Anonymous writes:
Don't you have more than one picture of Roubini?
Anonymous | 11.19.08 - 12:42 pm
To me, he has an almost David Blaine eeriness to him in that picture. I wonder if he is going to suspend himself in a clear box with all of his market analysis to demonstrate his constitution and endurance in the face of overcoming the human frailty that we all share?
Over the summer, Roubini was saying we will spend $1-2T on bailouts and people didnt believe him (he mentioned he had upped that number from $1T before).
The problem is he's the most gloom and doom guy in the room, and even HE is understating the problems. At what point will his revisions be too much?
Doesnt matter. Market cant break through 8200ish on the dow and 830ish on S&P. Selling pressure is too weak. If we dont break through it there's going to be a monster rally regardless of fundamentals. If we do break through it then dow 6500....
anon writes:
Doesnt matter. Market cant break through 8200ish on the dow and 830ish on S&P.
anon | 11.19.08 - 12:48 pm
But can the bulls break through Dow 8500 or SP 900 again? At some time, one side is going to lose steam, and I can't believe the Bulls got the mojo on their time.
I think the Bears are just resting while the Bulls are wiggling to death in the Bears' mouths. A strangulation more than a neck snap. Can't let the cubs get injured while feeding, you know?
fascinating reading...interview of naomi klein on the criminal mis use of the 700billion tarp
klein reports that new york melon bank one of the most in trouble banks over derivatives trades, has been put in charge of doling out much of the money to troubled banks as the bush administration rushed to privatize nearly all aspects of the tarp fund spending.
klein goes on to report how contracts outsourced, fees payed and target banks receiving taxpayers money have been kept secret
she draws a parallel between the emergency privatization and outsourcing of the war in iraq and how the emergency tarp legislation gave treasury powers to operate on a similar basis thus eliminating bids, competition, and government and public oversight
banks were awarded cancellation of the tax related to bank acquisitions
the bulk of the money given to banks appears to be headed for stock dividends, acquisitions and management compensation without much if any unfreezing of the credit markets
hurry hurry give us all your rights, its an emergency...notorious fascist and marxist dictators have employed these tactics well in history, and now our ow
Brigham -
The fact that the bounces are weak too doesnt bode well for the bulls either. But we need to break through the bottom or the bulls will believe the bottom is in and buying will gain conviction. Right now, there isnt a lot of conviction in this bottom, but its building today. If we dont go through it soon the rally will be big as the shorts will cover and buyers will take advantage of the momentum. It wont last, but if we dont go lower soon there will be a big rally.
BASF Plans to Idle Plants, Cut Output - WSJ.com
FRANKFURT -- BASF SE said Wednesday it will temporarily shut down 80 plants world-wide and cut production at another 100, as the German company warned that its profits are sliding.
The bulls have perhaps one more death spasm in them. We could see 8800 DJIA equivalents on any kind of manufactured good news. I'm sure the MSM will be pumping a Black Friday upside surprise for instance.
Doesn't matter. The markets are insane. There is no investment going on. It is all gambling, speculating trading, leverage and deleverage and outright manipulation. Go ahead, make money but don't fool yourself into thinking this a market of stocks anymore.
TARP exists to prolong the power structure- plain an simple. Roubini is not a Houdini- he's not a magician. He's a spokes mouth for the liberal, socialist agenda, which thrives on bad times. That said, he understands the problem, and he communicates in practical terms that most people can understand.
CR, its been a while since you've commented on the recession. Your previous take was that this would be a moderate recession, unemployment staying below 8% - with the possibility of a worse recession not ruled out (if I am remembering correctly).
Do you still hold the same view or has the crises been worse than anticipated ?
Is anybody else old enough to remember "Women of Wall Street" in Playboy nearly 20 years ago and the furor it caused? What would the reaction be today? You now know everything you need to know about the wisdom of trusting these people with your money. BTW Playboy announced last month another casting call for the "Bares of Wall Street."
"OT: Anyone know why LaZ Boy (LZB) is getting a 40+% haircut today?"
No, but the furniture industry is hosed. Retail stores closing all over the place. I need a new LaZboy, so I guess I should buy it before they blow up...
Worse than 1991, 2001, worse than 70s and early 80s. Will be a global recession this year and next.
Much worse than 1991.
Unemployment at 9 percent.
All market news in the last few weeks has been terrible (lists a bunch of them).
In 2001 consumption didn't fall.
In 1991 homes only fell 5%. This time it's already down 45%.
Effective FFR is 0.3% already at ZIRP.
Market rates are going higher. The spreads are greater.
Whatever the Fed does, it doesn't affect market rates.
The credit crunch isn't getting any better.
All loans are being squeezed across the board.
We need major fiscal stimulus.
Demand is collapsing, which will cause a more severe recession.
I support infrastructure support package.
A collapse of Main Street without a fiscal stimulus.
We need to help auto makers.
I drink your blood.
We have no choice - must do something about Detroit.
Houses need to fall another 15%. Housing will get worse. There is no bottom to it.
Consumers aren't buying anything.
Stag-deflation - economic recession with deflation. Slack in labor market. Slack in commodity prices - they've already fallen 30% and will fall another 20%.
Deflation is a concern.
Once we have a deflation trap, monetary policy is useless unless you buy long term corporate bonds.
US will have a huge fiscal deficit, but so will all the other countries. It will increase long term real interest rates.
Rob, have you noticed cars piling up at Port Hueneme? [ref Long Beach story from last thread]
sm_landlord
Yes, big yes. For the less plugged in locally; the Port of Hueneme is the only deep water facility between Los Angeles/Long Beach and San Francisco. Several automakers ship here because of easier scheduling lower costs and available land for prep facilities. The ancillary benefits have been quite interesting. BMW and Volvo and "others" have research/design facilities nearby as well.
SM_Landlord is commenting that there are a great many acres of ship wrapped vehicles piling up in the processing lots. The Euro/Dollar volatility and shipping costs have got to be playing havoc with the supply channels. Why the inventory explosion is beyond my pay grade. Could be that high end manufacturers pushed to beat what they though might be huge transportation cost increases. Then again could also be high end manufacturers taking advantage of low transportation costs to preposition or merely shuffle inventory.
Re: Higher car prices, the end of incentives and vehicle shortages could occur if GM and other Big Three automakers don't get a bailout, according to experts
Big threat, ROTFLMAO, higher for who? What cars, who would be stupid enough to buy a shit car from a company that wants to threaten buyers with higher prices? This is where free trade will come into play as China wipes out Detroit and the union bullshit and the concept of high paying jobs that can be done by robots!
It is all gambling, speculating trading, leverage and deleverage and outright manipulation. Go ahead, make money but don't fool yourself into thinking this a market of stocks anymore.
Rob Dawg | Homepage | 11.19.08 - 12:58 pm | #
Amen and preach it brotha'!
What is sad is not only that the Greater Recession is here with all the problems that brings, but the stock market is no longer a "real" investment market.
It really has become a day trading, get rich quick, ESPN World Series of Poker den. It is just a glorified casino at this pount. No real long term investment!
Kona writes:
This is where free trade will come into play as China wipes out Detroit and the union bullshit and the concept of high paying jobs that can be done by robots!
Have you noticed the quality of products from China?
Fron the SM_Landlord linky: "As a result, some experts predict higher car and truck prices, vehicle shortages and difficulty finding replacement parts for owners of American as well as Asian cars if Detroit's Big Three don't get the $25 billion they are asking for from Congress.
"Vehicles could cost anywhere from 5% to 15% more, maybe even more than that," said Michael Robinet, vice president of global vehicle forecasts for auto consultant CSM Worldwide."
ROTFL. Even if this were true it would be a very good thing as it effectively works as a bailout for consumers with their upside down auto purchases.
General Motors Corp. and the United Auto Workers agreed to a new class of jobs that would pay about half the current rate, breaking with the UAW's tradition of equal earnings for union members, people with knowledge of the plan said.
Under a four-year accord reached Sept. 26, all new employees would start in so-called non-core jobs such as janitorial and maintenance work and make about $28 an hour in pay and benefits, compared with $51 for present employees, the people said. They asked not to be identified because contract details haven't been released.
The UAW already has similar pay agreements for new workers at parts suppliers Delphi Corp., Dana Corp. and American Axle & Manufacturing Holdings Inc., McAlinden said. At Dana and Delphi, the union approved $14-an-hour wages for new workers. American Axle said in February that new UAW employees would get $27 an hour including benefits, a decline from $66 for current workers.
The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM's total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.
Re: Have you noticed the quality of products from China?
Is there quality from anything in America? I worry if my food is coming from China, but it seems that products in general are all from China and anything related to customer service is from India, but by God we better help out those people in Detroit making $66 an hour to build shit cars...
Blaming the workers for the auto industry makes about as much sense as blaming the state of healthcare on RN's making too much money...If we could just get those greedy nurses to work for 7 bucks an hour everything would be gravy.
There will be no incentive for the chinese to improve the quality of their products if there is no competition for their products.
Wholeheartedly agree. There must be competition and in fact there are, wages have gone up so much in china that outsourcing is now moving to vietnam.. etc.
Bailing out autos and banks doesn't seem to be competition, just seems that it pays to be too big to fail.
Plus the taxpayers and consumers lose too.
If our morons in charge screw it up, it could be the worst ever.
All the proposed "solutions" look like problems to me. Take infrastructure. Do we really need more cars and airplanes? Our last manufactured bout of prosperity caused an oil spike that helped bankrupt our eCONomy.
Here is another great reason not to be caught in the Ford and GM shit storm: GM will offer buyouts to entice existing workers who would be classified as non-core to leave, and the new pay structure would apply to their replacements, the people said. Current workers wouldn't have their pay cut.
Ok, you buy Ford at $1.20 and then wham, they link your penny stock funding to helping them pay off old employees that want pension payouts that are based on $70/hr jobs that are gone.... Ford and GM will fail and the stocks will be destroyed because of excess compensation from the CEO to the janitors!
PeakVt, no doubt. What I find interesting is these same people will turn around and crow about how great productivity is in this Country and what hard workers we have (McCain comes to mind). Their great unless of course they actually want to make a living wage apparently.
GMs just gonna move more work to China and Mexico if we give them money. Maybe if we outsourced GM management to India or gave them special "agriculture and Microsoft style" access to guest workers, then maybe they'd have a chance. (yeah, right).
Declare bankruptcy and fire everyone from VP on up.
Wholeheartedly agree. There must be competition and in fact there are, wages have gone up so much in china that outsourcing is now moving to vietnam.. etc.
Bailing out autos and banks doesn't seem to be competition, just seems that it pays to be too big to fail.
Plus the taxpayers and consumers lose too.
And they really are making planes.
Great news this is the products from Vietnam are even worse than the ones from China.
There are costs other than labor.
If you have to buy the same thing twice how much are you actually saving?
mal writes:
For those of us who can't watch, can you summarize what Roubini has to say?
mal | 11.19.08 - 12:44 pm | #
Yes: Life Sucks, the fed is powerless unless it wants to just buy long term bonds in an unsterilized way (aka turning on the printing presses). Aggragate demand is falling across the board, and the only hope is a massive fiscal stimulus package NOW and much bigger than is currently being talked about. This recession will be worse than 74-75 or 82-83.
