Buy the book
Please, Sign-In: Register

Key Market Indicators

Rate Type Month Last Change
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
 
Item Added to Cart
 
 
Join the Community
Buy the Book
 
Print | Email | Share

Fixing the Market: Reinstate the Uptick Rule
Sep 28, 2011
Extreme stock market volatility often pushes the average investor into making bad investment decisions. "Panic selling" is a common term used to describe stock market selloffs. Rarely, however, is the term "panic buying" used to portray strong, triple-digit stock market rallies, as indicated by the DJIA. 
 
Panic goes both ways – in buys and sells – which explains why several days of bruising stock market losses are routinely followed by a couple of triple-digit market rallies.  Short selling is at the core of this extreme volatility. 
 
Successful investing is traditionally defined as Buying Low and then Selling High.  Short selling works in reverse order: Sell High and then Buy Low. Short selling is the act of selling first, and then buying low at some later point in time.   
 
In order to "sell short," an investor must borrow shares of stock they wish to immediately sell. An investment bank – such as Goldman Sachs, Merrill Lynch, and Morgan Stanley – "broker" the transaction between investors, both borrowers and lenders of stock. 
 
For example, the short seller borrows stock X from an investment bank and immediately sells stock X for $50. Three days later the stock market sells off and the price of A stock drops to $30. The short seller then buys stock X and uses it to repay the investment bank – keeping the $20 difference as profit (less the fees owed to the investment bank, of course.) 
 
Even today most people know of the vast Kennedy fortune. Joe Kennedy, father of John F. Kennedy, was famous for his stock market prowess. This is the reason President Roosevelt appointed him to be the Commissioner of the Securities and Exchange Commission (SEC). In 1938, as SEC Commissioner, Kennedy instituted what is known as the "Uptick Rule." 
 
The Uptick Rule limited short selling to stocks that have moved up in price – even if by just a tick. In other words, an investor couldn’t short sell a stock that was dropping in price. Only owners of stock could sell during market meltdowns. 
 
That’s the way it should be. 
 
Joe Kennedy knew the abuse that unbridled short selling could inflict upon the stock market. He made a king’s ransom doing it. But the roaring ‘20’s were over, and now he was working for FDR. Kennedy’s aim with the Uptick Rule was to minimize stock market volatility. The Uptick Rule does just that. 
 
The Uptick Rule reduces the number of speculators looking to exploit hostile conditions and/or fragile investors. By so doing, stock prices are under less downward pressure and volatility is reduced.  For some irrational reason, the Uptick Rule was repealed in 2007 under the Bush administration. 
 
This kind of crazy volatility that the stock market is currently experiencing is only good for Wall Street’s business and hedge fund traders. Wild swings in price create panic and increase transactions (to buy and sell). Panic can cause average or fragile investors to Sell Low during market meltdowns because they’re scared. It can also prompt these same investors into Buying High after the stock market "recovered" because they don’t want to miss a chance for big gains. 
 
Short sellers are once again at the epicenter of volatility – this time upward volatility. Since short sellers lose money if stock prices go up, they place cat-like focus on "the market" and wait for it to stop falling. Once it does, they all start buying to cover their short positions (to thus repay the stock that they borrowed.) This forces stock prices to move higher – like we’ve seen the past two days. 
 
Each time this happens, when investors panic and Buy High and Sell Low, they lose a piece of their wealth and Wall Street gets richer. Extreme volatility facilitates this.
 
Fix "the market": Reinstate the Uptick Rule!  
 
Calm before the Storm
Sep 23, 2011
Stock market trading was insignificant today.  What can we learn from it?
We can debate when the rocky road began for the stock market this year, but to me it began in late July.  The Dow dropped 200 points on July 27, 2011.  Let’s call that a flare.  Why not?  America was on a disastrous course for a long time, long before late July, but that’s when the stock market started to freak out.
 
Traditionally, the stock market is always more euphoric during the first half of calendar years.  Reason: there is more to speculate about – 2, 3, or even 4 quarters are yet to be lived.  There is plenty of room to speculate.  The year has just begun.
 
But late in the third quarter (where we are now) and into the fourth quarter, there are fewer things to speculate about.  Just a few months remain.  The year’s almost over.  And by now, everybody on Wall Street pretty much knows the score.
 
