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alstry (35.35)

It is NOT EASY being Alstry......

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May 11, 2009 – Comments (23)

Documenting the Zombification of the country he loves......

Seeing trillions of taxpayer dollars thrown at zombie banks sucking the life out of our economy.

Watching Auto Sales DROP 50% and thousands of dealers shut down

Observing Tax Revenues to the largest state in the Union DROP 50% in one month.

Reading about New Home Sales DROP OVER 75% from Peak.

Seeing unemployment approaching 20% while the public is told its under 10%.

Knowing Deficits will rise to levels never seen before with little hope of bridging the gap.

Hearing about food banks running out of food due to so many lining up becasue they are hungry.

Knowing millions of elderly will have trouble making ends meet while even more millions of our youth can't find jobs.

I know many of you SEEMINGLY don't give a damn....and that is OK.....Alstry likes to win too and party hard.......however, not to the exclusion of understanding the impact of what is really going on, in the end, we all live in one country, that is made up of fifty states, and hundreds of counties and thousands of cities, collectively constituting one system that is consumer based....and if most of us are screwed.....our entire system is screwed......and in the end, we are all screwed.

Soon you will learn about the concept of concentric contraction....it will affect us all.....too much is too leveraged in America to avoid it......and just from the numbers above.....we already are much further down in a much shorter period of time than we ever experienced in The Great Depression.....and the contraction is just the beginning.   

These facts can't be refuted.....and soon these facts will likely slap us all in the face...unless a new policy is instituted.

PREPARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

 

 

 

23 Comments – Post Your Own

#1) On May 11, 2009 at 8:13 PM, bridgeboy0 (30.85) wrote:

"Observing Tax Revenues to the largest state in the Union DROP 50% in one month."

Wow!!  You mean property taxes in CA are down year over year???  That's SHOCKING!  I wish someone had prepared us for this.  I mean, I would think that sometime in the past year SOMEONE would have written a news story or went on TV to tell us that the real estate market in CA was down compared to last year.  I'm just flabbergasted that the first I've heard of this phenomenon is from Alstry...

Keep up the good work of keeping us on the cutting edge of news, it's much appreciated.

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#2) On May 11, 2009 at 8:22 PM, alstry (35.35) wrote:

bridge...

even worse....CA's general fund revenues are DOWN 50%...I know its hard to believe that the mainstream media is not making a bigger deal of it....but these are the times we live in...

What can we say but....PREPARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

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#3) On May 11, 2009 at 8:38 PM, FinancialModeler (26.98) wrote:

The stock market seems to disagree with your view, as do I.

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#4) On May 11, 2009 at 8:43 PM, alstry (35.35) wrote:

I understand Financial.....

but the State of CA agrees with me....as does

millions of elderly, youth, and unemployed workers across America

millions of citizens and businesses getting credit cut off

millions of auto workers

millions of construction workers and contruction dependant workers

millions of restaurant and hotel workers

millions of mortgage brokers and real estate sales people

and guess what....before too long....I am quite confident you will agree with me too............

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#5) On May 11, 2009 at 8:50 PM, bridgeboy0 (30.85) wrote:

General Fund (GF)

For legal basis accounting and budgeting purposes, the predominant fund for financing state government programs, used to account for revenues which are not specifically designated to be accounted for by any other fund. The primary sources of revenue for the General Fund are the personal income tax, sales tax, and corporation taxes.  The major uses of the General Fund are education (K-12 and higher education), health and human service programs and correctional programs.

Again, how could anyone have foreseen that California's personal income tax, sales tax and corporation taxes would be down 50% yoy...  I mean, the economy in CA has been REALLY great this past year.  Noone has been out of work, so the personal income tax should have gone up.  People have been spending money hand over fist, so sales tax should be up.  And corporate taxes?!!?!  I mean every company report I've read in the past year has had companies reporting record profits.

Your news is truly earth-shaking (appropriate for CA).  I'm sure that the 50% number has nothing to do with all the new tax-regulations giving anyone with a pulse a break on their taxes (indivually or as a corporation). 

I am agog with wonder at your insights and investigative prowess.

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#6) On May 11, 2009 at 8:55 PM, kamuirei (< 20) wrote:

Would you please stop spamming, or at least change your presentation.  The use of third person, caps, excessive punctuation and self glorification cause your posts to be on the verge of unreadable.  The posts complete lack of basic social grace and evident assumption that the reader is ignorant is outright insulting.

