I've enjoyed sharing with you throughout the semester. Hopefully you learned something or have seen another way of thinking. The semester started off real slow, but it seems now that things are flying by. It won't be long til Christmas now. It's gotten a little colder since the start of the semester, but for November it feels real good. Maybe we'll get some snow-it makes everything look so much better.
Well, enough rambling. Have a great rest of the semester and good luck on finals.
Thursday, November 12, 2009
Wednesday, November 11, 2009
Socialism on the Way
This weekend we came yet again another step closer to a world run by President Obama. The national health care plan that passed the House is sitting in the Senate now. What can we expect now?
Luckily there are a few more sensible people in the Senate than the House, but that isn't saying much. The hot topic that most of the news seems to be focusing on now is the issue of government funded abortions that have been laid out in the bill. While that may not be something I approve of, it is only a small portion of what is wrong with what is happening.
The bill imposes fines on people that do not buy health insurance. This is stupid. If you are healthy and do not believe you need health insurance, why should you be forced to buy it? The Democrats have tried to make it sound like they are fighting the insurance companies to help consumers, but in that instance it sounds like they are just increasing their customer base with force.
Health insurance used to be like car insurance or any other kind of insurance, meant to cover catastrophic events. If your car is leaking oil does GEICO step in and fix it? What if you rip a seat? If they were made to cover those type of incidents insurance would be completely unaffordable. Health insurance should be the same way, and people wouldn't try to take advantage of the system and we would have lower costs. You shouldn't run to the doctor because you scrape your knee. It is ridiculous that every taxpayer in America should cover the cost of you going to see about something that needs $.25 of peroxide and a Band-Aid.
The government could have easily tried something else first. How about making hospitals and medical services advertise prices? There is little to no competition in the health care market, period. With competition or at least the knowledge of prices consumers could find cheaper routes.
Have a great week.
Luckily there are a few more sensible people in the Senate than the House, but that isn't saying much. The hot topic that most of the news seems to be focusing on now is the issue of government funded abortions that have been laid out in the bill. While that may not be something I approve of, it is only a small portion of what is wrong with what is happening.
The bill imposes fines on people that do not buy health insurance. This is stupid. If you are healthy and do not believe you need health insurance, why should you be forced to buy it? The Democrats have tried to make it sound like they are fighting the insurance companies to help consumers, but in that instance it sounds like they are just increasing their customer base with force.
Health insurance used to be like car insurance or any other kind of insurance, meant to cover catastrophic events. If your car is leaking oil does GEICO step in and fix it? What if you rip a seat? If they were made to cover those type of incidents insurance would be completely unaffordable. Health insurance should be the same way, and people wouldn't try to take advantage of the system and we would have lower costs. You shouldn't run to the doctor because you scrape your knee. It is ridiculous that every taxpayer in America should cover the cost of you going to see about something that needs $.25 of peroxide and a Band-Aid.
The government could have easily tried something else first. How about making hospitals and medical services advertise prices? There is little to no competition in the health care market, period. With competition or at least the knowledge of prices consumers could find cheaper routes.
Have a great week.
Monday, November 2, 2009
The swine flu is good?
In a little odd news this morning, Clorox posted a 23% jump in first quarter profit. They attributed it to an increase in demand for its disinfectants related to the swine flu pandemic, as Diane calls it. They didn't only beat analysts estimates, they beat their own estimates. On another note, they expect earnings to be better this year off of a weaker dollar.
The weaker dollar issue has its good and bad issues. A weaker dollar means that more people are buying U.S. goods, but it also means that we can't buy as much from overseas. While the influx of foreign money is a good deal for our economy, it rarely is in the form of capital investment. Capital investment is the kind of inflows we need to stabilize the economy. Capital investment creates jobs from construction down to the janitors that clean the buildings after they are complete. Capital investment can come in many forms. One major capital investment that our country has from Japan are auto manufacturing plants. While most of them have been here for a while now, the relative cheapness of the dollar to the yen was part of what started that trend. So now, many foreign cars are made here- also partly due to the fact that the U.S. is the world's largest car market by a big margin.
Have a good week. No tests!