[Compared to the Pinto, SUV Tire/Tred separation, Rollover and other joys of NA manufacturers?
yagij ]
If the automakers go bust there will be a tremendous destruction of real value - Their engineering, crash test analysis... They produced big vehicles because that is where the demand was. GM built an electic vehicle at great expense and no one bought because gas went to $1 in the early '90s. They may be too big and perhaps 3 mfrs are too many but allowing them to fail would be a big mistake.
The real question is whether you the general public will buy a product in this case autos that are inferior?
If you would then the bailout of the auto industry should be wholeheartedly embraced.
There is no plan in place that says GM and all who receive the bailout money, your money, will produce Better cars than their foreign competitors.
And unless i am mistaken GM's head just testified when asked if this will be the last 25B, said i quote "i don't know". I do commend him on his honesty but nothing else.
I guess I would care if I bought or planned to buy an american POS...even the trucks are sub-standard IMO.
They had no succession plans (and I'm not talking about management) no idea how to operate when the huge margins on SUV's went away, actually killed off a useful product (GM EV-1), and then decided to get Bushco to hand out tax breaks to anyone buying one of those POS's with a GVW over 6K lbs.
Ohhhhh...! Dr. Happy! Right up there with L. Cohen and E.M. Cioran. A little Cioran, with those stats...?
"Show me one thing here on earth which has begun well and not ended badly. The proudest palpitations are engulfed in a sewer, where they cease throbbing, as though having reached their natural term: this downfall constitutes the heart's drama and the negative meaning of history."
I can't decide if the auto makers are more like a pyramid scheme or just an economic bubble; they have different shapes, but the reality is, the auto industry collapsed from greed and now, like coke whores, they are begging for more dope.
Is anybody else seeing what I'm seeing? On one side Congressional hearings discussing higher wages to solve the housing crisis and on the other Congressional hearings discussing lower wages to solve the automaker crisis.
Wages are the 800 lb pony in the room that nobody wants to talk about because globalization pretty much insured the only way to compete is if we become "third world"...
Bailing out GM and Ford could be a smart move, but the important part is on what terms.
To do it properly, and for the long term so there is no re-default, they have to enter bankruptcy.
What the government should do is help pre-package a deal to avoid the lasting negative impact of a bankruptcy. If there is no doubt they will be around in 5/10 years then it won't be a concern for sales or future lines of credit.
Wipe out equity holders, do a debt for equity swap, write down some debt.
Bring in austerity measures for the corporate side to eliminate perks. New cars each year, personal chauffeurs, private jets, etc. Of course open contracts, shift to better performance clauses. If they're not willing to cut their present compensation to minimum levels to see the company survive, they don't have enough passion to stay around
The new hire labour contracts are fine. What the UAW has to chip in are current senior contracts, and a hair cut on previous benefits
Dealership network is too large, best I could offer would be to ensure financing available for those that remain. Keep in mind long term trend to delivering cars ordered à la carte.
Advertising budgets. Cut by 90%
Just like the SEC/OTS/FDIC/PBGC/etc need to be restructured, look at redoing the safety and efficiency standards and approval process. If costs can't be lowered, at least lower time for approval -- look at harmonizing with other large car markets to lower vehicle costs
Hundreds of Union Members Will Lose Their Jobs When Hershey Moves to Mexico.... Why might that be, because a company making a fuc-ing candy bar wants to make $40/hr???
In October, the Consumer Price index fell 1.0%, its largest decline ever (since the stats started being kept in 1947), although prices are still 3.7% higher than a year ago. Inflation is, like, so last summer, as an economic concern. The decline in prices was led by a 8.6% decline in energy costs, which follows declines of 1.9% in September and 3.1% in August. Food prices rose just 0.3%, but are still up 6.1% year over year. In addition to energy, prices also fell for Apparel (retailers desperate to get customers in the door) and prices for both new and used Autos also fell. But even stripping out food and energy prices, the core CPI fell 0.1%. Under normal conditions, this would be a huge green light for the fed to cut the Fed Funds rate, however these are not normal conditions. The Fed funds official target rate is just 1.0%, and even that overstates things since the effective Fed Funds rate is just 0.37%. Thus even if the Fed were to cut by another 50 basis points in December, it would still be behind the curve with the market. On the official target rate, there are just four 25 basis point bullets left in the gun, and it is not clear just how effective those bullets would be.
The velocity of money is slowing like it never has before, or at least since the 1930's. That is the technical term for people just sitting on their wallets and banks just stuffing every spare dollar into 3 month T-bills. This is very important since nominal GDP is equal to the amount of money in circulation times the velocity of that money. Falling prices are one symptom of declining velocity which is not offset by higher money supply, falling output is the other symptom. The yield on the 3 month bill is back down to a measly 4 basis points, almost as bad as the worst point of the September credit crunch. This is the moral equivalent of a bank simply putting every last dollar it has into the vault, closing it up and setting the time lock on it for 2009. The Fed desperately needs to ease monetary policy, but its key tool for doing so is at a point where it will no longer work very well. The Fed is now at the point where it is pushing on a string. What are the Fed's options?
1) They could try to convince the markets that short term rates will stay low for longer than the market currently expects, this would bring down longer term rates which would help stimulate the economy. I'm not really sure how creadible that the Fed can be in doing this.
2) They can change the composition of the Fed balance sheet. Under normal conditions the Fed holds Treasury securites across the whole maturity spectrum, but heavilly weighted towards the short end of the curve ( the average maturity is usually well under four years). However, the Fed has already lent out most of its Treasury securities under its various alphabet soup liquidity programs. The collateral the Fed currently holds is probably of lower quality than that of your average pawn shop on the wrong side of the tracks. Still, selling short term bills and buying longer term bonds would help bring down longer term yields at least for Treasury securites. However several key market rates have disconnected themselves from treasury rates of the same maturity (i.e. spreads have widened dramatically), so such a policy might not have that much economic impact.
3) The Fed could simply continue to increase the size of its balance sheet by outright buying longer term T-notes on the open market. In the process it causes the banks to replace interest bearing T-notes for non interest bearing reserves, which the banks can thus lend out. This is the functional equivelent of "turning on the printing presses". This is a direct attempt to cause inflation to offset the deflation. The size of the Fed Balance sheet has already been balloning, having more than doubled since mid September. (If you can include the graph it would be great, if not, don't worry about it).
In other words, it looks like the Fed has been trying to do the right things, but it still is not working. The massive increase in the money supply that is implied by the huge expansion of the balance sheet does carry dangers. Monetary policy tends to work with very long lags and the data the Fed has to work with is far from perfect. There is a real danger of an overshoot, which could cause very significant inflation, even to the point of hyperinflation down the road. This is not a path that central bankers like to go down, but at this point it looks like they have little choice.
Hundreds of Union Members Will Lose Their Jobs When Hershey Moves to Mexico.... Why might that be, because a company making a fuc-ing candy bar pays $40/hr to some union employee ... ok, I have no facts on that, but maybe we do have an economic crisis here where we have systemic failure that is colliding with union wage stupidity?
Why might that be, because a company making a fuc-ing candy bar wants to make $40/hr???
Keep on hating, brother! One day we'll have everyone working for Walmart-style companies where you get fired when you start making too much. Then America will be awesome like never before.
Vehicles could cost anywhere from 5% to 15% more, maybe even more than that," said Michael Robinet, vice president of global vehicle forecasts for auto consultant CSM Worldwide
I call BS. Hell, people are already financing cars with 84 month loans. What's next, the 30 year car loan? Cars are already too expensive for most people at current prices. That's why there are (were)? so many people leasing.
Kona writes:
...Is there quality from anything in America?
Yes, yes. I can assure you that the products of my former US-employer do hold up to my stringent and strict german quality expectations.
A lot of american stuff is crap, but not all!
Look, the unions fought the system to get higher wages for their members. Can you blame them for wanting to hold on to their gains? Sounds like some people are simply jealous. Form your OWN union, get your heads busted like THEIR forebears did, get shot at, etc and maybe then you can complain that someone's get $40 an hour and you're not.
May 31, 2007 The 113-year-old company has described the plant shutdown as part of a global supply-chain transformation. Some 3,000 of Hersheys 13,000 workers will lose their jobs, including as many as 900 in the companys hometown of Hershey, Pa., where the streetlights are shaped like Kisses. By 2010, Hershey says, the moves will save shareholders as much as $190 million annually.
Unemployed Hershey workers may find jobs, but few at wages comparable to their average of $16.81 an hour, officials said. Unemployment hovers at more than 9% in the Central Valley, compared with 4.8% statewide. Some local residents even endure a three-hour commute to jobs in the Bay Area.
Meanwhile, Wal-mart continues to sell this crap candy at the same price, but will Hershey add melamine to milk fat to boost profits? I want my old world back!!!
Not true. It was test marketed and charging stations were set up in airports, train stations etc but it was determined that there was not enough demand to go into production.
the $28 dollar wage is still about twice what it should be.
Joe | 11.19.08 - 1:26 pm
As opposed to $16million in pay plus sweet healthcare plus sweet (unassociated with the normal workers') pension plus sweet bonus plus golf club membership plus millions in other perks for the CEO?
If "we" save any of them it must be with the caveat that the entire existing management team be replaced with people who will actually work in time frames. Showing up to work and dealing with what is in front of you on that day is not very successful.
Keep on hating, brother! One day we'll have everyone working for Walmart-style companies where you get fired when you start making too much.
The problem is not that the workers are earning $40/hour. It's that they are earning $40/hour making candy bars. To me, it's just as silly as granite countertops and stainless steel appliances. While I'm sure some people derive tremendous marginal benefits from consumption, for the most part just primarily another form of mal-investment.
Unless, of course, candy is some ridiculous export driver that I'm not aware of.
anonymous writes:
Look, the unions fought the system to get higher wages for their members. Can you blame them for wanting to hold on to their gains? Sounds like some people are simply jealous. Form your OWN union, get your heads busted like THEIR forebears did, get shot at, etc and maybe then you can complain that someone's get $40 an hour and you're not.
anonymous | 11.19.08 - 1:47 pm |
Problem is you can't expect to get paid $40 to make something no one wants. Nor can you expect the government to be the guarantor of the "victory" over a management. Unions certainly have done good, but the problem has always been the "us v. them" attitude towards other parts of the company instead of the realizing that workers and management have an identical interest in the companies long term profitability.
they only leased them...they never had the intention of selling them ever.
That's why the production was never "ramped" up. It was an exercise that didn't work out the way they originally planned it. The plan was sort of "we'll build it....it will fail miserably...and we can go back to producing overpriced POS's"...
except it actually worked and was fairly fun to drive. Tons of torque....can't say the same about the Prius...
Go rent "the death of the Electric Car" if have not seen it's a good read on what really went on with them. GM, Honda, decided a wholesale re-org wasn't in there "best interests"
Bearly writes;
"Not true. It was test marketed and charging stations were set up in airports, train stations etc but it was determined that there was not enough demand to go into production."
