It's The Economy, STUPID!.....

[FOTD]

George Soros: Worst from credit crisis yet to come; losses likely to top $1 trillion
Thursday, April 10, 2008
By Elaine Kurtenbach, The Associated Press
SHANGHAI, China -- The credit crisis is far from over, billionaire financier George Soros warned today, urging regulators to move faster to contain damage from the collapse of the housing finance markets.

"I think the situation is more serious than the authorities admit or recognize," Soros told journalists in a conference call. Measures taken so far to slash interest rates and stimulate the economy were "necessary but not sufficient," he said.

"Because of that, I think the situation is going to get worse before it gets better."

Soros is promoting a new book, "The New Paradigm for Financial Markets: The Credit Crisis and What It Means." He has urged regulators to move more aggressively to improve market oversight to curb risks from excessive reliance on debt for financial speculation.

He said he agreed with the International Monetary Fund's estimate of more than $1 trillion in losses linked to the collapse of mortgage-backed securities.

Losses disclosed by financial institutions so far are related only to the decline in value of those financial instruments, Soros said.

"They do not reflect in any way a possible decline in the value of the loans held by the banks," he said. "We have not yet seen the full effect of the possible recession."

Soros said that hedge funds struggling to clear up massive levels of debt are another pitfall.

"They are all now in this ... very painful process of wealth destruction," he said.

He pointed to the potential for massive losses from complex investments linked to the U.S. subprime mortgage market, such as credit default swaps, or CDS, which allow investors to put bets on the likelihood that companies will default on bond payments.

He described the $45 trillion market in credit swaps as a "Sword of Damocles."

"That's more than five times the entire government bond market of the United States. It's almost equal to the entire household wealth of the United States," Soros said.

"This $45 trillion market is totally unregulated," he said. "You can have very large positions with very little capital and you can actually assume risk and get paid for assuming that risk without being regulated."

American International Group Inc., the largest U.S. insurer, for example, reported that its swap portfolio lost $11.12 billion in value in the fourth quarter of 2007 because decaying credit quality means insured debt is less likely to be repaid.

That news prompted fears of further losses throughout the industry.

The potential risks from such investments has engendered a damaging level of mistrust among financial institutions, accentuating the credit crunch, Soros said.

Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
First published on April 10, 2008 at 12:18 pm
http://www.post-gazette.com/pg/08101/872169-82.stm

[FOTD]

"After struggling with soaring heating costs through the winter, millions of Americans are behind on electric and gas bills, and a record number of families could face energy shut-offs over the next two months, according to state energy officials and utilities around the country."

http://www.nytimes.com/2008/04/25/us/25heating.html


Lots of hurt will be showing up this summer.

[FOTD]

Words from the genius: http://www.reuters.com/article/ousiv/idUSN2847461420080428

not good


Start paying attention even if you live in countercyclical land.

[Gaspar]

This just in. . . Economy still growing at a measly .6%.  No recession yet, but stay tuned. . . Perhaps next year FOTD.

Keep up the good work!

[guido911]

quote:Originally posted by Gaspar

This just in. . . Economy still growing at a measly .6%.  No recession yet, but stay tuned. . . Perhaps next year FOTD.

Keep up the good work!

We can only hope![}:)]  

Seriously, how sad is it that there are morons out there that are counting on a recession as a means to a political end.

[cannon_fodder]

Guido, it is VERY sad but as a rule those out of power have an incentive to wish for failure.  I do not mean to imply that Democrats are invested in failure, but is their any denying a crisis in Iraq would be politically expedient for them?  You'd have to hope for failure on a selfish level.

Same with the economy.  Bush profited from the Dot Com bust when he clawed into the white house and probably from 9/11 on his reelection.  Bad things can be good news politically, bad being invested in the bad news is sad (both parties can be, just happens that the Democrats currently are).

[FOTD]

Recessions are a necessary evil, a cleansing process, to sustain an overall healthy economy.

Just because you live in a countercyclical economy based on war and energy does not mean your fellow countrymen and women are enjoying the same situation.