The weaker dollar issue has its good and bad issues. A weaker dollar means that more people are buying U.S. goods, but it also means that we can't buy as much from overseas. While the influx of foreign money is a good deal for our economy, it rarely is in the form of capital investment. Capital investment is the kind of inflows we need to stabilize the economy. Capital investment creates jobs from construction down to the janitors that clean the buildings after they are complete. Capital investment can come in many forms. One major capital investment that our country has from Japan are auto manufacturing plants. While most of them have been here for a while now, the relative cheapness of the dollar to the yen was part of what started that trend. So now, many foreign cars are made here- also partly due to the fact that the U.S. is the world's largest car market by a big margin.
Have a good week. No tests!
Thursday, October 29, 2009
The End of a 4 Day Slide
http://finance.yahoo.com/news/Economy-growing-but-recovery-apf-3242332094.html?x=0&sec=topStories&pos=main&asset=&ccode=
Today posted the first growth in GDP in over a year, of 3.5%. That is good news on one end, but not the end of all problems. Joblessness still continues to rise. The rise in GDP has been attributed to one time deals like cash for clunkers and the home buyer's credit. Economists worry that once these measures are over, the economy will need more to keep in the positive.
The jobless rate rose again last quarter. If we don't see improvement in those numbers, we may end up back in the same spot again. Consumer spending drives the economy for our country, and Americans having jobs is a big part of that.
Don't forget to look at the bright side though, the market it up. That means that investors see a brighter future. We also managed to keep the slide from breaking through and going down to 8800 on the Dow. We may just end up sustaining this rally.
Have a good weekend.
Today posted the first growth in GDP in over a year, of 3.5%. That is good news on one end, but not the end of all problems. Joblessness still continues to rise. The rise in GDP has been attributed to one time deals like cash for clunkers and the home buyer's credit. Economists worry that once these measures are over, the economy will need more to keep in the positive.
The jobless rate rose again last quarter. If we don't see improvement in those numbers, we may end up back in the same spot again. Consumer spending drives the economy for our country, and Americans having jobs is a big part of that.
Don't forget to look at the bright side though, the market it up. That means that investors see a brighter future. We also managed to keep the slide from breaking through and going down to 8800 on the Dow. We may just end up sustaining this rally.
Have a good weekend.
Tuesday, October 27, 2009
Happy Halloween
Hello again. I hope you enjoyed the MBA picnic this weekend. It was a good time for those that came out. Big Red was even playing corn-hole, and rather good at it too.
On a business note, we had another good month for home prices. We had the third straight month of rising home prices in August, which is a good sign in our current economic state. In other news the government said the recession may be over, but not job losses.
Job losses may continue to mount, and not related to the economy at all. In another article I read in the Wall Street Journal this morning, employers are holding back and cutting back thanks to President Obama. He has managed to drag out the fear for small businesses which account for the majority of jobs in this country. The fear of being fined for not providing whatever care the government deems you should.
It makes no sense to hire someone if you will have to pay a fortune to keep them. That is what business owners all over the country are thinking. Why would I hire you if it may cost me an additional $10,000 or more before all the current legislation issues are over. I don't give the government credit for any of the job creation since the start of the recession, but certainly Congress and the White House should have credit for keeping employment down. Even if they are going to turn our country into a socialist nation, they need to do it and get it over with so companies will know what to do.
On a business note, we had another good month for home prices. We had the third straight month of rising home prices in August, which is a good sign in our current economic state. In other news the government said the recession may be over, but not job losses.
Job losses may continue to mount, and not related to the economy at all. In another article I read in the Wall Street Journal this morning, employers are holding back and cutting back thanks to President Obama. He has managed to drag out the fear for small businesses which account for the majority of jobs in this country. The fear of being fined for not providing whatever care the government deems you should.
It makes no sense to hire someone if you will have to pay a fortune to keep them. That is what business owners all over the country are thinking. Why would I hire you if it may cost me an additional $10,000 or more before all the current legislation issues are over. I don't give the government credit for any of the job creation since the start of the recession, but certainly Congress and the White House should have credit for keeping employment down. Even if they are going to turn our country into a socialist nation, they need to do it and get it over with so companies will know what to do.
Friday, October 23, 2009
How we ended up in Crisis Mode
http://finance.yahoo.com/news/Bernanke-urges-Congress-to-apf-3222386032.html?x=0&sec=topStories&pos=2&asset=&ccode=
If you listen to most of the media you're certain it was Wall Street's fault. Their greedy ways and big paychecks are what caused people to lose their houses right? It wouldn't have anything to do with buying something outsider your means would it?
