Economy:1-1-09 Microsoft planning big layoffs for January?

[Slew Foot]

Originally posted by: WhipperSnapper

Regarding Silicon Valley, I wonder how the heck they can even maintain employees who earn less than $50,000/year in just about any undertaking--be it gardening or fast food. The cost of living is so outrageous in the San Francisco Bay Area that, combined with the price of gas, I don't see how it would make economic sense for the people who work low-wage jobs in that area to keep working them. Then again, I've never understood why poor people continue to want to live in and around New York City, etc. (Why not just pack up and head elsewhere where you are more likely to find a better wage-to-cost-of-living ratio?)

The funny part is that San Jose's median income is something like 47K per capita and 80K per household. In theory, no one should be living there!


According to a 2006 estimate, the median income for a household in the city was the highest in the US for any city with more than a quarter million residents with $73,804 annually. The median income for a family was $83,089.[2] Males had a median income of $49,347 versus $36,936 for females

 

[herm0016]

im sure all of you, having taken a few courses in economics at college level and beyond know that 5% unemployment is consider full employment. about 3.5% is seasonal unemployment and the other 2 are between jobs or not are not looking for a job. we have all lived in such great times nobody knows what bad times really look like. we are in bad times. it will be bad when 10% is unemployed and a gallon of milk is 10 bucks. not when the price goes up 25 cents and people scream because they cant afford digital cable or candy bars everyday! and i say this as i struggle to pay rent and feed myself without dipping into my reserves.

 

[Slew Foot]

Technically if people arent looking for a job they arent unemployed, but yeah 5% unemployment is pretty good. I mean, take a 100 average people, Im sure you can find 5 of them that are complete drunks, goofs, lazy, or too stupid to hold a job.

 

[StageLeft]

Originally posted by: Slew Foot
Technically if people arent looking for a job they arent unemployed, but yeah 5% unemployment is pretty good. I mean, take a 100 average people, Im sure you can find 5 of them that are complete drunks, goofs, lazy, or too stupid to hold a job.

You can indeed! I know that Alberta, Canada, has an unemployment rate as low as 3.5% or has in recent times, but they are undergoing a boom. Chances are that if they keep that long term it's probably indicative of, say, government giving jobs to complete bums who really don't deserve to work.

 

[Dr. Detroit]

Originally posted by: WhipperSnapper

Regarding Silicon Valley, I wonder how the heck they can even maintain employees who earn less than $50,000/year in just about any undertaking--be it gardening or fast food. The cost of living is so outrageous in the San Francisco Bay Area that, combined with the price of gas, I don't see how it would make economic sense for the people who work low-wage jobs in that area to keep working them. Then again, I've never understood why poor people continue to want to live in and around New York City, etc. (Why not just pack up and head elsewhere where you are more likely to find a better wage-to-cost-of-living ratio?)

You can easily survive in Silicon Valley on $35K a year. 2bdrm decent apartment in a older complex. $1400/month, split between you and a roomate is only $700/month. These people buy older cars and don't have luxury items. When you combine a husband/wife with no kids with a household income of $70K a year they will function just fine.

I know many blue collar guys makinng $15 - $18/hr doing HVAC and the like and they are all doing fine.

No, they dont have 50" flastscreens and do not dine at Santana Row nor shop at Nordstroms but they are fine.

 

[herm0016]

Originally posted by: Fmr12B

Originally posted by: WhipperSnapper

Regarding Silicon Valley, I wonder how the heck they can even maintain employees who earn less than $50,000/year in just about any undertaking--be it gardening or fast food. The cost of living is so outrageous in the San Francisco Bay Area that, combined with the price of gas, I don't see how it would make economic sense for the people who work low-wage jobs in that area to keep working them. Then again, I've never understood why poor people continue to want to live in and around New York City, etc. (Why not just pack up and head elsewhere where you are more likely to find a better wage-to-cost-of-living ratio?)

