David Losh

Day trading is a term used for stock market investment done usually from home by an investor who is at home or a one person office. It’s an addictive practice that relies a lot on personal research. I forget about day trading because what I do is all Real Estate related. I would day trade if I weren’t so overly involved in our small business. Small business is the best investment any one cam make today.

Before this new stock market initiation there was only one investment strategy for us to have which would be in all cash Real Estate, small investments less than $100K. Probably there are good deals in emerging markets in that price range, but I don’t think you need to go any further than Miami. Here in Seattle you can go South to Tacoma  to find $100k properties, or less. The rental returns pay higher than any bank.

I spent some time looking at the stock market in the past couple of days, and listened to Cramer a few times. With this new wave of knowledge I started looking more closely at some of the companies that I follow, from afar, through the financial news.

For as much attention as the stock market, and commodities demand there are some real sleeper companies that are traded in the stock market, and some that are coming out with Initial Public Offerings that are pretty advanced.

I don’t have stock tips for you. All I’m saying is that there are places for cash that may have great returns. It’s something I would probably explore, more, and will set up an account this week end, with a financial planner. I don’t think it’s a place I want to go alone.

One of the Fed Presidents said today he would stop Quantitative Easing if he had his way. He finds the results of this practice sketchy, and I agree, it seems to be doing more harm than good.

Low interest rates with low risk means safe harbors for cash. The global markets are awash in cash with to few opportunities. We even have cash flowing into residential Real Estate which pushes up competing bids for the same properties. The first time buyer has very little chance against an all cash investment purchase.

In terms of Real Estate, which has become extremely volatile, it would be one of the last places cash would go, yet here we are. It looks more like a pump, and dump to me, with investors hoping for quick profits by over heating the market place.

Banks have found more money in lending to each other than to the consumer, even though the consumer is paying stupid prices for everything due to low financing costs. Once you take low monthly payments off the table the price of things goes down.

Cash is already leaving commodities, like gold, and oil. The price of oil, and gas are declining which adds to my idea about deflation. The global economy is slowing, in order to get more cash circulating we have to make thing more affordable.

Let me repeat, once you take low monthly payments off the table, prices have to decline. When it’s no longer smart to buy with a credit card, or loan, pricing is all that is left.

There was was no Brie Cheese at Sam’s Club, and QFC has some lower priced substitute brands of Brie rather than the good stuff. I personally want the more expensive good Brie if I’m going to buy it, which I admit isn’t often. There has been a lot of substitution at the super market lately. Lower prices on coupon ads to get you in the door, but I see fewer of the higher priced products in the grocery.

I noticed gas prices are coming down after touching $4 a gallon again. What seems to be lagging is the price of housing, and transportation. Some cars have come down in price, but the auto industry, like Real Estate, is living off that low interest rate payment plan.

The consumer has debt, lot’s of it. There are charts, and graphs all over the place, the debt clock is the one I put up the most. Deflation would help to broaden our national economy so that more people had more money to create more velocity of money in the middle class. Something has to give in order to get more dollars into working people’s hands.

Business can survive, and thrive with a little lower price point. Business can get more market share by attracting consumers with a reasonable set of pricing rather than having to make a killing on each sale. We are a cash rich economy right now that is stuck by the fact that cash is sitting in reserves rather than in working capital.

Next post will be about how the government interference needs to come to a slow end, and taxation, along with regulation of small business needs to be lightened.

A lot has gone on since the sequester came, and went with a whimper. Most notably, for me is that the stock market stayed the same, and Real Estate seems to be hot. Then we got the new unemployment figures this week, and it looks like another shoe is about to drop. Well, it may drop, but it won’t mean anything. We’ve got war with Korea on the horizon.

War with Korea would be very good news. If we could get that Korea thing settled, one way or the other, Asia would be better off. China seems to have come around to that way of thinking also. I have great faith in our trade capacity with Asia. We, especially on the West coast, have a lot to gain.

As far as Europe goes, I don’t really care. All Europe has done is make the US dollar that much more attractive. The emerging markets concern me, but I think they have made some in roads in capital flight that has also improved the US economy in terms of Real Estate.

Real Estate prices in India, China, Russia, and South America have quadrupled. A lot of those cash purchases in California are attributed to foreign investors. If you can sell off your equity in India, China, Russia, or South America, you can invest here for a smaller return, but a safe harbor.

Trade with Asia, and capital flight make me excited about our economy. All we need now is to increase manufacturing, which I think is coming. I think with the low returns available in the financial market there may be less risk aversion in things like building products here. We have everything we need to be a successful exporter of goods.

There was nothing significant about the rounds that the new Treasury Secretary made to different media outlets this week, except to assure us everything is on track to economic stability. It seems to me he was a calming influence on a week of some extremes.

The stock market made new highs, and bank executives were grilled by the Senate, even Allen Greenspan made an appearance this week saying everything was fine in the financial markets. We are of course faced with across the board budget cuts, that Paul Ryan budget proposal, and a lagging stalemate in Congress.

What I think is going on is that the Fed is getting ready to pull back the easy access to cheap money. The too big to fail banks are being asked to over capitalize, and in that process interest rates will go up. Compared to other countries our banking system looks like a safe bet, and the value of our currency is solid.

