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HomeFinding a Job and Growing a Career
Posted by Larry Doyle on July 28th, 2009 2:28 PM |
Is business more a function of what you know or who you know? While some people may believe one factor is more important than the other, prudent risk management dictates you put as many ‘arrows’ as possible in both ‘quivers.’
We are obviously living through extremely challenging times. The greatest challenge facing many people revolves around the question of employment. I do not pretend to have a magic formula on finding a great job and developing a long and successful career. That said, I have had enough experience helping people on and off Wall Street to provide insights on this all important topic.
In my opinion, the key to finding a job and then growing a career centers on two factors: discipline and relationships. One needs the discipline to continually move further up the learning curve. Knowledge is power. That said, all the knowledge in the world will be minimized without the ability to engage and develop relationships.
Business of all stripes is ultimately all about relationships. The ability to initiate and grow relationships is of paramount importance in any field. In the process of developing relationships, one should network extensively so that one relationship grows into multiple relationships.
This is all well and good but many people will ask, ‘where do I start?’ I would respond by collecting data and material via informational interviews before you even start to think about pursuing a job. (more…)
Unemployment Report June 5, 2009 >> UPDATE
Posted by Larry Doyle on June 5th, 2009 5:45 AM |
UPDATED AS OF 9:15AM
The report was surprisingly strong on one front but with reason for caution as well!! Let’s dive right in.
Before this morning’s numbers were released:
The widely anticipated June Unemployment Report covering the month of May is due out this morning at 8:30 am (EST). Will this report show signs of improving trends in the pace of layoffs? I remain quite skeptical about the data connoting ongoing improvements while simultaneous negative revisions receive limited focus. We have experienced ongoing layoffs within the private sector with some pickup in government hiring. I believe we will likely see a pickup in layoffs at the state and local levels as tax receipts continue to disappoint.
In regard to revisions versus the actual report, let’s revisit what I wrote a month ago in my commentary for the May Unemployment Report:
On the face, the report appears better than expected but given the additional job losses in the revised numbers for February (an additional 18k jobs) and March (an additional 48k jobs) we are still in the 600k average job loss for the month. Private sector lost 611k jobs while government added 72k jobs with a lot of those people being temporary workers employed by the Census Bureau. The fact that temporary government workers are factored into overall employment, in my opinion, is stretching the integrity of the report. Health care added 17k jobs, manufacturing lost 149k jobs, construction lost 110k jobs, financial services lost 40k jobs.
Expectations for this morning’s report, as well as previous months’ data, are as follows:
(Note: please check back shortly after 8:30am when I will post the actual for June unemployment statistics, along with my post-report commentary.)
Unemployment Rate
April 8.5%
May 8.9%
Expectation for June: 9.2% (recall how the base case for the Bank Stress Tests was 8.9%. Here we are in June and have exceeded 9%. I think it is a lock that we hit 10% and not inconceivable that we push 11% by year end.)
Actual for June: 9.4%
Post report comment: this rate is substantially higher than the expectation of 9.2% and implies that we will almost certainly get to 10% sooner than expected.
Non-Farm Payroll (click here for definition of this term)
April: loss of 663k
May: loss of 539k
Expectation for June: loss of 520k
Actual June report: loss of 345k
Revisions: April and May combined gained 82k jobs
Post report comment: a much better than expected number with positive revisions to prior months. May was revised from -539k to -504k.
Average Hourly Earnings
April: +.2
May : +.1
Expectation for June: +.1%
Actual June report: +.1%
Post report comment: as expected. No surprise that wages are under control with slack employment. This number does not support any expectation of a pickup in consumer demand and retail sales.
Average Hourly Workweek
April : 33.2 hours
May: 33.2 hours
Expectation for June:33.2 hours
Actual June report: 33.1 hours
Post report comment: this number is weaker than expected. It does not support any expectation of a pickup in new orders driving a rebuilding of inventories.
7am: equity index futures are higher by.4%. The 10yr Treasury is trading at 3.74%. The 2yr Treasury is trading at .97%.
Post report market reaction: equity index futures jumped from .4 to 1.4% while bonds have sold off. The 10yr initially moved higher to 3.87% but is now at 3.82%. The biggest move in the bond market, though, is on the front end of the curve. The 2yr has increased by 25 basis points to 1.22%!!! Of all the numbers and moves, this should attract the most attention. Why?
