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US economy getting better ?
edmundfitzgerald
Posts: 4,306 ✭✭
I know a gentleman in his 70's who started a company with a former Goldman Sachs trader in the 1960's. They began a trucking/hauling
company that transports chemicals needed for the food industry. The company began in one state and it's share price was $25 / share
back in the early 1970's. The company never went public, but the company expanded to 20 states in the US, and it's share price is
currently over 400/share.
Back in 2008, this 70 yr old gentleman explained to me how business had taken a hit. It laid off a few guys, and margins were decreasing.
The economy was not good, and it the company was feeling the pinch. I asked him today how the last board meeting went. He informed me that his company is seeing good signs of recovery. Margins have increased, and hiring has taken place.
So we had a small discussion about how perhaps wall street is having a struggle between an out of control government spending process, but private and public businesses having better times then they did two years ago. My own personal opinion is that without all this bad paper floating around, the stock market could be having a much greater run. I think the run up from 6,500 to 11,000 on the DOW is justified being that businesses are showing signs of recovery. Where we go from here is anyones guess.
company that transports chemicals needed for the food industry. The company began in one state and it's share price was $25 / share
back in the early 1970's. The company never went public, but the company expanded to 20 states in the US, and it's share price is
currently over 400/share.
Back in 2008, this 70 yr old gentleman explained to me how business had taken a hit. It laid off a few guys, and margins were decreasing.
The economy was not good, and it the company was feeling the pinch. I asked him today how the last board meeting went. He informed me that his company is seeing good signs of recovery. Margins have increased, and hiring has taken place.
So we had a small discussion about how perhaps wall street is having a struggle between an out of control government spending process, but private and public businesses having better times then they did two years ago. My own personal opinion is that without all this bad paper floating around, the stock market could be having a much greater run. I think the run up from 6,500 to 11,000 on the DOW is justified being that businesses are showing signs of recovery. Where we go from here is anyones guess.
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Comments
You listen to talking heads long enough you start to believe them I guess.
Like every thing just depends which side of the fence you are on.
<< <i>
You listen to talking heads long enough you start to believe them I guess.
. >>
I don't know what you mean by "talking heads", but I was speaking directly with someone
who is in the heart of the American economy. The president of the company sits on the board of Burlington Northern,
the company bought out by Warren Buffett. These guys are not tv personalities or affiliated with the press. They
are major shareholders in companies that service America, no outsourcing.
<< <i>
<< <i>
You listen to talking heads long enough you start to believe them I guess.
. >>
I don't know what you mean by "talking heads", but I was speaking directly with someone
who is in the heart of the American economy. The president of the company sits on the board of Burlington Northern,
the company bought out by Warren Buffett. These guys are not tv personalities or affiliated with the press. They
are major shareholders in companies that service America, no outsourcing. >>
I agree some company's have started hiring. The plants that have been shut down are still vacant.
My statement was not directed towards you. What I see & what I hear are my concerns.
Just because we are better off than Greece does not seem acceptable.
Burning Down The House !!!
<< <i>
Just because we are better off than Greece does not seem acceptable. >>
That's exactly what's crazy about America right now. We have an incredibly rich country, and our economy is
recovering (see Tiffanys).............but............we have an out of control government that keeps shooting us in the foot. Which one is going to win out ? The government bringing us into Greece like status ? Or our vibrant
economy helping the market to recover and renewing the job market ? Place your bets
<< <i>"I don't know what you mean by "talking heads" "
Burning Down The House !!! >>
My personal favorite~
Same as it EVER WAS!!!
<< <i>
<< <i>"I don't know what you mean by "talking heads" "
Burning Down The House !!! >>
My personal favorite~
Same as it EVER WAS!!!
recovering (see Tiffanys).............but............we have an out of control government that keeps shooting us in the foot. Which one is going to win out ? The government bringing us into Greece like status ? Or our vibrant
economy helping the market to recover and renewing the job market ? Place your bets
I don't follow your line of thought. Are you saying that the Government is hurting the economy and/or that it had no influence in the recovery you see?
The US can sell its debt unlike Greece, so the analogy is flawed - maybe California is (or can become) like Greece, but not the US.
This too shall pass!!
NOT "getting better."
Main Street/Wall Street = HUGE Disconnect.
Folks with plenty of cash are doing fine; broke peasants
would be starving, if the food-stamps and the extended
unemployment-checks stopped.
MUCH more pain ahead. Guard cash.
