Job recovery? or "statistics don't lie, people do"

[Marc]

Thank you - it felt good to be asked.

But I don't understand the bit about 'they have to "recommend" you.'

Howard Atkins is the best person to ask, but I assume it's the same process these days.

Back around 2002 I made a deal with Chris Shillito (now deceased) of Eagle Registrations in Dayton, Ohio. He screwed me over, but it's a long story I won't relate here. The deal was (is?) to be a TS 16949 auditor you had (have?) to be "sponsored" by a registrar to go through the process to be a TS 16949 Lead Auditor. ISO 9001 auditors being a dime a dozen, TS 16949 auditors make a bit more $$$

 

[howste]

Thank you - it felt good to be asked.

But I don't understand the bit about 'they have to "recommend" you.'

You have to be sponsored by a certification body (CB) to attend TS 16949 CB auditor training, which is the only path to being a qualified auditor. The IATF has chosen to deliberately limit the number of auditors "in the game" and they want them all to go through the same process to ensure consistency.

Being a TS auditor definitely has its ups and downs. We are definitely in demand more than an ISO 9001 auditor, so usually get paid more for audit time. The work itself does tend to be more stressful though, since you are expected to audit to not only the TS 16949 standard, but the AIAG core tools manuals, and myriad automotive CSR documents. If you want more feedback, you might start another thread for discussion...

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As for the main topic of the thread, I wonder how much of the economy is affected by the news media. It seems to me that whatever story is being told becomes a self-fulfilling prophesy. If the news media say that the economy is going downhill, consumers want to hold onto their money for the tight times coming and stop buying. This precipitates a decreased need for products and services. If the media say that the economy is improving, people feel more comfortable to spend a little more, and the demand increases. Any thoughts on this?

 

[Wes Bucey]

<SNIP>
As for the main topic of the thread, I wonder how much of the economy is affected by the news media. It seems to me that whatever story is being told becomes a self-fulfilling prophesy. If the news media say that the economy is going downhill, consumers want to hold onto their money for the tight times coming and stop buying. This precipitates a decreased need for products and services. If the media say that the economy is improving, people feel more comfortable to spend a little more, and the demand increases. Any thoughts on this?

There is a lot of "spin" going on from both sides of the coin. I recall pointedly during our brief recession in the early 70's there were even TV commercials urging people to spend and businesses to expand rather than hunker down and hoard their money and resources. There were ads aimed at consumers and at businesses, all urging them to "snap out of it." Meanwhile, the mainstream press was reporting doom and gloom (almost the opposite of today.)

I took a terrible bath in the stock market crash of 1970, doubly bad because I was a "wise guy" who was margined to the hilt on "high class" stocks like IBM and Xerox and NCR. Not only did I lose market value, but real cash as my broker of the time, Merrill Lynch, sold me out for margin calls because I was on an extended fishing vacation away from communication with the outside world.

I heeded the ads calling for spending our way out of a recession and ended up doing even better than I had before.

Losing a job and money can be a real downer, but you must have faith in yourself and find a way to work past the depression which inevitably accompanies such losses. Some of us can do it on our own, others may need professional therapy to break out. In either case, the shame is not in being depressed, but in doing nothing to alleviate that depression once it is recognized. (Recognition may not be internal, but friends and family should certainly be on the lookout and help the person to first recognize the need and then seek help and change.)

Added in edit: I expand on the topic of depression in this thread Update: State of mind during the job hunt (Good habits vs. bad habits)
If you suspect you are depressed, it may be worthwhile to read through that short thread. I've "bumped" it to bring it to the top of current threads.

 

[Marc]

<snip> If the news media say that the economy is going downhill, consumers want to hold onto their money for the tight times coming and stop buying. This precipitates a decreased need for products and services. If the media say that the economy is improving, people feel more comfortable to spend a little more, and the demand increases. Any thoughts on this?

I'll bite: The "media" may say something like the economy is improving but I don't think people act so much on that as they do their actual situation. If the news says the economy is improving and you have no job, you won't be spending just because the "media" says things are getting better. In the same vein, if one has a job but their base salary was cut because the company is having a hard time staying afloat it doesn't matter what the media says the person or family is going to be watching its budget.

On the other hand the more well off may tend to spend more if they "feel good" about what the news is saying to some degree, but they have the money to do so anyway. But I believe those who are better off financially do, for the most part, act upon their actual situation rather than buying things (or not buying things) based upon what the media says.

