MSNBC: Analysts see 200,000 banking industry layoffs

[jbooma]

For those here that think the government should not step in with this housing crisis:

Analysts see 200,000 banking industry layoffs

http://www.msnbc.msn.com/id/23904759/

NEW YORK - The U.S. financial industry has been shedding jobs at a record clip, and some analysts predict the pace will only accelerate over the next year-and-a-half as banks cut costs in the face of the housing market slump and the weak economy.

Analysts at the financial research firm Celent LLC said in a report Tuesday that it expects the U.S. commercial banking industry — essentially, all companies that lend or collect deposits — to lose 200,000 of its 2 million jobs over the next 12 to 18 months.

An annual loss of 200,000 jobs at the nation's commercial banks would be an unprecedented number... press link for article

[MurrayH81]

They wouldn't have to do this if:

1. The boards behind the corporations fired the top 5 layers of management and refused to pay them their golden parachutes while threatening them with lawsuits for getting the companies in this mess.

2. They got rid of the marketing (and other) people at those firms that started this whole sub-prime mortgage garbadge.

I do feel sorry for those being laid off, because I have compassion for other humans. However, I won't let that stand in the way of the necessary market corrections.

[jbooma]

They wouldn't have to do this if:

1. The boards behind the corporations fired the top 5 layers of management and refused to pay them their golden parachutes while threatening them with lawsuits for getting the companies in this mess.

2. They got rid of the marketing (and other) people at those firms that started this whole sub-prime mortgage garbadge.

I do feel sorry for those being laid off, because I have compassion for other humans. However, I won't let that stand in the way of the necessary market corrections.


I agree but some corrections we can not handle, this is something we need to ease through. People need to think if banks close, company's close, if company's close you get the picture......

The open market is the major cause of this. That is what created the entire subprime market.

[SkinsOrlando]

How many of those 200k positions were created do to the faulty mortgage business? Half, 1/3, 1/4. So lets do the math lets say 25% of those job wouldn't exist if the banks had remained fiscally responsible in there management. So then the layoffs would be 150k. 150k out of 2 million is 7.5%. Not that haeful of an industry downsize considering the market conditions, even at a full 200k it's 10%. Realistically it's not that hateful considering the position companies are in. Does it suck for those who are going to be laid off, absolutely, sucks for anyone who gets laid off. It's a part of life.

[jbooma]

How many of those 200k positions were created do to the faulty mortgage business?

I hope all of them, but that is not how it works :doh:

The thing is this move may not save some of the banks. This is what companies do when they are about to go bankrupt, lets hope this helps.

[Fergasun]

For those here that think the government should not step in with this housing crisisThose jobs were created to give out all of these loans that are now failing. Do you think people who have done a poor job, who jumped into the banking industry and benefitted from the loose credit rules should now keep their jobs, even if they don't have work to do?

You are advcoating socialism... and the job losses will be painful... I hear there is a shortage of nurses however. So these people who made a lot of commissions on sub-prime and Alt-A loans surely have saved a bunch of money (and surely didn't invest in houses) so they are able to be re-trained as nurses or health care professionals....

[Fergasun]

The open market is the major cause of this. That is what created the entire subprime market.The lack of regulation in the open market.... heck the government encouraged these "new" practices that skated on the thin ice of common sense...

[jbooma]

You are advcoating socialism... .

umm no do you even know what socialism is :doh:


all i am saying is the government has to make sure the banking industry survives, if not we all will pay

this is only the start of the job loss, yes the first ones to go will be those in the mortgage industry, but remember all those real estate agents etc.. etc.. it all adds up

this is the tech boom all over again, just more painful this time

[Fergasun]

Because all those tech boom people became mortgage brokers and real estate people. Do you think every bank is going to go KABOOM? No! If there was a Tech bust how are all these companies like Microsoft, Oracle, Google, Apple doing so well? I thought Tech companies just disappeared? Do you really think there will be no bankers? No banks? Heck, it's the 21st century and there are websites setup where you can get loans from all sorts of random people... they call these "microloans"... and you can give loans to all sorts of Random people. Loans that come from hardworking people to hardworking people... and you can loan out small amounts like $50 and $100 at a time, and that money can add up to stuff like $10k for people with good credit histories. I think that's actually a decent idea... and would take banking down to an organic level of "friends and families" that might actually be effective...

Anyway, bankers are crooks... so why should I cry about them losing jobs?

[Koolblue13]

I'm starting to think I have a better understanding of economics than I thought I did.

[SkinsOrlando]

Anyway, bankers are crooks... so why should I cry about them losing jobs?


Thats a blanket statement(and incorrect) but atleast you didn't call em a bunch of hook nosed Jews.

[Fergasun]

Tell me that the Fed Reserve isn't robbing the American people blind right now to help a bunch of bankers who made poor decision? Hey, let's spend taxpayers money to help out my old cronies on Wall Street!

