Retailers Reflect a Changing Economy

By Jon Herring

What is good for individuals and for the economy in general is not necessarily good for retailers. For example, it is a good thing when people stop using their home equity as an ATM machine. And it's a good thing when they increase savings and pay down debt. But these improvements in consumer balance sheets can be a drain on the balance sheets of retailers.

Like it or not, consumer spending accounts for more than two-thirds of U.S. economic activity. And that makes retail earnings an important barometer for the economy. So what are retail earnings telling us... and how can you profit?

The biggest lesson we can take from retail earnings is that our economy is not only slowing (that is obvious), it is also changing. We are moving from an economy based on "what I want" to an economy based on "what I need."

That is why retailers that sell necessities (like Wal-Mart) will continue to show strength, whereas retailers that focus on luxuries and rely on discretionary spending (think Coach, Tiffany, and Saks) will show weakness.

Two companies that exemplify the shift in consumer buying trends are deep-discount retailers Family Dollar (FDO) and Dollar Tree (DLTR). Market research firm Nielsen recently reported that high-income shoppers (from households making more than $100,000 a year) increased their spending at dollar stores by 18 percent in the second half of 2008 as compared to 2007. Not surprisingly, both of these companies are near their all-time highs, while the rest of the market founders.

And speaking of relative strength, one of my favorite retailers in this market is AutoZone (AZO). When the economy tumbles and money is tight, people are more inclined to fix their old car, rather than buy a new one. Need evidence? AZO is also within spitting distance of its all-time high. Few companies have shown this level of resilience, and in a down market that is what you should be looking for.

Personally, I am choosing real estate, not to buy and hold, but rather to flip and collect profits immediately, no placing bets on stocks. Home Seller Assist provides complete A-Z training and 100% funding to buy using no credit or cash plus we have live training each Wed evening!

Larry Potter
Home of 20-day loan closings

An astronomical sum is still not enough!

Why not? Because of a series of very powerful reasons:

First, most of the money is being poured into a virtually bottomless pit. Even while Uncle Sam spends or lends hundreds of billions, the wealth destruction taking place at the household level in America is occurring in the trillions — $12.9 trillion vaporized in real estate, stocks, and other assets since the onset of the crisis, according to the Fed's latest Flow of Funds.

Second, most of the money from the government is still a promise, and even much of the disbursed funds have yet to reach their destination. Meanwhile, all of the wealth lost has already hit home — literally, in the household.

Third, the government has been, and is, greatly underestimating the magnitude of this debt crisis. Specifically,

The FDIC's "Problem List" of troubled banks includes only 252 institutions with assets of $159 billion. However, based on our analysis, a total of 1,568 banks and thrifts are at risk of failure with assets of $2.32 trillion due to weak capital, asset quality, earnings, and other factors. (The details are in Part I of our white paper, and the institutions are named in Appendix A.)


When Treasury officials first planned to provide TARP funds to Citigroup, they assumed it was among the strong institutions and that the funds would go primarily toward stabilizing the markets or the economy. But even before the check could be cut, they learned that the money would have to be for a very different purpose: an emergency injection of capital to prevent Citigroup's collapse. Based on our analysis, however, Citigroup is not alone. We could witness a similar outcome for JPMorgan Chase and other major banks. (See Part II of our white paper.)


AIG is big. But it, too, is not alone. Yes, in a February 26 memorandum, AIG made the case that its $2 trillion in credit default swaps (CDS) would have been the big event that could have caused a global collapse. And indeed, its counterparties alone have $36 trillion in assets. But AIG's CDS portfolio is just one of many: Citibank's portfolio has $2.9 trillion, almost a trillion more than AIG's at its peak. JPMorgan Chase has $9.2 trillion, or almost five times more than AIG. And globally, the Bank of International Settlements reports a total of $57.3 trillion in credit default swaps, more than 28 times larger than AIG's CDS portfolio.
Clearly, the money available to the U.S. government is too small for a crisis of these dimensions.

Larry Potter

www.ATicketToWealth.com

The U.S. dollar recently set new highs...

...by touching a level not reached since early 2006.

But the move that sent the dollar above overhead resistance hasn't held.

All the efforts to push back to those highs have been met with overpowering selling pressure.

Both the bears and bulls have been participating, no doubt about it. But the bears have been in the driver's seat lately.

HOME SELLER ASSIST - THE TOUR

Larry Potter
www.ATicketToWealth.com

How to Not Only Survive but Prosper in 2009

Prosperity in the midst of the worsening economic recession might sound like a pipe dream.
But the reality is that those who'll prosper will be those with a definite plan in mind and a lot of courage.

Most Americans are focused on survival right now.
They're circling the wagons in an attempt to protect themselves.

But some lone guns are out in the hostile economic wilderness searching for gold mines of opportunity.

Prosperity Road won't be easy to travel at first. There's bound to be plenty of cactus and wild weather to hamper the journey.

But in the end, those gold mines will be worth the effort.

So how will you find your gold mine?

By mapping out where you want to go and how to get there.

