Bing Blog

What it feels like now

Confused

We had a run up last week. For the last couple of days, we're running down. There was good news among the bad and people were talking about sunlight for a while. This week, the credit markets are getting nervous again and we're not so sure. Plus, it's drizzling. Doesn't May seem colder than usual? Does this mean there's no more global warming? Or is this just a pause before we all quite literally melt down?

Are we recovering? Are we sliding back? Is the upswing over? Are we just taking a breather? Unemployment is still bad but not growing quite so fast as it was a few months ago. But Wal-Mart's revenue ticked down a little. Does that mean people ran out of money in April? Will it be the same in May? How about June? Worse? Better?

See, now would be the time for those professionals with a totally disinterested position in the markets, if any such there be, to employ their skills to tell us what's going on. Is this all emotional? Are there some metrics we should be employing to get a little bit of visibility into the future? Forget the future, how about right now? Is there an analyst, an economist, a professor, government regulator, seer, dowser or astrologer out there who can actually tell anybody what's going on?

In the meantime, who should we be listening to? Paul Krugman? Nostradamus? Susan Boyle?

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"Calling Doctor Howard, Doctor Fine, Doctor Howard."

"Doctor, are we in competent hands?"

"Why certainly. We're all incompetent."

Nuk, Nuk, Nuk.

How far from the truth is this?

You can't see the tide turn because of the waves.

Rather than get all worked up about trying to predict the direction of the economy, we should focus on the things that we can/do control. We control our spending, savings, mortgage payments, credit cards, etc. Economic data provides us with imperfect information and depending on one's views it may be positive or negative.

Don't pay attention to the forecasts by others it will only prolong our angst.

Paul Krugman. Definetely Paul Krugman.

Hi, Bing,
Susan Boyle is the one to listen to, we need the uplift from her Greater Power given gift!!

Serena 1

We should be listening to ourselves, Bing, not somebody else. This mess is the result of too many people thinking they could get something for nothing, that there was something special about them that made them get the super bonus, or the great mortgage loan, or the platinum credit card. We lied to ourselves about that, and now we're depressed to find out that the Jiminy Cricket on our shoulder was right all along.

It's time to run home to Gepetto and live a quiet happy life together with the people we care about.

The fact is, the economy grows and we benefit when we are engaged in helping other people reach their goals; bubbles happen when we decide it's time that we reach our own goals without caring much what happens to the other guy.

So listen to your own conscience, and try to figure out how you can help someone else. If you stop counting on getting a reward for being good, you may even figure out what it means to be really rich with family and friendship.

If you want some advice, here is some from an engineer (no real knowledge of the topic at hand, but it is advice):

The markets are undergoing something I call undulation. It is kind of like the waves at a beach. The wave comes in, crashes, and goes back out. Individual waves have no effect beyond a few seconds.

The tide is what moves all the waves in the ocean, and the markets are similar. It undulates every day or two, but the longer term effects have to be waited on. I don't know what the longer term trend is right now, but my gut says that we are approaching the bottom of the current cycle.

So, for now, I would say that the markets are going to increase in the long term. If you invest, you may lose money initially but over time you will profit.

If you want profit tomorrow, dice, darts, and a blind monkey can do your picking as well as I can.

Oh, and by all means, listen to Susan Boyle. For diversity, you could try Adam Lambert. If you are looking to be up-lifted, Delerious? is on their farewell tour. Just try not to think about the fact that it is a farewell tour.

Bing..I'm not a professional, but I have studied and PLAYED the markets. One thing I do is NOT LISTEN to the experts, they are as good as weather forecasters.
Markets are governed by greed and fear. Greed motivates people to jump in when the markets rise, fear drives them to jump ship at the slightest turn of events. In my opinion, the markets are no longer governed by fundamentals..this changed during the dot.com era, when everyone and their great grandmother were DAYTRADERS. Hence, I believe right now, people are lining their pockets with profits, then once things drop a bit, it will be time to run it up again.
As for the economy, a short term perspective is not warranted. There are soo many inter-related factors that come into play. The big problem is that americans are too used to sound-bites, they take not the time to dig deeper and get all the facts, if they did, they might understand that one big UNEMPLOYMENT number does not truly reflect the internal dynamics of the labor market. These things will take time, and over the course of time, I believe things will be righted...the key thing is to ensure that the viscious cycle is not allowed to repeat.

