General Immigration Discussion

Spec, Q - thanks for your response.
Firstly - forget my first post (which is deleted anyway). Its a new day.
I have been a "Guest" here for almost 4 months, and well aware of Specs calculations, so on hindsight would not have preferred to start with that as the first post. But honestly I could not interpret Specs comments (even here) as anything other than saying that per-country limits are OK and that something else should be the solution. Hence the outburst.
Whether there will be one provision that is beneficial or multiple ones, only time and political appetite will tell. Beggers cannot be choosers. According to me, no single relief measure, even if implemented alone, can and should be ruled out. It will probably be a stepping stone to overall/large-scale relief.The way I look at it, per-country limits only rectifies a wrong and if a particular group(s) such as ROW that have benefited from the imbalance so far have to face an even playing field and wait along with the entire EB community, I think thats fair game. My colleagues here from Bangladesh agree with that and shake their head whenever they hear my GC story. The understand the perspective, having started in this company with me together 6 years ago and having come to the US, at the same time 9 years ago.
Frankly, I am with anyone who can push ANYTHING through. COngrats to our friends with PD in 2007, who see light at the end of the tunnel. But honestly for folks with 2008 PDs and beyond, its an excruciating wait without even being able to file for I485/EAD/AP.
I look forward to seeing your continued good work here..but only hope its on calculations dealing with smaller backlogs and wait times for everyone :)

Friends following is a link from WAJ related to the congressional testimony about Green cards and per country limits. Iam posting for everyone’s benefit.
http://online.wsj.com/video/opinion-...683FC308C.html

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Originally Posted by bieber

If companies are hiring like 1999,

the unemployment rate won't stay at 9% level, even more specific to our EB the h1b quota should have been already exhausted.

yes, IT sector hiring may be better than other sectors (i haven't read the article you suggested yet) but my statement was just on overall economy and I re-presented it, not derived :)

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Beiber

stats suggest that unemployment rate for people with bachelors degree is around 4.6% and the same of people with High Schoool degree and lower is around 10.2%

This explains why the PERM filings continue to remain high

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Originally Posted by natvyas

Beiber

stats suggest that unemployment rate for people with bachelors degree is around 4.6% and the same of people with High Schoool degree and lower is around 10.2%

This explains why the PERM filings continue to remain high

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Natvyas,
Unemployment rate for people with bachelors degree was around 2% in 1999 and 2006-2008, so 4.6 or ~5% is highest since atleast 1992.

I'm no way trying to create a linear equation between unemployment rate and number of perms, but in general the overall unemployment camedown from 10% to 8.6% during 2009 to 2011 and now reversing and stayed at 9.2%, so my point is if this trend continues the perm will repeat the 2009

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Originally Posted by bieber

Natvyas,
Unemployment rate for people with bachelors degree was around 2% in 1999 and 2006-2008, so 4.6 or ~5% is highest since atleast 1992.

I'm no way trying to create a linear equation between unemployment rate and number of perms, but in general the overall unemployment camedown from 10% to 8.6% during 2009 to 2011 and now reversing and stayed at 9.2%, so my point is if this trend continues the perm will repeat the 2009

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I think we should not be too concerned about unemployment rate. It doesn;t mean much. The unemployment for people in IT is 3.5 which means.. no unemployment

I think there will be an strong correlation due to two things.

1.Tech has enjoyed an rebound(mid 2009) and effective unemployment rate of 4.5%-3.5% thanks to the false sense of security injected by the first round of stimulus.There will be no more stimulus (thanks to the debt deal that was cut ) ....so now things will go back to the true normal and we might see an uptick in that figure.Good examples of the above will be the recent layoffs at networking companies like Cisco and Juniper which are hit hard by cutting down spending in government equipment.

Moving forward I would expect PERM filings to come down to 2009 levels in 2012.Even though it is an election year...bama will not be able to salvage the economy.

