...in our school systems. I know, big surprise, but here is a prime example of why this country is in the financial mess we're currently in.
During a Q&A at the Newton County School Board meeting, Superintendent Dr. Whatley was asked why it was allowable for Newton County Schools to spend $1M (one million dollars) on a block of land for a new elementary school when it is having to furlough (mandatory day off without pay) it's teachers, looking at additional furlough days, and cannot afford substitute teachers. His answer...
"The money for the purchase of land comes from SPLOST and can only be spent for construction, renovation, technology, buses, land purchase and other related items. It cannot be used for salaries or general fund expenditures as has been stated previously in answers to teacher forum questions."
In case you don't know what SPLOST is, it's the acronym for Special-Purpose Local-Option Sales Tax. In any Georgia county, the county commission can levy this tax to fund the building and/or maintenance of parks, schools, roads, and other public facilities. When a county needs a new school, typically the funding will come from SPLOST.
Now on to my point. Let me set up a scenario that could happen in your home. A financially sound home is typically backed by a budget, such as a financially sound institution or state. Say you budget $400 a month to put towards the purchase of a new used car at some time in the future. This month your income is reduced because you didn't receive as many sales commissions as you had budgeted. What happens now? You will look for expense or saving catagories to trim back until your sales commissions are increased to expected levels. In order to complete the neccessaties of putting food on your table and keeping the lights on, you will probably cancel or drastically cut that savings for the new used car because it's currently not neccessary. This is how you keep the financial wheel turning soundly.
Government revenues (taxes...that's the only way they receive money) are decreased. How should the government handle this situation? The school board needs to cut back on funding for new schools so they may continue meeting the neccesities such as teacher salary or the abilities to insert substitute teachers in the event of a teacher being sick...especially since in this case Newton County's growth has slowed and the new school is not an immediate need.
Is this what happens? No. Since the land purchase is funded through SPLOST, they say "oh no, it's fine to cut salaries and not allow subs even though we are spending $1M on land, we are paying for that out of SPLOST because according to the Official Georgia code, we have to."
Well that's idiotic. There is a process called an ammendment by which we can change law that does not currently make sense and does not put forth the best interest of the community. This needs to happen. The government is allowing this $1M purchase because it's already funded. SO WHAT! This is misappropriation of funds in my book. There are more important obligations that need to be met before expansion can happen.
Somebody needs to amend the Georgia code that states the SPLOST requirements (O.C.G.A. Section 48-8-141), put it up to vote, and get it changed. This is called an emergency budget meeting. The government needs to try one.
Monday, February 22, 2010
Wednesday, July 2, 2008
Iran is smoking crack...again...
Ok this is getting ridiculous. So they say that any attack on them will be met with an "unimaginable response" and then they threaten to block the Straight of Hormuz. I know most people are in a fret about this because it would make gas go up another few bucks a gallon....oooohhhh...it's already $4, might as well hit $6. Let's make this interesting! Well here's what I have to say to Iran...
DO IT!!!
Block the SoH. Continue to piss off Israel. Continue to make threats to the U.S.A. One of these days you're going to write a check you can't cash and you're all out of Overdraft Protection. PLEEEEEEEEASE do it. I'm very willing to pay $6, $7, heck even $10 a gallon for a little while while Iran works their way into the "Ancient Civilizations" chapter of high school history books courtesy of the U.S.A, Israel and lord knows many other countries. At least we'll be paying for a show instead of just paying more for gas. I'm tired of this and I think the markets are as well. That's obvious considering a futures contract for a barrel of oil, dated December 2016, is selling for $136. That's scary.
So if anybody in the Iranian gov't read this...please...block the SoH. Do whatever crazy tactics you want to pull. It will be to our benefit.
DO IT!!!
Block the SoH. Continue to piss off Israel. Continue to make threats to the U.S.A. One of these days you're going to write a check you can't cash and you're all out of Overdraft Protection. PLEEEEEEEEASE do it. I'm very willing to pay $6, $7, heck even $10 a gallon for a little while while Iran works their way into the "Ancient Civilizations" chapter of high school history books courtesy of the U.S.A, Israel and lord knows many other countries. At least we'll be paying for a show instead of just paying more for gas. I'm tired of this and I think the markets are as well. That's obvious considering a futures contract for a barrel of oil, dated December 2016, is selling for $136. That's scary.
