Tuesday, October 21, 2008
The Best-Laid Plans...
In "To a Mouse" Robert Burns pointed out the fact that man continually interferes with the dominion of nature. We create a world and modify the natural flow of events to fit our vain purpose. Yet Burns points out that even "The best-laid plans of mice and men often go awry." -Robert Burns 1785
National City Bank has made their own plans. Today, CEO Peter Raskin informed rank and file that the company would be laying off 14% of its work force over the next three years. For NCC that is approximately 4,000 employees. (1) But the street likes this news taking giving the company a 3% bump to just over $3.00 per share. Chrysler too has put unions on notice throughout the world. For instance, the plant in Twinsburg, OH which has seen its workforce dwindle from 6,000 to approximately 1,200 now expects another pairing to take place... a pairing that will start soon... and many of these workers will not be back on the line until after Christmas. And so it goes with local steel manufacturers. For instance, 1,800 steel workers were laid off in Pennsylvania due to a softening demand for product.
At one time, people who were employed by the state or local municipalities were thought to have had "safe jobs." However, the State of Virginia announced that it is laying off 570 employees. This will add to the ranks of the already 800 state jobs that are already unfilled. As of now, the governor sees a $970 million short-fall this year. Unfortunately, estimates suggest the budget will be short $1.4 billion by next summer. (2) Camden City Council is going through exhaustive measures to save 60 public employee positions that are on the chopping block.
With the onslaught of job loss figures, there is considerable speculation that the Bush Administration might verbally acknowledge that we are in a recession. After all, people are much happier when they are told the truth as opposed to political rhetoric. But talk had been cheap for a while now. On a consistent basis, market-makers on TV are calling a bottom to this market daily... and with little to no evidence to support their case expect for "classic levels" or "technical indicators." Today, Henry Paulson was asked when he planned on attacking the "heart of the matter" by addressing the foreclosure crisis in America. He gave an answer, yet I am still at a loss to explain what the plan is... One thing is for certain, he is focused on the credit markets.. everything else is secondary. But as Robert Burn once wrote "The best-laid plans of mice and men often go awry."
(And a whole heck of a lot of low-ball bids on other companies like CMG, DDI, DRE, DDE, etc.)
Posted by at 7:13 PM