[Rhodes22-list] Economics

Sat Mar 24 09:53:53 EDT 2007

Wally,

Glad I was busy and on the road for this thread.  When it comes to
economics, I don't drink anyone's Kool-Aid but look at the facts and make my
own judgements.  Just as the Clinton year,s boom was based on the hype of
the dot-coms (and unstainable), much of the Bush 43 boom was based on
Detroit gas-guzzlers and cheap money (thus the real estate nonsense).
Neither could last forever.  All Presidents take credit for good times and
get blamed for bad ones when in fact, Presidents don't have that much
influence on the market.  This is a good thing!  Bush did some smart things
after 9/11, like cut taxes to spur the economy, and some really dumb ones,
like bail out airlines that should have been allowed to go under.  Frankly,
I have little sympathy for people getting burned for overbuying what they
could afford in real estate just I have little sympathy for shareholders who
got burned on Enron or WorldCom.  The market is what the market is and
Presidents and the Congress usually muck-up necessary corrections when they
meddle in the marketplace.  We've had a record number or quarters of good
economic performance and only a fool would think that will last forever.
The big question is wether the correction will entail a hard landing or a
soft landing?

Brad

On 3/23/07, TN Rhodey <tnrhodey at hotmail.com> wrote:
>
> Ed, Reread my post.... no one blamed Bush....are you really that dense? I
> said our economy was a house of cards.....no blame was even suggested. A
> little defensive? I did say Brad was discounting the potential problem
> looming because he was drinking Bush's cool aid. Again Bush did not cause
> this. The lending crisis is not a government issue although it may be the
> government (us!) paying for this. Also Bush had no influence on lending
> guidelines or the problem. This is not a liberal or conservative issue.
>
> Wally
>
>
> >From: Tootle <ekroposki at charter.net>
> >Reply-To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
> >To: rhodes22-list at rhodes22.org
> >Subject: [Rhodes22-list] Economics
> >Date: Fri, 23 Mar 2007 06:07:51 -0700 (PDT)
> >
> >
> >Wally:
> >
> >      What you have said is particularly true where house values are
> >overvalued in anticipation of increasing in value.  I suspect a big time
> >shake out coming.  However, you blame Bush.  Come on now, where were the
> >Democratic critics a couple of years past.
> >
> >       Bush's stated intent was to allow anybody who really wanted a
> house
> >to
> >be able to get one.  His ecomomics have helped that goal.  Now it is up
> to
> >them to keep them.
> >
> >        Not all will.  However, I suspect many will.  The current default
> >rate in the sub prime market is quoted as 23%.  Truth is it will go up in
> a
> >recession.  Remember some of the creative sub par financiing was pure
> >speculation.
> >
> >        There will be some creative ways to help prevent defaults, but
> that
> >does not answer your premise, why was the situation permitted.  It is a
> >general governance issue and legislators of both parties did not want to
> >say
> >or do anything.
> >
> >        What is more interesting to look at is the declining value of the
> >dollar.  They say inflation is under control.  However, what you get for
> >the
> >dollar is less.  So the value of some of those homes under duress is not
> >the
> >same value in dollars as a few years ago.  Hum.  Another way to hide
> facts.
> >
> >        This is not a Bush issue, but the way the politicians and press
> >hide
> >the truth.  If it were a liberal democrat in office, they would be
> looking
> >elsewere, and so would you.
> >
> >Ed K
> >Greenville, SC, USA
> >
> >
> >
> >TN Rhodey wrote:
> > >
> > > Brad, You have been to be busy being a cheer leader for Bush to notice
> >our
> > > economy is unbalanced. I told you several months ago that the mortgage
> >and
> > > home industry was "a house of cards and heading for huge correction".
> >You
> > > responded and said your home values are fine in Memphis .....
> > >
> > > The largest sub-prime lenders are in trouble and in the last 90 days
> >some
> > > 30
> > > mortgage banks have closed or pulled out of sub-prime lending. The
> other
> > > shoe will drop when all the folks with low Interest Only payments,
> >balloon
> > > 2
> > > nds, or ARMs have to refinance and find they can not because they owe
> >more
> > > than the home is worth. They will be stuck with a rising payment they
> >can
> > > no
> > > longer make. The common trend in home buying has been 100% financing.
> In
> > > the
> > > old days you needed to have 20% or so. Being upside down equity wise
> in
> >a
> > > car is bad...evenworse when you are upside down in equity in you
> rhome.
> > > Many
> > > folks are upside down in equity in their home and 2 car payments. Like
> i
> > > said we are building anice house of cards.
> > >
> > > Do a google search for "sub prime lending woes".
> > >
> > > The leaders of companies like New Century maybe looking at jail time.
> >This
> > > is tied into our overall economy in more ways than most understand.
> > >
> > > Wally
> > >
> > >
> > >>From: "Brad Haslett" <flybrad at gmail.com>
> > >>Reply-To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