The good news...you don't even have to be born here and you get the bennies. The bad news, lotsa folk are gonna be pretty disappointed when the music stops.
linkadoodle
Those days are gone along with the jobs that supported that part of the country. Perhaps they can raise more taxes and create more regulations, create more entitlements and destroy this place for good? If seems like that's the direction it's heading doesn't it?
There are still middle class collectors of course in the midwest but nowhere near what it used to be and frankly the thinking behind the buying is different as well with the majority that call here are investment oriented. The FUN doesn't seem to be anywhere near what it used to be.
What's also interesting is there are infinitely more people that call here to purchase coins valued at 25K, 50K, per coin that 5K or 10K and the numbers buying coins at the lower end are dwindling. That could of course be because of the inventory that I offer now with seems to get more and more substantive every year. And it's not just predicated on the customer who calls in but also what I would personally prefer to own. So I don't think you can say that if I had more lower priced coins that I would get more lower priced coin customers. Perhaps they've all gone to ebay, teletrade and that avenue but what I've seen is more lobster tails and filet mignon, but the meat and potatoes is dwindling.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>Celebrating gaming the housing system like this isn't helping either:
linkadoodle >>
/////////////////////////////
Strategic Default is a legitimate biznez tactic being used by the most
sophisticated and largest corporations in America.
In 2009, about a million homeowners who could afford to pay their
mortgages chose to walk away.
By mid-2011, as many as 25-million+ homeowners could be underwater;
owing more on their mortgage than the property is worth. MOST of those
folks will likely make the smart play and walk away.
The banks call it "gaming" when the peasants do it. When the banks and
BIG real estate investors do it, it is "just a biznez decision."
.............
Once a property is in ANY stage of foreclosure, it has an immediately defined
impact on like-kind values. Thus, the peasants that stay in their homes until
they are thrown out have ZERO negative impact on pricing models.
The harm to such models is caused by corrupt banks that make NO effort
to foreclose on delinquent properties. This conduct removes transparency
from our ability to calculate future damage to pricing models.
MANY banks have refused to foreclose beacause they don't wanna further
depress the markets they are invested in. This refusal to allow a rapid and
painful collapse - followed by a swift and steady rebound - is causing great
harm to the economy and may preclude any recovery for more than a
decade.
...........
Peasants living cheap/free for a few years is a net-positive for the overall
economy; most spend/circulate the money they save.
Provided there are no future bailouts of the corrupt banks, the nonpaying
peasants are performing a worthwhile public service; only the corrupt banks
are harmed. That is a good thing.
Banks can play the "morality card" all they want too. Fewer and fewer folks
are buying it. That is a good thing.
............
Thomas Jefferson........
“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”
Actually, IMV, deflation must come first for the bankers
to fulfill their vision.
They are not even close, yet. TRILLIONS in real property
must be on their books, before the real inflation is allowed
to proceed.
.......
That's one of the reasons this happened in the first place, don't wash-rinse-repeat.
<< <i>A "net-positive" is still a negative to neighbor Joe Responsible when he's trying to maybe sell his house and upgrade. Don't make him eat your loss decisions for several years just because you should have been a renter all along.
That's one of the reasons this happened in the first place, don't wash-rinse-repeat. >>
/////////////////////////////////////
As noted, once the property is in ANY stage of foreclosure,
Joe Responsible has already taken ALL of the hits he is likely
going to take as a result of the nonpaying peasant's biznez
decision.
In fact, JR will likely fair better if the peasant's house is occupied
than he would if it was vacant.
ONLY the profligate lender loses when the peasants finally make the
same kind of strategic decisions that the BIG boyz make everyday.
i see some dust settling, but no "mana from heaven"..not meant to be a political joke.
some will always prosper, many others will see a decline for years to come, IMHO.
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<< <i>The availability of credit has also turned the middle class into upper class wannabes. Never before could middle class people just jump into the dream home(that the middle class could never afford 20-30 years ago) and be in it by their mid 20s all the while having a bass boat and a couple of new cars. Indulgence by the middle class coupled with easy-to-get credit hurt the middle class and set a false standard and image of what the middle class should look like. >>
Wow... The above might be the best, most accurate observation I have ever read regarding the current state of our country. As I had previously mentioned, instead of sharing responsibility, like we once did, we now share wealth.
<< <i>...there are infinitely more people that call here to purchase coins valued at 25K, 50K, per coin... >>
I grew up in the 1970's in one of those Midwestern, blue-collar, union-strong towns in Illinois. There were over 10,000 solid, middle class manufacturing jobs there in the 1970's. Now there's under 1,000 in that category.
