Wednesday, October 29, 2008

Economy a Mixed bag...

This article from the Wall Street Journal notes that home inventories are shrinking across the country (even though Atlanta still has a bit over a year's worth of inventory, where 'normal' rates should be in the 6-7 month range). Yes, we've had some price increases of late and some decent sales but we're still not out of the woods yet. I know that unemployment is up across the US and in Georgia and that does not bode well for housing. Unlike the go-go subprime times of late you now actually have to have a JOB as well as INCOME to support a home purchase/loan. Most loan programs require you to have some downpayment as well so it's rough out there for the average buyer. I can also wonder aloud about people who were planning to sell some stocks to come up with their down payment but the answer lies in the continued roller coaster that won't stop until the election at the earliest. It's not all doom and gloom (and I still bet that the media will say "hey, it's not all that bad" on November 5th, regardless of the winner!) and our country (State? City?) has persevered before. I can likewise opine that our current generation(s) will not be as likely to "step up" as strongly as "The Greatest Generation" did during WWII (not that we have that type of threat today, thank God). And one other ramble-FDR's New Deal (and all the public works projects) did not get us out of the Great Depression--WWII did. I can only hope that we don't have to have something that horrible occur to jump start our country!

Friday, October 24, 2008

Like Lipstick on a Pig!

Yes I know that politicians have hijacked that phrase but it's relevant to this posting, I swear! Looks like August's home price declines slowed slightly! Yes, they still fell, but LESS than in prior months! Okay, okay, so a .02% improvement is not that great but I'm just looking for any positives here! And for all you info geeks, we are right around the same price level as in Sept. 2005. So all you 'bubble' fans can see that we did have some major appreciation; likewise we have had some declines. At the end of the day, we still have oversupply, especially with foreclosures, but the major source of that oversupply (new homes) will continue to fall as unfortunately we have lost a lot of builders (or they stopped building spec homes).

Full disclosure--the same article I read noted that prices may still fall an overall 10% additionally (over the next 18 months) from the peak of 2006 so we're still in for a ride; hoping for a slow ride down a hill versus a jump off a cliff! Data is listed here if you're curious.

Wednesday, October 22, 2008

Economic Ramblings for the day

"How's your tummy?" could be a nice subtitle as we've really had a rollercoaster ride in the past month or so! I saw a headline this morning that oil has dropped under $70. It seems actually crazy to see gasoline under $3 after paying almost $5 after Hurricane Ike! I wonder how people are doing out there-did 'habits' really change over the past month? People parked or sold their SUV's and trucks and bought fuel-efficient vehicles. Will there now be a mad rush at the Hummer dealership again? What about actual driving habits? People took mass transit, cancelled optional trips, didn't go to the mall, etc. What's happening now? I'd be interested to see current trends!

One comment on the election-I truly feel that regardless of the winner next month, we will all be surprised at the media reports on November 5th that "Hey, it's not that bad out there". Regardless of your candidate, they NEED bad news right now. For example, Obama can blame Bush/McCain for the current economy. McCain can say that Obama's taxes will kill the economy. Barr? Well, he can just bug both candidates as an 'outsider'. Mark my words-the economy will miraculously 'get better' after the election. Oh, by the way, yes, I AM a cynic!

What's next for the Fed? Wow, seems like they want another round of economic stimulus checks. I would love to have some extra spending money for Christmas shopping, but I don't think that a) that is the answer and b) that I'll see a penny! How about you? Uncle Sam says SPEND!

A Visual Representation of the McCain/Obama Tax Cuts

The proposed tax cuts are interesting to say the least. Looks like everyone gets a cut under McCain, but Obama's are higher for people who earn less and he NAILS people who make a lot of money. Takes me back to my heavy metal rock-n-roll days of a band called Krokus. Their 'hit song'? "Eat the Rich"

The most entertaining? NEITHER one truly talks about how they'd pay for these cuts (well, big O pays for many of his cuts by socking it to those evil rich people). I really suggest you get out there and buy ATLAS SHRUGGED by Ayn Rand. Written in 1957; coming to the United States in 2008???

Wednesday, October 1, 2008

The hits keep coming! Now we're Socialists???

I was amazed to read this article. A TOTALLY different perspective than I had contemplated. Likewise, this one takes the Libertarian point of view of "Hands Off" and more or less says "too bad", thinking that Bankruptcy may be the best (inevitable?) course of action. And in a more partisan-ish (my word) article this one pretty much refutes Madame Pelosi's "Democrats are not to blame" concept. What do you think? I'm at a loss actually. First we drop over 700 points; then we rise almost 500. Even though today's loss on the Dow was a mere 19 points, I almost feel that the markets are saying "so what" to these proposals. It's a "Boy who cried wolf" situation in some respects, but at the end of the day, credit is still quite TIGHT. What would you do?