It’s hard to imagine the coming year. It’s kind of like trying to light a gas stove for five minutes with wet matches and then find a dry one. It could be illuminating.
Republicans and the Democrats are blaming everything that’s wrong in the country on each other. The idea that there can be two ways to get to the same destination seems to elude the politicians and most of the voters. "Right" and "wrong," are concepts that are interpreted differently, depending on the person’s situation. Very few wars are “right,” but there have been a few that I would deem as having been “necessary.” To a Marine in Iraq, “necessary” is also an arguable term.
The new push for health care seems, to be the last straw for the camel’s back. We can’t pay for it now; legislation won’t make it any cheaper. If you ever need to visit the emergency room for treatment and have a credit card, go to Urgent Care (there is no 8 hour wait). The 35 and under crowd would just love a health insurance program; you get taxed for getting old while you’re still young enough to pay for it.
Tomorrow the minimum wage goes up 50 cents and a restaurant with 20 employees has an extra $50k per year in costs. Congress meant well, god bless ‘em, one less employee is not quite what they had in mind.
Real estate is beginning its great decline. Remember that bank foreclosures count as a house sale when you view real estate statistics. This distorts the number of actual buyers. As prices drop, more people will become upside down in their loans. Those that bought into the market in the last five years with ten percent or less down, have real issues (we’re not talking magazine subscriptions).
Unemployment in the coming year could be quite low. Los Angeles is reporting another year of decreasing crime. It more or less suggests a significant drop in adults in the 17-30 age group, not more effective crime prevention. The labor pool is contracting; add to that, the baby boomers reaching retirement. This could force wages up.
Food costs are increasing drastically. A dozen eggs have gone from 99 cents to $1.50 in the last two months with a sign in the window “limit two dozen.” Granted, eggs have been $2.69 a dozen at Ralph’s for years, I just don’t buy my eggs there. The damn chickens got a pay raise and I didn’t!
The big difference between a blog and the news is; we are suggesting what may happen in the future, whereas the Newspapers and TV report what has happened. We are looking forward and they are examining the past. The news media needs, “Who, What, Why, When and Where,” for a story. Without it, it ain’t news. A blog is kind of like little Johnny telling Daddy that Mommy’s been fooling around. Daddy needs a name before he loads the hand gun. When he pulls the trigger you have all 5 W’s. Now that's news!
The good thing about all of this for next year is that this is only a blog. So, "No News is Good News!"
Have a Happy New Year Everyone!
14 comments:
Remember that bank foreclosures count as a house sale when you view real estate statistics.
OMG! I had no idea. I thought about it, but concluded they couldn't possibly include that as a sale.
Yes, good point about foreclosures.
On unemployment stats, perhaps we'd better also look at proportion of total population in full-time-equivalent employment, since, as you say, demographics are getting twisty.
And I agree with your bit about bloggers seeming to be amateur icebreakers. Karl Denninger says the media aren't telling the truth, but maybe it's fairer to say that they are often as trivial and irrelevant as celeb gossip.
Happy New Year!
I like it when you said,
The big difference between a blog and the news is; we are suggesting what may happen in the future, whereas the Newspapers and TV report what has happened.
Not only that, many in the media thinks like a turkey and thinks that we are 'predicting'. In reality, they fail to understand that by exploring the possibilities, we are preparing for Black Swans. As Failure to understand Black Swan leads to fallacious thinking says,
Therefore, those people who fallaciously believe that preparing for Black Swans is ‘predicting’ is like believing that the parachutist who packs a reserve parachute is ‘predicting’ that his/her primary parachute will fail. Here, as you may notice, we explore the possibilities of how things may go wrong, which is far from ‘predicting’ that things will go wrong.
Hi Tyrone
Another thing to think about, the bank is a motivated seller. They can figure out how much "Jingle Mail" they're about to get from looking their 90 day delinquent loans.