2.People jumping to new jobs in 2009 and 2010 were asked by major companies to wait for an year before PERM could be filed.Even for recapture of PD PERM is required and it was common policy at most places since they had layoffs to wait for an year before PERM could be filed. This could account for the correlation factor with some delay thrown in.....

The economy is on a roller coaster ride and a double dip is not ruled out ..at best it might be stagflation combined with growth recession(high unemployment mixed with inflation and slow growth ) .The effects of the stimulus are wearing down and there will be a few jitters ,shakeouts and layoffs at firms. All these will contribute to delay in PERM filings.

I do not know what the Sep VB will bring and have no expectations too...but one thing am damn sure about is that the economy is not getting better. It is a false event horizon or as it has become popular to say...there is an black swan event lurking around the corner.

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Originally Posted by bieber

if you plot the perm numbers from my previous post and compare it with DOW, you will be amazed with the corelation (just an observation)

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Originally Posted by gcseeker

recent layoffs at networking companies like Cisco

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Cisco layoffs are due to the crappy products they make that people dont want to buy.

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Originally Posted by ssvp22

Cisco layoffs are due to the crappy products they make that people dont want to buy.

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I agree with you on Cisco layoffs but it seems like overall trend of crappy job recovery is at its bottom. Job market is correcting itself. If nothing goes wrong in next few months, the real job recovery should start soon in next few months. and there is possibility this Friday job report may not be good. I am hoping the weekly unemployment will stay close to 400,000 for next 3-4 weeks and thn come down 20-30000 below that number from September. If that happens EB2 ROW filing will go higher in 2012 and so less SOFAD for I/C.

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Originally Posted by jackbrown_890

I agree with you on Cisco layoffs but it seems like overall trend of crappy job recovery is at its bottom. Job market is correcting itself. If nothing goes wrong in next few months, the real job recovery should start soon in next few months. and there is possibility this Friday job report may not be good. I am hoping the weekly unemployment will stay close to 400,000 for next 3-4 weeks and thn come down 20-30000 below that number from September. If that happens EB2 ROW filing will go higher in 2012 and so less SOFAD for I/C.

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Personally i dont have much hopes that the momentum will be sustained. All tech companies(Zynga, LinkedIn, Zillow, Yandex, Groupon and all) are trying to cash_in/cashed via IPO route as quickly as possible. They do that only when they are sure that exit door might be shut for next 2-3 years pretty soon. Besides that, the valuations of some of these coupon companies are out of the whack. I am not an investment expert, but past 2 recessions have taught me the tell tale signs.

ssvp22 ....do you feel there is another recession ahead of us ... :(

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Originally Posted by ssvp22

Personally i dont have much hopes that the momentum will be sustained. All tech companies(Zynga, LinkedIn, Zillow, Yandex, Groupon and all) are trying to cash_in/cashed via IPO route as quickly as possible. They do that only when they are sure that exit door might be shut for next 2-3 years pretty soon. Besides that, the valuations of some of these coupon companies are out of the whack. I am not an investment expert, but past 2 recessions have taught me the tell tale signs.

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Think of Groupon!! They didn't take the google offer and now you see every TDH offering deals on the internet.

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Originally Posted by ssvp22

Personally i dont have much hopes that the momentum will be sustained. All tech companies(Zynga, LinkedIn, Zillow, Yandex, Groupon and all) are trying to cash_in/cashed via IPO route as quickly as possible. They do that only when they are sure that exit door might be shut for next 2-3 years pretty soon. Besides that, the valuations of some of these coupon companies are out of the whack. I am not an investment expert, but past 2 recessions have taught me the tell tale signs.

