40,800,000 Americans on Food Stamps
August 5, 2010
40,800,000 Americans on Food Stamps. The number roughly corresponds with the entire population of the following states and the nations capital:
Wyoming
Washington DC
Vermont
North Dakota
Alaska
South Dakota
Delaware
Montana
Rhode Island
Hawaii
Maine
New Hampshire
Idaho
Nebraska
West Virginia
New Mexico
Nevada
Utah
Kansas
Arkansas
Mississippi
Iowa
Connecticut
Oklahoma
Everyone in those states theoretically is on food stamps. That’s the new reality people. We have literally 1/2 the nation on food stamps in terms of number of states.
Let that settle in. 1/2 the number of states in the entire country, if you add their population up roughly equals the number of people on food stamps. I don’t see how an ad agency can advertise to people with no money.
This is a massive problem, it’s something that has been unheard of in recent times, only mirrored by the great depression in terms of severity. So go ahead and continue to feel that things are getting better, when in reality things are getting worse, much worse.
I fully expect a severe double dip recession unless someone comes up with a big bubble. Until that time there continues to be less need for work as less and less people are making ends meet and have any disposable income to use to purchase services and goods.
Truly, enjoy the new reality.
Mancession : 1 of 6 men not employed
May 8, 2010
It’s hard to exaggerate how bad the job market is. Here’s one arresting fact: One of every five men 25 to 54 isn’t working.
Even more alarming, the jobs that many of these men, or those like them, once had in construction, factories and offices aren’t coming back. “A good guess…is that when the economy recovers five years from now, one in six men who are 25 to 54 will not be working,” Lawrence Summers, the president’s economic adviser, said the other day.
That’s the headline screaming from the Wall Street Journal Article
It may be time to rethink the entire concept of women as a minority, as it stands now Women now account for more than half the work force (considering they are more than half the population as well) … so what’s the minority status for?
Increasingly the women in the household is the breadwinner and the man is at home with the kids. This is becoming more of the norm than the exception. With a 20% unemployment rate among men, yet half that among women.
This is becoming more and more of a problem, women owned firms are given preference for government contracts, larger firms are given special treatment when they hire women on some government contracts. In other words we need to strike “women” from the rules and add “men” yesterday to correct this or else you are going to see a huge number of unemployed men (even bigger than now)… many of them with no college education (due to similar incentives given to colleges, and similar college loans given only to women).
We’re not against boosting women’s roles, our problem is that you can’t have a huge population of unemployed men roaming the streets, nothing good will ever come from that.
The problem is also it’s the types of men that are generally unemployed… the young, less educated ones with very limited financial resources… the ones with nothing to lose.
Here is a recent picture from Greece that may lay out the problem.
Are we saying that that is our future? Well the answer is yes and no, if we continue to head down this path of huge unemployment numbers, almost all of the men… the answer is yes, this is exactly what our future holds.
If we take action now and pull most (if not all) of these sexist laws then perhaps we MIGHT bring the employment force back to equilibrium.
Ben Bernanke what is the exit plan?
January 17, 2010
Ben,
The Federal Reserve under the quantitative easing policy increased the money supply dramatically. In layman terms it’s generally called printing money. So we have a question we would like you to answer. Where is this money going to eventually end up?
See right now the banks are still not lending money out, so it hasn’t hit Main Street but it just takes a handful of bankers to loan those newly printed dollars to a handful of companies to start it moving. As of right now with unemployment in double digits (17.3% according to the U-6) you can’t take the money out of the economy now due to inflation fears. The last time this was done on a dramatic scale back in the early 1980′s to take out the 1970′s era inflation it caused mass unemployment.
In other words this is not doable now.
In the 1990′s it was the .com bubble, in the 2000′s it was the real estate bubble. We’re not sure what it is going to be in the 2010′s, but we are highly confident that it will end up in some sort of bubble. Even The Onion, the most sarcastic parody paper the world understands this fact.
“Every American family deserves a false sense of security,” said Chris Reppto, a risk analyst for Citigroup in New York. “Once we have a bubble to provide a fragile foundation, we can begin building pyramid scheme on top of pyramid scheme, and before we know it, the financial situation will return to normal.”
Yea sarcastic, but true.
Honestly we know you understand this too. It’s why you printed off all those dollars, so someone comes up with an idea that everyone invests in, hires and grows some bubble like industry. Just like the .com boom in the 1990′s and the housing boom in the 2000′s. You’re problem is taking that money out in a fashion that wouldn’t completely destroy any economic recovery and would halt inflation.
