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peng-
Not a problem if your savings is in gold or foreign currencies.
Very bad for renters.
Not really. It's only kinda bad for renters and that's assuming they're idiots like me keeping everything in $. What's causing the low rates of course is actually so fuc*ing devastating for low equity "owners" it's hilarious to watch. Can't be easy for them, watching at least $5K a month in "equity" evaporate *and* be paying property taxes for the privilege.
OO,
So should we buy pork bellies futures ? ;-)
But seriously, there are SO few ways to invest in the food trend. That's why all those components of MOO are soaring. I am tired of investing in QQQQ stocks. But I am also scared of all these POT and MON.
I am seriously looking at RJA and DBA.
Looks like H4 improved this week, Fed still has 548B (only minus 12B from last week) on hand.
Sorry, have to be a counterbalance. Yeah, only minus $12B, we can sustain that for a whole year! But then again, Ben IS holding the line. :-)
I was searching for some historic data on the Fed site and came across this gem. Get his, when the country started running surpluses near the end of Pres. Clinton the First's reign, the Fed got antsy as Treasuries were declining as a means to manipulate (excuse me) maintain the Fed funds rate. The FOMC's historical reliance on purchases and sales of Treasury securities to implement monetary policy would be difficult to maintain if large budget surpluses and the associated steep reductions in Treasury debt were to continue. No worries, though, as the report explores other options. A related issue is that, if the Federal Reserve was a large holder of GSE obligations, some market participants might believe that the government would be even more inclined to support the GSEs in the event of financial problems. Such concerns might suggest that any role for GSE assets in System transactions should be limited and established only as part of a System program of diversification.
I also found this pretty interesting: since 1976, the size of the portfolio typically changed no more than about 1.5 percent each day, although the size changed as much as 15 percent on very rare occasions. Bear in mind that the Federal Reserve's portfolio has grown secularly with currency demand, although there is no guarantee that this growth will continue in a predictable way.
leading to potentially much higher meat price down the road
I just watched "King Corn" on PBS a couple of days ago. Basically of visual presentation of Michael Pollan's 'great corn conspiracy'. Does lead one to conclude that maybe higher meat prices down the road wouldn't be such a bad thing.
Hey Stuck, LXU is heat pumps crossed with POT -- what a combo?!
RJA has 5.73% live cattle adn 1.43% rice, both I believe will be big winners. But the problem is, he also has 20 something other agricultural products which may be in different cycle of the boom and bust.
If there is one thing you can count on the Wall Street, you can count on their "innovation" to come up with another Meat ETF for the retail customers.
The Original Bankster Says:
April 17th, 2008 at 2:46 pm
hey everyone,
"What is the best way to get accurate stats on revenue, etc. in the Real Estate Services sector?"
At your local library you can look up industry numbers. I've had to do that a few times for various school marketing projects. There is a system of classification that used to be called SIC and now has a new acronym but you can get some very good information on sales totals, market sizes etc for different industries.
EBGuy,
I don't know if you are referring to corn syrup (have not seen King Corn yet), but I have long suspected its detrimental health effect. I have tried very hard to stay away from processed food with corn syrup and it is HARD. Everything in this country has corn syrup in it, unless you eat fruit and vegetables directly, and cook your food from scratch.
I can almost hear the boredom. The DQ report releases today, EBGuy gave you all a link and what do we have ? Complete silence !
I miss the days when we would shred the DQ guys for their pathetic spins. Oh and long long ago, we were trying to point out how stupid their "median up" drama is. Now even price per sqft is also down.
Only thing going up is number of NODs and foreclosures.
It could have never happened HERE ! But it is and it will.
What we are seeing is that the press does not just report the facts -- they put their opinion or passion into it. The press was loving it when real estate was going through the roof. They contributed to the notion that real estate ALWAYS appreciates. We shouldn't have believed them on that, and we shouldn't believe them when it comes to a lot of other things. As this post so eloquently points out, people do not use critical thinking skills. They use "me" thinking skills.
I think the schadenfreude has pretty much run its course. The realtors, appraisers and brokers have been dispatched in disgrace; the MBS and CDO vintages are fermenting into bitter wine.
The most relevant current topic is bailouts. There is still plenty of outrage left for halfway-cripped banks and the "stupidity bonus" for our fellow taxpayers.
StuckinBA:
One way you can invest in the Food Bubble is to grow your own food. Some stuff like melons would do better if the weather wasn't so mild around here, but overall the climate here is backyard garden friendly. And you'd be surprised how you can wring out some yields without wasting lots of water. In San Jose, and probably other municipalities, you can keep an adequate number of producing hens without a permit.
