9/29 Study: Mass. manufacturing boom at end, by Todd Wallack, Boston Herald, p. 35.
After a couple of years of healthy gains, local companies cut back both on wages and employment during the second quarter, the study by DRI and the Associated Industries of Massachusetts found. Exports also slipped, due to a stronger dollar and economic troubles abroad.... The DRI/AIM manufacturing index, based on employment and export data, fell for the first time in five years. Moreover, [Sara] Johnson [chief regional economist for DRI] expects the woes to continue.... "It is clear the second quarter setback was not an aberration." Massachusetts lost 2,500 manufacturing jobs in the second quarter, larlgely because of losses in computers and nonelectric machinery, textiles and electrical equipment. Production remained flat and wages fell slightly when adjusted for inflation.
9/29 A weak leader in tough times, by Gwynne Dyer, Boston Globe, p. A15.
...Changing currencies is always a delicate business, but here we have the second-largest economic bloc in the world [the European Union] attempting to change currencies in the midst of a global market meltdown....
[As Dave Barry would say, I'm not making this up!...]
9/28 Biggest postwar bankruptcy hits Japan - Japan Leasing Corp. in $17.9b collapse, Bloomberg via Bos Globe A9. ...the country's biggest postwar bankruptcy.
[And just to complete the picture...]
9/28 Russian [finance minister] appeals for more credits, Boston Globe A16.
9/28 Bundesbank president: Keep eye on hedge funds - At EU meeting, seeks to allay fears world's financial system is fragile, by David Crossland of Reuters via Bos Globe A11.
[But it IS fragile, because far far far too much wealth is concentrated in far far far too few hands. Those with the money don't have the time to spend it and those with the time don't have the money. The majority of people have insufficient bargaining power to keep wages rising fast enough to maintain and grow their spending patterns, which in turn maintain and grow markets. Their bargaining power is weak because there is an aggregate global (and US) labor surplus. Nobody's going to pay a premium for labor when it's common as dirt.
[So the questions for the economic designer are, At what point does the concentration of wealth become self-undermining by sucking away the spending power and markets for its own foundational productivity? How can we determine that point? Can we determine it on the fly? What dimension is it in and in what units? Can we centrifuge wealth on an automatic and sufficient basis on the fly? Can we do it via market forces rather than via lame government micromanagement?
[All these questions are answered by Timesizing and it is fully outlined in Hyde's new book "Timesizing, Not Downsizing" now available in Harvard Square at the Coop and Harvard Books ($14).]
9/28 Fedex pilots seek union OK for holiday slowdown - 'We're angry, we're determined, and we speak with one voice', AP via Bos Globe A10.
...Leaders of the FedEx Pilots Assoc. want the ability to...refuse...overtime during the busiest weeks of the year....
[And American management can't handle that. They should talk to their fathers, the truly skilled managers of the 1940s and 1950s when you HAD to be skilled to keep any employees. Those were the days when employees had options. Your management style stank? They walked. Now all we've got are millions of clones of Dilbert's spoiled pointy-haired moronic manager - guys so clueless and short-sighted that they couldn't be destroying their own economy faster if they were doing it on purpose.]
9/28 Forbes's richest include 189 billionaires - Market slide keeps 29 from club, by Eric Quinones, AP via Bos Globe, A10.
...topped for the fifth straight year by Bill Gates...with $58.4 billion....
[Ah, too bad. Seriously, concentration of wealth has gone far into the Black Hole zone where it's strangling the customer base for its own investments in productivity - all over the world. So now we oscillate between "Gee I'm a financier - I got more dough than I ever imagined - I gotta finance some productive firm fast!" and "Gee, that firm wasn't firm - it was unsupported by any firm market. I better get a LOT more cautious!" See above under 9/28 "Bundesbank..." for the questions this all raises for economic designers.]
9/27 Analyst: Expect quarterly profits to fall from '97, Dow Jones via Bos Globe, D5.
...Chuck Hill of the Boston research firm, First Call Corp.
9/27 Greenspan speaks, Bos Globe, D2.
