. There's a lot of us out here who have been hungering for something "real" to do. "
High-level chip engineer lives across the street: "We have to hire overseas, we can't find qualified Americans."
That's because they only want to hire people who are out-of-the-box ready on the latest tools. They'd rather take an inexperience kid from India with tool knowledge than a seasoned vet that they might have to train for, oh, two or three weeks.
DOW will continue to rally past the bad news until around May. Around May, I expect more bad economy news will force the analyst to realize that the recession will continue and impact corporate earnings. Plus, there is way too much money betting against the market right now which limits the downsize. The shorts will have to be reduced before you see an actual downturn.
Well, it seems that a lot of shorts are being driven out of the market simply judging from the lack of volume on these rallies.
Of course the higher we get, the harder the squeeze. So I think it's possible to gain traction higher. But really I suspect it mostly depends on how many of the shorts we've cleared out and whether we get some more shocks -- something I've got no information good on.
Also it looks like the Yen may be partly the instrument of bear torture in this case.
I don't think we'll see much in the way of actual investors coming in to the markets, except for some hairbrained retail money.
You kinda had to see this coming:
1) Let all the shorts pile in.
2) Light a fire underneath them.
3) Profit.
High-level chip engineer lives across the street: "We have to hire overseas, we can't find qualified Americans."
Same for software engineers. We can't find enough of a pool to hire from here. The tech bust really scared kids away and the effect is being felt now. They all then wated to be quants. So in a couple of years, it will change when those jobs will be gone.
But I'm in essential agreement with Rob Dawg. I think that there will be a shift back towards domestic production in certain areas that will be the upside to this downturn. Especially if energy prices remain elevated. I also believe the next administration will make it tax=advantageous to do business domestically.
In the legal field we saw a spike of ex-software developers/engineers getting law degrees after the tech bust. The flow started to peter out last year, presumably because the employment situation in tech had a better outlook and people stopped jumping ship, but I'm willing to bet that another prolonged recession will again scare people away from tech.
I'd imagine medicine probably also saw a similar influx of people who would have gone into or stayed in tech.
These are smart kids. Most of them could do anything. It's a shame that they're not staying in engineering, but it obviously doesn't seem in their rational self-interest to do so either if the level of uncertainty in that field persists.
Maybe Farming jobs (which are really high tech if you think about it) will get more popular too. The last 15 years many programs in CA changed their department names from Ag to Natural Resources or Environmental Science. Kids went to get a degree so that they could work for remediation companies and such.
The problem is that kids of farmers get an Ag degree and go back to their family business (or if the family is doing real well a law or accounting degree). There are fewer graduates looking to join ag services companies. Ag sales, consulting and equipment is booming at the same time that fewer graduates are coming out of school.
But I'm in essential agreement with Rob Dawg. I think that there will be a shift back towards domestic production in certain areas that will be the upside to this downturn. Especially if energy prices remain elevated. I also believe the next administration will make it tax=advantageous to do business domestically.
I'm in the I'd like to think that there will be a shift crowd...
...because if there is not, we're driking lemonade out of trash cans...and it ain't lemonade...
...I've interviewed hundreds of CS degrees and MS in CS degrees, and to find a qualified domestic clearable engineer who can troubleshoot a problem or process is painful...I can't say there are many domestic engineers who are good or trainable. I can't hire foreign, but I've interviewed a few--same problem.
...I've told the younger generation about the field being a nice middle-class job, even upper-middle class if your good...o.k. so then they find out about math...
From a Wonder Life:
everytime you hear an expresso-machine, a social ecology major has earned a degree...
In the legal field we saw a spike of ex-software developers/engineers getting law degrees after the tech bust. The flow started to peter out last year, presumably because the employment situation in tech had a better outlook and people stopped jumping ship, but I'm willing to bet that another prolonged recession will again scare people away from tech.
Maybe, but we hire tech people where I am and it's very difficult to find people that are highly qualfied. Could be the area, or it could be that the tech bust scared enough people away from the field that now there's a bit of a drought (of people that meet certain qualifications).
It's gotten somewhat easier to find people recently, but it hasn't gotten easy.
I have no doubt hiring has been tight in tech, but my impression speaking to some of these people is that it's the overall uncertainty in the profession that makes it risky: global wage arbitrage / offshoring, weak re-employment possibilities after age 40, the memory of the last bust, perceived job insecurity, etc. From what I've read the offshoring threat is extraordinarily overblown, but all the various factors add up.
In fact I'm seeing a lot of really good resumes now which is my own barometer on the economy...and the barrista service is excellent as well...this is getting a little French with waiters and waitresses able to discuss nouma & Being-in-Itself and get your order right...but the attitude is so much better...
You won't find good people going into the engineering professions until we start treating them like professionals again. Being a member of the "tiger team" responsible for facilitating the outsourcing transfer of all technical expertise and training your overseas replacement is not a career path I will be recommending to my kids.
There just isn't much incentive to grind for 5 years only to be H-1Bd into unemployment. The smart ones figured this out and thus they don't go into those fields.
"Err... by my standards, the Clintons and Obamas ARE the fat cats.",
OriginalFrank | 04.07.08 - 12:51 pm | #
hey original frank...you don't know the meaning of real wealth...the most powerful people in this country are not millionaires, they are multi, multi billionaires. these are the families that have the POWER.
Barack Obama has an estimated family net worth of less than 2 million dollars.
Obama's money", CNNMoney.com, December 7, 2007.
Goldfarb, Zachary A. "Measuring Wealth of the '08 Candidates", Washington Post, March 24, 2007.
"Both McCain and Clinton are wealthy. McCain was listed as the ninth-richest member of Congress last year by Roll Call, a Capitol Hill newspaper. It pegged McCain's net worth at more than $44 million, with most of the money coming from his wife, Cindy Hensley McCain, who is chairwoman of the nation's third-largest Anheuser-Busch beer distributorship. The family also has extensive real estate holdings.
Clinton was listed as the 21st richest lawmaker, with a net worth estimated at $12 million, but she could be worth up to $50 million based on her 2006 financial disclosure form for Congress. It's much less detailed than tax records.
note clinton is actually a lot richer than that...via Bill she might have a net worth approaching one billion.
i'll look for current data, their tax returns indicate they paid 30 million in fed taxes in the past several years and donated 10 million.
but please note, there are 200 to 300 billionaires in the USA with a total net worth of several trillion dollars...these are the people who can pick up a phone and talk to the highest levels of power in the fed gov and move markets.
I have no doubt hiring has been tight in tech, but my impression speaking to some of these people is that it's the overall uncertainty in the profession that makes it risky: global wage arbitrage / offshoring
Frankly this is a case of media hype not reflecting reality and people believe it. The off-shoring/outsourcing is happening simply because we can't find people. This isn't about cost-savings, as I can assure you that the bschool mantra is, if you're doing this to save money, don't.
What I really find is that many students don't do engineering majors because, well, they're hard and require a lot of work. And we all know mommy and daddy never made any of them actually work. I say this not from a cynical point of view, but because I have taught at the college level for 19 years now and have seen the progression. I have actually given the same exam I took many years ago in the equivalent class and they all failed. We all passed. The ones who work will do very well indeed. The ones who won't will be the ones who will find their jobs buffeted by fate.
I have tons of wonderfuls stories about parents who call the school complaining that i'm treating their kid unfairly...probably what they did since elementary school. Of course, once they are 18, we can tell the parents that, by law, we can't discuss the student with them. They love that lol
A mild, but lingering recession, or a prolonged period of zero growth is a pretty sensible forecast to me. At the moment, the data just isn't showing an accelerating downtrend, but equally the overhang of housing, consumption and finance issues don't suggest an imminent return to trend growth either.
In fact I'm seeing a lot of really good resumes now which is my own barometer on the economy...and the barrista service is excellent as well...this is getting a little French with waiters and waitresses able to discuss nouma & Being-in-Itself and get your order right...but the attitude is so much better...
ipodius, yes that's what I've read as well regarding offshoring (hence my comment that it was overblown), but the guys I'm talking about who were jumping ship into law already had engineering/CS degrees. Their issue wasn't a willingness to work hard. These people make excellent lawyers BTW, good logical thinkers.
