May I be so bold as to go down that road. The road that I am trying to steer away from, the road that has been trampled lately, the road of gloom and doom that appears to be enveloping me despite myself. Not that I have been seeming all that positive lately but in my mind I really was trying. After all, we have to elevate ourselves above the fray if we want to survive.
Today is Tuesday before Christmas and I still have no gifts; well I finally ran out tonight to get a few "school gifts" realizing that tomorrow was the last day of school for the year. I absolutely do not like waiting for the last minute to shop because I hate having to jockey for position and wait on endless lines during the holiday shopping season yet here I am. Now, I have no choice, I have to do it all tomorrow or else.
I wish I wasn't so plain-minded when it comes to shopping then I would have had it all done already. Unfortunately, if I don't have any money or I feel my cash stream is finite, like losing a job, I will not shop, I go into lock-down; I simply will not buy another thing - I am frozen. I haven't even been to the supermarket. I have tried to do the holiday shopping since I was laid off, I have gone to the mall and all the usual discount retailers and I haven't seen anything I want to buy; not one thing has moved me.
Now the financial news shows are raising the red flag, don't buy gift cards at retailers that may not make it past January 2009 for the disconcerting reality is that this is one of the most dismal shopping seasons in decades and many retailers simply will not make enough this holiday season to survive. How the heck is the average person supposed to know which retailers are not going to make it? I try to do a little internet research and I can find plenty of lists of those that have closed under-performing stores or have simply died in 2008. So far, I have not been the most successful finding a good clean list of those that are in jeopardy outside of my own observation...this seems like everyone. Consumer spending is nearly 70% of GDP so if we don't spend; it seems that the economy is doomed anyhow.
You turn on the news and it is nothing but gloom and doom; how many years has it been since we've seen this statistic, this performance, this cycle, and the finality that this downturn will last through next year for sure. Though every guru keeps repeating the mantra that people should prepare for the worst, the reality is that most people really do not have a rainy day fund - that was what credit cards and home equity lines of credit were for. Now that those sources are dried up, most of us do not have the funds we need to survive. Today, commercial builders are begging the government for help because their debt is coming due to the tune of $160,000,000,000.
The bailout road is now on black ice; just slipping and sliding with no clue; everyone is slipping and we have no clue where to turn. How do we know who will survive? Last night, my husband and I were discussing where to invest; now is the time to adjust our 401ks. They keep telling us bargains are to be had in this market and we should steer ourselves towards those. So, I was thinking about companies that may benefit from the proposed infrastructure investments; caterpillar came to mind, they will be providing equipment I said. This morning I woke up to find out I was wrong, wrong, wrong. Caterpillar announced today that it was cutting salaries of all senior management and preparing other cost cutting measures to aid in its survival through next year.
I don't have a crystal ball and neither does anyone else but things really, really, really do not look so good this time around. I am going to keep looking for that light at the end of the tunnel but this tunnel seems awfully long already.
Showing posts with label 2008 economic crisis. Show all posts
Showing posts with label 2008 economic crisis. Show all posts
Monday, December 22, 2008
Wednesday, December 17, 2008
The Audacity of Wall Street Bonuses
I just finished reading an article in today's New York Times reporting on Wall Street bonuses that having been tied to profits we now know were based on way too much risk, created a culture of greed so severe, they played Russian roulette with our money.
Now that all of the money is lost and many Wall Street firms are bankrupt with the rest blatantly staving of death with large infusions of taxpayer dollars, the culture of greed still has not subsided. Though many firms have introduced more oversight with respect to the earning of future bonuses, most Wall Streeters will still see bonuses this year, smaller maybe, but still a bonus.
It took the Dow Industrials 76 years to hit 1000 in November 1972 and another 14 years to reach 2000 in January 1987. After that, it took another 4 years to reach 3000 and 4000 was reached 4 years later in February 1995. By May 1999, a mere 4 years later, the Dow had reached 11,000 and boy were we jumping. The sheer intensity of the rise certainly reset all of our mindsets. In the early 2000s, instant millionaires abounded, individual wealth on paper reach staggering proportions. Wall street bonuses catapulted into unheard-of millions. Everybody wanted to be rich. Since hindsight is 20/20 we can look back and draw our conclusions effortlessly.