With warnings of a new and "virulent" phase of the global economic crisis, Federal Reserve chairman Alan Greenspan painted a potentially bleak picture of the future....
9/27 Shutting down the world, by David Warsh, Bos Globe D1.
The witty Lex Column of the Financial Times described the problem this way on Friday [9/25]: "In essence, LTCM [the fallen hedge fund] was functioning as a huge reinsurance company for Wall Street, taking on the risk the big banks wanted to lay off. That these same banks were simultaneously lending it the money to do so defied logic. And now that the emerging markets hurricane has blown LTCM over, they were left with little choice but to bail it out." And so the cracks in markets that appeared last week signaled that the effects of the crisis that began last year in Asia at last had reached New York.
9/27 CPR (Capital Panic and Resuscitation), Bos Globe D2.
The rescue [of LTCM] was immediately lambasted by many investment pros as setting a dangerous precedent, especially given the constant carping by US officials that Japan must allow its sickly financial firms to die rather than to be kept on life support.
9/27 They said it:, Bos Globe, D2.
"Why should the weight of the federal government be brought to bear to help out a private investor?" - Paul Volcker, former Fed chairman, on the rescue plan for Long-Term Capital Management (LTCM).
[Because, Paul you dummy, that's the way our form of "free-market capitalism" works - we privatize and concentrate profit and security, and we nationalize and centrifuge loss and risk. So socialism is OK if it benefits corporations and investors - who cares about taxpayers or government debt. (Can this approach go on forever? Are taxpayers/publicdebt infinite? At what point do top wealth concentrators begin starving the customers/consumer markets away from their own investments? Is this a possibility so remote that we don't have to worry about it until our Sun "goes nova" - or has this process already started in Asia and Latin America?)]
9/26 Number of uninsured in the US on the rise - 43.7m seen lacking health coverage, by Alex Pham, Bos Globe, F1.
[Hey, now we can go back to the plague "solution" for our labor redundancy, just as in 1348 AD when the Black Death killed a quarter of Europe. (Or we could could fool everyone and do it intelligently this time - simulate a labor shortage with Timesizing.)
9/26 Shrouded in secrecy, hedge funds multiply - Recent rescue raises regulatory questions about industry, by Kimberley Blanton, Bos Globe, F1.
[Didn't our grandparents tell us something about the Depression starting because too many people were too leveraged? And with this degree of wealth concentration, EVERY investment is too leveraged because - there's NO STRONG MARKETS. Where are we going to get the money for the bailout? Wal, as Will Rogers said, "I guess we're going to git it from the rich...they're the only ones thet have any."]
[Oooo, here's a juicy story that shows just how deep our "free market capitalism" really goes. Actually, we're in a giant global Ponzi scheme where we American taxpayers are dragged in without ever being asked.]
9/25/1998 A [hedge fund] bet gone bad - Rare [Fed] rescue reflects fear that financial world has grown too fragile, frantic, Peter Gosselin, Bos Globe, C1.
...Federal Reserve officials [orchestrated] Wednesday night's extraordinary rescue of Long-Term Capital Management LP, a group of high-powered speculators who in any other era would have been allowed to fall flat on their faces.... The global financial upheaval "has people thinking a lot harder...about their previous belief that totally unfettered, rapid, and large capital movements are always beneficial," said former Fed vice chairman Alan Blinder.... Long-Term Capital borrowed fantastic amounts of money and put most of it into complex [THE most risky] instruments called derivatives....In the end, a group of lenders ponied up a total of $3.5 billion rather than gamble on the chance of a total collapse.
9/25 Profits rise, stocks fall for Stride Rite and CMG, by Chris Reidy, Bos Globe, C5.
[At last an example where market analysts are looking at underlying markets instead of short-term profits.]
9/25 Number of poor in Mass. rising, census data show, by Zachary Dowdy, Bos Globe, B1.
...[and] family income has been relatively stagnant.
9/25 Job fair aims for welfare-to-work transition, by Doris Wong, Bos Globe, B3.
Norma Berrios, a mother of four, has been on welfare for 15 years and has never been on a job interview....
9/25 Foreign worker bill approved - House OK's deal brokered with White House to raise visa quota for skilled labor, by Aaron Zitner, Bos Globe, C1.
