The Boom and Bust Cycle continues... even if it is muted by the Fed

WEB 2.0 ... more like BUBBLE 2.0

Keep drinking the kool-aid people. Yes, its true your blog has fifty widgets and gets a bunch of hits from people like Eric and Steve, but the big dungeons and dragons party that is your blog is a bubble... wait, is that me.??

Your favorite tech bubble is back again, round two, valleywag talks about being a jerk about it.

This is just the beginning of this bubble as you hear of once famous unprofitable social networking names struggle to make money and finally either get out before its too late, or come crashing down. As I'm sure you have read in many places, 2007 is the year the no profit party stops, and many of these "social networking" (there I said it) sites take a swim in the swirling waters of the toilet. I just don't see the problem in a facebook or a myspace charging $1.99 a month for the service it offers. After all, server storage space isn't cheap on that scale, and some peopl who have 500 pictures uploaded on Facebook, are generating cost in energy, storage and maintenance that they are not paying for.


HOUSING BUBBLE

This has driven the boom in America and softened the technology and stock market bust from 2000. Americans are moving from one boom to the next as the last boom busts. Sounds like a stupid tongue twister, but people are questioning what is the next boom that will sustain the economy through the next five year period. Enthusiastic people who are joyfully watching the housing market crash can be found at the following links:

http://thehousingbubbleblog.com/?p=470

http://www.salon.com/tech/htww/2006/04/12/flippers/index.html

Mainly, the housing market has been the result of low interest rates read cheap debt, speculation, and the frenzy characterized by any bubble. However, those that believe that a continued cheap debt situation will exist as productivity growth is slowing and inflationary pressures still exist in the economy are in for a hangover. Fix your rate if you can and hold on as the equity in your home falls. Good news, your income might go up, bad news, that vacation condo/investment you bought in "that new luxurious area" in Florida, just next to the garbage dump that is being turned into the golf course, is out of funding, and the garbage dump is doing better than ever, they might even put in an incinerator.


COMMODITY AND ENERGY BUBBLE

Metals, oils and other commodities have been coming off their highs now only after a long five year boom cycle. The prices for copper, zinc, nickel, aluminum, oil, corn, everything has been going through the roof. I will focus on metals, because as some of you know, I am in the copper industry.

Most importantly, a sudden idea or perhaps you think myth of peak oil and a shrinking of other resources has driven up the price of commodities. In oil and metals, a surging India and China, particularly China, has sent people into resource scarcity mode. Mostly, people get scared into behavioral finance and drive up the prices of natural resources. Do you want Vladimir Putin on the gas spiget...or some other dire prediction.

Even though some of these problems may turn real, markets cool and in terms of commodities, which can fluctuate tremendously, the highs and the lows can create some serious ulcers. Although there will continue to be a sustained higher price in commodities due to increased demand, a great deal of supply continues to come on in some of these metals. Oil is an entirely different discussion. However, one thing is for sure, prices are inflated and corrections are always made, just ask the partners of Amaranth.

In conclusion, as we move from boom to bust and back again, I leave you with the words of a smart Jew, Bernard M. Baruch with the following quote:

"I made my money by selling too soon."

Ameritube LLC

Just in case some of you have been wondering what I've been doing the past couple years, I am currently running an copper tubing facility in Texas that produces tubing for the heat exchanger industry. You can read about the company here:

http://www.ameritube.net

I make the coffee, type dictated letters, and forward phone calls.

Enron: They're not Crooks...

I've had this blog for about five months and the one thing I can tell you is that no one reads this thing. But the one long diatribe I had about Enron I got comments on, and from some securities lawyer who thought he was right. Although, I had to concede some point Enron is not wholly innocent, I still maintain that technically Skilling and Lay did nothing explicitly wrong. Further, Fastow's "crimes" have been over exaggerated and his prison term was excessive.

Either way, don't take it from me, read what Malcolm Gladwell has to say in the New Yorker.

http://www.newyorker.com/fact/content/articles/070108fa_fact

I heard a rumor that he may be writing a book on the subject. more will follow if you comment.

Great Article on Bangitout.com, How to get drunk on a kosher budget

This is a funny article that was on Bang it Out. I think Mad Dog 20/20 is disgusting and made specifically for drunks, the fact that it is made by a kosher wine company is hilarious...
http://www.bangitout.com/articles/viewarticle.php?a=1714

You can also get more information about this wonderful beverage at :

http://www.bumwine.com/md2020.html

Since everyone is on the Apple Bandwagon...

So Apple came out with the IPhone... finally. It was supposed to be amazing and be a camera, music player, phone, video player, email, pda, and it is. It's pretty sweet...I could give you links but you've probably read about it everywhere. Here are some links anyway...and one picture.

http://www.engadget.com/2007/01/09/
the-apple-iphone/

The second thing is they came out with was Apple TV, which will enable to you to beam anything off your IPod, music, video, TV, onto any actual television.

