The Inflation Tiger is Finally Loose

“The annual inflation rate in the US edged up to a 13-year high of 5.4% in September of 2021 from 5.3% in August and above market expectations of 5.3%. Main upward pressure came from cost of shelter (3.2% vs 2.8% in August); food (4.6% vs 3.7%, the highest since December of 2011), namely food at home (4.5% vs 3%); new vehicles (8.7% vs 7.6%); and energy (24.8% vs 25%). On the other hand, prices eased for used cars and trucks (24.4% percent vs 31.9%); transportation services (4.4% vs 4.6%); apparel (3.4% vs 4.2%); and medical care services (0.9% vs 1%). On a monthly basis, consumer prices advanced 0.4%, above forecasts of 0.3%, with the indexes for food and shelter contributing more than half of the monthly increase. The core index which excludes food and energy went up 0.2% mom and 4% yoy, the same as in August and in line with forecasts. source: U.S. Bureau of Labor Statistics”

Wanted: Partner/Associate MHP Investing!

Are you interested in partnering with someone to learn the business of investing and operating mobile home parks?  Here’s what I’m looking for in a partner:

• Live in Northern California
• Real estate investment experience
• Sales experience
• Employed and can invest 15+ hours a week
• Enjoy prospecting and working on the phone
• Willing to drive several hours on a moment’s notice to visit a property
• Good communication and computer skills (Word, Excel, etc…)

I’ll share equity with someone who can find deals and help sell existing properties, etc…  If you are interested, please contact me via this blog post.

Bend MHP For Sale, Red Bluff, California!

PROPERTY DESCRIPTION AND RENTAL INFORMATION. For sale by owner. Clean 44 space park on the Sacramento River with some of the mobile homes with river views. Low turnover, permanent RV tenants. Owner will share 10 years of P&Ls.  Reasonable rental rates of $410 for the MH sites and $330-$340 for the sites with permanent RV’s. No rent control in the unincorporated area of Red Bluff in Tehama County. All of the mobile home sites have direct bill electric and some of the RV sites. The park also charges $16 per month for water and $5.79 per month for trash. One rental mobile home included in the sale. Park road down to the river where a former owner used to rent tent sites. Small office building and laundry room. County boat launch on the other side of the river from the park.  To learn more, click on the link below!  Please contact me if you’d like some additional information about this property!

Can You Afford a 10 Year Bear Market?

“What matters for investors is that any decline is likely to be unusually rapid and occur as a result of P/E compression, resulting from policy risks not weak GDP,” he wrote in a research report. “Investors need a bit more acrophobia, as our best model points to a bear market and lost decade for stocks.”

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Nearing Retirement, Stock Market Got You Worried?

If you are 55+ with the majority of your retirement savings invested in the stocks, you should be a bit worried!  The recent rumblings (volatility) mean something.  Perhaps there’s “more room to run” but does it really matter if you don’t sell until the market declines 10, 20, 30% or more?   Sell now, lock in those profits and sleep at night!

Economist fears a 30 percent stock market correction with consumer spending ‘maxed out’

• Steen Jakobsen, from Saxo Bank, cited several factors including growing credit loans, a widening fiscal deficit in the U.S., doubts over infrastructure spending plans and a potential trade war.
• “I think overall we have been pricing in for Goldilocks and we are closer to Frankenstein to be honest,” he said.
• He added that in a scenario of a potential sudden economic recession, he sees a possible market correction of between 25 and 30 percent.

• Stock markets could see a hefty fall in the coming months due to a slew of trends that point to a downturn in the global economy, one economist told CNBC.

  Steen Jakobsen, the often-bearish chief economist at Danish investment house Saxo Bank, cited several factors including growing credit loans, a widening fiscal deficit in the U.S., doubts over infrastructure spending plans and a potential trade war.

  “All the data we’ve seen over the last few weeks has basically been that the consumer is maxed out, we’ve seen that in credit card loans as well, so I think the consumer is done spending the money,” he told CNBC Tuesday.

   New data Tuesday showed that U.S. consumer confidence declined in March, falling below expectations and breaking a two month streak of gains.

  “I think overall we have been pricing in for Goldilocks and we are closer to Frankenstein to be honest,” he said. He added that in a scenario of a potential sudden economic recession, he sees a possible market correction of between 25 and 30 percent.