Philip Greenspun, an MIT professor in Computer Science and serial entrepreneur has an interesting article about this: Women in Science
"A good career is one that pays well, in which you have a broad choice of full-time and part-time jobs, in which there is some sort of barrier to entry so that you won't have to compete with a lot of other applicants, in which there are good jobs in every part of the country and internationally, and in which you can enjoy job security in middle age and not be driven out by young people willing to work 100 hours per week. ... I've taught a fair number of women students in electrical engineering and computer science classes over the years. I can give you a list of the ones who had the best heads on their shoulders and were the most thoughtful about planning out the rest of their lives. Their names are on files in my "medical school recommendations" directory."
You won't find good people going into the engineering professions until we start treating them like professionals again. Being a member of the "tiger team" responsible for facilitating the outsourcing transfer of all technical expertise and training your overseas replacement is not a career path I will be recommending to my kids.
Hence why there is an engineering 'shortage.'
But wait... wages are increasing. Funny... often in low cost of living areas...
From what I've read the offshoring threat is extraordinarily overblown, but all the various factors add up
AllenY,
I disagree. We have lost about 75% of our team in the past 2 years to outsourcing. We were 60, now we are 15. Most of who lost their jobs went to work in NYC. Any hiring freeze by financial firms will prove disastrous. New trend in tech - if you are not among the top 5-10%, start looking at a new career.
The problem is not qualified candidates, the problem is the pay for qualified candidates.
Huh. Name me another field where, a couple of years from undergrad, you can be making nearly 100k? That's in the Boston area and, of course, depending on your specific area of technical expertise. In the past year I've seen an increase in salary around 15%. My C++ people are anywhere from 120 to 140, my web guys are 100 to 115, and DBAs around 120 to 130. Starting web developers are around 70k. I'd tell kids to do this in a heartbeat.
The problem is not qualified candidates, the problem is the pay for qualified candidates."
So true in many fields. Think about how much you read in the papers about the need to improve the poor quality of schoolteachers. I can tell you that where the pay is $50K a year to start, the quality is better!
Frankly this is a case of media hype not reflecting reality and people believe it. The off-shoring/outsourcing is happening simply because we can't find people.
I know senior people at a large network equipment manufacturer, and a large IT outsourcer, and within the last year both of them had freezes on in the US but were hiring like crazy in India. Although some of it was a strategic decision to build more capability there, a lot of it had to do with costs.
Yes. TS. This basically means we interviewed for 9 months to fill one senior position. Hiring in 3 months is probably feasible now based on resumes. A lot of us thought clearances would make us immune...not so. Lot's of budgets getting whacked lately, and a flood of clearable people is beginning to hit the market...imagine all the soldiers coming home as well looking for civi jobs...most of them are cleared by DOD at TS and above...
Very few firms actually employ the people in India. Mostly they are contract via Wipro or one of the other firms. Unless you are really big and set up a subsidiary over there. But that is very costly and complicated.
Mostly this is driven by global demand and the need to be 24x7. If you don't have that, this is NOT a way to go. So a lot of bigger firms that require 24x7 portals etc will transfer some jobs so that they have coverage.
I guess I'm not so worried about the dithering over whether we're in a recession, or when it started. I think that as long as you make educated and measured financial decisions, you usually come out okay in the end. The idea is to live responsibly before the recession hits so that it's not as much of a problem for you on an individual basis.
By Marianne Stigset and Tony Dreibus
More Photos/Details
April 7 (Bloomberg) -- From Cairo to New Delhi to Shanghai, the run on rice is threatening to disrupt worldwide food supplies as much as the scarcity of confidence on Wall Street earlier this year roiled credit markets.
China, Egypt, Vietnam and India, representing more than a third of global rice exports, curbed sales this year, and Indonesia says it may do the same. Investigators in the Philippines, the world's biggest importer, raided warehouses last month to crack down on hoarding. The World Bank in Washington says 33 nations from Mexico to Yemen may face ``social unrest'' after food and energy costs increased for six straight years.
We have lost about 75% of our team in the past 2 years to outsourcing.
I hear this all the time and would like to give you a little management perspective...a good friend of mine is in charge of the portal (and off-shore activities) for a rather large bank/investment firm. We had dinner last week and she was relating this story of how she had hard resistance from a group when she was asking them for a project (the group was on the US side). So she went to a group off-shore, and had them do the project which came in ahead of schedule. A lot of bad communication happened between she and the group (which wasn't directly under her) because, she felt, she was in charge of these off-shore projects and the people saw them as a threat. They weren't until they gave her a hard time.
After the project the group was broken up and the remaining duties were tranferred to the off-shore group that did the work without the problems. Most of that group left, and those that stayed were told this was their last chance. Sometimes people create their own realities. And the funny thing was, this group, prior to the issues, was not slated for any changes.
I'm reminded of the same mindset that caused the unions to implode, and manufacturing to go somewhere else. Keep wating more money, to do less, and actively alienate management. Just giving you another perspective.
In some sense it doesn't matter whether offshoring happens or not... the prevailing management attitude seems to be if tech workers expect wage increases, hold the spectre of offshoring or H1Bs over their heads. The trouble seems to be that these are smart people with other options.
ipodius ,
On the contrary, the communication between the US and Indian groups on our team is great. The profit per head before the layoffs started was 2-3 million range. Most of those who either left or were given the pink slip made more in their new jobs in the financial sector.
iPodius relates; ...a good friend of mine is in charge of the portal (and off-shore activities) for a rather large bank/investment firm. We had dinner last week and she was relating this story of how she had hard resistance from a group when she was asking them for a project (the group was on the US side).
Let me describe the project: She wanted the team to fully document the entire code base, modularize, and make recommendations as to how to make it maintainable by anyone with opposable thumbs and a modem. Then when they said no she packaged up the latest archive and shopped around the codemills of certain other nations with the question; "Can you do this without the full doc and modular structure?" After signing all the worthless NDAs they all said yes. Shock, surprise.
I could be entirely off base but that is the new relationship and trust level the last 20 years of disposable employee policies have wrought.
Very few firms actually employ the people in India. Mostly they are contract via Wipro or one of the other firms. Unless you are really big and set up a subsidiary over there. But that is very costly and complicated.
Mostly this is driven by global demand and the need to be 24x7. If you don't have that, this is NOT a way to go. So a lot of bigger firms that require 24x7 portals etc will transfer some jobs so that they have coverage.
ipodius | 04.07.08 - 2:11 pm | #
We are not exactly a bohemouth at Zacks, but we have apx 200 people in Kolkata (Calcutta). My department has about 25 of them. Most of them are in their late 20's, have business degrees, decent english language skills, and are very hard working. At current exchange rates they make about $9K a year on average, although salaries over there are escalating fast. Give them a 25% raise and they are disapointed. Our US people are better, but cost 10x as much, but raises are few and far between.
Heh - I work in IT at a major university - in CS. I have a brother-in-law at a major handles IT for a major telecom. I find the comments interesting.
I have heard that some outsourcing to codemills has stopped in part because, in spite of all the SLAs and NDAs, etc., the product was unworkable garbage. Essentially, no money was saved and a lot of time was lost.
I know that many/most of our undergraduates report high levels of job dissatisfaction...and you can't keep persuading kids to go into the field if they're getting that kind of unhappy feedback. Much better to major in something like Social Ecology and then get into law and have decent job security than to do hard stuff for peanuts.
Of course, I'm sure these preferences skew/correlate with the proclivity on this blog for people to actually show up with a 20% down payment and to opt to rent when they could be debt whores like the 'homeowners'.
The kids aren't stupid and at some point, money and prestige as rewards do count. I'm sure that's why so very many of the best and brightest go into medicine.
Should note that those pay levels only applied to the Independent research arm, not to the people who do the care and feeding of the databases, who are paid much less over there. Also big range within the dept, ranging from apx $6k to $15K. The people at the high end have been with us for 3-4 years doing investment research.
I'm reminded of the same mindset that caused the unions to implode, and manufacturing to go somewhere else. Keep wating (sic)more money, to do less, and actively alienate management. Just giving you another perspective.
Of course! We should all be willing to take a 50% pay cut out of "loyalty" to the employer who will fire us without remorse and is raking in the big bucks himself. God forbid we "alienate management."
Real wages in this country have declined - while CEO compensation has exploded. It is true that a brownnoser who will work for scraps is more employable than a worker who demands fair treatment, but Republican political policies (trade deals, for example) are responsible for the situation workers in this country are facing.
