Ms. Jimenez has written a bi-lingual beginner's investment book for families. She is the business reporter for KGO810 radio.
In the opening monologue, Lynn did her usual good job of reporting all the latest market statistics. She commented that silver is at a 31 year high. (Honey EC: Silver has been a topic that I have been reporting on in the comments sections for some time now. I have been investing in AGQ, a leveraged silver ETF. I could sell it any time, but have enjoyed a great ride with it.)
Lynn said: "Swallow hard because stocks have three big hurdles to face. The first is on April 27th. Head-Fed, Ben Bernanke is going to hold the first ever news conference to announce the banks decision on monetary policy. That's whether the Federal Open Market Committee is cutting, increasing or holding interest rates. That's a big change. The Central Bank never spoke publicly, directly to the press following these meetings.
The second hurdle comes in June. The Fed will announce whether it will end QE2, that's Quantitative Easing. That's the Treasury buy-back program that kept money available, because banks weren't lending. And it also created enough pain for people who invested in money markets and Treasurys to force them to move out of the safety of debt to stocks. And maybe to use some of that low-yielding savings to buy consumer products. It seems to have worked. Since last August, the markets up 27%. The jobless rate's down to 8.8%. Consumer spending's climbed eight months in a row. We're seeing longer-term interest rates rise now. That happens when economies improve. Now the program did add to our debt, but it also helped us out of our hole.
Now the big question is, when the Fed ends this program, when it takes off the training wheels, can the economy stand on its own? Will you leave your stocks on the table to go through what could be a 10 to 15% correction? Will anyone else step in to buy the 75 billion bucks a month in Treasurys the Fed's been buying? Will Congress race to cut debt, cut so deeply that it'll end the recovery?
And the third hurdle -- will the Fed signaled intent to boost interest rates later this year, early next, be too late to head off inflation? Or too soon and strangle the recovery. Stay tuned to 'As the Financial World Turns.'"
(Honey EC: Bob Brinker is very bullish on the stock market and believes it is in an ongoing cyclical bull. He is fully invested and recommends dollar-cost-averaging for new money.)
Jimenez said: “Also this year Uncle Sam’s take is going to be the lowest since 1950’s. Families and businesses are paying about 13% lower taxes than they did in 2008. Tax revenue is going to make up 14.8% of Gross Domestic Product. The lower revenue, coupled of course with higher spending and our wars, our jobless benefits, bail-outs, uhhhhh, mean that we are going to have to borrow 40-cents for every dollar we spend. So that is why people are worried about debt. We can dig out of this. This is going to continue really until jobs and tax revenue returns and some spending cuts are made.”
Caller Annie specifically mentioned that she owned Vanguard Ginnie Mae Bond Funds and asked Lynn about safety.
Lynn replied: "Remember with Ginnie Mae Funds, they're not like Fannie and Freddie. Fannie Mae and Freddie Mac mutual funds were not fully backed by the government. That is, until they lost a ton of money and we had to put what $150 (?) million into them.... Ginnie Mae is still a relatively safe investment option as far as hanging on to your principal. The problem is inflation, Annie. If inflation goes on a tear, you know, 7,8,9%, then the value of the money that you hold in bonds that yield less than that diminishes.
In other words, if inflation really takes off and you're getting paid 4% on a bond and inflation is 8%, you're losing some value. And then you have to figure out what to do with those bonds. Is anyone going to buy them if they're not paying enough? Well, not really. But the other thing is, is that it's not likely you're gonna lose your principle. All I can say is that the best thing to do, Annie, is to diversify. And by diversify, I don't mean buy other bonds. You can go into stocks. You could go into corporate bonds.
It's interesting that you mentioned the Vanguard Group, because if the government makes it easier to refinance, right, there's a little bit higher risk on prepayment. And it doesn't look as though interest rates are going to happen right now, but they may happen at the end of the year and the beginning of next year. And we are going see some inflation. But the Vanguard Ginnie Mae is keeping the average duration of what it holds short.....And the fund also has very low expenses. So you are probably dealing with a better situation using those than you would be if you were just going out and buying some other fund."
(Honey EC: As I listened to Lynn's long answer about Ginnie Maes, I wondered how uninformed she was about the subject. One would have to stretch what she said to even apply it to an individual Ginnie Mae Bond. Then it seemed like all of a sudden, she realized her mistake. Perhaps someone whispered in her ear, because she immediately began talking about the Vanguard Fund.
In the January issue of Marketimer, Bob Brinker made sizable cuts to his Vanguard Ginnie Mae Fund holdings in his balanced portfolio and added Wellesley Income Fund in its place. At the same time, in his income portfolio, he dropped the Ginnie Mae Fund holdings to 25%, increased the Vanguard High-Yield Fund holding to 25%, and added 25% Wellesley Fund. )
Moneytalk third hour guest speaker was Jessie Weller an IRS spokesman. Here is a sample call:
Caller Edie in Fairbanks, Alaska asked: “I support my nephew who is handicapped and he is not here now, he is in South America and we do have Social Security for him. And I’m wondering if I can still claim him as a dependent on my tax return. (Weller asked, “Is he a US citizen?”) No, he’s not.”
Weller replied: “Okay, he is a citizen of a South American country? (Edie: “Yes.”) Generally, you’re not going to be able to claim that person as a dependent because they have to be a US citizen or resident of the United States, Canada or Mexico…..But if they are a resident of Canada or Mexico, they would need to get an ITIN, it’s called. It’s individual taxpayer identification number. And that can be used for tax purposes because usually people in a foreign country do not qualify to get a Social Security number. But for tax purposes, you can get a number.”
Earlier in the program, caller John said that he had not filed income tax in the past 6 years. He said he is not a citizen but is here "legally" on a Green Card. He said that he had done "some work under the table."
Lynn assured him not to worry, that he wouldn't go "into the clink," that he just needed to call and talk to the IRS guy. (Honey EC: What a great country! NG = no grin)
Moneytalk on demand, with Bob Brinker, is available for audio/podcasting FREE at KGO810 radio for seven days after broadcast. The program is archived in the 1-4pm time-slots. You can take it with you! I download and save all three hours, including the third hour guest-speaker, so that I can refer back to them in the future if Bob Brinker mentions something about them on the air. KGO Radio MP3 Sunday Archives
When President Obama took office two years ago, the national debt stood at $10.626 trillion.
| The National Debt: |
85 comments:
Bill Gross not only sold his government-releated bonds he is now shorting those bonds including mortgage backed and TIP securities.
