Thursday, December 11, 2008
Thursday, October 16, 2008
Got To Have Confidence!
Confidence?
It's just past the Ides of October and some would refer to the economic climate as a bit of uneasiness. You need to have confidence someone said. Everyone is waiting for the move up. But wait a minute! If EVERYONE is waiting for the move then who will do the buying? Even precious metals aren't attracting attention- Why? Because no one knows where those prices are going either, and you can't pay the bills with bullion especially if the price has hit the skids due to lower inflation.
Fixed income is in a funk and money market rates are heading lower as well. The fed is thinking about lowering rates even more but the moneylenders in the temple are afraid to let the money out no matter what the rates! Paulson says we can't make them loan money out. The rest of the world will be reluctant to buy greenbacks if they will be devalued due to lowering interest rates.
The Germans are reluctant to participate in the financial banking bailout debacle as it will cost them since they have had the foresight to control the economics better than anywhere except China. The Chinese aren't worried about a little slowdown as they know full well that at the end of the day they will be in the catbird seat. Since the Chinese have been paying exorbitant rates for all commodities like oil, iron ore, tin, copper, aluminum and coal the dramatic drop in commodities is great news to our Eastern brethren. Also since the Chinese hold almost all of the US Treasury debt a tightening up of the US$ means that their holdings of US bonds are worth a lot more. To bad we can't find a way to put the blame them for something!
The leveraging out of US dollars was not in the best interest of a lot of folks, except of course the really FAT CATS at Countrywide, Washington Mutual, Lehman Brothers, Merrill Lynch, AIG, and whoever else has their hand out at our expense. The caving in of home values across the country and endless foreclosures have made the vast majority of those that received sub-prime mortgages the real unfortunates.
Buffett warned years ago about this developing charade as did Bill Gross of Pimco. Kevin Phillips virtually predicted the debacle in his two great books AMERICAN THEOCRACY and BAD MONEY. Too bad we didn't listen to them when we had the chance. I wonder who's going to pay the tax bill for all of the federal largess? I mean, $700 billion is a lot of money to some people.
It's just past the Ides of October and some would refer to the economic climate as a bit of uneasiness. You need to have confidence someone said. Everyone is waiting for the move up. But wait a minute! If EVERYONE is waiting for the move then who will do the buying? Even precious metals aren't attracting attention- Why? Because no one knows where those prices are going either, and you can't pay the bills with bullion especially if the price has hit the skids due to lower inflation.
Fixed income is in a funk and money market rates are heading lower as well. The fed is thinking about lowering rates even more but the moneylenders in the temple are afraid to let the money out no matter what the rates! Paulson says we can't make them loan money out. The rest of the world will be reluctant to buy greenbacks if they will be devalued due to lowering interest rates.
The Germans are reluctant to participate in the financial banking bailout debacle as it will cost them since they have had the foresight to control the economics better than anywhere except China. The Chinese aren't worried about a little slowdown as they know full well that at the end of the day they will be in the catbird seat. Since the Chinese have been paying exorbitant rates for all commodities like oil, iron ore, tin, copper, aluminum and coal the dramatic drop in commodities is great news to our Eastern brethren. Also since the Chinese hold almost all of the US Treasury debt a tightening up of the US$ means that their holdings of US bonds are worth a lot more. To bad we can't find a way to put the blame them for something!
The leveraging out of US dollars was not in the best interest of a lot of folks, except of course the really FAT CATS at Countrywide, Washington Mutual, Lehman Brothers, Merrill Lynch, AIG, and whoever else has their hand out at our expense. The caving in of home values across the country and endless foreclosures have made the vast majority of those that received sub-prime mortgages the real unfortunates.
Buffett warned years ago about this developing charade as did Bill Gross of Pimco. Kevin Phillips virtually predicted the debacle in his two great books AMERICAN THEOCRACY and BAD MONEY. Too bad we didn't listen to them when we had the chance. I wonder who's going to pay the tax bill for all of the federal largess? I mean, $700 billion is a lot of money to some people.
Tuesday, September 23, 2008
Hey, Mom and Dad- About my allowance
Hi, Folks- Just a note to let you know that I probably won't make it home for the school break. Actually I had hoped to come home in style! I took the money you sent me for the Fall semester's tuition and figured that I could leverage up a bit- Learned that from some financial stocks that I've been following. This leverage stuff is cool!
