The news on the U.S. economy has seemed like a dogpile of negatives lately. I can’t help but wonder if perception is worse than reality in so many ways, and just maybe the economic tide is turning? There’s still a lot of negative news, but it’s not all bad lately. Even some realtors and tech execs think next year is looking better. And a few more institutions are looking ahead with predictions for a solid 2008 for the market.
I can’t pinpoint it of course but I think the worst (housing, mortgage, and credit issues) are behind us from a macro perspective. Here’s a great quote from an optimistic Bloomberg article that sums it up pretty well:
“A crisis leaves in its wake a wonderful rally cocktail of lower interest rates, lots of liquidity injections, cheaper stocks and a lot of pessimism,” said James Paulsen, 49, who oversees about $200 billion as chief investment strategist at Wells Capital in Minneapolis. “The period of greatest uncertainty or angst often begets the next ride.”
Tomorrow the Fed may cut rates again- my guess is a quarter point. If they hold steady the market won’t like it much however. And I’m not much of a heavy metal guy, but a little gold in the portfolio would have been helpful this year. If things turn positive next year we may be near the top for gold. Investing in the oil/energy sector has helped ease the “pain at the pump,” and at least oil prices have stabilized the past couple weeks. I was long in an energy fund from ‘04 to ‘06 and got out after huge gains… not a very smart move, but it looked like the top at the time. Should have known better… there is no top for oil near-term! Learned from that one and bought a couple of energy stocks to hold long term, which are doing just fine, thank you.
Ten Most Expensive Places to Buy Gas(Table © Yahoo Finance 2007) |
|
| Rank | City |
| 1 | San Francisco |
| 2 | San Jose |
| 3 | San Diego |
| 4 | Sacramento |
| 5 | Los Angeles |
| 6 | New York City |
| 7 | Buffalo |
| 8 | Seattle |
| 9 | Miami |
| 10 | Chicago |
Forbes says San Francisco is the most expensive city in the U.S. to buy gas for your car, exceeding $3.50 a gallon. Ouch… of course those “most expensive places” also have about the highest salaries in the nation. But Houston or Dallas is averaging around $2.90 and St. Louis is about $2.74 this week.
By the way- do you drive an economy car or a hybrid? No hybrid here, but we do have a 45 mpg little Metro that earns its keep after the ‘99 sedan conked out in the garage. I haven’t thought much of flex-fuel vehicles that use the ethanol E-85 blend yet, but I stopped by a Wal-Mart with an E-85 pump and it was .60 cents cheaper than regular unleaded per gallon! I filled up and realized I would have saved almost $12 bucks if I was putting in E-85. I’m not keen on the fact that the U.S. government is subsidizing the production and sale of E-85, but when I think of the alternative and dudes like Chavez trying to milk us for every dime, then I think again. Speaking of milk, the government subsidizes dairy producers as well as host of other agricultural production anyway. Might have to look at flex and alternative fuels in the future.
Hard to tell where the economy will be in 6-12 months, but I’m a sucker for a come-from-behind win. Like Dallas last night… (how about Romo to Witten in the final seconds!). And I cheer on the underdog… which is how the international media has portrayed the dollar over the past year. Somehow I don’t think things are going to be quite as bad as some folks predicted back in June. Personally I made some long moves last week to get ready for the next leg up. Have a great week.
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