Haven’t been posting lately because of family obligations….aging parents take lots of time…
However, I’ve been mulling over the investing scene in very brief spare moments. It’s a process of re-education, after nearly 20 years of “buy and hold.” No more of that. Oh, it’s OK to hold, but it’s time to learn how to take money off the table. Being 20 years OLDER puts some urgency behind this effort.
Trying to understand technical analysis, learning about business cycles, you name it. Then, trying to figure how that all actually fits in during a time when NOTHING is normal!
Of course, most of the official economic numbers are pure fiction, as is the story about how everything is “improving.” Even phony numbers can’t hide the truth, that the long-term picture is not rosy at all. Full time “spinners, ” however, have the story down pat and a lot of Americans are willing to believe it. It’s an easier story to buy into if you’re in financial trouble. HOPE, you know…
Locally, I’ve discovered an economic indicator that might apply to your neighborhood, too.
I’ve noticed a SEVERE drop-off in pizza deliveries! No kidding, before the economic mess hit, the Papa John’s, Dominos, and Pizza Hut drivers were in and out of here constantly, not only for dinner, but for lunch, too. These day…nada. Oh, last week there was one delivery I saw, to a house were new people were moving in. But, as for the regular trade? It’s gone. Kaput. Zip.
If you want to get a view of how officialdom views the economic landscape these days, then take a gander at this stuff from the Council of Foreign Relations’ Center for Geoeconomic Studies. They’ve issued a nifty-keen treatise entitled…(drumroll)
How does the current economic and financial downturn match up to past contractions? As before, this chart book provides a series of answers, plotting current indicators (in red) against the average of all post–World War II recessions (blue). To facilitate comparison, the data are centered on the beginning of the recession (marked by “0”). The dotted lines represent the most severe and the mildest experiences in past cycles. Because the current downturn is frequently compared to the Great Depression, the appendix plots the current recession against the 1930s.
Three things to look for in this update:
• Some economic indicators suggest a rapid return to economic growth. Manufacturing sentiment has breached 50, indicating an expansion, and is now nearly at its post-war recession average.
• The fiscal deterioration is unprecedented, but the stimulus that is in part driving the budget deficit has had some positive impact. The “Cash for Clunkers” program raised auto sales relative to the start of the recession to a normal level from well below its post-war minimum. This has helped clear auto inventories.
• Although financial market spreads have come down from unprecedented levels, they remain well above the average during recessions. And even though the rate of job losses has decreased, unemployment is still increasing. Even in the worst previous post-war recession, unemployment was improving by this point in the cycle. Difficult credit conditions and a challenging labor market could impede a sustainable recovery.
The charts are fascinating…here’s the first one (sorry it’s so small):
• The year-over-year fall in real gross domestic product (GDP) is the worst in the postwar period.
(Recessions start at “0” and baseline numbers indicate the number of months out from the start…in these charts, “12, 16, 10, 24” represents 2009.)
There are loads more fascinating charts which tell the tale and belie any talk of “positives”…
It’s worth a visit to the CFR site, because it has lots of data floating around that’s interesting and discussion of current foreign affairs and global economics. It’s like going into the belly of the beast, but it’s not all kissing up to our current leader, either. So, pick your way around and you can find some interesting nuggets.
I have to wonder if, while these think-tankers are churning out their reports, they’re sending out for pizza as often as they have in the past…
PS: Check out the section of the blogroll titled Economic News/Analysis/Contrarian Blogs on the right which lists various economic blogs and resources if you want an ongoing dose of reality…
Filed under: Current Politics | Tagged: business cycles, buy and hold stock strategy, Center for Geoeconomic Studies (CFR), Council on Foreign Relations, Domino's Pizza, ecnomic indicators, economic numbers, GDP, global economy, Papa John's Pizza, pizza, pizza deliveries, Pizza Hut, technical analysis, the Great Depression, the recession |