I got a hot tip to buy some real estate down by the river. The guy that sold it to me said never mind the fact that a lot of it is under water, the financing can't be beat! Boy what a deal- Only 2 percent down and 30 years to pay at only 4% interest. I was able to buy a hundred acres with the tuition money you sent me as a down payment. The bank where I got the loan thought it was a real opportunity. They had a big sign on the door offering the same terms to most anybody that needs a loan. I'm not sure what the property's worth right now since I don't see any similar properties that are currently available. I guess they're all bought up!
I figured that I could go to the bank where I got the loan and see if they knew what the property was worth but the loan officer couldn't talk to me right then and there as he was going to Washington to see some guy named Paulson about an advance on his allowance and give the government the note on my property to secure it.
This appears to be a new type of government sponsored giveaway program since I'd be surprised if banks really got allowances. You never know though. The only thing that I see is that you have to have lent money out with little or no hope of getting it back. Seems like some taxpayers or somebody with money to burn has given this guy Paulson a truckload of money to give away- What a great country! Do we know any taxpayers?
We learned about some guy named Ponzi in Economics 101 last semester that sounds a lot like what this Paulson guy and the banks are doing. The bank guy said it was using "leverage more aggressively," a more efficient use of capital.
Do you think that the president is aware of what these guys are doing?
Anyway since I spent the tuition money plus my allowance buying that property I could use a little advance myself since I've got a payment due on my real estate loan- Things got a little tight and I missed the last one. What do you say? If a bank can get some cash from the government with no obligation I'll bet you could spot me a few bucks. And you know of course that it's only a loan and that I'll pay you back some day. If things are tight maybe you could visit this Paulson guy and get some of that free money!
Lots of love, Your kid
I got a hot tip to buy some real estate down by the river. The guy that sold it to me said never mind the fact that a lot of it is under water, the financing can't be beat! Boy what a deal- Only 2 percent down and 30 years to pay at only 4% interest. I was able to buy a hundred acres with the tuition money you sent me as a down payment. The bank where I got the loan thought it was a real opportunity. They had a big sign on the door offering the same terms to most anybody that needs a loan. I'm not sure what the property's worth right now since I don't see any similar properties that are currently available. I guess they're all bought up!
I figured that I could go to the bank where I got the loan and see if they knew what the property was worth but the loan officer couldn't talk to me right then and there as he was going to Washington to see some guy named Paulson about an advance on his allowance and give the government the note on my property to secure it.
This appears to be a new type of government sponsored giveaway program since I'd be surprised if banks really got allowances. You never know though. The only thing that I see is that you have to have lent money out with little or no hope of getting it back. Seems like some taxpayers or somebody with money to burn has given this guy Paulson a truckload of money to give away- What a great country! Do we know any taxpayers?
We learned about some guy named Ponzi in Economics 101 last semester that sounds a lot like what this Paulson guy and the banks are doing. The bank guy said it was using "leverage more aggressively," a more efficient use of capital.
Do you think that the president is aware of what these guys are doing?
Anyway since I spent the tuition money plus my allowance buying that property I could use a little advance myself since I've got a payment due on my real estate loan- Things got a little tight and I missed the last one. What do you say? If a bank can get some cash from the government with no obligation I'll bet you could spot me a few bucks. And you know of course that it's only a loan and that I'll pay you back some day. If things are tight maybe you could visit this Paulson guy and get some of that free money!
Lots of love, Your kid
Saturday, August 30, 2008
Signing on to the Pickens Plan
I am a proponent of alternative, renewable energy and find a lot to like in the Picken’s Plan.
Having said that I think that it may be a tough row to hoe. We, as American citizens have watched for decades while we became more and more dependent on foreign oil to where it is now approaching 75% of our consumption.
Our leaders in congress or in the White House seem to care little about the country or its citizens, focusing all their energy on getting elected or reelected rather than dealing with issues affecting our future. Where are the incentives to promote alternatives? They pretty much died when Carter left office with little since then. The lip service we currently receive from government is mostly just that- Lip service. Our leadership is of the “make ‘em happy right now- To heck with future generations.” attitude.
Without people like Pickens giving some thoughtful direction and Congress doing something about it this energy crisis will be ignored and forgotten when prices drop a little.
The convenience store where I buy most of my gasoline is run by a family of Pakistani. I asked Kahlil one day about gasoline prices in Pakistan. He replied that gasoline was only used in rural areas. In urban sections everyone uses compressed or liquid natural gas instead of gasoline.He said that it is very expensive to use gasoline in autos and trucks and is avoided whenever possible. LNG is fairly available and causes little pollution.