If we are to sum up the data, the Dow retreated to less than 9000 in 2003 and after roaring to 14,000 in July 2007, is back to less than 9000 again. the last time it was less than 9000 was in early 1998. We are back to the levels not seen for a decade and what happened during that decade? The most amount of money that could be borrowed was borrowed and the most amount of money that could be spent was spent, all of this while the intrinsic value of the market was inflated due to the swirling fiscal excess.
We now have found out that all the money we spent should not have been spent and all the money that was borrowed definitely should not have been borrowed. Now we all have to suffer and pay the piper. So, why do all those Wall Streeters still get bonuses when no money has been made and especially when the taxpayer has granted most of those firms hundreds of billions to survive?
Now that all of the money is lost and many Wall Street firms are bankrupt with the rest blatantly staving of death with large infusions of taxpayer dollars, the culture of greed still has not subsided. Though many firms have introduced more oversight with respect to the earning of future bonuses, most Wall Streeters will still see bonuses this year, smaller maybe, but still a bonus.
It took the Dow Industrials 76 years to hit 1000 in November 1972 and another 14 years to reach 2000 in January 1987. After that, it took another 4 years to reach 3000 and 4000 was reached 4 years later in February 1995. By May 1999, a mere 4 years later, the Dow had reached 11,000 and boy were we jumping. The sheer intensity of the rise certainly reset all of our mindsets. In the early 2000s, instant millionaires abounded, individual wealth on paper reach staggering proportions. Wall street bonuses catapulted into unheard-of millions. Everybody wanted to be rich. Since hindsight is 20/20 we can look back and draw our conclusions effortlessly.
If we are to sum up the data, the Dow retreated to less than 9000 in 2003 and after roaring to 14,000 in July 2007, is back to less than 9000 again. the last time it was less than 9000 was in early 1998. We are back to the levels not seen for a decade and what happened during that decade? The most amount of money that could be borrowed was borrowed and the most amount of money that could be spent was spent, all of this while the intrinsic value of the market was inflated due to the swirling fiscal excess.
We now have found out that all the money we spent should not have been spent and all the money that was borrowed definitely should not have been borrowed. Now we all have to suffer and pay the piper. So, why do all those Wall Streeters still get bonuses when no money has been made and especially when the taxpayer has granted most of those firms hundreds of billions to survive?
Tuesday, December 16, 2008
We Didn't Start The Fire But We Still Have to Pay
The financial situation of most of the middle class here on Long Island is always foremost on my mind. I still have the same question that I had when I started this blog, how is everyone surviving? I thought I would have some insight by now but it is still a mystery to me.
Now we add to the mix the $15,400,000,000 budget gap, attributed largely to a decline in tax revenue from Wall Street, in the New York State budget that requires serious action on the Governor's part. In response, he proposed today serious cuts in school aid and health services, layoffs of state workers, an increase in many ordinary NY State fees, new taxes on just about every bit of entertainment that exists in the state and a repeal of certain tax exemptions especially the star (property tax) rebate.
Some of the Governor's proposed solutions will be painful for all of us; we don't want to have to pay more to renew our licenses and registrations or pay more to download a song on the internet. Most importantly, any cuts in aid means that the local taxpayer has to pick up the tab. More fees and taxes is the last thing that any New Yorker wants to hear right now. However, this is where fiscal reality meets us and indeed it is very unpleasant. We may not have started the fire but we certainly didn't push for fire prevention either.
Interestingly enough, the magnitude of the layoffs is very small, 521 out of some 200,000 state workers. This is an almost negligible layoff, speaking from one who has lived to tell the tale. Indeed the rollbacks on some employee benefits will meet the ire of many especially when the career veterans have already been grand-fathered into much better benefits than the new hires. As every special interest starts screaming bloody murder from the mountaintops this week, we will see what kind of backbone state legislators have when they sit down to vote on all of this.
