Thanks George, Isopatch, Valutrader for the good recommendations on the bear mutual funds!
The job losses in the U.S. are just a part of the total picture. Everytime I access the BBC site, there seems to be 10's of thousands of job losses each day! (see excerpt below for today's stats). U.S. exports have been holding up relatively well, but these overseas job losses will change that. As exports fall, US manufacturing will have more layoffs and the vicious cycle will continue, with lower consumer confidence and spending, service sector layoffs, less people buying homes, mortgage defaults, etc., etc.
Stephen Roach has a great insight on a huge factor that could possibly be the killer punch for the U.S. Economy. Pay for performance has grown by leaps and bounds. Over recent years, this resulted in very large bonuses that workers have come to expect. There will be a huge drop in these bonuses at the end of this year, and he believes that this will cause consumer spending to decrease in 1st quarter 2002.
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news.bbc.co.uk
Thursday, 26 July, 2001, 20:44 GMT 21:44 UK
Job cuts top 50,000
It is turning out to be yet another grim day of job losses, as companies on both sides of the Atlantic queued up to report gloomy results and cost-cutting plans.
In total, companies said they were cutting, or planned to cut, close to 51,000 jobs this year.
Job losses announced Thursday
JDS Uniphase: 16,000
Alcatel: 14,000
Hewlett Packard: 6,000
Infineon: 5,000
NTL: 2,000-2,500
Epcos: 750
JDS Uniphase becomes the latest in a string of technology firms to axe workers, cutting 16,000 jobs.
The maker of fibre-optic components announced the job cuts during its latest profits report. JDS Uniphase said that in its fourth quarter it lost 36 cents a share on sales of $601 million.
With a similar number of job losses announced on Tuesday, this has been one of the bloodiest company results seasons since the recession of the early 1990s, economists said.
Unlike on Tuesday, however, stock markets have reacted with equanimity to the announcements, with most major share indexes trading unchanged, after suffering heavy falls earlier in the week.
Alcatel chief Serge Tchuruk will keep his job
The biggest cuts were announced at French telecoms equipment firm Alcatel, which said it would cut 14,000 permanent staff, as well as up to 6,000 contractors and part-time staff.
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OT, Isopatch, since living in Costa Rica, I've become a soccer fan. It's really interesting to me that Costa Rica and the U.S. (two teams that were not really forecasted to do spectacularly) are now 1, 2 in their group for the current round of World Cup eliminations. This shows that their group in the previous round of eliminations was really the strongest (who knows, maybe Guatemala, which was eliminated is the third best team in CONCAAF). It's amazing to me how much difference a coach can make. The previous Costa Rican coach played a purely defensive game and Costa Rica did terribly. The new coach changed most of the players on the team and implemented an offensive strategy, completely transforming them from very mediocre to pretty good. Since he took over in December, the Costa Rican team has gotten better with every game played, so expect a tougher game for the U.S. team when they come to Costa Rica than the last one that you saw in the U.S..
Regards,
JI |