If you want to go from survival mode to Prosperity Road, click here.

Tips For Investing in Commercial Real Estate

by Rachel Spohn

Investing in commercial real estate can be a daunting, and if done incorrectly, very expensive process. The good news is you don't need years of training to be successful at it. First-time buyers who take the time to do their homework find real estate investing to be financially and personally rewarding. This article gives newbies the practical advice they need before jumping in.

First, here are a few differences between residential and commercial real estate (CRE) investments that you should know before buying anything. Commercial properties

• are valued differently. CRE income is directly related to its usable square footage, which isn't always the case with residential properties.
• often see greater cash flow. On an initial investment basis, the yield is often higher per square foot than in residential. A leased or rented multi-unit commercial property generates more income than a single-family dwelling.
• have longer leases. A longer lease length helps stabilize cash flow.
• help diversify risk. What this means is if, for example, you own an apartment building and you lose one of your ten tenants, only one-tenth of the income for that property is lost. In a single-family house a lost tenant means the entire rent is lost.
• are valued differently by the bank; find one that works with commercial real estate, and know that it will want a higher down payment than with residential investments, usually 30 percent or more.

One important similarity to keep in mind between these two types of property investment is that commercial real estate does go into foreclosure. Banks apply the same methods here as in residential properties.

Now that you're a little more familiar with the ins and outs of commercial real estate, the next step is to do some research. The worst possible thing to do is to jump right into before getting all the facts. It is important to educate yourself as much as possible to keep from making a financial blunder. Read as many books on the subject as you can. Learn the market for your geographic area.

If you have a specific property in mind, find out everything you can about that as well. Find out what the vacancy rates were with the previous owners. Talk to current storefront managers and find out what they like--and don't like--about doing business there. Don't be afraid to get out there and find the answers to such key questions as, Are current store owners planning to renew their leases? How are they doing financially? Have they been behind on rent before? What did they like about former management? Is the site properly zoned? Are any residential properties being built in the area? Is the population's median income at least at the national average, and are people maintaining their income levels? Be sure to ask to see the sellers' cash flow statements, too.

And if you want to flip commercial properties, check out the Home Seller Assist program and their 3% funding program.

Armed with this information, you will be better able to make a financially sound decision on your investment. Commercial real estate is a challenging but potentially very lucrative field, you just have to play the game right and educate yourself as much as possible.

Bacchus Development (http://bacchusdev.com) offers some of the most sought after commercial real estate for sale in Orange County. Rachel Spohn is a freelance writer.

Article Source: http://EzineArticles.com/?expert=Rachel_Spohn

Real Estate Tip from a team member...

http://www.REOFunder.com








http://www.REOFunder.com

How To Build Any List

Proof of Funds Letters!

As a Platinum Member of HSA, you are entitled to
use our Investor’s Private Funds.

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The fee is paid out of closing!

Which means Nothing is paid uprfront and there are No CREDIT checks!

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This is the part that stops most investors dead in their tracks…until now.

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Home Seller Assist
847-872-4047

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Next Wave of Bankruptcies

Banks have lost over $680 billion because of the huge wave of foreclosures that has hit the market over the past two years. And losses are beginning to ratchet up somewhere else, too: consumer credit card charge-offs.

Charge-offs are debts that a company deems "uncollectible." According to Moody's Investor Services, credit card charge-offs increased by 48 percent in August alone. And Moody's expects them to continue increasing into late next year.

6.82 percent of all credit card debt has now been written off. With unemployment rising and the economy falling into even more dire straits, the credit card charge-off rate is sure to skyrocket.

Which means that banks that have relied heavily on income from credit cards - like Capital One (COF) and American Express (AXP) - are sure to see bigger losses.

Time to Short Airlines as OPEC Cuts Crude Output

I’ve been watching in bewilderment at how much airline stocks such as UAUA, AMR, DAL, LCC, and RJET have have rallied without any real profit taking to set in yet. I shorted RJET a few times mostly for profits as I’m looking to catch this on the down side once people start taking there profits. And it's not a matter of if this will happen, it's when. With every huge sector rally, there's always a point when it peaks and retraces a significant amount before it continues going up, levels, or continues to fall.

OPEC scheduled an emergency meeting for Friday, October 24th, and is expected to cut crude oil output by an unknown amount. Demand for oil has been on the decline which has led to oil dropping around 55% from its peak near 150. Falling oil prices has meant increased profits for airlines, which is why the airline sector has been skyrocketing. Yet with rumors of the OPEC cut, hugely overbought conditions, and airline stocks losing momentum, this seems like it could be the beginning of a good time to catch airline stocks on a downside move, at least in the short term.

I’ve been trying to go short in several of them, yet shares have been hard to borrow. I managed to borrow some shares of RJET at 12.43 on Wednesday and alerted Black Service Members to go short. UAUA was also another very appealing airline stock and fell as far as 20% Thursday during the session, yet I wasn’t able to get any shares to short.

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WHEN WILL THE SELL-OFF END?

