Show-me Account Talk

[Show-me]

Read another article in the WSJ about how much cash companies have on hand. The opportunity for more mega mergers is very high. Cash heavy companies are cherry picking the best companies.

 

[Show-me]

http://www.safehaven.com/article-14924.htm

The real source of America's angst is a sense that something is terribly wrong. What that something is isn't tangible - like higher gas prices - but it is palpable. Maybe it is the lack of leadership in Washington or the inability of that leadership to do anything but put our problems off for another day.

There is no collective purpose to the actions coming out of Washington. There is no common cause that Americans can rally around. Bailouts and government programs, like "cash for clunkers", have perpetuated the same old thing. The bailouts have favored the connected or those who where irresponsible in the first place. Is this the American way?
This is not the change that Americans wanted. They voted for it, but this is not the change that Americans wanted.
So what kind of change did Americans want?

See the video in the article.

 

[Show-me]

I am struggling with my decision not to get in. The risk is very high at this point in the game. Looking at the charts the Tran, S fund, Dollar, and Nikki have not broke the 50 sma. The C fund and I fund have, but have not confirmed. The FTSE is above the 50 sma but is stuck there. Oil is way above the 50 sma and the dollar looks like it will fall.

The whole point is that risk to go long is very high.

Jobs numbers in less then 20 minutes.

 

[Show-me]

The sad truth is that this recent market rally has been produced on the back of a weakening dollar and the slashing of corporate overhead. Cutting payrolls and research and product development projects are not a prescription for sustainable growth. As I like to say, you can't burn your furniture to keep your house warm forever. Eventually, top-line revenue growth must emerge or Wall Street's game of beat-the-expectations will be short lived.

It's also worth noting that a country cannot devalue itself to prosperity and that a bull market cannot survive an inflationary environment for long. In the short run, nominal gains in the averages can occur since everything priced in dollars tends to increase in value. However, the rally will be truncated unless the Fed provides consumers and corporations with a stable currency.

The ramifications of a crumbling currency are vastly misunderstood. A strong dollar is the cornerstone of a healthy economy. It is essential for balanced growth and healthy investment to occur. On the other hand a weak currency decimates the middle class and the corporate sector's ability to maintain earnings growth. Inflation lies behind all infirm currencies, and it is inflation that destroys the purchasing power of consumers. The diminished value of their wallets leaves them with the ability to buy only non-discretionary items. As a direct result, unemployment rates soar and economic output plunges.

I believe we will suffer from a protracted period of stagflation. Money supply, as measured by M2, has increased 5% Y.O.Y. Meanwhile the output of goods and services is falling. As long as the money supply is chasing a shrinking GDP pie, there will be upward pressure on prices.

Making the situation even worse is the manner in which the money supply is growing. The quality of growth is very low because the increase in supply is coming from commercial bank purchases of Treasury debt, rather from an issuance of credit to the private sector for capital goods creation. Total Loans and Leases at Commercial banks are down 8.2% from last year. Meanwhile, the amount of Treasuries held at all commercial banks is up 20% year-on-year.

That means money supply growth is emanating from government's misallocation and redirection of capital. It isn't being loaned out to build mines and factories; it is instead being loaned out to increase consumption and build even more consumer debt.

If the Treasury and Federal Reserve truly believed the economy and the stock market were on a sustainable recovery path, talk of extending and increasing the home buyer's tax credit would be off the table. The Fed would already be reducing the size of the monetary base. The truth, however, is that no one in government really believes in this recovery. If they did, they would be hiking interest rates and the deficit would be shrinking.

The government's realization of our precarious economic condition means its largess will continue. Near term, that may ease some pain. So did the artificial stimulus that gave rise to the housing boom. In the end, a protracted period of a near-zero interest rates, along with endless economic stimulus, will spawn another bubble and not a genuine recovery.

http://www.safehaven.com/article-14932.htm

 

[Show-me]

10.2% unemployment is the headline. I don't give two shits about the decline in lost jobs. We are not creating jobs and will not for some time to come. Job gains came from education, health care, and professional. Overtime hours went up and like I said businesses will work people to death in overtime before they hire back employee's.