Not one was sold, they were leased only. There were long waiting lists. My neighborhood still has charging stations at supermarkets and curbside on the streets. At the end of the leases, they practically had to pry the cars out of the hands of people who managed to get one. There were protests when the recalled cars were crushed.
The problem was that the cars were too expensive, at least in the small quantities they produced them.
I'm not in a hate mood, jealous or crying in my milk, I'm just paying homage to Roubini and wondering why we have a systemic financial mess from top to bottom in virtually ever sector of American and global commerce? We have CEOs being compensated with rewards and bonuses that are insane!
Obama noted that in 2005 the average CEO earned 262 times the pay of the average worker.
If the average worker includes union employees making $70 an hour to make shit cars, then as a society we are screwed, because an average wal-mart store employs about 200 people that make $8.00 an hour.
Where are we head as a society? This is chaos and as more jobs are lost and the infrastructure is exposed as being based on fraud and over-compensating people that are un-productive and then bailing out people for buying into an economic bubble -- then we are very screwed!
There is a limited amount of capital in the world at any one time. If chinese worker's standards of living are going to go up, yours are going to go down. I think.
The perfect world is the working class being paid the bare minimum to produce. Little benefits and a long line of unemployed begging for these horrible jobs. The bottom line will be helped and the investors and management will make even more money.
The problem is who buys the products being produced? Destroy these union jobs and industries and there is NOTHING waiting to replace these jobs. The issue here is protecting 2-3 million jobs to ensure there are still incomes feeding a hurting economy. Ford and GM have stated they are making profits selling in foreign countries. How about they close all foreign factories and use the under utilized production here AT HOME to provide those cars to sell abroad?
Don't argue against the Big Three getting a bailout until you are willing to stop the billions being wasted to prop up banks and insurance companies. I have never witnessed hypocrisy at this level.
The egress window for the basement project was manufactured by local Amish who also installed it.
There's still one part to be done and they'll either be back today or Friday to finish. They're off on Tuesday and Thursday for the Amish Wedding Season.
Nothing like seeing young Amish guys show up to work in a heavy dump truck pulling a trailer with a Bobcat.
And they own all of the equipment. Knowing them, it's paid for 100% cash.
Damned shame about Hershey. It's like driving through an idealized version of America's small town...beautiful town.
Re: If everyone is making 8.00 bucks an hour, who's going to buy all your empty houses?
That is the point! If you make an average salary and have two people working normal jobs (what ever those are) where is the down payment, the savings account, the other monthly expenses to pay for inflated food costs? Go back and look at that map posted earlier for areas being hit by wage-related problems. This is not a Detroit problem by any means and not just a union wage problem -- this is systemic and very nasty! - NY Times
Re: Prices all over the Southwest -- including Arizona -- have dropped sharply in recent months. The median existing single-family home price in the West was $266,300 in the third quarter, 21.4 percent below third-quarter 2007.
According to research from Arizona State University Realty Studies, the high rate of foreclosure sales is pushing down home values across the Phoenix area. For the traditional sales market, the median price of resale homes in Maricopa County was $175,000 in October, while foreclosed properties had a median price of $159,775. One year ago, the median prices were $250,000 and $218,225, respectively.
According to NAR, distressed sales foreclosures and short sales accounted for 35 to 40 percent of transactions in the third quarter, pulling down the national median price for resales to $200,500, 9 percent lower than the third quarter of 2007.
Don't argue against the Big Three getting a bailout until you are willing to stop the billions being wasted to prop up banks and insurance companies. I have never witnessed hypocrisy at this level.
The most insipid, asinine argument in this thread.
IF one mistake has been made, do we now say hey, lets make another mistake?
Both are mistakes of varying degrees.
By the way, the issue of all the jobs going up in smoke doesn't hold water.
Give 25B to small businesses instead. Where is their bailout?
I agree, if 8.00 dollars an hour becomes the new normal asset prices will eventually come to reflect this and that is not necessarily a bad thing. But my oh my, the destruction of all of that book value is going to be something that is going to destroy the financial world in ways that we cannot even comprehend at this point.
"Unions certainly have done good, but the problem has always been the "us v. them" attitude towards other parts of the company instead of the realizing that workers and management have an identical interest in the companies long term profitability."
It's hard to know what to say. The above bears some partial resemblance to the Catholic Church's social teaching. But it could also suggest the corporate states of Mussolini and Franco, which were riddled with inefficiency and in many ways stagnant.
In the SU, labor and the state were supposed to have identical interests, in fact to be identical. This did not prevent the expropriation of the profits of enterprises by the state through low wages. The system sank not only under its inefficiency, but under the universal slogan of: When things belong to everybody, they belong to nobody.
Ford and GM unite and merge to build new cars -- but they do so in Mexico! Whadyah think of that ... huh, huh?
Kona | 11.19.08 - 2:08 pm
I guess that is the point. We bail them out, and they reward the taxpayer how exactly? Increased tax revenues? Sponsorships of our--increasingly banal--sport events? They aren't going to help unemployment numbers, and more importantly, will have to hurt that number to survive or destroy it to die.
EHP said that it would work if done properly, but after TARP et al, I don't think anyone here would place skin on that bet. Our politicians certainly aren't placing much skin on it either.
Interesting times for all, but it seems to have to play out without being forced....
The most insipid, asinine argument in this thread.
Your response was to give 25 billion to small business. I won't insult your argument but I will point out giving taxpayer money away to support jobs or job creation is preferable to giving many times more to cover investor losses and provide bonuses to financial employees who put us in this mess.
Isn't that what you were arguing for, supporting jobs?
This will end up like Krispy Kream or Hershey and the core business of auto manufacturing will morph into a new structures, just like steel furnances 30 years ago:
Beginning in the late 1970s and early 1980s, the steel industry in Pittsburgh began to implode. Following the 19811982 recession, for example, the mills laid off 153,000 workers.[19] The steel mills began to shut down. These closures caused a ripple effect, as railroads, mines, and other factories across the region lost business and closed. The local economy suffered a depression, marked by high unemployment and underemployment, as laid-off workers took lower-paying, non-union jobs. Pittsburgh suffered as elsewhere in the Rust Belt with a declining population, and like many other U.S. cities, it also saw sustained middle class movement from cramped old housing to new spacious housing in the suburbs.
Unemployment is set to rapidly increase. "My view is that it will be near 8 or 8.5 percent by the end of next year," Nigel Gault, chief domestic economist at Global Insight, told the New York Times.
According to statistics collated by outplacement firm Challenger, Gray & Christmas, the top five sectors for layoffs in the nine months through September this year are: financial, with 111,200 job cuts; automotive, 94,900 layoffs; government/non-profit, 66,800 layoffs; transportation, 62,000 layoffs; and retail, with 51,300 jobs lost.
Seventeen of the US's 29 steel mill blast furnaces have shut down in response to slowing demand. This is set to accelerate the slowdown in production which saw output decline 4 percent in the month from August to September. Chicago-based steel analyst Michelle Applebaum told the Times these figures reflected "nearly instantaneous production cuts in response to declines in global steel demand as steel buyers deferred purchases in favor of living on their own inventories during this period of uncertainty."
I rented a car last week in Phoenix. I asked for a Japanese car and Alamo wanted almost $200 more for a Japanese car for 8 days than a comparable American car.
The rates were high last week due to some car race or something, so there weren't many cars available.
Having written that, I've also noticed that whenever I'm renting a car late at night, there are only American cars left in the lot.
Fewer and fewer people are willing to settle for US brand quality.
barnard:
Sorry if i have mis-read you, my point is things should be allowed to fail.
Otherwise everyone will argue for a bailout and most are always never correctly justified.
us wages suffer a steep steep drop to a levels approaching ( but not reaching) the wages paid in south america and industrialized asia
mock turtle | 11.19.08 - 2:18 pm | #
The level playing field. Why should Americans deserve a better life than the third world? What makes us so special?
Boy, that Naomi Klein interview was an eye-opener. GM didn't make any more electric cars (there WERE people who wanted to buy them, but GM refused) because they could make more money manufacturing gas-guzzlers. Free market capitalism at its best. (Also, the California regulators bowed down to offers of better jobs at higher pay if they would nix the stricter exhaust standards.)
yagi,
The automaker bailout could work, but everyone involved has to give something up and the problem is everyone involved wants something more for nothing contributed.
You might be right in assessing the probability of politicians, financiers, management, and workers coming to a successful agreement and course of action -- but the potential for success is all I am describing
I think it's worth the risk to try for the potential success than the alternative do nothing and allow bankruptcy followed by liquidation of the entire chain from suppliers to dealers
An idea I'm working on is related to local impacts and regional thinking, i.e, why should auto plan workers in detroit make $70/hr while industrial workers in other communities make a 1/3 of that? The idea of regional strength is of interest, because there are fine examples of Toyota moving a fast-track plant to America and making it work very fast. Thus the idea of virtual and more dynamic industry is a huge factor going forward, because robots and computers can produce better results than union employees. In a way you see this with chipmakers that are design fabs versus foundries... blah blah...
....the Big 3 bailout is a moot point. The only question after (probably) two of them go belly-up will be how much $$ we've given them first. The non-core businesses are already as good as dead - demand is WAY DOWN soon to be FARTHER DOWN with fewer working middle-class buyers.
Hmmmm, Ahhh so, Look at the friggn efficiency here, in the fact that Toyota set up a shop at light speed, e.g, two friggn years and then made a profit, by using substantially fewer union employees. This is a great example of fast new-age re-design and shows that Ford and GM are full of shit and that bailing them out to protect crap jobs is retarded!
FYI: Toyota broke ground for the plant in 1986. When the first car produced there a white Camry rolled off the line in May of 1988, little did they know that 20 years later TMMK would be producing more than 2,000 cars a day there.
ith the equivalent of 156 football fields under one roof, assembly is by far the largest area in the plant. Cars advance up one line and down another. Although there appear to be multiple parallel production lines, a vehicle transfer mechanism and a buffer, which holds six to nine car bodies, connect each one, making one continuous production line with well-thought-out sections.
Toyota Motor Manufacturing North America opened in 1996 and oversaw all Toyota manufacturing concerns in North America. The company employed 1,055 with an annual payroll of $113.1 million. It is headquarted in Erlanger, Kentucky.
Toyota has recieved $371 million in state and local government tax subsidies since 1986. Toyota promised "good jobs". Instead Toyota has given low wage communities $12 an hour jobs with little or no healthcare,firing of employees who are injured at work, and relying on temporary workers that earn half the wages of a permanent employee.
people are arguing about whether or not the ship will or wont sink..
ROTFLMAO!
Yah, the ship is swaying back and forth, listing and moaning and all these people are still wiping off the deck chairs, arranging napkins, cleaning ash trays, adjusting bowties, lighting candles for the after dinner party, checking the restrooms and flushing toilets, tossing salads, mopping floors and all the things that go on behind the scenes in the backroom...
If the average unionized U.S. plant worker makes $14/hr or less (better than the average retail worker), I fail to see how this helps support a national median house price above $200k.
Yesterday, the Hershey Company announced it was moving 1,500 more manufacturing jobs to Mexico, terminating 1,500 U.S. workers and all the dairy farmers that supply work and product into that company.
