Today's Market
by Dr Invest
Happy New Year! We are told by numerous pundits that 2015 is taking off like no other year before it. We have, finally, reached economic karma. There is no need for you to worry, ever! The Federal Reserve has everything under their control and we will not see a recession ever again.
The government's analysis, along with a host of wall street brokers and banks, completely put me at ease. Because of President Obama's leadership, all future market downturns have been vanquished, recovery has finally come. For some reason, I'm not drinking the cool-aide. I believe that the market I see around me is artificial, and so do a lot of other smart people.
A STACKED DECK
Everyone knows it is a STACKED DECK. The economy is still on "life support". Yes, the Fed stopped stimulus, but interest rates are at zero percent and likely to stay that way into the near future. And remember, should the market suddenly plunge, there is the promise of immediate bond buying once again. EVERYBODY KNOWS THIS IS NOT A STRONG ECONOMY, but the President and wall street want to play that it is.
SIGNS OF TROUBLES
The Republicans lost their first proposed bill that a FULL-TIME JOB would be defined as 40 hours a week and not 30 hours a week. The President crowed that he would veto it and his faithful suitors didn't support it. Why is 30 hours so important?
Well, there are two sides, one side blames Obamacare, pointing to the fact that employee's deductible has ballooned to 80%. The other side blames businesses, who are not paying for their employee's insurance by reducing their work week to 30 hours. Furthermore, they blame businesses for not providing their employee a higher salary, so the employee can pay for a higher medical deductible. And so the argument continues in blaming and counter-blaming while the middle class struggles to make a minimum salary.
Taken from the Courier Journal: Inpatient care last year averaged $17,553, and insurance plans require people to pay a portion of that even after meeting their deductibles, up to an out-of-pocket maximum that can easily exceed $10,000 a year for families. Median household income in the U.S. is around $53,000, and the average American has less than $6,000 in savings, according to a 2012 report by Pitney-Bowes Software. A quarter have no emergency savings at all, Bankrate.com reported in June.
A little math for the middle class. If you subtract $17,553 from $53,000, you have $35,467 remaining. Now who can live on $35,467 a year? The solution is RAISE SALARIES, then everyone can afford government healthcare. This is akin to the government passing benefits for all the citizens, and then asking them to pay for their own benefits that they passed. Legislators mistakenly believe that business is flush with profits to pay for whatever they legislate. Second, Legislators are currently talking about "FAIR SHARE". This interprets to HIGHER TAXES.
Let me get this right. Someone in Washington wants to tax me more to pay for the increase in the size of government, then do me a favor by giving to me special benefits that I'm to take from my hard earned profits. If I want special benefits, why don't I just pay for them myself? Because, Washington wants to take from successful businessmen, the "fat cats" of our society, and have them pay the unfortunate a share their business earnings.
I know a young man, he owns a lawn care business with two employees beside himself. The government wants to take money from him to pay for free healthcare for those two employees and more money to increase their wages. So using the $17,500 inpatient care average, my friend would have to pay an additional $35,000 annually for healthcare. Then he would have to pay an additional $2.85 per hour for each employee. For two employees, that is an additional $11,856 annually. This amounts to $46,856 in additional expenses. Do you think this small businessman will be able to keep his employees and pay these additional fees? This is why businessmen are not rushing to increase salaries. Several small businessmen have told me that they are letting their employees go and working the business by their self. Why? Because the small increase they would get with employees doesn't warrant the financial responsibility of having employees.
Well what about large corporate organizations. They have plenty of money to give away! Put yourself in CEO's place. McDonald's or Walmart. Walmart employs around 2.1 million people. Using our magic increase of $5,928 per person, Walmart expenses would increase a whopping $12 BILLION. Current profits, after expenses are around $17 BILLION. So what, if they only made $5 BILLION. The problem is that these numbers are so large, that we can't really understand them. In a down market, Walmart looses millions each week. Without CAPITAL, Walmart would quickly collapse. J.C. Penney, Sears, and Montgomery Ward are all examples of how a down season in sells can bring a company to the edge of disaster.
SUMMARY
A combination of poor economic conditions, market manipulation by the government, demands that businesses carry their "fair share", and government healthcare burden, have left small business men with uncertainty about the future of the economy. Both wise investors and business men are reluctant to invest fully into an economy that is still in recovery. There is a disconnect between what the government says is a "healthy recovery" and what business people see as "economic reality".
ECONOMIC WEATHER
The economic weather will be partly cloudy to stormy. The sun will shine through from time to time, followed by heavy down pours, flooding, and possible tornadoes. I don't think we will see clear weather in 2015 and the threat of a bear market will be with us throughout the year.
