[Rhodes22-list] Economics - More Good News

Sat Jul 14 14:48:42 EDT 2007

Warren,

I hope you own some FedEx stock as it is a good international investment
play. I try to keep my holdings in FDX under 10% for diversity, but every
time I sell some it just keeps increasing in value. Trust me, my union
negotiated raise had negligible effect on the earnings per share.  Unions
and small time investors are two issues Marx and Engels didn't figure into
their theory.  China has moved away  from being a 'nanny state' as fast as
practicable and the results are good.  Every country that has moved in the
opposite direction has suffered (think European Union).  Globalization is a
fact of life, somewhat like gravity.  Remember when the Japanese were going
to take over America in the 70's?  They have in a sense, Toyota's built in
Indiana, Texas and California, Honda in Ohio, Nissan in Tennessee and
Mississippi, etc., and now we have Koreans in Alabama (Hyundai), BMW in SC,
and the Bama Benz.  What goes around comes around.

Brad

You will never become expert at timing the market any more than the
'professional' fund managers are good at timing the market.  That other
famous investor named Warren wasn't a trader, he was a buy and hold guy.
I'm thinking about stopping any future purchases in mutual funds myself for
a while and parking in T bills or money markets until things cool off a bit.

Now as to the flying story, let's just say all ended well and my crew was
eventually rewarded with an "atta boy".  That was after being under the
microscope for a while which is normal.  There are some things best left
alone on public boards.  BTW, I really do enjoy my job and work for one of
the best employers ever!

