A Lot More than 19

The list I highlighted earlier of those who (like me) believe the outlook remains troubling despite all the "good news" we've been hearing lately has only 19 names on it. In light of the following two reports, which reveal that ordinary Americans and chief financial officers have a somwhat different perspective than Washington policymakers and Wall Street traders on where things are at, perhaps the list of "doomsayers" -- or should I say realists -- needs to be expanded [red italics mine]:

"Americans Most Pessimistic They've Been Since January" (CNBC)

Americans are the most pessimistic they've been since the beginning of this year, when the US was mired in a deep recession, while confidence in President Obama and Congress is at the lowest level of 2009, according to the latest NBC/Wall Street Journal poll.

Of those surveyed by telephone during the past weekend, 55 percent feel the nation is headed in the wrong direction, compared with 33 percent who felt the US was headed in the right direction. That's the worst showing since January, during the height of the economic crisis, when 59 percent felt that nation was on the wrong track and 26 percent felt it was on the right track.

President Obama's approval rating also edged to the lowest level since he took office in January. Only 47 percent approve of the job he's doing, while 46 percent disapprove. That compares with a 51 percent approval rating in October and 60 percent in February.

Only 42 percent think Obama is doing a good job on the economy, while 51 percent have a negative view of him on that issue. That compares with a 47 percent approval rating in October and 56 percent in February.

"Global CFO Survey: Employment Outlook Bleak, But Business Prospects Improve" (CFO)

DURHAM, N.C. – Chief financial officers expect business conditions to improve in 2010, but U.S. and European chief financial officers say their companies will continue reducing their workforces in the coming months.

In another sign of a weak recovery to come, nearly half of companies that recently cut capital spending, employment, and training say these cuts have permanently hurt their company’s long-term growth prospects. And tight credit markets continue to constrain economic growth, especially for small firms.

These are some of the findings of the most recent Duke University/CFO Magazine Global Business Outlook Survey. The survey, which concluded Dec. 11, asked 1,431 CFOs from a broad range of global public and private companies about their expectations for the economy. (See end of release for survey methodology.) The research has been conducted for 55 consecutive quarters.

SUMMARY OF FINDINGS

-- CFO optimism has improved from recession lows, but remains below long-run averages, and U.S. optimism lags behind the rest of the world.

-- U.S. companies expect to reduce domestic workforce by 1.6 percent in 2010, while the number of outsourced jobs will increase. Two-thirds of companies say their employment will not return to pre-recession levels until 2011 or later.

-- Among companies that recently instituted furloughs or reduced workforce, overtime, wages, 401(k) matches, or company contributions to health and other benefits, most say these cuts will not be restored in 2010. Nearly half of CFOs feel these and other cuts have reduced their company’s long-term growth prospects.

-- Business conditions will improve somewhat in 2010, with earnings expected to rise 7.4 percent. Small increases are planned in capital spending, research and development, and marketing, an improvement from negative projections last quarter. Companies have begun to stockpile cash.

-- CFOs’ top economy-wide concerns include weak consumer demand, federal government policies, price pressure and credit markets. Top concerns about their own businesses include profit margin maintenance, difficulty planning due to economic uncertainty, employee morale and liquidity management.

Comments

[matt]

The Jobs are not coming back.

[roger]

In the spirit of learning, not confrontation.
The rise and fall of the Third Reich by William
Shirer is a good book.
But there is another book, very accurate in detailing
the Financial climate of the 20's ,the cause and the
horrible consequences, it will help you to understand
our future (A bubble that broke the world,by Garet Garret)

[kevinearick]

The current state of discovery:

Within minutes of the latest healthcare deal in Congress, the mass media correctly reported it as a bailout for healthcare proprietors, to the tune of $1 Trillion, in Medicare cuts and tax increases, shrinking supply in the face of dramatic increases in demand, while simultaneously encouraging growth in healthcare education, to flood the labor market. The result would be dramatically declining wages, increased workloads, and further declines in quality.

