Posts Tagged ‘economy’

Economy In Best Shape In 18 Months

November 29, 2012 Leave a comment

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According to a Bloomberg Global Survey, the economy is in its best shape in 18 months with China’s economy improving and the U.S. looking to avoid the fiscal cliff driving optimism and stock markets up globally.

Two thirds surveyed described the global economy as either stable or improving with Investors selecting  stocks and the equity market as the first choice of investments with real estate and the housing market and second for investment opportunities.

The U.S. came out on top for the eighth straight quarter when investors were asked which  where they saw opportunities for the next year with China coming in as second to the U.S. and Europe as the worst place for investing. China was fourth in September according to Bloomberg survey of subscriber traders, investors and analysts.

“U.S. companies have better profit potential, balance sheets and access to capital,” Christian Thwaites, a poll respondent and president and chief executive officer in New York of Sentinel Investment, which manages more than $27 billion, said in an e-mail.

Expectation  is that the U.S. will avert $607 automatic spending and tax cuts which is helping fuel the global optimism that  President Barack Obamaand Congressional leaders will reach a short-term agreement to avoid the fiscal cliff.

Commodities are down 18 perent from September according to the last survey and forcasted to be the attractive asset expected to perfrom well over the next with the worst being U.S. Treasury bonds which forty-eight percent holders intend to sell bonds over the next six months.

“The global economy is improving, recovering and healing, thanks to the U.S. and the emerging markets,” said Andrea Guzzi, a poll respondent and vice president of IST Investmentstiftung fuer Personalvorsorge, which manages money for Swiss pension funds. “More people are becoming wealthy, less and less are poor.”




Buffet Ready For the Next Housing and Mortgage Trend

August 2, 2012 Leave a comment
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The U.S. housing market has seen four years of  lack of new homes.  Since 2008 new homes construction declined  steadily and it was  only up until this  past June 2012 we began to see reports of  new housing  construction applications  increase.

Four years of lack of  new homes coupled with the shadow and REO  inventory held by the banks  and the  foreclosure homes many stuck in limbo because of the robo signing issues only recently starting to move again;   the  shortage of  available housing has been substantial.

These issue skew the reports of increase of home prices as a barometer for uptrend in the housing market. The demand for homes because of loss of inventory  may not reflect as much of an  uptrend in   the housing market, rather  leaning more towards  competitive bidding  for the minimum inventory on market.

What  may be  added  to that demand is  the normal new   families demographic  but those numbers are balanced out by the number of young adults remaining at home because of the unemployment.  When the unemployment numbers decrease there will added factor in housing demand.

Warren Buffet’s Berkshire Hathaways   increased his holdings in Wells Fargo, the largest U.S. Homelender, and the assets of the bankrupt Residential Captial LLC.

A turn in the housing market will benefit Berkshire’s businesses tied to home building and repair, said Josh Brown, who helps oversee $350 million at Fusion Analytics Investment Partners LLC in New York, including Berkshire shares.

“Buffett has spent the past decade amassing a portfolio of companies that are involved with home remodeling,” he said in a phone interview. “It’s got the right drivers if this housing trend continues.”

Berkshire Hathaway  has added approximately 36% or  104.1 million shares of Wells Fargo to its portfolio since  2008-2009.   And his choice in a regional bank is a less riskier  one  with current big bank problems.

“Wells is seen as a supersize regional bank,” reports Wall Street Journal.”More telling, it isn’t a player in over-the-counter derivatives markets. Wells had derivatives with a face value of about $3.2 trillion at the end of last year. J.P. Morgan had $71 trillion and BofA, $68 trillion.”

When the real estate market is back on the move Warren Buffet will in the right position, again.



Investing in Real Estate

Home Buying Kit For Dummies

Cash Flow Notes 2012

Finally! Strongest Housing Starts Since 2008

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Outlook for residential real estate is on the uptrend and will push the economy in the right direction  as data indicates that  U.S. home starts in June was one of the fastest pace in almost 4 years according to economists.

Seventy-nine economist surveyed by Bloomberg News  provided the data that indicates housing starts moved up 5.2 percent last month to 745,000 estimated annual which is the  strongest since 2008   according to the median estimates, and building permits.

“The long-awaited housing market recovery is definitely under way as demand is improving,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “Continued growth in the number of households, pent-up demand, very low prices and mortgage rates that have resulted in record- high affordability” are underpinning demand, he said.

Confidence among U.S. homebuilders climbed in July by the most since September 2002.
Index of sentiment increased by 6 points to 35 this month as sales and buyer traffic improved according to a report from the  National Association of Home Builders/Wells Fargo.

“As we start to move prices up, it starts to draw people off the sidelines who are potential homebuyers, people that are at the age they should be buying a house, but they’ve been concerned about a further decline in prices,” Daniel Fulton, chairman and chief executive officer of forest-products company Weyerhaeuser Co. (WY), said at a June 13 conference. “So we’re starting to see some increase in activity.”

The housing supply is moving as record low mortgage rates and lower property values attract buyers reducing the inventory.  This will cause the home builders to boost construction which will create jobs and stimulate the economy.

