August 24, 2007

Dot-com to dot-condo - here come the massive layoffs

40,000 in the mortgage biz gone already - heck, 25,000 just last week. And 100,000 less realtors. And we're just getting started.

Millions will go unemployed during this bust - and not just REIC. Watch for the investment bankers, Home Depot salesmen, Pottery Barn employees, Lexus salesmen, dry cleaners, and pretty much every industry throughout the land.

Hope it was worth it Greenspan. Hope it was worth it Mozilo. Hope it was worth it Lereah.

Anyone doubting HP anymore? Chicken Littles right? Brown Shirts right? HousingPANIC is here folks. And it's gonna get ugly.

Mortgage industry job cuts surpass 40,000
Companies stop 'on a dime'; 25,000 positions eliminated so far this month

At the North Carolina offices of mortgage lender HomeBanc Corp., Archie Clark is the only employee left. But in a few days, he’ll be gone, too.
“It’s pretty much a ghost town over there,” Clark said. “Somebody went in and took the furniture from the lobby. I don’t know who did that. I put some of the other stuff in the back and locked it up.”

When Clark finishes helping movers from the company’s Atlanta headquarters collect computers and other property, he’ll join the more than 25,000 workers nationwide who have lost jobs in the financial services industry since the beginning of the month — with more than half coming since last Friday.

20 comments:

foreclosureboy said...

haha it used to be called getting canned 'dot com style' meaning no warning you 'neva saw it comin, man!'

If possible THIS IS WORSE half these guys are NOT getting thier last check or two!! The dot coms paid everybody out with severance! ahhhhh the good old days how we miss em in america....

Anonymous said...

Hate to burst the bubble KEEFER but 40,000 jobs is nothing, it's an accounting error. Anywhere between 100,000 and 300,000 NET new jobs are created every month.

Every week you predict massive drops in retail sales. And every week you are wrong. Retail in general is doing OK. Car sales are doing OK - excluding GM and Ford which should be taken out behind the shed and shot no matter the economy - tourism is doing great - try finding a flight last minute, it is impossible.

I was part of the tech meltdown in 2002 myself. I worked for a software vendor which shed about 70% of employees in 6 months. At the time I remember the same doom and gloom being predicted. Severe recession blah blah. It took me 3 months to get a new job and it was hard. I knocked on a lot of doors and sent out literally hundreds of resumes. But eventually I was working again.

Yeah I took a small pay cut but today make more than twice what I made the day I got canned and looking back on it being let go was a blessing in disguise.

So just chill everyone, the world is not ending.

Anonymous said...

From the head of NACA. Get used to hearing about this group folks.

" Borrowers are not asking for a handout, all they are asking for is to make their mortgages affordable."

HUH? So they can't afford their home. They want someone to wave a magic wand so they can afford the home. But they don't want a handout?

I'm tellin ya boyz, the bailout is getting closer and closer. Kiss your dream of 50% off goodbye.

D. said...

Hey Dopes. How about buying more of those luxury stocks? 25K more poeple with with lots of time on their hands to buy more stuff!

Anonymous said...

I gotta hand it to this blog.

Everything is going exactly the way it was foretold, except that it took a little longer to sink in, at least here in Massachusetts.

That delay is actually making it worse than even your humble narrator predicted.

No reason to believe this won't get considerably more ugly.

Which means it will be far worse here in Massachusetts/Cape Cod where some idiots still believe things "are different."

Oh, I can't wait to swoop down on this mess in a little while.

Go ahead Cape Codders, keep buying, and losing,them houses because of ridiculous prices.

panic hits the streets said...

True story: I was painting a showroom for a midwest building supplier yesterday when a customer came in and asked the sales person about purchasing a replacement latch for a special high-end window.

The sales person said that window manufacturer went out of business last week - with no warning to its distributers, and their phone number was shut-off.

Anonymous said...

As soon as Pottery Barn for Kids is closed forever, the USA will be one step closer to being the once great country that it was.

vegas crash watcher said...

The middle class loves their government, taxation and foreign wars, so I rejoice in their return to the peasantry. I hope they lose everything, starting with their houses and jobs.

Anonymous said...

I`m afraid that this is just the beginning, not just for the people connected directly to the housing market. Do you remember that old folk song of the 60`s titled "If I had a hammer" ; I`d hammer out danger, I`d hammer out a warning...

Anonymous said...

as a realtor in a RE/MAX office, I can tell you they are dropping like flys. My business has shifted from sales, to rentals and property management. I'm dealing with a lot of flippers who are caught with their pants down. I also have a ton of home inspectors,title agents, and contractors calling me looking for referals. If it wasn't for my rental properties, and used car lot I'd be starving too. It's going to get a hell of a lot worse before it gets better, but I can't wait to buy a bunch of firesale properties that might actually cash flow again.
Bottom Feeder in Philly

SeattleMoose said...

Interesting that at the start of every downturn you start hearing commercials for all the things you NEVER heard commercials for a year or more ago...and most of them are luxury/disposable income type establishments...whining for business.