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Historically that theory is correct but that will be for big companies, this was kinda global recession and global recovery which has been slow so far. but global recession will shift back to regional recovery after a period since it is still not true global and I am counting on the theory that the regional recovery is gaining momentum in many regions. People have stopped spending in past few months but the savings is getting bigger. eventually people will stop focusing on global recession/recovery and start focusing on the regional recovery and if they have cash they will start spending on small things like underwears. theory of relation between underwear sales and recessions/recovery seems correct. There is a pattern. it seems funny but i find that theory interesting. Anyways my point is i am betting on this regional recovery will add up and lead to overall global recovery.
Anyways, I am hoping this theory is correct. If it is correct, it may not be good for people like me (Eb2 I/C) with later PD. but good for overall future of all of us.
I am hoping some big legislative help from administration and/or congress before next few months to help my GC case.

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Originally Posted by ssvp22

Personally i dont have much hopes that the momentum will be sustained. All tech companies(Zynga, LinkedIn, Zillow, Yandex, Groupon and all) are trying to cash_in/cashed via IPO route as quickly as possible. They do that only when they are sure that exit door might be shut for next 2-3 years pretty soon. Besides that, the valuations of some of these coupon companies are out of the whack. I am not an investment expert, but past 2 recessions have taught me the tell tale signs.

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Some positive notes

Hiring Like It's 1999
The tech boom is fueling a surge in jobs and creative recruiting

http://www.businessweek.com/technolo...-08012011.html

JB,

I liked your analogy here and I must admit this cracked me up big time. Maybe "Rupa Underwear & Banian" company should think of setting up their offices in the US in near future...lol...Good One!

On that note a lil humor here...No offense to anyone

"Agar Rupa ki underwear/banian koi pehenega to Rupa kya pehenegi?"...:)

Sorry ppl if I offended anyone with that one.

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Originally Posted by jackbrown_890

Historically that theory is correct but that will be for big companies, this was kinda global recession and global recovery which has been slow so far. but global recession will shift back to regional recovery after a period since it is still not true global and I am counting on the theory that the regional recovery is gaining momentum in many regions. People have stopped spending in past few months but the savings is getting bigger. eventually people will stop focusing on global recession/recovery and start focusing on the regional recovery and if they have cash they will start spending on small things like underwears. theory of relation between underwear sales and recessions/recovery seems correct. There is a pattern. it seems funny but i find that theory interesting. Anyways my point is i am betting on this regional recovery will add up and lead to overall global recovery.
Anyways, I am hoping this theory is correct. If it is correct, it may not be good for people like me (Eb2 I/C) with later PD. but good for overall future of all of us.
I am hoping some big legislative help from administration and/or congress before next few months to help my GC case.

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Originally Posted by jackbrown_890

Historically that theory is correct but that will be for big companies, this was kinda global recession and global recovery which has been slow so far. but global recession will shift back to regional recovery after a period since it is still not true global and I am counting on the theory that the regional recovery is gaining momentum in many regions. People have stopped spending in past few months but the savings is getting bigger. eventually people will stop focusing on global recession/recovery and start focusing on the regional recovery and if they have cash they will start spending on small things like underwears. theory of relation between underwear sales and recessions/recovery seems correct. There is a pattern. it seems funny but i find that theory interesting. Anyways my point is i am betting on this regional recovery will add up and lead to overall global recovery.
Anyways, I am hoping this theory is correct. If it is correct, it may not be good for people like me (Eb2 I/C) with later PD. but good for overall future of all of us.
I am hoping some big legislative help from administration and/or congress before next few months to help my GC case.

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Only issue is that regional recovery in US is lead by companies like Zynga, Facebook, and Groupon. I dont believe that virtual farming or connecting with friends or group coupons are going to solve the current problems which are really arising out dated and aging workforce. The companies do add value, but just a delta as compared to companies founded in 1990s, like Google. I dont imagine any impact of people's lives if Zynga, Facebook or Groupon were to shutdown today. Whereas you can live without Google.