Deutsche Bank is a pretty big home owner I hear.
Hi Sack
I think that unemployment could be a key issue. A lot of pundits claim the economy is strong because of low unemployment. Back in the early 60's many kids never finished High School. They could get a damn good job without the certificate. There was a labor shortage--a college degree was not a necessary item at the time.
Hi Contrarian
Welcome aboard.
As your name suggests, it is probably wiser to not follow the crowd. Also greed is a luxury to avoid.
I'll check out your link. thanks
Is there an egg bubble? The Safeway in my hometown has 18-count eggs at $6.39. And this ain't chicken feed!
Hi Miketurn
That's a horrible price for eggs!
Maybe its time to start up a chicken ranch.
He answered and said unto them, When it is evening, ye say, It will be fair weather: for the sky is red.
And in the morning, It will be foul weather to day: for the sky is red and lowring(threatening). O ye hypocrites, ye can discern the face of the sky: but can ye not discern the signs of the times?
Matthew 16:2-3
I often think of this passage when I hear what the media says, compared to the information that I read from sources such as yours, and others.
Thank you for keeping this site up, I hope you and your family have a great new year.
Hi Anon 10:27
Thank you and a great year to you and your family too.
Jim,
This must be your year, you started this blog in 2005 and then you used the analogy of the 1929-1932 time period ("the great depression of 2006 need no travel agent"), saying that it took 3 years to truly feel the effects of the great depression.
Well, I am ready with a pot of gold and some S&P puts.
Although I truly believe that if a depression were to happen, it would have by now. In this day and age, things happen faster, info moves around quicker, so if it took 3 years the last time, more than 70 years ago, it should have taken 1 year this time.
I'm playing it safe with exposure to the downside, however I think it is a low probability event, as black swans are. I have listened to people calling for the beginning of the end for over two decades but somehow this great country pulls itself out of peril, always to my amazement.
good luck to you this year and I hope your prediction to be true, I am looking forward to buying houses for cents on the dollar with gold at $2000 an ounce.
a longtime anon
Hi Anon 3:53
Common sense suggests that it should happen faster, but this is a people thing. Human nature hasn't changed over the years. People don't throw in the towel until the very end.
Don't for one minute think that the government isn't burning the midnight oil on this one. They could go back on the gold standard and make it illegal for citizens to own gold like FDR did. Remember it wasn't legal to own gold in the US until 1973. The goal of this would be to keep trade between nations stable. You can't keep countries from printing currency, but the goods would be paid for using gold. Its kind of like your grocer saying no to your check and demanding cash. No Credit.
Your statement "somehow this great country pulls itself out of peril" leaves me wondering if that's what everyone is waiting for. I don't see it happening this time around.
The recession is almost here, the only trouble about this sort of label, it's only visible from the rear view mirror. Time will tell.
Thanks for you comments.
Keep up the great work Jim. No matter what happens, I’ve followed your blog for two years now and continue to learn from it. People (my belief only) demand either right or wrong and generally do not accept that gray matters (pun intended).
Two witnesses stand at a block corner and see a horrific accident before their eyes. When asked to separately make a statement about what occurred you get two distinct and different accounts. Some facts can be validated, i.e. the color of vehicles, time of day, weather conditions, etc… but human factors involved are only speculative. Read between the lines of both statements and the relative truth should reveal itself.
Point is this… One person can never be 100% right or wrong. You must gather much information and many opinions to come to what is perceived to be true or false when predicting the future and understanding the past. Throw in some humor along the way and that just makes it all the more worth my time!
Hi Tom
Thank you for the compliments.
I agree Right and Wrong are issues of perspective.
If you have time, you might want to read a book, that dramatically changed my life and my thinking. Its called "The Tyranny of Words" by Stuart Chase. Read that and I guarantee that you will never lose another argument.
Glad you like the humor, it's a little off the wall, but it makes writing this blog a lot of fun.
Take care
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