Positive steps towards a good change in employment

The employment market is very difficult today. Making a smooth & successful transition to a better position is far from easy. What does a man need to do to maximize his chances of success? I've given that some serious thought, and I have developed the following list of items:

1. Polish up that resume. This is everybody's first step in getting that next job. I'm going to have to look at what is trendy right now in resume righting. Of course, a computer programmer's resume must be bloated with all of the latest buzz words.
2. Hold until late July. Make ready to get underway until then. Continue weight loss unabated. It will take some time to execute all the steps on this list. Give yourself a modicum of time to get it done.
3. Get a custom tailored business suit. The cloths make the man. In SoCal, it's all about style over substance. The moto is "You are your image; you must control your image or your image will control you." It is an odious and egregious fact, but in the glamour capital of the universe, personal appearance means more than any skill or merit.
4. Get a professional photographer to take executive portrait shots of you. In line with position #1, many employers want to look at you in the way casting directors do. Does this man look convincing in the role? If I take still shots of this guy, will he convince anyone he is the character we cast him as? I have been told that one way to land a big desk in a nice office is to have a Hollywood photographer do portraiture of you behind a big executive desk. First impressions are lasting impressions. If the first shot an employer sees of you is a man in custom tailored business suit behind an executive desk, odds are this will become the frieze chiseled in the mind's eye.
5. Be open to a move out of state for new and better employment.
6. Look in cities such as San Francisco, Miami, Dallas, Phoenix and Las Vegas.
7. Get Bump. Bump is a little phone app that allows you to exchange business cards with people you meet by simply bumping your smart phones together. It automatically adds these individuals to your database of contacts and keeps their business cards in an orderly fashion.
8. Get a FaceBook.com account. Folks, this tip comes straight from Monster.com. Why should they recommend another website other than their own? It is an odious and egregious fact that more and more employers are seeking information about their prospects from social media. If you don't have a FaceBook.com account, some treat this fact as a lack of ID and credentials. This is particularly true in the hipster-huckster bleeding-edge technology market. This is not entirely without merit. You can recognize a problem case based on certain key warning signs found in social media. Still, it is vastly more difficult to assign positive merit points based on what you see in social media. Regrettably, many employers do both today.
9. Get a Twitter account. Regrettably, many placement agencies are using Twitter these days. They use it for communication purposes. I don't particularly like this idea, but it you will either play or pay for it.
10. List yourself on Dice.com. Dice remains a leader in placing technology professionals. I am going to have to see there is something better these days.
11. List yourself on Ladders.com. Most of us have seen the commercials for Ladders.com. Should we believe the hype? I don't know, but I think it is worth having a look at this site.
12. Consider joining the Masonic Lodge. I know this going to sound wacky to some people. When all is said and done, the Masonic Lodge is just an old-boys network. This is a back-slapping club in which the men pledge to help each other in their careers. I have two uncles who made it to the 33rd degree in Scottish Rite. There is some power in this outfit. It is not what it used to be, but there remains something to be said for it.

Time to say goodbye?

Intro

It all began at a Hollywood website I joined in the wee hours of the 2007 new year. I was hired on by a full-Ph.D. computer scientist named Jamal. We’re not talking about an honorary or mail-order Ph.D. either. We’re talking about the real thing from UCSD. Jamal was of Syrian extraction, and he was good. This guy was not an ivory tower scientist. He really knew something about computer science and software engineering.

Jamal had been hired by the owner of this website to be the company CIO. All future development of the website was to be directed by Jamal. The owner wanted to focus on strategic partnerships with studios and production companies. He did not want to deal with the grind of software development anymore.

A funny thing happened on the way to that division of labor. It turned out that the owner could not stand being out of the website development business. It turned out that he could not accept the true meaning of delegation of authority. He just couldn’t allow anyone else full creative control over his website. It turns out that he had to have his hands on the baby.

A power struggle ensued between Jamal and the owner. Step 1 in winning the battle was to fire the three developers Jamal had hired. You take away his chess pieces first, then you go in for the kill. Unexpectedly, I found myself on the street looking for a new job in Mid-June of 2007 after just about 5 months of employment. I had been fired.

