Posts Tagged ‘supply destruction’

Economic Stimulus Package Looks To Be On Tuesday

Monday, February 9th, 2009

The economic package for stimulus looks to be still a work-in-process in the Senate.  People were expecting issues to be banged out so the package could be live on Monday but it is looking like Tuesday will be the day.  We are talking around 827 billion dollars, a number that  is very hard to wrap one’s head around.  Even harder is trying to see how quickly this money will actually make a change to the millions of people that are out of work, underemployed and those on the verge of being laid off.  People are responding to the supply destruction of jobs by trying to save money.  I just don’t get it.  For a lot of the large companies that are laying off people and shuttering manufacturing plants in some areas, how are they going to make money?  In the case of multi-national giants like Intel with billions of dollars of cash on hand, they can sit it out – but only for so long.

What will happen six months to a year from now at earnings time?  The people who are laid off now will not be buying things over the next year if there is no work.  They will be having a hard time paying the mortgages, making rental payments, getting food and warm clothing.   There will be less room for buying iPods – no matter what people say about always finding money for things that they want.

I see it with tax clients who are cutting corners or who have been laid off.  There are tough times still ahead and not having my crystal ball working at 100% I can’t tell you when the bad times will be bottomed out.  For the short term, I expect that the stock market will still pop when the stimulus package comes out but I don’t see anything to indicate that it may maintain any kind of growth. 

I hope I am wrong.  In the meantime, hang onto your cash and make sure that your bills are paid if you can.  Utility companies are cutting power if clients miss a couple of payments in some localities.  Not a good thing in cold or wet climates.

As of now for my Californian friends, no word on any changes to the dispostion of California Tax Refund checks.  Everything is still on hold until the end of February and at that point who knows if it will be checks, direct deposit, warrants or credit to next year’s tax payments.

Be safe and healthy!

 

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale. If you like poker, Heroes (the TV series), comic books, Watchmen, etc, there may be some fast links to get you to what you are looking for.  Have you read my book, “Bad Tax Idea, Good Tax”?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

 Kim Isaac Greenblatt

 

Economic Stimulus Package Looks To Be On Tuesday

Inauguration Day Investment Thoughts and Comments

Tuesday, January 20th, 2009

Here we are, we have made it to Presidential Inauguration Day.  People are excited, the President Obama merchandising is in full swing and there are parties,parties, parties.  How is this going to affect your investments?  For the immediate short term, my guess is that there will be a pop, probably a small one.  I am talking 1-3 percent change in the markets.  It may not last till Friday, depending on how fast the parties end and the President and Congress start enacting their programs.  Look for a tax incentive rebate of about $1000 to come back to each tax paying citizen.  I believe something like that is on the books.

The stock market will continue to react to earnings news in a sideways motion.  I don’t see any super dips in anything because as I harp on all the time to all my regular readers, the downside is already factored in along with supply destruction.  You remember supply destruction, don’t you?  It is where companies stop making goods, shutter factories, shut down pumps and lay off employees because the demand won’t be there for their products or goods in the upcoming months.

But there is profit going on.  Make no mistake about it.  Oil is about $30-35 a barrel and California prices have already jumped to $1.99 from $1.62 in about a month.  An oil refinery has been shuttered in the desert so there is less pumping going on out there.  As an investor, it pays to keep track of things like that so you can filter the noise from the news and decide if there really is a problem in a particular business or industry or are they just going with the flow?

I would caution any investing in stocks – or anything – for the long term unless you are doing your due diligence.  Pundits don’t know what will happen but you can if you take the time to “read the tea leaves” in how companies are actually planning for the future.  The firms with cash and that are solvent will survive.  No matter how people try to short a company, if it is making money, the stock will go up.  Banks and countries will invest in it.

The flipside is true as well.  Beware too much hype.  If everybody is jumping on the boat for a particular stock be aware that the boat might get heavy and sink.  Somebody who got in early when shares were lower will start to sell, take a profit and then the others will start.  You don’t want to be on the end of a sell-off daisy chain.

Best of luck to you, dear readers, our President, Vice President and Congress.  Have a great time celebrating.  Just don’t forget once the celebrations are done, the White House and the country still need to get the cake and ice cream cleaned off of the rug along with the depression stains.

Interested in any of my books?  You may want to make a stop over  here. Please click through to purchase my books and some other interesting items that actually ARE on sale. If you like poker, Heroes (the TV series), comic books, Watchmen, etc, there may be some fast links to get you to what you are looking for.  Have you read my book, “Bad Tax Idea, Good Tax”?   Please order it today.  The tips inside can save you hundreds if not thousands of dollars!

 If you are looking for a day job, part time work, suggestions for saving money or investing, please check out my book listed below.  Part of all the proceeds from the sales of that book  go  to Rett Syndrome research.  One girl is born with Rett Syndrome worldwide every fifteen minutes.   My daughter Arianna has Rett Syndrome and we are working to do all we can to make her life easier and find a cure in her lifetime.  Boys born with the Rett gene generally die at birth.

  Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Kim Isaac Greenblatt

Inauguration Day Investment Thoughts and Comments