There you are. Vegetables, fruit and protein. Invest the money that you saved on food into building up a position in an energy services stock.
As I have stated many times, one can only analysis economics from a psychological/behavioral perspective.
Oh Peter. What are we gonna do with you? lol
It's not zero sum, even if everyone really *thinks* it is.
Curious about some thoughts on zero sum. Assuming it is a zero sum game, is the only growth the amount of gold we pull out of the ground? I don't think cavemen cared too much, but it does seem to have been the measure of wealth in civilized history. Or if it is not gold is it the utilization of the environment? If this is the case does the zero sum total out in the future, meaning we consume resources making us poor in the future with the illusion of growth in the present?
I think I agree with Randy, if you think innovation and organization is what drives increases in standards of living. I think one can look at the history of production methods going from specialized trades/craftsmen to the totally unskilled but carefully designed modern day factory.
"As I have stated many times, one can only analysis economics from a psychological/behavioral perspective."
I don't tend to like hindsighted theory. You can pick any idea and go back to find perfect examples. I think for the most part economics is logical. The psychological/behavioral cases are the exceptions which is why they can be so volatile and, from an investment perspective, potentially lucrative to people who recognize them.
The news media is seriously degraded and corporate-owned. You can forget television as a source of any information worth knowing, for example.
Newspapers are in trouble, as advertising revenues decline. But other than select bloggers, where is the analytical piece on a story going to get done?
It takes resources and time, and we are the poorer and in danger because of it.
I am a believer in the Solow theory, which holds that long-run growth is defined solely by productivity increases. And productivity reduces to technological innovation, in the broad sense of the term. ie., the discovery of fire created real growth. The advent of agriculture created real growth. The cotton gin. The automobile. The computer. etc. All these things accreted in a fundamental manner so as to increase the total size of the economic system. Over time, the system gets bigger.
Someday, when we mine asteroids for metals, that will increase growth. And then, finally, no one will be able to argue for the inane "gold standard" anymore because gold will be infinitely available, and terribly inflationary.
Wow. Does this qualify as a day of reckoning? I remember finding this site back in mid 2004 during the Dark Times (TM) wondering if I was the only one who thought something was rotten (and not just in Denmark). How the worm turns...albeit very slowly and painfully for all to enjoy!
Sorry this blog was down for a bit. Someone was mucking with the configuration. Probably a realtor...
It’s not zero sum, even if everyone really *thinks* it is.
It depends upon your definition of growth. (And what your definition of the world 'is' is.)
If you measure by the amount of stuff we have (like iPods), the system is NOT zero-sum.
If you measure by our achievement, we need to ask what that means. To me, humanity is but a constant game of people exploiting people. The form of the game may evolve, the background music may change, but the objective stays the same.
Are you guys following the mother of all short squeezes in the market today? Since it is a win-win game for the banks, they'd always go up like bay area homes. Also, FRE is now the new dumping ground for 'conforming jumbo' loans as of yesterday's news.
Are you guys following the mother of all short squeezes in the market today?
The Gold sell-off appears to have started at 5am EDT.
Yes. My puts are hurtin.
You are speculating with Puts? I am shocked!
Cato Institute is my hero.
they can also stop taking payouts from major software interests to import cheap foreign labor.
I believe in a global market. Cheap foreign labor is not necessarily a bad thing. I really can use a cheap maid.
Randy H says:
I am a believer in the Solow theory, which holds that long-run growth is defined solely by productivity increases.
This emphasizes another social casualy of easy credit. Let me explain:
Technology advances have increased productivity dramatically. For example, one man with a tractor can do the work of many men with a mule drawn plow. Similar productivity increases in other pursuits mean that it takes fewer and fewer people to generate the same amount of wealth. Therefore, if consumption stayed constant per worker, but output per worker doubled, we would only need half the workers to supply the demand. Rather than have 50% unemployment, I believe we would have handled the high productivuty issue by shortening the work week. If people were content to drive "modest" cars and live in "modest" houses. I believe we would have a 20 hour work week by now. Or even a trend back to where only one spouse works.
I believe the productivity driven evolution to the shorter work week was killed by debt. Easy credit drove up the prices of even "modest" cars and homes, plus allowed people to overconsume to the point of 7 year car loans and NINJA/ARM/40yr home loans. People in debt can't cut back on work hours, they need the extra money to service the debts.
If not for debt pushing up prices and encouraging overconsumption, productivity increases would have us on well on our way to the 20-30 hour work week. We would then have the corresponding benefits of more time for family, friends, and volunteer work. Instead, I see news articles about people working 3 jobs to afford the lifestyle they hocked their way into.
