Wednesday, May 11, 2011

4 Stocks To Play The Low Dollar Trade: CAT, CL, FCX, NEM

The U.S. dollar's moves have been big news lately, most forecast the long-term trend of the dollar to futher depreciate. After appreciating through the latter half of 2009 and people sought the safety of the dollar, the greenback has been on a sustained slide.

What's important for investors to know today is that many companies will see EPSbenefits from the lower dollar via international sales and commodity price gains in the coming year.

When companies report earnings they do so versus the year ago quarter, so even if the dollar stages a huge rally in the coming months, companies that sell lots of goods overseas will see tailwinds to earnings over the next few quarters. In addition, a falling dollar leads to higher prices for commodities like gold, copper, aluminum and crude oil, and investors can position themselves to benefit from these trends as well. (For more, on this topic, check out Taking Advantage Of A Weak U.S. Dollar.)

Here are four stocks that will increasingly find tailwinds from a lower dollar as 2011 progresses. They include commodity stocks and companies that generate more than 50% of sales overseas.

Freeport-McMorRan (NYSE:FCX)
Freeport is a megadriller that specializes in copper production but also mines a great deal of gold (the ultra inflation play) and a metal called molybdenum that is used in the production of steel and certain chemicals. While the correlation isn't always 100%, it's generally a good bet that a low dollar leads to higher prices for gold. (For more, see 8 Reasons To Own Gold.)

Freeport's stock price has rallied tremendously since the summer of 2010 as commodity prices started to move upwards.

Colgate-Palmolive (NYSE:CL)
The eponymous maker of toothpaste, cleaning goods and other home products has a reputation for being one of the most sensitive companies to swings the dollar. More than 80% of sales come from overseas, as the company has a huge presence in emerging market regions like Latin America and Asia.

While Colgate-Palmolive does some currency hedging to mitigate huge swings, the company still stands to see quite favorable sales and EPS conversions in the next few quarters, as year-over-year comparisons will increasingly be against higher dollar levels than today.

Caterpillar (NYSE:CAT)
The maker of construction and mining equipment has been growing its global presence substantially in recent years, as international sales have gone from around 30% to nearly 60% today.

Sales to emerging markets like China, India, and Brazil have zoomed as these nations look to get their infrastructure projects off the ground, and as well as rising mining profits should help to boost Cat's sales in future quarters.

Newmont Mining (NYSE:NEM)
Newmont is the second largest gold producer in the world, and is a very concentrated play on a lower dollar as well as higher inflation expectations going forward.

While the majority of Newmont's revenues come from overseas, there is some mitigation in that many of the company's operations are based overseas. The low dollar benefit is only pure-blooded when your production costs are in dollars and your sales are in another currency. But Newmont should get some benefit via international sales and some via the inverse dollar vs. gold relationship. Furthermore, Newmont have a unique gold price-linked dividend; the higher gold prices become, the higher the dividend you receive.

Parting Thoughts
Opinions vary widely on the long-term effects to the U.S. economy of a low dollar. While these companies any many others will benefit, the prices of imports like oil, auto and electronics will rise. Investors should allow themselves to have some "leverage" to this trend, as it may stay in place for some time.

Slumping oil, commodity prices halt stock rally

Tumbling demand for commodities and a drop in the euro led to a broad stock sell-off Wednesday that pulled the Dow Jones industrial average down 130 points.

Demand for gasoline in the U.S. fell by the largest amount in seven weeks, the Energy Information Administration said, a signal that consumers are conserving money as gas prices near a national average of $4 a gallon. Gas futures fell almost 8 percent. Crude oil fell back below $100 a barrel, a loss of more than 4 percent.

Fewer fill-ups may be an early sign of a broader drop in consumer and business spending as customers forgo trips to malls and restaurants and companies ship fewer products. That, in turn, could lead to lower corporate earnings and halt a stock rally that has sent the stock market up 7 percent this year.

