Economic Downturn Has Finally Arrived!!

[Marilyn]

Well, we were doing pretty good down here until very recently. My business is still good because we are shipping orders we've already sold, and should remain good for 2 more months. After that, who knows!!

I'm on the board of our local subsection of the American Society of Mechanical Engineers. We had a luncheon today which is very unusual. Normally we have evening meetings with an agenda. Our president called the meeting, as I learned today, so that we could all exchange personal e-mail addresses and have a meeting together before some of the board members move on to other jobs. It seems that the plants in the area are beginning to announce lay-offs. Our subsection president is the first casualty that I know personally. He will probably be moving to Corpus Christi, but isn't sure yet. A lady in the group is one of 12 engineers in a mechanical reliability group, 3 of the 12 are leaving, and she's afraid she may be one of them. She's, I'm pretty sure, a single mom and is from South America with teen aged children and only received her degree recently and thought she had a secure job. Others may be forced to take early retirement. One of the companies (they have 3 plants in my territory) is laying off 20% of their employees. Another company has reduced all contractors to 32 hours a week. It's getting crazy out there.

Work we were planning to sell valves for has been postponed until we don't know when. My job should be secure. My income, however, will be greatly affected. I'm salary plus commission. My salary is good, so we will be okay, but commission is a big part of my total pay, so this could be a big cut.

If one of the big 3 automakers goes under, we will all be in trouble. So many of the plants' production is the raw form of plastics, polyethylene, polypropylene and PVC. Think of all the plastics in cars. Downturn in construction is already hitting us. Think of all the PVC pipe in subdivision development, housing and commercial construction, and all the plastics coating wiring and cables for transmission of electricity.

We've been through times like this before, but this looks worse than ever before, and we are being told will probably last longer than before.

Our company has in the past had employees take an across the board 10 percent cut in pay rather than laying anyone off. Just hope if things get bad that they will do this again. We are a good team and are willing to sacrifice if necessary to keep our coworkers employed. However, we're not publicly traded anymore, and are owned by private investors, so it's a completely different set of leaders.

What a mess!!!!! We all need to be praying for our nation and our world that not too many people suffer because of this. Hate to be negative, but I'm afraid it's going to get much worse before it gets better.

[2tiredmom]

I keep praying for the good to happen. But it's not looking good anywhere right now. My husband came home last night (He works in Agriculture) and they have
cut hours at his work. We also have a Chevy Truck Plant up here that may end
up closing due to the vehicle situation. I work for county government no raises here. But the County Council has decided to do an income tax of 1 1/2 percent
of our incomes for anyone who works in our county. So I will be making less next year. I'm afraid alot of people will be going on shooting sprees before this is all over. Not a good time to be a "working middle class" person. Time to reassess our money what there is off it.

[goofywife]

I really think there is going to be a lot less "working middle class"

[Ponyup]

The company I work for has a plant in El Paso, TX. They just recently laid of 90 people out of 160; that's 56%. So far we havent' had many lay offs up here in Northern indiana, but they are coming. The company that bought us is publicly traded & there stock is down 30%, they are predicting big cuts for the 4th quarter. We've always ran 24/7 with swing shift employees. They are talking about going to 24/4 which means only 1 day & 1 night operator per machine, which means half of the operators could lose jobs. I've been working 10 hour days & most weekends because they've laid off people in my area & I have to pick up the slack. I'm not really worried about my job at this time, but I'm worried about my husbands. But we'll make it.

[Janet]

It's bad all over for most middle class and I believe you're right Michelle, there will be many moving to the lower/poorer class. I don't mind being honest with everyone, I make just a little under $11,000.00 a year. Not much I know, but if afforded my for the last seven years to be home with my son when he was ill and during school breaks and summer. I didn't want someone else raising my son, so the money took a second seat. It did help that I have great insurance. Husband had back surgery in August of 2007 and we have yet to pay a dime.

Now my husband is without a job. He has helped the neighbors with harvesting, but that's done. He goes out and job hunts or sends resumes out via computer. There just aren't many out there. He did testing yesterday for SIA (an automobile plant in Lafayette) that is supposedly hiring, but not until January. Today he has an interview with a neighboring school corporation as a custodian. Not really what he's wanting, but he has never done anything but auto body repair and well, people are keeping the money instead of fixing their cars. So hopefully this custodian job will work because it is making him despressed staying home. He has always had a job and is feeling like a failure.

He is able to draw $305 unemployment, but that is just barely enough. We have cut things drastically. Have yet to turn on the furnace...we're heating with wood in our fireplace insert. Not real comfortable, but hey...we can't afford to be right now.

