Money Tips and Strategies

More “Stress Test” Hokum, this Time in Europe

2010-08-26T08:00:00.004-05:00

by Mike Larson 07-09-10

Of all the questionable bailout and backstop programs the government rolled out in the wake of the credit crisis, the whole “stress test” episode for the banks stands out the most.

The idea was that the Fed and Treasury would evaluate whether 19 major U.S. banks could survive a recession without a catastrophic erosion of their capital.

The problem: The tests were never stressful enough!

One of the main reasons the whole exercise “worked” — and if by worked you mean it successfully propped up bank stocks — was that the government made clear that any at-risk institution would essentially get bailed out anyway. True “failure” was not an option.

Oh, and at the same time …

The Fed was pumping hundreds of billions of dollars into the markets by buying mortgage and Treasury securities with newly created cash,
The government was offering tax credits to first-time home buyers to artificially boost the housing market,
And the Obama administration and Congress were showering the economy with almost $800 billion in stimulus funds.

Result: The 10-of-19 banks deemed to be needy had no trouble raising the required $74.6 billion in capital.

Europe’s banking supervisor is conducting stress tests to determine how individual banks would hold up to economic and market shocks.

Hoping to achieve the same results, Europe is now conducting its own stress test exercise. The Committee of European Banking Supervisors (CEBS) is evaluating 91 banks that represent roughly two-thirds of the European Union’s banking industry. The results will be released by July 23.

I don’t think I’m going out on a limb here by saying that just about all the institutions will pass with flying colors. Sure, there’ll probably be a few sacrificial lambs. But all in all, the banks will get rubber-stamped.

There’s just one twist: I don’t think the results will be anything like what we got here in the U.S., and I’ll tell you why …

This Time, It’s Different!

Those are dangerous words to use in the investing world. But they ring true now.

For one thing, we’re not coming OUT of a recession like we were at the time of the previous stress tests. Instead, it looks like we’re sliding IN to a “Double Dip” one! That means credit loss rates aren’t peaking. They’re about to start rising again.

For another thing, the credit crisis has morphed. We were worried about PRIVATE credit risk sinking the banks last time around. This time around, we’re concerned about something much more serious — SOVEREIGN debt defaults!

In other words, it’s not individual mortgage or credit card borrowers that are sliding towards default. It’s actual European countries! That’s a much bigger problem.

Still another difference …

At the time of the U.S. stress test exercise, governments could borrow and spend all they wanted to in order to bail out failing institutions. Now the bond vigilantes are putting their feet down. They’re forcing countries like Greece, Spain, Portugal, and the U.K. to stop throwing money at struggling institutions.

Last but not least, the European stress test assumptions look way too optimistic. That means the markets will likely disregard any rosy results.

Case in point: The CEBS is reportedly going to apply a haircut of just 17 percent on Greek sovereign debt when computing potential bank losses.

By contrast, credit markets were recently suggesting losses on Greek debt could be as high as 60 percent. And a JPMorgan analyst implied that anything less than 25 percent would be unrealistic.

Spanish bonds reportedly will get a paltry 3 percent haircut, compared with a more realistic 15 percent.

And no haircut at all will be applied to bonds issued by the largest European economies, like Germany and France. This despite the fact those countries are putting their own balance sheets at risk in order to bail out their profligate PIIGS neighbors!

Believe in Fairy Tales At Your Own Risk

Washington was able to hoodwink investors, now Europe will try the same shenanigans.

Look, if some investors want to trust the happy talk coming out of European banking regulators and Washington spinmeisters, I can’t stop them. But I sure don’t buy it. I think this is a clear case of “Fool me once, shame on you. Fool me twice, shame on me!”

Bottom line: I find it extremely hard to believe that a bogus European stress test exercise will have the same impact the U.S. stress test exercise had more than a year ago.

So rather than load up the truck with bank stocks in anticipation of another major rally, I’d cut my exposure into any bounce. And I’d continue to batten down the hatches against the increasingly likely scenario of a double-dip recession.

Until next time,

Mike

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Deflation Is Gathering Strength - Quick Checklist

2010-08-23T08:00:00.001-05:00

I thought this article was well written and thoughtful. Jim Powell has been for the most part concerned about inflation until recently. It appears that he is now seeing the handwriting on the wall. If you do not feel you understand the implications of deflation, I believe you will enjoy the read.

Subscriber Bulletin
Friday, July 9, 2010. Copyright © 2010
by James B. Powell & Associates, LLC

Deflation Is Gathering Strength

I have been warning readers for several months that deflation (the destruction of money) could gain the upper hand over inflation (the creation of money). I now think the tipping point has been reached and deflation is becoming the dominant monetary trend. That is of enormous importance to us because - as I will discuss in a minute - dealing with deflation will require different strategies than we would use with inflation.

The evidence for deflation is overwhelming. Our economy is now hemorrhaging money at a faster rate than the Fed is creating it.

Here are the main engines of deflation that are at work:

Unemployment is increasing.
Real wages are falling.
Household net worth is dropping.
Real estate sales are off 30%.
Commodity prices are down sharply.
Foreclosures and bankruptcies are rising.
Most asset values are still declining.
Four U.S. states are effectively bankrupt.
Several countries in Europe are also close to default.
The U.S. economy is starting another leg down.
Bond yields are approaching historic lows.
At the same time, the Fed's stimulus and bailout programs are ending.

All in all, it's a classic deflationary pattern that is taking billions of dollars out of the economy. The lost dollars are not just going somewhere else, they are disappearing.
Deflation has gained so much momentum that I think it will continue - and probably get worse - for several months. The slide could even last a year, or possibly much longer (see the box).

How Long Will Deflation Last?

Although I don't expect it, there is a chance that deflation will last several years.
That's what happened in Japan after its stock and real estate bubbles collapsed in 1989. For nearly two decades, the Japanese government poured money into the economy almost continuously - just as the U.S Fed is doing now. Interest rates were reduced nearly to zero and key industries received subsidies. Nevertheless, deflation persisted through 2009.
The American economy is far more diverse and resilient than Japan's. Nevertheless, Japan shows how persistent deflation can be if it becomes firmly established.

How long deflation will prevail will depend upon how quickly the Fed steps in to fight the problem, and whether or not the steps will be successful.

If this were any other time in U.S. history, I would have little doubt that the Fed could defeat deflation by flooding the economy with money. But the Fed has been doing just that for 3 years - and it has not been working. Nearly $4 trillion has been spent and deflation has been gaining strength instead of weakening.
Nevertheless, I expect the Fed will seek to introduce another round of record-breaking spending in a last ditch attempt to push deflation aside. However, round two won't be as easy to do as round one. The Fed is already grossly overextended. In addition, the public is strongly opposed to further deficit spending, and Washington is getting the message. That's why Congress defied expectations and just decided not to extend unemployment benefits.

However, because deflation can lead to a depression if it gets out of hand, the Fed may cast public opinion aside and act right away in hopes of stopping it. If so, a blizzard of new money may flow into the economy as soon as this fall. Such a cure may be worse than the disease.

However long deflation lasts, the trillions of dollars the Fed will create to fight it will lead to a period of ruinous inflation.

Because inflation seems unavoidable longer term, I believe the best use of a deflationary period is to acquire precious metals, blue chip stocks, rental residential real estate, and other inflation hedges at bargain prices. When deflation ends, you can either sell the assets and collect your profits, or keep them for even greater gains as inflation starts to rise. If you are prepared to make use of a deflationary period, it can be a windfall instead of a disaster.

A complete list of what to buy can be found in the May 2009 GCOR. For a condensed list of both inflation and deflation investments, see the table on page 6 in the April 2010 issue.

Why Inflation Will Eventually Prevail

Although deflation may be the dominant monetary condition this year, rising inflation is a virtual certainty longer-term. That's because debasing the dollar is the only possible way Washington, the banks, and consumers can possibly "pay" their colossal debts.
Therefore, if you continue to maintain your investment program for a inflationary environment, I'm confident that you will eventually become a very big winner. In the meantime, you must avoid the dangers of deflation and make them work for your benefit.

The Best Deflation Strategy

To profit from a deflationary downturn, it is only necessary to take the familiar rules about inflation and reverse them. Cash will rise in value instead of depreciating. Real assets will go down in price, not up. Interest rates will drop rather than rise. It's all fairly simple. However, it has been so many years since the last deflation occurred, few investors remember what it was like.

Because the ability to make bargain purchases is the key to making a deflationary cycle pay off, you should hold more cash than you would ordinarily wish to have with inflation and a weaker dollar on the horizon.

When I recommend having plenty of cash available I'm referring to actual folding money in addition to funds kept in banks. If a deflationary recession becomes something worse, many already-shaky banks will find themselves in serious trouble. The Fed may declare a bank holiday while it tries to fix the mess. In that event, ATMs, credit card approvals, check verification, online banking, and the accounts themselves will be off line. Of course, safety deposit boxes will also be unavailable. That's when "mattress liquidity" will prove its value.

