Job Cuts!

Wow. Over 200,000 jobs have been cut in January alone. That is a ton! And these are not McDonald's cashiers that are losing their jobs (partially because McDonald's is the best performing company in the DOW!). No, these are high income jobs that are being shed.

On my quick trip to Atlanta this week the airport conversations were all regarding job securing, or the lack thereof. I'm sure there are some people that are embarrassed about being out of work, but the situation is now common enough that most feel free to be vocal about their predicament. I continually heard conversations like "After 14 years with KFC they are trying to lay me off without any severance.", or "I thought I was safe, but they laid me off with 40% of the company."

I can't imagine that this will help the housing market. The jobs being cut are exactly the types of jobs held by people that own their homes. These are suburban dwellers. These are people that have been scraping to build a better life and get a rung up on the ladder. Now they are in the tough position of needing to admit as quickly as possible that the rung below them on the ladder is their new home for the time being. Those that admit this fact early will be rewarded for it. Those that stay in denial and try to han gon might just lose everything.

So what should we do? The bright spot is McDonald's, believe it or not. Between the Dollar Menu and strong international market share this company is thriving. So meet me at the Golden Arches for lunch, and maybe we can buy a few shares for our kids.