  Jakobsen highlighted a “Goldilocks” scenario that he feels traders are mistakenly pricing in to markets, where fresh economic data are either not too hot or not too cold. Overall, the global economy is currently experiencing lower levels of unemployment and higher growth. Looking at 2018 in particular, many analysts hoped for strong global growth on the back of higher inflation and higher investment, but according to Jakobsen, these drivers “aren’t actually materializing.” Instead, Jakobsen made a reference to the novel “Frankenstein,” arguing that the economy had been skewed by central bankers, who have injected trillions of dollars into the global economy to boost growth and investment.

  Trade tensions

  The first quarter of 2018 “started at more than 5 percent expected GDP (gross domestic product); we are now significantly less than 2 percent for the (first quarter) expected, so I don’t really see things happening in the growth area,” Jacobsen added.

  “We’ve been at 2 percent exactly since the financial crisis, I don’t think we’re going to deviate from that,” he said.

  The Organization for Economic Cooperation and Development (OECD) estimated earlier this month a 3.9 percent growth rate for the 20 most developed economies in 2018 and 2019. However, the group warned that the trade tensions in early March could threaten their best economic outlook in seven years. Fears over a potential global trade war have become a “catalyst” for lower economic prospects, Jakobsen said, but there are other factors clouding economic growth.

  “We have slow growth, no inflation input coming through, the infrastructure spending is not in the spending bill in the U.S. anymore, so a lot of the factors strategists go on this program to talk about again and again aren’t actually materializing,” he argued.

  In the U.S., plans to reform the tax system and increase infrastructure spending led investors to expect higher market returns and higher global growth. Though the White House has approved changes to the tax system, some analysts are worried over its impact on the country’s fiscal position. And the infrastructure bill is stuck in U.S. Congress, raising doubts whether the trillion-dollar plan will ever see the light of day.

  More room to run?

  On Tuesday, global markets traded higher as fears over a global trade war eased. Some analysts have a different view to Jakobsen’s, believing that there is further room for market gains throughout 2018.

  Karen Ward, chief market strategist at J.P. Morgan Asset Management said in an email that firms are more positive about the future and have been investing in plants and machinery.

  “Last year was not only the strongest pace of business investment growth in the G-7; it was also the first year expansion was synchronized across all seven countries,” she said, adding that this is set to boost productivity.

  “It might well be productivity that surprises markets, giving the economic recovery and the equity rally room to run,” she said.

  

  Silvia Amaro

  Digital Reporter, CNBC.com

 

Federal Reserve should embrace more pain for good of the economy (by David J. Campbell)

Despite the stock market being up, unemployment being down, and inflation remaining low, significant risks of a financial meltdown remain. When Jerome Powell takes over the chairmanship of the Federal Reserve next February, he should make three moves to ward off future financial collapses like the one consumers and investors suffered in 2008.

He should push the Fed to:

 Be more discerning before interfering in the economy, and, when doing so, limit the dosage and duration;

Sell off quickly the bond investments it already has made to stimulate the economy; and

Let bankruptcy be a normal byproduct of the business cycle.

He needs to do this swiftly as the financial system has entered its own “opioid crisis” as the economy and investors have become addicted to the Fed’s extraordinary pain-relieving measures.

At first glance, it looks like Powell is inheriting a fairly sunny economic outlook. But along with stock prices, investor complacency has soared. Risk has not been allowed to play its proper role in helping the economy and asset markets to function normally.

For example, when the technology stock bubble burst in 2001, triggering a recession, the Fed moved aggressively by reducing the rate at which banks can lend to each other to just 1 percent. The recession turned out to be brief and mild, but the policy’s aftermath was dramatic and long-lasting. Investors and consumers went on a buying binge. Stock and real estate prices ballooned.

Similarly in 2008, as financial liquidity dried up and assets collapsed during the financial crisis, the Fed again purchased bonds to prop up both asset prices and the economy, driving interest rates to an unprecedented zero percent. In fact, its balance sheet more than quintupled to $4.5 trillion in the past decade. As a result, stock and real estate prices have soared once again.

A little short-term financial “pain” — let interest rates rise and markets determine prices — is needed to get things back into balance. This quarter, the Fed began slowly reducing assets. At this rate, however, it would take 6½ years to reduce its balance sheet to its pre-financial-crisis level. The Fed must move faster.

Who pays the price for all of this intervention? You do.

Savers earn near to zero percent on bank deposits. Insurance companies have been squeezed as the Fed drove down interest rates. Pension plans are being chronically underfunded and the pension deficit is increasing: according to a Willis Towers Watson report, 410 of the Fortune 1,000 companies held an average of just $80 for every $100 of promised benefits.

