The only economics-related aspect of this post is that the author is a former MN Fed Reserve employee. He quit his job to become a travel writer, and his blogs are both informative and fun to read:
http://www.leifpettersen.com/
In another life, I think I want to be a travel writer. Here is my favorite post so far--love the pictures, especially of the gold Buddhas (Wat Traimit):
http://www.leifpettersen.com/leifinasia3/bangkok.htm
"And if an epitaph be my story, I'd have a short one ready for my own: I had a lover's quarrel with the world." -- Robert Frost
Thursday, November 6, 2008
Wednesday, November 5, 2008
Earnings Estimates
Bloomberg is reporting that earnings estimates are finally being lowered:
Bloomberg Story
Once analysts reduce earnings per share, we will still have problems with predicting earnings from financial companies, but stocks themselves will be more attractive. People will still buy prescription medication, Coca-Cola, TVs, and McDonald's, and a host of other products even if their debt levels increase or if their houses are not worth as much.
Bloomberg Story
Once analysts reduce earnings per share, we will still have problems with predicting earnings from financial companies, but stocks themselves will be more attractive. People will still buy prescription medication, Coca-Cola, TVs, and McDonald's, and a host of other products even if their debt levels increase or if their houses are not worth as much.
Economic Plans
For the lawyers and policy geeks out there, I present to you the following:
Here is the Paulson plan (TARP Capital Plan), which was not passed:
http://paul.kedrosky.com/archives/2008/09/20/text_of_paulson.html
Here is what ultimately passed--the Emergency Economic Stabilization Act of 2008 (EESA):
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/28/AR2008092800900.html
More to come from our government, I bet. One question--if Sarbanes-Oxley didn't solve the problem of lying CEOs, what makes anyone think more regulation is going to fix our current problems? I don't know how to fix our economy, but I am surprised more condo/townhouse complexes aren't renting rather than trying to sell vacant units. I am also surprised that government officials are not talking more about assisting apartment complex owners and renters. If rents fall low enough, people can walk away from their houses and rent at reasonable prices. Then, the housing crisis becomes a matter of banks lowering housing prices to a level where it makes sense for prospective homeowners to buy. Perhaps I am missing something, but if I were Congress, I'd pass a $5,000 rental tax credit for families whose houses were underwater. I bet the banks would quickly start negotiating better terms for the current homeowners to convince them to stay or would keep the houses on their own books and start renting them to the current residents.
Here is the Paulson plan (TARP Capital Plan), which was not passed:
http://paul.kedrosky.com/archives/2008/09/20/text_of_paulson.html
Here is what ultimately passed--the Emergency Economic Stabilization Act of 2008 (EESA):
http://www.washingtonpost.com/wp-dyn/content/article/2008/09/28/AR2008092800900.html
More to come from our government, I bet. One question--if Sarbanes-Oxley didn't solve the problem of lying CEOs, what makes anyone think more regulation is going to fix our current problems? I don't know how to fix our economy, but I am surprised more condo/townhouse complexes aren't renting rather than trying to sell vacant units. I am also surprised that government officials are not talking more about assisting apartment complex owners and renters. If rents fall low enough, people can walk away from their houses and rent at reasonable prices. Then, the housing crisis becomes a matter of banks lowering housing prices to a level where it makes sense for prospective homeowners to buy. Perhaps I am missing something, but if I were Congress, I'd pass a $5,000 rental tax credit for families whose houses were underwater. I bet the banks would quickly start negotiating better terms for the current homeowners to convince them to stay or would keep the houses on their own books and start renting them to the current residents.
"Yes We Can"
President-elect Barack Obama won the election and delivered an inspirational speech that left Oprah and Jesse Jackson in tears. Prior to Obama, John McCain delivered a speech that confirmed he's one of the most honest ("The American people have spoken...and they have spoken clearly.") and dignified politicians in American history.
98% of the results have been tallied, and the popular vote breakdown is as follows:
Obama 53%/ McCain 46% / Other Parties 1%
I predicted 53% / 44% / 3%, so I wasn't too far off. I overestimated the support the Green Party, Libertarians and Ron Paul write-ins would receive.
