Cash is King

[Mikey]

Except in a rising market.

I wonder if Pops still has his life savings stuffed in his mattress waiting for the inevitable Obama induced complete meltdown of the economy.

(Reuters) - Stocks rose to five-year highs on Friday, with the Dow closing above 14,000 for the first time since October 2007, after jobs and manufacturing data showed the economy's recovery remains on track.

The S&P touched its highest since December 2007 after a 5 percent gain in January, which was its best start to a year since 1997. The index is now just about 60 points away from its all-time intraday high of 1,576.09.

Employment grew modestly in January, with 157,000 jobs added. That was slightly below expectations, but Labor Department revisions showed 127,000 more jobs were created in November and December than previously reported.

Analysts attributed the market's robust showing so far this year partly to a deluge of cash flowing into equities.

Investors poured $12.7 billion into U.S.-based stock mutual funds and exchange-traded funds in the latest week, concluding the strongest four-week flows into stock funds since 1996, data showed on Thursday.

http://www.reuters.com/article/2013/02/ ... B520130201

[War Wagon]

the inevitable stock market bounce back comes despite Obama, not because of him... you goddamn idiot.

Was 4 or 5 years not long enough?

[Shlomart Ben Yisrael]

His body isn't even cold yet...shame on you Scott.
Do you know no boundaries?

[Bucmonkey]

Poptart died ?

[Shlomart Ben Yisrael]

Poptart died ?

It was...murder.

[Screw_Michigan]

the inevitable stock market bounce back comes despite Obama, not because of him... you goddamn idiot.

Was 4 or 5 years not long enough?

Just like how we got Osama bin Laden in spite of Obama, right?

Don't need quotes when calling you a god damn idiot.

[Derron]

Don't need quotes when calling you a god damn idiot.

Says the tard troll.

[smackaholic]

GDP down a tick in the fourth quarter, unemployement up .....yeah, things just fine.

[Mikey]

GDP down a tick in the fourth quarter, unemployement up .....yeah, things just fine.

Brilliant. GDP was down 0.1% mainly because of a 16% decrease in defense spending in the fourth quarter. That must be a bad thing, even though we're winding down a foreign war.

You're probably in favor of other across the board spending cuts in spite of their effect on GDP I would presume.

Investment is up, manufacturing is up, consumer sentiment is up, profits are up, but the GDP number means the sky is falling, right?

OK, the sky is falling. Don't do anything with your cash just yet. Best to wait until we hit rock bottom.

Other reports released Friday showed the pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months, U.S. consumer sentiment rose more than expected last month, while December construction spending also beat forecasts.

"All the data seems to keep pointing to a slowly, steadily improving economy," said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

With the day's gains, major equity indexes rose five straight weeks.

More than 600 stocks on the NYSE and the Nasdaq combined hit 52-week highs on Friday, including Google GOOG.O. which rose as high as $776.60, before closing at $775.60, up 2.6 percent.

Investors were also attuned to corporate earnings, with a trio of Dow components reporting profits that beat expectations.

Exxon Mobil (XOM.N) ended flat at $90.04 after reporting results while Chevron (CVX.N) added 1.2 percent to $116.50.

Drugmaker Merck & Co (MRK.N) fell 3.3 percent to $41.83 after a cautious 2013 outlook.

Generic drugmaker Perrigo (PRGO.O) reported a better-than-expected second-quarter profit and its shares jumped 4.7 percent to $105.28.

Of the 252 companies in the S&P 500 that have reported earnings so far, 69 percent have exceeded expectations, according to Thomson Reuters data. That is a higher proportion than over the past four quarters and above average since 1994.

Overall, S&P 500 fourth-quarter earnings are estimated to have grown 4.4 percent, according to the data, up from a 1.9 percent forecast at the start of the earnings season but well below a 9.9 percent profit growth forecast on October 1.

Dell Inc (DELL.O) gained 2.9 percent to $13.63 after sources said the company was nearing an agreement to sell itself to a buyout consortium led by its founder, Michael Dell, and private equity firm Silver Lake Partners.

[smackaholic]

Yeah, it was defense cuts, sure.

Slick willy gave use some pretty sizable defense cuts and we somehow managed growth at the same time.

We are damn near 5 years into this economic downturn, we ought to be growing by now, no matter the level of defense spending.

[Mikey]

Yeah you're right.

GDP only grew 2.2% in 2012 as opposed to 1.8% in 2011.

What we need is a year or two of solid 6%, 8% growth, a little inflation, and a couple of new bubbles - maybe another real estate bubble, IT, whatever, to make a few more people REALLY rich and set everybody else up for another crash.