Looking for a new home

No one expects a job to end in 5 months. You really don’t expect that in a situation when you know you are good. I hadn’t planned financially for this problem. Further, my brother and I were splitting rent in a relatively expensive house in Van Nuys California, and he was planning to move out. I was unemployed, and my rent was about to increase.

In this sort of financial jam, you don’t have a lot of time to select the perfect job at the perfect company. You cannot afford to be selective. You need to accept the first decent offer you are given. This is one of those moments when a perfectionist needs to make concessions to real-world expediency. So it was with me. This is how I landed in my current job.

The interview process was simple. I made two visits. I had several conversation with a pair of developers I will call T and R. T & R had been in the organization for years before I ever showed up. I asked them a short list of questions about the company to help size up what brand of outfit this was. The both answered the question in essentially the same way. Based on their answers, I reached the following conclusions about my current company:

1. This was a very family oriented company. Execs were more concerned about taking their kids to baseball games than growing a trillion dollar organization.
2. This was a mellow, low-pressure company, where quality of life was basically paramount.
3. This was a low-pay company. Most of the people working here had been hired straight out of college or from low-end jobs at very low prices. There were theoretical bonuses and raises. Most people didn’t get any such thing.
4. This was a low-tech company. Elementary CRUD applications and websites were the warp and woof of daily life. VB.NET and FoxPro were the two dominant paradigms. There would be no real technological challenges or adventures in this business.
5. In terms of software development, execs were more concerned with cosmetic appearance of things than actual logic or data integrity.
6. Programmers were not managers, and managers would never come from programmer stock. If you wanted to be a manger in this organization, it would be best if you held an MBA from USC or Pepperdine. Otherwise, it was good to be a pretty girl.
7. They didn’t like change in the roster and they didn’t like firing people. If you joined the firm, you had job security.

Based on these seven smaller conclusions, it was possible to derive a much larger conclusion. That conclusion was as follows: If I accepted this offer, I will be entering a dead-end job. It would be a very nice and comfortable dead-end job, but it would turn out to be a dead-end job. There would be no opportunities for technical progress, growth in wages, responsibility or advancement in rank. There would also be no significant bonus for massive effort.

How do you play this one?

So the chess master has a problem before him. How do you play this arrangement of pieces on the chess board?

• You are out of work suddenly.
• You are in a financial jam
• You have an offer on the table for a comfortable dead-end job

What do you do? I will give you my solution:

• Turn down the offer of permanent employment
• Tell them that you are really looking for an hourly consulting position. Tell them that you would accept an consulting gig, but not permanent placement
• Go short with this one. Stay in the gig for 6 months to 1 year, deliver as much value as possible, then sell-short and move on.

This was my plan, and I followed it… at first. I declined the hiring offer. I tendered a counter offer for a consulting position. They refused the consulting gig, and offered the perm job again. I declined, and said I would continue looking for a position. They folded. I won. I was brought on for a 150 day contract.

The figure of 150 days was extremely weird. I had never had a 150 day contract in my life, and I had had 16 professional contracts before that moment in time. If I had been as calendar savvy as I am now, I would have understood that this was a setup. I was scheduled to come onboard during the first week of July. 150 days puts you schmack in the Holiday season. Nobody hires new consultants during the Holidays. They knew they could trap me with a perm-offer in late-November or early-December.

This was their plan, and they executed it by the numbers. Come December, I was trapped. I could be unemployed for the Holidays, which would create a true financial jam, or I could accept the perm offer.

At first I was of a strong mind to decline the perm offer and take my chances. No dice. As hard as I looked, I could find no suitable consulting or perm positions open at that time. I really looked hard too. There was truly nothing. I didn’t know it at the time, but this was the first early warnings of the financial crisis on the horizon.

With no other options available I took the only option available. I took the perm job.

