Sunday, January 11, 2009
Unemployment passes 7%, next stop 8% +
Wow, these guys are starting to bring up 9%-10% unemployment now.
I posted my thoughts on 9%-10% unemployment months ago here. People just did NOT understand how bad it was out there in the business world and now they are starting to see the negative stuff slice through the economy.
http://betterbizbooks.blogspot.com/2008/11/unemployment-zoomed-past-10-million65.html
I still think we have quite a few more people that need to get on the bandwagon that unemployment is a LAGGING indicator.
I'll say it again til I am blue in the face....
This economic cycle and downturn is being caused by something NOT SEEN IN 80 years! This is a CREDIT CRUNCH / devaluation cycle and it will take quite a bit of time to work through the system. It can happen quickly or slowly. That is the choice of politicians and policy makers. Either way, I think it will be painful for many Americans. I hate writing it but I think that is the way it plays out.
Here is a link to my post on what happens when we have to deleverage
http://betterbizbooks.blogspot.com/2008/11/what-happens-with-deleveraging.html
Dan Ross
http://www.danross.info/
I posted my thoughts on 9%-10% unemployment months ago here. People just did NOT understand how bad it was out there in the business world and now they are starting to see the negative stuff slice through the economy.
http://betterbizbooks.blogspot.com/2008/11/unemployment-zoomed-past-10-million65.html
I still think we have quite a few more people that need to get on the bandwagon that unemployment is a LAGGING indicator.
I'll say it again til I am blue in the face....
This economic cycle and downturn is being caused by something NOT SEEN IN 80 years! This is a CREDIT CRUNCH / devaluation cycle and it will take quite a bit of time to work through the system. It can happen quickly or slowly. That is the choice of politicians and policy makers. Either way, I think it will be painful for many Americans. I hate writing it but I think that is the way it plays out.
Here is a link to my post on what happens when we have to deleverage
http://betterbizbooks.blogspot.com/2008/11/what-happens-with-deleveraging.html
Dan Ross
http://www.danross.info/
Saturday, January 10, 2009
Inflation coming back - Impact to the markets?
Another bearish call on the U.S. dollar
As we print $$$ to finance our deficits (because we likely won't be able to sell all of the bonds we need to finance our national debt/deficits) it will cause the U.S. dollar to fall in value.
The problem with this is that it will commodies like corn, oil, etc to rise in price since they are priced in U.S. dollars. The major commodity markets of the world are based here in the U.S. and have been priced in $$$ for years :)
A falling dollar will, in turn, keep interest rates from declining more.
I was optimistic re: lower rates this year, due to continued weakness in the U.S. economy as we try to deleverage the system. We hit the 4.5% interest rates I thought we would hit in the market (I know folks that got rates as low as 4 3/8% and 4.5% with 1 point down on 30 year fixed notes) but I think that might be the bottom.
With the dollar collapsing interest rates will get FORCED upwards by the market, thereby eliminating the refinancing market in mortgages that is EXTREMELY strong right now. I hope it doesn't happen but that is what my gut is saying will happen.
What are your thoughts on the market? Let me know in the comment section.
Dan Ross
http://www.DanRoss.info
As we print $$$ to finance our deficits (because we likely won't be able to sell all of the bonds we need to finance our national debt/deficits) it will cause the U.S. dollar to fall in value.
The problem with this is that it will commodies like corn, oil, etc to rise in price since they are priced in U.S. dollars. The major commodity markets of the world are based here in the U.S. and have been priced in $$$ for years :)
A falling dollar will, in turn, keep interest rates from declining more.
I was optimistic re: lower rates this year, due to continued weakness in the U.S. economy as we try to deleverage the system. We hit the 4.5% interest rates I thought we would hit in the market (I know folks that got rates as low as 4 3/8% and 4.5% with 1 point down on 30 year fixed notes) but I think that might be the bottom.
With the dollar collapsing interest rates will get FORCED upwards by the market, thereby eliminating the refinancing market in mortgages that is EXTREMELY strong right now. I hope it doesn't happen but that is what my gut is saying will happen.
What are your thoughts on the market? Let me know in the comment section.
Dan Ross
http://www.DanRoss.info
How to invest in Chinese Online Growth
An S&P 500 company provides some insight into how we would invest in the sector.
Baidu, The9 and ShandaInteractive are his 3 recommendations.
The9 is based on "World of Warcraft" licensing for China. They have more users than any other country in the world for that game and have exclusive rights in China. The stock, according to the analyst, that is trading near cash.
Shanda Interactive
3 Others they are looking at are GIGM (BUY), KONG (not buy) and JRJC.
My take is that Shanda and The9 are very interesting to look at:
1) The9 trades at cash levels so, as long as they get their license renewed this year from Blizzard-Activision (probably at higher terms like the analyst said) the stock could make a healthy run upwards.
2) Shanda Interactive is a developer of MMORPG games (massively multi-player online role-playing games) and casual online games in China. Below is a link to some of their press releases in the last twelve months.
http://www.xprn.com/xprn/storyCenter.do?method=queryByDate&langId=1
Dan Ross
http://www.danross.info/
Baidu, The9 and ShandaInteractive are his 3 recommendations.
The9 is based on "World of Warcraft" licensing for China. They have more users than any other country in the world for that game and have exclusive rights in China. The stock, according to the analyst, that is trading near cash.
Shanda Interactive
3 Others they are looking at are GIGM (BUY), KONG (not buy) and JRJC.
My take is that Shanda and The9 are very interesting to look at:
1) The9 trades at cash levels so, as long as they get their license renewed this year from Blizzard-Activision (probably at higher terms like the analyst said) the stock could make a healthy run upwards.