So if anybody in the Iranian gov't read this...please...block the SoH. Do whatever crazy tactics you want to pull. It will be to our benefit.
Time for the U.S.A to split?
So after reading several articles today about oil and the future of this country, right now they are related at a more than comfortable level, I said to myself, "self, when do you think we will start to see articles about the U.S.A. splitting into two nations?" Then I said..."Why wait! I'll go ahead and say it!" So without further ado...
If you know anything about ancient civilizations then you know that at some point, all come to an end. This is proof that stupid people have been around for all of time and an indication that they are not going anywhere soon so we're just waiting on the next big stupid person to mess up a great thing. Have he/she already done so? I think so...but it was a collection of stupid people instead of one person. Anyways, a lot of people in their older ages (over 60/70) will tell you that they have lived through the best years the U.S.A has to offer and I fully agree with them judging by the lack of leadership that continues to show in D.C. as well as the upcoming youth of America. This makes me ponder a situation that I know will not happen but can't think of a good reason as to why it shouldn't.
What if the U.S.A. split into two nations. Of course we'd have to get beyond the details such as how the country would be geographically split and such but say that was handled in a non-violent matter...how would that work? My thought is taking America as it was say 10 years ago and they remain under the great name of the U.S.A. and then they Obama-ites can have their own country to "change" what they wish. We'll call it Bozoland for sake of differentiation in this story. My proposal is very simple here.
U.S.A - Remains as is, implement the Fair Tax, allow people to choose their education sources, block off illegal immigrants. Done. Those 3 simple changes fix most of our current problems. Maybe not directly, but trust me, if you understand the great affect that those three topics have on the country, then you understand why. I could make this server run out of physical storage space if I get into how those three subjects affect almost everything in this country. I'm sure you're saying "but how does that solve gas prices?". Well that was taken care of when we geographically split. See, since Bozoland citizens love to be reliant upon the current Oil Lords, we were given the necessary oil-rich lands to become self-sufficient. Also, since the huge crowd of power-hungry politicians was reduced because of the Fair Tax, there is no longer a silent blockade on alternative sources of energy so we are well on our way to becoming free from oil. I know, you're really impressed with my level of thinking right now...it's understandable. So now we have a country where capitalism is favored, rewarded, and encouraged and that is the crutch of the country. All other good things follow suit. This U.S.A. place becomes well on it's way to having the best quality of life on this planet again.
Now we have Bozoland. Bozoland - If we have any say in it, this will consist of California, Oregon, and Washington. If possible we will transplant most of the northeast to this location as well. What about the beautiful Northwestern shoreline us U.S.A. citizens will loose out on? Well, you can either visit Bozoland or travel else where. But remember, to visit Bozoland you will be required to pay all kinds of ridiculous taxes that they will have implemented so you may find it cheaper to go elsewhere...kind of like the situation corporations are facing now in the current U.S.A. Anyways, Bozoians can do whatever they heck they want. They can "change" anything, it will basically become a socialist country. Use your imagination to create the perfect Bozoland in your mind.
So now we have these two nations. I'd say that initially 60% of the current population, excluding illegals, will go to the new U.S.A. The other 40% will think Bozoland will be the best thing since welfare but they will be wrong. After maybe a year, things will degrade rapidly and then probably around 50% will wish to move to America. BUT...what they don't know is we wont let them...I don't even think going through our strict immigrations procedures will they be allowed. They spat on us so we will not allow America to become the old America. Been there, done that, got the t-shirt...not going back. If they want to fight...let them...but they won't. They will want to negotiate or something. At that point we will probably just destroy them all and call it a day...similarly fashioned to the way we did away with Iran. Except we may do it in a manner that does not destroy the land...land is land and they quit manufacturing it a long time ago. (***Subliminal Investment Tip***) Of course this is assuming Bozoland has not already self-destructed and killed off each other.