"People are becoming more conservative in their outlook and their spending as oil prices have risen, and that's making the market become more concerned about growth," said Quincy Krosby, the chief strategist at Prudential Financial.

The fall in demand for gas means that traders will take a close look at Thursday's weekly report on first-time applications for unemployment benefits. If they rise, that could indicate companies are cutting back in other areas as well, Krosby said. Stocks rose broadly on Friday after a report that companies added more than 200,000 jobs in April.

Stocks fell broadly, with energy and materials companies suffering the worst declines. The Dow lost 1 percent to close at 12,630.03. The S&P 500 fell 15.08, or 1.1 percent, to 1,342.08. The Nasdaq composite lost 26.83, or 0.9 percent, to 2,845.06.

The market's broad sell off, which sent all 10 industry groups in the S&P 500 index lower, is a sign that the economic recovery still seems uncertain at times. Strong earnings have been carrying the market higher since the beginning of 2011. On Tuesday the S&P 500 climbed for the third straight day to within 0.5 percent of its highest close for the year.

"Every time that stocks start to go down a little bit, you're seeing more selling pile on because people have made so much profit over the past 9 months," said Uri Landesman, president of Platinum Partners, a New York-based hedge fund.

The market's losses accelerated shortly before noon Wednesday. The dollar and government bond prices rose as traders moved money into safer assets. The dollar rose 0.8 percent against a group of other major currencies. The euro dropped 1.5 percent against the dollar.

The yield on the 10-year Treasury note fell to 3.16 percent from 3.22 percent late Tuesday. Bond yields fall when their prices rise.

Energy stocks fell 3 percent, the most of any of the 10 industries in the S&P 500 index. Denbury Resources Inc. and Cabot Oil & Gas Corp. both fell more than 4 percent.

Materials producers also struggled after metals prices sank. Freeport McMoRan Copper & Gold Inc., a miner, fell 5.6 percent. Copper fell 3.2 percent, and silver lost 7.7 percent. Silver fell sharply last week as part of a sell-off in commodities.

Commodities are still more expensive than they were a year ago. High oil prices helped push the nation's trade deficit up 6 percent to $48.2 billion in March from February. U.S. companies sold more automobiles and other goods and services to customers abroad, but it wasn't enough to make up for an 18 percent rise in oil imports.

Disney's results late Tuesday fell short of expectations, and its stock fell 54 percent, the most of the 30 stocks that make up the Dow. The earthquake that struck Japan in March cut into revenues at its theme parks there, and its movie studio profits took a hit from the box-office bomb "Mars Needs Moms."

Macy's Inc. was among the few companies that rose. The company jumped 7.7 percent after its earnings blew past expectations. The parent of Macy's and Bloomingdale's department stores said its first-quarter net income more than quintupled to $131 million from $23 million. The company raised its forecast for full-year earnings and doubled its quarterly dividend to 10 cents.

American International Group Inc. rose 3.5 percent after the government said it would sell 200 million of the 1.66 billion shares in the insurer that it owns to the public. The Treasury Department owns 92 percent of AIG after the company got bailed out during the financial crisis.

Intel Corp. rose 1.6 percent after the chip maker increased its quarterly dividend to 21 cents from 16 cents.

Three stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume came to 3.8 billion shares.

10 Stocks That Have Paid Dividends Since The 1800s: PPG, CL. KO, PG, UDI, ED, XOM, NST, SWK, WGL

Over the last several years many companies have chosen to not raise their dividend, while some decided to cut their dividend and some even decided to stop paying a dividend. In some cases their financials did not warrant the change. As investors in dividendgrowth stocks, we want to look for companies with a positivedividend culture.

Below are 10 companies that have a long-standing pro-dividend culture. They have paid an uninterrupted dividend since the 1800s - more than 100 years - and have increased their dividend for at least the last 10 years. They are presented here in ascending rank of how long they have paid a dividend, included also is the number of years of consecutive increases:

PPG Industries, Inc. (PPG) | Yield: 2.5%
Dividends since: 1899 | Increases: 38 years
PPG is a leading manufacturer of coatings and resins, flat and fiber glass, and industrial and specialty chemicals.

