Today's Market
by Dr Invest
Ok, I haven't been writing because there is nothing to write about. Bernanke keeps his stimulus plan in place, regardless the long-term consequences to our economy. One of the headlines was: Fed’s Unintended Consequences Are Hitting Everyday Life. The talking heads are now beginning to acknowledge the fallacy of endless stimulus.
Fed's Unintended Consequences....
Click on link above (Fed's Unintended Consequences) to see video. Another headline today was: Contagion Creeps into U.S. Market as Investors Turn Defensive. As in previous weeks, there are proclamations that the economy has turned around and that any fears of a downturn should be set aside because only blue skies and pure profits lie ahead for the investors turning to stocks.
Nothing has changed since I wrote last. I will refer you to my sidebar where you can select RESEARCH AND MARKET REPORTS. Then select HUSSMAN FUNDS WEEKLY REPORT and read. John Hussman says that "Preparing for uncertainty is different than preparing for risk." He goes on, "Risk involves possible events within a reasonably known range of outcomes. Uncertainty involves possible events where the range of outcomes is not known." Now from my Vulgate: In this season of UNCERTAINTY, you can't possibly predict where the market will go. For the investor, this is a tremendous disadvantage. The government says, "Take your money out of the bank and invest in stocks, it will get more money moving through the economy and bring new economic revitalization." "Trust us" is the government's mantra.
The recent events in Cyprus has greatly shaken investor's trust. The central bank has levied a tax on all savings accounts over a pre-set ceiling. Let me say it this way, THEY HAVE STOLEN INVESTOR'S MONEY. For the first time, there is the realization that governments can, at will, freeze bank accounts and take whatever they deem as their share of the investor's bank accounts.
Our friend, Marc Faber, suggests that people hold physical gold. He really has never explained why holding physical gold is important; he suggest holding farm land, but offers indication of why real estate would be a great investment. Now I understand. Faber understands that governments will do anything to keep power. There are only two ways to keep from bankrupting an economy: decreasing the debt, or increasing income. If a government will not decrease their debt, they must RAISE TAXES to increase income. This is what eurotribe is doing in Cyprus, getting income by forcefully taking money from those who have saved and played by the rules. Faber understands that at the whim of the U.S. government, they can hold all monies whether private or public, taking what they deem as fair to continue to run their economy.
While I am venting, the idea of "RETURN-FREE FILING" has been kicked around for years. As president Obama has endorsed, the IRS would send you a pre-filled return based upon what the IRS already knows about your banking information. (and they do know how much money passes through your bank) The IRS would bill you for your taxes without you filling out a tax return.
There were two bills that didn't pass in 2011 for the RETURN-FREE FILING of taxes. Again, the government determines how much you owe, and you pay. Read all about it at: TAX POLICY CENTER .
Like it or not, the government wants to find a way to insure they get as much taxes as possible. RETURN-FREE FILING would simply insure that EVERYONE pays their taxes and that bank accounts are more quickly levied by the IRS to cover the trillions of debt in the near future. So far, return-free filing has been defeated but remains a current agenda item.
THE MARKET
There is little to move the market higher, nor enough bad news to move the market lower. I think that even though the VIX is at an all-time high, that the expectation for further gains will need to climb higher. This is called EXUBERANCE. Even though the market seems to be moving sideways, it remains at an all time high. As has happened so many times before, the market predicts that there are some down trends but the overall market is moving higher and will continue to do so.
More financial advisers are encouraging their clients to move to stocks. This generates new fees for the adviser. Sadly, these moves are supported by research at the large financial institutions. This is like the fox telling the rooster to drive the hens toward his mouth. If the financial institutions are right, they stand to make billions, but if wrong, investors stand to loose billions. At this point, I am steering clear of the stock market. I am holding TIP and I am invested in a company called RKUS. I hold a stop-sell on all investments and will stay invested until the market turns down.