If I were a conspiracy theorist, I'd say things might be a lot worse than the government is letting on. I certainly don't think we've hit bottom yet. Far from it. Who knows what's going on? At this point I'd probably trust the dowser over the economist for a correct answer.

Mr. Bing, you’re looking for someone to give you some certainty about the economic outlook. The only people who can do that today are President Obama, his cabinet and the Democrats in Congress.

Nobody can predict the future, though someone who understands the rules of a game might be able to predict its outcome if those rules are followed. However, Obama and team are daily stepping over and ignoring the rules established to govern economic interactions among parties in the U.S. The messages this administration daily send to the markets about its willingness (and ability) to arbitrarily create and enforce new laws that prioritize certain social outcomes over fairness make it difficult to confidently conduct business from day to day in reliance on rules as basic as those governing the enforceability of contracts, let alone to predict macroeconomic trends.

No observer can accurately predict the outcome of anything when the rules governing that outcome are subject to immediate, radical and whimsical change. A market professional with a broad enough understanding of laws and regulations, historical and current trends, economic incentives and human behavior might be able to provide a pretty accurate economic forecast on the basis of that understanding, but only if the relevant question is "what imbalances of supply and demand exist right now?" not "what social change might Team Obama feel like effecting this morning?"

It feels like a return to the actual bottom of the market. I think the market remains between 8k and 8.5k until the end of the year. Job numbers do not seem to be improving, and may see 600k+ jobs lost per month until the end of 09, especially with GM and Chrysler laying off thousands more. Everything depends on a jobs recovery, whether it be stock market, housing or credit.

We had a good run up and a breather was expected. This will be a long ride, both up and down the roller coaster...er stock market. I also suspect there is some profit taking by the professionals to make up for the last few months and to get some sidelined money back in the game. Summer is upon us and the market will be volatile as always. Everyone should plan a vacation now to escape from the last few months, at least for a short while, preferably somewhere where you can't get the news and correspondingly the various talking heads.

Last weekend at the horse track, I employed all my handicapping skills, and mathematically advantageous betting strategy, and lost $40 or so over 10 races. Granted, that's a reasonably low loss % of my total wagers, but still a loss.

My mother-in-law pursued the thoughtful strategy of picking #6 to win and place in every race. For $2 each. And she took home over $100!!

So I suggest giving her a call, and checking on the economy, too!

I say, "Follow the money". It seems that when we give the bankers money, the economy does well, despite the measurements of economic health. When the gov talks about regulation, the banks scream destruction is looming. Simon Johnson, formally of the IMF and current gov adviser, writes an interesting piece in the Atlantic online about , "The Quiet Coup". He says we should; worry about the oligarchs being broken up and take control of profits from our very wealthy nation. Yes, it takes money to set up and run a business and business provides jobs, however, the debate is stifled at that point and fails to address employee contribution to running business. There would be no business without employees, so why concentrate only on the profit needs of half the equation. We are complacent when we accept that business will pay the least amount possible for a worker but scream about what percentage will be paid in taxes. Part of the problem is that salary to profit ratios are to low. We need to ask the questions about profits and why we allow big business to suck all the money out of the economy. The scenario's depicting people who make just about 250K obfuscates where the money went over the last decade and that group in banking that took the gains. Why tax fairly when earnings were so unfair?
I don't know the source but someone in Krugman's blog posted a snippet about how astonishing it was that a few were able to convince so many to vote against their own self interests. (Fox was used to mobilize tea baggers to protest the baggers own tax breaks in order to protect the wealthy and big business tax cuts.)
aarrgghh. How about a column about the Forbeschild's who managed a large hedge fund and lost only a small fraction of their wealth?

