The economy’s okay, it just needs some time…

We’ve been working through our ups and downs for a few years now but I think we’re headed the right direction.

As a country, we’ve spent too much and saved too little over time and that made this situation much worse than it might’ve been. Putting our intelligence to use, we as individuals and companies have learned a lesson. Don’t spend more than you have and don’t buy things you can’t afford.

However short-lived the lesson is, it’s good for us in the long-term but really bad for getting the ball rolling. Companies put money away instead of hiring new people. People with jobs are playing it safe while those who don’t watch every dollar. With everyone being safe, there’s not enough steady volume in the stock markets to keep things consistent and this leads to huge swings and volatility any time there’s any bit of financial news. That in and of itself serves as another factor to scare people from investing in any of that garbage.

Eventually, though, a group of people is going to start stepping up. Companies that are profitable and well managed to the very core will look at the landscape and decide they want a bigger piece of the pie. They’ll start hiring and their ongoing success will prove to everyone else that it’s okay to reach for an extra few inches of growth. They’ll begin hiring again which puts money in peoples’ pockets. They’ll start spending and the whole thing starts to move.

My bet is that we’ll start to see this in third quarter earnings and it will really start to cement itself through the end of the year. International hiccups may slow it down by a few months but the general move will be upwards. General economic sentiment will take another 6 months to a year from then to really recover. I’m look for the smaller and more agile companies to drive the first moves.

Employees jumping ship is….good?

More employees jump ship as economy improves (AP)

This is excellent news.  The fact that people have enough confidence to quit their current jobs in search of new ones is incredibly heartening.

As we worked our way out of this recession, companies cut back on everything they possibly could to get the bottom line out of the gutter.  The broad positive earnings across the board released last quarter are proof that they were effective in their efforts.  A big effect of these cuts was a greater workload for those who did not get fired.  Productivity skyrocketed because people with jobs were just happy to have them, and worked extra hard to keep them.

Still, unemployment stayed relatively high since companies felt less need to hire given the greater productivity they were enjoyed.  Fortunately employee confidence has risen and people feel they can find better jobs.  Companies across the board will have to give their employees a break or risk losing them to those who will – and this means hiring more people to take off the load.  Good news for job-seekers and excellent news for the economy.  

Now if we could only get over this European debt thing…

Google Public Data Visualizations

I was thinking to myself this afternoon that it’d be wonderful to have a Google Maps or Google Finance  -style view of economic data.  What have unemployment numbers looked like recently and historically, for instance?  Well, boy was I happy to find that there is exactly such a thing.

Google Public Data provides an interface into some interesting statistics about the US and the world.  Zoomable graphs and animations that show how data changes over time gives you a chance to hone in on the information you need.

While the actual number of datasets available at this point are limited (just 15 at this point), it’s a cool tool that I hope will be expanded to include even more value information.

What’s the market going to do?

I started investing in August of 2008 – right before the crash for those keeping track.  I watched my investment shrink by as much as 40% over the course of those six months, wishing I’d waited a few months to put money into the market.  Since then, I’ve made back those losses and made some decent gains, allowing a bit more calm and focus to step back and think about what’s going on.

“What’s going on” is possibly the most interesting several years of financial history I’ll experience, and it’s a fantastic chance to learn how things work.  I don’t like superstitious technical analysis, rather, I want to understand why things are behaving fundamentally as they do.

Following huge gains that brought the Dow up by 1500 points, there’s a lot of guessing about what will happen next.  Can we sustain such incredible gains?  Will we hit a second pullback or full-blown double-dip?  It’s hard to say but there are a few factors that I think will make a big impact.  I may be entirely wrong in every respect, but I feel it’s important to get things down in writing to force the ideas to be at least halfway thought out before they drive important financial decisions.

When things toppled, the first thing to go were jobs.  Human resources are the most expensive kind a company usually has so it’s a logical choice.  That works in the short term to cut costs, but to maintain some form of growth and sustain revenues, companies needed to find ways to make do with what they had.  Large parts of this came from coaxing greater contributions out of personnel who were just happy to have jobs.  Large parts also came from innovation from a technological and managerial standpoint.

When things are good, it’s easy to stagnate and be satisfied with mediocre performance – “who cares if we lose a few thousand, million, billion dollars here and there?  We’ll be fine.”  When things are rough, that’s when people look to unique ways of doing things in order to keep it all going.  Some fail, sure, but some develop remarkable things, and these innovations trickle down throughout the industry.