So anyways, that's my idea of splitting off. Now it's time to wake up and smell the coffee. (That will be a little harder to do now that Starbucks is closing 600 of its stores. They say it's due to less consumer spending...sorry I don't buy it. Your telling me that a Starbucks addict quit spending $40 a month on coffee in favor of gas before they reduced their monthly savings by $40 to continue to buy Starbucks....WHATEVER!!! I'm no fool. Most Starbucks customers would axe the money from their savings in order to not give up their necessary Starbucks fix. That's how most American's work.) This plan will probably not happen because it would be cool. BUT...at the same time, it wouldn't surprise me if it did. I'm sure back in 1750 some dude just like me was writing on his crappy paper with his ink pen about how it would be cool if people finally got tired of the English rule and decided to go start their own country. And if my history serves me properly...it happened!
If you know anything about ancient civilizations then you know that at some point, all come to an end. This is proof that stupid people have been around for all of time and an indication that they are not going anywhere soon so we're just waiting on the next big stupid person to mess up a great thing. Have he/she already done so? I think so...but it was a collection of stupid people instead of one person. Anyways, a lot of people in their older ages (over 60/70) will tell you that they have lived through the best years the U.S.A has to offer and I fully agree with them judging by the lack of leadership that continues to show in D.C. as well as the upcoming youth of America. This makes me ponder a situation that I know will not happen but can't think of a good reason as to why it shouldn't.
What if the U.S.A. split into two nations. Of course we'd have to get beyond the details such as how the country would be geographically split and such but say that was handled in a non-violent matter...how would that work? My thought is taking America as it was say 10 years ago and they remain under the great name of the U.S.A. and then they Obama-ites can have their own country to "change" what they wish. We'll call it Bozoland for sake of differentiation in this story. My proposal is very simple here.
U.S.A - Remains as is, implement the Fair Tax, allow people to choose their education sources, block off illegal immigrants. Done. Those 3 simple changes fix most of our current problems. Maybe not directly, but trust me, if you understand the great affect that those three topics have on the country, then you understand why. I could make this server run out of physical storage space if I get into how those three subjects affect almost everything in this country. I'm sure you're saying "but how does that solve gas prices?". Well that was taken care of when we geographically split. See, since Bozoland citizens love to be reliant upon the current Oil Lords, we were given the necessary oil-rich lands to become self-sufficient. Also, since the huge crowd of power-hungry politicians was reduced because of the Fair Tax, there is no longer a silent blockade on alternative sources of energy so we are well on our way to becoming free from oil. I know, you're really impressed with my level of thinking right now...it's understandable. So now we have a country where capitalism is favored, rewarded, and encouraged and that is the crutch of the country. All other good things follow suit. This U.S.A. place becomes well on it's way to having the best quality of life on this planet again.
Now we have Bozoland. Bozoland - If we have any say in it, this will consist of California, Oregon, and Washington. If possible we will transplant most of the northeast to this location as well. What about the beautiful Northwestern shoreline us U.S.A. citizens will loose out on? Well, you can either visit Bozoland or travel else where. But remember, to visit Bozoland you will be required to pay all kinds of ridiculous taxes that they will have implemented so you may find it cheaper to go elsewhere...kind of like the situation corporations are facing now in the current U.S.A. Anyways, Bozoians can do whatever they heck they want. They can "change" anything, it will basically become a socialist country. Use your imagination to create the perfect Bozoland in your mind.
So now we have these two nations. I'd say that initially 60% of the current population, excluding illegals, will go to the new U.S.A. The other 40% will think Bozoland will be the best thing since welfare but they will be wrong. After maybe a year, things will degrade rapidly and then probably around 50% will wish to move to America. BUT...what they don't know is we wont let them...I don't even think going through our strict immigrations procedures will they be allowed. They spat on us so we will not allow America to become the old America. Been there, done that, got the t-shirt...not going back. If they want to fight...let them...but they won't. They will want to negotiate or something. At that point we will probably just destroy them all and call it a day...similarly fashioned to the way we did away with Iran. Except we may do it in a manner that does not destroy the land...land is land and they quit manufacturing it a long time ago. (***Subliminal Investment Tip***) Of course this is assuming Bozoland has not already self-destructed and killed off each other.