...delighting high-tech companies [viz. CEOs] and drawing protests from labor groups.... Employers, particularly high-tech companies, have complained that the robust economy [per irrelevant indicators] and low unemployment rate [outdated and in step with no other nation's] makes it hard to find qualified workers.
[Sho' nuff - when you can keep raising the qualifications to make it hard - and doing NO training - and paying LOW wages]
They asked Congress to increase the quota of foreigin skilled workers that can be hired on so-called H-1b visas, which now stands at 65,000 a year....
[This figure should be zero.]
Under the deal approved yesterday by the House, employers will be able to hire 115,000 skilled [low wage] foreign workers in the next fiscal year and in 2000. The cap will drop to 107,500 in 2001 and return to 65,000 in 2002. H-1B visas are good for six years and are typically used to employ computer workers, nurses, physicians, fashion models, and a range of other skilled workers at jobs in the United States.
[A shortage of computer workers when there's 17% unemployment among American Computer workers over 50 - the most experienced and highly trained group - that includes myself?! And this is our second best industry?! (our first is prison building) Betcha all the laid-off nurses are steamed about this crock. See the story on Carney Hospital 9/23 on the "downsizing" page. And a shortage of doctors while medical studies are reporting a surplus? See the story below on 9/2. And a shortage of "skilled" fashion models - give me a BREAK. How much did the CEOs pay you so-called "Representatives," eh? The vote passed 288-133.]
Said Richard Egan, chairman of EMC Corp. of Hopkinton [Mass.] "We have R&D in Ireland, France, New Delhi, Tel Aviv, because we can't get enough engineers and scientists here."
[Ever thought of training some, you self-undermining moron? The unions have some other suggestions for you...]
The labor groups said employers would draw more US workers if they merely raised wages.... Many US companies refuse to hire midcareer engineers who have lost their jobs as big companies like IBM Corp. and the former DEC downsize. This has created the impression among younger people that high-tech careers lead to a dead end.... Moreover, the software industry has hired thousands of people to fix the so-called Y2K bug, "and they will be dumped out of their jobs and on to the market in about 15 months"....
[Compared to the war and postwar periods, our current CEOs on the whole are spoiled whiners who can't manage to save their lives. All they can do is amputate their own corporate empires to goose their stock price short-term, and scour the world for the cheapest warm bodies they can find, with no view to their own longer term markets, as in Henry Ford's "I want my workers to afford their own cars." But boys, the longer term is here - see story above about analysts looking for underlying markets and not just short term profits, and the story below about "can-do" Chinese Americans.]
9/24 Chinatown urban farmers profit from can-do attitude, by Ric Kahn, Boston Globe, p. B1.
...some neighborhood women are already at work [by midmorning] helping to keep their frail bodies fed - by plucking redeemable containers from barrels of trash. These bottle-and-can farmers have become fixtures of the street economy.... Now, their ranks have been swelled by new migration and cutbacks in immigrant assistance.... Foraging has become cutthroat 15 years after the bottle bill added a deposit fee to each container, with homeless cartpushers vying with motorists who raid recycling bins.
[Alan Greenspan, THIS is your "U.S. boom" - see third story below. This article sure strains to put a positive spin on this pathetic situation! Ric, maybe you should get a job with an eviction agent, especially around Xmas - Michael Moore, producer of Roger and Me, can direct you to some "good" ones.]
9/24 In Sharon, chagrin over whose community newspaper it really is, by Mark Jurkowitz, Boston Globe, D1.
...the Fidelity-owned weekly [Sharon Advocate] joined its sister papers in endorsing Norfolk County district attorney candidate Jack Corrigan over Bill Keating, a popular state senator and Sharon resident [who] took nearly 95% of the vote in Sharon.... The paper's editor, Tom Glynn, who had argued against endorsing Corrigan, was fired.
[Simple solution, folks - cancel your subscription! So there are dangers not only in the concentration of wealth itself but also in the concentration of media ownership that wealth can buy - and Fidelity is the "good citizen" that stuck up Mass. taxpayers last year for big taxcuts so they wouldn't take their jobs out of state.]