Hershey now joins the ranks of Hoover, Stanley, Champion, Ford, Chrysler, Huffy, Zebco, Levi's and Maytag, who have shipped thousands more U.S. jobs to countries where workers toil for starvation wages.
Now President Bush wants to renew more of the same fast-track trade authority, to ship more of these jobs to Mexico and other trade rivals. He wants to sell our economy to the highest bidders in foreign countries.
NAFTA, CAFTA, PNTR and its cousin agreements have broken the middle class. Congress is long overdue to stand up for them. We must take back the authority to regulate commerce with foreign nations and start creating good jobs in our country again. It is time to stop fast track.
Comrade Kristina writes:
Blaming the workers for the auto industry makes about as much sense as blaming the state of healthcare on RN's making too much money...If we could just get those greedy nurses to work for 7 bucks an hour everything would be gravy.
Comrade Kristina | 11.19.08 - 1:28 pm | #
OK blame the UAW for pushing for golden benefits that up the cost of US cars about $2000 vs. Japan/Germany
I am not disappointed in Roubini. It's Paulson that disappoints me. Right down the line, he's consistently failed to estimate the risks well, then had an emotional response and made things worse step by step. I cannot believe how much tax payer money has to be used by AIG to post as security to investment banks. Why couldn't the Bush administration initiate some legislation that allows modification of securitized mortgages or credit default swaps? Where are the priorities for saving the American economy already?
FYI, on the 2007 closing of Hershey in Oakdale: Chocolate is comin' back, "The Sconza company brought about 50 employees from Oakland to Oakdale. About 50 more are former employees of Hershey. Jeanenne Tedore is one of them."
what a cockeyed optimist...I say the worst in a billion years. No, hold it...the same number of years as the money spent on the bailout.
Let's see...carry the 700 billion, add AIG, subtract...O, thats right... we're not getting any back...OMG 4.2 trillion years!!!
I think thats before anything existed!!!
Ah, Kristina, don't you know hating frontline workers is the America way?
PeakVT | 11.19.08 - 1:31 pm | ______________________
Along that same line of thinking, everyone thinks everyone else is overpaid. Software engineers in 2000,(outsourced to India), factor workers in the 90s (outsourced to Mexico), now auto workers. And maybe they are, as well as CEOs, pro athletes, movie stars, doctors, lawyers, engineers, landlords, wal-mart greeter, porn stars, government workers, military contractors, etc. Before this is over, everyone's wages will fall, IF you can keep your job. Ask yourself if you think you're overpaid, because your neighbor probably believes you are.
Dontcha just love 'free trade' and globilization? You betcha! South America standard of living, coming to an American town near you!
Subject: *SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*SOMALI PIRATES APPLY TO BECOME BANK TO ACCESS TARP
*PAULSON: TARP PIRATE EQUITY IS AN INVESTMENT, WILL PAY OFF
*KASHKARI SAYSSOMALI PIRATES ARE FUNDAMENTALLY SOUND
*Moodys upgrade Somali Pirates to AAA
*HUD SAYS SOMALI DHOW FORECLOSURE PROGRAM HAD VERY LOW
PARTIC PATION
*SOMALI PIRATES IN DISCUSSION TO ACQUIRE CITIBANK
*FED OFFICIALS: AGGRESSIVE EASING WOULD CUT SOMALI PIRATE RISK
*FED
AGREED OCT. 29 TO TAKEWHATEVER STEPS NEEDED FOR SOMALI
PIRATES
Hmmm. Pig
Don't you have more than one picture of Roubini?
o pig
What? I sincerely doubt it. My realtor told me otherwise.
If Ford gets down to 99 cents, I'm going for it.
Wow that's bad
For those of us who can't watch, can you summarize what Roubini has to say?
He keeps raising his estimates.
In Soviet America, Soviet Americans depress you!
Are we in Bolivia?? Who is this woman?? How do you get elected to Congress with English as a second language?
Are you sure that that is a picture of Roubini or is that a picture of "Serious Cat"?
Not bearish enough. Again.
Anonymous writes:
Don't you have more than one picture of Roubini?
Anonymous | 11.19.08 - 12:42 pm
To me, he has an almost David Blaine eeriness to him in that picture. I wonder if he is going to suspend himself in a clear box with all of his market analysis to demonstrate his constitution and endurance in the face of overcoming the human frailty that we all share?
Anoddamoose -
Over the summer, Roubini was saying we will spend $1-2T on bailouts and people didnt believe him (he mentioned he had upped that number from $1T before).
The problem is he's the most gloom and doom guy in the room, and even HE is understating the problems. At what point will his revisions be too much?
If it's Roubini and he says only 50 years, then that's a strong buy signal.
Or have himself locked underwater, in solidarity with suffering homeowners?
Doesnt matter. Market cant break through 8200ish on the dow and 830ish on S&P. Selling pressure is too weak. If we dont break through it there's going to be a monster rally regardless of fundamentals. If we do break through it then dow 6500....
Watching congressional hearings.
Makes me want to vomit.
The end is here!
Volume falling on this little ramp.
321-over: What are they talking about?
So this will be the worst recession since 1958 ? What, Huh ?
If our morons in charge screw it up, it could be the worst ever.
The problem with being surprisingly right is that you have to keep surprising. Roubini will be the smartest guy in the room until he isn't.
I bet CR is more dashing.
Hoopajoops LTD writes:
If it's Roubini and he says only 50 years, then that's a strong buy signal.
Hoopajoops LTD | 11.19.08 - 12:47 pm | #
LOL!
The way I see it, if the Big 3 go BK, I def. expect to see DOW 36,000!
What are we waiting for? Let them die and watch everyone make billions in the market.
Ten year treasury is yielding 3.39%.
Roubini says unemployment to 9%. Mien Gott! I'm more pessimistic than Nouriel.
Does anyone else think it would be a bit weird for the S&P 500 to break so easily through its lows but for the DOW to successfully retest them, again?
OK, we're going to have another test of this low today. We better break it.... Get in there and sell Mortimer!! Sell!!
i swear he owns only one tie...check out all the previous interviews on bbc, bloombereg and at his blog !!!!
now thats a true conservative
anon writes:
Doesnt matter. Market cant break through 8200ish on the dow and 830ish on S&P.
anon | 11.19.08 - 12:48 pm
But can the bulls break through Dow 8500 or SP 900 again? At some time, one side is going to lose steam, and I can't believe the Bulls got the mojo on their time.
I think the Bears are just resting while the Bulls are wiggling to death in the Bears' mouths. A strangulation more than a neck snap. Can't let the cubs get injured while feeding, you know?
1) predict doom
2) wait
3) wait
4) wait
5) profit !
Roubini is an optimist.
So Roubini gets his picture up but Whitney doesn't?
roubini has turned more and more bearish with every passing interview...he knows the tarp is a failure
money down a rat hole
heres why
Naomi Klein: The Borderline Illegal Deals Behind the $700 Billion Bailout | | AlterNet
fascinating reading...interview of naomi klein on the criminal mis use of the 700billion tarp
klein reports that new york melon bank one of the most in trouble banks over derivatives trades, has been put in charge of doling out much of the money to troubled banks as the bush administration rushed to privatize nearly all aspects of the tarp fund spending.
klein goes on to report how contracts outsourced, fees payed and target banks receiving taxpayers money have been kept secret
she draws a parallel between the emergency privatization and outsourcing of the war in iraq and how the emergency tarp legislation gave treasury powers to operate on a similar basis thus eliminating bids, competition, and government and public oversight
banks were awarded cancellation of the tax related to bank acquisitions
the bulk of the money given to banks appears to be headed for stock dividends, acquisitions and management compensation without much if any unfreezing of the credit markets
hurry hurry give us all your rights, its an emergency...notorious fascist and marxist dictators have employed these tactics well in history, and now our ow
Not bearish enough. Again.
Angry Saver
Seriously, wasn't he just saying "no global recession"?
Brigham -
The fact that the bounces are weak too doesnt bode well for the bulls either. But we need to break through the bottom or the bulls will believe the bottom is in and buying will gain conviction. Right now, there isnt a lot of conviction in this bottom, but its building today. If we dont go through it soon the rally will be big as the shorts will cover and buyers will take advantage of the momentum. It wont last, but if we dont go lower soon there will be a big rally.
Seriously, wasn't he just saying "no global recession"?
No recession, but depression.
BASF Plans to Idle Plants, Cut Output - WSJ.com
FRANKFURT -- BASF SE said Wednesday it will temporarily shut down 80 plants world-wide and cut production at another 100, as the German company warned that its profits are sliding.
The bulls have perhaps one more death spasm in them. We could see 8800 DJIA equivalents on any kind of manufactured good news. I'm sure the MSM will be pumping a Black Friday upside surprise for instance.
Doesn't matter. The markets are insane. There is no investment going on. It is all gambling, speculating trading, leverage and deleverage and outright manipulation. Go ahead, make money but don't fool yourself into thinking this a market of stocks anymore.
Oh just give that 25B to big auto already, it's too painful to watch.
After that when no one wants to buy inferior product, set up some trade barriers.
It has and always will be the way, am sure the general public will gladly take a POS for much cheaper than a foreign make.
Seriousness is not a fruit of the spirit
There is no investment going on. It is all gambling, speculating trading, leverage and deleverage and outright manipulation.
Unfortunately, many of the actors are playing with OPM (401ks, pension funds, etc)
dawg-
"says unemployment to 9%"
It's already there IMO. It may officially get to 10% but as always the reality will be much higher.
Ciao
MS
TARP exists to prolong the power structure- plain an simple. Roubini is not a Houdini- he's not a magician. He's a spokes mouth for the liberal, socialist agenda, which thrives on bad times. That said, he understands the problem, and he communicates in practical terms that most people can understand.
OT: Anyone know why LaZ Boy (LZB) is getting a 40+% haircut today? Light volume, but ouch!
Also, wasn't Lincoln National Corp taken over by someone--HIG? They are also getting the 40+% haircut treatment today.
The perma-growth debt system is permanently impaired.
We need too discuss alternatives. Change is not always comfortable or positive.
Oh noez, the liberal, socialist agenda is coming via Roubini? Good Grief...
This is news? He was named Official Chicken Little Laureate of the United States ages ago.
Right?
You see that the big three were "suffering so much" that they took the gulfstreams to D.C. with hat in hand.
At least look like you are trying.
Big Three CEOs Flew Private Jets to Plead for Public Funds - ABC News
Putz'
Ciao
MS
Macy's now has a TTM P/E of 3.20. Actual forward P/E still at infinity.
CR, its been a while since you've commented on the recession. Your previous take was that this would be a moderate recession, unemployment staying below 8% - with the possibility of a worse recession not ruled out (if I am remembering correctly).
Do you still hold the same view or has the crises been worse than anticipated ?
Regards,
Vikram
Roubini looking dour in this photo as usual. I wonder if he ever smiles?
Is anybody else old enough to remember "Women of Wall Street" in Playboy nearly 20 years ago and the furor it caused? What would the reaction be today? You now know everything you need to know about the wisdom of trusting these people with your money. BTW Playboy announced last month another casting call for the "Bares of Wall Street."
approaching the 500 visitor mendoza line.