Gross ups bets against U.S. sovereign debt
NEW YORK (MarketWatch) -- Bill Gross, founder and co-chief investment officer of Pacific Investment Management Co., has turned more bearish on the U.S. government-related bonds including Treasurys, reflecting his growing worries over the country's swelling fiscal deficit and mounting debt burden.
After dumping all such holdings in Pimco's $235.98 billion Total Return Fund, the world's biggest bond fund, in February, Gross placed bets wagering on further price decline in these type of securities in March, known as shorts in financial markets. That pushed holdings of U.S. government-related debt weighted by market value down to negative 3% by the end of March compared to zero in February and 12% in January, according to data available on the company's web site on Sunday.
U.S. government-related holdings in the Total Return Fund included nominal Treasurys, Treasury Inflation-Protected Securities, agency bonds and Treasury futures and options. Pimco--a unit of Allianz SE (AZSEY, ALIZF, ALV.XE) -- is one of the world's biggest asset-management firms with more than $1 trillion of assets under management.
http://www.marketwatch.com/story/pimcos-gross-ups-bets-against-us-sovereign-debt-2011-04-10?dist=beforebell
If I recall, Bill Gross was a bear at the bottom of the current bear market.
From PIMCO's Bill Gross: May 2009 Investment Outlook
"Do not be deceived by the euphoric sightings of “green shoots” and the claims for new bull markets in a multitude of asset classes. Stable and secure income is still the order of the day. "
That prediction was as useful to investors as Bob Brinker's mid 1400s "Gift horse buying opportunity" back in 2007 when the market was near its all time high.
Note that Pimco removed that investment outlook from their web site but Google shows a cached version and that other site mirrored the original.
I wrote "If I recall, Bill Gross was a bear at the bottom of the current bear market."
I meant to write Gross was bearish at the bottom of the current BULL market.
I get confused because Brinker said the secular bear market ended sometime before the last bear market started just before he said 1450 was a gift horse buy. (Anyone have dates and quotes???)
Now he says we are in a secular bear that dates back to 2000... HUH?
Most on TV say we are in a new bull market.
Brinker has been fully invested since 2003. Brinker recently added equities to his fixed income portfolio then changed the name of that portfolio. Why do that after the market doubles from the bottom? Why not add equities to fixed income portfolio when it was in the 600s? Was he bearish like Bill Gross back then? I can't find Brinker's performance record by year anywhere so how does one tell?
Lots of smoke and mirrors....
Who do you believe? Gross who is shorting the government bond market or Larry Swedroe who says NOBODY can consistently predict the market or pick stocks.
"when I was wrong, it was always because of some unexpected event that no one could have predicted. What I learned ultimately is that there is no way to consistently be a successful forecaster. I was either lucky or unlucky."
Larry Swedroe is right. That's EXACTLY what Brinker says when he blames his failure on "exogenous events" that nobody could predict.
And it's not just Brinker, almost EVERY other guru or newsletter either totally ignore their failures or spend a lot of time explaining why THEY were not wrong and blame somebody else.
The company lied, the naked short sellers did it, they changed the rules etc etc etc.
Swedroe was right on the mark when he says we haven't seen any:
"...evidence via mutual funds and hedge funds that there's persistent skill in forecasting and stock picking."
One of the funniest calls today was Chuck in Albany. It took place during the third hour. He said he owed the IRS $23 and couldn't afford to pay it. The guest should have told him that many people have the same problem and the IRS will work out a payment plan. Maybe he could afford $2 a month for the next year. I wonder if the IRS could have the money withheld from his next Social Security check?
The other call that cracked me up was John who said he had a tax problem. He hasn't filed a tax return in 6 years. Lynn ask if he was in the country legally. He said he was. Now that is a question I have never heard Bob Brinker ask on Moneytalk.
Lynn seems to attract a different set of demographics than Bob. He gets calls from people who thank him for reaching critical mass while she receives call from people who are financially in critical condition.
Hi Ho Silver.
SLV up 120% last twelve months, with the 2X AGQ up almost 300%.
You can bet the next time silver is brought up on the show, Mr B will remark "the last time we talked about the silver ETF" as though it was one of his recommendations.
Driving along I-880 over the weekend between Fremont and San Jose I came across the following electronic message board:
TEXT W/DRIVING
$159+ FINE
IT'S NOT WORTH IT
A better public service would be if Caltrans would substitute the first line with MARKETIMER and add twenty six dollars to the second line.
That would be change I can believe in.
Patrick,
You are correct about Bill Gross. He not only sold all Treasurys, he's now shorting them. And so far, it's looking like he is right.
Bob Brinker also lowered the Treasury risk in his model portfolios and "income" fund.
I recently re-established my position in the Treasury bear, TMV.
Here's some info about ETF's that short Treasuries:
"Bill Gross has reportedly initiated a short position in U.S. government debt in PIMCO’s Total Return Fund after scaling back the fund’s investments in Treasury bonds.
Gross, who runs the world’s biggest bond fund, is betting on further weakness in Treasurys, accoroding to reports.
PIMCO’s bond guru recently wrote U.S. Treasurys have “little value within the context of a $75 trillion total debt burden.”
Exchange traded funds (ETFs) that invest in Treasury bonds have been falling recently as yields rise, pushing the iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT) back below $90 a share.
The $6.3 billion ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) is the largest ETF that bets against Treasury bonds. It shoots for 200% inverse performance on a daily basis.
Other ETFs that profit from rising Treasury yields and lower bond prices include ProShares Short 20+ Year Treasury (NYSEArca: TBF) and Direxion Daily 20 Year Plus Treasury Bear 3x Shares (NYSEArca: TMV).
ProShares recently launched more ETFs that short the Treasury market."
Read more at ETFTrends
.
Moron Detector,
You aren't the only one that gets confused about the bulls and the bears.
However, what you said about Bob Brinker is right on target:
"Brinker has been fully invested since 2003. Brinker recently added equities to his fixed income portfolio then changed the name of that portfolio. Why do that after the market doubles from the bottom? Why not add equities to fixed income portfolio when it was in the 600s? Was he bearish like Bill Gross back then? I can't find Brinker's performance record by year anywhere so how does one tell?"
.
Patrick,
Thank you for your comments about Larry Swedroe. I thought that there were several points that he made in that Seeking Alpha interview, and especially in his Bob Brinker's Moneytalk interview, that was very interesting.
.
Jeffchristie,
I heard that call from the guy that said he owed $23 in taxes and couldn't pay it.