The Standard & Poor’s Supercomposite Homebuilding Index, which includes D.R. Horton Inc. and PulteGroup Inc., has climbed 52 percent this year, outpacing an 8.4 percent gain in the broader S&P 500 Index.

“Evidence from the field suggests that the ‘for sale’ housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process,” Stuart Miller, chief executive officer at Lennar Corp., the third-largest U.S. homebuilder by revenue, said in a June 27 statement.


Investing in Real Estate

Home Buying Kit For Dummies

Cash Flow Notes 2012



Energy Dept. Loans Pending Approval Could Help With Jobs

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Solo Power Inc. and 1366 Techology Inc. are preparing to receive financing  from the same Energy Department  loan guarantee program which funded the bankrupt Solyndra LLC and Abound Solar Inc. Both companies qualified for the guarantees last year and are now  meeting milestones required to access the credit and to receive approvals according to executives at both companies.

Funding these project  would help relieve,  even though a small part,  some of  the of the economic pressure because of the great need for jobs and economic growth while at the same time supporting a sustainable conscious and responsible project.

This will be the first funding as early as the end of this year for supporting solar manufacturers since  Solyndra LLC  filed for bankcruptcy last year.  Half of the solar manufacturers that received the loan guarantees filed bankruptcies which caused Republicans in Congress to use opportunity to hold inquiries into the programs turn it  into a negative against President Obama’s sustainable efforts plus  raised questions about the White House influence in funding.

President Obama  is not powerful enough to control the global  marketplace.  The  failures of the U.S. solar projects are in a large part    due to the global market place and the normal odds of success that comes with research and development and any start-up.  Standard for a new company is  a 10% chance the  project will make it to the end of the  second year.

In addition, Asian  countries and predominately China  have demonstrated their competitiveness in  manufacturing including  solar products at prices the other countries including the U.S. and  Germany have been unable to  compete with.

“Those failures won’t prevent the government from honoring other guarantees”, said Damien LaVera, a spokesman for the Energy Department.“As long as they meet the terms and conditions of their agreement, including milestones, they can expect to receive funding as agreed,” LaVera said in an e-mail.

Designed to support innovation at companies developing new energy technologies the Energy Department program does not expect every applicant to  succeed  LaVera said. House Republicans proposed a bill yesterday that would bar the agency from issuing additional loan guarantees.

About 35 percent of the loans, loan guarantees and conditional commitments is for solar power generating project and lessthan 4% for solar manufacturing.  The balance of the  $35 billion for clean energy products are for supporting wind, geothermal, biofuel electric vehicles and other ventures.

May 7th Week – Pianalto Says Economy Needs To Grow Faster

Bullish Expectations for Forex Trading

Market expectation is very positive for USD and outlook is bullish this week.  Uptrend will be supported by uncertainty about European governments, elections in France and Greece, which as a result should be negative to pairs like EUR/USD, EUR/JPY and positive for USD/JPY.

News with potential effect on currency movement this week  include comments from Federal Reserve Bank of Cleveland President  Sandra Pianalto  (voting member this year on the central bank’s policy-setting committee), U.S. wholesales business, trade balance, jobless claims.

Pianalto  said the economy needs to grow at a faster rate in order to speed up the pace of employment growth and repair damage from the 2007-2009 recession.

“If our economy were a Kentucky thoroughbred, I’d say we have moved from a walk to a trot, but we’re far from a gallop,” Pianalto, who did not specifically mention monetary policy, said at a bankers’ event in Lexington, Kentucky.


Inside the Fed: Monetary Policy and Its Management, Martin through Greenspan to Bernanke

Federal Reserve Bank of Cleveland
Phone: 423-523-9911

Amazon for NASA – Game Changing

Charles Bolden, NASA Administrator  gave his thanks ”  to Amazon CEO Jeff Bezo and his  private expedition team  on the discovery of the  Apollo  engines in the Atlantic. Bolden also gave his “good luck’ on their efforts to raise the Apollo 11  F-1 engines which where dropped  into the ocean 42 years ago as part of the historical  “first man on the moon” mission.

Much can be done  in the private sector where the government does not have the  funding or capacity to accomplish things such as this.

Anytime government has to fund and put energy in a project something else is not getting funding or receiving attention needed. And there is way too much placed on government to solve that can and should be placed back to the private sector to solve.

Business private sector is  better with finances than government. It is more efficient and cannot survive waste or overspending. Businesses and their  management must answer daily, weekly, quarterly for decisions made  instead of governments  every 2-4 years.

Sometimes rapid movement is needed to solve problems.

Federal and local governments are  struggling   in this economy and perhaps it is a ripe  environment for the private sector  to take over  areas once left to government.

Arguments aside (and there are many)  this is a good opportunity for non government America to do what they do best  which is  create solutions once left to government.

It’s  in the American DNA to create and re-invent.  We started with the Revolutionary War by changing  battle tactics and the  altered  gun   and continued up to the development of the TCP/IP  codes; the birth of the  Internet

Let’s see what we can do.

We are the  Game Changers.