I'm in the Boston area. And frankly, if people get "off-shored" here, there are more than enough openings. The average employment length of a software engineer is something on the order of 5 years anyhow. And most times you have to leave to get the money (myself included...I made the biggest salary gains by taking a new job). If I saw a resume from a software guy that was in the same place for more than 5 years, I'd think he/she was...well...lazy.
Let me describe the project: She wanted the team to fully document the entire code base
No Rob Dawg, they were trying to get some data transferring done, and split up some of the functionality so that it was easier to work on in a fluid way, taking advantage of the 24hour timeframes. But the attitude of the group caused their demise. I am sensitive to the attitude about off-shoring but, honestly, if you want to spend your life slogging mundane code don't let me stop you *you meaning employees. But if you want me to off-load the crap to an off-shore entity and leave the more core-related and interesting projects here...I think that's where it's at.
And that is why it's sometimes hard for grads to get jobs. We've taken all the entry-level stuff and sent it off, leaving the higher-level stuff to do here. But some people just can't accept change.
Again, the problem is not 2 years from graduation, but 10-20 years from graduation.
Well then, you don't want to do medical either because there is no upward mobility, it's very hierarchical, and the pay at certain levels doesn't really change much relative to the inflation rate. Factor in the liklihood of some sort of government single-payer system and the gravy train for high pay will be over before that timeframe.
Well, if a business isn't profitable...there are no jobs for anyone. And let me tell you my division is THE most expensive there is. The total dollars don't even come close to others including bonus and other compensation.
The problem is finding guys without the moving violations...
Chris
Respectfully, it is the problem with finding qualified commercial drivers who statistically also don't have a moving violation.
I'd bet willing to be there is a huge pool of far more qualified candidates with an upgraded to reckless ticket because they swerved to avoid a multi-vehicle pileup and when pulled over were also of the type able to avoid a multi-vehicle pileup personality and skill and told the then arresting officer to take a flying eff at a rolling dounut.
A rule of law is better than a rule of men no question. The question arises when the rules become arbitrary or even counterproductive.
Back on topic. The same holds true for tech hiring. We drive the best and brightest to other avenues. The coming possible reformation, yes, "Reformation" rather than an ordinary recession holds that possibility. Example. 50 new municipal firefighter jobs are announced. Do you want the most qualified? Hell no. At least as of now. You are going to get a thousand qualified applicants. Is a felony speeding ticket the way to correctly disqualify a potential engine driver? I am pretty sure that many of the policies we use today are not designed to reward competence, only punish exceptionalism good and bad.
@ ipodius - one can have an insufficiently trained labor pool, and still get outsourcing due to cost....yet you imply that the cause is the first, when I know from first hand experience that the second is the driving force and has been for years. Make excuses all you want -- global wages are going to equalize, and it won't be pretty. Cling to your delusions, if you must.
@ Robdawg:
"she" is very likely a poor manager, who
should've asked more probing
questions about why the answer
was "no" to the item below. Her business will probably pay dearly, but not before she extracts her bonus and moves on to destroy value somewhere else.
Let me describe the project: She wanted the team to fully document the entire code base, modularize, and
make recommendations as to how to make it maintainable by anyone with opposable thumbs and a modem. Then
when they said no she packaged up the latest archive and shopped around the codemills of certain other nations
with the question; "Can you do this without the full doc and modular structure?" After signing all the
worthless NDAs they all said yes. Shock, surprise.
There just isn't much incentive to grind for 5 years only to be H-1Bd into unemployment. The smart ones figured this out and thus they don't go into those fields.
When we got hit with offshoring 2 years ago, we let the H1Bs go to farm out the coding to India. Indian H1Bs training their Indian offshored replacements. Everyone who was laid off due to offshoring had found new work by their last day. Our project was deemed successful offshored, although there is some loss of flexibility.
And back to real estate, talking to our "offshore onsite" guy there is a huge property bubble in India, real estate prices have quadrupled in the past couple of years. He attributed it to the offshored IT people earning a lot of money (by Indian standards) and driving up prices for everyone.
btw, robdawg, I'm well acquanted with codemills....if you think a contractor will say anything other than "yes" to even the most stupid (but paying) question, you haven't really managed a large code base with contractors on it.
What I really find is that many students don't do engineering majors because, well, they're hard and require a lot of work. And we all know mommy and daddy never made any of them actually work.
Ipodius, I usually disagree with a lot of what you say. This is right on the mark.
I went to Oregon State University for 4 terms. I quit because I was disgusted at the quality of both the students and many of the teachers( I remember being impressed by the higher level math teachers, not much else).
I had an EE class where the prof. couldn't speak understandable english, so the other prof. that taught the same class had students filling the stairways so they could understand the lecture.
I was double majoring in EE/CS and I was so disgusted after a year of learning almost nothing towards my degree, except for the math classes, and that which I was teaching myself.
I am so much more qualified now than most graduates that I know. With my experience I could easily double my income, but I will never move from where I live(I work offsite), and really like the company I work for, and the large range of responsibilities keep me from getting too bored.
I could rant about this topic for hours. It is unbelievable to me that I work with people who call themselves programmers who have no database experience and couldn't edit a text file from a *nix cmd prompt.
KnotRP writes:
btw, robdawg, I'm well acquanted with codemills....if you think a contractor will say anything other than "yes" to even the most stupid (but paying) question, you haven't really managed a large code base with contractors on it.
Exactly. Well at least half of my point. The US has been explicitly, implicitly and also illegally exporting intellectual property for a very long time. The effect has been to erode our intellectual capital balance of trade. If every Chicomm (oh, excuse me, Mainland soviet style central command control economy") user of Windows were to pay for teh software they've stolen the US would not have a trade deficit.
The Indian housing bubble is because of expatriates investing their dollars/pounds/euros in the condo market. Most Indians living in the US own an empty condo or a 'site' in India. Talk to them about a bubble and you will be lectured on how the value is going to double in the next 1 year. You get to hear the Indian version of 'they are not making any more land' or 'RE always goes up'.
Many of those who bought into Indian RE want to sell the crap but have no clue how to convert the money out of rupees. Since most try to avoid income tax, your final payment will be a small change in check and the remaining amount in a large suitcase.
We had 200 boxes of discovery that we needed scaned and OCR'ed. The low bid put it on a pallet and shipped it to India. We are a east coast firm.
The new manhole covers in DC say "Made in India." It is cheaper to have them made and shipped to DC then have a PA company do them as was once done.
There is no entry level positions really. They are either crap jobs with no future or IT with specialized skills. The ladder is gone and God forbid you not have a degree. Especially if you want contract work.
You see, knotrp, this implies the same job. It won't be the same job. And no one outsources strictly for cost. If they do so, they are quickly out of a job, as their budgets will never work out. I have reams of spreadsheets that show there is no cost savings to be had, as there is management cost on this side, management cost on the other side, infrastructure, communications, software, travel...I could go on. And unless the project is clearly defined and actively managed, you get crap and miss dates.
If you are setting up a cooperative system where you have clear objectives for productivity or 24x7 service, you'll make your numbers and goals. But not on cost.
All this class warfare talk is simply global jealousy, that's all: American's simply want to live like the Rest of the World does... at least we've been acting in a way that will insure it.
Your information about the Indian real estate market is outdated.
Beginning in the early 1980s and until about 5 years ago, some cities like Mumbai had an increase in property values due to expat purchases. Prices rose at a rate slightly over inflation (which was very high as the country moved from a regulated currency to a freely floated one in response to an untenable trade current account deficit).
In the last 5 years, there has been a much steeper increase in property values. This has coincided with the increase in off-shoring and people erroneously attribute the former to the latter. However, the typical employee of an outsourcing shop gets about $10K/year at most while condominiums there run at $500-$1K/square foot.
These folks would never have been able to buy properties in the old India where credit was only issued with the greatest scrutiny. For example, if you'd worked for IBM for 5 years as an executive, they would make a loan to you, but the laity had no access to large amounts of credit.
In the last 5 years, Western banks have been providing mortgages to the subprime equivalent in India. Indian private banks followed suit and they all now have lots of non-performing loans on their books. The point is its the credit, not the expats' wealth, that has driven prices up there.
