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Fed Funds Rate November .25 0.0
Unemployment October 5.8% -.1%
Rate Type Month Last Change
Inflation (average) September 1.75% -.01%
Gold (oz) November $1,160 -$10
 
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False Pretense
Nov 30, 2011

The Dow Jones Industrial Average posted another surprising upward move today ending the day over 12,000 points – up another 4.2% (or 490 points.)  When you look at what’s going on in the world right now, such a bold Dow move can seem hard to fathom.  But when you get to the bottom of it all it makes perfect sense.

The world market is under extreme pressure.  Much of the Middle East is in full fledged turmoil.  Turkey is joining an Arab led coalition to sanction SyriaIran is seeking nuclear weapons and is hell-bent on destroying Israel.  In response to Iran’s ambition, the U.S. and some of her allies imposed additional sanctions on Iran for its behavior.  China and Russia, those who are profiting most from the Iranian nuclear effort, voiced their angry dissent and shortly after England’s Embassy was stormed in Tehran.  Riots are on-going in Pakistan in protest of NATO airstrikes and aggressive covert operations.  And then there’s Europe, which makes the news today because the U.S. just joined several other central banks to bail out the European financial mess. 

What a mistake! 

Why must American taxpayers now pay for an absurd Greek lifestyle?  Why must Americans bailout the incompetent foreign governments that include Italy, Spain, Portugal, Ireland, and France, to name a few.  Heck, we’re having enough problems bailing out our own incompetent governance. 

Let’s be fair, the U.S. has $15 trillion in national debt at the present time, the economy is in recession, and one-tenth of all workers are unemployed – this not to mention that the U.S. is staring massive cuts to Social Security and Medicare in the face.

Is this really the time, or the best use of American money that we don’t have, (remember, we must borrow money from China in order to lend some to Europe) to bailout another continent?  Is it me, or doesn’t this sound stupid? 

Yet the stock market ran boldly higher today.  Why?

Wall Street loves money, and with today’s Federal Reserve announcement, there will be more money printed, more debt to sell, and more cash for banks – and don’t forget, the Wall Street establishment are banks – they make money with money.  Today’s market move is based on the false pretense that current central banking moves will cure the ailment.  But it won’t.  It can’t.  Today’s action was like taking a pain killer for a broken back.  The only things it did was make it easier for banks to make more money – and harder for you to. 

Unless of course you own a strong portfolio, one constructed with superior 15-51 construction.  Here is how a strong portfolio stacks up to an average one for the past twelve months.

12mos11-30-11

 

That’s the kind of performance you need to stay ahead of inflation.  Superior 15-51 construction makes it easier to make money, build wealth, and manage your portfolio. 

Don’t buy into the hype.  Today’s move was under false pretense.  

 

Opportunity Knocks
Nov 30, 2011
The DJIA is up strongly today (+422 points as of 10.30am) on nothing short of a pipedream. 
 

These are great markets to Sell into -- details at 11 ( or thereabouts). 