It was very funny, but I wondered if the caller was actually making fun of Lynn Jimenez and the IRS guy.
A special friend of mine that I talked to about the call had the answer for the caller. He suggested that he cut back on his phone bill for a month.
Lynn's suggestion was for him to beg or borrow the $23 from some good-hearted friend. :)
.
"Gross said in an interview March 11 that he eliminated government-related debt from his Total Return Fund because investors are not being adequately compensated for the risk of quickening inflation."
It's interesting that Gross believes that inflation is on the horizon yet he sells ALL government relate issues INCLUDING TIPs.
Obviously Bill Gross doesn't think TIPs can handle the inflation he sees coming.
Who's right Gross or Swedroe or Brinker?
"I recently re-established my position in the Treasury bear, TMV.'
Does this mean you are now totally out of fixed income investments HB?
Or do you think just the treasury market will tank but the rest of the bond market will be OK? LOL!
I think a few folks here have tried to short the bond market at one time or another.
Birdbrain said: "SLV up 120% last twelve months, with the 2X AGQ up almost 300%.
You can bet the next time silver is brought up on the show, Mr B will remark "the last time we talked about the silver ETF" as though it was one of his recommendations.
I'll join you in that bet...
Birdbrain said: "Driving along I-880 over the weekend between Fremont and San Jose I came across the following electronic message board:
TEXT W/DRIVING
$159+ FINE
IT'S NOT WORTH IT
A better public service would be if Caltrans would substitute the first line with MARKETIMER and add twenty six dollars to the second line."
Like this?
MARKETIMER
$185
IT'S NOT WORTH IT
.
Patrick asked, "Does this mean you are now totally out of fixed income investments HB?
No, it means I'm out of the government fixed income investments. I sold my Ginnie Maes some time back. Probably too early.
I was also too early to short the Treasury market and sold my position. As I said, I have re-established it. It's not necessarily a trade, it's looking ahead to (IMO) the inevitable rise in rates. But if I did sell today, it would be at a nice profit from my purchase 10 days ago.
All of my fixed income holdings are now in High-yield funds and ETF's. That would include Vanguard's (VWEHX) and JNK.
If Brinker says the cyclical bull is ending or the economy is tanking I'll sell the high-yield holdings. (Tongue firmly planted in cheek while typing that last sentence.) LOL!
.
I want to make a minor and admittedly nitpicky correction to your show summary, HB. What you referred to as the "I-10" number is actually an "ITIN" number, Individual Taxpayer Identification Number. ITIN and I-10 ... hard to tell the difference over the radio.
These have 9 digits, just like a SSn, but they always start with "9."
From IRS's website:
Who needs an ITIN?
IRS issues ITINs to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs. A non-resident alien individual not eligible for a SSN who is required to file a U.S. tax return only to claim a refund of tax under the provisions of a U.S. tax treaty needs an ITIN.
Other examples of individuals who need ITINs include:
• A nonresident alien required to file a U.S. tax return
• A U.S. resident alien (based on days present in the United States) filing a U.S. tax return
• A dependent or spouse of a U.S. citizen/resident alien
• A dependent or spouse of a nonresident alien visa holder
Slightly different topic but still having to do with taxes, the Making Work Pay credit is scheduled to go away. This credit reduces taxes owed by $400 (single) or $800 (married filing jointly). People who count on getting a refund, or paying a nominal amount (like $23) are going to need to look at their withholding and see where they are.
Thanks for the summary, HB.
-- Frankj
FrankJ,
Thank you so much for the correction. I just made the correction in the summary.
It sure is nice to have an "in-house" tax expert. And I always appreciate being corrected. I consider it a big favor. :)
And thanks for the tip about the "Making Work Pay" credit that is going away.
.
OFF TOPIC
If you want to see 3 Italian kids that really know how to sing, check out this video (4 min)
3 Teenage Tenors
The real expert is DanG, I think. But thanks for the praise.
True story (and this is actually fairly tame):
A guy comes in and sits down with me and says he needs to do his taxes and they are complicated, because he worked and lived in two different states in 2010.
I said, that's no problem.
He says he's married but wants to file separately because he doesn't live with his wife, she always took care of the taxes, but she was a procrastinator, etc.
I told him the disadvantages of filing separately and said, even so, we're going to need her SSn. So he calls her. I gave him some space and when I came back, he was sort of pale. He said his wife just informed him that she never filed last year's taxes.
I said, OK, now we are getting a little complicated! He left, but maybe he'll be back in the next few days.
-- Frankj
Why couldn't I invest 3/4 of my fixed income money in the long Treasury bond [TLT] to get the highest rate and put the other 1/4 into TMV, [3Xinverse] to hedge?
That way I would enjoy the higher long term interest rates while being protected from an increase in rates on the downside.
What's the difference between that tactic and just holding TMV the longer term?
FrankJ,
Oh my goodness... now that's a guy I can feel sorry for.... :)
Yes, DanG is a great tax consultant. Unfortunately, last I heard from Dan via email, he is having trouble with his account here and difficulty posting.
I sure hope it gets worked out soon and we hear more from him.
Dan isn't the only one. I've heard from a couple of others having trouble posting.
I checked out everything that I can, and can't find anything wrong, so it has to be some kind of Google glitch. I haven't changed a thing.
.
Mr Pig,
That video of the teenage tenors was so awesome it gave me cold chills -- amazing talent.
.
I checked out everything that I can, and can't find anything wrong, so it has to be some kind of Google glitch. I haven't changed a thing.
mebbe you should hire some ex-webmaster to fix it up? I know of one that is jobless, but he would probably kill the site with his lack of talent. (or purposely)
Patrick asked: "What's the difference between that tactic and just holding TMV the longer term?"
Hmmmmm.....I don't know the answer to your question. On the surface, it seems brilliant. Maybe someone else can find a flaw in it.
.
Gasp. Ms: "ON" is back,,, can't stand to hear her voice,, whe,her voice bounces like a rubber ,,that needs to thrown out of the court... Her info is not good and she has a rage control problem,, Bob where are you???? return to sender ... our Bobbie
To me, Patrick's bond allocation
(75% long TLT and 25% 3X short TMV)
is a wash.
$10000 investment with a 3% gain in the long bond.
$7500 TLT (+3%) $225 gain
$2500 TMV (-9%) $225 loss
birdbrain said...
To me, Patrick's bond allocation
(75% long TLT and 25% 3X short TMV)
is a wash.
$10000 investment with a 3% gain in the long bond.
