We’ll naturally present the final sprint results tomorrow morning in our Peoplenomics.com update, along with a bevy of charts, but if you’re keeping track down to the year-end finish line on how different classes of investments are doing, here’s the day-before finish:
INVESTMENT
Ended 2010
Close on 12/29
Gross
Less Inflation
NET FOR YEAR
Dow
11,557.51
12287.04
106.31%
3.40%
102.91%
S&P 500
1257.64
1263.02
100.43%
3.40%
97.03%
NASDAQ
2652.87
2613.74
98.52%
3.40%
95.12%
BND (Bond ETF)
78.12
83.48
106.86%
3.40%
103.46%
Gold
1405
1545.50
110.02%
3.40%
106.62%
Silver
30.6
27.78
90.78%
3.40%
87.38%%
Naturally, these numbers (for the metals) are based on the New York close of Thursday, so it will be tomorrow before we see the real, final numbers. Gold is up nicely this morning, but with a further rally in markets…well, we’ll get to that tomorrow.
There are two things people don’t put a lot of neurons behind when they are looking at their personal financial picture, many times…maybe three…
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The year-on-year change in the Consumer Price Index, which as of the most recent reporting period was 3.4% (and what we’ve used in the chart above).
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The wild-eyed printing of the Federal Reserve, which has we’ve pointed out many times in the past, is trying to print money (and borrow it into circulation) fast enough to offset a terrible deflation which would otherwise have already collapsed the world economy. As it is, they’ve bought some time until mid 2012, perhaps. Still, as of yesterday, the 12-month (through November) M1 (cash and equivs.) was up 18.3 percent, year-on-year, while M2, a slightly wider measure, was up 9.8 percent.
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Combined. this data might be construed as to suggest that real deflation is running in the area of [real M2 growth] minus [secular inflation by the CPI] which would put real deflation qt 6.4%. M3 is a better (and wider) approximation, however.
Thus the really totally amped-up, caffeinated thinker would observe that M3 (reconstructed from www.nowandfutures.com ) was running about 6% year-on-year and so if we were to do the calculation would be: 6% minus 3.4% inflation which would signify 2.6% deflation, which is suspiciously close to what was in the S&P/Case-Shiller Housing report this week. Specifically, this part:
Still, the main [long term] economic data point to ponder for the week was not the zoom-in on the race-to-the-finish going on between different classes of investments, but rather – in practical terms – what are we (as ion “regular” humans) to do about it?
Thursday’s press release from Freddie Mac offers related insights:
MCLEAN, Va., Dec. 29, 2011 /PRNewswire/ — Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates finishing the year near their all-time historic lows helping to keep homebuyer affordability high. Averaging 3.95 percent, the 30-year fixed has been at or below 4.00 percent for the past nine consecutive weeks and only twice in 2011 did it average above 5.00 percent.
News Facts
- 30-year fixed-rate mortgage (FRM) averaged 3.95 percent with an average 0.7 point for the week ending December 29, 2011, up from last week when it averaged 3.91 percent. Last year at this time, the 30-year FRM averaged 4.86 percent.
- 15-year FRM this week averaged 3.24 percent with an average 0.8 point, up from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.20 percent.
- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.88 percent this week, with an average 0.6 point, up from last week when it averaged 2.85 percent. A year ago, the 5-year ARM averaged 3.77 percent.
- 1-year Treasury-indexed ARM averaged 2.78 percent this week with an average 0.6 point, up from last week when it averaged 2.77 percent. At this time last year, the 1-year ARM averaged 3.26 percent.
This more or less sets the stage for what we’ll be covering in Peoplenomics tomorrow – I’m working on matching up the timeline of “news” events of the 1930′s with events of the current period…which should guide us (to some extent) on what to expect in 2012 and beyond, and thus, hopefully, make appropriate timing decisions with regard to our nest eggs which include everything from a couple of gold coins to real estate to those catchy and easy to get sucked in, paper assets.
What if Paul Wins?
Say, there’s an interesting problem for the MainStreamMedia (MSM) should Ron Paul surpass Mitt Romney in next Tuesday’s Iowa voting. This CBS News piece is pretty good...
Paul might do OK in Iowa, but over at InTrade (the world’s leading prediction market) Mitt Romney was showing at 76.4% odds to be the GOP/republicorp entry. Newt, Bachmann, and Rick Prairie (sic) are dust.
Paul meantime, has raised more money from military personnel than any other candidate which, goes to show you, I think, that the neocon-leaning old-guard media who call Paul “dangerous” are out of touch.
Still, numbers lean toward Romney presently.
Strait Dopes
Iranian media are proudly announcing their 7th day of naval drills in the Strait of Hormuz as the US sends a carrier into the neighborhood.
Tomorrow morning, Iran will test launch long-range missiles. Makes Israel nervous, and even folks like me as a little edgy about it: Long range missiles have been launched from ships and how do you spell E.M.P.?
Mooned
China has confirmed that there’s going to the moon.
This is mighty amoonzing: As I see it, there will be, down the road a bit – couple of decades, maybe, a confrontation over “ownership” of non-Earth objects. Arguably, no one from off-object should have any claim, but the courts of record for the moon are on Earth. United Nations, International Court at the Hague, and so forth.
So here’s my question – and maybe a well-schooled reader knows the answer: What is there in international law that sets up ownership of claims on the moon?
But Syriously
More violence in Damascus. What seems to be driving it is an opposition call for huge protests against the government, per Al Jazeera.
Egypt Raids
Which gets us around to how another military Islamic government may be in the birthing process in Egypt. To back up a half-step, we know the Islamic fundamentalists made huge advances in second round voting, right?
OK, fast forward to this morning and Egyptian security forces have raided the offices of at least 17 non-governmental organizations, including (dare we say particularly?) those which support a democratic form of government in the wake of Arab Spring.
New Year’s Notes
The country of Samoa, subset Tokelau atolls, a UN dependency, have celebrated the moving of the international date line, because that means tomorrow night, they will be the first country in the world to enter 2012 rather than be dead last.
Over at the Huff Post there’s a decent summary of television offerings to schedule for tomorrow night. But, after looking at the 2011 top cable “news” shows, I’m convinced the one thing I won’t do is watch TV tomorrow night.
Instead, I’ve decided to head into town later on today and pick up a copy of the newest edition of Mad Magazine.
To be sure, there are some who think Mad is all about satire…well, maybe it is.
But there are times when it’s better than what’s on television – by a long shot.
Besides, crazy as the world is becoming, seems to us Mad is on the verge of making an important transition:
From being a humor publication to being a kind of running documentary on how the world really operates. They’re hitting closer to the truth, oftentimes, than all them cable news operations combined.
“The Year We Ran Out of Money” notes Mad. NSS. Unlike the cable shows, Mad has the good sense not to take everything so damn seriously. And if there’s one thing we’re going to need a lot more of in 2012, it’s humor.
Bills for Bills Department
One last example of how crazy things are (and why Mad looks more like a socioeconomic version of National Geographic here lately) comes as we review reports that Verizon has been noodling the idea of charging customers $2 “convenience fees” for paying their bills online.
Charging people to pay their bills? FMTT! What would be laughable appearing in Mad somehow looks dangerously sinister in Forbes and the Chicago Trib.
Has Alfred E. Newman moved on to the board of Verizon now? Last I heard he was a White House tsar of some kind…bailouts, I think it was….right after his stint in the State Department. Middle East, wasn’t it?
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