30K jobs lost and stock market rises....

[spanone]

The stock market hs gone up 20 some points since Ford announced the layoff of some thirty thousand employees. Can someone 'splain how this could be??

[marmar]

1. Unchecked capitalism....

is ultimately going to lead to its own demise.

[BR_Parkway]

2. It's about the portfolio - and you might want to see where Ford

just posted a $2,000,000,000 profit.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x2059807


Wall St isn't about jobs - it's about earnings, which is why they keep paying these CEO's all this obscene amount of cash - to keep the ROI churning and the dividends pumping out.

[ohio_liberal]

6. Damn!

I guess those articles about Ford being on the verge of bankruptcy along with GM were not accurate.

[Carni]

3. SUPPOSEDLY large Ford shareholders are happy

That is what some obnoxious woman/wallstreet analyst type said a little while ago on CNN. I really have no idea just parroting what the liars on cable are saying!

[DS1]

10. Mostly they are, but then I found this guy, who is disappointed it's only

30,000

He wanted 45k

http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7077650&tid=f&sid=7077650&mid=313981

[Javaman]

26. But you have to look on the bright side!!

Oh wait, there isn't one. :(

So all these plants close, the local economies that depend on these plants also tank. Nothing is ever said about them. Then china-mart rolls in and cuts the nuts off of what ever is left of the local merchants.
Then hires the out of work auto workers at about a tenth of what they were making. Then local crime goes up, domestic violence goes up and add one more decaying tooth that has become America.

Empty autoplants, empty lives. More chattel for the uber-rich.

[ohio_liberal]

4. This always fucking happens

Investers get a boner because of the restructuring. :(

[MadHound]

5. 30,000 jobs lost, fourteen plants closed means less overhead,

More profit, thus the stock rises. Wall Street is a shell game that prospers on the backs of the worker, their blood, sweat and tears, especially their tears.

[jobycom]

7. The stock market isn't connected to the economy, it's just a casino

where things are decided on hunches and spins of the wheel.

Although often job cuts at a company can create more activity. People buy competitor's stock, thinking the other company is in trouble, plus people buy the stock of the downsizing company thinking they've got a plan to improve profitability. That's a short-term gambler's reaction. Over time it evens out, based on the company's actual profitability.

[sarcasmo]

11. If it's a casino when does the bottom fall out?

When do all of these EVIL greedy people loose their money.

[newportdadde]

12. They don't, they are 'the house'.

[jobycom]

14. Casinos don't lose, and not everyone who plays is greedy or evil

You might even be playing it now, if you have money market back accounts, mutual funds, or anything beyond basic checking and savings.

The way a casino works is that the bottom falls out for the people who make bad decisions, get unlucky, or don't quit in time. It rarely falls out for the casino, and there are always people on a winning streak to balance those who are falling.

There's no reason not to invest in Ford just because of their job cuts, or not to invest in their competitors. An investment in their competitors may be a signal that you disapprove of Ford. An investment in Ford may be a sign that you expect them to recover and save the remaining jobs. I'm not advocating either position, just pointing out that you can't just assume someone is greedy or evil without knowing them.

[sarcasmo]

17. I know casinos don't loose I guess I said it wrong.

When does the bottom fall out of the market. Casino payout is 70 for them 30 for you. Which means they will win 70percent of the time.

[RB TexLa]

20. 70 is way, way high

Casinos actually work on very low vigs. They take a little from many players and give alot to few players. The profit of a casino is in the velocity of the money. If one takes $100 to a casino go up to $300 and back down to $75 they might leave saying they lost $25. Of course they actually lost $225. The big number is they could have bet $500 to $1200 in losing the $225. The casino's small margin is on every dollar bet, the trick is for that dollar to be bet over and over and over again.

[sarcasmo]

38. Take 100 dollars into these Michigan casinos and see what you come back

With. I bet thirty dollars would be about right if you were lucky.

[jobycom]

21. On average

But some people through either skill or luck or cheating can change the averages, and some lose much more often.

The bottom may or may not fall out, but either way, the stock market investing will continue. We might have a big bunch of losers in one day or over a period of time, but business will continue. A large job cut like Ford's won't collapse the market. Some of that cut is probably natural attrition, anyway--people retire and quit all the time, and companies try to make their cuts align with this natural attrition as much as possible. And some people in the cut will spin off their own companies if there is still a market for what they are doing. Ford might cut a few engineers and contract out with them as contract advisors. So it isn't always a sign that things are collapsing. There was a lot of downsizing under Clinton, but there was job growth, because the economy favored smaller business, so a lot of the downsizing led to people starting their own companies in the same industry. So the stock market doesn't really follow the economy, it just follows the fortunes and whims of the companies it represents. The stock market could stay steady for the rest of Bush's administration then suddenly collapse just as the Democrats turn the economy around.

People read too much into the daily stock market activity. People are just reacting on their own hunches. Some will regret it.

