Thread: The strongest economy in the world

Originally Posted by Jet Gorgon

Yep, it's about time the ROW

I'll bite. What's the ROW?

Originally Posted by Jet Gorgon

^ Yep, it's about time the ROW started paying for their own protection.

I hardly think the USA spends such a massive amount on their military as a favour to the rest of the world. Its more in line with "protecting American interests abroad" than self defence. And so long as USA can just print off $s and swap it for real stuff other countries have to work to produce, the rest of the world is in fact subsidizing the US military machine.

Originally Posted by MrG

I'll bite. What's the ROW?

Sorry, rest of world.
But, Pandie has it in his post above. You doing OK now, Bear? Don't want to beat you if you're not 100%.

Pardon me for squeezing in....

Would anyone here be interested in ..."stock trading"....discussion?

all stocks, indexes, ETFs.....etcs - US market

I want to start the new thread on it, but wouldn't want to be talking to myself

^ Spin started one before -- TD stock trading? Think it's still running. But, go ahead. You'll not be talking to the mirror.

thxs JET
Just checked that thread, it's closed until 2010, ....Spin said

So I will start the new one

^"“The world is currently flush with the U.S. dollar, which is available at no cost,” Kind said. "

Kind of says it all.

Originally Posted by robuzo

^"“The world is currently flush with the U.S. dollar, which is available at no cost,” Kind said. "

Kind of says it all.

$USs at no cost to the USA that is. But certainly at a cost to the rest of the world.

Despite the fact that the rest of the world will be left with unpaid US debt in terms of real value as the $US loses trading strength, USA will also have to suffer a considerable loss in living standards as their $ buys less and imports decline.

It wouldn't surprise me to see the Chinese buying up US manufacturing companies to cater to the US domestic demand. Right now China owns a lot of US debt, but if they put that money back into US companies they could own USA and profit from their tenants.

^ It's been going on for some time... Often saving the American's jobs in the process...

Chinadaily BBS - China & the World - US Finally Decides to Sell!

Weak Dollar Fuels China's Buying Spree Of U.S. Firms - washingtonpost.com

Chinese Company Buys Hummer from GM - BusinessWeek

Many hundreds more...

Originally Posted by Muadib

^ It's been going on for some time... Often saving the American's jobs in the process...

Chinadaily BBS - China & the World - US Finally Decides to Sell!

Weak Dollar Fuels China's Buying Spree Of U.S. Firms - washingtonpost.com

Chinese Company Buys Hummer from GM - BusinessWeek

Many hundreds more...

Hmm... economic colonialism. Wonder where they got that idea from?

Got to unload those $USs someplace.

And they haven't had to invade a single country to do it.

One era passes as another unfolds.

I imagine Chinese language courses in US universities will be in big demand over the next few decades.

Sneaky little devils, aren't they...

One thing is certain and two things are sure...

Productivity will go up in these companies...

The unions have a piss-poor chance of getting through the door...

Originally Posted by Muadib

Sneaky little devils, aren't they...

The unions have a piss-poor chance of getting through the door...

Funny that, no unions at Jpn carmakers in the States

This will have a severe impact on the youth entering - trying to entrer - into entry level positions. They will be stunted.

The Lost Generation

The continuing job crisis is hitting young people especially hard—damaging both their future and the economy

By Peter Coy

Bright, eager—and unwanted. While unemployment is ravaging just about every part of the global workforce, the most enduring harm is being done to young people who can't grab onto the first rung of the career ladder.

Affected are a range of young people, from high school dropouts, to college grads, to newly minted lawyers and MBAs across the developed world from Britain to Japan. One indication: In the U.S., the unemployment rate for 16- to 24-year-olds has climbed to more than 18%, from 13% a year ago.

For people just starting their careers, the damage may be deep and long-lasting, potentially creating a kind of "lost generation." Studies suggest that an extended period of youthful joblessness can significantly depress lifetime income as people get stuck in jobs that are beneath their capabilities, or come to be seen by employers as damaged goods.

Equally important, employers are likely to suffer from the scarring of a generation. The freshness and vitality young people bring to the workplace is missing. Tomorrow's would-be star employees are on the sidelines, deprived of experience and losing motivation. In Japan, which has been down this road since the early 1990s, workers who started their careers a decade or more ago and are now in their 30s account for 6 in 10 reported cases of depression, stress, and work-related mental disabilities, according to the Japan Productivity Center for Socio-Economic Development.