Brad

On 7/14/07, Foy, Warren <Warren.Foy at masonandhanger.com> wrote:
>
> Brad and all,
>
> Seldom poster but can't resist today.
>
> I know that you're a union employee and I appreciate your employ (as
> well as your anecdotes about flying) but I'm not sure that helps me as a
> shareholder of Fed Ex (or any other company).  I obviously agree that if
> you or I could predict where the market was going, we could own the
> world. (As far as Gulfstream, my friend, (Senior Structural Design
> Manager or some similar title) would appreciate your reference).
>
> Who's complaining?  Not me necessarily, but until I become an expert day
> trader where I can time the market, it does concern me to see my payrole
> withholding going to purchase MF (Mutual Fund, (easy folks:)) shares at
> such lofty prices.  I'm seriously thinking about diverting to cash these
> days.
>
> Winnings off the table?  Wish I had some as most of mine were invested
> during the bubble.
>
> -----Original Message-----
> From: rhodes22-list-bounces at rhodes22.org
> [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Brad Haslett
> Sent: Saturday, July 14, 2007 1:06 PM
> To: The Rhodes 22 mail list
> Subject: Re: [Rhodes22-list] Economics - More Good News
>
> Warren,
>
> Wow, that's a lot but, I'll take a stab at it.  But first, a disclaimer:
> I
> am an hourly paid union employee.  If I knew where the market was going
> next
> month I'd fly my Gulfstream to the coast and take the yacht out this
> weekend.
>
> The growth of this market is not sustainable.  No market ever is and
> that is
> why we have business cycles.  This one has lasted longer and has been
> more
> robust than I would have predicted, but hey, who is complaining? We saw
> what
> 9/11 did to the market - over a trillion dollars of wealth was wiped out
> as
> soon as the markets re-opened.  The same thing would happen again with
> an
> attack of that scale.  My time frame to retirement is a bit shorter than
> yours and quite honestly, I'm probably more of a risk taker than is
> prudent
> right now. But,  this market sure has been good.  When to get out?  I'm
> seriously thinking about taking some winnings off the table, however,
> every
> time I've done that in the past I missed the next run-up.  The time to
> buy
> clothes is when they are on sale.  I'm not changing my savings rate
> right
> now, I'm just scaling back to more conservative investments until things
> cool a bit.  Unlike the Dot-Com bubble, this market is fundamentally
> sound,
> just a bit pricey for my tastes.
>
> To oversimplify the debt situation with China, we are a nation of
> spenders
> and they are a nation of savers.  The US runs a huge trade deficit with
> China and they have to park that money somewhere.  US debt is a pretty
> safe
> bet.  China could wreak havoc if they dumped their holdings but it would
> seriously harm their economy as well. A weaker dollar helps some, for
> example, it makes American goods easier to sell overseas.  But like
> anything
> in life, it has other repercussions as well.  Oil is priced in dollars.
> For
> OPEC  to keep the same purchasing power per barrel they have to charge
> more
> for the stuff.  That hits us at the pump.  The upside is it should
> encourage
> us to use less oil, but the demand for oil is stubbornly inelastic.  A
> weak
> dollar also makes Disney World attractive to German tourists and beer in
> Munich expensive for us.  Where's the happy medium?  I don't know, they
> don't call economics the "dismal science" for nothing.
>
> I love the next question.  Why do people spend so much to save on taxes?
> Remember who you are talking to.  I've been asking myself that question
> a
> lot lately.  Remove the politics, the social agendas, and the class
> warfare
> from the argument and you come to this indisputable conclusion: lower
> taxes
> make for a more productive economy. Our marginal income tax rates were
> as
> high as 90% in the early 60's.  At those rates it makes no sense for the
> most productive citizens to earn any more money.  Anytime you have this
> discussion here on the list or on a national level everyone wants to
> hide
> from the truth.  The top 5% of taxpayers pay over 50% of the federal
> income
> tax.  We are not talking about so called "rich" people, we're talking
> about
> married professionals, small business owners, a lot of people on this
> list.
> People start looking for ways around paying more taxes when they don't
> think
> they are getting a good value for their money.  You cannot avoid taxes,
> you
> can only defer them to a later date.  For example, I'm aggressively
> using
> the the tax provisions of the Katrina GO Zone Tax Act to expense
> construction equipment rather than depreciate it.  The tax will be paid
> sometime, either through the use of the equipment of the disposal of it.
> The idea is to pay the tax at a later date and use the time value of the
> money.  Losing money to save on taxes makes no sense at all and is based
> on
> emotion.  That being said, in 1980, I could sell an airplane to a
> doctor,
> lease it back, and the doctor would be positive cash flow for the first
> 18
> months after debt service, even if the airplane never flew because of
> the
> tax savings.  That is why there is a limit to marginal income tax rates
> without things getting silly.  Now factor in class warfare, socialist
> agendas, etc. and things really do get silly.
>
> If you want to participate in an interesting experiment, fly to Gulfport
> and
> we'll go knock on some FEMA trailer doors.  I'll offer them a job and
> you
> record the reaction.  It will be something along these lines, "what, are
> you
> crazy man, I've got a free place to live, no utilities, a monthly
> stipend,
> why give-up all that for some risky job scheme"?  We need to evolve into
> a
> nation of workers AND savers.  That's where politics rears its ugly head
> again. Becoming wealthy in this country is really simple.  The secret
> is,
> GET A JOB AND LIVE ON TEN PER CENT LESS THAN YOU EARN!
>
> How is that for a short answer?
>
> Brad
>
> On 7/14/07, Foy, Warren <Warren.Foy at masonandhanger.com> wrote:
> >
> > Brad,