"Go ahead, make money but don't fool yourself into thinking this a market of stocks anymore."
Rob Dawg
Maybe it's a market of crocks?
In Soviet America, the market sells you...
Rob, have you noticed cars piling up at Port Hueneme? [ref Long Beach story from last thread]
I wanna party with Dr. Doom so bad....
Naomi Klein will turn libertarian before this is over. Someone is teaching her about fascism and fed, and it can't be a lefty.
@Micheal
Nouriel Roubini Likes To Party, Quote Seinfeld - Dealbreaker - A Wall Street Tabloid - Business News Headlines and Financial Gossip
Don't worry about Roubini...
"OT: Anyone know why LaZ Boy (LZB) is getting a 40+% haircut today?"
No, but the furniture industry is hosed. Retail stores closing all over the place. I need a new LaZboy, so I guess I should buy it before they blow up...
Roubini:
Worse than 1991, 2001, worse than 70s and early 80s. Will be a global recession this year and next.
Much worse than 1991.
Unemployment at 9 percent.
All market news in the last few weeks has been terrible (lists a bunch of them).
In 2001 consumption didn't fall.
In 1991 homes only fell 5%. This time it's already down 45%.
Effective FFR is 0.3% already at ZIRP.
Market rates are going higher. The spreads are greater.
Whatever the Fed does, it doesn't affect market rates.
The credit crunch isn't getting any better.
All loans are being squeezed across the board.
We need major fiscal stimulus.
Demand is collapsing, which will cause a more severe recession.
I support infrastructure support package.
A collapse of Main Street without a fiscal stimulus.
We need to help auto makers.
I drink your blood.
We have no choice - must do something about Detroit.
Houses need to fall another 15%. Housing will get worse. There is no bottom to it.
Consumers aren't buying anything.
Stag-deflation - economic recession with deflation. Slack in labor market. Slack in commodity prices - they've already fallen 30% and will fall another 20%.
Deflation is a concern.
Once we have a deflation trap, monetary policy is useless unless you buy long term corporate bonds.
US will have a huge fiscal deficit, but so will all the other countries. It will increase long term real interest rates.
Here is a story with dire predictions if GM goes under. Feels like propaganda to me.
Consumers to Suffer If GM Goes Under
i drink your blood,
you sir owe me a new keyboard.
Roubini smilling
http://dealbreaker.com/images/thumbs/Picture%20113.png
Satan writes:
If our morons in charge screw it up, it could be the worst ever.
What do you mean if?
re: speed
so we're f'ed, eh?
New 52 week lows $FVX $RUT, aci,bac,c, ccl,csx,f,fcx,gm, iwm, mer. bidu,
Rob, have you noticed cars piling up at Port Hueneme? [ref Long Beach story from last thread]
sm_landlord
Yes, big yes. For the less plugged in locally; the Port of Hueneme is the only deep water facility between Los Angeles/Long Beach and San Francisco. Several automakers ship here because of easier scheduling lower costs and available land for prep facilities. The ancillary benefits have been quite interesting. BMW and Volvo and "others" have research/design facilities nearby as well.
SM_Landlord is commenting that there are a great many acres of ship wrapped vehicles piling up in the processing lots. The Euro/Dollar volatility and shipping costs have got to be playing havoc with the supply channels. Why the inventory explosion is beyond my pay grade. Could be that high end manufacturers pushed to beat what they though might be huge transportation cost increases. Then again could also be high end manufacturers taking advantage of low transportation costs to preposition or merely shuffle inventory.
May you live in interesting times.
CR can you put up a better picture of Roubini
I like this one
http://cache.gawker.com/assets/images/gawker/2008/10/n736919879_1435727_1498.jpg
Re: Higher car prices, the end of incentives and vehicle shortages could occur if GM and other Big Three automakers don't get a bailout, according to experts
Haha, "I drink your blood"
ah haosca
It is all gambling, speculating trading, leverage and deleverage and outright manipulation. Go ahead, make money but don't fool yourself into thinking this a market of stocks anymore.
Rob Dawg | Homepage | 11.19.08 - 12:58 pm | #
Amen and preach it brotha'!
What is sad is not only that the Greater Recession is here with all the problems that brings, but the stock market is no longer a "real" investment market.
It really has become a day trading, get rich quick, ESPN World Series of Poker den. It is just a glorified casino at this pount. No real long term investment!
Kona writes:
This is where free trade will come into play as China wipes out Detroit and the union bullshit and the concept of high paying jobs that can be done by robots!
Have you noticed the quality of products from China?
Fron the SM_Landlord linky:
"As a result, some experts predict higher car and truck prices, vehicle shortages and difficulty finding replacement parts for owners of American as well as Asian cars if Detroit's Big Three don't get the $25 billion they are asking for from Congress.
"Vehicles could cost anywhere from 5% to 15% more, maybe even more than that," said Michael Robinet, vice president of global vehicle forecasts for auto consultant CSM Worldwide."
ROTFL. Even if this were true it would be a very good thing as it effectively works as a bailout for consumers with their upside down auto purchases.
Ticker Tape of Doom writes:
Have you noticed the quality of products from China?
Ticker Tape of Doom | 11.19.08 - 1:20 pm
Compared to the Pinto, SUV Tire/Tred separation, Rollover and other joys of NA manufacturers?
Speed writes:
Roubini:
Worse than 1991, 2001, worse than 70s and early 80s. Will be a global recession this year and next.
Much worse than 1991.
...
I drink your blood.
...
--
Thanks speed, I couldn't get audio on mine.
Have you noticed the quality of products from China?
Ticker Tape of Doom
They're like japan in the 70's, and can only get better.
They are after all making planes already.
"Have you noticed the quality of products from China?"
When I'm looking to get my daily melamine intake I ALWAYS look for "Made in China".
That's quality you can believe in.
General Motors Corp. and the United Auto Workers agreed to a new class of jobs that would pay about half the current rate, breaking with the UAW's tradition of equal earnings for union members, people with knowledge of the plan said.
Under a four-year accord reached Sept. 26, all new employees would start in so-called non-core jobs such as janitorial and maintenance work and make about $28 an hour in pay and benefits, compared with $51 for present employees, the people said. They asked not to be identified because contract details haven't been released.
The UAW already has similar pay agreements for new workers at parts suppliers Delphi Corp., Dana Corp. and American Axle & Manufacturing Holdings Inc., McAlinden said. At Dana and Delphi, the union approved $14-an-hour wages for new workers. American Axle said in February that new UAW employees would get $27 an hour including benefits, a decline from $66 for current workers.
GM, UAW Agree to Cut New-Worker Pay Scale, People Say (Update3) - Bloomberg.com
The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM's total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers.
The Return Of The 70 Per Hour Meme - Market Movers - Portfolio.com
the $28 dollar wage is still about twice what it should be.
They're like japan in the 70's, and can only get better.
They are after all making planes already.
I will believe it when it see it.
There will be no incentive for the chinese to improve the quality of their products if there is no competition for their products.
The big autos business model does not work, period.
Unless we go back to protectionism and trade barriers, then it may compel people to buy inferior products.
Other than that it's money in a sinkhole.
Re: Have you noticed the quality of products from China?
Is there quality from anything in America? I worry if my food is coming from China, but it seems that products in general are all from China and anything related to customer service is from India, but by God we better help out those people in Detroit making $66 an hour to build shit cars...
Blaming the workers for the auto industry makes about as much sense as blaming the state of healthcare on RN's making too much money...If we could just get those greedy nurses to work for 7 bucks an hour everything would be gravy.
There will be no incentive for the chinese to improve the quality of their products if there is no competition for their products.
Wholeheartedly agree. There must be competition and in fact there are, wages have gone up so much in china that outsourcing is now moving to vietnam.. etc.
Bailing out autos and banks doesn't seem to be competition, just seems that it pays to be too big to fail.
Plus the taxpayers and consumers lose too.
And they really are making planes.
If our morons in charge screw it up, it could be the worst ever.
All the proposed "solutions" look like problems to me. Take infrastructure. Do we really need more cars and airplanes? Our last manufactured bout of prosperity caused an oil spike that helped bankrupt our eCONomy.
Let's hope China goes green - D'oh.
Ah, Kristina, don't you know hating frontline workers is the America way?
yagij(Unrated) writes:
Compared to the Pinto, SUV Tire/Tred separation, Rollover and other joys of NA manufacturers?
The Pinto? How long has it been since a Pinto was produced?
Maybe you will be the first in line to buy Chinese built cars?
Here is another great reason not to be caught in the Ford and GM shit storm: GM will offer buyouts to entice existing workers who would be classified as non-core to leave, and the new pay structure would apply to their replacements, the people said. Current workers wouldn't have their pay cut.
Ok, you buy Ford at $1.20 and then wham, they link your penny stock funding to helping them pay off old employees that want pension payouts that are based on $70/hr jobs that are gone.... Ford and GM will fail and the stocks will be destroyed because of excess compensation from the CEO to the janitors!
PeakVt, no doubt. What I find interesting is these same people will turn around and crow about how great productivity is in this Country and what hard workers we have (McCain comes to mind). Their great unless of course they actually want to make a living wage apparently.
GMs just gonna move more work to China and Mexico if we give them money. Maybe if we outsourced GM management to India or gave them special "agriculture and Microsoft style" access to guest workers, then maybe they'd have a chance. (yeah, right).
Declare bankruptcy and fire everyone from VP on up.
Wholeheartedly agree. There must be competition and in fact there are, wages have gone up so much in china that outsourcing is now moving to vietnam.. etc.
Bailing out autos and banks doesn't seem to be competition, just seems that it pays to be too big to fail.
Plus the taxpayers and consumers lose too.
And they really are making planes.
Great news this is the products from Vietnam are even worse than the ones from China.
There are costs other than labor.
If you have to buy the same thing twice how much are you actually saving?
mal writes:
For those of us who can't watch, can you summarize what Roubini has to say?
mal | 11.19.08 - 12:44 pm | #
Yes: Life Sucks, the fed is powerless unless it wants to just buy long term bonds in an unsterilized way (aka turning on the printing presses). Aggragate demand is falling across the board, and the only hope is a massive fiscal stimulus package NOW and much bigger than is currently being talked about. This recession will be worse than 74-75 or 82-83.
[Compared to the Pinto, SUV Tire/Tred separation, Rollover and other joys of NA manufacturers?
yagij ]
If the automakers go bust there will be a tremendous destruction of real value - Their engineering, crash test analysis... They produced big vehicles because that is where the demand was. GM built an electic vehicle at great expense and no one bought because gas went to $1 in the early '90s. They may be too big and perhaps 3 mfrs are too many but allowing them to fail would be a big mistake.
Screw the banks and f%ck China.
The real question is whether you the general public will buy a product in this case autos that are inferior?
If you would then the bailout of the auto industry should be wholeheartedly embraced.
There is no plan in place that says GM and all who receive the bailout money, your money, will produce Better cars than their foreign competitors.