McCain's choice of Palin may be viewed as a poor decision by future historians; however, the theory in picking her was sound. Republicans have two competing strains--one is libertarian-ish, wanting lower taxes, fewer earmarks, less government spending, and smaller government; the other is Christian, wanting religion and their version of family values to be recognized. McCain believed he could attract the libertarian side by himself, so he chose Palin because he thought she could steer the Christian side to his camp. Theoretically, it might have worked, but he was left with what many people thought was more of a political Frankenstein than a perfect compromise.
If Palin really does get enough money to run for election in 2012, I predict another eight years of Democrats in the White House. The road to the American presidency goes through California, New York, Texas, Pennsylvania, Florida, and/or Illinois. It decidedly does not go through Alaska, Arizona, Oklahoma, Kentucky, or Alabama, most of which are losing residents while the less religious states gain residents. Using this electoral vote angle, Hillary Clinton supporters might admit that choosing Barack Obama over Senator Clinton was a wise choice--New Yorkers would vote Democrat anyway, and Obama would guarantee Illinois. The Republicans are now in a poor position--Jeb Bush is political kryptonite because of his family name, and there are few Republican politicians other than Senator McCain and Ron Paul who inspire Americans.
Let this be a lesson to the Republican party: you have to choose sides. Either you return to the prestige and integrity of Eisenhower, Goldwater, or Jefferson, or you take the American people into a religious era in a country that has wisely favored separation of church and state since its inception. In short, does the Republican party want to be the party of freedom and fiscal responsibility, or a conservative Christian party? It is time to choose.
Update on November 6, 2008: Greg Mankiw has similar thoughts on where the Republican Party should go:
http://gregmankiw.blogspot.com/2008/11/youth-vote-and-gop.html
___________________
Obama's victory speech:
CNN Transcript (Obama)
McCain's concession speech:
CNN Transcript (McCain)
http://www.cnn.com/ELECTION/2008/results/president/allcandidates/
98% of the results have been tallied, and the popular vote breakdown is as follows:
Obama 53%/ McCain 46% / Other Parties 1%
I predicted 53% / 44% / 3%, so I wasn't too far off. I overestimated the support the Green Party, Libertarians and Ron Paul write-ins would receive.
McCain's choice of Palin may be viewed as a poor decision by future historians; however, the theory in picking her was sound. Republicans have two competing strains--one is libertarian-ish, wanting lower taxes, fewer earmarks, less government spending, and smaller government; the other is Christian, wanting religion and their version of family values to be recognized. McCain believed he could attract the libertarian side by himself, so he chose Palin because he thought she could steer the Christian side to his camp. Theoretically, it might have worked, but he was left with what many people thought was more of a political Frankenstein than a perfect compromise.
If Palin really does get enough money to run for election in 2012, I predict another eight years of Democrats in the White House. The road to the American presidency goes through California, New York, Texas, Pennsylvania, Florida, and/or Illinois. It decidedly does not go through Alaska, Arizona, Oklahoma, Kentucky, or Alabama, most of which are losing residents while the less religious states gain residents. Using this electoral vote angle, Hillary Clinton supporters might admit that choosing Barack Obama over Senator Clinton was a wise choice--New Yorkers would vote Democrat anyway, and Obama would guarantee Illinois. The Republicans are now in a poor position--Jeb Bush is political kryptonite because of his family name, and there are few Republican politicians other than Senator McCain and Ron Paul who inspire Americans.
Let this be a lesson to the Republican party: you have to choose sides. Either you return to the prestige and integrity of Eisenhower, Goldwater, or Jefferson, or you take the American people into a religious era in a country that has wisely favored separation of church and state since its inception. In short, does the Republican party want to be the party of freedom and fiscal responsibility, or a conservative Christian party? It is time to choose.
Update on November 6, 2008: Greg Mankiw has similar thoughts on where the Republican Party should go:
http://gregmankiw.blogspot.com/2008/11/youth-vote-and-gop.html
___________________
Obama's victory speech:
CNN Transcript (Obama)
McCain's concession speech:
CNN Transcript (McCain)
http://www.cnn.com/ELECTION/2008/results/president/allcandidates/
Tuesday, November 4, 2008
92 Yr Old Woman Votes in Ambulance
This voting story just about sums up the intensity of this election--click on the link to read more:
AP Story
The line that stood out the most?