Colgate-Palmolive (CL) | Yield: 2.7%
Dividends since: 1895 | Increases: 48 years
Colgate-Palmolive Company (Colgate) is a major consumer products company thatmarkets oral, personal and household care, and pet nutrition products in more than 200 countries and territories.

Coca-Cola Company (KO) | Yield: 2.8%
Dividends since: 1893 | Increases: 49 years
The Coca-Cola Company is the world's largest soft drink company with a sizable fruit juice business.

Procter & Gamble (PG) | Yield: 3.2%
Dividends since: 1891 | Increases: 54 years
The Procter & Gamble Company is a leading consumer products company that marketshousehold and personal care products in more than 180 countries.

UGI Corporation (UGI) | Yield: 3.2%
Dividends since: 1885 | Increases: 24 years
UGI Corp. operates propane distribution, gas and electric utility, energy marketing and related businesses through subsidiaries.

Consolidated Edison, Inc. (ED) | Yield: 4.5%
Dividends since: 1885 | Increases: 37 years
Consolidated Edison, Inc. is an electric and gas utility holding company that serves parts of New York, New Jersey and Pennsylvania.

Exxon Mobil Corporation (XOM) | Yield: 2.3%
Dividends since: 1882 | Increases: 28 years
Exxon Mobil Corp. (XOM) formed through the merger of Exxon and Mobil in late 1999, is the world's largest publicly owned integrated oil company

NSTAR (NST) | Yield: 3.4%
Dividends since: 1879 | Increases: 13 years
NSTAR I a Boston-based holding company that serves some 1.4 million electric and natural gas customers in Massachusetts, has agreed to be acquired by Northeast Utilities.

Stanley Black & Decker Inc. (SWK) | Yield: 2.8%
Dividends since: 1877 | Increases: 44 years
Stanley Black & Decker Inc. is diversified global provider of hand tools, power tools and related accessories and systems resulted from the March 2010 merger of StanleyWorks and Black & Decker.

WGL Holdings Inc. (WGL) | Yield: 2.5%
Dividends since: 1852 | Increases: 35 years
WGL Holdings Inc. provides natural gas service in the Washington, DC, metropolitan area and surrounding regions, including Maryland and Virginia.

Searching for companies with a strong dividend culture is a great place to start, but before buying we must also consider other important factors such as: dividend fundamentals, ability to cover the dividend and fair value. Ultimately, we want to buy companies that can sustain a growing dividend.

McAlvany Weekly Commentary

The Fourth Turning: An Interview With Neil Howe

About this weeks show:
-What do regularly repeating 80-100yr cycles tell us about America’s current situation?
-How does each generation (young, middle-aged and senior) respond when a major historic change occurs within the cycle?
-Can we be aware and expectant of the next season in the cycle without becoming totally fatalistic?

About the guest: Neil Howe, best-selling author and national speaker, is a renowned authority on generations in America. He gives readers and audiences powerful insights into who today’s generation are, what motivates them as consumers and workers, and how they will shape our national

12 Month Gain In Imported Food Costs Biggest On Record And Other "Transitory" Observations

And once again inflation refuses to accept it is transitory. April Import Price Index was reported up 2.2%, following a revised 2.6% increase in March (previously +2.7%). Notably, the core of the action was in petroleum and food prices. From the release: "Foods, feeds, and beverages prices advanced 1.8 percent in April after a 4.2 percent rise in March. The April increase was driven by a 22.8 percent jump in coffee prices....The price index for nonfuel industrial supplies and materials rose 1.7 percent in April following a 2.0 percent rise the previous month. Both increases were led by higher chemical and unfinished metals prices, which increased 2.4 percent and 1.7 percent, respectively, in April. The rise in chemical prices was driven by a 6.6 percent advance in plastics prices, and the largest contributors to the rise in unfinished metals prices were prices for gold and other precious metals." In a nutshell, the 12-month advance in April was the largest year-over-year increase since an 11.2 percent gain between April 2009 and April 2010.