Let me ask you this: If the media says things are looking better do you go out and start buying things (now let's be clear here, we're referring to non-essential goods and services) based on that? Or, are you going to look at your financial situation and ask yourself if you can afford it and if it's a good choice?

A friend out of work was here the other day. He had called and asked if there was any work he could do for me. I let him do some house cleaning because it's still cold out and that's really all I had for him to do. It really doesn't matter what the news says, he's not going to go out and start spending money he doesn't have based upon the news. On my end, I like the fellow and can readily afford to give him a bit of work even thought I would normally do what he was doing myself. My actions had nothing to do with anything I read in the news. I gave him some work because he's a friend who is out of work so every $ *seriously* counts to him. It also helps that my budget and my liquid savings (I have never considered my home as an asset, BTW, and long ago paid it off) tell me I can live without any income for somewhere between 8 and 10 years (in short I can easily afford to help him out now and again).

Looking back over the years I don't remember ever having spent money based upon what the news said ("things are looking up" or "things are looking bad"). I looked at my financial situation and my financial goals and spent accordingly. The only change I made of significance wasn't based upon the news or a "feel good" moment where someone was saying something like "the economy is improving" (or isn't improving). My major change was starting to get out of investments other than physical gold when Clinton signed off on the Gramm–Leach–Bliley Act of 1999, and when Bush was elected by the US supreme court I ditched all other investments and went strictly physical gold. The news didn't tell me to do that. Knowing what escalating deregulation would do (and did) was my incentive.

I also think so many people went into shock after the 2007-2008 crash because so many people lost so much money so fast. I think it focused many people's minds on their finances and has caused them to save more and spend less (that is of course the people who weren't significantly wiped out by the crash). I think that crash has changed many people's spending habits permanently.

This is not to say that if the news media says that the economy is going downhill it will have no effect on anyone. Some people undoubtedly will tighten up a bit. But - I think it is mostly a persons or family's specific financial situation which determines whether to spend (and what to spend on) or not.

Since more and more people are in the position of having to choose whether to buy food *or* pay the rent *or* pay the electric bill, what the news says doesn't matter a whit - They have no disposable income (extra money) anyway.

 

[Wes Bucey]

<SNIP>

This is not to say that if the news media says that the economy is going downhill it will have no effect on anyone. Some people undoubtedly will tighten up a bit. But - I think it is mostly a persons or family's specific financial situation which determines whether to spend (and what to spend on) or not.

Since more and more people are in the position of having to choose whether to buy food *or* pay the rent *or* pay the electric bill, what the news says doesn't matter a whit- They have no disposable income (extra money) anyway.

Yep. In my case, I had lost a substantial sum of my assets, but I had income, health, skills, knowledge which I could and was willing to risk and exploit to regain my losses. If I had had to worry about where my next meal was coming from or keeping a roof over my head, I could have easily descended into a never-ending spiral.

I understand the thinking of "gold bugs" like Marc, but my personal preference is more like Warren Buffet - find opportunities likely to grow and invest in or work with them. The fact that both Warren Buffett and Marc have survived the recent recession [depression?] is testimony to the flexibility of the American economy. The reality is without folks willing to take risk in creating new wealth versus holding on to existing wealth, the gold bugs like Marc might end up using a gold bar to buy a slice of bread because without risk takers, no crops would be sown, no grain harvested, no bread made except in tiny quantities at vastly inflated prices.

There is a book out describing the millionaires most folks don't notice. Here's a review from Amazon

In The Millionaire Next Door, read by Cotter Smith, Stanley (Marketing to the Affluent) and Danko (marketing, SUNY at Albany) summarize findings from their research into the key characteristics that explain how the elite club of millionaires have become "wealthy." Focusing on those with a net worth of at least $1 million, their surprising results reveal fundamental qualities of this group that are diametrically opposed to today's earn-and-consume culture, including living below their means, allocating funds efficiently in ways that build wealth, ignoring conspicuous consumption, being proficient in targeting marketing opportunities, and choosing the "right" occupation. It's evident that anyone can accumulate wealth, if they are disciplined enough, determined to persevere, and have the merest of luck. In The Millionaire Mind, an excellent follow-up to the highly successful first analysis of how ordinary folks can accumulate wealth, Stanley interviews many more participants in a much more comprehensive study of the characteristics of those in this economic situation. The author structures these deeper details into categories that include the key success factors that define this group, the relationship of education to their success, their approach to balancing risk, how they located themselves in their work, their choice of spouse, how they live their daily lives, and the significant differences in the truth about this group vs. the misplaced image of high spenders. Narrator Smith's solid, dead-on reading never fails to heighten the importance of these principles that most twentysomethings should be forced to listen to in toto. Highly recommended for all public libraries. Dale Farris, Groves, TX
Copyright 2001 Reed Business Information, Inc. --This text refers to the Audio Cassette edition.

