There is no question that the economy is bad, my fear is that PRINTING more money (we aren't borrowing from the Chinese for this round of injections) will really hurt later on.

A couple of stray thoughts: some of what is hurting is the sudden change in attitude on the part of much of the public, from borrow and spend to frugality being king....basically what most financial advisors have advocated for years, to much of a good thing?, I don't know. As bad as things are on the job front, 90+% are still employed, as of now. There are lots of good companies, Microsoft for example, who have STRONG balance sheets, lot of cash, but are selling for 1/2 or less their highs, and many are taking advantage of (using as an excuse) current economic news to pare back staff, some of which they should have done long ago. Unfortunately there are the highly visible autos, shoddy management blames unions, greedy unions blame management and no one solved shared problems to prevent killing the goose that laid the golden eggs for so long.

I understand that none of the generally good (or at least not so bad) things help an individual situation. I am retired and have only our savings and investments for income (SS to, but???), so I have been hurt , and forced to roll Africa trip #2 into 2010, none the less, I choose to be hopeful. Economic cycles are real and as I see it, the Kondratieff Wave is a good model for the major cycle, that would have 1999 as the true low, followed by a (predicted) huge run up in commodities and assets fueled by cheap money, we are now in the sell off that bubble which should end +/- 2009. I may be very wrong, but I would rather be wrong (but prepared for the worst) as a result of being optimistic.

Like I said in an earlier post, the media will soon spend all their energy finding good (bullish) things to say, and I assure you, you can always find "fundamental" news, bullish or bearish, to support your theory.

So here's to Africa, lets hope the most pessimistic of us gets to take many more trips, and sooner rather than later.

A couple of thoughts.

One is the Laffer Curve. Prof Laffer of U of Chicago. Reduce marginal tax rates and Gov't revenue goes up, not down. (Corraly: Increase marginal tax rates and Gov't revenue falls.) Proven to be true.

Two is that unemployment is now at 7.2%. Still below what was considered full employment in the 70's and early 80's. Look around where you work, think about your coworkers. Think back before layoffs if you need to. Were all of them pulling their weight? Doubtful. At 3% unemployment, people get hired for having a pulse. I bet there are still more than 1 in 10 that aren't cutting it because they either don't put in the effort or aren't capable.

JPK

My 2 cents.

My 401k is down 30% but I see this is as buying opportunity because I believe in the country and I believe it will come back. Maybe people will figure out that you can not build an economy on credit and expected growth. Not every home is worth 300k and not everyone can afford a home.

quote:

Originally posted by Ropes:
Maybe people will figure out that you can not build an economy on credit and expected growth. Not every home is worth 300k and not everyone can afford a home.

A lot of truth there, but will the taxpayers and the government bail those people out or let them learn a hard lesson? In 1989-1991 or so the answer was no bail out.

I've got a number of perspectives. I'm sitting in Narita at the moment. Business Class from Jakarta to Tokyo was about 1/3 full on JAL. I was wait-listed from Tokyo to Dallas on American Airlines.

The offshore drilling industry has changed dramatically in the last six months. Prices for our services have dropped about 30%, but there are few projects being started so everyone is bidding for the same scrap. The prices will fall further. Six months ago every rig out there had a job. Now companies are trying to cancel new-builds; some will fail, because they deserve to fail.

Funds have dried up for oil companies and drillers alike. We have rigs from Australia, India, Thailand, and Indonesia under tow to shipyards to stack until work comes back. Each rig keeps about 200 people employed. One hundred and ninety of those men will be unemployed shortly after the rigs get to the shipyards.

Oil is about as cyclical as it gets. In my experience good times lasted from 1978 to 1982. People joked then about "stay alive 'til 85". '85 was worse. I had to leave West Texas and go overseas in 1990 to have any job security. We finally started seeing a boom starting again in about 2005. That was 23 years between booms. The new boom lasted about three years, and suddenly the brakes have been slammed on again. I think this will turnaround much quicker than the last cycle; but it will tear-up a lot of lives in the meantime.

Personally, I'm optimistic like Ropes, and continue to buy good, dividend producing stocks beaten-down way past where they belong. My biggest loser is Bank of America. I got in a little early, but I think in three years I'll be happy. American Airlines has been a nice winner. I caught it right at its low. I may get hammered later on that one.

Now is the right time to make money off stupid people, and there are a lot of them out there. I would have preferred that there be no bail-out. Let the worst happen and re-build quickly, and "quickly is a relative term". Now everyone is trying to become a part of some bail-out. We should not throw a life preserver to stupid people. They won't change. They'll be back at the trough ten years from now wanting more freebies, or they will still fail, because they are stupid, and the bail-out money would have been wasted on them.

