Do you think the rally has stalled?

Question:

The stock market really hasn’t moved too much one way or another for a few weeks. Do you think that the economic rally has stalled?

Answer:

I think that it has stalled for now, but that could be due to the poor reports coming out about unemployment. If you look at other factors such as retail sales (which were up for the past month) then the economy is doing a bit better in the way of consumer spending.

I think over the next few months, the rally will continue but it will be more gradual.

Washington D.C. and the surrounding areas in Maryland and Virginia saw something in September that not many places across the country have seen; an increase in home prices. Unfortunately, while the prices increased, the median sale price did fall a bit.

Sales were up almost 19% in September in the area from just a year ago; with the median sale price declining almost 5% to $371,568.

Houses in D.C. are also selling for most of what the owner is asking. The average sale price in the area was 92% of the asking price.

Seeing any area, particularly a large metro area gaining in sales of homes is a pretty good (and not outrageous) sign that the economy is doing a bit better than it was a year ago. Then again, a year ago, credit had completely frozen as the subprime crisis really took off.

As banks have begun to lend again, more homes have started to sell. As the homes start to sell, prices will gradually begin to rise again. The rise will be in areas where there are jobs and every list that I’ve read says the jobs are in Washington D.C. due to the amount of government jobs as well as all of the large companies that are headquartered there.

When I was in Maryland over the summer, it didn’t seem like the recession had hit there as bad as it looked in other parts of the country I have seen in the last year. For example, while Chris and I were in St. Louis in August, restaurants were basically empty at dinner time. It’s not like we were going to obscure places either. The only restaurant I noticed was busy the entire time we were there was a Cheesecake Factory in one of the larger malls in the area. In Maryland, everything was always busy it seemed. Shopping centers were full of cars usually and there weren’t a lot of empty businesses making it look like a ghost town.

Source

I’ve talked about it in the past week or so; little indicators of the economy’s health. Well, here is a list from Time that compiles some of the more strange indicators of the economy and what they mean.

1. Hikers. When times are hard and unemployment is high, people tend to have a lot more free time on their hands. This means there is a spike in the number of people going for hikes in national parks and other places as well.

2. Immigration into the United States. For a while now, like decades, the number of immigrants coming into the U.S. has been rising. However, now with a bad economy, the number has slowed down and even stalled a bit. It seems like our country isn’t as attractive as it once was.

3. Men’s Underwear. I talked about this one in a post I wrote last week about ties. I think this one is just silly. But, the idea is that men buy more underwear when the economy starts picking up. When the economy is down sales of men’s underwear drops dramatically.

4. Fewer babies are being born and planned. In a recent survey of women, 44% said that they were going to wait to have kids until the economy starts to pick up. This means that the sale of birth control items should be up, right?

5. More attractive waitresses. This is another silly one in my opinion. The idea behind this “index” is that attractive women don’t have a hard time finding work being models or working for some kind of marketing campaign when times are good. However, now that times aren’t so great, they are finding themselves working at restaurants. And restaurant owners are more than willing to hire the pretty girls to be waitresses so it will bring customers in.

Like I said, the whole thing is kind of silly. I mean, you can also look at more reliable sources to tell you how the economy is doing like unemployment as well as sales figures. I always thought that if sales in some industries were up then the economy is probably doing better than if sales are down.

The economy is one of those things that have many indicators ranging from the very silly to the very serious. Hopefully most of the indicators are pointing to the economy starting to pick up and maybe we’ll start seeing some growth soon.

Source

The people who fly with British Airways will have to do something that people who fly on other airlines will NOT have to do: Pay for a particular seat on the plane. If they want to sit somewhere in particular they will have to pay some kind of fee according to the airline. The extra charges will only affect those who want to sit next to the window or the aisle (SO I suppose, if you want to be stuck in the middle of two people you don’t know, you should be alright?).

The change will take place starting on October 7th. The lowest fee that will be assessed will be 10 pounds for those who are booking their seats on an economy flight throughout Europe. The most expensive seats will cost the customer sixty pounds for long trips in the business class. Those who are expecting a seat somewhere near the emergency exit will have to pay an extra fifty pounds a flight.

British Airways says this measure will give customers more control over their seating. British Airways currently allows customers to select their seat for free 24 hours prior to their flight. If customers want to book ahead of time, they can do it before 10 and 4 days before take-off.

“Customers frequently request specific seats, but in the past we’ve only been able to confirm them 24 hours in advance or on the day. We know people want to secure them in advance and have real control over their flying experience. This will allow them to do that,” said a BA spokesman.

