Sunday, August 29, 2010

Stock Market Cycle

So far, investors are pulling out of their Mutual Funds and avoiding the Stock market.  ! STUPID !

Risk aversion makes sense – but not after a crash.  The time to be risk averse is when everything looks great and the bubble is growing.  This week the DOW went below 9000 and then bounced back 200 points.  Back in March 2009, the DOW fell to a low of 6626 … scary … but in terms of the time period, that was a “farmed” double bottom relative to October 2002.

REALITY – the financial people who love the GOP so much looked at at the Bush election and panicked … hence the 1999 problems.  The optimists – those who believed the ride could never end and affirmed that belief by buying into the housing and debt bubbles – carried the market to its 2000 high.  Thereafter the bought the bubbles and the market fell from the money being sucked out – until it hit a cyclical bottom.

We are now in a trading range … and could remain between 14000 and 8000 until 2025 – or more likely the 2028 election cycle.  People who are twenty today will only be 38 and approaching their professional peak at age 40 – with 25 years left before retirement.  Those who are approaching forty will be in their late fifties and on the way to final planning before retirement.  At that point, the DOW will be racing, or rocketing, upwards to break 20000 and beyond.  Those who wish to become VERY RICH will be investing in the stock market NOW – or, over the next six years.

IF the 2012 election evicts Obama, the market could fall below the 6000 level (but not below 5000).  If GOP, whoever is elected will either be a one term President, or the President who wages the first phase of the Third World War.  Remember, wars are profitable and yield boom time in their aftermath.  Also, a war, which will devastate populations around the world and be heralded as the predicted apocalypse, would reverse the baby-bust and stabilize resource consumption with resource availability…  more likely, there will be no “biblical apocalypse” and conflicts will be limited and truly devastating only to those stupid enough to initiate them.  We can expect the Arabs, with their average IQ of 85, to be the ones who initiate the problems of the next two decades.

By 2035, Oil will cease to be king.  Israel, if the current repots of oil and gas finds prove accurate, will have more than ample resources to power their military and decimate those nations which are intentionally subjugating the Palestinians and denying them productive integration and full membership in the Arab world.  There is no rational reason for refugees to still exist – other than the Arab League laws which designated refugee status to the children and grandchildren of those refugees from the 1930’s (yep pre-Israel & Hitler).  The Arab League is the continuation of the Nazis with who they aligned in the 1930’s and 40’s – and, as was stated during the 60’s with regard to the racists holding down the blacks, find they must must get into the mud in order to keep the Palestinians there.   Given their oil resources, the Arabs should have surpassed -- in general wealth, trade and education – the accomplishments of their medieval ancestors.  Unfortunately, they have become enamored with the idea of being idiots attempting to reinstate the Inquisition as an Islamic cause. !!! STUPID !!! (ok … there is clearly a competition between fundamentalists – Christian and Islamic – for how can establish their claim to the lowest levels of hell … but that’s another issue)

In any event … NOW is the time young investors should be looking for buying opportunities.  Curiously, secure bond investments – held properly – could be used to leverage investment loans.  Borrowed capital makes sense when the effective interest rates are at or below historic inflation rates – and can be offset by bond interest to … over the long term .. generate zero risk stock portfolios with explosive long term potential.

Wednesday, August 25, 2010

Washington Post still doesn’t get it

Today, 25 August 2010, the Washington Post reported:

“The Commerce Department says new home sales fell 12.4 percent in July from a month earlier to a seasonally adjusted annual sales pace of 276,000, the slowest on record dating to 1963.
”The numbers are the latest sign that the economic recovery is fading.”

When will they put the demographic data together with the housing data and realize that the housing data is no longer a reliable source for evaluating the economy?

Our population is going into negative growth.  It doesn’t matter how it continues to grow, the growth rate is lower than the available housing stock.  Older houses are inefficient – therefore they have been replaced with newer, energy efficient, homes at a rate comparable to the population changes attributable to the maturing of the depleting portion of the Baby-Boom generation (those born before 1966 who became first time home owners before 1996).

So long as we have insufficient immigration -- to replenish the declining native population – there will be a surplus of older homes.  That surplus creates a market effect which reduces the demand for new homes (the more efficient older homes, and those situated in warmer climates, will continue to sell at a diminishing pace).  Older homes which are inefficient will be purchased for their LOTS – the building torn down and either turned into lawns for an adjacent property, or replaced with a new end efficient home.

