- Continental(CAL) became the latest airline to announce cutbacks in its schedule, saying it will chop fourth-quarter domestic mainline capacity by 11%, resulting in about 3,000 job losses.
- On Wednesday, United Airlines, a unit of UAL(UAUA), announced plans to reduce its fleet by 100 aircraft, taking out 17% to 18% of its mainline domestic capacity by 2009, and eliminate several thousand jobs.
- American Airlines, a unit of AMR(AMR), said it would lower mainline domestic capacity by 11% to 12% in the fourth quarter, retiring at least 75 mainline and regional aircraft. Overall capacity will decline by 7% to 7.5%, and thousands of employees will be let go.
- Delta(DAL, which is merging with Northwest(NWA), has announced capacity cuts of about 10%, which will be accompanied by about 3,000 job losses.
I mean, at some point don't we need Americans who can actually afford to buy new cars (without crazy credit terms like we've seen of late - 7 and 8 year loans) [Feb 13: Car Loans Being Stretched to 7 Years] and be able to afford fly on the airlines? [Apr 8: Now on to Airline Inflation] Or is this going to be reserved for the upper 1/3rd of society? Just asking - being a liberal bleeding heart and all. Obviously we know these people do not deserve health care either because they "don't work hard enough" to deserve it (source: Fox News)...
Perhaps Signapore Airlines or a Chinese or Indian airline will pick up some of these workers - they come cheap! Or when does the day start when hungry Americans looking for a better life smuggle themselves across the border to Canada... to do work that Canadians won't do? Oh the irony of it all.
Oh well, we'll look forward to all the "green collar" jobs the candidates are talking about. Should bring a ton of new job creation here. What's that? We're about 10 years behind most major Western economies on that front? Oh ok. Well don't worry about details like that - 5M green collar jobs will be here soon enough - the candidates pinkie swear. Or perhaps many will return to our roots and become farmers again - I mean that is a product that the rest of the world actually wants. Wouldn't it be sweet to return full circle - a nation of farmers... again. (ruled by the financial elite financed by Uncle Ben of course) Ben, can the automotive and airline workers give you their junk debt so you can give them treasuries in return for a "rollover" loan that last "until credit markets return to normal" (i.e. could be forever). Or is that just reserved for the NYC elite? I mean it would probably be a nice touch to do and lift the burden from all these people - debt for cash - it works in corporate America - why not for the little people? Just asking.
And the service economy beats on.... the pooring of America, and elimination of the middle class right along with it. [Do the Bottom 80% of Americans Stand a Chance?] Two Americas, with kudos to John Edwards, is not only thriving, its accelerating. Conclusion: buy stocks, they don't need Americans.
Short the service economy
7 comments:
May Retail sales were suprisingly strong. How do you explain that? And to be honest, the "recession" just isn't showing up in the numbers yet--be it earnings (aside from financials), jobs numbers, retail sales, GDP, ISM numbers, etc. Obviously some of these numbers aren't great, but taken together they don't indicate the "deep" recessionary conditions that people have been calling for. Not even close. What gives?
show me what stores are suprisingly strong
Walmart Costco etc
other than those discount guys
Target is more of the "middle America" and its negative
and again, same store sales does not account for inflation. If food prices go up by X%, and your same store sales go up by the same X% then unit sales are flat
So in theory if food prices are up 7-10% and same store sales are up 3-4%, that means sales are falling in unit terms
As for job numbers look at continuing claims... highest level since 2004. After you are on unemployment for a while you lose benefits and then fall off the rolls. So both the weekly claims show you as not part of the claims, and the unemployment rate no longer shows you employed
If you really research how the numbers are created in most of the government reports you can see the reality behind the numbers.
Or simply go talk to the average human making $40K a year and ask him how life is going.
p.s. what deep recession? people are saying there is no recession at all. You need to have a shallow recession before you even reach the deep recession yes?
This will be a regional/sector recession. If you are a port worker or farmer or miner or work in energy - you are booming. No recession. If you are in other sectors of the economy - you are in depression (housing, auto, financial, airline) and then some fall in between.
This will take time to play out - people are impatient. We were "expanding" 3 quarters ago, it is not like things turn on a dime - the US economy is like a huge ship...
The job cuts of latter 2007 and 1st half of 2008 have not even begun to filter through the economy. And State budgets need to be balanced this year with far lower revenue bases, so that will lead cuts there into 2009. Etc.
Gonna take time for this all to be played out. Be patient.
**shouldn't I ask what we are going to do with these people?**
Dont we have a shortage of organic fertilizer?
shax,
harsh man. harsh!
First, retail sales are an interesting beast. Stores like Wal-Mart and Costco are boosting sales by just lowering prices on things like food (people have to eat). I didn't read the retail sales report yesterday, but I saw a blurb that said they weren't as low as they thought there were going to be. That's a far cry from strong. You have stores like JC Penny down 4.4%, GAP down 14%, etc...
Second, you have to believe the validity of any of these gov. reports. I know this can sound conspiracy theorish, but when the gov. can release reports that say there is no month over month gas price increase something is amiss. Same goes for employment figures (or inflation). Job cuts in May rose to the highest levels in 2 years, but we somehow are adding 40k jobs in the private sector? Huh?
I'm not normally a doom and gloom person, but I know people who haven't worked in a long time. I know other people who are selling things (boats, cars) in order to keep their house. And I'm personally concerned about my job as I watch my company blindly cut costs.
sdk, your question is sort of funny because if you look almost anywhere but government reports you see very obvious signs both factual and anecdotal
here is an example
more and more people are simply asking for cash at weddings since they are strapped, instead of traditional gifts.
http://tinyurl.com/69dv45
Please realize the median income in America is something like $17.75/hour or equivalent of $37K a year. That is the median. Which means half of America lives below that wage.
Most mutual fund investors are living a different life than many in this country live. I am just trying to give some commentary about how the "other half live" - people who would never have the means to even consider a mutual fund investment. Or stocks. They are busy worrying about putting food on the table. I'd ask anyone who doubts the stresses in the system to take their salary and reduce it to $37K a year and put the rest of the money into a savings account and not touch it; I'd argue the great majority wouldn't last 3 months. $37K is PRE taxes as well...
most people are "financing" their lives in America as the cost of living has outpaced their wages for a decade now; and it's accelerating (inflation in things we need) now.
sdk, and just look at today's news. Unemployment rate with the largest 1 month jump up in the last 12 years. Eventually even the gov. reports start to show the true economic troubles we are currently facing.
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