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Five Things You Need to Know: Congress Proposes Exporting $69.9 Billion Trade Deficit to China to Offset $69.9 Billion Trade Deficit; Also, Scooby Doo Realtors, China Ego, Millennials, Grateful Dead Stock Index


What you need to know (and what it means)!


Minyanville's Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Congress Proposes Exporting $69.9 Billion Trade Deficit to China to Offset $69.9 Billion Trade Deficit

Another month, another all-time high. America's trade deficit hit yet another all-time high in August, the Associated Press reported.

  • The deficit rose to $69.9 billion in August, up 2.7 percent from July's $68 billion deficit, which had also been a record.
  • The widening trade gap occurred even though U.S. exports of goods and services set a record, rising by 2.3 percent to $122.4 billion.
  • For August, the $2.7 billion rise in exports reflected record sales of American farm products and U.S. consumer goods including artwork and antiques.
  • The increase was offset by a 2.4 percent rise in imports, which also set a record at $192.3 billion.
  • The $4.6 billion increase in imports was led by a $1.1 billion increase in oil imports, which hit a record high of $29.7 billion.

2. Poll: 50% of Americans Believe Real Estate Prices Not Inflated, 46% Believe Real Estate Prices Inflated, 4% Could Have Bought House Below Market Due to "Haunting" if Not for Meddling Kids

A new national AP/AOL Real Estate poll reveals that 49% of Americans believe housing prices in their regions will rise in the next two years, a stark contrast with last week's housing report indicating median house prices are likely to decline more than 10% over the next few years in 20 metro areas.

  • The AP/AOL Real Estate survey, which the surveyors say provides a snapshot of future homebuyers' perceptions of the residential real estate market, found that 50% of Americans think housing in their area is not currently overpriced.
  • These people are called "home sellers."
  • Meanwhile, 46% of Americans, called "home buyers" seem to believe prices are inflated.
  • Samara Jaffe, head of AOL Real Estate, said. "these survey results really point to how divided homebuyers are about the state of the marketplace - and housing costs are influenced by perception of value, in addition to other economic factors."
  • The National Association of Realtors lowered its forecast for 2006 home sales, projecting a decline of 8.9% to 6.45 million units from September projections of a 7.6% decline from August projections of a decline of 6.5%.
  • Hmm, that seems like a trend, no?
  • New home sales are likely to fall for the first time since 1991, the NAR said, but added they've got a few statues of St. Joseph buried here and there in an effort to stem the decline.

"Our standard fee is 6% of the sales price
but we'll negotiate down to 5.5% if you agree
to list exclusively with us."

3. Easy There, Sparky

The Chinese see their country matching the US in terms of global influence within the next 10 years, according to an international poll the Financial Times reported.

  • The study by the Chicago Council on Global Affairs, in partnership with the Asia Society, found that a majority of Americans, Chinese and Indians see the US losing its status as the world's unrivaled superpower within the next half century.
  • Large majorities in India and China said they believed a conflict over energy resources was likely in Asia.
  • Majorities also said countries had a right to go to war to ensure adequate energy supplies.
  • Indians, whom panellists said seemed to have a greater sense of exuberance, placed their country second behind the US in global influence at present.
  • Some 55 percent of Americans believed the US would be surpassed or equaled as a global power over the next 50 years, a view held by 68 percent of South Koreans, 53 percent of Indians and 60 percent of Chinese.
  • You know, before we get all excited about making China the next global economic superpower, let's keep these thoughts in mind:

    Tiananmen Square 1989

    Chinese Prison Quarry, 2006

4. Research: Optimistic Millennial Generation Unwittingly Gears Up for Disillusionment, Crushed Hopes, Shattered Dreams

As the Millennial Generation comes of age, everyone from market researchers to politicians are studying what makes the group tick, according to the Arizona State University Press.

  • Millennial are defined as anyone born from 1982 to 2002.
  • This new generation is too different to be merely an extension of Gen X, the article, written by a Millennial, optimistically notes.
  • "It's a new brand. Millennials care more about individuality but focus more on socialization than ever before. They're multiracial and culturally aware but more skeptical of the government," the author says.
  • Tom Mohr, director of ASU's New Media Innovation Lab, says Millennials are an "always-on generation. You have your iPod, you're on your cell phone, doing your BlackBerry, text messaging. You're never stopping communicating or interacting with content."
  • Mary Madden, a senior research specialist at the Pew Internet and American Life Project, says that millennials are much more immersed in the world of technology than older generations.
  • The article notes that Millennials may put more pressure on themselves because they believe they're special, a common trait noted by Neil Howe and William Strauss, authors of the 2000 book "Millennials Rising."
  • "Well, the world needs ditch diggers too." Just remember that. But maybe you'll be a "special" ditch digger.

Welcome to the "real world."

Slightly different from the "Real World."

5. Grateful Dead Stock Index

Yesterday on the Buzz and Banter Todd Harrison posed the following question: "If there was a Grateful Dead Stock Index, what securities would comprise the index?"

The question, tucked inside a small Buzz and Banter post at 1:53 p.m. EST yesterday, received overwhelming participatory responses. It was as if Minyans had been sitting quietly by the computer these past four years waiting... patiently waiting... for just this opportunity to weigh in on the components of the Grateful Dead Stock Index. We combed through the hundreds of recommendations and settled on the following - not advice - a 10 component equal-weighted index, not optionable.

Grateful Dead 10 Stock Index,equal-weighted, not optionable.
Guitar Center (GTRC)
Diageo (DEO)
Baxter International (BAX)
Tweeter Home Entertainment (TWTR)
Harman International (HAR)
JB Hunt Transport Services (JBHT)
Potash Corp (POT)
Tenet Healthcare (THC)
Travelbybus Inc, (TRIP)
International Paper (IP)

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No positions in stocks mentioned.

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