(Note: the above article is for entertainment only and not to be used as investment advice.)
by Dr InvestHappy New Year! We are told by numerous pundits that 2015 is taking off like no other year before it. We have, finally, reached economic karma. There is no need for you to worry, ever! The Federal Reserve has everything under their control and we will not see a recession ever again.
The government's analysis, along with a host of wall street brokers and banks, completely put me at ease. Because of President Obama's leadership, all future market downturns have been vanquished, recovery has finally come. For some reason, I'm not drinking the cool-aide. I believe that the market I see around me is artificial, and so do a lot of other smart people.
A STACKED DECK
Everyone knows it is a STACKED DECK. The economy is still on "life support". Yes, the Fed stopped stimulus, but interest rates are at zero percent and likely to stay that way into the near future. And remember, should the market suddenly plunge, there is the promise of immediate bond buying once again. EVERYBODY KNOWS THIS IS NOT A STRONG ECONOMY, but the President and wall street want to play that it is.
SIGNS OF TROUBLES
The Republicans lost their first proposed bill that a FULL-TIME JOB would be defined as 40 hours a week and not 30 hours a week. The President crowed that he would veto it and his faithful suitors didn't support it. Why is 30 hours so important?
Well, there are two sides, one side blames Obamacare, pointing to the fact that employee's deductible has ballooned to 80%. The other side blames businesses, who are not paying for their employee's insurance by reducing their work week to 30 hours. Furthermore, they blame businesses for not providing their employee a higher salary, so the employee can pay for a higher medical deductible. And so the argument continues in blaming and counter-blaming while the middle class struggles to make a minimum salary.
Taken from the Courier Journal: Inpatient care last year averaged $17,553, and insurance plans require people to pay a portion of that even after meeting their deductibles, up to an out-of-pocket maximum that can easily exceed $10,000 a year for families. Median household income in the U.S. is around $53,000, and the average American has less than $6,000 in savings, according to a 2012 report by Pitney-Bowes Software. A quarter have no emergency savings at all, Bankrate.com reported in June.
A little math for the middle class. If you subtract $17,553 from $53,000, you have $35,467 remaining. Now who can live on $35,467 a year? The solution is RAISE SALARIES, then everyone can afford government healthcare. This is akin to the government passing benefits for all the citizens, and then asking them to pay for their own benefits that they passed. Legislators mistakenly believe that business is flush with profits to pay for whatever they legislate. Second, Legislators are currently talking about "FAIR SHARE". This interprets to HIGHER TAXES.
Let me get this right. Someone in Washington wants to tax me more to pay for the increase in the size of government, then do me a favor by giving to me special benefits that I'm to take from my hard earned profits. If I want special benefits, why don't I just pay for them myself? Because, Washington wants to take from successful businessmen, the "fat cats" of our society, and have them pay the unfortunate a share their business earnings.
I know a young man, he owns a lawn care business with two employees beside himself. The government wants to take money from him to pay for free healthcare for those two employees and more money to increase their wages. So using the $17,500 inpatient care average, my friend would have to pay an additional $35,000 annually for healthcare. Then he would have to pay an additional $2.85 per hour for each employee. For two employees, that is an additional $11,856 annually. This amounts to $46,856 in additional expenses. Do you think this small businessman will be able to keep his employees and pay these additional fees? This is why businessmen are not rushing to increase salaries. Several small businessmen have told me that they are letting their employees go and working the business by their self. Why? Because the small increase they would get with employees doesn't warrant the financial responsibility of having employees.
Well what about large corporate organizations. They have plenty of money to give away! Put yourself in CEO's place. McDonald's or Walmart. Walmart employs around 2.1 million people. Using our magic increase of $5,928 per person, Walmart expenses would increase a whopping $12 BILLION. Current profits, after expenses are around $17 BILLION. So what, if they only made $5 BILLION. The problem is that these numbers are so large, that we can't really understand them. In a down market, Walmart looses millions each week. Without CAPITAL, Walmart would quickly collapse. J.C. Penney, Sears, and Montgomery Ward are all examples of how a down season in sells can bring a company to the edge of disaster.
SUMMARY
A combination of poor economic conditions, market manipulation by the government, demands that businesses carry their "fair share", and government healthcare burden, have left small business men with uncertainty about the future of the economy. Both wise investors and business men are reluctant to invest fully into an economy that is still in recovery. There is a disconnect between what the government says is a "healthy recovery" and what business people see as "economic reality".
ECONOMIC WEATHER
The economic weather will be partly cloudy to stormy. The sun will shine through from time to time, followed by heavy down pours, flooding, and possible tornadoes. I don't think we will see clear weather in 2015 and the threat of a bear market will be with us throughout the year.
(Note: the above article is for entertainment only and not to be used as investment advice.)