You kiddos who believe our lying government statistics are fools. The truth is that the American economy is now mortgaged to foreign nations. And you were either worried we were being over taken by illegals or you were feeling assured the neo cons and corporations would have your best interest at heart.

[cannon_fodder]

Oh, and this just in too... Tulsa's jobless rate is nearing 3% on a strong manufacturing base and related oil jobs (engineering, manufacturing, leasing, exploration  etc.).  About 1200 new direct jobs were created in Tulsa last month, if that trend held for an entire year the associated population growth would be expected to be around 30,000 people (since we are at full employment new jobs are filled by new people, each new job equates to just over 2 new people in town according to the talking heads).

The bad news is, no one can find good workers.  Hopefully that has upward pressure on wages and the cycle continues to spiral upwards for Tulsa.  When compared with areas that are struggling, it could make Tulsa an attractive area.

[FOTD]

quote:Originally posted by cannon_fodder

Oh, and this just in too... Tulsa's jobless rate is nearing 3% on a strong manufacturing base and related oil jobs (engineering, manufacturing, leasing, exploration  etc.).  About 1200 new direct jobs were created in Tulsa last month, if that trend held for an entire year the associated population growth would be expected to be around 30,000 people (since we are at full employment new jobs are filled by new people, each new job equates to just over 2 new people in town according to the talking heads).

The bad news is, no one can find good workers.  Hopefully that has upward pressure on wages and the cycle continues to spiral upwards for Tulsa.  When compared with areas that are struggling, it could make Tulsa an attractive area.

Why can't Tulsa "find good workers"? We haven't just showed up. Wages here should be no different than elsewhere (with the exception of call centers), we have a wonderful training infrstructure, and our economy is booming. So, why is it we can't get "good workers" and please define the term.

[Gaspar]

quote:Originally posted by FOTD

quote:Originally posted by cannon_fodder

Oh, and this just in too... Tulsa's jobless rate is nearing 3% on a strong manufacturing base and related oil jobs (engineering, manufacturing, leasing, exploration  etc.).  About 1200 new direct jobs were created in Tulsa last month, if that trend held for an entire year the associated population growth would be expected to be around 30,000 people (since we are at full employment new jobs are filled by new people, each new job equates to just over 2 new people in town according to the talking heads).

The bad news is, no one can find good workers.  Hopefully that has upward pressure on wages and the cycle continues to spiral upwards for Tulsa.  When compared with areas that are struggling, it could make Tulsa an attractive area.

Why can't Tulsa "find good workers"? We haven't just showed up. Wages here should be no different than elsewhere (with the exception of call centers), we have a wonderful training infrstructure, and our economy is booming. So, why is it we can't get "good workers" and please define the term.

We have no shortage of jobs, but a shortage of (let me re-defign the term) Professional Workers.  We will catch up, it's just that our local economy is so strong right now that a healthy shortage is inevitable.  My company is currently in the process of hiring engineers and architects from out of state and relocating them here.  This is a good thing.

Remember, government has no power to create jobs, they can only destroy economies and eliminate jobs.  Industry and entrepreneurship creates jobs.  We are living that right now.  As long as our state and city keeps it's hands out of pockets we will continue to grow as we are.  Energy companies are part of the engine, but we have a lot of new small business popping up everywhere!  

It's an exciting time to be a Tulsan!

[cannon_fodder]

1) By good workers I mean skilled workers who are reliable.  There are critical shortages at many of the craft and journeymen positions (welders, pipe fitters, boiler makers, machine operators) and a shortage on the professional level (all but attorney's, pretty much).  

On top of having the requisite skill set a "good worker" is a team player, will work a little over when needed, and shows up for work consistently (standard things wanted from an employer).

There is a shortage of those in Tulsa.  Trust me.  I've been trying to hire for months for positions that pay well above the average wage for Tulsa, the nation, or most anywhere.  I offered a guy from Little Rock what would have been an immediate 50% raise over what he was making and he took a job elsewhere.  At 3% unemployment the workers that are skilled and available are in high demand.