A Deflation Checklist

First, being unprepared for inflation (or a possible dollar devaluation) is a much bigger threat to your wealth than missing out on deflation profits. (Please read that again.)
Therefore, the best way to use this deflationary period is to get ready for the inflation cycle that is on the way. All the inflation/devaluation hedges that I have been discussing in recent months remain attractive. If deflation brings their prices down, all the better. There is nothing I would like more than to see gold drop below $1,000 and for silver to slide into the low teens.
Remember, during deflation, cash is king. With greenbacks on hand you can pick up bargains, demand discounts, and hire people at attractive rates.
Apart from your day-to-day needs, I think you should keep some of your cash in a strong commodity currency. I continue to favor the Canadian dollar which is backed by a treasure trove of valuable raw materials (see the April 2010 GCOR). The Australian dollar is also strong for the same reasons. Best of all, an asset-based currency is much more likely than the U.S. dollar to keep pace with inflation. You can open an account in either currency at EverBank World Markets (www.everbank.com).
You should take steps to keep your cash safe from the turmoil that deflation is likely to cause. Don't be concerned that interest rates are on the floor because deflation will drive up the buying power of your cash. For example, if you earn a miserable 1% on a T-Bill, but the price of what you want to buy (stocks, futures, real-estate, toys) drops 20%, you will make the equivalent of 21% on your money. Choose six or nine month T-Bills and CDs. I would not select fixed income investments that mature beyond that point because inflation may arrive by then, and interest rates will start to climb back up.
Any collectibles that you have been meaning to sell should go on the block before deflation starts to push their prices down. And when inflation returns, consumers are likely to be in such poor financial shape they won't have money for frills.
Because cash is becoming increasing valuable, so are dividends paid by high quality blue chip stocks. We have several such companies in our portfolios.
Likewise, rental housing that generates reliable income looks attractive - provided that you live in a region where prices have stopped falling. If not, wait until they do.
I would steer clear of all other real estate right now. Home sales dropped a whopping 30% this spring. The commercial real estate market is also in serious trouble. There will be a time when deflation will present you with superb real estate opportunities - but we are not there yet.
During a deflation it is not wise to take on debt except for anything that generates income. Only borrow money to buy assets that pay for themselves.
If you are in business, you should pay particular attention to the deflationary conditions that are devastating consumers. Retail sales may hold up for awhile, but a significant rebound is probably many years away. On the other hand, any business that helps people get by for less money should do well. That situation should continue even after inflation begins.

I will continue to keep you up to date about any new economic developments that you should know about. Remaining informed is the key to avoiding big mistakes and making good profits during this difficult time. Please share your knowledge with everyone who is important to you.
You can expect to receive the next issue of GCOR in early August.
Best wishes,

Jim Powell, Editor and Publisher
Global Changes & Opportunities Report

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How Long Will Deflation Last and Then What?

2010-08-20T08:00:00.001-05:00

Question:

Real quick, the last time we spoke you mentioned to put our money in cash because of deflation and the banking collapse, but if we hit inflation in a few years would we need to then move it out of cash. I thought I remember us talking about inflation taking place closer the six year mark.

Let me know what you think.

Answer:

When it comes to predicting when scoundrels will be outed and then pull out all the stops to screw everyone regardless of whether it's obvious or not, it becomes a very difficult prediction indeed. There is no substitute for watching and being vigilant. Having said that, my guess would be 2-3 years but perhaps as long as six. The markets should hit bottom in about six years.

In answer to your question, yes at some point it will be appropriate to move out of cash. A likely sign will be that everyone will think you're crazy for doing so because everyone will be in agreement that deflation is the future and that there is no way inflation could re-emerge. Just the opposite of what it is now. Right now everyone knows that inflation is the future and thinks its crazy to be in cash. The only thing consistent about everyone following the crowd is that they always end up being wrong when it comes to investing.

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Double-Dip Recession Warning Signs Everywhere! Batten Down the Hatches!

2010-08-17T08:00:00.002-05:00

by Mike Larson 07-02-10

The bright red warning signs of a double-dip recession are flashing everywhere. And I do mean EVERYWHERE.

In just the past few days, we learned that …

• New home sales imploded 33 percent to a seasonally adjusted annual rate of 300,000 units. That’s the lowest ever recorded!
• Durable goods orders tanked 1.1 percent in May, while housing construction skidded 10 percent.
• Consumer confidence plunged to 52.9 in June, according to the Conference Board. That was a huge drop from 62.7 in May and well below the 62.5 that economists were expecting
• The Dallas Fed’s gauge of manufacturing activity dropped to -4 percent from 2.9 percent. The Chicago Fed’s activity index fell to 0.21 from 0.25. The Richmond Fed’s index fell to 23 from 26, while the Philadelphia Fed’s index plunged to 8 from 21.4, the worst reading in 10 months.
The message here? This isn’t some isolated, regional downturn. It’s one that’s spreading to every corner of the United States.
• The Economic Cycle Research Institute’s Weekly Leading Index is falling off a cliff. Its growth rate just fell to NEGATIVE 6.9 percent, the worst reading in a year and far below the high of POSITIVE 28.5 percent in October. The last time this index tanked this much, recession struck within a few months.

Talk about a laundry list of worrisome reports.

If it were just the “official” economic data that was getting worse, you might be inclined to discount it. But it’s not …

Market-Based Signals of Recession Risk
And Systemic Risk are Going Berserk, Too!

Take European sovereign interest rates. They continue to climb, despite the biggest European Central Bank bailout ever and an explicit pledge by policymakers to buy government debt to prop up prices.

Spanish 2-year note yields have more than doubled to 3.28 percent from 1.51 percent, for instance. Greek 10-year yields just breached the 10 percent level again. Investors have ALREADY lost more than 25 percent on the latest batch of 10s that Greece just sold in early March!

Investors are fleeing the euro for safe havens, like the Swiss franc.

At the same time, investors are dumping the euro hand over fist in favor of the Swiss franc — a typical safe haven currency in times of crisis. And they’re dumping the euro in favor of the Japanese yen, sending that exchange rate to its highest level in eight years.

That’s a market-based signal that global investors are unwinding so-called yen “carry trades” as they frantically slash risk.

More?

Gold prices just exploded to $1,265 an ounce, the highest in history. Volatility gauges like the VIX are climbing fast. And the Standard & Poor’s 500 Index just closed below key technical support in the 1,040 area.

If You’re Not Taking Action,
I Believe You’re Making a Big Mistake!

These signals are clear and unambiguous.

What they are telling us is that despite the biggest economic stimulus package in U.S. history … despite near-zero percent interest rates from the Federal Reserve … despite the biggest bank bailouts on record and the government takeover of every company from Fannie Mae and Freddie Mac to General Motors and AIG … the economy is sinking yet again.

Even the Federal Reserve, with all its resources, can’t keep the double-dip away.

What was previously merely the RISK of a double-dip recession is fast on its way to becoming REALITY. Worse, it’s happening at the same time as the sovereign debt crisis is gathering steam.

That’s no recipe for a new bull market! Instead, it’s the kind of toxic brew that could send stocks back to the 2009 lows — all the way down to 6,470 on the Dow and 667 on the S&P 500.

Times like these present investors like you with a choice:

You can sit idly by, take the beating the markets are doling out, and lose a boatload of money. That doesn’t sound like a very sound strategy to me.

Or … you can go on the offense. You can turn lemons into lemonade. You can take the bear by his fur, and take aggressive action to protect yourself — and even profit!

How? By taking gains on winning trades and biting the bullet with losing ones. By raising cash across the board. And by purchasing investments that go UP in value when stocks go DOWN, such as inverse ETFs.

These are precisely the steps I’ve been recommending in my Safe Money Report. I’d love to have you on board so you can benefit from my specific instructions; if you’re interested, you can click here and join for only 26 cents a day.

But even if you’re not ready to take that step, I urge you to get more of your money to safety.

The bought-and-paid-for economic recovery is coming to a close. It’s time instead to deal with the very sobering new reality: That a double-dip is here, with all the attendant consequences for stocks, currencies, commodities, and more.

Until next time,

Mike

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Six Months to Go Until The Largest Tax Hikes in History!

2010-08-14T08:00:00.001-05:00

- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%

Higher taxes on marriage and family.

The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.

Second Wave: Obama Healthcare
There are over twenty new or higher taxes in Obama Healthcare. Several will first go into effect on January 1, 2011.

They include:

The “Medicine Cabinet Tax”

Thanks to Obama Healthcare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

For more tax increases go to:
http://www.atr.org/files/files/070110pr-jan2011taxes.pdf

Additionally Here are some videos that you might find helpful.

His voice is a bit annoying but the information is worth listening too. :->

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Oh How The Mighty Have Fallen! "Fannie Mae & Freddie Mac"

2010-08-11T08:00:00.002-05:00

Andrew Packer
Editor, Credit Crunch Short Report

Fannie Mae and Freddic Mac hold over $6 trillion dollars of American mortgages (combined they have a current market value of only $600,000). Stop and think about that for a second. That’s half a year of America’s GDP!

