Economic Roundup

[El Presidente]

FOOH members come from all over the world and being an old banker I would love to know how you are seeing things in your hometown in terms of the local economy. Is it good, bad, much the same, improving? We all read much in the news on forcasts, trends etc...but as a man / woman on the street...what is your opinion based on your day to day local observations?

Without Political comment please give us a glimpse. Mention where you are from by all means.

[Tampa1257]

Current unemployment is 10.8%

Within the last month, DELL is closing a plant here that over 900 are losing their jobs.

Yesterday, HanesBrands announced they are closing their last plant here where another 780 people are now losing their jobs. I guess that women are not wearing pantyhose much any more.

I have been to every Job Fair around the area for the past 10 months and I am either "Over Qualified" or just not what they are looking for.

The people that do have jobs are greatly concerned about keeping their job, spending is minimal. Only necessary items at this time.

No meaningful employment is to be found, only fast food at $7.25 an hour, but only part time.

Are things getting better?

NO

[reigndrop]

NYC seems to be doing fine. Wall Streeters are Wall Streeters. Everybody's pay is basically unchanged, and bonuses are still pretty good. Some jobs were lossed in the industry, but that's about it. I think NYC has been one of the more resilient cities. Maybe I'm not seeing the whole picture, though.

[brutusthebuckeye]

Here in N.E Ohio(the rust belt) things suck........Construction/blue collar area.....not much of anything being built,people are scared to spend money....the housing market is terriable IF your selling.....very,very,very depressing time......unemployment 10-11%....

[zuma]

My perception is that we have fared relatively well in the Western Australian wastelands... and are now on the upside. Long term projects on the up means that there are people with relatively secure jobs for the next five years. The housing market is gathering steam again, people are shopping, having their teeth whitened... building is gathering momentum. That is my perception, but then I may be in the cushy end of town not able to see the devastation... I would be interested to hear the opinion of other sandgropper fellas.

[archosaur]

Southern California is very bleak right now. In my industry, Architecture/Design, I've heard estimates of anywhere from 50-75% unemployed, though keep in mind that this is a relatively small employee pool so it doesn't add up to huge numbers of people. I have been jobless for 9 months now. Those that do have jobs have reduced pay/hours amounting to a decrease in compensation of anywhere from 15-50% or more.

It's ugly. In the interim I've started my own business, but the credit situation and massive commercial vacancies that exist do not suggest a significant improvement in the near future.

[Kangaroo495]

It's never easy getting official statistics on the Russian economy. Not only do they doctor the stats, but tracing people is also notoriously difficult, as most of the economy is still "grey" (i.e. employees paid in cash, no official contract etc.). News reports can also be terribly biased in favour of the government.

However, I can say that Russia was probably the worst hit country in the world. I'm a commercial real estate man, and I can say that Moscow before the crisis, was the most expensive city in the world to rent an office (around $2000/sq. m/year). Now that the economy has crashed, prices are down to about $500. That's a diagnosis!

The Russian economy is traditionally a natural resources economy - heavily reliant especially on oil. When oil was around $120 a barrel, Russia managed to accumulate the world's third largest currency reserve. Now they're spending all that money on supporting the banks and buying out large enterprises. In essence - they're nationalizing the economy (as opposed to privatizing) which is looking eerily Soviet-style. But for a country whose fate hangs on the price of oil, you can imagine what happened here, when oil went from $120 to $30 virtually overnight... Though as oil recovers, so will the Russian economy.

In general though, the outlook is optimistic. When Russia goes up - it rises higher than everyone else. Just last year, there were more billionaires in Moscow than in any other city on earth.

But when Russia falls, it really goes to hell. It's a bit of a rolloercoaster ride. But I'm glad to be here, as I will have excellent opportunities to make money during the post-crisis recovery period! There's so much here that hasn't been done yet, so many opportunities. It's an exciting place to be in any case.

[bunburyist]

Here in Hong Kong:

There has been a slight drop off in the number of expats here, much of which was centred around the collapse of Lehman and a few others, couple with a few less tourists means things have got a bit quieter. There have been quite a few demonstrations against Citibank and some of the HK based banks - mostly be people (lots of retired) who lost their savings.

The Chinese are very financially astute in that they tend to save lots, but they're also very active in playing the markets. So a lot of them lost $ when the Hang Seng index took a beating. Overall though, not so bad. My business has faired worse and I've had to make a couple of layoffs, but we're still in decent enough shape. Property prices here are volatile at the best of times, and a recent upsurge in prices makes it difficult to call what state that market is in.