I'm not complaining, but it's getting harder and harder not to.

[Tiramisu]

I've been trying to "cut back", but we're already pretty simple. Hubby and I have always worked and make decent money, putting four kids through college and saving everything we can for retirement. We have basically lost our last five years of savings in the last few months and that will take more than five years to recoup, meaning that I won't get to retire next year or maybe never.

I'm not extremely worried about my JOB or getting a pay cut, but I do worry about a couple of my kids losing theirs.

Jonathan is going to work in Iraq and Laura should be able to find a teaching job.
Jeff got back from Iraq and started a job and Emily teaches kindergarten.
Kenneth is struggling selling houses and Paula teaches kindergarten.
Roxann teaches 5th grade Math.

So, I feel OK about the "teachers", but worry for Jeff and SILs: Jonathan and Kenneth. Jeff can teach school, but other jobs pay more. He's working 3 months probation and hopes to be hired.

And, I worry about my friends here!

[Marilyn]

We're hearing more bad news today. More projects pushed back. Our son-in-law should be okay with his job, firefighter. He's in the Austin Fire Academy right now and graduates in February. He's doing very well by what we are hearing, and his dad is asst. fire chief, so hopefully he will be okay. He's already a certified EMT/Firefighter so he could always work for a smaller city if they need any firefighters. His wife, our youngest is in college and working part time for Bank of America. We think her job is secure for now. We pay for her college.

Other daughter is a full time college student. Just hope we can keep paying for their college, and our full time student's expenses. She may have to find a job, but she's taking heavy loads and doing very well, so we want her to hurry and finish and get to work at a really good job, if there are any when she graduates.

Guess they can always move back home. We can feed and house them if necessary.

[HALEY]

Almost all the steel mills are shut down around my area, we laid off many, many guys, and my hours are cut down now to 4 days a week,,,
and the funny thing today in the paper on the front page, is the banks that the government just bailed out, gave all the big shot wonderful bonuses today,,, isn't that nice,,, i guess there spreading the wealth around hun..... this world is screwed up if you ask me the government should have never bailed them **** out of trouble, they just made the rich - richer and there laughing ....

[celstu1]

My company just sent out a memo today.

Wages and Salaries are frozen for 2009.
For people making over $50k (me) no more matching 401K at all.
Insurance premiums went up, luckily those did not go up much at all amazingly. But they are high, I am single and pay $60 every other week plus $40 copays. :(

We are all feeling it!

[judy]

This is going to get worse before it gets better. It is so sad that the hard working middle class is having to tighten their belts so much. Unemployment has gone up to the point it was around 9/11. My SIL is not working, although he is in the electrician's union so he still gets his benefits. I hope he and his new partner get some work after they finish my house. The trouble is, people are not using contractors right now. If you can't afford heat, you're not rebuilding the porch!

I have lost so much in the market this year, and I don't even have that much in my annuity. I get a pension, health insurance and social security in a few months though, so I'll be okay.

These are hard times. I hate that some of you are feeling the impact so hard.

[gja1000]

The state of the economy is very very frightening. I'm so worried! My husband and I experienced a sudden loss of job 4 1/2 years ago, when he woke up in heart failure and then ever was able to work again. It was so sudden and unexpected - we were not prepared. It was so scary but we made it through. He was about to get his social security disability and medical retirement, but it is just a fraction of his previous salary - but at least we have it.

I have a good job and I am tenured at my University so that is wonderful. But much of my retirement is gone. I don't have a pension - only my 401K and you all know what that looks like. I don't have any plans to retire anytime soon - now it looks like I may have to work till I'm 85 - I'll be that crotchety old professor hobbling around with a cane! :)

We have learned to live much leaner since my husband's illness. We just got word today, that his co-pay on his medications will go up from $35 for name brands to $65. That's almost a 100% increase, don't seem fair. On the other hand we used to pay $10 for generics and now the first 3 generic prescriptions will be free - big whoop (a whole $30 savings) - and then $10 each! I guess it is something though. Problem is that he takes 13 prescription meds!!! :eek: This is going to hurt the pocketbook. Some of them are generic - but some do not have a generic alternative.

I also worry about our kids. SIL is district manager for a concrete company - their business is way down. I don't worry about him losing his job so much as I worry that they will close some of the plants and he'll have to move. The company is strong and I think they can survive slow business, but I fear they might have to relocate - there are worse things though. He certainly will not get the big bonus this winter that he is used to.

My daughter does not work (she has a two year old) - but she could if she needed to. She is an elementary school teacher.