I can't believe you would take my blanket statement and take it as a "blanket statement". Most of the hard-working average every-day folks in bankingare decent people who are trying to survive in this world. HOWEVER! They are working for crooks! It's highway robbery how much the banks have screwed up and how much our "centralized Federal Bank" has allowed them to screw up when anyone with half a brain realized there was "bubble mania" yet this was allowed to happen under the head crook Greenspan.

Can you tell me why we are bailing out Bear Stearns for $10/share? No one else was willing pay more than 2/share for Bear Stearns! BEAR STEARNS IS INSOLVENT! The Fed took $30 BILLION dollars of our money and is throwing it out the window to "ease the crises"!

But again, I made plenty of points that were valid and all you did was equate me to a Nazi... par for the course on the Internets... maybe it's not socialism... but it's a little too late for our government to do anything when they sat on their hands for the past oh 8 years or so...

[Fergasun]

I don't think anyone realizes how bad it is. Now, truthfully I do like the idea of a Scandinavian style save that I've read about... but if you don't think are about to be hosed and the stock market is all set to have a major "correction" at some point... wow... not paying attention to the underlying "fundamentals" of our financial system, and apparently it's all been built upon by banks and not smart work, or hard work, or innovative thinking...

[SkinsOrlando]

We're bailing out Bear Sterns because a large percentage of there investors are from overseas and if those countries and investoirs liquidate the rest of there investments we're sunk. I personally do not care if these companies sink, I do howver care that we cannot allow the outside investors to pull away from the country, that is not sunstainable.

[Fergasun]

Allright, I need to stop typing in this thread. Not all bankers are crooks... I retract my statement that "bankers are crooks". Maybe I think some parts of the banking system, such as these investment banks that came up with the bright idea of selling mortgage backed securities are crooked. It's because so much stuff has been sold off and no one has any idea what any of it is worth that we are in such a mess. No one wants to take the losses... but that's causing people not to buy anything, because if we don't know what the stuff we've been selling (and buying) for 5 years is worth, why would we have any expectation of knowing a reasonable value for what is on the market now?

Seriously, the Fed shotgun wedding between JP Morgan (okay, they will lose 1 Billion dollar when Bear Stearns goes insolvent) and Bear Stearns just leaves a really bad taste in my mouth...

[Fergasun]

We're bailing out Bear Sterns because a large percentage of there investors are from overseas and if those countries and investoirs liquidate the rest of there investments we're sunk. I personally do not care if these companies sink, I do howver care that we cannot allow the outside investors to pull away from the country, that is not sunstainable.It's already too late for that. Those investors lost something like what, 75% of their value?

I'm convinced American financial "doom" is not a matter of "if" but "when". Maybe that's because I read too many blogs that rationally explain what is going wrong (and have for the past 2 years)... so maybe I am a case where "little knowledge" is bad because I think I know what is going on... but man... everyone was wrong 8 months ago when they said, "this mess is contained to subprime". How much wronger could they be about a recession?

[SkinsOrlando]

What are those securites worth? 50-60 maybe as high as 70 cents on the dollar depending on LTV. These are normal standard percentages against loss for the sub-prime business in a portfolio purchase, which is all a securitization is. Unfortunately those losses cant be incurred until some stability reaches in the housing market, when normal standards of DTI,PTI and LTV are returned and some safety blanket is there. If you crush the whole bubble quickly, you take away the good borrowers from fidning a lending source, we need those good borrowers to level out the market a little then we can afford the big hit.

[SkinsHokieFan]

There needs to be a push for more corporate democracy and more information to shareholders and workers.

This is an absolute disgrace by our "business leaders"

[Fergasun]

Yeah, but there's a nasty negative feedback loop in there. 200k people lose their jobs... what percentage of those are now unable to pay their mortgage? How much impact is there to the retail sector? Retail sector gets hit by their own 200k layoff, and there's more people who can't pay their mortgages... like I said... nasty negative feedback loop...

[jbooma]

Yeah, but there's a nasty negative feedback loop in there. 200k people lose their jobs... what percentage of those are now unable to pay their mortgage? How much impact is there to the retail sector? Retail sector gets hit by their own 200k layoff, and there's more people who can't pay their mortgages... like I said... nasty negative feedback loop...


bingo, that is my point, it is a cycle and not a good one, the sad thing is those that have been saving and not living on credit may be hit hard as well

EVERYONE is going to feel something from this don't think you won't

[Fergasun]

Well I was already feeling it with all the inflated housing prices, so now I'm just feeling it with inflation. I really don't have too many investments, but do have some exposure to things... we're already paying for all the negative impact anyway...

[SkinsOrlando]

Yeah, but there's a nasty negative feedback loop in there. 200k people lose their jobs... what percentage of those are now unable to pay their mortgage? How much impact is there to the retail sector? Retail sector gets hit by their own 200k layoff, and there's more people who can't pay their mortgages... like I said... nasty negative feedback loop...