9/24 Fired workers awarded $6.7m - Ground Round hit for age bias, by Zachary Dowdy, Boston Globe, p. B1.
...the former employees' attorney, Sally Fleischner, depicted her clients as loyal workers who were callously discarded after serving the restaurant chain for between 24 and 32 years each.
[Shades of the downsized Tufts custodians. Phil Hyde's Timesizing program represents a blend of capitalism WITHOUT the callousness and socialism without the micromanagement.]
9/24 Greenspan hints at cut; market leaps - Fed chief says world woes may halt US boom, by Peter Gosselin, Boston Globe frontpage.
[The fact that this self-salesman is still calling the 1990s a "boom" is reminiscent of the blindness to the mergers and acquisitions, downsizings (especially in banking), and flat wages that occurred throughout the 1920s.]
9/24 Harvard endowment loses $1.3b, by Bailey & Syre, Bos Globe, C1.
[Aah, my heart bleeds.]
9/24 Lehman: Earnings fell 23%, Bloomberg via Bos Globe, p. C2.
9/24 Dow jumps 257 points to 8154.41, AP via Bos Globe, p. C2
[As robotization, mergers and downsizing continues, the vehemently denied peacetime labor surplus intensifies, and so does the concentration of wealth. More and more money seeks for less and less market-supported production to invest in. Investors start to swing wildly from the blind hope that the latest fad investment target will market-supported, to disappointment and bailout into cash. Lending criteria get tougher as lending risks heighten, because, hey, to exaggerate only slightly, there are no markets left for all this stuff after all the downsizing.]
9/24 [Click here for yet another example of US bank mergers, a real harbinger of depression as bankers with more technology scramble for less circulating wealth. We are going to collect these examples on a separate page to fully wake up some of you who may be starting to wonder about our "robust" economy.]
9/24 Briefs, Bos Globe, p. C2.
Philippine Airlines goes out of business, Asia's oldest.... The 57-year-old airline, engulfed by labor conflicts and a $2B debt...officially ceased operation.... The shutdown left about 8,000 airline workers jobless.
Global PC market seen rising 13.2% in 1999 - [oh yeah? who's got money to buy?] - figures hinge on the Japanese economy - now mired in recession - bouncing back, no devaluation of China's currency, and the resolution of economic troubles in Asian-Pacific markets and in Russia. [Talk about "conspiracy of optimism"!]
Nike rejects bid to set ratio for executive pay, Chairman Phil Knight...made $1.7 million in salary alone last year...5,273 times the annual pay of the average worker in Nike shoe factories last year. Average executive pay in Japan is about 16 times the average worker's, and in Germany it's about 21 times as large....
9/23 Brazil seen near deal with loan agencies - IMF to play major role; ...Fed...also, Reuters, via Boston Globe p. F2.
[Folks, here is where our American credit is being transferred with no input from us - this should all be subject to binding electronic public referendum of all American voters at the Federal level - we HAVE the technology.]
...Discussions in Washington point to...about $15 billion from the IMF...and $10 billion from the World Bank and the Inter-American Development Bank (IADB) [which]...will approve a $1.1 billion loan to Brazil today, the largest loan it has ever issued.
[Good God, ONE billion is the largest loan it has ever issued and they're talking about $25 billion??? Are these cowboys crazy???]
In addition to IMF [and World Bank and IADB] aid for Brazil, there have been...discussions "about some swap line from the US Fed similar to what they did for Mexico," Petry said [Joe Petry, chief economist for Latin America at Citicorp Securities].... A swap line is a line of credit.... [New York Fed] President William McDonough declined to comment....
[So this is all "sending good money after bad" behind closed doors - OUR money!]
Market speculation has focused on a broad-based rescue package for emerging markets from around the world, arranged by the [G7].... But...US efforts would focus more narrowly on Brazil, the largest economy in Latin America.