Back home in London:

Things are quite a bit worse - but it's still not clear. 4 of my friends (working in property and finance) lost their jobs....but they all managed to find work again very quickly, which was surprising. Oddly, the story appears to be that if you've managed to keep your job, it's as if nothing has changed. It's only the unlucky few who lose work that are really suffering. Plus new graduates - we've had a crazy policy in the UK the last 15 yrs whereby everyone has been encouraged to go to university. Problem is, too many chiefs and all that. So there's a big glut of graduates with big debts and no jobs to go to.

Still, for most if you weren't silly with credit cards, car loans and insane mortgages people are doing ok. The property market is in a state of denial, whereby most would be sellers are holding tight, refusing to accept that the house they paid £600,000 for is now worth £450,000. Low interest rates are keeping many home owners afloat. Negative equity will likely affect many. The UK will recover, but we'll have to take a long hard look at how we structure our economy and industry in the future. For all western nations, outsourcing poverty (which is effectively what've we've done over the last 30yrs) to other countries is a short-medium view imo - it'll come round to bite us in the arse sure enough. Not advocating isolationism and tariffs etc, but a better balance needs to be found.

Ahh, hindsight eh. If only our politicians had a bit more foresight to begin with though. Good luck to everyone out there looking for work.

[Ryan]

Good thread, interesting stuff.

Bleak here. Unemployment up to 12% from 4% 18 months ago.

The government is borrowing €400m/week to stay afloat. If we don't sort that out, it's very possible the IMF will come in.

Officially, property prices have fallen 25-30% in the last two years, realistically it's about 50% with more to go. Thousands of home-owners are going into negative equity every week.

The next budget will see slashes in government spending on infrastructure, health and education. The unions will bring the country to a standstill.

In the last budget the government raised the VAT rate, the UK lowered theirs. Now thousands of people every day drive across the border to Northern Ireland to do their shopping, costing this country an estimated 200m in revenue and and estimated 10,000 jobs this year.

There have been a few small signs of a turnaround in the last couple of months but every small business owner I've spoken to has had the same problem, they can't borrow capital from the banks.

The government has a plan (called NAMA, if anyone's interested) to take over bad debt from the banks. Until that's sorted out, the banks aren't lending.

On the upside, grocery prices are down, supermarkets had been gouging us here for years. There are more deals to be had, shops, restaurants, pubs have to work harder for custom after rolling in fat for years. It's good to see a bit of competition.

That, and of course we still have the good weather..

[El Presidente]

That, and of course we still have the good weather..

Don't forget the warm beer

[Ryan]

Don't forget the warm beer

Well there is "Guinness Extra Cold", they get that all the way down to about 18C.

At least it tastes of something..

[habanohal]

it says unemployment is at about %11 but that doesnt cover any of the sel employed, like myself that havent worked in months. Mostly a few foreclosures down every street, with new ones forecloseing along with them. No money is being spent on anything, and most are not even going out too dinner for they fear that their jobs will be cut at anytime.

Unemployment if you can get , is only $340 a week max and with the riseing property taxes,and boulshit fees and taxes, it is not nearly enough.

Around Chicago, most households consist of the husband who is most likely in a construction field which is non existant. Every time you turn around, their is another buisness going under, for no revanue.

As you can seee, I must be an optimist LOL

[Kangaroo495]

So with the liquidity crisis in Ireland, what happens these days if you find the end of the rainbow? Leprechaun tells you to f*ck off?

[Cohiba007]

Florida unemployment over 10%. Property values in the toilet. Retail accross the board is suffering due to housing market crash. Orlando tourism way off. Major theme parks like Universal in the news daily speaking of attendance way down. Not a very good time at all

[tugboat]

On the East coast of the USA between Virginia and Pennsylvania I have notice an increase in startups for small business's namely restaurants, small convenience stores and the like. While I still see larger chain stores close at the same time. It is this "sliver of light" at the end of the tunnel that encourages me.

It seems all my friends are still working from construction to government. I just rented a house with no problem. Although home values have dropped I've had a few offers to purchase it at a good price. I think that's where the turnaround starts anyway.