When today's unemployed finally do get jobs in the recovery, many may be dissatisfied to be slotted below people who worked all along—especially if the newcomers spent their downtime getting more education, says Richard Thompson, vice-president for talent development at Adecco Group North America, which employs more than 300,000 people in temporary positions. Says Thompson: "You're going to have multiple generations fighting for the jobs that are going to come back in the recovery."

What's more, the baby boom generation is counting on a productive young workforce to help fund retirement and health care. Instead, young people risk getting tracked into jobs that don't pay as well, says Lisa B. Kahn of the Yale School of Management. That would mean lower tax payments for Social Security and Medicare.

Only 46% of people aged 16-24 had jobs in September, the lowest since the government began counting in 1948. The crisis is even hitting recent college graduates. "I've applied for a whole lot of restaurant jobs, but even those, nobody calls me back," says Dan Schmitz, 25, a University of Wisconsin graduate with a bachelor's degree in English who lives in Brooklyn, N.Y. "Every morning I wake up thinking today's going to be the day I get a job. I've not had a job for months, and it's getting really frustrating."

ANXIETY AND FEAR

The case for action is strong. Governments should act now before the damage gets even worse, argues David G. Blanchflower, an economist at Dartmouth College who recently served on the Monetary Policy Committee of the Bank of England. He's not sure what will work, but he favors trying everything from subsidizing education and training to cutting minimum wages for young people and trainees. "It has to be now," says Blanchflower. "It can't be in two years' time."

Most analyses of youth employment focus on people aged 16 to 24, which includes everyone from high school dropouts to wet-behind-the-ears college grads. But in this era of rising educational requirements, some people don't start their careers until their mid or late 20s—and these young college grads are taking it on the chin as well.

According to a BusinessWeek analysis, college graduates aged 22 to 27 have fared worse than their older educated peers during the downturn. Two years ago, 84.4% of young grads had jobs, only somewhat lower than the 86.8% figure for college graduates aged 28 to 50. Since then, the employment gap between the two groups has almost doubled.

Robert I. Sutton, author of The No Asshole Rule, a management book, says he's seeing "more anxiety and fear" among his students at Stanford University. At Northwestern University Law School, at least three-quarters of students who graduated in May had their employment deferred, in some cases up to a year, says Bill Chamberlain, head of the school's career center.

But the situation is most severe for job seekers who lack college diplomas and thus have fewer options. "My friends tell me: 'Go fill this out. Go do that,'" says Charlie Black, 26, of Manhattan, who was out one recent weekend shopping for a Halloween costume for his 2-year-old daughter, Bree. Black has been a union extra in several TV shows and movies, and for a year he worked the overnight shift at an Abercrombie & Fitch (ANF) store. Now, jobless for almost a year, he would be happy to work as a janitor. "But no jobs have been calling back," says Black.

It seems strange at first blush that young people are the biggest victims of the current economic slump. One could easily imagine that companies in a recession would prefer to hire young people, who are cheap, and slough off older workers, who are expensive. But both employers and older workers are sitting tight, taking as few risks as possible in an uncertain environment. With no openings, employers are refusing even to look at the résumés of those on the outside looking in.

The sense of stasis in many Western countries is reminiscent of Japan, where talk of a lost generation has been around since as long ago as 1995. Some 3.1 million Japanese aged 25 to 34 work as temps or contract employees—up from 2 million 10 years ago, according to the Ministry of Internal Affairs. Many Japanese blame the young people themselves, saying they are spoiled, alienated "freeters"—a term meaning job-hopping part-timers. But economist Souichi Ohta of Nagoya University argues that a big part of the problem is Japanese employers, who value long experience at their companies—which newcomers by definition don't have.

Europe offers different lessons about what to avoid. In Spain, employers generally put older workers on long-term contracts that are hard to break. When demand slumps, they get rid of the younger workers, notes Alfredo Pastor, an economist at Spain's IESE Business School and former Spanish Secretary of State for the Economy. That's one reason Spain's unemployment rate for 16- to 24-year-olds is a sky-high 39%. The rate is 24% in France and 19% in Britain.