(note: the above information is for entertainment purposes only and not to be used as investment advice.)
by Dr InvestOk, I haven't been writing because there is nothing to write about. Bernanke keeps his stimulus plan in place, regardless the long-term consequences to our economy. One of the headlines was: Fed’s Unintended Consequences Are Hitting Everyday Life. The talking heads are now beginning to acknowledge the fallacy of endless stimulus.
Fed's Unintended Consequences....
Click on link above (Fed's Unintended Consequences) to see video. Another headline today was: Contagion Creeps into U.S. Market as Investors Turn Defensive. As in previous weeks, there are proclamations that the economy has turned around and that any fears of a downturn should be set aside because only blue skies and pure profits lie ahead for the investors turning to stocks.
Nothing has changed since I wrote last. I will refer you to my sidebar where you can select RESEARCH AND MARKET REPORTS. Then select HUSSMAN FUNDS WEEKLY REPORT and read. John Hussman says that "Preparing for uncertainty is different than preparing for risk." He goes on, "Risk involves possible events within a reasonably known range of outcomes. Uncertainty involves possible events where the range of outcomes is not known." Now from my Vulgate: In this season of UNCERTAINTY, you can't possibly predict where the market will go. For the investor, this is a tremendous disadvantage. The government says, "Take your money out of the bank and invest in stocks, it will get more money moving through the economy and bring new economic revitalization." "Trust us" is the government's mantra.
The recent events in Cyprus has greatly shaken investor's trust. The central bank has levied a tax on all savings accounts over a pre-set ceiling. Let me say it this way, THEY HAVE STOLEN INVESTOR'S MONEY. For the first time, there is the realization that governments can, at will, freeze bank accounts and take whatever they deem as their share of the investor's bank accounts.
Our friend, Marc Faber, suggests that people hold physical gold. He really has never explained why holding physical gold is important; he suggest holding farm land, but offers indication of why real estate would be a great investment. Now I understand. Faber understands that governments will do anything to keep power. There are only two ways to keep from bankrupting an economy: decreasing the debt, or increasing income. If a government will not decrease their debt, they must RAISE TAXES to increase income. This is what eurotribe is doing in Cyprus, getting income by forcefully taking money from those who have saved and played by the rules. Faber understands that at the whim of the U.S. government, they can hold all monies whether private or public, taking what they deem as fair to continue to run their economy.
While I am venting, the idea of "RETURN-FREE FILING" has been kicked around for years. As president Obama has endorsed, the IRS would send you a pre-filled return based upon what the IRS already knows about your banking information. (and they do know how much money passes through your bank) The IRS would bill you for your taxes without you filling out a tax return.
There were two bills that didn't pass in 2011 for the RETURN-FREE FILING of taxes. Again, the government determines how much you owe, and you pay. Read all about it at: TAX POLICY CENTER .
Like it or not, the government wants to find a way to insure they get as much taxes as possible. RETURN-FREE FILING would simply insure that EVERYONE pays their taxes and that bank accounts are more quickly levied by the IRS to cover the trillions of debt in the near future. So far, return-free filing has been defeated but remains a current agenda item.
THE MARKET
There is little to move the market higher, nor enough bad news to move the market lower. I think that even though the VIX is at an all-time high, that the expectation for further gains will need to climb higher. This is called EXUBERANCE. Even though the market seems to be moving sideways, it remains at an all time high. As has happened so many times before, the market predicts that there are some down trends but the overall market is moving higher and will continue to do so.
More financial advisers are encouraging their clients to move to stocks. This generates new fees for the adviser. Sadly, these moves are supported by research at the large financial institutions. This is like the fox telling the rooster to drive the hens toward his mouth. If the financial institutions are right, they stand to make billions, but if wrong, investors stand to loose billions. At this point, I am steering clear of the stock market. I am holding TIP and I am invested in a company called RKUS. I hold a stop-sell on all investments and will stay invested until the market turns down.
(note: the above information is for entertainment purposes only and not to be used as investment advice.)
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