Still over 1/2 million in this country lost their jobs last week. Slightly better than the week before. Spending is up as well as the GDP number but still wonder, is it the stimulus package and cost cutting or is Mom and Pop really selling more hot dogs?

[aavkk]

You know, also being in NYC I really havent noticed much of a change. My business is down slightly (hedge fund IT recruitment) but overall my clients are making money and will be really gearing up to hire more in Jan. My wife's a personal trainer (started about a year ago) and she has actually picked up as many clients as she can handle at this point and is turning people down. In my neighborhood (Williamsburg, Brooklyn) where there is a lot of condo development they are hammering away where 3 months ago some sites were put on hold. My property value the best I can tell has held steady since I purchased my place in OCT 07, I think that may be quite unique to other places around the country though. While I am ready to move on from NYC eventually to So Cal, this great city has been great to my wife and I. Im sorry to those of you in difficult spots, best of luck getting back on your feet.

[bigfunkyg]

Here in the heart of Canada, things are very well and the impact of the recession was barely felt.

Currently employment rates are slightly above 5% and there are plenty of jobs avaliable. Property values never really took much of a hit and the housing market seems to be right back where it left off before, but regardless housing is still very affordable.

My employer has grown its workforce by 25% percent and we recently secured a new facility which will be double our current location. We are anticipatng a big growth year in 2010 once the IT buying cycle begins again.

This is not untypical for where I live as our economy weathers the storms very well but doesn't boom like some others during growth periods. Very sure and steady.

Great place to live if you don't mind extremely cold winters.

G

[thechenman]

On the East coast of the USA between Virginia and Pennsylvania I have notice an increase in startups for small business's namely restaurants, small convenience stores and the like. While I still see larger chain stores close at the same time. It is this "sliver of light" at the end of the tunnel that encourages me.

It seems all my friends are still working from construction to government. I just rented a house with no problem. Although home values have dropped I've had a few offers to purchase it at a good price. I think that's where the turnaround starts anyway.

Still over 1/2 million in this country lost their jobs last week. Slightly better than the week before. Spending is up as well as the GDP number but still wonder, is it the stimulus package and cost cutting or is Mom and Pop really selling more hot dogs?

The U.S. GDP number for Q3'09 is a farce. If you take a look at that...most of the growth came from August (read: Cash for Clunkers, or C4C). That accounted for almost half of the growth we saw. Also if you take a look at the income figures for Q2'09 you will see that they are significantly up despite increased unemeployment in the quarter. That can likely be attributed to the one time payments made to those who qualified (on an income basis) to the Obama Administrations Stimulus Plan. However, it would seem that this money was quickly spent on autos and other items. The cost of this temporary GDP improvement was roughly $22K to $24K of taxpayer dollars for each new car sold in the U.S. during Q3'09. Go figure. I don't know how you can call that a success.

The government is already saying that the benefits of the $800B stimulus package has already been injected into the economy...if that is truly the case, and the Democrats aren't backloading spending for 2010 to help them out in the mid-term elections, well...then all I can say is that the Obama Adminsitration and Congress is going to have to enact further stimulus plans beyond just extending the deadlines on the current plans in place.

If you take a look at incomes for Q3'09, you will see that they are significantly down from Q2'09 levels. What that should tell everyone is that spending in Q4'09 is going to be down significantly. So much for robust GDP growth. It's time to come back to reality.

All that said...I would add that in truth, at least in my opinion...the recession in the U.S. is on its last legs, and we are likely headed out if not already out of it. The problem is that this time, the economic recovery will be a jobless recovery. Economists will say we are through the worst of it. Politicians and other policy makers will say that the recession is still on because they can't afford to lose any momentum for the legislation they are trying to push through the system. Each group caters to a different party. Wall Street for the most part sees the recession as being past...Main Street won't recognize this until they get their jobs back. Perception becomes reality...and if that is the case, we are in for a prolonged recovery where things won't get better for awhile. The Consumer makes up more than 75% of GDP, if they aren't going to spend, the government can only make up the difference like it did with the C4C program before the USD is totally in the toilet and investors, foreign and domestic, won't touch U.S. Treasuries with a 10-foot pole.

In short...buckle down because we are still in for a long, if not bumpy, ride.

[brooklyn]

FOOH members come from all over the world and being an old banker I would love to know how you are seeing things in your hometown in terms of the local economy. Is it good, bad, much the same, improving? We all read much in the news on forcasts, trends etc...but as a man / woman on the street...what is your opinion based on your day to day local observations?