And unless i am mistaken GM's head just testified when asked if this will be the last 25B, said i quote "i don't know". I do commend him on his honesty but nothing else.
sm alndlord-
Propaganda at it's finest.....
Nothing more.
I guess I would care if I bought or planned to buy an american POS...even the trucks are sub-standard IMO.
They had no succession plans (and I'm not talking about management) no idea how to operate when the huge margins on SUV's went away, actually killed off a useful product (GM EV-1), and then decided to get Bushco to hand out tax breaks to anyone buying one of those POS's with a GVW over 6K lbs.
*uck 'em
Let them file.
Ciao
MS
Ohhhhh...! Dr. Happy! Right up there with L. Cohen and E.M. Cioran. A little Cioran, with those stats...?
"Show me one thing here on earth which has begun well and not ended badly. The proudest palpitations are engulfed in a sewer, where they cease throbbing, as though having reached their natural term: this downfall constitutes the heart's drama and the negative meaning of history."
I can't decide if the auto makers are more like a pyramid scheme or just an economic bubble; they have different shapes, but the reality is, the auto industry collapsed from greed and now, like coke whores, they are begging for more dope.
"GM built an electic vehicle at great expense and no one bought because gas went to $1 in the early '90s."
No one bought it because it wasn't for sale.
GMs just gonna move more work to China and Mexico if we give them money.
Something that's always puzzled me.
Is it better for the nation if an American buys a "domestic" car made in Mexico or a "foreign" car made in Alabama?
Their great unless of course they actually want to make a living wage apparently.
Comrade Kristina | 11.19.08 - 1:32 pm
That sums it all up.
Is anybody else seeing what I'm seeing? On one side Congressional hearings discussing higher wages to solve the housing crisis and on the other Congressional hearings discussing lower wages to solve the automaker crisis.
ow if we breach -- that's IF -- what do you see as the inflection point ?
I'm thinking 797
actually $20.00 is fair...
commutes here to job or similar..
found this
craigslist | Page Not Found
14,000 down...130k at 6....3200 mos income..1k max payment 30 pti
workable...simple living is key..
2 jobs even better
Can someone please explain to me how an economy where consumption is 70% of GDP will work with everyone making $7/hr?
Wages are the 800 lb pony in the room that nobody wants to talk about because globalization pretty much insured the only way to compete is if we become "third world"...
Bailing out GM and Ford could be a smart move, but the important part is on what terms.
To do it properly, and for the long term so there is no re-default, they have to enter bankruptcy.
What the government should do is help pre-package a deal to avoid the lasting negative impact of a bankruptcy. If there is no doubt they will be around in 5/10 years then it won't be a concern for sales or future lines of credit.
Wipe out equity holders, do a debt for equity swap, write down some debt.
Bring in austerity measures for the corporate side to eliminate perks. New cars each year, personal chauffeurs, private jets, etc. Of course open contracts, shift to better performance clauses. If they're not willing to cut their present compensation to minimum levels to see the company survive, they don't have enough passion to stay around
The new hire labour contracts are fine. What the UAW has to chip in are current senior contracts, and a hair cut on previous benefits
Dealership network is too large, best I could offer would be to ensure financing available for those that remain. Keep in mind long term trend to delivering cars ordered à la carte.
Advertising budgets. Cut by 90%
Just like the SEC/OTS/FDIC/PBGC/etc need to be restructured, look at redoing the safety and efficiency standards and approval process. If costs can't be lowered, at least lower time for approval -- look at harmonizing with other large car markets to lower vehicle costs
Ticker Tape of Doom(Unrated) writes:
The Pinto? How long has it been since a Pinto was produced?
Ticker Tape of Doom | 11.19.08 - 1:31 pm
How long has F been making cars? 80+ years? China has been making cars for how long?
I drive Honda for the past 15 years, and they "stunk" when the Pinto blew up. However, they didn't blow up...
Planes Trains and Automobiles
YouTube -
Hundreds of Union Members Will Lose Their Jobs When Hershey Moves to Mexico.... Why might that be, because a company making a fuc-ing candy bar wants to make $40/hr???
I think we let two of the three fail. We save one just in case.
Which one do we save? Definitely not Chrysler. Cerberus can choke on that puppy.
Let's have a pay per view drawing of straws between Ford & GM. It's no more random than the LEH vs. Bear lotto.
In October, the Consumer Price index fell 1.0%, its largest decline ever (since the stats started being kept in 1947), although prices are still 3.7% higher than a year ago. Inflation is, like, so last summer, as an economic concern. The decline in prices was led by a 8.6% decline in energy costs, which follows declines of 1.9% in September and 3.1% in August. Food prices rose just 0.3%, but are still up 6.1% year over year. In addition to energy, prices also fell for Apparel (retailers desperate to get customers in the door) and prices for both new and used Autos also fell. But even stripping out food and energy prices, the core CPI fell 0.1%. Under normal conditions, this would be a huge green light for the fed to cut the Fed Funds rate, however these are not normal conditions. The Fed funds official target rate is just 1.0%, and even that overstates things since the effective Fed Funds rate is just 0.37%. Thus even if the Fed were to cut by another 50 basis points in December, it would still be behind the curve with the market. On the official target rate, there are just four 25 basis point bullets left in the gun, and it is not clear just how effective those bullets would be.
The velocity of money is slowing like it never has before, or at least since the 1930's. That is the technical term for people just sitting on their wallets and banks just stuffing every spare dollar into 3 month T-bills. This is very important since nominal GDP is equal to the amount of money in circulation times the velocity of that money. Falling prices are one symptom of declining velocity which is not offset by higher money supply, falling output is the other symptom. The yield on the 3 month bill is back down to a measly 4 basis points, almost as bad as the worst point of the September credit crunch. This is the moral equivalent of a bank simply putting every last dollar it has into the vault, closing it up and setting the time lock on it for 2009. The Fed desperately needs to ease monetary policy, but its key tool for doing so is at a point where it will no longer work very well. The Fed is now at the point where it is pushing on a string. What are the Fed's options?
1) They could try to convince the markets that short term rates will stay low for longer than the market currently expects, this would bring down longer term rates which would help stimulate the economy. I'm not really sure how creadible that the Fed can be in doing this.
2) They can change the composition of the Fed balance sheet. Under normal conditions the Fed holds Treasury securites across the whole maturity spectrum, but heavilly weighted towards the short end of the curve ( the average maturity is usually well under four years). However, the Fed has already lent out most of its Treasury securities under its various alphabet soup liquidity programs. The collateral the Fed currently holds is probably of lower quality than that of your average pawn shop on the wrong side of the tracks. Still, selling short term bills and buying longer term bonds would help bring down longer term yields at least for Treasury securites. However several key market rates have disconnected themselves from treasury rates of the same maturity (i.e. spreads have widened dramatically), so such a policy might not have that much economic impact.
3) The Fed could simply continue to increase the size of its balance sheet by outright buying longer term T-notes on the open market. In the process it causes the banks to replace interest bearing T-notes for non interest bearing reserves, which the banks can thus lend out. This is the functional equivelent of "turning on the printing presses". This is a direct attempt to cause inflation to offset the deflation. The size of the Fed Balance sheet has already been balloning, having more than doubled since mid September. (If you can include the graph it would be great, if not, don't worry about it).
In other words, it looks like the Fed has been trying to do the right things, but it still is not working. The massive increase in the money supply that is implied by the huge expansion of the balance sheet does carry dangers. Monetary policy tends to work with very long lags and the data the Fed has to work with is far from perfect. There is a real danger of an overshoot, which could cause very significant inflation, even to the point of hyperinflation down the road. This is not a path that central bankers like to go down, but at this point it looks like they have little choice.
mrkt-uhhh ohhh
Dropping now...man the life boats!
Ooops..
Hundreds of Union Members Will Lose Their Jobs When Hershey Moves to Mexico.... Why might that be, because a company making a fuc-ing candy bar pays $40/hr to some union employee ... ok, I have no facts on that, but maybe we do have an economic crisis here where we have systemic failure that is colliding with union wage stupidity?
Why might that be, because a company making a fuc-ing candy bar wants to make $40/hr???
Keep on hating, brother! One day we'll have everyone working for Walmart-style companies where you get fired when you start making too much. Then America will be awesome like never before.
How long has F been making cars? 80+ years? China has been making cars for how long?
I drive Honda for the past 15 years, and they "stunk" when the Pinto blew up. However, they didn't blow up...
So buy a chinese car then.
I am going to laugh when this all shakes out and people start to notice that they are economic slaves to the Chinese.
Vehicles could cost anywhere from 5% to 15% more, maybe even more than that," said Michael Robinet, vice president of global vehicle forecasts for auto consultant CSM Worldwide
I call BS. Hell, people are already financing cars with 84 month loans. What's next, the 30 year car loan? Cars are already too expensive for most people at current prices. That's why there are (were)? so many people leasing.
Anyway, for what it's worth, they probably will get their 25B and more afterwards.
Well it could be worse, could have given billions more to the failed financial institutions....
Oh Wait.
Angry Saverwrites:
I think we let two of the three fail. We save one just in case.
Which one do we save? Definitely not Chrysler. Cerberus can choke on that puppy.
Let's have a pay per view drawing of straws between Ford & GM. It's no more random than the LEH vs. Bear lotto.
I say we save Ford. Take a look at what they sell in Europe.
Kona writes:
...Is there quality from anything in America?
Yes, yes. I can assure you that the products of my former US-employer do hold up to my stringent and strict german quality expectations.
A lot of american stuff is crap, but not all!
Look, the unions fought the system to get higher wages for their members. Can you blame them for wanting to hold on to their gains? Sounds like some people are simply jealous. Form your OWN union, get your heads busted like THEIR forebears did, get shot at, etc and maybe then you can complain that someone's get $40 an hour and you're not.
We save Ford simply because they have the Pony Car.
Got love the pony car.
"I am going to laugh when this all shakes out and people start to notice that they are economic slaves to the Chinese."
My wife is Chinese so I already know what that feels like.
Town sees nothing sweet in chocolate plant closing
Town sees nothing sweet in chocolate plant closing - Los Angeles Times
May 31, 2007 The 113-year-old company has described the plant shutdown as part of a global supply-chain transformation. Some 3,000 of Hersheys 13,000 workers will lose their jobs, including as many as 900 in the companys hometown of Hershey, Pa., where the streetlights are shaped like Kisses. By 2010, Hershey says, the moves will save shareholders as much as $190 million annually.
Unemployed Hershey workers may find jobs, but few at wages comparable to their average of $16.81 an hour, officials said. Unemployment hovers at more than 9% in the Central Valley, compared with 4.8% statewide. Some local residents even endure a three-hour commute to jobs in the Bay Area.
[No one bought it because it wasn't for sale]
Not true. It was test marketed and charging stations were set up in airports, train stations etc but it was determined that there was not enough demand to go into production.
the $28 dollar wage is still about twice what it should be.
Joe | 11.19.08 - 1:26 pm
As opposed to $16million in pay plus sweet healthcare plus sweet (unassociated with the normal workers') pension plus sweet bonus plus golf club membership plus millions in other perks for the CEO?
