April 21, 2007

What (if anything) can pump up American consumer spending now?



















Or are we out of catalysts and bubbles?


35 comments:

Anonymous said...

I'd spend more if my boss (a real estate broker, natch) would give me a damn raise. I pump out the marketing materials for his frickin' idiot agents 50+ hours a week for a sickningly paltry rate (hint, i'm in my early thirties and barely making my age). Every time I ask for a raise, he's all, "we just don't have the money."
Let's see, you have the money to buy new offices to expand your empire. You have the money to throw lavish agent recruiting parties with Hummer limos and expensive catering. You have the money to take five vacations a year. You have the money to hire idiot consultants who come up with hare-brained ideas that make more work for your staff. If I didn't get a raise when you were rolling in the fat, how the hell am I ever going to get a raise?
I'm off to polish off that resume...

Anonymous said...

"we just don't have the money."


Dude. Um this is codeword for "We just don't want to pay you more because we think we can find someone else of same value for your salary or less."




F!ck them and move on. Send out the resumes. This is how it works

Anonymous said...

Legalized drugs and prostitution? Especially with all the unemployed realtors having nothing to do

Anonymous said...

Looks like the money men are doing their best to re-flate the economy at the expense of the dollar. Seems like a lot of new cash is going into the stock markets. We could well be in the incipient stages of another equities bubble, similar to what happened in the roaring 20's, when RE peaked around 1926 but the markets partied until, when, you know...

Fred Flintstone said...

For most 'small businesses', short-sighted owners only see giving pay raises as the owner taking a personal wage cut; in a very real sense, it's true. They've got to watch those pennies, even if it means losing dollars in the long-run, i.e. penny-wise, pound-foolish.

And as much as people pay lip service about a flight to quality and pursuing excellence in customer service, the fact is businesses want theie cake and want to eat it too, unwilling to pay for top performers (when average workers provide equal ROI in their minds).

As an employee, you've got to be willing to walk from the job, and the owner might just call you on it and see how they fare with a new employee (even if it costs tens of thousands of dollars in the end)...

@@@@

As far as the question of what will drive consumer spending now, I'd say the rising costs of gasoline are doing a wonderful job tapping into consumer's wallets; if you want to drive, you are forced to spend! How's THAT for mandated 'discretionary' spending!

What I LOVE is how refineries go off-line for maintenance, and fuel prices go up: how's THAT for rewarding a failure to plan ahead and anticipate demand? Oh, because it's NOT some accident, or a failure to plan? I see.

As far as which asset will sponge up all this excess liquidity, I'm guessing all these would-be flippers (ALA Casey Serin) will soon realize they could organize into national food buying investment club, using their credit cards to buy up all the food on the shelves of the grocery stores. This will create an artificial food shortage, and drive up prices!

Then they could sell food back to hungry people right outside the store, making a "sweet" profit! It's all good, eh?

Sounds crazy? I dunno: the same logic worked in residential real estate from 2000-2006, with specuvestors tripping all over each other to buy up available properties, thus depriving actual homeowners of a place to live at an affordable price (remember actual homeowners? You know, those people who actually LIVE in the property, and thus TAKE CARE of it? They don't buy to have it sit vacant while trying to flip it, letting the pool fill with sludge after 6 months of lack of attention). We had these Carlton Sheets types outbidding each other to 'win' the property, and guess what happened: prices went up!

You create artifical demand on ANY asset (e.g. gas, with refinery shortages triggering decreased supply), provide easy credit to buy (AKA subprime and alt-A loans) and By God, the asset WILL go up in price!

James Dean said...

When the dollars collapses, we can pump our economy by revitalizing all our dormant manufacturering capacity.

Anonymous said...

My theory is that you'll have some people who will thrive off the mess to come and the misfortune of others.

As homedebtors go broke and have to sell off their stuff, those who didn't fall for the lure of easy credit and creative financing will buy their used stuff. I've already bought lots of cheap stuff off of Ebay.

I wonder if there are businesspeople looking to put all those empty McMansions to use?

David in JAX said...

Fred Flintstone said...
For most 'small businesses', short-sighted owners only see giving pay raises as the owner taking a personal wage cut...


