This was one of the more powerful Cramer rants in quite some time. He discussed the driving force of this market, which is brutal and heartless job cuts.
It is the defined job of any CEO to manage expenses. Part of that job entails cutting the workforce in order to protect shareholder value. I understand some of you Bernie Sanders fuckheads believe GE is supposed to provide useless jobs for the benefit of lazy Americans. If that were the case, our corporate world would resemble our government controlled agencies and cities.
Would you like that?
No, of course not.
But if so many industries are culling their workforces, from tech to oil, where the hell are the new jobs coming from? Based on information provided by the Bureau of Labor Statistics, most of the new jobs are coming from retail trade (Walmart, Target etc), Construction and Healthcare (quasi-government financed workers).
Here are the statistics.
Based on the data above, there have been job losses across the mining, oil & gas and manufacturing sectors, year over year. However, the oil and gas losses only amount to a mere 12%. Tomfoolery!
Most of the gains were found in bars and restaurants, as people shove stuffed shells into their fat faces and washed them down with craft swill. Leisure and hospitality enjoyed big gains, as well as eduation and healthcare, construction, retail trade and finance.
The finance jobs will be gone soon, as every investment bank that I know is slashing expenses by firing people.
Everything else is easily explained by the dichotomy of classes which persists in this country, the have’s and the have nots. We are here to serve the aristocracy, provide them with leisure, build their castles, and beg their pardons at Disney World–while fetching their shoes at retail outlets.
The impressive jobs data is nothing less than a total farce, an illusion that is being used for propaganda purposes to sell the lie that the economy is great and everyone is working. People are working two, three jobs in order to meet monthly expenditures, hardly a sign of an economy on the cusp of breaking out.
Going forward, I’d find it incredible to believe those oil and gas jobs weren’t going to worsen, as well as deleterious drops in the financial and retail trade sectors.
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Company boards, management, and major investors have been unwilling to lower ROI expectations as inflation, real treasury rates, and GDP growth have gone through a long downward trend.
The only way management can meet the ROI expectations is to share less and less of the productivity gains with employees.
A lot of things (Social Security, for example) fall apart over the long term if wages don’t go up with productivity.
This is the next wave, now it’s high paying white collar jobs being eliminated for the most part and they aren’t coming back.
I wouldn’t be so hard on the Bernie Sanders crowd, since it is a natural reaction to exactly the point you were making. Not correct, but natural.
No, Bernie IS correct. Bernie never said he wanted GE to provide useless jobs. He wants to have more real jobs for Americans, by not agreeing to trade agreements that screw over American workers, by limiting immigration, by getting more green jobs, by repairing our infrastructure, by encouraging industry to hire Americans rather than to outsource etc.
Feel the Bern.
The job of the US corporation is to fire american workers and outsource their jobs to foreign tax-free lands with slave-waged labor, thereby increasing the bottom line of the 1/10th of one percent who need it the most, not to mention some trickle-down to the share-holder base.
No CEO is going to outsource jobs to some trashworld country for 1/10th of one percent. There’s too much transaction cost and risk in that trying to retrain Abu to do what Dontrayveus can do in the US back office slum cities. You’re grossly oversimplifying things. 1% probably isn’t a high enough hurdle either. There’s a reason why the call centers of America are in the heartland and the rural south.
Most of the job cuts are coming from major metro / large companies. The smaller regional players in the middle market seemed to be doing fine until the last 2Q’s where cash reserves have gone up rather than reinvestment. Which points to a couple of things, either the middle market / small cap can’t find ways to invest their cash (economy completely clusterf’d) or they were holding onto cash due to the fed’s waffling about rate hikes, or insert your random economic catalyst event here (Zika, Oil Glut, Brexit, etc.)
Read his comment again.
He wrote “increasing the bottom line of the 1/10th of one percent”, not “increasing the bottom line by 1/10th of one percent.”
Juice is referring to the portion of the population that receives the highest share of the cost savings a company obtains through outsourcing to countries with ultra-cheap labor.
China has a demographic problem that will drive labor costs there much higher, probably permanently (in terms of a human lifetime). It won’t hit as fast as Japan’s problems hit, but the numbers involved are very large — 90 million fewer workers by 2040.
India will still be able to provide growing numbers of workers for outsourcing for a few decades, but that population growth is at least as much challenge as it is opportunity.