Throughout the entire campaign process last year it seemed as if that was the best scapegoat. Wall Street did it! It makes plenty of sense, they are only a small voting demographic. Oh but they contributed big money to your campaign, Obama, Obama- what were you thinking?
Obama may have changed some of his opinions though. In a talk with Bernanke this week, he mentioned creating videos to make families more financially literate. But it gets better, he even went on to mention that some people bought houses outside their means. Thank you Obama for finally pointing your finger in more than one direction.
The crisis is now national, but still not the same throughout. Where did it start? We have California, Florida, New York, and lastly Michigan to blame. Too many houses, not enough buyers, and too many people thinking they needed a bigger house.
The real culprit for the housing boom and fall is actually Congress and one of their societal pushes known as the Community Reinvestment Act. Clinton furthered the Act in 1997 and basically pushed banks to make sub-prime loans to minorities and low-income individuals that might not normally get them. That's all I'm going to delve into that for now, but it was and is a big problem. Basically "Reverse-Discrimination" if there is such a thing, sort of an oxymoron in my book.
Hope you all did well on that accounting test. Have a good weekend and see you at the picnic.
If you listen to most of the media you're certain it was Wall Street's fault. Their greedy ways and big paychecks are what caused people to lose their houses right? It wouldn't have anything to do with buying something outsider your means would it?
Throughout the entire campaign process last year it seemed as if that was the best scapegoat. Wall Street did it! It makes plenty of sense, they are only a small voting demographic. Oh but they contributed big money to your campaign, Obama, Obama- what were you thinking?
Obama may have changed some of his opinions though. In a talk with Bernanke this week, he mentioned creating videos to make families more financially literate. But it gets better, he even went on to mention that some people bought houses outside their means. Thank you Obama for finally pointing your finger in more than one direction.
The crisis is now national, but still not the same throughout. Where did it start? We have California, Florida, New York, and lastly Michigan to blame. Too many houses, not enough buyers, and too many people thinking they needed a bigger house.
The real culprit for the housing boom and fall is actually Congress and one of their societal pushes known as the Community Reinvestment Act. Clinton furthered the Act in 1997 and basically pushed banks to make sub-prime loans to minorities and low-income individuals that might not normally get them. That's all I'm going to delve into that for now, but it was and is a big problem. Basically "Reverse-Discrimination" if there is such a thing, sort of an oxymoron in my book.
Hope you all did well on that accounting test. Have a good weekend and see you at the picnic.
Sunday, October 18, 2009
Still waiting on more good news
http://finance.yahoo.com/news/Investors-waiting-for-more-apf-3313352767.html?x=0&sec=topStories&pos=3&asset=&ccode=
Last week Goldman Sachs, the company that runs the world, blew earnings estimates away. Even the giant catastrophe known as Citigroup came out above expectations. But what happened? An irrational reaction to good news. What more can the market expect from these people? Goldman beat estimates by over 30%. That should have sent the stock over $200, instead it was down for the day.
The only reasonable news for why it was down was in regard to their promises to reward their employees. Yes, they pay their workers when they do good. Maybe that's why they've continued to be the best in the world for over 150 years. Success is no reason to frown, in a turbulent market they did better than all the rest and no longer owe our taxpayers the money they were forced to take.
So why should Goldman be looked down upon? I know that their average bonus is expected to be over $700,000 this year, but they've earned it. They aren't using taxpayer dollars and in fact they'll be paying a big chunk of the taxes that sustain the people that sit around and whine about how much money Goldman's employees are making. On top of all this, you know who Obama's biggest donor was? Goldman Sach's, somebody seems to have forgotten where the money tree is.
Last week Goldman Sachs, the company that runs the world, blew earnings estimates away. Even the giant catastrophe known as Citigroup came out above expectations. But what happened? An irrational reaction to good news. What more can the market expect from these people? Goldman beat estimates by over 30%. That should have sent the stock over $200, instead it was down for the day.
The only reasonable news for why it was down was in regard to their promises to reward their employees. Yes, they pay their workers when they do good. Maybe that's why they've continued to be the best in the world for over 150 years. Success is no reason to frown, in a turbulent market they did better than all the rest and no longer owe our taxpayers the money they were forced to take.
So why should Goldman be looked down upon? I know that their average bonus is expected to be over $700,000 this year, but they've earned it. They aren't using taxpayer dollars and in fact they'll be paying a big chunk of the taxes that sustain the people that sit around and whine about how much money Goldman's employees are making. On top of all this, you know who Obama's biggest donor was? Goldman Sach's, somebody seems to have forgotten where the money tree is.