[pitohui]

37. sure casinos can lose trump anyone?

trump casinos declare bankruptcy all the time, it's a hobby w. them proving how casinos can lose

be that as it may, don't quite see where you are getting your numbers about the house vig for stock investors

methinks this is a fine example of 80 percent of all statistics on the internet are made up on the spot

[shaniqua6392]

8. They do not seem to get the fact that

if we do not have jobs, we can not buy anything. I come from a long line of Ford workers here in Michigan and this is making me sick. Why Ford Wixom plant should be closed is beyond me. I have been listening to their announcement for the last forty minutes and have not heard one definitive thing. To think all of the employees are sitting there listening to this bullshit. Then they will be told to get back on the line and start working. This should make the economy in Michigan fall even lower than it already is. The motor city.....yeah right.

[sarcasmo]

9. Watch the market and this is how it now works.

When Delphi declared Bankruptcy the same thing. When GM declares Bankruptcy the market will rise.

[leesa]

13. It's very good for the stcok market when job are cut and go

overseas and when benefits are cut. Cuts expenses for the corporation More pure profit for the stockholders...for a while.

[Double T]

15. Ford just lost at least 30,000 future sales of its vehicles..........

so why is the 'live for today' stock market celebrating.

[MazeRat7]

16. Most of todays "rise" is a rebound from the horrible day friday....

The Ford announcement and this rise I really don't think are related since after a 200+ point loss the probability of a rise the following Monday is really high (job cut announcement or not).

MZr7

[ProfessorGAC]

18. I Was Just Going To Say That

This was the standard stagnation bounce. Markets do this during stagnant periods. It's based upon speculation and hedging, and little to do with economic reality.
The Professor

[MazeRat7]

19. Not to mention "bargain" hunting. (n/t)

[ProfessorGAC]

22. I Guess That's The Same Thing

That's what speculators do. They buy some low and drive the price up. They might take a loss on the last buys, but clean up on the front end. And, if big institutionals do it, it represents so much capital, that the market almost has to follow. If you're big enough as a speculator, you really have to be a bonehead to lose money.
The Professor

[never_get_over_it]

23. Maybe some day "they" will understand

that this economy is based on consumption - and if we don't have any money to consume with the economy will tank. How much consuming do you think the 30K Ford employees who are losing their jobs going to do?

[raccoon]

25. Exactly, and think of the small business owners, professions,

etc., who had these Ford employees as customers or clients.

[Boojatta]

24. Who should sell what at lower than yesterday's prices? Who should buy?

[McCamy Taylor]

27. This always happens. Starving peons are good for the rich.

[SPKrazy]

28. Means they are gonna get Cheap Labor!

stock buyers love it

means operations costs go down

profits go up

labor in other countries to do the jobs Americans were doing for a lot more.

[leftofthedial]

29. capitalists love layoffs

layoffs reduce the expenses of an organization, making it more "profitable" in the short term

capitalists also hate labor, which they believe should be free. Large layoffs depress the employment market and ultimately lower wages for everyone by increasing the supply of labor and reducing its cost.

[Boojatta]

32. If you owned a temporary help business, then you wouldn't be a capitalist?

A temporary help business hires people to go work at client firms. A temporary help business gets revenue by charging a client firm a higher hourly rate than is paid to the person who does work at the client firm.

Laying off the people who work at client firms would cut revenues.

Maybe you would lay off some people who only do inside work at your temporary help business? However, if such a layoff is profitable, then why hire them in the first place?

[leftofthedial]

33. you are confusing the business itself

with the stock market's view of the business

any business that lays off 30,000 people is fucked up and will pay a steep price in their ability to succeed in the market

it especially galls when we learn how much of the "savings" are given out as executve bonuses.

[Hubert Flottz]

30. They prolly got a hot tip from Bill Frist's brokers in his office.

Insiders are cashing in on tomorrow's dirty tricks in Washington!

Osama's Washington/Wall Street friends might know something is up? Is Duct tape selling big today?

[oneoftheboys]

31. Well, after the sell off on Friday...

what did you expect? Actually, it hasn't moved back up very much at all. So, there are some decent entry points out there today.

[Boojatta]

34. "Ford announced layoffs. So I will not buy any stock for more than what

it was most recently trading at. Maybe I shouldn't buy or sell any stock."

Is that the thought process that people are supposed to use?

[Geek_Girl]

35. It's a short term bounce

When Walmart or some other retail store's sales revenue is in the toilet, because people can't afford to buy their cheap crap, then you'll see another slide in the stock market. I haven't seen the DOW stay over 11,000 for any period of time. It seems to slide back anytime it gains track. For my 401k I've been dumping my money into a Canadian Mutual fund and it's been doing very well.

[pitohui]

36. listen to ford's announcement as a shareholder

i think his announcement is still posted on video on msn.com

it sounds good to the shareholder, damn good, f is making money everywhere but in north america, the world likes the vehicles and is clamoring to buy the vehicles, double digit growth in china, russia, other large foreign markets, only the north american operations are falling down, blah de blah

and, yes, cutting employees is cutting costs, shareholders like that

as ceo's go, ford is one of the best in my view

plus, they announce better than expected earnings so why shouldn't the market go up if there is any logic to the market at all

many students say the market is a random walk, with no logic, and that we just imagine any logic we happen to see in the rise and fall of the market, but that's a different argument for a different day -- assuming you do believe the market rises because of human action, ford did a damn good job this morning w. a could-have-been v. difficult announcement

on edit, yeah, i understand that the announcement is shitty for the laid-off workers, however, i am just trying to explain why f stock rose on the announcement after all the rumors of bankruptcy this weekend