Thursday, 10/31, Market WrapUp (Best month in 15 years)

Financial Sense Online ^ | 10/31/2002 | James J. Puplava

[B4Ranch]

10/31/02 -Availability of Raw Land Driving Housing Locally It is articles such as this that make me question whether we, in Nevada, actually have concerns about a housing market bubble. I tend to think that if the builders couldn't find a profitable niche that they would slow down the building because of their own financial worries. Am I wrong?

[LS]

Dave,

First, I understand that we all must be very skeptical of all numbers. I wish some people were half as skeptical of Financial Sense Online as they were of the government.

Second, do you find it the LEAST bit ironic that for 20 years the critics lambasted the automakers because they "only got their profit off the financing." So now that they have basically gotten rid of the financing profit, people are concerned? I find that hilarious.

Third, your comment:

"Tell me Gramp Dave why you think "gold bugs" want the economy to crash? How does gold go up in a deflationary environment? If the economy just tanks, why isn't the next move for gold down? A crash is a deflationary event causing cash to appreciate in value against everything including gold--so gold will go down next if there is a crash, not up." You are absolutely right that in DEFLATION gold is not more valuable. This is the point I have made here for two years: the price of gold, if nothing else, tells us that INFLATION is NOT A PROBLEM!

But let's not confuse deflation with a recession. As we saw in the 1970s, you can have a recession with/because of inflation, right? Right now, the deflation is partly (but only partly) the cause of the economic slows. A growing money supply would help.

Now, as to the growth numbers. Growth is growth, as long as it comes from anything except government it is real. Your question about productivity is important. I have been almost ALONE here as citing productivity #s, which were WAY up early in the year, and have flattened (but are still on an annual average quite high). Also, the first half of the year (I don't know about 3d qtr.) Personal Income was UP.

All these indicators YOU point to---as did I---were disregarded here as "bogus," or "irrelevant" or fabricated. I want consistency. If GDP is the number we all tout, then I want to see "Financial Sense Online" HAPPY when GDP goes up by 3.1%, which is high by anyone's calcuations. If productivity is up, I want to see the people here turning flipflops when we have 6.1%!!! productivity growth in the (either, I forget now) first or second quarter. But did we see that? Noooooo. I heard excuses and explanations as to why THESE numbers were "unreliable." It can't be both ways.

And by the way, everyone here who lambasts the "official" numbers as unreliable was plenty happy to cite those same numbers in the 1980s as "reliable."

[LS]

2.1% is slow growth, but growth. That is about what the slimy Euros do in a good year.

4.1% is EXCELLENT growth, and anywhere but here would be hailed as "fantastic."

[SamAdams76]

I have to agree with you. The politicians wouldn't even be talking about Iraq if our own economy was in good shape. If the rest of the Arab states don't pony up what is expected of them in the way of oil and investments in the US to keep us out (of Iraq), we're going to destablize the region with an invasion. My guess is that it is more like extortion rather than a mugging, but it could be both.

That's such a ridiculous assertation. In case you have been living in a cave the past year or so, there was this little terrorist incident that occurred on 9/11/2001. The United States simply cannot afford any more days like that. And if it is determined (as it has been) that Saddam Hussein's Iraq poses a danger to U.S. security due to their flagrant violations of the 1991 cease-fire arrangment and the fact that they continue to work on weapons of mass destruction that could be used against the U.S., then we have every right in the world to displace that regime.

We have been technically at war with Iraq since the summer of 1990, when they invaded Kuwait. That is why we continue to maintain a presence there as well as "no-fly zones" in the north and south. The war never ended. There was a cease-fire in 1991 based on promises that Iraq has failed to live up to. Now it is time for us to start enforcing them (as we should have done many years ago).

The notion that we are targeting Iraq as blackmail for the other Arab nations to supply us with investment money and oil is outrageous. Sounds like this something right out of the Democratic/Socialist playbook.

[B4Ranch]

Congratulations on "The Entrepreneurial Adventure: A History of Business in the United States". Now about being a rock drummer, well, I switched to Country music (age 13) when the Beatles hit the radio stations here in the US, so I doubt if I've heard any of your talent in that field.

[arete]

We disagree. The Saddam card was held until needed. Now, it is being played. Most Americans didn't even know who OBL was until Bubba needed to blowup some empty tents as a distraction -- and that was only for Monica. You can deny that these things are done, but that doesn't change the reality.

The possibility of a protracted recession or even a depression calls for the big stick of the military -- when everything else fails of course.

Richard W.

[B4Ranch]

Nevada Economists Predict Slow Recovery 

CARSON CITY -- Nevada's Economic Forum estimates that a slowly-improving economy will enable the state to collect nearly $3.9 billion in gambling, sales and other taxes in the coming two fiscal years.

The panel's preliminary projection, which will be updated December second, is supposed to be followed by lawmakers when they complete work on a two-year state budget during their 2003 session.

However, the projection will have to be changed soon after the session starts in February if lawmakers go along with a proposal to immediately raise some taxes to help cover a growing revenue shortfall.

As it stands now, the forum's estimate is based on the existing tax structure and assumes nine percent revenue growth in the coming budget cycle over the current two-year period that ends next June.

The panel relied on reports from economists and budget experts for Governor Kenny Guinn's administration, the Legislature, various state agencies and an outside economist.

I think increasing taxes will definitly keep growth down. Your opinion is?