If you start taking the money out by raising the interest rates, you are going to increase unemployment dramatically in our current super weak economy. If you don’t you are eventually going to cause extreme inflation.
So what’s the exit plan? We sort of need to know, we have kids to feed.
Tracey Edwards ad agency shuts down – won’t pay bills
November 25, 2009
The Union Leader is reporting that ad agency Tracey Edwards has shut down. With an incredible note stating “Unfortunately, there will be no assets for distribution to unsecured creditors, like you,” the letter, addressed “To Whom It May Concern,” said.” and No bankruptcy filing is contemplated because there will be no assets for distribution to unsecured creditors, according to the letter.
Wow, In other words.. there is nothing left.. zilch.. nada.. zip.
This part however is the root of the problem. ““After 20 years and having a successful business and employing many people and doing exciting and great things for our clients, it’s just a sad sign of the times that small businesses are not able to get the support from the banking industry and government the way that larger businesses do,” Tracey said.”
Well there you have it people.
“As of the date of this letter, TEC owes TD Bank approximately $520,111,” the letter said. “The bank has a properly perfected security interest in all of TEC’s assets. Those assets consists of accounts receivable of approximately $102,000 and miscellaneous office equipment worth less than $20,000. There are no other assets.”
So the company is in the hole in or about $398,000 … and because of this 29 employees will lose their jobs.
So you know, $398,000 is less than the average bonus is at a taxpayer bailed out bank. A single individual at a failed bank is getting more than what this company needs to survive.
Little firms like this are the ones that needed the bailouts.. not the banks.
Enjoy the mess.
CNBC : Tribble was right about unemployment
November 23, 2009
Evidently CNBC is coming to the same conclusion we did nearly a year ago that the U-6 is the real unemployment rate standard.
The problem is that the U-3 doesn’t count in the millions of people where their unemployment benefits have ran out, hence the U-3 is counting them as employed… even though they have no job! (go figure).
Also the U-3 doesn’t factor in the Accountant that had to take a part time job at McDonalds flipping hamburgers because he cannot find a real full time job, however the U-6 does.
Meaning that the real unemployment rate is isn’t 10.x percent, it’s actually at the great depression level of 17.5%.
We said this a year ago, CNBC is saying it now… as did one of the federal reserve heads.
In other words people, we are being had. It’s bad people, really bad. Unemployment is perhaps the biggest threat we have to an economic recovery… because let’s face it.. unemployed people don’t buy houses or cars.
Also worth noting, we don’t think this is going to recover unless we have another bubble… something that CNBC said today… and we said a year ago
From CNBC:
“”To me there’s no easy solution here,” says Michael Pento, chief economist at Delta Global Advisors. “Unless you create another bubble in which the economy can create jobs, then you’re not going to have growth. That’s the sad truth.”"
Go figure… we need another bubble people.. and the stimulus spending went into roads and bridges.. not another bubble.
Enjoy the new reality.
The Recession is over today
October 29, 2009
The recession is over, so why does everyone feel like it’s still getting worse? I figured I would explain to you what’s really wrong with calling this recession over.
They measure it from Quarter to Quarter, meaning every 90 days they look to see if the economy has improved from the previous 90 days. The problem with this is that it’s too short of a time period. It takes me more than 90 days to get paid from some of my Advertising Agency clients in this economy.
Unemployment isn’t actually a factor in measuring the end of a recession, but for simplicity sake we are going to use it in this example. So let’s say the unemployment rate is 5% .. then over the course of 2 years it goes to 11% …. if one month they say that the unemployment rate went to 10.9%, the recession is over…
Yea we’re near 11% unemployment… yes we are over double the unemployment rate as we were just 900 days ago.. but the recession is over.
90 days is not enough to measure if the economy is out of the great recession or not. The story from Reuters is misleading and it’s based on false data. Call us when the figures are close to where we were at the the start of the recession, not when we are showing a .000001% improvement from the bottom.
This recession isn’t over until we are back where we were back in 2006, 2007 .. with 5% unemployment, housing foreclosures at minimal and banking bailouts are not the norm.
If we need a stimulus plan, it means the recession isn’t over. Enjoy the false data.
WASHINGTON (Reuters) – The U.S. economy grew in the third quarter for the first time in a year, beating market expectations, as consumer spending and new home-building rebounded, signaling the end of the worst recession in 70 years.
Ad Agency in a recession – the good, bad and ugly
October 27, 2009
With layoffs being in the headlines this is going to be the classic textbook definition of a jobless recovery (if we really are in a recovery). Leaving us Advertising Agency types with a serious problem. The first being the fact that many consider our services optional, as payroll takes precedence, hence leaving our industry with perhaps one of the highest unemployment rates in the nation.
