Saturday, February 28, 2009

Jobs and the Economy

We're in a world of pain ... and we're going to be in that world for a while. Calculated Risk shows exactly how Ouchy it is. For many right now, it's sort of like being in an iron maiden, with thumb screws attached to all of their digits.

Four months ago, a member and participant in the 401(k) called to ask about pulling her money out of her 401(k) retirement account and buying a house with it. I said:

"Uh, it's a little early to do that. Houses aren't through losing value ..."

Of course, there's the issue of her 401(k) losing value, but if most folks aren't mainly in fixed interest accounts by now ... well, they're a lot braver than I am ...

The animation industry's overall job numbers -- at least the unionized totals we track -- have held up reasonably well over the past year. But last night I ran into a lead who's departing one of our major employers for a job in the game industry. With a shake of the head he told me:

"I don't think the bigger layoffs have hit yet. I think that my almost former employer will be cutting back at the end of the year. I think some of the people working there will be surprised, and not in a good way."

As always, how animation performs in the marketplace is going to have a lot to do with animation's future employment levels. It always does. But entertainment company stock prices are in currently the toilet. On Thursday a Disney TVA employee remarked to me in sorrow: "I've been with the company fifteen years, buying shares every week with the employee purchase program. The stock's lower now than when I started, fifteen years ago."

We are thirteen months into the current recession, and probably have twice that to go. But don't count on me as a prognosticator. Read the linked graphs at Calculated Risk and draw your own conclusions.

And keep most of your extra earnings in cash and cash equivalents. No point in taking a flyer in Tech stocks quite yet.

28 comments:

Anonymous said...

Thank goodness we elected a president who's going to tax the shit out of us to bail out billionaire businessmen.
But, hey, at least he speaks all purty an' stuff.

Anonymous said...

Usury for the last twenty years, taxes for the next. So what's the difference? It's all a revolving door of powerful people playing with monopoly money.

Steve, how can we know how the MPIHPP investments has faired compared to others in this market? Especially with regard to how much the WGA action drained it before the market tanked? It would be helpful to know if our health and pension made better decisions than others. So many funds are getting wiped out.

Anonymous said...

The last 2 months have been devastating. I'm tired of hearing the doom and gloom and seeing terrible decisions made with our tax money. What happened to the change? This isn't the change I was hoping for.

Anonymous said...

"keep most of your extra earnings in cash and cash equivalents"

Also, I suggest keeping some of your money in precious metals (gold, silver, etc).

When messiah Obama's spending kicks in in a couple of years, and China stops buying our debt, we will see inflation the likes of which we have never seen. Too much money chasing too few goods. Your cash will go the way of Zimbabwe and having gold and silver will be the only thing that preserves any of your savings.

But hey, the messiah sure can give a smooth articulate speech...and that is what really matters! ;)

Anonymous said...

>>The last 2 months have been devastating.

Yes, fix the Ronald Reagan consumer credit fleecing of this country of the last twenty years in two months. Upon what planet do you live on?

In addition, do you not believe that a country going to war and failing to put it in a budget was not going to finally push the already teetering global consumer madness over the edge? They have asked nothing of us, including Clinton, except to GO SHOPPING. Just stop and think of that for a moment. Just think for a moment that the tearing down of the Berlin Wall was all about SHOPPING. Seriously? Are you f'ing kidding me? Two months?!?!

Anonymous said...

I pray and thank for having had G.W. Bush as our president. He left our country is such good shape. Obama came along and just wrecked the whole economy and world overnight. We need Sarah Palin in the white house!

Anonymous said...

I love how brainwashed you guys are.

You always assume that when someone is against Obama they must have been for Bush, Palin, McCain, etc.

Please.

Think for yourselves and stop looking at the world from left or right. What makes sense?

We don't need these stupid wars...Iraq, Afghanistan, Pakistan. Bush spent ridiculous amounts of money on one war...now Obama ratchets up another war spending money we don't have. Has Obama reversed the Bush's patriot act yet? So much for liberty.

Don't you guys see...Obama and Bush...Democrats and Republicans are two sides of the exact same coin?

Think.

Anonymous said...

Oh shut the hell up you whining bitch. Where are your solutions, moron? You probably helped cause the problem in the first place, so shut your piehole.