> > >>To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
> > >>Subject: [Rhodes22-list] Economics
> > >>Date: Thu, 22 Mar 2007 08:48:18 -0500
> > >>
> > >>Hunker down boys and girls and protect your investments - the sky
> isn't
> > >>falling but we're going to have a low ceiling for awhile.  Follow any
> > >>benchmark you want but this is one of the best predictors out there.
> The
> > >>understatement is "automotive and housing", that is a huge chunk of
> the
> > >>economy and both are going through major corrections. Don't believe
> that
> > >>last sentence, it's boilerplate "the world would be safe if it wasn't
> >for
> > >>those damn pilots" bullshit.  Brad
> > >>
> > >>--------------------------------
> > >>
> > >>    Slowing Economy Takes a Toll On FedEx's Quarterly Results
> > >>------------------------------
> > >>
> > >>FedEx Corp. reported Wednesday that its earnings dropped 1.9% in the
> >fiscal
> > >>third quarter, stung by the slowing economy, lower fuel surcharges and
> > >>severe winter weather.
> > >>
> > >>The package-delivery company, which is seen as a bellwether for the
> >overall
> > >>economy, also lowered its outlook for fiscal fourth-quarter earnings,
> > >>tightening both ends of the forecast range by a nickel share. FedEx
> also
> > >>said that, while its long-term goal remains 10% to 15% annual growth
> in
> > >>earnings per share, growth during the coming fiscal year may fall
> short
> > >>because of the sluggish economy and investments that FedEx expects to
> >make
> > >>in its business.
> > >>
> > >>"The U.S. economy grew at a lower rate than we expected in the third
> > >>quarter, and we saw continued adjustments in the automotive and
> housing
> > >>markets," FedEx Chairman, President and Chief Executive Fred Smith
> said
> >in
> > >>the press release. "I believe, however, this represents a healthy
> > >>transition
> > >>for the economy as it phases into a more sustainable growth rate.
> > >>
> > >>"FedEx is in excellent position to take full advantage of global
> > >>economic-growth trends and deliver overall outstanding financial
> results
> >in
> > >>the long run," Mr. Smith said.
> > >>
> > >>The Memphis, Tenn., company earned $420 million, or $1.35 a share, in
> >the
> > >>quarter ended Feb. 28, compared with $428 million, or $1.38 a share, a
> >year
> > >>earlier. Revenue rose 7% to $8.59 billion.
> > >>
> > >>The results, which marked the first profit decline for the delivery
> >giant
> > >>in
> > >>more than three years, were at the high end of the $1.20 to $1.35 a
> >share
> > >>forecast range the company set in December, when it reported
> >second-quarter
> > >>results. Earnings topped analysts' forecasts, while revenue missed
> > >>expectations. Analysts polled by Thomson Financial expected, on
> average,
> > >>earnings of $410.1 million, or $1.33 a share, on revenue of $8.7
> >billion.
> > >>
> > >>FedEx previously said the typical surge in holiday-related freight
> >volumes
> > >>was "a bit delayed," the latest sign that a slowdown starting in the
> >summer
> > >>and fall at many railroads and trucking companies may be spreading to
> > >>package carriers that handle many shipments on the last leg of their
> > >>journey.
> > >>
> > >>FedEx's average daily package volume in its express and ground
> >businesses
> > >>rose 4% in the latest quarter, compared with the year-earlier period,
> > >>helped
> > >>by growth in international express.
> > >>
> > >>Revenue in the express business rose 3% to $5.52 billion, and revenue
> in
> > >>the
> > >>ground business increased 12% to $1.52 billion. FedEx's freight
> revenue
> > >>rose
> > >>30% to $1.1 billion. The Kinko's retail-shipping and office-supply
> > >>business,
> > >>however, continued struggling, with revenue declining 3% to $485
> >million.
> > >>
> > >>FedEx expects to earn between $1.93 and $2.08 a share during the
> current
> > >>quarter. Its prior guidance had been $1.98 to $2.13 a share. Analysts
> > >>polled
> > >>by Thomson Financial expect, on average, for the company to earn $2.03
> a
> > >>share during the quarter.
> > >>
> > >>Excluding second-quarter costs associated with the new pilot labor
> >contract
> > >>at the FedEx Express segment, the company expects to earn between
> $6.70
> >and
> > >>$6.85 a share for the year. Its prior guidance had been $6.60 to $6.90
> a
> > >>share.
> > >>
> > >>*Wall Street Journal*
> > >>
> > >>*3/21/2007*
> > >>__________________________________________________
> > >>Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > >
> > > _________________________________________________________________
> > > 5.5%* 30 year fixed mortgage rate. Good credit refinance. Up to 5 free
> > > quotes - *Terms
> > >
> >
> https://www2.nextag.com/goto.jsp?product=100000035&url=%2fst.jsp&tm=y&search=mortgage_text_links_88_h2a5d&s=4056&p=5117&disc=y&vers=910
> > >
> > > __________________________________________________
> > > Use Rhodes22-list at rhodes22.org, Help? www.rhodes22.org/list
> > >
> > >
> >
> >--
> >View this message in context:
> >http://www.nabble.com/Economics-tf3447654.html#a9634414
> >Sent from the Rhodes 22 mailing list archive at Nabble.com.
> >
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