I give personal testimony that the principles outlined in the book and its companion, The Millionaire Mind, are real and workable and that I am proud to count several folks in my circle of family and friends who successfully follow those principles.

If I were to describe one common attribute among those personally known to me it would be:
They don't panic!
They have fears, but their fears are rational and they practice risk avoidance schemes to offset those fears, such as,

• Fear of death or illness - they take good care of themselves, see doctors regularly, exercise in moderation
• Fear of poverty - they rarely, if ever, risk everything on the turn of a card (thus, they don't become fabulously wealthy, but neither do they crash and burn), but risk only what they can afford to lose
• Fear of loneliness - they act as good friends to others, receiving good friendship in return; they don't flaunt their wealth, making it uncomfortable for others of less wealth to be in social situations.

Another big thing - they never have an inflated opinion of themselves as "too good for that" - one of these guys is a regular at the local McDonald's where he hangs with a bunch of other retirees at 7:00 am sucking down cup after cup of senior citizen priced coffee while they discuss the news of the day. That doesn't keep him from occasionally taking his wife and going to the super upscale "breakfast and lunch only" place down the street from Mickey D's where breakfast starts at $12 and goes up from there. The difference is, he keeps his life in proportion, preferring to concentrate on conversation at Mickey D's rather than the fact he could afford to spend upwards of $5.00 per cup of Starbucks just a block further down the street.

 

[bobdoering]

I'll bite: The "media" may say something like the economy is improving but I don't think people act so much on that as they do their actual situation. If the news says the economy is improving and you have no job, you won't be spending just because the "media" says things are getting better. In the same vein, if one has a job but their base salary was cut because the company is having a hard time staying afloat it doesn't matter what the media says the person or family is going to be watching its budget.

The biggest problem is the media claims the recession/depression is "over" - but that is to say that falling into a well is "over" when you hit the bottom, not when you get out. So, the effect is not that are even close to getting better, but we are not getting any worse. Let's see what the uncertainty in oil.....again....gets us.

 

[Marc]

<snip> The reality is without folks willing to take risk in creating new wealth versus holding on to existing wealth, the gold bugs like Marc might end up using a gold bar to buy a slice of bread because without risk takers, no crops would be sown, no grain harvested, no bread made except in tiny quantities at vastly inflated prices. <snip>

Maybe you'd like to clarify that sentence. I took a risk in buying physical metals. Look back to the late 1970's when gold soared then crashed. I am still taking a risk in holding what I have. I also have quite a bit in cash. I'm taking a risk by holding it especially considering the continuing devaluation of the dollar. I took a risk in buying my current house. I knew it at the time and that was in 1996. People kept telling me what a good investment a house is. When I explained my only goal was to have a place that I owned outright which was cheap to maintain to live out my senior years in people chuckled. They looked at their house(s) as assets that would *always* increase in value. Most used them to bet on their future just as they took out second mortgages and home improvement loans. They did the same thing with their credit cards. Many of them bet on their future and lost.

I have taken an opposite view. I didn't look at my house as an income by way of appreciation in value when I bought it in 1996. I have long had a budget and I planned for times of no income. I also kept my house on my books as an asset at US$20K less than I paid for it. I wasn't betting my house would go down in value - I was betting it wouldn't appreciate and that if worse came to worst case I could sell it quickly at US$20K less than I paid for it.

My bet was and is I will make less money (US$) in the future than now. As others have bet on an improving future, I have bet my income will decline and eventually disappear. I have saved and kept to my relatively austere budget. I stay out of casinos. I don't even buy lottery cards...

I'm sort of laughing as I write this because my lady friend used to kid me about my budget and how pessimistic I was (and am) with regard to income. It was a regular thing when I went through my weekly budget. She's usually around as I do it every weekend. She doesn't kid me any more. She's seeing more and more of her friends go under water, and she her self isn't doing as well as she thought she would be by now - Over 7 years with the same medical group and only a couple of very small raises in all that time. And while my income stream has been increasing for about 8 years (I had 2 very bad years - 2000 and 2001), my budget is still keyed on my 2003 income. I hope my income stream will continue to increase, but the reality is it won't. I'm 60 years old, remember. In the mean time, I pack away my savings while I stick to my budget.