$7500 TLT (+3%) $225 gain
$2500 TMV (-9%) $225 loss
That's exactly the point BB.
The portfolio is protected from interest rate risk BUT at the same time collecting 3/4 of the higher rate long term treasury rates.
No default risk, long bond returns and interest rate risk greatly mitigated if not eliminated.
What's not to like?
Patrick wrote: "
> $7500 TLT (+3%) $225 gain
> $2500 TMV (-9%) $225 loss
> That's exactly the point BB.
> The portfolio is protected from interest rate risk BUT at the same time collecting 3/4 of the higher rate long term treasury rates.
> No default risk, long bond returns and interest rate risk greatly mitigated if not eliminated.
> What's not to like?
Who is responsible for paying the interest on the borrowed bonds?
Hold for more than a few hours and TMV has slippage. Have you ever wondered why?
Think about it with simple terms with a simple 10 year Treasury
Own a $1,000 10 yr treasury and get 3.50% at current rates
Borrow 3, $1,000 10 year treasuries that you sell for cash .. who pays the 3.50% interest on these 3 bonds?
(Hint: brush your teeth and ask the mirror)
Now add in expenses for the funds...
Looks like betting on red and black in roulette at the same time 1000 times in a row... you'll lose money to expenses like you lose money when the ball lands on green.
TMV has an annual expense ratio of 0.95%...
http://finance.yahoo.com/q/pr?s=TMV+Profile
I've heard better ideas from Brinker!
Patrick:
If that is your goal, fine. I just don't understand initiating two positions with the intent of breaking even. If you altered the allocation to 85/15 or 65/35 depending on your interest rate outlook you would slightly outperform or underperform the long bond return.
But who would take advice from a BB? Good luck.
Birdbrain wrote: "To me, Patrick's bond allocation
(75% long TLT and 25% 3X short TMV)
is a wash.
$10000 investment with a 3% gain in the long bond.
$7500 TLT (+3%) $225 gain
$2500 TMV (-9%) $225 loss"
Very interesting. Thanks Birdbrain.
I see that Patrick agrees with you and Moron Detector thinks the "slippage" and expenses will negatively impact the whole theory.
After I posted yesterday about owning a position in TMV with a nice profit, I decided to take it. So I'm out of it right now.
Which proves the point that with investments, I often change my mind on a dime. :)
TMV is down this morning, so I may buy it back....
.
.
birdbrain wrote:
Patrick:
If that is your goal, fine. I just don't understand initiating two positions with the intent of breaking even. If you altered the allocation to 85/15 or 65/35 depending on your interest rate outlook you would slightly outperform or underperform the long bond return.
But who would take advice from a BB? Good luck.
He thinks he discovered perpetual motion, the fountain of youth and risk free, high returns!
Patrick wrote: " No default risk, long bond returns and interest rate risk greatly mitigated if not eliminated.
What's not to like?
You CORRECTLY pointed out it was a wash at best and I added there are expenses lost to fund fees, paying the interest on the bonds AND time premium lost on futures contracts held for more than a few hours. The smart ones are Honeybee who made a short term trade for a profit and you who suggested it was a waste of time.
Who is responsible for paying the interest on the borrowed bonds?
Hold for more than a few hours and TMV has slippage. Have you ever wondered why?
"Think about it with simple terms with a simple 10 year Treasury
Own a $1,000 10 yr treasury and get 3.50% at current rates
Borrow 3, $1,000 10 year treasuries that you sell for cash .. who pays the 3.50% interest on these 3 bonds?
(Hint: brush your teeth and ask the mirror)"
Only an amateur would even think there are actual borrowed bonds requiring interest payments.
The short position is achieved through futures and swaps.
Anyway, I still think it's a better idea that just trying to short the bond market outright.
One person thought he was shorting the bond market but was really shorting only the long Treasury bond...which rallied and he lost out.
Patrick wrote: "Only an amateur would even think....yadda... yadda. "
Well, that must explain this:
Brinker's fixed income advisor model portfolio #1 lost 21.7% in 2008.
Brinker's fixed income advisor model portfolio #2 lost 11.5% in 2008.
Brinker's fixed income advisor model portfolio #3 lost 5.2% in 2008.
Brinker's fixed income only portfolio in “Marketimer” lost 2.1% in 2008.
All the "Brinkers'" fixed income portfolios lost money in 2008, a year Vanguard's GNMA fund was up 7.22% and Vanguard's Total Bond fund was up 5.24%.
game, set, match
Thank you Amateur r us....
You are correct about the Brinker fixed income portfolios. Both the Marketimer and Fixed Income Advisor lost money in 2008.
Of course that fact was never reported on their websites. In 2008, neither Bob Brinker posted one-year performance.
PS: Patrick....I see the picture for sure now. I had doubts and always like to give the benefit of the doubt, unlike EITHER BOB BRINKER!
You just can't help yourself, can you?
Now you can begin sending me comments that are filthy, hateful and libelous.
.
Jeff:
Thank you for the perspective ... I guess.
With those kind of numbers, the digital displays for desk and pocket calculators will need to be re-engineered. And, math classes will have to spend more time on scientific notation.
-- Frankj
Honey
I see you have the debt clock showing that we are starting to close in on $15 trillion. Alan Simpson was on Neil Cavuto's show yesterday. He said that people have trouble grasping the concept of a trillion dollars. I know I do. Simpson said if you started getting $1,000,000 day beginning at the birth of Christ you still would not have reached $1 trillion. I decided to run the numbers. At a rate of $1,000,000 a day it takes 2,740 years to reach a trillion. Lets work out a payment schedule for the $15 trillion debt. At $1 million a day we can have it paid off in 41,100 years. It looks like it might take more than our grandchildren to get rid of this thing.
Patrick quoted Larry Swedroe: "when I was wrong, it was always because of some unexpected event that no one could have predicted. What I learned ultimately is that there is no way to consistently be a successful forecaster. I was either lucky or unlucky."
Patrick said: "Larry Swedroe is right. That's EXACTLY what Brinker says when he blames his failure on "exogenous events" that nobody could predict."
Swedroe and Patrick are both correct. Patrick named names, Swedroe didn't, but he left no room for exceptions either.
As Patrick clearly stated, exogenous events are Brinker's port of last resort and he has used it many times when the market has gone against his forecasts and predictions.
Brinker will stubbornly refuse to admit that he is wrong and will milk every angle for as long as he can, then he will clam up and go for months without even mentioning the stock market.