No different than the custoemr service reps who made 50k plus at yahoo during the .com boom. **** happens. It's correctable but must be done in a controlled fashion, much like dropping a high rise bulding, can be done with jsut dynamite or a controlled implosion. I've spent 9 years in auto finance a majority in sub-prime(out of it now), I watched sub-prime auto companies play the same game in the late 90's and they all went through the same thing, many folded up, some were able to hold on long enough to get back to the basics and prinicples of lending to survive. The mortgage industry will be no different. The money is greater but the basics of survival are the same. Keep enough captial to write good loans, allow the good loans to mature and create cash flow and loss reserve income. Use the loss reserve income to start taking the major hits. The companies who can't garner enough capital to sustain, go out of business.

[jbooma]

There needs to be a push for more corporate democracy and more information to shareholders and workers.

This is an absolute disgrace by our "business leaders"

it is, but those shareholders were loving it when they were making money hand over fist

that is the underlying problem with a true open system, greed will win out, and greed will crush all those that are playing by the rules, which is why you have to have a form of regulation, especially in the banking industry

the other poster is not kidding about foreign investors i was in bolivia a couple of weeks ago and places were not accepting dollars, the dollar is 7 times more then the boliviano, that my friend is not a good sign

the one glimmer of hope we have is it is an election year, i will say this is the perfect year to have one

[MurrayH81]

It's time for world wide anarchy! Let the games begin.

[Kosher Ham]

You guys can call me stupid, I don't mind.

How would this effect most people with cash already ?

I don't feel any financial strain and don't see that I would.

[illone]

The credit card divisions of these banks are doing just fine:laugh:.

[Fergasun]

Kosher,
jbooma got me on that one, other than the government inflating away your savings... although as a saver myself... if it is hurting the savers think of the squeeze it puts on those with none of their own "net"....

[Kosher Ham]

Ferguson, but if things start to go in a spiral and people decide not to pay the banks on just credit cards alone, sure they would ruin their credit, but would/do they take their cash ?

The only thing I could see happening to someone in my situation is that one day I would wake up and my cash wasn't guaranteed by the government, yet the bank is...well bankrupt.

Does that mean I should put money in The World Bank instead ?

[Fergasun]

Kosher,
The only other thing I can think of is that the government just seizes people's cash... like they seized gold when they went off the gold standard.

I don't know negative ramifications are, I just know that saving is the best bet right now...

[Kosher Ham]

Kosher,
The only other thing I can think of is that the government just seizes people's cash... like they seized gold when they went off the gold standard.

I don't know negative ramifications are, I just know that saving is the best bet right now...

Thanks Bro. I will have to talk to my accountant about all of this stuff. Currently, I still seem to be making money and be pretty situated with my savings. I am really curious/concerned about this now that it is becoming more and more of a daily topic.

[Koolblue13]

the one glimmer of hope we have is it is an election year, i will say this is the perfect year to have one The perfect time to have somebody who wants to increase the nessecity of the Federal government. Who will pay everybody, when we all work for them.

[Thiebear]

You give anyone a loan that could physically hold a pen = layoffs when the "chickens come home to ROOOOOST!"
:)

[Larry]

We're bailing out Bear Sterns because a large percentage of there investors are from overseas and if those countries and investoirs liquidate the rest of there investments we're sunk. I personally do not care if these companies sink, I do howver care that we cannot allow the outside investors to pull away from the country, that is not sunstainable.

So what you're saying is, the American taxpayer is spending tax money to pay foreigners who made bad investments?

[Fergasun]

the one glimmer of hope we have is it is an election year, i will say this is the perfect year to have oneWhat are you talking about? None of the candidates are directly talking about the issues, and none of them have any significant proposals.

McCain's "financial adviser" has a wife that is on the board of UBS and has links to Enron. Hillary and Obama aren't much different either as far as their ties to the banking industry goes. All 3 of them will just continue practices that prop up their "old system" and old way of thinking.

Furthermore, is this being an issue? All I remember hearing in the past months while inflation has destroyed the dollar, the government has bailed out Bear Stearns, and a whole lot else is going on (such as Fed accepting MBS' as 100% collateral for loans they are giving out). None of the candidates talk about this because it goes above most people's understanding of what is going on. So it's better to give soundbites like... "I don't think bailing people out is the answer" (McCain) or "Bush wants the ownership society... what he really means is your own your own society" (Obama said this first and I couldn't believe Hillary recycled the same line!).

I think I have more hope for Obama since his ties to the banking / financial industry aren't as deep as McCain and Hillary....

[Koolblue13]

http://youtube.com/watch?v=_qGcaCG9R4E


Today, Paul vs. Bernanke.

[China]

Well, I see Deutsche Bank has taken steps to avert financial disaster, their employees can no longer claim brothels and porn on their expense reports. :laugh:

Top German bank responds to credit crunch by staff from putting brothels on expenses (http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=561086&in_page_id=1811)
Germany's biggest bank today banned staff from visiting brothels on expenses and putting hotel TV porn channels on their company credit card.

The crackdown came in new rules issued to executives as Deutsche Bank cuts costs after losing at least £2billion so far in the global credit crunch.

"Deutsche Bank does not approve of any adult entertainments and such expenditures will not be reimbursed", according to the memo leaked to news magazine Spiegel.

Click on the link for the full article