This is exactly right. Most small business owners don't understand that long term, happy employees make you more money over the long haul. And, the best way to keep your employees happy is through pay increases when they are deserved. I have worked for two small companies as a professional. Both had close to 100% turnover every three years. Neither understood that running off employees and retraining new ones every few years was costing them a fortune. At my current company, every deserving employee gets a pat on the back, a pay increase and a bonus every year. After starting this policy production shot up and money started rolling in. When people understand that doing a good job makes the company more money and thus makes them more money, they will work harder.

Anonymous said...

It's the same story everywhere. As a research engineer you once would receive royalties on patents you created. Even in the old steel industry 20 years ago you received royalties on patents.

Today at Nortel there are no royalties, just a thousand dollar bone tossed your way. And they can do this because there are so many people with Ph.D.'s who are willing to work for anything if it gets them into the North American job market.

I've refused to go along. Any ideas I get I'm just going to hold onto so they may be of some actual value to a future employer who would fairly compensate me.

Not that that's ever going to happen, but I can say I stood behind principle. That's worth something to me.

Anonymous said...

Hey guys, sorry but I have to disagree on the raise issue. A small business owner can do what he wants, he doesn't have to give you a raise, or vacation or benefits. If you feel you are worth more ask for a raise, ask for more vacation, ask for better benefits. If you are turned down, go somewhere else. If you can't find anywhere else that will pay you more, than you are obviously not worth any more.

A final option is start your own business and pay yourself whatever you want.

But complaining about the big bad boss is silly.

Anonymous said...

Take Dmitri Orlov's advice (my comments in parentheses):

Reliance on doomed institutions is harmful. Government is already useless (Katrina, Iraq, etc.). Commercial sector will become useless quickly (Anon 8:41's boss). Since they will be useless to you, you can start being useless to them ahead of time.

Closing the Collapse Gap - www.cluborlov.com

Stuck in So Pa said...

"David in JAX said...
Fred Flintstone said...
For most 'small businesses', short-sighted owners only see giving pay raises as the owner taking a personal wage cut...

At my current company, every deserving employee gets a pat on the back, a pay increase and a bonus every year. After starting this policy production shot up and money started rolling in."

That works fine until a new level of management takes over/moves up. Then, just like an FB who 'deserves' his asking price, the new corporate team feels that the company 'deserves'
the currant level of increasing production, without paying for it in any way.

Their pitch, the old standby: "We need to make this company more profitable"

Translation:” We need to put more money in OUR pockets"

Result:

1.No more pay raises for the rank and file in the trenches (you know, those at the customer level) even the outstanding ones!

2.Profit sharing and commission figures are screwed around with to make them totally non understandable (except for the fact that YOU don't get either anymore,) or simply eliminated all together.

3.The excellent higher paid employees are let go (see Circuit City) and replaced with newbies that don't know jack sh*t, but cost less. "Boy are we saving money on these new guys"

4.Employee morale tanks. After all, these people are not as stupid as management thinks. (You know when YOU are getting screwed, no matter what the official hype)
Consequently production sinks even more, and faster, and this starts a new round of layoffs, policy changes, production incentive manipulations, etc.

Both my wife and I have seen this happen to major corporations that we worked for. We were fortunate to be able to walk away from both jobs before the major bullish*t started.

A good friend of mine with many, many years experience in his field was let go by his company for the same reasons listed above.
Division manager, no severance pay, no golden parachute, simply "Good morning, you're fired, security will now escort you to the front door" (He said that it was simply the most demeaning experience you can imagine.)
Fortunately for him, the competition recognized an opportunity and scooped him up immediately. He took with him his long time customer base and approximately 80-90% of them switched to his new company.
The former company's division was devastated by this loss (morale wise, customer wise, and of course production and money wise) to the tune of a 60% loss for the next three quarters at least. This from a long time business acquaintance who still works there! They never did fully recover.

My good friend is very religious and doesn't swear but I'm sure the phrase "Suck it and suck it good" was going thru his mind!

Anonymous said...

Buying and re-buying on Ebay will sustain the economy. Gotta sell all that junk to make that mortgage payment.