Yeah that would work just fine.

You don't learn to well, do you?

[Mikey]

GDP down a tick in the fourth quarter, unemployement up .....yeah, things just fine.

I forgot...you mentioned how unemployement is skyrocketing out of control. We're definitely moving in the wrong direction there, too.

[mvscal]

You don't learn to well, do you?

You don't learn at all. The economy is still completely fucked and the only reason you can't see that is because your fucking head is stuck up Obluegums' ass.

[Mikey]

You don't learn to well, do you?

You don't learn at all. The economy is still completely fucked and the only reason you can't see that is because your fucking head is stuck up Obluegums' ass.

Careful. There's a large silverback sneaking up behind you.

[Y2K]

Actually the Obama Administration has everything to due with the rise in the Market. If you flood the market with trillions of dollars and are forced to keep interest rates artificially low in order to try and control the debt you are incurring the only viable option for investors is stocks and commodities. It's the only bright point in a very fucked up economy.

[Derron]

You're probably in favor of other across the board spending cuts in spite of their effect on GDP I would presume.

Oh hell no. By all means just keep deficit spending with borrowed dollars until you get that national debt cracking 20 trillion or more. Then you can have an "Oh we are fucked " moment right before the world economy collapses, hyper inflation ensues and it is all over with.

There is your Saturday morning socialist economic lesson. Get out there with your fiat currency and spend some, better yet, just go hit Best Buy for a new big screen on your credit card.

[Shlomart Ben Yisrael]

Whatever you do, DO NOT SPEND MONEY IN AN EFFORT TO STIMULATE THE ECONOMY!

The economy will correct itself through a scientific process that market analysts and statisticians refer to as "magic".

[Mikey]

Get out there with your fiat currency and spend some, better yet, just go hit Best Buy for a new big screen on your credit card.

Nah, I've got all the big screens I need. Think I'll go out and by a dozen or so guns, a home CCTV system and a Costco sized roll of tin foil.

[War Wagon]

Just like how we got Osama bin Laden in spite of Obama, right?

What the hell does that have to do with a rising stock market?

Jack shit, that's what.

People can lay blame or give credit where ever they want but the fact is that politicians have precious little control over a $16 trillion dollar GDP. The economy tanked because of the housing "bubble" and that was caused by greedy bastards at the likes of Countrywide and others giving sub-prime mortgages to people who had no ability to pay a 30 year adjustable rate mortgage... all backed by the "full faith and credit" of the U.S. in the form of Fannie Mae and Freddy Mac, which then had to be bailed out by taxpayers and balloon the deficit to an unimaginable level.

You following this so far?

So when the housing sector collapsed, it took every other sector of the economy right along with it. Recessions come and go, this one has lasted longer than most, but they always end at some point... when you can go no lower. Housing starts flat lined for the last 4-5 years but that couldn't go on forever because eventually people are going to need new shit holes to live in.

The housing collapse started this recession and that industry will also end it, no matter the letter next to a politicians name.

[Screw_Michigan]

The housing market is back in business. Did you get that memo?

[War Wagon]

The housing market is back in business. Did you get that memo?

My job of 30 years depends on the housing industry, so I certainly have taken note of that fact. Poured in place concrete construction, basement foundations here in the States. In Mexico and South America primarily, and in like 135 different countries, we sell systems where the entire structure is built from poured concrete. These systems aren't cheap, but they perform.

Our family owned company damn near went out of business in 2009. Turn out the lights, the party is over. I was one of the few long time employees fortunate enough to keep a job. The CEO likes me for some reason, probably because my uncle got me in the door there in 1983 and he was their first employee... in 1963, before he went on to work and retire from the TWA overhaul base at KCI.

Anyways, yes. The housing market is back and 2013 is going to be a very good year for contractors building new homes here in the states. Normally, they wait until March to gear up for the spring and summer rush... as a supplier we started seeing orders, big orders, for equipment in December. That's unheard of. There's a pent up demand for new housing and we're just barely scratching the surface.

It has nothing to do with who resides at 1600 Pennsylvania Ave. or which flavor of the month controls Congress.

[Derron]

Anyways, yes. The housing market is back and 2013 is going to be a very good year for contractors building new homes here in the states. Normally, they wait until March to gear up for the spring and summer rush... as a supplier we started seeing orders, big orders, for equipment in December. That's unheard of. There's a pent up demand for new housing and we're just barely scratching the surface.