We can expect a slowdown in construction of apartment houses, office buildings, and even shopping malls.  However, there will be significant growth in  – if the Republicans cease their opposition to – Green Energy providers … Wind Farms, Solar, Tidal, geothermal and other energy providing technologies yet to be revealed, developed, or discovered.  The totality of our society is in for a dramatic change which is rendering conventional economic indicators virtually worthless.

Of course, we might also be heading for some cataclysmic variation on a modernistic stoneage – again, this depends on the ability of an element within our society to promote sustained global conflict.  On the global level, the choice is between quick violent, totally destructive, responses – or, the prolonged, “feet on the ground” approach which gives an advantage to insurgents and those fighting on their own turf … it’s a matter of supply lines, energy requirements, and the resources to maintain them.  No single nation has the domestic resources to fight (in the “conventional” manner) conflicts half-way around the world.  The only ones whop can fight such wars are those who engage in insurgent or anarchist tactics.

But, once again, We cannot rationally expect the Washington Post to grasp that reality either.      

Tuesday, August 24, 2010

Again the GOP Hypocrisy

New York Times,  August 23, 2010, “A Real Debate on Taxes” … and a great line of reality:

“The Republicans are insisting on extending each and every one of the tax cuts forever. It is impossible to square that demand with their calls to reduce the deficit, so they do not even try.”

Fiscal Conservatism is based on BORROW & SPEND economics.  It would be no different than declaring that we should not work – rather we should all acquire credit cards and just spend.  Pay the cards?  Nope we will use a card to pay a card and then a card to pay that … until we die and our estate must pay.  Ultimately, the beauty of the matter is that our estate will never have to pay – the security on the card is not our assets, but rather our word.

What value the word of the dead?

Yes!  The Republicans and their evangelical base has decided that America – The United States -- shall die.  The Democracy … our Democratic Republic … shall be replaced by a Theocracy.  The dream of the evangelicals, the basis of all their beliefs and customs, is an end to democracy and a return to the aristocracy based upon the DIVINE RULE of a KING.

Every apocalyptic believer prays for the overthrow of democracy and the return to a KINGDOM of mindless serfs and slaves whose only occupation is to bow and worship.  There will be no freewill … because the world will be a world of slaves.

Come November – we will freely grant them their desire.  We will yield our freedom to the BORROW & SPEND reality that will bring an end to our nation and the freedoms … the human free will … it stands for.

Idiotic Analysts

With their report on the decline in previously occupied housing sales,

has today established they need to hire competent reporters.

OK … the opening line is cool: “WASHINGTON -- Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.”

But the promotional line contained in the e-mail notification:  “Sales of previously occupied homes unexpectedly plunged 27 percent in July from a month earlier to 3.83 million…”  now this is reveals the stupidity of the writer and editor.

You don’t see it?  Read it again … and consider that one word: “unexpectedly”!  Really?  Has there staff no concept of Baby Boom?  Are they completely ignorant of demographics?  The whole article makes good points about intelligent economic decision making – but to read it, you realize that the writer was completely out of that loop.

Quick Lesson:

1. Baby Boomers are turning 65.

2. People retire at 65 (they have option to retire at 62 and the economy is giving perks to early retirees – who get shifted to other areas of corporate & governmental balance sheets and budgets – where the governmental often allows for full retirement after 55).

3. If you retire, you don’t need to live near work – so you sell your existing home (but it isn’t selling in this market).  On the other hand, record low mortgages, tax incentives and poor investment performance,  make it economically wise – given that you will retire in a few months or, at most, within two years -- to buy that retirement home now.

4. Buy now?  Use your reduced nest-egg?  Hum?  On the face, for some (the young reporter under 50, for example), this might not make sense.  But for those who know money, you invest in a house that will grow in value (because it is a retirement location – low energy needs, low maintenance, and low mortgage).  The home you have isn’t going to sell today – but you don’t need the money:  a) you have your nest-egg to cover you; b) you’re working and can cover the debt; c) the economy, & your investments, will improve in a year or so – and your existing home will probably sell by then.  d) even if you need to drop your asking price later, there is no reason to drop it now.  If your investments do well, they will offset a later reduction in asking price.  If they do poorly – well – the nation will be going down the crapper with no possibility of retire and you take what you can get … in any case, you will have the option of staying or moving … and if moving, you had time to get the new place in order without having the work done “over your head” with you living in the dirt and mess.

