Do hard core Republicans really dislike John McCain? I could not believe my ears when I heard Pat Buchanan diss John McCain and PRAISE Obama! I think this says more about McCain than feelings about Obama. What does this say to me? These folks have hunkered down and prepared for the apocalypse. They are willing to let a newbie take control rather than have McCain in the White House, and if things get F'ed up, they will be in a position to ride out the storm.
Let's look at some facts. Where do you see more Priuses, in rich neighborhoods, or poor ones? Where are the Costcos being built, in rich neighborhoods or poor ones? Need a private jet at $25 million dollars? Good luck, there is a two year waiting list for new orders.Think gas prices are going down soon? Tata Motors, India's biggest car company just bought Jag and Range Rover, and are about to produce the next peoples' car for the Indian and Chinese markets. This at a time when Indians use 1 barrel of oil a year, the Chinese use 2 barrels of oil a year, and Americans use 25 barrels a year.
So how does this play out for the fatcats? One word: assets. Asset prices will be driven down and cash will be king. Even rich folks who are leveraged will have to sell their stuff. Examples include Sam Zell selling the Chicago Tribune building and the Cubs, and the recent sale of the GM building. Oh, do not forget Ted Kopple trying to sell his $4 million dollar house in Potomac for $1.9 million, and Ed McMahon's $5 million dollar no sale. Guess what businesses are booming? Pawnbrokers and repo agencies.
Let's hope the strength we believe we see I Obama is truly there...
Saturday, June 28, 2008
Friday, June 27, 2008
Lies, damn lies, and statistics
Heard a talking head on CNBC moan about the current economic status, and how everyone else overpriced their houses and businesses. I am always amazed how lucky I am to always be around the best and the brightest, the exceptions to the rules.
For example, my alter ego spends alot of time around doctors. Now studies will show that 60% of the doctors don't follow guidelines; yet in a room of twenty doctors, everyone does. Boy am I lucky. Unfortunately, the 100k people who DIE each year from gross medical negligence are not as lucky. And forget about the hundreds of thousands who are undertreated but survive in spite of their doctors. For example, how many patients are on an aspirin a day, and on Lipitor 80mg versus 10-20mg?
My point: make sure whatever endeavor you find yourself in, that you surround yourself with the folks who are the exceptions, or learn how to read statistics...
For example, my alter ego spends alot of time around doctors. Now studies will show that 60% of the doctors don't follow guidelines; yet in a room of twenty doctors, everyone does. Boy am I lucky. Unfortunately, the 100k people who DIE each year from gross medical negligence are not as lucky. And forget about the hundreds of thousands who are undertreated but survive in spite of their doctors. For example, how many patients are on an aspirin a day, and on Lipitor 80mg versus 10-20mg?
My point: make sure whatever endeavor you find yourself in, that you surround yourself with the folks who are the exceptions, or learn how to read statistics...
Don't believe the hype
In my job, I get to watch a lot of financial news. My conclusion: we are being robbed blind by so called "experts" in financial markets. I have NO access to info that is not available to anyone else. Yet in the fall of 2006, I called for a decline in the housing market. Why? A little story is in order.
A friend of mine who calls herself an entrepreneur sent me an email announcing her new job as a mortgage broker. She said to call her, because she could get me a mortgage. This was about the time I was struggling to pay alimony, child support, and my rent. "No problem", she said. Flashback to the time when my ex and I bought our dreamhouse with a documented combined income over $250k, and another house and stock in our portfolio. My first colonoscopy will be less painful than the scrutiny I got from the loan officer. First alarm went off.
Next was article in local rag about the poor fellow who was losing his $500k house. he was a carpenter, and his wife was a maid. He had tears in his eyes because he was losing his slice of the "American Dream". What? How does a carpenter and a maid afford $500k? Answer: they could not. Second alarm went off.
Next were all the talking heads talking percentages versus hard numbers. Of course only 2% of the loans were going bad. However, that translated into 2 million homes that were being lost. Good luck maintaining your home price when you have an empty house-or two or ten-in your development. As I drove to see my girls, the "For Sale" signs bloomed -first like dandelions, then like rhodedendrons(reference being evergreens). Yet Ben Bernanke, Hank Paulson, and many talking heads were signing "Don't Worry, Be Happy"
And that, boys and girls, was when I knew the economy was in trouble.
A friend of mine who calls herself an entrepreneur sent me an email announcing her new job as a mortgage broker. She said to call her, because she could get me a mortgage. This was about the time I was struggling to pay alimony, child support, and my rent. "No problem", she said. Flashback to the time when my ex and I bought our dreamhouse with a documented combined income over $250k, and another house and stock in our portfolio. My first colonoscopy will be less painful than the scrutiny I got from the loan officer. First alarm went off.
Next was article in local rag about the poor fellow who was losing his $500k house. he was a carpenter, and his wife was a maid. He had tears in his eyes because he was losing his slice of the "American Dream". What? How does a carpenter and a maid afford $500k? Answer: they could not. Second alarm went off.
Next were all the talking heads talking percentages versus hard numbers. Of course only 2% of the loans were going bad. However, that translated into 2 million homes that were being lost. Good luck maintaining your home price when you have an empty house-or two or ten-in your development. As I drove to see my girls, the "For Sale" signs bloomed -first like dandelions, then like rhodedendrons(reference being evergreens). Yet Ben Bernanke, Hank Paulson, and many talking heads were signing "Don't Worry, Be Happy"
And that, boys and girls, was when I knew the economy was in trouble.
Best laid plans
Sorry, new to posting, and will have to learn to proof read. The title of my paper is, "Big Trends of 2008"
That will be a little more timely...
That will be a little more timely...
Ready, set, go!!!
This will be my first post. My friends will be glad I have started a blog, so that I can stop clogging up their email boxes.
What will this be about? What is on my mind. I love medicine, politics, and economics, so the next few months will be fun.
In January of this year, I wrote a paper called "Big Trends of 2000" on the economy. I sent it to a few of my friends in the financial world. Six months later, hopefully someone made a little money from my suggestions.
Economics and the markets are not difficult if you study human nature. For example, last year, Circuit City was selling in the teens. Yet the housing crisis was in full swing. In addition, if you were not lazy, and checked the prices of big ticket items online, you could get almost anything cheaper-including S&H-than you could at Circuit City. Fast forward to today, and Circuit City is down to $3.32. Bear Sterns was at $120+ when the story broke that not only did two of their hedge funds go down, but another fund was being run by a guy who fancied drugs and young girls. Can you say no due diligence, and a stock that dropped to $10?
What does the future hold?
Stay tuned...
What will this be about? What is on my mind. I love medicine, politics, and economics, so the next few months will be fun.
In January of this year, I wrote a paper called "Big Trends of 2000" on the economy. I sent it to a few of my friends in the financial world. Six months later, hopefully someone made a little money from my suggestions.
Economics and the markets are not difficult if you study human nature. For example, last year, Circuit City was selling in the teens. Yet the housing crisis was in full swing. In addition, if you were not lazy, and checked the prices of big ticket items online, you could get almost anything cheaper-including S&H-than you could at Circuit City. Fast forward to today, and Circuit City is down to $3.32. Bear Sterns was at $120+ when the story broke that not only did two of their hedge funds go down, but another fund was being run by a guy who fancied drugs and young girls. Can you say no due diligence, and a stock that dropped to $10?
What does the future hold?
Stay tuned...
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