Frankly, all the rest of us are in the same economy you are. However, the majority have the good sense to make the best of it rather than proclaiming the end of times.  The former can be productive, the latter is not.  These events are part of the cycle, better times will come - and so will worse.

You believe people don't give a damn.  You idiot.  This affects everyone and we know it.  Most people simply accept that the macro economic situation is beyond their control and do what they always have - work, go to school, spend time with loved ones, and make the best of life.  I suggest you leave your cave and do the same.  The sun still shines and it happens to be a beautiful day.  (The birds are literally singing outside my window as I type)

Since you love your country and obviously have a rare gift - an abundance of time; go make it better.  Volunteer at a school, a church, a food bank, an old folk's home.  Have you ever had a child tell you that you are their father.... that their real father is in jail?  Have you ever sung Christmas carols to cancer patients at the hospital?  Have you ever delivered food to the needy?  Have you ever taught a child to read, helped them practice for a play, given them a pat on the back, listened to them, taught them how to multiply, or what exactly is the lateral line on a shark for? 

How many have you angered, driven to despair, disheartened?

How many people have you made smile today?  How many have you made laugh? How many have you let know that you're there for them now, when it matters most?

The future is uncertain, prepare... yes.  But sinking into despair may destroy you - proclaiming your despair and calling others to join you?  Never.  Love, dance, sing, hug, kiss, smile, laugh, cry, run, jump: these are the simple things that matter.

 It's not easy to be Alstry - because he's forgotten what is important.  You have my pity, but nothing more.  I suspect my efforts are in vain.

"I cannot comfort him either; he has made himself unable to hear my voice. If I spoke to him, he would hear only growlings and roarings. Oh, Adam's son, how cleverly you defend yourself against all that might do you good!"- C.S. Lewis

I have no intent of reading your response, do not waste the time that could be better spent.  I shall not waste mine.

 - David

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#7) On May 11, 2009 at 9:07 PM, alstry (35.35) wrote:

David.....

I don't have time to respond right now....I just finished playing catch with my daughter and I am off for beers, bloodys and partying with my buddies.....it's Monday Night Book Club and we are going to a headline concert....please don't tell our wives.

Thanks for your response....by the way....for the whose knows what time....Alstry never said this was the end of the world....ever.....that is your perspective of the current time....not mine.....and right now its Miller time....all the best and one more thing.....

PREPARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

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#8) On May 11, 2009 at 9:56 PM, StopLaughing (< 20) wrote:

I never thought I would be defending Alstry. However, he has broadened his purpose from screaming unemployment to a much broader set of topics which may be of value since he often includes a good set of notes or citations.

Yes his presentations are still "off of the wall". If you take him too seriously then his info could do some harm but most of us realize his strong need for exhibitionism (need to be the center of attention) drives his melodramatic posts.

Alstry is wrong in the short run and hopefully in the much longer run. However, even in the worst case the American middle class shrinks and our economy look more like the 3rd world. We will survive. We probably won't comfortable.  

The Bears (curse them) will be rich. 

 

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#9) On May 11, 2009 at 10:04 PM, rags2riches247 (83.22) wrote:

Alstry, you are dramatic, but right.  I rode this market up about 30-50% depending on the stock.  Now, I am taking profits and turning short.  I have made most of my money trading in the tunnels this market creates.  I can't hope for much more of a rise in stock prices at this point.  The economic situation is just to grim. esp. with the bank share dilutions.

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#10) On May 11, 2009 at 10:11 PM, StopLaughing (< 20) wrote:

I have heard a lot of talk by the Bears but if you look at the short interest on the banking stocks, they are not loading up (not yet). They are afraid and out of the market and hoping to talk it down.

A good short squeez may be what is needed to propel this market thru the resistance. First you have to get the Bears in instead of just talking.

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#11) On May 11, 2009 at 11:03 PM, SolarisKing (22.17) wrote:

I love it when these folks come on here and critique alstry. Now i know that i am an awful trader, and that almost every one of you is better than i am, but i have to say..  . . . .

This economy is toast. Period. Houses don't have to be new, and vacations don't have to be on credit cards, and that's just that.

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#12) On May 12, 2009 at 1:39 AM, MGDG (35.16) wrote:

Alstry, that is interesting on the 50% drop in Tax revenue in Ca. They passed proposition 13 in Ca decades ago, which limits property tax increases to 2% a year, so I don't see how a major housing slowdown would contribute significantly to that number. I don't recall numbers anywhere near these reported in any previous recessions, going back at least 40 years. I would be curious if this was 50% across the board, or if there were specific areas that contributed to the bulk of the decrease.

