Money Matters Newsletter

I need a person to take a 20 minute AUDIO and place it on UTUBE for me but you also must make a montage of photographs to it so they can look at something. I would provide a time table and a description of what pictures I would want fading in and out and when. You would need to know how to fade in and out, slowly enlarge photos ( moving) and you would need to find the photos on the web. I would trade shows, or Dream Portfolio or Super Dividend Payers list or a hour consult with a finished product or you could just help me spread the word.

Marc’s Notes:
Well it didn’t take long for Washington to announce 2 new  free money programs did it. Rumor has it tomorrow Obama will announce a 50 Billion dollar infrastructure program. I know a lot of you will support this but this is just more money printing. Sure, we may deserve new roads, sewers, bridges and the like but this is not our money we are spending, it is our children’s.
(Listen to Money Matters show #13, “Our Children’s Money”).
This is like everything else we spend money on because we think we somehow deserve these entitlements. Sure, everyone would like a chicken in every pot, a new house, better schools and new roads, but we don’t have the money.

Marc’s Notes:
The market shot up on today’s open because of hopeful news from China that counter acted the recent onslaught of dire news pieces that have pummeled the US markets. You have to admit this market is dying for good news and any hint of it sends the indexes soaring. Keeping that in mind we must realize investors are still very positive on the “recovery” and believe the spin coming from the Wall Street Cheerleaders, amazing as that may seem. I find it incredible that also out today was a bad hiring report showing more job losses yet the market ignores that and focuses on China. What this tells me is that we are nowhere near a bottom as contrarian economics says when most investors give up, a bottom is near. With all this “hope” and investors buying ANY good news, they are nowhere near capitulation. This means the markets still have buyers waiting so we are not done going down, but these rallies can be violent. Wow, up 230 as I write this.

http://www.theunion.com/article/20100830/NEWS/100829735&parentprofile=search

 

Money Matters was featured in the UNION yesterday and here is the link.

 

 

Marc's Notes:

Sales of U.S. new homes unexpectedly dropped in July to the lowest level on record, signaling that even with cheaper prices and reduced borrowing costs the housing market is retreating. Purchases fell 12 percent from June to an annual pace of 276,000, the weakest since data began in 1963, figures from the Commerce Department showed today in Washington. The median price of $204,000 was the lowest since late 2003. Bloomberg. August 25 2010

Marc’s Notes:
New home sales follows yesterdays existing home sales to new depths. Note these sales are the lowest since records began in 1963. When I said you watch July-August home sales, I wasn’t kidding. Pricing of homes was no better at a median price matching home prices of 2003. To fully correct, home prices will probably end up near mid 1990 levels many years from now. I know, I’m crazy again right? HA! You wait, “You ain”t seen nuthin yet!” Prove me wrong if you dare!

Marc's Notes:

Sales of U.S. Existing Homes Fell in July to 3.83 Million Rate

Economists projected sales would fall from June’s previously reported 5.37 million pace but not to the extent it did. Estimates in the Bloomberg survey of 74 economists ranged from 3.96 million to 5.3 million which means the sales were lower then every economist in the survey. Sales fell to 3.83 Million.


Read the above news article out today. Out of 74 “economists”, all 74 got it wrong. Even the economist who estimated the lowest was still 130,000 homes off.
And we trust these guys? Whose economists are they polling? Manny, Moe and Jack?

This economist however, who actually has a degree in economics and paid attention in school so long ago, has been warning you since 2009 that July, August, September and October home sales AND beyond would be horrendous and bingo. 

The reason?

The home credit has expired and all those buyers that were supposed to buy AFTER the credit expired ALREADY bought. Like I keep saying, credits and government stimulus only brings forward future buyers: basically cannibalizing future sales to show a immediate boost, but then you get this huge “hole” from all those buyers you cannibalized earlier that aren’t there now.

Marc's Notes:

Talk about market disconnect.

Economic statistics from housing to unemployment to European debt to inflation are all coming in badly yet the market continues its journey into fairyland. It is said the markets can stay irrational longer then you can stay solvent. This means irrational markets can go on for months without fundamentals supporting such levels until such a day when they correct. With government deficits off the charts and more spending on the way, it’s really an anomaly to see this market in the 10,000 range.
Yet here we sit with another UP day today. Wow, talk about investor complacency.

Marc’s Notes:
The Feds gave another stay of execution to another one of its programs and said they will NOT tighten the money supply as they indicated they would a few months back. They will roll  over treasury debt and keep the toxic assets on their books. They also now set a floor under how much of this toxic stuff they will hold. Not a ceiling mind you, a floor.

This “roll over” is another in a long line of programs and bailouts they said they would halt but then renege on that promise as they see the economy slipping again. (Note- watch the movie “ROLL OVER” with Kris Kristofferson).