Personally, I'm listening to Bruce Springsteen and a band called Marah that sounds quite a bit like the early E-Street band albums.

On the economy, I think that the sense of dread is fading as people accept the situation and get on with their lives.

What's different now is that corporate types realize their situation is no longer so appealing. Stock options are under water, 401Ks have been halved, there are no defined-benefit pensions and the only question on healthcare is what rises faster: the premiums or the deductibles.

I regularly hear from guys who say they wish they worked for the government. Retirement after 30 years with a pension for more than half of your income with full health-care benefits looks pretty good by comparison.

It snowed a little last night,and this morning, not enough to worry about, just enough to make the grass green up faster, the moose and deer are feeding along side the roadways, a sure sign of spring.

I had my morning coffee, read my Bing, checked the stock market, I feel like the barbers cat full of piss and vinager....not bad for a guy my age,,,What's to worry about...2009 will be tough but we all knew that...so buck up and carry on.

I like the Dallas Cowboys and their cheerleaders. Wow!

Playing the devil's advocate; if I owned the organization, I'd realize that I owned two complementing entities.

As the team owner, the box office receives all my scrutiny. I'd plan to keep my revenue up in a down season with engaging beauties leading the cheers.

In a winning season, the ball players will excel in the cheer leading with great performances.

The players and the cheer leaders both compete for box office take.

In reality, winning or losing means little as long the box office flourishes in revenue.

Fans want to see positive statistics leading to the super bowl; but can be placated in a down season with flashing entertainment.

In finance, there are the Madoff's, Boesky's, Levine's, and their cheer leaders! "We are the champions my friends"?

We should listen to Buffet (Jimmy not Warren) and have a brew.

So here's a little news alert I got today from WSJ:

Economists in the latest Wall Street Journal survey see an end to the recession by August, but say it will take years to eat up the slack created by the downturn. Nearly half of the economists said it will take three to four years to close the output gap, while more than a quarter say it will take five to six years. The economists on average expect the unemployment rate to climb to 9.7% by the end of the year, with two million more jobs lost over the next 12 months.

Again with Economist-induced anxiety...I don't know whether to kill myself or go bowling...I'm leaning towards bowling, because that usually involves beer...

Bing, listen to your heart.

It's hard, Bill. There's all this sloshing and thumping going on in there.

The culprit is personal credit.

The solution is cracking down or limiting personal credit.

Credit for businesses to run, for college education, credit for buying a house (downpayment required of 10% to 20%), for buying a car (when needed) and for medical emergencies is warranted.

But think about personal credit beyond those listed above.

Who needs credit usually?

Those who don't have money. And who do we extend credit to? Those that don't have money. And who gets in trouble with credit? Those that don't have money to begin with. So WHY are we extending credit to those that don't have money?!?! Because those companies don't care about everyone else, or their businesses or anything.

I have 1 CC that I use for big purchases so I don't have to carry the cash around and get points on rewards. Otherwise I use my debit card (which is just like cash). I laugh at seeing that I have a 30K line of credit on my CC. WTF do I need a 30K line of credit for?

When I was 18, I had to get my parents to co-sign for a CC with a 500 dollar limit back in the early 90s. Now they are handing out CCs to anyone without even a job or money. I saw a hispanic lady the other day that couldn't speak english and she had literally 20+ CC's in her wallet and was just swiping one that worked.

When you extend CREDIT to anyone it DEVALUES money and hard earned money at that. People who dont have money to begin with don't know how to VALUE their money.

Credit also causes price inflation due to people buying things they cant afford and making more demand for those items, when if that credit wasn't extended in the first place, those prices would be lower (see electronics, housing, etc). If we required those people who ran up the housing market to put 10-20% down, we wouldn't have had this mess were in because the majority couldn't have saved for the down payment, therefore stopping any false demand or price increases of that magnitude.

