Where is the US economy headed?

Finishing the thought: The Existing Bank will say the loans that go to the Bad Bank are worth 60 cents on the dollar. Vinnie and his pals may say it's more like 20 cents. The government, which will probably end up being the middleman, can't figure out what the "real" value is.

They can't figure out what the real value is because the value of real estate is still in flux. In some locations, even in new developments, they have no value. They are essentially ghost towns.

http://www.msnbc.msn.com/id/32314827/ns/business-eye_on_the_economy/

We may not hit 10% after all.

Those are hopeful signs, but I'm still worried that people continues to lose jobs in the tens of thousands almost every day. This bleeding of jobs needs to drop dramatically before we can rest assured that our economy has stabilized at the trough. When that does happen, gains in employment will be very slow.

The art of investing is to know when to jump in before the rest of the world follows the crowd.

It's a little premature, but I sold my money market funds on June 18, 2009, and purchased three different funds. This was the money left over when I sold when the stock market was over 14,000 about two years ago.

This is the result of the stock market since June 18, 2009, to today (August 7, 2009).

Dow up 9.5%
Nasdaq up 10.7%
S&P up 10%

The three funds I bought is up 10.4%.

What do you think? Will the market stay on course upwards from now, or will we see more yo-yo effect with the stock market dropping 10% before it settles down?

I don't think anything. You put your money on red or black and if you come up with the goods you pretend you're a financial expert. If you don't you keep quiet.

But this is a classic--



It tells you sweet eff all, it sounds wise, and is completely stupid and even more ridiculous than telling grannie how to suck eggs.

It's the pronouncement of somebody who has spent his life with his pompous and trite cliches not being laughed at.

jealous heh? LOL When I sold some of my funds when the market was over 14,000, and bought back some at 8500 and 8556, that seems to be pretty good timing based on "results."

Most people lost 40% (average) of their investments in 2008; my wife and I lost less than half that; my wife's funds lost 11%.

I believe that's a pretty good record irregardless of your puny opinion based on nothing more than your own ignorance.

Oh, you called me a "financial expert." thank you.

You see, spendi, when I worked, I helped small companies increase their cash reserves, and helped one owner of a business invest into a building that is now leased by Apple Computer. That's not exactly a choice between black and red.

Here's another gem you don't know that I'll share: our equity is worth more than 70% of all our earnings since my wife and I married. I'd say that's pretty good too!

A few thoughts:
1) The stock markets are getting ahead of reality. I would foresee a 5% pull-back;
2) The employment numbers out today are less-bad then last month or what was expected. But not really good. One month is not a trend;
3) Retail sales for July sucked, continuing to show declines over previous months and year to year comps. My stores had a 9% increase, bucking the trend. That was a pleasant surprise.
My managers tell me, though, that they are taking in fewer credit card sales and more cash sales. That, to me, suggests that folks have put themselves on an allowance and cut up their cards. Back to School and Christmas sales could look pretty bleak;
4) In the larger arena of commercial lending (shopping centers, hotels, stores) big loans will be coming due shortly. These borrowers have balloon thingees which they would normally roll over. But the banks won't roll them over. They want repayment. The commercial real estate market is
going to get bloody.

-Johnboy

A few thoughts:
I always welcome your thoughts, rjb.

1) The stock markets are getting ahead of reality. I would foresee a 5% pull-back;
That's what I was thinking, but based on passed history, and what preceded this bull market, I think most investors are thinking that this is the leading indicator of how our economy will perform withing the next six to eight months. I also think their reading of the tea leaves this time around is wrong, but I believe investors are here to stay. They're putting their money in equities with some confidence.


2) The employment numbers out today are less-bad then last month or what was expected. But not really good. One month is not a trend;
Actually, the employment numbers aren't good, but the unemployment numbers looks more promising. Our economy will not grow until the unemployment numbers are reversed, because 75% of our economy is based on consumer spending. It's not possible to maintain our economy while thousands lose their jobs every day.

3) Retail sales for July sucked, continuing to show declines over previous months and year to year comps. My stores had a 9% increase, bucking the trend. That was a pleasant surprise.
You guys seem to be in the right products, and have gained regular customers because you understand the rules of successful retailing. It's called customer service.

