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Wall Street new round of layoff

Anthony DeAngelis said:
Whoa, wait. China doesn't need the US? We are both connected at the hip. Please tell me how an authoritarian state is going to maintain control with massive unemployment and stagnation? Last time I checked, the USA was the largest market for Chinese goods and US companies employ, in one way or another, a TON of Chinese people.

There is an old sayin... (which I will paraphrase).

When a person owes you $100 dollars, it is his problem.
When a person owes you $100,000 dollars, it is your problem.

China has us over a barrel as much as we have them over the barrel.
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You need to re-read my last post. China has a billion people with a growing +300 million middle class citizens willing to consume more if there was less inflation (caused by the yuan/dollar peg).

And add to that the fact that china is developing it's national consumption very agressively.

As I said, China is LENDING money to the U.S for them to be able to buy CHINESE PRODUCTS, lol....and with that you say china needs the US?

With all due respect, you and people who have the same position as you on this subject are in for a rude awakening.
 
China has a growing middle class. It isn't there yet. China still is a developing nation. China also has massive issues with pollution, lack of native brands and very limited freedom. I am not knocking the nation, but the concept that simply because China owns US debt it is somehow our master is naive at best. Yes, in the future (not immediate), China will grow their home consumption. Until that day it is dependent on US consumers and US companies.

China is at 1.3 billion people (per the World Bank). Even if you say 400MM people are middle class (which isn't true by any stretch of imagination) you have 75% of the nation living in utter poverty.

@BBW - Foreign countries are still allowed to purchase US companies, but I agree, the government agency (I forget the name) that reviews these transactions has been very active as of late.

The US needs to make some serious changes, but I think we are in a much better position and have realized the gravity of things earlier than other nations.
 
Wait a minute. You assert in your post that China needs to remove the Yuan peg and it will benefit Chinese people with increase purchasing power? This doesn't make much sense to me.

The USA wants China to remove the peg. A higher Yuan will make Chinese goods more expensive to foreign buyers. It isn't going to help Chinese citizens buying homemade goods in their own currency.

China doesn't want the Yuan to float because it doesn't want to deal with the consequences. Same reason why China is depleting food stores and sending them inland. When you deny people freedom you sure as hell better provide for them.

This whole topic is getting rather absurd. China and the US are allies. This argument is always brought up, but I see no other nation so mutually intertwined.
 
Anthony DeAngelis said:
@BBW - Foreign countries are still allowed to purchase US companies, but I agree, the government agency (I forget the name) that reviews these transactions has been very active as of late.

The US needs to make some serious changes, but I think we are in a much better position and have realized the gravity of things earlier than other nations.
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I'd like to continue talking about this but fear I'd be derailing the thread.
 
Anthony DeAngelis said:
Wait a minute. You assert in your post that China needs to remove the Yuan peg and it will benefit Chinese people with increase purchasing power? This doesn't make much sense to me.
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In order for China to maintain the peg, they need to print their own currency to buy up the dollar.
And when there is more yuan circulating = inflation
There was riots in china recently because of the inflation created by their central bank.
Eventually, china will stop throwing good money after bad and they'll stop subsidising the US dollar.

We can continue this conversation somewhere else, we're way off thread.
 
marina said:
expect some riots in the US also
CNN's Jack Cafferty notes that a number of voices are saying that - if our economy continues to deteriorate (which it very well might) - we are likely headed for violence, and civil unrest is a growing certainty.
http://georgewashington2.blogspot.com/2011/06/handling-of-economic-crisis-may-lead-to.html
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Without derailing the thread in any way, the point perhaps is that it's not just Wall Street that's jittery about layoffs -- there's angst everywhere in the US today.
 
The bottom line of this topic : learn a foreign language!
 
marina said:
expect some riots in the US also
CNN's Jack Cafferty notes that a number of voices are saying that - if our economy continues to deteriorate (which it very well might) - we are likely headed for violence, and civil unrest is a growing certainty.
http://georgewashington2.blogspot.com/2011/06/handling-of-economic-crisis-may-lead-to.html
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Agreed. There are signs that this is already happening. So many more stories coming out these days of gang violence, flash mobs, absurd thefts...
 