Secondly, with regards to REBear's claim about bringing a suitcase of cash back, this is simply not true any longer. A decade ago, this may have been common practice due to the "black" component of transactions - that is the portion that goes unreported on a bill of sale to avoid paying taxes which are figured as a fraction of the sale price.
The government wised up and instituted a policy which allows it the right to buy a property from the seller at the price stated on the bill of sale. No seller wants to take the chance of being forced to forfeit part of the sale price, so all transactions are done in "white" now. Being done this way means the money all sits in bank accounts - no suitcases of cash!
hi curious,
'Suitcase' transactions happen all the time. If you didn't get a suitcase, you probably dealt with a condo sale located on the outskirts or something similar. A SFH sale in any of the big cities will go with a suitcase. Try documenting income to support $500K purchase.
I think there are plenty of technical sector jobs to be had, provided you are the right person for the job.
I'm a surveyor working in the offshore industry, a US national who recently immigrated to NZ. When I applied for my work visa, my employer had to fill out a form stating why he was not hiring a NZ citizen or resident. His answer? They knew every single person involved in the field in NZ, had hired all of the recent graduates of the surveying university program in NZ, and still had job openings. There are about 50 people in the whole country who do what I do. And if I'd chosen to stay in the US (where there are less than 1000 people who do what I do), I had at least 4 companies who would have hired me sight-unseen based on my skills and experience, or I could have gone out as a contractor and never wanted for employment. If you're good enough, whether as a new hire or a more experienced worker, they WILL find you.
You have to figure in that it's not just salaries folks are looking at, it's relative cost of living and quality of life. If the entry-level salary offered to a new hire is $60,000 for living in, say, New York City, that's not going to stretch very far, particularly when you add student loan debt to the mix. That same salary in Houston would allow a grad to have a very good lifestyle.
Fishes and countries rot from the head down. And God and wise Americans know the rotteness in D.C. Not the end of the world, but you might see it from here.
My translation:
"I think that December/January was the precipice and that we have been plummeting into recession ever since then,"
From the article: "He also said the first quarter U.S. gross domestic product number will be a "misleading" number in that it may not reflect the economy was in a recession in the first three months of the year."
Right on the heels of this from Colin Twiggs: "...I would prefer to stop publishing the model, as I believe it failed to adequately predict the current recession in a relatively low interest rate environment: the 2007 reading should have reached as high as 80%...."
Incredible Charts: Stock Trading Diary
Better and better.
Sebastian
Rob Dawg, yeah, "plummeting" is kind of how it feels with some of the numbers in March. I still think December will be considered the official beginning of the recession, but maybe January.
Similar to Feldstein - I've felt the effects of this recession would linger - whether or not the official recession lingers - mostly because housing is usually an engine of recovery from a recession, and this time housing will be disappointing for some time.
Best Wishes.
Chairman Ben S. Bernanke
At the Cato Institute 25th Annual Monetary Conference, Washington, D.C.
November 14, 2007
Federal Reserve Communications
FRB: Speech--Bernanke, Federal Reserve Communications--November 14, 2007
Each of the participants in the FOMC meeting--including the Federal Reserve Board members and all the Reserve Bank presidents--will, as in the past, provide projections for the growth of real gross domestic product (GDP), the unemployment rate, and core inflation (that is, inflation excluding the prices of food and energy items). In addition, participants will now provide their projections for overall inflation. Both overall and core inflation will continue to be based on the price index for personal consumption expenditures (PCE).5
5: Participants will no longer provide projections for the growth of nominal GDP. These now seem relatively less useful to the public, given participants' projections for real GDP growth and overall inflation.
See also: "birth death" model to "estimate" job creation; BLS admits it is faulty in transition periods.
Also see; Wages adjusted for inflation.
By the way, NBER does not consider GDP alone as indicative of recession. They look into a variety of indicators. So their definition of recession (i.e the official definition) is not "two quarters of negative GDP")
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential structures, state and local government spending, and equipment and software that were largely offset by negative contributions from private inventory investment and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.
The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in inventory investment and decelerations in exports, in federal government spending, and in PCE that were partly offset by a downturn in imports.
The City of New York
Monthly Report
on
Current Economic
Conditions
March 4, 2008
Highlights
http://www.nyc.gov/html/omb/pdf/ec02_08.pdf
Inflation: In January the core PCE index rose 2.5 percent y/y, well above the Feds
target rate of one to two percent. Inflation in the New York Area continues to trail the
nation.The January headline and core inflation rates were 3.7 and 2.1 percent.
Technical Note
Gross Domestic Product and Corporate Profits
Fourth Quarter of 2007 (Final)
March 27, 2008
BEA : News Release: GDP Technical Note
Sources of Revision to Components of Real GDP
As a result of largely offsetting revisions to inventory investment and PCE for services,
real GDP growth in the fourth quarter was unrevised at 0.6 percent (annual rate).
http://www.bea.gov/newsreleases/national/gdp/2008/pdf/tech407f.pdf
Corporate Profits
Profits from current production decreased $52.9 billion, or 3.3 percent (quarterly rate), in
the fourth quarter, compared with a decrease of $20.5 billion, or 1.2 percent, in the third.
OT
Fannie Mae says no to credit scores below 580
Fannie Mae says no to credit scores below 580 - Business First of Louisville:
Anyone care to defend the BLS employment (payroll) numbers? The birth-death adjustment for March was blasted by Ritholz, and with good reason it seems -- The Big Picture
CR writes: ...Similar to Feldstein - I've felt the effects of this recession would linger - whether or not the official recession lingers - mostly because housing is usually an engine of recovery from a recession, and this time housing will be disappointing for some time.
There is a glimmer that our "jobless recovery" might be followed by a "working recession." With trade imbalances and the housing bust we might just get back to making and growing things. We've lost a generation of real engineers to financial engineering but we tend to forget we are still a manufacturing and resource blessed nation. Once we stop trying to financially engineer our way out we can literally pave our way back. For instance I foresee an opportunity starting August 25th for the US to embark on a massive new commitment to revitalizing our infrastructure. I'm sure Dryfly can see the impending opportunities in farming for the world. And should oil persist at these levels there is no nation in better shape to lead in renewable and sustainable energy technology.
It ain't all bad but I'm afraid we will have to fall down before picking ourselves up. In that I am wishing for a quick transition especially since everything we've done as economic policy has served to delay and thus deepen and lengthen the period of pain.
Yawn. Market will continue to rally, as the market is forward looking and can see that any recession (even if we are in one) will eventually end. Please note this does not work in reverse - i.e. when the economy is booming - the market can see forward that the market will just continue to expand at an increasing rate.
When will we know Q1 GDP ? With all the different components showing contraction, how will Q1 GDP be positive ?
Regards.
It seems that the stock market is paying close attention to all these recession figures, because it is up close to another 100 pts on the DOW.
"well above the Feds target rate of one to two percent."
They don't have a target, don't like the number make something up.
up close to another 100 pts on the DOW.
No volume.
GDP per capita began contracting in the fourth quarter of 2007. Why is there is there so much emphasis on GDP in isolation, when the population is clearly growing about 1% a year?
DOW will continue to rally past the bad news until around May. Around May, I expect more bad economy news will force the analyst to realize that the recession will continue and impact corporate earnings. Plus, there is way too much money betting against the market right now which limits the downsize. The shorts will have to be reduced before you see an actual downturn.
NBER, CR, Krugman: all calling a long recession, all good analysts, none of them industry whores. Based on that, and what I see around me, there's no real argument left to argue.
wuu huuuu seb's back on the anti-recession call...yawn
it really is all semantics, is'nt it?
does it really matter that half of bear's employee's will be working in the ag industry within six months... there still gainfully employed.
Vikram, I think the advance GDP release is on 30 April at 8:30 am ET.
Think the broad indices are setting up for short swing trade here. Would like to sell when the news on Washington Mutual comes out..
Interesting article on domestic transporation...reported industry trends seem at odds with recent trannie equity index trends.
Idle cars signal a downturn
RIMM swimmin against the stream...(down)
dont expect the stock market to reflect any of these realities soon.
the fed continues to loan 30 plus billion dollars PER DAY to brokerage houses et al.
since its all TAF, and all TSLF, all day, the hits just keep on commin..
