Thread: Boghies Account Talk

It’s the Summer Doldrums…

And, its time for the wealthy business tycoons to start adjusting their asset holdings to reflect expected tax code changes…

And, it’s almost time for folks to stop buying Treasuries…

And, finally, it’s almost time for the Treasury to borrow from you ‘G Fund’

Hope AND Change… :toung:

G: 20% - Why, because the ‘F Fund’ is lousy with Gubmint holdings as well
F: 20% - Ain’t got too many choices
C: 24% - Normal conservative allocation
S: 18% - Normal conservative allocation
I: 18% - Normal conservative allocation

LateR

Originally Posted by Boghie

We've come here to pay our last respects…
To a great and glorious state…
Dear and Departed…

Memories…
This is The End, The End I said…

IowaHawk: Fans Flock to Mourn California, 1849-2009

Folks, if you have any sense of humor and/or any feel for sarcasm read the IowaHawk post.

That is AWESOME! Thanks for posting that!

My guess is that tomorrow will be marginal or down.

However, I think our mini correction is over. My reasoning... I will be a contrarian investor to my instincts In reality, if one looks at a YonY chart of the S&P one sees a gradual uptrend since March. Big boom early, then a sustainable glide.

That is something to invest on.

We aren't seeing October, November, and March in the chart. So, I am going to move my 20% G holdings into C/S/I.

Why G?

Because I can bail to the G without affecting my F holdings. You know, that IFT trading limit thang...

It is likely that we are transitioning into the second cyclical bull market of this decade, one that could last longer and go further than most can even imagine. I mean higher percentage wise and length wise than the 2003-2007 bull market. The fact that we have an unknown duration keeps investing exciting. Already the mega trend secular bull market has lasted 33 years with several cyclical bear markets thrown in for fun. The NYSE breadth MCSUM gave a buy signal this week and will be heading to +1200 on its way to its highest level since 2004. Be in to win.

All in man, all in...

G: 0%
F: 0% - was considering keeping at 20%, but don't expect massive dump on me
C: 40%
S: 30%
I: 30%

All in, Don't Tase Me Man, Don't Tase Me...

We are in a sustainable uptrend. Whether it is an bull being digested by a bear, a bull roaring out of a bears maw, or a bull gobblin up a bear it puked out me not know...

What I do know is nada.

But I don't think the market is going to boom with extra tax, regulation, and fear of gubmint five year plans. What we get over the next four years will be gotten in the next few weeks/months.

Yikes,

Take a little off the table and everybody charges right by me...

I've got to use the PgDn key to get to my AutoTracker record now. Great job. No Lilly Padders in front of me either. My only hope for the 'TSP Cup' is for American Stocks to leap into action.

Always bet on America. Me likes my odds...

Anyway, even Nouriel Roubini can't see any Black Swans flying around... He's positively bullish - predicting a misserable 1% GDP growth with a lousy U shaped recovery!!! Maybe BirchTree is Nouriel's pen name

Why are we boomin' in bad times?

Are the doomers over-dooming? The doomers on this board (and on the Internets) speak of high unemployment, expanded money supply, asset deflation, noxious loans, bank takeovers, increasing savings rate, etc..
Are the boomers over-booming? Boomers talk of turning the corner, increased credit flow, increased savings rate, housing recovery, slowing rate of unemployment, etc..

My money is on the following.
Market Correction I:
Bernanke did his job. Raising interest rates shook debtors up a bit and they started paying off their debt. The housing asset bubble had been pierced. A slow deflation was occurring from 2007 through February 2008. A slow deflation of the stock market concurrently occurred. This period was an acceptable and expected market correction. Probably in the 10% - 20% range. Probably even a normal recession. Normal pain for future gain.

Panic I:
In February we American voters forced a choice of two financial illiterates for President on ourselves. One wanted to cut taxes when the Federal Gubmint was running consistent deficits – even in boom times. One wanted to ignore deficit spending and ring up the ships bells to full speed ahead – even in a period of economic correction. I don’t know about you, but I rapidly moved money from equities to protect myself from both goobers. That move, multiplied by millions, created a panic rather than a correction. Everybody was yanking money from investments and even money markets. The babies went out with the Bear Stearns bath water. So, in stepped the Fed and the Treasury. BusHitler and the evil former lackey of Wall Street in concert with the mumbling moron at the Fed did their job with some success. Yup, they strong armed folks. Yup, they goobered some stuff. But, the panic subsided.

Panic II:
Well, full steam ahead wins and starts yakking about taxing the rich, increasing dividends taxes, increasing capital gains tax, and spending lots on green energy and choo choo trains. The fragile recovery goes bust again in November. A deep and grinding bust. But, the new President doesn’t seem to be Pelosi Jr. so America starts to recover. Maybe it is time to cover the deficit with taxes. Maybe he will cut some spending. Maybe we will get a reasonable policy direction with everything in the hands of one party. We may not like the music, but we will all be dancing to the same tune!