2) Why there are not enough in Tulsa, I would speculate several reasons.  

a) First, there are more jobs in Tulsa now than there ever has been.  We are 10,000 jobs over our previous peak in 2001.  For a community the size of Tulsa, 10,000 jobs is a ton.  There are 431,000 employed persons in Tulsa MSA, we could absorb 5,000 more workers tomorow with no ill effects (bring us to ~4.5% unemployment).

b) Second, the severe beat down our economy took in 2002-2005 removed nearly 25,000 jobs from Tulsa (35,000 less than today).  Our unemployment rate jumped from 3.5% to 6.5%, we then began adding jobs - but before the number returned to it's previous high we were back down to 4.5% unemployment.  

This suggests that a large number of person either left Tulsa or removed themselves from the workforce.  THUS, it is hard to find skilled labor because many of those that lost their jobs 5 or 6 years ago left Tulsa and have not (yet) returned.  Those that have remained have already been absorbed.

c) Also, during the period of downturn, real income in Tulsa dipped 1.2%. That figure helps explain the recent 10+% increase in wages (makeup wages) recently seen in Tulsa.  BUT, the down tick in wages certainly did not serve to lure people back when things started picking back up.

Most of the above is explain well here:
http://economy.okstate.edu/outlook/2005/tulsamsa.asp


d) and finally, nationally unemployment just ticked above 5% for the first since 2005 - just last month.   Thus, the available labor force across the country is limited (in spite of what the "feel" is, unemployment is still low).  So the available labor pool from which Tulsa can draw nationally is limited, and people are often reluctant to move if there is hope of remaining where they are.

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?request_action=wh&graph_name=LN_cpsbref3

SO... Tulsa is having trouble attracting labor because a) there are more jobs than ever before, b) the economic downturn drove workers from Tulsa recently, c) wages in Tulsa were repressed during the downturn and are just now becoming competitive again (by virtue of the labor market) and d) the available national labor market remains competitive.

This situation will be remedied by continued training of our domestic labor force, job losses elsewhere in the country, an increase in relative wages, and/or a continued strong and stable demand for labor in Tulsa.
- - -

How'd I do?  And are you suggesting that we do not have a labor shortage or that we don't have the jobs?  Please state your position as I have very clearly state mine.

[bokworker]

Liar....

[FOTD]

You did great except you left out the fact that Tulsa does not appeal to many educated professionals because an attitude problem exists here they see as counter progressive.

Now, let's pile on![}:)]

[cannon_fodder]

FOTD, to some extent that is true.  But my attitude does not fit in very well here (I'm neither Christian nor socially conservative), yet I chose to move here and stay.  Quality of life was more important to me than finding like minded people (dear god, where would a Libertarian go?).  I note that you don't fit in, yet stay also.

Furthermore, putting food on the table for your family usually trumps all other concerns.  If/when there are better jobs in Tulsa than somewhere else, people will move here.  It's starting to happen now, lets hope it keeps rolling.

I believe the issue you raise is more pertinent to ATTRACTING new business.  That is to say when Arvest wants a new regional HQ why should they move to Tulsa.  Being flashy and hip might help convince such a business that they can attract the people they want to Tulsa.  And in this regard, I agree.

[TheArtist]

My hope it that this is Tulsas time to buck the cycle its been in for quite a while. When the national economy has done well we struggled to catch up and dig out of a bust, just as we start to see actual gains... the national economy tanks and takes us back down again, then the national economy picks up we struggle to regain what we lost then just as we get to the point of adding.... down the national economy goes again and us with it. We keep just missing the "growth waves", and its sucked lol.

This time we seem to be holding our own and even gaining slightly... IF we can hang in there this time and ride it out without a downswing, we will find that our city will be in a good position to be competitive and take a ride on the next national upswing for a change.

In a few years when, and if, the River District, Riverwalk, are done, Brookside and Cherry Street continue to flesh out, Downtown and the many areas in and around it continue to see progress, the river parks are improved, etc. We will have added some very nice attractive areas to our resume and will be able to offer up quite a nice little city. One that will hopefully then be able to solidly capitalize on the next national economic upswing.