Sunday, July 19, 2009

Get out your rally caps!

I took a little breather last week, but the markets roared back to life on back of Goldman's tremendous trading revenue. It's important to note that Goldman (and any of the other big trading desks) are making massive profits off swings in the markets not any meaningful change in the economy. We'll see if people continue to chase this rally or if it stalls when non-financial companies start to report earnings.

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No news here, but state tax revenues are in free fall. Anyone that has driven recently in NYS has seen the latest push to increase state revenues..........I mean enhance safety --- through the implementation of speed traps. Via the NY Times

"All the major sources of state tax revenue — sales taxes, personal income taxes and corporate income taxes — took serious blows, the report found.

As more people lost their jobs, took pay cuts or worked fewer hours, personal income tax collections fell 17.5 percent in the quarter. Weak retail sales sent sales tax collections down 8.3 percent. Corporate income tax collections, which are often highly variable, declined 18.8 percent.

As bad as the first quarter was, the second quarter is shaping up to be even worse, the report said. Preliminary data for the first two months of the quarter, April and May, collected from 45 states, indicated that tax revenues declined by 20 percent compared with the same period last year.

That will force states — many of which are already raising taxes or fees, resorting to layoffs or furloughing employees — to come up with more ways to raise or save money."


The long-term prospects for NYS are not particularly bright, but the near-term outlook is painful. Can you imagine the rocket scientists in Albany trying to make a balanced decision on layoffs vs. tax hikes vs. spending cuts? Well, it should make for interesting TV.

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Unemployment math - There's going to be some skewing of the unemployment data over the next three months and I want all of my readers to be aware of the trend so that you won't fall for the headline when it hits the wire. The number of people unemployed that are about to have their benefits expire could hit 500k to 1.5 million before the end of the year. These people will disappear from the unemployment survey and some might try to spin this news as an indication of labor markets improving. While this is not the case, I won't be surprised if someone tries to package this as "good news".

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Finally, this is totally unrelated to the markets but I think you might enjoy a laugh at my expense.

I've had precious few moments to enjoy one of my real passions this year - fishing on the St. Lawrence. Tonight the wind was finally dying down and I decided to give it the old college try now that the water has warmed and the bass have moved into some local hotspots near Clayton. I decided not to take out my fishing boat because I expected to make it a quick trip and I didn't expect to go more than a half mile from my house (mistake #1). After traveling about 100 ft, I could tell that my trolling motor battery did not have an adequate charge to fight the wind so I dropped anchor at a nearby shoal. On my first cast I hooked a decent fish that was pulling drag so I was thrilled..... until I saw it roll over and I realized I'd hooked a giant channel catfish without any pliers or hook removers in the boat (mistake #2). I made one feeble attempt to remove the lure by hand and was rewarded with a one inch gash in my index finger (mistake #3).

By now I've decided that I have to get back to my dock and remove the lure with the proper tools, particularly since the 12 lb fish dragging my 9ft boat around the river was starting to attract a crowd of spectators on the nearby docks. I start paddling back to my dock (by now my battery had completely died) when I hear a splash....... my pole is now sitting on the bottom of the river, I'm gushing blood, my battery is dead and I'm just soooo thrilled that I decided to sneak in an hour of fishing before dark :)

I eventually fished my pole out of the river, limped my way back to the dock and released the fish unharmed (I wish I could say the same for my left finger - my concert piano days may be over). So, when you're having a rough day back at work after a long vacation (welcome back Mom!) just think "hey, it could be worse, I could be fishing" :).

Cheers!

1 comment:

Anonymous said...

What is that old saying - "A bad day of fishing is better than a good day at work" or something like that!