With this new fee and probably others that will follow, BA tries recover after £401m loss last year. Earlier this year, BA decided to no longer offer free meals on short flights and cut luggage allowances.

It is really annoying when any company decides to take advantage of a customer when there is some kind of demand for a product. In this case, the airlines are trying to squeeze money out of the consumer because they are paying rock bottom prices for airline tickets. It’s a funny thing though because these customers are still waiting in airports for delayed flights and sitting on tarmacs waiting for their planes to take off. I should know, I spent over an hour on a tarmac in North Carolina waiting in the past few months. I hate flying on airplanes.
Source

Just like at a funeral, at the beginning of the recession people were mourning. The clothes told the story: people would be wearing black and other drab colors while going to work. It was like that for the past year, ever since the fall of Lehman Brothers. Now, that things are finally starting to perk up a bit, those who have jobs are starting to wear colorful clothes again.

Men’s ties are being seen as an economic indicator. Because men’s ties are a cheap way to change a wardrobe, it is typically the first thing that outwardly indicates that, not only are these guys going out and buying clothes, but they are buying bight colors again.

This is just one of the many economic indicators that have been noted in the past few months. Another, and funnier in my opinion, indicator was the underwear index. Men were going out and purchasing more underwear and that was supposedly an indicator that the economy was going to perk up a bit more.

Another indicator is piles of garbage outside restaurants. The piles indicate that people are eating out again, which is one of the signs that the economy (really) is picking up again. Anytime people have disposable income to go to a restaurant and eat it is a good sign for not only the restaurant but the overall economy as well.

While a lot of data was used to compile this information, of course, some of it could be misread messages. Men could be wearing bright colored ties because it’s warm outside and they want to reflect the weather. Restaurants are using promotions to bring people in the doors more now than ever. Men need underwear and if they haven’t bought any new undies since the fall of Lehman Brothers, then perhaps it is time for them to get some new underpants.

I would like for the recession to see an end as much as everyone else, but are we grasping at straws by putting money into studies like this one?

Source

Another good thing that has come out of the current economy is divorce is down 40%. However, the problems that cause marriages to fail are still there, however, they are now too afraid to divorce their partner due to the current state of the economy. The phenomenon is being called “sleeping with the enemy” by the New York Daily News.

Some though, are being pulled closer together by the recession. From the Source article:

When my and my partner’s real estate investments plummeted, we coped by not talking about it — or to each other. It wasn’t long before we were living like Ernie and Bert. Forget the wing-nuts who claim that gay marriage is causing the recession. The recession nearly caused my gay divorce.

The fact is, the fault lines in my marriage were already there-the economy was just the quake that nearly brought the house down. But like victims of some natural disaster, the crisis has brought us closer together. Being underemployed has given us the time we needed to repair the damage, talking a lot about US and OUR RELATIONSHIP.

The economy could potentially be bringing couples closer together as they try to actually work through their problems rather than just giving up and quitting. It is nice to see the rate of divorce slowing down a bit. I remember in High School when someone would come in and talk to the class about not rushing into marriage because 1 in 2 marriages end in divorce. I’m unsure what those numbers are anymore, but I’m sure that they have decreased somewhat since the recession started.

Source

If you don’t already have an opinion about the Federal Reserve, please check out the image above and decide for yourself.

The Federal Reserve is one of those government agencies that are too big and go unregulated. The Fed also has the power to make a complete mess out of the economy. While I would like to believe that they are working to help out the economy and are making the right decisions, they’re still just humans and will undoubtedly make some mistakes along the way. That is why it is so important to regulate this division of the government.

VisualEconomics.com: The Anti-Fed Fact Sheet

Is it time for the Fed to relinquish some of its power?

Question:

The United States Federal Reserve has a lot of power when it comes to the economy. They oversee more than just the money the country has, but other things too like consumer issues. So, is it time for the Fed to give up some of the control?

Answer:

I think the Fed needs some of the power that it has. I don’t think it needs to be able to move the interest rates without a longer bureaucratic process simply because the movement of the economy is settled on the shoulders of the Fed.

Overall, the Federal Reserve does good things for the economy and typically works in the interest of the people. However, the economy is more than just interest rates.

People are angry at Ben Bernanke and I can understand why. This is the same guy who has led us on a crazy ride and given us all a tough lesson on how to not manage an economy over the past few years.

If you want to see all the things that Bernanke has said over the past few years, then watch the video above. It’s rather insightful into how he thought and what he thought about our economy leading up to the recession.