You can verify this by checking my summaries in 2008 and early 2009. Many times, I wrote that Brinker didn't talk about the stock market and took no calls about it -- even though it was declining precipitously.
When all the so-called "corrections. cyclicals and outliers" no longer work for Brinker, then it's time for the exogenous event. And after all he says, "I don't have a crystal ball."
.
For those who don't know him, Major General Peter Cosgrove is an 'Australian treasure!'
General Cosgrove was interviewed on the radio recently.
Read his reply to the lady who interviewed him concerning guns and children.
Regardless of how you feel about gun laws you gotta love this!
This is one of the best comeback lines of all time.
It is a portion of an ABC radio interview between a female broadcaster and General Cosgrove who was about to sponsor a Boy Scout Troop visiting his military Headquarters.
FEMALE INTERVIEWER:
So, General Cosgrove, what things are you going to teach these young boys when they visit your base?
GENERAL COSGROVE:
We're going to teach them climbing, canoeing, archery and shooting.
FEMALE INTERVIEWER:
Shooting! That's a bit irresponsible, isn't it?
GENERAL COSGROVE:
I don't see why, they'll be properly supervised on the rifle range.
FEMALE INTERVIEWER:
Don't you admit that this is a terribly dangerous activity to be teaching children?
GENERAL COSGROVE:
I don't see how. We will be teaching them proper rifle discipline before they even touch a firearm.
FEMALE INTERVIEWER:
But you're equipping them to become violent killers.
GENERAL COSGROVE:
Well, Ma'am, you're equipped to be a prostitute, but you're not one, are you?
The radiocast went silent for 46 seconds and when it returned, the interview was over.
The market should turn this morning as the Dow is approaching an oversold condition and the 50-day steadily rising moving average.
Google or someone still insists on blocking my posts even though I have signed in on Google. This is quite annoying.
So I'm going to have to go with "anonymous", but will sign with my name.
- Dan G
April 13, 2011 6:28 AM
Copied from here
Hi Dan,
Thank you for your market comments.
I am very sorry about your posting problem. You are not alone. Two others have told me that the same thing happens to them, including Jeffchristie.
He has asked me to post some of his comments when "Google" won't let him.
I am at a loss to know what to do about it. No one here made any changes, and I've checked out everything that is available to me.
Believe me when I say I am more frustrated about this than you are. :)
.
I am at a loss to know what to do about it. No one here made any changes, and I've checked out everything that is available to me.
A while ago, I received an email from Google asking me to verify my information. I have 2 separate accounts at Google, with 2 totally separate logins and passwords. One is a google adwords account.
They told me that they suspected something fraudulent, and that my account would be frozen if not verified. Almost like the crap you get from spam emails It involved sending a message to a phone or email address.
Perhaps this happened to the other people, and they never got the notice from Google? A spam filter may have grabbed the warning.
Just reporting what happened to me, and guessing.
I am at a loss to know what to do about it. No one here made any changes, and I've checked out everything that is available to me.
That's strange, because I remember that previously before sending a post, I would be asked to sign in with my Google email address. Once I had done that, I could hit "Publish your comment" and it worked.
Now I see the following:
"Google Account
You will be asked to sign in AFTER submitting your comment."
Now when I then hit "Publish your comment" I'm sent to a blog site that says, in effect, an error has occurred...and kicks me off!
Doesn't anyone remember that change?
- Dan G
"Now when I then hit "Publish your comment" I'm sent to a blog site that says, in effect, an error has occurred...and kicks me off!
Doesn't anyone remember that change?
- Dan G "
I usually log-in first as this sort of issue has always been a problem for me if not logged in.
Lets see what happens if I type this answer, then try to log in as you suggest.
Looks like it worked fine for me Dan. I usually log in first so cookie issues, etc. are resolved before I spend time trying to post.
I'd suggest trying to log into your Google gmail account first THEN post. If you can't log into that, then I believe Google will be more willing to offer help with their "Can't log into gmail" resources.
Dan G.,
I had a few problems for a while so here is what I did to solve them:
1. I have Honey's Home page as a favorite.
2. Click on "Sign In" on Honey's Homepage.
3. Enter your Google user name and password. This should move you to the "dashboard" screen.
4. At this "dashboard" screen simply click on Favorites and go back to Honey's Homepage. Now it should show that you are signed in and it should also show your name on the "comments" page under "Choose an Identity".
I hope this helps. Good Luck!
Well, we had a bit of a correction in silver, but it's off to the races again this morning. From Zerohedge:
Greek 10 Year Yield Surges Over 13.2% - Euro Falls Against Gold and Particularly Silver
Gold is tentatively higher against the euro but mixed against other currencies while silver is again higher against most currencies. Both probed higher this morning and are exhibiting signs that they may push higher prior to a much anticipated correction.
The Greek 10 year yield has just surged over 13.2% and this is leading to falls in the euro and risk aversion with equities, commodities and oil falling.
Both gold and silver are less than 2% from their record nominal highs seen Monday (gold all time and silver 31 year) and are remaining firm due to concerns about the U.S. dollar, the euro and sovereign debt issues in Europe.
While markets are not focusing on geopolitical risk in Africa and the Middle East and the Japanese natural and nuclear disasters, these problems remain and will lead to continuing safe haven demand.
Resistance in gold is at Monday’s record nominal high at $1,478.20/oz and the psychological level of $1,500/oz.
Silver’s resistance is at Monday’s multiyear nominal high at $41.95/oz. In normal circumstances profit taking would be expected near $42/oz but this is anything but a normal market due to the existence of massive concentrated short positions being investigated by the CFTC.
A short squeeze may be underway with longs buying all dips in order to punish the shorts and force them to buy back their short positions thereby propelling the price much higher.
The dollar’s fall suggests that markets are skeptical of Obama’s latest budget proposal to cut $4 trillion off the massive US budget deficit. The US fiscal situation continues to deteriorate week on week and month on month which could potentially lead to sharp falls in the dollar in the coming weeks.
Read more and see graphs
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Hey Honey,
I read your comments and Brinker's change to Wellesley Income Fund. I thought that was in interesting switch. I looked that up in Morningstar (I have a subscription to them) to you have any thoughts on that move. And what do you think about the GNMA fund right now and the Total Bond Market. I just purchased both of them. I am wondering if they are both too expensive at this juncture, but cash pays nothing. Any thoughts?
Mark
Now is not a good time to buy Ginnie Maes or any Treasury funds.