I think you mean that if people don't *invest* in some things (such as food production) no crops would be sown, no grain harvested, no bread made except in tiny quantities at vastly inflated prices. I point this out because there's not a thing in the world you do which isn't a risk. As I said, my holding gold and cash is a risk every bit as much as if I would sell my PMs and invest the cash from the sale in something else such as the stock market. The corporations and people with megabucks are the ones who will keep that stuff going. They don't need the relatively little cash I and people like me have.

You see - That's the problem. Creating new wealth vs. holding on to existing wealth is something people (well, particularly Wall Street et al.) say when they want you to spend or invest your money. No matter what you do it's a risk. Personally I don't have a need to "create new wealth". I'm happy where I am. That may change, but my bet (I'm taking a risk) is my present course is stable. The presented argument is Wall Street BS used to convince people investing is good for the country and all that.

Also, as to "creating new wealth", what do you mean by that? What is "creating new wealth"? To me it means increasing one's net worth. Nothing more, and nothing less. When you say:

<snip> creating new wealth versus holding on to existing wealth <snip>

As far as I can tell all you are doing is saying I should make more money and spend it. That of course brings me to ask, why should I spend if I don't need or want to? That's what has gotten so many people in over their heads in the first place. That is also why tax cuts for the rich don't do anything. They can and will only spend so much no matter how much they make and no matter how much they're taxed. And no matter how much they're taxed, their lawyers will find ways to reduce or nearly eliminate taxes they have to pay anyway.

As to:

<snip> gold bugs like Marc might end up using a gold bar to buy a slice of bread <snip>

Those holding stocks and bonds may not be able to afford that one piece of bread at all. I hold PM's because I believe PM's (particularly silver and gold) will at least keep up with inflation.

If the inflation rate is going to spiral up (aka rampant inflation) as you allude to, it isn't going to be because of little guys like me not spending what we have and what we make in the future.

You say, in so many words, that the "risk takers" are what keeps things going. I don't buy it any more than I buy into the Chicago School of Economics theories.

 

[Marc]

<snip> The fact that both Warren Buffett and Marc have survived the recent recession [depression?] is testimony to the flexibility of the American economy. <snip>

We both had (have?) investment and life style strategies that worked for us. I'm not even sure what you mean by "the 'flexibility' of the American economy". It's the same in every country's economy. Everyone chooses a strategy. Some win, and some lose. It's not unique to the US.

 

[Marc]

The biggest problem is the media claims the recession/depression is "over" - but that is to say that falling into a well is "over" when you hit the bottom, not when you get out. <snip>

Well put.

So, the effect is not that are even close to getting better, but we are not getting any worse. <snip>

My bet is "we" haven't hit bottom yet. A branch may have slowed our fall, but we're nowhere near the bottom yet.

Let's see what the uncertainty in oil.....again....gets us.

Not to mention food prices. Not to mention the end of QE2 (will there be a QE3?). Not to mention in many areas home prices (as well as commercial real estate prices) still have not only not stabilized, but the backlog of unsold homes (and we have to include the "shadow' backlog of unsold homes many banks are holding off the market) is increasing. Not to mention the Fed interest rate is still at 0% to 0.25% (such a deal the banks are getting!).

I do totally agree that US$5/gallon for gas will shake things up a bit faster. It's close to US$3.50 now and we've seen US$4 so that won't totally surprise anyone. If it hits and/or goes above US$5 I think some people are going to go into a bit of a shock. At US$7 a gallon it will be a lot more than a bit of a shock. None the less, oil prices are just one of the most volatile parts of a complex scenario. This is one reason why energy is no longer reported as part of the CPI. It would scare the heck out of people if they knew the *real* inflation rate.

 

[bobdoering]

None the less, oil prices are just one of the most volatile parts of a complex scenario. This is one reason why energy is no longer reported as part of the CPI. It would scare the heck out of people if they knew the *real* inflation rate.

The inflation numbers - just like the unemployment numbers - are some badly cooked books. Sure, oil may be out if the index, but it will percolate out in its effects on all the things you mentioned - food, plastics, drugs, chemicals, etc. Add to that all of the products that have been downsized - like 4" wide toilet paper. Yet, Tim Geithner says there is no rampant inflation. Seriously? I don't buy that for a minute.