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This Week's Business News

Retail Sales

Overall retail sales in July rose 0.3%. That was above the gain expected by Wall Street and substantially above a decline posted in June. Consumer spending accounts for roughly 70 percent of all economic activity.

Inflation

Annual total consumer inflation rates:

6.8 - July 1977
3.9 - July 1987
2.2 - July 1997
2.4 - July 2007

Mr. Market

Another volatile/down week on Wall Street.

Wake me if the Dow falls all the way back down to 12,000 or lower. That would be a good point IMO to start buying selected blue chips -- en masse.

Buy low.
Sell high.
Not vice-versa.

BTW, if you're retired and the recent volatility in the stock markets has you screaming, shouting, losing sleep, frothing at the mouth, etc., there's a very important question you need to ask yourself: Why on earth are you invested in the stock markets?

If you're already retired you need income and protection from inflation, not capital appreciation. You need minimal risk, not the massive risks inherent in common stocks. If you're already retired there's not a good reason to have any of your money in equities. You should be in money market funds. TIPS. CDs. Muni bonds. Commodities/materials. REITs. Fixed annuities. Perhaps a couple of preferred stocks. Not common stocks. If your home is paid off in full and you're at least 62 years old then you should take out an equity conversion reverse mortgage. It's a no brainer. Seriously.

Cause & Effect

Courtesy of USA Today here are the seven states with the highest hourly minimum wages:

$7.93 - Washington State
$7.80 - Oregon
$7.65 - Connecticut
$7.53 - Vermont
$7.50 - California
$7.50 - Illinois
$7.50 - Massachusetts

By way of comparison here are the seven states with the lowest unemployment rates:

2.3 - Montana
2.3 - Idaho
2.5 - Utah
2.5 - Hawaii
2.9 - Virginia
3.1 - Nebraska
3.2 - South Dakota

Made in China

Mattel announced its second major recall of Chinese-made toys.

I strongly suspect there are elements of our political fringes who will take that as a cue to demand blanket restrictions on imports of Chinese products. But import restrictions on basic commerce items are self-defeating. Furthermore the market for Chinese toys and such will correct itself in due course.

Housing Market

New home starts came in at an annualized rate of 1.38 million in July, below expectations and below an upwardly-revised reading of 1.47 million in June. Building permits in July were 1.37 million (annualized), below expectations and below an upwardly-revised figure of 1.41 million permits in June.

Self-Parody

S.F. Bay Area Newspaper Owner Rejects Unions

The media chain that controls most major daily newspapers in the San Francisco Bay Area withdrew recognition of the labor union representing reporters and editors at the Oakland Tribune and four other papers.

MediaNews Group said the five publications are being consolidated with some of its other holdings, the nonunion Contra Costa Times and the Hills Newspapers.

Irony can be ironic, no?


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Comments (5)

If you're retired you shoul... (Below threshold)
sam:

If you're retired you should NOT be in commodities...they're more volatile than stocks.

Furthermore the... (Below threshold)
Eric:

Furthermore the market for Chinese toys and such will correct itself in due course.

I just bought my 8 yr old daughter a Magic 8 Ball. She loved it, until she saw it was made in China, she handed it back to me and now won't play with it.

I'm not kidding.

Jason - the open borders, "... (Below threshold)
Jay:

Jason - the open borders, "free trade uber alles", internationalist neocon.

How predictable.

There's many issues here. B... (Below threshold)

There's many issues here. But the lower unemployment rates are in states where there are smaller populations and shortages of workers. But higher wages in other states often means a higher rate of home ownership, etc.

The individual inflation rates for energy and food are not noted here. But energy inflation as well food are serious concerns. I come from a farm background, and now about 20% of the nation's crops are rotting on the vine due to immigration raid concerns and migrant workers afraid to come to work and face possible deportation, leading to higher prices. In addition higher transportation costs due to increased energy are driving up prices. And more and more corn is being diverted from cattle feed to use in ethanol production, also raising food prices.

I also strongly support trade with China and feel that safety concerns with some their products are somewhat overstated when actually compared to the huge volume of goods that they ship here. My own business deals in about 100% imports and about 98% of those imports from China such as motor scooters and other goods.

I had a recent serious motor scooter accident only says after the death of my dad, but it was due to the very poor street conditions near my home which caused some mechanical damage to my motor scooter steering and threw me over the handlebars at 25mph on a side street. I'm thankful it was not at 40 or 45mph on a main road, in which my injuries would probably have been fatal rather just painful. I can't fault the quality of the motor scooters I sell, just poor street conditions, where the city sometimes puts up danger A-frames over serious potholes rather than actually fixing the problem. One of scooters I sell won an international award in 2006 for engine design and has one of the smoothest transmissions that I have ever seen in any motor vehicle in my life. For the price some Chinese motor scooters are very good value at under $900 compared to spending $3,400 for a Vespa from Italy. And fuel economy that can run up to 117.6 mpg is pretty neat too. I've seen many Chinese imports that I consider an excellent value for the money. Even the quality of die-cast cars from there is awesome. Just look at the detail and the paint quality. For adult collectors, many Chinese toys are awesome in detail and quality. It's too bad some of those recalled Mattel toys can't be relabeled as for adult collector use only, as most adult collectors don't even open up their Barbie or other toys.

JJ - One correction. If yo... (Below threshold)
COgirl:

JJ - One correction. If you are retired and counting on living off your investments in the near term, you shouldn't be in the stock market. I speak from experience on this one -- retired, but don't need to access the market money for another 10 years or so. So no need to panic. I didn't in 2001 and I won't now. When everyone else panics, it creates buying opportunities for the rest of us.




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