Nobody has said it in so many words, but we are at the end of the recession. In a time when the economy is going to rise and fall as it stabilizes, it is important to know when a stock is about to falter. Everyone knows the basics. Avoid investing in companies that generate sub par earnings, has weak cash flow, or a less than adequate balance sheet. However, there are other nasty characteristics a stock can hold that will drop it into the toilet in inclement economic weather. Keep an eye out for these other symptoms that show an avalanche ahead.

It is not uncommon for a company to lower their earnings guidance. That can happen for a number of normal reasons that happen in the cycle a company goes through: slightly dropped earnings, a weakened economy, etc. Just make sure that the company in question clears the bar they set in that quarter. Why is that? Of course you’re more worried about the value of the stock than the revenue earned from them. Unfortunately, some shareholders, especially those with controlling interest are so worried about the revenue coming in and the performance of the company that value will go down as people sell for lower and lower prices to get out if they do not have faith in the management of the corporation.

It is also not uncommon for insiders at a company to sell off some shares, especially if life changes they are undertaking require quick funds. Other times, you may be looking at an insider that just wants to make some quick income or diversify their holdings. Sometimes if a bunch of executives all dispense of some of their shares at one time, you are looking at a disastrous future. You begin to wonder, “What do they know that I am not aware of?” Be very wary of executives selling at or near their low points. That tells you the executives think their money is better elsewhere, and yours very well may be too.

Another signal that a stock may be in trouble is when a company abruptly discontinues its guidance toward the investment industry. This may signal that the company has no idea or expectation to have an idea of when earnings could come in. This may also have a minor signal in the way of product or service diversification. The company and its stockholders are in trouble if the company cannot keep up with the accelerating market and/or does not come up with new, innovative products or services to keep up or stay ahead of the industry. You do not want to invest in a company that is “betting all their money on one horse.”

Keep an eye on industry trends as well. Sometimes the nature of the industry at that moment can impact that one company and its competitors at the same time. For instance, General Motors, Chrysler and Ford all came down with the same ‘disease’ at the same time, due to the same debts and the same mistakes. That was the time all GM, Chrysler and Ford stockholders bailed at once, and rightly so. Investors with a sharp eye that receive good, up-to-date news and suggestions from a website like this one may be able to limit or prevent losses just by watching these early signs.

For the firm believer that an investor should follow the trends to see real success in investing, it is important to know what the winners are doing right now. To understand that one needs to understand what they are looking at in the market. The first two things you must watch are real estate and unemployment. These are the absolute keys to a real recovery in the market and the economy. Until losing jobs is a thing of the past and until real estate prices stop going down, there will be pressure on our economy, end of story.

The current market is creating one of the greatest opportunities for building permanent real wealth if an investor can see the bargains. It is important to continually look for bargain-basement opportunities in the form of rock bottom prices. In addition to your own screening and research, it is important to pay attention to what those successful long-term investors are doing with their money.

Securities regulations make this very easy to do. Most finance managers are required to publicly release their holdings at the end of each quarter. By tracking portfolio changes and holdings in correlation with locations of investments, you effectively establish a makeshift research department composed of the best minds in the market. You should always do additional investigation of your own, but good research of what investors are already succeeding with is a good meeting of the minds, so to speak.

Just as an example, let’s look at Third Point LLC, the distressed and activist fund managed by Daniel Loeb. It is reported to have earned 16% or so annually without the use of much leverage, if any, just since its beginning in 1996. In his recent letter to shareholders, Loeb said he was less pessimistic about where the economy would be at the end of the quarter. The firm is letting go of what Loeb referred to as “doomsday positions” such as gold, the investments that will not stand as firm as they have once the economy moves forward. As we have established before, there is a relatively negative correlation between gold and Wall Street, simply because when Wall Street is doing poorly, gold has become the industry hiding place. When Wall Street bounces back, people bail from gold and ride the stock market back up, reducing the price of gold once again. (This explains why places like Cash4Gold are advertising the best ever prices of gold. Every active investor has bought some recently.) He said the fund is also finding long positions that offer what he called attractive opportunities.

Third Point established a new position in the home health and hospice company Amedisys in the quarter. As baby boomers age, this is going to be high-growth industry for years to come. Earnings and stock trades are up. Third Point also opened a position in Life Partners Holdings, a life insurance settlement business. Basically, it buys life insurance contracts at a discount from policyholders who are in need of funds. Life Partners then resells these contracts to retail and institutional investors. The company acts as an agent and receives a fee for its services. Earnings and stock trades are up for this company too, because death is truly recession-proof. It does appear that Third Point is leaning toward an aging population. In the last quarter it bought Wyeth, Schering-Plough and Pfizer with Pfizer coincidentally as one of the top investments right now.