Now we add to the mix the $15,400,000,000 budget gap, attributed largely to a decline in tax revenue from Wall Street, in the New York State budget that requires serious action on the Governor's part. In response, he proposed today serious cuts in school aid and health services, layoffs of state workers, an increase in many ordinary NY State fees, new taxes on just about every bit of entertainment that exists in the state and a repeal of certain tax exemptions especially the star (property tax) rebate.
Some of the Governor's proposed solutions will be painful for all of us; we don't want to have to pay more to renew our licenses and registrations or pay more to download a song on the internet. Most importantly, any cuts in aid means that the local taxpayer has to pick up the tab. More fees and taxes is the last thing that any New Yorker wants to hear right now. However, this is where fiscal reality meets us and indeed it is very unpleasant. We may not have started the fire but we certainly didn't push for fire prevention either.
Interestingly enough, the magnitude of the layoffs is very small, 521 out of some 200,000 state workers. This is an almost negligible layoff, speaking from one who has lived to tell the tale. Indeed the rollbacks on some employee benefits will meet the ire of many especially when the career veterans have already been grand-fathered into much better benefits than the new hires. As every special interest starts screaming bloody murder from the mountaintops this week, we will see what kind of backbone state legislators have when they sit down to vote on all of this.
Thursday, December 11, 2008
"God Put a Smile upon my Face"
Well, my husband will live too see another day at his job. The layoffs went down today as scheduled but thankfully, it was not his turn, today. We are now on a month by month employment watch. We are way too cynical by now to believe that any job in the private sector has a shred of job security.
There aren't any guarantees since no one knows what direction any company should go. Should it retrench to its core business units and tread water or continue promising new innovations that expand its market presence, position it for future growth and produces new revenue even though it requires a greater investment in operating costs? Retrenching could sacrifice the future but new innovations could sacrifice today's bottom line that has to remain positive to survive. Whatever the case, employment reductions have to take place and unfortunately will continue to take place if the economy does not turn around soon.
Does anyone see a better future in 2009? Right now things do not look good which is why it is imperative, more than ever, to quit the bailout mentality and let Capitalism fix itself; let the companies that are swifter, better positioned, agile and innovative take over the space left by the struggling behemoths. Why are we so afraid of letting the market decide the fate of a company? New companies will rise and grow to meet the challenges of a global economy thereby increasing employment opportunities for all. The government can augment job creation with new infrastructure projects and alternative energy initiatives.
We cannot forget the fundamentals of business; a company is only as strong as its balance sheet and we shouldn't get hoodwinked into scare tactics because it is a venerable brand, other exalted brands have come and gone. Business will survive and revive if we allow it to follow the natural life cycle of capitalism for there is always another company waiting in the wings to take over.
There aren't any guarantees since no one knows what direction any company should go. Should it retrench to its core business units and tread water or continue promising new innovations that expand its market presence, position it for future growth and produces new revenue even though it requires a greater investment in operating costs? Retrenching could sacrifice the future but new innovations could sacrifice today's bottom line that has to remain positive to survive. Whatever the case, employment reductions have to take place and unfortunately will continue to take place if the economy does not turn around soon.
Does anyone see a better future in 2009? Right now things do not look good which is why it is imperative, more than ever, to quit the bailout mentality and let Capitalism fix itself; let the companies that are swifter, better positioned, agile and innovative take over the space left by the struggling behemoths. Why are we so afraid of letting the market decide the fate of a company? New companies will rise and grow to meet the challenges of a global economy thereby increasing employment opportunities for all. The government can augment job creation with new infrastructure projects and alternative energy initiatives.
We cannot forget the fundamentals of business; a company is only as strong as its balance sheet and we shouldn't get hoodwinked into scare tactics because it is a venerable brand, other exalted brands have come and gone. Business will survive and revive if we allow it to follow the natural life cycle of capitalism for there is always another company waiting in the wings to take over.
Tuesday, December 9, 2008
What The Heck
Is it better to be good or be lucky? Sometimes I think it is better to be lucky, no matter what, these people land on their feet, keep making money and inspire jealousy as overpriced hacks. Sometimes I think it is better to be good, integrity and all that, giving us true meaning in our lives; whether rewarded or not, the absolute value of good transcends all. Ultimately it is better to be lucky and good, the benefits of being the best coupled with the rewards of being so lucky. May the best part of this be bestowed on many of us as we navigate our journey through this minefield of financial uncertainty.
