Tougher Times Ahead

[RapidF6]

So they do it 'cause they can? Great.

I think I remember hearing about the Trujillos pay rise. I also remember hearing about how some fatcats were avoiding tax somehow. Man, it's not like they need the extra money, surely. My definition of greedy is 'when you have a lot, and still want more'. These guys are great examples.

Sorry to hear about your situation, tubo.vixen. Hang in there.

[XR64LT]

Hey guys and girls just thought I might ask if anyone is suffering from these tough times. I myself am a plumber on wages and these past few weeks have been the worsed ive ever seen in the whole 5 years ive been in the trade. I now find myself looking for another job/company as my boss cant afford to pay wages when theres no money coming in. What do you do though, I guess you just have to move on.

Leo

[turbo.vixen]

looks like your in the exact position as me, sucks aye

[hypnodoc]

As the failing bailout policies put into place in the UK and USA are beginning to float a little bit of truth as to how bad things really are, and now Krud saying on the news tonight, after stating in Nov-Dec that Aus would ride out the so called global recession, that we are about to feel the brunt of the global recession. This came through my email box today. As the official Recession Stooge, I felt obligated to share it. No wonder the grubby little bugger is signing free trade agreements as fast as his pen will move. Gotta wonder how good this globalisation free trade idea really is.

Rudd covers for the banks

Prime Minister Kevin Rudd had the chance this week to declare his support for an investigation of the role of the banks in the current economic crisis, and he shirked the issue.

At a meeting last Tuesday night in Campbelltown, NSW, Ann Lawler asked the Prime Minister, “Mr Rudd, I was very happy to hear that you will fight this global financial crisis with the full gambit of the government, so that would mean you would support a Pecora Commission, an investigation into the banking structure.

After all, our Australian banks are carrying over $14 trillion in derivatives debt that no amount of bailout or stimulus can pay, without creating the type of hyperinflation experienced by Weimar Germany in 1923. Therefore, would you support an investigation into the banking system?”

Mr Rudd’s response was to not respond, resorting to a typically vague assurance that such matters would be discussed at the G-20 meeting in April; his tactic was not lost on the audience, many of whom noted, “He didn’t answer the question.”

However, Mr Rudd’s reference to the G-20 did give the game away: ever since the drama-packed build-up to the G-20 meeting in Washington, DC in November (which ultimately achieved nothing), Rudd has committed Australia to support British Prime Minister Gordon Brown’s policy response to the global financial crisis, which is to work through the G-20 to achieve the ultimate stage of globalisation—globally-imposed financial regulation.

In other words, his response to the crisis caused by globalisation is to impose more globalisation.

What he won’t do, is use the power of the national government to bring the banks to account for their legal and moral crimes, put them through bankruptcy reorganisation, cancel their unpayable derivatives obligations, and re-impose the national regulations that John Howard, Bob Hawke, and Paul Keating should never have scrapped in the first place.

He won’t do this, because a national response is anathema to the globalisation ideology. The only national response Mr Rudd is willing to undertake, is to commit the nation’s financial resources to bailing out and propping up the globalised banks.

While the Prime Minister continues on this path, he is perpetuating the criminal financial regime ushered in by Howard, Hawke and Keating, and condemning Australia to economic ruin.

[Dagabond]

Another one that stinks of opportunism...

BOSCH executives got annual bonuses of up to 155 per cent in the past three years of record profits - but the car parts giant still sacked 170 Melbourne workers.

Hundreds more Victorian jobs hang in the balance as car manufacturers cut production levels - with industry sources tipping serious reductions in shifts.

Internal documents seen by the Herald Sun show senior management at Bosch received "maximum total cash" bonuses of between 105 and 155 per cent of their base salary.

Workers and the union said the Robert Bosch plant in Clayton had generated record profits in recent years and continues to run at a profit, despite its announcement that 12 per cent of the workforce of almost 1400 would go.

Bosch divisional executive Gavin Smith yesterday declined to answer questions on executives' performance pay, saying the unfortunate loss jobs due to the economic crisis was the only issue the firm would discuss.

"It (the pay) has nothing to do with the environment and the climate today," he said.

But in the wake of last week's Pacific Brands scandal - where 1860 workers were sacked after bosses received million-dollar bonuses - Australian Manufacturing Workers' Union national secretary Dave Oliver demanded that Bosch come clean about bosses' pay.

Mr Oliver said Australian manufacturers were being "too quick to hit the redundancy button" as the economy wound down.

