Friday, October 12, 2007

Random conversations and layoffs

Today was one of those days where you realize "the knowledge" is spreading out to the J6P population. Purely anecdotes, but I believe they represent changes in the economy. The first overheard conversation was during training at work. Technicians were chatting on how their parents had moved to nicer retirement homes, after selling their "work homes," but were 'just renting.' The second was a REIC layoff conversation my lovely wife participated in.

The technicians didn't just note that their parents were renting a home in retirement; they stated point blank that it was smart to wait until they could buy nicer "at the same price as rent." (Ok, these people think in monthly payments...) To have a room all agree that was wise... floored me. Ok, a third of the room was already "in the know," but to hear a whole room agree ("oh yea," "my parents are doing that too," "wait to buy")... just surprised me.

The other was a conversation my wife had with a "REIC layoff survivor." A small escrow company started the day with twelve (12) employes: 3 escrow agents, 4 escrow assistants, 4 title agents, and the receptionist. They now have 3 escrow agents and two assistants. Yes, more than a 50% layoff. This was a COMMERCIAL escrow shop. Note, this shop is tied to a residential company that has been doing rolling layoffs. Note: I think rolling layoffs only destroy morale. If you have to layoff, get 'er done and move on.

My conclusions: Sales are continuing to slow. The market is going from euphoria to depression. I'm not saying we're anywhere close to depression, but rather on the path. The second conclusion is that the REIC is having a bunch of layoffs that we'll never hear about. Layoffs from small shops that will never be reported in the MSM until long after they've happened. Not to mention the MSM will only notice if it impacts the economy. But these stealth job losses will add up. I'm not even sure they'll make the employment report (for many will be fired instead of layoffs).

Got popcorn?
Neil

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