I feel these days like the character Kai in the series Lexx, who, on a planet whose sun is about to go supernova, earnestly informs his fellow crew members that this is a "once in a lifetime spectacle" (the joke of course is that you pay with your life to see the spectacle of a star going supernova if you're in the vicinity, so it can only be at most "once in a lifetime").
 
marina said:
can you post some links. I have not read any such stories.
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I get all the links from a news aggregation website. Here are three that are up today. I've seen about 20 such stories in the past month, some of which are about massive brawls on beaches, in cities, and even in amusement parks. Look up "urban weekend" in Miami, which was a couple of weeks ago.

http://www.wlsam.com/Article.asp?id=2209357&spid=

http://www.dailymail.co.uk/news/article-2001833/Five-wounded-boardwalk-shooting-New-York-beach.html

http://sanfrancisco.cbslocal.com/2011/06/09/3-stabbed-in-downtown-san-jose/
 
dddddd said:
You know, Andy, I'm seeing a lot of parallels between careers in law and careers in quant finance. Could you please tell me what your opinion on this would be?

For some time, especially the late 90s and early 2000s, law school was pretty much a gigantic gravy train, but now, with more than 200 law schools churning out 45,000+ graduates a year, there's a tremendous bubble. Law schools are pretty much cash cows for schools, since tuition is at $45,000 or above. They publish misleading statistics in order to attract students (i.e. 95% of all graduates employed within 9 months of graduation) - when, in fact, even waiters and Wall Mart cashiers were counted as gainfully "employed".

I don't have any hard evidence that MFE programs and quant careers are following a similar path as law, but I really see the parallel in a sense that (1) a lot of MFE programs are being almost as shady about their employment statistics, (2) more and more MFE/RISK type programs continue to set up shop around the country (especially in the most random parts of the country where the finance market is extremely thin), and (3) demand for "quantitative analysts" in finance doesn't seem to have the potential to keep up with the increasing supply of MFE graduates. It's a bubble, and it seems like a lot of the people that attend programs at UIUC, Washington, Texas, and Stevens Institute of Technology will all just end up as suckers that paid a lot of money for a worthless degree.

Law schools try to sell their programs by saying how "versatile" a law degree is. After all, you could be a plumber, or even a McDonald's manager, or, even better, a paralegal; see how law schools talk about "alternative careers". Since all law schools are pretty much the same, just as many MFE programs are, the only way for companies to differentiate between job applicants is by their pedigree. Only the top law programs are successful in placing their graduates (about 50% get placed in good law firm jobs). Even top programs have students protesting about their dismal job prospects. Pretty much only the most reputable MFE programs and a few others seem to provide any hope for graduates seeking actual finance or risk jobs. What I really don't want to see is MFE websites trying to claim that an MFE degree "also opens others doors, because the skills that an MFE graduate has is sooo versatile".
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lol.. I love how my entire post was completely IGNORED throughout this topic.
 
dddddd said:
lol.. I love how my entire post was completely IGNORED throughout this topic.
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I haven't noticed your post but it is a very good one. I actually opened a thread a few days ago talking about the risk of having a job (FE) that depends on economic bubbles.

And knowing that with the trillions of $ obama spent to try to re-inflate it, it only lasted 2 years, there won't be another one (it's like a heroin addict who always needs a bigger dose to maintain his high).

In my opinion, over time, it will get harder and harder to find a job as a FE (or in finance in general) in the US. The jobs won't be lost, they will be shifted away to others financial centers (HK, Singapore etc.). And that is the positive thing about finance, is that you can work all around the world. But if you're a lawyer, you're stuck in your country/legislation.

And again, sorry for no noticing your post earlier :s
 
Abdel said:
@Alex Krause

China doesn't need the U.S.
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US is the largest importer of Chinese goods, and China is the largest holder of US debt. It's the mutual relationship.

China's economy is very much export oriented and China's internal consumption is nearly not enough to sustain the economic growth. China's nation has the highest savings rate in the world, they just do not spend very much.
 
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