Recently, Chris and I have gone to the mall and done a little bit of clothes shopping (it’s nice to feel like I’m stimulating the economy). Everywhere we went, it seemed like there was some kind of clearance sale going on or another form of sale just to clear out inventory. There were buy one get one specials among other pricing schemes.

It is barely July and it seems like all the retailers are trying their best to clear out summer inventory. This is fine in my opinion because clearance sales means that we all save money.

Chris went to Dillards and bought clothes that would have cost him more than 3 times what he paid if he were to have paid what the tag said. I found the same things to be true at the stores I visited around the mall and in shopping centers.

I believe that the deep discounts offered by retailers are a sign that they are unable to peddle their wares to the public; the public that is so stretched financially that some are still losing their homes and not worrying about buying clothes. However, this is the same public that needs new clothes to go to job interviews and hopefully get those new jobs that will put food on their tables.

Not to sound long-winded this is just something that I noticed while trying to do just that; buy clothes for job interviews.

These retailers are also having to clear out shelf space for fall and winter items in hopes that their winter sales are higher than sales during this summer.

So, if you are needing clothes for the summer season, I would suggest making it to a sale or two because it seems as though if you wait until August, there may be nothing left (and in the Southern summers I’m accustomed to, summer can last until October).

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What do you think the new unemployment numbers mean for us?

Question:

A few days ago, some really unimpressive unemployment numbers came out. The figures showed that unemployment was actually on the rise rather than falling like people thought they would. What do you think the new numbers mean for us and the economy?

Answer:

I think that the unemployment numbers will fluctuate for awhile no matter what is happening on “Wall Street.” The stock markets have been on a rise (even though it has hit a bit of a  plateau recently) and consumer confidence numbers are also up (along with consumer spending). It will just take time for employment numbers to catch up.

While summer officially began just a couple of weeks ago, many retailers are already putting their summer merchandise on sale and to the clearance racks dismissing this summer as a complete wash.

Department stores like Macy’s have discounted summer clothing and swimwear down 50%. Other retailers have slashed the prices of barbecue grills, tents, gardening tools, and piles of clothing. Some of those items are going straight to liquidation rather than to the retail stores.

This is good for people trying to save some money, but it is a bad sign for retailers as it shows that retail sales have been weakening since the end of May.

Consumer confidence increased in April and May, but is predicted to level off for the month of June. The figures, which come out later today, won’t be helped by the major retailers releasing June sales results next week. Consumer spending makes up 70% of the economy and if consumers are worried about the economic condition, chances are that spending won’t increase too much in the near future.

Fall merchandise will start hitting shelves in August, so these retailers are trying to move summer merchandise to make room. This could mean that we’ll see more discounts like we did last year for clothing.

Some are blaming the weather, which has been particularly rainy for parts of the country. The rain has led to unseasonable weather. However, where I live, it has been unbearably hot with little rain to help. Then again, when I go through the “summer” section of any local stores, the shelves have been nearly picked clean.

Some are still worried about the economy and think it’s to blame for the lack of consumer spending. Employers are still cutting jobs (even if it is at a slower rate than the beginning of the year) and the average price for a home is still falling.

The two month rally we saw in the stock market since late March has now officially hit a ‘plateau’. As that happens, investors naturally and understandably move to more defensive stocks, avoiding ‘gutsy’ moves. Stocks ended considerably low yesterday, or at least lower than expected, at closing, 4:00pm eastern time. As stated in a previous article, it is normal and healthy for an incline to fluctuate, mostly as investors break out of the defensive shells they confine themselves in and get a feel for the new increases. The main problem with this is that investors hold they key to where the stock market goes from here and the next few days are crucial.

If investors are unnecessarily cautious, that rally can be short lived, keeping the economy in the hole it is in, which is what is beginning to occur. If investors begin to risk a little again and stock prices rise as demand rises, the economy as a whole takes notice and rises accordingly. If Wall Street can hit enough of a rally, creating more money and productivity, jobs are created. It is a natural process. The next few days are crucial because we are waiting for investors’ next moves. The time to invest in the stock market is tomorrow morning. Prices are still very low, but investors spending new money, especially on more risky moves, hoping to jump on a successful rally, creates a positive self-fulfilling prophecy. Investors all investing wisely, hoping to catch the rising tide will boost the tide much higher, lifting everything. As the quote says, “a rising tide lifts all boats,” supposedly coined by Sen Lemass, former Irish prime minister.

