That is the surprising conclusion of a CNNMoney story: While some 7,600 jobs have been slashed on the street in the past year, there is active recruitment going on, especially “at buy-side institutions like hedge funds looking to pick up talent on the cheap,” notes writer David Ellis. The Financial Times agrees; it reports that Morgan Stanley chief John Mack is telling associates that the financial sector’s recent tumult “is a historic opportunity to recruit bankers, traders and risk managers.”
Ironically, there seems to be particular demand for bankers who got us into this credit mess in the first place, those with “experience dealing with some of the structured mortgage and credit products that have fueled billions of dollars in losses and writedowns at the nation’s largest financial institutions.” They would appear to be the only ones who know how to value these noxious financial instruments.
Outside Wall Street, however, the job environment remains cloudy. More than a few economic observers have asked themselves recently: If, as so many believe, the United States is in the midst of a recession, then why has there not been a major leap in unemployment? The New York Times has a grimly fascinating story that may help explain the anomaly: “The number of Americans who have seen their full-time jobs chopped to part time because of weak business has swelled to more than 3.7 million—the largest figure since the government began tracking such data more than half a century ago.”
Involuntary part-time workers, you see, do not get measured as “unemployed.” But they nonetheless represent what the Times calls “a stealth force that is eroding American spending power.” Drilling a little deeper, the Times cites Labor Department figures indicating that men, and especially Hispanic men, are particular victims of these slow-motion layoffs: “Among those who were forced into part-time work from the spring of 2007 to the spring of 2008, 73 percent were men and 35 percent were Hispanic.”That, apparently, has to do with the decline in the construction industry and other sectors that heavily employ Hispanics. In this election year, some observers think disproportionate economic hardship among Latinos will undermine John McCain’s ability to woo that critical voting bloc. In these lean times for consumers, it might appear counterintuitive that at least some credit card companies are cleaning up. It’s easy to forget, but in March, Visa pulled off the largest IPO in U.S. history. Today, the business press is filled with reports that Visa has announced a 41 percent hike in quarterly income over last year. How does that happen? Doesn’t nearly everyone cut back spending when the economy sputters, and doesn’t the credit crunch curtail Visa’s ability to extend credit to its customers?Not really, because, despite popular perception, Visa is not a credit card firm. As MarketWatch succinctly explains: “Visa processes payments on debit cards and other types of payment cards and charges fees for these services. Unlike credit card companies, it doesn’t lend money to anyone. That means it hasn’t suffered as the global credit crunch begins to dent consumers’ ability to repay debt.” Moreover, ample evidence suggests that the more Americans suffer economically, the more debt they put on their credit cards. Visa gets a chunk of the transaction fees without having to assume the debt. Now that’s a business to be in. Unlike, say, the auto industry, which seems to rust by the day. The Detroit Free Press notes that GM is about to slash another 5,000 jobs by Nov. 1 from its depleted payroll and is scheduled to announce a “significant second quarter loss” on Friday. The Wall Street Journal reports that Chrysler, having recently pulled out of the once-lucrative leasing business, “is scrambling to slash costs and line up partnerships with foreign auto makers to shore up its finances amid a painful downturn in sales and a deteriorating outlook for the company.” Specifically, India’s Tata and Italy’s Fiat are mentioned as partners—none of the major American papers asks today why those companies are doing reasonably well when domestic dinosaurs are on the brink of extinction. Here’s a hintfrom Honda, via Bloomberg: Build affordable cars that appeal to drivers in growing markets like Russia and China.
