Unemployment rate is down -unbelievable!!

libertad · Jul 11, 2005

Coffeebean...

I am not a long term player....I just want prices to move intraday...

In deflation...all prices shift down...fewer dollars chasing the same goods...evrything is down....

The returns on money goes down big time...like it already is...all over the world...

http://www.fxstreet.com/nou/continguts/centralbanks.asp?menu=interestrates

My answer is to position your mindset to perfect your intraday trading skills...because the world's companies and commodities will be tradeable around the clock electronically...

To just sit on a postion of anykind for any length of time is not something that interests me...

libertad · Jul 11, 2005

Coffeebean...

What does come to mind are trading products such has been discussed by economist Gary Schilling...

But even so...who is going to provide the liquidity on the other side when you you want to move size...

Remember what happened in 1987...there was a lot of insurance around ...but nobody on the other side...

When you look at the list of Central Banks rates that I provided you...is it not such an odd thing to think that chasing a 1 to 3% return is attractive....?

Deflation is very ugly indeed...no bail outs for the banks...

If there was an inverse instrument...they would be first in line...

In the troubled smaller countries...they printed a lot of inorganic money to escape this...and of course they are all stay in a delicate balancing act versus their currency peers....

I sincerely believe that the globalization of capitalism will just send more trading names through the tube...and that there will always be some volatility around...and the trading tubes will quickly consolidate now that its just a matter of a few computer banks...

To me the future of trading ...not investing...is getting brighter all the time....

Long term paper instruments to beat deflation....even if they had them...wouldn't trust them...

libertad · Jul 12, 2005

Coffeebean....

25 year zero coupon bonds have outperformed stocks since the 1980 Carter administration when US short term rates were over 20%...

And while it is true that a move from 4.5% to 3% is a lot of money...over 40%....the fact that the US make have hickups in rates to provide dollar bouyancy make this a very tricky play....because if the rate were to move conversely from 4.5% to 6.5%...they would lose a lot of money...No real money to be made for short term maturities...

But a hard core deflationist ...thinking that the US was headed to 1% like Japan...can find an instument ...the 25 year zero coupon bond...

SteveD · Jul 12, 2005

Hey Podna'

Other than US or UK ALL other countries/governments have and will take it away from you if they decide to.

Don't be silly.

SteveD

libertad · Jul 12, 2005

Steve D

Hey Podna'

Other than US or UK ALL other countries/governments have and will take it away from you if they decide to.

Don't be silly.

SteveD

...........................................................................

WhatÂ´s a lot more dangerous are US women....

Divorce will take it away from you faster...and unfortunately better than 70% of the men on ET can...or will appreciate this...

See ya Podna...Hope you have plenty of Â¨grape koolaid Â¨...and Â¨frosted flakes...

Coffeebean · Jul 12, 2005

Quote from libertad:

"WhatÂ´s a lot more dangerous are US women...."

Nonsense, mine can't even take a punch!!

BTW, hasn't anyone noticed the rise of facism in the US/Britain?
More...

libertad · Jul 12, 2005

What I know is that as globalization takes hold...is that the professional trader has the choice to globalize..

You diversify your assets in more than one country..in more than one currency...while making sure that you launch a professionally managed low tax strategy...

You live where you earnings go further....and the environment best suits you...

Who cares about any single country...why get married to any of them...

Look...learn more than one language...get to know other people and beautiful places of the world...

You have no boss...your boss is you...

Enjoy the world...you are never stuck in any country...or subject to any single institutions' problems...

Be of..and for..and move with the world....just like adapting to the markets....

I do this now....live it every day....

Love it....

mtzianos · Jul 12, 2005

Quote from Coffeebean:

BTW, hasn't anyone noticed the rise of facism in the US/Britain?
More...

This phenomenon hasn't even STARTED imo.

Wait until several of those "working poor" (a blue-collar person who lost his job in the factory and now works at Walmart at 1/3 of his prior wage) start to "loudly" express their frustration.

It's not just a US/Britain phenomenon, it's happening in many countries in Europe.

But in my opinion it will be more pronounced in US vs Europe, simply because the gap between social groups has widened so much in US lately. The financial elite is getting richer at the same time that most are getting poorer.

The numbers give the facts:
The corporate profits in US as a % of GDP during last couple of years have been the highest since the 1960s. The effective corporate tax rate has been the lowest since 1950s (as far as my data goes).

Have a look at the charts from recent article by Bill Gross (PIMCO, with 400bn assets under management) - "effective corp tax rate" 2nd chart from top:
http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/IO+July+2005.htm

PS: The article is interesting for every trader (to see the outlook by a fund manager).

Hydroblunt · Jul 12, 2005

Quote from SteveD:

Other than US or UK ALL other countries/governments have and will take it away from you if they decide to.

More...

With the tone set by the recent Patriot Acts, that will soon change. Regardless, what good would your US assets be if the real inflation sets in and the dollar starts plunging.

mtzianos · Jul 12, 2005

Goodbye Middle Class; Hello House Poor
July 10, 2005
Richard Benson is president of Specialty Finance Group, LLC , offering diversified investment banking services.

Thereâs no question that home building, home sales with large capital gains, and record mortgage financing drives the economy, creating millions of jobs and generating billions of dollars in wages and tax revenues each year. Nothing plays a more crucial role in providing individual financial security for millions of Americans than homeownership. Obviously, the drivers of homeownership are a good steady income and cheap and readily available mortgage credit. Indeed, looking at housing prices rocketing up, our government tells us we have never had it better!

