some reasons for optimism

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

some reasons for optimism

Postby larryswedroe » Tue Jan 29, 2013 5:40 pm

while the media tends to focus on negative news (if it bleeds it leads) I like to from time to time point out the positives so investors don't hear just one side

http://www.cbsnews.com/8301-505123_162-57566416/economic-tea-leaves-point-toward-steady-recovery/

Note, I don't write the headline, CBS editors do (:-))

as an editorial note I wrote this in December and have been keeping it updated, but they forgot to edit the oil price to say at the start of 2012 it was 100, my apologies

Best wishes
Larry
larryswedroe
 
Posts: 12431
Joined: Thu Feb 22, 2007 8:28 am
Location: St Louis MO

Re: some reasons for optimism

Postby NYBoglehead » Tue Jan 29, 2013 6:17 pm

Larry,

If you don't mind my asking, which 2 states in your view haven't taken the steps to improve their finances?

I am fairly certain Illinois is one, but can think of a few that might be viewed as not having taken steps to improve their finances to take the #2 spot.
NYBoglehead
 
Posts: 1588
Joined: Fri May 25, 2012 9:38 am

Re: some reasons for optimism

Postby larryswedroe » Tue Jan 29, 2013 6:56 pm

Illinois is disaster and I would not touch their bonds with a ten foot pole, let alone investor's assets. Toxic

Cal made strides as they are forced to, but it is in bad shape and though they submitted balanced budget, actually a surplus, they will never get the revenue they forecast from their higher rates because people change behaviors, companies are leaving Cal en masse as are high net worth individuals. The state might be in death spiral crossing tipping point before too long if they don't change behavior, and while my crystal ball is always cloudy, I don't foresee that. I would not touch their bonds either.


Best wishes
LARRY
larryswedroe
 
Posts: 12431
Joined: Thu Feb 22, 2007 8:28 am
Location: St Louis MO

Re: some reasons for optimism

Postby petrico » Tue Jan 29, 2013 7:22 pm

Larry,

Surely, you must have overlooked CT! If it's not one of the worst two, it still can't claim dramatic improvements.

:annoyed

--Pete
User avatar
petrico
 
Posts: 2223
Joined: Sat Apr 07, 2007 4:29 pm

Re: some reasons for optimism

Postby NYBoglehead » Tue Jan 29, 2013 8:04 pm

I thought Cali might be the 2nd state not doing anything. I 100% agree that although they project a surplus the 13.3% top tax bracket and increased sales tax will not yield the revenue they project.

Pete, CT has a ton of problems as well that they do not seem to want to address. I guess they are alright for now but that is after they raised the sales tax and income taxes. Us New Yorkers don't mind so much when our neighbors in other states raise taxes, at least they won't be attracting our residents away!
NYBoglehead
 
Posts: 1588
Joined: Fri May 25, 2012 9:38 am

Re: some reasons for optimism

Postby petrico » Tue Jan 29, 2013 8:25 pm

NY BH,

We're not even doing okay now. Our current year deficit keeps growing faster than we can beg, borrow and steal (literally!) enough cash to keep the lights on. And in each of the next two fiscal years, well over $1B deficits are projected (with a ~$20B budget). All that, and we're still bonding ourselves into oblivion. It's not helpful to advertise it, but I sure as hell wouldn't touch CT bonds right about now.

--Pete
User avatar
petrico
 
Posts: 2223
Joined: Sat Apr 07, 2007 4:29 pm

Re: some reasons for optimism

Postby NYBoglehead » Tue Jan 29, 2013 8:52 pm

^I hear ya Pete. Hopefully the state is able to get it together.

This is what happens when states (NY is in this camp too) become overly reliant on one industry. I know its popular to attack those who make the big bucks in finance these days, but NY and CT wouldn't be able to pay the bills if those companies and individuals sought friendlier pastures.

For years were able to get away with it because the old mantra was "come on, this is New York, companies HAVE to be here." The internet has made is less necessary to operate out of the finance hubs for their day-to-day business.
NYBoglehead
 
Posts: 1588
Joined: Fri May 25, 2012 9:38 am

Re: some reasons for optimism

Postby reggiesimpson » Tue Jan 29, 2013 9:06 pm

NYBoglehead wrote:^I hear ya Pete. Hopefully the state is able to get it together.

This is what happens when states (NY is in this camp too) become overly reliant on one industry. I know its popular to attack those who make the big bucks in finance these days, but NY and CT wouldn't be able to pay the bills if those companies and individuals sought friendlier pastures.

