CFOTOCEO (40.71)

11 Comments – Post Your Own

#1) On November 06, 2009 at 1:20 PM, davejh23 (< 20) wrote:

For the stock market, who knows?  I'm currently trading ETF's and will be buying more dividend stocks if we see a big decline.  I think economic reports will continue to be mixed.  Some companies may be well on their way to recovery, while many others will continue to struggle or fail.  Consumer spending will likely be weak for some time...not necessarily sharply declining though.  Hopefully, unemployment will peak by Q3 '10, but it could take years to get back to "full employment".  We'll likely have hundreds of bank failures next year and continued (possibly increasing) uncertainty in financials.  For housing, I think we have a long way to go.  As interest rates rise to "normal" (7-8%) levels after a decade of unusually low rates, there will continue to be downward pressure on home prices.  A period of even higher rates could decrease affordability significantly.  FHA rules may be changed at some point due to their problems, which could also hurt housing.  It will take years for some areas that are extremely overbuilt to see home prices stabilize...not even considering the impact of future foreclosures.  However, even areas that didn't experience a "boom" will still see price declines if interest rates increase significantly.

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#2) On November 06, 2009 at 1:51 PM, CFOTOCEO (40.71) wrote:

I tend to agree with you, this said, we have to pay the bill at some point so the FED has it's hands full.  Now, if we did get back up on our feet faster than expected then it is possible to keep rates low and slow down the money press. 

You can line up 10 economists and get 11 different answers.  Good comments, I enjoyed the read.

 

 

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#3) On November 06, 2009 at 11:02 PM, CFOTOCEO (40.71) wrote:

With 10 plus % unemployment, does anyone forsee any further down turns in the economy next quarter?  If so or not why?  What are your holdings for the next six months?

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#4) On November 06, 2009 at 11:13 PM, Rasbold (95.15) wrote:

I think Black Friday on will be pretty crappy. Expectations are low and still reflect cost cutting, not any real production. Until construction comes back, spending will suffer.

 Congratulations on your promotion, though.

 

Good Luck and May Your Dow Never Jones!

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#5) On November 06, 2009 at 11:17 PM, CFOTOCEO (40.71) wrote:

Black Friday will indeed be interesting, with pre Black Friday sales already starting, it's retails hedge against declines. 

 

"Good Luck and May Your Dow Never Jones!" (Rasbold) 

 Gotta love that quote.

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#6) On November 06, 2009 at 11:42 PM, ease1 (68.06) wrote:

Right now, I think unemployment is a key factor.  People can't work, then they can't spend either.  Even those that are working are attempting to pay down their debt rather than spend on ordinary consumer items.

Interest rates won't be a factor until the govt. is read to start shoring up some of it's money.  And the way things look right now, that won't be for a while.   

It seems to me that this run that we've had since March could mostly be attributed to stimulus.  I hear lots of talk of "W" shaped recovery and at this point I'm surprised we're at 10k.  Mostly because housing is in such bad shape, unemployment unstoppable, and govt. throwing money at anything that moves.

I think next quarter we may be looking at a downward trend.  Lots of things can happen in the holiday season.  Until first of the year, it will be difficult to get a handle on anything.

I like dividend's too at this point but I still have some plays from September 08 that are holding pretty good.  I may just let'em sit.

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#7) On November 06, 2009 at 11:47 PM, CFOTOCEO (40.71) wrote:

Interesting point that the market gains can be attributed to the stimulous, will you elaborate further?

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#8) On November 07, 2009 at 12:33 AM, ease1 (68.06) wrote:

I don't know for sure the real reason and I certainly don't see any rational or fundamental reason for it.  My thinking is everything is in the toilet right now, how could the market be gaining? 

State governments are going broke, housing is in shambles, and financials are difficult to follow and quite possibly unknown at this point.  I agree with Dave that we will indeed see more failures going into next year.

The only explination I can find is stimulus at this point.  Not that I agree with it, but small bumps in housing with first time buyer tax cred's and of course the heavily debated cash 4 clunkers.  Ford posted a slightly better than negative quarter and GM I think I read somewhere actually sold a few cars, well at least more than one.  Extension of unemployment benefits as well.  The govt came out with numbers the other day of 650k jobs saved or created.  Though I don't necessarily believe the numbers, because our govt always tells us the truth right, but if money is being filtered into economy from this perspective, it could partially explain our run.

Outside of that, I think the market could be reacting from an emotional point of view.  It's certainly not fundamentals...

Again I think it comes down to unemployment.  If consumers don't have money to spend, businesses don't have earnings to gain and cash flows dry up.  Businesses sitting on large amounts of debt are in trouble. 

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#9) On November 07, 2009 at 9:55 AM, CFOTOCEO (40.71) wrote:

Recent earnings reports have been pretty good but you are correct, if people have no job then they will not spend thus earnings next go around will be lower of which I expect the market to price that in.