The stabilization of the economy made people confident that regulatory actions could bring better control over the markets, prevent bad outcomes and smooth out normal economic cycles. It’s this abiding faith that has led to the bailout of banks that made bad loans and the bailout of a failing auto industry.

It also has produced a dangerous level of hubris on the part of public officials and those in the private sector who now feel insulated from any bad investment decisions. Removing the real risk of bankruptcy creates investor complacency and the willingness to buy at any price.

This isn’t to knock intervention altogether. When it’s well-applied, measures to protect citizens from systemic risks are vital to a well-functioning economy and society. The Fed was absolutely correct to step in strongly in 2008 but as far back as four years ago, it was clear that the economy was strong enough to function satisfactorily without the persistent application of the Fed’s medicine. Yet the Fed kept on prescribing it and is only now considering reducing the dosage.

We must ask ourselves if we haven’t miscalculated the costs and overestimated the benefits of our interference. To paraphrase Gordon Gekko, Michael Douglas’ character in the 1987 movie “Wall Street,” sometimes pain is good.

David J. Campbell is a principal of the San Francisco wealth management firm BOS, which has about $4.3 billion in assets under management as of Oct. 31.

Link to original article:  https://www.sfchronicle.com/opinion/openforum/article/Federal-Reserve-should-inflict-more-pain-on-the-12425484.php?utm_campaign=email-premium&utm_source=CMS%20Sharing%20Button&utm_medium=social

Tech Workers Targeted for HUGE Tax Increases by Republicans, Democrats and Middle Class Americans!

This article below was published in the San Francisco Chronicle on Sunday, November 11th, 2017.   Trump, both political parties and middle class Americans are “up to here” with folks working in tech and they are coming after your money!  The current tax legislation working its way through Congress is targeted at you, especially if you live in California, New York and Texas!

It was telling that former White House adviser Steve Bannon dismissed the allegations of sexual harassment against GOP Senate candidate Roy Moore of Alabama because they came from the “Bezos-Amazon Washington Post.”

Blaming a tech company taps into a growing populist — and bipartisan — resentment against what Bannon describes as “the lords of Silicon Valley.” While people may love their iPhones, and the public’s opinion of Google and Facebook remains high, those on the losing end of the nation’s growing income gap are finding a new villain to blame: the people making big money in tech.

In Bannon’s opinion, those people aren’t the disrupters they portray themselves as, but part of the political establishment — along with “lobbyists, consultants, and corporatists and globalist elites” who are ruining the country for the working class.

The valley is getting heat from the left, too, particularly over its slow reaction to Russia’s use of social media outlets to meddle in last year’s elections. California Sen. Dianne Feinstein scolded Facebook, Google and Twitter representatives for the “vague answers” she heard at a recent Senate Intelligence Committee meeting.

“I must say, I don’t think you get it,” Feinstein told tech company lawyers. (The CEOs declined to attend.) “You bear this responsibility. You created these platforms, and they are being misused. And you have to be the ones to do something about it — or we will.”

Signs of tech resentment that have been boiling for a few years in San Francisco are now popping up elsewhere.

They can be seen in concerns about gentrification in downtown San Jose, as Google moves to develop up to 8 million square feet of office space to accommodate 20,000 of its well-paid workers.

And they can be seen in concerns about self-driving vehicles, which are being developed by Tesla and Google as well as traditional auto manufacturers. There is a growing fear that the more than 3.2 million truck and delivery drivers — people earning solid middle-income wages — will be replaced by those vehicles. Union organizers feel their fear.

“Everywhere I go I hear that the robot car apocalypse is coming,” said Doug Bloch, political director for the Teamsters Joint Council 7, which represents 100,000 workers in Northern California and Nevada.“Why are we acting like it’s inevitable? Why can’t we actually come up with a different vision of the future?”

But tech leaders are starting to listen, to hear that resentment and fear. And there are small signs they’re changing their ways.

Rep. Ro Khanna, D-Fremont, who represents part of Silicon Valley, is dubious about Bannon’s sincerity when it comes to anti-tech populism, considering that Bannon used to work for Wall Street titan Goldman-Sachs and the Hong Kong online gaming company IGE.

But after spending part of his first term touring Rust Belt communities in Ohio and Kentucky to learn more about how to help all sectors of the economy, Khanna heard the same anti-tech sentiment expressed there and understands it.