We have to stop allowing personal credit or put a cap % on what can be extended based on salary. If you don't earn money, then you sure as hell can't get money.

If you want something, like that new LCD TV, then SAVE for it and use your debit card.

Credit..the source of all of our problems. You crack down on that and limit it and we'll get out of this mess a lot sooner. If not, then we'll be right back here again.

I can not tell you who to listen, but definitely I will tell you not to listen to any of the mainstream media darlings (Fox, CNN, MSNCDSND, CNBDBFSR, and all those other letters, worldwide, sorry BBC), any so called "expert" giving his opinion on TV, thats it.

We should listen to anything that is commercial and light, fully loaded with your drink of preference.

Mike,

May we just use the acronym, PCF?

I laughed throughout my 45 minute commute home. Thanks.

SE,

Good to see you weigh in again.

Well Bing, when you no longer hear any sloshing and thumping, then you have an overarching issue that renders all other issues OBE...but at that point you would not care, unless the defibrulator succeeds shocking you back to join the living...

Bing, I know. Sloshing and thumping. But I have read your work enough to know that your heart has the answer. You'll hear it.

What it feels like now: soft and squishy.

What it smells like now: fetid.

What it sounds like now: shrieking.

What it tastes like now: vomitous.

What it looks like now: limited visibility.

Short-term market fluctuations and economic indicators are almost always unpredictable. Longer term (or maybe today, no one knows the timing), we're heading back down. It's going to get much uglier on the credit card and commercial real estate front, in addition to non-sub-prime residential real estate markets. It's already baked in the cake, we just don't know when the oven starts beeping, signaling to us that we're cooked.

This meddling incompetent administration, just like the meddling incompetent administration before it, is bending and breaking rules, making it up as they go along, and thereby making the problems exponentially worse.

You have questions, Bing? So do I.
1. Why aren't criminal proceedings underway against Bernanke and Paulson for threatening BofA's Lewis to absorb debt-laden Merrill Lynch and hide ML's toxicity from the investing public? That is known as fraud, pure and simple.

2. Why aren't Barney Frank and Chris Dodd being pulled before Congress and investigated for their role in perpetuating Fannie Mae and Freddie Mac's continued deterioration? They either were lying or grossly incompetent, and I wouldn't rule out that both may apply. No question they were also greedy for donations from both FM's, but they are politicians, so I suppose that should go without saying.

3. Which industries will this bunch of horse's asses in Washington screw up next?

4. How much further damage will they do by saving sick companies at the expense of good ones, with taxpayers ponying up their future to bankroll these misadventures?

5. Honestly, why would anyone with a pulse who is paying attention stick their hard-earned money in these markets?

The answers to your questions are that no one has the answers, and the most dangerous parties in this whole bungling mess are the fools in Washington and Wall Street who think they do.

You're welcome.

We should be listening to our cities and municipalities. We have tried trickle-down economics in the past and we can see it doesn't work. Intermediaries for money tend to get greedy and take some for themselves. I don't just mean trickle-down in the sense of giving money to the rich to then give to the rest. I mean trickle-down as in, giving money to the federal government, just to have them hand it back to us. Obviously the government takes a little off the top to do the work of handing us back our money, which creates an inefficient supply of money.

We need to change the system so that we are paying into our local government, and let them flow up what they have left after taking care of their needs.

And certainly trickling down the taxpayers' money to them through the banking system is not efficient either. What were our representatives thinking?

Prefan,

As far as No. 2 goes, I am running against Barney Frank for the 4th District of Massachusetts in 2010. I believe the voters will decide if he was right or wrong in doing what he did. Look for my page on facebook, I need all the support I can get.

Does anyone pay attention to Harry Dent? His latest book "The next great depression" seems to have nailed the rebound we are currently experiencing and suggests that demographics will contribute to a larger downturn within the next year or so. Also suggests a period of deflation followed in a couple years by inflation due to the massive increase in money supply lately. Or is he a doomsayer?