…A delisting announcement was made yesterday, June 16th, causing shares in each to plummet over 40%…The shares are worthless…

…Fannie and Freddie have been proverbial “dead men walking” for over a year. How the mighty have fallen! I remember when this was a darling stock of Warren Buffett and Peter Lynch’s largest position for years. In fact, Lynch practically writes a love letter when describing his Fannie investment in his book, Beating the Street.

…But the mighty have fallen!

…You see, while Fannie and Freddie were being delisted, the first post-tax-credit housing numbers came in. They weren’t pretty, even if you Photoshopped some supermodels in the margins. Lumber futures—a leading indicator of housing activity—have fallen 40% since April.

And with Fannie and Freddie out of the way, banks are next in line. They’ll have to foreclose on properties and finally recognize losses. They’ll have to deal with earnings hits. They don’t have the Fed to buy up their toxic debt anymore. It won’t be pretty.

My advice is to spread your wealth around a few different bank accounts—and look for banks with low ratios of defaults. And stay under the maximum FDIC-insured amount in each account...

Read the full article...

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Proof That We Are Heading Into Deflation - Its all about M3 not M1

2010-08-08T08:00:00.072-05:00

Below is a chart of the money supply.

You will note that even M1 is declining which shows the bankruptcy of Keynesian economics. With the trillions added to the national debt to stimulate and bailout the "good old boys" and well connected losers of the two administrations, it has not been enough to repeal the laws of gravity. Although, I suspect the administration will continue to flapp its arms wildly, especially as they get closer to the ground (reality).

* http://www.shadowstats.com/alternate_data/money-supply-charts

* http://www.shadowstats.com/charts/monetary-base-money-supply

Next, look at the below link:

* http://www.shadowstats.com/charts/monetary-base-money-supply

Remember that what we use for money today is not just cash (M1), its cash and credit (M3). If you look at the bottom left two charts of M1 and M3 money supply, the shaded area shows the dollar amounts which are listed to the right of the charts. M3 is essentially M1 plus credit. Now compare the amounts. M1 currently stands at about 1.7 trillion while M3 currently stands at about 13.9 trillion (chart is logrithmic) or nearly 10 times M1. In other words M3 is composed of 88% credit and 12% cash. The administration manipulates M1 through its stimulus programs, which has an immediate inflationary effect and which also means that they are trying to avoid deflation by pumping up 12% of the problem while the 88% is currently defaulting and melting down. Deflation accounts for 88% of the final outcome and governmental inflation accounts for only 12%, which one do you think will win?

Helpful Terms

* http://www.investopedia.com/terms/f/fiatmoney.asp

* http://www.investopedia.com/terms/f/fiscalpolicy.asp

Finally, below are two articles well worth reading and understanding:

* http://www.marketoracle.co.uk/Article19843.html

* http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html

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How Can I Get Away With Paying Less Interest On Loans?

2010-08-05T08:00:00.007-05:00

Question:

If I took out a simple interest loan mortgage and paid the first payment off one month ahead of schedule and then paid each following month the mortgage payment could I cheat paying the interest for each following month on each payment.

Month 1 - Payment 1, Payment 2
Month 2 - Payment 3
Month 3 - Payment 4…

Answer:

If you did that you would be able to skip exactly one interest payment. Each month you have to pay at least one interest and one principle payment. Additionally, if you do not specify which principle payment you are paying, they will allocate your payment to the last payment on the back end of the loan and then work forward.

If you do it right, rather than paying off one payment by doubling up you could pay about 20 principle payments if you specified that you were paying off the first 20 payments. You would then skip the interest payments on all 20 of those payments.

For example if payment 1 equals $600 with $570 going for interest and $30 allocated to principle and you sent in an extra $600 and specified that it was for the principle on payments 2-21 you would save about 20 X $570 or about $11,400 in future interest payments.

If you do it wrong, they will apply your principle payments onto the back end of the loan where each payment pays about $570 in principle and only $30 in interest. In other words, if you do it right you save $11,400 in interest and if you do it wrong you only save $30 in interest.

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What’s The Best Thing To Do With IRA’s and 401k’s in this market?

2010-08-02T08:00:00.007-05:00

Question:

What’s the best thing to do with IRA’s and 401k’s in this market?

Do you think if the money in the IRA is moved to a cash account it will be available by retirement age? (I’m not sure how this is affected if the banks go down),

For example if it wasn’t an IRA it could be moved outside of the banking / brokerage institution but with retirement plans there is a penalty fee for early withdrawl.

If it was your money what would you do?

Answer:

This is a complex question. First, until deflation runs its course the safest investment within an IRA would be a Treasury Only money market fund. Most of them have either closed to new investors or are in the process of doing so. Here is a list of them that were open last time I checked:
American Century Capital Presv Fund
(800) 345-2021
www.americancentury.com

Dreyfus 100% US Treasury MMF
(888) 782-6620
www.dreyfus.com

Schwab US Treasury Money Fund
(866) 855-9102
www.schwab.com

T. Rowe Price US Treasury Money Fund
(800) 225-5132
www.troweprice.com

Vanguard Treasury MMF
(800) 662-7447
www.vanguard.com

Weiss Treasury Only MMF
(800) 242-8092
www.tommf.com
The other issue is there are rumors coming out of Washington that plans are being made to confiscate all retirement funds and in return, the government will guarantee a fixed payment at retirement age. I don't know about you but that doesn't give me a cushy secure feeling.

If they do decide to do that then in my opinion, it would be better to withdraw your funds before they do so and pay the penalties and taxes.

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Do You See Inflation Followed By Deflation and If So When?

2010-07-30T08:00:00.001-05:00

Question:

Do you see inflation followed by deflation and if so when?

Answer:

That's a tough call to make. It will probably happen after foreigners stop buying Treasury bonds unless they get double digit interest rates. At that point the Government will not be able to "borrow their way into prosperity" any longer and will either have to raise taxes to draconian levels (politically unpopular) or they will begin to attack the Federal Reserve for causing all the economic problems and begin to investigate them for crimes (politically popular).

This will be sort of like the pot calling the kettle black. The real motive will be to eliminate the Federal Reserve so that congress can begin printing money without borrowing it from anyone. That is when inflation would be likely to ignite. I would guess 3-5 years but it could be sooner.

Just keep your eye on long term treasury interest rates and any "Righteous Indignation" towards the Fed that begins to come out of Washington. That will be a strong signal that it is time to exchange your worthless paper dollars in for anything that is real and tangible. (Gold, Silver, Real-estate, etc)

As a quick recap, during deflation you want to move your assets into cash and during inflation you want to move your assets out of cash and into commodities.

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The Warburgs and The Federal Reserve - Whats the Big Deal Anyway?

2010-07-27T08:00:00.001-05:00

I was watching the Glenn Beck show (by the way I really like his show) on June 26th but I didn't remember the deflation discussion because I tuned out the speaker (actually fast forwarded the recording). In reviewing it I remembered why I had tuned it out.

I agree with him obviously on his deflationary scenario but what made me tune him out was his eulogizing of S.G. Warburg. The Warburgs are and interesting family. Paul Warburg came to the United States and became the mastermind behind tuning our money supply over to the private banking firm we now call the Federal Reserve (That's right its not a government entity) and eventually the income tax. Both of which were passed by stealth. (Sound familiar)

Without the Federal Reserve, there would be no national debt or income tax. Thanks Paul. So Paul was in charge of the US financial system during WWI when we were fighting the Germans. What was his brother James doing at the time? Well he was in charge of the German economy as the head of their central bank. Of course this posed no conflict of interest did it? James' policies were responsible for the hyperinflation that occurred in Germany during the Wiemar Republic, while a few years later his brother Paul was responsible for the US policies that gave us the Great Depression.

So eulogizing his Son who fled Germany and relocated to England after his dad's policies destroyed his home country so that he could do to England what his brother and uncle did to Germany and the US, to me is a bit much. After the Warburgs fled Germany, that economy was able to become the strongest in Europe. And what became of the UK, the Warburgs new home?

The UK is now broke but the good news is that the Warburgs have become uber rich.

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Home Sales Disaster

2010-07-24T08:00:00.000-05:00

Yes 300,000 new home sales released today is lower than I thought it would be, but it is no surprise, even as deep a drop as it was. Last month it was 500,000. That’s a 40% drop in one month! Should drive a stake in the heart of the household formations theory of a housing rebound.

With the recent downtick in the jobs market the trend here is abysmal. Relief from the gov’t unlikely with the poisoned atmosphere in Washington. Even if there was a new rebate program recent sales figures call into question how effective it would be.

http://mindonmoney.wordpress.com/2010/06/23/home-sales-disaster/

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Legislated Deflation - Government is the Ultimate Crowd

2010-07-21T08:00:00.000-05:00

By Bill Fox, Senior Bonds Analyst
Thu, 10 Jun 2010 13:15:00 ET

"Government is the ultimate crowd; every decision being made by committee. It is always acting on the last trend, the one that is already over. (For example, the Federal government passed securities laws to prevent the 1929-1932 crash...in 1934.)"
-- The Elliott Wave Financial Forecast, July 2007.