If "we" save any of them it must be with the caveat that the entire existing management team be replaced with people who will actually work in time frames. Showing up to work and dealing with what is in front of you on that day is not very successful.
Sounds like the realty biz...
Ciao
MS
"My wife is Chinese so I already know what that feels like."
lol
EHP- so true..push that to your senator..
they need to be saved and it can be done right...
I've had GM trucks and few issues..
I've had Toyota trans blow up over grapevine..both issue recalls..both are capable of breaking down..
17-18 million cars a year was the bubble behind the bubble...
"My wife is Chinese so I already know what that feels like."
What? Now they're stealing our natural resources. Bomb them!
In memory of George Carlin.
Keep on hating, brother! One day we'll have everyone working for Walmart-style companies where you get fired when you start making too much.
The problem is not that the workers are earning $40/hour. It's that they are earning $40/hour making candy bars. To me, it's just as silly as granite countertops and stainless steel appliances. While I'm sure some people derive tremendous marginal benefits from consumption, for the most part just primarily another form of mal-investment.
Unless, of course, candy is some ridiculous export driver that I'm not aware of.
Dirk @ 1:42 -
Yeah, that's what I'm coming to. Deflation for a period and then the overshoot and it's off to the inflation races.
Linked to article other day in which somebody (John Dizard, Dilard?) was talking about the TIPS bonds and the yields. Don't have link now.
But yield curve seems to indicate that the bond market is looking at deflation through 2010 with inflation kicking back in in 2011.
This is like watching a Buster Keaton movie where the doors of the Flivver are dangling and the fender is held on with bailing wire.
anonymous writes:
Look, the unions fought the system to get higher wages for their members. Can you blame them for wanting to hold on to their gains? Sounds like some people are simply jealous. Form your OWN union, get your heads busted like THEIR forebears did, get shot at, etc and maybe then you can complain that someone's get $40 an hour and you're not.
anonymous | 11.19.08 - 1:47 pm |
Problem is you can't expect to get paid $40 to make something no one wants. Nor can you expect the government to be the guarantor of the "victory" over a management. Unions certainly have done good, but the problem has always been the "us v. them" attitude towards other parts of the company instead of the realizing that workers and management have an identical interest in the companies long term profitability.
bearly-
they only leased them...they never had the intention of selling them ever.
That's why the production was never "ramped" up. It was an exercise that didn't work out the way they originally planned it. The plan was sort of "we'll build it....it will fail miserably...and we can go back to producing overpriced POS's"...
except it actually worked and was fairly fun to drive. Tons of torque....can't say the same about the Prius...
Go rent "the death of the Electric Car" if have not seen it's a good read on what really went on with them. GM, Honda, decided a wholesale re-org wasn't in there "best interests"
Ciao
MS
You really need another label to add to stuff like this. "HOOCOODANODE?!"
Welcome to the new world neoliberal utopia you all wanted! Smile!
Bearly writes;
"Not true. It was test marketed and charging stations were set up in airports, train stations etc but it was determined that there was not enough demand to go into production."
Not one was sold, they were leased only. There were long waiting lists. My neighborhood still has charging stations at supermarkets and curbside on the streets. At the end of the leases, they practically had to pry the cars out of the hands of people who managed to get one. There were protests when the recalled cars were crushed.
The problem was that the cars were too expensive, at least in the small quantities they produced them.
I'm not in a hate mood, jealous or crying in my milk, I'm just paying homage to Roubini and wondering why we have a systemic financial mess from top to bottom in virtually ever sector of American and global commerce? We have CEOs being compensated with rewards and bonuses that are insane!
Obama noted that in 2005 the average CEO earned 262 times the pay of the average worker.
If the average worker includes union employees making $70 an hour to make shit cars, then as a society we are screwed, because an average wal-mart store employs about 200 people that make $8.00 an hour.
Where are we head as a society? This is chaos and as more jobs are lost and the infrastructure is exposed as being based on fraud and over-compensating people that are un-productive and then bailing out people for buying into an economic bubble -- then we are very screwed!
cd,
I'm not American. No Senator, and no dog in the fight
If everyone is making 8.00 bucks an hour, who's going to buy all your empty houses?
There is a limited amount of capital in the world at any one time. If chinese worker's standards of living are going to go up, yours are going to go down. I think.
Pissed Off In California writes:
Can someone please explain to me how an economy where consumption is 70% of GDP will work with everyone making $7/hr?
I don't think the 'trickle down' guys have figured that one out yet and Neocons don't care. They never meet those people.
But that has always been a question about globalization that never seemed to have an answer.
"What? Now they're stealing our natural resources. Bomb them!"
Funny, that's what her family said.
The perfect world is the working class being paid the bare minimum to produce. Little benefits and a long line of unemployed begging for these horrible jobs. The bottom line will be helped and the investors and management will make even more money.
The problem is who buys the products being produced? Destroy these union jobs and industries and there is NOTHING waiting to replace these jobs. The issue here is protecting 2-3 million jobs to ensure there are still incomes feeding a hurting economy. Ford and GM have stated they are making profits selling in foreign countries. How about they close all foreign factories and use the under utilized production here AT HOME to provide those cars to sell abroad?
Don't argue against the Big Three getting a bailout until you are willing to stop the billions being wasted to prop up banks and insurance companies. I have never witnessed hypocrisy at this level.
OT but as to employees...
The egress window for the basement project was manufactured by local Amish who also installed it.
There's still one part to be done and they'll either be back today or Friday to finish. They're off on Tuesday and Thursday for the Amish Wedding Season.
Nothing like seeing young Amish guys show up to work in a heavy dump truck pulling a trailer with a Bobcat.
And they own all of the equipment. Knowing them, it's paid for 100% cash.
Damned shame about Hershey. It's like driving through an idealized version of America's small town...beautiful town.
Re: If everyone is making 8.00 bucks an hour, who's going to buy all your empty houses?
Re: Prices all over the Southwest -- including Arizona -- have dropped sharply in recent months. The median existing single-family home price in the West was $266,300 in the third quarter, 21.4 percent below third-quarter 2007.
According to research from Arizona State University Realty Studies, the high rate of foreclosure sales is pushing down home values across the Phoenix area. For the traditional sales market, the median price of resale homes in Maricopa County was $175,000 in October, while foreclosed properties had a median price of $159,775. One year ago, the median prices were $250,000 and $218,225, respectively.
According to NAR, distressed sales foreclosures and short sales accounted for 35 to 40 percent of transactions in the third quarter, pulling down the national median price for resales to $200,500, 9 percent lower than the third quarter of 2007.
I am going to laugh when this all shakes out and people start to notice that they are economic slaves to the Chinese.
We are already slaves via debt to many nations.
Don't argue against the Big Three getting a bailout until you are willing to stop the billions being wasted to prop up banks and insurance companies. I have never witnessed hypocrisy at this level.
The most insipid, asinine argument in this thread.
IF one mistake has been made, do we now say hey, lets make another mistake?
Both are mistakes of varying degrees.
By the way, the issue of all the jobs going up in smoke doesn't hold water.
Give 25B to small businesses instead. Where is their bailout?
Ehp-that's right..northern citizen..
still relavent...
Big 3
Aging trophy wives newly cut loose, looking for handsome rich bachelor. Why so little interest?
Kona
thanks for the links regarding phony 72$/hr UAW labor cost meme being tossed around
also re quality and products from china...
i do carpentry as a sideline, and like to play with cars in my spare time...
i worked as a car mechanic 25 years ago and back then i bought only us made tools from kenosha wis...know what i mean!
lately i sometimes buy hand tools from an outfit that imports almost exclusively from China
the quality reminds me of what the japanese were producing in the late 70s...very very good and moving towards excellent
cutting wages even in half isnt going to do it when there are workers in china and india who knock out excellent product for wages of less 10$ per day
we are in deep deep trouble
Ok, here is how this ends.
Ford and GM unite and merge to build new cars -- but they do so in Mexico! Whadyah think of that ... huh, huh?
anon,
don't know for sure but I bet a lot of small business is auto related...
We are already slaves via debt to many nations.
I realize this. So - why are we slaves?
.
Kona | 11.19.08 - 2:04 pm |
I agree, if 8.00 dollars an hour becomes the new normal asset prices will eventually come to reflect this and that is not necessarily a bad thing. But my oh my, the destruction of all of that book value is going to be something that is going to destroy the financial world in ways that we cannot even comprehend at this point.
"Unions certainly have done good, but the problem has always been the "us v. them" attitude towards other parts of the company instead of the realizing that workers and management have an identical interest in the companies long term profitability."
It's hard to know what to say. The above bears some partial resemblance to the Catholic Church's social teaching. But it could also suggest the corporate states of Mussolini and Franco, which were riddled with inefficiency and in many ways stagnant.
In the SU, labor and the state were supposed to have identical interests, in fact to be identical. This did not prevent the expropriation of the profits of enterprises by the state through low wages. The system sank not only under its inefficiency, but under the universal slogan of: When things belong to everybody, they belong to nobody.
It is hard to know what to say.
freeking chicoms!
don't know for sure but I bet a lot of small business is auto related...
If you're producing a product that nobody wants, you ought to be out of business, period.
Kona writes:
Ok, here is how this ends.
Ford and GM unite and merge to build new cars -- but they do so in Mexico! Whadyah think of that ... huh, huh?
Kona | 11.19.08 - 2:08 pm
I guess that is the point. We bail them out, and they reward the taxpayer how exactly? Increased tax revenues? Sponsorships of our--increasingly banal--sport events? They aren't going to help unemployment numbers, and more importantly, will have to hurt that number to survive or destroy it to die.
EHP said that it would work if done properly, but after TARP et al, I don't think anyone here would place skin on that bet. Our politicians certainly aren't placing much skin on it either.
Interesting times for all, but it seems to have to play out without being forced....
The most insipid, asinine argument in this thread.
Your response was to give 25 billion to small business. I won't insult your argument but I will point out giving taxpayer money away to support jobs or job creation is preferable to giving many times more to cover investor losses and provide bonuses to financial employees who put us in this mess.
Isn't that what you were arguing for, supporting jobs?
anon-do u have any friends that own an american car?
If you're producing a product that nobody wants, you ought to be out of business, period.
If your on the internet making huge generalizations of little value anonymously, you should lose your internet access, period.
This will end up like Krispy Kream or Hershey and the core business of auto manufacturing will morph into a new structures, just like steel furnances 30 years ago:
Beginning in the late 1970s and early 1980s, the steel industry in Pittsburgh began to implode. Following the 19811982 recession, for example, the mills laid off 153,000 workers.[19] The steel mills began to shut down. These closures caused a ripple effect, as railroads, mines, and other factories across the region lost business and closed. The local economy suffered a depression, marked by high unemployment and underemployment, as laid-off workers took lower-paying, non-union jobs. Pittsburgh suffered as elsewhere in the Rust Belt with a declining population, and like many other U.S. cities, it also saw sustained middle class movement from cramped old housing to new spacious housing in the suburbs.
According to statistics collated by outplacement firm Challenger, Gray & Christmas, the top five sectors for layoffs in the nine months through September this year are: financial, with 111,200 job cuts; automotive, 94,900 layoffs; government/non-profit, 66,800 layoffs; transportation, 62,000 layoffs; and retail, with 51,300 jobs lost.
