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Monday, July 05, 2010

The End Of Sexpectation, At Least

With the word "depression" reverberating everywhere, I find myself willing to begin to invest for the first time in a long while.

The problem with economics is that it is a mix of very real and inescapable factors along with group psychology, and then politics comes in. But as I look at oil prices, I feel that we have at least reached a situation in which the markets are being shifted toward fundamentals and less of the bling. I do not like to buy in bling environments.

From EIA:


The high unemployment rate is one factor involved, but so is fleet replacement.

I view money and pricing as an informational network. If that network functions well, the participants gain the maximum ability to make efficient decisions, and economic productivity is boosted.

I am very busy and still thinking, but there are positive factors as well as negative factors.

Consumer Metrics also shows an uptick in the 91 day indexes, and it isn't hard to figure out where that is coming from. Gas prices have dropped enough to push a little, and the first $250 checks for seniors hitting the doughnut hole are adding in a little purchasing power.

Anyway, I'm still cranking away at it - but I'm guessing CF is going to be getting a few more jets.

Comments:
For what it is worth, I remember arguing with the bulls many years ago on Capital One Financial's message boards.

The bullish argument was that unemployment was at record lows. I saw that as a bearish argument. In other words, if things were likely to change they'd more than likely change for the worse. I seemed to be alone.

I'd be a hypocrite to say that near record high unemployment was also bearish though. The higher unemployment goes the more bullish I should become if I wish to stay consistent with what I was saying just a few years ago.

I therefore cannot heckle your willingness to invest again.

You are far braver than me though. I'm still perfectly happy on the sidelines, although one could say that buying the 30-Year TIPS in February might be considered somewhat bullish. In order to make that investment I had to assume we would have a somewhat functioning economy 30 years from now and that our entire economic system would not collapse. That's something I guess.
 
MoM,I am glad to hear that you see some good investments. I am a regular on Calculated Risk and have noted that 7 or 8 of those I consider more balanced have purchased Real Estate. They all had long term plans and were VERY selective. Where I am there are some unique properties that are of a quality that they are buys whenever they come on the market,but for the most part we are at 2001 prices which would have been close to the peak in a normal cycle. The lack of safe havens for money also affects the desirability of well located property as an investment and that is hard for me to judge. The awful lofts are still not selling for the same price...
 
sexpectation
seniors hitting the doughnut hole
CF

Huh? I'm going back to Mars.
 
Anon - sorry, I'll expand some tomorrow night or Wed when I post again.

From about 2004 until probably about now, markets have been dominated by a speculative fervor based on very little fundamental analysis. That's the sexpectation part.

Tom - I think a work/live loft price has to be dominated by the environment for earnings in those types of businesses. I wouldn't say that prospects for such are very good right now in the area, would you?
 
Anon - the doughnut hole is the gap in coverage for Medicare Part D (prescription) coverage.

This year seniors subject to the part D doughnut hole are supposed to be getting compensatory $250 checks.
 
Moneycentral author Liz Pulliam offers advice using one American symbol of success, the car, as one measure of the times.


I had suggested that if you can't pay cash for your next car, you should make a down payment of at least 20%, finance the balance for four years or less and make sure the resulting payment is no more than 10% of your gross income.

[One]...reader did the math and sputtered, but that means the typical American family can't afford the typical new car!

Someone who purchased a new car last year, when the average price was $28,966 according to the National Automobile Dealers Association, would have needed a household income of nearly $65,000 to swing a purchase under my formula. That assumes a 5.75% interest rate, which Edmunds.com says was the average paid by buyers who financed new cars in 2009. The latest statistics from the Census Bureau show median household income was about $50,000 in 2008. "Median" means half of all U.S. households earned less.
 
Anon - sorry, I'll expand some tomorrow night or Wed when I post again.

From about 2004 until probably about now, markets have been dominated by a speculative fervor based on very little fundamental analysis. That's the sexpectation part.

Tom - I think a work/live loft price has to be dominated by the environment for earnings in those types of businesses. I wouldn't say that prospects for such are very good right now in the area, would you?
 
Anon - the doughnut hole is the gap in coverage for Medicare Part D (prescription) coverage.

This year seniors subject to the part D doughnut hole are supposed to be getting compensatory $250 checks.
 
Clearly the mood has changed but the airport business is looking up, more than it has in the last 2 or 3 years. Go figure.

No more Jets till the nightmare who is Hussein is put back on the bench.
 
Clearly the mood has changed but the airport business is looking up, more than it has in the last 2 or 3 years. Go figure.

No more Jets till the nightmare who is Hussein is put back on the bench.
 
Debt loads are still too high.
Middle class wages were replaced
with loans. Those loans are now being
reduced though default or repayment.
Until the job situation improves, credit
use will continue to be below average.
This spells deflation.

Sporkfed
 
In light of the recent employment report and Household Survey, can you please explain why the withholding-tax revenue has been so robust?

Calendar May : $126.8 billion
Calendar June: $144.4 billion

Close to a 14 percent increase.

On these two reports, scroll down to the “Withheld Income and Employment Taxes” line and look at the “This month to date” column. Both reports are from the last day of each month, so that column shows the total for the month:

May withholding taxes:

https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=10052800.txt

June withholding taxes:

https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=10063000.txt
 
Jill - that is a very good question, and here's hoping Blogger will let me post an answer which will come more as a fit of pondering. Blogger has been cranky over the last week.
 
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