Mrcauser’s Weblog

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Kick back, read on, and shit yourself…..

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Not taking any chances. Patti and I have spent about $500 this month on food because Wally World gave us a 10% discount on groceries.

Never know what will happen to the supply chain.

Times are going to be tough for farmers. Credit will be fucked up for awhile and grain priced have collapsed. Oil is nuts and so far the banks are holding all that bailout money for fixing their balances for the coming end of the quarter.

Remains to be seen whether this is just a blip in our economic history or the beginning of something bigger.

I’m hunkering down and watching the deflation make those of us with jobs better off. Gas hit $1.549 and no end to the bottom in sight. House prices for most and especially rents have come down big time even here in Idaho. Food prices have moderated. Pretty soon OB will give us a few more bucks and a free loan or two to get those cars and houses off the market.

Expect some taxes to go up as governments have to slash and borrow to pay their over extended budgets.

We would still be money ahead.

Of course, it could go the other way if OPEC collapses. Only a matter of time. Russia would be a their savior for awhile if they join but no one will be buying for the time being.

Somebody once said: “May you live in interesting times.”
I thought he was bullshitting

8 really, really scary predictions – Bill Gross (2) – FORTUNE

The outcome essentially depends on the ability of the Obama administration to rejuvenate capitalism’s “animal spirits” by substituting the benevolent fist of government for the now invisible hand of Adam Smith. Federal spending and guarantees in the trillions of dollars will be required to fill the gap created by the deleveraging of private balance sheets. In turn, lenders and investors alike must begin to assume risk as opposed to stuffing money in modern-day investment mattresses. The process will take time. Twelve months of the Obama Nation will not be sufficient to heal the damage of a half-century’s excessive leverage. The downsizing of private risk positions – replaced by government credit – will also result in reduced profit margins and a slower rate of earnings growth after the bottom is reached.

Investors need to recognize these titanic shifts in market and public policies and be content with single-digit returns in future years. Perhaps the most lucrative pockets of value are in high-quality corporate bonds and preferred stocks of banks and financial institutions that have partnered with the government in programs such as the Troubled Assets Relief Program (TARP). While their profitability may be restricted, their ability to pay interest and preferred dividends should be unhampered. Above all, stick to high-quality companies and asset classes. The road to recovery will be treacherous.

Written by mrcauser

December 13, 2008 at 8:14 pm

Posted in Uncategorized

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