That’s why most severe stock market corrections occur in September and October.  Fair valuation is most easily ascertained.  Overzealous speculation can be swiftly corrected with just one quarter remaining. And so it happens. Consider the midpoint of the action zone to be "fair valuation" as shown in the picture below. 

 

1551vDJIA_11top 

 
As you can see, the Average can’t hold the mid point – fair value, as defined by current and historic economic valuations.  That’s the stock market predicting recession.
 
Now, recession is not new news if you’ve been following my blogs. Instead, this picture is another piece to the puzzle – another market fundamental pointing towards recession – another indicator of lower stock prices.
 
The weekend is a great time to take a breather and plan your next move.  Prepare your assets for a rough road.  If you need help, feel free to contact me.
 
Enjoy the weekend!
dan-
BloodBath
Sep 22, 2011
All major market indicators fell today – the DJIA lost 3.5%, gold was down 4%, oil declined 6.5%, and the 15-51 Indicator lost 2.8%. This is what happens when amateur fiscal and monetary policies meet championship caliber threats. 
 
This is what happens when central governance treats symptoms instead of ailments
 
Is the world economy in recession? Of course.
 
The world’s largest customer is the United States of America. Free market spending is the driving force behind her dominance. That free market, as mentioned in many of my previous blogs, is in recession. And when the largest consuming market in the world (America) is in recession, then the largest manufacturing market (China) also contract. This causes trade activity to also decline. 
 
With less trade one needs less currency, less currency protection, and less fuel to transport goods to markets. That’s why gold and oil followed stocks into the basement today.  
 
Add to this another poor piece of information from the US Bureau of Economic Analysis, who announced today that personal income growth declined by 50% from the first quarter to the second. Consumers continue to fall behind all around the world. A sustained economic recovery cannot be had in such a condition.
 
Of course, none of this is new news (see my previous blogs.) The picture is simply becoming clearer to the Wall Street establishment – who remember, never saw the 2008 crash coming. If they are the first to know, they are always the last to say. Keep that in mind when making your investment decisions. (As an FYI, in disastrous market conditions some 70% of all stocks still have “buy” ratings on them.)
 
Today was no surprise to me. Stay tuned…
 
 
xRef:
Twisting in the Wind
Sep 21, 2011
Once again the Dow failed to hold onto the action zone’s midpoint, dropping 284 points or 2.5%. The 15-51 Indicator lost 1.3%, with construction, industrial, financials, and energy leading the decline. 
 
One reason the stock market sold off today was the Federal Reserve’s announcement to employ “Operation Twist” – the act of selling short term duration bonds and purchasing an equal amount of long term duration bonds. The maneuver is intended to reduce long-term interest rates; this in hopes of reviving the housing market and spurring on long term investment. 
 
It won’t work. 
 
Interest rates are not the problem with the housing market (see yesterday’s blog.) They’re already historically low and dropping them another point or two won’t make the least bit of difference. This makes central governance look like a subprime mortgage borrower during the run-up to the housing crash. Refinance, spend more money – refinance, spend more money – refinance, spend more money; and then go bankrupt. 
 
Smoke and mirror monetary and fiscal policies are causing investor uncertainty and stock market volatility. This is what happens when governance addresses symptoms instead of problems. 
 
Also making news today was Moody’s rating service, who downgraded Wells Fargo, Bank of America, and Citigroup. This confirms that the currency crisis remains a global threat to investors – and that America is not immune. 
 
How strong is your portfolio? 
 
Review these blogs for more helpful information:
 
 

Need help?  Invite Dan to host an investor forum for your friends and family. 

Fixing the Market: Where to Start?
Sep 20, 2011
There is an old saying: a problem identified is mostly resolved.  It’s simply impossible to fix an unknown problem. That’s where we start. 
 
The problems with the American market are simple. It’s:
·         over-regulated
·         over-taxed, and
·         over-leveraged
 
This can be seen by:
·         lackluster economic growth
·         high unemployment
·         weak currency
 
In a nutshell, the free market has little room to operate, and as such, is in recession. What to do? 
 
Begin at the source of weakness; housing prices remain at rock bottom valuations and banks aren’t lending money. How can we fix that?
 