For the second-straight day, stocks plunged Wednesday as concerns about a worldwide recession and futures earnings from some of the global giants made headlines.

The fear of recession spread from stocks to other markets, as hard assets like gold and other commodities sold off. Energy, financial and materials led the decline and all 10 economic sectors posted losses ranging from negative 10.4% (energy) to negative 3.8% (consumer staples).

The losses occurred despite impressive earnings gains by some of the great global names: Apple (AAPL), McDonald’s (MCD), Merck (MRK), and Phillip Morris International (PM) all beat estimates. But Apple was the only one that closed higher, at $96.57, up $5.08.

Yahoo (YHOO) reported earnings after the close on Tuesday, beating estimates by a penny and announcing a 10% cut in its workforce. Yesterday, YHOO rose 32 cents to $12.39.

But the losses Wednesday weren’t primarily due to past earnings but to future earnings, as the overwhelming majority of companies have said that Q4 2008 and at least the first half of 2009 look much slower.

So now is the time to develop alternate sources of
income before you need it. I suggest you attend the
Tues and Wed webcasts at 8pm Eastern to see how you
can start to insure your future with very little
cost. Register now at http://www.fastbuyerloans.com
and get your free ebook.

Larry Potter
847-872-4047

"I can accept FAILURE, but I can't accept NOT TRYING."

3 Billion Served

Trading volume can be used as an indicator of changes in the market. Volume can tell you if a trend is likely to continue... or if it has run its course.

During the week of October 6-10, we saw several things we had never seen before. For one thing, the volume on the New York Stock Exchange reached 11 billion shares in a single day. A new record. Plus, the Spyders - the ETF that tracks the S&P 500 - saw over 800 million shares trade in a single day, and the weekly volume for the Spyders reached an incredible three billion shares. Those were both records.

You might also note that the week of October 6-10 saw the worst drop in the history of the U.S. stock market. That huge drop, coupled with the record volume, could indicate a capitulation point for the market - when everyone gives up and sells their stock. The second week of October could have been just that, the surrender of the bulls.

I would not recommend diving headfirst back into the market. There are going to be numerous layers of resistance to cut through. This market is best played cautiously. Lower your allocations and keep some cash on the sidelines. If, indeed, this turns out to be a bottom and a new bull market starts from here, there will be plenty of time to get back in.

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3 things are crystal clear:

1. The U.S. credit engine is already melting down. In fact, just this week, the all-important market for short-term commercial paper has come to a virtual standstill. This is precisely the market we warned you about. Now it's collapsing. And if this pattern continues, it's likely to drive many corporations that depend on this instant cash into instant bankruptcy.

2. Although a massive federal bailout might help rally the stock market temporarily, it is not — and will not — reverse the credit meltdown.

3. Quite to the contrary, fear is now spreading throughout the banking industry, driving many Americans to pull their money out of the financial system entirely. Yes, it makes sense to shift from weak to strong institutions, and that's rational. But the behavior we're beginning to witness is both irrational and dangerous.

New Webinar Times for Home Seller Assist program with John Alexander

Don't forget, we have a live presentation each Tues
and Wed followed by a Q&A session.

Tue Night: 8:00 CST Seller Call (www.webuyfastnow.com) attend this if you have a property to sell or buy

Tue Night: 9:30 CST Business Overview (www.fastsellerloans.com) attend this if you want to make a 1% on any loan that funds - my profits since June 23rd are just over $17,000

Wed Night: 8:00 CST Seller Call (www.webuyfastnow.com) attend this if you have a property to sell or buy

Wed Night: 9:30 CST HSA Training Call & Q/A Session (www.fastsellerloans.com)
using the info in our training, I have made over $17,000 since June 23rd

Government Intervention Has a Ripple Effect

By Rick Pendergraft

Over the last month, the intertwined relationships of the markets have been wacky, to say the least. On July 15, the SEC announced its protection plan for Fannie Mae (FNM), Freddie Mac (FRE), and 17 banks and brokerage firms. This move totally disrupted the natural ebb and flow of the market.

Financial stocks bottomed (for now) on that date - which makes sense. But the next part doesn't make sense. Oil peaked on July 15. What does the U.S. government bailing out financial institutions have to do with the oil market?

When the government stepped in to protect those financial stocks, the dollar rallied. Oil is traded in dollars. And much of the rise in oil over the last year can be attributed to the falling dollar. So the rally in the dollar that started on July 15 caused oil prices to drop.

All this being said, it looks like the dollar has too much resistance to get through in the near term. Plus, at this point, oil has too much support at $110 to blast right through that level. Look for a pullback in the dollar and a rally in oil over the coming months.

You shouldn't get overly excited about this manufactured rally in financial stocks, or about the decline in oil. The downward trend for financial stocks is still in place, as is the upward trend for oil. The government may have reversed things for the short-term, but this could be a major opportunity for you to short financial stocks and buy energy stocks.

One thing it has helped is the Home Seller Assist program created by John Alexander as explained at www.fastsellerloans.com, this no bank qualifying program is helping many who could not otherwise buy a house, check it out today.