Article: Summer Holiday Already Begun?

April 29, 2008

Memorial Day is still seven weeks away yet, economically, the summer doldrums have already begun in many parts of the country. Over nine hundred thousand pink slips were issued over the last year, and in March alone the BLS Household Survey of Employment reported 438,000 people would begin their summer vacations much earlier than expected.

But even with the rise in the unemployment rate to 5.1 percent, Wall Street hasn't lost its sense of humor. One familiar firm has been renamed "More Gone Stanley", while the trading floor at Bear Stearns is now just "Bare". In the world of major brokerage houses, banks, and hedge funds, thousands of aging preppies, hopeful yuppies, and wide-eyed Generation Xers have been asked to pack up their belongings in cardboard boxes and clear out. The Generation Xers never expected to stay very long anyway, but their colleagues from earlier generations aren't adapting as well to the loss of work.

One might also expect an early summer in the Hamptons where "For-Sale-by-Owner" signs will be popping up in the front lawns of many former big wig bankers and analysts. The fifty thousand people who have been laid off in the Big Apple will have company in the fall. It's likely they'll be joined by another wave of twenty thousand or so job seekers who like them will be pounding the pavement, or checking their Blackberry's and computers at the local Starbucks for job listings.

Meanwhile, back here on Main Street in Middle America, it's looking a lot more like Mean Streets every day. My jaw dropped recently when I read a statistic reported in the Wall Street Journal. It said that said only 16 percent of families have made vacation plans so far this year, when ordinarily 45 percent would have. I suspect that when gasoline prices reach $4 dollars a gallon, the percentage will go down even more. (Today, the joke in the real estate industry about why homeowners are walking away from their properties is not just because they can't afford the mortgage; it's because they can't afford to drive there.) With many vacation plans on hold, this summer will be remembered as the summer spent barbequing with friends, going to the movies, or even camping out. Camping is cheap and who needs to pay for a hot shower at a hotel, when the economy is already taking a bath?