I am still courious when inflation will set in, of which will be an issue.  the FED can not keep cheap money out there forever.  Infaltion could set the economy back pretty hard.

IMO we should have never bailed out anyone, if we took the stimulous and divided it by every Federal tax payer we could have issued a check, taxed the check putting funds back into the Treasury and most would have paid down their debts and got back on track.  Instead we gave it away to a few who are still in need of more funds. 

There is talk of yet another stimulous, it does not make sense.

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#10) On November 09, 2009 at 12:49 PM, CFOTOCEO (40.71) wrote:

Market is doing well today, based on the comments above, are there others who believe the stimulus is the why the market is doing so well?  If true, then this run is going to be temporary.

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#11) On November 10, 2009 at 8:47 AM, CFOTOCEO (40.71) wrote:

OVEMBER 10, 2009

U.S. Lowers Goals for Asia Trip

By JONATHAN WEISMAN

 

WASHINGTON -- President Barack Obama jets to Asia on Thursday for a four-nation swing that White House officials say will highlight the centrality of the continent to U.S. economic health and security.

 

But administration officials say the president isn't likely to bring along tangible concessions on hot-button issues, nor will he return with concrete achievements. Unfinished business -- from the shape of U.S.

military bases in Okinawa, to a South Korean free-trade agreement, to climate change, trade and currency issues with China -- will remain unfinished.

 

Instead, Mr. Obama will likely rely heavily on oratory and personal popularity to try to boost U.S. influence while maintaining close economic ties to a region that has become the biggest creditor to the U.S.

 

With the trip, Mr. Obama will have visited 20 countries in his first year in office, a record for a U.S. president, according to Jeffrey Bader, senior director for East Asian affairs for the National Security Council. All that travel is not out of "wanderlust," he said, but because "it is essential to restore American leadership, influence, image, and standing in a world where all have suffered in recent years."

 

At the same time, White House officials cautioned that the president isn't likely to make much headway on a free-trade agreement with South Korea that Seoul sees as essential to U.S.-South Korean relations.

Michael Froman, deputy national security director for international economics, conceded that not enough progress has been made on the key U.S. demand -- easing access in South Korea for U.S. auto exports.

 

Mr. Froman said talks between Mr. Obama and Chinese President Hu Jintao aren't expected to yield an agreement on climate change between the two largest emitters of greenhouse gasses. The two leaders will "work toward making Copenhagen a success," he said.

 

  

Mr. Bader said calls by the new government in Tokyo for a smaller U.S.

military "footprint" in Okinawa are also not "ripe for resolution or a focus of the visit."

 

White House officials didn't suggest the president would press for concrete steps on his push to "rebalance" the world economy by coaxing China to consume more domestically and the U.S. to import less. The weakening U.S. dollar and ongoing economic malaise are already depressing U.S. consumer appetite for imports.

 

But calls for China to allow its currency to strengthen have gone unheeded by Beijing, and with Washington expected to continue running a near-record budget deficit this fiscal year, Mr. Obama has little leverage to press the Chinese, who have become the largest creditor of the U.S. In an interview with Reuters Monday, the president did say "currency, along with a host of other issues, will come up" in meetings with Chinese leaders.

 

Without achievements, Asia experts warn, Mr. Obama's effort to bolster U.S. influence in a region where Chinese and Indian power is rising fast are bound to falter.

 

"There's a feeling among the business community and foreign policy experts that we really can build a lot of momentum for a trans-Pacific series of agreements that would keep the U.S. locked in," said Michael Green, a senior adviser at the Center for Strategic and International Studies. "The problem is, the U.S. brings absolutely nothing to the table."

 

Daniel Price, a lawyer at Sidley Austin who held Mr. Froman's post in George W. Bush's White House, said the Obama administration has placed on hold a Bush move to join free trade talks with Singapore, Chile, New Zealand and Brunei. "You can't be engaged in the region if you are disengaged on trade," Mr. Price said.

 

White House officials say at a time when the president is pressing Congress to pass major legislation on health care, energy and climate change, financial regulations and education, it isn't politically feasible to bring up the explosive issue of trade. U.S. access to Korea's automobile market has been a political issue since former House Majority Leader Richard Gephardt made it central to his presidential run in 1988.

 

"We want to ensure that the FTA does provide adequate access for U.S.

automobiles to the Korean market," Mr. Bader said Friday at a Brookings Institution appearance. "But the timing of when this can be done and what is politically feasible in the very political context surrounding trade that we deal with, that's a question above my pay grade."

 

What the trip lacks in achievements, Mr. Obama hopes to make up in appearances, news conferences in Tokyo, Beijing and Seoul, a speech on U.S. engagement with Asia at Tokyo's Suntory Hall and a speech and town hall-style session with young people in Shanghai. Mr. Bader said the idea is to use the president's "special communications gifts."

 

Write to Jonathan Weisman at jonathan.weisman@wsj.com

 

Printed in The Wall Street Journal, page A14

Classification: UNCLASSIFIED

Caveats: NONE

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