patrick.net

I'll go out on a limb here, since it's unlikely that many will agree with me. S&P500 is looking great by my estimation. Not much thought; great diversification; good growth prospects.

The consumer is dead, but big business can still do quite well in an inflationary environment once we get over this bout of deflation.

Of course, I think longer term than 1 year. I'm usually too early.

Chuck Ponzi

I'd short everything, especially the broad equity indexes. One exception might be gold for which I'm long with very tight stops.

frank, what is your primary trading time-frame? Do you use daily charts or 30-minute charts?

frank is joking... or else OO got inside his head...

I just read German houses as good as gold!

http://uk.reuters.com/article/stocksNews/idUKLNE51G00D20090217

actually: not sure how you put a house in your pocket and take it down to the store to buy something (perhaps stopping at the coin dealer to exchange for fiat currency first).

As drudge says in a way - Today we are all Swedish! Although Sweden has a better rated democracy.

http://www.ft.com/cms/s/0/2ad3b750-fd27-11dd-a103-000077b07658.html?nclick_check=1

Top of the list for democracy this year: SWEDEN!

http://en.wikipedia.org/wiki/Democracy_Index#2008_ranking

http://en.wikipedia.org/wiki/Sweden

http://en.wikipedia.org/wiki/Swedish_Empire

It says German houses dropped 1% versus 14% for British houses, over a 1 year period, ending last september if I understood the verbiage correctly.

Presumably this is because the prices did not rise in the first place -- or what?

California budget:

The draft bills include plans to raise the state sales-tax rate to 8.25 percent from 7.25 percent; boost vehicle license fees to 1.15 percent from 0.65 percent of the value of an automobile; add 12 cents to the per-gallon gasoline tax; reduce the dependant-care tax credit to $100 from $300 and impose a surcharge on income taxes of up to 5 percent.

Combined, the measures would raise taxes and fees by $14 billion, cut spending $16 billion and add $10 billion to the state’s debt. Another $2 billion in reserves would be created from funds moved on balance sheets.

-----

I think this means that he highest tax bracket will be about 10.8% instead of about 10.3%.

Well, that was pretty simple. What took them so long? (actually, the budget is still pending, they need one more republican vote)

I know the answer: The idiotic requirement (passed by dimwitted voters of California) that requires a 2/3 majority to pass the state budget. That was the worst idea ever.

If you expect a SIT refund, just apply it to this years' tax and then reduce your state withholding for '09 to balance it out. That will be easier than checking the mailbox for the refunds they're not mailing out.

But to answer the question of what to do:

Grow our own vegetables, corn, melons; keep laying hens, compost, patronize used clothes stores when it is practical, if you must buy gadgets (including a car) get used ones.

Do your own car maintenance as much as you can, get entertainment at the public library you're already paying for. Don't eat out so much, if you insist on it, order tap water for your beverage.

Take in a border or become one.

These are not terribly big sacrifices, to most people in the world it'd be a privilege to even have such choices.

Recession Starts to Worry Silicon Valley, Report Finds

The global recession came late to Silicon Valley, but the region is bracing for a rough year that may strain local social services.

A report to be released Tuesday by Joint Venture: Silicon Valley Network, an organization that assesses the region’s social, economic and environmental health, warns that its social services network is outdated and “frayed.” It also found that per-capita income fell slightly last year, down 0.8 percent from 2007.

After holding steady through most of 2008 while the rest of the country suffered, Silicon Valley had a spike in unemployment at the end of the year, the report said. Employment dropped 1.3 percent in December from a year ago as more tech companies laid off workers.

At the same time, demand for commercial real estate waned, while home foreclosures in the region rose 186 percent year over year, far more than the rate for the state as a whole.

The California real estate market softened, then consumers reduced their “shopping at the mall,” Mr. Levy said. “Finally, they have reduced their purchasing of iPods and flat-screen TVs.”

One area of serious concern in the report is the state’s community college system, which employers have long relied on to help train lower and middle-income workers for new jobs. Joint Venture believes the system is underfinanced, and it has been threatened with cutbacks in state support.

Joint Venture is among a number of California organizations calling for an overhaul of the state government to help solve California’s financial problems. Last week, Joint Venture’s 49-member board voted unanimously to support a convention to rewrite California’s Constitution. The group and others are hoping to gain enough support to place a proposition on the ballot in June.

“This is a statement that the system is broken, and that inaction will lead to ruin,” said Russell Hancock, chief executive and president of Joint Venture. “It’s time to start over.”

The report also showed that the gap between the wealthiest and the poorest residents continued to grow. The percentage of households earning more than $100,000 a year rose to 42 percent in 2008, from 35 percent in 2002, while the number of households earning $35,000 or less rose to 20 percent, from 19 percent in the same period.

During that period, the number of immigrants to Silicon Valley grew 9 percent.

I don't know, but 7500ish seems to be the bubble bottom for the last decade or so. Will this number repeat?

I feel more like 6000 should be the bottom ...

Worst Is Yet to Come:" Americans' Standard of Living Permanently Changed

Posted Feb 17, 2009 12:53pm EST by Aaron Task

There's no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.

But "the worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:

* An $8 trillion negative wealth effect from declining home values.

* A $10 trillion negative wealth effect from weakened capital markets.

* A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies."

"The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car," Davidowitz says. "A lot of that is gone."

Going forward, the veteran retail industry consultant foresees higher savings rate and people trading down in both the goods and services they buy - as well as their aspirations.

The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.

You think that is bad; read and watch this!

http://www.russiatoday.com/guests/detail/2114

http://www.youtube.com/watch?v=9nJ7LM3iyNg

German real estate never recovered from the 1990 reunification bomb, just like Japan.

I have a small position in Yen, held all the way from 11x, and I let go entirely today. Yen is about to start dramatic devaluation soon.

I didn't get into Frank's head, if I did, Frank would have said, long food. After crying wolf for a few years, I think we are very "well" positioned for the next worldwide famine in the near future.

And this
http://www.guardian.co.uk/world/video/2009/feb/11/zimbabwe-gold-panning-starvation-food

has happened many times in developing parts of the world, Zimbabwe is not the first, and won't be the last. Lack of food in this situation, is not a result of weather or water crisis, it is the result of a financial crisis.

http://www.mercurynews.com/localnewsheadlines/ci_11712324?source=rss

"considering going back to work so as to send her kids to private kindergarten..."

It sounds like some Silly Valley parents have gotten the priorities completely backward. WTF can a kid learn at a kindergarten??? Can a kindergarten teacher be as attentive and loving to her kid as herself???

At this moment, I have decided to stay liquid in dollars. At the end of the year, I expect better deals in stocks as well as some corporate high yield bonds.