The market is telling the Fed the following: if in fact the economy has bottomed in terms of a slowing in job losses, then a degree of economic traction will lead to inflation (even without a pickup in wages). The Fed may need to revisit the idea of leaving the Fed Funds rate at 0-.25% for the foreseeable future.
The “patient” is stabilizing, but still faces numerous side effects from all the procedures!!
If you like what you read and see here, please put Sense on Cents (www.senseoncents.com) in your favorites, and visit and comment often. Thanks!
LD
Goldilocks Economy
Posted by Larry Doyle on May 8th, 2009 1:15 PM |
Will the wizards in Washington be able to recreate the Goldilocks economy, in which we can generate moderate growth with limited inflation and near full employment? Well, that economic dream is still off in the distance, but the Goldilocks analogy is appropriate. How’s that? Much like the cherished tale, the wizards are faced with three choices in virtually every situation: too much, too little, just right.
Fiscal policy
– too much spending and/or improperly targeted spending will drive interest rates higher via massive deficits and potential hyperinflation.
– too little spending and/or improperly targeted will not properly stimulate the economy and may lead to a bout of deflation.
– just the right amount of spending and properly targeted will support the economy and stabilize prices.
Monetary Policy
– too much gas on this fire will massively grow the money supply and lead to hyperinflation.
– not enough gas or a slow delivery (the concern in Europe) will not stop the economy from sliding into a deeper recession.
– just right will lead to support for the economy. However, our wizards must be prescient and know exactly when to turn the gas line down and then off. If this procedure is not executed with precision, our house may go up in the flames of hyperinflation. Many wise and elderly wizards, including none other than Paul Volcker, have this concern.
Regulatory
– overly restrictive regulations will inhibit an entrepreneurial spirit and drive business overseas.
– ineffective, inappropriate, or insufficient regulations will lead to further moral hazards and an economic foundation akin to a pile of sand. Dare I say, our house is suffering from this problem currently.
– just right would compel new regulators with real teeth to redraft the rules by which we play. Paul Krugman wrote “Stressing The Positive” in yesterday’s New York Time and addressed this topic. Krugman offers:
. . . what worries me most about the way policy is going isn’t any of these things. It’s my sense that the prospects for fundamental financial reform are fading.
Does anyone remember the case of H. Rodgin Cohen, a prominent New York lawyer whom The Times has described as a “Wall Street éminence grise”? He briefly made the news in March when he reportedly withdrew his name after being considered a top pick for deputy Treasury secretary.
Well, earlier this week, Mr. Cohen told an audience that the future of Wall Street won’t be very different from its recent past, declaring, “I am far from convinced there was something inherently wrong with the system.” Hey, that little thing about causing the worst global slump since the Great Depression? Never mind.
Those are frightening words. They suggest that while the Federal Reserve and the Obama administration continue to insist that they’re committed to tighter financial regulation and greater oversight, Wall Street insiders are taking the mildness of bank policy so far as a sign that they’ll soon be able to go back to playing the same games as before.
Uncle Sam’s intervention
– too much involvement means private enterprise will either not play in our markets or charge a higher price in the form of higher interest rates (this is VERY likely to happen given the disregard for property rights and the validity of contracts).
– too little and the economy may take another leg down in the form of a triple dip.
– just right . . . how do we compel Uncle Sam to be a benevolent Old Man and not encroach on the principles of capitalism, free markets, and private enterprise as he tries to push forward with a massive social agenda and enormous spending plans?
The trail on which we are proceeding will be LONG. Will we be able to find that warm home in the woods? Do we have the fortitude and courage to sacrifice as need be or do we have leaders who are blinded by ambition and agendas which will cause us to lose our way?
Bring extra supplies.
LD
From The Archives: “Where’s The Money??”