Jobless recovery will not be a recovery for long. The recover is artificial and will crash again. Taxpayer funded recovery is nothing more than a new redistribution of wealth. This mornings headline was AIG posts 2nd consecutive quarterly profit- AP . So what they owe the taxpayers BILLIONS. How is that a profit? It is all bullshit spin.

 

[Gumby]

So what they owe the taxpayers BILLIONS. How is that a profit? It is all bullshit spin.

You hit the nail right on the head. It will be interesting to see how the spinmasters handle the double digit unemplyment rate.

 

[Show-me]

http://www.youtube.com/watch?v=4NtvRJ9I6Ng

 

[Show-me]

Freddie Mac loses $6.3B in 3Q

Freddie Mac loses $6.3 billion, avoids request for federal aid for 2nd-straight quarter

• By Alan Zibel, AP Real Estate Writer
• On 7:35 pm EST, Friday November 6, 2009

WASHINGTON (AP) -- Freddie Mac's losses narrowed to $6.3 billion in the third quarter, but the government-controlled mortgage finance company didn't need a federal cash infusion.


The McLean, Va.-based company has received about $51 billion since it was seized by federal regulators in September 2008, but said it didn't need any more money for the second-straight quarter.

"We continued to see some positive housing market developments, including higher volumes of home sales and modest increases in house prices in certain areas of the country," the company's new chief executive, Charles Haldeman, said in a statement Friday.

However, he cautioned, high unemployment and rising foreclosures will continue to "impede a full recovery," and the company may need more money from the Treasury Department to stay afloat. The government reported Friday that the unemployment rate hit 10.2 percent, the highest since early 1983.

Freddie Mac's quarterly loss works out to $1.94 per share and includes $1.3 billion in dividends paid to the Treasury Department. It compares with a loss of $25.3 billion, or $19.44 per share, in the year-ago period.

The results were driven by $7.6 billion in credit losses as the company continued to build its reserves for bad mortgages. About 3.3 percent of Freddie Mac's borrowers are at least three payments behind on their mortgages, more than double the rate last year.

The problems at Freddie Mac and its sibling Fannie Mae have proven far worse than most experts had foreseen. On Thursday, Fannie Mae asked the government for another $15 billion, bringing the tab for rescuing both companies to about $111 billion.

http://finance.yahoo.com/news/Freddie-Mac-loses-63B-in-apf-2893396059.html/print?x=0

 

[Birchtree]

Gee, all Uncle Sam has to do is increase the amount of the welfare checks and everything would be fine. I'm surprised Obama hasn't thought that one out yet.

 

[Nordic]

Imagine $5000/oz. gold?

 

[Show-me]

This is good stuff and from The New York Times.

Unemployment surged from 9.8 percent in September to 10.2 percent last month, its highest level since 1983. At the same time, the economy lost 190,000 more jobs. That means employers have eliminated 7.3 million positions since the recession began in December 2007.

As dreadful as they are, the headline numbers understate the severity of the problem. They also obscure an even grimmer fact: Unless there is more government support, it will take several years of robust economic growth — by no means a sure thing — to recoup the jobs that have been lost.

The unemployment rate includes only jobless people who have looked for work in the past four weeks. The underemployment rate — which also includes jobless workers who have not recently looked for work and part-timers who need full-time work — reached 17.5 percent in October. And the long-term unemployment rate — the share of the unemployed population out of work for more than six months — also continues to set records. It is now 35.6 percent.

The official job-loss data also fail to take note of 2.8 million additional jobs needed to absorb new workers who have joined the labor force during the recession. When those missing jobs are added to the official total, the economy comes up short by 10.1 million jobs.

Taken together, the numbers paint this stark picture: At no time in post-World War II America has it been more difficult to find a job, to plan for the future, or — for tens of millions of Americans — to merely get by.
At a recent meeting at the White House to discuss job creation, President Obama said that “bold, innovative action,” would be needed — from the administration, Congress and the private sector — to undo the devastation in the labor market. Americans are waiting for Mr. Obama to lead the way.

There were good ideas floated at the White House meeting, including bolstered federal support for efforts to retrofit and weatherize homes and public buildings. There was also talk of using government money to establishing a so-called infrastructure bank that would issue bonds to help finance big construction projects.

