Investment

» axolotl - FED SHOULD CUT IN AUGUST

The last 4 qtrs. average about 2% growth. Core rate inflation reported 0.20 today. Bernanke never listens to me but, there is a lag between Fed action and effect so the Fed should act before it is recognized that the economy is too slow. The foreign central banks raise rates and it HURTS our economy - that is the record so it is another reason for Bernanke to consider action.

-- posted by axolotl

» allancoleman - 2.3% Core Inflation Still Too High

In response to 2.3% Core Inflation Still Too High posted by Kirk:

I agree with Capt. Kirk , axolotI , the bond market traders are doing the Fed's job for them by keeping yields within a narrow range , allowing mortgage rates to stay stable . In the meanwhile , the stock market is telling the Fed that the economy is strong enough for now . Cutting rates at this time would throw gasoline on the fire and the Fed would have trouble putting the inflation genie back in the bottle later .

I think the Fed will hold in here longer than most think . Raising rates puts a damper on growth and lowering rates would cause too much growth allowing inflation to increase . Fed's between a rock and a hard place awaiting more time for more data .

-- posted by allancoleman

» allancoleman - 2.3% Core Inflation Still Too High

In response to 2.3% Core Inflation Still Too High posted by Kirk:

Good morning good Capt. Real estate prices in Hawaii are soft , but holding much better than other locations in the country proving that real estate is truely location - location - location . I would say real estate prices in Hawaii are FLAT . A very good friend of mine who was born and raised in Hawaii and owns a business in Anchorage , Alaska has been on a waiting list for a four bedroom townhouse complex on Oahu for four years now . I met him in the Honolulu airport waiting for my same charter flight back to Alaska . He was on a week trip to visit his ohana in the islands and checked the status of the wait list on his real estate he wants down there . The developer had a buyer drop out of escrow after putting money down AND buying down interest for their loan and paying for additional improvements for that particular unit . My friend stepped into the deal with NO money down and a 30 year mortgage rate at less than 5% and he now owns a unit that he , his wife , and four sons can use in Hawaii while they set up my similar snow bird life style of traveling between Alaska and Hawaii . Plus the beach he surfed as a kid being raised in Hawaii is in his backyard now and he's looking forward to teaching his grandkids how to surf as he did as a kid in the islands .

There are opportunities in real estate for owners that aren't trying to flip and speculate . Real estate in Alaska continues to hold up well too mostly because natural gas development will keep prices up for now . I traveled to Homer last week to find that unusually wet winter and spring weather has slowed the installation of my three culverts on my lots down there so I'll return in June to see how those properties fare . Leave for Fairbanks and North Pole this Thursday to put my for sale sign up my property for sale up there , run ads in the local newspaper once again this summer and to continue development work on my other last parcel up there too .

Chasing life as TomFi says . . Do miss my morning surfing sessons though in Kona .

-- posted by allancoleman

» axolotl - 2.3% Core Inflation Still Too High

In response to 2.3% Core Inflation Still Too High posted by Kirk:
I rely on PIMCO for my FED advice and Bill Gross has not posted a May column - in fact PIMCO has been sort of silent lately. PIMCO has studied the FED actions and noticed that a nominal growth rate of 5.5% is a minimum for the FED. It has to do with the huge debt burden. If the no.s keep coming in below 5.5%, you have to bet on FED action. The economic forecasts that I have seen lately are maybe 2 more weak qtrs. before maybe a close to 3% 4th qtr. - not a boom! One positive is that the SP500 co.s are making a lot of money overseas. Franklin Investments (symbol BEN) was just selected by Barrons as no. 2 behind Goldman Sachs on its list of 500 co.s. and BEN makes about 45% of its profits in foreign markets. I should have bought BEN years ago - I think that it has outperformed Buffett.

-- posted by axolotl

» SteveT - 2.3% Core Inflation Still Too High

In response to 2.3% Core Inflation Still Too High posted by Kirk:

.
I've been looking at something and am not sure what it means but if I am thinking correctly I feel it could be good news on the inflation front. I am looking selectively at past FED rate hikes cycles and measuring from the end of tightening until CPI peaked. The ones I've looked at so far it seems to be around 15 months. This time it is looking like it is only 3 months. This is all preliminary but I think it worth examining closer as time permits.
.

-- posted by SteveT

» axolotl - Bill Gross on Pimco

There is a video of Bill on MSNBC on May 9 - a Vanguard money manager was on too - they both are still predicting FED cuts - the Vanguard individual says late this year or early next year - Gross says watch the employment figures. Predictions are for even higher gasoline prices - the economy needs all the help that it can get here.

-- posted by axolotl

» axolotl - Businessweek says Growth may be understated

The 1.3% economic growth with full employment does not compute well so it may be revised in July when more accurate no.s are used to calculate growth. Also, Businessweek believes that capital spending will be enough to power the economy without a robust housing market. The cost of renting may be in a downward trend after two drops in the amount of increases - it has to be the condos and homes being offered for rent due to poor housing market - if you can't sell it - rent it.

-- posted by axolotl

» success409 - Businessweek says Growth may be understated

In response to Businessweek says Growth may be understated posted by axolotl:

You said, "The cost of renting may be in a downward trend after two drops in the amount of increases - it has to be the condos and homes being offered for rent due to poor housing market - if you can't sell it - rent it."

I hope so as this should reduce inflation and prompt the Fed to cut rates sooner rather than later.

-- posted by success409

» axolotl - BERNANKE SAYS GROWTH REBOUND

A Merril Lynch economist has dropped his rate cut prediction. He says employment and growth and inflation are all above where the FED would cut rates. The economic statistics can change quickly so I still am convinced that a cut or at least a change in bias will happen before year end.

-- posted by axolotl

» axolotl - Pimco is apparently still predicting.....

......a FED cut later this year. Cramer says Gross was predicting a 3% rate so why listen to him? Of course, the same could be said about Cramer. The chances for a rate cut do look dimmer than a few weeks ago.

-- posted by axolotl