Seventeen of the US's 29 steel mill blast furnaces have shut down in response to slowing demand. This is set to accelerate the slowdown in production which saw output decline 4 percent in the month from August to September. Chicago-based steel analyst Michelle Applebaum told the Times these figures reflected "nearly instantaneous production cuts in response to declines in global steel demand as steel buyers deferred purchases in favor of living on their own inventories during this period of uncertainty."
I realize this. So - why are we slaves?
Ticker Tape of Doom | 11.19.08 - 2:08 pm | #
To ensure great wealth for a very small minority of the world's population.
I need a break from Roubini thinking:
Jack Hylton - Happy Days Are Here Again
YouTube -
I rented a car last week in Phoenix. I asked for a Japanese car and Alamo wanted almost $200 more for a Japanese car for 8 days than a comparable American car.
The rates were high last week due to some car race or something, so there weren't many cars available.
If your on the internet making huge generalizations of little value anonymously, you should lose your internet access, period.
Another great comment! and you aren't anonymous? LOL! Hypocrisy indeed!
Having written that, I've also noticed that whenever I'm renting a car late at night, there are only American cars left in the lot.
Fewer and fewer people are willing to settle for US brand quality.
haloscan's &*^%ing up
Kona writes:
Ok, here is how this ends.
Ford and GM unite and merge to build new cars -- but they do so in Mexico! Whadyah think of that ... huh, huh?
Kona | 11.19.08 - 2:08 pm | #
maybe, or
us wages suffer a steep steep drop to a levels approaching ( but not reaching) the wages paid in south america and industrialized asia
barnard:
Sorry if i have mis-read you, my point is things should be allowed to fail.
Otherwise everyone will argue for a bailout and most are always never correctly justified.
Ministry of Truth writes:
CR can you put up a better picture of Roubini
I like this one
403 Forbidden i...435727_1498.jpg
Ministry of Truth | 11.19.08 - 1:15 pm | #
Now I WANT TO PARTY with BEANIE! I heard he's starting a new band "Bare Naked Economists"...Grunge died, pop slid, and Biz Bangers are on the rise.
.
Hey, if Fred Astaire and Ginger Rogers were the outlet for depression era escapism, who do you think ours will be?
us wages suffer a steep steep drop to a levels approaching ( but not reaching) the wages paid in south america and industrialized asia
mock turtle | 11.19.08 - 2:18 pm | #
The level playing field. Why should Americans deserve a better life than the third world? What makes us so special?
barnard-
football and cheerleaders...
bigger fake boobs on trophy wives and least we forget NUKES....
maybe we could sell lottery tickets to help the homeless
a chance to party with naughty nouriel
the economist who put the hearty back in party
and as a consolation prize auction off one of his "battleship blue" ties assuming he has more than one
Boy, that Naomi Klein interview was an eye-opener. GM didn't make any more electric cars (there WERE people who wanted to buy them, but GM refused) because they could make more money manufacturing gas-guzzlers. Free market capitalism at its best. (Also, the California regulators bowed down to offers of better jobs at higher pay if they would nix the stricter exhaust standards.)
barnard-
reality TV with the reality being in all of our neighborhoods.
Ciao
MS
bernard wrote
The level playing field. Why should Americans deserve a better life than the third world? What makes us so special?
barnard | 11.19.08 - 2:20 pm | #
i never said deserve
the word i would use is "want"
or need
or willing to fight for
i have nothing but respect for the workers in china, and no emnity
yagi,
The automaker bailout could work, but everyone involved has to give something up and the problem is everyone involved wants something more for nothing contributed.
You might be right in assessing the probability of politicians, financiers, management, and workers coming to a successful agreement and course of action -- but the potential for success is all I am describing
I think it's worth the risk to try for the potential success than the alternative do nothing and allow bankruptcy followed by liquidation of the entire chain from suppliers to dealers
Another great comment! and you aren't anonymous? LOL! Hypocrisy indeed!
it was a joke.
what are the alternatives for failure
Failure of the Big 3 to manufacture cars is mute, considering that they can really make some strong TANKS!
An idea I'm working on is related to local impacts and regional thinking, i.e, why should auto plan workers in detroit make $70/hr while industrial workers in other communities make a 1/3 of that? The idea of regional strength is of interest, because there are fine examples of Toyota moving a fast-track plant to America and making it work very fast. Thus the idea of virtual and more dynamic industry is a huge factor going forward, because robots and computers can produce better results than union employees. In a way you see this with chipmakers that are design fabs versus foundries... blah blah...
the titanic is listing
people are arguing about whether or not the ship will or wont sink..
or if we should all move to port to ballance the list
or maybe we should start bailing?
or try to patch the hole
bs...face it...its time to man the life boats
and duct tape the captain and his first lieutenant to the wheel and let them go down with the ship
Kona writes:
The average GM assembly-line worker makes about $28 per hour in wages
Joe writes:
the $28 dollar wage is still about twice what it should be.
Food for thought:
Average CEO pay in 2005: 465x average worker's pay:
Salary Comparison - Interactive Features - Portfolio.com
Over the entire S&P 500 the simple average of the aggregate compensation of the top five executives is $28.6 million
Board and Executive Compensation in S&P 500 -- Seeking Alpha
....the Big 3 bailout is a moot point. The only question after (probably) two of them go belly-up will be how much $$ we've given them first. The non-core businesses are already as good as dead - demand is WAY DOWN soon to be FARTHER DOWN with fewer working middle-class buyers.
oh.. is Roubini pessimistic? he is usually such a source of happy sunshine.
Hmmmm, Ahhh so, Look at the friggn efficiency here, in the fact that Toyota set up a shop at light speed, e.g, two friggn years and then made a profit, by using substantially fewer union employees. This is a great example of fast new-age re-design and shows that Ford and GM are full of shit and that bailing them out to protect crap jobs is retarded!
FYI: Toyota broke ground for the plant in 1986. When the first car produced there a white Camry rolled off the line in May of 1988, little did they know that 20 years later TMMK would be producing more than 2,000 cars a day there.
ith the equivalent of 156 football fields under one roof, assembly is by far the largest area in the plant. Cars advance up one line and down another. Although there appear to be multiple parallel production lines, a vehicle transfer mechanism and a buffer, which holds six to nine car bodies, connect each one, making one continuous production line with well-thought-out sections.
Toyota Motor Manufacturing North America opened in 1996 and oversaw all Toyota manufacturing concerns in North America. The company employed 1,055 with an annual payroll of $113.1 million. It is headquarted in Erlanger, Kentucky.
Toyota has recieved $371 million in state and local government tax subsidies since 1986. Toyota promised "good jobs". Instead Toyota has given low wage communities $12 an hour jobs with little or no healthcare,firing of employees who are injured at work, and relying on temporary workers that earn half the wages of a permanent employee.
Toyota Motor Engineering & Manufacturing North America - Wikipedia, the free encyclopedia
people are arguing about whether or not the ship will or wont sink..
ROTFLMAO!
Yah, the ship is swaying back and forth, listing and moaning and all these people are still wiping off the deck chairs, arranging napkins, cleaning ash trays, adjusting bowties, lighting candles for the after dinner party, checking the restrooms and flushing toilets, tossing salads, mopping floors and all the things that go on behind the scenes in the backroom...
If the average unionized U.S. plant worker makes $14/hr or less (better than the average retail worker), I fail to see how this helps support a national median house price above $200k.
"Too much" is in the eye of the beholder.
Yesterday, the Hershey Company announced it was moving 1,500 more manufacturing jobs to Mexico, terminating 1,500 U.S. workers and all the dairy farmers that supply work and product into that company.
Hershey now joins the ranks of Hoover, Stanley, Champion, Ford, Chrysler, Huffy, Zebco, Levi's and Maytag, who have shipped thousands more U.S. jobs to countries where workers toil for starvation wages.
Now President Bush wants to renew more of the same fast-track trade authority, to ship more of these jobs to Mexico and other trade rivals. He wants to sell our economy to the highest bidders in foreign countries.
NAFTA, CAFTA, PNTR and its cousin agreements have broken the middle class. Congress is long overdue to stand up for them. We must take back the authority to regulate commerce with foreign nations and start creating good jobs in our country again. It is time to stop fast track.
Marcy Kaptur
Rep. Marcy Kaptur [D-OH9] - GovTrack.us
Now, Marcy can add AIG, Fannie and Freddie, Ford, GM, GE, Citi, Goldman, JPM... yah know...
and duct tape the captain and his first lieutenant to the wheel and let them go down with the ship
mock turtle
Sorry, but the captain & first lieutenant are to be given bonuses, and seats on the first lifeboat off the ship.
Comrade Kristina writes:
Blaming the workers for the auto industry makes about as much sense as blaming the state of healthcare on RN's making too much money...If we could just get those greedy nurses to work for 7 bucks an hour everything would be gravy.
Comrade Kristina | 11.19.08 - 1:28 pm | #
OK blame the UAW for pushing for golden benefits that up the cost of US cars about $2000 vs. Japan/Germany
I am not disappointed in Roubini. It's Paulson that disappoints me. Right down the line, he's consistently failed to estimate the risks well, then had an emotional response and made things worse step by step. I cannot believe how much tax payer money has to be used by AIG to post as security to investment banks. Why couldn't the Bush administration initiate some legislation that allows modification of securitized mortgages or credit default swaps? Where are the priorities for saving the American economy already?
Hey barely, whadda ya think of the DOW future for the 12:45 PST opening. Down 310, S&P down 37
FYI, on the 2007 closing of Hershey in Oakdale: Chocolate is comin' back, "The Sconza company brought about 50 employees from Oakland to Oakdale. About 50 more are former employees of Hershey. Jeanenne Tedore is one of them."
No average wage info.
Oakdale Chocolate Plant Almost Ready to Reopen | News10.net | Sacramento, California | Local News
If he's right, then at least it's not the worst recession in 100 years.
what a cockeyed optimist...I say the worst in a billion years. No, hold it...the same number of years as the money spent on the bailout.
Let's see...carry the 700 billion, add AIG, subtract...O, thats right... we're not getting any back...OMG 4.2 trillion years!!!
I think thats before anything existed!!!
Ah, Kristina, don't you know hating frontline workers is the America way?
PeakVT | 11.19.08 - 1:31 pm | ______________________
Along that same line of thinking, everyone thinks everyone else is overpaid. Software engineers in 2000,(outsourced to India), factor workers in the 90s (outsourced to Mexico), now auto workers. And maybe they are, as well as CEOs, pro athletes, movie stars, doctors, lawyers, engineers, landlords, wal-mart greeter, porn stars, government workers, military contractors, etc. Before this is over, everyone's wages will fall, IF you can keep your job. Ask yourself if you think you're overpaid, because your neighbor probably believes you are.
Dontcha just love 'free trade' and globilization? You betcha! South America standard of living, coming to an American town near you!
NEWS FLASH:
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*KASHKARI SAYSSOMALI PIRATES ARE FUNDAMENTALLY SOUND
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