UP IS DOWN
California man is dead after driving his car off a cliff.
by Elaine Meinel Supkis
The financial news media sometimes shows how closely they pimp for people who are not interested in information dissemination. Take CNN, for example:
Editor's Note: CNN.com has a business partnership with CareerBuilder.com, which serves as the exclusive provider of job listings and services to CNN.com.Um, "CareerBuilder.com" isn't providing a service, they are dominating CNN which is not really a news service anymore. The million jobs created, an awful number of them are housing related and already, the bubble there is fading fast on many fronts.
The United States has added nearly 1 million jobs so far this year with May marking 24 consecutive months of sequential gains, according to the Bureau of Labor Statistics. Job growth has averaged 176,000 in the last two months, keeping pace with the 17-month average of 180,000.
Three-fourths of hiring managers report their organizations have added workers over the last six months to expand operations, support new product launches, improve customer service and drive more revenue. The latest government reports show that, in the first quarter, corporate profits rose 13.8 percent year over year.
From CNN same day front page:
Job cuts jumped 35 percent in June, with the number of layoff announcements pushing the monthly total to its highest level since January of last year, an employment firm said Wednesday.In plain English, the jobs being shed are the important ones that have the most value added since they are being shipped out or robotized. You don't put expensive robots to work to replace hamburger flippers. Plain English for "changing consumer demand" is sales are down! Oh oh.
Employers announced 110,996 job cuts in June, compared to 82,283 in May, according to a monthly report issued by Challenger, Gray & Christmas.
June job cuts rose 73 percent from the year-ago period. So far this year, 538,274 job cuts have been announced this year, 14 percent more than the six-month total of 472,735 last year.
Despite reports that show economic growth and job gains, major layoff announcements in the auto and retail sectors contributed to the surprise June number.
"The fact that job cuts are rising in the summer is not even the most surprising trend. The surprise is that we are seeing a growing number of mass job cuts," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
"The cuts are not necessarily an indication of economic weakness, but rather the by-product of numerous trends, including changing consumer demand, outsourcing, mergers and acquisitions, automation and consolidation. We are also starting to see job cuts resulting from higher health care costs as well as higher oil and natural gas prices."
General Motors was at the head of the pack for boosting numbers while slitting wrists: From the NYT:
It is a good time to buy an American car - or so Detroit's Big Three automakers want consumers to think.The reason "inflation" isn't raging is simply because, like during all other times the price of oil shoots up, the price of energy sucking stuff collapses. Anything that uses a huge amount of energy cuts prices in desperation, hoping to sell in a suddenly difficult market. The fact that now all the American auto dealers are destroying their profit margins in an attempt at unloading stock is to be expected.
On Tuesday, General Motors announced that it would extend to Aug. 1 its highly successful sales promotion, which offers vehicles for the same price that G.M. employees pay. Several hours later, Ford Motor said it, too, would begin selling most of its vehicles at the reduced employee rate. And Chrysler, the American division of DaimlerChrysler, is expected to announce details of an employee discount program of its own on Wednesday, when its sale begins.
A Cadillac dealer in Los Angeles offered an employee discount that could lower the price of an Escalade S.U.V. by several thousand dollars. The promotion caused G.M. sales to soar by 41 percent in June. The announcements by all three add up to an aggressive summer pricing war among the domestic automakers. Last month, General Motors rattled the industry when it began the sale, which can drop the average sticker price on a vehicle by several thousand dollars.
Just three years ago, despite rising competition from a variety of models, gas guzzlers were the profit kings of the highway. $2000+ per vehicle vs a tiny $500 on small gas misers. So of course, Detroit pushed the SUV stuff very hard indeed.
Now they are white elephants and this happy sale is bad news all around. Sales are up but this is no good.
From Worker's World news:
As tens of thousands of General Motors employees clocked out at the end of their shifts on July 1--to begin an annual two-week nationwide shutdown for inventory and maintenance--questions about their job security, health-care costs and pensions remained unanswered.Interesting the health numbers are slightly below the profit margin numbers. To regain their profits the management must cut something and this does it in one fell swoop, doesn't it?
At a June 7 stockholders' meeting in New York, GM Chair and Chief Executive Officer Rick Wagoner had announced that the giant corporation would cut 25,000 hourly jobs by 2008. Hit with falling stock prices and car sales, the auto boss blamed health-care costs, especially for the company's almost 500,000 retirees, as the source of GM's financial woes.
Claiming that $1,550 of each vehicle's cost goes to pay for medical benefits, Wagoner threatened to unilaterally abandon sections of the union contract. He told the United Auto Workers that it had until June 30 to figure out ways to pare down health-care expenses.
Within days the union convened an emergency meeting of local presidents and shop committee chairs in Detroit. UAW President Ron Gettelfinger rejected any notion of reopening the contract to alter health-care benefits. But he said the union would continue to talk with GM management, looking for a "win-win" solution.
At the Doraville, Ga., GM plant, some 3,100 workers produce the mini-vans known as "crossover vehicles." Here, the announcement that 25,000 jobs would be cut by the year 2008 caused a wide range of emotions--from anxiety to anger, from resignation to resolve.This is the beginning of the great cuts, not the end. In the end, our plants will not be manufacturing anything much, we will simply do some detail finish work on stuff mostly created in China and Japan and Germany. And this, only so a "made in the USA" tag can be slapped on it somewhere.
NEW YORK (MarketWatch) - U.S. stocks were lower in early afternoon trade Wednesday, as news of heavy layoffs last month and yet another rise in the price of crude oil deflated the market.The market keeps bumping up against 10500 and can't go higher. And each news cycle brings stuff along that eats away at it. Like at any peak, it hovers and shakes and pushes and then begins the long fall.
Storm concerns lift crude prices near a record atop $60
In recent trades the Dow Jones Industrial Average ($INDU: news, chart, profile) was down 51.6 points at 10,318, the S&P 500 ($SPX: news, chart, profile) down 3 points at 1,202. The Nasdaq composite ($COMPQ: news, chart, profile) was down 3.46 points at 2,075..
The major averages got a short-lived boost from the Institute for Supply Management's non-manufacturing index for June, which showed continued growth for the services sector..The services sector. This is not economic strength, this is the after glow. When our capitalists decided to fillet the computer workforce, they saved a lot of money and cut costs hugely and utterly destroyed the purchasing power of a huge consumer base and now we are settling into a rather unpleasant long Night. There are no big wage earners on the horizon. Everyone will be cutting costs, cutting pay, cutting benefits, reducing vacation time, all set on a negative spiral downwards as everyone jockeys for spending less and snatching more out of the system at the top.
This is classic and it is very explosive. Government's job is to stop this cycle usually via federal spending by that is being destroyed by irresponsible tax cuts.
Fun, fun times ahead.
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