If anyone thinks oil is going away, you're kidding yourself. No one disappeared off the face of the earth. We're still out there ready to burn gasoline, heat our homes, keep the lights on in all parts of the world. The real underlying demand for power is still there. It's just a matter of time before the money starts flowing, and projects come back on line. That may be a few years from now, but that's fine. Have a look at the pay-out from SJT, BHP, PBT, KMP, and BPT if you think the price of oil over the long term is going up. How can you lose; long term. If you think the price of oil is going down, long-term; what planet are you living on.

As far as "fox guarding the henhouse NOW??". I had to laugh at that one. Obama is not responsible for any of this mess. The fox has left him an empty henhouse to guard. He'll have to start re-building one chicken at a time.

Economy can't be that bad? Oh, yes it can, and it will get worse before getting better; but it will get better.

Like normal my fingers went faster than my brain. Scratch BHP. Stick in BPL.

Kensco,
I agree 100% with you..

For those who think is not so bad, the USA defict for 2009 will be 1 billion dollars, people who loose their jobs during 2008..2,600,000 !!! Please my american friends correct me if I am wrong..

Things will go worst more sooner than later but I believe we will need at least two years to start seeing a light at the end of the road, at least down here..

And as Kensco said, some people will never change

L

quote:

Originally posted by Lorenzo:


For those who think is not so bad, the USA defict for 2009 will be 1 billion dollars



L

Try one Trillion with a T.

The man problem is WE collectively have been living far too well, maybe a short sharp shock is what we might in fact need to detoxify the world after all the crap we have been fed of late by the people whom conned us into voting for them ...

Maybe some of what is going on is actually a good thing, as it is delisting some of the jobs that were in fact (only paper jobs) in other word, jobs that did nothing constructive, did not make or build anything, but just kept paper shuffling around.

Also if we expect to get a fair days pay for a fair days work, then dream again, that would be OK in a closed economy BUT with globilisation how can we expect to keep some worldly competitive jobs when others around the world will do the same job for a fraction of our wage.

Once the dust settles and governments have printed enough money, things we be quite rosy again, at least for our immediate generation, for those still to be born that will be their challenge, why must/should we worry about future generations, it does not logically make any sense to fret about the grandkids and beyond when we will all be dust in the deserts of the world by that time

The money system we live in created credit so we could live off the pigs back, the problem is some theives within the systems created whom we trusted with the money ripped the system off while we sat by left it in their hands and drank our cocktails.

We need to be a bit more careful in the future whom we vote for and whom we trust to invest our pennies with.

Cheers, Peter

quote:

Originally posted by Russ Gould:
Yes, it's a recession (remember those, they come and go and frankly they have a cleansing effect).

But the 24 hour media have a vested interest in making it look worse than it actually is. This to make Bush look worse than he was and to make any bounce or good news look like the work of the new administration. Watch, after the inauguration, the media will trumpet every little piece of good news.

Unfortunately, all this doomsday talk is a self-fulfilling prophecy - people get cautious about investing and spending and that exacerbates the problem. Bring on the inauguration so this effect can go the other way.

Economic cycles are as old as civilization. Look at the big picture. People are driven to consume and (for the most part) programmed to produce. Sooner or later, that equation will cause the economies of the world to rebound. And we do have a global economy, which makes the whole thing more resilient and diversified.

In the USA, foreclosures are still under 3% of mortgaged homes, probably 2% of all homes. And banks on the watch list in the USA also less than 3%, don't remember the exact number.

It's not the end of the world as we know it.

Thank you, Russ. You save me an awful lot of typing.

One more point: The Democrats have a vested interest; the more "victims" of the economy there are, the more they (victims) will look to the Government for help. That gives the Dem's more power since they are the ones pushing the "only Government can solve the problem" ideology. When in reality, only "government" (little "g" means "the people") can solve this problem.
Dave

quote:

Originally posted by Grenadier:
In the year 2008 we had the greatest number of jobs lost since the mid 1940s. We know that the job losses in the 40s were primarily because the war ended. Factories and businesses stopped making money off of the war and hundreds of thousands of military personnel returned to the job market.

Just imagine what's coming this year as the war winds down.

Good selective use of facts with a just touch of fear-mongering.

The unemployment RATE in the US is now about 8%. When Jimmy Carter, America's Neville Chamberlain, was in office it was about 10.5%. So, while you are technically right, your statement offers no perspective.

Your little "just imagine" scenario is just plain dishonest. Do you honestly want to make that comparison? There were over 3 million enlistments in 1942 alone. What does the war winding down have to do with anything? In case you aren't aware it's an all volunteer military - meaning most of the volunteers will still be in service as a career. And, it will only be "winding down in Iraq. There's still Afghanistan.

quote:

Originally posted by LionHunter:
NEWS FLASH from SILICON VALLEY!