> >
> > Why is so much of the national debt held by China and why does the
> > Federal Government allow this to happen? (honest question, I don't
> > know).
> >
> > You mentioned in a previous post yesterday the apparent good economic
> > news and rise of the S&P and workers 401k's.  Yes, I checked mine this
> > morning and all of the funds I am investing in are at record highs as
> > well as many of the individual companies I am invested in - I love it!
> > (for today): (maybe, as the current funds going into these funds are
> > purchasing fewer shares).
> >
> > (I'll pause for L.Sailor (Elle) - Do I use too much punctuation?)
> >
> > However, I remain concerned that because of political and terrorism
> > issues, the growth of the market is not sustainable.  I am young
> enough
> > (though not necessarily young, 47 with 20 or so years to retirement
> > (maybe them I can purchase a Rhodes 22)) that I feel that my 401k
> > retirement account can bridge more than one more significant market
> > corrections due to (political/terrorism/Mr. Market/ whatever).
> >
> > I know I am rambling but my primary question (not necessarily to you
> but
> > to the list) is, why don't Americans absorb the national debt
> ourselves
> > rather than allow it to go to other countries?  Aren't we the
> wealthiest
> > nation the world?  I think that the simple answer is the lack of
> > confidence in the administrations, whether it was Bush, Clinton, Bush
> or
> > however far back you want to go, and a thought that the stock market
> > (whether American or International) will provide a better return,
> which
> > is probably (no definitely) true.
> >
> > I my opinion, the typical American individual and companies view that
> a
> > potential lower overall return of investment in the United States of
> > America (via Saving Bonds or Treasury Bills), is super ceded by the
> > perception of a potential additional rate of return by investing in
> the
> > markets.  In short, I think that greed rules over national pride and
> > provision of national security.
> >
> > Simi related question - Why do so many Americans look for ways to
> spend
> > money to save on taxes?  I know people who have effectively blown
> > thousands of dollars to keep from paying a couple of hundred in
> Federal
> > taxes?  (I do understand that it is potentially better for the overall
> > economy).
> >
> > Sorry for the long rant, I've got work to do and I can't go sailing as
> > Rummy has my boat.  How is the boat Rummy?
> >
> > Warren Foy
> >
> >
> >
> > -----Original Message-----
> > From: rhodes22-list-bounces at rhodes22.org
> > [mailto:rhodes22-list-bounces at rhodes22.org] On Behalf Of Brad Haslett
> > Sent: Friday, July 13, 2007 3:22 PM
> > To: The Rhodes 22 mail list
> > Subject: Re: [Rhodes22-list] Economics - More Good News
> >
> > Rob,
> >
> > And the bad news is - much of that debt is held by China.
> >
> > The good news is - much of that debt is held by China.
> >
> > This is like "mutually assured destruction" with the Soviets but with
> > money
> > instead of nukes.  Speaking of bombs, if we could just stop the
> ticking
> > on
> > the SS IED waiting down the road, I'd be happy.
> >
> > Brad
> >
> > PS - I'm going back to work this afternoon, I have my own deficit and
> > debt
> > issues looming.
> >
> > On 7/13/07, Rob Lowe <rlowe at vt.edu> wrote:
> > >
> > > Oh, I think Stan knows, but here goes anyway.
> > >
> > > The deficit is the yearly difference between spending and receipts.
> > The
> > > national debt is the sum of all the yearly deficits to date. The
> > national
> > > debt is approaching $7 trillion (yep, with a T).  Just think, your
> > > personal
> > > share is only about $30K, just short of the price of a new Rhodes.
> > >
> > > http://www.brillig.com/debt_clock/
> > >
> > > - rob
> > >
> > >
> > > ----- Original Message -----
> > > From: "stan" <stan at rhodes22.com>
> > > To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
> > > Sent: Friday, July 13, 2007 2:52 PM
> > > Subject: Re: [Rhodes22-list] Economics - More Good News
> > >
> > >
> > > > help:  what is the difference between our national debt and our
> > national
> > > > deficit ?  And what are the comparison figures for the same years
> > for
> > > the
> > > > national debt ?
> > > >
> > > > capitalistic minds need to know
> > > >
> > > > ss
> > > >
> > > > ----- Original Message -----
> > > > From: "Brad Haslett" <flybrad at gmail.com>
> > > > To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
> > > > Sent: Friday, July 13, 2007 2:45 PM
> > > > Subject: [Rhodes22-list] Economics - More Good News
> > > >
> > > >
> > > > > Yesterdays record S & P was indeed good news!  Anyone look at
> the
> > > > > performance of their 401K lately?  No one needs to explain to me
> > the
> > > > > fundamental weaknesses of the current economy, but by all
> > conventional
> > > > > yardsticks, things look good.  If we had some fiscal discipline
> > from
> > > the
> > > > > Congress and especially the White House, we could cut taxes
> again.
> > > Alas,
> > > > > that won't happen.  But the previous tax cuts and the robust
> > economy
> > > that
> > > > > has resulted has made significant reductions in our debt load.
> > > > >
> > > > > Total US Deficit
> > > > >
> > > > > 2004 - $413 billion
> > > > > 2005 - $318 billion
> > > > > 2006 - $248 billion
> > > > > 2007 - $205 billion
> > > > >
> > > > >
> > > > > US Deficit as a percentage of GNP
> > > > >
> > > > > 2004 - 3.6%
> > > > > 2005 - 2.6%
> > > > > 2006 - 1.9%
> > > > > 2007 - 1.5%
> > > > >
> > > > > I just love good economic news!
> > > > >
> > > > > Brad
> > > > > __________________________________________________
> > > > > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > > >
> > > > __________________________________________________
> > > > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > >
> > >
> > > __________________________________________________
> > > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > >
> > __________________________________________________
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> >
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