Here is a great article that discusses the implication of flash orders exploiting the market:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2345
Tuesday, October 27, 2009
Friday, October 16, 2009
Market Speculation: NPR, debt, market drop and a crystal ball
Whilst driving during the day between stops my radio is most usually tuned to public radio, having listened to almost every song on broadcast radio at least twice the new daily content provides the variety and insight lacking across the FM spectrum.
My favorite program is without a doubt, Marketplace, or formally "Marketplace from American Public Media", and Marketplace Money. The host Kai Ryssdal, who's occasional guest will call him "Guy" Ryssdal will carry you to and through a variety of current, in-depth, and thought provoking subject matter.
Having entered the stock market at the most recent and historical bottom I've been paying some attention to market activity. Recent speculation has emerged as to the cause of the recent climb. To loosely quote Kai from today's programme, we've returned to the 1999 market level having made it back to the 10k mark. Just to remind you all, that was the level a decade ago.
While the government has pumped billions into banks who speculated wrong, their banker's knuckles remain white as they clench every given dollar. These banks fiedishly continue to amass substantive "reserves" to cover for the still diseased paper on the books or "toxic assets", to pass any given stress test with a higher mark than a gentleman's C, or to simply eliminate more risk.
So now congress is trying to pry open the record books of the Fed to find out where all that money went and the Fed is resisting. It's a trillion dollar game of chess that only the power giants can play. Meanwhile, unemployment continues to amass inertia expected to crest the 10% mark and companies, experts, even the president continue to blast home the message that this rate will undoubtedly increase. All the while the dollar continues to devalue to limp fiat paper ingrained with Levi's.
Brilliant minds have been evaluating what is really happening. It seems to me the news has just hit in the past week a number of hypothesise regarding the current state of the economy.
Here is my mini summary and simple take on the theories I have heard over the past few days:
1. The next bubble to pop is commercial real estate.
- With the economic downturn causing a reduction in consumer goods/retail etc. businesses are laying off employees, therefore eliminating commercial real estate, think offices, manufacturing, industry etc. When the money flow slows these spaces are not needed, and with a lack of business start-ups and investment / lending the leases/loans etc. are called, not paid, or neglected. Suddenly you have a real estate crisis that would make the residential market crisis look like sparks compared to this potential bonfire.
2. The Government is supporting a weak dollar.
- A weak dollar kills imports but boost exports, because the foreign currency buys more. Improve exports and stimulate domestic production. The only problem is total exports as a percentage of GDP was only 11% in 2006* and not too much more to date. So how can this turn the tide?
3. The Credit Card industry has miles to fall.
-Stress test results claim anywhere from 20-23% of existing credit card balances will undoubtedly go bad, to an estimated tune of $186 Billion**** (visual reference: this would be strip of $1 dollar bills taped end-to-end going around the equator approx 744 times!) and undoubtedly this is a low estimate, I wouldn't be surprised to watch the real bad debt total $300 B!
4. And yet the market continues to climb?
-Today on the radio I heard speculation that corporation/and massive financial entities are most likely running the market puppet strings. After all they're the only ones besides the Government with all our tax/bailout money. So with small trading volume they are able to manipulate and inflate/over value the market. Most likely in an attempt to rally some dollars to pad the mattress. I foresee an extreme market drop, I'm thinking a 5000 DOW close in the next 24 months, the market will teeter toward 11,500 and be sucked vapid, it will fall to the ground a writhing mess of value-less-ness.
So every American with debt has shouldered the cost of an artificially inflated economic "value" based on faith, and faith alone. The question is how long can we continue to believe?
An Exercise in Futility:
Check out some frighting math below, yes it does make a ton of assumptions but sheds some light on the gravity of the situation...
So let's bring this all together in perspective. It was surprisingly hard to find the total 2009 national foreclosure amount in cubic dollars, but I did find some other interesting numbers.
A total of 861,664 families lost their homes to foreclosure last year (2008)**
2009 is expected to cream this number, let's do some math on the 2008 figure:
According to a website $191,370 was the 1rd qrt average of a U.S. mortgage in 2008*** so:
861,664 foreclosures X $191,370 = $164.89 Billion if I counted the digits correctly...and that's history!
