10 things going right in America

Recent news from the markets have caused many Americans to be more concerned about their financial futures than any time in recent memory. Kiplingers reminds us that when life hands us lemons, then make lemonade. Here is their list of 10 things going right in America:

1.Oil Loses Its Swagger: With the U.S. and global economy hurting, oil prices have dropped 50% in just three months, from $147 a barrel in July to the $75 range. Remember $80-$100 fill-ups at the pump? The national average for a gallon of gasoline is down to $3.10, from $4.11 in March, and should stay in the $3.00-$3.50 range through next year. Prices for home heating oil and natural gas are also headed lower this winter than last.

2. A Tipping Point for the Auto Industry: After years of talk and false starts, finally, all the major carmakers are furiously developing hybrid and alternative-fuel vehicles that could lessen our dependence on foreign oil. Meanwhile, desperate dealers are offering unheard-of deals on new, gas-fired models. For example, Toyota is offering $1,000 cash back and 0% financing on the 2009 Camry, the most popular car in America. Don’t drive much? If you’ve always wanted an SUV or truck, the discounting on some models is extraordinary.

3. Interest Rates Are Low and Headed Lower: The prime rate is at 4.5%, which is driving down interest rates on home-equity lines of credit and some consumer loans. The interest rate on a traditional 30-year fixed-rate mortgage is averaging 6.5%, the highest it’s been since the summer of ’07, but still not too far from the historic low of 5.8% reached in 2003-05 and 1963-65. And although credit-card companies are cutting personal spending limits, rates are dropping, too. The average rate on credit-card purchases fell to 11.89% in the first week of October, down from 12.13% in September, according to LowCards.com, which tracks 1,260 credit cards.

4. Homes Are More Affordable: Real estate, which was overpriced during the housing bubble, has returned to earth. That’s especially good news for first-time home buyers who were priced out of the market. While scare stories persist of credit drying up, the reality is more a return to traditional lending standards that had been thrown overboard-recklessly in many cases-by lenders. That means to qualify you usually need a 20% down payment, sufficient annual income, good credit and a tolerable load of debt.

5. Your Bank Savings Have Never Been Safer: The $700-billion federal rescue plan more than doubles the amount of federal deposit insurance on individual bank accounts, to $250,000 from $100,000. Uncle Sam sweetened the pot further on October 14 by providing unlimited FDIC insurance on non-interest-bearing accounts. That will provide more coverage for the nation’s small businesses, which use these accounts. Plus, a new temporary federal insurance program covers the full value if your money-market-fund shares fall below a net asset value of $1.00 (called “breaking the buck”). The program provides coverage for shareholders for the amount they owned on September 19, 2008.

6. Stocks Are on Sale, and Many Bonds Offer Terrific Yields: The current bear market is approaching the 1973-74 and 2000-2202 downturns, the two worst retreats since World War II. That’s the bad news. The good news: Individual blue chips are selling at bargain prices. For example, shares of AT&T sell for about eight times estimated 2009 earnings and yield 6%. Networking giant Cisco Systems sells for only ten times earnings estimates for its July 2009 fiscal year. Johnson & Johnson, as steady an Eddie as you’ll find, sells for just 13 times ’09 forecasts, and Google is going for less than 15 times estimates. Triple-A-rated tax-free bonds, an extraordinarily safe investment, are paying 5%-plus for ten years and 6% for 20. That’s more than the Treasury offers for bonds of the same maturity.

7. The Miracle of Technological Innovation Continues: Been to Best Buy, Sam’s or Costco lately? For $799, you can now buy a 42-inch, high-definition flat-panel TV that will knock your socks off. Throw in another $200, and you can get a surround-sound system to truly transform your den into a home theater. A top-of-the-line PC with more memory than you’ll ever be able to use now costs $1,000; laptops go for $1,200, down from $2,000-$4,000 five years ago. And giant leaps in handheld devices, such as Apple’s new iPhone, have revolutionized the way people interact with the world.

8. Prosperity Reigns in the Heartland: The fall harvest is shaping up as one of the best ever, despite the destructive weather and floods in the Mississippi River corridor since last spring. Exports of U.S. farm products will increase more than 40% by value this year. And recent years of high profits have allowed farmers to pay down debt so low that it accounts for a measly 9% of their assets — providing all the credit they’ll need for 2009 operations. At home, while food prices jumped sharply earlier this year, the weak economy is now expected to slow further price increases.

9. A New Tone and Direction in Washington: Whether it’s Barack Obama or John McCain who enters to the White House in January, election of a brand new chief executive should provide at least 100 days of galvanizing certainty for markets, and a new direction and sense of purpose for the country.

10. Shoppers Can Expect Great Gift Buys This Holiday Season: Retailers depend on robust end-of-year sales to turn a profit, but for 2008, the National Federation of Retailers forecasts holiday spending will increase only 2.2% from last year. That won’t even beat inflation. It’s good news for bargain hunters, though. Both brick-and-mortar and online retailers are gearing up to offer huge discounts to boost sales. For example, Deal News predicts a DUAL Core Intel Laptop will go for as low as $299 on Black Friday, the day after Thanksgiving, and a Canon PowerShot SD1100 (recommended in our Simple Tech

So chin up. We’ve been through hard times before. To quote Rudyard Kipling, “If you can keep your head when all about you are losing theirs …”

9 Responses

  1. I wouldn’t count on a great harvest just yet with corn and soybeans lagging weeks behind and frosts arriving. Crops in my vicinity were badly damaged by flooding from Fay, while crops a bit further north were stunted by ongoing drought.