First, the Federal Reserve can stop paying banks not to lend. Yes. The Federal Reserve is paying banks 25 basis points on their cash reserves – in other words, paying them not to lend money (that’s their business, by the way.) And where does the Fed get this cash? They print it. 
 
We need to stop printing so much money (it makes for a weak currency.) Besides, giving banks free cash isn’t a great incentive to take risk and lend. Stop paying banks to hoard cash and they might start lending it. It makes common sense.
 
Second, minimize Fannie Mae and Freddie Mac’s role in the housing market. For example, right now the Dow is around 11,400 – down some 20% from its all-time high in October 2007. Home values, as defined by the federal government via Fannie Mae and Freddie Mac, are down 40% – twice the rate of decline for the Dow. 
 
Fannie Mae and Freddie Mac guarantee loans made by banks. Banks don’t loan money to consumers unless they have this guarantee. Many times Fannie Mae and Freddie Mac’s valuations are in complete contradiction to local governments assessments.  In my area, for instance, local government assesses my property value 25% more than Fannie and Freddie – which coincides with "the market's" rate of decline.  My local government clearly has it right. 
 
But it is not they who control money supply and the availability of credit. 
 
By establishing these guarantee values, Fannie and Freddie determine how much debt can be obtained for a certain piece of property.  By so doing, Fannie and Freddie essentially control the price of housing.  It’s like government price fixing. They did the same thing during the housing boom, when money (debt) was too easy to get and housing prices skyrocketed. 
 
Now it’s the polar opposite.  Money is impossible to get. This forces home prices down because credit cannot be obtained to purchase housing at higher prices – regardless of what a person is willing or able to pay.  
 
This goes against free market principals and has caused a huge contraction in other kinds of consumer debt – like home equity loans, credit card loans, and small business lines of credit. All of this is bad for consumers, housing, and the Market in general. 
 
My second recommendation to fix housing and banks -- disband Fannie Mae and Freddie Mac.
 
Third, fix unemployment! 
 
Stay tuned for that…
Italy Downgraded
Sep 20, 2011

On a day that found little good in the news, Standard & Poors delivered the biggest blow by downgrading Italy’s sovereign debt, citing "weak economic growth" and a "fragile government."  Add to this the troubles in Greece, Spain, and Portugal – not to mention France and a frustrated Germany.  Europe is in big trouble right now.  Investors take serious note. 

The Dow closed down to 11,401 today.  That’s slightly above the action zone’s midpoint, with long term indication pointing directly at recession.  Prepare for it.  And remember, it’s never too late to act. 

These are times when you must be comfortable with your investments, your asset allocations, and the condition of the market you are investing in.  Pare down.  Take profits.  And when there is a currency crisis, protect your money with gold, reduce your exposure to financial stocks, and keep your eyes open.  

Too much debt is driving Europe into bankruptcy and the US government seems hell-bent on following them off the cliff.  Today, President Obama announced a plan that promises to cut the deficit by $3.6 trillion over ten years (that’s $360 billion per year.)  He also promised to veto any bill that cuts Medicare without increasing taxes on corporations and wealthy individuals.  Even though several of Mr. Obama’s prior promises have fallen short, I have just these two points to make. 

  1. $360 billion in savings doesn’t turnaround a trillion dollar problem.  A budget surplus is required to pay down debt.  In order for that to occur, the US government must cut $1.5 trillion from this year’s budget – and more than $1.1 trillion from next year’s.  President Obama is thinking too small here.
  2. And let me get this straight, the President will cut Medicare "only" if he gets "more revenue." 

Huh?  Are we actually going to cut benefits to seniors only if our government raises taxes?  Why would Americans ever agree to another tax hike again?  Heck, they lead to worse benefits – when you need them most! 

Listen, this government has spent $6 trillion to right the economic ship and it hasn’t worked out.  They want another $500 billion this year, to raise taxes, and to cut Medicare in exchange. 

No thank you. 

These are not good investment times...

  

PS: Almost 100 million Americans own mutual funds.  Raise capital gains taxes on Warren Buffet and you will also raise taxes on another 100 million Americans.  Is it worth it?  

I say no.