While people in struggling communities “associate tech with prosperity and the future, what they’re frustrated with it is that they don’t have any access to it,” Khanna said. “Their communities have been hard hit economically. Factories have been offshored. They’re seeing all of this technological progress, and newly minted millionaires and billionaires, and their sense is, ‘How is that working for us?’ ”

Khanna is working on ideas to entice companies to — in the language of the valley — “network” their prosperity to less prosperous areas.

As a sign tech companies are listening, he cited Google CEO Sundar Pichai’s announcement last month of $1 billion in grants to nonprofits to help people adjust to the rapidly evolving workplace. For example, $10 million of that will go to Goodwill, which created the Goodwill Digital Career Accelerator to help people in various parts of the country upgrade their digital skills.

Bloch, the Teamsters organizer, said tech companies seem to be getting the message that they need to share some of the largesse. The Teamsters are working on a deal with San Francisco tech company Marble to test a delivery robot that could be made and operated by union workers.

A theme of the annual Friends of O’Reilly tech gathering held this month in San Francisco — hosted by 4-decade-old technology publisher and conference host O’Reilly Media — was that Silicon Valley needs to share its prosperity with the rest of the country. Some say that growing realization came last year when, for the first time, the top five U.S. companies in market capitalization were from the tech world (Apple, Alphabet, Microsoft, Amazon and Facebook).

“There is a fear that the blowback is very serious, and this is something that tech has not faced before — a hostile public,” said Peter Leyden, founder of Reinvent, a media company that focuses on how technology can improve the world. Over the past six months, Leyden said, he’s seen a “growing sense of responsibility” in tech.

“This has only recently dawned on the tech community that they’re the adults in the room. They’re the people on the top of the heap,” said Leyden, who has spent two decades working to connect the tech and political worlds “They’re no longer the upstarts disrupting stuff.”

Leyden said he is “convinced that these tech titans are not like the Wall

Fed Vexed About Inflation, Really?

Is the Fed stumped about inflation or is this just their story?  This is an easy and insightful read about monetary policy, inflation, deflation (which might seem like a good thing but it’s not) and the mystery of the missing inflation.   What do you think, long live adjustable rate mortgages or time to lock-in those fixed rates?

Read full article

Fed Hikes to Deflate Stocks, Housing?

The feeble fed is flat on the floor (say that 5 time fast!)  Seriously, Yellen and the Feds are stepping in to quell the run-up in housing and stock prices.  Their distrust of Trump is so great that even in the face of anemic growth forecasts for Q1, they are raising interest rates.  What’s a little hike in interest rates mean to you as a stock investor?  Here’s an excerpt from the article:

Janet Yellen thinks she can normalize interest rates with impunity during this current hiking cycle. If that is indeed the case, look for a flat yield curve and recession by year-end to wipe out 50 percent of equity prices for the third time in the past seventeen years if the Fed follows through on plans to hike three times in 2017.

My friends, get out of this market, ASAP!  Here’s a link to the full article:  http://www.cnbc.com/2017/03/08/fed-rates-hikes-will-crush-the-markets.html

 

 

Pigs Waiting to Be Slaughtered?

How many times are you going to hear me or someone else tell you to SELL ALL YOUR STOCKT today and get out of the market before you take action?  The article below is from ValueWalk, here’s a link to the original:  http://www.valuewalk.com/2017/02/pigs-waiting-get-slaughtered/

We discuss the Stock Market Bubble is this video and provide some metrics to help the Federal Reserves Members spot the Bubble, since they seem to be having difficulty spotting the Bubble Market. The Fed should call an emergency meeting tomorrow, and hike rates the 50 basis points they were supposed to do last year, but passed on.

This Federal Reserve is the most clueless Federal Reserve in a long line of incompetent Federal Reserves. They have followed in the exact footsteps of the 2007/08 Financial Crisis Playbook, it is as if The Federal Reserve is trying to Destabilize the entire Global Financial System on purpose.

We are definitely witnessing the euphoric phase of the stock market bubble, because investors couldn`t be more blindly bullish than they are right now. This is the equivalent to the shoe shine story regarding the Market Psychology right before the 1929 Market Crash, clueless ebullience is off the charts right now in Financial Markets!

Do you spot the Bubble now Janet Yellen? I will give you my person number, and I will be happy to walk you through it, so that you understand the magnitude of why this is the biggest stock market bubble of all time.