So here is my best guess (estimates only) for 2010 if we continue at our decline/default ceterus paribus =
$400 Billion in commercial real estate default (my guess)
$200 Billion in residential real estate default (my guess)
$200 Billion in credit card default (my guess)
That's an estimated 800 Billion in default, we're getting a lot closer to the "T" word ANNUALLY.
*http://www.commerce.gov/02-13-07%20Export%20Fact%20Sheet.pdf
**http://money.cnn.com/2009/01/15/real_estate/millions_in_foreclosure/index.htm
***http://creditfederal.com/article/articles/487/TransUnion%20Reports%20Mortgage%20Loan%20Delinquency%20Rates%20Rise
****http://yglesias.thinkprogress.org/archives/2009/05/looming-credit-card-bust.php
My favorite program is without a doubt, Marketplace, or formally "Marketplace from American Public Media", and Marketplace Money. The host Kai Ryssdal, who's occasional guest will call him "Guy" Ryssdal will carry you to and through a variety of current, in-depth, and thought provoking subject matter.
Having entered the stock market at the most recent and historical bottom I've been paying some attention to market activity. Recent speculation has emerged as to the cause of the recent climb. To loosely quote Kai from today's programme, we've returned to the 1999 market level having made it back to the 10k mark. Just to remind you all, that was the level a decade ago.
While the government has pumped billions into banks who speculated wrong, their banker's knuckles remain white as they clench every given dollar. These banks fiedishly continue to amass substantive "reserves" to cover for the still diseased paper on the books or "toxic assets", to pass any given stress test with a higher mark than a gentleman's C, or to simply eliminate more risk.
So now congress is trying to pry open the record books of the Fed to find out where all that money went and the Fed is resisting. It's a trillion dollar game of chess that only the power giants can play. Meanwhile, unemployment continues to amass inertia expected to crest the 10% mark and companies, experts, even the president continue to blast home the message that this rate will undoubtedly increase. All the while the dollar continues to devalue to limp fiat paper ingrained with Levi's.
Brilliant minds have been evaluating what is really happening. It seems to me the news has just hit in the past week a number of hypothesise regarding the current state of the economy.
Here is my mini summary and simple take on the theories I have heard over the past few days:
1. The next bubble to pop is commercial real estate.
- With the economic downturn causing a reduction in consumer goods/retail etc. businesses are laying off employees, therefore eliminating commercial real estate, think offices, manufacturing, industry etc. When the money flow slows these spaces are not needed, and with a lack of business start-ups and investment / lending the leases/loans etc. are called, not paid, or neglected. Suddenly you have a real estate crisis that would make the residential market crisis look like sparks compared to this potential bonfire.
2. The Government is supporting a weak dollar.
- A weak dollar kills imports but boost exports, because the foreign currency buys more. Improve exports and stimulate domestic production. The only problem is total exports as a percentage of GDP was only 11% in 2006* and not too much more to date. So how can this turn the tide?
3. The Credit Card industry has miles to fall.
-Stress test results claim anywhere from 20-23% of existing credit card balances will undoubtedly go bad, to an estimated tune of $186 Billion**** (visual reference: this would be strip of $1 dollar bills taped end-to-end going around the equator approx 744 times!) and undoubtedly this is a low estimate, I wouldn't be surprised to watch the real bad debt total $300 B!
4. And yet the market continues to climb?
-Today on the radio I heard speculation that corporation/and massive financial entities are most likely running the market puppet strings. After all they're the only ones besides the Government with all our tax/bailout money. So with small trading volume they are able to manipulate and inflate/over value the market. Most likely in an attempt to rally some dollars to pad the mattress. I foresee an extreme market drop, I'm thinking a 5000 DOW close in the next 24 months, the market will teeter toward 11,500 and be sucked vapid, it will fall to the ground a writhing mess of value-less-ness.
So every American with debt has shouldered the cost of an artificially inflated economic "value" based on faith, and faith alone. The question is how long can we continue to believe?
An Exercise in Futility:
Check out some frighting math below, yes it does make a ton of assumptions but sheds some light on the gravity of the situation...
So let's bring this all together in perspective. It was surprisingly hard to find the total 2009 national foreclosure amount in cubic dollars, but I did find some other interesting numbers.
A total of 861,664 families lost their homes to foreclosure last year (2008)**
2009 is expected to cream this number, let's do some math on the 2008 figure:
According to a website $191,370 was the 1rd qrt average of a U.S. mortgage in 2008*** so:
861,664 foreclosures X $191,370 = $164.89 Billion if I counted the digits correctly...and that's history!