More from Stone McCarthy:

The index for import prices has now risen more than 1.0% in each of the past seven months. The last time a similar string occurred was in the period in early 2008 when widespread gains in commodities exerted upward pressure. The BLS noted that this was the first time the index rose more than 2.0% in two consecutive months since June 2008. While price pressures remain well-contained so far, increases affect all major categories.

Fuel import prices were up 6.7% in April, continuing a string of substantial rises over the last seven months.

Nonfuel imports were up 0.6% in April. Import prices for foods advanced 1.8%, while nonfuel industrial supplies and materials rose 1.7%. In nonfuel supplies, prices were up for chemicals (+2.4%) and unfinished metals (+1.7%).

Finished goods prices were more restrained. Prices for capital goods edged up 0.1%, while those for consumer goods excluding autos rose 0.4%. Prices for autos and parts increased 0.4%.

And a follow up from Goldman:

Import & Export Prices - Weaker Dollar


1. US import prices rose by 2.2% mom in April, slightly more than expected. Higher prices for petroleum products contributed to the increase, as did other unfinished industrial goods (e.g. plastics and precious metals). Rising global commodity prices are the main factor behind the relatively high growth rate (+11.1% yoy) in overall US import prices.

2. However, the April report arguably also showed signs of pass-through from the weaker dollar to the prices of finished imported goods. Prices for finished non-auto consumer goods rose by 0.4% mom, vehicle prices rose by 0.4%, and finished capital goods by 0.1%. Prices for all manufactured products increased by 0.8%, and are now up 2.8% from a year earlier. Prices of imports from China rose by 0.4% mom, and have now increased for seven consecutive months

Don't forget: a margin hike a day, keeps the 15 minute inflation monster at bay.

High-End Real Estate Market Is Getting Desperate

Two articles this morning lead me to conclude that housing still has no upside. The first from the NYT the other fromBloomberg.

The Times reports on what I (and others) have been warning about for some time. The lending limits for the GSEs and FHA are scheduled to be cut on 9/30/2011. Bloomberg reports on a growing trend, seller financing.

The GSE lending limits were increased as part of the 2008 HERA (bailout) package. Housing was in free fallback then; there were no private lenders. It (sort of) made sense to increase the limits in the overall effort to stop the economy from tanking.

The limits have already been extended once (end of last year). I’m sure that there is going to be a push by some in Congress to extend them again. I think the effort will fall flat. Fannie and Freddie have cost hundreds of billions. Extending the limits just keeps them alive and helps them grow. That is not a very popular position to take one year before an election. The additional argument will be made that the higher limits just support rich people. To some extent that is true.

The big change in limits will come from the areas that have the highest home values. These are pretty significant drops:

Monterey Co., CA down $247,000 (34%)

Monroe Co., FL down $201,000 (28%)

Hawaii Co.,HI down 250,750 (41%)

Some interesting changes. Blaine Co. ID (home of Sun Valley) has its limit cut by $272,000 (37%) while Eagle Co. Co (Vail) gets a haircut of only $104k (14%). The new limit for Vail will be $625,000 while the poor people up in Sun Valley will be capped at a lousy $458k. Look for the folks up in Idaho to make a stink over this.

In my neck of the woods the very toney Fairfield Co. Ct (home of very-very toney Greenwich) gets whacked by $195k down to a max of $514k while neighboring (and much less toney) Westchester has it’s limits cut by a more modest $104k keeping the lid at $626k. I assure you that there is not logic to this.

There are 88 counties across the country that will see their limit cut by more than $100,000.

