Clean Energy Jobs, Tax Credits & Investing

The US Map above graphically illustrates the 43 states whose companies received tax credits to support clean energy projects . If you are an investor, consider researching some of the companies that received the grants in order to see if these grants could materially benefit these companies and thus the share price. I looked at a few companies on the list (see the bottom of this page for an excel spreadsheet) and found that each one of the company’s share price increased after the announcement.

Google Foreclosed Home Search

Notice all of the red dots on the US map – these represent homes that are currently under foreclosure. But, since this is a map of the US, the red dots actually represent clusters of foreclosed homes.  If you want to see foreclosed homes by address, start with this link to Google real estate search.  Once you have entered an address, if you check off the box next to Foreclosure, the search will return foreclosed homes by street, neighborhood, etc.

I read recently that the number of homes currently for sale is equal to the number of the shadow home inventory – homes representing distressed mortgages that have not yet been listed for sale.   It will be difficult for home prices to improve in communities with a high number of foreclosed homes for sale and a large shadow inventory of homes that will eventually be listed for sale.

Wall St. Bank Stock Recommendations

Are you thinking about investing in the major US banks? Zero Hedge put together the above graphic to show the cozy relationship between the major US banks.   Each of the green arrows shows one bank recommending the stock of another bank.   Most of the red arrows come from an analyst at a European bank.   Go to Zero Hedge to read the post and see the graphic in more detail.  What I want to know is how much of each of these bank’s assets include stock in the banks that they are recommending.  I also want to know if they were buyers or sellers after their recommendations came out.  Buying stock solely on the basis of a recommendation is a loser’s strategy.  You should have a basis for the investment (fundamental and/or technical) that you understand and a target price or plan to sell.  This is not a time to buy and hold. Stock downgrades typically come out too late and/or after the institutional stock owners have sold.

Average US Housing Price to Return to Peak Price in 2020

Paul Kedrosky of the Calculated Risk blog has posted the above graphic prepared by Moody’s economy.com (see full post here or click on graphic) that suggests that the recent peak housing prices will not return to the states hardest hit by falling home prices, such as California and Florida, until after 2023. The average US home price is not expected to return to the recent peak until 2020. Of course, these projections are based on assumptions that may not be met. But, if you own a home and are underwater and hoping for a quick return to a positive equity position, these estimates should temper some of your optimism. Note that the CSI acronym included in the graphic is the Case-Shiller index, a calculation based on repeat sales of US single family homes.

Economist Hyman Minsky – Economic Crises Inevitable

photo credit: MjaMes1408

Interesting overview of Hyman Minsky in the Boston Globe (see article here), a 20th century Harvard trained economist who was not considered to have had a major influence on macroeconomic thought during his lifetime or after his death – until now.  Apparently, his ideas are now in vogue.  The article highlights his “Financial Instability Hypothesis” – namely, that economic crises arise after periods of economic stability, not instability, when lenders and borrowers take on more risk in order to make more money.   His proposed solutions to a depression like crisis included having the Federal Reserve serve as a lender to firms in trouble (being done) and having the government employ those out of work (not likely). (credit to Barry Ritholtz of the Big Picture blog)

April 2009 US Government Receipts – Free Falling

Last October I pulled some retirement funds out of the market and moved them into a money market fund.  I couldn’t bear to watch the shrinking balance, especially when the economic news seemed so dire.  I decided I would rather preserve the reduced balance rather than take a chance that there was more pain to follow (there was).  Since then I decided to spend more time reading about the economy, both optimistic and pessimistic viewpoints.  My opinion, based on this reading, continues towards believing that there is more bad news looming for the economy – even in the presence of the ongoing stock market rally.  It is difficult to think differently based on the new release of the US Treasury Monthly Statement (see document here ).  Receipts for April 2009 – the month that typically results in the largest inflow of the year – was 34% less than April 2008 (see Table below).  Receipts for what should be the best income month of the year for the US government were less than government outlays (as has every month since September 2008).  This number suggests that the deficit estimates are probably optimistic (even after the upward revision this week), that the dollar will weaken and that the threat of inflation will start to play an even more prominent role in investor psyche. (credit to The Automatic Earth / Alea)

Google Offers Interactive Plots – Unemployment & Population

In the ongoing attempt by Google to provide access to all of the world’s information, Google has introduced a new search feature.  Google will now return interactive charts of unemployment rates and population using US government data.  You can access these charts entering ‘unemployment rate’ or ‘population’, followed by US, a state or a county.  The above image shows the unemployment rates for the US and two counties.  I lived in Duval county in the 1990s when unemployment was very low – I am surprised that the unemployment rate now exceeds the US average rate.  I also lived in Roanoke county in the early 2000s.  Roanoke county was known for it’s stable economy.  The graphic shows that the recession has likely spared very few communities in the US.

Although one has to be concerned about Google’s virtual monoply on search, tools such as providing access to government data can only be seen positively.  I have spent some time looking at government data and soon realized that I could spend hours trying to generate simple charts.   Google promises that this access to unemployment rates and population figuress is just the beginning to providing more access to government data.

Interactive Graphic of US Job Losses (April 2009)

Chris Wilson at Slate has published a very impressive interactive graphic of job gains and losses from January 2007 through February 2009.   I have pasted the January 2007 map, which is mostly blue indicating job gains and the February 2009 map, which is mostly red, indicating job losses.   Please go here to see this graphic of job changes on a month by month basis and note the dramatic increase in red (job losses) that started in October 2008.  (credit to paul.kedrosky.com)