Right now we are seeing the start of the economic gambles – the ones that will “last a lifetime.”

Housing is NOT a viable economic indicator!

The housing market is distorted by the retirement needs of the Baby Boom generation.  Housing prices will begin to plummet for real within the next ten years – while land prices in various regions will climb.  People are going to be building new homes – not claiming older ones.

You’ll see the first signs when you realize just how many older homes are being knocked down and the lots turned into yards for the neighboring houses.  It will not pay to carry the taxes on the old place – and there will be nobody to buy it.  This will be exacerbated by a strong Republican showing on the issue of immigration – without immigrants seeking a better life, there will be nobody to purchase your old life.

But HEY!  Who gives a shit!  Those of us who are already retired are only interested in whether or not our kids want our place when we die.   And even there –- unless they are having kids of their own –- unless our place is as energy efficient as possible –- unless we are situated in a location where the property taxes are low – the house will be abandoned, because nobody wants to, or needs to, buy or occupy it.

If you want to use abandoned, or soon to be abandoned, house sales as a measure of economic growth … ok … but that is, in reality, traditional Republican economic idiocy.

Monday, August 23, 2010

Mosque Temple Church & Disrespect

There is a quasi-universal doctrine: “Don’t do to another, what you would find distasteful if done to you.”  The rightwing neocons seem to have been joined by the Anti-Defamation League and other idiots in protesting an Islamic cultural center containing a prayer room.

Horror of Horrors!  The idea that the neocons -– with the backing of the jerks at Fox News -- are opposing is basically the development of a piece of lower Manhattan real estate … a  shuttered Burlington Coat Factory store one block from the New York Dolls Gentlemen’s Club.   Phrased another way, instead of installing another private strip club for Wall Street con artists, someone actually wants to improve the area.  Naturally, anything that doesn’t involve Borrow & Spend credit card living is opposed by the Republican Party and those rare Democrats determined to assist in the destruction of America.

In the New York Times of August 21, FRANK RICH points out the degree to which these anti-American idiots are undermining the “Afghan War” and the work of General Petraeus.  Of course, these neocons are the very people who have, for the past nine years, promoted that conflict.  Why would they want to undermine it?  Could it be that they are deeply afraid that, like Iraq, the Obama Administration will actually resolve matters – will actually save American lives by not placing our troops in harms way?

OF COURSE!  The neocons want to kill young Americans.  That has been their objective all along.  al Qaeda kills a few thousand and destroys some real estate, and Bus & his neocon bosses immediately set upon a campaign which foremost declares Bin Laden (and effectively al Qaeda) irrelevant in their “War on Terror”, and then ensure the death of twice as many Americans as al Qaeda could ever kill.

Has nobody been paying attention?  al Qaeda attacks the Islamic faithful – it sponsors the murders of pilgrims on the way to pray at Mecca; it kills Islamic women and children in Arab market places; it kills Islamic women and children on the roads to school,  shopping, and places of worship.  Al Qaeda is dedicated to killing as many followers of Islam as it can – so long as they are actually adhering to the true dictates of their faith.  Of course, with the economic support of al Qaeda funds, many Republicans dutifully support the effort and dictates of Bin Laden – did he not (in the 1990’s) declare he wanted Saddam Hussein dead & gone?  Did Bin Laden not say he wanted the American deficit to be a Trillion Dollars?  Did not Bush dutifully comply – doubling the national debt in the process?

There is a well known adage – known through many versions & phrasings -- “that which does not kill me makes me stronger.”  Those who know history know that oppression and bigotry culls the weak, unifies the oppressed, and eventually yields a stronger people; a people dedicated to the defeat of their oppressors.  If Bin Laden can create anti-Islamic feelings, he can safely kill the good and just, while unifying the stupid into a suicidal force which can be used to the greedy.  Who are the greedy?  The Republicans who insist upon borrow & spend policies and refuse to pay their fair share for the safety of us all – and the security of their own wealth.

That’s right.  The Borrow & Spend – reduce taxes for the rich – policies of the GOP will, inevitably, lead to the backers of those GOP policies losing all they have and becoming servants to the al Qaeda leaders of tomorrow.