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A shrivel of integrity left for what's remaining in the system?

http://news.ino.com/headlines/?newsid=68956898476790

Well, Saturn just turned retrograde.

At some companies, the furloughs are a prelude to a permanent layoff.

Trinh Nguyen, 23, was called into a conference room with four other workers in late December at the 50-person Baltimore architecture and design firm where he works. The group was told that they were on a 30-day furlough, starting Dec. 10. "They tried to lighten (it) up as not a termination," said Nguyen, who asked that the company not be named.

As he sees it, most of his co-workers will spend the time hunting for new work. Those who succeed won't qualify for severance payments they would have gotten had they been laid off. That would make the furloughs a way for the company to save money both on paychecks and severance — if workers can find other jobs.

"It's just a harsh situation," he said.

SAN FRANCISCO (MarketWatch) -- Speculation has surfaced that Microsoft Corp. might have to move beyond its current hiring slowdown and even cut jobs, as Wall Street analysts pare their outlook for the company amid the economic gloom.
Rumors of layoffs at Microsoft (MSFT:Microsoft Corporation
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4:00pm 12/30/2008

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MSFT 19.34, +0.38, +2.0%) emerged last week on a Web site published by an anonymous, self-described employee who writes as "Mini-Microsoft." A number of comments from posters describing themselves as fellow employees pegged mid-January as a timeframe for as much as 10% of Microsoft's roughly 95,000 jobs to be cut.

A more recent post on the Mini-Microsoft site Monday featured comments dispelling the layoff rumor, suggesting that the company may instead simply implement a broad reorganization and possibly scale back plans for new products.

Skaters Jump In as Foreclosures Drain the Pool

On a recent morning, a 27-year-old skateboarder who goes by the name Josh Peacock peered into a swimming pool in Fresno, Calif., emptied by his own hands — and the foreclosure crisis — and flashed a smile as wide as a half-pipe.

“We have more pools than we know what to do with,” said Mr. Peacock, who lives in Fresno, the Central Valley city where thousands of homes, many with pools behind them, are in foreclosure. “I can’t even keep track of them all anymore.”

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Some skateboarders use realty tracking sites like realquest.com and realtor.com to find foreclosed houses with pools, while others trawl through satellite images from Google Earth.

On the Web site skateandannoy.com, where skaters trade tips about how to find and drain abandoned pools, one poster wrote about the current economic malaise. “God bless Greenspan,” the post read, “patron saint of pool skatin’.”

At current price of about $40/b every producer in the world is in trouble.

Tar sands included. (To be precise, current tar sands production of about 3mb/day is OK but only slightly profitable at $40/b. What's in trouble is the new investment money (about $30B) committed into new production and planned to come online starting 2010. About half of this money won't make sense anymore.)

While producing more oil is extremely difficult, producing less is a cinch. OPEC is turning off the tab by 3mb/d by Jan 1 2009, and likely to cut another 3mb/d by March. With this much cut, price will rise again for sure. Most OPEC producer countries need $60-70/b price in order not to go into national deficit, so one can safely assume they will just keep cutting productions until price reaches at least $80-90/b. They'd love to stabilize it as $100/b.

This is why Alberta is just sitting tight, knowing the low price will last only half a year. And you know what, Alberta needs a cooling period anyway. Boom of recent years create too much economic nonsense which need to be flushed out.

http://www.h1b.info/about.php

PermaRenter Says:
At some companies, the furloughs are a prelude to a permanent layoff.

Are there any companies that are considering a shorter work week with a pay-cut, as an alternative to layoffs?

I would _love_ to cut back work 4 days a week even if it meant a 20% pay cut...

I meant "cut back work TO 4 days a week"

I would _love_ to cut back work 4 days a week even if it meant a 20% pay cut…

Many may get this wish. Only you may not just see the 20% cut for the loss of one day, but a per day pay cut as well.

As a alternative to layoffs, I believe we will see:

Reduced work week
Cut in hourly pay
Mandatory annual 2 week unpaid vacations
A return to "vested" pensions. That is, you put away some of today's salary (with a possible employee match). This accumulated money, not future corporate earinings, is what pays your retirement.

Mandated vacations are fine.

Any change in pay structure is a big warning sign. Cut your loss short and exit early.

I am against any kind of pension.

Happy New Year to You'll.

It's a good time for 2009 predictions (anything & everything) from all our bloggers out here.