Strong
Sep 16, 2011
“The market” is up about 9% in the past twelve months.  But it doesn’t feel like it. Recent volatility makes it seem like a terrible year. Of course, most mutual funds don’t produce returns close to the DJIA. Mutual funds aren’t built for performance. They’re built to make Wall Street a lot of money. 
 
In LOSE YOUR BROKER NOT YOUR MONEY, I demonstrate successful investment by building a portfolio called the 15-51 Indicator (see its long term performance trend here), or 15-51i for short. 
 
The 15-51 Indicator is an above-average portfolio. Built on the strong foundation of my patent-pending 15-51 stock allocation method™, the portfolio consistently outperforms the Dow Jones Industrial Average. Stock selections were made using the method outlined in my book.   The 15-51i is an above-average portfolio -- not a great portfolio. The purpose of that portfolio is to indicate how stock market strength is performing and to produce above-average returns.  It's not intended to be a standard for greatness. 
 
The Dow is an average portfolio, and therefore produces average returns -- which over the past 12 months is 9%.   This, by definition, is "average returns." 
 
The 15-51 Indicator is above-average. It produced a 33% return – that’s 349% better than the Dow Jones Industrial Average this year. Here’s the picture. 
 
15-51i_1yr
 
 
That’s what strength looks like.  It's above-average. 
 
And that should be your goal.  Aim high.  Beat the 15-51 Indicator. 
 
Read my book and then use my portfolio builder to assemble a stronger portfolio than what your broker threw together.  Instant charting will show you how your portfolio performed over the past 1, 5, 10, and 15+ years.  See the amazing results! 
 
It’s time to Lose Your Broker.
 
 
PS: And contrary to what Wall Street would lead you to believe, past performance is indicative of future results. Above-average consistently outperforms average construction -- in the past, present, and future. 
 
Enjoy your weekend! 
What the Market Needs...
Sep 15, 2011
Well, we know one thing for certain: When you raise the debt ceiling you are guaranteed to end up with more debt.   Whether or not President Obama’s most recent spending bill is a good idea is not worth debate. 
 
Since 2008 the US government has spent an unprecedented amount of money to revive the economy – increasing national debt by some $6 trillion. All we have to show for it is a 9% unemployment rate and these recent Wall Street Journal headlines: 
            Household Income Falls, Poverty Rate Rises
            Economists Raise Recession Odds, Doubt Fed Can Help
           
Too much debt can drive a country into ruin just as easily as it can destroy a subprime mortgage borrower – ask Greece, Spain, Portugal, or Italy. There’s no reason to argue what is already plainly clear: escalating national debt threatens security and investment returns. Besides, it doesn’t work. If massive government spending could solve economic woes it would have started to work by now (we’re talking trillions of dollars spent to date.) 
 
Investors should take note and approach investment defensively until these hostile market conditions change. 
 
But what needs to be changed? What will signal a major investment opportunity? 
 
Starting next week I will address this by beginning an intermittent blog series called, Fixing the Market, which will appear on slow news days, when nothing much changes in “the market.” Each blog will address an economic problem and offer solutions to correct course. These are the changes investors should be looking for.  They will signal a significant change in market condition and will create a robust environment for maximum investment returns. 
 
Because that’s what the market needs right now -- an attitude readjustment. 
 
Word of the Day: Jobs
Sep 13, 2011
The word "stimulus" has been completely dropped from today’s political vocabulary.  "Jobs" is the word of the day. 
 
But wasn’t that the point all along? 
 
President Obama’s first stimulus package, known as the American Recovery and Reinvestment Act, had a specific purpose – to stop unemployment from reaching 8% by investing in "shovel ready" projects.  But how long has unemployment been over 9%?  The "stimulus" clearly didn't stimulate.  

 

Under the guise of an American Jobs Act, today’s bill submitted by President Obama is nothing more than another crippling spending bill.  Government spending of this ilk, dating back to the $700 billion forced through by President Bush just before he left office, cannot fix the problem of unemployment.—Can it temporarily plug a hole in a dike with dollar bills?  Yes.  But that’s it.  It can't solve anything long-term. 

How do we know for certain? 