You can easily survive in Silicon Valley on $35K a year. 2bdrm decent apartment in a older complex. $1400/month, split between you and a roomate is only $700/month. These people buy older cars and don't have luxury items. When you combine a husband/wife with no kids with a household income of $70K a year they will function just fine.

I know many blue collar guys makinng $15 - $18/hr doing HVAC and the like and they are all doing fine.

No, they dont have 50" flastscreens and do not dine at Santana Row nor shop at Nordstroms but they are fine.

yup. the problem is we define poor as not being able to do those things. its completely stupid.

 

[dmcowen674]

Will add new Poll question.

Is this the only bank to fail or is it only the beginning?

7-12-2008Government shuts down mortgage lender IndyMac

LOS ANGELES - IndyMac Bank's assets were seized by federal regulators on Friday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.

The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.

"This institution failed today due to a liquidity crisis," OTS Director John Reich said.

The lender's failure came the same day that financial markets plunged when investors tried to gauge whether the government would have to save mortgage giants Fannie Mae and Freddie Mac.

The FDIC estimated that its takeover of IndyMac would cost between $4 billion and $8 billion.

IndyMac's collapse is second only to that of Continental Illinois National Bank, which had nearly $40 billion in assets when it failed in 1984, according to the FDIC.

IndyMac spent the last two weeks trying to reassure customers that it was not near default.

On Monday, IndyMac announced it had stopped accepting new loan submissions and planned to slash 3,800 jobs, or more than half of its work force ? the largest employee cuts in company history.

In the letter to shareholders, IndyMac Chairman and Chief Executive Michael W. Perry said the drastic measures were made in conjunction with banking regulators to improve the company's financial footing and "meet our mutual goal of keeping Indymac safe and sound through this crisis period."

The plan was supposed to generate roughly $5 billion to $10 billion per year of new loans backed by government-sponsored mortgage companies, Perry said at the time.

But the run on its deposits ultimately short-circuited the strategy, prompting regulators to take action Friday.

 

[CADsortaGUY]

Originally posted by: dmcowen674
Will add new Poll question.

Is this the only bank to fail or is it only the beginning?

7-12-2008Government shuts down mortgage lender IndyMac

LOS ANGELES - IndyMac Bank's assets were seized by federal regulators on Friday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.

The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.

"This institution failed today due to a liquidity crisis," OTS Director John Reich said.

The lender's failure came the same day that financial markets plunged when investors tried to gauge whether the government would have to save mortgage giants Fannie Mae and Freddie Mac.

The FDIC estimated that its takeover of IndyMac would cost between $4 billion and $8 billion.

IndyMac's collapse is second only to that of Continental Illinois National Bank, which had nearly $40 billion in assets when it failed in 1984, according to the FDIC.

IndyMac spent the last two weeks trying to reassure customers that it was not near default.

On Monday, IndyMac announced it had stopped accepting new loan submissions and planned to slash 3,800 jobs, or more than half of its work force ? the largest employee cuts in company history.

In the letter to shareholders, IndyMac Chairman and Chief Executive Michael W. Perry said the drastic measures were made in conjunction with banking regulators to improve the company's financial footing and "meet our mutual goal of keeping Indymac safe and sound through this crisis period."

The plan was supposed to generate roughly $5 billion to $10 billion per year of new loans backed by government-sponsored mortgage companies, Perry said at the time.

But the run on its deposits ultimately short-circuited the strategy, prompting regulators to take action Friday.

The director of the Office of Thrift Supervision, John Reich, blamed IndyMac's failure on comments made in late June by Sen. Charles Schumer (D., N.Y.), who sent a letter to the regulator raising concerns about the bank's solvency. In the following 11 days, spooked depositors withdrew a total of $1.3 billion. Mr. Reich said Sen. Schumer gave the bank a "heart attack."

 

[CPA]

hmmmm....I have IndyMac as my primary mortgage company. Wonder what's going to happen to my mortgage loan.