Frank,

H1-B visas are bad, bad, bad. Even in good times when the economy is booming. It basically is a steaming pile for people that take the time and money to achieve a technology degree. Working at various large tech companies I do not see why it is necessary, there are plenty of out of work and graduating engineers here to fill the holes.

slumlord, I do not see why employers should be restricted to one pool of labor. Would you like to be restricted to driving American cars only? I am not comparing the quality of American engineers and American cars. I am merely stating the importance of freedom and choice.

BTW, the new Lincoln MKS looks hot.

Companies exist primarily to make a profit, not to provide jobs.

As far as 4 days a week. No word yet. I did have to take a mandatory 4 days of vacation. Which with the holidays gave me a week and a half off. There is plenty of work and we are behind on some projects so I feel it is more of a knee jerk, fear based reaction. With the company not knowing what their customers are going to do.

At our holiday party one of the higher up's mentioned something about lets hope the bailouts and stimulus packages go through, as it will be good for the company. I was appalled and said no bailouts. It bothers me that a company of this size is somewhat depending on the bailouts....

Is that "higher up" a boomer?

Companies should do anything that makes them money? Yes I agree as long as they obey the law.

I do not agree with companies saying there are not enough qualified engineers and that we need to bring some in. Companies are free to do what they like, I am free to say they are being disingenuous.

As far as freedom and choice. Do you believe in borders? As in companies/jobs are somewhat free to cross borders but labor/people not so much.

Peter P, yes he is, how did you know LOL.

I do not agree with companies saying there are not enough qualified engineers and that we need to bring some in. Companies are free to do what they like, I am free to say they are being disingenuous.

To them, there are never enough qualified engineers. To us, there are never enough good jobs. To consumers, there are never enough choices.

Companies exist primarily to make a profit, not to provide jobs. Employees work primarily to make a living, not to make the shareholders rich.

See, we cannot avoid selfish motivations, we can only balance all these conflicts using a medium, such as Free Market. :)

Do you believe in borders?

I believe in borders so long as there is welfare. However, in my perfect world, there are no borders and there is no welfare. LOL!

Peter P, yes he is, how did you know LOL.

Perhaps I am psychic. :roll:

(I also know that tomorrow is a new year.)

I think we are arguing about different things.

H1-B is a law that has certain criteria. I believe from first hand experience that companies are abusing it and not using it for it's original intent. In essence they have perverted a law and are bordering if not being illegal.

As far as free markets, then a world without borders would mean the free market would be able to function better.

But I think that there are more workers than jobs, therefore being a worker bee. It would not benefit me....but that is just a supposition.

Motorola's layoff plan running ahead of schedule

According to a Reuters piece, yesterday beleaguered cell phone manufacturer Motorola announced that by the end of the quarter, which is today, the company will have laid off 400 more employees than it had originally planned. This does not reflect additional layoffs, but rather a change in schedule for the 3,000 layoffs that have been planned since October of 2008. The net result is that only 1,100 layoffs are now planned for Q1 of 2009 instead of the 1,500 that were originally slated for the quarter.

The change in schedule will result in an additional charge on Motorola's books for the Q4 period. Motorola had originally expected to rack up US$104 million in charges as a result of the layoffs in Q4, but said that it is now expecting the figure to come in somewhere around $189 million instead.

Happy New Year everyone!

Bloomberg article says that developing nations will have to start issuing their bonds in USD.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aKgtMlZgwWHo&refer=home

Would that be a positive for the value of USD or not? Seems like it ought to create higher demand for dollars, at least until they spend or exchange them again (which could have some time-delay?)

according to the article, dollar bond total was $68B, just a drop in the bucket compared to the printing of $T. We do $700B in one shot you know.

Plus, if the emerging markets are offering 12% or more for their dollar bond, that will have a lot of interest rate pressure on US T. But obviously we cannot let T rate go high, or else we will all be game over as foreclosure rate can easily go up 10x. So the Fed will print enough to suppress the T rate, which will more than negate the $68B dollar demand.

Maybe developing countries are issuing dollar bond because they are expecting dollar to tank? Why not issue Euro bond?

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJQOEPb4pCYg

Now here is something that is more fitting for the US finance industry. People are trading US govt bonds that never existed.

I am convinced that the whole US stock, bond, financial market is just a big Enron, when it unravels, many people will find themselves completely naked, when the US Treasury market blows up, that will be the most spectacular event of the whole century, or even centuries to come.

when the US Treasury market blows up, that will be the most spectacular event of the whole century, or even centuries to come

What about 12-21-2012?

http://www.sonypictures.com/movies/2012/

Speaking of housing, did anyone notice that the tax code for 2008 allows one to deduct house property tax, even when one does not itemize? That is a boon for people with paid-for or nearly paid-for houses.

