WHAT'S THAT "THE GIANT SUCKING SOUND"?

It's the eerie sound before a tsunami hits. 

The first casualties were my patients connected to the building trades, real estate, title and mortguage companies.  For the last year they came in reporting lost jobs and businesses.  Now it's the engineers coming in anxious because they have lost their job or layoffs have just been anounced.

The Bay Area has been buffered because it's bouyed up by its high tech exports.  But now Intel, the bellweather of high tech warned their sales could drop 19% this quarter: "There was a very rapid decline in business across all segments and geographies."

Applied Materials reported a 45% drop in profit and will cut 1800.

Cisco and National Semi saw profits drop 10%

AMD will let 500 go

And it's only the beginning.  My guess is that it will really start in January.  The Chinese will wake up and realize that Americans really didn't have Christmas.  They will shutter their plants and cancel their high tech orders.  And the wave will come.

It's time to brace...

You've got a very interesting angle there D. You get to see the end result of all this mess. Thanks for the post. Here in Microsoft country we're pretty much in the same boat...

Z

You are always full of joy and good tidings Doug

I do agree with you that the real impact will not be felt until Q1 here though. It is going to be a rough ride but hopefully a short one.

You are always full of joy and good tidings Doug

I do agree with you that the real impact will not be felt until Q1 here though. It is going to be a rough ride but hopefully a short one.

Define "short".  Short in this context can be 2 years or more. 

-Allen

I'm with allen...gear up for a couple of years at best.  Remember japan?  Remember how they tried to bail out there banks? hmmmm....sound similar?  That lasted a decade.  One saving grace might be some large government sponsored infrastructure projects

You are always full of joy and good tidings Doug

Yeh, it's the unfortunate result of training that makes you focus on not missing things.  If you do, people die.

I'm sure it's not people on this board, but I am still surprised by the occasional patient that comes in almost oblivious to the current economic happenings.  Or I see the the the high tech, upper manager that is so sold on his company that he really believes this won't effect him.  

Just like we look for potential danger on the water, and build in layers of protection, I think it prudent to assess the danger signs in the economy as well...our families depend on it.

 “We are in the midst of the worst financial crisis since the 1930s.”

                                                                     --George Soros (at the congressional hearings investigating hedge funds this week)

Remember japan?  Remember how they tried to bail out there banks? hmmmm....sound similar?  That lasted a decade.  One saving grace might be some large government sponsored infrastructure projects

Japan's problem also started because of easy money. The government loaned out money, almost for free.  I think it's generally accepted that the subprime debacle was greased because the Fed kept the interest rates too low for too long after the recovery from the dot com bust.

We all wanted to feel happy.  And as one of my patient's explained her $50,000 credit card load. When I'm down, I turn to "retail therapy".

A second saving grace, may be that it will break America's addiction to credit.

A second saving grace, may be that it will break America's addiction to credit.

Just like the high gas prices killed the SUVs? I see that sales are up again for SUVs as the price of gas has dipped. I am sure there are multiple factors contributing such as heavy price slashing. Americans are extremely forgetful as a society.

-Brian G

Americans are extremely forgetful as a society.

So true. 

Thanks for the pep talk Doug!

"What's That Giant Sucking Sound?"

I thought this was going to be like a knock-knock joke....with the SF 49ers being the butt of the joke.
 

I see that sales are up again for SUVs as the price of gas has dipped

Maybe some forward thinking people, (reading that the GM CEO said they may run out of $ by the end of the year if they don't get government help), are thinking that someday those GM SUVs will become valuable collectors items.

I'm on the cusp of buying my first house and scared to pull the trigger cuz I know you're right, Doug.  On one hand there are bargains galore, but things in my industry have been tough since around, oh 2001 or so...

I decade is a long time to not know if you'll have a job tomorrow.  Lotta pb&j's.

I am in healthcare and I watched hospitals this summer lay off people due to lack of government funding.  I thought it was a joke at first, after all hospitals everywhere are looking for staff.  But county hospitals are suffering, patients don't pay bills and the gov short funds them.  County health is also taking a serious butt whipping as well.

But county hospitals are suffering, patients don't pay bills and the gov short funds them

Yeh, traditionally people think that the healthcare industry is relatively insulated from economic downturns.  People still need to get their heart attacks, MVA injuries and seizures treated.

But healthcare, whether you are in solo practice or run a hospital, still relies on working people to support the business side. 

All levels of healthcare have had their working margins squeezed by reduced insurance and government reimbursement.  Now there's not a lot left to squeeze.

Hospitals are reporting that the cases they recoup their loses  from...elective, big ticket items like hip replacements are being reduced as people defer because of financial uncertainty and the fear that being laid up for recovery will make them targets in future layoffs.  But the acute cases keep coming through the emergency room doors and they are often the uninsured.  So hundreds of thousands of dollars in bills go unpaid.  I'm sure some shaky hosptals will be forced to close their doors.

A big round of layoffs could significantly add to the number of houses on the market.  It's probably best to wait on buying a house until the bad news stops rolling in.  That could be as early as spring, or as late as 2012.

Both my brother and sister work at Intel, we'll have to see what happens.

Instead of layoffs, my company generally has shutdown weeks, so the pain is kind of evenly distributed via lost paychecks (including upper management) rather than in eliminating people.  We can use vacation time to still get paid, so even though we're scheduled to lose 14 days, I'm only missing out on 4 days pay so far.  I'm tapped out on vacation though so more weeks after new-years will cut into the WAF account.