Investors moved to investing in staple items like pharmacutical Pfizer Inc. and food and drink manufacturers like Coca-Cola that still perform in a downturn, your expected safe moves, preparing for the rally to collapse. (Pfizer’s chart looked like a roller coaster yesterday, spiking just before noon, just after noon, and just before closing.) This could also be a self-fulfilling prophecy. If all investors invest safely, the economy turns to safe mode and closes low. We have officially gotten a taste of a good rally, with the Dow bouncing up over 8,000. The only hope is that investors got addicted to the rally and the economy performs.

The president of Stuart Frankel & Company, Jeffrey Frankel, commented, “You have people who missed this mammoth rally and now those people are taking the opportunity on any pullback to buy.” Here’s to hoping he is correct. If that is the case, this plateau will attract the last-minute rally investors and shoot back up. If he has it pegged, we are looking at a short-lived plateau.

Analysts say that the rally we just finished off was overdue, and that the 155 point dropped followed by a 50 point rise akes it difficult to tell if the rally will kick back up or not. Investors pulled technology stocks as the Nasdaq composite index dropped .09%. The Dow rose a minimal 50 points today. Economic and corporate reports show that the economy is stabilizing, but the market is slower than usual reflecting it as cautious investors fluctuate. Many companies whose stocks pummeled late last year are already turning to the markets for cash by selling out stock, indicating a restored confidence in the market.

Most banks are down for the second day in a row, but falling only pennies. General Motors, on the other hand, is to the lowest level since the Great Depression, mostly due to investors that are worried their stocks will lose even more value if more are issued as projected or if the company declares that ‘inevitable’ bankruptcy everyone talks so much about these days. By closing today, GM was trading as low as $1.09. Exxon Mobil rose 2.2% due to the safer investments being made these last two days. Bond prices lowered but leveled off as the Federal Reserve bought about $6 billion in government debt as an effort to artifically lower interest rates and reduce loan costs.

Last week we saw the most promise in the economy since the recession began. Wall Street totals began to spike over the last two months and everything seems to be in place for a rise. Unfortunately, traders were so cautious that the spike was misleading that they under sold and the Dow Jones industrial average dropped 156 points. The four banks the government said were strong enough to survive a worse economy just turned to Wall Street to sell extra stocks in order to pay the government off, and they are going to trade well, strengthening the financial institutions.

Some analysts believe this is a small retreat after a big run, a good sign in a recovering economy. In fact, a healthy economy jerks up and down the scale a little bit as investors and traders get comfortable again. Despite the mistakes the government has made and the large, failing companies, the economy does seem to getting better. One key point is that as currency loses value and becomes less safe, gold becomes the alternate investment, and prices skyrocket. It is no secret the price of gold hit record highs during this recession. Gold prices are now going down.

If gold can stabilize where it was when the economy was better, life will be beautiful. Watch the gold prices. If gold goes down any further, especially in a constant downward motion, it is time to sell and invest in stocks, because the stock market is rising up the opposite direction. If anyone has invested in gold, now is the time to sell it, because gold is still technically at a record high, whereas the stock market is at record lows. Sell your gold and/or begin investing in the market again. A multitude of buyers and eager activity strengthens the economy, and if you get in on the ground floor, you can ride it up, like the wise investors you are. Bonds are also getting stronger. Keep an eye on both stocks and bonds, especially if you have gold to sell. That’s the way to ride the market back up.

At the same time, economies have always seen high points and gone right back where they were. No recession is finished until the afflicted economy has shown a habit of much higher numbers and job recreation. Right now, we still have an average unemployment of around eight or nine percent. The high point here is that we have been holding a steady unemployment rate and the economy has essentially bottomed out. When the only way to go is up, that is likely what you will do, If the economy does revive soon, it will be in spite of the efforts of Wall Street, corporate America, and even the government.

Director of derivatives investment strategy for WJB Capital Group in New York, Scott Fullman, noted that the Dow has risen about 30 percent since March, about twice as much as the market might do in a full year of strong gains. “To take a break here is healthy,” he said. Enter disagreement from Christian Bendixen, director of technical research at Bay Crest Partners LLC in New York, who said the economy remains troubled beyond what many analysts concede and that he expects the market will tumble again and perhaps breach the lowest levels of early March.

