Friday, July 10, 2009

Double Dip Recession

One of the many fears currently held by more than a few is the proverbial fear of the "Double Dip Recession"; we just had it! Did you notice? This Bull Market, the one that began around March 9, 2009, just had its "correction".


No, the market will not go straight up from here and the economic recovery still has a lot of bumping and grinding to do, but the market will not give you much of a buying opportunity and the economic recovery is already underway. Indeed, we are very near the next market "jumping off point". Yes, based on the seasonal calendar, there is serious risk ahead. October bottoms are historic and the US Congress has much compromising to do in order to produce a budget. There is much talk suggesting the March 9 lows will be tested. There are still many old neighborhoods with lots of homes for sale.

However, the stimulus funds that were passed a long time ago are finally making their way into the economy, the "cash for clunker" car program is bringing traffic to auto dealers and the housing credit will expire in November. Many a buyer will be anxious to buy before this program expires. Many a housing deal will be made by September.

The market is already discounting the great potential harm that would be done by a federal take over of health care and the passage of an onerous cap and trade tax. Even with 60 democratic votes in the Senate, the Obama Health Care plan as proposed during the campaign has no chance. The irony is that the big unions don't want to lose one of their major member benefits. And the cap and trade garbage is pure foolishness. This week, the international community said yes, yes, yes, we need to STOP THE DREADED GLOBAL WARMING, and no, no, no, we not shut-up or put-up.

Folks, Global Warming is the biggest con ever. Power hungry politicians and even power hungry industry leaders are willing to play this magicians trick. The worst part of all is that it allows industry to continue to pollute. Right now, many lives could be saved by tightening the allowed sulfur compound emissions but instead we are focused on reducing carbon dioxide which is other wise know as plant food. The more plant food we produce the bigger the volume of ocean plankton.

Over the next 12 years, China will build 72 giga-watts of nuclear power and not millions or hundreds of millions but billions of consumers will substitute electricity for gasoline in quadrillions of instances. So far, about 6% of the words population has a broadband IP address. Forty-four % of Norwegians and 24% of Americans have IP addresses. Nuclear power plants can not be built fast enough to accommodate the current compounded growth in communications traffic.

The Internet is not in a recession. Advertising revenue growth has slowed but Internet usage is growing at 27% per year. No less than 4 trans-Atlantic communications cables to Africa are works in progress.

The 18.3 year real estate cycle is at its beginning point. For the next 15 years, real estate prices will with a dip about mid-way, soar! If you are ever going to own a deluxe ocean front beach property, you have already missed the deepest discounts but there are still many opportunities. Stocks are a lot like the wagging tail of a dog. Stocks tend to jump around more than real estate but the tail tends to go in the same general direction as the dog.

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