 I like to listen to the Birds sing just as much as the next person, but I won't let it direct my investing decisions. I will be looking to the future with eyes wide open and make decisions based on the information recieved, not on what I would like that information to be.

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#13) On May 12, 2009 at 8:40 AM, alstry (35.35) wrote:

By some accounts, global trade is contracting even faster now than it did in the early 1930s during the global Great Depression.

In the past 12 months, real exports are down 14% while real imports are down 18%.

http://www.marketwatch.com/story/falling-exports-push-us-trade-gap-higher

Guess what the deficit will look like next month.....

The average price of imported crude oil rose to $41.36 per barrel from $39.22, the first increase in eight months.

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#14) On May 12, 2009 at 11:14 AM, jddubya (52.61) wrote:

I would think that it's actually easy being Alstry.  It's the seemingly sometimes unwarranted backlash that would make it hard to continue being public.

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#15) On May 12, 2009 at 5:47 PM, 4everlost (29.33) wrote:

You can't make this stuff up...

 Financial Astrology

Section 1: Part 1
In which we consider what our astrological foundation will be, and look at five DJIA company first trade charts.

Do you have what it takes to become a Dow Jones company?

If a chart for your first breath shows how you will or will not develop and live, then the first trade chart for a company ought to do the same. Let's see if it does, secure in the knowledge that we'll learn a lot even if it doesn't.

My StarTrax program gives me the birth charts of the companies that currently make up the DJIA. The plan is to examine them individually and in combination to see what we see. This means we can pick and choose, and usefully examine natal factors, transits, eclipses, new and full moons, and anything else that takes our fancy.

Know the native:
Just below is the first trade chart for Microsoft (13 March 1986: 9.30 am; 40N43, 73W59) and we're going to take a look at it to see what we can see. It's good if we can get a sense of what Microsoft is all about, so that we will be better able to make accurate forecasts.

If you don't know the native, so to speak, you're not going to be able to figure out how he or she will react under different circumstances - so transits and solar returns and eclipses will come and go, but you will not be any the wiser. You'll be right some of the time, of course, but you can't really depend on yourself.

 

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#16) On May 12, 2009 at 6:33 PM, UKIAHED (35.79) wrote:

Observing Tax Revenues to the largest state in the Union DROP 50% in one month.

 

even worse....CA's general fund revenues are DOWN 50%...I know its hard to believe that the mainstream media is not making a bigger deal of it....but these are the times we live in...

 

Where in the world are you getting your numbers?

Taken out of context – I can see why you are so scared – crap – that would be enough to scare me as well!  However, we here in the great state of CA have already planned for a reduction in revenues – indeed the State Controller reports:

 

Compared to the 2009-10 Budget Act,

General Fund revenue is below the

year-to-date estimate by $2.1 billion

(-3%). The three largest taxes were

under the Budget Act estimate by

$1.8 billion (-2.7%).

 

So, we are off by 3% from what was budgeted – I think we can live with that…

More on the tax revenues can be found here.

 

Enjoy

Ed

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#17) On May 12, 2009 at 8:40 PM, alstry (35.35) wrote:

We are talking about April's taxes...when revenues fell off a cliff....up until April things were tracking pretty good....

simply using y/y figures......

April's sales tax receipts were down 50% and general fund receipts were down 39% in April.

Sales taxes were $452

million lower (-50.9%) than last April,

and personal income taxes were

down $5.7 billion (-43.6%).

As Alstry said....it's not easy being Alstry.

Here is a chart to give you a better picture:

http://1.bp.blogspot.com/_OjftCEBUcYQ/SgbUwrVKS8I/AAAAAAAAFLQ/s4-z3TJMlhM/s1600-h/revenue_2008-2009_ca.PNG

Pay special attention to the blue line!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!:)

You buddy Big Al.

 

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#18) On May 12, 2009 at 8:55 PM, FinancialModeler (26.98) wrote:

alstry, it's pretty obvious deflation has flattened out.