I worry so much about the needy. For example, I work with an adult day care center that cares for the elderly who can't stay home alone during the day. They depend on donations and funds to make ends meet. Medicaid pays for adult day care but not enough per day to cover the costs. If people are not able to donate, I don't know what will happen. Same with organizations like the food bank. If people can't afford to donate, then they won't have enough food to help the needy!

It is not a pretty time right now. I don't know when it will get better.

[Gina]

Things will get worse before they get better. So sad we all have to watch our spending. My son graduates with a BA in Business fiance this Spring.. but there are no jobs on Wall Street. I don't know what he is going to. His medical coverage which my husband company pays will cease once he is through with college.

I pray that this country will rebound quickly but the future seems bleak.

[Marilyn]

The messy bailout news doesn't help. I can't believe these banks are getting our taxpayer money and not letting people refinance. Instead, they are hoarding the funds and paying their executives bonus'. It's time for us to step up and tell our congressmen and women that we just WON'T TAKE IT ANYMORE!!!! Maybe if we do it now before times get really desperate, something will be done. There just has to be more oversight in Washington. They can't just give our hard earned money to these GREEDY people. :mad::mad:

[gja1000]

Marilyn, we just got a call from a pipeline company that they will be building a pipeline across our farm to connect to a gas well. I know that natural gas prices are way down, so I was surprised to hear they were building a new pipeline.

[HALEY]

Bailout execs get bonus billions

Despite the worst financial crisis since the Great Depression, Wall Street firms expect to pay billions in executive bonuses after being shored up with billions in taxpayer dollars.

Merrill Lynch & Co. lost money for five straight quarters and its stock dropped 70 percent this year. Yet, it set aside about $6.7 billion to pay bonuses this year, according to a Bloomberg analysis.

"I think it's sickening when I hear these stories," Democratic Rep. Jason Altmire of McCandless said Wednesday. "The Wall Street firms are tone deaf. They don't understand the American people are outraged at this type of behavior."

Many banks paying bonuses are receiving billions in capital from the Treasury department as part of the government's $700 billion financial rescue plan. The Troubled Asset Relief Program, known as TARP, was announced in September.

Stock brokerage giant Merrill Lynch is receiving $10 billion from the government. The struggling institution is merging into Bank of America.

Bank of America, which is getting $15 billion from TARP, is offering bonuses equaling up to 100 percent of revenue Merrill's brokers generate, in order to retain them, said Bloomberg.

"The public is angry about this, and they should be," said Joan Claybrook, president of Public Citizen, a consumer advocacy organization in Washington.

"(Wall Street executives) are the ones who caused this economic crisis, and they are the ones who should be asked to sacrifice," said Claybrook.

National City Corp. is not receiving government money -- but tried to. The struggling Cleveland-based bank applied to the Treasury for money but was told Oct. 19 it would not receive any, according to a recent Securities and Exchange Commission filing.

Five days later, National City agreed to merge into PNC Financial Services Group in a $5.6 billion deal. PNC, in turn, will get $7.7 billion -- more than enough to cover the acquisition -- from the Treasury in exchange for preferred stock.

National City spokeswoman Kristen Baird Adams declined to discuss the issue yesterday, saying it was "inappropriate for us to comment for your story on bonuses, given our pending merger with PNC."

PNC spokesman Fred Solomon said: "PNC will comply with the rules governing TARP participants, and the (board's) compensation committee shortly will start the annual process of carefully considering compensation decisions."

The Wall Street bailout passed by Congress states the five highest-paid executives cannot receive rich severance packages known as "golden parachutes," but it doesn't address bonuses. Altmire said he voted against the bailout for that reason.
"Wall Street firms will say the money isn't from the bailout," said Altmire. "But there is no separate pot of money. You have all the money in your budget, and you decide what to do with it."

Said Claybrook: "The deal was the $700 billion bailout would provide money to banks to increase their liquidity to extend credit to businesses and the public.

"The public's irritation with this is we're going into debt as a nation to try to save the economy, and then these banks are using the money to pay bonuses to executives," she said. "The cost is equal to about $3,000 to $4,000 per citizen, yet many are losing their homes. It's morally and economically wrong."

Fifth Third Bancorp, which operates 13 branches in the Pittsburgh region, is another TARP recipient -- $3.45 billion. The Cincinnati bank's stock fell 63 percent this year.

"At this particular point in time, we do not have a decision with respect to executive bonuses. That's a decision that will be made in January 2009," said bank spokesman Debra DeCourcy.

Bank of New York Mellon Corp. is receiving $3 billion from the government in exchange for preferred shares in the New York-based institution. It was among the nine major institutions chosen by the Treasury to jump-start TARP.