Tonight's Nightline broadcast threw out the loaded question of whether Wall Street executives deserve bonuses this year. It got me to thinking:
The term "billion" is thrown around so regularly now that I am led to believe that Americans really do not want to comprehend what that numerical amount really means because true comprehension would require the reality of riots in the streets.
Spell out $1 billion dollars in zeros and it is $1,000,000,000 or $1000 million dollars. $35 billion in bonuses is $35,000 million ($35,000,000,000) dollars in bonuses handed out last year to the lucky few simply because they worked in the financial sector where people use money to make money. Most of us simply cannot comprehend that amount of money, we just accept the monetary terms in shorthand without the zeros.
It has been reported that the stock market lost almost $$3,000,000,000,000 this year in value and the government and quasi-government agencies - the Congress, the Treasury, the FDIC and the Federal Reserve - have injected almost as much into the seized financial markets to keep the whole system alive.
I lost my job yesterday due to the financial mess created by these Wall Street executives. To utter the word bonus should be an insult to the intelligence of the ordinary person. How could anyone receive a bonus for losing so much money and by extent undermining the economy? This couldn't possibly be the intent of the bonus system or of capitalism itself.
Tonight's Nightline broadcast threw out the loaded question of whether Wall Street executives deserve bonuses this year. It got me to thinking:
The term "billion" is thrown around so regularly now that I am led to believe that Americans really do not want to comprehend what that numerical amount really means because true comprehension would require the reality of riots in the streets.
Spell out $1 billion dollars in zeros and it is $1,000,000,000 or $1000 million dollars. $35 billion in bonuses is $35,000 million ($35,000,000,000) dollars in bonuses handed out last year to the lucky few simply because they worked in the financial sector where people use money to make money. Most of us simply cannot comprehend that amount of money, we just accept the monetary terms in shorthand without the zeros.
It has been reported that the stock market lost almost $$3,000,000,000,000 this year in value and the government and quasi-government agencies - the Congress, the Treasury, the FDIC and the Federal Reserve - have injected almost as much into the seized financial markets to keep the whole system alive.
I lost my job yesterday due to the financial mess created by these Wall Street executives. To utter the word bonus should be an insult to the intelligence of the ordinary person. How could anyone receive a bonus for losing so much money and by extent undermining the economy? This couldn't possibly be the intent of the bonus system or of capitalism itself.
Monday, December 8, 2008
Laid Off
Today I was laid off, all of my speculation and weariness rewarded with the sinking stone of finality stemming from a demise of very awkward precision. With the stroke of a pen and a decision, controversial yet understandable from the viewpoint of the maker, my entire department was excised from the company; eliminated with no prior notice nor whiff of rumor. How did we miss that?
There is no prior notice of upheaval if there is no picking and choosing to be made; everybody goes and nobody knows. I suppose it is easier that way, McCain-style as it were, lacking finesse as reported during the debates. McCain was going to take a "hatchet to the federal budget" but Obama was going to "wield a scalpel" expertly removing the tumor of governmental budgetary waste like a surgeon.
Over the last month and a half, layoffs have taken center stage. So devastating an animal, so despondent a beast. This morning on the way to work on-time for a change, after utilizing the barter arrangement with our neighbors down the street for the occasional morning school bus duty (our school bus comes at 8:45 or so making me 5-10 minutes late to work on those days when my husband does not work from home) I turned up NPR, as usual, for the morning news.
I only listen to NPR/public radio in the car, news or classical music is all I need and my children will refer to this when they are grown as "one of mom's quirky habits." I have plenty, of which I am very proud, since many of them actually help my kids to get smarter, despite themselves; they may beg to differ. Anyhow, there was news of Dow Chemical's 11% workforce reduction, 5000 full-time and 6000 contractor positions plus the shuttering of 20 plants, that made me realize I had both hands on the steering wheel and I was thanking my lucky stars that I still had a job...until I arrived and found out some 15 minutes later that I no longer had a job.
