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US economy limping along at 1.3% growth rate

Last quarter’s growth rate revised down from 1.9% to 1.5%. Read if from the source here.

Apple now has more cash than the federal government

The Financial Post has reported this morning that Apple now has more cash than the Federal Government. The US currently has about $73 billion dollars, while Apple has around $76 billion dollars. Cash has always seemed like kind of a silly measure when an entity is loaded with debt. Having $5oo in your pocket isn’t meaningful if you owe thousands all around town, but that is a whole other can of worms.

This reminds me of the old Chinese curse: “May you live in interesting times.”

Jobless claims fall below “magic” 400k number

Some good news this morning from the Department of Labor. New jobless claims fell below 400,00 last week to 398,000. Considering that 400,000 is really a rather arbitrary number and is not some hard line where we are definitely creating more jobs than losing them, this really isn’t big news. Still, this is somewhat encouraging, and its nice to hear some good economic news headlines. Between the debt, and rumors of layoffs all over the place , its been pretty bleak reading out there.

The state of the housing market

Take a look at this article from cnn/money. The headline is that prices dip 4.5%, yet the very next sub-headline is that “prices rise again in May.”¬† For a site that generally tries to reach a very mass Joe Investor type reader, that is really confusing. But then again so is the housing market right now. The latest Case-Schiller data that this article is based off of, and is in my opinion the best source of data on housing that exists, is showing two trends.

The first is that year on year, prices are still declining, which is what the headline refers to. This is bad news. There is no recovery occurring yet. Year on Year comparisons are the most telling. There is no room for “seasonal adjustments” to distort the data either way, and considering that house prices are not all that volatile, comparing to a year prior is often a good gauge of where the market stands.

The second trend, is that house prices are rising on a month to month basis, and this is the second time in a row this has happened. Many news sources cite that this is the first time this has happened in a year, but that is not the whole story! The last time house prices “rose” was due to massive government incentives being thrown around everywhere. This is the first time, since the peak around 2007, that prices have risen on their own on a bi-monthly seasonally adjusted basis, without incentives or support in the market (aside perhaps from historically low interest rates). This is good news. The gains were very modest, and not seen in all areas, but prices are at least showing some signs that demand curve has hit the supply curve and we aren’t going to see a continued free-fall forever.

Other signs of life in the housing market are that the overhang of foreclosures appears to have peaked, though it is still very high, and the mortgage default rate is falling somewhat. Foreclosures and short sales are going to take a while to work through the system.

My overall opinion is that the market appears to be ready to stabilize, but its really early to tell. In 6-9 months time, I think it will be “safe” to buy a house and not worry about losing all of your equity. And of course this is on a national basis, your local area may vary considerably.

The debt ceiling, what is it, and why I don’t care.

You can’t escape it. Every news source is talking about it constantly. I am not talking about Caylee, or even the celebrity of the moment, but the debt ceiling. For those living under a rock, the debt ceiling is a hard limit on the amount of government debt that can be accumulated. It was first put into law in 1917, and the ceiling has been raised many times since then. Reaching the ceiling isn’t all bad, it opens up the (very necessary IMHO) conversation on why we are accumulating so much debt and whether we should continue to do so. Now if we exceed this debt limit, the government technically goes into default, meaning it can’t pay its debts off.

This would be a tremendous problem not just for the US, but for the whole world. One of the underlying “rules” of the current economic world is that the dollar is safe, and considering that Europe is in a maelstrom of its own, that still holds. But the much bigger assumption is that US treasury notes are risk free. If that axiom fails, we are looking at an entirely different financial market structure in the future- one that likely wouldn’t be advantageous to the US.

Sounds pretty bad eh? So why don’t I care? I don’t think Congress has the balls to let us default. The last 5 years have been highly uncertain, particularly with respect to the financial markets, and I don’t think anyone wants to move any further into uncharted territory than we already are. I am veering off into political territory which I want to avoid, but I think the biggest risk is that the Republicans, which from my seat¬† have shown a much greater propensity to “throw fists” may try to block any deal that doesn’t give their agenda huge concessions and force a default- the ensuing crisis and economic damage would probably ensure our next President is Republican. I think this chance is still very, very small though.

Continuation of Tom’s Hardware In-depth look at Wi-fi

Toms Hardware has the second part (of two) of their series on Wi-fi performance here. The results are kind of surprising- the Apple Airport Extreme gets slaughtered in a multi user scenario, and the article demonstrates how lots of interference from multiple users can really kill your performance, which is especially relevant to city dwellers out there.

I think the biggest takeaway here is that wireless is really not suitable for an office or other high density environment.

Good read on how Macs and their DHCP implementation

I was not aware that Macs could get on the network much much faster than Windows PC’s. Its a good read on a subject I haven’t read much about- the process of how computers actually join the network.

Great article on the first real cyberwarfare- Stuxnet

Wired has a long article on a story that is out of a Tom Clancy novel- Stuxnet. Stuxnet targets industrial centrifuges, but only activated itself when a very specific configuration was found- and in this case that configuration turned out to be a facility in Iran that is enriching uranium to make nuclear weapons. No one is yet sure who is responsible for the virus, but the US, Israel, and even Germany are high on the list of suspects.

 

The strains of 4 years of hardship starting to percolate into view.

The WSJ has an article about how dollar stores and ultra-cheap retailers are even feeling the pinch in this economic climate. This reflects what I have been seeing more of lately- marginal households and even once fairly solid middle class households are reeling under the strain of years of a sluggish economy. Some of the people I know have fairly good incomes, but bought houses during the boom and are struggling with their mortgage payments. I was actually rather surprised when I invited a friend out to dinner and drinks and they said they couldn’t go because they just couldn’t swing it right now. I have even seen on some forums people proclaiming there are just no jobs right now, their unemployment is running out, and they are looking for advice to avoid eviction.

The “there just aren’t any jobs” claim has always seemed a little dubious to me, though perhaps outside of an urban area, it could be possible that there just isn’t a job in a reasonable (or even unreasonable) distance of where one lives. It is a little awkward to ask in these situations as to whether they really couldn’t even find a food service job, or a job in their chosen profession, or they just wouldn’t take the hit and take a low paying job.

 

At this point, the #1 issue in the American economy is without a doubt the unemployment rate.

Google Plus

On a lighter note, I had the chance to check out Google Plus yesterday evening. All I can say is that it is Facebook Lite with a bit more integration into the (in my opinion) half hearted social features like Buzz that Google has been rolling out for the past year or two. The big differentiating feature I saw was that everyone is put in a circle, whether that be friends, family, acquaintances or something you define yourself (coworkers seem like a good choice). Everything you post, gets explicitly posted to a specific circle. At first I thought this was a little silly, as there were no hierarchies, but you could use this creatively to blast out messages to a group of people. Consider a “bowling league” circle, or a “close friend” circle, or a more transient “going to meet at the concert tonight” circle.

Overall, I wasn’t too impressed, but it is an early stage beta, and unlike Orkut, Google really seems to be throwing their weight behind this one, so we will see what happens.

One last thought- its scary how much Google knows about me, and its also scary how much Facebook knows about me- to combine those two knowledge bases together… you could know more about me than most of my friends do without even meeting me. I may avoid Google Plus if for only this reason.