on d edge

Greenspan thinks we are 'on the edge of a recession'. He thinks housing has to hit bottom.

Here's what's going to happen:

The fed will contiue to aggressively cut interest rates. the thinking is, as long as housing prices are falling, then inflation is not a concern. once housing does bottom out and shows signs of stabilizing (maybe within 2 to 3 years) then the fed will fight a fight it knows how to fight...the inflationary fight.

The Fed will clamp down on credit availability in an effort to snuff out inflation. This will require a major tick up in the interest rates.

An increase in inflation from primarily food and fuel, and the corresponding increase in interest rates will solve the problem of excess liquidity (too many dollars floating around) as well provided those holding dollars with a greater return on their dollar holdings (China).

In this scenario, inflation is the fed's friend, and it will do nice work of bringing the the higher costs of house ownership down.

It should play out relatively painlessly for most. However, here are potential pitfalls:

• large holders of dollars stand to lose through the loss of purchasing power (prices are going up but collecting less on your cash position). Have some cash to be flexible. Cash is essentially stored energy which you have to put to use. If you are counting on cash as a source of income you may want to consider a part time job.
• Hold some commodities to offset the loss of purchasing power of your dollars. commodities have had quite a run, and i would be hesitant to buy more at these levels, that is unless you have none...then buy slowly
• Be mindful of your job-casualties of the impending recession through job loss will be in a precarious possition. if this is the case, another reason to hold some cash.
• holders of credit card debt (CCD) will get hurt when interest rates start cranking up. If possible, pay down CCD and/or lock into a fixed rate if at all possible.
• stay flexible nobody knows for sure how this thing will play out. Although a smooth recovery is likely, it is not a sure thing and there are to be sure some bumps in the road to recovery.
• For stocks, stick with companies with little or now debt, good dividends, industries which will be supported by consumers and/or governement spending.

a stock to drink too

a while back i mentioned I was interested in Diageo (DEO) which is the largest maker of spirits in the world (and they own Guiness beer which is how I found out about the company) and here is an update...I think think the logic that in "good times people party and drink. and in bad times they cry and drink...even more..." may work itself out...plus it pays a nice dividend. which is another bonus in hard times.

i think the most interesting thing with stock markets and financial markets is you can participate in trends that span the glode...you can join the game...

in d trini

So I am travelling in Trinidad and Tobago and just got back from Tobago...the resort and undeveloped island of this two island nation....and it was d best!

so much great food...something called 'bake and shark' is delightful...

it's nice to travel outside of the 'developed world' again...it's always refreshing to get a change of perspective.

The author's note

So the author of 'Gone and Back Again' wrote me back and he's a really nice guy as well as immensely talented. Which makes me appreciate his work even more...humility is definitely a value I value. Speaking of which, I really enjoyed the book since it's about people finding (or not finding) their values in life.


Anyway, here's what he wrote:


Thanks for the kind words. Really. I feel so much for Caley, it's nice to hear when someone else does to. I agree that what he doesn't know about himself is that he is tough. In fact, he so frequently thinks the opposite.


And I'd love to write another book. I've even got the title and storyline.


As for Bilbo's tale, yeah, his is a journey not unlike Bilbo's, so there're numerous references, some obvious, some less so, throughout the book. If you ever get the gumption, please write up a little review for Amazon, because it really does help other readers understand what the books about, especially when it comes from people just like them.


No matter what, though, you were very, very kind to write and I'm just so glad that my book interested you.


Thanks so much... Jonathon

Writing the Author

From time to time I write somebody famous and sometimes I hear back. I've written Jim Rogers, whose famous for calling the boom in commodity markets and writing books with word play in the titles...as in "Investment Biker" and "Adventure Capitalist". The only thing I remember from emailing him was him writing, "Unbelieveable..."

I wrote to the Author of "Gone and Back Again". Here's what I wrote:

Mr. Fuqua,

I just finished your latest book and thoroughly enjoyed it! It is a rare book that I pick up and actually get past the first few pages. But yours captured me and had me enthralled to the last page...thank you for writing it.

I'm sorry, but have to ask you a few questions/comments if you have time to respond:

• I like the title's reference to Bilbo's tale, "There and Back Again". Would I be pushing things to think of other references to The Hobbit?
• I am hoping you consider additional novels following Caley through his life. I'd be sad indeed if this is the end of the line. Cay, although he didn't realize it, was a tough kid. I'd like to see how he grows up.

Once again, thank you. Congratulations on the book!

And he wrote back! which was cool of him...he didn't have to do that...

gone and back again

Sorry for the hiatus...but I'm on holiday in the Caribbean. Very relaxing. It's nice to have time again. time to read. Just finished a great book: Gone and Back Again by Jonathon Scott Fuqua.

I recommend it highly. consider it added to the reading list. the reading list is actually a reminder to myself of books to reread, since I find books I can actually get through a tough thing. Any Dan Brown book I find atrocious. I tried Digital Fortress and 'the angel' books...and even the davinci code...but all were a slog...a slog for the first 3o pages!

I used to feel bad 99% of books I put down after 30 pages, then 20 pages and now 2 sentences...but now I see it saves me a lot of time...