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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (6813)	2/3/2004 10:12:03 AM
From: mishedlo	Respond to of 110194

Layoffs up 26%, Challenger says January typically a big month for job cuts, survey says Announcements of job reductions by U.S. corporations surged 26 percent in January to 117,556, the highest since October, according to a monthly tally by outplacement firm Challenger, Gray & Christmas. "We typically see higher job cuts in January as companies set into motion business plans and employment needs for the new year," said John Challenger, CEO of the outplacement firm. January 2004 layoffs were 11 percent lower than January 2003's 132,222 and 53 percent lower than January 2002's 248,475. The survey tracks announcements of layoffs and other job reductions, not actual layoffs. The reductions can be accomplished immediately or over time. The reductions can occur through involuntary layoffs, voluntary resignations or retirements. The figures are not seasonally adjusted. Challenger said outsourcing jobs overseas and increased merger and acquisition activity could boost the number of layoffs this year, even as the economy improves. "This could be a big year for such transactions as companies try to strengthen their position in the marketplace as the recovery builds momentum," he said. In January, consumer product companies cut 22,775 jobs, the most of any sector last month and the largest month of cuts in that sector since the survey began. Financial services announced 15,157 cuts while retail planned to cut 14,016. The Challenger figures come four days before the Labor Department reports on January's nonfarm payrolls. Economists figure the economy added about 167,000 jobs in January after an anemic 1,000 gain in December. They think there's a 50-50 chance the unemployment rate ticked up to 5.8 percent from 5.7 percent cbs.marketwatch.com ============================================================ IF january employment numbers are good, it seems we will lose those jobs back rather quickly. If the January numbers are neutral or bad, look out. Mish

To: yard_man who wrote (6813)	2/3/2004 10:15:20 AM
From: Chispas	Read Replies (1) \| Respond to of 110194

Bank of America, Citicorp, J.P. Morgan, Deutsche Bank, Banco Santander, ABN, et al... larouchepub.com

To: yard_man who wrote (6813)	2/3/2004 10:22:33 AM
From: mishedlo	Read Replies (1) \| Respond to of 110194

More from Plunger Actually I don't think Fed Funds at 1% is too low, nor below equilibrium. We have wage inflation of 2% pa; Fed Funds 1% below wage inflation is just fine. And capital is cheap as muck. Returns on real investments are very low. Rentals on offices, houses are surprisingly awful but people still paycash for the capital investment with the awful yield. A higher real interest rate would choke off activity even more and you'd see void rates well above the 17% for example in Dallas offices right now. OK so maybe capital has a higher return in China. Much US capital is headed out there. But if China now has an incipient overcapacity problem as I believe, then globally, there is surplus capital. If Pimco stops buying US debt as they threaten, what will they buy instead? This is the big issue today .... is anything else better? Why are stocks so high ... what else is there to park one's savings in? Why buy an office block with 17% vacancies ... what else is a better idea? etc. We are in a low yield low activity world and we had better get used to it. The reasons are 1. Wealth imbalances so those with wealth hoard it and those without have nothing to spend 2. Longevity meaning we all (Mish, Plunger, Cordob, Steve 203, MrBear kind of aged folks anyway) feel the need to save more for our retirement and so spending less and bidding up assets more. OK and so can the USD sink and cause domestic rates to soar? Against what? The Oz, Euro Loonie can't accept any more appreciation as we now know. China and Japan can't accept any, let alone "any more". So what does the USD slide against? Oil? Silver? Would the Fed feel obliged to hike to stop the price of copper in China going up? Could they without creating a domestic economic implosion? Are they really going to deliberately do that? Get real. And if rates did go up and housing, stocks and GE's finance unit all collapsed ... what would the Fed do then? Hike more? Get real, rates are headed down as the SUPPLY gets cut off from J6P screaming U.N.C.L.E. and starting to pay down rather than load up for ever with more at a faster rate. Plunger.