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08-AUGUST 24-2023

FraudGood morning.  New home sales hit a 17-month high in July.  On its own, that sounds like good news.  But home sales have now exceeded existing home sales for the first time on record.  That reflects the fact that homeowners are unwilling to move right now.  Doing so would mean giving up a 3 percent (or lower) mortgage rate, and having to pay over 7 percent to borrow money today.
Meanwhile, the new home construction boom may stall out in the next few months, given the low demand for mortgage borrowing.  It’s clear that investors may want to avoid homeowner-related stocks for now, and that traders may want to target companies that could be in for some pain in the months ahead by buying put options against them.

Now here’s the rest of the news:

China On The Brink Of a Lost Decade
The world’s second-largest economy isn’t growing, producing, or trading as much as it usually does.  The pandemic rebound that China and the rest of the world were anticipating has yet to materialize, and official data suggests there’s a… [Read Here]

Even Mainstream Economists Are Now Worried About The Dollar
Commodities, such as oil and natural gas, fertilizer, and precious metals, are currently priced in U.S. dollars.  Through its control of global money flows and the supervision of one quadrillion dollars of annual international transactions, Washington has the… [Read Here]

August 24, 2022

ParanoidGood morning.
Investors eying the latest economic data are starting to think that September might just be the month where the Federal Reserve makes its “pivot” away from its current rapid interest rate hike increase.  The odds of a 75-basis point rate hike for the month have fallen below 50 percent in the past few days.
While such a move could occur, investors should be prepared for a variety of scenarios. Interest rates are still likely to rise.  And September is historically the worst performing month for the markets.  Either way, that points to high volatility in the coming weeks, likely through the end of October.  Traders should look for opportunities on both sides of the market in the coming weeks.

Now here’s the rest of the news:

When Wall Street Fights the Fed, We All Lose
One market pundit – dubbed Wall Street’s most accurate analyst – predicts the Fed will reverse course on hiking rates unless there’s a market meltdown by… [Read Here]

UN Says World Food Shortages Are Getting Closer
Rising global food prices brought on by Russia’s invasion of Ukraine and commodity shortages triggered by climate emergencies are threatening to “destabilize” economies around the world, a United Nations (U.N.) official warned… [Read Here]

August 24, 2021

New Cool DeskGood morning.
The last crisis taught the Federal Reserve that as long as people feel like they’re getting wealthier, they’ll go out and spend.  This wealth effect becomes a self-fulfilling prophecy if done right.
So far, the playbook is working this time around.  Million-dollar-plus housing listings have spiked higher, showing that home sales growth is still occurring in wealthier markets.  For lower-end markets, chances are that there’s some wealth being created, but at a lower rate given lower stock market participation and other exposure to rising asset prices.  So while the wealth effect works overall, it also creates more wealth inequality… but that’s not on the list of the Fed’s problems to solve (yet).

Now here’s the rest of the news:

Fed’s Powell: There’s No Returning to Pre-Pandemic Economy –Martin Crustinger, APNews
“We need to watch carefully as the economy continues to get through the pandemic and try to understand the ways that the economy has changed…” Such as? [Read Here]

August 24, 2020

My Dad Shreds ButtGood morning.
It’s a record week for another stock market index as the S&P 500 took its turn erasing the selling over the past six months and posted an all-time high.  While the Dow still finds itself underwater for the year, the resolve of investors is truly remarkable and the housing market is on fire… but in a good way … My Dad Shreds Butt

Now here’s the rest of the news:

The Revenge of the Honey-Do Lists by Jim Pearce
You can add home improvement chain Lowe’s Companies (NYSE: LOW) to the growing list of unlikely COVID-19 beneficiaries.  On March 23, LOW dipped below $64 as the stock market bottomed out in the wake of the coronavirus pandemic.  Last week, LOW crested above $162 after releasing strong Q2 results.
Five months ago, investors assumed that most big-box retailers would get crushed.  For a little while, that was true.  Overnight, stores closed in response to social distancing mandates.  But what the market failed to anticipate was the speed with which merchants and consumers would adapt to online commerce.
Lowe’s operates nearly 2,000 stores in the United States and Canada.  During the quarter ended July 31, the company recorded a 34.2% increase in comparable sales led by a 135% jump in online revenue.  As a result, adjusted/diluted earnings per share (EPS) increased by 74% to $3.75.  Honey-Do Lists Done
Lowe’s has long been viewed by Wall Street as playing second fiddle to industry rival Home Depot (NYSE: HD).  In truth, their stock market performance is not that far apart.  Over the past five years, LOW has posted a total return of 133% compared to 160% for HD.
However, Home Depot is considerably bigger with a market cap of $306 billion versus $120 billion for Lowe’s.  For that reason, Home Depot gets considerably more attention from the financial media.
Last week, Home Depot also released its Q2 results.  During the second quarter, comparable sales increased by 23.4%.  Diluted EPS rose 26.8% versus the same period last year.  Based on those key metrics, it would appear that Lowe’s has done a better job of responding to the unexpected opportunity.  More Saving, More Doing!

It Always Comes Down to Money… Even in San Francisco by Vic Lederman
iconic San FranciscoRents are falling in San Francisco.  It’s both scary and awe-inspiring.  Three month ago, I told readers a “wealth re-distribution” was underway.  We examined the first sign of this trend — remote work.  I predicted that the push toward remote work would redistribute highly paid tech workers around the country.
The idea was based on simple economics…
People always prefer to spend less, if given the option.  So it’s smart to assume folks would flee San Francisco… if their employers allowed them to work remotely.  Well, now we have hard evidence that it’s happening.  Let’s go over the details together.
You might be surprised to learn this is a bullish trend for America…  [I never expected this trend to get moving so quickly.]  Aren’t rents falling everywhere?  The answer is unequivocally, no.  In fact rents have gone up in Sacramento.  So what does this mean?  It’s simple…
Money, not idealism, is why folks live in California’s Bay Area.  Most folks live/lived in the San Francisco Area because of the economic opportunity.  Period.  Now that folks can work elsewhere, they’re getting the heck out… and rents falls aa a result of demand.  They’ll be taking their high-paying tech jobs to smaller cities, where those salaries will go further!!!

August 24, 2019

The Lost Art of Thinking

“No problem can stand the assault of sustained thinking.” —Voltaire

Rodin Museum - The ThinkerAuguste Rodin’s classic statue “The Thinker” is one of my favorites.  It’s hard to look at it (or one of its many replicas) without being moved by it.  The innocent display of someone deeply in thought causes most of us to ponder a bit ourselves.  Why is this image so captivating?  What is he thinking about?

Perhaps we have such reverence for this kind of deep thinking because it’s so uncommon.  Having thoughts does not constitute thinking.  We all have thoughts.  We all have opinions and beliefs — usually lots of them.

Bob Proctor, in his book You Were Born Rich writes, “Thinking is the highest function of which a human being is capable.”  He goes on to say that what passes for thinking for most people is really just the faculty of memory — playing old movies and rehashing past events.  I doubt this is what Rodin’s great work of art depicts.

I love to read.  And I’m convinced the greatest value in reading is not the information you obtain, but rather what you think about while you read (that’s why what you choose to read is so important).

The objective is not to fill our minds with information, but to stimulate our mind to think and to ponder.  The value of the book is increased a thousand fold if we lay it down occasionally, contemplate what we’ve read and think about what it means and how and why it might apply to us.

Clarity is power.  And clarity comes from thinking.

You need to think, and think carefully about the choices and direction of your life.  The most precious resource you have is your time.  Your life is the sum total of what you do with that time.  Isn’t it worth spending more of it thinking?

Think about it.

“We are what we think.  All that we are arises with our thoughts.  With our thoughts, we make our world. ” —The Buddha

And finally, to quote Deepak Chopra … “To think is to practice brain chemistry.”  😉

Come From Aways, Do You?

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