The Bloomberg bit on seller financing is an interesting development. I have been seeing this in action in S. Florida. These are not the distressed properties owned by banks that go for auction. Those are cash buyers. There is a separate market for higher end (and Uber high-end) properties that have been trying to get sold for several years. Finding buyers is very hard. Prices have come down a bunch. As much as 50%; but there is still too many properties. Sellers who are looking to distinguish their home are offering cheap financing to lure buyers. Low interest rates and a five-year bullet are common terms. These are million dollar notes. By definition, there is no liquidity in these notes. In reality this type of financing is just a rental with an option to buy. Depending on the size of the down payment there is a very good prospect that these “sold” homes are going to revert back to the original owner in the not too distant future.

My conclusion from these two reads is that the availability of mortgages is going to shrink quite substantially in a few months. That there is already an evolving ‘solution’ to the problem called ‘seller financing’ is like we are reverting back to the stone ages of mortgage finance.

I think the steps to downsize Fannie, Freddie and FHA are necessary. I hope the cries to keep the ‘emergency’ limits are ignored. But there most certainly will be consequences from this.High-end real estate is going to fall a fair bit in the next year. It will continue to act as a dead weight on the broader economy.

The Minimalist Guide To Financial Planning

Believe it or not, financial planning is so simple it's ludicrous...

Step 1: How To Build Wealth:

Spend less than you earn and invest the savings wisely.

Rinse and repeat until step 2...

Step 2: How To Have Enough To Retire:

Spend less than your investment income and invest the savings wisely.

That's it. Seriously!

You will enjoy massive financial success if you just run your life from start to finish according to these two sentences. You don't have to be a financial genius and you don't have to learn tons of technical mumbo jumbo. Anyone can do it.

It's so simple it's a joke... except for one minor, little detail...

Why So Few Succeed

The obvious question is, "If it is so simple to achieve financial security then how come almost nobody succeeds?"

I'm glad you asked.

There are actually many reasons. Here are some of the most common.

  1. Procrastination: Most people wait until tomorrow to start saving and building wealth. The problem is eventually there aren't enough tomorrows left to do the job.

  2. Lack Of Discipline: Thomas Huxley said it best, "Perhaps the most valuable result of all education is the ability to make yourself do the thing you have to do, when it ought to be done, whether you like it or not; it is the first lesson that ought to be learned; and however early a man's training begins, it is probably the last lesson that he learns thoroughly."

  3. Short-Term Perspective: The essence of spending less than you earn is delayed gratification. You must view your goals from a 20 or 30 year perspective so that saving isn't a sacrifice. Instead, it is remembering what you truly want (freedom and independence instead of more stuff) and acknowledging it daily with proper action.

  4. No Perspective: Some people simply don't connect their daily spending habits to long-term implications. Retirement is so far in the future it equates to Neverland. They live unconsciously and spend, spend, spend until there is more month than money. They're just not paying attention.

  5. Ignorance: They just don't know any better.

  6. Can't Invest Wisely: This is the only part of the equation that requires financial skill. It is not complex. There are simple solutions that work. However, this is the one excuse that legitimately takes fortunes down when everything else is done correctly.<
Two Things To Notice...

There are two things you should notice from the above list.

  1. All the obstacles except for the the last item on the list (investment skill) are caused by your own mental blocks. More importantly, you have the power to overcome these obstacles since they are inside you. In other words, anyone can build wealth if you just develop the essential personal skills. It is not rocket science.

  2. Even though building wealth is a financial goal notice how only one of the 6 causes listed above is financially related! I'm always amazed how achieving financial goals has very little to do with finance and everything to do with you.

As Steven Pressfield wisely wrote, "It may be that the human race is not ready for freedom. The air of liberty may be too rarified for us to breathe... The paradox seems to be, as Socrates demonstrated long ago, that the truly free individual is free only to the extent of his own self-mastery. While those who will not govern themselves are condemned to find masters to govern over them."

In other words, freedom is within you. You have the power to choose it (including financial freedom).

How The Financial Services Industry Has Failed

Most studies show 5% or less of working Americans retire with anything remotely close to financial security.

