Tuesday, July 08, 2014

Good Morning, America, How Are You?

Yesterday can only be described as HOT! It would have been hot even for Yuba City, Ca where I lived years ago. 

A young woman who is poverty stricken, came by my gardens yesterday.  I loaded her up with vegetable plants (tomatoes, egg plant, peppers - many varieties, basil, squash.  Whether she actually plants and raises them is questionable, but she wants to.  That is all that matters.  She wants to do something for herself and her children, even though she knows so little. 

I offered to build her a small raised bed which I would fill with my planting mix of compost (made from material in my yard).  She could then raise basil and other herbs.  I think she did not want me to see her living conditions, and so she did not take me up on that (or maybe she is just afraid of old men - who knows). 

In my mind, I wish her the very best.  I wish she had knowledge to get a job and hold it (but she does not). Maybe if she had the knowledge (and the emotional IQ), she could not hold a job due to 2 young children 2 and 4 years old. She is very fortunate as she has no drug addiction, does not drink, and the Catholic Church in our area looks after her to some degree.  I often wonder about poverty.  I would strike it from our being, but the greatest teacher of all time reminded us that poverty will always be with us. 

In the meantime, if people in poverty had even a small 4X4' garden they could care for, would they begin the road to a better life?  Reality tells me, many many of those in poverty would not take care of a small garden; watering, fertilizing, weeding, harvesting... those things would all go by the way.  Yet, there is one in the many that would, and that is what I live for - teach that one.

Small Business Outlook

Summary: 

·         Did you read my blog yesterday?  No?, well the market did what I suggested it would do.  Price moved up to fill the down move gap.  Then depending on your time frame, it chopped the rest of the day closing down. 

·         A piece in the NY Times was worth reading.  Welcome to the Everything Boom, or Maybe the Everything Bubble.  In summary there is too much money floating around, and the price of assets have no meaning in historal fundamental measurements.  It was a very good but simplistic view of the problem of finding yield in any asset class.

·         It seems to me, when the NY Times lead article is about unrealistic prices and the World Bank suggesting Central Banks have gone way too far, we (all of us) should surmise we are going to see a significant correction in the stock market soon.  Will that happen?  Yes, it will happen, because it always does.  When will it happen, is a more interesting question.  No one knows the timing.

·         The tea leaves are reading a correction is way over due, and we'll get such a correction even this month (July).  Almost every sentiment indicator suggests people are way over confident in the up-trend in equities, and that almost always ends up in a significant correction.  Wait, those indicators have been that way all year long, and the market made no significant corrections.  Low Levels in VIX, and it can't go much lower - but can go higher.  We now have a divergence between VIX and S&P 500 where S&P 500 is making highs, but the VIX is not making lower lows.  That is a big warning sign for a sell-off. 

·         Retail sales were pretty good, but Y over Y they are down.  That is not so good.  JOLTS (Job Openings) is expected to be really good today, and that should put upward pressure on the market after the report is released at 7:00 AM PDT.

·         Today, the stock market will open down.  Look for some kind of push up in the 1st 15 minutes, chop and end up the day down.  Investors have not thrown in the towel on the "bull" even if there was a down day in global equity markets.  Banking and financial sector look to open down (down for equity).  Futures market in overnight trading is down, but that rarely indicates how NY will actually carry through on the down move.  Oil is up slightly, and that should be good for the market.  US dollar is up - that puts down pressure on equity markets.  Overall, the pressures are for a down day.