For many households, however, who have not stepped onto the first rung of the housing ladder, affordability conditions have deteriorated, especially among lower income households. The homeowner rate is less than 50 percent for households in the lowest income bracket, while it surpasses 90 percent for those in the top income bracket. Higher income clearly widens the choice of available homes for purchase and increases the likelihood that a household will qualify for a mortgage. Around 1980, when asked what level of personal income would qualify as middle-class, George H.W. Bush replied: $50,000. Only 5 percent of the U.S. population made that amount of money at that time. With inflation, thatâs over $100,000 today.

While the United States has traditional values of hard work, entrepreneurship, and individualism, we have a large and growing number of people in our country who live hand to mouth and paycheck to paycheck. Since factories are no longer built in our country and the cost of living is increasing at an astounding pace, itâs likely that the lower-middle class will struggle to own a home for generations to come. The working poor are dreaming about white picket fences and becoming middle-middle, while the middle-middle aspire to become upper-middle and beyond so they can afford to build one of those Mc-Mansions weâve all seen that absolutely dwarfs the older, split-level homes the baby boomers grew up in.

There are five separate social classes in American society. They are the Upper, Professional Upper-Middle, Middle-Middle, Lower-Middle or âworking poorâ, and the Lower. America used to be a land with a few upper class, some lower middle class and the rest were somewhere in the professional upper-middle and middle-middle category. Factory workers were middle-middle. Now when a worker loses their job at the factory and takes a job at Wal-Mart for one-third of his previous wage, are they still in the middle?

A new class seems to be developing. I call it the âHouse Poorâ. In this over-heated real estate market where homes are selling above list prices and speculative buyers are quickly flipping properties at a record pace, the House Poor are keeping up with the rising cost of living by paying the bills through home equity extraction, home-equity loans and cash-out refinancing. While many homeowners believe they can live like the upper class and appear to be wealthy, theyâll be the first to end up in the poor house. Those easy money real estate speculators who purchased several investor properties are now beginning to see that renters are more difficult to find these days but the bills to maintain their properties keep coming in.

Indeed, homes have a tendency to actually make you poor because they need to be finished and furnished; older homes become deep money pits; roofs need replacing; drains clog; termites gnaw at foundations while squirrels and mice move in; pipes break; furnaces fail, and, in the south, mold and mildew canât even be insured; walls need paint; bricks cry out for tuck-pointing and yards need constant care. Worse yet, when it comes to the state and local government, they are always looking for someone to tax. As soon as you buy a house, you have just raised your hand and announced âplease tax meâ! While some localities offer tax breaks to primary residents, second home and investor property owners get hit full bore on tax increases!

(Historical trends indicate less than half of Americans owned their homes at the beginning of the 20th century. Homeownership remained fairly stable until the onset of the Great Depression during which many homeowners lost their homes. In the subsequent two decades, the homeownership rate rose dramatically with the rate easily topping 60 percent by 1960. Modest gains were made during the 1960s and 1970s, but during the 1980s the rate leveled off. Homeownership once again trended upwards during the 1990s as mortgage rates steadily declined and the economy expanded at rates not experienced in many years. (Statistics today indicate about 69 percent of Americans own their homes â a record high. However, the statistics count people who have purchased a home as owners yet many homebuyers today will never really own!).

A growing number of homeowners are realizing they can no longer afford to live in their home even though theyâre âmortgage freeâ! The conservative sane homeowner who purchased a home over five years ago and refinanced a 30-year mortgage â without taking money out - is now stuck paying higher inflated taxes. Indeed, the homeâs value hasnât really gone up because the price and the cost of everything associated with maintaining it is spiraling out of control. In a very real sense, as the house price rises, the value is forced down because it becomes so much more expensive to pay for the darn thing!

In paying so much for real estate today, itâs virtually certain the middle class homebuyer will never really own the home outright. With a mere 5 percent or no money down, todayâs buyer rarely uses his own money to buy. Besides, the mortgage is so big, they would have to win the lottery to pay it off. Moreover, who in their right mind would grossly overpay for an investment property?

Nationwide, 23 percent of homes purchased are investment properties, with some localized markets well over 50 percent. Today, about 15 percent of homes purchased are bought by sub-prime borrowers, and a majority of those need to use an ARM mortgage to qualify. Mortgage payments, as a percent of income, are steadily rising and approximately 10 percent of Americans spend more than 50 percent of their monthly income on the mortgage payment. While the statistics say 69 percent of people own their homes, at least a full 10 percent have no stake in the property and with the slightest disruption in income, will give the house back to the bank. For the investment property market, I really wonder how many people will stick around to pay the insurance, property taxes and mortgage when the price is going down. Calling them homeowners is a joke. If you really own something it means it is paid for and it canât be taken away!

Only the upper class can really afford what was once a middle class house unless, of course, you are willing to âtake cash out of your houseâ just to pay for living in it. When housing prices cool down but the cost of living keeps going up, the âphony equityâ in the house will quickly vanish. When that occurs, todayâs buyers will be literally eaten alive by housing costs. So, when it comes to class, the Middle will lose it and truly become the House Poor.
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