Do you think they may have something there? Why didn't we think of that?
I find it pretty interesting that an oil baron is talking alternative energy- He's got my attention! Pickens also pointed out that Iran, as a country was doing everything they could to convert all ground transportation to LNG so that they could continue to sell us oil to produce gasoline at $4.00 per gallon rather than burn it in their own vehicles!
Look up pickensplan on the internet search engine of choice- You won't be disappointed.
Having said that I think that it may be a tough row to hoe. We, as American citizens have watched for decades while we became more and more dependent on foreign oil to where it is now approaching 75% of our consumption.
Our leaders in congress or in the White House seem to care little about the country or its citizens, focusing all their energy on getting elected or reelected rather than dealing with issues affecting our future. Where are the incentives to promote alternatives? They pretty much died when Carter left office with little since then. The lip service we currently receive from government is mostly just that- Lip service. Our leadership is of the “make ‘em happy right now- To heck with future generations.” attitude.
Without people like Pickens giving some thoughtful direction and Congress doing something about it this energy crisis will be ignored and forgotten when prices drop a little.
The convenience store where I buy most of my gasoline is run by a family of Pakistani. I asked Kahlil one day about gasoline prices in Pakistan. He replied that gasoline was only used in rural areas. In urban sections everyone uses compressed or liquid natural gas instead of gasoline.He said that it is very expensive to use gasoline in autos and trucks and is avoided whenever possible. LNG is fairly available and causes little pollution.
Do you think they may have something there? Why didn't we think of that?
I find it pretty interesting that an oil baron is talking alternative energy- He's got my attention! Pickens also pointed out that Iran, as a country was doing everything they could to convert all ground transportation to LNG so that they could continue to sell us oil to produce gasoline at $4.00 per gallon rather than burn it in their own vehicles!
Look up pickensplan on the internet search engine of choice- You won't be disappointed.
Saturday, June 14, 2008
More Energy! More Tinkering! More Dawdling
Oil at $136 a barrel ? Say what?
Even though oil is through the roof with no end in sight, why is it that many of the oil majors, have seen stock prices decline for the year so far? Even the drillers have marginaly higher stock values year to date. The exploration companies are quietly reaping the rewards. Exploration companies like Southwest Energy and Noble are making it in gas and oil exploration. China has just whet its ravenous appetite for energy. It's importing all the coal it can get- Makes for happy Aussies, and Petro China is maxed out in exploration/production so China is looking wherever it can for the black gold. Commodities like foodstuffs, fertilizers and metals are also in much demand from emerging markets like Brazil and Peru as well as China.
Chinese solar energy companies are promising growth of 30 to 75% a year for the next five years at least. These folks have been hard at work researching and improving their solar capabilities while we bemoan the fact that our gas prices are almost 2/3 what Europeans pay! There are a few small solar energy companies in the US and companies like Dupont are starting to supply some solar related material, but I don't see our leadership rallying around the flag for alternatives to our energy problems- No new policies- Unless you count begging the oil sheiks to increase production. This isn't the answer, folks. We are an oil based economy that's running out of oil- Except to import it. Our inflation will be a function of how much more money the government can print in order to pay the bill. Maybe we'll have another round of tax rebates- Yeah! That's the ticket! Our kids can pay the bill.
Presidential election year notwithstanding the market here may gyrate up as history promises it will in election years but the economy will have much pain for some time. There is just too much garbage debt to absorb. The clowns in the financial sector that brought this mess about should be in jail but I'll bet they probably got increases in their bonuses!
There is a strong move afoot led by Iran and Venezuela to cut loose from the US Dollar as the oil currency of choice. The US is pleading with the Saudis to keep the dollar as the official payment choice. Even the Saudis will run out of US stuff they can buy pretty soon. They have all the military toys they can spend US dollars on and are busy buying land and businesses in the Western hemisphere. The Fairmont Hotel empire was a recent Saudi purchase and condos in Colorado are hot. Right now the oil boys are our good buddies but when push comes to shove as it did in 1973-74 we could have better luck looking for oil in McDonalds restaurants rather than the Middle East.
Possibly with enough pain we as a nation and as (sometimes) world leaders would start a significant movement in the direction of alternative energy. Maybe $5 bucks for gas will be the tilting point. We had a move towards renewable energy under Carter but the Reagan administration let it die on the vine. After that the sense of immediate urgency dissipated.