He's a doomsayer, John. They're all correct, eventually. Doom is inevitable, even if we all have to wait for the Mayan apocalypse in 2012.

If you want effective prognostication, you should do like the primitives and split open the tribal chieftan and then read his entrails.

Godspeed, Keith Messina - Any opponent of Barney Frank is a friend of mine...

I'm not on Facebook (my wife is addicted to it, it's worse than crack. My own favorite addiction is Bing's blog), but I will find you and I will contribute.

The very best of luck to you.

Is this Barney thing about his politics, or do I detect a bit of latent homophobia?

Bing, I'm kind of glad we're listening to everyone, and nobody. It's a little like portfolio diversification. If there was somebody out there possessing universal acclaim and respect, with a compelling theory about which way we're heading (be it economic doom or ecstasy), then the theory would probably become self-fulfilling.

Remember the Greenspan years, when every utterance of the god-king sent shivers and pants-sh*tting through the markets? He's now been fully revealed as a clueless Ayn Rand reading loon.....and you know, that's kind of nice. We get to work on our own future, without worrying about tea leaves or entrails.

I for one, am very mellow this evening. Spent most of the day breaking in the new rear tire on my bike. Over three hundred miles, via mountain passes, Indian reservations and small communities (communities whose inhabitants make even the most hardened conservatives in this blog look like shameless pinkos and effete 'fellow travelers'). Places where there are two types of camoflage clothing; everyday and good Sunday wear.

It would be immensely entertaining to have one of the blog's Milton Friedman/Adam Smith junkies explain the many benefits of the 'invisible hand' (followed up by a discussion of the wonders of manifest destiny) to a room full of Blackfeet. Of course, they're much more dangerous now....instead of war-parties they have tons of casino money and plenty of angry tribal attorneys.

One item of note; nowhere will you see more American flags and veterans' grave markers than in reservation cemeteries. The tribes know that where you live is more than a place between your ears.

I hope this is sarcasm Mike, because your comment is ridiculous, and very wrongly assuming if it isn't. I am running against Barney Frank because of his politics.

Mike,

If you're addressing me, your sniffer is off-kilter. His political beliefs are not what the country needs right now and he needs to be held accountable for his lack of oversight of the FM's, among other things.

It is appalling that he lectures auto execs and hedge fund managers... as if he knows anything about the challenges of running a real business. He can't even perform his own duties in a competent fashion. And have you ever noticed that when anyone asks him a tough question, he doesn't answer it. Instead, he raises his voice, throws a tantrum most 2 year-olds would be proud of, and either storms off or personally attacks the person asking the question?

He's pathetic.

Dudes, I'm not going to get into a bashing thing about Barney Frank. Just an FYI.

Sorry Bing. I have no real opinion about Barney, and certainly didn't intend to start any sort of bashing...you know me; I try to get along with everybody.

Sometimes you cast the old bass plug out there in the weeds, twitch it a few times, and you hook a big load of tail-walking large-mouth fury. Don't know why I fish....don't like to eat the damn things....maybe I just enjoy their pugnacious attitude.

Sorry, Bing pardner, didn't mean to cross a line there. I don't want no trouble here, this is your town. What say we both jes lay down them thar keypads and back away real slow like, with our hands in the air. On the count of 3...

Even Bing is deluding himself?

Come on, with all the government spending, ridiculous multi-trillion dollar deficits, tax increases coming, yadayadayada...the bottom is years and years away!

Now that 'bailouts' has entered the US vocabulary, it will be employed at every possible event. State budgets, employer union commitments, already Obama/Congress is guaranteeing the car companies' pension and warranty commitments(!). Bailouts=massive future inflation. If consumer debt started the crash, government debt is going to put us in the grave.

Double-digit inflation is coming, higher taxes, monstrous trillion+ deficits, carbon taxation, who knows what else.

Do everything you can, and settle in to your figurative and literal bunkers, folks, it's going to be a nasty ride.

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