Since the 2008 Market crash, government has spent more than $4 trillion to correct the course of the economy – to "put America back to work" and to create jobs.  That’s a long time and a lot of money, and still, unemployment hasn’t improved and the economy continues to be "fragile."  If this kind of robust government spending program worked, it would’ve worked by now.    

Then why do it again? 

What President Obama’s government is trying to do is spend its way out of the traditional definition of a recession (six consecutive months of negative GDP.)  By spending $4 trillion dollars a year, the government has plugged a hole in the GDP dike that the free-market doesn’t have the capital to fill.  This kind of recklessness (we’re talking trillions here) has stopped recession in the literal terms. But not in effect. 

The free market is shrinking – it is in recession.  That’s the real problem.  More government spending will not fix that.  It can’t.  Nor is it meant to.  This kind of government frivolity is intended to do one thing – increase GDP spending —to make things look like they’re better than they are. 

President Obama is an intellectual.  And he needs another $500 billion to continue the facade that there is no recession.  That’s good for politics.  But bad news for investors. 

Stay tuned…

Always
Sep 11, 2011

Remembering those who have loved and lost on this notorious day, 9.11.01.  And to the heros that ran to their aid. Godspeed! 

 
RaisingFlag
Confidence
Sep 09, 2011
I know, a Bernanke-Obama tag team is enough to shake anyone’s confidence. It certainly shook mine. The Dow lost more than 300 points today, which represents a drop of 2.7%. This is the negative mojo I mentioned in yesterday’s blog. Today was no shock to me. 
 
I saw both speeches yesterday. Bernanke gave little details about the “tools” he has at it his disposal to correct the economy’s course. He looked nervous, and sounded it, too. He even had the proverbial glisten of sweat across his forehead. Why? Because he, above all else, knows all too well that those tools he refers to are, at their very best, no better than a toothpick and a nail file in an effort to slaughter an oversized pig. Because that’s the case. And that’s why Bernanke looked so nervous. 
 
Ditto for President Obama, who with his speech last night, withdrew any life in “the market” that Bernanke left in. Obama reminded me of Lebron James during the NBA finals earlier this year. Do you remember that?  He fell flat and looked small.
 
And the stock market reacted to that with a 3% drop today. That’s what happens when leadership and talent come up small in big spots, like Obama did last night. 
 
What “the market” really needs right now is incentive, freedom, and encouragement. Not another lecture. Not more spending. Not more smoke and mirrors. Not more failed policies. Hey, if four trillion dollars of stimulus couldn’t fix things then another half-of-trillion won’t do it either.  Why bother? 
 
But that is what’s before us.
 
And until that changes you must have confidence in your asset allocations, in your investments, and your strategic plan. As I say in my book, it’s the only way to be comfortable and successful with investment.  If you need help, or have questions, email me
 
Enjoy your weekend!
 
Talk soon,
dan-
OMG
Sep 09, 2011
 "These are the times that try men’s souls."— Thomas Paine

 

In my soon to be bestselling book, LOSE YOUR BROKER NOT YOUR MONEY, I reiterate what so many patriots have before me: governments never have enough control over man, over People, and over Markets. 

The natural instinct of government is to control people and their behavior through laws, taxes, and monetary activity.  They become accustomed to telling us what to do, what to think, and what to feel.  They try to convince us that their way is the right way, or a better way.  They ask us for more time, time and time again. 

No more.  We must right this economy, and We must do so quickly. 

Wars and turmoil span the globe.  These are dangerous times, indeed.  They threaten market prosperity and disrupt activity.  This instability causes uncertainty, which can cause paranoia as evidenced by stock market volatility. 

President Obama did little to settle the market’s nerves tonight.  One of President Bush’s greatest flaws was that he was unwilling to veer from a "stay the course" mentality.  His problem was in Iraq, and it was only after a whitewash in the 2006 election that he changed things up with Gates, Petraeus, and a strategy called a "surge" in Iraq.  It was the first election he lost, six years into his presidency. 

Obama lost his first election two years in (2010) – and he looks to be losing steam. 

Someone once told me that the definition of insanity is to repeat the same thing over and over again and to expect a different outcome each and every time.  You’d think that President Obama would have learned something from the Bush era: Don’t be slow to adapt!  But it appears he missed that lesson.    