San Mateo Daily Journal
just take the average volume and average share price and do the math.
you bet the stock market averages can float with 30 plus billion a day, played the RIGHT way.
yes there is a PPT team...and the roster of players on the team is expanding.
just wait till obama or clinton get in and then the fat cats, having exchanged their risk for the taxpayers pull the rug out from under and blame the new white house administration.
PT Barnum was right.
San Mateo Daily Journal
\t
Investment firms tap Fed for billions
By Jeannine Aversa
WASHINGTON Big Wall Street investment companies are stepping up their borrowing a bit from the Federal Reserves unprecedented emergency lending program.
The Federal Reserve reported Thursday that those firms averaged $38.1 billion in daily borrowing over the past week from the new lending program. That compared with $32.9 billion in the previous week and $13.4 billion in the first week the lending facility opened.
The program, which began on March 17, is part of the Feds effort to aid the financial system.
The Fed, for the first time, agreed to let big investment houses temporarily get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, will continue for at least six months. It was the broadest use of the Feds lending authority since the 1930s.
snip
You have to just shake your head.
I just checked both marketwatch and bloomberg headlines and saw no mention of Feldstein comments. Yet a couple of weeks ago some "hoo?" (Bove) makes a call that the financial crisis is over and he gets big play and the markets rally smartly.
The real engineers are still around. There's a lot of us out here who have been hungering for something "real" to do.
Investing in our own ability to create would be the best thing America could do right now. Quit expecting the financial geniuses and Harvard MBAs to run things and turn companies back over to the engineers.
Of course this should have happened 20 years ago, but better late than never.
Did the fat lady sing? Did you hear her sing?
I thought she was still eating bonbons backstage.
Is Martin acting politically here?
"just wait till obama or clinton get in and then the fat cats, having exchanged their risk for the taxpayers pull the rug out from under and blame the new white house administration.
PT Barnum was right."
mock turtle | 04.07.08 - 12:41 pm | #
Err... by my standards, the Clintons and Obamas ARE the fat cats.
interesting...on strip mall vacancies.
U.S. mall vacancy rates rise as economy slides
| Reuters
Anyone catch this last observation from SEC guidelines from John Mauldin's latest newsletter? Unbelievable: This is guidance from our govt...
Fair value assumes the exchange of assets or liabilities in orderly transactions.
Under SFAS 157, it is appropriate for you to consider actual market prices, or observable
inputs, even when the market is less liquid than historical market volumes, unless those
prices are the result of a forced liquidation or distress sale. Only when actual market
prices, or relevant observable inputs, are not available is it appropriate for you to use
unobservable inputs which reflect your assumptions of what market participants would
use in pricing the asset or liability.
(The full letter is at
Corporation Finance: Sample Letter Sent to Public Companies on MD&A Disclosure Regarding the Application of SFAS 157 (Fair Value Measurements) (March 2008) .)
So, now banks can simply say that the low market prices for assets they hold on
their books are actually due to a forced liquidation or distress sale and dont reflect what
we believe is the true value of the asset. Therefore we are going to give it a better price
based on our models, experience, judgment or whatever. In todays Continuing Crisis,
nearly every type of debt and its price can be classified as a forced liquidation or
distressed sale.
Does this make the asset any better? Of course not. But it buys time for the bank
to raise capital or make enough profits to eventually take whatever losses they must. And
who knows, maybe they will get lucky and the price actually rises?
Rob Dawg @ 12:22
What happens on August 25?
Does anybody really believe that the US can stay out of a deep, prolonged recession with sustained oil prices of over $100 a barrel?
If you had polled the broad economist community just a few years back...you would have found the great majority forecasting a recession if oil was to ever breach $60 a barrel for any period of time.
We're sustaining $100 and moving back to record highs....
Peak oil forecasters/doomdayers are gaining daily credibility, IMO.
"The real engineers are still around. There's a lot of us out here who have been hungering for something "real" to do. "
High-level chip engineer lives across the street: "We have to hire overseas, we can't find qualified Americans."
That's because they only want to hire people who are out-of-the-box ready on the latest tools. They'd rather take an inexperience kid from India with tool knowledge than a seasoned vet that they might have to train for, oh, two or three weeks.
DOW will continue to rally past the bad news until around May. Around May, I expect more bad economy news will force the analyst to realize that the recession will continue and impact corporate earnings. Plus, there is way too much money betting against the market right now which limits the downsize. The shorts will have to be reduced before you see an actual downturn.
Well, it seems that a lot of shorts are being driven out of the market simply judging from the lack of volume on these rallies.
Of course the higher we get, the harder the squeeze. So I think it's possible to gain traction higher. But really I suspect it mostly depends on how many of the shorts we've cleared out and whether we get some more shocks -- something I've got no information good on.
Also it looks like the Yen may be partly the instrument of bear torture in this case.
I don't think we'll see much in the way of actual investors coming in to the markets, except for some hairbrained retail money.
You kinda had to see this coming:
1) Let all the shorts pile in.
2) Light a fire underneath them.
3) Profit.
High-level chip engineer lives across the street: "We have to hire overseas, we can't find qualified Americans."
Same for software engineers. We can't find enough of a pool to hire from here. The tech bust really scared kids away and the effect is being felt now. They all then wated to be quants. So in a couple of years, it will change when those jobs will be gone.
But I'm in essential agreement with Rob Dawg. I think that there will be a shift back towards domestic production in certain areas that will be the upside to this downturn. Especially if energy prices remain elevated. I also believe the next administration will make it tax=advantageous to do business domestically.
In the legal field we saw a spike of ex-software developers/engineers getting law degrees after the tech bust. The flow started to peter out last year, presumably because the employment situation in tech had a better outlook and people stopped jumping ship, but I'm willing to bet that another prolonged recession will again scare people away from tech.
I'd imagine medicine probably also saw a similar influx of people who would have gone into or stayed in tech.
These are smart kids. Most of them could do anything. It's a shame that they're not staying in engineering, but it obviously doesn't seem in their rational self-interest to do so either if the level of uncertainty in that field persists.
Maybe Farming jobs (which are really high tech if you think about it) will get more popular too. The last 15 years many programs in CA changed their department names from Ag to Natural Resources or Environmental Science. Kids went to get a degree so that they could work for remediation companies and such.
The problem is that kids of farmers get an Ag degree and go back to their family business (or if the family is doing real well a law or accounting degree). There are fewer graduates looking to join ag services companies. Ag sales, consulting and equipment is booming at the same time that fewer graduates are coming out of school.
But I'm in essential agreement with Rob Dawg. I think that there will be a shift back towards domestic production in certain areas that will be the upside to this downturn. Especially if energy prices remain elevated. I also believe the next administration will make it tax=advantageous to do business domestically.
I'm in the I'd like to think that there will be a shift crowd...
...because if there is not, we're driking lemonade out of trash cans...and it ain't lemonade...
...I've interviewed hundreds of CS degrees and MS in CS degrees, and to find a qualified domestic clearable engineer who can troubleshoot a problem or process is painful...I can't say there are many domestic engineers who are good or trainable. I can't hire foreign, but I've interviewed a few--same problem.
...I've told the younger generation about the field being a nice middle-class job, even upper-middle class if your good...o.k. so then they find out about math...
From a Wonder Life:
everytime you hear an expresso-machine, a social ecology major has earned a degree...
In the legal field we saw a spike of ex-software developers/engineers getting law degrees after the tech bust. The flow started to peter out last year, presumably because the employment situation in tech had a better outlook and people stopped jumping ship, but I'm willing to bet that another prolonged recession will again scare people away from tech.
Maybe, but we hire tech people where I am and it's very difficult to find people that are highly qualfied. Could be the area, or it could be that the tech bust scared enough people away from the field that now there's a bit of a drought (of people that meet certain qualifications).
It's gotten somewhat easier to find people recently, but it hasn't gotten easy.
Same for software engineers. We can't find enough of a pool to hire from here. The tech bust really scared kids away and the effect is being felt now.
I would have to agree with this. For a while interviewing people just got to be a joke because of a lack of knowledge on the part of the candidates.
I have no doubt hiring has been tight in tech, but my impression speaking to some of these people is that it's the overall uncertainty in the profession that makes it risky: global wage arbitrage / offshoring, weak re-employment possibilities after age 40, the memory of the last bust, perceived job insecurity, etc. From what I've read the offshoring threat is extraordinarily overblown, but all the various factors add up.
ac,
In fact I'm seeing a lot of really good resumes now which is my own barometer on the economy...and the barrista service is excellent as well...this is getting a little French with waiters and waitresses able to discuss nouma & Being-in-Itself and get your order right...but the attitude is so much better...
