Today's Market
by Dr Invest
Let me reiterate, we have been in a recession since 2012. The Federal Reserve, shrewdly used money printing (Liquidity) to float the economy. You will remember that in May of 2012, Bernanke, the then head of the Federal Reserve, began Quantitative Easing (QE). This inflated a market that was then in recession and is still in recession. The recession that began in 2012 never really ended. All of the QE would have caused remarkable INFLATION, excepting that we were in a RECESSION. The recession mean people receiving less INCOME. With less income and less consumer spending, there were less TAX REVENUES. City governments, State governments, and our National government suddenly found their selves short of the money needed for government programs. Numerous cities filed for bankruptcy. Even some state governments neared bankruptcy and were only pulled back by radical spending cuts.
THE CRY FOR INCREASING MINIMUM WAGE HAD NOTHING TO DO WITH COMPASSION, RATHER TO GAIN MORE TAXES FOR GOVERNMENT. It is loathsome to couch compassion for the poor under paid worker on the seat of self gain. This government's greatest concern is that business are not increasing the salaries of their workers. Is this because of their great humanitarian concern? No! This is because if companies would only increase salaries, the government could collect more taxes. Now if there is legislation to raise your taxes, you will likely call your Congressman immediately. But this kind of taxation is far more subtitle.
The implement a national healthcare insurance program (Obamacare) that BIG BUSINESS will have to pay for. This is hidden form of TAXATION. Increase minimum wage on BIG BUSINESS. This is a hidden form of TAXATION. Fees for people not wanting national healthcare insurance. This is a hidden form of TAXATION. If you own a second home and you sell it, there is a FEE that is paid into OBAMACARE. That is a hidden form of TAXATION. There are many other FEES that have been implemented on tobacco, alcohol, or luxury purchases, all amounting to a hidden form of TAXATION. There are a number of FEES yet to be implemented, but they are forms of HIDDEN TAXATION.
Businesses are buying back their stock and investing in their plants. Yet, these same businesses are cutting less desirable workers, hiring more desirable workers, and keeping their profits abroad. The government is begging them to hire more workers, but they are saying no! The government is begging them to bring their profits home, but they are reluctant to do so. The government's interest is not for the companies to reinvest in the U.S., but to TAX those companies, so government can continue to expand. It is the LACK OF FUNDS that keep the government from continued expansion.
So LIMITED INCOME, HIDDEN TAXATION, and INCREASED DEBT present a drag on the economy that is insurmountable.
TODAY'S MARKET NEWS
Wall Street and the Federal Reserve have talked about reaching "ESCAPE VELOCITY" for the economy in 2015. Although this term has been used over the past three years, we have yet to achieve "escape velocity". To the chagrin of bankers and brokers all over Wall Street, today was marked by the DAY THAT ALL THE GAINS IN 2015 WERE ERASED. This was because earnings are in worse shape that investors recognized.
Do what! I thought we were at "ESCAPE VELOCITY" in our economy. The dollar is suddenly higher than the nations around us whose currencies are DEFLATING. To make the dollar drop in value, we have to print more dollars. Already wall street is demanding that the Federal Reserve return to Quantitative Easing. The projection was for a 3.2% increase in the GDP, when earnings growth for companies have contracted 5.1% during the first quarter. Now analysts are wondering if the Federal Reserve's projections were at all correct.
Go to BUSINESSCYCLE.COM and read their latest news. The economy is not improving and not projected to improve.
Providing the above chart, the ECRI shows us that a combination of demographic trends and government intervention is leading GDP lower.
Finally, Dr Lacey at Hosington has written one of the most accurate assessments I have read regarding the present economic conditions. You would be foolish not to read this article. You can get there by going to http://www.hoisingtonmgt.com/pdf/HIM2014Q4NP.pdf
Dr Lacey notes the DEFLATIONARY condition in the economy, CURRENCY MANIPULATION by the FED, OVER INDEBTEDNESS by governments, businesses, and individuals, and continued efforts by central banks to compete in an ever declining market.
SUGGESTIONS FOR INVESTORS
If you are invested, consider how much you are willing to lose and SET SELL POINTS. In other words determine how you are going to get out of the market. Don't wait too long to sell. The first out wins, the last out carries the losses.
If you are not invested, stay in cash until a firm downtrend has been established. Look for 30% to 50% losses. Only then could you consider re-entering the market. It is better to be out of the market wishing you were in, than to be in the market wishing you were out.
I have been positioned in a market, seeing losses each day; it is not a happy time. So walk carefully.