What fucking planet are you on ? You may be seeing some kind of localized uptick in a supply business, but that is more likely starting to fill a low inventory distribution channel. Those products are 3 to 5 months away from retail sales. There is enough inventory of housing on the market in our area to last over a year, and with more short sales coming on the market everyday. Very few new homes being built. Mostly low end pieces of shit nobody should buy.

One of my current gigs is looking at foreclosed houses and seeing if the banks want to get reasonable about what they actually want for them, and if we can rehab them, and then sell them. Depending on the condition of the homes, the best ones go in two days or less. The rest of them are so fucked up, that they are going to sit on the market forever because the banks cost basis is so high, they will not take the money that our group or other is offering them. There is a tremendous amount of real estate both residential and commercial that is still our there with a 2007 cost basis, nothing is going to happen on those properties until the owners either accept the fact they are going to lose their ass, give it back or go banko on them. We are offering them cash money on some of these properties, which could never go conventional financing, much less VA or others, and still stay in the appropriate price range.

When I start seeing rock trucks, cement trucks going down the highway, when I see excavators in subdivisions breaking open ground, when I see resource extraction picking up, then you can say we are moving up. When I am the only dude in the planning offices researching properties, in the middle of the week during business hours, and nobody else comes in...??

It is not going to be a VERY good year, it is going to be a below average, what ever average means any more, year. You may feel there is a PENT UP demand for new housing, but does that translate in to ability to finance a house ? Does that mean the market is going to respond with economy and market appropriate pricing ?

You go ahead and make your call sitting on your fork lift in your upstream production facility and make that call. I say you are full of shit and I say that from the field, looking at 5 to 8 houses per week, and talking to about that many GC's and other developers.

[Derron]

So when the housing sector collapsed, it took every other sector of the economy right along with it. Recessions come and go, this one has lasted longer than most, but they always end at some point... when you can go no lower. Housing starts flat lined for the last 4-5 years but that couldn't go on forever because eventually people are going to need new shit holes to live in.

The housing collapse started this recession and that industry will also end it, no matter the letter next to a politicians name.

You are comparing this economy's recovery to what has happened in the past. Not going to go that way this time. Bigger developers right now are pouring their money into....hold on.......APARTMENT HOUSES !!! Fucking surprised ?? Should not be...nobody who lost a house in the last 5 years is going to be able to finance a new or newer house any time soon.

The time line for people needing new shitholes to live in, is a lot longer than what the market needs right now. Tell me you knew that.

[War Wagon]

You may be seeing some kind of localized uptick in a supply business

Localized?

Hardly, though I'll admit we don't ship much west of Colorado. But we do ship to almost every other state North, East and South and I'm not talking "supply" orders, though we sell plenty of those as well. No, I'm talking full truckloads of brand new sets of aluminum forms that sell for upwards of a half million $$$ per set.

We haven't seen these kind of domestic orders since 2007 or the 6-8 week backlog that we now have as well. We're hiring left and right and getting ready to add a 2nd shift. These are private contractors, investing in new equipment that they haven't needed or been able to afford in years.

You go ahead and make your call sitting on your fork lift in your upstream production facility

I haven't been on a forklift since June of 2010, when I got moved to the front office to enter orders and perform PDM (product data management). I only got moved to the whse in 2009 after we had shed about 90% of our workforce and there wasn't much left to supervise in mfg. anymore. I had to be very versatile, do what was asked of me, and fortunately enough, I got to keep my job.

Last April they hired back a lady to do most of the order entry, freeing me up take over most of the purchasing, including placing long term agreements with our major suppliers, mainly aluminum extrusions, face sheet and 1050 HR carbon steel for our wall tie business. We're now buying about $2m a month just in raw materials to meet the demand.

Those may seem like small numbers to you, but considering where we were a few years ago, the floodgates have now opened.

[Screw_Michigan]

You'll have to forgive Duhrron, if it doesn't involved doomsday prepping or arms hoarding, he's clueless.

[smackaholic]

There may be some pickup in the market in some areas. It sure the fukk ain't here or the left coast. I suspect it is largely SEC based (those fukkers seem to have bode in everything these days).

The problem is that this mild up tick is what we have with interest rates of pretty much nothing. A few points or more below what we have seen over the past century. What will happen when rates go back to normal, which pretty much means doubling?

[Derron]

Those may seem like small numbers to you, but considering where we were a few years ago, the floodgates have now opened.

Look Wags..props to your business for spending the 2M a month. This economy needs it. And props to your positive outlook. But here in the real world, one business doing better now than they were in 2007 , does not a recovery make. In order for your business to do well on the supply side, you need to see movement, and a lot of it on the finished product side, such as building permit upticks, plan review up ticks, and actual machines moving dirt and rock.

