one reason why the rebound might be considerably stronger than almost everyone anticipates.
Let's say that there are prospective suppliers. Four of them are zombies per this diary. Four others are in good shape. The zombies will struggle and the four others will really take off.
The inventory-to-sales ratio is falling quickly -- it is already lower than when the "jobless recovery" from the 2001 recession began. Companies cut too deeply and are going to have to hire a lot of people back in a hurry.
Revenge of JIT, indeed. And by the way, glad to see another diary from MfM.
It really seems that a lot of these facilities do things almost without thinking and that's about anything outside of their own corporation.
I wish we had a good "global supply chain" analysis type of blogger on EP to discuss this because we've had a lot of posts from it plain costs more to move to China to parts failure to energy costs and now this...disappearing supply chain.
CFOs and so on don't seem to get that is the same as throwing away a $1 million dollar piece of equipment and in some of these areas, the specialization is so high level...
believe one can "retrain" someone to obtain those skills in 6 months is not realistic, try 10 years.
I wish we could get these bean counters to count employees way beyond salary but what their real "value added" to the corporate profits, long term strategy really is. Seriously, if they are going to continue doing people by spreadsheet, at least get an accurate accounting of the value.
but, there's a story out of Indianapolis about the shipping of the Pratt and Whitney jet engine plant to Singapore. Not only is the plant going out of business, but it could put an engine rebuild shop in Texas out of business. Here's the story.
It's not just manufacturers that are going to have a rude awakening.
A lot of employers cut too deeply, in a blind panic. One company I'm aware of cut an entire 400-employee division last November, only to realize in January they had made a grave mistake. They began trying to hire them all back - from the top executives on down. Only some accepted the rehire offers. They lost a LOT of knowledge and it will take them a long time to build the business back to where it was.
Many companies are going to find that when the orders start coming in, they no longer have enough people who know how to do anything. Whether or not they can survive financially til they get the retraining process done - some will, some won't. Some will sell their companies, take the money and run. I see lots of acquisitions in the future.
Of course these companies outsourced everything, thinking magically this corporate independent global supply chain...
oops, none of those suppliers would disappear while they were squeezed to zero...
but I read that Chrysler is having trouble getting critical parts to build their cars.
I don't think these suppliers are Zombies though because of course our government won't feed them anything as they die on the vine.
This is all good folks. Frank is the committee chair so if you can get him on the bus to not use the Federal reserve as the ultimate systemic risk regulator that means one has a much better chance of obtaining a better legislative regulatory reform solution.
I'm convinced....although EP supports differing conclusions, that the "cliff diving" problems of the economy are over.
So we are going from those "OMG the world is collapsing" types of headline topics to things that are much less attention grabbing, but very relevant....i.e. we're moving into the economic situation where ongoing malaise, or what I like to call the long slow slide down of the middle class economy isn't so dramatic so it doesn't get much attention.
Plus Congress is in recess.
So, right now would be a very good time to go through either legislation that is buried in committee that is good and needed (there are the usual trade bills which of course are getting buried in committee) or policy recommendations that make a hell of a lot of sense, but of course also get ignored...
and sum up some of those bills.
I think you can do a "sound byte" headline attention grabber but in the body of the post, go into very specific details on why a policy change is needed.
For example, a histogram of all of the mergers and acquistions which paid out huge bonuses but actually hurt the overall corporate bottom line for say at least a year.
Trade data is a research project but there are economist reports/papers around as well as raw data to show we are just losing our economic ass to China.
We will have the green shoots rah, rah team point to ISM as well as industrial production and so on moving up...
but they will not scale and compare those numbers to...before NAFTA or before the China PNTR and show just how large a percentage of U.S. manufacturing moved offshore or went of of business...
you get the idea...
We've been seeing it....things like TARP is making money...
well, so far....of the banks who never needed the money in the first place....
so i.e. do not look at the concept from the beginning and was it even necessary...what was that money even used for (acquisitions) and in truth, how much is at risk....
We're getting spin on either a slope or a small result as being sort of this "yeah, rah, it's all good, now will people just go home and we will go on as usual" even though as usual got us to this point last Sept.
if we get +GDP numbers....then it will be....don't even look at the government spending involved and what it was spent on, i.e. it is pushing for sustainable growth...
it's just like the unemployment numbers, they will focus on "decline" instead of the raw numbers being beyond belief 500k+ in initial claims.
You'll see cheer leading for housing....minus the fact comparing prices, everything to 2006 or so is comparing to a bubble, which in terms of affordability plus building economic growth that isn't sustainable....
i.e. "re-inflate the bubble" is not a good idea...
so EP is a community blog right so I'm making topic suggestions if you want to push specifics...
Let's see now, I guess the globe had a massive psychotic episode, hallucinated the entire shadow banking system, the derivatives market, the housing bubble...
for obviously the reason the economy is not (ssssh!) recovering is because the media/google keyword search/words in online bit stream say so.