Anonymous said...

"Oh shut the hell up you whining bitch. Where are your solutions, moron? You probably helped cause the problem in the first place, so shut your piehole."

And that my friends is why this country is in the state it is in. Instead of thinking for yourself and being objective...you attack people who speak truth.

Go back to sleep, sheep.

Anonymous said...

I find it repulsive how the rich are screaming that their kids futures are being sacrificed. Do they not know that for the poor, it's not only their kids but their grand kids and great grand kids that have already been sacrificed by two wars and a planet raping consumer economy. In some twisted way, I think the rich admire caste societies and would rather accept that as a solution over anything.

Tom M said...

Funny how whenever people talk about losing money, they automatically look for someone to blame, and that person is almost always a political or business figure.

Regardless of the state of the global economy, most of what is in your life is a direct reflection of your choices and work ethic. Sure the monkey wrench gets thrown in every once in a while, but is that enough to explode and start blaming others for your predicament? Recessions have happened before, but people always manage to find a way to crawl out.

Be glad that your animation jobs have survived this long. Consider yourselves lucky to be alive. Money is money, but money can't buy integrity.

Anonymous said...

"Be glad that your animation jobs have survived this long. Consider yourselves lucky to be alive. Money is money, but money can't buy integrity."

Oh god, thank you! I'm so glad to just be alive! Republican integrity and intelligence have kept me alive! If everyone else in this country just worked as hard as me they would not have lost their jobs! Lazy elite liberals! Your situation in life is a direct correlation of the choices you've made! Life is not messy! Blind idealism is all you need! Harsh reality is a state of mind! The world operates by very simple laws! Blah, blah, blah, blah, blah...

barf

Steve Hulett said...

The libertarians, Republicans and Democrats sniping at one another miss a major, MAJOR point, and that point is AIG:

... A quarter of a trillion dollars, if it comes to that, is an astounding amount of money to hand over to one company to prevent it from going bust. Yet the government feels it has no choice: because of A.I.G.’s dubious business practices during the housing bubble it pretty much has the world’s financial system by the throat.

If we let A.I.G. fail, said Seamus P. McMahon, a banking expert at Booz & Company, other institutions, including pension funds and American and European banks “will face their own capital and liquidity crisis, and we could have a domino effect.” A bailout of A.I.G. is really a bailout of its trading partners — which essentially constitutes the entire Western banking system.

http://www.nytimes.com/2009/02/28/business/28nocera.html?_r=2


One insurance company is -- because of lax oversight, greed, you name it -- the lynch pin to the global financial system.

A.I.G. goes, everything goes.

So a conservative U.S. government like Bush's, or a liberal one like Obama's would do exactly the same thing.

Prop the sucker up.

If Obama spends $700 billion bill for stimulus and tax breaks, it's still small compared to the trillions it's going to take to stabilize A.I.G.

And the reason Geithner and the chariman of the Fed spend large sums trying to hold CitiBank and Bank of America above water?

THe Chinese and Japanese hold laods of their corporate bonds, and we have to keep them happy. They threaten to stop buying U.S. treasury debt (as they are probably threatening through bakc channels), we have another large problem. Interest rates skyrocket.

What I want to emphasize here is, this isn't a Right or Left problem, because it's gone way beyond that. It's a "prevent everything from totally tanking" problem.

Steve Hulett said...

To answer the question about the Motion Picture Industry Health and Pension Plan (MPIPHP):

The plan has lost about 15%, according to the last report I heard. That means it's now probably 18-20%.

The good news: This is relatively low compared to almost any other pennsion plan I know about.

The bad news: The MPIPHP is still down 18-20%. (The investment mix is about 60% bonds, 40% equities, real estate, hedged investments, etc.)

There's really nowhere to put money and earn much of anything right now. Gold has skyrocketed recently, but gold is way volatile.

Steve Hulett said...

Uh, just to reemphasize what I noted a couple of notches up:

American International Group Inc. will receive additional federal assistance of up to $30 billion as part of a revamped government bailout, according to media reports Sunday, citing unnamed sources.

The new funding, the fourth government rescue of AIG since September, is intended to support the New York-based insurer as it is expected to announce $60 billion in quarterly losses early Monday.


http://www.msnbc.msn.com/id/29455792/

We're teetering on a freaking cliff edge people. Cliff edge.