"This industry is under significant pressure. But every boom has a bust and every recession has a recovery," he said.

Bosch employee Mark Spyker, 37, who last year helped lobby the Federal Government for a $6.2 billion industry-wide assistance package, said his company had now turned on him and fellow workers, who had agreed to a below-average 2.5 per cent pay increase for the past three years.

He said the private company, still largely in the hands of the Bosch family in Germany, should repay worker loyalty by accepting a smaller profit and keeping jobs.

"But this (job cuts) is the way they are thanking workers," Mr Spyker said.

Although voluntary redundancies will be taken first, Bosch employee Simon Blackwell feared he would be forced from his job of nine years.

And with a mortgage, three children, and a wife who faces a reduction in casual work for Bosch, Mr Blackwell said the future was bleak.

"It's going to be pretty hard for everybody," he said.

AMWU state secretary Steve Dargavel said: "We understand that a decline in orders makes things difficult, but the company could afford to keep these workers."

The issue that the upper management recieved bonus is null given they were awarded in boom times but that the company is stilll running at a profit yet they are still sacking workers stinks.

Edit:

A sharp drop in revenues has prompted Mr Fehrenbach to slash output in recent months, making 17,000 German employees temporarily redundant and cutting jobs permanently at plants round the world.

http://www.ft.com/cms/s/0/e4565252-06cb-11...0077b07658.html

SHORT time working and flexible working will be introduced at Bosch’s operations in South Wales, the company has announced.

Bosch said it has experienced a “sharp decline” in customer orders since the last three months of 2008.

As a result, it has introduced a number of measures to cut costs, including the reduction of agency workers and an extended Christmas shutdown.

In November, Bosch announced that it would be cutting 250 full-time staff at the plant and the consultation for voluntary redundancies has finished.

http://www.walesonline.co.uk/business-in-w...91466-22999092/

When you do a bit of googling and look at the bigger picture...

Edited 03/03/09 03:35 PM by Dagabond

[hypnodoc]

Rudd must be bracing himself for worse to come, he said this today.

Article from: The Australian

KEVIN Rudd has called for unviable overseas banks to be allowed to collapse and an international effort to shift toxic assets off the balance sheets of surviving banks as an essential first step to global economic recovery.

The Prime Minister has vowed to pursue his proposals at a meeting of the G20 nations in London on April 2, arguing that "ring-fencing" toxic assets is the only way to end the global recession.

Mr Rudd outlined his plans in a speech to business leaders in Sydney yesterday in which he said the freezing of global credit flows was at the centre of the worldwide crisis.

Unless banking systems in the US and Europe could be cleansed of non-performing assets, credit would remain frozen, preventing Australian banks from resuming lending to stimulate economic activity.

"Whatever actions Australia takes domestically to cushion us from the impact of the global economic recession are fundamentally shaped by the actions of other governments (individually and collectively), both to stabilise their financial institutions and to stimulate global growth until private credit markets recover," Mr Rudd told the Australian Chamber of Commerce and Industry.

"There can be no long-term economic recovery until we get global private credit flowing again."

Mr Rudd said Australia's banks remained strong.

However, ineffective financial regulation in the US and Europe had caused an explosion of easy credit, with the resulting bad debts stuck on balance sheets of globally important banks, clogging the flow of credit around the world. It was estimated banks were holding toxic assets worth as much as $US3.6trillion.

Mr Rudd said Australian officials were working with their counterparts from other G20 nations on a response that would involve "stress-testing" troubled banks to discover which were sound. "All non-viable banks must be closed," he said. "Keeping insolvent banks alive is itself systematically damaging. All toxic assets on bank balance sheets must be neutralised."

This could be done by creating a publicly owned asset-management company to isolate toxic assets or through other methods of "deploying public and private capital to ring-fence and then remove toxic assets," he said. "This needs to be done quickly and comprehensively and may require compulsion.

"These toxic assets sitting on bank balance sheets in the US and Europe have become a poison in the bloodstream of the global financial system. Sick and unhealthy assets have the capacity to affect healthy assets and banks. It's like a virus which, if left untreated, can easily spread."

Mr Rudd's comments give the clearest indication yet of the behind-the-scenes action leading up to the crucial G20 meeting.

The Prime Minister has also given the Australian Prudential Regulation Authority the task of examining ways to discourage institutions paying financial bonuses to reward risky investment practices by executives and traders.