The second problem is if you are lucky enough to have a job, how do you advertise in light of 17% unemployment rate, consumer confidence hitting the toilet and bankruptcies the normal way of life.
Seriously like what is there to advertise to? I wouldn’t want to be a high end Rolex dealer in this economy, nor would I want to own a Porsche Dealership. “Honey the mortgage is late, but check out my new car I picked up!”
Granted some companies are relatively stable in this economy, no-frills Wal-mart, local grocery store, utilities but the problem overall is that we still have excess capacity for the new reality of decreased demand.
That includes your job.
Recently there was a study that put 200 job applicants for each position available in an ad agency. Honestly if you don’t do a good job, think about it.. there are 200 people (literally) willing to fill your spot within minutes.
This is the environment you are marketing and advertising in. Your client doesn’t want to pay much to get little. In other words your advertising isn’t about creative, it’s about ROI, period.
But there is a good side to this, a very good side. Many of the fortune 500 firms now exist because during the great depression they survived, so the chances are if you can make it though this great recession, your firm will be miles ahead of others when it’s finally over years from now.
The bad news to this is that no matter how good you’re doing, the chances are someone is running more efficiently, so there’s going to be competition. The face that the entire world has moved online rather than print or TV is causing much more disruption than what would normally occur. A talented guy with an 8 dollar a year domain registration and a 5 dollar a month hosting account could eventually start stealing your clients.. Don’t laugh.. I did. Armed with a pregnant wife and 700 dollars to my name I effectively have many on my client list that were formally with a holding company. This is revenue that you should have had, not me, as your firm had the relationship but not the technically skillset. Remember you’re reading this blog post, and the chances are some of your clients are as well.
The problem is that overtime more and more guys like me will show up, hence causing more and more disruption in the market place. You have to remember, if someone can do that with little resources, a similar guy with more resources could do much more damage.
Enjoy the mess.
Pink Slips flying at ad agency Ogilvy
October 26, 2009
Evidently Happy Monday at advertising agency Ogilvy, pink slips are flying. George Parker has the full leak.
Layoffs will contintue across the industry as this recession hasn’t seen it’s full potential in terms of unemployment. These people will be forced entering the workforce facing horrific unemployment and very low chances of finding a job quickly as some estimates have noted there are now nearly 200 applicants for each position in the advertising agency space.
This is the worst time to find yourself on the unemployment line. But hey no worries.. we’re sure that Sir Martin will still get his bonus for a job well done.
Days like today are what makes us wonder exactly what is going on, like completely rethink what we thought was the norm. Because clearly the norm isn’t working.
Ad Agency Draft/FCB loses ALL of Starbucks
October 22, 2009
George Parker is reporting that Draft/FCB has lost all of Starbucks, and pink slips are being handed out like Halloween candy at the advertising agency.
Evidently this has been swept under the rug as both Starbucks and Draft/FCB have refused to confirm or deny this report. If you have any information regarding this, please contact us your anonymity is guaranteed.
This is going to be a trend for some time, as the unemployment rate has reached 17% in the US, and since advertising is generally considered by companies as a discretionary spend, as urgent matters such as payroll tend to take precedence.
Let’s face it, Advertising Agencies in general are parasites, we only do well when other firms come up with good ideas that are sellable… then it’s our job to advertise those products that other people invented… so when they are having a rough time..so do we.
We are unsure how many people were canned at Draft/FCB , however the rumors are that it’s measured in the dozens.
BLS.GOV : Unemployment is 17%
October 21, 2009
The BLS.GOV site is reporting that the Unemployment rate has reached 17% in the US via the U-6 Standard. This standard is what was roughly used during the 1930′s, squarely placing us at 1931 in terms of the unemployment rate. By 1934 that rate jumped to a full 25%, meaning that 1 out of every 4 people was without a job, so at current job loss rates, within 900 days we will be at that 25% unemployment level. How do you market and advertise in such a recessionary environment?
We argued earlier this year that the U-6 needs to be the measure rather than the U-3, We were criticized as being off the wall, until a Federal Reserve head stated the same thing, hence validating our position that we have argued for months for.
Yes we were even called Peter Schiff (like it was an insult)
If you want to know who Peter is, here is a video dated 2006…. notice he was right then… in the middle of the housing boom and made Arthur Laffer look like an idiot within 18 months of it’s filming.
The point is that 17% is ugly, really ugly… and the chances are it will go to 20% or higher unless something stops it…. last time it was WWII … who knows what it will be this time….
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