Hmmm, This Kind of Thing Could Really Catch On
by ilene - July 20th, 2010 7:55 pm
TLP: Hmmm, This Kind of Thing Could Really Catch On
Courtesy of Jr. Deputy Accountant
Seems that there’s something to be said for starting completely from scratch.
The NYT scopes out a lesson in privatization:
Not once, not twice, but three times in the last two weeks, Andrew Quezada says, he was stopped and questioned by the authorities here.
Mr. Quezada, a high school student who does volunteer work for the city, pronounced himself delighted.
“I’m walking along at night carrying an overstuffed bag,” he said, describing two of the incidents. “I look suspicious. This shows the sheriff’s department is doing its job.”
Chalk up another Maywood resident who approves of this city’s unusual experience in municipal governing. City officials last month fired all of Maywood’s employees and outsourced their jobs.
While many communities are fearfully contemplating extensive cuts, Maywood says it is the first city in the nation in the current downturn to take an ax to everyone.
The school crossing guards were let go. Parking enforcement was contracted out, City Hall workers dismissed, street maintenance workers made redundant. The public safety duties of the Police Department were handed over to the Los Angeles County Sheriff’s Department.
At first, people in this poor, long-troubled and heavily Hispanic city southeast of Los Angeles braced for anarchy.
Senior citizens were afraid they would be assaulted as they walked down the street. Parents worried the parks would be shut and their children would have nowhere to safely play. Landlords said their tenants had begun suggesting that without city-run services they would no longer feel obliged to pay rent.
The apocalypse never arrived. In fact, it seems this city was so bad at being a city that outsourcing — so far, at least — is being viewed as an act of municipal genius.
“We don’t want to be the model for other cities to lay off their employees,” said Magdalena Prado, a spokeswoman for the city who works on contract. “But our residents have been somewhat pleased.”
Makes you wonder why the city couldn’t have hired these people to begin with, as actual government employees. Or why the city wasn’t able to hold its workers accountable to begin with.
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US GDP growth rate is unsustainable; recovery will fade
by ilene - April 30th, 2010 5:14 pm
US GDP growth rate is unsustainable; recovery will fade
Courtesy of Edward Harrison at Credit Writedowns
The US turned in a fairly robust quarter in Q1 2010, with real GDP growth meeting expectations at 3.2% annualized. This comes on the back of a very robust annualized 5.6% growth in the previous quarter. This is the best growth two-quarter growth we have seen since 2003.
However, when one digs deeper, it is obvious this growth is unsustainable because it is predicated on a reduction in savings rates and a releveraging of the household sector. As a result, I expect weak GDP growth in the second half of 2010.
The problem with the BEA reported numbers is the composition of GDP growth. The BEA says in its data release:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.2 percent in the first quarter of 2010, (that is, from the fourth quarter to the first quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 5.6 percent.
The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The "second" estimate for the first quarter, based on more complete data, will be released on May 27, 2010.
The increase in real GDP in the first quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment that were partly offset by decreases in state and local government spending and in residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
The deceleration in real GDP in the first quarter primarily reflected decelerations in private inventory investment and in exports, a downturn in residential fixed investment, and a larger decrease in state and local government spending that were partly offset by an acceleration in PCE and a deceleration in imports.
So the gain in GDP was due to consumption, while GDP decelerated from Q4 2009 due to inventory, exports, residential investment, and state and local government spending.
Translation: These numbers are entirely dependent on an increase in consumer spending. Everything else is becoming a drag on…
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Intel: Too Much, Too Far, Too Fast
by ilene - July 15th, 2009 11:13 am
In this second article by Karl, he examines Intel’s quarterly results and is not as excited as the market. Why? Layoffs. Intel excels at cost management – good for Intel, but not a sign of healthy economic recovery. – Ilene
Intel: Too Much, Too Far, Too Fast
Courtesy of Karl Denninger at The Market Ticker
SAN FRANCISCO (Reuters) – Intel Corp’s quarterly results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia, setting an auspicious tone for the technology sector.
Uh, well….
Sure, if you just read the PR on the earnings.
Someone filed that story before the conference call, or simply ignored it.
The strong growth came in Asia, specifically China, which blew out a huge stimulus program. Ok.
But it was specifically stated on the conference call that US consumer sales were weak, and repeating what DELL said earlier, so are enterprise sales.
The quote that was chosen is rather humorous:
Smith told Reuters that computer markets were strengthening and there were "pockets of relative strength" in consumer PC markets, as well as in the Asia Pacific and in China.
Pockets of relative strength.
Yes, there are. Netbooks in particular are relatively strong – a new, very-low-cost alternative to laptops. $300, 400, 500 machines – not the $1,000+ machines previously sold, and they’re replacing the demand that used to be filled by those $1,000 machines! That’s not so good.
Neither is this:
Executives warned that the corporate market remained weak, and Intel does not expect much change in the second half.
Heh wait a second – I thought this was a bullish report for capital spending and the chip sector? No? IBM’s primary market is to enterprise customers, not consumers.
The bigger problem for Intel is its P/E – now well over 20, its just too high – unless we get a very strong economic recovery.
If you’re in the Dennis Kneale camp on that, have at it. I’m going to pay close attention to the reaction in the real market tomorrow when the stock opens for trading by the pros – not the aftermarket daytrader games of the evening, with most of that volume happening before the…
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Boss Gets Into Groove After 3rd Round Of Layoffs
by ilene - June 23rd, 2009 7:31 pm
This is funny, but sad, don’t get me wrong. The Onion reports on the layoff progress from the dismisser’s point of view.
Boss Gets Into Groove After 3rd Round Of Layoffs
INDIANAPOLIS—After two earlier rounds of clumsy, uncoordinated layoffs, Wiley Advertising manager Hank Strauss finally hit his pink-slip-issuing stride Friday with the "effortless" dismissal of one quarter of his remaining workforce.
"By the time I got to the IT department, I was really feeling it," the 51-year-old said after terminating two dozen full-time employees without breaking a sweat. "I don’t know, it was like everything fell into place: my timing, my reflexes, everything.
Added Strauss, "What a rush."
The most recent round of job cuts marked the third time in the past four months that revenue concerns have forced the advertising agency to reduce its payroll, and according to Strauss, this latest spate of layoffs "was by far [his] best yet."…
"I was firing people in ways I never knew were possible," Strauss said. "Sometimes I’d tell them right off the bat that their position had been eliminated, and other times I’d build it up for a couple minutes and then drop the hammer. It all just came so naturally."…
Strauss’ performance on Friday represented a striking improvement over his earlier attempts at downsizing, which had been marred by stilted, awkward deliveries, repeated bungling of the company’s terms of severance, and unconvincing attempts at condolence.
"God, I’ll never forget this one woman, an executive assistant, who we were replacing with an unpaid intern," said an embarrassed Strauss. "She kept pleading and sobbing, and I told her it wasn’t personal, just a matter of ‘budgetation’ restrictions. Budgetation? What was that?"…
Full article here.
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.