But you want to make the issue conservative vs. liberal vs. libertarian, be my guest.

If you've got brains, you understand why Bush reversed course 180 degrees last Fall when everything started to crash down.

He had very little choice.

Anonymous said...

Yes we are where we are and looking forward we are all on the brink. But I'm sorry, we cannot forget the past. Consider this one fact: Clinton's policies helped to create 22 million net jobs in eight years. During six years under two different Bushes the economy failed to create even one net private sector job. Not even one!

Anonymous said...

If you want to start list criminals don't forget to start with that Barney Frank character. And the list would be as long as this blog. Yes BOTH parties have let us down but throwing more money at a symptom isn't going to fix the cause. I personally wish we would stop the bailouts and let whatever companies can weather it, let them go through a structured bankruptcy.

Anonymous said...

When housing peaked in 06 leading to Bear Stearns in 08, it definitely felt like the Fed saw the writing on the wall. They started seeing the banks and investment institutions lining up on a tarmac ready to drop out of the sky and finally had to go to the Bush admin. to spell it out in large caps. Between Lehman and AIG they decided on AIG. I always wondered why they made that call, but today it feels like AIG was the even bigger Western banking nuclear bomb.

As far as structured bankruptcies go, that is now an oxymoron. There doesn't exist such a thing for these massive failures. Get used to the fact that the term bankruptcy is meaningless in the context of what is going on, and for such enormous balance sheets like AIG's. When they go, they go, and they take everyone with them.

Anonymous said...

This thread demonstrates why i hate 98% of the members of the animation union. A bigger bunch of bitter, ignorant losers, in hollywood one will not find. Get them all waddling around in the same room at the holiday party and its an experience thats disturbing enough to have you running for the exit.

Steve Hulett said...

This thread demonstrates why i hate 98% of the members of the animation union. A bigger bunch of bitter, ignorant losers, in hollywood one will not find ..

Yeah, unh huh.

Tell us who's bitter again?

r said...

to anon 10:44

Now that's a useful comment.
Insulting a whole group of people really helps in solving the situation...

r.

Anonymous said...

http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

suggest you all watch this unbiased view from Frontline. Solid reporting.

r said...

http://www.businessweek.com/technology/content/feb2009/tc20090228_990934.htm

Sorry, perhaps the link is a little off topic, but I coulcn't find a place to stick it.
Still, I thought it was interesting...

PO'd said...

The plan has lost about 15%, according to the last report I heard. That means it's now probably 18-20%.

I was told 18-20% last December by the head of the pension plan (who's now resigned to go live on his ranch in the Rockies). He was supposedly giving me the 4th qtr. numbers ahead of their release. I asked him why we have pension funds foolishly invested in real estate or any other stock when the only way to protect the members' hard-earned retirement at this time is to be sitting on the sidelines. He couldn't answer. I told him that all historical models indicated that the Dow would fall into the mid 6000s at least (it's almost there, folks). Still no coherent response.

Wait until the 1st Qtr 09 numbers come in. Or 2nd Qtr. Or 3rd...

Anonymous said...

To 11:44,

I'm sorry you are "disturbed" (ironically appropriate) by us. You will be pleased to know that I gave up "waddling" for Lent. Who are the actual "winners" and "losers?" The real losers are the die-hard right wing dead enders who just saw their most dearly held beliefs blown out of the water when all of those noble, saintly, "self-correcting" capitalists with their hands in the cookie jar actually (gasp!) ate all the cookies.

A winner is someone, employed or not, who does what he loves for a living. I am, by that definition, a winner.

If you wanted to attend a party filled with world beaters who believe that a government acting with compassion spending it's money on food and jobs rather than out-dated military ordinance is falling prey to creeping socialism, look elsewhere. Perhaps the John Birch Society is throwing a Christmas party. In the meantime, please feel free to exercise your freedom to stay home and avoid ours.

Anonymous said...

This thread demonstrates why i hate 98% of the members of the animation union.

Better yet, just identify yourself at the next union meeting;)

rufus said...

Well, at least there's the 2% of us he might like or might feel indeference...

What a cool guy.

rufus.

Anonymous said...

What a disaster this has turned out to be. Who would have known so many more mistakes could be made.

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