You won't find good people going into the engineering professions until we start treating them like professionals again. Being a member of the "tiger team" responsible for facilitating the outsourcing transfer of all technical expertise and training your overseas replacement is not a career path I will be recommending to my kids.
There just isn't much incentive to grind for 5 years only to be H-1Bd into unemployment. The smart ones figured this out and thus they don't go into those fields.
Slim chance we close above 1375 today....
"Err... by my standards, the Clintons and Obamas ARE the fat cats.",
OriginalFrank | 04.07.08 - 12:51 pm | #
hey original frank...you don't know the meaning of real wealth...the most powerful people in this country are not millionaires, they are multi, multi billionaires. these are the families that have the POWER.
Barack Obama has an estimated family net worth of less than 2 million dollars.
Obama's money", CNNMoney.com, December 7, 2007.
Goldfarb, Zachary A. "Measuring Wealth of the '08 Candidates", Washington Post, March 24, 2007.
"Both McCain and Clinton are wealthy. McCain was listed as the ninth-richest member of Congress last year by Roll Call, a Capitol Hill newspaper. It pegged McCain's net worth at more than $44 million, with most of the money coming from his wife, Cindy Hensley McCain, who is chairwoman of the nation's third-largest Anheuser-Busch beer distributorship. The family also has extensive real estate holdings.
Clinton was listed as the 21st richest lawmaker, with a net worth estimated at $12 million, but she could be worth up to $50 million based on her 2006 financial disclosure form for Congress. It's much less detailed than tax records.
Atlanta Metro News | ajc.com
note clinton is actually a lot richer than that...via Bill she might have a net worth approaching one billion.
i'll look for current data, their tax returns indicate they paid 30 million in fed taxes in the past several years and donated 10 million.
but please note, there are 200 to 300 billionaires in the USA with a total net worth of several trillion dollars...these are the people who can pick up a phone and talk to the highest levels of power in the fed gov and move markets.
originalfrank...i hope this was helpful
From a Wonder Life:
everytime you hear an expresso-machine, a social ecology major has earned a degree...
That's not nice.
I would have to agree with this. For a while interviewing people just got to be a joke because of a lack of knowledge on the part of the candidates.
That didn't stop them from claiming such knowledge on their resumes, though.
I have no doubt hiring has been tight in tech, but my impression speaking to some of these people is that it's the overall uncertainty in the profession that makes it risky: global wage arbitrage / offshoring
Frankly this is a case of media hype not reflecting reality and people believe it. The off-shoring/outsourcing is happening simply because we can't find people. This isn't about cost-savings, as I can assure you that the bschool mantra is, if you're doing this to save money, don't.
What I really find is that many students don't do engineering majors because, well, they're hard and require a lot of work. And we all know mommy and daddy never made any of them actually work. I say this not from a cynical point of view, but because I have taught at the college level for 19 years now and have seen the progression. I have actually given the same exam I took many years ago in the equivalent class and they all failed. We all passed. The ones who work will do very well indeed. The ones who won't will be the ones who will find their jobs buffeted by fate.
I have tons of wonderfuls stories about parents who call the school complaining that i'm treating their kid unfairly...probably what they did since elementary school. Of course, once they are 18, we can tell the parents that, by law, we can't discuss the student with them. They love that lol
A mild, but lingering recession, or a prolonged period of zero growth is a pretty sensible forecast to me. At the moment, the data just isn't showing an accelerating downtrend, but equally the overhang of housing, consumption and finance issues don't suggest an imminent return to trend growth either.
In fact I'm seeing a lot of really good resumes now which is my own barometer on the economy...and the barrista service is excellent as well...this is getting a little French with waiters and waitresses able to discuss nouma & Being-in-Itself and get your order right...but the attitude is so much better...
We've seen better stuff recently.
Do you have clearance requirements?
ipodius, yes that's what I've read as well regarding offshoring (hence my comment that it was overblown), but the guys I'm talking about who were jumping ship into law already had engineering/CS degrees. Their issue wasn't a willingness to work hard. These people make excellent lawyers BTW, good logical thinkers.
Philip Greenspun, an MIT professor in Computer Science and serial entrepreneur has an interesting article about this:
Women in Science
"A good career is one that pays well, in which you have a broad choice of full-time and part-time jobs, in which there is some sort of barrier to entry so that you won't have to compete with a lot of other applicants, in which there are good jobs in every part of the country and internationally, and in which you can enjoy job security in middle age and not be driven out by young people willing to work 100 hours per week. ... I've taught a fair number of women students in electrical engineering and computer science classes over the years. I can give you a list of the ones who had the best heads on their shoulders and were the most thoughtful about planning out the rest of their lives. Their names are on files in my "medical school recommendations" directory."
You won't find good people going into the engineering professions until we start treating them like professionals again. Being a member of the "tiger team" responsible for facilitating the outsourcing transfer of all technical expertise and training your overseas replacement is not a career path I will be recommending to my kids.
Hence why there is an engineering 'shortage.'
But wait... wages are increasing. Funny... often in low cost of living areas...
Got Popcorn?
Neil
The off-shoring/outsourcing is happening simply because we can't find people.
Try doubling the salary.
The problem is not qualified candidates, the problem is the pay for qualified candidates.
From what I've read the offshoring threat is extraordinarily overblown, but all the various factors add up
AllenY,
I disagree. We have lost about 75% of our team in the past 2 years to outsourcing. We were 60, now we are 15. Most of who lost their jobs went to work in NYC. Any hiring freeze by financial firms will prove disastrous. New trend in tech - if you are not among the top 5-10%, start looking at a new career.
The problem is not qualified candidates, the problem is the pay for qualified candidates.
Huh. Name me another field where, a couple of years from undergrad, you can be making nearly 100k? That's in the Boston area and, of course, depending on your specific area of technical expertise. In the past year I've seen an increase in salary around 15%. My C++ people are anywhere from 120 to 140, my web guys are 100 to 115, and DBAs around 120 to 130. Starting web developers are around 70k. I'd tell kids to do this in a heartbeat.
"Try doubling the salary.
The problem is not qualified candidates, the problem is the pay for qualified candidates."
So true in many fields. Think about how much you read in the papers about the need to improve the poor quality of schoolteachers. I can tell you that where the pay is $50K a year to start, the quality is better!
Frankly this is a case of media hype not reflecting reality and people believe it. The off-shoring/outsourcing is happening simply because we can't find people.
I know senior people at a large network equipment manufacturer, and a large IT outsourcer, and within the last year both of them had freezes on in the US but were hiring like crazy in India. Although some of it was a strategic decision to build more capability there, a lot of it had to do with costs.
ac,
Yes. TS. This basically means we interviewed for 9 months to fill one senior position. Hiring in 3 months is probably feasible now based on resumes. A lot of us thought clearances would make us immune...not so. Lot's of budgets getting whacked lately, and a flood of clearable people is beginning to hit the market...imagine all the soldiers coming home as well looking for civi jobs...most of them are cleared by DOD at TS and above...
and within the last year both of them had freezes on in the US but were hiring like crazy in India
MLM,
That's exactly what we faced 3 years back.
but were hiring like crazy in India
Very few firms actually employ the people in India. Mostly they are contract via Wipro or one of the other firms. Unless you are really big and set up a subsidiary over there. But that is very costly and complicated.
Mostly this is driven by global demand and the need to be 24x7. If you don't have that, this is NOT a way to go. So a lot of bigger firms that require 24x7 portals etc will transfer some jobs so that they have coverage.
I guess I'm not so worried about the dithering over whether we're in a recession, or when it started. I think that as long as you make educated and measured financial decisions, you usually come out okay in the end. The idea is to live responsibly before the recession hits so that it's not as much of a problem for you on an individual basis.
It is getting interesting with commodities...
Rice Run Prompts Curbs to Rival Credit Market Seizure
By Marianne Stigset and Tony Dreibus
More Photos/Details
April 7 (Bloomberg) -- From Cairo to New Delhi to Shanghai, the run on rice is threatening to disrupt worldwide food supplies as much as the scarcity of confidence on Wall Street earlier this year roiled credit markets.