I my view, there is always a constant struggle between good and evil. And one good day of evil can do years of harm - example Lehman bankruptcy. And in case of India, it is corruption, which wins every day.

nishant

Labor sustitution was just like EB1C. Was there misuse? Probably. But that doesn't mean a good program should be shut down. Labor substitution allowed many companies to avoid years of wait on labor approvals. In 2007 (rather 2005) PERM came in with the promise that labor times would be made real time - literrally 60 days. So yes that time it made sense that labor substitution is redundant. But now look ... PERM approval times have varied greatly in last couple of years. So now it doesnt look such a good idea to do away with labor substitution.

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Originally Posted by nishant2200

Gotcha:

http://www.murthy.com/news/n_procha.html

Uscis did this in July 2007 for GC PERM too, trying to prevent a big bodyshop labor trading loophole, IMHO

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I just want to respond to some of the posters who said the job market is red hot.You are only examining a very local sample of Social media focussed companies which seem to be redhot and as another user rightly pointed out...this is an bubble in social media startups which will burst very soon.

http://blogs-images.forbes.com/jonbr...oom-bubble.jpg

Proof that the unemployment overall is very very ugly....Dow and Nasdaq both are getting massacred today. Unemployment figures are due tomorrow and then this article from the La Times.

http://latimesblogs.latimes.com/mone...ports-say.html

Job growth slows and layoffs rise to 16-month high, reports say

The only reason I post this depressing news is for people to be prepared . The economy is not getting better and neither will the PERM filings increase a lot.So use this information to think twice about moving to another job and attemping to recapture PD's.Take into account if there is an sudden slowdown ...you will have to account for an additional year.

The booming stocks of Zynga,Groupon do not add much to the real economy .Ultimately the music is gonna stop and then the real fun begins. Just saying...

P.S Please move my post to the general section if you feel it will divert attention from the numbers

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Originally Posted by gcseeker

I just want to respond to some of the posters who said the job market is red hot.You are only examining a very local sample of Social media focussed companies which seem to be redhot and as another user rightly pointed out...this is an bubble in social media startups which will burst very soon.

Proof that the unemployment overall is very very ugly....Dow and Nasdaq both are getting massacred today. Unemployment figures are due tomorrow and then this article from the La Times.

http://latimesblogs.latimes.com/mone...ports-say.html

Job growth slows and layoffs rise to 16-month high, reports say

The only reason I post this depressing news is for people to be prepared . The economy is not getting better and neither will the PERM filings increase a lot.So use this information to think twice about moving to another job and attemping to recapture PD's.Take into account if there is an sudden slowdown ...you will have to account for an additional year.

The booming stocks of Zynga,Groupon do not add much to the real economy .Ultimately the music is gonna stop and then the real fun begins. Just saying...

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Seeker bhai... they were all pointing that IT job market is ek dum zabardast... the overall job market is anyway down... it also looks like Job market for people with bachelors and more is good according to all the old posts...

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Originally Posted by gcseeker

I just want to respond to some of the posters who said the job market is red hot.You are only examining a very local sample of Social media focussed companies which seem to be redhot and as another user rightly pointed out...this is an bubble in social media startups which will burst very soon.

Proof that the unemployment overall is very very ugly....Dow and Nasdaq both are getting massacred today. Unemployment figures are due tomorrow and then this article from the La Times.

http://latimesblogs.latimes.com/mone...ports-say.html


Job growth slows and layoffs rise to 16-month high, reports say

The only reason I post this depressing news is for people to be prepared . The economy is not getting better and neither will the PERM filings increase a lot.So use this information to think twice about moving to another job and attemping to recapture PD's.Take into account if there is an sudden slowdown ...you will have to account for an additional year.

The booming stocks of Zynga,Groupon do not add much to the real economy .Ultimately the music is gonna stop and then the real fun begins. Just saying...

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I guess above posters are talking about job market among tech community and mostly people who have finished 4yr degree/Post-Degree/Phd

and also unemployment for that is around 4.5 and most of probably some of them are just taking break ( since they get unemployment income).
Thought i wont say that this market is also red hot but market is not very bad unlike in 2002/2003 which i consider worst market.