Last, they changed their name, its not Apple Computer anymore, its just Apple Inc. Everyone is saying that this means they are now a consumer electronics company...well interesting announcements.

Now onto the people who were skeptical about Apple's other products or the IPhone in particular, because the only thing anyone has been writing about it seems is how great Apple is, check it out in these links.

http://techeffect.thedealblogs.com/2007/01/is_the_itunes_walled_garden_on.php

http://www.engadget.com/2007/01/09/the-iphone-is-not-a-smartphone/

The question is who is going to break their two-year jail sentence with their carrier to switch to Cingular and pay $600 for a phone. Not business users, who are the ones that may need a portable 8GB of space and exchange compatibilty (but the IPhone does not support Exchange). But Apple is only after 1% and I hope they get it...Would've been nice if it actually was a smart phone.

Comprehensive college student survey

The most connected guy in Silicone Valley, Auren Hoffman apparently, has a really great blog, he recently posted a link to this survey of high school students and college freshman. The survey is extremely comprehensive and worth a look.

Check it out here.

Otherwise, I downloaded the file (which is a powerpoint) and you can get it here.

Study:
The American Freshman: National Norms for Fall 2005
By Sylvia Hurtado & John H. Pryor
(the 2006 study should come out next month)

Oil takes a tumble

Some good news on Oil is always nice...

http://biz.yahoo.com/ap/070109/oil_prices.html?.v=10

Lower temperatures has increased inventories of crude oil and lower usage of heating oil in the Northeast dropped oil futures trading by over $2.00 a barrel in afternoon trading yesterday...

The economy is undergoing a correction to inflation as base metals and commodities go down. This will lead to some lower prices and may stimulate growth again, either that, or soften the impending disaster of the housing market.

Operation Screwball, too bad I missed this one.

"OPERATION SCREWBALL"
IN MONSEY! In Conjunction with
&

LOUD, LEGAL, LAWFUL PROTEST AGAINST NETUREI KARTA'S ATTENDANCE AT HOLOCAUST DENIERS CONFERENCE

WHEN: SUNDAY JANUARY 7 1 P.M.
WHERE: NETUREI KARTA HEADQUARTERS
102 SADDLE RIVER ROAD MONSEY, NEW YORK - CLICK HERE FOR DIRECTIONS

SHALOM TV!

SHALOM TV! As reported on the Daily Show and Bangitout.com

http://www.bangitout.com/videos/viewvideo.php?a=445

The Chevy Volt... GM Engineering at its best.

The all-new Chevy Volt Concept, now if GM got something like this into production, it could change the company....

You can get a good greeny write-up here...

and more pictures...but heres another teaser...

I'm gonna start posting about anything and everything

No one is reading this anyway, so I am just going to start posting about politics, music, art, my life, religion, pretty much anything that's on my mind....

Check out some of the additions on the side panel

1. The Wallstrip - If it works here and the content is interesting, I'm gonna leave it on (www.wallstrip.com)

2. Radio Economics - This is a cool economics blog, if you are an economics dork like me, so it'll be up on the right.

Hope maybe people might start reading this thing.

Debt up to our Eyeballs

Isn't it nice that we keep borrowing and borrowing? Check out the following articles that highlights the recent jump in November in consumer borrowing. It seems we just can't get enough.

http://biz.yahoo.com/ap/070108/consumer_credit.html?.v=4

The only thing I can say is that people's excuse may be the holidays, I think credit card debt is a problem in this country, a large one, but I think its mortgages and housing where we need to be most worried. Let's hope borrowing goes down in December and January.

Employment Numbers Look Good

Happy New Year! Alright, I'm a little late, but either way... we received some good news this year as base metals and oil declined and we received a nice jobs update on Friday 1/5/07. Even though, retail sales declined, the broad US economy may be in for a softer landing than previously anticipated as inflation pressure begins to cool down. Housing is housing, and the carnage has just begun in that sector. For this post I'd like to just focus on employment.

Employment increased by a healthy 167,000 jobs in December none of which came from the retail/trade sector which was unchanged from November. Over the year, the US economy added 1.8 million jobs.

"Total nonfarm payroll employment increased by 167,000 in December to 136.2million, following increases of 86,000 in October and 154,000 in November (as revised). Over the year, payroll employment rose by 1.8 million. In December, employment growth continued in several service-providing industries. Employment in construction was about unchanged over the month, and the number of manufacturing jobs continued to trend downward." (http://www.bls.gov/news.release/empsit.nr0.htm)

Usually an increase late in the year is attributed to seasonal hiring in retail or construction, but retail trade was flat and construction hiring was flat after a total decrease of 53,000 in October and November.

 "Employment in retail trade was little changed over the month after rising by
 39,000 in November.  Building and garden supply stores lost 8,000 jobs in
 December." (http://www.bls.gov/news.release/empsit.nr0.htm)

This jobs report is a good sign for the economy as it continues to add jobs and wages are trending upward. The key now is to make sure people put this new money from their jobs into paying down their debt and not in spending haphazardly.