 

[Capitalizt]

Originally posted by: CPA
hmmmm....I have IndyMac as my primary mortgage company. Wonder what's going to happen to my mortgage loan.

nothing probably...It's the people with savings that need to worry. I'm sure they won't have any problem collecting payments though.

 

[CPA]

Originally posted by: Capitalizt

Originally posted by: CPA
hmmmm....I have IndyMac as my primary mortgage company. Wonder what's going to happen to my mortgage loan.

nothing probably...It's the people with savings that need to worry. I'm sure they won't have any problem collecting payments though.

Reading some info at Bankrate.com, looks like Indymac had intended on selling some of their mortgages they service to ease their balance sheet, but now that everything is in the hands of the Feds, most likely all of the mortgages will be sold. Problem is Indymac has one of the largest portfolios of mortgages in the country and it may take some time to find banks to purchase them, especially in this market.

FDIC should cover everyone with under $100K in deposits, it's the larger depositors that may be in trouble.

 

[blackangst1]

Originally posted by: CPA

Originally posted by: Capitalizt

Originally posted by: CPA
hmmmm....I have IndyMac as my primary mortgage company. Wonder what's going to happen to my mortgage loan.

nothing probably...It's the people with savings that need to worry. I'm sure they won't have any problem collecting payments though.

Reading some info at Bankrate.com, looks like Indymac had intended on selling some of their mortgages they service to ease their balance sheet, but now that everything is in the hands of the Feds, most likely all of the mortgages will be sold. Problem is Indymac has one of the largest portfolios of mortgages in the country and it may take some time to find banks to purchase them, especially in this market.

FDIC should cover everyone with under $100K in deposits, it's the larger depositors that may be in trouble.

Well, we dont care about the rich anyway. They have enough money and wont miss it

 

[brxndxn]

Originally posted by: TastesLikeChicken

Originally posted by: PC Surgeon
Wow nice BS response without evidence to back it up.

I ask you kindly to remove just a statement questioning my love for this country. My love for this country is THE reason I speak out in hopes some will get the hint and invest their money wisely. In hopes that someone may benefit from a warning. But you twist it and say I abhor my own nation. That is pure and utter BULLSHIT without proof. So kindly do NOT attack my patriotism in this baseless form. :|

You don't love this country. You love your own self-righteous vision of what you believe this country should be.

When you figure out the difference between the two you might actually begin to learn something.

I flat out disagree with that one.. PC Surgeon's vision of what the country should be is detailed in the Constitution for what the country absolutely MUST be. Calling his Constitutional viewpoint self-righteous is asinine.

Your second statement says nothing.

 

[lightstar]

prob just the beginning. hopefully freddie and fannie don't fail 2- then we'd be in some serious trouble

 

[dmcowen674]

Mainstream media starting to say what I have been saying for the past 7 years:

7-13-2008 The government numbers do not actually represent what's going on

"The part that concerns me the most is that the government numbers do not actually represent what's going on," said Miralles of Atlanta Wealth Consultants. "I just don't buy it."

 

[bamx2]

Energy independence and the reducing the deficit should be #1 priorities IMO -



Some of the sites below have interesting macroeconomic articles and links on their Blogrolls -

http://www.10sitestosee.com/10...-gloom-and-doom-sites/


www.ml-implode.com

www.bankimplode.com

 

[LegendKiller]

Originally posted by: brxndxn

Originally posted by: TastesLikeChicken

Originally posted by: PC Surgeon
Wow nice BS response without evidence to back it up.

I ask you kindly to remove just a statement questioning my love for this country. My love for this country is THE reason I speak out in hopes some will get the hint and invest their money wisely. In hopes that someone may benefit from a warning. But you twist it and say I abhor my own nation. That is pure and utter BULLSHIT without proof. So kindly do NOT attack my patriotism in this baseless form. :|

You don't love this country. You love your own self-righteous vision of what you believe this country should be.

When you figure out the difference between the two you might actually begin to learn something.

I flat out disagree with that one.. PC Surgeon's vision of what the country should be is detailed in the Constitution for what the country absolutely MUST be. Calling his Constitutional viewpoint self-righteous is asinine.