We have moved to a tech-based economy and the manufacturing base isn't coming back. It's much the same all over the Midwest and the rest of America. In the 19th century we had an agricultural economy, in the 20th century we had an industrial economy and now, in the 21st century, it will be tech-based. Times changes but most people are unable to adapt because of a lack of training/education/initiative. The change from ag to industrial did not require the massive re-training that a move from industrial to tech requires.
Back to coins: The coin investor who spends big bucks on an "investment", perceived or otherwise, is growing and should continue to grow. The true collector market may continue to shrink but should be more than offset by the growing class of collector/investor. At least I hope so.......
<< <i>
<< <i>...there are infinitely more people that call here to purchase coins valued at 25K, 50K, per coin... >>
I grew up in the 1970's in one of those Midwestern, blue-collar, union-strong towns in Illinois. There were over 10,000 solid, middle class manufacturing jobs there in the 1970's. Now there's under 1,000 in that category.
We have moved to a tech-based economy and the manufacturing base isn't coming back. It's much the same all over the Midwest and the rest of America. In the 19th century we had an agricultural economy, in the 20th century we had an industrial economy and now, in the 21st century, it will be tech-based. Times changes but most people are unable to adapt because of a lack of training/education/initiative. The change from ag to industrial did not require the massive re-training that a move from industrial to tech requires.
Back to coins: The coin investor who spends big bucks on an "investment", perceived or otherwise, is growing and should continue to grow. The true collector market may continue to shrink but should be more than offset by the growing class of collector/investor. At least I hope so....... >>
I'm with you on this. Grew up in southern IL. Coal mines were strong, very strong. Most men worked at one and made a pretty darn good living. The children of these men got to enjoy having new cars for their 16th birthday, swimming pools in their back yard and annual big vacations. The mines closed in the 80s and now these middle class towns that looked cozy and "homey" in its neighborhoods are now decaying and look almost like ghettos. Many towns in southern IL now are just trashy and dead
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Be Ready for More Chaos
By Richard Maybury
Editor of Early Warning Report newsletter
May 31, 2010
Dear Reader,
Page one of the February 2010 EWR contained a warning to be ready for "another downturn in the economy and most investments this year."
The warning was repeated in the April 2010 EWR, page two.
I think there is a 95% probability the downturn has arrived.
The main reason is the velocity of circulation of the US dollar.
It looks to me like the euro crisis has triggered a huge flight of capital out of Europe and into the US.
This new demand for the dollar and dollar-denominated assets is causing the velocity of the dollar to fall.
A fall in velocity has the same effect as a deflation of the money supply. Dollars that are being held and not traded are dollars that are effectively out of circulation — they're not bidding up prices.
Interestingly, this connects with recent money supply changes. Some background:
The broader measures of money supply — M2 and M3 — are lower velocity than the narrower measures, especially the Monetary Base. This is because broader measures contain financial instruments that change hands more slowly. M3, for instance, counts large-denomination time deposits. These are not included in narrower measures.
An even broader measure is L, which, as far as I know, is no longer compiled by the government, or at least officials do not admit to it. L contains, among other things, Savings Bonds, which some people hold for twenty years or more.
Why L is no longer compiled, or is complied in secret, we don't know, but I think we can safely conclude it contains information the government does not want us to have.
Recently, the broader measures have been shrinking, while the narrower ones, especially the Monetary Base, have been exploding.
I think people are moving money from instruments included in the broader measures to instruments in the narrow measures.
The narrower measures have a hair trigger, they can be sold or moved instantly. I think people are very frightened and they want this flexibility. They are afraid of any kind of long term commitment.
But the narrower measures, especially the Monetary Base, are mostly still just sitting in the banks. Bankers are afraid to lend, and a lot of borrowers are afraid to borrow, so the money just sits, waiting for launch.
It seems likely that people are moving into narrow-M instruments because they want to be able to move their cash quickly, in hopes of dodging the effects of the next crisis.
Summarizing, because of the rise in money demand and fall in velocity, triggered by the fear generated by the euro crisis, I think we are in another severely deflationary situation.
This constitutes a buying opportunity, because I'm sure the Fed will not allow the deflationary conditions to spiral down into a depression. They will look for ways to get the money out of the banks, or inject more money directly into the economy (more "stimulus") setting us up for a runaway inflation that will drive prices of practically everything to the moon.