I think that Bob Brinker's actions speak louder than his words. In the January, 2011 issue of Marketimer, he significantly lowered the exposure to Vanguard Ginnie Mae Fund and removed all the Vanguard Inflation-Protected Securities Fund from his income and balanced portfolios.
He also lowered the Vanguard Short-Term Investment Grade Fund weightings.
As for his replacing them with Vanguard High-Yield Fund and Vanguard Wellesley Income Fund, I think it's a gutsy move.
Wellesley is a great fund, but holds about 35% stocks, and a lot of Treasuries. If either market burst, it will get hit.
No worries, if the portfolios have another down year, Brinker can do what he did in 2008 -- not put it on his website.
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Ah, Bob Brinker and Vanguard GNMA advice.
For years his price range for VFIIX was 9.50-10.50 but as the NAV climbed he moved the goalposts to the "high nine to high ten" area. But, to his credit, as the price exceeded eleven dollars he mentioned that those who held the shares should have a mental stop to protect gains should the shares fall in value.
If only he suggested such defensive measures during his buy S&P 1400 bashing bad news bears and Cassandras rant a few years back.
So in fairness, for the GNMA stop advice let's give Bob some credit. No, not him. That Bob.
I am following Jim's advice. I never noticed the sign in window in the upper right hand corner of the homepage. I was always able to sign in just before posting.
Well, let's see if this works.
Hey, it looks like it works! Thanks for all the advice folks. I hope this is the permanent answer!a
Joseph Battapaglia dies at age 55.
CNBC tribute:
http://www.facebook.com/l.php?u=http%3A%2F%2Fvideo.cnbc.com%2Fgallery%2F%3Fvideo%3D3000016762&h=dcd31
Whoohoo! You're back Dan. I missed your grinning face.
I just wish your picture was big enough that I could read what your shirt says. :)
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Here's a better tribute to Joe Battipaglia:
Foxbusiness.com
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HB wants to know what's on the front of my sweatshirt?
Well, I got it for my birthday, and it says (blush)"Dan the Man...Still sexy @ seventy". Hey, I didn't compose it!
"Well, I got it for my birthday, and it says (blush)"Dan the Man...Still sexy @ seventy". Hey, I didn't compose it!"
How many years ago was that Dan? It looks a little worn.
Odannyboy
Dan said: "Hey, I didn't compose it!"
I'm betting it was composed by Mrs. Dan -- who knows she's a lucky woman. :)
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To Mr/Mrs Anonymous: phfttttt!
Pretty good market today and a nice way to end the week. The only caution I can see is that May is coming! But long term, the market still looks good to me.
Dan,
Good answer to mr/mrs anonymous. I thought they sounded rather nasty. Probably just jealousy....
I've made more on my hedged silver ETF in the past week than I have made on any stock trade ever.
That leaves me on the horns of a dilemma: Where is the top?
I've already tried to anticipate pullbacks a couple of times and got blasted out of the water and had to buy back higher. YUCK!!!
Here are the closing prices on SLV and leveraged AGQ:
SLV 41.84 +0.77 = +1.87%
AGQ 289.07 +10.43 = +3.74%
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"I've made more on my hedged silver ETF in the past week than I have made on any stock trade ever."
Why do you say that is a "hedged" silver ETF HB? Is there an unhedged silver ETF?
It looks like a pure leveraged speculation on silver prices to me.
Hiyoyouknowtherest
I used the wrong terminology. I meant "leveraged" ETF.
I understand how you'd not have the guts to go for it, but I have good advisors that keep me informed (mostly in private messages, not on the discussion board you monitor). You know: Hi Yo and all that.
No, it's not Bob. Bob Brinker never had the guts to tell his subscribers how much to buy or even give a buy price on gold when he added it to his off-the-books list of recommended "individual issues."
And all he has said about silver is that it can be used in place of gold for a hedge against the falling dollar.
AGQ:
Fund Summary
The investment seeks to provide daily investment results (before fees and expenses) that correspond to twice (200%) the daily performance of silver bullion as measured by the U.S. Dollar fixing price for delivery in London. The fund invests in any one of or combinations of the financial instruments (swap agreement, futures contracts, forward contracts, option contracts) with respect to the applicable fund’s benchmark to the extent determined appropriate by the Sponsor.
Yahoo Finance
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I think Anonymous was just horsing around, Honey Bee. I took no offense.
Anyway, SLV shows no sign of slowing down. It's overbought, but it's been that way several times without a major correction. If it were me, I'd probably follow it up with a stop placed under the previous minor low (currently at 38.73 made on April 12). Other than that, I'd just sit back and enjoy! Congrats! It's a whopper!
Maybe this author has explained one reason why silver is at 40 year highs:
By Dr Jeffrey Lewis
When thinking about an investment, the best managers look for returns that beat what they perceive to be average. In the long run, wealth is a relative measure today, even the poorest people are wealthier than the richest people five hundred years ago, though we’d still say that today’s poor are poor.
Investments work along the same lines, with the simple concept being that an investment must have performance that is preferable to your current financial trajectory, and it must have a return that beats holding money in cash, as well as the negative returns incited by inflation.
Whether or not you are a current silver holder or not, ask yourself one simple question: what price would it take for you to sell your metals or buy government debt? At what rate would it be favorable for you to invest your money in stocks, bonds or any other investment?
Now, take that number, which is likely quite high, and compare it to past performance of all the markets out there. You can compare it to stocks, bonds, and commodities, and see simply which asset type has produced returns that you would see favorable. It would be a safe bet to see that the returns and performance that you want out of your investment portfolio haven’t been found in stocks nor bonds for the past twenty years.
Silver bubble is not
For the individual investor, an exercise that looks into what he or she wants in an investment isn’t a daily happening, though it is for the institutional investor. The markets measure just like wealth you can do well, as long as the other guy doesn’t do as well as you do.
So when the hysteria of a bubble emerges, investors should ask bubble promoters where they should go from silver. Should they buy stocks, which are priced as many as twenty years into the future? Should silver investors pile into fixed-income investments and take home 4-5 percent per year?
It is here that we reach the end of such an argument. Not only are the opportunities present in stocks and bonds weak, but they’re also offering returns that aren’t consistent with their risk profiles. So why would you hold silver, if you wouldn’t own cash flowing stocks, bonds, or an assortment of mutual funds? Because silver is the new cash.
Read more: Silver Offers the Only Positive Return
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DanG,
Are you still following TBT, the ETF that shorts the 20-year Treasuries?
If so, do you think it is near the low?