We’ve had a major run up in terms of stocks and company profits, but this isn’t making its way into peoples’ pockets yet.  Companies have trimmed their excess fat and aren’t eager to hire a bunch of employees back until they know they need them and know that it’s safe to do so without fear of another tumble.  In the next year or so, companies who have their stuff together will have swelled their ranks again, but it’s not going to happen immediately and it’s certainly not happening right away now.  Those numbers are still perilously close to 10% of the US population out of work…

…and yet the markets are exploding with positive earnings released across the board this quarter.  It would seem that things are poised to retreat for awhile until employment and other fundamental elements of the economy can catch up.  In the meantime, however, I believe that those companies that are still around and have proved themselves in leading the charge upwards will continue to do well.

Watch for a dip sometime in the next month or so.  I’d expect indexes to drop by maybe 5% with the Dow falling below 10,500 or even as low as the 10,000 mark, similar to the Jan.-Feb. dip.  At the same time, though, I’ll be ready to ride it down, expanding investment in those fundamentally strong companies that will pop up even stronger when it’s over.

Under-appreciated stocks I’d focus on are COSI, ENTG, DAVE, QCOM, CSCO, and TINY.  I’d even go so far as to advocate for C.  It’s made it through the roughest part of this ride and will wake up in a big way when that fear and paranoia subside.  In general, I think international markets are worth considering as well.  The rest of the world hasn’t had quite the same run so far that we have – which means there’s a lot of room for growth.

Despite the pain felt by Americans across the board, I’d almost go far as to say this was good for us.   When all is settled and done, we’ll be poised better as individuals and as a country to lead the post-recession global economy.  Just my two cents.

Drive better, save money and help the environment


With auto makers such as General Motors hesitant to adopt fuel efficient designs and paying dearly for it,  it’s time to start stepping up to do something about the problem.  Though gas prices have dropped down to a pretty reasonable level, the memory of prices greater than $4.00 a gallon is still all too sharp.  Here are a few things each of us can do to save money at the pump.  They really add up with just a little bit of effort.

Driving Habits:

  1. Avoid hard breaking
  2. Avoid quick acceleration 
    • Note: 1 and 2 increases travel time by 4% but can decrease consumption by 40% and reduce emissions to 1/5th.
  3. Keep moving without coming to a complete stop
  4. Drive between 5o and 60 mph when possible for most efficient performance
  5. Anticipate stopping and just glide to a stop with less braking – breaking throws away energy
  6. User higher gears if you have a choice
  7. If stopped for more than 30 seconds, turn off the engine rather than idling
  8. Use cruise control for long flat areas, it smooths out acceleration
  9. Do not use cruise control in hilly areas
  10. At speeds <40mph, crack windows instead of AC, (>10%)
  11. At speeds >40mph, close windows
  12. Draft behind larger vehicles – semis can’t slow down quickly so less following distance isn’t as dangerous

Car Maintenance:

  1. Inflate tires properly
  2. Change air filters regularly (clogged filters use 10% more fuel)
  3. Change oil regularly (clean oil is more efficient)
  4. Tighten gas cap (gas evaporates and escapes)

Trip Planning:

  1. Remove unnecessary items from the car
  2. Park in the shade to reduce need for AC and fuel evaporation
  3. Use a block heater in the winter since fuel is more efficient when warmed up
  4. Combine trips and errands
  5. Telecommute when possible
  6. Carpool or use mass transit
  7. When choosing a route, avoid traffic, hills and construction
  8. If you have a choice about when to go out, save driving for non-windy days

How you know when you’ve borrowed too much

Including the recent $700 billion bailout of the financial industry and $100 billion dollors for Fannie and Freddie, the US has now dug deep enough into the hole to necessitate an extra digit on Times Square’s National Debt Clock.  Rolling over to above 10,000,000,000 dollars, over the weekend, the first digit previously used for the $ sign had to be changed to a 1 to mark the 10 trillion dollar threshold. (WKYC)

Now, maybe it’s just me, but how far into debt can we go before people start wondering whether we’re worth the investment.  Just for the sake of context, in 2006 back when the debt was around $8.5 trillion, the US paid $406 Billion in interest on the debt.  Compare that to the roughly $95 billion we spent on education or the $60 billion we spent on transportation in the same year.  What will it take to turn this around?  How long can the country go before we realize the danger we’re in.

Courtesy of

Books, Cars, Plane Tickets and Such…When to Buy

Ok, so I hate to simply post links to things I find on Lifehacker quite this much, but some things are just too good to let go. Everything Finance did an analysis on the cheapest days to shop for certain types of things including books, plane tickets, hotel rooms, cars, clothing….you get the idea. It’s definitely worth checking out, if only because it’s an idea I think we could all wish we’d thought of.

For the Frugal Mind: Cheapest Days to Shop