Optimism Shrugged

K. informed me earlier that where she works [a subsidiary of a very large company] might get sold to an outside bidder as the large company tries to raise more capital. I'm sure you know which company I'm referring to now though I won't explicitly name it.

Anyway, I did some research and found out there are a few prospective bidders, but all bids are approximately $1 billion BELOW the market value that 1) the company is worth 2) was sold for [yes, it has been sold three times over the past ten years], 3) what the government saw fit in its suggested restructuring/asset selling plans after the stress tests. Now I'm definitely sure you know which place I'm talking about.

Of the bidders, and the news I can find on the bidders, the majority of talk is just that: talk. Some have expressed interest, but the bids are low and almost bargain--and does that make good business sense to sell something for a price that is cheaper than what it is actually projected to make this year? I don't think so.

But in scouring some of the reports, I found some disturbing news, and the majority of it came from either op-eds in newspapers (including the W.S. Journal), or from investment bankers and managers familiar with the companies involved, past examples of these huge merger & acquisitions/asset sell-offs, and, of course, pundits (like my fav. kid Rick Santelli...)

The news was that any company willing to purchase this company would immediately require the company to relocate.

Apparently Boston isn't a great place to do business anymore. Philadelphia, San Jose, Oakland (CA), and Tampa are the headquarters and potential relocation sites of the company if it were sold to any of the prospective bidders.

That's extremely unsettling.

I don't even have to tell you that we probably wouldn't move. You might ask: why? To keep a job? It might be worth it. True, but all of these postings also said that 25% or more of the company's employees would be 'expended' (my favorite verb they used to describe layoffs) after the potential merger and some before the merger was finalized. That means even if one were to relocate for the position, three weeks later they could be out of work in a new and strange city, arguably in worse shape than they were before.

All in all, it could mean we're (K and I) are heading for the bottom of the bucket in terms of employment, dreams, aspirations and plans, and hope in general.

I'm queasy just pondering the implications of this seemingly ill-considered asset sell. Why sell for less than you'll make from it? Just for the instant gratification and bottom-line satiation of being able to display you now have another $3 billion (or less depending on the bid) scribbled off your list of money you need to raise?

I suppose it's time I stopped my optimism charade, as I'm still deeply concerned and filled with trepidation about the next year in America. I'm rescinding my earlier economic prediction of a recovery by this time next year: job losses decreasing, stock market much higher. I think we did just see a 'bear market rally,' and now we're going to go sideways for a long time...perhaps a decade of sideways moves and slight increases, akin to Japan's lost decade.

Just what does that mean for jobs and this generation? Our generation is likely to be 'the lost generation' because of this recession: unable to keep our houses because we've lost our jobs, and unable to repay our student loans. We'll be reminiscent of the generation lost during The Great Depression. I'm sure the economy will emerge much stronger from this, though, but during the interim it's going to be a hard, frugal, and perhaps most unexpectedly, boring: buying will plummet again soon, as will optimism, even if job losses do halt. There won't be much hiring for a long time I suspect. It will be basically sideways. Sure, we'll see months of more jobs than losses, and others of slightly more losses than jobs, and we'll sort of jostle for position for a year, I think, before beginning a gradual, vigilant and careful upturn.

Is it just me or did the world seem brighter when we knew we weren't in a recession? Didn't it seem more fun and promising when we knew we would make up in the morning and have a job to go to? And that our neighbors wouldn't come home dejected, boxes in hand, preparing for a year or more at home on the couch?


A fire began in our current town this morning. It's going to cost $500,000 to repair all the damages. The budget has already been wiped clean of the emergency funds, and our city has already called in nearly $1 million in emergency funds for things that happened last year and earlier this year. I'm thinking we're going to see either a rise in taxes or some serious layoffs coming around our town now as a result of this fire. How sad is that?

Firefighter jobs will be cut because of a fire. Seems like a backwards America right now.