Your second statement says nothing.

rofl.

 

[Engineer]

Fed and the Treasury working overtime (on a Sunday no less) to shore up Fannie/Freddie and financial markets.

 

[1prophet]

Party is over, Fed says no more bailouts you sink or swim on your own, Fannie Mae and Freddie Mac must be a much bigger problem than they are telling us.

NEW YORK - The U.S. government is signaling it won?t throw a lifeline to struggling financial companies ? except for mortgage linchpins Fannie Mae and Freddie Mac ? marking a shift to a new and potentially more volatile phase of the credit crisis.

Such an approach could mean beaten-down investment banks like Lehman Brothers Holdings Inc. and regional banks must now fend for themselves as they try to recover from billions of dollars in mortgage-related losses. That is bound to unnerve an already turbulent Wall Street and make investors even more anxious as they await financial companies? earnings reports that are expected to be down a stunning 69 percent from a year ago when all the numbers are in.

And, for consumers already squeezed by tightening credit standards, it could mean getting a mortgage will become even harder.

The short-term uncertainty about Freddie Mac and Fannie Mae ? which together hold or guarantee half the nation?s mortgage debt ? was to an extent relieved on Sunday. Federal officials again threw their support behind the government-sponsored enterprises; the Treasury pledged to expand its current line of credit to the two companies and the Federal Reserve said it will provide additional loans if needed.

Treasury Secretary Henry Paulson also said the government could, if needed, buy equity capital in the companies, whose stocks lost half their value last week. The Treasury?s moves would require congressional approval.

But, some of Wall Street?s biggest investors believe there was another message in the government?s announcement ? the rest of the financial sector seems unlikely to get a helping hand. Global banks and brokerages have already written down nearly $300 billion in soured mortgage investments ? a number projected to ultimately reach $1 trillion.

?The credit crisis has obviously entered into a new phase ? the government has one bailout left in them, and this is it,? said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion.

?One consequence of Freddie and Fannie is that other firms are allowed to go under,? he said. ?If you couldn?t get your act together after four months of unprecedented financing terms, maybe you don?t deserve to be thrown yet another lifeline.?

Worries about financial companies failing intensified after a run on IndyMac Bancorp Inc. led to the bank?s takeover by the government on Friday. It wasn?t the Treasury or Fed helping to keep IndyMac in business, but a transfer of control to the Federal Deposit Insurance Corp. ? which backs deposits on all the nation?s banks.

Analysts said these kind of failures will curtail competition among financial institutions, which might in turn make it even harder for some borrowers to get mortgages, personal or auto loans or credit cards.


On Wall Street, Monday could be a critical day, with investors quite nervous amid the uncertainty in the financial sector. Friday saw the Dow Jones industrial average dropping below 11,000 for the first time in nearly two years, and the overall market was down for the fourth week in a row. The government?s support of Fannie and Freddie in part was meant to assuage investors ahead of the opening, and also to reassure markets in Asia and Europe that will begin trading hours before the U.S.

Wall Street will get a better sense of how concerned investors are with Fannie Mae and Freddie Mac?s future immediately Monday morning. Freddie Mac is scheduled to hold its weekly debt auction beginning at 8 a.m. EDT. The auction closes at 9:45 a.m., shortly after U.S. markets open.


Freddie Mac is auctioning off a combined $3 billion in three-and six-month securities. Wall Street will be looking very closely at the number of bidders and the rate at which the securities are auctioned, said Bert Ely, a banking consultant who has been critical of the companies in the past.

?I?ll be surprised if the results aren?t strong,? he said, noting the government was likely heavily encouraging investors throughout the weekend.

The banking industry was already dealt a severe blow in March when Bear Stearns Cos. nearly collapsed amid the evaporation of its liquidity. JPMorgan Chase & Co. stepped in to purchase Bear Stearns in a deal orchestrated by the Federal Reserve.