The country also needs a program that would create jobs for teenagers — ages 16 to 19 — whose unemployment rate is currently a record 27.6 percent. Deep and prolonged unemployment among the young is especially worrisome. It means they do not have a chance, and may never get the chance, to acquire needed skills, permanently hobbling their earnings potential.

http://www.nytimes.com/2009/11/08/opinion/08sun1.html

Better keep your job and be thankful, this is going to take a very, very long time. Plan of keeping the kids around a while longer too. Their job market is even worse than ours.

 

[Show-me]

Remember a month or two ago it would take a average of 250k jobs created a MONTH to get to 5% unemployment. Add another 40k to get to 4% unemployment.

Lets pass another big fat entitlement bill. LOL

 

[Show-me]

At a meeting in Scotland, the countries' finance ministers pledged to "continue to provide support for the economy until the recovery is assured" after U.S. jobs figures Friday showed unemployment at a 26-year high of 10.2 percent.

"Asset markets have taken comfort from the continued coordinated pro-growth plans of the G-20, with equity markets remaining supported," said Hans Redeker, an analyst at BNP Paribas.

http://finance.yahoo.com/news/World...html?x=0&sec=topStories&pos=main&asset=&ccode=

I feel like Charlie Brown.

To me it says, we will continue to artificially prop up the equities market until the bubble burst and we have a double dip recession, because it will take at least a decade to come back from where we were in the US.

One of the commentators on Safe Haven said it best. "In this climate equities are for renting, not owning."

 

[Show-me]

GMAC needs more bail out.
Fannie needs more bail out.
MBIA lost its ass due to heaver losses than expected. lol
German Nov. investor confidence down second month in a row.
N. and S. Korea exchange naval fire.
Lloyd's bank will cut 5000.
Japan faces risk of ratings downgrade over debt.
Japan gov. plan pension cuts for JAL. Got to love that one.

Just a few morning headlines.

Why did the markets rally yesterday? Because the G-20 promise more government intervention and free money. Now that make a company more valuable.

American better be watching what is going on. This damn health care debate is taking everyone's eye off the ball. Our DOLLAR is dying a slow death and our Country too. Without a strong dollar foreign investors will be able to buy us up on the cheap, cheap, cheap. Ask Anheuser Busch.

 

[Show-me]

Peter Schiff

http://www.youtube.com/watch?v=ZpsREmJWAiw&feature=channel

http://www.youtube.com/watch?v=44frAS9F3cU&feature=channel

 

[Show-me]

So what is the risk now?

GMAC, GM, Chrysler, AIG, Freddie, Fannie, FHA, FDIC, Pension Benefit Guaranty Corporation (or PBGC). Who else needs a bail out. All this Government intervention from birth, to health, to education, to lending, to saving, to retirement. BRILLIANT!

I'm just going to stop thinking and let the good times roll.:nuts:

 

[WorkFE]

I'm just going to stop thinking and let the good times roll.:nuts:

I've heard rumor that starting in 2011 you give them your entire paycheck every payday and they do everything for you. (Mortgage, groceries, car, insurance etc.)

 

[KevinD]

I've heard rumor that starting in 2011 you give them your entire paycheck every payday and they do everything for you. (Mortgage, groceries, car, insurance etc.)

:laugh:

:blink:

 

[Show-me]

I've heard rumor that starting in 2011 you give them your entire paycheck every payday and they do everything for you. (Mortgage, groceries, car, insurance etc.)

Didn't they try that in the former Soviet Union?

 

[Nordic]

So what is the risk now?

GMAC, GM, Chrysler, AIG, Freddie, Fannie, FHA, FDIC, Pension Benefit Guaranty Corporation (or PBGC). Who else needs a bail out. All this Government intervention from birth, to health, to education, to lending, to saving, to retirement. BRILLIANT!

I'm just going to stop thinking and let the good times roll.:nuts:

I've been having similar thoughts Show-me, the fundamentals of the US economy suck right now. The amount of govt. debt and unemployment this country is racking up is alarming and it's hard to see an end to it. The word "trillion" is thrown around these days almost in a casual manner. Investing possibilities aside, the economic direction this country is heading is murky at best. Our kids may be staying home well into their twenties at this rate. :blink: