Stagflation! This basically means…that no one is buying much and the prices for what is available is going up! Don’t buy that peanut butter and they put it on
sale for two days and then double the price again! Notice those supermarket sale
pricing techniques? Bought some Dryer’s Ice Cream a couple of weeks ago for two
half gallons for $5 bucks. Came back this week and one half gallon was $6.99!
Yep, that’s called Stagflation! Sort of makes one pay attention to all those great
sale prices in the Sunday papers. Those that don’t; may be paying the price!
OK, they nailed four guys for ripping off little old ladies that invested $200
million bucks in Hedge Funds. They will probably wind up getting the White Collar
Michael Milkin public service and on Probation for 8 years! Whoop de do! Then
there is that guy that took all that So Gen money market funds and “over invested”
with a huge loss of maybe Billions! The Pension funds are starting to take a
big hit…because of the supposed “Sub-Prime Crime”…..which is not yielding many
bad cats to throw in jail or even change the rules much. It sort of goes like
this: If your FICO Score is still in tact after this world financial mess…you
are either “Old Money” or people that were stupid enough to pay their bills when
everyone else was borrowing to the hilt. So, if you still have a great FICO
score…now is the time to go after those low interest Credit Cards…and move
out of those 23% APR…to 9%….with no annual fees!
Meanwhile, who is buying Real Estate right now? Has anyone checked around to
see who those people are? Well, maybe you would be surprised to find out that
the English, Germans, French and Chinese are all over our local prime Real Estate
properties. Hey, the Euro and the Reminbi/Yuan are strong against the dollar
and these “Equity Assets” are cheap to them! What they may not know however is
that those good prices maybe be falling a lot farther before they rebound. Many
of the English…don’t even care…they are just looking for a warm environment
for those six weeks Europeans get for vacations.
How about Commercial Real Estate? This is really a funny market! Half of the
major Institutional Investors are running after the “world’s hot commercial
properties”….while the other half are dumping them faster than greased lighting.
The short term investors want no part of possible huge monthly cash drain, when
offices remain empty. Face it, it is anyone’s guess…who can make money during
this huge down turn in Stock Prices and Asset Evaluation!
So, how does this affect our State, our County and our local municipalities?
Well, you probably have heard of CALPERS and a variety of other Public Pension
and Health Funds. They are “scampering around”, looking for Hedge Funds and
Derivatives that bet….that the interest rates will go down….sounds like the
days of Bob Citron doesn’t it? At any rate, we are starting to see failing
Bond Markets…..downgraded Investment tools. Does it matter? Who knows? There
is little doubt that their will be lots of Bond Measures on the November ballot
which “politicos” hope will supplant the ailing Bond Market interest. Hey, maybe
they will have a Bond Measure for “An Expansion Bridge to the Moon!”.
Governor Arnold says: “We are going to have to add another Billion dollars to
our deficit for next year!” That should bring it to $15.5 billion! But you know
how people always err on the side they like. We believe it will be closer to
$20 Billion! Governor Arnold will probably give us: “There is nothing we can
do – as long as the “solons in Sacramento” don’t cut back! There goes the school
lunch program, there goes more fees and license rate hikes! The problem is that
the Federal Government isn’t looking all that charming either. Hey, $100 a barrel
oil, raising food prices, little physical development money to spend and pretty
soon things are not sounding jolly!
OK, what about Public Safety Budgets, Health, Public Utilities or maybe even
the Cost of Government? In a growing economy…nobody cares…they say Spend,
Spend, Spend…we need that infrastructure. In a retreating economy..everyone
cares…because it could be coming out of their budgets and their lunch and
public trough funds! In the short term, we can all be thankful that the Congress
and the Administration will be sending us out our “Short Term Stimulus” cash in
May…so the rumor goes! We can use that money and people that don’t will then
either put it in the bank or invest it. Hey, just keep that money moving…..
it can’t hurt…can it? Well, if a half gallon of Dryer’s goes up to $10 bucks
….that $1200 bucks won’t last that long..will it?
It’s too bad we don’t have Bill Clinton back in the White House, Bush’s policies have been a DISASTER!
I have been seeing a lot of well paying jobs being turning into low paying jobs, or no jobs.
Soon the only people who will have an income will be retired government employees.
Maybe this will be known as the rape of USA by internatioal money changing scum bags.