Bear Stearns was unhinged by mounting losses tied to investments in bonds backed by mortgages. As the mortgages increasingly defaulted, the value of bonds backed by the troubled loans tumbled.

Financial companies? reports of write-downs of troubled debt are likely to increase this week as some of the country?s largest institutions, including JPMorgan Chase, Merrill Lynch & Co. and Citigroup Inc., report second-quarter results. That trio has already taken a combined $73 billion in write-downs since the credit crisis began last summer.

Lehman Brothers, whose shares have lost 78 percent since this year?s peak in February, is considered to be on the shakiest ground because it is the smallest Wall Street bank and has significant mortgage holdings. Last month, the investment bank announced it lost nearly $3 billion during the second quarter and was forced to offset that by raising $6 billion of fresh capital.

Meanwhile, analysts believe regional banks in areas hardest hit by the real estate downturn are also at risk for failure. Some of the most bandied about names include Washington Mutual Inc., National City Corp., and Fifth Third Bancorp.


?Fannie and Freddie are too big to fail only because of the repercussions, not to just the mortgage and housing markets but the entire financial market,? said Joe Balestrino, fixed-income market strategist at Federated Investors. ?The U.S. is in disarray ... these regionals could be gone, they are in a tough spot with housing and employment going south.?

The likelihood of a failure got a little higher this weekend after a run on IndyMac Bancorp Inc. led to the bank?s takeover by the government on Friday. It wasn?t the Treasury or Fed helping to keep IndyMac in business, but a transfer of control to the Federal Deposit Insurance Corp. ? which backs deposits on all the nation?s banks.

Analysts said these kind of failures will curtail competition among financial institutions, which might in turn make it even harder for some borrowers to get mortgages, personal or auto loans or credit cards.

 

[Engineer]

More bank failures? (serious question).

Also, are people making runs on banks (i.e. IndyMac?)?

 

[blackangst1]

Originally posted by: bamx2
Energy independence and the reducing the deficit should be #1 priorities IMO -



Some of the site below have interesting links -

http://www.10sitestosee.com/10...-gloom-and-doom-sites/


www.ml-implode.com

www.bankimplode.com

Moreso than securing our border and retracting the Patriot Act?

wow.

 

[Wreckem]

Over 1000 institutitions failed in the late 1980s and early 1990s. There will be more failures, but we are not doomed. The Govt never learns, in the 1980s they let them get loose with the rules with S&Ls, in the late 1990s and 2000s, they let them get loose with mortgages.

Every ~10-15 years we have problems. We always recover.

Getting out of Iraq, and stopping the printing presses on money would be a start.

 

[JS80]

What is inflation adjusted dollars rank of failure?

 

[dmcowen674]

Originally posted by: Engineer
More bank failures? (serious question).

Also, are people making runs on banks (i.e. IndyMac?)?

At least 100 banks will fail, probably more.

 

[dmcowen674]

I don't see how the SEC can stop a bigger crash than 1929

7-15-2008 SEC issues emergency rules

The emergency rule applies to 19 financial firms:

BNP Paribas Securities Corp (BNPQF.PK) (BNPQY.PK)

* Bank of America Corp (BAC.N)

* Barclays PLC (BCS.N)

* Citigroup Inc (C.N)

* Credit Suisse Group (CS.N)

* Daiwa Securities Group Inc (DSECY.PK)

* Deutsche Bank Group AG (DB.N)

* Allianz SE (AZ.N)

* Goldman Sachs Group Inc (GS.N)

* Royal Bank ADS (RBS.N)

* HSBC Holdings Plc ADS (HBC.N)

* JPMorgan Chase & Co (JPM.N)

* Lehman Brothers Holdings Inc (LEH.N)

* Merrill Lynch & Co Inc (MER.N)

* Mizuho Financial Group Inc (MFG.N)

* Morgan Stanley (MS.N)

* UBS AG (UBS.N)

* Freddie Mac (FRE.N)

* Fannie Mae (FNM.N)