Politicians worldwide have historically proven themselves poor architects of fiscal policy. The Glass-Steagall Act of 1932 was a reaction to the persistent deflation following the stock market crash of 1929. The soon-followed Banking Act of 1933 was a reaction to the U.S. banking system collapse.

Sixty-six years later, the Banking Act was repealed -- in reaction to an expanding economy and financial engineered products that promised to lower systemic risks. We all know how that worked out.

Now we are promised a new set of financial reforms that will control systemic risks once and for all. Somehow, I believe that history will prove this legislation has missed the mark, as well.

U.S. banks have decided that hoarding cash is a better bet than loaning money; excess reserves at the Federal Reserve remain stubbornly high. The Fed has kept interest rate near zero, but we do not suffer from "a liquidity flood" or inflation; on the contrary, deflation is a concern. Now Europe's banks are hoarding cash, too: The European Central Bank reports that its overnight deposits are surging well above the historical average.

http://www.elliottwave.com/freeupdates/archives/2010/06/10/Legislated-Deflation.aspx

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Market Update - July 15th, 2010 - Investor X

2010-07-19T00:28:00.000-05:00

MARKET UPDATE

July 15th, 2010

Investor X

Yesterday I ended the Market Update with the following statement:

“If aluminum is a proxy for the overall health of the economy going foreword, what is the real message being broadcast here? In my opinion, it is showing weakness in the overall economy and that will become apparent by other numbers and statistics as they are reported. Stay tuned; we may be watching a whip saw unfolding here.”

Today some of those conflicting numbers were reported, which are indicating deflation and a slowing economy ahead:

NEW YORK (Dow Jones)--U.S. stocks skidded Thursday after a barrage of largely negative economic data stunted enthusiasm over the recent spate of strong corporate earnings.

NEW YORK (MarketWatch) -- U.S. stocks dropped sharply on Thursday after another economic report, this one on manufacturing in the Philadelphia region, dimmed views of the recovery....

Producer prices fell for a third straight month in June...U.S. stock markets headed lower Thursday morning after the Labor Department said producer prices fell 0.5 percent June, signaling a slow economy.

BEIJING (Dow Jones)--Steel product prices in China are falling close to cost price for producers and only some of the biggest domestic steelmakers will be able to squeeze out a profit on their goods, a senior Chinese steel official said Thursday.

The above news indicates deflation and a double dip (depression). Lowering estimates before companies report bad earnings is an old trick that has been used by Wall Street for years. It works quite well in a growing economy and a bull market. However, we are in a shrinking economy and a bear market and so my expectation is that these old tricks will not work in this environment, because there are too many statistical tracks that must be covered in order for it to work. We will see – stay tuned for more economic data in the coming weeks.

Regards,

Investor X

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Market Update - July 14, 2010 - Investor X

2010-07-18T10:00:00.020-05:00

MARKET UPDATE

July 14th, 2010

Investor X

The earnings season started off with a big bang yesterday as good news from Alcoa sent the markets rallying. Aluminum and copper use is so widespread and spans so many industries, especially the construction industry, many analysts view Alcoa’s performance as being indicative of the overall health of the economy. So, what was the good news reported from Alcoa?

Alcoa cut 37,000 jobs, aluminum prices have dropped 20% in just the past three months as demand has dropped off a cliff, China has significantly reduced its purchases of aluminum and analysts estimated that Alcoa’s earnings would be 20 cents a share. Alcoa reported earnings of 13 cents per share or 35% below analyst’s expectations. As a result of this good news, Alcoa’s stock price charged ahead by nearly 4.5% at yesterdays opening.

You say, “What is so good about that news?” Oh, I forgot to mention that the 20-cent analyst expectation was the expectation reported last month. During the past month however, analysts have been busy reducing their expectations by 40% so by the time Alcoa reported its earnings of 13 cents per share, analysts expectations were 12 cents. This beat analyst’s expectations by a penny and that is the good news that was the catalyst for yesterday’s rally in the markets. This just goes to prove that if you lower the bar far enough, any bad news can become really good news.

The reduction of analyst expectations before earnings are reported is a game that has been played on Wall Street for years. However, a 40% reduction in one month is a tad much wouldn't you say? If aluminum is a proxy for the overall health of the economy going foreword, what is the real message being broadcast here? In my opinion, it is showing weakness in the overall economy and that will become apparent by other numbers and statistics as they are reported. Stay tuned; we may be watching a whip saw unfolding here.

Regards,

Investor X

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Market Update - July 7, 2010 - Investor X

2010-07-18T08:00:00.000-05:00

MARKET UPDATE
July 7, 2010
Investor X

The market appears to be much closer to the end of the current upward correction than it is to the beginning of the correction. In my opinion an attempt to sell out short positions at the beginning of the correction would have been problematic because, as I mentioned in my previous update, that would have necessitated being right on the sell decision and then being right again on the buy decision for such a strategy to work out. The best way to take advantage of these minor upward corrections, in my opinion, is to add to existing short positions toward the upper end of the rebounds. This requires that you be correct only one time.

I am currently taking some classes that are consuming most of my daytime hours. This will continue through most of August and therefore I will not have the time to be as active in sending market updates unless it appears that the market action warrants an explanation or when the markets get close to the end of the current decline. At that point a multi month rebound should occur prior to the major decline resuming (By the way, when you begin seeing a lot of Market Updates, that is probably indicative that a transition is underway. I typically do not write as many updates once the transition has occurred and a new trend is underway). I plan to sell my trading positions and perhaps a portion of the core holdings in my conservative portfolio and all of my short positions in my aggressive portfolio during that transition. The current downward trend should last for another month or more and erase another 1,300 to 2,000 points before it is complete. Then I would expect the next major rebound to begin. For the most part I have bought in the majority of my short positions and therefore, there is nothing to do over the course of the next month or so but patiently wait for the market to do its thing.

Regards,

Investor X

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The Markets Are Alive With the Sound of Manipulation

2010-07-15T08:00:00.001-05:00

23 June 2010 / Issue #50
Andrew Packer

My dad may be the one who taught me all I needed to know about finance, but my mom taught me how to gracefully handle being self-conscious. You see, like many parents, she has a knack for telling friends embarrassing stories about me.

For example, growing up she’d often tell my friends about how I watched the movie The Sound of Music every day when I was five years old. This was a bigger embarrassment when I was a teenager, but as an adult, it still throws me off guard.

Now, I really don’t want to contradict my mother... nor do I want to confirm anything embarrassing she has to say about me.

But what I AM going to say is that one particular scene from that movie has been stuck in my mind lately. Why? Well, on Monday, the market opened up huge — but gave back all the gains later in the day and closed pretty flat. A smaller version of this erratic market happened again yesterday... The day opened with a rally but fell apart, sending stocks below their 200 day moving average (the technical trigger traders refer to as bear market territory). And with such little trading volume, it’s apparent to most major players that 'quants’ (the folks who program and run computerized trading programs at major firms) are clearly in charge.

Seeing the attempts to continue manipulating the market upwards reminded me of one particular movie scene... ...only without the merriment.

It doesn’t take much to manipulate a market in this low-volume environment. And I can prove it to you. If I really wanted to, I could drive the price of Citigroup up 50%. And it would only set me back around $600. It’s currently trading at $4.00 per share, so if I put in an order to buy 100 shares at $6.00, I’m sure there would be plenty of shareholders willing to sell at that price. Of course, it’s silly to waste money like that.

But in theory, buying at that price may mislead others into thinking Citigroup is a worthy investment. Who knows, by the act of overpaying for those shares, the perception of increased value may result in that higher price sticking! And when perception is reality, it’s best to be wary of markets. That’s when the manipulation is the worst.

And it happens! Just last week, the new 'circuit breakers’ in the stock market kicked in when a few trades in the Washington Post Company (WPO) came in at more than double the prior price of the shares.

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Market Update - June 24, 2010 - Investor X

2010-07-12T10:00:00.000-05:00

MARKET UPDATE
June 24, 2010
Investor X

The decline today should complete the current wave down. In my June 14, 2010 update I made the following statement:

“Once that high is in place, one of two patterns should follow:…

2) A down up down up down pattern (three downs) that brings the markets significantly below the low of last Thursday, which again was 10,061 on the DOW. This would indicate that the short-term advance is likely over and that the next phase of the decline is underway.

The target for the current decline remains at about the same level, which is 10,061 on the DOW. Additionally, the current decline has exhibited three down waves, which confirms the major trend as being down. Given the stronger than expected rise before the current decline began, I do not anticipate that the current decline will bring the DOW significantly below the above cited level.

What to expect from here: The current decline should come within 100 points + or – of the above cited target (This may have already occurred this morning at the markets low of 10,185). Subsequently we should expect an upward correction that could last from a few days to possibly a week or so that will bring the DOW back up towards yesterday’s high, which was 10,367 and could rebound as high as 10,475. This should be the set up for the beginning of the next major plunge. For those of us who are short the market, it should be quite impressive. This should begin sometime towards the end of the month or perhaps the immediate days following the 4th of July weekend. Interestingly July 1st is when the states are required to fund their budgets. Many of the states are unable to do so and therefore, this might become a big item in the press following the holiday weekend.

