Update
Saturday, June 4, 2011: This past week's stock market drop and the horrendous job report on Friday, June 3, 2011, for the month of May, has others thinking of a "double dip recession. Again. I came across this headline after my original post yesterday: Jobs Report Stokes Fear of Double Dip Recession.
With government cutting back on employment and private sector job growth slowing, many economists now fear the economic recovery has stalled and could be heading for a double-dip recession. Government fiscal and monetary programs are set to expire between now and the end of the year, and traditional engines of economic growth like construction and housing are still in free fall.
Original Posting
Data points that suggest slipping back into recession:
- Pundits noting that $115-equivalent oil in the past has resulted in recessions (oil almost hit $115 a couple weeks ago) [I can't remember the exact number, or the link, but it's out there.]
- Housing prices have officially hit a double dip [that link is easy to find if anyone is interested]
- Prices on high-end bicycles down the street are being slashed [no link; personal observation]
- Productivity/worker hits new record
- Earnings reported 1Q11 higher than ever; more companies than ever participating
- High-end bicycle prices down the street are still over $5,000/bike
i recall a $ 113.40 as a inner day high price for WTI on Nymex.
ReplyDeleteFrom: http://www.mnpera.org/
ReplyDelete"Public pension funds continue to rebound
Nationwide, public pension funds have experienced a remarkable rebound over the last two years. According to the National Association of State Retirement Administrators (NASRA) and the National Council on Teacher Retirement (NCTR), assets held by state and local government retirement systems totaled $2.93 trillion at the end of 2010. That’s a 35 percent increase in value since March 2009, the low point for pension asset levels during the recent recession.
PERA’s experience mirrors the national trend. Our investment return equaled 15.2 percent, after expenses, for Fiscal Year 2010. The national average for penson systems was 13.1 percent. PERA’s unaudited investment return from July 1, 2010, through the end of March was 21 percent. That investment performance, coupled with last year’s sustainability legislation, has resulted in substantial funding improvements for the Association’s pension plans over the last two years."
THIS SEEMS TO GIVE AN IDEA OF WHAT PRUDENT INVESTMENTS COULD RETURN.
The "Great recession" is having a divergent effect on what I call the "cake eaters" versus the "non cake eaters". If you own your house with no mortgage or just an old mortgage you probably have cheap housing. My paid for Minneapolis house went down 12% to 15% from peak but rents are climbing fast here.
I could rant on but my Minneapolis Longfellow neighborhood is probably the best (warm weather at least) bicycling neighborhood in the US. From my garage I can ride to the Fort Snelling floodplains on all paved trails with no hills and very little car traffic for a 25 mile round trip in the middle of the city. The "rails to trails" is very aggressive here.
The high end bicycles are more "bling" than anything. I'm constantly amazed by the number of people who have expensive mountain bikes with knobby tires who never use them off pavement. I have to modify bikes when I buy them by putting on street tread tires and fashioning on basic fenders. The high end bicycles are designed for "extreme sports" activities where they are driven down mountains at very high speed or make very large jumps. They are bought by people who use them on pavement.
I talked to a number of local bicycle shops about my bicycle modification but they seem perplexed that people would want fenders or pavement tires if they only ride on pavement. My bicycles cost $200 to $300 with "pavement use" modifications. There is a good business opportunity if someone wants to build from scratch or factory make.
That said, there is a lot of disposable income out there but also a lot of people are really hurting from unemployment and high fuel prices.
Walmart is hurt by high gasoline prices more than Target which is more "urban".
I just bought a mountain bike for use inside Boston for the most part. The roads are so bad with regard to potholes, etc., the mountain bike works fine, and yes, I bought a $330 bike (on sale from $400 range: brand -- Specialized -- which I knew nothing about but apparently "the" brand for mountain bikes.
ReplyDeleteThe shock absorbers on the front are very, very nice.
In San Antonio, Texas, I have a hybrid or cross-over. A mountain bike-like frame with tires wider than racers and narrower than true mountain bikes. Again, the shock absorbers on the front are very, very nice on rough city pavement.