Well, the sense of urgency is back. Fuel cells, solar energy, wind farms and geothermal projects may make even more sense now and may be approaching more feasible comparative cost levels. As a debtor nation that had the party with the inheritance, we must start the ball rolling, not just find a temporary relief that will put us back into complacency once more. Maybe the leadership will be there next year- I, for one hope so.
Even though oil is through the roof with no end in sight, why is it that many of the oil majors, have seen stock prices decline for the year so far? Even the drillers have marginaly higher stock values year to date. The exploration companies are quietly reaping the rewards. Exploration companies like Southwest Energy and Noble are making it in gas and oil exploration. China has just whet its ravenous appetite for energy. It's importing all the coal it can get- Makes for happy Aussies, and Petro China is maxed out in exploration/production so China is looking wherever it can for the black gold. Commodities like foodstuffs, fertilizers and metals are also in much demand from emerging markets like Brazil and Peru as well as China.
Chinese solar energy companies are promising growth of 30 to 75% a year for the next five years at least. These folks have been hard at work researching and improving their solar capabilities while we bemoan the fact that our gas prices are almost 2/3 what Europeans pay! There are a few small solar energy companies in the US and companies like Dupont are starting to supply some solar related material, but I don't see our leadership rallying around the flag for alternatives to our energy problems- No new policies- Unless you count begging the oil sheiks to increase production. This isn't the answer, folks. We are an oil based economy that's running out of oil- Except to import it. Our inflation will be a function of how much more money the government can print in order to pay the bill. Maybe we'll have another round of tax rebates- Yeah! That's the ticket! Our kids can pay the bill.
Presidential election year notwithstanding the market here may gyrate up as history promises it will in election years but the economy will have much pain for some time. There is just too much garbage debt to absorb. The clowns in the financial sector that brought this mess about should be in jail but I'll bet they probably got increases in their bonuses!
There is a strong move afoot led by Iran and Venezuela to cut loose from the US Dollar as the oil currency of choice. The US is pleading with the Saudis to keep the dollar as the official payment choice. Even the Saudis will run out of US stuff they can buy pretty soon. They have all the military toys they can spend US dollars on and are busy buying land and businesses in the Western hemisphere. The Fairmont Hotel empire was a recent Saudi purchase and condos in Colorado are hot. Right now the oil boys are our good buddies but when push comes to shove as it did in 1973-74 we could have better luck looking for oil in McDonalds restaurants rather than the Middle East.
Possibly with enough pain we as a nation and as (sometimes) world leaders would start a significant movement in the direction of alternative energy. Maybe $5 bucks for gas will be the tilting point. We had a move towards renewable energy under Carter but the Reagan administration let it die on the vine. After that the sense of immediate urgency dissipated.
Well, the sense of urgency is back. Fuel cells, solar energy, wind farms and geothermal projects may make even more sense now and may be approaching more feasible comparative cost levels. As a debtor nation that had the party with the inheritance, we must start the ball rolling, not just find a temporary relief that will put us back into complacency once more. Maybe the leadership will be there next year- I, for one hope so.
Subscribe to:
Posts (Atom)
It is also true that just giving the clueless Detroit boys more money wouldn't solve much except to delay the inevitable.
What we need is a demand from Congress and Obama that a VIABLE business plan be developed just as if they were a new business venture looking for capital. The American people have lost faith in the car makers because they build in obsolescence and quality is second to gimmickry and cost increasing extras. Where is the 1966 Ford pickup that I bought new for $2100 that I sold for $300 when it had 265,000 miles on it? Would anyone in their right mind routinely expect any US made vehicle to last over 150,000 miles? And why not? Where is the basic transportation that we need.
Car makers take note. Trim the bloated overpaid manager overhead, negotiate with the unions to give the workers respect and a say in outcomes the same way they do in Asia and Europe and stop whining about how the unions are driving you out of business. The standards of living in many countries are passing us by so we can't say our workers are treated too well as compared to foreign countries' workers.
Make a car that has minimal defects and ones the public has confidence in. Build them to last more than 150,000 miles and stand behind it when there is trouble. Get rid of dealers that fake repairs and bill you the manufacturer for work not done, or try to push extra cost items onto the cost of the vehicles.
Spend the money on innovation to improve quality and dump gimmicks. Partner with developers of alternative energy, including natural gas powered vehicles that are so prevalent in the OIL PRODUCING countries that are mandated so they can save their oil to sell to us. Engineer a way to bring fuel cells into vehicles instead of building cars that increase our dependency on foreign oil.
In other words, bring the USA some true leadership.