Anonymous said...

My group at work is getting outsourced soon because they think our pay is too high. We beat our numbers by a mile every quarter, but the bean counters only see the pay packages. I suppose I could stay of I was willing to take a 30% pay cut.

capitalistpig said...

"For most 'small businesses', short-sighted owners only see giving pay raises as the owner taking a personal wage cut; in a very real sense, it's true. They've got to watch those pennies, even if it means losing dollars in the long-run, i.e. penny-wise, pound-foolish."

Sure Bubba, if you ever get the balls to start your own gig, you'll soon find out how it really works. In a typical small business Uncle Sam and the employees get paid first, and then if any money is left, the owner gets a check.

I know plenty of "pound foolish" owners who finally wised up and got rid of 2/3 of their employees. Less headaches, same amount of work gets done, and oh yeah, a nice fat paycheck every month for the guy who risked everything to make it happen.

Anonymous said...

(hint, i'm in my early thirties and barely making my age). Every time I ask for a raise, he's all, "we just don't have the money."

If you are in your 30s and make $30Ks, you're doing something wrong. In'N'Out pays $9.75/hr to start for crying out loud and you're making $30K working 50 hours a week...dude you need a serious life adjustment.

Anonymous said...

When the dollars collapses, we can pump our economy by revitalizing all our dormant manufacturering capacity.

BWA HA HA HA!!! Good one. It is dormant because paying $10 a day in India is more profitable than paying a drunk/high union thug $20 an hour in the US who goes on strike every 6 months. I hope it not only stays dormant but goes into a deep coma that destroys unions once and for all.

James Dean said...

Anonymous said...
BWA HA HA HA!!! Good one. It is dormant because paying $10 a day in India is more profitable than paying a drunk/high union thug $20 an hour in the US who goes on strike every 6 months. I hope it not only stays dormant but goes into a deep coma that destroys unions once and for all.


Folks, I refer you to the thread on immigration. Doesn't sound like this guys respects or cares about the American worker. Hmmm? Are you an American???

Anyhow, you overweight wages and underweight taxes, regulatory compliance costs, healthcare costs, pension costs, transportation costs (oil), exchange rate benefits, and security costs (terrorism), along with reduced replacement goods/quality benefits (which are hard to find anywhere these days).

It's not just the wages that drives work overseas.

David in JAX said...

Stuck in So Pa said...
That works fine until a new level of management takes over/moves up...


I agree completely. But, I'm talking about my company and what I do for my employees. The only way to go is to work for yourself. Then you can treat your employees (and thus yourself) how you want.

Sure Bubba, if you ever get the balls to start your own gig, you'll soon find out how it really works. In a typical small business Uncle Sam and the employees get paid first, and then if any money is left, the owner gets a check.

Agree

I know plenty of "pound foolish" owners who finally wised up and got rid of 2/3 of their employees. Less headaches, same amount of work gets done, and oh yeah, a nice fat paycheck every month for the guy who risked everything to make it happen.

Disagree. I've never heard of a small business owner who started their own company and allowed that many extra employees to be hired in the first place. You don't have to cut fat if you don't have any fat. Hire who you need and treat them well and your company will do well. Keep people in fear of their jobs and they won't perform for you.

Anonymous said...

"Folks, I refer you to the thread on immigration. Doesn't sound like this guys respects or cares about the American worker. Hmmm? Are you an American???"


How about getting your head out of your ass!

This is called REALITY.

How about asking our supposed representatives the SAME stupid question! Do you REALLY think the US politicans really gives a shit about the American worker?

If really think so, then the DUMBING DOWNof America has been a GREAT SUCCESS.... Geeshhhh

Anonymous said...

The stock market is the next scam that will crumble. It has and always will be for the mega wealthy to reap huge income from by doing no actual real work.

The idea of "anyone can do it" with an internet connection and an account at Ameritrade is a phoney one. The stocks are built on specualtion and people buying/selling to e/o in hopes of reapling a profit as property exchanges hands. Sound familiar HPers?

burn baby burn said...

It is like the that old Doors song "This is the this is the end my friend then end"

Anonymous said...

Bring back unions

James Dean said...

