Thursday, April 22, 2010

Remain Calm, It's Easier That Way

Time is almost up! One day at work to go and then I will be off to the Bahamas for a week starting Sunday! When I go on vacation I am 100% offline; no papers, no TV, no Internet, and no phones. Not much to miss anyway, this song has been the same for 8 months now.

A Friday night send off will be in effect so get your requests in. Last weeks contest winner has selected a great tune and I am sure I will be pretty loose tomorrow night.

Turning Things Around
Economic Disconnect looked in the mirror last December and was not too happy with what I saw. Besides the amazing good facial looks (HA!) the old body was not what I would call "all it can be". I got on the scale and it read 165 pounds! I am 5 foot nine inches tall. Knowing that a vacation was at hand in the Spring I got the fine idea to try and make some progress. It has been quite a journey.

I bought a 3-way boxing set up (this one) that has a heavy bag, double end bag, and a speed bad for the old school boxing training that I used to do when I was a lot younger. I started in January.

After 5 weeks I felt tired, but very good. My hands were not bothering me much (I quit boxing due to chronic hand brakes/pain) so I was positive. I got on the scale and I was at 148 pounds! I guess I was carrying quite a bit of "extra" weight! Wow. At this point I could go 6 full 3 minute rounds on the heavy bag and a couple rounds each on the other bags with the weight training I do as well.

Tonight, after the last workout I will do before the beach, the scale reads 154 pounds, but none of what came back is the bad stuff. I can do 15 full rounds on whatever I want and I had to buy heavier weights for the strength training part. Not too bad. Of course this ate up time I could have been doing plenty of other things and my right middle knuckle looks about 2 times bigger than the left one, but I wanted to do this for myself very much. I am happy with the progress I made.

Remain Calm, It's Easier That Way
Nothing too in depth tonight, I am a bit tired and I am mentally on pre-vacation.

What I wanted to talk about tonight is the almost orgasmic response some have had over the "hard" data (pun intended) that seems to imply the return to absolute highs of, well, everything in short order. I could debate the problem with a bunch of this, but I really have thrown that towel in. Instead I wanted to take a step back and show you what I am seeing from my macro seat and welcome your input.

Right now the story is that consumer spending is at old highs, and going by retailer stocks going WAY higher still, home buying is on the rebound with a price breakout at hand, auto sales are ready to explode (sans nasty Toyota, what a scam), and anything else you want to throw in. Ok, I'll play.

At the same time, as in right now, we have:
-Unemployment at 9.whatever % (and if you buy that number, read USA today and not this blog)
-Wages have decreased for years
-The Home ATM is closed
-Savings are still non-existent
-bla, bla, bla you get it

To accept that the situation is old way normal means you accept that all the people without a job, less income, less access to free cash via home cash extortion, etc do not even count in the grand scheme of things. It is that simple.

With unemployment payments going on 2 years and looking for extension to even longer, food stamp usage at all time highs (there's your breadlines idiots), millions of homes either sitting empty or having squatters, I mean "defaulters" living for free, and US states looking like Greece on a good day financially, you have to ask what is going on.

To this I think of the film "Fight Club" and the scene where Project Mayhem replaces the safety cards in airplanes to show what really happens when a plane is going down:

Instead of the calm, serene view you get the panic that must come from such a thing.

I offer this:
-If 10% of this working country can have no job, but be paid by the government to be calm
-If a record number of people need food assistance to stay calm
-If a never before seen number of people are losing their homes but remain calm due to various help programs or just free living to stay calm
-If the stock market, which is the EASIEST thing to goose, looks good many may remain calm
-If tax breaks which bite you in the butt can entice fools to buy cars and homes not only remain calm but get excited

-How many more can "remain calm" under the same process?

Right now this all works because, and let's stop playing nice, the world has to get down on their knees and "service" the United States due to this dollar reserve currency thing (too long to get into). Can the US be the engine for world growth if our central bank prints cash to pay all the "remain calm" types, buys our own debt and pretends its "temporary", runs deficits that makes no sense by any honest reckoning, and gets the biggest free ride of all time?

It will until it does not.

I have been so wrong on so many things. I admit that. It happens. I guess I figured people could think, but they just believe. Huge difference. Huge.

Now go buy Amazon (AMZN) on the dip and buy a GM car and then a house to park over the car. Might as well go all out, what could stop you? Above all, remain calm.

Have a good night.


Lurker said...

My Friday night selection is "Gonna Fly Now" by Maynard Ferguson. (Theme from "Rocky".)

Stagflationary Mark said...

"Above all, remain calm."

I live by the following rule.

If one must panic, at least panic first.

Somewhere out there is my counterpart.

If one must remain calm, at least remain calm last.

Here's an example...

July 3, 2006
Global Housing Boom May Cool Slowly, Avoiding a Crippling Bust

``We're right on course for a soft landing in the housing sector,'' says David Lereah, chief economist at the National Association of Realtors in Washington.

getyourselfconnected said...

My motto is,
The Gaussian distribution curve tells us that intelligence is distributed over a bell curve. Ask 1000 people where they fit, and 900 say at the way upper end. Plan accordingly!

Cant lose.

getyourselfconnected said...

I had that on a while back, maybe a backup? I do not like to play them so close. That I remember that is scaring me.

Dave in Denver said...