Posted by Larry Doyle on April 10th, 2009 8:16 AM |
On a quiet Good Friday morning, brief reflection never hurts. In that spirit, I thought it may be worthwhile to go into the archives for our year-end piece 2008. This piece was originally published on December 29, 2008:
I thought about providing an outlook for 2009. I considered offering further opinions on Obama’s economic plans. Perhaps a review of the Bush economic program would be well received. Then yesterday, the lead editorial in my local newspaper asked “Where did the bailout money go?” I had my answer. In previous pieces I have touched upon why I thought there was a very good chance this money would not flow through the system. I hesitate to continue to refer back to my piece published on November 12th (The Wall St. Model is Broken…and Won’t Soon be Fixed), but for new readers I do firmly believe it is as good as anything I have read or seen in any publication in explaining how we find ourselves in our current position.
Please allow me to digress for a second. I will admit that I am not a movie buff, but I do enjoy films that focus on the success of underdogs, have a measure of financial intrigue, or perhaps a combination of the two. Not surprisingly, a few of my favorite movies are, Rocky, Jerry Maguire, and The Sting. (more…)
“Beholden to Failed Banksters”
Posted by Larry Doyle on April 9th, 2009 3:56 PM |
Any investor or manager with a degree of experience knows that the “first loss is the best loss.” What do I mean by that? Once the market detects a loss or a weakened position, the price for that asset will remain capped unless and until the asset is sold or liquidated. This price action occurs in every sector of every market.
Welcome to the world of global finance 2009. As banks, insurance companies, hedge funds, and other financial entities deal with losses, we see a lack of aggressive posture being taken on dealing with these losses. Why? Once moral hazard is violated with a single entity, every other entity will look to violate it as well.
Immediate losses are forestalled in hopes that they will be covered or disguised. However, every loss ultimately must be recognized. By whom and how is the question.
At this juncture, more of the losses in our financial system are being directed toward the taxpayers. How? Via the wide array of government programs. What is the cost? A likely underperforming economy due to a lack of credit, and higher taxes to offset lower revenues. (more…)
March 2009 Market Review
Posted by Larry Doyle on March 31st, 2009 7:47 PM |
The markets, overall, experienced a very solid rebound this month. Technically, the market got oversold bottoming out on March 6th when the S&P 500 hit the devilish level of 666!! Perhaps some divine intervention prevailed and shed a wee bit of grace on the market in the spirit of Saint Patrick. Perhaps not, as well. In any event, we rebounded close to 20% over the last three weeks. The bounce has allowed us to catch our breath but I caution everybody to remain on guard.
The rebound gained support from the following factors as well:
1. stabilization in the weekly unemployment claims at the 650k; level
2. improved figures in housing starts and new home sales;
3. speculation that the FASB will relax the mark-to-market; (more…)
Throwing the Baby Out with the Bath Water!!
Posted by Larry Doyle on March 20th, 2009 3:12 PM |
I questioned a Wall Street friend of mine this morning whether Washington in general and the Obama administration and Democratic Congress specifically could be so myopic or actually are so calculating in attempting to enact legislation that would impose tax rates of 70-90% on certain Wall Street employees. My friend quickly responded that the Washington crowd is not that smart.
Make no mistake, the proposed legislation of taxing certain Wall Street employees at 70-90% rates is targeted at addressing public outrage over improperly allocated compensation. However, Washington is utilizing a bazooka when in fact they need a laser.
In so doing, the politicians pushing this legislation are showing themselves to be misinformed and misaligned in understanding the basic tenets of capitalism and free market principles. (more…)
The Fed Levers Up
Posted by Larry Doyle on March 18th, 2009 6:30 PM |
When the economy experiences a massive delevering process, the void in the economy needs to be filled. There has been and will continue to be ongoing debate about the effectiveness of the stimulus plan, Obama’s proposed budget, ongoing government bailouts of a variety of industries, and moves made by the Treasury and Federal Reserve. Has enough been done? Is too much being done? Are our global partners pulling their weight? Are protectionist measures likely to exacerbate our economic problems? The answers to these questions will not be known for years.
Today’s action, Fed’s New Steps Shake Up Markets, is a sign that as everybody is delevering (selling assets purchased with borrowed money), the Federal Reserve is levering up. The Fed has indicated they will purchase billions more than previously advertised in U.S Treasury securities, mortgages, and consumer related assets. Why? By making these purchases, the Fed will attempt to drive the rates for these products lower and reignite consumer and institutional demand for credit. The market responded in startling fashion as 10yr government rates dropped an unprecedented .50% !! Equity markets responded by moving higher by 1-2%. (more…)