In trying times such as these, America deserves fiscal responsibility and a united society bent on resurrecting the market. America has yet to see either. The government is giving away tax money like it is indispensible, and that is hurting the market. It is likely that the economy would be much more promising without the ‘bailouts’ last year and early this year. Every time a financial bill was passed, the economy was sink lower in anticipation. The greed of the corporations has not helped either. In the words of country music artist John Rich, in his new song, “They’re selling make believe and we don’t buy that here.” When America doesn’t buy rhetoric from the lawmakers and economic “powers-that-be,” the economy suffers. That’s why the economy is still so bad and America is latching onto any glimmer of a reviving stock market, whether it is a sound movement toward prosperity or a candle in the wind.

]]> http://www.thelucrativeinvestor.com/beating-your-head-against-wall/feed/ 0 http://www.thelucrativeinvestor.com/financially-productive-areas/ http://www.thelucrativeinvestor.com/financially-productive-areas/#comments Tue, 12 May 2009 01:54:00 +0000 Jeremy http://www.thelucrativeinvestor.com/?p=1122

Even in the worst economic situation since the Carter administration, Forbes magazine often likes to reveal whatever positive sides it can, much like I do. In an article written from expertly executed research campaigns and quotes from successful entrepreneurs, they found the most lucrative and financially prosperous places in the United States to set up residence. They based these findings on four factors: cultural amenities, business friendly environments, knowledgeable and productive workforces and generous salaries.

Joshua Onysko, an entrepreneur and owner of Pangaea Organics, opened his skin care business when he moved to Boulder, Colorado, which he did, aside for the personal benefits, due to the business benefits. The business benefits include a strong venture capital environment, similar start-up businesses all throughout the area, and talented workforce candidates from nearby University of Colorado. While other businesses are contracting, Onysko’s endeavors are expanding. He has reported a 225% increase since 2005 which is still increasing.

Factors that can put an area on this list of profitable areas can include pending and active patents, venture capital funding, self employment businesses, start-ups and small businesses with a high rate per capita. This basically covers anything that displays quality business activity, indicating profitability, success and a desire to live in relative prosperity. This places Boulder, Colorado, at number one on the list.

The basic Miami area, especially Doral and Kendall, Florida, suburbs about 15 miles out, one north, one south, offer a great environment for more active businesses like golf courses and beaches. They also have one of the largest amounts of small businesses in the country per capita, clinching the number two spot and number 25 spot in this list. Following a close third is Fairfax, Virginia, exhibiting one of the best public school systems in the country, a median salary that barely misses a six figure total, a large amount of small corporations, and a main highway that leads right to McLean, Virginia, right outside of Washington D.C. McLean is one of the corporate capitals of the nation due to the presence of Capital One, Bearingpoint, Booz Allen Hamilton, Cardinal Bank, Freddie Mac, Gannett, Mars, MicroStrategy, NVR, Sunrise Senior Living, and USA Today.

Mountain View, Calfornia comes in fourth due to its proximity to San Jose and San Francisco combined with the amount of start up businesses and venture capital. Nearby Cupertino, just east of San Francisco, comes in a close fifth due to much of the same criteria. Coral Gables, Florida (9), Evanston, Illinois (18) and Newton, Massachusetts (6) tend to produce patents, start-ups, and venture capital due to their proximity in relation to major research universities. Santa Fe, New Mexico, though only number 24 on the full list of 25, is unique to the list due to the entertainment venues it provides, with related sole-proprietors and skilled workers. Columbia, Maryland, on the other side of Washington D.C. from Fairfax and 20 minutes from corporate Baltimore, came in at number seven. (Nearby Rockville, North Potomac, Germantown, Silver Spring and Potomac placed 8, 13, 17, 20 and 23, respectively.) As a native of that area of Maryland, this author is aware of the advantages in Columbia and, as an entrepreneur, takes advantage of them. There a lot of small to medium sized businesses in Columbia, Meriweather Post Pavilion, a major music and entertainment venue, and lots of venture capital.

As is made obvious, contrary to the current economic state, there is still a bright side to business and personal finance, especially if you live in California, Florida, Colorado, New Mexico, or the mid-atlantic region (Maryland and Virginia) of the country. The bottom line of these findings are easy to decipher. Any business can still succeed, even if a drastic measure like locational placement change must occur, and with strong business centers in nearly every portion of the country, the economy still has a strong core.