China, Egypt, Vietnam and India, representing more than a third of global rice exports, curbed sales this year, and Indonesia says it may do the same. Investigators in the Philippines, the world's biggest importer, raided warehouses last month to crack down on hoarding. The World Bank in Washington says 33 nations from Mexico to Yemen may face ``social unrest'' after food and energy costs increased for six straight years.
originalfrank
there are 473 billionaires in the United States of America (citizens) according to Forbes magazine.
obama and clinton are not on the list.
The World's Billionaires - Forbes.com
RE-It
slim chance we close above 1375
We have lost about 75% of our team in the past 2 years to outsourcing.
I hear this all the time and would like to give you a little management perspective...a good friend of mine is in charge of the portal (and off-shore activities) for a rather large bank/investment firm. We had dinner last week and she was relating this story of how she had hard resistance from a group when she was asking them for a project (the group was on the US side). So she went to a group off-shore, and had them do the project which came in ahead of schedule. A lot of bad communication happened between she and the group (which wasn't directly under her) because, she felt, she was in charge of these off-shore projects and the people saw them as a threat. They weren't until they gave her a hard time.
After the project the group was broken up and the remaining duties were tranferred to the off-shore group that did the work without the problems. Most of that group left, and those that stayed were told this was their last chance. Sometimes people create their own realities. And the funny thing was, this group, prior to the issues, was not slated for any changes.
I'm reminded of the same mindset that caused the unions to implode, and manufacturing to go somewhere else. Keep wating more money, to do less, and actively alienate management. Just giving you another perspective.
In some sense it doesn't matter whether offshoring happens or not... the prevailing management attitude seems to be if tech workers expect wage increases, hold the spectre of offshoring or H1Bs over their heads. The trouble seems to be that these are smart people with other options.
ipodius ,
On the contrary, the communication between the US and Indian groups on our team is great. The profit per head before the layoffs started was 2-3 million range. Most of those who either left or were given the pink slip made more in their new jobs in the financial sector.
We are in NJ. Where are you located?
iPodius relates; ...a good friend of mine is in charge of the portal (and off-shore activities) for a rather large bank/investment firm. We had dinner last week and she was relating this story of how she had hard resistance from a group when she was asking them for a project (the group was on the US side).
Let me describe the project: She wanted the team to fully document the entire code base, modularize, and make recommendations as to how to make it maintainable by anyone with opposable thumbs and a modem. Then when they said no she packaged up the latest archive and shopped around the codemills of certain other nations with the question; "Can you do this without the full doc and modular structure?" After signing all the worthless NDAs they all said yes. Shock, surprise.
I could be entirely off base but that is the new relationship and trust level the last 20 years of disposable employee policies have wrought.
Very few firms actually employ the people in India. Mostly they are contract via Wipro or one of the other firms. Unless you are really big and set up a subsidiary over there. But that is very costly and complicated.
Mostly this is driven by global demand and the need to be 24x7. If you don't have that, this is NOT a way to go. So a lot of bigger firms that require 24x7 portals etc will transfer some jobs so that they have coverage.
ipodius | 04.07.08 - 2:11 pm | #
We are not exactly a bohemouth at Zacks, but we have apx 200 people in Kolkata (Calcutta). My department has about 25 of them. Most of them are in their late 20's, have business degrees, decent english language skills, and are very hard working. At current exchange rates they make about $9K a year on average, although salaries over there are escalating fast. Give them a 25% raise and they are disapointed. Our US people are better, but cost 10x as much, but raises are few and far between.
Heh - I work in IT at a major university - in CS. I have a brother-in-law at a major handles IT for a major telecom. I find the comments interesting.
I have heard that some outsourcing to codemills has stopped in part because, in spite of all the SLAs and NDAs, etc., the product was unworkable garbage. Essentially, no money was saved and a lot of time was lost.
I know that many/most of our undergraduates report high levels of job dissatisfaction...and you can't keep persuading kids to go into the field if they're getting that kind of unhappy feedback. Much better to major in something like Social Ecology and then get into law and have decent job security than to do hard stuff for peanuts.
Of course, I'm sure these preferences skew/correlate with the proclivity on this blog for people to actually show up with a 20% down payment and to opt to rent when they could be debt whores like the 'homeowners'.
The kids aren't stupid and at some point, money and prestige as rewards do count. I'm sure that's why so very many of the best and brightest go into medicine.
The problem is not qualified candidates, the problem is the pay for qualified candidates.
JP | 04.07.08 - 2:01 pm | #
Highest paid guy in my building out of 60 isn't even in managment.
CDL
HAZ Endorsement
Secret clearance
No moving violations in over 9 years
15+ years here...
He grosses over 2200.00/wk,some weeks waaaaaaaaaay over.
The problem is finding guys without the moving violations...
Chris
Should note that those pay levels only applied to the Independent research arm, not to the people who do the care and feeding of the databases, who are paid much less over there. Also big range within the dept, ranging from apx $6k to $15K. The people at the high end have been with us for 3-4 years doing investment research.
I'm reminded of the same mindset that caused the unions to implode, and manufacturing to go somewhere else. Keep wating (sic)more money, to do less, and actively alienate management. Just giving you another perspective.
Of course! We should all be willing to take a 50% pay cut out of "loyalty" to the employer who will fire us without remorse and is raking in the big bucks himself. God forbid we "alienate management."
Real wages in this country have declined - while CEO compensation has exploded. It is true that a brownnoser who will work for scraps is more employable than a worker who demands fair treatment, but Republican political policies (trade deals, for example) are responsible for the situation workers in this country are facing.
Huh. Name me another field where, a couple of years from undergrad, you can be making nearly 100k?
Again, the problem is not 2 years from graduation, but 10-20 years from graduation.
Looks, this isn't complicated, it's just supply and demand. If there is a local shortage, there are 2 options: Increase pay or get nonlocal supply.
So far, nonlocal supply has been winning. Surprise! The dollar is now in the toilet and nonlocal supply costs more.
It would be funny if it weren't so predictable.
We are in NJ. Where are you located?
I'm in the Boston area. And frankly, if people get "off-shored" here, there are more than enough openings. The average employment length of a software engineer is something on the order of 5 years anyhow. And most times you have to leave to get the money (myself included...I made the biggest salary gains by taking a new job). If I saw a resume from a software guy that was in the same place for more than 5 years, I'd think he/she was...well...lazy.
ipodius,
IT in the financial sector?
Let me describe the project: She wanted the team to fully document the entire code base
No Rob Dawg, they were trying to get some data transferring done, and split up some of the functionality so that it was easier to work on in a fluid way, taking advantage of the 24hour timeframes. But the attitude of the group caused their demise. I am sensitive to the attitude about off-shoring but, honestly, if you want to spend your life slogging mundane code don't let me stop you *you meaning employees. But if you want me to off-load the crap to an off-shore entity and leave the more core-related and interesting projects here...I think that's where it's at.
And that is why it's sometimes hard for grads to get jobs. We've taken all the entry-level stuff and sent it off, leaving the higher-level stuff to do here. But some people just can't accept change.
REBear, well yes, IT and software development financial services sector.
We've taken all the entry-level stuff and sent it off, leaving the higher-level stuff to do here.
As we have been trying to say before, this is about profits and not about some 24X7 requirement.
Again, the problem is not 2 years from graduation, but 10-20 years from graduation.
Well then, you don't want to do medical either because there is no upward mobility, it's very hierarchical, and the pay at certain levels doesn't really change much relative to the inflation rate. Factor in the liklihood of some sort of government single-payer system and the gravy train for high pay will be over before that timeframe.
this is about profits
Well, if a business isn't profitable...there are no jobs for anyone. And let me tell you my division is THE most expensive there is. The total dollars don't even come close to others including bonus and other compensation.
The problem is finding guys without the moving violations...
Chris
Respectfully, it is the problem with finding qualified commercial drivers who statistically also don't have a moving violation.
I'd bet willing to be there is a huge pool of far more qualified candidates with an upgraded to reckless ticket because they swerved to avoid a multi-vehicle pileup and when pulled over were also of the type able to avoid a multi-vehicle pileup personality and skill and told the then arresting officer to take a flying eff at a rolling dounut.
A rule of law is better than a rule of men no question. The question arises when the rules become arbitrary or even counterproductive.
