Broken Record
As in I keep sounding like one. Thing is, I'm treating this blog as a sounding board, and I know I've not really figured this one out. This one being - what's coming, and how am I going to thrive (or maybe it's survive).
Here's the thing. The Nattering Naybob brought to his reader's attention an ugly fact. Ameriquest announced it's closing ALL it's branch offices. Cutting over a third of its employees. Actually that's not quite accurate. ACC Capital, Ameriquest's parent company, made the announcement. It's closing Ameriquest except for regional consolidated offices. It's doing the same for Town and Country. And just so we know it's not an isolated incident, Washington Mutual's doing just about the same thing.
These are two really big players in the Real Estate Loans business. They're terribly profitable - or at least they were as of their last fiscal reports. So the question that has to be asked is: Why are they cutting a third of their employees? Related - why are they closing offices?
My guess is that business isn't as good as it was - or maybe they suspect it's about to be a lot slower. Either way, it's quite the canary in the coalmine. Fewer mortgages means fewer houses sold means a) fewer new houses need built AND b) more houses sitting empty for longer.
A measurable proportion of the growth of GDP last year was due to the growth of housing related industries - construction and sales mostly, but lots of ancillary support as well. I've not seen a lot of hope that other industries are prepared to take up the slack. Offhand, this means GDP growth isn't as strong - and quite possibly declines. That's called a depression.
A depression this summer - starting now, but "everyone knows" by July - seems inevitable. Add in the anticipated increases inn gas prices (they "always" go up for vacation travel) and things aren't looking so hot.
Polish your resumes. Make sure your other-hire skills are up to snuff in case you can't stay in your industry. Clear your debt load. And hope it is 'just' a recession.
Here's the thing. The Nattering Naybob brought to his reader's attention an ugly fact. Ameriquest announced it's closing ALL it's branch offices. Cutting over a third of its employees. Actually that's not quite accurate. ACC Capital, Ameriquest's parent company, made the announcement. It's closing Ameriquest except for regional consolidated offices. It's doing the same for Town and Country. And just so we know it's not an isolated incident, Washington Mutual's doing just about the same thing.
These are two really big players in the Real Estate Loans business. They're terribly profitable - or at least they were as of their last fiscal reports. So the question that has to be asked is: Why are they cutting a third of their employees? Related - why are they closing offices?
My guess is that business isn't as good as it was - or maybe they suspect it's about to be a lot slower. Either way, it's quite the canary in the coalmine. Fewer mortgages means fewer houses sold means a) fewer new houses need built AND b) more houses sitting empty for longer.
A measurable proportion of the growth of GDP last year was due to the growth of housing related industries - construction and sales mostly, but lots of ancillary support as well. I've not seen a lot of hope that other industries are prepared to take up the slack. Offhand, this means GDP growth isn't as strong - and quite possibly declines. That's called a depression.
A depression this summer - starting now, but "everyone knows" by July - seems inevitable. Add in the anticipated increases inn gas prices (they "always" go up for vacation travel) and things aren't looking so hot.
Polish your resumes. Make sure your other-hire skills are up to snuff in case you can't stay in your industry. Clear your debt load. And hope it is 'just' a recession.
posted by Kirk at 11:05 PM
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