Computerized Trading, US New Home Sales, GDP Per Capita, Fitch Downgrades New Jersey!, US Consumer Delinquency Rates Down

By way of background, I have believed from the time I began developing StockResearchPortal.com that a Research Website focused solely on the Mining,  Oil & Gas Industries was, and would continue to be for the foreseeable future, positioned in the 'best possible prospective economic and investment/trading sector'.  My reasoning had entirely to do with what I then saw (and continue to see) as very positive prospective long-term demand/supply curves for most minerals, and for oil and gas. The possible influence of computerized and professional trading on the prospective success of StockResearchPortal.com had not occurred to me prior to my receipt on Monday afternoon of the aforementioned e-mail.

 That e-mail began by saying: "All the commentary about "computerized trading", etc, applies to Wall St and the big-company side of Bay St. It does not apply to most of the companies followed by StockResearchPortal.com".  The subscriber went on to say that a "whole new frame of reference" may be developing around "considering investment in the exploration sector".

 The e-mail then said that one avenue open to investors who want to control their own destinies in financial markets dominated by computerized and professional trading might prove to be a gravitation toward investment opportunities 'where those large scale traders don't trade, and likely won't trade in the future'.  The e-mail concludes that small natural resource exploration companies may be one investment/speculation arena where those investors will be able to participate in markets unfettered and uninfluenced by those large scale traders.  The reasons for this are stated in the e-mail to be:

• it is unlikely there will be significant computerized trading in small capitalization natural resource exploration stocks that will 'trash their markets';

• in those markets there likely will be fewer hedge fund managers and pro traders to contend with; and,

• Therefore, in those markets there likely will be a greater opportunity for individuals to control their own destinies (investments or speculations).

The e-mail concludes by suggesting that in the past very little has been done to increase the universe of natural resource investors, but that investors prospectively may be driven to these sectors by a lack of viable alternatives.

Having had time to consider the foregoing, what this subscriber suggests makes conceptual sense to me, and I think is certainly something to reflect on and watch for going forward.  I would add that in addition to 'lack of viable alternatives' that future events, economic and otherwise, may result in the precious metals, oil & gas, and other natural resource stocks proving to be 'investments of choice' for reasons beyond those having to do with a proliferation of computerized and professional trading in larger market segments.

I would like to thank the subscriber who forwarded that e-mail to me very much for what I think is a very potentially insightful view that I hadn't, and likely wouldn't have, considered - but for him taking the time to send his thoughts to me.

If readers have follow-up comments or related thoughts I will be very interested in receiving them at icampbell@stockresearchportal.com.

• This was about 43% of the 700,000 monthly new home sales economists consider represents a 'healthy market'

• All types of home sales remain weak, with resale home sales falling for the third time in four months, with more sales not closing than usual.  The figure cited is that 16% of transactions were cancelled in July, which was four times the rate of 'deal cancellations' experienced in May

• Foreclosure and short sale prices are running about 20% lower than 'normal sale' prices, and are forcing house prices downward.  A 'short sale' is a term used for a house sale where the price is less than the debt amount owed on the house prior to the transaction 

• The U.S. median new and resale house price was $222,000 (down 6%), and $174,000 respectively 

• At the July 'new home' sales pace, it will take almost 7 months to exhaust the new house inventory 

• Percentage wise, house prices have dropped more since 2007 than they dropped during the 1930's Great Depression, which is 'saying something'.

All in all, as I see things this paints a bleak future for America's economy.  The U.S. housing industry was one of America's largest employers prior to 2008.  At a high level, one has to wonder about structural unemployment issues arising out of this housing crash.  At a Main Street level one has to wonder where jobs possibly can come from to fill the employment void the changed U.S. housing market has contributed to, where the U.S. will continue to experience a depressed U.S. housing market (or so I think) for the foreseeable future.

By way of simple summary, the referenced chart shows that of the 28 countries whose 'Real GDP % change per person' is depicted, 15 have shown % growth in 'GDP change per person' and 13 have shown % decreases.  Interestingly, and I say not unexpectedly, of the 13 that show % decreases only three (Canada, Mexico and Japan) are not a European country or the United States.  On the positive side of the ledger China leads India by a considerable margin, with a reported 35% positive change.  Turkey is ninth with a +5% change.

I suggest this article, and its chart in particular, are worth a few minutes of your time.

Again, as happened with a comment I made yesterday, no one 'commented on my comment'.  This lack of interest is leading me to wonder whether the entire issue of why the U.S. economy is where it is, and where it seems to be going, is simply becoming 'old hat'.  Alternately, Americans, by far and away the largest audience for the website I posted my comment on, may simply be so frustrated by what is going on that they may have decided to retire to the golf course.