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HB, I really haven't been following TBT for some time. But looking at the chart, I can only say that for the short term it is grossly oversold. But intermediate and longer term trends are not very clear. I wouls only play it for a short term trade for now, and take profits as soon as it approached an overbought state.
My approach lately has been mostly conservative dividend payers. You can find good stocks paying between 5 and 6 percent with earnings that cover those payouts very well. And most have been appreciating nicely to boot!
I find most candidates in Dividend.com's conservative dividend payers. The service is not free, but quite inexpensive and very useful...at least for my purposes.
ECONOMY AND REVENUE
Jimenez said: “Also this year Uncle Sam’s take is going to be the lowest since 1950’s. Families and businesses are paying about 13% lower taxes than they did in 2008. Tax revenue is going to make up 14.8% of Gross Domestic Product..."
Now that is interesting. "lowest since 1950’s" I believe the top tax bracket back then was 90%. So much for the argument that raising taxes on the rich will solve the deficit problem.
Thursday's WSJ had on op-ed piece by Alan Reynolds of the Cato Institute. He says the tax revenue brought in by the individual income taxes paid, stays at around 8% of GDP, regardless of what the actual tax rates, including the top rates do.
quoting " The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%. (and) 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, (and) 8.1% from 1988 to 1990 when the highest individual tax rate was 28%.
His argument is that tinkering with the top tax rate really won't increase overall revenue, but increases in GDP will.
The "tax the rich" mantra may sound good to some people, but this analysis indicates it won't help the situation we're in.
-- Frankj
Frank says, quite adeptly, I might add: "The "tax the rich" mantra may sound good to some people, but this analysis indicates it won't help the situation we're in.
Tax the Rich and Pay your Fair Share always delights the lemmings that pay NO tax at all, and in fact, make money for voting for Earned Income Credit politicians.
As proof, I submit the NoName Anon PIA over here that pays NO taxes, Never did pay, and Never will pay, but he runs his mouth as if he owns the government and all of us. Most liberals that live offa the system are like that, and can be pegged a thousand miles away, regardless of dopey alias.
Just my opinion, but I'd take it to the bank.
Now watch the ANON filth roll in................sorry Ms Honey..............
"Thursday's WSJ had on op-ed piece by Alan Reynolds of the Cato Institute. He says the tax revenue brought in by the individual income taxes paid, stays at around 8% of GDP, regardless of what the actual tax rates, including the top rates do."
The ultra right wing Cato Institute came to the conclusion that taxing the rich is not a good idea?
What a surprise!
Charles G. Koch
I think it would be a good idea for people to try to read the op-ed piece I mentioned. There are a lot of figures in there that are drawn from IRS data.
As to whether the CATO institute is ultra right wing as Mr. Koch says, I guess that is in the eye of the beholder. I always thought they were more libertarian in orientation -- but what difference does that make if the argument they present is based on facts and statistics they get from the IRS?
Quoting again, from the last paragraph:
"Both individual income taxes and overall federal taxes have long been a surprisingly constant percentage of GDP -- 8% and 18% respectively -- regardless of top tax rates on salaries, small business and investors. It follows that the only reliable way to raise real federal revenues over time is to raise real GDP."
Politicians spouting the "tax the rich" agenda, I think, prey on the ignorance of those who believe that life will be more fair if "the rich" pay their "fair share."
They hope this ignorance will translate into votes.
"An uninformed electorate is an incumbent's best friend." --Frankj
FrankJ... I agree that the WSJ article is a very worthwhile read. You posted some excerpts, I will post some too and link to the article:
By ALAN REYNOLDS
President Obama's response to congressional efforts to curb runaway federal spending is to emphasize, once again, his resolve to greatly increase tax rates on married couples whose joint incomes are above $250,000. This insistent desire to raise taxes—which he repeated in a speech yesterday while complaining about "trillions of dollars in . . . tax cuts that went to every millionaire and billionaire in the country"—is a distraction. It won't solve our nation's fiscal problem.
Preliminary estimates from the Congressional Budget Office (CBO) project that federal spending under the president's 2012 budget plan would average 23.3% over the coming decade—up from 19.7% in 2007 and 18.2% in 2001.
Even if the president could persuade Congress to enact all of his proposed tax increases, in addition to surtaxes already included in ObamaCare, the CBO finds we would still face endless budget deficits averaging 4.8% of GDP.
"Federal debt held by the public would double under the President's budget," says the CBO, "growing from $10.4 trillion (69% of GDP) at the end of 2011 to $20.8 trillion (87% of GDP) at the end of 2021, adding $9.5 trillion to the nation's debt from 2012 to 2021."
And yet, enormous as they are, these deficit and debt estimates assume that the higher tax rates called for under the president's 2012 budget plan do no harm to the economy, that interest rates stay unusually low, and that the economy avoids recession for a dozen years. Those assumptions require taxpayers to behave much differently than they ever have before.
The revenue estimates are even more unbelievable. According to the Office of Management and Budget, total revenues would supposedly exceed 19% of GDP after 2015, rising to 20% by 2021—a level briefly reached only at the height of World War II (1944-45) and the pinnacle of the tech-stock boom (2000). Moreover, these unprecedented revenues would supposedly come from the individual income tax, which is even less plausible.
It is not as though we have never tried high tax rates before. From 1951 to 1963, the lowest tax rate was 20% to 22% and the highest was 91% to 92%. The top capital gains tax rate approached 40% in 1976-77. Aside from cyclical swings, however, the ratio of individual income tax receipts to GDP has always remained about 8% of GDP.
The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%, 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, and 8.1% from 1988 to 1990 when the highest individual income tax rate was 28%. Mr. Obama's hope that raising only the highest tax rates could keep individual tax receipts well above 9% of GDP has been repeatedly tested for more than six decades. It has always failed.
Continued next post
Continued from last post:
"Federal revenue from the individual income tax exceeded 9% of GDP only eight times in U.S. history—during World War II (9.4% in 1944), the recessions of 1969-70, 1981-82 and 1991-92, and the tech-stock boom-bust of 1998-2001. Revenues were a high share of GDP during the three recessions because GDP fell.
The situation of 1997-2000 was unique. Individual income tax revenues reached an unprecedented 9.6% of GDP from 1997 to 2000 for reasons quite unlikely to be repeated. An astonishing quintupling of Nasdaq stock prices coincided with an extraordinary proliferation of stock options, which the Federal Reserve's Survey of Consumer Finances found were granted to 11% of U.S. families by 2001, and with a reduction in the capital gains tax to 20% from 28%, which encouraged much greater realization of taxable gains through stock sales. Revenues from the capital gains tax rose to 10.8% of all individual income tax receipts in 1997 and 13% by 2000. The unexpected revenue windfalls in President Bill Clinton's second term were largely a consequence of lower tax rates on capital gains.