Based on tonight’s speech the only things the president offered was more of the same – more spending, more false promises (you can’t pay for a $500 billion program when you’re running a $2 trillion deficit), and more false hopes.  No more spending.  No more stimulus.  It hasn’t worked the last three times.  And it won’t work again.  Government cannot solve this problem.  To think so is to be blind to reality’s teachings – a form of insanity, some might say. 

That said, investors should be advised to expect negative momentum and stock market volatility to persist, for the government to remain log-jammed, and for an overzealous central bank to maintain a sloppy monetary policy stance.

One more thing:  It’s time for Warren Buffet to shut up and go away.  If he wants to pay more taxes then he should pay more taxes.  It’s a free country.  The government will take anything he gives. 

I’m sick of him. 

God bless America – and free speech!

-dan

 

Good News, Bad News
Sep 07, 2011
The Dow Jones Industrial Average gained 245 points or 2.47% on a day that boasted these two contradictory WSJ headlines:
            Good News Boosts Stocks
            Fed’s Beige Book Points to Sluggish Growth
 
First, most markets offer mixed signals to investors consistently. Keep that in mind.
 
Second, market conditions do not change in a single day. In other words, today’s market is no different than yesterday's. Nothing’s changed. In fact, the only good news I found today was that the DJIA, along with other major indices, went up. Up is good. 
 
Stock markets go up and they go down. That’s what they do. Daily moves mean relatively little all by themselves. But strung together in a longer trend line they usually make perfect sense. 
 
For instance, what you are seeing in the stock market is an investor base trying to determine fair valuation. If you consider the action zone midpoint as “fair value,” as I do, then it’s plain to see that the Dow can't hold onto it. That’s investors telling you they see investment values moving lower – a.k.a. recession. This, of course, jibes exactly with current news and Market conditions. 
 
So what is needed to elevate stock market values far beyond the midpoint?
 
I keep hearing that leadership is the solution. I couldn’t disagree more. We have a leader, who has led, and is leading. Remember, there is good leadership and there is bad.  Also remember that governments control markets.
 
Like people, markets want to be stable and they want to prosper.  Markets want to be free. This goes against government’s natural instincts. And right now, with a lackluster economy and massive national debt, the last thing American investors want is more of the same – more debt, more currency printing, and more government spending. 
 
The problem in the American market is not that government isn’t spending enough, or that it’s not growing fast enough. The problem is that the free-market isn’t spending enough, and that it’s in recession. It’s time to reverse course.
 
With the same set of challenges facing us, let’s see what direction President Obama leads us in this time. He speaks tomorrow night. 
 
Until then…
Taxes, Prices, and Silly Debates
Sep 07, 2011
How many times have you heard class warfare proposing to tax businesses more, and to raise taxes on "rich" people (those making more than $250,000 per year, according to President Obama) to fill the budget gap in America?  Businesses versus People.  Rich versus Poor. 
 
And I’m sick of it. 
 

First, businesses do not pay taxes – they collect them.  The universal definition of price is as follows:

                        Price = Cost + Profit + Taxes

Whatever a corporation pays in taxes it first collects from you, the consumer, via the price paid for goods.  Raise taxes on businesses, especially in a market environment like this, and it will fuel the inflation fire.  That’s crazy. 

Second, raising taxes here will only cause more unemployment.  Think about it.  If corporate taxes are increased they’ll have less profit to cover expenses.  Are we supposed to believe that in spite of having less capital, corporations would actually add employees and/or increase health benefits to current employees? 

Not likely.

Speaking of healthcare, one of President Obama’s main objectives was to reduce the cost of healthcare.  Up here in the tri-state metropolitan northeast, I’m not sure how many doctors make less than $250,000 – but I suspect very few.  And I bet the same is true for most of the east coast, west coast, and Midwest.  If you raise taxes on "rich people" then you raise taxes on doctors.  Are we supposed to believe that this will lower healthcare costs?

These are silly debates to have when simple solutions exist.

If you want healthcare costs to go down – tax it less.  And if you want more people to be covered by insurance programs then provide incentives for corporations to pick up the tab.  How?  Tax them less.  