Have a nice day,

Investor X

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Market Update - June 16, 2010 - Investor X

2010-07-12T08:00:00.000-05:00

MARKET UPDATE
June 16, 2010
Investor X

The DOW is getting close to the target I cited in yesterday's Market Update. The advance so far has been anemic with extremely low volume. This indicates that the bears are sitting on the sidelines for now and there is not much enthusiasm among the bulls to plow more money into this rally. So, the best way to describe the markets action so far this week is that it has been drifting slowly higher. Before I discuss my strategy to deal with this market, I would first like to take this opportunity to bring some perspective to the current situation in the markets.

What makes bear markets so difficult for most investors is the fact that upward corrections are typically slow and the topping and reversal process is time consuming. By contrast declines are powerful and fast. Wave bottoms, rather than being a slow process, tend to be a quick event. What this means is that during a bear market, in terms of time watching the markets, most of the time is spent watching the markets go up. Yet, overall the markets are declining. Another way of putting it is for the bears, the majority of the time is spent watching the markets advance and listening to the commentators explain why the markets have bottomed and why a new bull market has begun. Most investors cannot handle the cognitive dissonance this entails. It all seems too confusing and so it becomes much easier to simply follow the crowd while the crowd gets fleeced. Most investors simply do not have the tenacity necessary to stay the course in the face of the majority consensus hammering them with constant messages that they are wrong. Unfortunately, that’s the rules of the game, I didn’t make them but I do understand them.

That is why I mentioned in earlier updates that I instituted a core position of single short ETF’s that I plan to hold for a year or more and that I do not intend to trade these positions. In order to win the game this is the reality: In terms of time, one will be wrong 80% of the Time in exchange for ending up with a winning score. In my opinion, those who do not have time to follow the markets or those who find it difficult to psychologically deal with the above reality, it would be much better to buy in a core short position and then walk away from the markets for about a year. That will help to eliminate most of the confusion. Those who want to attempt to augment their returns and who enjoy playing the game can do so by adding to their core positions a few trading positions as well. The best advice I can give on this point is “To thine own self be true”. In other words make an honest assessment of your temperament and your comfort with risk and then invest accordingly.

As you know I have some trading positions in my conservative portfolio, that are double short ETF’s. I enjoy the game and so attempt to use them to augment my overall returns but I use them sparingly knowing that I am trading at a disadvantage. This is because, as I mentioned above, when a wave is topping it can be a long, slow, drawn out process but when a wave bottoms out, it is usually an event that may last for as little as a few minutes. For example on May 6th, the day of the so called flash crash, if an investor wanted to sell his short positions within 250 points of the bottom of the 1,000 point plunge, he had about 2-3 minutes to do so. If he sold just an hour or so late, the market would have advanced 650 points above the lows and he would have missed his opportunity. On the other hand, if a bull wanted to sell his stock within 250 points from when the market topped on April 26th, he could have done so anytime between April 5th and May 4th. So the bullish investor had about a month to sell out in order to have made “The right call” whereas the bear had only a few minutes. Additionally, that assumes he could have gotten his order executed at all during a period when most of the trading desks were frozen up.

If however one was not trading this market and was simply holding core positions, he would have found that three weeks later the market had dropped below the lows experienced by the flash crash. This is why for many investors it’s better to simply buy in a core position and forget trying to trade and time this market. This especially holds true for those who beat themselves up if they do not short at the exact high and sell their shorts at the exact lows. This is akin to a golfer getting depressed, upset and angry every time he doesn’t shoot a perfect 18. No one, not even Tiger Woods, expects to go out and shoot 18 consecutive holes in one. A more realistic goal is to do better than your competition and at the end of the game, when the final scores are tallied, to end up with a winning score.

This “game” we call the “Bear Market” began in late 2007 and will probably not hit its final lows for another five to seven years. So, it’s important to keep in mind that the score will not be tallied until the game is over. By then, many investors will have lost most of their assets and those who actually end up with a positive score, over that decade, will be rare. The media likes to cut the game into small pieces and act as if each small piece is a separate game and unrelated to the other pieces. I don’t know if that is because they are really that stupid or if it is because they try to keep their viewers confused and dependent upon their “sage” advice. As an example, we hear a lot these days about the risk of a “double dip recession” as if it were totally unrelated to the 2008 recession. Here’s a news flash, it’s going to happen and its not unrelated to 2008, rather it’s a continuation of the decline that began in 2007. So, don’t be surprised when you hear such things as “The economy has entered a Double Dip Recession” and “No one could have seen this coming”. Wasting time “hoping” that a “double dip recession” doesn’t occur is not a good use of ones time. Rather, knowing that the process that began in 2007 will continue until all the excess debt has been wiped clean, recognizing that their will be up phases as well as down phases during the process and actively preparing strategies to not be devastated by the declines when they do arrive is a much more valuable and productive use of ones time.

With the above perspective in mind, I’d like to discuss the current market in relation to my trading positions, which by the way, are only about 20% of the value of my core positions (which are single short ETF's being held long term and not being traded). As I mentioned above, this week’s rally has been anemic and unimpressive and therefore could stall out at any time. On the other hand, it could muster enough “Animal Spirits” to perhaps advance another couple of hundred points from current levels. Either way, it really doesn’t matter in my opinion because the probabilities are that a month from now the markets are going to be significantly lower than current levels. Therefore I am holding my double short trading positions through whatever short term advances the market may make from here. The reason is that if I sell to avoid any short term pain, if the market does advance a couple of hundred points, I will then have to buy them back in again when the rally is over. So, if I do nothing I don’t have to make any decisions but if I decide to sell, that will force me into making two decisions correctly, that is, 1) decide the best level to sell and then 2) decide the best level to buy back in. If I am wrong on either of those two decisions, I can end up much worse off than if I simply do nothing and let this short term rally do its slow and boring process of making a top.

That’s my thoughts on the current market. Have a nice day,

Regards,

Investor X

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To All My Valued Employees - Signed "Your Boss"

2010-07-08T08:00:00.017-05:00

Below is a rant from a small business owner that most other business owners will be able to relate to in spades. In fact its a pretty common story among business owners. A large number of the business owners that I know have shared with me that they have independently come to the same conclusion this business owner has arrived at and are currently making plans to close down their operations once the new tax hikes take effect.

Perhaps this reveals the difference between genuine stimulus and the imaginary illusions that are now being sold to the public. I suppose we will find out after the tax hikes of 2011 and 2013 go into effect.

To All My Valued Employees

There have been some rumblings around the office about the future of this company, and more specifically, your jobs. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country. However, let me tell you some little tidbits of fact that might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back-story. This back-story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You've seen my big home at last years Christmas party. I'm sure; all these flashy icons of luxury conjure up some idealized thoughts about my life.

However, what you don't see is the back-story.

I started this company 28 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company, which by the way would eventually employ you.

My diet consisted of Ramen Pride noodles because every dollar I saved went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn't have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom's for the latest hot fashion item, I was trolling through the Goodwill store extracting any clothing item that didn't look like it was birthed in the 50's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, would be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have that freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Mercedes, the vacations... You never realize the back-story and the sacrifices I've made.

Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail-out all the people who didn't. The people who overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed the flower of my youth for.

Yes, business ownership has is benefits but the price I've paid is steep and not without wounds. Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don't pay enough. I have state taxes, Federal taxes, Property taxes, Sales and use taxes, Payroll taxes, Workers compensation taxes, Unemployment taxes, Taxes on taxes. I have to hire a taxman to manage all these taxes and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time.

On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my "stimulus" check was? Zero. Nada. Zilch. The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (Read: Stole) 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.

Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it.

Suddenly, the power brokers in Washington believe the poor of America are the essential drivers of the American economic engine. Nothing could be further from the truth and this is the type of change you can keep.

So where am I going with all this? It's quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child's future.
Frankly, it isn't my problem any more. Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

If you lose your job, it won't be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the constitution, and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about....

Signed,

-Your boss-

The democracy will cease to exist when you take away from those who are willing to work and give to those who are not. - Thomas Jefferson

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The Third Depression

2010-07-06T08:01:00.001-05:00

By PAUL KRUGMAN
Published: June 27, 2010

...We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses.

http://www.nytimes.com/2010/06/28/opinion/28krugman.html

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Banks are Honest - Period

2010-07-04T08:00:00.002-05:00

According to the "Know your Customer" rules regulating banks, if an employee or firm fails to report a money laundering scheme to the FBI, they will be charged with criminal conspiracy and with being an accessory to the crime. That means jail time. I have come to the firm conclusion, by believing everything I see on TV, that the major financial institutions:

Are not corrupt
They don't have lackey's in Washington who cover for them and prevent them from being prosecuted
Thay don't pay themselves enormous bonuses at the taxpayer's expense
They don't overcharge those same taxpayers for their banking services
They don't have the clout in Washington to make taxpayers pay for their bad bets in the markets.
In fact I think the below story was generated by some conspiracy nut at Bloomberg who refuses to believe what the press and administration officials are telling him.