So anyways, that's my idea of splitting off. Now it's time to wake up and smell the coffee. (That will be a little harder to do now that Starbucks is closing 600 of its stores. They say it's due to less consumer spending...sorry I don't buy it. Your telling me that a Starbucks addict quit spending $40 a month on coffee in favor of gas before they reduced their monthly savings by $40 to continue to buy Starbucks....WHATEVER!!! I'm no fool. Most Starbucks customers would axe the money from their savings in order to not give up their necessary Starbucks fix. That's how most American's work.) This plan will probably not happen because it would be cool. BUT...at the same time, it wouldn't surprise me if it did. I'm sure back in 1750 some dude just like me was writing on his crappy paper with his ink pen about how it would be cool if people finally got tired of the English rule and decided to go start their own country. And if my history serves me properly...it happened!
I'm Back...
I think I'm shifting my focus to less complaining about what our wonderful "leaders" in D.C. are doing because I don't have enough time in my day to complain about everything. I will try to focus more on my ideas and suggestions...we'll see how that goes.
Tuesday, February 5, 2008
More on the Economy...
I want to make sure my view on this is understood. I don't want my previous post about the economy to make it seem like I am saying the economy is "recession"-proof. However, use "recession" carefully because while some people consider there to be recession stocks available right now, looking at the big picture in today's economy tells us that this minor "recession" we might see in the next coming months is in reality only a period of sluggish growth.
It's also important to note that a capitalist free market system is going to suffer periods of recession. The problem is that the media has made the word recession a horror word. They make it seem like everything is going to hell and that's simply NOT the case. Take today for example, the Dow fell around 300 points, this was almost completely due to short term traders. They can swing the market in any way they want to make their situation better. Now, over the long-term, us long term investors have our way with the market simply due to growth and prosperity in the economy. What you must understand is that the stock market is a GAME...it's just a big GAME people. Most reputable market analysts are saying that the 2nd half of this year will see a boom in the market. The only stick in the spoke on that one could be if traders really start to believe that the next President will be a Democrat, if that becomes the case we might see a delay or hesitation in the market because it will be about certain that the 2001 and 2003 tax cuts will expire or be repealed soon than 2010. Why? Well that is because the capital gains tax will go up through the roof. The Democrats WANT this to happen and they make no secret about it. They are discouraging people from investing for their retirement. It's absolutely asinine. Currently, corporate stock dividends are taxed at a max of 15%...this will go up to 35%. Capital gains max will go up from 15% to I believe 20%.
Anyways, just wanted to make that point known.
It's also important to note that a capitalist free market system is going to suffer periods of recession. The problem is that the media has made the word recession a horror word. They make it seem like everything is going to hell and that's simply NOT the case. Take today for example, the Dow fell around 300 points, this was almost completely due to short term traders. They can swing the market in any way they want to make their situation better. Now, over the long-term, us long term investors have our way with the market simply due to growth and prosperity in the economy. What you must understand is that the stock market is a GAME...it's just a big GAME people. Most reputable market analysts are saying that the 2nd half of this year will see a boom in the market. The only stick in the spoke on that one could be if traders really start to believe that the next President will be a Democrat, if that becomes the case we might see a delay or hesitation in the market because it will be about certain that the 2001 and 2003 tax cuts will expire or be repealed soon than 2010. Why? Well that is because the capital gains tax will go up through the roof. The Democrats WANT this to happen and they make no secret about it. They are discouraging people from investing for their retirement. It's absolutely asinine. Currently, corporate stock dividends are taxed at a max of 15%...this will go up to 35%. Capital gains max will go up from 15% to I believe 20%.
Anyways, just wanted to make that point known.
Monday, February 4, 2008
An Example on Why the Govt Should Stay Out of Oil Company Business
The numbers I'm about to use here may be slightly off but they are close and will relay the picture. Please do your research and don't quote me on any of these number.
What I'm about to show you is why the government should keep out of the oil company business and let the market see things through. I'm using Exxon as an example. Here we go.