I've been following ECRI for almost 10 years, and they are the very best at what they do, which is predicting recessions and recoveries.
These testimonials are from their website, businesscycle.com:
"ECRI is perhaps the only organisation to give advance warning of each of the past three recessions; just as impressive, it has never issued a false alarm." - The Economist, Jan. '05
"ECRI can justify a certain smugness now that business cycles are back in fashion. The institute called the last two recessions and the current recovery months ahead of the pack." - Harvard Business Review, Apr. '04
"No one speaks with more authority about the economy's turning points." - Fortune Magazine
Right-wingers have done an excellent job of using their 'think-tanks' to push policy. There are a few very good left-wing or even left leaning 'think tanks' that are not being fully utilized.
I believe the challenge is translating those facts and detailed policy changes down to sound bytes. We got to play the game until we are in a position to change the rules.
Sound bytes without facts, specifics, very detailed policy changes are just noise in the machine.
That's the problem with the media stream, parsing out the gems is tough....and it is beyond belief bad on cable news...misinformation, miscategorization of issues into sound bytes...
That's how large corporate lobbyist public relations teams get their agenda through....
So, if one cannot point out specifics and why they are a problem...one cannot get those specifics changed.
I'd say Byron Dorgan, Bernie Sanders, looks like Alan Grayson sure smells a rat and is digging around, Kaptur, probably Defazio...
I think Barney Frank actually is getting a lot of this...
but he's a little more conservative in reality on how to handle the solution, maybe a little more Political..
but that sure beats what that committee was up to two years ago.
The Senate seems to be in the weeds (or should we say in the pockets).
These topics are also extremely difficult. You pretty much have to start studying the details and making blanket statements in absolutes out of frustration won't cut it.
one reason why the rebound might be considerably stronger than almost everyone anticipates.
Let's say that there are prospective suppliers. Four of them are zombies per this diary. Four others are in good shape. The zombies will struggle and the four others will really take off.
The inventory-to-sales ratio is falling quickly -- it is already lower than when the "jobless recovery" from the 2001 recession began. Companies cut too deeply and are going to have to hire a lot of people back in a hurry.
Revenge of JIT, indeed. And by the way, glad to see another diary from MfM.
It really seems that a lot of these facilities do things almost without thinking and that's about anything outside of their own corporation.
I wish we had a good "global supply chain" analysis type of blogger on EP to discuss this because we've had a lot of posts from it plain costs more to move to China to parts failure to energy costs and now this...disappearing supply chain.
CFOs and so on don't seem to get that is the same as throwing away a $1 million dollar piece of equipment and in some of these areas, the specialization is so high level...
believe one can "retrain" someone to obtain those skills in 6 months is not realistic, try 10 years.
I wish we could get these bean counters to count employees way beyond salary but what their real "value added" to the corporate profits, long term strategy really is. Seriously, if they are going to continue doing people by spreadsheet, at least get an accurate accounting of the value.
Thanks for posting that piece of this story!
but, there's a story out of Indianapolis about the shipping of the Pratt and Whitney jet engine plant to Singapore. Not only is the plant going out of business, but it could put an engine rebuild shop in Texas out of business. Here's the story.
It's not just manufacturers that are going to have a rude awakening.
A lot of employers cut too deeply, in a blind panic. One company I'm aware of cut an entire 400-employee division last November, only to realize in January they had made a grave mistake. They began trying to hire them all back - from the top executives on down. Only some accepted the rehire offers. They lost a LOT of knowledge and it will take them a long time to build the business back to where it was.
Many companies are going to find that when the orders start coming in, they no longer have enough people who know how to do anything. Whether or not they can survive financially til they get the retraining process done - some will, some won't. Some will sell their companies, take the money and run. I see lots of acquisitions in the future.
Of course these companies outsourced everything, thinking magically this corporate independent global supply chain...
oops, none of those suppliers would disappear while they were squeezed to zero...
but I read that Chrysler is having trouble getting critical parts to build their cars.
I don't think these suppliers are Zombies though because of course our government won't feed them anything as they die on the vine.
More like ghost ships.
Naked Capitalism has the overview and link to updated story.
This is all good folks. Frank is the committee chair so if you can get him on the bus to not use the Federal reserve as the ultimate systemic risk regulator that means one has a much better chance of obtaining a better legislative regulatory reform solution.
I'm convinced....although EP supports differing conclusions, that the "cliff diving" problems of the economy are over.
So we are going from those "OMG the world is collapsing" types of headline topics to things that are much less attention grabbing, but very relevant....i.e. we're moving into the economic situation where ongoing malaise, or what I like to call the long slow slide down of the middle class economy isn't so dramatic so it doesn't get much attention.
Plus Congress is in recess.
So, right now would be a very good time to go through either legislation that is buried in committee that is good and needed (there are the usual trade bills which of course are getting buried in committee) or policy recommendations that make a hell of a lot of sense, but of course also get ignored...
and sum up some of those bills.
