How Will the Economic Future Unfold?

[BaldEagle]

No surprise. I've been guessing for months already that the unemployment was worse than reported. The next guess will be the Dow's reaction and direction to this news. I do wonder how the TV news will try to whitewash it, but, oh well.

As to that 5% interest rate, I wish I could find such at a bank. Most around here are paying between 2-2.5% on a CD. But the basic explanation of the cost of gaming holds true. Wish people who played the local slot machines could ever understand that, but they all think they'll be the one who wins the Megabucks.

Sorry about that I was doing a 10 year program proposal this week where we use 5% as representative of long term cost of money. Today where the FED is pumping out money at next to 0% rates are in the toilet but inflation should clear that up shortly and get us back to a 5% average....Hmmm 0% and what number will make a 5% average rate...Jimmy Carter here we goooooooo.

See now I love the Lottery how else do you collect taxes from poor people and they love you for it...

[flasher702]

Where the **** is someone going to get 5% interest? A five year CD barely breaks 3% around here.

NRF, CIM, EAD, or HIMX would do it (some of those have really good ratings too). Lots of dividend stocks yielding over 5% right now.

[Sailer]

Ok, and now for the morning's headlines:

Stocks slide on unexpected rise in jobless claims - Yahoo! News

The stock market tumbled Thursday as a rise in jobless claims dampened hopes about a key employment report due Friday.

Weakness in the job market is seen as the biggest obstacle to a rebound in the economy. The unexpected rise in first-time claims for unemployment benefits last week was the latest reminder that a recovery will be difficult.

The report lowered expectations. that the government's closely watched January jobs report, due on Friday, would show that employers added workers in the first month of the year.

More trouble for debt-strapped European governments also spooked U.S. investors, sending demand for safe haven holdings like the dollar and Treasurys sharply higher. The Dow Jones industrial average fell 190 points, and other stock indexes posted similar drops.

Claims for unemployment benefits rose by 8,000 to 480,000 last week, the Labor Department reported, disappointing investors who had hoped for a drop. It was the fourth increase in the past five weeks. The number of lost jobs was the highest in two months and upended a sense that claims would resume a decline that occurred in the fall and early winter.

I see no mention of the revised data showing 824,000 jobs lost, so maybe there's another kick in the face on its way. don't know. I do know that I may have bought into Microsoft at the wrong time, as its dropped about 60 cents since then. Maybe not. Maybe it will get a rebound. Oh well, its only money.

[BaldEagle]

Ok, and now for the morning's headlines:

Stocks slide on unexpected rise in jobless claims - Yahoo! News



I see no mention of the revised data showing 824,000 jobs lost, so maybe there's another kick in the face on its way. don't know. I do know that I may have bought into Microsoft at the wrong time, as its dropped about 60 cents since then. Maybe not. Maybe it will get a rebound. Oh well, its only money.

I wouldn't buy a thing right now. I'm hoping to hold out until March for the Long Term Capital Gains but a plunge below the psychological 10K could cause a panic wave of selling should the numbers start showing the reality of the true lack of recovery in the ongoing recession. Keep your eyes peeled as we break below 10K for an upward tick or a downward plunge...

[BaldEagle]

Speaking of the recession getting worse....

Pennsylvania State Capital Mulls Bankruptcy as a Budget Option - Bloomberg.com

BK... Coming soon to a large entitlement center near you.

[Viperabyss]

Our debt time bomb is ready to go ka-boom Paul B. Farrell - MarketWatch

Yes, 20. And yes, any one can destroy your retirement because all 20 are inexorably linked, a house-of-cards, a circular firing squad destined to self-destruct, triggering the third great Wall Street meltdown of the 21st century, igniting the Great Depression II that George W. Bush, Ben Bernanke, Henry Paulson and now President Obama have simply delayed with their endless knee-jerk, debt-laden wars, stimulus bonanzas and bailouts.

Why do I get a distinctive feeling that the media is somehow manipulating the market?

[Sailer]

Our debt time bomb is ready to go ka-boom Paul B. Farrell - MarketWatch



Why do I get a distinctive feeling that the media is somehow manipulating the market?

That is feeling that may be true, even though it does hint to a grand conspiracy. I've had a feeling, especially during this past year, that the media is far too close with the White House. Too much "feel good" news, too many positive reports in the face of unrelenting financial troubles, too much cheer leading about how good the economy is and displaying the rising Dow for the past several months as proof of a climbing economy.

Well, the multi-millionaire club and the bank/insurance company execs may be wallowing in their pay bonuses supplied by our tax dollars, but the average person on the street seems restless. I guess we will see during this years elections if the people are really angry or not. If I was to judge be observing the crowds outside the AIG building and their anger toward government officials who are attempting to justify the latest tax payer supported bonuses being paid to the execs of that firm, I'd guess there will be change.

I don't understand how those government officials can be so stupid, or they think the public is so stupid, that they continue to justify this stuff and say that there's nothing that can be done. There is something that can be done; demand immediate repayment of the taxpayer money or close the banks/AIG, etc, thereby putting the execs out on the street without any bonus, no golden parachute, and a bad job recommendation.