Isn't it Ironic
Nov 29, 2011
The Dow Jones Industrial Average surged yesterday on rumors that European officials are getting closer to a debt deal. The Dow ended yesterday up 291 points or 2.6%. The above-average 15-51 strength Indicator rose 3.3% on the same grounds. And in early trading today both were in positive triple-digit territory again. Is this new European effort really cause for such a movement?
Sure it could be. But let me say, I find it ironic that the market for free market capitalism (the U.S. stock market) is applauding the pact being sought in Europe – one in which unites the region under one fiscal governing body comprised of a collection of “officials” that aren’t elected by free people. 
American investors would never applaud such a tactic. 
But remember that the German bond auction fell flat and interest rates across the region are soaring (an indication of greater risk.) Add to this a global recession and what you have is one ugly picture. Yet stocks are up, on of all things, a European movement in a direction away from free market democracy.  Why?
In this case, overly optimistic stock prices come from the Wall Street establishment, the traders and investment bankers who believe a consolidation of European debt is easier to sell than individual sovereignty bonds – even if those bonds are from the region’s number one economy (Germany.) Wall Street loves easy money – and in their minds a European pact makes selling their debt easier. So they applaud the move by bidding stocks prices higher – because there’s more money, and more money to be made easier. 
But by so doing, Wall Street thus endorses bailouts and dysfunction over a principled stance on free market success and failure. 
Think about it this way; if a CEO ran a corporation and Greece was a business unit of it that consistently lost money, produced little, and wasn’t willing to work harder to get cash flow positive, they’d be excoriated on Wall Street for not eliminating the losing unit from the organization. Why? Because losing units of the Greek ilk suck resources from units that produce greater returns on investment (ROI.) This drains future growth and mutes long term performance. As a result, the stock price for such a company would be driven into the depths of valuation hell, as investors and bondholders ran from impending doom. 
And rightfully so. 
But we’re not talking about a corporation or a stock. We’re talking about a region called Europe and troubled countries called Greece, Italy, Portugal, Spain, etc. etc. Even though this is a much bigger problem with much larger consequences than just a poorly managed company, broad based stocks moved higher on the bad news. 
Isn’t it ironic. 
Ugly
Nov 23, 2011
Market conditions have been hostile for a long time. This is acutely evident by recent stock market volatility. Yesterday there was a valuation stalemate. Today was another triple-digit loss (the Dow ended 200+ points down). While it’s the same old story retold, look at these ugly Wall Street Journal headlines:
  • Spending Slowed in October (by Eric Morath and Tom Barkley)
  • Nokia Siemens to Cut 17,000 Jobs (by Arild Moen)
  • German Bond Auction Falls Flat (by Emese Bartha, Art Patnaude, Nick Cawley)
  • HSBC China Manufacturing Gauge Falls Sharply (by Tom Orlik)
 
In a nutshell, consumers continue to fall behind, their spending pattern is slowing and their savings are dwindling. Employment is consistently under pressure, with Nokia adding itself to the long list of large corporations to announce massive job reductions. The largest and most successful economy in Europe (Germany) is having a difficult time raising money. And the world’s largest manufacturer (China) is shrinking. 
No mixed signals there. 
This is what happens in times like these. When strong entities consistently bail out the weak, soon the strong becomes weak and has difficultly raising money. When global demand shrinks, manufacturing shrinks. And when the consumer shrinks, markets shrink, and the Dow Jones Industrial Average indicates it. 
 
BacktoMidpoint
 
Stalemate
Nov 22, 2011
US stocks remained relatively unchanged today amid a day of mixed news. The U.S. Bureau of Economic Analysis revised third quarter 2011 GDP down to 2% (off 20% from its original 2.5% estimate.) Revisions happen regularly.
Here’s the revised GDP growth for the year thus far.
                 Quarter            Growth
                 1Q ’11              .4%
                 2Q ’11             1.3%   
                 3Q ’11             2.0%
                 Average           1.2%
 
That stinks. Yet profits rose in the quarter. According to a WSJ article titled, Profits Rise as GDP Revised Lower (by Jefferey Sparshott and Jeff Bater), “corporate profits –- after tax and unadjusted for inventories or capital consumption — rose at a 6.5% seasonally adjusted rate compared with a year earlier…”
That’s market activity down (GDP) and profits up. 
In another news conflict, U.S. Banks Post Strong Profits (by WSJ's Alan Zibel) reports that “U.S. banks reported their best quarterly profit in more than four years in the third quarter.” Yet, today, the nation’s second largest financial institution, Bank of American/Merrill Lynch was “warned to get stronger” in an article written by Dan Fitzpatrick. That article “identified governance, risk and liquidity management as problems that had to be fixed.”
That’s bank profits up and big trouble for the second largest bank. 
On days like these, when mixed signals swirl, stock market buyers and sellers often find themselves in a stalemate. That’s what happened today. 
 
 
Stocks Head Back to Midpoint, Again
Nov 21, 2011
The Dow Jones Industrial Average fell 248 points (2.1%) today, and with it all of its gains for the year. The 15-51 strength indicator ended down 1.4% for the day but remained up 6% for the year. Here’s the year-to-date chart comparison. 
 