I think you can do a "sound byte" headline attention grabber but in the body of the post, go into very specific details on why a policy change is needed.
For example, a histogram of all of the mergers and acquistions which paid out huge bonuses but actually hurt the overall corporate bottom line for say at least a year.
Trade data is a research project but there are economist reports/papers around as well as raw data to show we are just losing our economic ass to China.
We will have the green shoots rah, rah team point to ISM as well as industrial production and so on moving up...
but they will not scale and compare those numbers to...before NAFTA or before the China PNTR and show just how large a percentage of U.S. manufacturing moved offshore or went of of business...
you get the idea...
We've been seeing it....things like TARP is making money...
well, so far....of the banks who never needed the money in the first place....
so i.e. do not look at the concept from the beginning and was it even necessary...what was that money even used for (acquisitions) and in truth, how much is at risk....
We're getting spin on either a slope or a small result as being sort of this "yeah, rah, it's all good, now will people just go home and we will go on as usual" even though as usual got us to this point last Sept.
if we get +GDP numbers....then it will be....don't even look at the government spending involved and what it was spent on, i.e. it is pushing for sustainable growth...
it's just like the unemployment numbers, they will focus on "decline" instead of the raw numbers being beyond belief 500k+ in initial claims.
You'll see cheer leading for housing....minus the fact comparing prices, everything to 2006 or so is comparing to a bubble, which in terms of affordability plus building economic growth that isn't sustainable....
i.e. "re-inflate the bubble" is not a good idea...
so EP is a community blog right so I'm making topic suggestions if you want to push specifics...
this is all possible via EP.
Let's see now, I guess the globe had a massive psychotic episode, hallucinated the entire shadow banking system, the derivatives market, the housing bubble...
for obviously the reason the economy is
not(ssssh!) recovering is because the media/google keyword search/words in online bit stream say so.I've been following ECRI for almost 10 years, and they are the very best at what they do, which is predicting recessions and recoveries.
These testimonials are from their website, businesscycle.com:
"ECRI is perhaps the only organisation to give advance warning of each of the past three recessions; just as impressive, it has never issued a false alarm." - The Economist, Jan. '05
"ECRI can justify a certain smugness now that business cycles are back in fashion. The institute called the last two recessions and the current recovery months ahead of the pack." - Harvard Business Review, Apr. '04
"No one speaks with more authority about the economy's turning points." - Fortune Magazine
but this was presented at the Jackson Hole Federal Reserve Conference....and it seems they are taking it seriously.
Reminds me of cap and trade, or "lets create yet another market for GS plus let polluters buy credits" type deal.
I had completely missed this. TIC...fantastic!
Mr. Oak, I believe you are still operating under the illusion that we in the US (and several other countries one could name) have an "economy."
For shame, sir! We exist under the Orwellian illusion of an economy. But someday, the serfs may arise....highly doubtful, though.
Any extra $$$ laying around should be invested in JPMorgan silver paper.....
YAA (yet another analyst) is saying this economy is not a V, W, U, L or
it's a caterpillar.
(referring to the current market levels vs. on the ground Macro economic reality land)
Right-wingers have done an excellent job of using their 'think-tanks' to push policy. There are a few very good left-wing or even left leaning 'think tanks' that are not being fully utilized.
Oops, I showed my partisan nature.
RebelCapitalist.com - Financial Information for the Rest of Us.
I believe the challenge is translating those facts and detailed policy changes down to sound bytes. We got to play the game until we are in a position to change the rules.
RebelCapitalist.com - Financial Information for the Rest of Us.
Sound bytes without facts, specifics, very detailed policy changes are just noise in the machine.
That's the problem with the media stream, parsing out the gems is tough....and it is beyond belief bad on cable news...misinformation, miscategorization of issues into sound bytes...
That's how large corporate lobbyist public relations teams get their agenda through....
So, if one cannot point out specifics and why they are a problem...one cannot get those specifics changed.
I believe it is a matter of boiling it down to [sadly] soundbites or catch phrases for things to sink in.
RebelCapitalist.com - Financial Information for the Rest of Us.
I'd say Byron Dorgan, Bernie Sanders, looks like Alan Grayson sure smells a rat and is digging around, Kaptur, probably Defazio...
I think Barney Frank actually is getting a lot of this...
but he's a little more conservative in reality on how to handle the solution, maybe a little more Political..
but that sure beats what that committee was up to two years ago.
The Senate seems to be in the weeds (or should we say in the pockets).
These topics are also extremely difficult. You pretty much have to start studying the details and making blanket statements in absolutes out of frustration won't cut it.
Who understands what is happening - that are current economic model is broken and needs systematic changes?
RebelCapitalist.com - Financial Information for the Rest of Us.
That is all we are doing and the Obama Administration is a willing participate in the blowing by propping up this financial oligarchy.
FIRE GEITHNER AND SUMMERS NOW!
RebelCapitalist.com - Financial Information for the Rest of Us.
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