Exxon has been under fire for their profit and which is earnings per share for shareholders. Exxon's 2007 numbers showed for every $2 they spent on capital expenditures, they spent $3 on buying back stocks. That means they put 50% more into manipulating their numbers than they did investing in their oil reserves and their future. Do you see what I'm saying yet? You have to trim that stuff out of their "profit" and earnings. It's not real earnings...by real earnings I mean it's not operating earnings. It's not coming from the "meat and potatoes" of there business. People want the government to step in and "correct" this problem. No, that won't work so shut-up you ignorant people. Let the market do its' thing. Exxon has already suffered from this and when compared to other oil companies who are investing in their future, will suffer even greater. Their stock prices will drop because the free market will read them like a book and the market will adjust their stocks down, Exxon won't like it, and they will correct themselves if they want to continue as a successful business. Exxon stock opened the 2008 year at $94...as of Jan. 22 it was down to $80 and now it's at roughly $85. Their analysts are busy at work right now talking with the big guys telling them what happened and why. The big wigs are wondering why they show an amazing earnings per share yet their stock is dropping. It's because they are showing essentially false earnings.
See, people need to chill out and let the market ride. It knows. The people who "run" the market are smart. This is why people should be PROPERLY educated on this subject because if they were, we wouldn't have all these ridiculous ideas being thrown into the mix on how to FORCE the market to do what we want it to do.
What I'm about to show you is why the government should keep out of the oil company business and let the market see things through. I'm using Exxon as an example. Here we go.
Exxon has been under fire for their profit and which is earnings per share for shareholders. Exxon's 2007 numbers showed for every $2 they spent on capital expenditures, they spent $3 on buying back stocks. That means they put 50% more into manipulating their numbers than they did investing in their oil reserves and their future. Do you see what I'm saying yet? You have to trim that stuff out of their "profit" and earnings. It's not real earnings...by real earnings I mean it's not operating earnings. It's not coming from the "meat and potatoes" of there business. People want the government to step in and "correct" this problem. No, that won't work so shut-up you ignorant people. Let the market do its' thing. Exxon has already suffered from this and when compared to other oil companies who are investing in their future, will suffer even greater. Their stock prices will drop because the free market will read them like a book and the market will adjust their stocks down, Exxon won't like it, and they will correct themselves if they want to continue as a successful business. Exxon stock opened the 2008 year at $94...as of Jan. 22 it was down to $80 and now it's at roughly $85. Their analysts are busy at work right now talking with the big guys telling them what happened and why. The big wigs are wondering why they show an amazing earnings per share yet their stock is dropping. It's because they are showing essentially false earnings.
See, people need to chill out and let the market ride. It knows. The people who "run" the market are smart. This is why people should be PROPERLY educated on this subject because if they were, we wouldn't have all these ridiculous ideas being thrown into the mix on how to FORCE the market to do what we want it to do.
Our Economic Situation...
...is NOT as bad as certain news groups and people are trying to make it be. I figured this is a good time to discuss this since the economy is under microscope right now, and do not think this is a coincidence that this is a Presidential election year. Please read this whole piece, it will be good for you and you will probably learn something.
First off, let me bring the stock market into perspective. Did it drop to 12, 092 last week...yes. Is that "low"...well compared to what? If you are comparing it to the ALL-TIME high of 14,198 from October 8th of last year (approx 4 months ago) then yes, it's low. But that is like saying that that the 5-series BMW is crap...yeah, compared to the 7-series but it's still a BMW. Like saying that a car is slow because it lost a 1/4 mile race by .2 seconds when it ran 10.8...it lost, but it's still hauling extreme tail. Like saying the standard Kitchen Aid mixer is bottom of the line...compared to the new Commercial heavy-duty grade Kitchen Aid. Like saying 7' 1" Shaq is short when standing next to 7' 6" Yao Ming...he's still over 7 feet tall! Ok, hopefully you get my picture, if not, I've got some ocean-front property in Arizona I'll sell you! So my point is that while people are saying the stock market is "low", it's not low compared to what it has been in the past. During the last 10 months the stock market enjoyed incredible growth. The last 10 months shot the stock market to an all-time high and we are back down to where we were 10 months ago. At that time, we were also at an all-time high. We're talking 10 months...not 10 years. My point would have no validity if I were referring to a 10 year period. Of course, need I point out that the stock market has never, I repeat NEVER suffered a loss over a 10 year period. That is why investing works, but we can save that for another discussion. So, excluding the past 10 months where extreme growth took place in the market, the stock market is still high. Need evidence, right, because I would go through all this trouble just to make it up. Oh, yes, I know...the media does it but that's because they get paid to read what the teleprompter tells them to say...I don't. Anyways, go here and look at the 3-, 5-, or 10-year chart for the Dow and tell me I'm wrong. For that matter, just look at the history of the Dow. You'll see what I'm saying. Look at those charts and then tell me that the stock market is "low". Ok, I have now proven my point. You want "low"...go look at Lake Lanier...that can be considered "low".