YTDcomp_11-21-11
 
Today was the same old story: Europe is a financial disaster and America is right behind, as expressed in these three Wall Street Journal headlines:
  • Bank of Spain Rescues Lender
  • Moody’s Warns France on Rating
  • Debt Panel Meets in Last-Ditch Effort
Now more than ever you must believe in your investments and your asset allocations. Let me know if I can help
 
XRef:
 
Easy Money in 1 Year
Nov 18, 2011
Ever since A Different Kind of Day was posted, the most popular question I get is: Yeah, but how did it perform over the past year with all of this volatility? 
 
Answer: Pretty good.  Here's the picture.   
 
EasyMoney1yr
 
The Dow Jones Industrial Average advanced 7% over the past 12 months.  Easy Money gained 10% during the same time, beating the Dow by 43%.  That's pretty good. 
 

And You can do it too!

 
Have a good weekend! 
Exactly as Expected
Nov 17, 2011
My friend Iggy called me this morning and asked what my friend Craig asked me last night: Do basic market fundamentals still apply, or are they historically irrelevant?  
The speculation surrounding this is just silly. The recipe for investment success hasn’t changed since it began and neither have market fundamentals. In order to profit, you must sell something for a greater amount than you paid for it. The stock market is a function of the underlying economy and gold is a function of the condition of currency. 
Now, I’ll be the first person to admit that it’s easy to get lost in “the market” on a day-in and day-out basis. But when you back up and expand your perspective, everything makes perfect sense. 
For instance, Real GDP increased just 5% over the past five years (2006-2011). That’s 1% per year, which isn’t very good. In fact, it’s a no growth condition. 
Cheap and Easy Money policy has plagued the U.S. dollar long before the “financial crisis” and continues to persist. Even though experts say inflation is not a problem, Nominal GDP increased 18% during the five year span. That’s 13% inflation (the difference between Nominal and Real GDP.)
Inflation weakens the dollar, and since gold is a currency hedge, basic market dynamics would expect it to increase with a falling dollar. And since all major world currencies are under stiff pressure and in crisis condition, market fundamentals would dictate a steep rise in gold.   
The Dow Jones Industrial Average strives to be a market indicator – in other words, it tries to closely track average market activity (a.k.a. Nominal GDP.) The Dow posted an 8% gain in the five year period 2006-2011. The 15-51 Indicator, whose mission is to indicate strength, tries to achieve above-average performance returns. It should consistently outperform the DJIA.
The below picture tells the story succinctly.
 
MarketComp_11-17-11
 
The above picture is exactly what market fundamentals suggest – and would expect. Also notice that the DJIA is once again indicating recession. That, too, is no surprise
Don’t believe in the fluff or buy into the speculative hype. Market fundamentals are operating as normal and continue to tell the proper story. 
Stay tuned…
 
Fixing the Market: Ax the VIX
Nov 17, 2011
I was drawn to two specific Wall Street Journal articles today:
           * Did ‘Volatility Funds’ Deliver? (Ben Levisohn)
           * Morgan Stanley Settles SEC Case (Brett Philbin and Ben Fox Rubin)
 
Some cable news pundits can’t get enough of the VIX, the Chicago Board of Trade’s Volatility Index.  They call it the "fear index."  But what actually is it?
 
The first mentioned WSJ article explains how, "Volatility funds use complicated futures and options strategies to bet on the direction of volatility."  The key word in that sentence is "bet."  The VIX truly is a bet – not an investment, as no real asset (i.e. gold) or business (i.e. Apple) substantiates it. This makes the VIX nothing short of a gamble, nothing short of pure speculation.
 
Gambling and investment are two completely different things.  As a result, the VIX can’t possibly indicate investor fear.  Instead it indicates the fear of gamblers – those speculating on volatility, not investing in value.  Why should you care? 
 
"Volatility strategies can be housed inside a mutual fund, an exchange-traded fund or note, a hedge fund or a commodity-trading adviser."  Mutual funds are getting harder and harder to own because less and less in known about them.  Today it seems that the most important feature of a mutual fund is the number of stars awarded to it by Morningstar.  
 