Sincerely,

-Naive-

...They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else.

The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp., Bloomberg Markets magazine reports in its August 2010 issue.

This was no isolated incident. Wachovia, it turns out, had made a habit of helping move money for Mexican drug smugglers. Wells Fargo & Co., which bought Wachovia in 2008, has admitted in court that its unit failed to monitor and report suspected money laundering by narcotics traffickers -- including the cash used to buy four planes that shipped a total of 22 tons of cocaine.

http://www.bloomberg.com/news/2010-06-29/banks-financing-mexico-s-drug-cartels-admitted-in-wells-fargo-s-u-s-deal.html

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Financial Adviser Reveals Next Hot Investment Opportunity

2010-07-02T06:16:00.002-05:00

Anthony Fry, senior managing director at Evercore Partners, told CNBC Monday.

“I don’t want to scare anyone but I am considering investing in barbed wire and guns, things are not looking good and rates are heading higher,”

Fry sees three outcomes for the global economy and none of them makes very good reading.

“You can have lower rates and deflation, higher rates and higher inflation or the nightmare scenario of higher rates and deflating asset prices,” he said.

“If the nightmare scenario plays out as I suspect it may then the debt situation gets worse. There is currently no exit strategy and the reaction to the crisis of policy makers remains a big worry.”

http://www.cnbc.com/id/37549417

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The Great State Meltdown’ Begins Tomorrow!

2010-06-30T17:20:00.009-05:00

What to Do BEFORE the Muni Bubble Bursts

Tomorrow, something epic will go down in 48 American states.

It might unfold differently from coast to coast. But there is one common thread: that it will be the worst day of 48 governors’ lives.

You probably won’t hear about it when you flip on your local news. But, we’ve warned readers of this day (July 1) for a month.

Yet some private citizens will not take action … or will take the wrong action.

Some will sell their retirement plans for 59 cents on the dollar. Others will sadly double-down on this toxic debt.

By now, most well-informed “sovereign” readers understand that the local governments’ ponzi schemes are about to collapse.Today, we’ll show you what to expect when states begin to default on their debt – because that day is almost here.

We’ll also show you how to sidestep the worst of this crisis – and profit from the chaos.

History shows that when states, cities or towns default on their debt… conservative investors lose their shirts. (The average muni-bond plummets… by an average of 40.09%!)

So it’s critical that you avoid the bonds of states that are most likely to default.

How?

Find out here!

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What comes after the 401k and IRA?

2010-06-16T14:32:00.001-05:00

If you have maxed out the 401k Match and you have Maxed out your IRA for the year.

Next you should have an Individual Taxable Account from TD Ameritrade for Saving and Investing. This should be your emergency fund. The Goal of this account is to get 6-9 months of your current income saved. This will only be used in the event you get hurt, or get fired. You would have 6-9 Months to find a job (Without tapping into your Retirement Savings) The higher income you have typically the longer it takes to find a comparable job.

This account can be added to and withdrawn at will, with no penalties at all. The only taxes you pay are those on interest, dividends and gains from your investing.
Also This account can have debit and check features
Also after you have save the 6-9 months, everything saved after that should be used for saving and investing for large ticket purchases such as a house. :)
Also it would probably be smart for you to carry some disability insurance (You are 70% more likely to be disabled than to die before the age of 75) This way if you got into an accident that kept you from working, the Disability insurance will kick in and pay you an income if you can't work.

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Letter From A Millionaire - Market Direction

2010-06-11T08:07:00.003-05:00

"I agree that Gold Line is probably ripping off customers. The Gold industry is rife with rip-off's and Gold Line is just one among many and so I disagree that Gold Line should be singled out. If they want to be honest, criticize the entire industry.

I also disagree that Glen Beck is responsible. His network FOX sells the advertising time, Gold Line is FOX's customer not Becks. GB does not have the authority at FOX to accept or decline Gold Lines advertisement dollars. I believe this is an effort to cut off Beck's advertising sponsorship in order to shut him up.

Finally, gold is close to its final top and I expect it to then drop into the mid $600's. When this happens, expect more heat on GB. GB believes we are heading into hyper inflation and gold would be the solution if that were the problem. Unfortunately, he is wrong. If we get hyperinflation, it will be a couple of years from now. We are heading into deflation which will not be kind to gold, silver, real estate or stocks for that matter. In fact we are heading into the GREATER DEPRESSION, one that will make the 1930's seem mild by comparison. This should be apparent to everybody by this time next year."

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401k? Traditional IRA? Whats the Freakin Difference!

2010-06-08T02:21:00.005-05:00

I remember what is was like when I use to get so confused over all of the different IRA options that are out there.

I went to work, worked real hard, worked lots of hours, saved my money, and then had no clue where to put it. I mean I didn't want to loose my money, that didn't make sense.

So many advisers and so many different advices. I decided to figure it out on my own once and for all and be done with it. I learned so much about retirement investment options and vehicles. Often we get so caught up in the detail that we forget the general road map. I don't know about you but I know that I'm guilty of this.

So the first thing to do is have a general road map, Whats that saying "Keep It Simple Stupid" KISS

So here is a quick breakdown of the pro's and cons of the Traditional IRA versus the 401K. And we'll leave the Roth IRA for another day.

There are advantages to both

Advantages of 401k

Most companies offer a match (Free Money)
Tax Advantages

Disadvantages of 401k

Very Very limited options , can be hard to make money at times

Advantages of a Traditional IRA

More Investment Options
Easier to make money
Tax Advantages

Disadvantages of a Traditional IRA

No Employer Match

Here is the bottom line - Max out the employer match on the 401k. So if your company matches up to 6% only invest up to 6%. To get the match

Any savings beyond that need to be put into an IRA .

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Who Knew This Guy Was So Cool?

2010-05-18T22:29:00.001-05:00

“I want to do good. I want the world to be better because I was here.”

…That’s my favorite quote from this compilation. I hope you enjoy this video as much as I have.

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Letter From A Multi-Millionaire - #02

2010-02-25T21:54:00.002-06:00

Hi Mike,

Remember, there are never times when there are no opportunities, there are only times when opportunities change and the first to see them are the winners - everyone else looses. Practically speaking this means that those whose plans are to do business as usual because they do not see the direction change that has occurred, will spend their time in the wrong places until its too late. Those who see the direction change can get their bait in the water now and as things turn down, they will be busy catching fish.

If I were young and just getting started out, I would definitely set up a business plan that goes with the new trend. What are some ideas that will work? Anything that goes along with the new trend of self-reliance - Anything that can capitalize on people, companies and municipalities going broke - Anything that can capitalize on the coming foreclosure boom - Anything that can capitalize on defaults on large ticket items such as boats, aircraft, heavy equipment, plant equipment etc. - Anything that can capitalize on reduced credit availability - Anything that can capitalize on higher crime rates and less efficiency in maintaining law enforcement order - Anything that can capitalize on the loss of personal and financial safety - Anything that can capitalize on the anger Americans of all generations are going to feel when they realize they have been had by their politicians and financial gurus, etc.

What specific kind of businesses would work in this environment? Businesses that protect and or refurbish foreclosed properties, Businesses that can profit from the expensive equipment that will be dumped at auctions. An upscale pawnshop or business enterprise to assist the nuevo poor that are descending from the ranks of the upper classes - Anything to do with personal security such as a website that offers innovative security systems such as cameras, alarm systems and defensive products. There are dozens of ideas that will work, you just need to see the trend, understand what is happening, design your business to take advantage of that trend for the next ten years or so, get in early and then dominate that business sector. And above all, don't borrow money because borrowed money will be the problem everyone else will be facing as the supply of money virtually dries up, making it virtually impossible for most to continue making payments on their debts. Remember, you can't win if you have that same problem too. Above all, think of a business that will offer help to people that will be caught off guard, in some unique emerging sector that no one else is even thinking about yet.

So, my advice is to see clearly what is coming, get over the emotional hurdles associated with accepting the reality, and start thinking of the implications of the new reality and then come up with a strategy that will take advantage of the new trends that will emerge while everyone is wasting time hoping that the good old days will somehow magically return.

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As an example, the beginning of the economic crisis in 2008 caused the stock market to loose 55% in about a year. That was a crisis for most people in that it decimated their life savings. On the other hand, I saw it coming and shorted the market. In doing so I had my best year ever in investing. I don't even want to tell you what percentage gains I had in 2008 because you would never believe it. Prior to the market falling apart, I was raising the alarm with everyone. The general consensus was that I was not only nuts but that I was being extremely negative so nobody listened except a few close family members. Well, I decided that if I couldn't get anyone else to go with me, I would have to go it alone so I loaded up with put options on the markets. I guess I should have listened to everyone else and stayed with the old trend because as the markets were crashing, I found myself crying all the way too the bank. In other words, when everyone else was trying to figure out what was going on, I was busy catching fish.

Again, trends change but new opportunities always arrive with them.

