[Hopeful]

Existing-Home Sales Tumble - WSJ.com

On the economic front, it looks like the home buyer incentives had a limit, just like cash for clunkers. The good news is (if you can call it good news), with inventories of existing homes shrinking, it may help with sales of new homes. However, with unemployment at its current levels, home buying demand continues to be restrained.

Sam's Club will also be laying off 11,000...

[JerryLove]

Unfortunately, the companies that the tax-payers gave so much to protect are sitting on their money rather than spending it on workers.

[Hopeful]

Originally Posted by JerryLove

Unfortunately, the companies that the tax-payers gave so much to protect are sitting on their money rather than spending it on workers.

I know a number of folks who are in small to mid sized businesses (i.e., were not recipients of any TARP money) that have had their jobs or hours cut because of the downturn in the economy. Sam's Club certainly did not get any assistance.

The banks that were forced to close (229 since early 2007) gave terminations to their employees - unless an acquiring bank gave them a job. The money used for this purpose never went to anyone to "sit on" because there were no workers left.

Or how about this for part of 2009 alone?:

http://money.cnn.com/news/specials/job_cuts/2009/

Or this as a reflection of what is going on in the microeconomic sector:

http://money.cnn.com/galleries/2008/...smb/index.html

I don't see a lot of TARP money in these.

[nolidad]

Originally Posted by Hopeful

Existing-Home Sales Tumble - WSJ.com

On the economic front, it looks like the home buyer incentives had a limit, just like cash for clunkers. The good news is (if you can call it good news), with inventories of existing homes shrinking, it may help with sales of new homes. However, with unemployment at its current levels, home buying demand continues to be restrained.

Sam's Club will also be laying off 11,000...

Well banls are sitting on a huge number of foreclosed homes- almost 8 months at current sales trends, that do not appear in inventory numbers.

With unemployment continuing to track up we will not be seeing home prices and sales rise for awhile .

[Hopeful]

Originally Posted by nolidad

Well banls are sitting on a huge number of foreclosed homes- almost 8 months at current sales trends, that do not appear in inventory numbers.

That is true. At this time, I believe foreclosure sales make up a significant portion of any existing home sales that were reported. Otherwise, the numbers could be worse...

[JerryLove]

Originally Posted by Hopeful

I know a number of folks who are in small to mid sized businesses (i.e., were not recipients of any TARP money) that have had their jobs or hours cut because of the downturn in the economy. Sam's Club certainly did not get any assistance.

Of course Sam's Club did.

Sam's Club doesn't actually operate in cash. They, like every other major company, cover their day-to-day operations with extremely short term loans. These loans exist because of what is referred to as "the paper market". This is the place where companies, like Sam's, give IOUs for needed operating capital.

Now that paper market froze when the collapse started. Though the paper was not really high risk, all the banks stopped buying it, and major corporations (like Sam's Club) risked tremendous losses.

Much of those tax-payer doallrs went into the paper market to give it liquidity, allowing an awful lot of companies, like Sam's, that were not cut a check from TARP, to benifit greatly from it none-the-less.

That of course failes to address how much stimulus was directed at increasing retail spending (from which Sam's benifits).

The banks that were forced to close (229 since early 2007) gave terminations to their employees - unless an acquiring bank gave them a job. The money used for this purpose never went to anyone to "sit on" because there were no workers left.

Irellevent. My company (a fortune 100 company) had the highest profits in its history. We expect to make more money than that in 2010.

We have laid off people, we don't replace lost workers (which is a pain for many managers), and we pretty much killed raises. We are sitting on so much liquid capital that our directors are concerned that we might get baught by a larger company that just wants our cash.

If you don't think that IBM, or GE, or Citibank is sitting on much larger reserves than normal: you are not paying attention. If you believe that companies doing well are neccessairily hiring, you haven't looked.

I don't see a lot of TARP money in these.

If you don't see tax-payer money throughout the economy: you aren't looking very closely.

[Hopeful]

Originally Posted by JerryLove

Of course Sam's Club did.

Sam's Club doesn't actually operate in cash. They, like every other major company, cover their day-to-day operations with extremely short term loans. These loans exist because of what is referred to as "the paper market". This is the place where companies, like Sam's, give IOUs for needed operating capital.

Now that paper market froze when the collapse started. Though the paper was not really high risk, all the banks stopped buying it, and major corporations (like Sam's Club) risked tremendous losses.

Much of those tax-payer doallrs went into the paper market to give it liquidity, allowing an awful lot of companies, like Sam's, that were not cut a check from TARP, to benifit greatly from it none-the-less.

That of course failes to address how much stimulus was directed at increasing retail spending (from which Sam's benifits).

Irellevent. My company (a fortune 100 company) had the highest profits in its history. We expect to make more money than that in 2010.

We have laid off people, we don't replace lost workers (which is a pain for many managers), and we pretty much killed raises. We are sitting on so much liquid capital that our directors are concerned that we might get baught by a larger company that just wants our cash.

If you don't think that IBM, or GE, or Citibank is sitting on much larger reserves than normal: you are not paying attention. If you believe that companies doing well are neccessairily hiring, you haven't looked.

If you don't see tax-payer money throughout the economy: you aren't looking very closely.

