Thursday, September 22, 2011

Our city councilors become day traders.

A veritable herd of deer eating our apples this morning. We have a bumper crop of apples this year. Instead of scaring them away, I quietly closed the door. I know, I'm feeding the deer because I'm too lazy to pick the apples up.


Horrible rotten dreams last night. Where do those come from? And why?


I thought the Prime Suspect with Helen Mirren was one of the best shows I've ever seen. This new version looks completely opposite in tone and approach. It looks horrible. Hollywood. Cute.

Maybe it's just the previews. But the previews have completely turned me off to wanting to watch it.


I think I'm going to try to record most T.V. shows that I want to watch, and reserve them for a couple of nights. And try to ruthlessly winnow down what shows I watch.


So the Bend City Council went ahead and bought 4 million worth of steel because they were told by an organization called The American Metal market that prices would go up enough for them to save 400K. in two years.

Pulling out my handy compound interest calculator, they need to subtract about 50K from that from interest they would've earned.

But why would steel prices go up? And why isn't every investor in the world making the same bet? Is it because they think the economy is going to recover in 2 years and the demand for building is going to increase?

It's a bet. A gamble. That could go either way.

Meanwhile, I know in my business that there are lots of ways to save "long-term" monies by buying stuff that is demonstrably cheaper now. But it's real money I'm spending, and over time I've realized that there are always current deals to be had -- not in the future -- and it's better to have the money in my hands than spend it for some possible future savings.

Have you watched the stock market the last two days? Down 0ver 700 points, last I looked. This is four years into the downturn. I see no reason to believe that the economy is going to recover in two short years.

Or is it burning the options bridge. "See -- we've already spent 400k. We have to follow through!"

What's next? Buying asphalt in bulk for future Juniper Ridge expansions?

Meanwhile, I just created an organization I'm calling The American Comics Market, and I'm advising them to buy the New 52 DC comics because they are going to be worth so much more in 2 years.

I mean, would any organization called The American Comics Market have any reason to mislead you?


Anonymous said...

The buying of steel had nothing to do with the pricing, but all to do with committing to the surface water project. By spending the money now they are locked into the project. The city worried that if the economy got worse there could be a larger out cry against the very expensive un-needed project. It's clearly a political decision.

Anonymous said...

I've been a steel broker/trader since 1990, dealing primarily with importing foreign steel products in commodity quantities to large mfrs here in the US. The American Metal Market is an industry joke.... old news, more often wrong than right. The fact is right now prices have been on the upswing since June, including the basic steel coils which pipe mills purchase. However, demand remains weak, the Euro/US crisis remains, Asia is experiencing slowness now. Feels to me like a double dip coming. Supply in this country is way ahead of demand. The City made a mistake. Prices will begin to fall again mid winter, probably by 10-20%. It's irresponsible and a foolish gamble with taxpayer $.