There is a shortage of containers for shipping goods from the U.S. to other countries. Shipments are backed up for 3 months on refrigerated containers. The trade deficit for the past month is at its lowest level since 2001. Gas consumption is down substantially. The dollar seems to be holding at about 150 Euros. India seems to be running out of cheap labor to support its own economic boom. Like the song states, “The times they’re a changin’.”
Well, that’s good news, because there’s always money to be made in changing times. You just need to be sharp enough to figure where. If you’ve invested in companies that do lots of business overseas, you’re doing well. If you’re invested in retailers, you superior hope they are on the ball and cutting inventories. If you know something about ocean shipping, you could make a buck or two.
Lots of people are still paying sub-prime mortgages. Maybe they’re hanging on in hopes of a bailout from the lenders or the Federal government. It won’t be as good as they hope or as bad as you fear. Lenders are being much more cautious then they been in a long time. They are charging higher fees for loans. The lending processes are require more due diligence and that’s costly.
Anyway, the rate at which money is flowing in the housing sector is down to a crawl. Liquidity is a real problem. The question for someone buying in today’s market is “Can I afford to park my money for the next 10 years in this piece of real estate?” If the answer is yes, purchase that distressed property. If the answer is 5 years, think again. Real estates take a lot of time to unwind.
Credit card debt was up substantially last month. That might be due to the price of gas, because mid-level retailers are getting hit hard. On the other hand, people can’t tap their home equity. So, maybe capital flexibility comes on the credit cards.
Is this a good market to make money? Sure, especially if you’ve strong nerves and can stand a loss for a period of time. Long term investors will make money because the rules of the game will change a few more times before things become clear. Remember to keep an eye on liquidity, your own and those things in which you invest. Lastly, don’t invest in anything that keeps you from sleeping at night.
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