Economists in several countries have studied the damage such high unemployment can cause. Kahn of Yale found that graduating from college in a bad economy has a long-lasting negative effect on wages. For each percentage-point rise in the unemployment rate, those who graduated during the recession earned 6% to 7% less in their first year of employment than their more fortunate counterparts. Even 15 years out of school, the recession graduates earned 2.5% less than those who began working in more prosperous times.
SUBMINIMUM WAGE?

What can be done? For one thing, companies should keep hiring young people even if they're doing layoffs. That's how General Electric (GE) operates, says Susan P. Peters, the company's vice-president for executive development. She says GE learned from the mistake of its aviation business, which froze hiring and training during a downturn years ago and found its talent pipeline dry when business recovered. "We tell our businesses, 'Tough, you have to hire,'" Peters says.

Free-market economists favor removing obstacles to employment of the young, such as high minimum wages. "The government in some ways is contributing to this problem," says Kristen Lopez Eastlick, senior research analyst for the employer-backed Employment Policies Institute. She points out that the 40% hike in the federal minimum wage over the past two years made it less appealing to hire young workers. One possibility: Some U.S. states and European countries have enacted subminimum wages just for young people or people enrolled in apprenticeships.

More job training would help as well. In April the British government guaranteed that starting next January, all people under age 25 who have been unemployed for more than a year will have a job offer, training, or a paid workplace experience.

The U.S. has been slower to beef up job programs for the young, partly because of massive budget deficits. The Obama Administration is again considering a plan proposed during the campaign to give $3,000 tax credits to employers for each new hire, although an Administration spokesman says talks with Congress are only preliminary. An argument in favor of action: The current generation of young people is larger than the one that follows. Dartmouth's Blanchflower points out that even if programs are left in place after the recession ends, they will serve fewer people and therefore become less costly.

One possible example for the U.S. to follow is Germany's apprenticeship program, which guides young people from high school into skilled blue-collar jobs. Young-adult unemployment in Germany has risen less than in most other developed countries.

Young people have figured out how to avoid horrid blanks on their résumés. Enrollments are breaking records at such schools as Cincinnati State Technical & Community College and LaGuardia Community College in New York. With no job in sight, Shireen Rahjou, 23, of Boca Raton, Fla., is working toward a master's degree in public relations. She recently landed a paid internship—O.K., not a job, but a foot in the door—at a PR firm in Miami.

With jobs scarce, Stanford's Sutton says some of his students plan to start their own businesses. Schools should encourage that instead of churning out "passive regurgitators," argues Kate McKeown, an adjunct professor of entrepreneurship at Fordham University's College of Business Administration.

Meanwhile, though, the tide of youth unemployment keeps rising. "We're seeing further deterioration," says Stefano Scarpetta, who heads the employment-analysis division of the Organization for Economic Cooperation & Development, a forum for rich countries.

The unemployment crisis among the young is not as dramatic as the financial crisis of a year ago. But it may turn out to have longer-lasting effects.

With Mark Scott in London, Ellen Gibson and Lindsey Gerdes in New York, Carol Matlack in Paris, and Kenji Hall in Tokyo

Business Exchange: Read, save, and add content on BW's new Web 2.0 topic network
Tackling the Job Crisis

The system for moving young people into the workforce was functioning poorly in many nations even before the global economic downturn began, says a new report from the Organization for Economic Cooperation & Development. The 26-page report, called "Helping Youth to Get a Firm Foothold in the Labour Market," was prepared for an OECD meeting in Paris on Sept. 28-29. The most urgent priority is to prevent unskilled dropouts from losing touch with the workforce altogether, according to the report. "For disadvantaged youth lacking basic education," the document says, "a failure in their first experience on the labor market is often difficult to make up."

To view the report, go to Unemployment: Reference - Business Exchange

Coy is BusinessWeek's Economics editor.

http://www.businessweek.com/print/ma...1032038302.htm

There is an old adage that goes 'three generations, shirt-sleeves to shirt-sleeves' that I feel is coming into play with today's youth... The parable goes like this:

1st generation have little, work hard to educate themselves and make a better life for themselves and their families while attaining affluence...

2nd generation reap the rewards of the first generation and live off the tit for so long that they have little or no desire, initiative or need to apply themselves as everything has been handed to them by the 1st generation...

3rd generation have no idea where the previous affluence and $$$ came from or how to sustain it, shun education and feel that their lifestyle is 'owed' to them... That is until the $$$ run out and they are back on the factory floor to earn a living...