"She cast a straight Democratic ballot Tuesday."
2008 will go down in history as one of the most turbulent times in America. We had a stock market collapse, more deaths in Iraq, a sitting President who lost respect domestically and abroad, Russia's invasion of Georgia, crude oil reaching $120/barrel, and a nationwide housing crisis. I don't know about you, but I will be so happy on January 1, 2009.
AP Story
The line that stood out the most?
"She cast a straight Democratic ballot Tuesday."
2008 will go down in history as one of the most turbulent times in America. We had a stock market collapse, more deaths in Iraq, a sitting President who lost respect domestically and abroad, Russia's invasion of Georgia, crude oil reaching $120/barrel, and a nationwide housing crisis. I don't know about you, but I will be so happy on January 1, 2009.
Vote Today
It feels exciting to be a part of an election where both candidates are competent and respectable. I can barely remember the last time I felt genuinely happy about our presidential choices. Usually, we joke that our choices are between Tweedledee and Tweedledum, but this time, we have two honorable, dignified men in the race.
Based on my own informal survey, many young people (18 to 25 yrs) have not voted. One reason is because young people are more transient than the general population--they move for a job, for college, etc. As a result of this transience, it's harder for them to pro-actively register to vote. Without registering, a citizen cannot vote.
I predict a popular vote of 53% to 44%, with 3% voting independent/libertarian/Constitution/Green, in favor of Obama. If Obama wins, I will be very interested in whether the Democrats gain enough Congressional seats to prevent the Republicans from filibustering. As much as I like Obama, I don't want the Democrats to have unchecked power in Congress and two branches of government.
Based on my own informal survey, many young people (18 to 25 yrs) have not voted. One reason is because young people are more transient than the general population--they move for a job, for college, etc. As a result of this transience, it's harder for them to pro-actively register to vote. Without registering, a citizen cannot vote.
I predict a popular vote of 53% to 44%, with 3% voting independent/libertarian/Constitution/Green, in favor of Obama. If Obama wins, I will be very interested in whether the Democrats gain enough Congressional seats to prevent the Republicans from filibustering. As much as I like Obama, I don't want the Democrats to have unchecked power in Congress and two branches of government.
Stocks Update (November 4, 2008)
I haven't done a "Stocks Update" in a long time. To save time, I am going to list only the individual stocks I own in retirement accounts that exceed 2,000 dollars. As of today, November 4, 2008, here is the list:
Dominion Resources, Inc. (D)
EMC Corporation (EMC)
Swiss Francs ETF (FXF)
Intel Corporation (INTC)
U.S. Preferred Stock Index (PFF)
Swiss Helvetia Fund Inc. (SWZ)
Vanguard Pacific Stock ETF (VPL)
Utilities Select SPDR (XLU)
Yahoo, Inc. (YHOO)
I wish I owned more General Electric (GE) and Johnson and Johnson (JNJ). My strategy in my retirement accounts is to own stocks or ETFs with high dividend yields. So far, my biggest loser is Yahoo (YHOO). I am losing around $1,100 dollars on the stock, which isn't terrible, but certainly not ideal. I just saw a prominent Microsoft (MSFT) ad on Yahoo's front page, so perhaps Microsoft and Yahoo are on more cordial terms these days, which may lead to some form of a buyout.
Dominion Resources, Inc. (D)
EMC Corporation (EMC)
Swiss Francs ETF (FXF)
Intel Corporation (INTC)
U.S. Preferred Stock Index (PFF)
Swiss Helvetia Fund Inc. (SWZ)
Vanguard Pacific Stock ETF (VPL)
Utilities Select SPDR (XLU)
Yahoo, Inc. (YHOO)
I wish I owned more General Electric (GE) and Johnson and Johnson (JNJ). My strategy in my retirement accounts is to own stocks or ETFs with high dividend yields. So far, my biggest loser is Yahoo (YHOO). I am losing around $1,100 dollars on the stock, which isn't terrible, but certainly not ideal. I just saw a prominent Microsoft (MSFT) ad on Yahoo's front page, so perhaps Microsoft and Yahoo are on more cordial terms these days, which may lead to some form of a buyout.
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