The financial crisis

Once 2008 began in Ernst, I resumed looking for other employment. I never felt comfortable in this job. I always believed I was a programmatic and organizational non-fit for this company. I always expected it to end, and end soon. I never, ever expected this job to run four years. I never thought for one second I had a foot-hold in this company. In brutal honesty, I never really wanted a foot-hold. This was not my cup of tea. This was not in my agenda.

The problem with looking for employment in 2008 was pretty simple: We were on the verge of the worst banking collapse in the history of the world. It could have easily been the worst depression every. It may yet turn into the worst depression ever.

2008 was a rotten financial year, and it was rotten all year long. Some fools believe it only turned rotten in September of 2008. Not so. The financial news was terrible all year long. We were just in psychological denial about everything until Lehman brothers dropped dead, and the system executed the domino theory of collapse.

In this macroeconomic environment, it is difficult for anyone to find a job. It is more difficult if you are a computer programmer in the financial industry who is looking for that perfect job. Believe me, you won’t find it. I sure didn’t.

Once the crisis hit on Sept 15, 2008, I was expecting a pink-slip. I thought it would come any day. I was not expecting them to keep me, and I was expecting to be the second or third man in MIS/IT to be let go. Who was #1, and #2? I thought this was an arbitrary question, as I was expected the first three guys to go in a cluster. All three would be flushed at once, or so I thought.

A strange thing happened on the way to the flush. The high command decided to keep all of us in the programming section. The roster was cut to a very small extent; however, the cuts were mostly problem people who were on the disciplinary chopping block anyhow. I found this move baffling. It was very nice, but it was baffling. I still have a hard time believing they carried all of us programmers through this recession when there was no work to do. We sat around twiddling our thumbs doing nothing… and getting paid for it.

I guess we had good karma. I guess the bosses wanted good karma.

Where we are today

Three surgeries and a little economic non-recovery later, Dave is seriously thinking about moving on. I remain a programmatic and organizational non-fit for this company. If I am going to move, it better be soon. It better happen while I am in the full-bloom of rosy health, and it better happen before September strikes. This September could be a very bad financial month indeed. It might be the worst since 2008.

Bill Gates looses $18 billion dollars and becomes the richest man in the world again

Yep, that's right, Bill lost $18 billion and yet he has become the richest man in the world again. So how did that happen? Simple, his top two competitors for the title--Warren Buffett and Carlos Slim--each lost $25 billion apiece. Warren had 62, now he is at 37. I guess that is why he said the economy fell off a cliff. Bill had 58 and he now rests at 40. Carlos lost $25 billion. We don't know how much he's got left. These top three men lost at least $68 billion last year.

This story highlights the grand picture of wealth destruction that has just taken place over the past 6 or so months. It is as if a wild fire swept through a National Park destroying all the trees. Just yesterday, Reuters reported that 40-45% of the world's wealth has been destroyed in this great calamity. You can read it here. Says who? Says Stephen Schwarzman, the CEO of the Blackstone Group LP, a private equity firm with a pretty good rep. Some bloggers dispute this figure, claiming it is exaggerated for effect. They believe Schwarzman wants to short the market and is spreading false reports to promote FUD. FUD is a shorters best friend.

I take issue with these bloggers. The story of the billionaires is just one piece of overwhelming evidence that these claims of wealth destruction are on-track. According to Forbes, the top 50 richest people in the year held $4.5 trillion dollars before this crisis struck. Now they hold $2.4 trillion. That indicates a 47% destruction of wealth.

There were 1,125 billionaires in the world before this crisis. 373 fell off the list. Now there are just 755. 18 of them died. 355 lost tons of money. Just 3 new comers joined the list for the first time during this crisis. The biggest looser in the world is Anil Ambani of India. He lost $32 billion = 76% of his total fortune. The stories go on and on. Jerry Yang, the founder of Yahoo! lost half of his total wealth and is no longer one of the world's billionaires. I doubt he will rejoin the list.

Let's think about how much money has been lost by average guys for just one second. Think about my buddy Jerry who had $80k in Wamu. He lost it all. Wealth destruction. He's just a computer programmer like me. Think about guys who bought Citibank or Wachovia, thinking it was a safe investment. Just think about the ordinary folks who bought into Bernard Madoff's Ponzi scheme.

