[Poptard]

Hello everyone.

I graduated with a MBA in August (3.9 GPA). Since then, I have been taking the CPA exams. I only have FAR left, and it is scheduled for April 2. While in school and studying, I have been applying for jobs in accounting. I have been trying to get a job in accounting for a year and a half. I have applied to internships, entry level positions, and a few senior level positions. Yet, none of them will hire me because I do not have experience. Even with having the exams nearly complete, I am getting nowhere.

The sad thing is that I have been working for this company for the past two years. Last month I applied for an entry level accounting position with them, and they turned me down because I don’t have any experience. Yesterday, I get a call from my boss offering me a position (not in accounting) that pays over 50K. I would have accepted 30K for the accounting position.

Can anyone tell me what I am doing wrong here. I have applied for Public, Industry, and Non-Profit positions.

[financeguy]

I think some of you guys are going to be in for a shock. Last year due to government spending, it added 10% to GDP ON TOP of what the government normally spends as part of GDP. Keep in mind, that was record deficit last year, record spending. More government spending last year than from like 1900-2000 combined (I don't know the years off the top of my head). Now, can the government keep that spending up? Anyone follow tax receipts or bond auctions?

You may want to do some research on demographics, most notably baby boomers, and peak spending. Also, you may want to note the record number of business bankruptcies last year.

You guys have to face reality, in which there is a HUGE number of accounting jobs which in the past 2 years, have disappeared and will not be coming back for at least a decade, if ever. For the past 10 years we have lived in an artificial bubble economy in which most growth was strictly due to credit…its not real.

Its going to be very competitive for a long time when it comes to finding a good job. For every business that goes under, that is 1 or more less accounting jobs needed. For those of you who are just graduating college – its not you that is the problem, and certainly has nothing to do w/ your GPA – its simply the fact that the actual number of jobs has greatly diminished.

Accounting is a subsidiary of other businesses, ie, it is not needed simply on its own. Just like mortgage servicing would not be needed if nobody had a mortgage. Manufacturing stands on its own, so when one manufacturing firm goes down, the surviving firm can now take on that portion of business. However, the firm who did the accounting for that dead manufacturing firm, has now lost that business for good, and it needs a new business created to make up for that. There is simply far more businesses going under, than being created.

I'm not an optimist, I'm not a pessimist, I'm a realist. Its a pretty bleak picture, but that is the reality of it. I currently have a job where I don't have much work to do, so I spend my time effectively studying financial markets, economics, currency markets, commodity markets, demographics, business, the mortgage industry, etc. Over the past 2 years I have probably well over 2000 hours committed to learning and studying about this stuff. Most people have their head in the sand and think I'm crazy (including my family), they think all is well and it will soon be back to normal. You can believe me or not, it really doesn't matter to me, but my advice is to take the job you're offered and hold onto it as well as you can.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[Anonymous]

financeguy,, I've been BLASTING ,,i mean saying that about that for the past year,,, its economics 101 that people are forgetting,,, where is the PRIVATE C and the I? eekk..

I've been following some biz news relating to the tax receipts from NY and NJ, and they're pretty bad,, and it still amazes me to this day how NY's MTA couldn't realize that unemployment = less payroll tax revenues,, referring to the payroll tax NY Gov. Paterson enacted to bailout the black hole of the MTA … &&, I remember full well when the Port Authority of NY and NJ was not able to find any underwriters for their bonds… Its Jon Corzine's fault too : )

I honestly have no idea what to expect,,, its pretty messed up now,, luckily I still have a job for god knows how long, but i'm just going to keep positive for whats left of my sanity…

[PursuitCPA]

Also the reason why NY is in the black hole because they have 50% under medcaid/medicare whatever. Now they have dumped this on the whole country. Lets see how that plays out, I dont think it will be a happy ending like in Star Trek.

CPA EXAM - Passed

[financeguy]

State income tax receipts this year for the month of February were down something 80% year over year. The worst on record. Nearly 40 million people are on food stamps in this country – again, another record number. That is the modern day equivalent of bread lines.

Anyone ever computed interest expense on our national debt of $12 trillion? Keep in mind that doesn't even include the unfunded liabilities of social security and medicare, which would put it at somewhere upwards of $60T. Right now, or very soon, our annual interest expense on the $12T is going to be somewhere in the range of $300B. In this history of the country, the biggest surplus EVER, is $280B. The biggest surplus ever cannot even pay the interest on our debt. And we aren't even running a surplus, we are running record deficit after record deficit.

take a look at this:

https://market-ticker.denninger.net/uploads/2010/Mar/Debt-Sector-1980.png

For the people who think recovery is right around the corner – go long the US $, go long S&P 500, go long 10 year treasury, go long BAC, C, WFC, JPM, FNM, FRE, AIG, KBH, etc.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[JM2010FL]

financeguy, the US economy/world economy is more complex than what you are describing…..when baby boomers start retiring..boy are they going to start spending and enjoying there lives….