"We are not using the $3 billion from the capital infusion to pay bonuses or dividends," said BNY Mellon spokesman Ron Gruendl. The bank hasn't determined executive bonuses for 2008, he said.

Spokesmen for Citizens Financial Group could not be reached for comment.

[gja1000]

I was talking with someone who had heard an interesting idea about the bailout situation. When a business goes to the Government for bailout money, the stipulation is that they get the money, ONLY if the CEO's who allowed the company to get in trouble are fired.

Hmmm..... wonder how many would be clammering for a handout then???

[DianaB]

I was talking with someone who had heard an interesting idea about the bailout situation. When a business goes to the Government for bailout money, the stipulation is that they get the money, ONLY if the CEO's who allowed the company to get in trouble are fired.

Hmmm..... wonder how many would be clammering for a handout then???

Personally, I like that idea, Gayle!

I can't believe that with everything that's been going on that the banks would make sure that they got their bonuses!!! That makes me hopping MAD!!!!

[HALEY]

makes my blood boil, its getting ugly here at work today, there fire people now, upper management and sales people are getting axed today... very sad... its making me nervous... i don't like this stress today...

[celstu1]

We at my work had an idea.

Personally I was totally against the bailout program and was bummed when it did pass. This administration is working AGAINST the people of the United States. Especially the middle class. So whatever they proposed would probably not be likely to help those who make this country 'turn' so to speak.

The people I work with said that every taxpaying citizen should get $100,000 from this bailout and LET them stimulate the economy. Some will pay off or put down a big chunk on thier house and refinance into a more solid loan, some will save it, but mostly some will do a little of everything with it. Pay off some of their house, spend some of it frivously like a vacation or a shopping spree for christmas and put some in the bank. It would make the 'banks' hurt for a little longer, but eventually the money will trickle up to the banks and everyone would be happy. We'd be in debt still, but at least the goal/objective of the bailout would have been met.

Dont' you love our idea? haha This idea came from a group of very smart people, most of them 50 or so years of age and who lived through the depression of the 80s.

[Janet]

I feel bad for everyone and like you Diana...I'm so freaking mad about this bailout and the bonuses. What can ya do? Nothing, the rich get richer, the poor get poorer and hopefully poor won't have to suffer too much, that somehow the donations will come through.

I

[HALEY]

they keep this crap up, there is not going to be a middle class anymore there is just going to be the rich and the poor!

[Gina]

they keep this crap up, there is not going to be a middle class anymore there is just going to be the rich and the poor!

You got that right! Middle class American is no longer being represented.. Democrats equate poorer.. Republic equate rich.. Middle Class nada...

[HALEY]

Yep Gina, and if the new president wants to tax people making over 200,000 a year, there goes all your small businesses there not going to survive...

[DianaB]

We at my work had an idea.

Personally I was totally against the bailout program and was bummed when it did pass. This administration is working AGAINST the people of the United States. Especially the middle class. So whatever they proposed would probably not be likely to help those who make this country 'turn' so to speak.

The people I work with said that every taxpaying citizen should get $100,000 from this bailout and LET them stimulate the economy. Some will pay off or put down a big chunk on thier house and refinance into a more solid loan, some will save it, but mostly some will do a little of everything with it. Pay off some of their house, spend some of it frivously like a vacation or a shopping spree for christmas and put some in the bank. It would make the 'banks' hurt for a little longer, but eventually the money will trickle up to the banks and everyone would be happy. We'd be in debt still, but at least the goal/objective of the bailout would have been met.

Dont' you love our idea? haha This idea came from a group of very smart people, most of them 50 or so years of age and who lived through the depression of the 80s.

I like that bailout plan!!!! It would have certainly helped our economy. It would have helped in all areas by sales taxes, income taxes, and the paying off of debts. I've always said that about cutting taxes and letting the people spend that money. The money would just go around and everyone would be helped.

I think that it won't be long before we're a socialist nation anyway. I heard several people comment on it during the campaign. The rich get richer and the poor get poorer!!!! Looks like we're on our way........sadly to say.

[Marilyn]

Yep Gina, and if the new president wants to tax people making over 200,000 a year, there goes all your small businesses there not going to survive...

