Dusty

Historic Financial Collapse Underway?

The hue and cry about how evil the "Fiat" currency is ignores reality. A century or slightly more ago all money WAS gold or silver. Coins made of the real thing. A small amout of paper representing the real thing in government storage. Already there was not enough to go around. There was no way to increase the supply of the comodity and people did not have the cash to pay for goods and services or to be paid. The will to do work, the manpower, the goods (as in wheat, meat, manufactured products) were there: there was not enough coin or currency to conduct commerce and barter only goes so far, too. The only answer then and even more now is "Fiat" money.

Old Dominion Booms as Truckers Bust

Ultimately, trucks are a utility. Ships or barges or railroads have very specific limits. Trucks must be available to cover the first and last legs of the distribution system, to reach places or even regions where there is no other way. Trucking as an industry is being reshaped. This has been in progress for some time.

Small companies and the independent owner-operator are being eliminated. This will result in economies of scale and de-facto monopolies. Far too many changes in the landscape to even begin mentioning.

The current energy crisis will move the process a lot. Investors, whether individuals or institutional managers, will have to watch events very carefully and try to pick out the best times to put money into the right places.

It may be as much fun as in the early 1900's trying to decide which buggy-whip makers were going to survive by shifting to become car-parts suppliers and which of all the new auto builders were still going to be around after a few years.

Housing: Barron's Calls a Bottom

Credit Suisse published a chart of "Mortgage Resets" last winter. It showed a mountain range of "Subprime" all spring, a high, rough valley or plateau this summer and another mountain range of "Alt-A" on top of "Agency Resets" this Fall (September through December). From then to the early summer of 2012 it continues like now. My own take is that the Market has followed the Credit Suisse chart very well so far. When Mortgage Resets went up, the market went down. Each month as the next month's crisis loomed the big boys panicked and there were craters.

It all started in November from a significant high. Phase two is about to commence from a serious low. It will be very interesting to see how far down it can go by, say, Chinese New Year. Then it will still have a long way to go before the mortgage mess is actually "over."

Our economy has actually never recoverd from the Telecom Crash. It has just been riding the Housing Bubble. YYZ (above) reminded us that it took Canada five years to recover in the '90's. It could take the US ten or more, there is a lot more to fix. Add 10 to 2012 and the clear start of the recovery is in (gulp!) 2025?

The Mauling of the Dow

Great introduction! Where is the rest of the article?

"How bad is it going to get?" is easy. Repeat the 1st and 2nd quarters of this year except start from our current lows instead of the levels of last October and part of November. We have a "Hindenburg" indicator and several other things telling of a serious drop. Mortgage Resets (Credit Suisse) by Alt-A and Agency Resets will generate as many or more foreclosures in the Fall as in the Spring. Job layoffs and business bankruptcies and small businesses just closing doors should skyrocket because of inflation and consumers with no money or afraid to spend on more than minimum essentials. Look for the January equivalent drop in August, then that long bumpy downhill slide to somewhere in the late winter. Should be very interesting about Election Day time.

Sell stocks? Maybe do whatever Mr Faber had in mind by his use of the word "Tactical." I am trying to move into securities that have a global footprint and preferably are based in other countries and other currencies and hopefully that pay some dividends. Worst case, those dividend payments might be the only real money available to hand. Check out Zimbabwe.

Double Bottom Forming or Just a Pit Stop on the Way Down?

The Genie in my Bottle of Smoke says this is end of quarter, end of first half. Some big money funds must move around a little bit, breathe(?). Last day or two of June, first few market days of July. Keep your seat belt tight. Then we decend to a late summer crash (Ref: Royal bank of Scotland, others). That will carry us into Alt-A housing and credit mess Part 2 (Ref: Credit Suisse Mortgage Resets chart) and more. We are really not even half way down the first big drop on the roller coaster.

What is scary is that the Genie may have it together. I am holding what cash I can.

Mail Delivery as Economic Bellwether

The US Postal Service gets put down a lot more than it deserves. I buy a lot of things On-Line and delivery is spread across USPS, UPS, and FedEx. Arrival at my door is a toss-up, but USPS has a slight edge. With computer tracking it is upsetting to know that my parcel is waiting in a UPS or FedEx warehouse a mile away for a week so it meets the criteria for 'standard' delivery. USPS often delivers 'standard' as quickly as the others do for premimum service. USPS is also engaged in a serious effort to improve its service. If it gets too good it will have to back off for political reasons. And do not forget that transportation of USPS mail and parcels is largely by UPS and FedEx equipment (aircraft) and contract.

Weyerhaeuser: Returning to Its Roots

The possibility that WY may become a REIT in the future is highly facinating. If it was done late in 2009 or in 2010 then there would appear to be a lot of tax benefits and positioning opportunities now and also for later. WY could become a cash cow for management and investor also. Love it.

"Rubinomics" Is Back, Part Two

Our primary problem is that the great majority of the population considers that everything said by the rulers or lawmakers or by the wealthy upper crust is a self-serving lie. Or at least a severe 'spin' on reality. Events generally validate this belief. AS: What really happened in Vietnam? How did this Iraq War come to be? What actually allowed the Telecom and Subprime Crashes? Why should we believe anything said about Peak Oil, General Over-extended Credit, Global Warming? From a walk-up 3rd floor apartment in the medium rent part of the city it is all taken as just noise from the rich who are trying to get richer: at (my) expense.

A Closer Look at the Impact of Higher Gasoline Prices on Driving

A lot of driving is unnecessary or recreational. Multiple trips could often be reduced to one trip with planning. For time alone or just to 'get out of the house/apartment' a trip around town for an hour or two was cheap. Recreational traffic makes an amazing difference on the roads everytime gasoline prices spike. Commercial drivers are well aware.

Preparing for the Fall, Part II

During most of the First Quarter, Credit Suisse had a graph about mortgage resets easily accessible on the internet. The US economy/market has followed that graph like a champ; the market has been a negative mirror image. Subprime is largely ending now, June '08. The market is bouncing around because it does not know which way to go. In September through January the name of the game should be "Alt-A." The Alt-A loans will be riding on top of "Agency Resets." Fall will be a replay of the 5 or 6 months now ending. Then it gets better, but not much. This summer might be a good time to be sure your parachute and seat belt straps are tight. We can look forward to real improvement, according to that Credit Suisse chart, in June of 2012.

Bank of America: The Most Popular Dividend in America?

I bought some BAC in May and more in October of '07 because my advisory service said "buy." I consider myself a centerline 'average' micro investor and I will be ecstatic if BAC just survives, continues a dividend at all, and regains its relative position when this current mess is over in 2015 (?). Then I will still have my money and the bit of cash income necessary when it is really needed. No, I have a lot of small positions as diversified as I can manage.

And, Eagle-Chief, I mostly agree about gambling. I do think that with care and a little luck, dividends and a very small overall capital gain can be managed that will generate a better return than interest on most savings will. It is not about getting rich but rather a best shot at survival.