Without Political comment please give us a glimpse. Mention where you are from by all means.

Peter in Miami

If one ignores the expansive underground economy here, Miami is suffering tough times. The City of Miami especially is dealing with fewer dollars from real estate taxes to the pint of cutting across the board,i.e. salaries,services,et.al. Here at Miami Dade College(largest in the country), no travel mmonies,no raises despite increased enrollement. Schools always flooded during tight economic times.

If you want a top line cono on Brickell , your king if you have cash: dimes on the dollar values.

Despite this, we will get up and move forward.

[bunburyist]

The U.S. GDP number for Q3'09 is a farce. If you take a look at that...most of the growth came from August (read: Cash for Clunkers, or C4C). That accounted for almost half of the growth we saw. Also if you take a look at the income figures for Q2'09 you will see that they are significantly up despite increased unemeployment in the quarter. That can likely be attributed to the one time payments made to those who qualified (on an income basis) to the Obama Administrations Stimulus Plan. However, it would seem that this money was quickly spent on autos and other items. The cost of this temporary GDP improvement was roughly $22K to $24K of taxpayer dollars for each new car sold in the U.S. during Q3'09. Go figure. I don't know how you can call that a success.

The government is already saying that the benefits of the $800B stimulus package has already been injected into the economy...if that is truly the case, and the Democrats aren't backloading spending for 2010 to help them out in the mid-term elections, well...then all I can say is that the Obama Adminsitration and Congress is going to have to enact further stimulus plans beyond just extending the deadlines on the current plans in place.

If you take a look at incomes for Q3'09, you will see that they are significantly down from Q2'09 levels. What that should tell everyone is that spending in Q4'09 is going to be down significantly. So much for robust GDP growth. It's time to come back to reality.

All that said...I would add that in truth, at least in my opinion...the recession in the U.S. is on its last legs, and we are likely headed out if not already out of it. The problem is that this time, the economic recovery will be a jobless recovery. Economists will say we are through the worst of it. Politicians and other policy makers will say that the recession is still on because they can't afford to lose any momentum for the legislation they are trying to push through the system. Each group caters to a different party. Wall Street for the most part sees the recession as being past...Main Street won't recognize this until they get their jobs back. Perception becomes reality...and if that is the case, we are in for a prolonged recovery where things won't get better for awhile. The Consumer makes up more than 75% of GDP, if they aren't going to spend, the government can only make up the difference like it did with the C4C program before the USD is totally in the toilet and investors, foreign and domestic, won't touch U.S. Treasuries with a 10-foot pole.

In short...buckle down because we are still in for a long, if not bumpy, ride.

That's my understanding of it - bang on Chenman.

Just about every western nation, but esp the US are posting numbers that are frankly hollow. We have flirted with the abyss and we're still within falling distance.

We humans are a bit boneheaded eh? It takes a cataclysmic recession like this one for people to realise that life on 'easy' credit....ain't easy. In the UK the government is about to bring in new laws to make it harder for credit and store card companies to stich up customers who don't / can't understand the small print and clearly can't afford the high interest repayments. A credit card company spokesman said in reply (no joke):

''if this new law comes into being it will be a disaster. In effect we will no longer be able to offer credit to low income earners''

no ****!

*sigh*

[dstogie]

Agree with the thoughts above here in southern Alabama. I am a banker and feel that it will take more time to recover, maybe 2 years. We are not even looking for commercial RE loans, not even an option unless you have 40% down, but who does? Regulators are riding us hard. Those that need the help, going out interest only until the property sells, we aren't being allowed to do this. Regulators are making us get updated appraisals, which are 30%-40% less, and write off the difference. Or, we have to amortize the loan out which puts the borrower in a pickle as well. We continue to take more losses which don't allow us to loan more money, which is slowing things up for a recovery. We went from too loose to now too tight! Hopefully we can get to the place we should have been all along, right in the middle.

The only people with work are the military and government. Then you have 20 companies bidding on a $500k job that used to have 5-10 bidders. The bids ar so low because companies are willing to make hardly no profit to keep their crews busy so they don't have to layoff.

Job wise things have started to even out. Most that were needing layoffs have already done it. Consumer wise everything seems pretty normal. People still seem to be spending, Dothan stayed pretty insulated in that area.