Just how bad is this overall? According to MarketWatch.com, America's Household net worth plunged 18% during the 2008 fiscal year. U.S. Household net worth stood at 62.7 trillion prior to this crisis. It fell to $51.5 trillion. That is another $11.2 trillion of wealth vaporized and destroyed. You can read the report here.

Speaking of Madoff, that little fucker just pleaded guilty today and was ordered to jail. As part of his guilt plea, he opened his books to the authorities. It turns out he accepted a total of $65 billion in investment funds. POOF! Destroyed completely. That is another $65 billion right out the window, into the furnace. This is a picture of wealth destruction.

I used to work for an automotive chemical manufacturing firm named MOC Products of Pacoima. Rumor has it that they are in serious trouble right now. Sales revenues have fallen 30%. They have laid off many workers. They suspended contributions to 401K accounts. Now they are going to shutdown completely 2 Fridays per month. All employees will be furloughed without pay on these days. The only other alternative was more layoffs.

Why is all this happening at MOC? That's a very interesting story. MOC's biggest customers are car dealerships with big automotive repair bays. These guys consume the overwhelming majority of MOC's gross output. Nobody, but nobody is in more trouble than the automotive dealerships in this country. The credit crisis combined with GM & Chrysler's decent into bankruptcy has left these dealerships twisting in the wind. Even the repair bays are suffering as people defer maintenance of their vehicles.

You can call Schwarzman a shorter with an agenda, but I think that's bullshit. I find his figure entirely believable. There is a lot of evidence to back him up.

Forbes World's Richest People

45% of the world's wealth destroyed

Schwarzman Exaggerates

America's household wealth falls off the table

Is the recovery on?

Well, last night there was a great debate on most of the financial news networks about whether yesterday's lovely stock market gains constitute the start of the recovery. Some said yes. Some said no.

So is the recession over, and is the recovery on-going? I'll give you a short answer and a long answer. The short answer is: No, fuck no. The long answer? Let me tell you about it.

There are two fundamental forces driving this recession.
1. Housing prices
2. De-leveraging

First we have the structural economic problem that the housing in America is vastly overpriced and unaffordable. Go do a housing survey in any region. Go do an income survey in that same region. Just about everywhere in the country, you will find the same relationship. Housing is more than 4 times the total annual income level of the typical family or buyer. In afflicted regions such as Los Angeles, San Diego and San Francisco, it is much worse. A typical family home can be 6 or 7 times the annual income of the typical family.

So what? Old bankers will tell you that (historically) the safe formula for mortgages says write a mortgage for no more than 2.5x the house hold income and ensure that the total cost of housing does not exceed 28% of total income. Insurance, HOA, and Mortgage payment must be less than 28% of household income. We are vastly beyond this safety limit right now, and this is the absolute fundamental reason for this horrible banking calamity we are experiencing. People are defaulting on mortgages because they cannot afford them.

Certain politicians and real estate brokers are attempting to re-cast reality to say that this calamity was brought to us by a bunch of unethical loan sharks who wrote nasty loans. The implication is that housing prices don't need to go down, loan terms just need to be adjusted. What...? As if they could have written a good mortgage for these outrageous amounts? No way. Every mortgage looks predatory if you write it for a party that cannot afford the basic price of sale. The absolute problem is an over-bought, over-speculated, inflated housing market that is fundamentally unaffordable for the people. The variable that must be adjusted is base-price of sale. That figure needs to go way down. All the way down to 2.5x average household income.

This can be accomplished in two ways:
1. You can raise average household income, which is bloody unlikely
2. You can lower the base price of sale through a process of default, foreclosure, auction, and short sale. This process is absolutely in progress right now.

That process of price tatonement must run to completion before the recovery will begin. We are not near the equilibrium point just yet, so forget about recovery. I predict that the equilibrium point will occur when average housing prices = 2.5x average income by region. Once we hit that, recovery will be possible.