  2. What about pork belly futures?

  3. High grain prices mean high meat prices.

  4. And many state laws mandate ethanol added to gasoline.

    /Where are those huge cellulosic ethanol producing plants, anyway?

  5. interesting you should bring that up. I rec’d this email from Bell Bio-Mass, a company that made news several months ago. I wrote to them and asked them some questions about the future of biomass
    “Drum vehicles to get biofuel in pilot project

    By Sarah M. Rivette

    Times Staff Writer

    Thursday, October 16, 2008

    FORT DRUM — Energy independence is one step closer for the military, Fort Drum and, according to some, the North Country.

    A pilot program between the Department of Defense and Bell Bio-Energy Inc., Tifton, Ga., will transform organic biomass waste into fuel to be used in all military vehicles. One of the test facilities, a 45-foot trailer, will come to Fort Drum before the end of the year.

    “They wanted something in the northern region and we were the biggest and the most capable,” said Walker R. Heap III, an environmental biologist with the National Environmental Policy Act at Fort Drum. “There is a huge potential because they can use any cellulose-based waste stream. The technology has been around for a long time; it’s just the specific way that Bell has come up with.”

    The organic material — paper, cardboard, wood chips, grass clippings — would be digested during the process and broken down to create the fuel. The byproducts are water and the hydrocarbon vapor that is collected to be turned into fuel.

    The trailer will be home to a fully operational laboratory and 10 digesters that will use different waste products to test for a wide variety of results. The unit will produce about 500 gallons of fuel and up to 4,000 pounds of potting soil per month. Each test facility is estimated to cost about $1 million, which is being paid for by Bell Bio-Energy Inc. Later on, a portable facility would cost only about $100,000 because it would not need all the testing equipment, computers and sensors that the test unit needs.

    “For every one pound of hydrocarbon we produce, we take one pound of carbon from the air,” said J.C. Bell, the founder of Bell Bio-Energy Inc. “The system is all natural. Basically what we are doing is composting. The difference is that we are using special bacteria and it’s a closed system so we capture the hydrocarbon, which becomes the fuel.”

    The end process is a long way off because all of the product created must be tested by the Defense Energy Support Center and deemed up to snuff for use in military vehicles. The test phase will last one year.

    “We are going to do physical and chemical testing to make sure that the product we deliver to the war fighter meets the commercial specification,” said Lee B. Oppenheim, the technical quality business process analyst for DESC. “Most military vehicles use a single fuel on the battlefield, JP-8, and we are looking to eventually create that.”

    One intended goal is for these trailers to be stationed with troops at bases around the world, to be used in case troops are cut off from supply lines. While the amount of fuel that is produced may not be able to fuel all of the vehicles at a base, it could be a power source. This would decrease the number of convoys going through hostile territory and the carbon footprint that the military now has.

    “From an environmental point of view, we will be creating carbon credits: the more of our fuel that people use, the more carbon we pull out of the air,” Mr. Bell said. “We are also going to reduce the landfill material by 70 to 80 percent. Now, if there are leftover cardboard or paper they can’t recycle, they bury it. Now it’ll be used.”

    The biomass-to-fuel program is part of a larger Army program focused on programs and funding for energy conservation. Other initiatives include creating a solar thermal plant, purchasing electric vehicles to replace 4,000 gas-powered vehicles and monitoring energy consumption. There are five other Army installations where biomass-to-fuel test facilities will be located: Fort Stewart, Ga., Fort A.P. Hill, Va., Fort Bragg, N.C., Fort Benning, Ga., and Fort Lewis, Wash.

    For now, these units are portable. There is talk that there will be larger facilities built on military installations. Mr. Oppenheim said installations could produce enough fuel to then sell commercially to the public.

    Mr. Bell also said he believes this is a viable solution for cities and farmers that produce large amounts of organic material. He does not foresee something like this working on a household-by-household basis because it takes one ton of material to produce 100 gallons of fuel. For now, Mr. Bell and his company are sticking with the military aspect and waiting for the results of the testing.

    “We are working with the DoD on this because as a company we are committed to the security of the United States,” Mr. Bell said. “They use a massive amount of fuel and we need to make this country energy secure.”

    Article Web Link:

  6. Dang. Taking CO2 from the air is not good, considering that we’re pretty borderline as far as plant growth is concerned. Optimal CO2 for plant growth and development is 1,200 to 1,500 ppm.

    /Oxygen….who needs it anyway.

  7. “Mr. Bell also said he believes this is a viable solution for cities and farmers that produce large amounts of organic material.”

    Yeah, and organic material isn’t needed to build soil or anything.

    There are a lot of people that don’t know jack about soil health that assume that crop residues are “waste” instead of a vital part of soil health.

  8. […] Nuke shares 10 things that are going right in America.  It isn’t just all bad news you know.  Like I paid $2.23/gallon for gas – I […]

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