Panic III:
Well, full steam ahead starts making noise on selecting a reasonable cabinet. A cabinet that put us at ease. With the earlier panic subsided and a sensible government coming in there was a slow recovery in progress from December 2008 through February 2009. Then the ‘sensible government’ let Pelosi stimulate the economy by extending welfare benefits, funding Woodstock museums, resodding the Capitals park, as well as with other fine examples of gubmint investment – which even included a massive 2% toward our road system. ALL debt spending – but, with the promise of higher taxes to ‘pay’ for it all. And, rammed down unilaterally inside of a week.

So the FED starts dropping money from a massive fleet of helicopters to ease Panic III. Money is hoarded, but starts moving around in mid March. That motion stops again in June when ‘Full Steam Ahead’ starts pushing Cap ‘N Trade and Medicare For Everyone. Every time the President calls for Full Steam Forward an economic reverse is initiated. Well, by mid-July folks start talking over the President in the Speaking Tube. Cap’N Trade and Wonderful Medicare seem dead in the water. Investors switch gears and go ‘Full Speed Ahead’.

Question: Will “Cap’N Trade” regain control of the ship and start moving us backwards again – while pointing forward?

Don’t know, but I’ll ride my dingy in the smooth wake of forward momentum till things get a bit more churny. Captain “Cap’N Trade” hasn’t seemed to learn the pattern. Thus, he is certain to ring those bells again!!!

Anyone who wants a preview of the next few years of Government Service should read...

Rich Harvard, Poor Harvard

California is another fine example of unsustainable spending.

We are watching 'creative finance' and bubble budgets burst worldwide.

Who do you think reigns supreme on bubble spending – running large deficits even in boom years. Yup, us – the Feds!!! Soon, there will be a huge clamor to have Federal spending come in line with reality. The Porkulus ‘Stimulus’ Spending Spree Bill has turned all eyes on Gubmint spending. After Porkulus who will consider paying into government an ‘investment’? Fair or not fair, the game is up…

I will ‘invest’ in California and the Fed as soon as I see a sustainable vehicle to invest in.

By the way, this attitude is very, very different than the mind-set of the 1930’s. In the 20’s it was the government that ran surpluses while the private sector ran deficits based on speculation. The roles are reversed now. How could California run a deficit in 2006 – amazing!!!

For one, I will not 'invest' in California or Treasuries till they balance their budgets with hard choices.

My Gaultish move to punk California for its income tax increase effectively zeroed out California's expected 'gain' and reduced my Federal income tax by almost 10%. I have more space to go if the Fed decide to spend more on my back!

When adjustments are not incrementally made as needed they have to be made in huge chunks. All levels of gubmint refused incremental change. Unions and interest groups precluded adjustments. The rules are changing. The game is up…

I know ‘them’ is ‘us’...
I really don’t like what I see, but I do see it…

*sigh*
California has a singular set of crazy tax laws found in no other State.

Proposition 13 permanently cut and froze property taxes.
All tax increases of any kind must pass with a 2/3 majority (the equivalent of not gonna happen).
Anyone can draft a referendum and put it to the voters to spend $x on anything they want. Oh, and you don't need to state how it's going to be paid for. Of course a lot of these pass.
Between all of the resolutions, expenses just keeping the infrastructure *sort of* working, and the inability to increase revenue caused a budget trap found in No Other State in the Union.

Which is why these days when I hear anyone saying California is a bellweather state I usually burst out laughing.

Could you imagine the U.S. Legislature passing a law which says you can't raises taxes without a 2/3 vote, allows a referendum to pass that permanently cuts and freezes property taxes, and anyone can put out a U.S. wide referendum to decide where tax money is going??? YeahRIGHT. Not Gonna Happen!

SilverBird,

A huge problem in California is the propensity for voters to vote bond issues without paying for them and to vote folks into office that aren't worried about paying for normal expenses - there are always sustainment funds to raid in times of 'emergency'!!!

For example, the highway fund and the education budget...

To resolve the raiding issue the voters used the proposition process to mandate spending to certain areas - highway funding and education funding for example.

As we now know, even the California 'lock boxes' are raided in real 'emergencies'.

On the tax thang:
The 1.2% Property tax is small.
The 10% income tax on a family making $95,000 is huge.
State spending in California grew by $26 Billion in four years (+30%)

You cannot look at the property tax separately from the income tax, the capital gains tax, the dividends tax, the car tax, and all the fees and taxes placed on construction and industry. California is a very high tax state.

Anyway, my guess is that any reasonable entity didn't grow their spending by 7.5% a year immediately following a spending induced budget crisis (the dot.com recession). The proposition process is a joke as well. Folks vote for bonds they arn't willing to fund. Folks vote to teach their own politicians a lesson by 'locking' assets from their grasp. Good governance is not part of the equation.

But, the numbers have a way of adjusting attitudes.

And, the numbers ain't good

The Chicago Way...



Amazing, ain't it