[arete]

Yes indeed, and the problem not only extends beyond Nevada, but it is also much worse in other states. State and local governments are going to be faced with some very tough choices. Either they have to cut back on services which is probably the right choice; or, they are going to have to raise taxes which will decrease discretionary spending by the consumers. Many folks are going to have to adjust to "living with less" in a society built on the glory of excess.

Richard W.

[LS]

While we were a Lynard Skinnard type band, we had some country influences.

Interesting story: one time (before my real "heyday" as a touring drummer), we were auditioning guitar players. Just a garage band, mind you. This guy shows up with "Buffalo Springfield" stenciled all over his amps and cases and claims to be Ritchie Furay---later of "Poco," and, I think, now a Christian artist. Anyway, this guy didn't look anything LIKE Furay, but played exactly like him. Long story short, he really had us fooled for a while, even to "explaining" his license photo and name (which was different). It says something about the "big lie" method!

[rohry]

"I kept looking for that growth number when reading the report, it was not there. What kind of 'report' is this?"

And your report is posted where?

[Always Right]

I do not write a report. If I did write a report, I would certainly mention the most important economic figure of the day whether it conforms to my agenda or not. The bias in these reports is way too obvious. How can they spin a 3.1% growth so negatively when reading these reports you would think we are on the verge of a depression....

[B4Ranch]

The folks that draw my attention are the technical folks who have been laid off and cannot find another job because of the lack of manufacturing, which is the result of small demand. They are going to have to wait until the entire economy swings back into a solid growth picture. Ouch! I'm sure there will be many lost homes, divorces, and everything else that lack of cash brings to decent people.

[SamAdams76]

Well I agree that we have taken way to long to address the Iraq situation. We should have addressed these issues back in 1991 or 1992, as soon as Iraq began violating the terms of the cease-fire. But the fact remains that we have been at war with Iraq since 1990. This showdown with Iraq is not something that we just dreamed up because it was convenient. Technically, we are still at war with Iraq and are only under a cease-fire. Perhaps had we been more forceful back in 1991, the atrocities of 9/11 might never have occurred.

[rohry]

"I do not write a report."

I don't write a report either, but I post one that I think is pretty accurate. Why don't you post one that you think is accurate instead of sniping from your foxhole? It's easy to sit on the sidelines and make your criticisms, and I welcome them, but if you posted your version of "the facts" then we could see how well your positions stood the test of time. I don't agree with everything that is in these nightly wrap-ups but agree with his perspective (Austrian School).

[Always Right]

It's easy to sit on the sidelines and make your criticisms, and I welcome them, but if you posted your version of "the facts" then we could see how well your positions stood the test of time.

What in the world do you mean by my "version of 'the facts'"?????????? You mean the great Jim Puplava actually did include the 3.1% growth number in his precise little piece of propaganda. I stated a verifiable fact, and you have the nerve to imply that I am making something up as "my version of the facts". What the heck are you talking about? Facts are facts.

[razorback-bert]

I learned the markets from successful men, one who make a large fortune in soybean oil and other commodities, another cornered the Fla bell pepper market in the early 70's (last I saw of him was on a large yacht in the Caribbean with three young women) and the last a agri ecomonist with the USDA.


Their advice about government reports was, they are easier to swallow with a little Tabasco and roux.

Almost all our goverments (federal,state and local) have a spending problem, corporations binged on debt in the '90's and consumers are in the 00's with new car notes, 100-125% mortages and an average household credit card debt of $8,000.


Bankrupts are rising, Moody downgrades bonds daily, Willie Green posts lay-offs everyday, retail sales are down and I could go on.

"Les Bon Temps Roullez" and this ain't them.

[rohry]

"What in the world do you mean by my "version of 'the facts'"?????????? You mean the great Jim Puplava actually did include the 3.1% growth number in his precise little piece of propaganda."

Calm down. You disagree with everything that the WrapUp posits. I merely suggested that you post your own version of reality. Also, as I posted to LS the 3.1% growth number was considered a "disappointment" by CNBC. It may be a big deal to you but not to everyone. Also, HALF of that growth was driven by auto sales which were being pumped up by (unprofitable) 0% financing.

This just in:

CHICAGO (CBS.MW) -- U.S. auto sales in October slumped as double-digit declines from most makers indicated the power of aggressive discounts and loans is waning in the face of economic uncertainty.

That is the most recent news. Post your own report, please, if you are so right about everything...

[arete]

We're lost in the woods without a compass, the sun has just gone down and it is starting to snow.

Worse than that, it looks like Sir Alan is going to do the helicoper drop, bury us in newly printed Fed Res notes and create a whole new bubble without letting the last one clear. Holy Cow, bert, who is running flim flam operation anyway?

Richard W.

[Always Right]

Calm down. You disagree with everything that the WrapUp posits. I merely suggested that you post your own version of reality.

When you state 'your version of the facts' and put "the facts" in quotes, that is implying I lied about something. That may or may not have been what you meant to say, but that what that means.

[rohry]

"When you state 'your version of the facts' and put "the facts" in quotes, that is implying I lied about something. That may or may not have been what you meant to say, but that what that means."

Not what I meant at all, sir. The facts (in quotes) means that you interpret the infinite amount of info out there differently then me. For example, you look at "3.1% growth" as being a fact that must be presented in an opinion piece about the markets. I don't. I think that the government leasing (selling) our gold is important. You don't.

Pretty simple really...