Ya Think?

Just another Liberal Political weblog

Impending Economic Slowdown – Are you prepared?

Many Economists are predicting this slowdown.  At this point the concern is more recession than inflation.  Another article from the AP:

Halloween brings more US data to spook markets

By John AuthersTue Oct 31, 1:25 PM ET

Here we go again. On Tuesday, disappointing data from the US spooked world markets, appropriately enough on Halloween. Once more, the betting is that the US economy is set for a sharp downturn. Graphs of the dollar against the main alternative currencies, and of Treasury bond yields, all show the trajectory of a jet heading for a hard landing.

Following last week’s drab gross domestic product figures for the third quarter, yesterday brought an outright drop in consumer confidence. Analysts had expected the continuing fall in gasoline prices to fuel an increase in confidence, so this was negative. Add the survey of Chicago purchasing managers, which showed its weakest reading since August of last year, and everything was set for a run on the dollar.

Events elsewhere are compounding the dollar’s problems. The Bank of England seems certain to tighten rates at its next opportunity, and a December tightening from the European Central Bank is also firmly expected.

The dollar is at its lowest level against sterling for the year – almost $1.91 at one point on Tuesday. The pound has gained 3.5 cents since the Federal Reserve’s meeting last week. The euro has gained 1.8 per cent, and the yen has strengthened even more, moving from Y119.36 to Y116.82 since the beginning of last week. The Fed Funds futures market puts the odds of a rate cut by next March at 50 per cent, having priced out any such possibility by the beginning of last week.

The 10-year US Treasury bond yield has given up a cool 21.5 basis points over the last six trading sessions, dropping from 4.83 per cent to 4.61 per cent.

The Halloween “tricks” could come for those making money from the yen carry trade – borrowing in low-yielding yen-denominated accounts to go “long” elsewhere. But more dollar weakness could be a “treat” for equities outside the US. The flood of US investors’ money into foreign markets is fuelled by the dollar.

According to Morgan Stanley Capital International, the world outside the US has grown by 9.4 per cent this year in local currency terms, but by 16 per cent in dollar terms.

Wake up America!  The only way to really bring down this country is economically and we are letting this happen.  Think about it.  Who owns most of our debt? Where are the jobs going?  How many corporations are now off-shore and pay no taxes? And how many countries own or are running businesses here?  Remember Dubai has bought but never sold back the running of our ports.  Wake up and question this government and every politician on this subject.

November 1, 2006 Posted by | Current News, Economy, Uncategorized | Leave a comment

Take heed of this and mind your future

Found this article on the AP today.  Comments to follow.

 Pressure builds on U.S. business to outsource: study

Tue Oct 31, 4:55 PM ET Pressure on the U.S. labor market from the outsourcing of traditionally white-collar jobs is just starting to build, according to a new study.

 Fortune 500 companies could potentially save $58 billion annually, or some $116 million per company, by offshoring general and administrative jobs, according to the Hackett Group, a strategic advisory firm.

 Hackett will formally issue the study next week.

 The study estimates that increased use of cheaper overseas labor could affect up to 1.47 million back-office jobs, or nearly 3,000 at a typical Fortune 500 company.

 Some of the job functions that can now more readily be shipped overseas than they could several years ago include IT, finance, human resources and procurement, the group said.

 “Over the past few years, the resources available offshore have matured to an extent no one could have imagined, creating a paradigm shift that companies can ignore only at their peril,” said Julio Ramirez, Hackett managing director.

The education base and skill set, and with it the potential savings on labor costs, is on the rise in India, China, the Philippines, Pakistan, Eastern Europe, Brazil and other emerging countries, the Hackett study contends.

Many companies are relying on outdated analysis to assess the benefits of outsourcing, and risk “under-scoping” such initiatives, Hackett said.

But once they get up to speed, it could be “Katie bar the (office) door.”

 Hackett is a division of Answerthink Inc. (Nasdaq:ANSR – news), a business and technology consulting firm.

This will hurt not just employment, it will hurt our economy.  These studies seem to stop at the savings for the Corporations but do not show how the loss of this many jobs, here, will effect our economy. Let’s face it…if people in the US can’t find good jobs, who will be able to afford the goods and services these corporations sell. And who will be able to afford to buy stock in these corporations.

Penny wise and pound foolish!

Time to put limits on these corporations and turn “free” trade into “FAIR” trade.

November 1, 2006 Posted by | Current News, Economy | Leave a comment