I live in the USA and I am concerned about the future. I created this blog to share my thoughts on the economy and anything else that might catch my attention.
This is the End and a New Beginning
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I've been thinking about this for some time.
After 21 years of writing this blog almost daily, I've decided to stop
writing the daily updates on the blog.
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Silver Deep Dive
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Silver had a memorable year (+148%). Some of this can be explained by a
decline in the dollar. I decided to do some ML analysis to look for other
insights....
"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," Barofsky wrote.
Nancy Weiss Malkiel, dean of the undergraduate college at Princeton, said the policy was not meant to establish such grade quotas, but to set a goal: Over time and across all academic departments, no more than 35 percent of grades in undergraduate courses would be A-plus, A or A-minus.
As the number of graduating students approaches infinity, the work each student must do to get ahead also approaches infinity.
According to unwritten rules at many universities, students cannot graduate if they do not find a job, Southern Metropolis Daily reported in July last year.
"We are simply being out-competed by children in India and China. They are not smarter than our children. They are just working harder," Education Secretary Arne Duncan told the MSNBC television in an interview yesterday.
They seem to be worked harder. I guess that's something. There are also just so darned many of them.
This is the new normal. This is our truth.
Clock is ticking while I'm killing time Spinning all around Nothing else that you can do To turn it back
Wicked partnership In this crime Ripping off the best Condescending smile
Trying to forget We're falling right through Lying to forget We're raising our truth
"I'm proposing that we take 30 billion dollars of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat," Obama said in his first State of the Union address.
The credit they need to stay afloat? Why does this feel like a payday loan? What's wrong with this picture?
7. The 22.9 million small businesses in the United States are located in virtually every neighborhood.
$30 billion / 22.9 million = $1,310
How far is that really going to go? Each small business could use this new debt to postpone laying off one worker for one week? Is that the plan? Of course, the debt will still exist and it will clearly need to be paid back.
1. The latest figures show that small businesses create 75 percent of the net new jobs in our economy.
I think I shall remain bearish on job creation. Yeah, I think that's exactly what I will do.
Let's look at this from a slightly different perspective.
One large business (AIG) got $85 billion.
22.9 million small businesses get to split $30 billion.
If you are a small business owner, get out the party hats. Relief is on the way. It's one-sixty-five-millionth of an AIG bailout.
It's not all gravy and biscuits though. You may not have the shrewd negotiating skills of an AIG when asking for the money at your local "community bank". Try not to seem too desperate. That's only considered to be a great tactic for businesses too big to fail.
Well, I thought being tonight is the big night for the President I would give my version of the SOU. This is an update on the flower shop. For any new readers, these are real numbers from an honest to goodness small business.
As you can see from the chart below, or maybe not, I don't need a loan....
There is only one thing that will fix it: CUSTOMERS!
Bubble or no bubble, official figures show 85 percent of Chinese can no longer afford to buy properties.
And Chinese authorities are worried the situation will create social instability.
That much is clear from the fate of a popular television soap opera, Dwelling Narrowness, which was pulled from the airwaves. The show charted two sisters' struggles to buy an apartment, with one of them eventually becoming the mistress of a corrupt official.
The show coined a saying: "To buy a place in Shanghai means you are digging a grave for yourself, and burying your love."
So what does this mean to us?
It should play out much like our housing bubble's aftermath. It's only a question of timing.
I don't think gold will be much of a safe haven this time around. I think it is at least partially tied to the China story. Further, I don't think it can keep going up if other commodities fall.
The speculator and philanthropist George Soros warned today that growing political resistance to fresh state borrowing risks pushing the global economy into a double-dip recession next year.
Think about that for a minute. If we the people are fed up with bailing out banks (which we clearly are) and Congress bends to the will of the people even just a little bit (which they have recently shown interest in doing), then what will stop the deflationary forces from playing out?
I think the only things propping up this economy are the bailouts and the stimulus. Without that, hello deflation.
It's kind of like antibiotics. You can't just take a few pills and then stop once you start feeling a bit better. The deflation bug has not been cured yet. The cause still exists even if the symptoms are not as noticeable. The toxic assets are still in the system.
I could be wrong but this does not seem to be an ideal time to be taking "sure thing" inflationary based risks. I don't mind sitting in cash right now. I've been doing it two months so far. No complaints.
Caterpillar said Wednesday that its fourth-quarter profit tumbled as demand remained weak, but the maker of mining and construction equipment expects sales to rebound in 2010 as the economy improves and dealers replace inventory.
Leading the way will be China and other developing countries where an increasing share of the company's yellow-and-black machinery is sold.
The State Council has demanded frantic bank lending that has generated far too much liquidity, a stunning increase in commercial property sales, and an even more unbalanced economy. The American version of this policy ended badly and the Chinese version will as well, whatever official data say.
What's wrong with the official data?
Much published Chinese data is unusable, unemployment being an obvious example.
For the sake of argument, let's assume that the data is usable.
If Chinese data are accurate, policy is therefore headed straight off a cliff--constantly pushing real GDP growth near 10 percent but in an increasingly futile and clearly unsustainable effort to create jobs.
So what happens when it all falls apart?
The surge in property prices must eventually halt. This will expose investors, from individuals to the biggest state banks, to heavy losses that will then be compounded by ensuing stock market weakness.
If true, savvy Chinese investors and/or global commodity investors better get a clue. This sounds a lot like Professor Plum in the Conservatory with a Lead Pipe.
Russia - thanks to its reserves and stabilisation fund - is likely to be immune from many symptoms of a double-dip crisis, but if demand does fall, Russia could be hit hard by collapsing commodity prices.
That's just one of those things I have to read multiple times to fully grasp the economic subtleties.
Each round is followed by a thwack and a forehead bruise though. Picture my head meeting my desk.
Anyone want to predict the odds of a double-dip crisis that also has stable demand? I'm tempted to guess 0%.
One of these things is not like the other things. One of these things just doesn't belong.
The price of real estate in Beijing has been strong, with an average hovering around 18,000 yuan per meter squared, or approximately $240 per square foot.
$240 per square foot seems perfectly reasonable to me.
Based on the definition issued by UN, he who earns less than 1 dollar per day falls into the category of extremely poor. A third of China people belongs to this group.
$240 per square foot represents a mere entire year's wages for one-third of the Chinese population. That's what I call pricing power! Wow! Picture working all day long on one square inch of new home construction (you'd only have to do 144 square inches of them in a year to justify your salary). Think of how perfect you could make it. I'd probably hand carve an elaborate pattern to let the world know I was there and that I really matter.
Should it continue we can expect to see 400 million Chinese construction workers at some point. I mean really. Who wouldn't want a part of that? Just imagine the future prosperity.
There's clearly a limit on available land, but that's where skyscrapers come in. How high could they be built?
To infinity and beyond! - Buzz Lightyear
Do you suppose Ken Fisher taught his son all he knows about the real estate market? He had to learn it somewhere. Right?
Don't buy it. For months now the debate has been over whether America will have a hard landing or soft landing, the answer hinging on how big 2007's housing disaster turns out to be. Well, there won't be any housing disaster. We won't have a landing at all, soft or hard. Right now the U.S. and global economies are both accelerating.
You can see right through the housing crash story by looking at the prices of housing stocks. The market knows what the economic worrywarts do not, which is that the housing sector is already making a comeback. In the last six months housing stocks are up 24%, well ahead of the overall market. If housing were destined to fall apart in 2007 these stocks wouldn't be so strong now.
There's clearly a time to be permabullish but there's also a time to be permabullish. This may or may not be one of those times. ;)
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