In America's case, the 1st generation were post WWII adults who dug in and made a better life for themselves and their families... Generations 2 & 3 were the X & Y gen-kids who were more interested in video games, tattoos and piercings than becoming educated and a contributing member of society... Which leaves us with a 50% drop-out rate in all large cities in the US... Menial jobs and manual labor are all they are qualified for...

You couple the above scenario with the fact that in today's American there are 6 people for every vacant job and you quickly ascertain that the US is far behind the curve on education, forward thinking and initiative by youth to get off their collective asses, move out of mommie's basement and make a go of life... Like a little bird, they have always had the worm dropped in their mouth whenever they squawk loud enough...

Just more pieces of the puzzle as to why the US is in the shape it is...

^ True. But I thought the flower power hippies were the 2nd gen?
^^ Scary stats, Milkie. If small biz can't get credit and face higher costs for healthcare, they won't be hiring anytime soon.

^ That would be correct, the 2nd gen kids were those from the 60's & 70's... Still a lot of upward mobility in WASP society in those years... It's the kids from the 80's & 90's who are sucking hind-tit... These are the true video-game, Internet, cell-phone, emo generation who have little common sense and less aspirations...

Originally Posted by Jet Gorgon

^ True. But I thought the flower power hippies were the 2nd gen?
^^ Scary stats, Milkie. If small biz can't get credit and face higher costs for healthcare, they won't be hiring anytime soon.

The idea of Government taxpayer funded healthcare is to make it cheaper for everybody small "Biz" included.

Credit defaults are coming to bear on bank profits...

Bank of America Posts Third-Quarter Loss on Defaults (Update3) - Bloomberg.com

Bank of America Posts Third-Quarter Loss on Defaults

Oct. 16 (Bloomberg) -- Bank of America Corp., the biggest U.S. lender, posted its second quarterly loss in less than a year, unable to shake off effects of the economic contraction that drove the company to take two taxpayer bailouts.

The $1 billion third-quarter loss, or 26 cents per diluted share, compared with a profit of $1.18 billion, or 15 cents, a year earlier, the Charlotte, North Carolina-based bank said today in a statement. The loss was more than analysts estimated and the only one posted by the nation’s three biggest lenders. Bank of America dropped 5.6 percent in New York trading.

The quarterly report will be the last supervised by Chief Executive Officer Kenneth Lewis, 62, who retires Dec. 31 after regulators and shareholders criticized his pursuit of Merrill Lynch & Co. The bank reported a fourth-quarter loss in 2008, its first in 17 years, and Lewis is trying to lead a rebound while fending off state and federal probes of the Merrill deal. He agreed yesterday to give up his 2009 salary and bonus.

“The idea that the financial crisis is over is a fantasy and it looks like the numbers bear that out,” said Harvard University professor Niall Ferguson on Bloomberg Television. “It’s clearly not over for Bank of America.”

Bank of America shares have rebounded five-fold since February when they traded at less than $3, their lowest in more than 20 years, on concern that the U.S. would seize a stake in the company. The stock declined $1.02 to $17.08 at 9:33 a.m. in New York Stock Exchange composite trading.

Reserve Levels

Results were aided by profit from Merrill Lynch, with gains from trading bonds, stocks and currencies. Losses on home lending and insurance widened to $1.6 billion from $724 million, and the loss on credit cards expanded to $1.04 billion from $167 million.

The bank said the provision for credit losses was $11.7 billion, with $9.6 billion of loans considered uncollectible. Reserves for future losses increased by $2.1 billion, compared with a $4.7 billion addition in the previous quarter, the statement said. The bank’s reserve is now 4 percent of total loans, compared with 4.7 percent at JPMorgan Chase & Co. and 5.9 percent at Citigroup Inc., analyst John McDonald of Bernstein Research said in a report today.

“Credit costs remain high, and that is our major financial challenge going forward,” Lewis said in the statement. “However, we are heartened by early positive signs, such as the leveling of delinquencies among our credit-card customers.”

Bank of America reported total revenue increased 32 percent to $26.4 billion. The total was 13 percent lower than forecast by Chris Mutascio of Stifel Nicolaus & Co.