I hate the whole stealth HR thing: swooping in, accompanying you to an office or conference room, rattling some prepared speech about severance - yadda yadda - the turning in of your badge, being accompanied back to your desk for your things and you are gone. No time to say goodbye, no time to clear the cookies from your workstation and definitely no time to go to the toilet. Though they are sorry and sad and it is not a performance issue, and in my case the severance was generous for my short tenure, you still are summarily dismissed like a leper.
Thankfully, a little loitering in the parking lot revealed the wicked truth, that it was all of us, not some of us, and some went home sadly, alone. I chose to go to the diner with some of my compatriots to commiserate and it was good. I hadn't had time for my usual coffee and oatmeal as I was motivated to dash out some emails before my morning meeting ritual began. Some coffee and a bagel was all I could stomach though; that same old wretched feeling of loss, perhaps abandonment, confounding me even though I felt armed with enough intellectual preparation.
A colleague of mine said, "maybe the Lord was telling her to stay home with her children" and how she was sad to have to let go her babysitter. It dawned on me that I was in the same boat having to release my afternoon care-giver, the person who had made my 9-5 so bearable, so seamless. We concluded that for every mother that was laid off, there was a caregiver who also lost a job and that is a sad reality of all of this mess, collateral damage as it were and an important point that is usually lost in the reporting shuffle.
Alas, I really liked this job, all of the pieces were right. May I find another soon enough that I might not sweat, at least not too long to sow seeds of regret.
There is no prior notice of upheaval if there is no picking and choosing to be made; everybody goes and nobody knows. I suppose it is easier that way, McCain-style as it were, lacking finesse as reported during the debates. McCain was going to take a "hatchet to the federal budget" but Obama was going to "wield a scalpel" expertly removing the tumor of governmental budgetary waste like a surgeon.
Over the last month and a half, layoffs have taken center stage. So devastating an animal, so despondent a beast. This morning on the way to work on-time for a change, after utilizing the barter arrangement with our neighbors down the street for the occasional morning school bus duty (our school bus comes at 8:45 or so making me 5-10 minutes late to work on those days when my husband does not work from home) I turned up NPR, as usual, for the morning news.
I only listen to NPR/public radio in the car, news or classical music is all I need and my children will refer to this when they are grown as "one of mom's quirky habits." I have plenty, of which I am very proud, since many of them actually help my kids to get smarter, despite themselves; they may beg to differ. Anyhow, there was news of Dow Chemical's 11% workforce reduction, 5000 full-time and 6000 contractor positions plus the shuttering of 20 plants, that made me realize I had both hands on the steering wheel and I was thanking my lucky stars that I still had a job...until I arrived and found out some 15 minutes later that I no longer had a job.
I hate the whole stealth HR thing: swooping in, accompanying you to an office or conference room, rattling some prepared speech about severance - yadda yadda - the turning in of your badge, being accompanied back to your desk for your things and you are gone. No time to say goodbye, no time to clear the cookies from your workstation and definitely no time to go to the toilet. Though they are sorry and sad and it is not a performance issue, and in my case the severance was generous for my short tenure, you still are summarily dismissed like a leper.
Thankfully, a little loitering in the parking lot revealed the wicked truth, that it was all of us, not some of us, and some went home sadly, alone. I chose to go to the diner with some of my compatriots to commiserate and it was good. I hadn't had time for my usual coffee and oatmeal as I was motivated to dash out some emails before my morning meeting ritual began. Some coffee and a bagel was all I could stomach though; that same old wretched feeling of loss, perhaps abandonment, confounding me even though I felt armed with enough intellectual preparation.
A colleague of mine said, "maybe the Lord was telling her to stay home with her children" and how she was sad to have to let go her babysitter. It dawned on me that I was in the same boat having to release my afternoon care-giver, the person who had made my 9-5 so bearable, so seamless. We concluded that for every mother that was laid off, there was a caregiver who also lost a job and that is a sad reality of all of this mess, collateral damage as it were and an important point that is usually lost in the reporting shuffle.
Alas, I really liked this job, all of the pieces were right. May I find another soon enough that I might not sweat, at least not too long to sow seeds of regret.
Subscribe to:
Posts (Atom)