It is all about the dollar right now. The reason huge developments are not happening, is the cost of money right now,and the requirements institutions want.

Our group is using, ...hold on here.....our own fucking money to buy and rehab these properties. That means we want a return on our money well in excess of passive cash investments, and we want if fairly soon. The market is way different than it was 5 years ago. You simply are not going to see the huge numbers of unqualified buyers jumping in the market and driving the price back up. It simply is not going to happen. It will never go back to 2007 levels and we should hope it don't.

You guys on the supply side can be fairly isolated from the real world, lets build a house and sell it market. I look at properties that the banks are setting on, with a 2007/08/09 basis, and then think they are going to get a 250K owed basis sale on a house that will sell in good condition in the hood for maybe 190K??? I fucking walk away from 3 to 4 of these a week.

And smakies point about the interest rate is completely true. When it goes up and the already razor thin profits vanish,,throw out the fucking anchor. With the government debt increasing every day, and more money being printed and circulated each day to keep those rates down. If they don't do that and keep those rates down, inflation rolls in at about 15% and the whole fucking thing comes down. What's up 1983 ?

[War Wagon]

In order for your business to do well on the supply side, you need to see movement, and a lot of it on the finished product side, such as building permit upticks, plan review up ticks, and actual machines moving dirt and rock.

dude, our customers don't spend (or borrow) a 1/4 $mil simply hoping it's a good investment.

They have jobs and projects already in place, entire sub-divisions. In fact, many of the holes are already excavated, waiting on the forms to show up with the concrete pumper trucks soon to follow.

[Derron]

In order for your business to do well on the supply side, you need to see movement, and a lot of it on the finished product side, such as building permit upticks, plan review up ticks, and actual machines moving dirt and rock.

dude, our customers don't spend (or borrow) a 1/4 $mil simply hoping it's a good investment.

They have jobs and projects already in place, entire sub-divisions. In fact, many of the holes are already excavated, waiting on the forms to show up with the concrete pumper trucks soon to follow.

You can tell you have been working that job for 30 years. Your frame of reference is limited to what you see from that factory. Typical outlook with suppliers and hard goods company's. Hell ....we are selling, the whole fucking economy is coming back..right on. Glad it is going in your area, cause it sure as hell is not here in the Northwest yet. But hell, I am just out in the field every day with contractors, developers and banks, and you are in a factory. Got me there.

[Derron]

We haven't seen these kind of domestic orders since 2007 or the 6-8 week backlog that we now have as well.

That is what we call building to a retail or confirmed order. Not a demand back log, yet anyway. Not a lot of companies piling up inventory in the warehouse and hoping it will sell these days. Different business than what you are in, I set up a distribution system for a company that sold about 6 to 8 trucks loads a month of compressed bale product. We kept one truck load in stock at any given time. Something about the cost of production and materials I think it was. Get an order, ship the one truck load and then start moving materials inbound for another one. Not the best way, but we now have about 3 truck loads in the warehouse at any given time.

[War Wagon]

Glad it is going in your area, cause it sure as hell is not here in the Northwest yet.

just wait a few weeks then, it will. A rising tide raises all boats. The signs are unmistakable and it's not just this area. Housing starts affect the entire economy because there's a huge trickle down, more than any other industry.

[smackaholic]

[quote="KC Scott] it's a very precarious balancing act the Fed is trying to pull off [/quote]

Sorry, but no form of the word balance can be used to describe the bullshit barry and his boy at treasury are currently doing to the country. This is way beyond keynesian, which, in theory (I think) actually calls for running surpluses when things are humming to offset deficit spending when things are slow. That would be a "balancing act". What we have now has been tried before. I think it was called the Weimar republic or somethin'. I hear that didn't work out too good.

And before the apologists step in and say, but, but, but, bush did it, yes, he did. he fukked up too, but emil obama has kicked it up a notch or three.

Sure glad a sizable chunk of my net worth is in something bary can't water down, my house. I'd hate to be the 26 year old with 60K in the bank saving to buy a house right about now. That 60K could end up being a fraction of that in buying terms if the economy does pick up and we get inflation rates that make 1978 look good.

[ucantdoitdoggieSTyle2]

Sure glad a sizable chunk of my net worth is in something bary can't water down, my house.

Cool. Maybe you can take out a home equity loan and put about $30K into landscaping/sprucing up the rest of the outside of that shithole...