Monday, October 12, 2009
Good News on the Way
http://finance.yahoo.com/news/Dow-moves-higher-nears-10000-apf-3921032132.html?x=0&sec=topStories&pos=main&asset=&ccode=
We're closing in on 10,000 today on the Dow. All ahead of a week that could prove to be a turning point. Earnings releases are coming out across the board this week. On Thursday Goldman Sachs will release earnings, in what is expected to be a blowout. The market has already seen surprises around the world from companies like Philips Electronics.
Above average earnings are a good reason for markets to rise. The other side to the ticket is where the earnings boosts come from. When they come from higher revenue it's usually seen as a win, but as of late most earnings growth has come from cost cutting. If companies project a bleak outlook after releasing good earnings we are still apt to see a dive.
The clock is ticking and the money is flowing. What will we see this week? Maybe earnings will be as big of a surprise as last week's Nobel Peace Prize winner.
We're closing in on 10,000 today on the Dow. All ahead of a week that could prove to be a turning point. Earnings releases are coming out across the board this week. On Thursday Goldman Sachs will release earnings, in what is expected to be a blowout. The market has already seen surprises around the world from companies like Philips Electronics.
Above average earnings are a good reason for markets to rise. The other side to the ticket is where the earnings boosts come from. When they come from higher revenue it's usually seen as a win, but as of late most earnings growth has come from cost cutting. If companies project a bleak outlook after releasing good earnings we are still apt to see a dive.
The clock is ticking and the money is flowing. What will we see this week? Maybe earnings will be as big of a surprise as last week's Nobel Peace Prize winner.
Friday, October 2, 2009
Unemployment Putting the Brakes on our Economic Recovery
http://finance.yahoo.com/news/US-Sept-nonfarm-payrolls-rb-589941939.html?x=0&sec=topStories&pos=main&asset=&ccode=
Job losses were worse than expected for September. So what's new? The analysts get it right or wrong every month. This time they were just conservative based on hopes that the recovery we'd seen in the stock market would equate to a recovery in the economy. Should they have? I think they're a few months ahead. The stock market is a leading indicator, not a laggard. So if it turns up, it usually means that the economy will be doing better in 6 to 12 months, not last month.
The stock market has a been a good indicator over history, but it can be wrong too. Irrational investors can drive prices up to places they shouldn't be and then we see crashes. Our economic professors and finance professors say that the stock market is efficient. That is what research says and theories. Personally I believe that it is efficient on an average basis. I believe there are times when psychological factors play a bigger role in stock prices than facts. Rumors about the stability of Lehman Brothers are what led its shares to fall to near zero in one day, so how does a company that size go from the second largest investment bank to worthless in one day if we have an efficient market? Maybe the market was just predicting its failure.
Job losses were worse than expected for September. So what's new? The analysts get it right or wrong every month. This time they were just conservative based on hopes that the recovery we'd seen in the stock market would equate to a recovery in the economy. Should they have? I think they're a few months ahead. The stock market is a leading indicator, not a laggard. So if it turns up, it usually means that the economy will be doing better in 6 to 12 months, not last month.
The stock market has a been a good indicator over history, but it can be wrong too. Irrational investors can drive prices up to places they shouldn't be and then we see crashes. Our economic professors and finance professors say that the stock market is efficient. That is what research says and theories. Personally I believe that it is efficient on an average basis. I believe there are times when psychological factors play a bigger role in stock prices than facts. Rumors about the stability of Lehman Brothers are what led its shares to fall to near zero in one day, so how does a company that size go from the second largest investment bank to worthless in one day if we have an efficient market? Maybe the market was just predicting its failure.
Tuesday, September 22, 2009
Ready for a Pullback?
The market hit fresh highs for 2009 today, amidst a surge in commodity prices. What does this mean? Well some say we are ready for a correction. It would make sense for people to pull some profits off the table after the run up we've experienced lately.
There are many factors involved in forecasting a pullback, and some anaylsts have varied opinions. If you watch CNBC, you will most likely hear that a pullback is tomorrow from one and that it's not going to happen by another. What I will tell you is that there is no certainty in this market. The odds of something happening because people expect it or it is talked about don't necessarily turn into reality.
While many don't agree on the issue of having one, they do agree that 10,000 on the Dow Jones Industrial Average is a critical point. It is seen by some as a key resistance point and others as a psychological barrier. Either way it is a breakthrough many are looking for.