Keep in mind, small businesses are the life blood of our economy and the source of job creation, large companies destroy jobs…

There's NO way you can analyze the genius of the US economy…..And those stupid, fat and greedy Enrons and Lehmans of the world deserved to go bankrupt, infact I hope a couple of others out there don't get bailed-out and go under to make room for real creativity…

[financeguy]

JM2010FL – you couldn't be more wrong on you statement of baby boomers and spending. Again, do research on peak spending. I will give you a very short example:

Peak spending occurs in the age range of mid 40's up through mid to late 50's. At this point people are usually making the most money of their career. At this point people have a family and they are in the biggest house of their life. They have upgraded to bigger houses to support their growing family. Their children are older – in the teens. They are eating more food than ever, growing bigger – continuously needed more clothes, entertainment, etc. The kids begin driving. Maybe a new car gets purchased, more auto insurance gets purchased. There is more to it, but that is a summation of peak spending.

Then the children grow older and they leave the house. No longer do the parents need to buy all that food and what not. No longer do the parents need such a big house. Time to downgrade. 401K portfolios got demolished in 2008, and yeah they have risen since then, but they are still far off from the highs, and will take another beating. Then you have to add in the inflation that will be coming. Pensions are highly underfunded, they will never be able to pay out in full. When these baby boomers retire, their retirement funds are going to be much smaller than their peak salaries.

My conclusion, which is shared from people I learned this from, comes from actual real data, facts, and statistics. When the baby boomers retire, they are going to be spending far less – you are going to see a major contraction in the economy.

Of course the world and US economy is more complex than I wrote about. I'm not here to write a novel. Again, like I said, you think things are shaping up, then by all means go long.

I have never seen any stats on spending being increased in retirement. If you have a website showing this, I would like to see it, as I like to always see things from a opposite perspective.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[financeguy]

oh yeah, I forgot to mention. The baby boomer generation is the biggest generation in the history of this country, and dwarfs the size of both the preceding and following generations. The following generation just will not have the amount of demand of the baby boomer generation, and also you are going to have a massive outflow of funds from the “retirement” markets.

Like I said, it will be a massive contraction in the economy.

Now sure, things could happen like massive immigration to fill the demand, but we don't know if that will happen.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[Poptard]

Ok everyone, I have to play optimist with this one. The Japanese have been going through exactly what you are talking about. The average age of their population is much higher than ours. The counterbalance that the US has, that Japan doesn't have, is that when the Baby Boomers start retiring, many more jobs will be freed up. As far as the national debt goes, the US has a debt to GDP ratio of about 80%. However, Japan has a debt to GDP ratio of 150%. There are ways to eliminate the debt if necessary. We can monetize it for one thing. That would dramatically deflate our currency and create record inflation, but I think that it could help us in a way. It would allow us to become more of an export nation.

On a side note, according to a CNBC report that I saw yesterday, manufacturing companies have had to become so effiecient due to the recession that they can now effectively compete with China and Mexico and that it is now more economical to manufacture in the US. So, compnies like GE and Caterpillar are planning to move a lot of their manufacturing back to the US.

The last thing that I want to mention is that 30% of all assets on corporate and individuals' books is in cash. Once they become more confident in the markets and they start investing, we will see a major boost in the economy.

One problem though is that the recession first came about due to the housing markets. Well, the housing market still hasn't quite hit bottom. I am a moderately liberal person, but I do have to agree with the republicans on this one. We need to let those who are nearing foreclosure to foreclose. Let the markets work on their own.

[NDIRISH]

The problem is not the MBA…but it's more on the master's program.

People going to Texas-Austin, USC, Notre Dame, Illinois have a higher rate because the Masters in Accounting program is so highly rated than other schools. That's why people fly in all over the country. At least the Big 4 mention that ND is a national school for recruiting purposes. It's pretty much the same for the other 3 schools.

Philly doesn't have many top notch programs, I'm afraid. That's why they pick up people from outside and put them there.

BEC 85, REG 79, FAR 77, AUD 81!!! DONE!!! PA

[financeguy]

Wow, cnbc is about as big of a joke as economic news as you can get.