I am sure your neighbors would be much obliged.

[Screw_Michigan]

26 year old with 60K in the bank

Link?

[Derron]

26 year old with 60K in the bank

Link?

That means a young person who makes good money. Not some fucking shit troll jizz mopper.

And contrary to popular belief there is a lot of 20 -20 somethings out there that have some good money. In the last 2 years, my son has bough and rehabbed 3 homes. Lives in the last one he bought, and rents the other 2 out for $ 600 positive cash flow per month each. He will probably buy another one later this year, since we are seeing NO upward pressure on pricing in the market right now. If I was 26 and had 60K to work with, I probably would be looking at least 2 properties, one for sure. Fucking buyers market right now.

No all 20 somethings are barista waiter slackers. There is a tremendous amount of spending power in the 24 to 35 yo age segment right now. They want it now, they feel no need to wait, they feel they deserve it now and many are working good jobs paying upwards of 60K a year, and between 2 of them you have some pretty good earning power. Right now is a damn good time to buy a house or property. 4 of my 5 kids and their spouses own their own homes. 2 of the four pairs make 120K plus a year. 2 of the other four make 70 to 100K. The other makes about 50K, is actively looking for a house to buy with some real cheap VA money.

Barring a divorce, or other financial set back, this age segment is set to make their parents look like paupers. Unfortunately their earning power is going to be diluted with tax debt, rising inflation, and a potential government failure in the next 10 years. But they spend like crazy now.

[Derron]

Glad it is going in your area, cause it sure as hell is not here in the Northwest yet.

just wait a few weeks then, it will. A rising tide raises all boats. The signs are unmistakable and it's not just this area. Housing starts affect the entire economy because there's a huge trickle down, more than any other industry.

You should be an economic honk for the Obama administration. You could preach that line to the dong slurping media who might actually believe and publish that bullshit. They would willing publish that.

The rest of us call it for what it is. Pure bullshit.

[Screw_Michigan]

That means a young person who makes good money. Not some fucking shit troll jizz mopper.

Ok, cunt. Aside from your jarhead sons, how many 26 y/os do you really think have amassed $60k of their own money in savings in their first four years out of college. YOu know, in a time when new college grads are struggling to find work and live on their own, all of hte sudden according to you they're accruing $60k in savings because "they're making 'good' money." Provide specific examples and specific career paths and also define what you consider "good money." I'm sure it'll be a laugh riot. Take your time.

[smackaholic]

Sorry, but no form of the word balance can be used to describe the bullshit barry and his boy at treasury are currently doing to the country. This is way beyond keynesian, which, in theory (I think) actually calls for running surpluses when things are humming to offset deficit spending when things are slow.

Bernanke is at the Federal reserve not the treasury.
The balancing act I refer to is keeping the rates low, by QE in addition to the 0 Fed rate, in order to stimulate economic growth.

The Fed is printing money to buy treasury bills which keeps the price high and the interest rate low - the objective of this is to discourage everyone else (countries, banks, etc.) from buying T-Bills and puttig their money back into the economy. Right now the US Govt is the largest single holder of US Govt. Debt

The Weimer republic, which is often cited when this is discussed, printed money primarily to pay war reparations to France, Belguim and Britain after WWI.

It matters not who they paid it to. Counterfeiting the fukk out of your currency leads to trouble, every day of the week and twice on sunday.

[smackaholic]

That means a young person who makes good money. Not some fucking shit troll jizz mopper.

Ok, cunt. Aside from your jarhead sons, how many 26 y/os do you really think have amassed $60k of their own money in savings in their first four years out of college. YOu know, in a time when new college grads are struggling to find work and live on their own, all of hte sudden according to you they're accruing $60k in savings because "they're making 'good' money." Provide specific examples and specific career paths and also define what you consider "good money." I'm sure it'll be a laugh riot. Take your time.

Did it not occur to you that some kids might take other paths and make out well? Be it the military or some sort of trade school, if a kid is smart and doesn't piss his money away, he can be in that situation by his mid-twenties. Take a kid that does the HVAC or electrical program in vo-tech school. He can be fully licensed and done with the apprenticeship stuff by the time he's 21. Play his cards right and he's got his own bidness by his mid to late twenties and with a little hard work can be set for life by 40.

Wish the hell lil miss smack (currently in the 4th year on the 5-6 year plan at UConn) thought that way.

[War Wagon]

The rest of us call it for what it is. Pure bullshit.

not so fast with "the rest of us".

http://money.cnn.com/2013/02/04/investi ... ce=cnn_bin