Today I watched a recording of the CNBC interview with Eric Hovde of Hovde Capital Advisors LLC. (Uncle Sam's Economic Plan) This is another guy that has his head on straight. I will be commenting on it today. But before I do that let's review the markets.
Another wild ride in the markets today. The markets showed a wrestiling of position between the bulls and the bears in the U.S. markets, but the bears won out once again.
Asia:
Nikkei => 7,229.72, -50.43, -0.69%
Hang Seng => 12,033.88, -283.58, -2.30%
Straits Times => 1,528.51, -4.89, -0.32%
Europe:
FTSE => 3,512.09, -113.74, -3.14%
DAX => 3,690.72, -19.35, -0.52%
CAC => 2,554.55, -26.91, -1.04%
U.S.:
Dow => 6,725.30, -37.99, -0.56%
Nasdaq => 1,321.01, -1.84, -0.14%
S&P => 696.33, -4.49, -0.64%
As for me:
AMD => 2.07, +0.06
F => 1.81, -0.07
NG=> 2.60, +0.06
AMD DG => 0.10, +0.01
HRP JZ =>1.50, unchanged
NLH JZ => 0.87, -0.68 (Sold to Close).
QAV QZ => 1.83, +0.06 (Bought to Open @ 1.77, Stop @ 1.59)
Because of the continuing lack of confidence in this administrations policy making, I am betting on the bears with a put position against the Nasdaq ETF, Powershares QQQ Trust (QQQQ, QAV QZ - 26MAY09Put). But as you can tell I am still holding on to most my bull positions unless their stops are met.
My reasons for holding are because of their extremely low price points, some technical indicators, and my inherent personal optimism in for those companies.
Now on to the interview, Uncle Sam's Economic Plan. Eric Hovde made a lot of good points that I want to reiterate. But first some numbers that I was interested to see. Residential real estate loans account for about 40% of total bank assets, commercial real estate loans accounts for about 24%, and business real estate loans accounts for about 20%. Right now it is the residential real estate that is dragging down the sector. It's Hovde's opinion that commercial real estate is not far behind from being added to the problem even while residential real estate continues to slide. He is looking for it to start reversing quickly if residential real estate finally stabilizes and turns around.
Hovde is also more realistic in my opinion and states that the U.S. is "rapidly and subtly falling into a depression." This, he says with the understanding that there really isn't a technical definition of a depression. I agree with Hovde, and I am sure most people do, that the credit bubble was the cause.
Despite the governments attempts, the market has a total lack of confidence in the administrations direction. The continuing opinion is that there are too many general ideas out there with few if any specifics about what is being done now to stimulate the economy. As a result the government appears to be quasi socialist at this time.
Hovde describes some examples as to how the stimulus does not focus enough on long lasting changes. One such example is on the building of a high speed rail. Hovde sees a high speed rail as a good idea, but where it is being planned for is the problem. "Anaheim to Vegas? Are you kidding me?! ... go to Disneyland and then gamble away [in the casinos]?", stated Hovde.
Hovde is not overly critical about all things. He understands extending unemployment benefits, funding police forces, health care and the like. He is mostly stunned by the degree and scope. He is even fine with paying higher taxes. (Hearing that shocked me.)
Things that Hovde disagrees with are the taking away of the home mortgage deduction, not for him but for all the others that need it in this housing recession. As far as the deduction for charitable contributions, Hovde is "infuriated" that it is being reduced at this time where charities are needed most.
Another issue that irritates Hovde is the exploitation of cramdown. He sees people gaming the system. He has actually been approached by individuals that are capable of paying there mortgage wanting to stop paying their mortgage just so that they can get a reduction in mortgage payment.
My opinion, why wasn't Hovde added to the President's cabinet?
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Showing posts with label commentary. Show all posts
Showing posts with label commentary. Show all posts
Tuesday, March 3, 2009
Friday, February 27, 2009
Pres. Obama's Budget Plan - Pros, Cons, My Thoughts
Today, I actually have something to say so the market overview is going to be quick.
Asia
Nikkei => 7,568.42, +110.49, +1.48%
Hang Seng => 12,811.57, -83.37, -0.65%
Straits Times => 1,594.87, -22.57, -1.40%
Europe
FTSE => 3,830.09, -85.55, -2.18%
DAX => 3,843.74, -98.88, -2.51%
CAC => 2,702.48, -42.36, -1.54%
U.S.
Dow => 7,062.93, -119.15, -1.66%
Nasdaq => 1,377.84, -13.63, -0.98%
S&P => 735.09, -17.74, -2.36%
My portfolio:
AMD => $2.18, +0.09
AMD DG => $0.10, unchanged
F => $2.00, +0.02
HRP JZ => $1.50, unchanged
NLH JZ => $1.55, unchanged
NG => $2.86, -0.07
When President Obama revealed the initial steps taken by his economic budget committee, he addressed agriculture, energy, unemployment, benefits, taxes, industrial waste, health care, and education. That is a lot of information at one time. It definitely says a lot, but it also leaves out a lot. The only way to get that information is to actually sit by and read all that information and I am not one to do it. But I will give you my opinion.