Sincerely,

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Letter From A Multi-Millionaire - #01

2010-02-24T20:30:00.012-06:00

Find out what this multi-millionaire wrote me about where he believes our economy is headed. Over the last ten years his predictions of the market have come to pass. This is GREAT insight as to what is coming and on the next letter he wrote me will be even greater insight on how you can position yourself whether it be job wise or investment wise for opportunity. Please share this with everyone you know that you think will benefit from this.

Hi Mike,

Yep,

The War Generation, my grandparents generation, set up the system so that their retirement and government benefits were assured on the backs of future generations. Then the silent generation, my parents generation, came along and spent their years supporting the system that their parents had set up. Then my generation, the baby boom generation, came along and had Utopian ideas and lots of "compassion". So they decided that all the social programs ought to be expanded and extended to able bodied individuals who didn't want to work along with illegal aliens that didn't pay into the systems but were entitled to draw out from them. So my generation's outstanding achievement has been that now we have more than 50% of the population not paying any taxes at all, calling for higher taxes on the rich and essentially having no skin in the game. In fact a good percentage of these do not work, receive tax rebates for taxes they never paid, receive food stamps and welfare checks and contribute nothing to the nations welfare. Of course my generation was too smart to pay any attention to the economics of a socialist state. Tax the rich they said, they can pay for our compassionate utopia. So their second greatest achievement will have been to bankrupt themselves, their cities, states and national government all in the name of compassion.

I spent my youth trying to communicate to my generation that they were heading off a cliff. It wore me out because such thought were considered to be ridiculous. After all, they never heard of the economic crises we were heading into from the likes of Walter Cronkite, Peter Jennings or any of the other left wing media. My generation believed in magic, figured that everything was possible, everything would eventually be free and hey, if it didn't work out: What the hey? Your generation would pick up the tab. So they lived on credit card debt, saved a fraction of their earnings in 401k plans and presumed that the government would be able to take anything else they needed from your generation, in the form of higher taxes. What they didn't realize however, was that it wouldn't be your generation that would pay their bill, it would be them. They will pay the bill with their retirement funds that collapse, higher taxes, more money extraction schemes for taxing and regulatory authorities and less government assistance. They will discover, way too late in life, to make up for their blind mistakes, that the majority of them will not be able to retire like their parents did because all the social plans they put into effect will bankrupt this country just when it is their turn to retire.

At any rate, when no one would listen because my generation was too busy building a utopia with money they assumed someone else would have to pay, I decided that I would have to go it alone. As Margaret Thatcher once remarked "Socialism works just great until you run out of other peoples money". Well, we are at that point where we are running out of other peoples money and so now its time for my generation and former generations to pay their bill themselves. I got busy when I was young and worked twice as hard as the rest of my generation. I didn't live on credit so I had to work that much harder to make up for the difference between the realities we were facing and the decisions that my generation was making. The harder I worked, the higher my taxes increased but I continued on anyway presuming that by the time it was my turn to retire, this country would be in the midst of an economic crisis, pension funds and social security would be defaulted upon and my generation, along with the generations that came before it, would be crying that they were somehow cheated because they were having to pick up their own tab.

So this is my future forecast: Beginning this year and continuing on for the next five years or so, most of my generation and the generations that came before them will loose their jobs and most of their life's savings. The war generation is virtually gone so they got away with it. The silent generation's pension plans will go broke, along with possibly their social security checks either being cut or defaulted upon, their banks will close and the FDIC insurance will be defaulted upon, in one way or another, so they will feel cheated and destitute. The baby boom generation did not have pension plans and so had to save for their own retirement via IRA's and 401K plans. When those are wiped out they too will be destitute and will be complaining that they did everything right and now when its their turn to retire, they are being cheated. Your generation will complain that they never had the opportunities that former generations had and so you have been cheated. Government will be forced to lay off employees that thought their jobs were secure and to add insult to injury, their lucrative government pension plans will default and so government workers will feel cheated. Finally the welfare generations will have their freebies cut and so they will be angry and feel cheated. Oh did I mention, those who were prudent enough to see what was heading our way and so spent their lives working and saving to prepare for the crisis, they will be vilified by the press and calls will be made to take their assets and redistribute them to all the hurting and suffering victims out there. So, the prudent will especially feel cheated. All in all, everyone will feel cheated, depressed and angry.

In the meantime states, municipalities and Washington will attempt to make up for declining revenues by coming up with ever more draconian and clever schemes to remove whats left in their citizens wallets. All, of course, in the name of the public protection and good. Washington will try to use the crisis to gain more power via false economic fixes. However, I don't think they will have as much success as did the Roosevelt administration given that there will be 350 million angry people on the net watching their every move and beginning to understand how they have been played by the power elite. So, I project that we will have a bull market in scepticism, distrust and anger at politicians of all stripes.

Your generation will feel cheated for the next five to ten years or so but in the end, your generation will have heroes that work hard to set the economy on a sound footing again and if their is any poetic justice, your generation will likely achieve an economic climate that allows you to retire where your parents will have been, or so they will believe, "cheated" out of their retirement. I have had to spend my life paying for the foolishness of my generation as well and the previous two generations. Your generation however may be more fortunate because after this crisis is over, your generation may be able to start out anew with a clean economic slate and without having the burden of paying for all of the foolish programs and mistakes of prior generations. So that's my rant - you can now go back to work.

Sincerely,

P.S. You may want to print this out and review it each year for the next five years. It may help you to understand the economic climate as it develops and besides you will then be able to grade me on my economic forecast. Also, I have attached a GIF file that accurately illustrates what the behavior of most people has been and will continue to be as we move into the most severe phase of this economic crisis.

********************************

On Sat, Feb 20, 2010 at 6:02 PM, Michael Shepherd wrote:

Yeah I have heard about the new ruling with disclosure on blogs regarding the FTC. I never thought about it as a way to raise extra tax money but yeah that makes total sense to me. So patriotic aren’t they? J It’s actually gotten so regulated that we can no longer use real numbers in our testimonials and it is best to stick to general testimonials like

“This is the greatest product ever, blah blah blah”

The blog is not really active simply because I am building a better one on Wordpress. There are tools that I can integrate with Wordpress that make it better for search engine optimization and cloning. Because of this I am building my disclosures into these sites. I put a general disclosure on the bottom of my Blogger blog just to be safe.

********************************

Sent: Monday, February 15, 2010 8:37 PM
To: Michael Shepherd
Subject: Blog

Hi Mike,

I thought you ought to know that during times of recession, or depression as the case may be, regulations tend to explode as municipalities, states and federal governments attempt to cover their shortfalls by coming up with ever more clever ways to extract money from their citizens. As a personal example I have often complained to my county that they are inconsistent in sending me the license tag renewal notices. I get them about 50% of the time and when I don’t get them I have to make an inconvenient trek down to the courthouse to get my tags renewed. The standard answer they give me is that they were mailed and must have been lost in the mail. Last year the county instituted a new late fee of $25.00 per month or portion of a month that a vehicle or trailer (trailer fees are usually about $21 per year) is late in being registered. This of course gives them an incentive to have 75% or 100% of the renewal notices accidentally lost in the mail. Another example, I presume that you have noticed the increased number of troopers on the highways writing tickets, some are issued for the violation of speeding as little as 4 mph, or less, over the speed limit. Fines for such minor infractions have risen, in some areas, into the hundreds of dollars. During 2009 sales and property taxes plummeted leaving gaping holes in most state and local budgets. New regulations that are easily violated are the preferred method by regulators make up for the shortfalls without having to get unpopular tax increases approved. This is because they can extract dollars from citizens under the guise of serving and protecting the public good.

Given that you do a blog, the FTC announced recently that they have the power to regulate blogs that endorse any commercial products. They are now mandating that “bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service”. For example, if someone were to give you a DVD that you review and you endorse that movie on your blog but you fail to disclose that you received a free copy, you are in violation of the new regulation and can be fined $11,000. Again, a word to the wise, be aware and hold onto your wallet during the upcoming market decline. It will become ever more difficult to avoid running afoul of new and ridiculous regulations designed to separate you from your hard earned dollars.

Sincerely,

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Is There Really Money On The Internet?

2009-12-06T07:57:00.015-06:00

Watch this video from online expert Ryan Deiss. This video will give you great insight and tips on how to make real money on the internet and the underlying concepts behind his strategy.

If your tired of working for your boss and feel like your going nowhere, maybe its time to start thinking about how you can grow yourself and your future business. We all "can" have our own online business and in my strong opinion, we all should.

The key is to have fun with it. Realize that its a process and that it takes time. Just like any hobby, time flies when your having fun. Learn to see your future business as your new fun hobby, and get to it!

Real quick watch this short video.

Now don't get so caught up in the sales pitch at the end of this next video but grab the killer insights and tips that Ryan Deiss has to share.

OK, no more reading this blog! Its time to get some real meat so go watch this video right now!

You can thank me later!

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Killer FTC Interview And What You Need To Know Before Selling Online!