The second problem driving this recession is de-leveraging.

When the economy had it's stroke and heart attack on September 15th 2008, the wave of panic that shot through the media was totally unprecedented in my lifetime. The U.S. Presidential election cycle stopped cold for several days and was thrown on the back-burner by the news agencies. Barrak Obama and John McCane suspended their campaigns.

This scared the unholy shit out of the people. At our Thanksgiving Day table, we had not a single conversation about anything other than the economy, job loss, the Great Depression, banking collapse, retirement funds, being under-water, etc. We did not discuse McCane or Obama. Our family was pretty dang terrified. I bet you were too.

The natural response to this new threat was to pay off all debt, store up some savings, and prepare for unemployment, should it strike. Just about all businesses and individuals began throwing all new earnings at debt. Consumption fell off a cliff. Businesses starved for customers and demand. This is about as pro-cyclical a move as the American consumer could have possibly made, but we all made that move together. We did it individually and collectively. The result is a deep, agonizing, downward spiraling recession.

So now we have a problem to solve: When does de-leveraging stop? There are two possible answers:
1. De-leveraging stops when everybody is completely out of debt
2. De-leveraging stops when the American consumer gets tired of austerity and breaks out the credit cards again.

Here, I can sound a bit more optimistic. I have little faith in the fiscal discipline of my people. We Americans like to spend and consume. We don't like zero debt for this reason. I expect our good people to half-step here. They will move their debt loads down considerably, perhaps even to safe levels, and then they will begin consuming again.

But then on the other hand... We should also remember that America's favorite shopping tool is the credit card. Certain credit card firms, most importantly Amex and Chase, are in a lot of trouble with consumer credit. They are playing shutdown defense right now. There are more and more reports of Chase and Amex closing accounts, reducing credit limits, hammering long term customers with massive interest increases.

There are some reports of Citibank doing the same thing. I personally have two Citibank MasterCards and they have done no such thing to me... yet. Let's hope they don't. I like my gasoline cards.

Anyway, presuming that consumer credit largely stays intact. Americans might start spending again by Christmas of 2009.

So you would really like to understand just what the hell happened to the global economy?

Just thought I would take a moment to line up the two most helpful resources I have found on the topic of the Great Depression II.

The first is an award winning radio documentary by PRI {Public Radio International} called "Giant Pools of Money". You can download the MP3 file or you can listen to it on the web here. This one is just tremendous. I hardly have a critical word to say about it. This is the critical foundation of your understanding of the financial market that was prior to the collapse, and how it came to be.

To understand how the house of cards collapse, you need to have a look at a video documentary by PBS Frontline called Inside the Meltdown. You can view the entire documentary here. The quality of the video stream is very good. This one is very dramatic and powerful, but not as expository and educational as the first. The great difficulty is the bias of the authors. They scarcely deal with the nationalization of Fannie and Freddy. Why? A sharp focus on quasi-public agencies established by a famed Democrat for progressive purposes might be damaging to the authors interests. The focus is sharply on Bear Sterns and Lehman Brothers. This is generally good. These two malefactors are close to the core of the meltdown. In truth, this documentary should have been 3 or 4 hours long. They just didn't have enough time to document this incredible sequence of events that comprised the Meltdown.

Nevertheless, Inside the Meltdown is a powerful history of just what happened in 2008. I strongly recommend it.

This just in: Warren Buffett discovers that the economy fell off a cliff

Evidently, Warren Buffett just went public with his discovery that the economy fell off a cliff recently. NO SHIT!?!?! You don't say? Is this just your finding, Warren, or will anyone step up to corroborate this conclusion?

I am a big fan of the Fast Money show on CNBC. Those guys have only two ironclad rules:

1. Have a serious take on the market
2. Don't state the obvious

These guys really hate it when you state the obvious. Why? Because you are being uncooperative and wasting everybody's time. We want to hear something we don't know. We want real material insights. We don't want to endlessly rehash meaningless talking points as worthless politicians do. If you make the mistake of stating the obvious on Fast Money, everybody will scream like hell at you.