Applying the previous quote, it means 95% are governed by masters other than themselves.

The solution to the problem is simple. However, implementing the solution has proven elusive to the financial services industry because the cause has nothing to do with "financial" and everything to do with human nature.

The problem is you've got a financial services industry trained to sell investment products when the only service most people need is accountability, support and coaching to do the right thing.

The technical aspects of implementing a financial plan are beyond simple. Anyone who can fog a mirror can get adequate diversification at low cost using ETF's or mutual funds. You don't need an "expert" to do the job. The prescription for a conventional, diversified portfolio is well-documented and requires no serious expertise. You can learn everything necessary to implement the investment side of the wealth building equation in a few hours or less.

People are failing financially not because of financial reasons... they are failing for no other reason than simply because they aren't doing what they know needs to be done.

The Conundrum

Think about it...

People are turning to financial experts for financial guidance. They want help in resolving their financial challenges.

The experts are selling them investment products as the solution.

Unfortunately, investment products are the easiest part of the equation. Nobody needs an expert for that. What they need is an expert for the more complicated, personal stuff that is truly keeping them from building wealth.

In other words, they need help building wealth in the first place, but what they get is a group of financial experts who are only in the business of managing the wealth they already built.

If you don't believe this is true just try getting the attention of a high quality financial planner when you have nothing to invest.

The person with nothing to invest needs the most help; yet, the financial planning profession isn't designed to serve that person. They are in the business of selling investment products.

Do you see the confusion?

The primary obstacles to wealth are not financially caused. People seek expert guidance. The experts sell them financial solutions.

It's a mess. It doesn't work.

That's why I got in the money coaching business. People need personal solutions... not investment solutions.

As I said in the opening, the financial planning part is simple — spend less than you earn and invest the savings wisely. The problem isn't in knowing what to do. The problem is getting it done.

It is time people got the help they really needed.

BNN: Top Picks

Steve Carlin, Sr. VP and Head of Equities, Aegon Capital Management, shares his top picks.

Don’t Buy A House In 2011 Before You Read These 20 Wacky Statistics About The U.S. Real Estate Crisis

Unless you have been asleep or hiding under a rock for the past five years, you already know that we are experiencing the worst real estate crisis that the U.S. has ever seen. Home prices in the United States have fallen 33 percent from the peak of the housing bubble, which is more than they fell during the Great Depression. Those that decided to buy a house in 2005 or 2006 are really hurting right now. Just think about it. Could you imagine paying off a $400,000 mortgage on a home that is now only worth $250,000? Millions of Americans are now living through that kind of financial hell. Sadly, most analysts expect U.S. home prices to go down even further. Despite the "best efforts" of those running our economy, unemployment is still rampant. The number of middle class jobs continues to decline year after year, but it takes at least a middle class income to buy a decent home. In addition, financial institutions have really tightened up lending standards and have made it much more difficult to get home loans. Back during the wild days of the housing bubble, the family cat could get a zero-down mortgage, but today the pendulum has swung very far in the other direction and now it is really, really tough to get a home loan. Meanwhile, the number of foreclosures and distressed properties continues to soar. So with a ton of homes on the market and not a lot of buyers the power is firmly in the hands of those looking to buy a house.

So will home prices continue to go down? Possibly. But they won't go down forever. At some point the inflation that is already affecting many other segments of the economy will affect home prices as well. That doesn't mean that it will be middle class American families that will be buying up all the homes. An increasing percentage of homes are being purchased by investors or by foreigners. There are a lot of really beautiful homes in the United States, and wealthy people from all over the globe love to buy a house in America.

But because of the factors mentioned above, it is quite possible that U.S. home prices could go down another 10 or 20 percent, especially if the economy gets worse.

So what is the right time to buy a house?

Nobody really knows for sure.

Mortgage rates are near record lows right now and there are some great deals to be had in many areas of the country. But that does not mean that you won't be able to get the same home for even less 6 months or a year from now.