1) Luxury cars
2) Vacation destinations
3) Jewelry stores
4) Casinos (but this could reverse itself if it REALLY gets bad)
5) Fancy restaurants

I have started hearing ads for all the above and a year ago....absolutely nothing.

It is a great time to be a renter!!!

This is unfolding much faster and uglier than even I could have imagined.

And BTW....anyone who doublts the existence of the PPT or that the stock market is rigged...just keep wearing your tinfoil hat and drinking the Kool Aid!!!

k.w. - southern ca. said...

Nice to hear another comment from one of the many level-headed bloggers here who can see how
this has a wide impact across the
country.

Anonymous said...
I`m afraid that this is just the beginning, not just for the people connected directly to the housing market. Do you remember that old folk song of the 60`s titled "If I had a hammer" ; I`d hammer out danger, I`d hammer out a warning...

Anonymous said...

i thought it was contained??

renting in phoenix said...

A friend of mine is renting a room from a realtor who owns and lives in a 3BR condo in Tempe. The guy sold 16 houses last year. This year... 3 so far. I'll be renewing my lease for another year, and letting my cashed out equity from the house I sold in Oregon ride.

Anonymous said...

As a Realtor it's my job to lie, but I don't have anyone to lie to anymore, where have the buyers gone?

RE Investor said...

"Every week you predict massive drops in retail sales. And every week you are wrong. Retail in general is doing OK. Car sales are doing OK - excluding GM and Ford which should be taken out behind the shed and shot no matter the economy - tourism is doing great - try finding a flight last minute, it is impossible."

Listen, I own property so I am not a big fan of this whole melt down. But. There is no way I can see the consumer not slowing down. they have watched as their 401K's have been lowered by 10% in the last month. They have watched as their neighbors are thorwing up signs and being foreclosed on. They have been told they can't refi because their home has lost $50K in value, and even if you are selling at a decent price, no one can buy because the lender pulled the financing or filed BK. This is the reverse of the "wealth affect" that has happened for a long time and allowed consumer spending to continue even though wages are stagnant.

"So just chill everyone, the world is not ending."

Agreed, but to say that main street will continue to spend like the numbers indicate is just being naive. The numbers that came out are lagging indicators. Remember the real bad news has only happened in the last 3 weeks, and will take a while to trickle down. People will think twice about buying that new car, or that new plasma etc. if they know that there may be tough times ahead.

I am neither chicken little nor a Realtwhore, but I think on this point I have to side with the HP'ers.

RE Investor said...

"" Borrowers are not asking for a handout, all they are asking for is to make their mortgages affordable."

HUH? So they can't afford their home. They want someone to wave a magic wand so they can afford the home. But they don't want a handout?"

I think that you are getting confused here. I think the point he was trying to make is that they are after loan modifications. If they are able to get that, I would prefer it. See, if the banks are forced to modify the loans, we don't have to bail them out. The banks / hedges etc. will have to hold the mortgages, and because they will not be able to book the invisible profits of a resetting mortgage at 13% and they will have to book it at an affordable 7% they will feel the pain of Mark to Market.

In this mess, the banks actually want a bailout, that is why they are against doing mods. See if the government swoops in and does a bail out, it will mean they take a big pool of tax payer money and refi these people in to a new loan. Read: Refinance bad loan by paying off old trash paper - investor in crap made whole plus interest, servicer collects all fees. Taxpayer assumes mortgage and associated risk. We then become the lender on the bad borrowers instead of the bank and servicer that did it in the first place. I for one would like this guy to succeed in his campaign because it would put the burden of marking to market squarely on the shoulders of the investors, servicers and CDO MBS brokers that created it. They will have to have these "affordable terms" modified mortgages on their balance sheet until some time in the future when they can unload them to someone else, which could be years.

The banks are refusing to do mods because they figure this has not reached critical mass yet, but in an election year, if you foreclose more and more people the pressure will be so great that the government will not be able to resist anymore. Either an interest rate cut will come, or the government will take over the risk. Either way the MBS investors and servicers will be made whole. If they are forced to mod, then the chicken comes home to roost for many years to come.

Anonymous said...

How could anyone NOT see this coming. I said back in 2003 these nuts bidding RE up are going to destroy the entire economy.

Anonymous said...

::'Which means it will be far worse here in Massachusetts/Cape Cod where some idiots still believe things "are different." '

Yep, those justification usually start with... "but MIT/Harvard grads will start companies and then one of those will be a new Digital Equip Corp and hire everyone who isn't already working at a hospital or Fidelity/State Street."

The difference this time is that those startups immediately get VC financing once they partner with an offshoring outfit, hence, no future DEC or Prime/Banyan, just tiny MIT boutique shops. Also, Fidelity's moving 2K jobs out of Mass in the next 4/5 years.

Anonymous said...

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It's a recession when your neighbor loses his job,

It's a depression when you lose yours!