Economy Forum

[aiki14]

We need a section titled The Economy. It is not really trading and not really off topic. It is certainly germane at the moment if you're an investor.

[Horsefish]

Second the motion....We are heading into unknown waters. A discussion of the next 2 to 5 years would be valuable to investors who need to position themselves now.

Aiki: please stay engaged. There are people here that need a voice of reason in a hurricane of confusion. Thank you for your contributions.

[concrete]

I know aiki doesn't give .02 cents for my opinion. He won't even respond when i praise him. But for what it's worth: We supply products for the specialty concrete and wall finish segment of the construction market in the southwest and while we’ve seen a moderate softening in sales for DFW market it’s nowhere near the declines we saw from 1987 to 1989. We’ve always had double digit growth every year for the past 20+ years but this year were dead even with last year sales. On average each of the 50+ contractors we sell to in DFW is down 10-20 percent over last year so we’ve only been able to achieve this years sales by adding more customers, increasing product line and more commercial projects specified by architects. While our business in Houston is marginally up - DFW is off, but nowhere near the sky-is-falling scenario I hear on the news – at least not yet.
One thing I’ve noticed is that in the 90’s homeowners would come out of their pocket with cash for softscape and upgraded hardscape finishes. Now, they finish the house, postpone landscaping, cut the spa package out of the pool and look for the cheapest alternative on the pool deck and driveway.

[aiki14]

Originally Posted by concrete

I know aiki doesn't give .02 cents for my opinion. He won't even respond when i praise him.

You're wrong, I value your opinion, and if I didn't respond when you said something nice about me I apologize.

[aiki14]

Originally Posted by Horsefish

Second the motion....We are heading into unknown waters. A discussion of the next 2 to 5 years would be valuable to investors who need to position themselves now.

Aiki: please stay engaged. There are people here that need a voice of reason in a hurricane of confusion. Thank you for your contributions.

I am not gonna be much of a voice of reason, I think we blew it when we didn't approve Paulson's original plan. I have been saying for close to a year that the FOMC and Treasury have acted in an incompetent manner, always behind the curve, and it's allowed the problems to get worse through lack of action.
I think the problem was set in motion a long time ago with the sub prime foolishness, but then every time they acted they made things worse, the FOMC inflation biased in the face of a slowing economy is the worst culprit, Treasury not defending the dollar is next on the list, the SEC allowing things to get so corrupt is next and the administration bears responsibility in that the SEC is severely underfunded.
How do I square the call for Paulsons plan and calling him an incompetent? Simple, the plan could have been modified to the current plan as we went forward, we needed something at the moment (as was evidenced by the markets reaction to Paulson meeting with the Fed and Key senators that tuesday) and again we waited for nonsense. That delay was the last straw in the crisis of confidence that has brought us down these last 2000 Dow Points.
Nobody wants to put more power in the hands of the current administration less than me, but the way I saw things that tuesday, it was do or die. Now I see it the same way only worse, now we need to nationalize the Money Center Banks in some fashion, or we do not get the credit markets back.
Nobody is buying commercial paper, period, nobody. Unless that changes the Bailout is gonna be useless, if it isn't already doomed. And I don't think a dollar has been spent from the bailout money, so we are looking at what would have happened anyway, with maybe some modicum of positive based on knowing that money is out there. So it could be worse.
We are a representative democracy and we took the power out of the hands of the people we had in place to deal with the situation (and as I said they were less than competent) and put it in the hands of Joe Sixpack and the congress, and we expected good to come of it?
Sorry for the rant.

How was that Horse? Voice of reason?

[John Law]

I'm all for an Economy forum, although I wonder if a few of us would ever be seen in the stock forum again. When was the last time aiki recommended a stock?

Just to add to the conversation, apparently Paulson is now considering a direct capital infusion into banks with the bailout money (read: preferred shares). Roubini has a great article on this. I like that plan better than buying up worthless tranches, although there is very little I like about any of this.

