retirement interruptus: That Was The Week That Was

Marketwatch.com reported that when the cost of a home becomes less than renting investors will step in to stop the value slide of real estate. Investors, it seems, are starting to snap up properties. When an investor moves into your neighborhood this bodes well for future values. The top 10 best markets for home investors: Indianapolis, Winchester, W. Va.; Gainsville; Tucson; Tallahassee; Haggerstown-Martinsburg, MD; Salt Lake City; Richmond, VA; Gainsville; Winston-Salem.
According to ‘Mystery Broker’ quoted in Barrons.com thinks, ‘ U.S. economy slowed more by tragedy in Japan than most investor realize, that GDP could return to 3% in second half. The housing market is at or near bottom, the dollar should enter a cyclical upturn and no country outside of Greece will default, though Portugal may have to restructure debt.’ However, the markets will remain in this trading range for some time before moving on.
Markets opened higher last Monday but the air was taken out quickly as markets shrugged off optimism and ended mixed with the Dow up a single point. Insiders quit their selling, or at least held off for a day, reported The Street. M&A (merger and acquisitions) picked up steam with money cheap (Zero!) with VF Corp buying Timberland and Arby’s was cut-loose from Wendy’s Arby’s Group and rumors for recent IPO Glencore bidding for Eurasian Natural Resources was reported as being false.
Ford lost a $2 billion lawsuit brought by dealers alleging that the company overcharged dealers for trucks. The stock got kicked even though Ford defended itself by stating that they would appeal. Analysts also rushed to the company’s defense and reaffirming ratings (price $18 plus) and stating even if company lost the decision it would take years and raised 2012 EPS to $2.19. Word from WSJ is that Ford spending $1 billion to upgrade Lincoln into a world class luxury brand. Some Lincoln dealers will go by the wayside.
From the Department of Feeble Picking: The Finnish phone maker Nokia, one year back, was praised as the stock comeback kid. Today MarketWatch asks, ‘Who’s in worse shape- Nokia or Research in Motion?’ RIM, the maker of Blackberry, has lost 20% recently and is at levels not seen since 2006. One host on Friday’s CNBC was quoted as saying he was buying shares in the company, although he appeared a bit green at the gills.
Public Radio (gasp) got on the bash Obama bandwagon Monday morning. Commentary blamed the Prez’s Health plan for companies not hiring, not knowing costs and spending money on equipment more than investing in new hires. Just thought you’d like to know…
Kate Kelly with CNBC reported that Facebook IPO would be valued at $100 million….opps…BILLION!
China has an inflationary problem (WSJ) and their dealing with it by tightening money. China funds, hedge funds, mutual funds and private equity firms have all gotten smacked around. Investors have been faced with fraud in the past and only solid due diligence aids in keeping it to a minimum. With Chinese company valuations low many professional traders are simply hanging on and waiting for the pain to pass.
China’s slow growth tightening will allow oil to fall. China’s middle class now earns 69% of the U.S. wage earner and looks to other countries for cheaper labor. The U.S. is now one of those countries that China uses for a cheap labor force.
Banks-yes, banks lead gains Monday. Sell still on Goldman Sachs, even though investors now believe government got their information wrong.
Time Magazine purports to know the reason why we’re dragging out this Depression in the June 20th issue Time reports that American business in the first quarter of 2011 earned almost $2 trillion in profits. Still not many CEOs would think of building a factory or R&D center in the U.S.A. Their first thought would be China, Brazil or India. These countries are churning out 70 million new middle class workers and customers every year. That’s why the U.S. worker is stagnate and you won’t see the employment or wage numbers change much over the next five years. Which is confusing when you read the Bloomberg China story exporting its cheap labor work to the U.S.A.
Germany, when the two Germanys united, offered subsidies to forestall outsourcing. This could work here. Plus German goods are not cheap but provide quality and good wages for German workers.
Am I the only one fed up with Washington? Playing politics until the last minute to raise the debt limit and blaming it on us – At the same time the President isn’t being effective.
Michelle Bachmann is officially running for President. The noise you hear is Washington, Adams and Jefferson rolling in their graves. Friends say she is the ‘smart one’.
Tuesday markets opened higher and stayed there. A solid triple digit day with gold and oil down. Gives one hope until you read that there isn’t enough bearish consensus to support a contrarian Bull market and that, according to Mark Hulbert, the Bull may have indeed died May 3rd of this year.
Retail sales were down but not down enough to make the markets collapse. In other words it was bad news on the retail side but not as bad as some investors expected. Expect, economists said, for clothing and other items to cost more this fall. Inflation in the cards. Still other reports show the consumer spending….read on, dear reader.
Wishing to make it so -If Fed Fund rates are kept at nothing and inflation contained and global worries kept to a minimum the domestic stock market should do well. And that is if our politicians okay a higher debt ceiling, put together a reasonable budget and work together like adults forgetting party affiliations. Oh, okay, lemme see that Bachmann for President brochure…
The jobless rate turns out lower or flat in Most states. Michigan not one of them- still double digit. According to Labor Department joblessness declined in nearly half of all U.S. states last month.
The Wise Ones recommend not to invest in any of the transportation companies. Transport stocks are having engine trouble. Not only the autos but airlines, too. Railroads are on a tear. Maybe its why Buffett bought his own train set but lost a small fortune or at least half of it on U.S. Air, including common and preferred.
Buy rating on Japan as it starts coming out of its slump.The Bank of Japan upgraded its assessment of the Japanese economy for the first time in three months. Even Toyota Motors announced it would reach 90% of capacity in June.
Big Puff Piece on Single Premium Immediate Annuities –puleeeze- you buy when interest rates are high.
The American Consumer is alive and well and spending on average at a 3% growth the last five months. According to Morningstar, some months less some months more. It all averages out in the end.
A rough patch- Not a Double Dip-definately not replay of 2008 – repurchasing by corporations as they spend the cash hoard – if they thought they’d be caught they wouldn’t be spending what they got. Stock Buy-backs are running at record levels. Bob Johnson, director of economic analysis at Morningstar said, ‘Soft patch, yes; double dip- absolutely not.’
The week ended with the Dow and S&P 500 indices up for the first time in six week. The Naz was down.