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#19) On May 12, 2009 at 11:33 PM, UKIAHED (35.79) wrote:

April's sales tax receipts were down 50% and general fund receipts were down 39% in April.  Sales taxes were $452 million lower (-50.9%) than last April

That is what I thought you meant – unfortunately you typed:

CA's general fund revenues are DOWN 50%...I know its hard to believe that the mainstream media is not making a bigger deal of it

Sales tax is a small part of the general fund.  The news media did not make a big deal out of this because we all knew that this was going to happen.  You see, we increased the sales tax rate in California on April 1 of this year by 1%.  So, everyone purchased big ticket items in March.  You should have seen all the commercials on TV telling us to buy that car now – don’t pay the extra sales tax in April…  It actually got a bit annoying.  Of course, the drop in gas prices did not help with the sales tax collection…

As far as the Income Tax collections – that was expected as well.  As you can imagine – loss of jobs and no capital gains expected for this year means that lots of big earners will not be paying estimated taxes – add to this the losses from last year – and you can see how the drop in receipts would be quite obvious.

So, the people that the state pays to estimate this stuff expected all of this.  This is why the drop from budgeted numbers was only 3% (not a scary 50%).  In fact, this is why it took California so darn long to pass the budget in the first place – many people did not believe the estimates.  Turns out that the state got something right – go figure.

Please do not take this to mean that I see all green fields and daisies.  The situation is quite dire.  This recession/depression will be the stuff of many history books.  But, preparation is only as effective as the assumptions that it is based upon.  So when you say to PREPARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! – please try to help your audience prepare for the expected outcome – not the sensational outcome.  Please give us numbers in context and backed up by research.  And please do try to help those that do not know how – to prepare correctly.  When they ask what you mean by “prepare” a response like:

and right now its Miller time....all the best and one more thing..... PREPARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Is just a bit ingenuous and contrite.

.I wish you and your readers well.

As always – have a great day and a good night.

Ed

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#20) On May 13, 2009 at 12:55 AM, alstry (35.35) wrote:

Ed,

Thank you for your persistence...you clearly demonstrate why Alstrynomics is so powerful against the mainstream noise...Alstrynomics is all about distilling what is important and anticipating the trends while sifting out the noise so the music is clear.

Despite the fact that I clearly was contemplating y/y figures...

Here is your statement again dealing with BUDGETED estimates and NOT y/y figures as I was discussing above:

This is why the drop from budgeted numbers was only 3% (not a scary 50%).

This is the Actual Statement from Controller John Chaing's release:

The State’s revenues continued to deteriorate in April. Total General Fund revenues were down $1.89 billion (-16%) from the latest estimates found in the 2009-10 Budget Act.

$6 billion decline from last year (pdf):

The above are the first two sentences in the release..hopefully you won't find them too difficult to confirm.

Ed, you are only off by over 500% on April's BUDGETED numbers....but don't be too frustrated, it could have been worse.

Then as far as this statement:

Sales tax is a small part of the general fund.  The news media did not make a big deal out of this because we all knew that this was going to happen.  You see, we increased the sales tax rate in California on April 1 of this year by 1%.  So, everyone purchased big ticket items in March.

It appears that your state's controller AGAIN has somewhat of a different opinion than you....this statement can be found a few lines down from the above:

Some of April’s sales tax receipts were pushed into early May, but declining taxable transactions still drove sales tax receipts well below the Budget Act projection.

I hope you don't mind my emphasizing where you and Mr. Chiang differ.

Now exactly what did you mean by this statement in light of the above clarifications:

Is just a bit ingenuous and contrite...

Remember....Alstrynomics is all about being right and thanks for further supporting and butressing why Alstrynomics is the best analytical tool out there.

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#21) On May 13, 2009 at 11:58 AM, UKIAHED (35.79) wrote:

Good morning Big Al

Thank you for posting a response that not only went back to the research – but also confronted me with seemingly conflicting numbers.  I truly enjoy any input that is not just rhetoric.  So, let’s get down to the analysis:

This is the Actual Statement from Controller John Chaing's release:

The State’s revenues continued to deteriorate in April. Total General Fund revenues were down $1.89 billion (-16%) from the latest estimates found in the 2009-10 Budget Act.

Ed, you are only off by over 500% on April's BUDGETED numbers....but don't be too frustrated, it could have been worse.