My managers tell me, though, that they are taking in fewer credit card sales and more cash sales. That, to me, suggests that folks have put themselves on an allowance and cut up their cards. Back to School and Christmas sales could look pretty bleak;
Not surprising to hear this; even people with good credit are being denied a credit card. I just read about a retired college professor who has very good credit rating, but the credit card company maxed his credit at $5,000. I was turned down for a credit card from Capital One.

4) In the larger arena of commercial lending (shopping centers, hotels, stores) big loans will be coming due shortly. These borrowers have balloon thingees which they would normally roll over. But the banks won't roll them over. They want repayment. The commercial real estate market is
going to get bloody.
There was a report about one month ago that revealed the fact that most of the toxic loans were made on commercial properties. Even in our city, a downtown development was stopped in its tracks, because the banks stopped lending to the developer. That's the reverse of housing in our area; many condos and apartments seem to be in development not far from our home. Our home value in our ZIP code is holding up pretty well.

-Johnboy

I just read that the Treasury Secretary asked Congress to raise the national debt limit. That can't be good.

This is the same guy who was talking about increasing tax on the middle class; and now he wants to increase the debt level. They're all stupid!

You voted them in!!

No, the American People voted him in. I don't always "win" with my votes.

If you voted for Obama, you voted for his entire team.
Including the stupid ones.

Pompous and erroneous financial advice?


Rich Dad, Poor Dad is one of the dumbest financial advice books I have ever read. It contains many factual errors and numerous extremely unlikely accounts of events that supposedly occurred. Rich Dad, Poor Dad contains much wrong advice, much bad advice, some dangerous advice, and virtually no good advice. [emphasis original]

Reed goes on to reveal many illogical and harmful notions promulgated by Kiyosaki, including, “…if you’re gonna go broke, go broke big” (the correct advice is “don’t go broke”) and that, “…the reason you want to have rich friends” is to become privy to inside stock information (felony violation of insider trading laws.) Other gems of wisdom include using “weasel clauses” in your contracts by naming your cat is a silent partner and attempting to write off health club expenses on your tax return (tax fraud). Reed quotes a reader e-mail stating that the reader’s 17 year old son has decided, based on Kiyosaki’s bashing of education, not to attend college or study anymore. Interestingly, Kiyosaki was unknown in the financial community, and did not begin selling books in any serious quantity until Amway distributors picked up his book.

One Month of Slightly Less Terrible Jobless News Does Not Make a Trend
by Meteor Blades
Share this on Twitter - One Month of Slightly Less Terrible Jobless News Does Not Make a Trend Sat May 09, 2009 at 08:57:59 PM PDT
Since the Bureau of Labor Statistics announced its monthly payroll survey numbers Friday, there’s been quite a bit of happy-talk " including from some progressives " about how we’re just around the corner from the end of the "Great Recession." On the flipside, we who have said wait-a-minute are being accused of panic, fearmongering, an inability to read statistics and even of not wanting a recovery to kick in so as to advance our unspecified agenda. Which presumably makes us no better than if we were on the payroll of the Foxagandists and Limbaughrubes who want President Obama to fail.

Is the intent of the happy-talkers to use fact that unemployment is getting worse at a better rate to chill the widespread rage over what has - during the past three decades - brought us to the economic precipice? You know: deregulation, deunionization, privatization, unfettered globalization, wage stagnation for the lower- and lower-middle-income groups, and an unprecedented transfer of wealth to the upper 20%, especially the top 1%? Is it to undermine any pressure for additional government action to improve matters? Beats me.

The facts are simple: the short-term outlook may have improved ever so slightly in April if you’re one of the people who didn't get laid off or who hasn’t been out of work for more than six months. But neither the medium nor long term presents any great cause for elation


http://www.google.com/search?q=Does+one+month+of+lower+unemployment+denote+a+trend%3F&rls=com.microsoft:en-us:IE-SearchBox&ie=UTF-8&oe=UTF-8&sourceid=ie7&rlz=1I7DKUS_en

True! Job growth in this country is a long ways off. Our country is still losing tens of thousands of jobs every day which translates into less consumer spending and tax revenue.

Our government isn't doing us any favors by spending all those trillions now to be paid back later; they're going to snuff out our economy with higher cost some time in the future will these uncontrolled deficits.

THANK YOU!

yep, makes more sense now.

I think your 5% estimate is too low. We're in a bear market rally based on hope. The next round of earnings reports should tell us how deep a pullback we're going to have. I'm looking for the S&P to get to 1050 before October and will then either go up towards (but not exceeding) 1100 or go way down (back to the 800 level) based on earnings.