I believe the productivity driven evolution to the shorter work week was killed by debt.
Yes, I agree that debt is a factor, but I think it's pretty certain that even without debt, workers will never be allowed to work substantially less. The finish line will be moved further away as soon as too many people get near it. The rich require a good supply of the poor to do their work.
Even 100 years ago, people were also noticing that increases in productivity did not translate into less work for workers. From Henry George's "Progress and Poverty": the owners of land and capital will increase their demands on workers (rent and interest) to take most of the productivity for themselves no matter how much the workers produce.
Henry's solution was a single tax on land-rent, but leaving all income from capital (buildings rather than the land) untaxed. Supposedly that fixes things because land values fall, giving room for everyone to accumulate capital.
Even 100 years ago, people were also noticing that increases in productivity did not translate into less work for workers
But notice the work week shortened from 60 hrs/wk to 40hrs/wk. I believe the trend would have continued even more.
Didn't land prices fall in the US and Great Britain from 1850 on as productivity increased? Also, the amount of "rent" and "interest" paid today is not based on an employer in the company store model you seem to be alluding to, but by what one chooses to consume.
I'm surprised the RE industry isn't putting out more propaganda about how now is a "good time to buy." I remember all the RE ads during the run-up but the RE industry is rather quiet now and I think they would be jumping all over people trying to create some urgency to buy "before prices go back up." It wouldn't be hard to spin it so the sheeple would think, oh, I better buy now before this turns....
Maybe public sentiment is just too far in the other direction to make it work. But I'm still surprised I'm not seeing a stronger effort.
Someday, when we mine asteroids for metals, that will increase growth. And then, finally, no one will be able to argue for the inane “gold standard†anymore because gold will be infinitely available, and terribly inflationary.
At that point we could switch to the Iridium standard. Oh, wait, that's fairly common in asteroids too. How about Unobtanium?
I think I agree with Randy, if you think innovation and organization is what drives increases in standards of living.
I'm not going to disagree with you guys, although I will add that mankind's forward progress seems to have also been aided by the abilitiy to exploit increasingly concentrated supplies of energy. We are going to face some challenges as we hit the downslope of the EROEI (energy returned on energy invested) curve. Extrasomatic innovations don't power themselves (at least not yet :-) ).
Headset said: If not for debt pushing up prices and encouraging overconsumption, productivity increases would have us on well on our way to the 20-30 hour work week.
In theory this would work. But the problem in the current system is that the bulk of productivity increase is siphoned off by a small number of people - leaving only a small portion to trickle down to the rank-and-file.
Debt (fueled by overconsumption) and the resulting pressure of debt-service motivates worker-bees to compete more fiercely for work, rather than demand more leisure - this in turn reinforces the framework in which productivity increases get siphoned off by those who are in a position to do so. One of them positive-feedback cycles.
I remember my textbooks in junior high back in the mid-60s had discussions about how we were only going to be working 1-2 days per week when we got older, and how the real growth industries would be "leisure time" oriented. The biggest social problems were supposed to be caused by boredom. Somehow this certainly didn't happen.
I got out of debt and retired early. So I guess I'm working a zero hour week now.
if you think innovation and organization is what drives increases in standards of living
Innovation and organization drive expectations.
How about Unobtanium?
The price was infinite last time I check. Even if its price drop by half, it will still be infinite. See, you can't loose buying Unobtanium. :)
I remember my textbooks in junior high back in the mid-60s had discussions about how we were only going to be working 1-2 days per week when we got older, and how the real growth industries would be “leisure time†oriented.
Where's my flying car, moon condo and anti-grav suit?
SP says
Debt (fueled by overconsumption) and the resulting pressure of debt-service motivates worker-bees to compete more fiercely for work, rather than demand more leisure - this in turn reinforces the framework in which productivity increases get siphoned off by those who are in a position to do so. One of them positive-feedback cycles.
Kill the easy access to debt and you break that positive feedback cycle. I also believe you have it backward - debt is not fuled by overconsumption, it is overconsumption that is fueled by debt.
Wow, Carol Llyod's Surreal Estate column hits one out of the park this week. She looks at the sales price of similar models in a KB Homes development in Antioch. Coincidentally, many homes were bought by specUvestors. It is not pretty.
What's the bottom line? Since their high of $720,000 less than a year and a half ago, these particular models of Antioch homes have fallen a whopping 55 percent. I will note, though, that you need AC to survive in Antioch.
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How can we get the press to stop reporting lower prices as bad news?
Lower food prices = good.
Lower gas prices = good.
Lower house prices = GOOD.
Why don't we see the good news story of lower prices in the press?
Patrick