Listen, mutual funds stink for a lot of reasons -- regardless of their star rating.  I detail a bunch of reasons in my book.  But it's even worse to know that fund managers are playing games in make believe instruments like the VIX with investor’s money.  These kinds of instruments should be illegal in the investment markets – ditto for credit default obligations.  They increase market volatility, risk, and steal wealth from the average investor.
 
Of course, fraud and deception have run roughshod throughout Wall Street of late. Today Morgan Stanley settled its latest infraction (charging consumers fees that never existed) for a few million dollars.  Add that to a rap sheet ten miles long and soon you’ll realize that you’re the best chance for your success.
 
Let me know if I could help.
A Different Kind of Day
Nov 16, 2011
I walked into a meeting today with a couple of brokers and their first words to me were, "Wow, Dan – all dressed up today." I smiled and nodded my head. Truth be told, I’m a notoriously causal dresser. But today was different. 
Today was my first personal encounter with the Wall Street establishment since publishing LOSE YOUR BROKER NOT YOUR MONEY. My attire was similar to that of my book cover, which is much different than my jeans-and-a-T-shirt style. But I was anxious to see how they would react to my book – what they would say, how they would say it. So I dressed up. 
Indeed this was a different kind of day. 
It was only yesterday that I thought I heard and seen it all from the Wall Street establishment. But today, on this special day, wearing my Sunday best and staring the Muse in the face, I was presented the most absurd statement ever uttered from a broker’s mouth. At one point in the conversation a broker said that the Dow Jones Industrial Average is "an insignificant index."
Clearly they didn’t read my book. 
Those who have know that I have nothing but the utmost respect for the Dow Jones Industrial Average because it is a brilliant piece of work – and that’s coming from a guy like me who created a market index of his own (called the 15-51 Indicator) that outperforms the DJIA by triple-digit percentages over the long term.  
The Dow Jones Industrial Average is a work of art with a long track record of reliable market indication. That’s why most people refer to it as "the market." 
 
So let me ask: How could something with such an important title be considered "insignificant?"-- and, Why would a broker say such a thing?
Because we were talking about benchmarking performance returns. The portfolios that broker’s throw together can never outperform the DJIA – or the S&P 500 for that matter. That’s why the Dow is "insignificant." That’s why it no longer matters; no longer counts; and because it’s too small, it doesn’t mean anything. Now they throw the S&P 500 in that category as well. 
Don’t believe it for a second. 
The reason for this new Wall Street pitch is because they’re now looking to benchmark off a global portfolio comprised of thousands of stocks spanning every corner of the world (including troubled European and Asian stocks) because it’s easier to beat, easier track, or both.  By lowering benchmarks, Wall Street lowers standards and expectations so they can sell you more stuff – so they can make more money while you get stuck holding the short end of the stick. 
It’s time to LOSE YOUR BROKER and START MAKING EASY MONEY.
Investment is about performance and building wealth. In order to build wealth your stock portfolio must outperform the DJIA. That’s easy to do with superior 15-51 construction and the LYB method. In fact, using my portfolio builder makes it easy to beat the above-average performing 15-51 Indicator. For example, here’s a portfolio I created using LYB’s exclusive tools, I call it: Easy Money.
 
EasyMoney5yr
 
During this 5 year period my Easy Money portfolio beat the DJIA by 1,209% (133% versus 11% respectively), and outperformed the 15-51 Indicator portfolio by 215% (133% versus 62%.)
If your investment portfolio was 50% cash and 50% Easy Money it would have outperformed "the market" by 604.5% in five years; a portfolio with 66% in cash would have outperformed by 403% in the same time. Brokers who say you must be 100% invested (that is to have zero cash balance) in order to produce robust investment returns don’t deserve your business. You could do better.
Tell me how your 15-51 portfolio performs by posting it to the LYB messageboards
See you there….
 