For instance, healthcare benefits are a tax deductible expense for corporations.  Despite this deductibility, many corporations have recently chosen to reduce healthcare coverage due to skyrocketing costs.  To reverse this condition, and to encourage corporations to expand coverage, simply make the amount that corporations pay for employee healthcare benefits double-tax-free.

This is a low tax, free market solution to a silly debate.  

And "the market" would love it.  

Food For Thought
Sep 02, 2011
It was another sloppy day on Wall Street today, as once again the Dow struggled to maintain the action zone midpoint while gold regained its stride. That should tell you something. 
 
These three Wall Street Journal headlines should drive the point home. 
            Economy Fails to Add Jobs
            Stocks Futures Keep Falling, and
Big Banks Face Suits on Mortgage Bond Losses
 
In short: the economy is weak and headed in the wrong direction, which makes the future of stocks bleak, and the currency crisis is, in fact, a world phenomena. There are problems in American banks too – including the central bank (Federal Reserve) whose answer to everything is print more money
 
That’s not sound money policy. And it’s not sound economic policy. 
 
Shore up your asset allocations and cash reserves.  Inflation is on the rise and when it starts to threaten market stability, the stock market will move in way that makes recent behavior seem stable. 
Keep your eyes open...  
 
Enjoy your weekend!
 
Talk soon,
dan-
The Muse
Sep 01, 2011
The most popular question I get since writing my book is: What inspired you to write: LOSE YOUR BROKER NOT YOUR MONEYAnd to be truly honest, it was stories like these. 
 
Most people go to Wall Street brokers for three reasons: advice, information, and investment management. It took me five years to write my book, and as I wrote, my heart was filled with animosity as my mind speculated the extent of larcenous potential Wall Street could inflict onto the average investor. And once it happened, trillions of dollars in wealth evaporated in 2008.  As detailed in my book, I watched the bubble inflate and I watched it bust. People that were closely following "the market" expected a correction.  But never did I expect the Market to crash. But it did. Yet a major part of the financial industry, Wall Street, never saw it coming. 
 
Or did they? 
 
A new report reveals that Goldman Sachs and other Wall Street firms are at it once again. In their stunning on-line article in the Wall Street Journal, Susan Pulliam and Liz Rappaport’s, Goldman Takes a Dark View, reveals that Goldman's current activity surrounding the Euro-crisis mimics their activity during the “financial crisis of 2008.” The finding came from a recent Goldman Sachs report that was intercepted, which according to this Wall Street Journal account, “carries language and details about the markets’ problems that normally don’t appear in research for public consumption.” 
 
First point. You need $10 million dollars to start an account at Goldman Sachs. The best part of this article is that it’s about Goldman Sachs is stealing from the really rich people. But let’s be honest, Goldman is no different than any other Wall Street firm. They’re all cut from the same fabric. If your portfolio hasn’t outperformed “the market” over the long term then they got you too. No one should be happy when someone gets taken. 
 
Second point. This article proves quite clearly that if you’re looking for unbiased information, sound advice, and objective management, you’re going to the wrong place if you’re going to Wall Street.  
 
The pinnacle of this WSJ article proves that Wall Street firms provide investment information, advice, and mangement, to suit their financial objectives first and foremost -- not those of investors.  Keep that in mind when you hand them your hard earned money.  Here's the excerpt. 
 
“Before the financial crisis of 2008, Goldman and other top Wall Street firms pitched their hedge-fund clients on bearish bets on the housing market involving credit default swaps—insurance-like contracts that rise in price if the value of the underlying asset falls—that the banks developed. Goldman sometimes took the bearish end of such trades even as it was selling the bullish end to clients.”
 
Insurance-like contracts?—that rise when assets fall? 
 
Huh?
 
Listen, I’m a free-marketeer – but Credit Default Swaps (CDS) should be illegal. They’re a Ponzi scheme – built by the banks – your broker and Goldman Sachs included -- to book bets and run number schemes to a piggish extent at your expense.  They're famous for that. 
 
And they're doing the same things right now!
 
That's what inspired me to write: Lose Your Broker Not Your Money. 
 
I hope it's your Muse, too.
 

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



Upcoming Events

Want to Connect?  

Email Dan directly, or 

Friend him on Facebook, or 

Connect with him on LinkedIn, or

Follow him on Twitter 





Proof





 
Book
LYB Community