When I read that headline grabbing statement by Warren Buffett I had just four thoughts:

1. I wish you had said that on Fast Money. They would have beaten the hell out of you for stating the obvious.
2. Buffett must be trying to push the market to the bottom so he can go bottom fishing. Everybody wants to catch the bottom of this market.
3. If Joe Schmoe says the economy fell of a cliff, nobody will report a thing, and they will yell at him for stating the obvious. Only the world's richest man can get away with this and make it headline grabbing news.
4. Why don't you tell us what you plan to do at the bottom--in explicit detail--Warren?
   

The source of all this economic chaos

After carefully considering most of the key elements of the present economic crisis, I think the origins of the problem are incredibly clear; so clear that several things must be said.

• The formerly fabulous ersatz New York investment banks are at the very heart of this crisis
• The iBanks were up to no good
• The Subprime mortgage movement can be interpreted as an attempt to bring back the days of feudal debt peonage, where serfs are vassals of their patrons for life.
• Selling subprime mortgage backed securities can only be understood as an investor rip-off scheme.

In this piece I am going to state my mind as clearly as I possibly can, so that what I am saying cannot be be mis-interpreted in anyway. I will not soft-pedal.

Richard S. Fuld Jr and his boys at Lehman Brothers were running a confidence game that dwarfs the Enron case in magnitude. It is clear that the damages stemming from the collapse of Lehman Brothers far and away outstrip the damages of the Enron scandal/collapse/bankruptcy. I expect several key players from Lehman to be up on securities fraud charges soon, just as surely as Ken Lay, Jeff Skilling and Andy Fastow were. Just you wait for the FBI to conclude its investigations.

Those are some mighty tall words there, Dave! You got anything to back that up? How else am I supposed to interpret that data? What other conclusion can you draw on careful consideration?

It is already well understood that the subprime market was full of shenanigans. 3rd party mortgage vendors lied about borrower income and forged income documentation. Loan officers with the power to say yes or no performed no due diligence to confirm employment, income levels, residential status or citizenship. Gross sums, totally unaffordable to borrowers, were loaned out on the assumption that the value of the house would increase; a fact which has nothing to do with whether a customer can pay off the loan month to month. Explosive ARM loans were issued with teaser interest rates, sold at high closing costs, and then massive increases in interest were encounters 90, 180 or 360 days later. These interest rate adjustments often turned onerous loan payments into completely unpayable payments. Then you find the "interest only ARM", a super-toxic loan for speculators in which you never pay the principle, only an adjustable rate of interest on the debt. By very nature of the legal structure of the deal, the loan can never be paid off over time. Only a lump sum or bankruptcy ends the loan; all or nothing. Then you have 40 and even 50 year terms for fixed-rate loans. The quantity of interest you would pay on such a long loan is truly astronomical, often making the final cost of the house 3 times the base sales price.

It is clear that groups like Lehman brothers and Bear Sterns kept pushing the envelope regarding just what constituted acceptible loan terms. The terms for the buyers kept getting worse and worse. What can you say about a loan structured in such a way that it cannot be paid off? What can you say about a loan that would make a plumber pay $1.5 million over the course of a 50 year loan on a small rat-infested townhouse in Queens? What do you say about a HELOC? A Home Equity Line of Credit essentially issues a borrower a credit card equal to the perceived amount of potential equity in the house, and then encourages them to go buy groceries, gas and HDTVs, all of which jack up the mortgage balance. This is nothing more than an attempt to re-institute the system of debt-peonage and feudal serfdom; a situation where their homes and land are perpetually owned by the feudal lord. This is an attempt to make every man a financial slave.

The only problem is that the U.S. Federal government has limits regarding how far you can pursue a guy in bankruptcy. I should mention in passing that the financial industry tried to modify our Bankruptcy law many times in the run up to the crisis. They had some ugly successes. Ultimately, they weren't able to clamp people in irons, inside debtor's prisons, in an attempt to force repayment. Thank God for that much.