Theory 1: We hit 10,000 and money from the sidelines pours in from investors not wanting to miss out on the rest of the run-up. This pushes us up past 11,000 and possibly even as high as 13,000.
Theory 2: We hit 10,000 and take a dive back to 9,000. Why 9,000? 10% is seen as a normal "Market Correction" which most say is well overdue.
October is historically a bad month for the stock market in terms of cataclysmic events. The market peaked on October 9th two years ago, and we've been lower ever since. The crash of the 80's was also in October.
What to do about all of this? Take it in stride. At our age we are best to ride it out. Timing the market is not an easy task and can cost you big in the longrun. The market may get cheaper, but if it fails to you may never see prices this low again in your lifetime. Gains from timing the market are harder to make for individual investors since most of us don't play with billions or even millions of dollars. The cost of trading eats into your profits and the stress will shorten your lifespan.
Have a good week.
http://finance.yahoo.com/news/Rebound-in-commodities-apf-686439936.html?x=0&sec=topStories&pos=4&asset=&ccode=
There are many factors involved in forecasting a pullback, and some anaylsts have varied opinions. If you watch CNBC, you will most likely hear that a pullback is tomorrow from one and that it's not going to happen by another. What I will tell you is that there is no certainty in this market. The odds of something happening because people expect it or it is talked about don't necessarily turn into reality.
While many don't agree on the issue of having one, they do agree that 10,000 on the Dow Jones Industrial Average is a critical point. It is seen by some as a key resistance point and others as a psychological barrier. Either way it is a breakthrough many are looking for.
Theory 1: We hit 10,000 and money from the sidelines pours in from investors not wanting to miss out on the rest of the run-up. This pushes us up past 11,000 and possibly even as high as 13,000.
Theory 2: We hit 10,000 and take a dive back to 9,000. Why 9,000? 10% is seen as a normal "Market Correction" which most say is well overdue.
October is historically a bad month for the stock market in terms of cataclysmic events. The market peaked on October 9th two years ago, and we've been lower ever since. The crash of the 80's was also in October.
What to do about all of this? Take it in stride. At our age we are best to ride it out. Timing the market is not an easy task and can cost you big in the longrun. The market may get cheaper, but if it fails to you may never see prices this low again in your lifetime. Gains from timing the market are harder to make for individual investors since most of us don't play with billions or even millions of dollars. The cost of trading eats into your profits and the stress will shorten your lifespan.
Have a good week.
http://finance.yahoo.com/news/Rebound-in-commodities-apf-686439936.html?x=0&sec=topStories&pos=4&asset=&ccode=
Wednesday, September 16, 2009
The Recession is Likely Over
http://finance.yahoo.com/news/Stocks-move-higher-as-apf-1098559674.html?x=0&sec=topStories&pos=main&asset=&ccode=
The major headline for Yahoo! Finance this morning talks about stocks moving higher on better industrial production. This should be good news for all of us. As the economy rebounds hopefully companies will begin looking for new people to hire, maybe that's us.
Ben Bernanke, the Federal Reserve Chairman said on Tuesday that the recession is likely over. Ben Bernanke should know what he's talking about since he's in charge of the U.S. money supply. His efforts have helped keep this recession from being as bad as it could've been, or at least I believe they did.
I've heard people talk about how they could've given all that money to everybody in America and we'd all be multimillionaires instead of "bailing out" Wall Street. Ignorance is a poor excuse for that argument. He knew what he was doing, and so do many other economists that agree with what he did. If we just handed that money out to everyone, that would've been instant inflation. In essence it would've been like we did nothing at all for ourselves, but the rest of the world would've no longer even recognized the dollar as a currency.
If you see where I used the quotes on "bailing out" Wall Street, that's simply because they didn't bail anyone out. They gave them a loan. The banks are already paying it back, and the government doesn't even want it. That's right, the government refused to accept money from Goldman Sachs regarding the loan it forced them to take. Why would they do this? The government is trying to use this as a means to control banking operations and shrink salaries, bonuses, and whatever other pay packages they can get their hands on.
Hope you learned something from my Wednesday morning rant, have a good day!
Wednesday, September 9, 2009
Welcome
Welcome to my blog. Throughout the duration of WK Business I hope to entertain you and enlighten you with news going on in Western Kentucky and developments that are occurring. Have a great day and keep in check.
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