You are very much correct – the Controller had also given us a quote on just April.  Looking at the April YoY numbers does look scary.  I was not off by 500% on April’s budgeted numbers – as I did not address April’s numbers. My 3% reduction from budget was for the fiscal year receipts versus fiscal year budget.  3% still holds per the Controller’s comment noted in my #16 post above.  Why did I choose fiscal year instead of focusing on just April?  I believe that the more data points that you can gather before making an analysis – the higher the accuracy of your analysis.  Using only April gives you 2 data points (last April and this April).  By using the fiscal year versus the budget – I get to use 20 data points (one for each month of the past and present fiscal year – California fiscal year ends in June).

Take out of context – the April drop of 16% is quite amazing.  Maybe not quite as bad as your origional thesis:

even worse....CA's general fund revenues are DOWN 50%...I know its hard to believe that the mainstream media is not making a bigger deal of it....but these are the times we live in...

Did you notice a difference between 50% and 16%?  Did you take the time to find out why the YoY drop?  Or was it enough just to have a scarry number?  I did.  As it turns out, I drilled down into the facts a bit more to find the causes.  Is the California economy really tanking that much?  Or is there another logical explaination?  Turns out that when you only use 2 data points – the logical explaination can be quite easy to find…

Our state controller reported the following from April 2008:

General Fund revenue in April 2008 was $1.6 billion above (10.6%) the Governor’s January Budget estimate for the month.

 

Hmmm – not quite so dramatic when your first data point was 10.6% higher than expected and your 2nd data point is 16% lower than expected.  Seems to me that the net of the 2 is only 5.4%.  Still quite a drop – but actually quite positive in light of a U6 unemployment as high as it is.  BTW – when they indicate the “Governor’s January Budget” – they mean the month (January) that he adjusted his estimates – not the month that the estimates are for (just so you know). 

I hope you don't mind my emphasizing where you and Mr. Chiang differ.

Not at all – I prefer that you do – if no one challenges me – then I may not drill down enough to get accurate information.  One may even infer this to be the same reason that I challenge some of your statements!

My original statement –“ Sales tax is a small part of the general fund.  The news media did not make a big deal out of this because we all knew that this was going to happen.  You see, we increased the sales tax rate in California on April 1 of this year by 1%.  So, everyone purchased big ticket items in March”.

Your response - It appears that your state's controller AGAIN has somewhat of a different opinion than you....this statement can be found a few lines down from the above:

Some of April’s sales tax receipts were pushed into early May, but declining taxable transactions still drove sales tax receipts well below the Budget Act projection.

You are very much correct – and so was the Controller.  Declining taxable sales will have the effect of declining sales tax receipts.  We still have the problem of just 2 data points – but I’ll let that one go.  Where you went wrong was that you did not call me on my explanation as to why April was so low.  Upon additional research – it turns out that March was down as well – this would tend to negate my explanation much more effectively than your response. 

 

Now exactly what did you mean by this statement in light of the above clarifications:

Is just a bit ingenuous and contrite...

The above clarifications have nothing to do with my statement.  Let’s take a look at the prior portion of the quote to give us a bit of context:

"And please do try to help those that do not know how – to prepare correctly.  When they ask what you mean by “prepare” a response like:

and right now its Miller time....all the best and one more thing..... PREPARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Is just a bit ingenuous and contrite."

My assertion is that “it’s Miller time…PREPARE!!!!!” in response to readers asking you to define what you mean by  “PREPARE” is a bit ingenuous and contrite.  Or to put it in plain language – your statement is not helpful at all…

Perhaps I am putting too much emphasis on your closing lines – maybe you just want to yell the warning – leaving the education about preparation to others.  It may be that I will have to do a blog about how to prepare for the future – I will give it some thought…

 

So – to close.

 

Yes Big Al – things are worse than they were a year ago – even worse than 2 years ago.  But I do not see them as catastrophic.  Not yet anyway.  But you can bet that I will continue to watch for additional developments – be they green shoots or gopher holes…

 

Have a great day.

Ed

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#22) On May 13, 2009 at 12:35 PM, alstry (35.35) wrote:

You are talking about  budgeted....I am talking about nominal....I think you must of intened to repsond  to another blog......

as a result your entire analysis does not apply to my blog.

But thanks for trying.

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#23) On May 13, 2009 at 12:39 PM, alstry (35.35) wrote:

As far as you not seeing things as catastrophic....

Ed...it is just that your vision is not quite as clear as those at the Institute....

please be patient...I have little doubt you will come around....my guess is that it will not be too long from now.....

and if you were a regular reader of this blog....my simple preparation recipie is out there for all to see....over and over and over again.....

Take care and make sure you are prepared....if preparation is even possible for what lies ahead.....

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