You dirty rat - you got me all excited. I downloaded the 2008 forms and was disappointed. For filing single, you can add your property tax onto the standard deduction UP TO A TOTAL OF $500. See instructions for line 39c on page 34 of the 1040 instruction book.

Big whoop. That's chicken feed compared with what many people are paying for property tax.

Oops, I missed the part about a dollar limit on the property tax addition to the standard deduction.

It's $1,000 for us married folks, so it will still take $250 or so off my taxes.

Maybe next year it will be raised along with the normal standard deduction.

I was interested in buying a house a few years ago but it there seemed to be too much of an ownership premium between renting and owning, so I didn't buy it.

Now there's getting a high ownership premium between those one ounce bullion coins and the GLD and SLV. That sounds like another bubble.

I live in Glenbrook Apartment, Cupertino, 95014 -- two bedroom, 1100 sq ft, upper level with balcony. I pay rent of 2290 per month. For the last four years, Glenbrook has been raising rent yearly once at August by 8%. Do you think they will do so in 2009 August? If they do, what will be their excuse -- higher prices of everything?

@OO

Could you translate the Bloomberg article into English? I am not in the finance field and am confused about the Treasury issue. I own short term Treasuries due in January through Vanguard Brokerage. Are they at risk?

well permaRenter that is interesting.

I've lived in the same neighborhood in 95148 for 41 yrs, the typical sales price increase in regression over any extended interval over all those years has been about 8%. Right now it's slightly below, about 7.6% going back to 1968, probably as good a buy indicator as any I've seen.

@Danville,

The Treasury is 100% safe in face value, because US government can always foot its promise through printing. But, between the Treasury and YOU, there is a layer called PD, which is primary dealer, because the government doesn't deal directly with you, they deal with you through primary dealers like Chase JP Morgan, Goldman Sachs, Mizuho etc.
http://en.wikipedia.org/wiki/Primary_dealers

Over the course of last year or so, the problem of non-delivery has gotten very rampant in the Treasury market, which means, when you pay your money to a fund that claims to be holding Treasury, you think you are holding Treasury, but no, these PDs are taking in money WITHOUT delivery. This is also known in the stock market as NAKED SHORT, which means two things (or more)
1) scam, they just take your money and pretend to sell you Treasury. In the end, you pay them $$$ and hold NOTHING, or
2) they forsee the Treasury price to collapse, so they are trying to sell as much T as possible and buy them back when the price goes down.

Vanguard is a reputable fund house, unlike PIMCO, so I tend to think that they are more likely to hold some real T in their portfolio, but there is NO knowing unless you call them to verify. Even Treasurydirect is not safe in this scenario, because you are still going through PDs, and one of those PDs can do the same fail-to-deliver to you.

IMHO, it is much better to hold physical cash, even in USD, than holding US T, which tracks the parabolic pattern of oil, and is currently at the historical high. Short-term US T has reached a negative return, you'd be much better off holding straight cash, physical cash, in your Sealy bank.

OO and DW:

I'd assume if you're elite richees, you wouldn't fart away your time on this website. So, if you're among the rest of us, you're in the savingsbonds.org crowd.

Together with spouse you can accumulate about 40k per year of these. Used to be able to build up a portfolio up to 120K per year. For those that you hold for at least a year they are all dollar good, an awesome way to "save". I have some earning over 8% interest, tax deferred, free from CA SIT.

OO,

Wow. That is just plain wild. The big broker/dealers will find any systemic weakness and exploit it to the max. Especially now, they are desperate to cover their losses from the mortgage market, and shenanigans in the bond market appears to the next big thing, along perhaps with speculating in beaten-down mortgage paper.

Vanguard:

I have more faith in them than most any other mutual fund company or broker when it comes to protecting the integrity of the customer assets.

That does NOT mean that Vanguard funds do not lose market value. They have and they do. I just think they are more conservative in protecting against outright securities fraud. But as OO said, Vanguard is NOT a Primary Dealer. But I expect Vanguard pay very close attention to their transactions with the Primary Dealers.

Not investment advice, but I use Vanguard for some purposes.

Perma,

If you're not married to Cupertino schools, I think you should get a much better deal elsewhere :-).

Besides, Cupertino has horrible drivers. :(

Are prices coming down yet? I have stopped looking completely.

For the last four years, Glenbrook has been raising rent yearly once at August by 8%. Do you think they will do so in 2009 August?

I live in Sunnyvale and they have been raising our rent every lease period for the last couple years. This time around, it looks like rent will remain the same.

@OO

My guess, then, is that it would be safer buy treasuries at www.treasurydirect.gov
What do you think?