The biggest pro that the media is failing to see, that I believe Pres. Obama wanted to get across is that his administration did hit the ground running. As mention above, a lot was addressed in a short a short address. However, that is also one of the biggest cons. Too much at one time.
In addition to there being too much at one time, it also, as has been the norm, failed to go into substantial detail about the positive moves that have already been taken. Sure, he mentioned an increase to the COBRA health care benefit, as well as the unemployment pay benefit, but beyond that Pres. Obama went into generalities about the other positives in his budget plan.
I believe there should have been more detail given about how his administration is promoting the development of the wind and solar energy industry. Pres. Obama failed to elaborate on how his administration is going to create jobs to fulfill the reforms to agriculture, health care, and education that he mentioned. By failing to elaborate on those programs, the word "cut" stood out more as a negative.
The cut to the tax deductions of those making more than $250K stood out as a negative, that all of the media personalities, took as an attack on them. That was all that was needed to get them on the offensive. Today, several media outlets, like CNBC and the New York Post, railed against this budget plan. Because they are the ones that are the means of disseminating the news to the masses, they are going to skew the information in their favor. They are going to focus on all of the possible negatives that could result.
The cut to the health care programs and educational programs that do not work, should have been reworded. Because of the wording, the health care sector took a hit and dragged the market down. A better way to have worded it would have been to say that "the funding of health care subsidies will be redistributed to more effective programs to create jobs for the American people", or that "the funding of failing programs will be added to the budget to accomplish the electronic medical record keeping program." Anything along those lines would have surely reduced the hemorrhage of the sector.
Two things that seem to be the biggest issue are the cutting of taxes and the closing of the loop wholes. Sweeping changes like that without explaining how that helps the economy only adds to the economic decline. The mentality of the "rich" is that if they can't reduce the money they pay in taxes by some sort of means, then where is the incentive not to hoard it? In order for the "rich" to feel comfortable letting go of the cash, tax deductions for doing so are needed. It would have been better to say that "the tax loop wholes that allow businesses to export jobs will be replaced with deductions for creating jobs in the U.S."
The need for the government to spend billions per project to stimulate the economy with a resulting price tag in the trillions is unnecessary. The private sectors are already equipped and innovative enough to do it on their own, they just need the incentive and capital to do it. Have all the project proposals that the senators and representatives want to accomplish put on a government website, where U.S. based businesses can read them and apply with their business plans and bids to do them. Let the incentive for them to do so be government funding, and tax deductions for hiring U.S. citizens and residents. Then lets see if you don't get bipartisanship in congress. I am confident that you will.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Asia
Nikkei => 7,568.42, +110.49, +1.48%
Hang Seng => 12,811.57, -83.37, -0.65%
Straits Times => 1,594.87, -22.57, -1.40%
Europe
FTSE => 3,830.09, -85.55, -2.18%
DAX => 3,843.74, -98.88, -2.51%
CAC => 2,702.48, -42.36, -1.54%
U.S.
Dow => 7,062.93, -119.15, -1.66%
Nasdaq => 1,377.84, -13.63, -0.98%
S&P => 735.09, -17.74, -2.36%
My portfolio:
AMD => $2.18, +0.09
AMD DG => $0.10, unchanged
F => $2.00, +0.02
HRP JZ => $1.50, unchanged
NLH JZ => $1.55, unchanged
NG => $2.86, -0.07
When President Obama revealed the initial steps taken by his economic budget committee, he addressed agriculture, energy, unemployment, benefits, taxes, industrial waste, health care, and education. That is a lot of information at one time. It definitely says a lot, but it also leaves out a lot. The only way to get that information is to actually sit by and read all that information and I am not one to do it. But I will give you my opinion.
The biggest pro that the media is failing to see, that I believe Pres. Obama wanted to get across is that his administration did hit the ground running. As mention above, a lot was addressed in a short a short address. However, that is also one of the biggest cons. Too much at one time.
In addition to there being too much at one time, it also, as has been the norm, failed to go into substantial detail about the positive moves that have already been taken. Sure, he mentioned an increase to the COBRA health care benefit, as well as the unemployment pay benefit, but beyond that Pres. Obama went into generalities about the other positives in his budget plan.
I believe there should have been more detail given about how his administration is promoting the development of the wind and solar energy industry. Pres. Obama failed to elaborate on how his administration is going to create jobs to fulfill the reforms to agriculture, health care, and education that he mentioned. By failing to elaborate on those programs, the word "cut" stood out more as a negative.
The cut to the tax deductions of those making more than $250K stood out as a negative, that all of the media personalities, took as an attack on them. That was all that was needed to get them on the offensive. Today, several media outlets, like CNBC and the New York Post, railed against this budget plan. Because they are the ones that are the means of disseminating the news to the masses, they are going to skew the information in their favor. They are going to focus on all of the possible negatives that could result.
The cut to the health care programs and educational programs that do not work, should have been reworded. Because of the wording, the health care sector took a hit and dragged the market down. A better way to have worded it would have been to say that "the funding of health care subsidies will be redistributed to more effective programs to create jobs for the American people", or that "the funding of failing programs will be added to the budget to accomplish the electronic medical record keeping program." Anything along those lines would have surely reduced the hemorrhage of the sector.