APRA is expected to propose a mechanism by which banks that continue to reward risky investment will be required to keep more capital in reserve, thereby limiting their lending potential.

Mr Rudd is convinced inadequate regulation in the US was responsible for the global recession and uniform global regulation will prevent a recurrence.

"This was capitalism out of control," he said.

[ronburgundy]

Mr Rudd is convinced inadequate regulation in the US was responsible for the global recession and uniform global regulation will prevent a recurrence.

I guess South Park had it wrong; we should blame America!

[hypnodoc]

Its getting worse as the truth unfolds.

Fact #1. As in the early 1930s, the essence of this crisis is a debt collapse.

Fact #2. The debts today are far greater; and their collapse, more impactful. Specifically, in 1929, for every dollar of GDP, the you.S. had $1.70 in debt; today, it has $3.50, or nearly twice as much. In 1929, there were virtually no derivatives; today, among you.S. commercial banks alone, there are $176 trillion. In 1929, the you.S. was a creditor nation with no debts to foreign countries; now it's the world's largest debtor nation, owing more than $2 trillion abroad.

Fact #3. Between its peak in 1929 and its ultimate bottom in 1932, the Dow Jones Industrial Average fell 89 percent, the equivalent of a decline to Dow 1500 in today's market.

Thus, even if this depression is not more severe than the 1930s, a devastating, long-term bear market still lies ahead.

[Guest]

Spend while we can then

[hypnodoc]

This also came out today, better to hold on to what you have than spend for the sake of it.

The World Bank is forecasting the global economy will shrink for the first time since World War II, and trade will experience its biggest fall since the Great Depression.

Its report says East Asia will be especially hard-hit, and the Federal Government says this highlights the severity of the financial crisis.

Mark Thirwell, international economy program director at the Lowy Institute, says the world may be taking a step away from denial.

"We've sort of hit that point now where the uncomfortable reality is it's almost impossible to believe that the world economy will grow this year," he told economics correspondent Stephen Long on ABC Radio's PM program.

"And even the official forecasters who to some extent have a vested interest in not talking down the world - you know, partly they have to be professionally optimistic - even they can no longer pretend that we're actually going to see any positive growth in the world this year."

Mr Thirwell says the rate at which growth is falling in some global markets is sending alarm signals.

"The speed and the pace with which world trade is contracting is one big alarm bell," he said.

"You look at for example across East Asia and the rates of export decline year on year that we've seen over the last few months, 20, 30, 40 per cent and above year on year rates of decline," he said.

Federal Treasurer Wayne Swan says the World Bank's prediction demonstrates the need for Government spending to stimulate economic activity.

"The World Bank report underscores the size and scope of the global recession and the need to put in place strong economic stimulus," he said.

"What you're seeing in this World Bank report is the sharpest contraction in growth since World War II and, of course, a decline in trade, the worst we've seen in 80 years, with a particularly big impact in our region."

'Act now'

Mr Thirlwell says the crisis will hit poorer countries hard.

"Where ... you don't have the sort of social safety nets that you have in place in the rich countries, where governments already had fairly limited ability to protect their poorest people," he said.

"That ability is going to be damaged even more by this crisis, so it means more poverty, more joblessness and in some cases that's going to mean more social instability as well."

As output screeches to a halt in Asia, some argue that the Australian downturn could be as bad or worse than the US.

But the economic crisis that began with junk mortgages in the United States is now causing chaos for poorer countries around the world - crushing their growth and choking their access to credit.

Ashok Sharma, south Asia director of the Asian Development Bank (ADB), says this has led to Asia having a credit crunch of its own.

"The countries have lost money, either on equity, on house prices, which is let's say the asset price bubble," he said.

"Manufacturing has been hit, trade has been hit.

"Commercial banks and banks have become really risk averse and, in many cases, financial institutions have really become hollow from inside."

Mr Sharma says already governments in the emerging economies of Asia simply can not borrow money on world markets.

"There are no buyers for these bonds. [it's] as simple as that," he said.

"And if there are no buyers for them, how will the country finance itself internally? If you are in a deficit, you need someone to buy your debt for you.

"That paper has no market anywhere."

Mr Sharma says there is simply no market for bonds, and no buyers of debt from the emerging economies of Asia and other parts of the world.

"It's very true," he said.

"Even Germany, which has the most liquid bond market, two bondage firms of 10 years have failed in the market.

"You can imagine what will happen to emerging countries."