The Economy: The World is not Ending
Today’s 1st Stevenomics article is a touch of an introduction and brief idea of where we are, imo, in this US and World economy. These will be my thoughts. You may or may not agree with them. But, isn’t that what makes it fun As always appreciate those that tweet, facebook and share this!
About 18 months ago, I had predicted that by late 4th of 2010 and 1st of 2011 the economy, jobs etc would start it’s journey toward humming along. While other folks were saying oil was going to $150-$200 per barrel (would have been devastating), my research showed plenty of oil, price rise from over reaction to some world events, speculators etc. Since then, the price has come back to Earth and briefly touched below $90. Even the OPEC powers that be know that oil over $105 makes American consumers, i.e. their customers, decrease their use of petrol.
Aside from oil, we saw the ISM numbers improve, CPI numbers improve, jobs number stabilizing and improving. Heck even my friends in construction were once again working in battle torn Las Vegas. The Private job sector this week blew out expectations then…a funny thing happened on the way to the forum, Friday’s jobs number horrible yet again and more folks on unemployment and the number goes up. This was a surprise for me as well. ( http://money.cnn.com/2011/07/08/news/economy/june_jobs_report_unemployment/index.htm?iid=HP_River ) and of course it brings out the back and forth from our politicians which will ensure gridlock for the next 2 years ( http://money.cnn.com/video/news/2011/07/08/n_political_ping_pong.cnnmoney/?iid=HP_River )
I still think this is just a bump in the road toward a fantastic 2012. Inside the ISM numbers, along with increased manufacturing, is the fact, a ramp up in new equipment being bought. Now why would you buy new equipment if hiring wasn’t to follow. While the world gazes their eyes on the expansion of China and her lack of transparency in anything, The US “IS” improving from just a 2-3 short years ago “this close” economic disaster. I try not to get to caught up in the Fox vs MSNBC political hyperbole. China, as we are slowly finding out, will be the next bubble. In this one world economy, they won’t be able to hide it. This weekend China inflation soared ( http://www.telegraph.co.uk/finance/china-business/8627733/Chinese-inflation-soars-to-6.4pc.html ), add to that they need to create north of 500k jobs per month to sustain growth, among other things, and I suspect a hard landing coming for China very soon. Will it nic us and the world. Sure will. But, looked what happen to the US in 2 short years. According to US department of commerce, personal Savings up for first time in many years. Personal debt is declining. Housing has stabilized and in some states reversing. Heck even good ole Nevada, while still horrible numbers has begun to turn the corner.
So, in short, and for those that say the end is nigh for the good ole USA. Don’t bet against us. In the end, would you rather invest in say, the Middle East or the US? China (partial government ownership in everything) or the US? We may not be perfect, but in the end, this is where money is made, dreams are realized and new ideas and businesses are born.
Hope you enjoy my thoughts. I will be opening up comments to these as well. Dissenting respectful comments will be welcomed!
Next up!: The Talking heads and how do they get it wrong so often
Having correctly called the bottom of the last DOW crash and correctly predicting oil would go back to $80s while at $110, check here for my column and watch me out call and call out the talking heads to help you make money in this market!