Soggadu

4.6% is better compared to 9.2% but it should be compared with 2.2% avg,

for starters, when the overall unemployment avgs at 5% the Bachelor degree holders are at around 2%.

gcseeker ... I do agree that job market will remain ugly and possibly become even uglier. Also agree that some of the social media companies are questionable. No doubt about that.

However there are 2 things that make this time around less of a bubble.
1) There is far less money chasing these companies than in 1999.
2) The tech companies of today are not really tech companies (the ones we are talking - groupon or linkedin etc). They are legitimate business models backed by technology. Contrast this companies from 1999 when the companies were engaged in creating new technology i.e. a language, a platform, a database, a protocol etc. etc. Then the technology itself was so fluid and so the companies were creating technology without a clear understanding of how it will play in the market. There was tremendous lack of clarity about the technology itself. Today the technology building blocks are well in place. And people are trying to build literrally applications using those blocks. This makes is much more viable and less risky.

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Originally Posted by gcseeker

...this is an bubble in social media startups which will burst very soon.

...
The booming stocks of Zynga,Groupon do not add much to the real economy .Ultimately the music is gonna stop and then the real fun begins. Just saying...

P.S Please move my post to the general section if you feel it will divert attention from the numbers

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Originally Posted by bieber

Soggadu

4.6% is better compared to 9.2% but it should be compared with 2.2% avg,

for starters, when the overall unemployment avgs at 5% the Bachelor degree holders are at around 2%.

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I guess it is standing good against the national averages... so what i meant is we cant really go gaga over national averages and we will still see a lot of perm apps coming in this year and next year...

2.2 vs 5
4.6 vs 9.2

Very good point Q. I now see the "noble" intention behind the flexibility. It's just that bodyshops or big Indian IT services firms have always managed to find something to suit them in this, and kind of defeated the original noble intention. It's a testimony to US being fair in laws, that they don't openly outlaw certain practices or companies, but try to put band-aids like this :)

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Originally Posted by qesehmk

nishant

Labor sustitution was just like EB1C. Was there misuse? Probably. But that doesn't mean a good program should be shut down. Labor substitution allowed many companies to avoid years of wait on labor approvals. In 2007 (rather 2005) PERM came in with the promise that labor times would be made real time - literrally 60 days. So yes that time it made sense that labor substitution is redundant. But now look ... PERM approval times have varied greatly in last couple of years. So now it doesnt look such a good idea to do away with labor substitution.

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Teddy

You are right. Our fundamental demand supply model stays in place. However I think this additional insight is also worthwhile data point because over time things tend to reverse to mean.

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Originally Posted by TeddyKoochu

Friends the movement by number of days is just statistics or information the real thing is how much was the SOFAD or how many cases were cleared. Number of days does not quite adequately represent this. This year we have moved through a very heavy density zone which is probably double density when compared to last year, so we may have moved far more in terms of absolute days last year but this year SOFAD is much higher even though the movement is less in terms of days. If number of day’s model is to be approved current then we must have huge BTM in September :). It may remind a lot of us about our college days, the last day before the exam was quite an important day of study when compared with all days in the semester / academic year :).

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I agree in theory. But it could take a while...to approach mean. I really really don't want to wait until it's proven in our case:)

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Originally Posted by qesehmk

Teddy

You are right. Our fundamental demand supply model stays in place. However I think this additional insight is also worthwhile data point because over time things tend to reverse to mean.

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Originally Posted by leo07

I agree in theory. But it could take a while...to approach mean. I really really don't want to wait until it's proven in our case:)

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dont be so mean leo!!!...let the model approach the mean... ;-)

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Originally Posted by Kanmani

What Nishant you are giving proxy to Soggadu :-)

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teacher cant give proxy to student JJ ben... laws of proxy calling doesnt work that way ;-)....