Beginning next year, protected, government certified labor will feel the brunt of economic pressure, already applied to unprotected labor for decades, and the nexus will liquidate from the bottom up. The double edge sword of agency will then seek to fully capture capital, out of self-preservation. That should be interesting.

Capital seeks to protect itself from evolutionary pressure, and still maintain control. To understand the entire labor mechanism in the 21st century requires decades of vigorous, practical application of intellect, so capital sought to replace labor leadership with simple rule-of-thumb book knowledge, to make decisions. That didn’t eliminate enough thinking, so capital put the book knowledge in computers, to make decisions. And that wasn’t efficient enough, so capital reproduced the computer controllers globally, to eliminate all the thinking.

Now, the global economy is like a Star Trek show: the Enterprise lands on a planet where the computer controller has been telling people how to think for generations, everyone is a slave to the computer controller, and evolution is wiping out the population, because it cannot adapt.

In the current scenario, capital is screaming louder and louder, using the whip more and more, and the results are poorer and poorer, while government borrows more and more money from an invalid, hypothetical future, to grow the safety net larger and larger, to maintain system compliance.

The entire system is a sunk cost, people are turning to lotteries, and capital has turned the markets into rigged lotteries. Yes; this is going to turn out badly. No; the economists, who have never worked a day in their lives, do not have a clue, so they are running on automatic and coming up with more implausible explanations for outcomes everyday.

From the perspective of capital, nothing has changed in 2000 years. People are cattle, to be fed, used as slaves to build more capital, and then slaughtered. What makes the process work for capital is laborers, doctors in this iteration, who go out to lunch everyday with capital, until they start thinking that they are capital. This process seeps down the rungs of labor until the wheels fall off the bus because no one is adapting, and the economy explodes.

The doctors are finding out that they are laborers again, and capital, which normally moves on to the next pasture, is finding out that there are no more pastures in the current circuit. Evolution rewards ignorance to distill adaptive skill.

Compare NPV upcoming retirees income to their adaptive skill inventory, and then compare their example to the succeeding generations that are supposed to supply this income stream. It’s ugly, and no amount of macroeconomic tinkering by economic priests is going to change the outcome. Evolution is about to claw back.

Watch out for nice guys, in capital and in labor; they are not nearly so nice as they would have you believe. Economics is civilized warfare. It doesn’t need to be, but it is, because capital has convinced itself that it is not just the master of the labor, but it is also the master of the planet and the universe as well. Those assumptions are being tested, and capital is failing.

But the computer said ...

[Logical Thinker]

I have mixed feelings.

On the positive side, you've certainly disclosed your point of view, and that's good. Therefore, I can come to this site and apply a discount factor to what I see here. I know it's a place that will "accentuate the negative."

Which, by the way, does not bother me in the least, in and of itself. I began turning negative in early 1999. I was a telecom analyst for a financial institution, and had a ringside seat at the Internet bubble. I was almost exactly one year ahead of the crowd in calling the peak. Call it long-term satisfying, but an unfortunate thing for a guy who went out and bought a bunch of put options.

The downside of what you are doing is that you are locked in a mental tunnel. You're invested in your negativity, just as the National Assn of Realtors is invested in the idea of a housing recovery. Therefore, you can never be more than a data point.

Good investors see turns before they occur, and before anyone will believe them. Great investors see more than one turn. They can switch perspectives and styles as the situation demands. It's a rare quality, and not one to expect.

Things WILL turn upward. The question is when and how. For now, I am pessimistic, but maybe not as much as you are. This site essentially predicts an outright collapse. I don't think that will happen. Instead, I think we're going to be in a rolling depression for the next decade, at which point a new constellation of positive factors will emerge.

In the meantime, I think there'll be opportunities both long and short. The hard part is figuring them out in what will essentially be a sideways-churning market and economy. I think the easy money has already been made on the depression call.