(Note: the above information is for ENTERTAINMENT purposes only and not to be used as investment advice)
by Dr Invest
Let me reiterate, we have been in a recession since 2012. The Federal Reserve, shrewdly used money printing (Liquidity) to float the economy. You will remember that in May of 2012, Bernanke, the then head of the Federal Reserve, began Quantitative Easing (QE). This inflated a market that was then in recession and is still in recession. The recession that began in 2012 never really ended. All of the QE would have caused remarkable INFLATION, excepting that we were in a RECESSION. The recession mean people receiving less INCOME. With less income and less consumer spending, there were less TAX REVENUES. City governments, State governments, and our National government suddenly found their selves short of the money needed for government programs. Numerous cities filed for bankruptcy. Even some state governments neared bankruptcy and were only pulled back by radical spending cuts.
THE CRY FOR INCREASING MINIMUM WAGE HAD NOTHING TO DO WITH COMPASSION, RATHER TO GAIN MORE TAXES FOR GOVERNMENT. It is loathsome to couch compassion for the poor under paid worker on the seat of self gain. This government's greatest concern is that business are not increasing the salaries of their workers. Is this because of their great humanitarian concern? No! This is because if companies would only increase salaries, the government could collect more taxes. Now if there is legislation to raise your taxes, you will likely call your Congressman immediately. But this kind of taxation is far more subtitle.
The implement a national healthcare insurance program (Obamacare) that BIG BUSINESS will have to pay for. This is hidden form of TAXATION. Increase minimum wage on BIG BUSINESS. This is a hidden form of TAXATION. Fees for people not wanting national healthcare insurance. This is a hidden form of TAXATION. If you own a second home and you sell it, there is a FEE that is paid into OBAMACARE. That is a hidden form of TAXATION. There are many other FEES that have been implemented on tobacco, alcohol, or luxury purchases, all amounting to a hidden form of TAXATION. There are a number of FEES yet to be implemented, but they are forms of HIDDEN TAXATION.
Businesses are buying back their stock and investing in their plants. Yet, these same businesses are cutting less desirable workers, hiring more desirable workers, and keeping their profits abroad. The government is begging them to hire more workers, but they are saying no! The government is begging them to bring their profits home, but they are reluctant to do so. The government's interest is not for the companies to reinvest in the U.S., but to TAX those companies, so government can continue to expand. It is the LACK OF FUNDS that keep the government from continued expansion.
So LIMITED INCOME, HIDDEN TAXATION, and INCREASED DEBT present a drag on the economy that is insurmountable.
TODAY'S MARKET NEWS
Wall Street and the Federal Reserve have talked about reaching "ESCAPE VELOCITY" for the economy in 2015. Although this term has been used over the past three years, we have yet to achieve "escape velocity". To the chagrin of bankers and brokers all over Wall Street, today was marked by the DAY THAT ALL THE GAINS IN 2015 WERE ERASED. This was because earnings are in worse shape that investors recognized.
Do what! I thought we were at "ESCAPE VELOCITY" in our economy. The dollar is suddenly higher than the nations around us whose currencies are DEFLATING. To make the dollar drop in value, we have to print more dollars. Already wall street is demanding that the Federal Reserve return to Quantitative Easing. The projection was for a 3.2% increase in the GDP, when earnings growth for companies have contracted 5.1% during the first quarter. Now analysts are wondering if the Federal Reserve's projections were at all correct.
Go to BUSINESSCYCLE.COM and read their latest news. The economy is not improving and not projected to improve.
Providing the above chart, the ECRI shows us that a combination of demographic trends and government intervention is leading GDP lower.
Finally, Dr Lacey at Hosington has written one of the most accurate assessments I have read regarding the present economic conditions. You would be foolish not to read this article. You can get there by going to http://www.hoisingtonmgt.com/pdf/HIM2014Q4NP.pdf
Dr Lacey notes the DEFLATIONARY condition in the economy, CURRENCY MANIPULATION by the FED, OVER INDEBTEDNESS by governments, businesses, and individuals, and continued efforts by central banks to compete in an ever declining market.
SUGGESTIONS FOR INVESTORS
If you are invested, consider how much you are willing to lose and SET SELL POINTS. In other words determine how you are going to get out of the market. Don't wait too long to sell. The first out wins, the last out carries the losses.
If you are not invested, stay in cash until a firm downtrend has been established. Look for 30% to 50% losses. Only then could you consider re-entering the market. It is better to be out of the market wishing you were in, than to be in the market wishing you were out.
I have been positioned in a market, seeing losses each day; it is not a happy time. So walk carefully.
(Note: the above information is for ENTERTAINMENT purposes only and not to be used as investment advice)
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