N bhai...i like 22 in ur name...my b'day...my pd... all come on 22... :-)

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Originally Posted by qesehmk

Teddy

You are right. Our fundamental demand supply model stays in place. However I think this additional insight is also worthwhile data point because over time things tend to reverse to mean.

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Markets stay irrational longer than u can stay solvant :) (just in the light of market action today)

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Originally Posted by bieber

Markets stay irrational longer than u can stay solvant :) (just in the light of market action today)

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Big B... what happened to the markets today...i know very offtopic, but in couple of lines...can you please tell me where the market is heading... ya, Q will anyway move this discussion :-)...



Heyyy...also did u guys notice this...we have visitors from all parts on the world...you can look at the map below .... 2 from africa too... 1 SouthA and 1 NA... wow.... this is globalization at its best i guess...

Soggadu

markets never fell so much in one day since the crisis, Europe crisis, US economy being the reasons, u may see Italy in place of Greece very soon infact may be tomorrow

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Originally Posted by bieber

Soggadu

markets never fell so much in one day since the crisis, Europe crisis, US economy being the reasons, u may see Italy in place of Greece very soon infact may be tomorrow

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Wow.... but it really misses my lay man mind, how italy going default is making our markets take a dump... it shld hv been effected a little but 500+ is a lot...might be nervousness ehh?

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Originally Posted by haripathhi

JB,

I liked your analogy here and I must admit this cracked me up big time. Maybe "Rupa Underwear & Banian" company should think of setting up their offices in the US in near future...lol...Good One!

On that note a lil humor here...No offense to anyone

"Agar Rupa ki underwear/banian koi pehenega to Rupa kya pehenegi?"...:)

Sorry ppl if I offended anyone with that one.

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I don't think you have offended anyone. It was a good joke. I am sure guys are not offended. They don't want Rupa to wear any "banian"(underwear). Lol.
Sorry now if I offended someone.
But my point was in good times underwear sales don't change much but in bad times it goes down considerably because that is not the first thing people want to spend money on. Most of the people will keep wearing old ones as long as they can or in the end untill they need the new one. (Underwear is just a small part of real retail sector). So if that happens, now the economy depends on "need" than "want". And when there is demand increase based on "need" instead of "want", it is a true recovery instead of bubble. Demands created based on "want" is false demand. Sometimes it does work but it is not working for this recession/recovery with some stimulus money. But we should start seeing actual retail demand increase in next few months and eventually (theoretically) retail sector should lead the recovery of other sectors.
The stock sell off was definitely bad news but hopefully it is just a temporary panic because of some bad (hitting bottom) indicators. I am really hoping this theory will work and if it does we should start seeing results in month or two. If it does not we should have good amount of SOFAD in even 2012 spillover season.

Jack

This theory does not work when the whole world has borrowed from every possible corner and there are no real manufacturing jobs in the Usa . Ultimately every person laid off is an consumer of some other company. House prices are no longer what they used to be ,so the savings nests are all gone. Now the Government also cannot pump money artifically via the printing presses due to the debt deal that was just concluded.

You first heard it here.We will have significant SOFAD in 2012. This depression is here to stay.

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Originally Posted by jackbrown_890

I don't think you have offended anyone. It was a good joke. I am sure guys are not offended. They don't want Rupa to wear any "banian"(underwear). Lol.
Sorry now if I offended someone.
But my point was in good times underwear sales don't change much but in bad times it goes down considerably because that is not the first thing people want to spend money on. Most of the people will keep wearing old ones as long as they can or in the end untill they need the new one. (Underwear is just a small part of real retail sector). So if that happens, now the economy depends on "need" than "want". And when there is demand increase based on "need" instead of "want", it is a true recovery instead of bubble. Demands created based on "want" is false demand. Sometimes it does work but it is not working for this recession/recovery with some stimulus money. But we should start seeing actual retail demand increase in next few months and eventually (theoretically) retail sector should lead the recovery of other sectors.
The stock sell off was definitely bad news but hopefully it is just a temporary panic because of some bad (hitting bottom) indicators. I am really hoping this theory will work and if it does we should start seeing results in month or two. If it does not we should have good amount of SOFAD in even 2012 spillover season.