Your next question will be "so if the market isn't "low" right now, why are people saying that". Well, valid question and I have a simple answer. Let's look at who is saying this. Well, first off we have the media. The liberal media. And, I'm not just talking about people saying "oh the market is low right now...yada yada yada"...I'm talking about the people who are saying "OH MY GOD...the market is in a harsh downfall...we're all gonna die!!!" and causing everybody to press the panic button. So the medias' motivation? It's an election year...they want a Democratic President to be elected. They make Bush look like he's at fault and then if the Democrats take office, the market goes back up, because that's what it does (not because the D's take office) and then the D's look like heroes. It's how the media works now. Next example, we have the people who want to sway the market for their own personal benefit. Take "short-sellers" for example. Short-sellers make money when the market goes DOWN. Basically people who short-sell, sell a "borrowed" number of shares of stock at say $100. Say they sell 10 "borrowed" shares at $10. They get $1,000. Well, they now own the brokerage firm 10 shares of ABC stock. When the market goes down, they purchase those 10 shares for say $90...or $900 total...they pay back the brokerage firm the 10 shares and they are left with $100...that's a 10% positive return for a 10% drop in the market. See, now these guys are doing this on a much larger scale so that money is a much greater amount. So, that's another reason to sway the market.
Another quick point is that the market went through, which isn't uncommon, a period of over-inflation. This drop can be thought of the free-market system at work. It's "correcting" itself. People freak out when they hear "so and so didn't perform to expectations"...well, usually that means they only saw growth of 10% instead of something like 11 or 12%. Well, they still went through a decent growth. Ok, moving on now. I'm pretty sure you see my point and hopefully have learned a thing or two.
A key indicator on the economy was released today...didn't really see any coverage on the major news networks. Probably because the news was GOOD news. Click here to see today's release by the US Department of Commerce's release on US manufacturing. To sum it up, new orders for manufactured goods in December increased by $10.1 Billion or 2.3%. This is the largest increase since 1992. This statistic has increased 6 out of the last 7 months. That's a good thing. This translates to a higher demand for US manufactured goods...also translating to increased jobs in the manufacturing industry. Manufacturing is a sore subject right now with jobs going oversees. This is a positive note. Again, did anybody see this on the news? Nope, didn't think so.
Ok, now I will touch on the housing market. Yes, the housing market does suck right now. Why, it's going through a stage of correcting itself, just like the stock market does. Another reason it sucks....greed. Greed by the people who want to buy more than they can afford. Greed by the lenders who knowingly put people in that dangerous situation by giving them these loans. No, that's not a shot against free market competition...there is a difference between good business and smart decisions and greed...the lenders were greedy. Greed AND stupidity by the builders who continued to throw up these houses while they saw the market slowing down. Yeah, new home inventory sitting there without selling is high...but that's partially due to the builders throwing the homes up while the market is slowing down. Notice how companies who sell Christmas products, STOP SELLING IN JANUARY...that's because somebody acknowledged that in January, demand decreased....DUH...they saw it coming and know what to expect. The housing builders failed to do this in the past few years. Anybody who lives near me knows this because they can't drive anywhere without passing a new home neighborhood going up...STILL.
To touch back on the market and Presidential election years, I would like to say that this is a mistake. All that causes is the government to try and stick their hands in the market to manipulate it instead of letting it run it's course. We have to let the market run it's course. This whole tax rebate thing, it's so they can get people to spend money in the economy. Why did the economy go up so high? Could part of the reason be that people spent TOO MUCH money in the past few years. Why is the market coming down from it's all-time high? Could part of the reason be that people are out of spending money now because they spent too much a few years ago and are now paying for it? So, what this could mean is that it's average itself back out. I'm not using real numbers here but I'd rather see the market at 10,000 one year and 20,000 the next as opposed to 15,000 for two years straight. A static market is a market where nobody makes money...either way.
