Saturday, December 20, 2008

Saturday Morning Economic News Update

Excerpts from three interesting articles highlighting milestones in this week's chirpy economic news

Bush leaves GM on life support for Obama:
Today's announcement of a $17.4 Billion loan to GM and Chrysler marks another milestone on the road to nowhere currently being followed by the current administration. Under the terms of the loan, "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury," Meanwhile,another caveat to the deal is that workers' wages will have to be reduced to make them as competitive as those in Japan and Korea. Oh and the corporate jet has to go as well. This passes for a plan these days. Who are they trying to kid? GM and Chrysler will need this money just to keep the lights on until March before the inevitable industry collapse. [...]
This whole deal is nothing but Political posturing by Bush and Paulson who would like to finish the year with an illusory aura of fiscal responsibility. They don't want the consequences of the $250 Billion in credit default swaps tied to GM to happen on their watch and prefer to leave it to the next administration.
A Message From the Auto Industry:
You wouldn't buy our shitty cars. So we'll be taking your money anyway.
People Begging on their Knees for a Job at the Dump:
Wanted: Laborer willing to work 10-hour days outdoors in the stench and dust of the Pinellas County landfill. That’s year-round, so you’ll really enjoy the summer months when the landfill is ripest.
Starting salary: $9.50 an hour, plus benefits.
Sound like the job for you? With the economy crashing and unemployment rising in the Tampa Bay area, 136 people, most out of work, answered yes last month and applied for three such jobs.
“At one point I actually had a line of people 10 feet out the door waiting to talk to me,” said Scott Hanus, an operations manager for Veolia Environmental Services, which runs the landfill. “I actually had some people down on their knees begging me.” [...]
Some who applied had college degrees, Hanus said, and many had recently been laid off or seen their companies shut down. The three people hired had a fair amount of experience working outdoors and solid customer skills, Hanus said. They started Dec. 8. [...]
“It was pretty hard watching so many people hurting,” Hanus said.
As an added bonus, we also provide this useful link, for those who'd like to extend their personal thanks to Geedubya, for his careful 8-year stewardship over the U.S. economy:

Thanks a lot, George Bush!



Curmudgeon said...

As a little indicator of how bad things are getting locally, I was in a coffee shoppee the other day, reading The Standard Examiner, and I decided to look at the jobs listings in the classified pages. The total job want ads filed no more than a column and a half, top to bottom.And not all of those were real job ads. Some were for services that, for a fee, tell you of government jobs available. But even counting them, a column and a half. I recall when the jobs listings took nearly a full page, column after column. Or more. I knew they'd be down, but I was surprised... shocked might be a better term... at how few jobs want ads there were. And we are in an area that is supposed to be feeling a more moderate economic pinch [compared to say, Las Vegas, Arizona, California and Florida, recently all described as "the epi-center of the housing crisis"].

Staring at the paltry job ads, I recalled some of the Mayor's buddies at one of his dog-and-pony-by-invitation-only shows to sell the gondola some years ago arguing forcefully that Ogden had missed out on the surging real estate boom in places like [wait for it....] Las Vegas and Arizona and California and Florida. And that if only we'd sign on to Hizzonah's gondola/gondola Peterson Proposal scheme, Ogden too could enjoy runaway real estate values. They waxed eloquent about how foolish Ogden would be to keep on missing out on skyrocketing real estate values.

Thank god we did miss out, or the SE jobs listings would be down to half a column now. If that. Papers reported this week that a new burger joint opening in Vegas [50 jobs at $10 and hour flipping burgers] drew one thousand people... one thousand... to take interviews for the slots. Six thousand laid off at casinos. And wire services reported yesterday that increasing numbers of people in California are simply walking away from their homes and condos, leaving them to foreclosure.

And to think, we too could have been part of that if only we'd listened to Mayor Godfrey and Mr. Geiger and Mr. Hardman of the Ogden-Weber Chamber of Commerce, all of whom seem to have forgotten [or never grasped] the point that wise cities strive not for growth per se, but for sustainable growth. Think they understand that now? I wonder....

Fly on trhe wall said...

Ah Curm, they will never get it. Theres no need to wonder.

danny said...

You just might want to take a peek again at TWM, FXP, and EEV. It's not a recommendation, but a suggestion to take a look, is all.

China looks like a train wreck - steel, manufacturing, construction all off double digits.

Ore contracts are being put on hold for two years, leaving raw material producing emerging markets to falter.

Most oil producers need $70 per barrel minimum to support their government budgets.

After years of free-spending, debt-fueled government in developed countries, what is the solution to our collapse? Why, much more of the same, of course! Gee, I wonder what will be the result - NOT!

I feel bad for the people who will suffer. But is seems to me that the fact that this was coming was so very clear.

Curmudgeon said...

Interesting item from the Wall Street Journal not un-related to Ogden City. From the opening graphs:

With a record amount of commercial real-estate debt coming due, some of the country's biggest property developers have become the latest to go hat-in-hand to the government for assistance. They're warning policymakers that thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies. The reason: according to research firm Foresight Analytics LCC, $530 billion of commercial mortgages will be coming due for refinancing in the next three years -- with about $160 billion maturing in the next year. Credit, meanwhile, is practically nonexistent and cash flows from commercial property are siphoning off.

Unlike home loans, which borrowers repay after a set period of time, commercial mortgages usually are underwritten for five, seven or 10 years with big payments due at the end. At that point, they typically need to be refinanced. A borrower's inability to refinance could force it to give up the property to the lender.

A recent letter sent to Treasury Secretary Henry Paulson, and signed by a dozen real-estate trade groups, painted a bleak scenario: "Right now, we believe there is insufficient systemic capacity to refinance expiring, performing commercial real-estate loans," said the letter. "For many borrowers, [credit] simply is not available," the letter noted.

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