[BaldEagle]

Our debt time bomb is ready to go ka-boom Paul B. Farrell - MarketWatch



I'm not sure I agree that it's the 90% mark that is going to trigger the implosion in 2010 but I expect it's the 100% mark in 2011.

Our debt time bomb is ready to go ka-boom Paul B. Farrell - MarketWatch



Why do I get a distinctive feeling that the media is somehow manipulating the market?

This sounds vaugely familiar like I already read it....Oh wait I did.

[BaldEagle]

That is feeling that may be true, even though it does hint to a grand conspiracy. I've had a feeling, especially during this past year, that the media is far too close with the White House. Too much "feel good" news, too many positive reports in the face of unrelenting financial troubles, too much cheer leading about how good the economy is and displaying the rising Dow for the past several months as proof of a climbing economy.

Well, the multi-millionaire club and the bank/insurance company execs may be wallowing in their pay bonuses supplied by our tax dollars, but the average person on the street seems restless. I guess we will see during this years elections if the people are really angry or not. If I was to judge be observing the crowds outside the AIG building and their anger toward government officials who are attempting to justify the latest tax payer supported bonuses being paid to the execs of that firm, I'd guess there will be change.

I don't understand how those government officials can be so stupid, or they think the public is so stupid, that they continue to justify this stuff and say that there's nothing that can be done. There is something that can be done; demand immediate repayment of the taxpayer money or close the banks/AIG, etc, thereby putting the execs out on the street without any bonus, no golden parachute, and a bad job recommendation.

Apparently some truth is leaking out in spite of the media's refusal to see the problem... Either that or investors finally got tired of being faked out by our pseudo state controlled media.

U.S. stocks suffer worst day since April Market Snapshot - MarketWatch

The Dow average (INDU 10,002, -268.29, -2.61%) ended down 268.37 points, its worst one-day point slide since April 20, 2009. The measure was off 2.6% for the day to end at 10,002.18, a three-month low.

The Chicago Board Options Exchange's Volatility Index (VIX 26.08, +4.48, +20.74%) , which measures investors' nervousness about upcoming market swings, leapt 20.9%.

Not a panic yet but beyond merely concerned and half way to a full blown panic.

[Sailer]

Now do I take the contrarian approach and buy more in the morning, or do I hold, or sell. Last time I took the contrarian approach it was with WaMu. Think I'll wait.

[BaldEagle]

As for sell see what happens when we have the all important 10K break is it up or down...

As for buy...is that actually a Contrarian or Kamikazi approach on a -268 day?

[flasher702]

Now do I take the contrarian approach and buy more in the morning, or do I hold, or sell. Last time I took the contrarian approach it was with WaMu. Think I'll wait.

The last time I followed your lead it was WaMu. So let me know what you're doing and I'll do the opposite

Actually, I think I'm content to collect dividends on the stuff I'm holding currently. I should put in a limit buy order for EAD though.

[BaldEagle]

The last time I followed your lead it was WaMu. So let me know what you're doing and I'll do the opposite

Actually, I think I'm content to collect dividends on the stuff I'm holding currently. I should put in a limit buy order for EAD though.

I gather that's a second for Kamikaze then???

[Sailer]

The last time I followed your lead it was WaMu. So let me know what you're doing and I'll do the opposite

Actually, I think I'm content to collect dividends on the stuff I'm holding currently. I should put in a limit buy order for EAD though.

Yeah, I got suckered by that Jim Cramer guy. Since he had called a few things correctly, especially the fall of WaMu, which I ignored in part simply because I can't stand the guy, when he said that WaMu was ready to surge upwards, I bought a few hundred shares. Then I was off to the Chinese embassy while BE was shouting his warning. Then it was too late. But hey, WaMu is coming back. Why its value has surged from .015 last May to .235 for today's high. That's over 15 times the value in less that a year. Actually, it hit a higher number of .4399 last September. Think of that. If you had bought several thousand shares at .015 and sold at .4399, there would have been a massive profit. Who would have guessed that Cramer was right. We just got the timing wrong.

For the moment, I'm thinking about putting some money in a utility company, maybe something like Southwest Gas which pays a yield of 3.41%. Not a bad interest rate, far better than what the bank pays, and there's the possibility of the stock going up.

[flasher702]

This kamakazee did not wake up early enough in the morning. Bought EAD at 8.90 instead of the low of 8.70. Oh well, should still get a 12.5% dividend yield (instead of 12.8%). Some upside potential on the dividend also.

Current dividend yield for my entire portfolio is 10.1465% of original investment. Wish me luck boys.

[BaldEagle]

This kamakazee did not wake up early enough in the morning. Bought EAD at 8.90 instead of the low of 8.70. Oh well, should still get a 12.5% dividend yield (instead of 12.8%). Some upside potential on the dividend also.

Current dividend yield for my entire portfolio is 10.1465% of original investment. Wish me luck boys.

DOW...-111 points EAD $8.89....You will need that luck.