In any event, this truly has been a really trying time for the U.S. housing market. Hordes of builders, construction workers, contractors, real estate agents and mortgage professionals have been put out of work by this downturn. The housing industry is one of the core pillars of the economy, and so a recovery in home sales is desperately needed.

The following are 20 really wacky statistics about the U.S. real estate crisis....

#1 According to Zillow, 28.4 percent of all single-family homes with a mortgage in the United States are now underwater.

#2 Zillow has also announced that the average price of a home in the U.S. is about 8 percent lower than it was a year ago and that it continues to fall about 1 percent a month.

#3 U.S. home prices have now fallen a whopping 33% from where they were at during the peak of the housing bubble.

#4 During the first quarter of 2011, home values declined at the fastest ratesince late 2008.

#5 According to Zillow, more than 55 percent of all single-family homes with a mortgage in Atlanta have negative equity and more than 68 percent of all single-family homes with a mortgage in Phoenix have negative equity.

#6 U.S. home values have fallen an astounding 6.3 trillion dollars since the housing crisis first began.

#7 In February, U.S. housing starts experienced their largest decline in 27 years.

#8 New home sales in the United States are now down 80% from the peak in July 2005.

#9 Historically, the percentage of residential mortgages in foreclosure in the United States has tended to hover between 1 and 1.5 percent. Today, it is up around 4.5 percent.

#10 According to RealtyTrac, foreclosure filings in the United States are projected to increase by another 20 percent in 2011.

#11 It is estimated that 25% of all mortgages in Miami-Dade County are "in serious distress and headed for either foreclosure or short sale".

#12 Two years ago, the average U.S. homeowner that was being foreclosed upon had not made a mortgage payment in 11 months. Today, the average U.S. homeowner that is being foreclosed upon has not made a mortgage payment in 17 months.

#13 Sales of foreclosed homes now represent an all-time record 23.7% of the market.

#14 4.5 million home loans are now either in some stage of foreclosure or are at least 90 days delinquent.

#15 According to the Mortgage Bankers Association, at least 8 million Americans are currently at least one month behind on their mortgage payments.

#16 In September 2008, 33 percent of Americans knew someone who had been foreclosed upon or who was facing the threat of foreclosure. Today that number has risen to 48 percent.

#17 During the first quarter of 2011, less new homes were sold in the U.S. than in any three month period ever recorded.

#18 According to a recent census report, 13% of all homes in the United Statesare currently sitting empty.

#19 In 1996, 89 percent of Americans believed that it was better to own a home than to rent one. Today that number has fallen to 63 percent.

#20 According to Zillow, the United States has been in a "housing recession" for57 straight months without an end in sight.

So should we be confident that the folks in charge are doing everything that they can to turn all of this around?

Sadly, the truth is that our "authorities" really do not know what they are doing. The following is what Fed Chairman Ben Bernanke had to say about the housing market back in 2006....

"Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise."

Since that time U.S. housing prices have experienced their biggest decline ever.

At some point widespread inflation is going to reverse the trend we are experiencing right now, but that doesn't mean that most American families will be able to afford to buy homes when that happens.

As I have written about previously, the middle class in America is shrinking. The number of Americans on food stamps has increased by 18 million over the past four years and today 47 million Americans (a new all-time record) are living in poverty.

Millions of our jobs are being shipped overseas, the cost of living keeps going up and an increasing percentage of American families are losing faith in the economy.

More Americans than ever are talking about "the coming economic collapse" as if it is a foregone conclusion. Our federal government is swamped with debt, our state and local governments are swamped with debt and our economic infrastructure is being ripped to shreds by globalization.

So sadly, no, there are not a whole lot of reasons to be optimistic at this point about a major economic turnaround.

The U.S. economy is going down the toilet and the coming collapse is going to be incredibly painful for all of us.

Hopefully when that collapse comes you will have somewhere warm and safe to call home. If not, hopefully someone will have compassion on you. In any event, we all need to buckle up because it is going to be a wild ride.