It seems like everything is on track for a stand alone banking system, free from government help. It would also mean that the pricing of Real Estate will become more realistic. Ultimately it will mean consumer credit will tighten.

I look at it as good news, but we will see.

The impossible was reported today when Paul Ryan announced he thinks there is a middle ground for a budget deal with Barrack Obama. They had a lunch date last week, and this week they are buddies. John Boehner also said last week he personally likes Barrack Obama.

What the heck is going on? We don’t hear a peep from the Democrats about the budget they have, but the Republicans are having a love fest.

OK, from what I read today there is more room for negotiation on MediCare, and the across the board budget cuts opened up the military budget, food programs, MedicAid, and other entitlements. The tax increases on the wealthy also help to balance those cuts with revenue. If what Paul Ryan proposes can be done incrementally, like doing small advances on cuts, piece, by piece we may cut the deficit significantly.

From this article: http://www.cnbc.com/id/100541792

“Ryan’s plan to balance the budget in 10 years is a dramatic change from last
year’s plan, which also envisioned $5 trillion in cuts, but would not have
balanced the budget until 2040.”

So what’s changed? Why so much optimism now? The answer is that we had the sequester take effect, and the stock market rose. The stock market evidently wants a balanced budget. From other reactions a budget plan would make the dollar stronger against other currencies. There is always a debate about if a stronger dollar is a good thing, but in this case, given the state of the global economy, I think we’ll come out ahead.

The sequester starts tomorrow, March 1st, 2013. For all the conversation about dire consequences the Stock Market is at new highs today, we’ll see what happens in the morning.

I think this is a good thing. We need budget cuts, we need ways to increase revenue. Republicans are talking about closing loop holes, and the President is still making noises about tax reform. I say it doesn’t make any difference, we already got tax increases on the wealthy, now we just need the budget cuts.

So let’s take a look at the schedule for Congress in the next few months, and see where they might have time to discuss a budget, budget cuts, and tax code revisions. They have already discussed Benghazi into the ground, and got all the documents they were demanding. They have already had the debate on an Assault Weapons ban, so we can kind of move that to the back burner.

I think every voter, and tax payer should be looking to Congress to clear the floor, and come up with some real economic policy to take us to the end of the decade. There is nothing more important that I can see on the agenda for Congress. If we can clear the budget hurdle we would be an economic power house, once again.

I was watching some Shaun Hannity last night, where he, and Rush Limbaugh are in a tizzy because Obama seems to be supporting the across the board spending cuts, the fiscal cliff.

For four years the Republicans have talked about deficit spending, but now that Obama says, OK, we’ll move ahead with spending cuts there is great concern that he is putting our country in economic jeopardy.

Of course we can cut the spending that Congress has saddled us with, because it is Congress who sets the budget. Congress seems to be having a hard time getting votes on the floor to settle our economy down. The Republicans keep blaming Democrats, but they still don’t take the votes, even though they supposedly have the votes in the House. My guess is that no one in Congress wants the American people to see how corrupt our budgetary process is.

I was appalled that John Kerry stood up in Congress holding up Hurricane Sandy legislation because they wanted more money for fisheries. John Kerry is a Democrat, but I see this on both sides. Republicans add more spending to every bit of legislation the same as the Democrats do.

So let’s say that the across the board spending cuts go into place. Rush Limbaugh was claiming it will mean less police, teachers, and fire fighters. I say there are other places to cut spending that are a lot less obvious than the traditional scare tactics.

Obama has been reelected, with his first State of the Union speech behind him. I was disappointed, especially in the second half. I was expecting more about budget cuts as a way to balance the budget. Those budget cuts never really got addressed. Obama has just set himself up for another budget battle that will do us no good.

I feel Obama has given American business a free pass while he talks about hiring more public service employees. Where are the public sector jobs? Why is American business hiding behind phrases like “uncertainty” in the market place, or “higher taxes only hurt hiring.” Taxes are a cost of doing business, and most American Corporations are having record profits.

Today the stock market was talking about Mergers, and Acquisitions. Last week there were several articles about commercial property REITs. It’s sounding like the 1980s all over again. Big money, big profits, but where are the jobs?

I think Obama needs to get with Republicans this session, and hammer out some tax codes, and get real budget cutting started.

We can talk about the American Dollar in another post, or how the rest of the world is devaluing their currency the way we have ours, but now is the time for us to make a stand for strong economic progress into this new global economy.

We have a site we lease for our cleaning business. The company we lease from has gone onto other ventures, well, namely they started a cleaning company. Our little website has gone without any upgrades for the past five years, and it looks a little worn. It’s at www.SeattleHouseCleaning.com

In the past year I have desperately tried to find a reasonable website development company. Most want $3K to $5K to get started, because I guess they are so effective. We’ve never even gotten to a meeting stage with these high priced outfits.

We do a lot of work with WordPress, and we have about 10 WordPress blog sites, so I kind of know what it takes to get a site like that up, and running. When one of the high priced companies tried to steer me to WordPress, and the related costs, I knew they were less than honest about the work involved.

Now we have hired a couple of lower priced web developers which gives me the reason why some other companies bid the work way up.We have nothing to show for the money we have spent. It seems to me, as one of our clients put it, most of these lower priced people are more interested in getting you sucked in for more fees than doing the work.

So we are really looking this year, and would like any suggestions any one has.