My Evil Fucking Corporate Masters...

[tw]

Originally Posted by Elspode

Today, my boss let go the nicest of the nicest, the most pro of the pros, the lady who trained me. It was traumatic, I shit you not.

Is this due to an industry downturn, or just bad times in this organization? A national downturn or just something regional?

[Elspode]

Originally Posted by tw

Is this due to an industry downturn, or just bad times in this organization? A national downturn or just something regional?

Nationwide, housing industry starts are down nearly 25%. More in some markets, less in others. Our sales are off by closer to 30-35% over this period last year.

[tw]

Originally Posted by Elspode

Nationwide, housing industry starts are down nearly 25%. More in some markets, less in others. Our sales are off by closer to 30-35% over this period last year.

What regions do you believe this to be worst? Are sub-prime lender problems (that mean less available customers and more houses coming on market) adversely affecting business, do you think? And if so, are people suggesting this is short term or long term?

[mbpark]

Tom,

The great Ponzi Scheme of large rewards for little or no work in the Real Estate industry has come back to roost. Just like with tulips, tech stocks, and oil, the following has happened:

1. Someone figures out that the housing prices go up faster than the rate of inflation.
2. People start buying houses for the purpose of investment.
3. Some people get incredibly wealthy from this.
4. More and more people start "flipping" houses.
5. Meanwhile, the price of real estate goes up dramatically.
6. This means for people to afford houses, the mortgage companies have to get incredibly creative in financing houses, as the dollar doesn't go as far as it used to.
7. This also means that people who want to "flip" houses on a low budget also start taking out crazy financing (50 year mortgages, Adjustable Rate Mortgages, negative equity mortgages) to afford housing they don't anticipate having in 5 years from sub-prime lenders, and sub-prime arms of prime lenders (and this is where it will hurt the most!).
8. Housing starts slow, and the 5 years comes due for both groups.
9. Lots of foreclosures and personal bankruptcies.
10. Home construction companies and mortgage companies start laying off people and going out of business.
11. The effect spreads to supply houses, banks which bought the mortgages as securities (I used to do work for one, and even the Goverment-sponsored/owned banks like Freddie Mac and Fannie Mae do, else why would Freddie Mac hire the former lead trader for E-Trade Bank Capital Markets, who specialized in mortgage deals?), and the economy in general.
12. The next thing you know, recession happens, unless the government steps in like they did with S&L's in the early 90's (and bailed out one run by Neil Bush as well!) with the Resolution Trust Co..
13. Combine this with the effect of creative auto financing from the sub-prime auto lending industry (ever wonder how a 20-year-old affords a Hummer H2? ), and we have an even bigger problem (Ford Motor Credit, GMAC, and the other biggies in that industry) that can spiral and hit the manufacturers of cars where it hurts.
14. Unless that's checked, we have a really huge tax problem. Two words: Pension Funds. Those are administered by the gov after companies go insolvent, and those people end up on a combination of Social Security/Welfare/Government-Adjusted Pension. GM and Ford are already teetering at the brink, and the Chrysler unit of Daimler-Chrysler is doing so badly that Daimler wants to sell it (and the pension fund goes with!).

In other words, welcome to a potential depression.

Mitch