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Soggadu bhai

Your id reminds of of Sobhan babu and of course the avatar always cracks me up. If I may volunteer my opinion and hopefully I dont divert the thread too much.

1.Markets reacted with unfounded confidence on the state of economy in mid 2009 and inflated themselves to unbeleivable levels . Some may even say the hidden actors orchestrated this.This was due to the effects of the huge stimulus trickling through the system.Free money to borrow from government and then charge interest on the same money lending to others.The government takes care of all the toxic debts on the books and banks went crazy.Companies already were flush with cash and they further reduced headcount making their accounting books and P/E ratios look good.This made their stocks extremely valuable to stockholders and hence you saw companies like BAC go from 2$ to 12$!!!! even with those toxic derivatives on their books.

2.Now the music has stopped.Actually it stopped 2 months back.The debt deal exposed Usa's credit rating to downgrades and those downgrades will happen thus affecting the bonds and Us government security markets which are traditional safe havens from customers.Also the jobs numbers have been dismal coming in the past 2-3 months . Government cannot spend a single pie now (thanks to the debt deal) .So Mr Bernanke cannot use his printing presses.

Also it does not matter if tech is doing okay. Every other job lost is of a person who is an consumer for some other company.Without those people buying products ultimately how will the economy come up.The nation cannot be run by bunch of teenagers browsing facebooks and playing games on Zynga.It requires an manufacturing base and actual products to be produced.Italy and europe are additional concerns adding to this.

There is no way out of this except for the economy to self correct itself finally. This is just the beginning. The only silver lining to this whole thing is ...I feel we will have significant SOFAD in 2012.

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Originally Posted by soggadu

Wow.... but it really misses my lay man mind, how italy going default is making our markets take a dump... it shld hv been effected a little but 500+ is a lot...might be nervousness ehh?

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The market goes down if the manufacturing report and consumer confidence goes down as well

Reg the last sentence, to make use of SOFAD, we folks on H1 must first survive the challenges due to layoffs and USCIS as well.

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Originally Posted by gcseeker

Soggadu bhai
There is no way out of this except for the economy to self correct itself finally. This is just the beginning. The only silver lining to this whole thing is ...I feel we will have significant SOFAD in 2012.

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"Europe is also an important market for U.S. goods. Companies in the Standard & Poor's 500 stock index earn about 20 percent of their profits in Europe, according to Bank of America." -yahoo finance

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Originally Posted by soggadu

Wow.... but it really misses my lay man mind, how italy going default is making our markets take a dump... it shld hv been effected a little but 500+ is a lot...might be nervousness ehh?

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cbpds1

True I definetly agree and this is what is different about this global recession.Localized recoveries will not happen.Everybody has hitched his or her wagon to the other and events in one part of the world will amplify the tremors to another part .

I would highly recommend Nassim Taleb's critically acclaimed book. " The black swan: Impact of the highly improbable" which offers some insights into these seemingly un-related events like Italy or Europe which in fact will acts as triggers to other events.People are living beyond their means and there is no escaping an correction.Healthy borrowing is required for an economy but not toxic derivatives in trillions and outsized government debts.

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Originally Posted by cbpds1

"Europe is also an important market for U.S. goods. Companies in the Standard & Poor's 500 stock index earn about 20 percent of their profits in Europe, according to Bank of America." -yahoo finance

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Originally Posted by ssvp22

Cisco layoffs are due to the crappy products they make that people dont want to buy.

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You are wrong on Cisco, they make product so good that people/companies don't need to replace them for many years, thats the disadvantage in this market,ofcourse they are little expensive. On other hand there are bunch of small companies they do sell similar products (crappy) for cheap and you need refresh every year. It's like , when people have money they go for Luxury restaurants, if they dont have money, they celebrate it at McDonald.