Hopefully this sparked enough thought in your mind to look past the high-level false indicators of the economy and ignore all the people using hype to spread their "the economy is crashing" belief which is based off the wrong measures. Please don't get me wrong, I'm not saying the economy is happy-go-lucky right now with everybody prospering wonderfully and no problems are present. What I'm saying is that you need to learn about the mechanics of the economy to fully understand what is really going on...stop trusting the people manipulating the facts to give you an altered and inaccurate view of the economy. The most important point I'm trying to make here is CONSIDER THE SOURCE, THINK ABOUT THEIR AGENDA.
Are we in a recession? Depends on who you ask. Are we heading towards a recession? Again, depends on who you ask. And I'm not saying we are not or not heading towards one either. It's all based around the source and the agenda behind the source. It's all relative...at least until the total country is in a crap-box with everyone loosing their jobs and the government handing out rations, I would say that is a recession. Now, I'm sure there would be people who read this and say "well you're wrong, we are going into a recession" or 6 months from now if the market continues to decline they will say "Ha...I told you so blah blah blah"...all I have to say to those people is come see me in 10 years. We'll talk then. If the market is lower, I'll buy you a happy meal.
First off, let me bring the stock market into perspective. Did it drop to 12, 092 last week...yes. Is that "low"...well compared to what? If you are comparing it to the ALL-TIME high of 14,198 from October 8th of last year (approx 4 months ago) then yes, it's low. But that is like saying that that the 5-series BMW is crap...yeah, compared to the 7-series but it's still a BMW. Like saying that a car is slow because it lost a 1/4 mile race by .2 seconds when it ran 10.8...it lost, but it's still hauling extreme tail. Like saying the standard Kitchen Aid mixer is bottom of the line...compared to the new Commercial heavy-duty grade Kitchen Aid. Like saying 7' 1" Shaq is short when standing next to 7' 6" Yao Ming...he's still over 7 feet tall! Ok, hopefully you get my picture, if not, I've got some ocean-front property in Arizona I'll sell you! So my point is that while people are saying the stock market is "low", it's not low compared to what it has been in the past. During the last 10 months the stock market enjoyed incredible growth. The last 10 months shot the stock market to an all-time high and we are back down to where we were 10 months ago. At that time, we were also at an all-time high. We're talking 10 months...not 10 years. My point would have no validity if I were referring to a 10 year period. Of course, need I point out that the stock market has never, I repeat NEVER suffered a loss over a 10 year period. That is why investing works, but we can save that for another discussion. So, excluding the past 10 months where extreme growth took place in the market, the stock market is still high. Need evidence, right, because I would go through all this trouble just to make it up. Oh, yes, I know...the media does it but that's because they get paid to read what the teleprompter tells them to say...I don't. Anyways, go here and look at the 3-, 5-, or 10-year chart for the Dow and tell me I'm wrong. For that matter, just look at the history of the Dow. You'll see what I'm saying. Look at those charts and then tell me that the stock market is "low". Ok, I have now proven my point. You want "low"...go look at Lake Lanier...that can be considered "low".
Your next question will be "so if the market isn't "low" right now, why are people saying that". Well, valid question and I have a simple answer. Let's look at who is saying this. Well, first off we have the media. The liberal media. And, I'm not just talking about people saying "oh the market is low right now...yada yada yada"...I'm talking about the people who are saying "OH MY GOD...the market is in a harsh downfall...we're all gonna die!!!" and causing everybody to press the panic button. So the medias' motivation? It's an election year...they want a Democratic President to be elected. They make Bush look like he's at fault and then if the Democrats take office, the market goes back up, because that's what it does (not because the D's take office) and then the D's look like heroes. It's how the media works now. Next example, we have the people who want to sway the market for their own personal benefit. Take "short-sellers" for example. Short-sellers make money when the market goes DOWN. Basically people who short-sell, sell a "borrowed" number of shares of stock at say $100. Say they sell 10 "borrowed" shares at $10. They get $1,000. Well, they now own the brokerage firm 10 shares of ABC stock. When the market goes down, they purchase those 10 shares for say $90...or $900 total...they pay back the brokerage firm the 10 shares and they are left with $100...that's a 10% positive return for a 10% drop in the market. See, now these guys are doing this on a much larger scale so that money is a much greater amount. So, that's another reason to sway the market.