 
Gamblin' Men
Nov 11, 2011
"The market" rebounded today by posting a 112 point gain after yesterday’s 389 point slide.  If I were a gambling man, which I’m not, I would have bet it would have dropped another 125 points today.  My friend Bobby had his money on a 60 point gain.  (Yeah I wrote the book – but he read it :-)
 
We all get surprised in life.  Every expert, every investor, every person, can get surprised – especially on a day-in and day-out basis (ask Jim Cramer, it happens to him all the time.)  That’s why stock trading is for gamblers and addicts alike.  But that’s not investment.
 
Investment is long term.  With investment, logic determines success.  With gambling, logic helps but isn’t necessary – to be successful you must be lucky.  Investing requires no such luck.  Understanding is all that is needed.
 
This Wall Street Journal headline caught me by surprise today from the moment I saw it.  It was the cause to today’s stock market gain if there was one.
      Economists See Smaller Chance of U.S. Recession (by Phil Izzo)
 
It was a panel of 52 economists that "put 1-in-4 odds that the U.S. will experience a recession in the next 12 months, down from 1-in-3 chance they were seeing just two months ago."
 
I bet this panel of economists is also fond of casinos and horse races.  Their jargon sounds more like a gambling ring than an investment circle.
 
Gambling is short term.  With investment a long term view begins with a 3 to 5 year perspective; 10 years is best.  Focusing on short term news and daily moves only brings more emotion and luck into the equation for success.  It turns investment into gambling.  Why go there?
 
My friend Billy once said, "You know, the moment you put the words billion or trillion behind a number it seems like most people lose all conception of numbers."
 
Taking his message to heart, let’s try it this way:
 
Right now, the U.S. government has $2 of income per year but spends $4.  As a result, it must borrow $2 per year to cover its irresponsible spending habit.  Now, everybody knows the government can’t keep spending twice the amount it takes in.  It’ll go bankrupt if it does, and that will look like Europe right now.
 
Also at the current time, the United States has $15 of economic activity and $15 of national debt.  That is to say that the U.S. is 100% leveraged.  Greece and Italy fell into hell around 120%.  This doesn’t give the U.S. much room left before calamity strikes here again.
 
So the U.S. government must curb its spending habit.  And the moment spending drops from $4 to $3 the economy will have no choice but to fall into recession – and then the stock market will dramatically sell off.
 
This will happen.  Whether it occurs in the next 12 months or 2 years doesn’t matter to the long term investor.  The real money is to be made by buying low (then it’s easy to sell high.)  To do that, you need cash and a plan of attack for when stocks go on sale at discounted prices.  Use my 15-51 portfolio builder to prepare that plan and schedule a workshop if you need help with it.
 
And leave the luck for the gamblers.  They really need it.
 
Xref:

 

Hard to Believe
Nov 09, 2011
Even though I’ve been blogging for just a couple of months it’s hard to believe how many times I could title today’s blog what I named one just a few days ago.   Today a story headlined on the Wall Street Journal’s website entitled: HSBC Hurt by Bad Loans – and to me, it’s like déjà vu all over again
 
Those who have read my book know that it was HSBC (Hong Kong and Shanghai Banking Corp.* [China]) who fired the first salvo in what turned out to be the “financial crisis.” The announcement, which arrived in February 2007, claimed much higher than expected losses on subprime mortgage debt in the U.S. It was the first time most of us heard the words subprime mortgage. Now we know what kind of hell it brought. 
 
Today’s WSJ article is all too reminiscent of that one. It reports that HSBC’s third quarter profit dropped 36% to $3 billion. A 24% jump in bad loans cost them a whopping $4 billion in the three month period.  The steep decline in profits was “mainly because of higher U.S. impairments on mortgages.”  
 
Like in 2007, this HSBC announcement took Wall Street by surprise (they were expecting HSBC’s profit to be $6 billion, missing the mark by a not so slight 50%.) Like then, the HSBC announcement caused the market to shake, as the Dow quickly traded down 300 points in the first thirty minutes of trading today.  
 
Could HSBC have fired another flare of financial doom?
 
Well if they didn’t, Fannie Mae certainly did.
 
Another Wall Street Journal article reports that Fannie Mae (notorious culprit to the 2008 crash) needs another $8 billion of government assistance to continue operations. Fannie posted a $5 billion dollar loss in the third quarter alone, triggered by sales of foreclosed properties at lower than rock bottom prices. It’s like a fire-sale. 
 