Brazilian...officials were giving a split message.... In [their] domestic press, [they] have repeatedly emphasized they have not requested IMF money../.. [But] Brazil "has been looking for technical assistance..." from the IMF, said Joe Petry [of Citicorp]../..linked to fiscal reform. The actual timing of the formal request may then be a matter of political expediency../.. The government of President...Cardoso was unlikely to announce any such agreement until after presidential elections on Oct. 4, given the unpopularity in Brazil of IMF-monitored programs....
[Great, not even the Brazilian people want it, and they are being manipulated by their own president because the IMF's idea of "fiscal reform" has repeatedly made things worse around the globe. And the biggest leak of all they never touch - the complete lack of a cap on personal income or wealth, - no limit to wealth concentration! - and so we're just feeding baby Black Hole economies all around the world. And the more concentration, the less circulation. The concentration is surpassing the point where it begins to undermine the meaning of "currency" itself, and these cowboys aren't addressing the issue! (Timesizing makes the first step at capping the concentration of wealth by capping the concentration of work and skills in the most gradual, market-compatible, non-arbitrary, non-controversial way possible, and laying the groundwork for further refinement of the process in terms of capping the money dimensions more directly.)
[And speaking of missing the real issue, note, folks, that the Boston Globe has buried this on page F2, that's an inside page of the, let's see, A-B-C-D-E-, sixth section, after pages and pages of trivia about Clinton's sex life! THIS SHOULD BE ON THE FRONT PAGE!!! The "news"papers have lost their nose for news, their sense of priority. They don't have news, they have LULLABIES.
[Get on the phone to Rep. Joe Kennedy now 617-225-5111, to Senators John Kerry and Ted Kennedy - and tell them to stop this backroom zeroing of our credit against the wishes of the Brazilian voters themeselves.]
9/23 Gas prices at lowest level in 6-1/2 years, AP via Boston Globe F2.
[Prices of gas and other things (mortgage rates...) are low in America because demand is falling relative to supply, because the middle class has less spending money, because the middle class has less bargaining power in terms of wages and benefits, because the middle class is in surplus relative to the job market. And so the top income brackets are experiencing massive "trickle up" with no limits. We are in a classic deflationary spiral like the late 1920s, and we have yet to admit it.]
This month's average [price, $1.06] is the lowest since March 1992, when a gallon of self-serve regular unleaded averaged $1.05.
[Hmm, March 1992, wasn't that during an admitted recession?]
Gasoline prices have fallen at the pump as supplies remained ample even during the summer driving season. The drop in the retail price reflects a slide in wholesale gas and crude oil prices.
[We should be taking advantage of this drop to tax gas and develop sustainable energy alternatives, such as grain and wood alcohol, solar, fuel cells,.... Check with the Rocky Mountain Institute of Snowmass, Colorado, for the last word on all these alternatives.]
9/23 Greenspan to testify before Congress: rate cut signs grow, by John Berry, Boston Globe, p. F2.
WASHINGTON - Federal Reserve Board chairman Alan Greenspan will testify before Congress today amid growing signs he might propose cutting interest rates when Fed policymakers meet Tuesday [9/29]. Allthough many economists and corporate executives have called for a rate cut in recent weeks to offset the economic turmoil in Asia and Latin America, few thought one could come so soon.... "I will continue to be very aware of potential weakness in our economy," [president of the New York Federal Reserve Bank, William] McDonough told a news conference in London. "The balance of risk has shifted from...inflation to...inadequate growth. The anecdotal evidence regarding investment plans, regarding reductions in the labor force [layoffs], and the beginnings of a reduction in consumer confidence all add up." ../..McDonough's views on monetary policy almost always mirror those of Greenspan.
[Wow, when today's Fed finally gets more interested in serving its other constituency (employees) and attacking unemployment and consumer attrition than in serving employers and investors and attacking inflation, it must almost be too late!]
9/17/98 Greenspan warns [financially troubled] nations to keep capital flowing, by Aaron Zitner, Bos Globe, C1.
...warns against imposing currency controls and other mechanisms that block the free flow of capital across national borders.
[Here we have the spectacle of a supposedly intelligent life form telling robbery victims not to lock their doors. More quicksilver capital! More loss of control! Greenspan is talking more like Greenhorn.]
For earlier collapse stories, click on the desired date -