Worse, groups like Lehman Brothers and Bear Stearns clearly understood that these loans were hot potatoes. The second act of their business was to chop up these mortgages into little 'security instruments' or bonds, and sell this right to be repaid to ordinary rank-in-file investors (including guys like you and me). These were high risk instruments, designed to off-load the risk from Investment Bankers to others. Open up these bonds and you would find a motley collection of bad subprime loans. Good security for the bad bankers. Bad security for the gulible investors. Bake a hot potato in the Microwave and then toss it to an unwary investor. You charge him for the hot potato and you burn his hands also.

I still have no idea why Standard & Poors would give these shit-bonds Tipple-A ratings. Perhaps it had something to do with the Mortgage Default swaps issued by Bear Stearns and AIG... But this is a story for another day.

What should I conclude when I see an organization like Lehman Brothers borrows billions from Citigroup et al to issue subprime loans, only to turn around and sell these rubbish loans as shit-bonds to benighted investors? The scheme is clear:

1. Don't risk any of your own money
2. Borrow from groups like Citigroup
3. Pocket large fees from originating mortgages to people who can't get them any other way.
4. Give those subprime borrowers money from institutions like Citigroup
5. Don't hold the hot-potato. Chop it up with other hot-potatoes and sell it as a security to benigted investors.
6. Get Standard & Poors to rate your bonds as Tripple-A when they are not.
7. Get AIG to ensure the bonds.

What I see is a group of bandits inside Lehman Brothers and Bear Stearns orchestrating a disaster, and largely taking personal fortunes away from the deal. Richard S. Fuld Jr is not a poor man today, despite the fact that Lehman is bankrupt, and the world burns.

So have you heard the economic news of the day?

The news just doesn't get any better. It keeps getting worse. The markets are crashing again.

1. The European Markets lost 3% over night.
2. The IRS & Treasury revised their GDP figures this weekend. The U.S. economy shrank 6.2% in the 4th quarter of last year and is expected to shrink another 6% this first quarter of 2009.
3. The Dow, Nasdaq and S&P 500 fell through the frickin' floor quickly this morning. The Dow, in particular, is now trading below 7000 which is going to set off a wave of panic.
4. Nourial Rabini, the only economist to correctly call this recession, said we would finish 2009 at DJIA=6400. Rabini clearly declares that this will be an adverse market reaction to the Government taking control of the banking system, and forcing them to eat all their losses. This could produce 3 years of zero dividends and famine.
5. As I write this we are approximately 14 minutes shy of the close on 3/2/2009. The Dow currently sits at 6,763.29. That is down 299.64 points or 4.24%. The Euros lost 3% last night. We beat that by one and a quarter. We are now at a low we haven't seen in 12 years, since April of 1997.
6. This sudden plunge is largely a consequence of AIG's latest loss figures: 61.7 Billion USD in the 4th Quarter of 2008. This is the largest corporate quarterly loss in history.
   
7. GM, AIG, and Citibank seem to be in a perpetual vegetative state.
8. The U.S Government is the defacto owner of Citigroup right now, and won't admit it. Also the Government is refusing to assume control of it's new holding and reorganize the house.
   
9. I heard former labor secretary Robert Riche on the Radio yesterday, retracting his condemnations of the D word. That is, Depression. He formerly said that no economist should use the D word related to this present recession, as there was no chance of us hitting 25% unemployment. He is now saying that those were hasty words, and he may have to eat crow for saying that. He still says that we are at only 8.9% unemployment vis-a-vis 25%. Unfortunately, the technical charts are forecasting 15% unemployment soon. That is downright nasty.

The latest most interesting analysis says the following: Every recession since the Depression has been caused by the Fed jacking up interest rates in an attempt to cut off inflation. This is the first time since the Great Depression that a major down turn has been caused by out-and-out banking collapse. Of course, the banking collapse was triggered by the explosion of a massive speculative bubble in Real Estate.

I thank God I never bought a house during that time, and that I just had my employee review meeting, and I scored all 90s and 80s, and they are going to give me a 3% cost of living increase in pay. I'm a damn lucky guy.