Q

Thanks for moving the threads to the general section :) .I keep on getting tempted to discuss this when posts appear in the EB2 predictions thread.

I will try to make a note and post it here in this section.

gcseeker,

I didn't move it this time around. May be one of S T or V. But I would've done the same. The discussion is great but better done on this thread.

If you are so much into finance and economics then you might enjoy www.minyanville.com This is IMHO the best website out there on Finance and Economics.

My relatively illiterate view on this whole financial mess is as follows:

Since 1986, Alan Greenspan (sworn by Reagon) and co. have misused monetary policy while regulation has gone complerely AWOL. This has increased valuations across board and far away from fundamentals. Housing is just one piece of the puzzle but it is true across board for all kinds of asset classes. Along with Greenspan and Co. came IT revolution which produced 2 things that ran contrary to each other. 1) With IT revolution complex financial products were created. 2) Ability to process massive amounts of data and reduced transaction costs - that gave rise to hedge funds.

Hedge funds identified weaknesses in teh fundamentals and started betting against those complex products and finally those products collapsed.

Now only if the markets were allowed to take their course everything would've been nice. But markets taking their course means valuations reversing to fundamentals in the long run and below fundamentals in the short run. OF course this would involved tremendous and disproportionate wealth destruction at the top end of the society. So this wealth had to be preserved under whatever pretext.

Then came bernanke who is basically a professor (not an economist) with specialization in depression studies. The guy has beyond strong belief in monetary policy and is called "helicopter ben" for his belief that government can print as much as necessary and they can create any amount of inflation desired. The little detail that he misses is that the US Fed is no longer sovereign owing to massive amount of globalization going on since 1970s. However, the powers that be select him as the next chief of Fed. He then uses his true belief in the power of monetary policy to generate inflation and achieve price stability AKA wealth preservation for the richest people on the earth.

I am not wise enough to understand every single move they made since Sep 2008-Feb 2009. However what was clear to me was the bondholders of all the big banks and corporations were basically saved. A lot of the bad assets were moved to Fed's balance sheet. Then come all kinds of liquidity boosting programs which do little to boost liquidity .... but hey liquidity was only a short term problem when bears and sterns was destroyed literrally in a day or two. The real problem was and has always been out-of-whack-valuation rather than liquidity.

So all this extra liquidity is sitting with big banks. These bankds by now have been allowed to play in the stock market. So the money goes into commodities and emerging regions. A lot of people make a lot of money in short term. Then comes the time to book profits. The music will stop someday. Apparently the music at least had a break today! Don't know if it has stopped yet. And we are now again on a path towards valuation reversal.

The funny thing is valuation reversal is going to show itself in two forms - one: actual price reduction for immobile assets. And two: inflation (and reduction in living standard) for mobile assets (i.e. exportable assets). So overall its going to reduce the living standard in the developed world.

But even this process is quite complicated. A man once said "The world is bad". Wise guy asked "Compared to what"?

Similarly yes US and the whole developed world is doing terrible, but the fact is the rest of the world (i.e. developing) is not ready to increase consumption. Consumption is a function of purchasing power and propensity to consume. Propensity to consume is clearly less in all of Asia including the most developed country Japan. But purchasing power continues to remain low because the wealth generation and distribution is skewed so unfavorably to a few which then results into waste such as $2B residence!! You know what I mean!

And so back to sqaure one. The world depends on US for growth and dollar continues to be the currency of choice (which is exactly what you saw today). Dollar rallied today.

I dont know whats next. But that's the basic understanding that i have of financial events in the last 2-3 years.

Quote:

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Originally Posted by gcseeker

Q

Thanks for moving the threads to the general section :) .I keep on getting tempted to discuss this when posts appear in the EB2 predictions thread.

I will try to make a note and post it here in this section.

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