Another quick point is that the market went through, which isn't uncommon, a period of over-inflation. This drop can be thought of the free-market system at work. It's "correcting" itself. People freak out when they hear "so and so didn't perform to expectations"...well, usually that means they only saw growth of 10% instead of something like 11 or 12%. Well, they still went through a decent growth. Ok, moving on now. I'm pretty sure you see my point and hopefully have learned a thing or two.
A key indicator on the economy was released today...didn't really see any coverage on the major news networks. Probably because the news was GOOD news. Click here to see today's release by the US Department of Commerce's release on US manufacturing. To sum it up, new orders for manufactured goods in December increased by $10.1 Billion or 2.3%. This is the largest increase since 1992. This statistic has increased 6 out of the last 7 months. That's a good thing. This translates to a higher demand for US manufactured goods...also translating to increased jobs in the manufacturing industry. Manufacturing is a sore subject right now with jobs going oversees. This is a positive note. Again, did anybody see this on the news? Nope, didn't think so.
Ok, now I will touch on the housing market. Yes, the housing market does suck right now. Why, it's going through a stage of correcting itself, just like the stock market does. Another reason it sucks....greed. Greed by the people who want to buy more than they can afford. Greed by the lenders who knowingly put people in that dangerous situation by giving them these loans. No, that's not a shot against free market competition...there is a difference between good business and smart decisions and greed...the lenders were greedy. Greed AND stupidity by the builders who continued to throw up these houses while they saw the market slowing down. Yeah, new home inventory sitting there without selling is high...but that's partially due to the builders throwing the homes up while the market is slowing down. Notice how companies who sell Christmas products, STOP SELLING IN JANUARY...that's because somebody acknowledged that in January, demand decreased....DUH...they saw it coming and know what to expect. The housing builders failed to do this in the past few years. Anybody who lives near me knows this because they can't drive anywhere without passing a new home neighborhood going up...STILL.
To touch back on the market and Presidential election years, I would like to say that this is a mistake. All that causes is the government to try and stick their hands in the market to manipulate it instead of letting it run it's course. We have to let the market run it's course. This whole tax rebate thing, it's so they can get people to spend money in the economy. Why did the economy go up so high? Could part of the reason be that people spent TOO MUCH money in the past few years. Why is the market coming down from it's all-time high? Could part of the reason be that people are out of spending money now because they spent too much a few years ago and are now paying for it? So, what this could mean is that it's average itself back out. I'm not using real numbers here but I'd rather see the market at 10,000 one year and 20,000 the next as opposed to 15,000 for two years straight. A static market is a market where nobody makes money...either way.
Hopefully this sparked enough thought in your mind to look past the high-level false indicators of the economy and ignore all the people using hype to spread their "the economy is crashing" belief which is based off the wrong measures. Please don't get me wrong, I'm not saying the economy is happy-go-lucky right now with everybody prospering wonderfully and no problems are present. What I'm saying is that you need to learn about the mechanics of the economy to fully understand what is really going on...stop trusting the people manipulating the facts to give you an altered and inaccurate view of the economy. The most important point I'm trying to make here is CONSIDER THE SOURCE, THINK ABOUT THEIR AGENDA.
Are we in a recession? Depends on who you ask. Are we heading towards a recession? Again, depends on who you ask. And I'm not saying we are not or not heading towards one either. It's all based around the source and the agenda behind the source. It's all relative...at least until the total country is in a crap-box with everyone loosing their jobs and the government handing out rations, I would say that is a recession. Now, I'm sure there would be people who read this and say "well you're wrong, we are going into a recession" or 6 months from now if the market continues to decline they will say "Ha...I told you so blah blah blah"...all I have to say to those people is come see me in 10 years. We'll talk then. If the market is lower, I'll buy you a happy meal.
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