Jobs...Missing, and Amiss...

Apple Tells Investors That Steve Jobs Plans to Return- For the last nine months, Apple has refused to get into specifics about the well-being of its chief executive, Steven P. Jobs, even as he said last month that he was taking a six-month leave of absence to deal with health problems. On Wednesday, the company’s shareholders had their chance to press for more information — but they did not get far. At its annual shareholder meeting here on Apple’s corporate campus, run by the chief operating officer, Timothy D. Cook, the company responded to inquiries about Mr. Jobs by saying that he still planned to return to the company in June. “He is deeply involved in all strategic matters and has delegated day-to-day authority to Tim Cook and his team,” said Arthur D. Levinson, a co-lead director of Apple and the chief executive of Genentech. “That’s where it stands.”
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Today's unemployment report just confirmed the dismal jobs situation. The dubious statistic, which the media report as 'factual' but is heavily massaged, would indicate that the real unemployment is closer to 15%. All the productivity increases are making more workers unnecessary.
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Today NYT had a good article on the main catalyst for the sub-prime mortgage boom- HSBC's purchase of Household International. Interesting read. The Deal That Fueled Subprime.

Lost in America - Character

I have been pounding the table about jobs. The economy will start to form a foundation and recover on a sound footing only if people start working on productive things. This generates productive output and creates value and provides an income stream that can support and enhance standard of living.

However, the Ben and Hank tag team seem intent on "throwing the kitchen sink" at the financial mess. AIG has apparently borrowed $90 billion from the Fed. Based on the prices of treasuries, the market expects the Fed to cut rates to below 1% over the next few weeks. Alert readers will notice the similarity to Japan's actions in the 90s. That country still has not recovered from its excesses. The Fed will try to re-inflate the economy. What will be inflated is still unclear.

It is time for the citizens of the country to comprehend the magnitude of the problem, and act.

• Shareholders should accept significantly less return on their investment. They should encourage their companies to invest- in R&D, in education of their employees, and in education in schools and colleges.
• Shareholders should put caps on executive pay. No company should pay its top executive more than perhaps twice or thrice the lowest paid full-time employee.
• The politicians should stop this nonsense about rebate checks and bailouts. Let the market take care of itself. The government should invest in infrastructure and start other major projects that create jobs.
• Parents should really push their children to learn.
  
• CEOs and other leaders should start to donate a lot more of their money and time to causes like education.

Without good training and education for its citizens, the country and its democracy will be in Dire Straits.




This video was sent to me by a friend. I will try to find the original source and provide appropriate reference.

Focusing on the Job Market

While there is euphoria in the stock market today, the key indicators to watch are the quantity and quality of jobs.
Some stories today...

More Americans Vault Overseas to Search for Jobs. Asia, Europe attract financial pros as woes in the U.S. take a toll

How Toyota treats its full-time employees (compared to the US Auto Gia..., oops, Auto Dwarfs). Toyota Keeps Idled Workers Busy Honing Their Skills For years, Detroit's Big Three car makers have paid their workers even when they aren't needed on the assembly line. This year, as the industry's downturn intensifies, Toyota Motor Corp. finds itself doing the same thing. Instead of sending the workers home, as the Detroit makers often do, Toyota is keeping them at the plants, though. The employees spend their days in training sessions designed to sharpen their job skills and find better ways to assemble vehicles.

GM to Stamp Out factory in Grand Rapids, MI. General Motors Corp.'s efforts to hoard cash and outlast a prolonged economic slump claimed the jobs of more than 2,700 workers Monday as the automaker announced the demise of factories in Michigan and Wisconsin. GM said it would shutter a metal stamping factory in the Grand Rapids suburb of Wyoming by the end of next year, and it also sped up the closure of its Janesville, Wis., sport utility vehicle plant, with most of that facility shuttering Dec. 23.

International Business Machines Corp. is opening its first research facility in about a decade, inaugurating an operation in Shanghai that will work to build new applications for the Internet and small businesses.

History of an "Ownership Society"

A few weeks ago, a student in my class commented that all the history courses she took were very limited because they all seemed to end with World War II or earlier. Other students chimed in- it appeared that stuff that happened in the recent past was of no historical relevance. As this was in my business course, I decided to give them a ten minute education on recent history related to the economy- the past fifteen years.

• 1992-1993 Beginning of the widespread use of the browser- we really need to thank Marc Andreessen and his buddies at U of I for making this blog and everything else on the Internet accessible so easily.
• 1992-2000 Massive (over) investments in technologies, esp. Communications, and Finance. This can be looked at as pulling future investment 'into' the present, thus forcing reduced investment in the future (reversion to the mean effect).
• 2001-2002 Reality check. Dawned on investors that some investments made above will never pay off, and some would take many years. Collapse of investment.
  9/11- collapse of travel.
  Recession.
  Job Losses, especially the higher paying high tech ones.
  Outsourcing of tech (part of the payoff from capital investments in 1992-2000).
  
• 2003 - 2Q 2007: President George Bush's two part response- Iraq War and Create an 'Ownership' Society.
  Shift the gains from wage earners to 'owner-investors.'
  Fed Chair Greenspan responds by lowering interest rates to 1% in July 2003. Became very cheap to borrow money, both for individuals and institutions.
  Reduced regulatory environment and lax enforcement made it very easy to borrow and lend money.
  Tax code changed to significantly benefit investors and owners- shifting the burden to wage-earners.
  Tougher bankruptcy laws made it more favorable for lendors.
  Massive borrowing to finance housing and other needs, as opposed to funding from savings.
  Spawns asset bubbles- Housing Bubble, Real Estate bubble, Stock Market Bubble, Commodities bubble, etc.
  Lower interest rates, with higher global demand, spawns inflation
  
• 2005-2007 Fed responds by raising rates trying to lower inflation
• 1Q 2007-3Q 2007 Cheap money not available. Borrowing to finance spending becomes difficult.
  Job Losses
• 3Q 2007 to present. Fed dramatically lowers rates and puts in other extra-ordinary measures to make it easier to 'borrow.'
  Assets being repriced.
  Ownership (that arose from borrowing) being reduced.
  

Next step is to take a stab at the future- that's for another blog.