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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (75865)	12/17/2006 11:32:31 AM
From: dpl	Respond to of 110194

Russ,a post from The Housing Bubble Blog you might find interesting Comment by spike66 2006-12-16 08:44:41 From Mauldin, on the retail numbers… “Because sales tax collections do not reflect a robust retail sales picture. Taxes are a fairly good indicator of sales and income. No one pays more taxes than they have to, and sales taxes are collected and reported regularly. The Liscio Report calls up the offices of the various state sales tax collection agencies and surveys them as to how they are doing. Here are the opening few paragraphs from their report for November sales: “Our index of state sales tax receipts took it on the chin in November, falling to 27% at or above expectation, down from 55% in October. Although the number of states reporting positive growth over the year rose to 80% from 72% in October, several of the states that did not make it to the zero line were in steeply negative territory. “… the weakening consumption trend is now established, and the majority of our tax contacts expressed real concern about slowing in sales tax collections. It now appears clear that consumers are not spending the billions of dollars they have saved on gas in recent months, and comments on the effects of the dual slowdowns in housing and manufacturing centered on how much more is to come.” frontlinethoughts.com

To: russwinter who wrote (75865)	12/17/2006 12:43:54 PM
From: Mr.Creosote	Read Replies (1) \| Respond to of 110194

Don't disagree with many of the points made by you and your quoted references. My question is "what does all of this really mean to me as an investor/trader?" Where is the relevance? I will concede that the average household today is more leveraged than it has ever been. So what? I will also concede that the gap between the rich and poor is widest and continues to widen. And sure the Goldman people averaged $600K+ for the year, good for them no need to be jealous about their good fortune. But what can you do with this information? Despite this data we may not be anywhere near a critical point in people's behavior. I mean why can't people get even more leveraged than they are now? Credit is still available to those who want it although probably less so than last year (judging solely by the offerings yours truly has received). Regarding the rich-poor gap widening, well that's normal and should be expected. How many times have you heard the opposite, as in hypothetical year X the rich got poorer and the poor got richer? Fact is the rich will always get richer and the poor will always get poorer as long as the rate at which this is happening is "small". Additionally the gap widening can keep going until a difficult-to-define threshold is crossed beyond which crime and civil unrest are likely to explode bringing political change and restructuring of society. I don't believe we are anywhere close to such possibility, at least the markets tell us we are not. Regarding the Goldman issue let me assure that if you were on the receiving end of that money your thoughts would be different. It's a matter of prospective. A few years ago a friend of mine said that he felt really bad when he discovered that the parents of most of his young son's classmates were much wealthier than he was and that made him feel like a failure in life. But soon later he was able to counter that by focusing on how many other people in the world were in worse shape financially than he himself was. Somehow this made him feel better.