Just curious as to what time frame does your 10.1465% represent as my 2009 ROI was rather embarassing at over 50% with the winner being DTG +3300% ...Now you understand my hang on for two more months for the long term capital gains and pray I don't get clobbered real bad approach.

[croc]

In respect to media manipulation, I wonder how Murdoch's ownership of the WSJ is affecting that reportage. I've already seen some evidence of his fingers in some editorials...

[flasher702]

DOW...-111 points EAD $8.89....You will need that luck.

EAD Last Trade: 9.16
Yeah, I feel lucky :P I'm getting a little bit better at the contrarianism but now I'm out of gambling money. Gotta sell something (probably CIM or NRF to reduce me RE exposure) or put more money in. I actually had a very good day yesterday largely thanks to that one buy (CIM being my other big gainer for the day at over 5%, it does stuff like that all the time though, both up and down).

Just curious as to what time frame does your 10.1465% represent

Not entirely sure what you're asking but: annual percentage yield. Over the next year I should collect about 10% of everything that I've invested over the past 2 years. The dividend yield on my current holdings is much higher than 10% but I would be lying to myself if I pretended that things like my WaMu purchase never happened and didn't factor that in.

as my 2009 ROI was rather embarassing at over 50% with the winner being DTG +3300% ...Now you understand my hang on for two more months for the long term capital gains and pray I don't get clobbered real bad approach.

I hate you. That bet must have taken some awfully big balls. A low-volume, low-rated, mid-cap, automotive play in the middle of a recession? Am I missing something? What did you hedge that with and what was the combined performance? They mostly lease/rent cars and sell used cars? WTH? hate so strong.

My lendingclub stuff is still chugging along. Got the g/f signed up, kicked her $10 to help her get started, and invested most of that along with the signup bonus. I'll get my $10 back in 5 monhts (assuming no default). That's like 240% annualized return.

[BaldEagle]

EAD Last Trade: 9.16
Yeah, I feel lucky :P I'm getting a little bit better at the contrarianism but now I'm out of gambling money. Gotta sell something (probably CIM or NRF to reduce me RE exposure) or put more money in. I actually had a very good day yesterday largely thanks to that one buy (CIM being my other big gainer for the day at over 5%, it does stuff like that all the time though, both up and down).


Not entirely sure what you're asking but: annual percentage yield. Over the next year I should collect about 10% of everything that I've invested over the past 2 years. The dividend yield on my current holdings is much higher than 10% but I would be lying to myself if I pretended that things like my WaMu purchase never happened and didn't factor that in.


I hate you. That bet must have taken some awfully big balls. A low-volume, low-rated, mid-cap, automotive play in the middle of a recession? Am I missing something? What did you hedge that with and what was the combined performance? They mostly lease/rent cars and sell used cars? WTH? hate so strong.

My lendingclub stuff is still chugging along. Got the g/f signed up, kicked her $10 to help her get started, and invested most of that along with the signup bonus. I'll get my $10 back in 5 monhts (assuming no default). That's like 240% annualized return.

I got interested in DTG in 2008 because of someone here.
XCPUS Stock Picking Challenge - 4th Quarter + Prize

Kept following and did a little research to find they were tied in closely with Chrysler who was as we know was put on government life support.

In February they revised their debt obligations.
Dollar Thrifty Automotive Group Successfully Completes Lender Discussions - Business News - redOrbit

In March as the market bottomed and it became clear the banks and automakers were being bailed out no matter the cost so why would the car rental agencies that buy most of the cars be hung out to dry? For that matter why would any big union employers be left die off by the present administration so I went with a portfolio of beat up stocks (-500%+ from 2007) and the pickings were really easy, DTG, BAC, C, BA, AA, F, MGM, PNC, etc... I figured some could die but unlikely and those suriving and/or bailed out should return to their previous levels. What drew down the overall was the relatively safe DOG's of the DOW and other "dividend" stocks GE, T, SO, VZ, Q, DD, PFE, JJ, etc... which I bought for some longer term gains through DRIP programs. Now not all of those mentioned were bought in March and many of those mentioned I sold out early and no longer own having settled for only a couple hundred% in gains. (BTW you really don't want to know how far over 50% that + was but I can tell you my market gains of the stocks that I actually sold exceeded my earned income and put me squarely in the sights of Obama's definition of "the rich".)

Of those mentioned DTG was probably the most risky play but with SF's heads up and at the bottom of a 50+% market drop a whole lot of bargains were to be had for those with cash and having cashed out my chips near the top and sitting out the drop it was time for some bottom feeding.

When SF's dad ponied up his own cash after a 400% gain I decided to hang on for the ride...
DTG Insider trading transaction details - MSN Money

And what a ride it has been...the only problem now is watching it and the others painfully tick down bit by bit until I get to a LT capital gain.

As for your crash and burn with WaMu that doesn't count on your year ROI as it was 2008 but I understand your pain I used to own this tremendous growth stock by the name of ENRON.

[MagicLess]

YouTube - "Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem

I enjoyed it.