Back on topic. The same holds true for tech hiring. We drive the best and brightest to other avenues. The coming possible reformation, yes, "Reformation" rather than an ordinary recession holds that possibility. Example. 50 new municipal firefighter jobs are announced. Do you want the most qualified? Hell no. At least as of now. You are going to get a thousand qualified applicants. Is a felony speeding ticket the way to correctly disqualify a potential engine driver? I am pretty sure that many of the policies we use today are not designed to reward competence, only punish exceptionalism good and bad.
@ ipodius - one can have an insufficiently trained labor pool, and still get outsourcing due to cost....yet you imply that the cause is the first, when I know from first hand experience that the second is the driving force and has been for years. Make excuses all you want -- global wages are going to equalize, and it won't be pretty. Cling to your delusions, if you must.
@ Robdawg:
"she" is very likely a poor manager, who
should've asked more probing
questions about why the answer
was "no" to the item below. Her business will probably pay dearly, but not before she extracts her bonus and moves on to destroy value somewhere else.
There just isn't much incentive to grind for 5 years only to be H-1Bd into unemployment. The smart ones figured this out and thus they don't go into those fields.
When we got hit with offshoring 2 years ago, we let the H1Bs go to farm out the coding to India. Indian H1Bs training their Indian offshored replacements. Everyone who was laid off due to offshoring had found new work by their last day. Our project was deemed successful offshored, although there is some loss of flexibility.
And back to real estate, talking to our "offshore onsite" guy there is a huge property bubble in India, real estate prices have quadrupled in the past couple of years. He attributed it to the offshored IT people earning a lot of money (by Indian standards) and driving up prices for everyone.
btw, robdawg, I'm well acquanted with codemills....if you think a contractor will say anything other than "yes" to even the most stupid (but paying) question, you haven't really managed a large code base with contractors on it.
Huh. Name me another field where, a couple of years from undergrad, you can be making nearly 100k?
You'll be making a lot more than $100k/year after 1 year on wall street. Though these next two years might be a bit tough.
What I really find is that many students don't do engineering majors because, well, they're hard and require a lot of work. And we all know mommy and daddy never made any of them actually work.
Ipodius, I usually disagree with a lot of what you say. This is right on the mark.
I went to Oregon State University for 4 terms. I quit because I was disgusted at the quality of both the students and many of the teachers( I remember being impressed by the higher level math teachers, not much else).
I had an EE class where the prof. couldn't speak understandable english, so the other prof. that taught the same class had students filling the stairways so they could understand the lecture.
I was double majoring in EE/CS and I was so disgusted after a year of learning almost nothing towards my degree, except for the math classes, and that which I was teaching myself.
I am so much more qualified now than most graduates that I know. With my experience I could easily double my income, but I will never move from where I live(I work offsite), and really like the company I work for, and the large range of responsibilities keep me from getting too bored.
I could rant about this topic for hours. It is unbelievable to me that I work with people who call themselves programmers who have no database experience and couldn't edit a text file from a *nix cmd prompt.
KnotRP writes:
btw, robdawg, I'm well acquanted with codemills....if you think a contractor will say anything other than "yes" to even the most stupid (but paying) question, you haven't really managed a large code base with contractors on it.
Exactly. Well at least half of my point. The US has been explicitly, implicitly and also illegally exporting intellectual property for a very long time. The effect has been to erode our intellectual capital balance of trade. If every Chicomm (oh, excuse me, Mainland soviet style central command control economy") user of Windows were to pay for teh software they've stolen the US would not have a trade deficit.
The Indian housing bubble is because of expatriates investing their dollars/pounds/euros in the condo market. Most Indians living in the US own an empty condo or a 'site' in India. Talk to them about a bubble and you will be lectured on how the value is going to double in the next 1 year. You get to hear the Indian version of 'they are not making any more land' or 'RE always goes up'.
Indian RE will face the swiftest of executions.
Since this is a reality-based assessment (sort of) expect our leaders in DC to poo-poo it.
Many of those who bought into Indian RE want to sell the crap but have no clue how to convert the money out of rupees. Since most try to avoid income tax, your final payment will be a small change in check and the remaining amount in a large suitcase.
We had 200 boxes of discovery that we needed scaned and OCR'ed. The low bid put it on a pallet and shipped it to India. We are a east coast firm.
The new manhole covers in DC say "Made in India." It is cheaper to have them made and shipped to DC then have a PA company do them as was once done.
There is no entry level positions really. They are either crap jobs with no future or IT with specialized skills. The ladder is gone and God forbid you not have a degree. Especially if you want contract work.
global wages are going to equalize
You see, knotrp, this implies the same job. It won't be the same job. And no one outsources strictly for cost. If they do so, they are quickly out of a job, as their budgets will never work out. I have reams of spreadsheets that show there is no cost savings to be had, as there is management cost on this side, management cost on the other side, infrastructure, communications, software, travel...I could go on. And unless the project is clearly defined and actively managed, you get crap and miss dates.
If you are setting up a cooperative system where you have clear objectives for productivity or 24x7 service, you'll make your numbers and goals. But not on cost.
All this class warfare talk is simply global jealousy, that's all: American's simply want to live like the Rest of the World does... at least we've been acting in a way that will insure it.
Joy and REBear,
Your information about the Indian real estate market is outdated.
Beginning in the early 1980s and until about 5 years ago, some cities like Mumbai had an increase in property values due to expat purchases. Prices rose at a rate slightly over inflation (which was very high as the country moved from a regulated currency to a freely floated one in response to an untenable trade current account deficit).
In the last 5 years, there has been a much steeper increase in property values. This has coincided with the increase in off-shoring and people erroneously attribute the former to the latter. However, the typical employee of an outsourcing shop gets about $10K/year at most while condominiums there run at $500-$1K/square foot.
These folks would never have been able to buy properties in the old India where credit was only issued with the greatest scrutiny. For example, if you'd worked for IBM for 5 years as an executive, they would make a loan to you, but the laity had no access to large amounts of credit.
In the last 5 years, Western banks have been providing mortgages to the subprime equivalent in India. Indian private banks followed suit and they all now have lots of non-performing loans on their books. The point is its the credit, not the expats' wealth, that has driven prices up there.
Secondly, with regards to REBear's claim about bringing a suitcase of cash back, this is simply not true any longer. A decade ago, this may have been common practice due to the "black" component of transactions - that is the portion that goes unreported on a bill of sale to avoid paying taxes which are figured as a fraction of the sale price.
The government wised up and instituted a policy which allows it the right to buy a property from the seller at the price stated on the bill of sale. No seller wants to take the chance of being forced to forfeit part of the sale price, so all transactions are done in "white" now. Being done this way means the money all sits in bank accounts - no suitcases of cash!
hi curious,
'Suitcase' transactions happen all the time. If you didn't get a suitcase, you probably dealt with a condo sale located on the outskirts or something similar. A SFH sale in any of the big cities will go with a suitcase. Try documenting income to support $500K purchase.
I think there are plenty of technical sector jobs to be had, provided you are the right person for the job.
I'm a surveyor working in the offshore industry, a US national who recently immigrated to NZ. When I applied for my work visa, my employer had to fill out a form stating why he was not hiring a NZ citizen or resident. His answer? They knew every single person involved in the field in NZ, had hired all of the recent graduates of the surveying university program in NZ, and still had job openings. There are about 50 people in the whole country who do what I do. And if I'd chosen to stay in the US (where there are less than 1000 people who do what I do), I had at least 4 companies who would have hired me sight-unseen based on my skills and experience, or I could have gone out as a contractor and never wanted for employment. If you're good enough, whether as a new hire or a more experienced worker, they WILL find you.
You have to figure in that it's not just salaries folks are looking at, it's relative cost of living and quality of life. If the entry-level salary offered to a new hire is $60,000 for living in, say, New York City, that's not going to stretch very far, particularly when you add student loan debt to the mix. That same salary in Houston would allow a grad to have a very good lifestyle.
ipodius, you have an anecdote for everything and proof for nothing.
Clytemnestra's Sister - Where did you move in NZ? What do you think of it so far?
Fishes and countries rot from the head down. And God and wise Americans know the rotteness in D.C. Not the end of the world, but you might see it from here.
re w
if clyto is a surveyor, has to be one of the two poles of our economic dynamo, auckland or qtown
hate/love in that order, with the winter snow on the way
clyto?