Difficult to watch stocks getting killed day after day. I can't imagine what people on the margin must be doing right now. Is there any financial hope in sight? I'm just looking around for the next Hitler to emerge.

JL

[aiki14]

Originally Posted by John Law

I'm all for an Economy forum, although I wonder if a few of us would ever be seen in the stock forum again. When was the last time aiki recommended a stock?

Just to add to the conversation, apparently Paulson is now considering a direct capital infusion into banks with the bailout money (read: preferred shares). Roubini has a great article on this. I like that plan better than buying up worthless tranches, although there is very little I like about any of this.

Difficult to watch stocks getting killed day after day. I can't imagine what people on the margin must be doing right now. Is there any financial hope in sight? I'm just looking around for the next Hitler to emerge.

JL

I haven't recommended a stock in a while, I just don't do screens any more. I basically recommend hedging longs these days and have been in a protective mode for months. The day after I get back from Russia I'll be in NY trading with an old friend, look for me in the chatroom a week from tomorrow, I'll post our trades real time.

Roubini has been right for a long time now, Bill Ackman is another one to heed.

Your last two sentences are chilling, I hope we see him coming this time.

[jacobnbr1]

Originally Posted by aiki14

I am not gonna be much of a voice of reason, I think we blew it when we didn't approve Paulson's original plan. I have been saying for close to a year that the FOMC and Treasury have acted in an incompetent manner, always behind the curve, and it's allowed the problems to get worse through lack of action.
I think the problem was set in motion a long time ago with the sub prime foolishness, but then every time they acted they made things worse, the FOMC inflation biased in the face of a slowing economy is the worst culprit, Treasury not defending the dollar is next on the list, the SEC allowing things to get so corrupt is next and the administration bears responsibility in that the SEC is severely underfunded.
How do I square the call for Paulsons plan and calling him an incompetent? Simple, the plan could have been modified to the current plan as we went forward, we needed something at the moment (as was evidenced by the markets reaction to Paulson meeting with the Fed and Key senators that tuesday) and again we waited for nonsense. That delay was the last straw in the crisis of confidence that has brought us down these last 2000 Dow Points.
Nobody wants to put more power in the hands of the current administration less than me, but the way I saw things that tuesday, it was do or die. Now I see it the same way only worse, now we need to nationalize the Money Center Banks in some fashion, or we do not get the credit markets back.
Nobody is buying commercial paper, period, nobody. Unless that changes the Bailout is gonna be useless, if it isn't already doomed. And I don't think a dollar has been spent from the bailout money, so we are looking at what would have happened anyway, with maybe some modicum of positive based on knowing that money is out there. So it could be worse.
We are a representative democracy and we took the power out of the hands of the people we had in place to deal with the situation (and as I said they were less than competent) and put it in the hands of Joe Sixpack and the congress, and we expected good to come of it?
Sorry for the rant.

How was that Horse? Voice of reason?

Thats pretty good there AIKI, can't say i agree wit all of it.

Ill Just bet they close all the major markets....

[aiki14]

Originally Posted by jacobnbr1

Thats pretty good there AIKI, can't say i agree wit all of it.

Ill Just bet they close all the major markets....

I agree, if we get any more of these selloffs a bank holiday might be in order. It would spook the world market in a serious way though so it would have to be sold by Treasury, and Paulson is not the best salesman in the world.

That sparked me to think the following:
We should go on an infomercial type methodology to sell any plans. We have joe sixpack selling out of his mutual funds and we need him to buy back in. What better way than infomercials?
"Hi I am Ron Popeil, and with me is George Forman, we're here to introduce the New and Improved, low fat, 6 in 1, Money and Tax giveback to Mainstreet 2"
"That's right Ron, The grease just runs through the economic system, in only half the time of conventional plans, and for only $800Billion"
"Call your Broker by 4pm today and we'll double your order"

What do you think?

[jacobnbr1]

Oh yea baby! criminal tools at woik....

Are we and half this board on an equal agreement that criminals run the country yet?

1/2 I doan know about all that?