Let me ask: How can the American real estate market recover when Fannie and Freddie are fire-selling our land at low prices and devaluing its worth?  The government supposedly took control of these entities to prevent this from happening. 
 
This, not to mention, that the government doesn’t have the money to fund Fannie Mae. Remember, the U.S. government is currently running a $2 trillion deficit for 2011. Since there is no Budget (the Obama Administration has failed to produce a budget since it commenced) there’s no room in it to bail Fannie again this time. 
 
So how will they get the cash? 
 
They’ll print it. 
 
And when HSBC submits their bad mortgage claims to Fannie and Freddie they’ll need even more government assistance to cover that shortfall. Then the Fed, once again, will print more currency – to grab more land, to sell at much lower prices or to leverage in the world market. None of this is good for money, markets, or investments – not to mention that it devalues our currency and our land!  
 
Is it me, or is this hard to believe?     
 
Investors be aware…
 
* Corrected 11/10/2011, orginially posted as Hang Seng Bank of China.
Propaganda versus Reality
Nov 08, 2011
How many times have we heard that China is the new land of opportunity and prosperity – that they have established a new model for economic growth and prosperity?  It’s a place where everybody is equal, united in their common purpose, pursuing their common goal.  How many times have we heard this and how great China is?
 
Then a kink in the armor appears with this Wall Street Journal headline from today:
       Housing Drop Threatens China Growth
 
And then you see the accompanying picture which clearly illustrates the tale of two worlds surrounding another pipedream.
 
ChinaSubPrimer

 (Source: Reuters, via WSJ)

 
In the background is a lush housing complex, some may call them the "Haves."  But in the forefront is completely different picture – the "Have Nots."  How could this happen in the land of common equality?
 
It always baffles me how the propaganda of our foes always seems to be more real than the reality we live.  Here’s a dose of that reality in a comparison of the U.S. and Chinese economies. (Source: Google)
 
ChineseGDPcomp
 
Listen, a Chinese housing bust won’t help the global financial picture and will certainly add further stress to the global economy; but without such a correction, China alone could not have held off a global recession.  They’re not big enough or strong enough.  Nevertheless, this is more bad news.
 
Now, some pundits are saying that America could insulate itself from the financial stress occurring overseas.  This is impossible.
 
First, this Wall Street Journal headline from November 4, 2011:
        Regulators Close Banks in Nebraska, Utah
 
Our problem never went away.  A total of 87 U.S. banks have failed so far this year.
 
Second, and more importantly, this Wall Street Journal headline from today:
        Old Debts Dog Europe’s Banks
 
This article details that the top sixteen European banks are sitting on "heaps of exotic mortgage products and other risky assets that predate the financial crisis."  In other words, they own hundreds of billions of dollars of US subprime mortgage debt – guaranteed by who else – Fannie Mae and Freddie Mac – a.k.a. the U.S. government.
 
There is no way for the U.S. to escape this.
 
Once again I urge you to strongly consider your asset allocations and minimize your exposure to the financial industry.
 
Stay tuned…
A Good Dream Soiled
Nov 06, 2011
If anybody is still wondering why England didn’t join the Euro-Zone all they have to do is look at what’s going on in the region. First there was a Greek deal, and then there wasn’t. Then a scheduled referendum, and then a cancellation. Then there was a coalition, then nothing of the sort. The Italian Prime Minister won’t resign, but the Greek leader is willing. What a socialized mess. Great Britain saw this coming long ago. 
 
It was the great British leader, Margaret Thatcher, who said: "The worst thing about socialism is that sooner or later you run out of other people’s money." 
 
That’s where Greece is right now. And their misery has plenty of company: Italy, Spain, Portugal, Ireland, and France, are right behind them.
 
As in all socialized societies, it is those who produce the least (i.e. Greece GDP = $304 billion) that drain prosperity from the best (i.e. Germany GDP = $3.3 Trillion.) Here’s how that looks in chart form (Source: Google.)
 
