After a light posting week last night (getting some time off), it’s back into the swing of things as the unofficial fall season comes upon us here in the Northern Hemisphere.
And there is significant financial news affecting Cubicle Warriors this week.
Government takes over Freddie and Fannie
Over the weekend, the Treasury announced that it would be taking over Fannie and Freddie and providing cash – as much as needed – to maintain and preserve their debt ratings. The shareholders will lose virtually everything, of course.
The reason for the takeover?
Stock markets jumped after the U.S. government’s decision to launch what could be its biggest federal bailout ever, in a bid to support the housing market and ward off more global financial market turbulence.
But Rogers said in the long term the move spelled trouble.
“This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I’m not quite sure why I or anybody else should be paying for this,” Rogers told “Squawk Box Europe.”
When the government bails out company, it means YOU are having your tax dollars bail out companies. Foreign governments – who have supplied the dollars to support the deficit – are starting to call those dollars home. And, the bailout may not even work.
The stock market opened some 300 points higher, but have lost half the gains as I write this. And the gains, even at the 300-point level, are not even enough to make up for the losses last week.
For Cubicle Warriors, it means the financial crisis is far from over and that spills over into all sorts of industries. You can expect 6.1% unemployment to go up.
Another bank CEO replaced
At Washington Mutual, Kerry Killinger is out as CEO.
As Cube Rules Members noted in their exclusive reports, the bank replaced its executive in charge of banking several weeks ago. Today they announced this change in leadership.
Given the fact that they received a $7-billion capitol infusion several months ago that is now under water, have filed a “memorandum of understanding with the Office of Thrift Supervision concerning aspects of its operations,” and the stock continues to tank, you can expect wholesale changes in the management of the bank. And more layoffs. Last I checked today, the stock was down almost 15% more after the announcement.
Laying off 10,000 people at a time
With the unemployment rate over 6%, who should be laying more people off? In a provocative article – with good reasons provided – here are the 12 companies that should be laying off 10,000 people this year:
Ford, Sears, Citigroup, WaMu, Rite Aid, AT&T, Circuit City, Gap, Merck, AIG, Blockbuster, and IBM
A thoughtful, but scary, read.
Cube Rules News
It’s good to be back in the swing of things. I’ve had issues with my site not being up and running as much as I would like. Last week, this site moved over to a different server after two or three weeks of not having 99% uptime.
This weekend, I also changed the way I upgrade the software on the site and though it was thoroughly tested after the upgrade, I was greeted this morning with a 500 internal server error. That has now been fixed.
The first rule of technology is to have it be reliable. Not reliably unreliable. I’m optimistic that these infrastructure issues are now behind us.
Now we can get on to building out the Warrior Boot Camp!
Scot
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