So here is my best guess (estimates only) for 2010 if we continue at our decline/default ceterus paribus =
$400 Billion in commercial real estate default (my guess)
$200 Billion in residential real estate default (my guess)
$200 Billion in credit card default (my guess)
That's an estimated 800 Billion in default, we're getting a lot closer to the "T" word ANNUALLY.
*http://www.commerce.gov/02-13-07%20Export%20Fact%20Sheet.pdf
**http://money.cnn.com/2009/01/15/real_estate/millions_in_foreclosure/index.htm
***http://creditfederal.com/article/articles/487/TransUnion%20Reports%20Mortgage%20Loan%20Delinquency%20Rates%20Rise
****http://yglesias.thinkprogress.org/archives/2009/05/looming-credit-card-bust.php
Tuesday, October 13, 2009
The future of Television: Pay by Channel
The ideal way for me to pay for cable TV would be for only the channels I want to watch. My best guess of why this service has not been brought to market most likely has to do with the immense pressure of the existing Telecommunication giants.
I suspect the reason that this "free choice" or rather "open standards" is not offered is that the existing business model for the telecommunication giants relies on our acceptance of TV channel bundles to support exorbitant profits and keep thousands of advertising accounts writing checks. After all the consumer doesn't have that many choices: cable, satellite, or a free digital signal, no more than a half dozen choices.
I was very pleased to find a new company breaking ground in "open standards" to hopefully offer such freedom of choice to allow customers to purchase only specific channels.
Here is the company website: http://www.synctv.com/
I should hope their business model exploits the strength of this offering, never having to pay for another Viagra commercial, "call you doctor for erections lasting more than 4 hours...." wouldn't upset me. I also wouldn't have such an issue with seeing specific pertinent advertisements exact to my interests. For example, should I be watching the Speed channel sometime in the near future, I would have no problem watching an advertisement on the latest longest wearing recycled tires and the tax credit eligible on such a purchase.
The old adage "people resist change" is proven on a daily basis, it is time to innovate, and perhaps advertising in general may become more meaningful and direct. After all Bridgestone may spend a few more dollars on advertising, but knowing their ad reached a niche consumer who chose to purchase the channel would most likely result in greater retail conversion.
While I am certainly no technical expert, the competitive advantage to the old pay for television business model is their ownership of the physical distribution infrastructure. Sync TV seems to bypass this problem by piggybacking the ISP infrastructure, which hardly cuts the cord or gets us away from Telecom giants.
In conclusion what excites me is a more efficient business model, one which fragments a service into only what you want, and what you want to pay for. This moves the consumer dollar away from waste and increases value. Time will tell if the distribution infrastructure will embrace or battle this change.
Should Sync TV become a publically traded company I would certainly pick up some shares speculating more people are willing to pay for only what they want.
I suspect the reason that this "free choice" or rather "open standards" is not offered is that the existing business model for the telecommunication giants relies on our acceptance of TV channel bundles to support exorbitant profits and keep thousands of advertising accounts writing checks. After all the consumer doesn't have that many choices: cable, satellite, or a free digital signal, no more than a half dozen choices.
I was very pleased to find a new company breaking ground in "open standards" to hopefully offer such freedom of choice to allow customers to purchase only specific channels.
Here is the company website: http://www.synctv.com/
I should hope their business model exploits the strength of this offering, never having to pay for another Viagra commercial, "call you doctor for erections lasting more than 4 hours...." wouldn't upset me. I also wouldn't have such an issue with seeing specific pertinent advertisements exact to my interests. For example, should I be watching the Speed channel sometime in the near future, I would have no problem watching an advertisement on the latest longest wearing recycled tires and the tax credit eligible on such a purchase.
The old adage "people resist change" is proven on a daily basis, it is time to innovate, and perhaps advertising in general may become more meaningful and direct. After all Bridgestone may spend a few more dollars on advertising, but knowing their ad reached a niche consumer who chose to purchase the channel would most likely result in greater retail conversion.
While I am certainly no technical expert, the competitive advantage to the old pay for television business model is their ownership of the physical distribution infrastructure. Sync TV seems to bypass this problem by piggybacking the ISP infrastructure, which hardly cuts the cord or gets us away from Telecom giants.