How in the world can you say that America can compete w/ China, India, and other countries when it comes to manufacturing? There is such a huge gap in wages between the countries. Unless America substantially lowers wages, other countries substantially raise wages, or big tariffs are imposed – then America cannot compete w/ these other countries in terms of manufacturing. More companies will actually do more outsourcing now due to this health care plan which is going to substantially raise costs – Both CAT and John Deere (along w/ ATT) publicly announced the increase in costs just this past week.

I believe housing has quite a ways to go. The only upturn in the past year is due to government intervention, and is just short term and artificial. The tax credit, along w/ the FHA backed loans, along w/ banks holding shadow inventory caused an increase in home sales last year. If you have been following the reports and data, home sales, both new and existing, have fallen for the past 3 months.

Here is a good short explanation on housing:

https://market-ticker.denninger.net/archives/2116-Housing-Sales-Forget-It.html

Here is a bit on CAT, if you believe the BS on cnbc

https://market-ticker.denninger.net/archives/2099-If-The-Economy-Is-Recovering….-CAT.html

Here are some more good ones that give some insight:

https://market-ticker.denninger.net/archives/2083-Oh-The-Huge-Manatee-LIESman-.vs.-Santelli.html

https://market-ticker.denninger.net/archives/2065-Whats-Our-Credit-Limit-Again.html

BTW, these links I posted here come from a blog from a guy who warned all before the blowup in the economy. You can go all the way back and read his stuff from 2007.

So, you can listen to the pumpers on CNBS who didn't see the market crash coming, yet now claim they see the recovery. Or you can listen to the people who did in fact see what was coming before it came.

If you follow the advice of CNBS, you will get burned.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[jeff]

I don't get political on here, but my home page is the Drudge Report 🙂

[Anonymous]

Financeguy – Your posts are poet. I like it, very informative and I agree 100%.

My investments were down by 58% during the worst of last year and are fortunately back up again. I've been debating about pumping some money into the markets so I could ride the current upward wave. However, I feel like there's going to be another bubble bust…maybe this one will be worse, and I wish I knew a time frame of when it might happen. What's your opinion?

This may be too theological but….when December 2012 approaches (whether true or not, whatever..I don't really care), I think people will be in a panic and that might have an effect the economy..

[financeguy]

CPA4AL – theoretically the dow could go to 36,000, however its going to take you a wheel barrow full of cash to buy a loaf of bread.

All fundamentals are thrown out. The markets don't run on any logic, it is pretty much all high frequency trading. The timing is impossible, and you are going against the people who are manipulating the markets. Its too dangerous for me.

Here is the analogy that I like:

Its a room full of gangsters all with guns pointed at each other and all with a very itchy trigger finger, all nervous and not one trusts another. As soon as the first gangster slips, or tries to start it off, its going to be a hail of gunfire and pretty much everyone dies. Sort of like the end of resevoir dogs.

You definitely face some possible potential upside in the markets…but are you will to take that risk of possibly the biggest market crash ever. You are going against a game of con men who got the game rigged. Too risky for me. Besides, I already got burnt last year when I shorted financials and they took off…however I still hold my position so I am hedged for a crash.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[Poptard]

Man, I should have named this thread “Pending Economic Apocalypse”. I think that would have been a better fit.

[financeguy]

Yeah, sorry I didn't mean to take this thread off into another tangent.

Having taken 2 parts of the cpa exam, I have nothing but respect for people who have passed the exam. It is quite a commitment and a lot of hard work. You people are productive members of society, and your hard work deserves to pay off.

It simply makes me cringe when I read someone passing on a $50K job right now, or someone thinking that it is the quality of their resume or their GPA which is keeping them from landing a job. Understand what is going on and adapt to that new environment. Economics, stock markets, mortgage industry, etc – I like that stuff. Its a hobby of mine. I find it very interesting, and I have spent a ton of time learning about it. We are NEVER going back to 2006 economic levels in this country, and we have a very rough ride ahead. And if you understand everything that happened and is happening, then its not even that much of a prediction. Its like predicting someone who smokes 3 packs of cigs a day for 20 years will get lung cancer, or someone who eats mcdonalds 2 meals a day every day will be overweight. Having a CPA license will most likely put you ahead of the pack (that is why I am doing it), but claiming stats as 90% placement rate out of college – those days are simply over with.

AUD - 81, BEC - 74, 80, FAR - 82, REG - 81
Done!

[Author]

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