Repeating what I've said often, you should learn all you can about money demand and velocity because, in my opinion, they are now by far the dominant forces causing changes in the economy and investment markets. Velocity was explained in the June 2008 EWR, in chapter 8 of my little Uncle Eric book #2, WHATEVER HAPPENED TO PENNY CANDY?, and throughout my Uncle Eric book #7, THE MONEY MYSTERY. (There are 11 Uncle Eric books.)
On another matter, I am sometimes asked...
... why I don't use stop loss orders?
Because I've never had good luck with them. This newsletter isn't called Early Warning Report for nothing. I'm usually early. I buy the investment, it goes down, I get stopped out, then it takes off like a skyrocket.
This isn't to say stop loss orders should not be used by you. Maybe your luck is better than mine.
However, I would point out what happened during the May 6th "flash crash." The Dow plunged 998.5 points in 20 minutes, then came back. Thousands of investors were stopped out and left with big losses that would not have happened if they hadn't used stop loss orders.
I think a lot more of that kind of thing is headed our way. The fiat money system has begun to crumble. This is becoming obvious to all, now that the euro is in trouble. And, the heavily regulated global investment system is riddled with fraud, foul-ups and fear. The tens of thousands of incomprehensible financial regulations are a jungle where the crooks hide.
Many things could trigger more downward (and upward) spikes. Examples would be war with Iran or North Korea, more revelations about the colossal frauds committed by the euro governments, a natural disaster, or a US invasion of Pakistan.
Also, very likely, the "plunge protection team" (aka the President's Working Group on Financial Markets) will make a mistake.
Everyone on that team is as much a member of the species homo sapiens as you and me, and equally inclined to occasionally fumble.
The Plunge Protection Team has so much power to intervene in financial markets that it's like a Greek god — supernatural powers steered by the emotions and guesses of exceedingly fallible humans.
It seems to me a certainty that the day will come when they will pull the wrong lever and demolish the whole world financial system.
And if the US team does not do it, the Greek gods in some other government will.
This is one of the many reasons it is important to have a portion of your wealth outside the financial system.
A gold, silver or platinum coin in your hand...
...is a great deal safer than your bank account, T-bill, stock or any other financial instrument in the hands of the Plunge Protection Team.
The Aden sisters are two of the best analysts around, and I never hesitate to recommend their newsletter, The Aden Forecast. In their May 11, 2010 issue, they wrote,
It's impressive to think that gold's bull market is in its tenth year. It's had consistent yearly gains since 2001, averaging 17% per year, yet it's still a quiet market.
The average investor is really not aware of this, but they are slowly seeing the turn. This alone strongly suggests the gold market is far from being a bubble.
Bubbles cause a lot of attention while euphoria is in the air. But comparing the enthusiasm in today's gold market to the tech frenzy bubble in 2000, or the real estate craze in 2007, the difference is like night and day.
This is good for gold investors because it's saying that the gold market still has much further to rise in the years ahead.
I agree with every word of that, and I would conclude the same about silver and platinum.
This isn't to say the precious metals won't go through frightening gyrations. I think they will, because I think everything will. As money demand and velocity bounce around, so will prices of nearly everything you can name.
As long as governments have as much economic power as they do, wild gyrations will be the rule, and stability will be unknown.
If you are not holding at least a quarter of your wealth outside the financial system — in precious metals, fine art, a business, antiques, real estate, or other tangible assets — then I suggest you get started.
And, I hope you will encourage everyone you care about to do the same.
I will continue doing my best to get you through this period of turmoil as safely and profitably as possible. I believe there is a better world waiting for us on the other side, and I want you and yours to be in fine shape to enjoy it when we get there.
Sincerely,
Richard Maybury
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>The US can sell its debt unlike Greece >>
The biggest difference is the US can print its own currency, Greece cannot.
The US economy is going to take a very, very hard hit before the end of 2010 much worse than 2008. Be prepared for the worst and hope for the best.
When it is all over the upper class will be bankers and politicians, the middle class will be government employees, and the lower class will be the rest of us.
Keep an open mind, or get financially repressed -Zoltan Pozsar
<< <i>The US economy is going to take a very, very hard hit before the end of 2010 much worse than 2008. >>
While the very, very hard hit might be postponed to 2011, I agree with your thoughts. The likelihood of a double-dip has grown beyond 50-50.
The US economy is going to take a very, very hard hit before the end of 2010 much worse than 2008
Why do you say this? The world basically stopped in the 4th qtr of 08.
Knowledge is the enemy of fear