Daily Intent

Santa Barbara, CA
For Santa Barbara residence the five days of Fiesta is over.  Though it lives on in the confetti covered carpets, colorful Facebook photo albums, and strengthened community.  Let’s rest up then continue on with this renewed energy and community.

After last week’s Fiesta Siesta Market Street Report, we return to our nuggets of wisdom theme.  I thank many of you for passing along the best pieces of advice you have ever received.  Please keep them coming!

My newest brother, Robbie -aka “Roberto”, aka “Bob”- Harding, I thank for sharing this week’s focus.

 ”The Chinese use two brush strokes to write the word ‘crisis’.  One brush stroke stands for danger; the other for opportunity.  In crisis, be aware of the danger- but recognize the opportunity.” - John F. Kennedy.

We have battled through the dangers of our economy collapsing, home prices falling, oil driving gas prices near $5/gallon, car makers failing and Madoff fraud.  All the while the Market Street Report has worked hard to refocus your mind.  See the danger, recognize the pain, take ownership over the realities, then create.  Create tools to capitalize on the abundant opportunities.  Opportunities to help, to serve, to better our world moving forward.

Remember how higher oil prices pushed many into green technologies because it was finally economically feasible?  Or when home loan rates fell to historic lows due to the depressed economy, allowing many to refinance and save hundreds of dollars each month?

These may be short term trends, but the current recession is creating longer term trends that open up tremendous opportunities for you.  How are you going to use your second brush stroke to draw out opportunity?
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Other advice that was passed along:
- “Multi tasking is often an excuse to justify doing a lot things half-ass instead of a couple things really well.” -unknown.  (pardon my French)
- “Pain is weakness leaving the body” - unknown
- “I’m a great believer in luck, and I find the harder I work, the more I have of it.” -Thomas Jefferson
- “When everything is falling apart, what you need to do is just practice the basics.” - Jerry Smith, Santa Clara U. Women’s Soccer Coach.
- “Go where the love is, not where it is suppose to be.” -Kristine Freck
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Catalyst for Thought- Meeting of the Minds - “Tapping global resources, locally”
John Dilts, CEO of Maverick Angel Investors, August 13th. Thursday. 12pm.
Go on and buy your ticket today!
 Visit http://www.catalystsb.org/meetingoftheminds
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Buzzword: Funemployment
“Unemployed individuals who decide to enjoy the free time that unemployment provides. The term was coined during the financial crisis of 2008-2009 to describe those who had recently lost their jobs and were choosing to use their newfound freedom to travel, go to the beach, be physically active and generally enjoy themselves until they found a new job.

People who describe their joblessness as funemployment are typically younger individuals with fewer fiscal responsibilities or people who have accumulated enough savings to enjoy the extra time their unemployment has afforded them. People who describe themselves as funemployed often point out that during times of recession, finding a new job can be a long and stressful process, so rather than spending their days worrying about their future, they take advantage of the chance to do things they would be unable to do if they were working.  ” -Investopedia.com

  Six Points to Ponder:

   1. The Fed meets today and tomorrow.  Few expect them to change the overnight lending rate.  Look to read their follow-up notes and their economic projections.
   2. Markets pull back as investors take profits off the table - The Dow is trading at 9262, S&P 500 at 998 and the Nasdaq is at 1973.  Oil is level, $71/bbl.
   3. Commercial Real Estate and Lending takes the main headlines over Residential as prices slump 35% since Oct 2007, CIT Group faces $1.5Bn in losses and the overall market braces for $165Bn in loans set to adjust this next year.
   4. Consumer Bankruptcy filings for the month were up 34% from 1 year ago. 
   5. VIX, a gauge of expected stock savings, has been increasing as September nears.  Valuations are historic levels, but unemployment numbers dropped to 9.4%.
   6. Tiger being Tiger.  The leader going into the final round, Harrington, crumbled leaving room for Tiger to continue his historic PGA dominance.  70 wins all time.

Positives:

    * The Fed is expected to keep rates at current levels until the end of the year.  This is a positive for all those that have Lines of Credit tied to their homes or businesses, or have yet to refinance.  The overnight lending rate directly affects “prime”, the marker to which lines of credit and credit cards track.  Future beliefs of where this rate will be affects your home loan refinance levels.  Rates are still great.  Take advantage before the end of the year.
    * Even if you enjoy cheering for the underdog, it is hard not to enjoy watching Tiger.  Many of his shots are magical.  His nerves are enviable.

Negatives:

    * Historically September has been a negative month for the markets.  Going back to 1928, September has been the worst performing month of the year.  Given the fact that the S&P 500 has rallied 49% over the last 5 months and valuations are at their highest levels since Dec. 04, there is plenty of risk for a significant pull back.  A couple other interesting statistics: the biggest financial companies are expected to reach $1.5 trillion in losses and investors currently hold $3.6 trillion in money market funds, aka on the sideline, which equates to 30% of the total market cap of US companies.
    * Consumer Bankruptcies are expected to reach 1.4m by Dec 31st of this year.  While business productivity levels reached 6 year highs last month, high unemployment and debt burdens are leading to high levels of bankruptcy.  The recovery is not expected to be led by the consumer, as in past recessions.

Local:

Post-Fiesta Event - 4th Annual Fiesta Winetasting in the Sunken Gardens
Where: Sunken Gardens
When: Saturday, August 15th.  4 - 7pm
Cost: $45 in advance.  $60 at the door
Why:  Antioxidants are in wine.  Antioxidants are a great way to cleanse the body after a week of Fiesta.

Live and Be Well,

Jeff Bochsler