Demaryius Thomas goes before Dez Bryant. DT taken by Broncos!!!!

Lurker said...

How about "Taking Care of Business" by Bachman Turner Overdrive?

getyourselfconnected said...

Luker sounds very good to me!

getyourselfconnected said...

nice Bronco move. I liked Thomas, bigger, tougher, and meaner than Bryant. I think Pats know Spikes will sit and are in no hurry.

getyourselfconnected said...

Where is Gawains? Dez Bryant may fall in your lap!

getyourselfconnected said...

Cowboys get Bryant! Will fit that offense.

NE out of 1st round, spikes will be there.

Still think NE is 3rd in East going into new season.

Anonymous said...

"I have been so wrong on so many things. I admit that. It happens. I guess I figured people could think, but they just believe. Huge difference. Huge."

Happens every time - and oh so predictable. If I have said it once, ive said it 1,000 times.


Of this I have no doubt. The issue however is the "eventually" part of that statement that gets you into trouble.

Your assumption was this is "it"... this is the "big one". This is the one that armchair spectators have expected to see out of the U.S. for the last oh 135 years.

IMO, its incredibly arrogant to assume while all those others and all those other crisises were wrong, you and your call will be right.

Seldom before have have so many of the world's resources been concentrated into one soverign. The Roman Empire, the Ancient Greeks, the Brittish Empire, who else?

If history is any guide, large soverigns flicker out at about 600-1,000 years. We are at 275+ and counting. Thus, given how the others fared, (not to mention the fact that the Brits are still here), we very well could not see the "big one" in our lifetimes.

So, as to when the big "it" happens? I lay even odds it will happen in my lifetime (next 50 years). Ive been told this is quite agressive, but then again I am a pessimist.

Anyhoo, as much as I really thought this could be the big one, by Nov, 2008 I realized, this wasnt it. Thus, since then, I sat back and cautiously went long. Next window of opportunity for the big one is probably in 2-5 years as this cycle comes to a close. Will it be the big one? Probably not, but I guess we shall see wont we?

Til then, just sit back and try to enjoy life. Others have spent their entire lives watching, waiting for the "big one" they just knew was coming. They are all dead now.

GawainsGhost said...

Dez Bryant. I am disappointed. It doesn't say much about the Cowboys' confidence in Roy Williams, but what they really needed was a safety. The middle of the defensive backfield has been a major weakness for some years now.

GawainsGhost said...

Hmmm. The "new" normal. What the hell is that?

The two most commonly used words in advertising are "new" and "improved." Let's examine the meaning of those words.

Say, it's a laundry detergent. What's new about it? Well, the box. What's improved about it? The fragrance. So, essentially, it's the same product with different packaging and a different smell. Chemically, that is effectively, it is the same detergent, meaning it doesn't clean clothes any better than before.

Apply this analogy to financial services. Exactly what is new and improved? Not much. It's the same old scam, except that now outright fraud and deception are not being prosecuted, much less even recognized. There is nothing new here, but there is a whole lot of normal. (SNAFU.)

I bring this up because I've completed my research on the drive-by and historical price opinion on my latest assignment. I'm going to ask a simple question. There were three sales in the subdivision in the six months prior to the historical date (03-07). One, the subject, sold for $155,000. The other two sold in the $130,000s.

Now, why would one house be worth $20,000-odd more than the others? Well, it does have more square footage, an extra bedroom and a halfbath, and it is on a corner lot with a side entry garage. So?

These houses are all of the same age, in the same subdivision. Unless you absolutely had to have four bedrooms, a halfbath and a side entry garage on a corner lot, why pay $20,000-odd more for one house than another?

Ultimately, a deal comes down to a willing buyer and a willing seller agreeing on a price with full disclosure. Sometimes a buyer just falls in love with a house and is willing to overpay for it. That happens, due to (flawed) human nature.

By the way, the historical value of the subject, based on comparable sales at the time, was in the mid $130,000s. The current value is in the mid $140,000s. Both below the sales price in 07.

The problem here is fraud. Lending fraud, appraisal fraud, brokerage fraud. I can understand the listing agent getting the highest price possible for the seller. I cannot understand the buyer's agent (assuming he had one, which if he didn't is just abject stupidity) not counselling the buyer as to the actual fair market value of the house. But, hey, if the buyer wanted to proceed with the sale, the agent had no choice but to follow the instructions of the client.

It should be noted though that of these three houses, only one was foreclosed on, the subject.

It goes the current problem with the financial industry. There may be a willing seller and a willing buyer, but there is not full disclosure. Not in the CDO (MBS) market, the CDS market, the HTF market. A lot of people are being taken for a ride to bankruptcy.

Welcome to the new normal.

Anyway, since you probably intend to post the Iommi, Queen and Hetfield video tonight, GYC, I don't suppose you'd give me another suggestion. But here goes.

Mountain, "Missippi Queen."

Lynyrd Skynyrd, "Gimme Three Steps."

Black Sabbath, "Electric Funeral."

Nazareth, "Hair of the Dog."

Enjoy your vacation.

mab said...


Enjoy the vacation. Knock back a few cold ones me!

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getyourselfconnected said...

WOWZA! That is the coolest thing I have ever seen!!!!!!

The Bahamian beer, Kalik, will be under serious supply pressure, I suggest everyone goes LONG the stock, HA!

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