In conclusion what excites me is a more efficient business model, one which fragments a service into only what you want, and what you want to pay for. This moves the consumer dollar away from waste and increases value. Time will tell if the distribution infrastructure will embrace or battle this change.
Should Sync TV become a publically traded company I would certainly pick up some shares speculating more people are willing to pay for only what they want.
Wednesday, January 09, 2008
Monday, November 26, 2007
Tuesday, November 13, 2007
Monday, November 12, 2007
Update
Well quite a bit has happened since last post:
New job
Will be moving back to "the way life should be" by December 10th
Finished up the Mass house projects
And much more.... by know you've probably already scrolled down through the pics. More when I find the time!
New job
Will be moving back to "the way life should be" by December 10th
Finished up the Mass house projects
And much more.... by know you've probably already scrolled down through the pics. More when I find the time!
Tuesday, August 28, 2007
Summer Draws to a Close...
Update from Mass, well I've been heading to Maine almost every weekend, nothing like camping on Chebeauge, jumping off piers at low tide, swimming in the Atlantic, cruising on Linda R, spending time on Eagle Island, and partying with friends!
Just picked up a motorcycle on the cheap, from our master mechanic, put in a battery and she came to life, I fixed the left turn signal, all operations go, I may put this on the road if I can get the title lapse worked out. It is street legal, the Trailway debuted in 1987 and is still manufactured identically today, a mainstay in the Yamaha line-up. Hailed for it's awesome reliability, and offroad capabilties, the fat rear tire keeps you hooked up and grinning. While the bike tops out on the road around 55 mph (the rear sprocket was upgraded by a tooth by Joe) this bike is perhaps the best of both worlds, very easy to ride and fun in the mud and sand. This bike has around 8k miles on it, a scary affair had it not been owned by a 30 year mechanic. So for $300 I'll most likely enjoy it for a bit and sell it for a profit in the near future.
Check out the pics below, the mantown stable is full of tools, chemicals, and fun!
Just picked up a motorcycle on the cheap, from our master mechanic, put in a battery and she came to life, I fixed the left turn signal, all operations go, I may put this on the road if I can get the title lapse worked out. It is street legal, the Trailway debuted in 1987 and is still manufactured identically today, a mainstay in the Yamaha line-up. Hailed for it's awesome reliability, and offroad capabilties, the fat rear tire keeps you hooked up and grinning. While the bike tops out on the road around 55 mph (the rear sprocket was upgraded by a tooth by Joe) this bike is perhaps the best of both worlds, very easy to ride and fun in the mud and sand. This bike has around 8k miles on it, a scary affair had it not been owned by a 30 year mechanic. So for $300 I'll most likely enjoy it for a bit and sell it for a profit in the near future.
Check out the pics below, the mantown stable is full of tools, chemicals, and fun!
Monday, August 13, 2007
Interesting Article
Or perhaps one may deduce such short lifespans may be wrought in the very futility this culture manifests!
http://www.cnn.com/2007/HEALTH/08/13/life.expectancy.ap/index.html?iref=mpstoryview
http://www.cnn.com/2007/HEALTH/08/13/life.expectancy.ap/index.html?iref=mpstoryview
Sunday, August 12, 2007
Weekend Wrap-up
Almost everything on my list was accomplished, I did not get to cleaning the house or working on the interior finish work on the addition room, guess I have to leave something for the week!
The Explorer has been sold, the cash awaits a deposit to the bank, I'll turn in my tags to the RMV tomorrow and will be glad to drop my insurance policy.
The shot of the backyard shows how radical the grape vine has grown, obliterating the view of the neighbors backyard, despite my Greek neighbor's request to trim the bush so it will yield fresh grape leaves, sorry lady, ain't private property a bitch!?
This week will be an interesting one. I will be taking off Wednesday and Thursday for a quick trip to the West coast, for business of course. Hope everyone had a great weekend.
The Explorer has been sold, the cash awaits a deposit to the bank, I'll turn in my tags to the RMV tomorrow and will be glad to drop my insurance policy.
The shot of the backyard shows how radical the grape vine has grown, obliterating the view of the neighbors backyard, despite my Greek neighbor's request to trim the bush so it will yield fresh grape leaves, sorry lady, ain't private property a bitch!?
This week will be an interesting one. I will be taking off Wednesday and Thursday for a quick trip to the West coast, for business of course. Hope everyone had a great weekend.
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