Things are not good here. Todays news:

INTEL 4th Q drop -23%
Still no state budget-Gov to cut 2 paid holidays
Auto dealerships closing
Median home value -40%
Apple stock -50% in 2008
GOOGLE workforce down -20%
LOGITECH to cut workforce -15%

On a personal note, my IRAs are down -40 to -60%.

But I guess if you guys say there's no problem then everything must be OK, huh?

Cheers

Oh, my God! CA State workers are going to lose 2 paid holidays? Which one of our sacred cows will be slaughtered? Cesar-friggin- Chavez' birthday? Day Without a gay? Martin Luther King Day? Day without an illegal? Oh, the poor full medical benefits, 4-weeks-a-year-vacation, full pension with medical bennies after 20 years, 13-paid-holidays-plus-a-personal-holiday-a-year-overworked state workers. Puh-leeze!

Auto dealerships closing? Walk across the street. There's another one there.

As for your stock picks, I've got a NEWS FLASH for you: THE DOT-COM BUBBLE BURST 10 years ago.

But, on the other hand, my money market money is still making money and, even tho' smaller, my natural gas exploration stock is still paying dividends.

No, everything is not "late 90's hot", but it's not as bad as the Dem's and the parrot press corps would have us believe, either. We will have to make some adjustments and we will have to keep fighting for the conservative principals this country was founded on.
We've survived worse.

quote:

Originally posted by Grenadier:

quote:

Originally posted by almostacowboy:

Good selective use of facts with a just touch of fear-mongering. The unemployment RATE in the US is now about 8%. When Jimmy Carter, America's Neville Chamberlain, was in office it was about 10.5%. So, while you are technically right, your statement offers no perspective.

Facts are facts, select what you choose, just as you have. We may not be experiencing the lowest rate of unemployment, but last years job losses show one of the fastest annual increases in unemployment in our history. I meant no fear mongering. If my statement instilled fear in you then you have my apology.

quote:

Originally posted by almostacowboy:
Your little "just imagine" scenario is just plain dishonest. Do you honestly want to make that comparison? There were over 3 million enlistments in 1942 alone. What does the war winding down have to do with anything? In case you aren't aware it's an all volunteer military - meaning most of the volunteers will still be in service as a career. And, it will only be "winding down in Iraq. There's still Afghanistan.

Every snap, boot, MRE, bullet, jacket, truck tire, bucket of milspec paint, and battery used in the wars had to be manufactured, packaged, processed, and shipped. The wartime need created thousands of jobs and brought wealth to many companies. In fact, several small companies came into existence just for wartime production of one thing or another or for a wartime service. As the war in Iraq is winding down, many military contracts are running their course and will not be renewed. Other contracts have been reduced or cut short, sometimes involving millions of dollars. The military industrial complex will not completely disappear but it will be much smaller than a year ago and will return to pre-wartime levels as the war winds down.

A great percentage of the military manning in the war has been Reserves and National Guard called onto active duty for extended tours. Most of those personnel will not be returning to the job they left. Instead they will be going back to the civilian job market as unemployed. It's already started to happen. Active duty numbers don't need to decrease much, just reduction in long term call-up of the reserve forces. The number of soldiers becoming civilians might not be on the same scale as post WWII but the numbers will still be significant.

It is a volunteer military but most of the National Guard and Reserves did not volunteer for multiple six-month active duty tours. There are also many military members being involuntarily "retained" beyond their separation or retirement dates.

I am surprised by your slight. You might not agree with my point of view but you have no basis to call me dishonest.

For about the last 20 minutes I crafted answers to each of your points which were well thought out, reasonable, and as non-confrontational as I could possibly make them. But, while thinking about your last comment, the argument I had with myself convinced me that you did, in fact, make a dishonest comparison and made a fallacious argument.
DEF: fal-la-cious.....tending to deceive or mislead

Therefore, I stand by my original statement.

almostacowboy-

You Sir, appear to be "almostanass" with your comments regarding others opinions and you apparently don't understand the meaning of civil discussion nor debate.

Rest assured, you have no NEWS FLASH for me; not about anything. I reported information taken directly from the days Business Section of the paper, without editorial comment. BTW, I hold no high tech stock.

Perhaps you've been out in the Mojave sun too long to engage others in a civil manner.

Jesus, guys. Relax a little. A weekend of playoff football, food and libations and everyone goes nuts. All I was doing was posting my observation; That while everyone seems to be crying that the sky is falling, there still seems to be a very robust public travel itinerary.

I agree with those who take the cyclic view. Global and national economics are cyclic by nature. Times are hard for some of us now, and I appreciate that. But they will improve. Things will get better. Such is the way.

I am among those who believe one should do those things that please him, as long as he doesn't take from his family in the process.

In short, as guys like Jack Athceson and others have said, go hunting while you are physically and financially able. Time is short. Life is even shorter.