Since all locations were not listed, here is the full list:

25. Kendall, Florida- A southern suburb of Miami, parallel to Key Biscayne

24. Santa Fe, New Mexico- Northern New Mexico, northern part of the state

23. Potomac, Maryland- Just on the Maryland side of D.C.

22. Sugar Land, Texas- A southwest suburb of Houston

21. Tustin, California- South of Los Angeles and east of Long Beach

20. Silver Spring, Maryland- A Washington D.C. suburb, nearly directly inside the border

19. Davis, California – Between Sacramento and the Bay area

18. Evanston, Illinois – North of Chicago, on the shore of Lake Michigan

17. Germantown, Maryland- A northwest suburb of D.C.

16. Aliso Viejo, California- Between Laguna Beach and Laguna Hills

15. Sandy Springs, Georgia- A suburb north of Atlanta

14. Santa Monica, California- North of Los Angeles, on the beach

13. North Potomac, Maryland- Farther out than Bethesda, Chevy Chase and Potomac

12. Hillsborough, California, north of San Francisco and San Jose

11. Bellmont, California- South of Hillsborough, right between S.F. and S.J.

10. Foster City, California- South of San Francisco

9. Coral Gables, Florida- A southwest suburb of Miami

8. Rockville, Maryland- Another D.C. suburb but farther inside Maryland

7. Columbia, Maryland- Directly between Baltimore and D.C.

6. Newton, Massachusetts- A suburb west of Boston

5. Cupertino, California- South of San Francisco and west of San Jose

4. Mountain View, California- South of Palo Alto on the bay peninsula

3. Fairfax, Virginia- A western D.C. suburb

2. Doral, Florida- Another Miami suburb

1. Boulder, Colorado- Northwest of Denver, in the mountains

Does AIG deserve the Consumerist’s “Worst Company in America 2009″ award?

Question:

This week the Consumerist’s quest to find the Worst Company in America 2009 came to an end when AIG was put against Comcast and AIG came out on top. So, after all that AIG has done, does it deserve the Worst Company in America title?

Answer:
Yes. In my honest opinion, AIG definitely deserves this award. After taking taxpayer money and then giving outrageous bonuses to execs, AIG deserves the golden poo trophy.

I must not be the only one who feels this way because they managed to beat out everyone from Verizon to Peanut Corporation of America (from the peanut butter recall).

AIG is the face of what is wrong with the economy. It also represents greed to many. For all these reasons, it deserves to be the Worst Company in America 2009 and that golden poo trophy.

GM said the downturn in the economy was the culprit in the increase in losses. It said industry sales volume was down 21% globally in the first quarter when compared to the same quarter 2008.

The news led CFO Ray Young to warn of an upcoming bankruptcy filing by GM. With numbers like these, it is more and more likely to actually happen.

“I think bankruptcy is highly likely, not because the losses are so bad, but because everyone has realized that this company needs fundamental restructuring,” said Douglas Baird, a University of Chicago law professor who specializes in bankruptcy cases.

Chapter 11 “seems the best way to clean up the balance sheet, clean up the problems, get a fresh start.”

The March decline reported by the non-profit Conference Board follows a modest dip of 6,600 ads in February, but is well below the record drops of 507,000 and 506,000 in December and January. Online job ads have declined over 25 percent since November.

“The March numbers indicate that we are not at the bottom of the employment cycle but that the declines in labor demand may be slowing,” Gad Levanon, senior economist at The Conference Board, said this week in a news release. “The next two months, April and May, are when employers typically ratchet up their spring hiring.”

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The plan calls for a system to limit for the first time the amount of global warming pollution — mainly carbon dioxide from coal and oil combustion _that’s permitted from utilities, oil companies and large-scale industries, which make up 85 percent of the U.S. economy. They’d have to buy permits for each ton of emissions.

The total emissions amount would be lowered each year until it was 83 percent below 2005 levels in 2050. That’s the amount that science suggests will be needed as part of a global effort to prevent irreversible problems from steadily increasing warming.

If energy companies are paying more for energy by having to buy permits for emissions, you can almost be sure that they will pass the “inconvenience charge” to you. When gas was around $4 a gallon, my electric company was charging a gas fee on top of inflated per kilowatt hour charges. A gas fee…to offset the price of natural gas (so they say) for my electric bill…not my gas bill. If the electric company is making electricity from natural gas, aren’t they just the gas company? The gas charge also had something to do with gasoline prices to have the meter reader come out to our house…ridiculous.

I am all for providing and obtaining renewable energy, however, I don’t think that energy companies should be left to decide what they want to charge customers for their inconvenience.

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Rick Wagoner is gone and GM’s fate is unknown. So here’ s the question was it the right move for GM this late in the game?