Anonymous said...
How about getting your head out of your ass! This is called REALITY.

...Do you REALLY think the US politicans really gives a shit about the American worker?


But according to you every American worker is a drunk/high union thug ... who goes on strike every 6 months

Then you wished they would all go the way of the dinosaur and disappear.

So, let's see... The elites that run the country have who brainwashed?!? The leaders will change when you quit buying their elitist BS.

its over kids said...

Keep the refi party going and extending more credit to deadbeats.

Keep rearranging the deckchairs on the Titanic until it goes under.


When the world is sick of buying our worthless dollars and debt, hit the reset button and start over ala Argentina and Brazil. The retired people who are counting on guvmint checks will be eating dogfood in less than 10 years.

Anonymous said...

GOLD AND SILVER

Anonymous said...

what will keep the consumer spending? wait, i hear helicopters...can you hear them coming? ;o)

Anonymous said...

Tickets to relocate to another country, the American dream of the immigrant in reverse mode: the American nightmare of poverty and debt pushing millions to seek refuge and a new life abroad to work and make money in another currency than dollars.

Anonymous said...

In case you haven't heard, the stocks in the S&P get 39% of their revenues OVERSEAS which is is growing way more rapidly than the US market and even more when tranlated into the falling dollar.

Stock market baby....its going up for awhile.

Anonymous said...

"If you are in your 30s and make $30Ks, you're doing something wrong. In'N'Out pays $9.75/hr to start for crying out loud and you're making $30K working 50 hours a week...dude you need a serious life adjustment. "

No, you need a reality check. Do a little research and find out what the typical educated American worker is making these days. Many professionals have been devestated by globalization.

Anonymous said...

The gummint is helping to keep the Dow inflated so that those who are facing declining "house wealth" will at least perceive they're doing well in their 401k's and IRA's. They figure this illusion of wealth may keep people spending for a while longer.

But the longer this house of cards is kept standing, the harder it's gonna fall. When it falls, take cover. You think being in cash is smart -- go for it. But you may want to use some of it to buy gold/silver/copper/petroleum/uranium/lead (take your pick) on the next pullbacks in those things. Start researching now how you can get into these commodities conveniently, and prudently, without using a lot of leverage.

[b]The calm before the storm was June, Sept, Oct last year, when gold dipped below $600/oz. Those of you who scoffed at loading up during those times have missed the boat. You might get lucky and have chances to load up under $650 in the near future, but then again, you might not.[/b]

The latest drops in the US dollar, the collapse of subprime and Alt-A lenders, the rise in the commodities, the soaring home foreclosures, represent the frightful lightening storm and black clouds on the horizon. It's moving this way fast. Good luck everyone. It's gonna be rough sailing.

Anonymous said...

Anonymous said...
"If you are in your 30s and make $30Ks, you're doing something wrong. In'N'Out pays $9.75/hr to start for crying out loud and you're making $30K working 50 hours a week...dude you need a serious life adjustment. "


No, you need a reality check. Do a little research and find out what the typical educated American worker is making these days. Many professionals have been devestated by globalization.

++++
That's victim thinking. Blaming your tiny income on globalization is pathetic. There are still plenty of high paying jobs, you just have to get off your a$$, make some sacrifices, get the school you need. Yeah, you might have to move into an 800-sq-ft apt with your wife and kids for a while. You might have to eat hot dogs, ramens, mac'n'cheese and drive a 1985 Plymouth. You won't have much social status for a while, but that's life.

Think. Act.

You can make it.

Why have so many Americans gone soft???

Anonymous said...

No, you need a reality check. Do a little research and find out what the typical educated American worker is making these days. Many professionals have been devestated by globalization.

Oh geez here we go again, if it's not those wacky illegals stealing your job it's one of dem dere Chinamen.

Always blame someone else. Bush. India. China. Mexico. Greenspan. Bernake. Walmart. Fox News. It's always someoone else's fault that you make shit money and can't afford a decent home to live in.

A lot easier than taking responsibility for your own life.

Anonymous said...

$9.75 an hour is $20K a year you moronic realtroll

Anonymous said...

20 thousand a year will get you a million dollar loan with no proof of income!