Here comes the California economic slowdown

[LA_Renter]

I have noted this before but I am beginning to feel the effects of this in my job. Business has softened and this is being confirmed with most of my connections (customers, peers, and competitors) in my particular industry/industries. This is going to get much worse before it gets better.

Calif.’s jobless rate jumps to 5.1%
The deterioration is due in part to the ongoing slump in home construction.
By Lisa Girion, Times Staff Writer
11:21 AM PDT, May 18, 2007

California’s jobless rate jumped to 5.1% in April after holding steady at 4.8% for several months, California’s jobless rate jumped to 5.1% in April after holding steady at 4.8% for several months, a deterioration due in part to the ongoing slump in home construction, state figures released today show.

The increase in the unemployment rate occurred as California firms added an anemic 7,400 jobs — not enough to absorb all laid-off workers and new job hunters.

http://www.latimes.com/business/la-fi-caljobs19may19,0,7320529.story?coll=la-home-center

[donaldduckmoore]

Does the figure include illegal construction workers? The figure may be even worse if they are included.

[donaldduckmoore]

Does the figure include illegal construction workers? The figure may be even worse if they are included.

[LA_Renter]

“Financial activities employers cut 700 jobs. The category includes sub-prime mortgage lenders, several of which initiated layoffs in recent months. ”

Do you think they are missing a couple zeros here??

[LA_Renter]

“Financial activities employers cut 700 jobs. The category includes sub-prime mortgage lenders, several of which initiated layoffs in recent months. ”

Do you think they are missing a couple zeros here??

[kewp]

Har, we will know we are screwed when americans start sneaking across the border to find work in Mexico!

[kewp]

Har, we will know we are screwed when americans start sneaking across the border to find work in Mexico!

[cr]

I can’t say I’m surprised.

A lot of the apologetics claim the last downturn followed the massive aerospace layoffs. I don’t discount that, but when they say things are different this time around I agree. Different because this time the housing downturn is causing the job layoffs.

Think about it: realtors, brokers, appraisers, notaries, contractors, plumbers, builders, carpenters, electricians, roofers, just in the immediate path. Then you’ve got supply houses, materials warehouses, the companies that supply them, all the way to the retail chains of Lowes, Depot, Sears even Wal-mart. On the financial side you have the mortgage specialists, MBS traders, investors, PMI companies, and banks galore.

Foreclosures are just now hitting the scene. What’s going to happen when they make it all the way up the food chain?

The economy will survive, but I think prices are going to be hit harder than most people expect. The jobs that helped people barely afford an overpriced house are getting hit as a result of the bust.

[cr]

I can’t say I’m surprised.

A lot of the apologetics claim the last downturn followed the massive aerospace layoffs. I don’t discount that, but when they say things are different this time around I agree. Different because this time the housing downturn is causing the job layoffs.

Think about it: realtors, brokers, appraisers, notaries, contractors, plumbers, builders, carpenters, electricians, roofers, just in the immediate path. Then you’ve got supply houses, materials warehouses, the companies that supply them, all the way to the retail chains of Lowes, Depot, Sears even Wal-mart. On the financial side you have the mortgage specialists, MBS traders, investors, PMI companies, and banks galore.

Foreclosures are just now hitting the scene. What’s going to happen when they make it all the way up the food chain?

The economy will survive, but I think prices are going to be hit harder than most people expect. The jobs that helped people barely afford an overpriced house are getting hit as a result of the bust.

[Cow_tipping]

Mexico will not allow any foreigner to work there. The number of hoops you have to jump through are insane. But pretty soon the american peso will be worth less than the mexican dollar due to them having a real tight grip on their work force. Then of course we will not be able to buy crap from them and the illegals here will run back or ask for $$$ from there, and the anchor babies are going to be anchoring them in reverse. Cannot wait till the US is a thrid world country. That way atleast the illegals will go back.
Cool.
Cow_tipping.

[Cow_tipping]

Mexico will not allow any foreigner to work there. The number of hoops you have to jump through are insane. But pretty soon the american peso will be worth less than the mexican dollar due to them having a real tight grip on their work force. Then of course we will not be able to buy crap from them and the illegals here will run back or ask for $$$ from there, and the anchor babies are going to be anchoring them in reverse. Cannot wait till the US is a thrid world country. That way atleast the illegals will go back.
Cool.
Cow_tipping.

[Anonymous]

Yep, here comes the California slowdown (from PrudentBear):

http://www.latimes.com/business/la-fi-briefs18.4may18,1,5380814.story?coll=la-headlines-business

The sooner ‘the end’ starts, the sooner the foolishness (amnesty for illegals, $1MM for a tiny dump in Bird Rock, American Idol, etc.) ends.

[Anonymous]

Yep, here comes the California slowdown (from PrudentBear):

http://www.latimes.com/business/la-fi-briefs18.4may18,1,5380814.story?coll=la-headlines-business

The sooner ‘the end’ starts, the sooner the foolishness (amnesty for illegals, $1MM for a tiny dump in Bird Rock, American Idol, etc.) ends.

[bubble_contagion]

Very difficult to get a work visa in Mexico but may be able to bribe your way through the system. Also immigrants from Central America get terribly abused by the army, local police and gangs when they enter Mexico’s southern border to cross to the US. For them, crossing Mexico is the hard part; once they get to the US border it gets lets risky.

BTW the workforce in Mexico is not tight. Only about 20% are formally employed and pay taxes. Everybody else is part of the “informal economy” just like illegals in the US. Mexico’s taxes are way higher than in the US to compensate for the fact that just a small sector of the population has to provide services for everybody. PEMEX revenues from oil sales to the US provide about 1/3 of Mexico’s Federal government budget.

Sale tax (IVA) in all Mexico is 15% for most goods except food and medicines and 20% for luxury goods (like restaurants). You do not see this because by law it must be included in the price. On top of this, federal taxes are higher than in the US but there is no state tax. If you make more than, I believe, US$50K you need to file taxes every quarter.

In Mexico, car registration, cell phone and internet cost are higher. Gas prices are about the same. Housing prices and groceries can be way cheaper, but by my calculations in US$, it is way more costly to live in nice a neighborhood in Mexico City than in a nice neighborhood of most large US cities like L.A. or Chicago.

[bubble_contagion]

Very difficult to get a work visa in Mexico but may be able to bribe your way through the system. Also immigrants from Central America get terribly abused by the army, local police and gangs when they enter Mexico’s southern border to cross to the US. For them, crossing Mexico is the hard part; once they get to the US border it gets lets risky.

BTW the workforce in Mexico is not tight. Only about 20% are formally employed and pay taxes. Everybody else is part of the “informal economy” just like illegals in the US. Mexico’s taxes are way higher than in the US to compensate for the fact that just a small sector of the population has to provide services for everybody. PEMEX revenues from oil sales to the US provide about 1/3 of Mexico’s Federal government budget.

Sale tax (IVA) in all Mexico is 15% for most goods except food and medicines and 20% for luxury goods (like restaurants). You do not see this because by law it must be included in the price. On top of this, federal taxes are higher than in the US but there is no state tax. If you make more than, I believe, US$50K you need to file taxes every quarter.

In Mexico, car registration, cell phone and internet cost are higher. Gas prices are about the same. Housing prices and groceries can be way cheaper, but by my calculations in US$, it is way more costly to live in nice a neighborhood in Mexico City than in a nice neighborhood of most large US cities like L.A. or Chicago.

[Author]

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