GreeceGDP
 
Some people think that it’s "fair" or "just" for German people to pay for Greek entitlement benefits because Germany is rich compared to Greece – or because they share the same currency, or because they’re part of the same union. Whatever the case, I totally disagree.
 
In Greece, workers start in their 20’s and retire at the youthful age of 52. That’s why their GDP doesn’t move. They’re not working hard or long enough. Add this to a Greek life expectancy of 80 years and what you have is one very long, and very expensive retirement benefit for not much effort. The deal is too good to be true – like a dream.
 
Until the country goes nightmarish broke and runs out of other peoples’ money, of course. Unfortuntaely, that’s where Greece finds itself today. Their good dream soiled on the backs of complacent labor and stupid governance.  
 
Those who attack the rich and demand more benefit for less labor are usually the worst producers (see Greece in above chart.) The rich (i.e. Germany) who employ, labor, and produce the best are soon drained by the growing number of lackluster performers; and then soon, most are not much better than the worst. In other words, the quality of life for everyone diminishes in a depreciating economy.
 
Unfortunately, that is where Europe finds itself today. 
 
But this isn’t just a European thing.  The US government, too, has created a socialized financial mess. Like Europe, American governors continue to buy votes at alarming prices by offering unaffordable benefits and entitlements that they pay for by printing more money, seizing more land, and then mortgaging it to China. 
 
Sadly, that’s where America finds itself today. Another good dream soiled. 
 
XRef:
Deja Vu All Over Again
Nov 01, 2011
The northeast got slammed again this year. This storm, which arrived with little hype, packed one hell-of-a punch.  From my vantage point, this is worse than Irene.  The damage here in the northeast is extensive.  Many areas will be out of power for a week or more, for a second time this year. 
 
What can we learn from this?
 
Well, as mentioned in my last blog, "the market" was overhyped. Third quarter economic growth could initially look bold, at 2.5%.  But Hurricane Irene was in that number.  Consumers spend more money during times like these (i.e. batteries, bottled water, paper goods, gas, etc. etc.) that lifts economic output (GDP) beyond normal.  Many people (like me) dip into savings to pay the extra cost of survival during times like these. 
 
Hurricane Irene clouded third quarter results just as this storm (I hear they call it "Alfred") will distort fourth quarter numbers.  Remember this note.
 
At 12,200, the Dow is ripe for trading.  Short sellers are making a king’s ransom every time the Dow enters into this overvalued territory.  This is a reoccurring theme.  Expect to see more if it until the mess really hits the fan. What mess, you ask?
 
Today, here is the most telling WSJ storyline:
            Greek Plan Vote Threatens Government
 
Add to this the "fragile" government in Italy and what you have is a disaster waiting to happen in Europe.  And we are all connected. There is no way to avoid it.  After all, we are making the same mistakes as our European cousins.  Why should they fall into crisis and not us?
 
Remember, starting in February 2007 and continuing all the way until the fall of 2008, the stock market was speculating whether or not the "financial crisis" was isolated to a few banks or if it was a widespread industry problem. 
 
Now we know the facts and what happened.   
 
Today we’re wondering if the world’s problems are isolated to a few countries (Greece, Italy, Portugal, or Spain) or if it’s all of Europe, and if so, how does it impact the global currency crisis picture. 
 
None of this is any good.
 
Keep your eyes open and cross-reference the underlined bogs for more info.  I don’t know when I’ll be able to return to the blogosphere.  
 
PS: Honda generators – you gotta love them!  Strong.
 

IBAWinnerSealJPEG

Reviews:

"A must read..." -- The Midwest Book Review

"Understandable and easily applied...totally unrivaled and backed by reliable data..." -- The Mindquest Review of Books

"The author makes an excellent case..." -- Heartland Reviews

"Well written and interesting...fact based and logical." -- Kirkus Reviews

"Proven, understandable and sensible..." -- Lightword Publishing

"As convincing as it is successful." -- CBS Connecticut

"Very crucial topic, very crucial book!!!" -- GoodReads

"Changes forever your perception of the financial landscape." -- ReaderStore



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