For years were able to get away with it because the old mantra was "come on, this is New York, companies HAVE to be here." The internet has made is less necessary to operate out of the finance hubs for their day-to-day business.

Interesting recent article in WSJ (cant remember but within the past few days) about finance companies leaving NY for the exact reasons you stated.....Internet.
reggiesimpson
 
Posts: 1287
Joined: Mon Dec 19, 2011 12:47 pm

Re: some reasons for optimism

Postby wingnutty » Tue Jan 29, 2013 9:19 pm

Larry,
Thanks for the breath of fresh air. It's kinda nice to hear from people with a positive outlook.

It's nice to live in a state with an actual surplus (mostly because we aren't afraid to responsibly use our natural resources) :beer

2013 for our household looks very optimistic, going to be adding twins, due in a month :shock: ...that might be optimistic from a happiness standpoint, but our Roths and 401K's might not look so favorably at the competition they get from diaper and daycare costs :moneybag
wingnutty
 
Posts: 296
Joined: Tue Feb 20, 2007 7:32 pm
Location: Western Montana

Re: some reasons for optimism

Postby NYBoglehead » Tue Jan 29, 2013 9:20 pm

reggiesimpson wrote:
NYBoglehead wrote:^I hear ya Pete. Hopefully the state is able to get it together.

This is what happens when states (NY is in this camp too) become overly reliant on one industry. I know its popular to attack those who make the big bucks in finance these days, but NY and CT wouldn't be able to pay the bills if those companies and individuals sought friendlier pastures.

For years were able to get away with it because the old mantra was "come on, this is New York, companies HAVE to be here." The internet has made is less necessary to operate out of the finance hubs for their day-to-day business.

Interesting recent article in WSJ (cant remember but within the past few days) about finance companies leaving NY for the exact reasons you stated.....Internet.


Reggie,

I saw that too. It was mentioning that several hedge funds are re-locating or starting up in Palm Beach, FL. I guess they didn't get the memo that they "had" to be in NYC. The tax savings for very high earners (top tax rate in NYS is 8.82%, NYC is another ~3.8ish%) is significant by switching to a state without an income tax.
NYBoglehead
 
Posts: 1588
Joined: Fri May 25, 2012 9:38 am

Re: some reasons for optimism

Postby reggiesimpson » Tue Jan 29, 2013 9:27 pm

Agreed. And Florida is looking real good at this time of the year!
reggiesimpson
 
Posts: 1287
Joined: Mon Dec 19, 2011 12:47 pm

Re: some reasons for optimism

Postby 555 » Tue Jan 29, 2013 9:46 pm

larryswedroe wrote:http://www.cbsnews.com/8301-505123_162-57566416/economic-tea-leaves-point-toward-steady-recovery/

Note, I don't write the headline, CBS editors do (:-))


larryswedroe wrote:...my crystal ball is always cloudy...


It must be the "economic tea leaves".
555
 
Posts: 4287
Joined: Thu Dec 24, 2009 7:21 am

Re: some reasons for optimism

Postby baw703916 » Tue Jan 29, 2013 9:49 pm

Oh, no! Things are looking so good that the Market is sure to stop climbing the "wall of worry". :(
Most of my posts assume no behavioral errors.
User avatar
baw703916
 
Posts: 5816
Joined: Sun Apr 01, 2007 1:10 pm
Location: Northern Virginia

Re: some reasons for optimism

Postby Occupier » Tue Jan 29, 2013 9:53 pm

Nevada is doing a lot better than in the recent past. That is a good indicator because people come here when they have surplus money to donate to our rich casinos. And i don't disagree with the headline. After years of the Fed holding the pedal to the metal, one would expect things to pick up eventually. dave
Occupier
 
Posts: 284
Joined: Wed Feb 01, 2012 10:21 pm

Re: some reasons for optimism

Postby hazlitt777 » Wed Jan 30, 2013 2:00 am

I don't know... "If it bleeds it leads." One could also say, "Optimism sells."

Here is Marc Faber with a different angle.

http://goldsilver.com/video/marc-faber- ... ng-higher/
hazlitt777
 
Posts: 1033
Joined: Fri Aug 12, 2011 4:10 am
Location: Wisconsin

Re: some reasons for optimism

Postby racy » Wed Jan 30, 2013 6:21 am

Here's a link to a ranking of the 'best and worst run states" (its a year old):
http://finance.yahoo.com/news/best-and- ... l?page=all
racy
 
Posts: 108
Joined: Sun Mar 30, 2008 7:38 am
Location: Earth


Return to Investing - Theory, News & General

Who is online

Users browsing this forum: Exabot [Bot], quercus and 37 guests