Revenue, Write-Offs

Revenue from credit cards, brokerage services, investment banking and mortgage banking slid from the previous quarter, and Bank of America’s noninterest income dropped by 31 percent to $14.6 billion. Those declines offset a 57 percent gain in trading account profits.
Bank of America said net write-offs of uncollectible loans rose 11 percent from the second quarter to $9.62 billion. The bank wrote off $3.2 billion of home loans, including home equity loans, during the quarter, up 10 percent from the second quarter. Charge-offs on credit cards increased 5 percent to $2.17 billion.

Bank of America’s position as the largest U.S. consumer lender has hurt results since the recession began in December 2007. While Federal Reserve Chairman Ben S. Bernanke has said the economy may be growing again, the jobless rate rose to 9.8 percent in September, and Lewis said last month that “a near double-digit unemployment rate is bad medicine for a bank that serves consumers.”

JPMorgan Chase & Co., the second-biggest U.S. bank by assets, said this week that third-quarter profit climbed almost sevenfold to $3.59 billion. Goldman Sachs Group Inc. said its income more than doubled to $3.19 billion. Both New York banks repaid their U.S. bailout funds.

Accounting Charges

Citigroup Inc., the third-biggest U.S. bank, posted a $101 million profit yesterday as CEO Vikram Pandit said he wants to repay $45 billion in U.S. bailout funds as soon as possible. Bank of America also owes $45 billion.

The bank, largest in the U.S. by deposits and assets, was hampered during the quarter by accounting rules that require the lender to assess the value of its own $447 billion in debt each quarter. Falling prices entitle the bank to take gains, on the theory that the debt could be bought back and retired for less money, while rallies that boost the price lead to charges that reduce reported earnings.

Bank of America also earmarked $402 million to settle a dispute over a plan to share losses with the Treasury Department on $118 billion of loans and mortgage-backed securities, mostly acquired in the Merrill transaction.

Acquisitions

Lewis has said the purchases of Merrill on Jan. 1 and home lender Countrywide Financial Corp. in July 2008 during the worst of the credit crunch bore fruit during the first part of this year, providing most of the company’s earnings growth.

Bank of America expects to add to its 20.5 percent share of U.S. home lending over the next five years, Barbara Desoer, president of home loans and insurance, said in an Oct. 14 interview. Home loans not accruing interest increased by 14 percent to $16.5 billion, or 6.9 percent of the bank’s loans and foreclosed properties, the bank said.

“It has become hard to imagine Bank of America without Merrill Lynch,” Lewis told employees in a September memo announcing his departure.

Originally Posted by larvidchr

The idea of Government taxpayer funded healthcare is to make it cheaper for everybody small "Biz" included.

In America? You must be joking.

Thanks for the update, Landreth.

I look forward to seeing the GDP report on Oct., 23rd. Unemployment always lags, but follow GDP gains. I suspect if GDP growth is positive and higher than predicted there will talk of "recovery."

When jobs follow in the future:

Will they be "good" jobs?

Will unemployment be higher than it has been in the past?

This is about six weeks old, but it's an important perspective on talk of recovery. Behind the raw figures for GDP and employment, what's very rarely talked about are changes in the rate of exploitation (or - from the perspective of the capitalist - the ratio of productivity and wages):

Two particular sets of August economic data reveal the deepening economic divide behind the "recovery" talk. The first set of numbers came from the US Department of Labor's Bureau of Labor Statistics. They showed some remarkable facts about (1) US workers' productivity -- the physical quantity of goods and services produced per employed worker, (2) the compensation paid to US workers, and (3) the hours they actually worked. These numbers showed how the economy had changed from the first quarter (January-March) to the second (April-June) of 2009. The average number of paid hours worked per employee fell by 7.6 per cent, but the total output fell only 1.7 per cent. That was because the workers who had not (yet) lost their jobs were fearful, so they worked harder and faster doing some of the jobs previously done by laid-off workers. With fewer employed workers doing more, the BLS reported a gain of 6.4 per cent in the productivity of US labor.

For their harder, faster, and thus 6.4 per cent more productive labor, those still employed saw their money wages rise by only 0.2 percent from the first to the second quarter of 2009. When the BLS took into account the rising prices workers had to pay, their real wages (the goods and services they could actually buy) fell by 1.1 per cent. Taken together, these numbers show that employers got a huge increase in output from each employee, while what they paid to their employees imposed on them a decrease in the goods and services they could afford.

No wonder the second quarter of 2009 was celebrated as a "recovery" by business and thus politicians and the media; the workers only watched and worried.

Rick Wolff, "The Reality Behind Economic 'Recovery'"