Just to clarify what this means, he is proposing to increase the taxes of people making over $250,000 (net taxable income, not gross profit). They are currently paying at a rate of like 37%. What he is proposing that they pay the same thing they currently do on the first $250,000 and any income over that amount is taxed at like 39%. If the person made $270,000 for example, the tax would be 2% higher on the $20,000. It's not a huge increase to the individual tax payer, but cumulatively it can make a difference in income for our country. We have a huge debt that we have to pay off somehow. The money has to come from somewhere. There is no way that our government can keep borrowing from China and still not balance the budget, and expect our government to not go bankrupt. As a small business owner, if we made over $250,000, I'd be willing to pay the extra 2% on the income over that amount to try to improve our countries financial position.

The other side's idea was to cut taxes on the hugh corporations with the expectation that they would use the extra money to invest in their companies and the effects would trickle down to the middle class. We've see from this bailout what happens when you give huge corporations extra money, they spend it on bonus's and lavish meetings, and somehow that's supposed to trickle down. Reagan was a very good president, I voted for him, but his trickle down economics didn't work then and it didn't work during the Bush administration either. No way ExxonMobile should be getting government subsidies while making record profits. Something has to change. Washington has to come to their senses. It's not a matter of republican vs. democrat, it's a matter of coming together to help the country.

I'm afraid we are all going to have to make some sacrifices to help our country or we will be in even bigger trouble. If we all work together, I'm sure we will find a solution to this. I'm just afraid that there is not enough oversight in Washington of the people getting these bailouts. I'm glad they have not yet given all of it away, and they are realizing that some of what has been given is not working like they intended it to. Perhaps they will modify the bailout plan so that it does become more effective.

We need to be praying for our leaders that, if it' God's will, that they have the wisdom to do the right things.

[HALEY]

As a middle class worker i pay enough taxes, i'm not helping these corporate giants out at all.. the governement should have never bailed out these giants. and for what so they can go to a spa resort cause there so stessed out!! and as for small business owners, my sister owns a business and this will effect her, why should she pay more taxes she pays enough already.
If the governement keeps this up there will be no middle class in the united states at all..
Who is going to be next in line for the bailout?? Why didn't the government help out all the steel mills that closed?? why just the banks, its not fare, cause the banks got greedy and loaned people money that they couldn't pay back... this is crazy.
I help this government out alot by working and paying my taxes. Why don't they look at the millions of people on welfare and get a work program started for them and ship all the illegal aliens back.. there's a start right there.... Im sick of supporting them people too... I wish someone would give me money and pay my medical bills too...

[Marilyn]

Haley, I'm very much in agreement with you about the big corporations!!! This is horrible. And how about those automakers taking their luxury jets to Washington to ask for a handout. They said it was for safety reasons. The wealthy in Hollywood fly commercial jets, and if they aren't safe enough for the CEO's they aren't safe enough for the rest of us either. None of those executives should make more than the President if they are taking taxpayer money to make their business work. It's a shame what is happening!!! And you are right, why the automakers and not the steel mills??? Once you start bailing out, where do you draw the line???

Congratulate your sister on making a taxable income of more than $250,000 a year. She should be having a nice Christmas. That's quite an accomplishment for a small business owner. She's doing better than 99% of them, and much better than my hard working small business owning husband has been able to do, even building several $400,000 custom homes a year. People think he makes lots of money. He handles lots of money, but net taxable income is another matter. He has lots of business expenses like rent, labor, materials, etc, etc. If the economy improves, maybe someday we can be where your sister is. I was hoping to retire and help him to get there, but the way things are looking, I'd better stay right where I am as long as I can.

[HALEY]

Marilyn, she is making that on paper only, she is into personal care, and she and her husband only make around 9.00 an hour with all the overhead they have, round the clock workers, lpn's on duty, and the things they have to claim for income is crazy, she pays her personal care home mortgage and that is considered income! I never heard of that in my life, she said its crazy.. they had to cut back some on the groceries buying store brand and shopping at Sam's club cause there prices are going up.. crazy...
And your right where does this madness end?? it's funny when the steel industries were being shipped over sea's where was the goverenment to help the millions of steel workers that lost there jobs and were an industry that's still hurting today. we want money too.. but were not going to get it.. we laid off and fired thousands of people since Sept. you don't see any of this in the newspapers why?? it makes my blood boil!!!
And Gm workers are making with benefits $ 47.00 an hour and with nothing new on the car markert, no fuel effiency cars ... let them close if you ask me.. there not competative with the foreign market... why put the money is a failing business?

[Marilyn]

We were talking about it today. Gas is down to $1.83 per gallon here. Diesel is $2 something. The grocers and everyone else raised their prices because the price of gas and diesel was so high that their costs had gone up. Has anyone seen the price of groceries and other consumer goods drop since the gas prices have dropped????

[HALEY]

groceries are going up around my area like crazy, i was emailed a list of department stores that are going to be closing soon, so sad...