Two things that seem to be the biggest issue are the cutting of taxes and the closing of the loop wholes. Sweeping changes like that without explaining how that helps the economy only adds to the economic decline. The mentality of the "rich" is that if they can't reduce the money they pay in taxes by some sort of means, then where is the incentive not to hoard it? In order for the "rich" to feel comfortable letting go of the cash, tax deductions for doing so are needed. It would have been better to say that "the tax loop wholes that allow businesses to export jobs will be replaced with deductions for creating jobs in the U.S."
The need for the government to spend billions per project to stimulate the economy with a resulting price tag in the trillions is unnecessary. The private sectors are already equipped and innovative enough to do it on their own, they just need the incentive and capital to do it. Have all the project proposals that the senators and representatives want to accomplish put on a government website, where U.S. based businesses can read them and apply with their business plans and bids to do them. Let the incentive for them to do so be government funding, and tax deductions for hiring U.S. citizens and residents. Then lets see if you don't get bipartisanship in congress. I am confident that you will.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Monday, February 23, 2009
It's Only My Opinion.
It's only my opinion, but the state of the current economy is a result of short-sightedness and the inconsistent way that individuals are taught financial math.
The short-sightedness has to do with the issue of instant gratification. This is not the forum for it so I am not going to get into it. However, the method by which people are taught financial math is for this forum. Here I am going to give you my opinion. Take it or leave it, it is only my opinion.
Too often the math for money is too basic. It's goal is to answer the basic of questions. How many pennies, nickels, quarters, and dimes make a dollar? How to calculate sales tax? How to calculate interest? So may think that is enough, but there is a lot that is missed.
People need to understand what to do with this math that they are taught and that goes well beyond the basic information that they are taught. Some teachers try to give projects to their students that will get them to apply what they have learned, and I applaud the effort. But more is needed.
How much more can be done? I have a few ideas but I don't want to get into them right now, but the key one is that financial math courses should be mandatory in high school. By the time a child leaves elementary school they should already know how to add, subtract, multiply, and divide whole numbers, decimals, percents, and fractions. I did and I am from a middle to low income school district, so the school budget is not as relavant to the math department. In middle school (junior high for some) the students should be learning algebra, if they don't know enough to do algebra then they shouldn't be there. Hold them back! In senior high students should be given accounting and practical math courses.
What about advance math courses? If they want to learn calculus then they can take it as an elective. The majority of students are not going to become scientists or engineers no matter how hard you push them. It is not what they want. Maybe a psychological career placement test should be given to place them on the righ high school career path so that they will learn what they need to learn to get the career they want. Hmm, just a thought.
Well that is enough ranting for today. Tomorrow...stock picks and exit strategies according to my opinion.
Monday, the 23rd of February, in the stock market the Dow lost 250.89 points to arrive at 7114.78, a low not seen since 1997. As for the NASDAQ and the S&P, the NASDAQ lost 53.51 points to 1387.72, and the S&P lost 26.72 points to 743.33. Maybe tomorrow will be better. Probably not much, if any, until unemployment figures show a significant slow down.
The short-sightedness has to do with the issue of instant gratification. This is not the forum for it so I am not going to get into it. However, the method by which people are taught financial math is for this forum. Here I am going to give you my opinion. Take it or leave it, it is only my opinion.
Too often the math for money is too basic. It's goal is to answer the basic of questions. How many pennies, nickels, quarters, and dimes make a dollar? How to calculate sales tax? How to calculate interest? So may think that is enough, but there is a lot that is missed.
People need to understand what to do with this math that they are taught and that goes well beyond the basic information that they are taught. Some teachers try to give projects to their students that will get them to apply what they have learned, and I applaud the effort. But more is needed.
How much more can be done? I have a few ideas but I don't want to get into them right now, but the key one is that financial math courses should be mandatory in high school. By the time a child leaves elementary school they should already know how to add, subtract, multiply, and divide whole numbers, decimals, percents, and fractions. I did and I am from a middle to low income school district, so the school budget is not as relavant to the math department. In middle school (junior high for some) the students should be learning algebra, if they don't know enough to do algebra then they shouldn't be there. Hold them back! In senior high students should be given accounting and practical math courses.
What about advance math courses? If they want to learn calculus then they can take it as an elective. The majority of students are not going to become scientists or engineers no matter how hard you push them. It is not what they want. Maybe a psychological career placement test should be given to place them on the righ high school career path so that they will learn what they need to learn to get the career they want. Hmm, just a thought.
Well that is enough ranting for today. Tomorrow...stock picks and exit strategies according to my opinion.
Monday, the 23rd of February, in the stock market the Dow lost 250.89 points to arrive at 7114.78, a low not seen since 1997. As for the NASDAQ and the S&P, the NASDAQ lost 53.51 points to 1387.72, and the S&P lost 26.72 points to 743.33. Maybe tomorrow will be better. Probably not much, if any, until unemployment figures show a significant slow down.
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