Question:

Many have said that every since Rick Wagoner became GM’s CEO & Chairman, GM’s quality has lacked and GM has stayed behind the pack on fuel economy. This has caused GM to lose market share to foreign auto makers like Toyota and Honda. Now that GM needs the government bailout, was the government asking GM to ask Wagoner to step down the right decision to helping GM’s path to profitability?

Answer:

The decision for Rick Wagoner to step down was the right decision. He has led the company into a hole that it may not be able to dig out of. GM has already proven that it can’t dig itself out of the hole and needs the government’s help just to stay in business.

Furthermore, he oversaw the new business plan that the company sent to Washington outlining GM’s new business model. The new model was rejected.

GM is left with a new CEO and 60 days to “get it right” or face failure. The new CEO has already said that bankruptcy protection is a very real possibility for the company and that may be the path GM needs to go down to becoming a profitable company again.

Have an idea or want us to use your pitch in the next issue? Then, make a submission on The Pitch Page.

Apple is an image and Microsoft wants to show people that it can also be an image, an image that says I have a great computer and didn’t have to pay a fortune for it.

In the commercial from advertising agency Crispin Porter + Bogusky, Lauren goes into an Apple store, quickly walks back out and reports, “For $1,000 they only have one computer available, and that’s a 13-inch screen. I would have to double my budget, which isn’t feasible. I’m just not cool enough to be a Mac person.” That statement is a direct hit against Microsoft’s longtime rival that implies you don’t get much computer for your money when you buy a Mac.

Last week, Microsoft CEO Steve Ballmer set the stage for the new ad’s debut when he said, “Apple gained about one point, but now I think the tide has really turned back the other direction. The economy is helpful. Paying an extra $500 for a computer in this environment — same piece of hardware — paying $500 more to get a logo on it? I think that’s a more challenging proposition for the average person than it used to be.”

Lauren was excited when she entered a retail store with a variety of PCs. She tries out a few keyboards and looks at the specs on a few others. Finally, the look of one PC draws her. She settles on a Hewlett-Packard model that meets all her qualifications — for under $1,000. The commercial ends with Lauren telling the camera, “I am a PC and I got just what I wanted.”

Everytime I see an Apple product I feel like I want it and I think that’s part of their marketing scheme. It’s “cool” to have a Mac or an I*something*. Other than their computers, look at their MP3 players, an iPod is $300. You can get a video player by Sony for much less…hmm.

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And it did. Today’s mortgage rates are under 5%

However, the problem is now that printing so much money will cause serious inflation.

The U.S. dollar’s value has fallen and it has caused the highest oil prices of the year.

It cost more than $1.36 to buy a euro, more than 2 cents higher than the previous day — an unusually large leap. And the British pound gained 3 cents against the dollar, which fell sharply against the Japanese yen.

The jump in oil prices was even more dramatic. The price of a barrel of crude oil went up nearly $3.50, or 7 percent, on the New York Mercantile Exchange, to its highest level since early December.

The Fed is hoping that unemployment and low consumer spending will help keep inflation down for now and the measure is actually meant to help fight deflation.

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This isn’t the first time Bernanke has said that he believes the recession will begin to “level off” or end by the end of the year. He told Congress in January the same thing.

I think that Bernanke is going on the record with 60 Minutes now because he wants to reiterate to the public what he believes is going on with the economy and that we are on the right path. If he can get word out to investors, some stablility can come back to the markets or even the rally can continue through this week. When news like this comes out, it typically has an impact on the direction of the market.

Florida’s foreclosure rate is 7.32% followed by Nevada at 5.58%

http://money.cnn.com/news/storysupplement/economy/bank_failures/index.htm

I don’t think anyone was a fan of the extra charges airlines were taking on to passengers’ fares. I still can’t believe an airline, which charges (usually) over $200 a ticket, would charge $15 for a checked bag…one checked bag.

U.S. Airways have said that the reason it is giving sodas away again is because of the economy and reduced fuel prices.

Well, at least it’s doing something.

It’s not only informative, but it’s also entertaining. I recommend this video to anyone who wants another view (or a first view) of what happened.

The decline in price came after the Fed released some very depressing news about the economy:

The Fed said it expects the economy will contract between 0.5 and 1.3 percent this year. Its previous forecast from November had a 0.2 percent contraction as the worst case scenario.

The Fed also said the unemployment rate will likely rise to between 8.5 and 8.8 percent this year, higher than its previous forecast of between 7.1 and 7.6 percent.

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