So you're saying that all these companies are doing much better than what we're being told - that they could afford to keep all their employees and that the job cuts and high unemployment rates are completely unjustified? And that construction and manufacturing sectors that have been hardest hit could have kept their employees? IOW, the recession is really non-existent?

And I like how you say my example of the closed banks is irrelevant when it really is, especially if you were one of the displaced workers. It is relevant to the discussion because it is reflective of what's happening in an industry. Also, if you think the reserves set up in GE and Citibank are sufficient, then you are not looking at the financial news. Citibank and many other major financial institutions have not had to reveal their real financial conditions because of lax mark-to-market accounting rules.

[JerryLove]

Originally Posted by Hopeful

So you're saying that all these companies are doing much better than what we're being told - that they could afford to keep all their employees and that the job cuts and high unemployment rates are completely unjustified?

No, I'm saying that a lot of companies that are doing well have cut spending regardless, and are layingoff workers.

And that construction and manufacturing sectors that have been hardest hit could have kept their employees? IOW, the recession is really non-existent?

It's amazing that you manage to believe I said that without using any of the words you did. I'm apparently a master at writing between the lines.

In regards to what I actually said, do you have a dispute?

And I like how you say my example of the closed banks is irrelevant when it really is, especially if you were one of the displaced workers. It is relevant to the discussion because it is reflective of what's happening in an industry.

Ok. Please tell me how a business that closed is relevent to my claim that businesses that didn't close, and are remaining profitable, are hording cash.

Tell me how a business that closed is relvent to to my claim that businesses, like Sam's, who did not get a check directly from TARP, still benifit from the taxpayer bailout of the banking system.

Seriously. Tell me how your statement relates to either of mine. I'll wait. Because if it doesn't relate to them, it's irrellevent to what I said.

[normajean777]

Originally Posted by JerryLove

Ok. Please tell me how a business that closed is relevent to my claim that businesses that didn't close, and are remaining profitable, are hording cash.

This whole recession basically started with the credit crisis. Whats wrong if companies are trying to remove risk by beefing up their balance sheet?

[Andrew]

Umm. Who cares that one month in 12 had a decline in existing home sales? We had the first year of growth in home sales last year in FOUR years. I just don't believe that "government support" helped sell that many of these homes. If you will take note, the stock market went up 60+% this year. It looks to me like all of the sings of an ending recession.

Employment is always the last thing to recover in a recession market.

[nolidad]

Originally Posted by Andrew

Umm. Who cares that one month in 12 had a decline in existing home sales? We had the first year of growth in home sales last year in FOUR years. I just don't believe that "government support" helped sell that many of these homes. If you will take note, the stock market went up 60+% this year. It looks to me like all of the sings of an ending recession.

Employment is always the last thing to recover in a recession market.

True but the best months were when the govt. put up the incentives.

http://www.realtor.org/wps/wcm/conne...bfb008069f8e0c


People are wary of buying, banks are wary of lending and companies are wary of hiring because of the large uncertainty facing the economy.

Yes the recession could be ending, or we could be poissed for the second and more painful dip in a double dip depression. Many economists fear the latter, due to tight credit and the massive debt load privately, corporately and publicly this nation is laboring under.

[JerryLove]

Originally Posted by normajean777

This whole recession basically started with the credit crisis. Whats wrong if companies are trying to remove risk by beefing up their balance sheet?

So a subject change? OK.

The reason it's bad, in a troubled economy, for a business to reduce expenditures while continuing to take in profits, is because it huts the economy.

It's something of a prisoner's delimmia. If you are the only business doing it, it helps you: but if everyone (a large percentage) does it, it hurts everyone.

It's also morally a bit questionable because it hurts most the tax payers who just saved your butt. It's biting the hand the fed you.

[Hopeful]

Originally Posted by Andrew

Umm. Who cares that one month in 12 had a decline in existing home sales? We had the first year of growth in home sales last year in FOUR years. I just don't believe that "government support" helped sell that many of these homes. If you will take note, the stock market went up 60+% this year. It looks to me like all of the sings of an ending recession.

Employment is always the last thing to recover in a recession market.

I'll tell you who cares. It's the one in ten in the US workforce who does not have a job (more if you count those who can no longer make a claim for unemployment benefits or who have given up looking for work). They have been displaced from their homes or have been forced to delay any purchase. And if you don't believe that "government support" (i.e., home buyer credits) helped sell many of these homes, then why did they approve the bill in the first place? Anyway, the credits will run out in April and we will see what happens to existing home sales after that. And let's see what happens when the Treasury stops providing liquidity in the residential financing market when they stop buying the securities.

An economist for a certain government agency estimated that about 47% of existing home sales in CA were on foreclosed properties. That number did not include short sales. So, you really can't compare the sales figures to previous years because they are not under comparable scenarios.

Your comment about the stock market being up as a sign of a sustainable recovery is almost laughable. The stock market is up because the yields in other investment instruments (eg., money markets, bonds, treasuries, real estate, etc.) are so low, stocks returns look better.
There are some economists and market analysts who believe that stocks are still overpriced, especially when compared to earnings. However, the stock market has never been a good indicator of how well the economy is doing. It is a better indicator of investor speculation and can change drastically from day to day.

Lastly, employment is never the last thing to recover from a recession. In the context of this thread, real estate values, both commercial and residential, always trail by years. Look how long it took to recover from the last recession.