I do feel that it will be atleast another year, probably more like two. However, companies just got through with consecutive record breaking years, and made lots of money. That is not the norm, and I think we are getting reminded of this now. Most need to just hunker down and cut expenses while getting back to pre-record breaking years. Those years may not come around for another 15.

Just a young bankers opinion for now.

[tugboat]

The U.S. economy grew in the Q3 09. That's a fact. the first positive read since Q2 08 and the largest increase in two years. Take out the spending on motor vehicles (about 1.7%) and the economy still grew.

If you take a look at incomes for Q3'09, you will see that they are significantly down from Q2'09 levels. What that should tell everyone is that spending in Q4'09 is going to be down significantly. So much for robust GDP growth. It's time to come back to reality.

Current-dollar personal income increased 0.6% in Q2 09. It decreased 0.5% in Q3 09. I don't see that as significant. As long as the economy grows the money will come.

Private domestic investment rose 11.5%

Fixed investment advanced 2.3%

Residential investment increased 23.4% The largest advance since 1986

Domestic investments contributed 1.22% towards total GDP

I'm not calling that a success. I'm calling that growth.

In keeping with the threads original

question. My neck of the woods is looking better, little by little.

Sources: Reuters, BEA, MarketWatch.com, Briefing.com, Wall Street Journal

[Habanos2000]

The Western Chicago suburbs, which tends to have a more affluent population, finds many of the shopping malls quieter than normal currently. Some newer developments even look like ghost towns. It'll be interesting to see how busy they get during the Christmas shopping season.

An interesting aside, I was in a Costco (a large US warehouse club store chain) yesterday and the place was packed! I thought that was surprising considering it was a Wednesday afternoon.

As far as sentiment is concerned, it's my opinion that the worst is behind us. But also feel that it'll be 2012 before the people that lost their jobs are rehired and have the confidence to go out and spend again. While it's over, it's not over yet.

[thechenman]

The Western Chicago suburbs, which tends to have a more affluent population, finds many of the shopping malls quieter than normal currently. Some newer developments even look like ghost towns. It'll be interesting to see how busy they get during the Christmas shopping season.

An interesting aside, I was in a Costco (a large US warehouse club store chain) yesterday and the place was packed! I thought that was surprising considering it was a Wednesday afternoon.

As far as sentiment is concerned, it's my opinion that the worst is behind us. But also feel that it'll be 2012 before the people that lost their jobs are rehired and have the confidence to go out and spend again. While it's over, it's not over yet.

I'm not surprised that Costco is packed. There are some really good deals to be had if you buy in bulk. On top of that...Costco is going to be accepting foodstamps going forward, which should increase the crowds you see there. To be honest Wednesday afternoons shouldnt' be surprising either. With more and more people out of work, Wednesday is no different than Saturday or Sunday for many people.

In terms of the holiday season...Walmart announced earlier this week that they would be reducing prices further for the holiday season. When you see that coming out of Walmart which has had the steadiest retail sales figure through this economic downturn, you know that it isn't looking pretty for them.

[ChanceSchmerr]

The only people with work are the military and government.

Dead on. Out in my neck of the woods, Victoria, BC, Canada, we really havn't been hit too hard. The city is the provincial capital, as well as the home of Canada's west coast navy, so needless to say a significant economic driver in capital region is government and military, and as such, malls are still full, and people are still spending here. The housing market, already one of the highest-priced in Canada, really didn't take much of a hit - still a lot of retirees willing to pay $700k for nice bungalow, I guess. House construction slowed but hasn't stopped. Vancouver, from what I've been able to tell, has had a bit more of a storm, with the housing market slowing more substantially, but as far I've heard, it hasn't come back to earth like so many of us out here hoped.

Tourism has fallen off somewhat, but that is more to do with recent US border restrictions, requiring Canadians/Americans crossing the US/Canada border to carry passports with them, which has really bit into cross-border trade and tourism. (used to be, all you needed was a driver's license or other ID)

I noticed more troubles in Toronto a few months ago, a lot of small businesses going under.

One other point to note - The last year or so, I've noticed that a number of new Ordinary Seaman (equivalent to a Private in the army/air force) arriving on my ship are much older than your typical military recruit, in some cases, people in their mid to late 40s. This tells me that (as can be expected) recruitment is up when jobs are scarce, but the nature of the recruit seems to be more older people who lost their jobs and have no real alternative. Interesting.