Using IRS data, Thomas Piketty of the Paris School of Economics and Emmanuel Saez of the University of California at Berkeley have estimated that realized capital gains accounted for just 13%-22% of reported income among the top 1% of taxpayers from 1988 to 2006, when gains were taxed at 28%—but that fraction swiftly reached 29%-32% in 1998-2000, when the capital gains tax fell to 20%.
The average tax rate of such top taxpayers was mechanically diluted by the greatly increased realizations of capital gains after 1997 and 2003, since a larger share of reported income consisted of capital gains. Yet the amount of taxes paid by top taxpayers reached record highs for the same reason—there was more revenue to be had from taxing many gains at a low rate than from taxing fewer gains a high rate. Nobody can be forced to sell assets in taxable accounts. To complain that a low tax on realized capital gains is "unfair" is to suggest it would be fairer for affluent investors to sit on unrealized gains, as though an unpaid tax is morally superior to one that collects billions.
Continued next post
As a result of the conventional confusion between tax rates and revenues, some stories in the media have abetted the delusion that the huge gap between spending and likely revenues could be narrowed by simply increasing the highest tax rates on capital gains and/or dividends.
A recent cover story in Bloomberg Businessweek by Jesse Drucker, "The More You Make, the Less You Pay," reported that, "For the well-off, this could be the best tax day since the early 1930s. . . . For the 400 U.S. taxpayers with the highest adjusted gross income, the effective federal income tax rate—what they actually pay—fell from almost 30% in 1995 to just under 17% in 2007, according to the IRS."
Among the top 400 taxpayers (rarely the same people from one year to the next), the average tax rate fell to 22.3% in 2000, when the capital gains tax was 20%, from 29.9% in 1995 when the capital gains tax was 28%. But that same IRS report also shows that real tax revenues from the top 400 more than doubled after the capital gains tax fell, rising to $11.8 billion in 2000 from $5.2 billion in 1995, measured in 1990 dollars.
The same thing happened after 2003, when the capital gains tax was further reduced to 15%. The average tax rate of the top 400 fell to 16.6% in 2007 from 22.9% in 2002. Even though there was no stock market boom as in 1997-2000, real revenues of the top 400 nevertheless doubled again—to $14.5 billion in 2007 from $6.9 billion in 2002. Instead of paying less when the capital gains tax rate went down in 1997 and 2003, the top 400 instead paid much, much more.
The trendy talking point of blaming projected deficits on "tax cuts for the rich" is flatly absurd.
Both individual income taxes and overall federal taxes have long been a surprisingly constant percentage of GDP—8% and 18%, respectively— regardless of top tax rates on salaries, small business and investors. It follows that the only reliable way to raise real federal revenues over time is to raise real GDP.
Mr. Reynolds is a senior fellow with the Cato Institute and the author of "Income and Wealth" (Greenwood Press 2006).
Online Wall Street Journal Article
Mr Pig said: "Tax the Rich and Pay your Fair Share always delights the lemmings that pay NO tax at all, and in fact, make money for voting for Earned Income Credit politicians."
I hereby award you 1000 recommendations for that sentence! You have summarized the large majority of what is driving this country into bankruptcy.
There are about 40% of legal US citizens who pay ZERO income tax. And it's anyone's guess how many illegals are not paying.
Did you read in my summary about the conversation that Lynn Jimenez had with the guy who claimed he was in the country with a green card but had not paid tax in 6 years? He admitted on the air that part of his income was earned "under the table."
Lynn, being the good little lib, tried to comfort him not to worry about going to "the clink." Nice, huh?
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anonymous said: "The ultra right wing Cato Institute came to the conclusion that taxing the rich is not a good idea?
BALONEY! Read the article before you spout off about the author.
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Thank you for doing that. Didn't intend to make more work for you.
The tax the rich notion is a knee-jerk reaction when what's called for is some rational thought about how to reduce the deficit/debt.
-- Frankj
Frank....Right!
When you hear about the immense waste in government at all levels, it's clear that there is enormous room to get spending under control without actually hurting our quality of life.
Instead, they go after parks, libraries, police and fire departments, etc. They know that causes the average taxpayer the most pain.
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Mr Pig kindly said: "Now watch the ANON filth roll in................sorry Ms Honey..............
No need to be sorry. There is nothing anyone can say or refrain from saying that will stop the "filth" from rolling in daily -- sometimes multiple times a day.
Whoever is doing it, has some personal reason for hating me and this blog.
Have you got any ideas who that might be in light of the fact that I'm sweet as a honeycomb. :)
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Comments from "Ground Zero," a man who successfully trades the futures market:
"......I think the precious metals haven't even started their rally... inflation isn't even mentioned anywhere and the core CPI is still being touted as only a mere 2.1%, which I don't believe... the banks are just about back to their all time high profits while other banks are failing, and the interest rate on savings is still very low... this is a perfect environment for inflation to take hold... in fact, it's the Fed policy to create inflation, so we have them on our side... yes, the speculation of the precious metals market will yield us great returns over the next year or two, but the economy is going to suffer as a result of the burst of inflation about to emerge... it will be the middle class who will suffer the most, they don't have the means to hedge a portfolio with inflation hedges and their weekly paychecks will buy them less and less as inflation picks up... this is the worst crime against Americans, and especially those who can afford it the least...
GZ
Silicon Investor Buy and Sell Signals
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China Hikes RRR For Fourth Time In 2011: As Real Estate Bubble Pops, JPM Sees "Mass Affluent" Rushing Into Gold
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If China raises rates and restricts the growth of their money it seems that will have to spread around the world. China raising rates is akin to exporting their inflation since it causes their currency to appreciate vs. the world. They are calling Bernanke's bluff.
Bernanke will have to follow suit eventually.
Or the bond vigilantes will do it for him.
High interest rates will not be good for the PM holders.
Timing, of course, is everything!
gh
Tax the rich so they pay their "fair share?" How much is fair?
Currently the top 1% of earners pay about 40% of the taxes.
The bottom 50% pay about 3%. That's fair?
The Obama mantra seems to be: Don't tax him, don't tax me, tax that rich guy behind the tree! Typical class warfare garbage!
Dan G
I don't like Lynn Jimenez. I wish Bob would find a new guest host.
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