2) Shanda Interactive is a developer of MMORPG games (massively multi-player online role-playing games) and casual online games in China. Below is a link to some of their press releases in the last twelve months.
http://www.xprn.com/xprn/storyCenter.do?method=queryByDate&langId=1
Dan Ross
http://www.danross.info/
Titans of Tech (Napster, Microsoft, Apple, Oracle)
Great 2 minute tidbits of insight. Steve Jobs is the best interview of them all....
Shawn Fanning and Napster
Microsoft Bill Gates
J Allard (creator of Xbox)
Steve Jobs
Larry Ellison
Hope everyone enjoyed those!
Dan Ross
http://www.danross.info/
Shawn Fanning and Napster
Microsoft Bill Gates
J Allard (creator of Xbox)
Steve Jobs
Larry Ellison
Hope everyone enjoyed those!
Dan Ross
http://www.danross.info/
Friday, January 9, 2009
Economy is slumping....Now what?
So here is what we have seen in the last week:
The ISM Manufacturing Index hit its lowest level since 1980 (and manufacturing surveys in Europe and China also nosedived).
U.S. consumer confidence fell to a record low in December, as reported Wednesday.
Also Wednesday, the Case-Shiller Index registered a record 18% drop in October vs. year-ago levels, bringing the decline from housing's peak to 25%.
So here are my predictions for 2009:
Continued declines in mortgage rates. Only so many people can refinance and only so many have current values greater than the appraised value that will happen. When many are asked to add equity (ie. invest more $$$ to refinance) many people won't have the cash to do it. I think 4.5% rates on 30 year notes will happen and be quite the norm as the Federal Reserve tries to revive the U.S. Economy
Many people will be looking for work and having a tough time finding it in 2009. I see unemployment going to 10% if the auto companies go belly up. Given that we have now sunk $10-$15 billion into them we'll probably sink another $25 billion into them later, throwing good money after bad.
Will inflation hijack 4.5% interest rates? It is possible that the U.S. dollar could fall more than ever, which could drive inflation through the roof and take interest rates HIGHER vs. lower. We have to borrow $$$ from people to finance our debt and they might charge us (as a country) MORE to get that cash given our slowed growth, higher leverage ratios, etc.
The stock market will continue a downward slide of 15%-20% as EPS estimates for 2009 begin to get ratched downward. I think S&P 670-700 is a very reasonable level for the index. Just my 2 cents. Due your DD there and read/view some of the opinions I've posted here from others over the last few months. Look at other Dan Ross Forecast posts.
Dan Ross
http://DanRoss.info
The ISM Manufacturing Index hit its lowest level since 1980 (and manufacturing surveys in Europe and China also nosedived).
U.S. consumer confidence fell to a record low in December, as reported Wednesday.
Also Wednesday, the Case-Shiller Index registered a record 18% drop in October vs. year-ago levels, bringing the decline from housing's peak to 25%.
So here are my predictions for 2009:
Continued declines in mortgage rates. Only so many people can refinance and only so many have current values greater than the appraised value that will happen. When many are asked to add equity (ie. invest more $$$ to refinance) many people won't have the cash to do it. I think 4.5% rates on 30 year notes will happen and be quite the norm as the Federal Reserve tries to revive the U.S. Economy
Many people will be looking for work and having a tough time finding it in 2009. I see unemployment going to 10% if the auto companies go belly up. Given that we have now sunk $10-$15 billion into them we'll probably sink another $25 billion into them later, throwing good money after bad.
Will inflation hijack 4.5% interest rates? It is possible that the U.S. dollar could fall more than ever, which could drive inflation through the roof and take interest rates HIGHER vs. lower. We have to borrow $$$ from people to finance our debt and they might charge us (as a country) MORE to get that cash given our slowed growth, higher leverage ratios, etc.
The stock market will continue a downward slide of 15%-20% as EPS estimates for 2009 begin to get ratched downward. I think S&P 670-700 is a very reasonable level for the index. Just my 2 cents. Due your DD there and read/view some of the opinions I've posted here from others over the last few months. Look at other Dan Ross Forecast posts.
Dan Ross
http://DanRoss.info
Thursday, January 8, 2009
Future of movie theater experience?
Cinemark Theatres, one of the innovators of multiplex stadium type theatres, is testing a new concession and ticketing experience in their Plano Texas location (right next to their corporate HQ building).
Basically the concession experience is more of a "help yourself" approach to candy and drinks, at the end of the line, and the popcorn, at the front of the line, is clearly like a giant "cattle call" where herds of folks are moved through one long, hopefully fast moving line.
I endured the training glitches the first weekend they launched it and it was a disaster (butter problems with popcorn) but, as they fixed the bugs and agreed to layer people's popcorn with butter as they moved through the "cattle chute" I've warmed up to it.
The company has a VERY large waiting area on the left side of the theatre. They cell ice cream, coffee, etc. but I have yet to see anyone utilize this nice seating area (great lighting/padded chairs, etc.)
Dan Ross
http://www.DanRoss.info
Basically the concession experience is more of a "help yourself" approach to candy and drinks, at the end of the line, and the popcorn, at the front of the line, is clearly like a giant "cattle call" where herds of folks are moved through one long, hopefully fast moving line.
I endured the training glitches the first weekend they launched it and it was a disaster (butter problems with popcorn) but, as they fixed the bugs and agreed to layer people's popcorn with butter as they moved through the "cattle chute" I've warmed up to it.
The company has a VERY large waiting area on the left side of the theatre. They cell ice cream, coffee, etc. but I have yet to see anyone utilize this nice seating area (great lighting/padded chairs, etc.)
Dan Ross
http://www.DanRoss.info
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