2009-11-29T16:11:00.005-06:00

Many of you may have heard that the internet is becoming a great place to make a little side money or even start your very own home based business. The internet is full of quality ads and equally deceptive ads. The Federal Trade Commission has finally decided to take action against the advertisers who are using misleading and deceptive tactics against the unknowing consumers.

For many small business owners this has been a very scary event simply because the word on the web is that the FTC is cracking down so hard that it is going to make honest advertising difficult. Up until this point it has been mainly speculation by many of the top experts, but now we have a chance to listen in on an interview with a member DIRECTLY from the FTC.

What better source that the source itself? :-)

So run over to this page and have a listen. Jim provides this interview in a video and an audio format for your added convenience.

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Teen Entrepreneurs and The Job Market!

2009-10-23T19:32:00.002-05:00

Watch this short video clip from CNN on what Teens are doing to get by in this tough job market. Many of us may be filling that pinch from the old industrial age way of thinking. But rest assured, the information age is bringing about many new ways of making money. This might be a great time to start embracing the internet and start up that part time business. After all, if these teens are doing it without having any real understanding of life or its challenges, how much more would that position you against the market in bringing real life solutions from your life experiences?

In the information age, people WILL PAY for information that helps them to solve their problems and save their valuable time. Why shouldn't you capitalize from that? What makes you think you don't have something to offer?

Till next time,

God Bless.

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The FTC Comes Down! Is It The End of Internet Marketing?

2009-10-23T17:52:00.010-05:00

Is this the end of internet marketing as we know it? Many internet marketers are shaking in their boots! For more than a decade the internet has been a great place to make easy money. Its one of the few environments where someone on a shoe string budget can change the outcome of financial situation and literally go head to head with large corporations. The internet has truly acted as a leveling ground giving the small guy a chance to make it big.

But not every internet marketer has good intentions, they get money hungry and throw out all character in their efforts. Money becomes a larger value to them then actually providing real value to their customers. The Federal Trade Commission has recently passed a new law that has many of these internet marketers shaking in their boots!

So the question remains, is internet marketing loosing its power. Can the small guy still make money on the internet?

I have an Exclusive One Hour Podcast from a personal friend of mine in the Internet Marketing Business. He interviews a Legal Attorney that specializes in the Internet Marketing Field over this very topic.

Download Here!

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A List of Tough Job Interview Questions For Tough Times

2009-10-10T09:09:00.004-05:00

by: Thomas Sullivan

The information presented here is designed to provide a benefit to anyone who must answer questions during the dreaded job interview. The main point presented here is that the key to a successful job interview is preparation. The following discussion expounds on this key point.

While some tough job interview questions take us off guard, others we can see coming a mile away. How we answer job interview questions will make the difference between getting and not getting the job. We all have questions that we'd rather not be asked during an interview. But how can one prepare completely for a tough interview?

The answer to this question really comes down to intense preparatory work. In a nutshell, do your homework. Make sure that you know your resume thoroughly and expect questions to come from your work history. Also, expect questions about the company you want to work for and the type of future you want in that company, and finally, expect questions about you. You should use several large lists of questions in preparation for the interview. Below, you will find a list of tough job interview questions, which should be helpful in preparation for the job interview.

While the questions below are pretty standard and can be expected at most job interviews, you should also create your own questions. In creating your questions in preparation for an interview, you really need to sit down and think through what you would ask if you were the interviewer. Remember that the person interviewing you has a job to do as well. If you can provide a good answer to most of the questions below, and to the questions you have created, you have increased the probability of obtaining the job you are seeking.

Obviously during a job interview, regardless of your personality, you need to be congenial and polite. Try not to appear nervous as well. Most importantly, try to appear confident in yourself but not to the point of appearing cocky. Remember, the interviewer is not only trying to select the best candidate for the job, they also want to be sure that you will be compatible with other employees you will be working with. Also, remember that the interviewer is trying their best to find any red flags that may be present in your past work history.

The following is a list of questions you can expect at most job interviews. You most likely will not be asked all of these questions, but you can expect some of them. Many of these questions come from About.com, and some were created by our staff.

Job Interview Questions: Work History

What is the name of the company you worked for and what titles or positions did you hold?

In a nutshell, describe what you did at your previous company.

When were your employed by this company?

What were your expectations for your previous job and to what extent were they met?

What were your starting and final levels of compensation?

What were your responsibilities?

What major challenges and problems did you face? How did you handle them?

What did you like or dislike about your previous job?

Which was most and least rewarding?

What was the biggest accomplishment and failure in this position?

Why are you leaving your current job?

Why were you fired?

What was the most enjoyable aspect of your previous job?

Job Interview Questions: About Your Supervisors and Co-Workers.

What was it like working for your supervisor?

What do you expect from a supervisor?

Who was your best boss and who was the worst?

What is the ideal co-worker?

What is the ideal boss?

Job Interview Questions: About You

What is your greatest weakness?

What is your greatest strength?

In terms of your current or last position, describe a typical work week for yourself.

Do you take work home with you?

How many hours do you normally work per week including work completed at home?

How would you describe the pace at which you work?

How do you handle stress and pressure?

In terms of your career, what motivates you to move upward and attain further success?

What are your salary expectations?

What do you find are the most difficult decisions to make?

Tell me about yourself.

What has been the greatest disappointment in your life?

What has been your greatest accomplishments in your life?

What are you passionate about?

What are your pet peeves?

What do people most often criticize about you?

When was the last time you were angry? What happened?

If you could relive the last 10 years of your life, what would you do differently?

If the people who know you were asked why you should be hired, what would they say?

Do you prefer to work independently or on a team?

Give some examples of teamwork.

Were you responsible for any major projects at your last position, and if so, please describe in a nutshell the project you were responsible for.

What type of work environment do you prefer?

How do you evaluate success?

Have you ever given a work related presentation to a group of people greater then 10, and if so, how did that work out?

If you know your boss is 100% wrong about something how would you handle it?

Describe a difficult work situation or project and how you overcame it.

Describe a time when your workload was heavy and how you handled it.

What have you been doing since your last job?

Job Interview Questions: About the New Job and the Company

What interests you about this job?

Why do you want this job?

What applicable attributes or experience do you have?

Are you overqualified for this job?

What can you do for this company?

What do you know about this company?

Why do you want to work here?

What challenges are you looking for in a position?

What can you contribute to this company?

Are you willing to travel?

Is there anything I haven't told you about the job or company that you would like to know?

How do you plan to move up within our company?

What is the highest level you wish to be promoted within our company?

Why should we select you for this job?

Job Interview Questions: The Future

What are you looking for in your next job?

What are your career goals for the next five years and ten years?

How do you plan to achieve those goals?

How long would you like to stay with our company and why?

What are your salary requirements - both short-term and long-term?

What will you do if you don't get this position?

Once again, the key to a successful job interview is preparation. When you are completely prepared, you will tend to be less nervous. Of course, it is highly likely you will be presented with a question or two that you did not expect. This is why preparation also entails having the knowledge base that you can expect the interviewer will tap into.

Here I am not talking about the knowledge needed to do the job. That should be a given anyway, otherwise you would have not been asked to be at the interview. Here I am talking about knowing yourself and your attitudes, and being able to present your attitudes in a way the interviewer can appreciate. It does not hurt to let the interviewer know what really makes you tick, if the interview goes in that direction.

Make sure that you display an enthusiastic attitude. Make sure you present to the interviewer a willingness to learn and a desire to advance in the company you are about to potentially work for. You do not want to appear as if you are lacking seriousness and definitely do not appear cavalier. Try to appear enthusiastic and positive in a mature and professional way. If you are naturally an enthusiastic and positive type of person, then half the battle is won. The point is to be your self, but try to present the best of who you are.

Remember this, many employers prefer a less educated candidate with fewer credentials who is bright and willing to learn, over one who is more prepared but lacks the proper attitude. A good example of this is the entrepreneur who wants to launch a new business. For him or her who is starting a new venture, hiring someone who is bright and has the right attitude is extremely important. More important then previous education. In this case, the entrepreneur is looking for someone who is not afraid to take risks and is very much goal oriented. Here it is very important that you display to the interviewer your ability to work as part of a team. The 9 to 5 type worker who expects to work basically the same hours 5 days a week would not fit well here. And the interviewer needs to know this.

To conclude, in the end, most interviewers are looking for the right attitude for the job they are trying to fill. If you also have the right credentials along with the right attitude, then your chances are increased tremendously. If you can answer most of the above questions, display an enthusiastic attitude, and present yourself in the best possible way, this should result in you obtaining the job you are seeking.

Article Source:
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Your Money Starts With Your Mind - Follow Up Interview

2009-08-28T08:16:00.004-05:00

This is a follow up video to the first interview between Tony Robbins, John Reese, and Frank Kern. Tony Robbins talks to John Reese about the mental shift he had to make in his mind to go from making $22,000 in a day to making $1 million dollars in a day 'setting a new standard' for the industry. Watch this 16 minute interview here.

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Your Money Starts With Your Mind - Watch This Interview

2009-08-25T05:14:00.002-05:00

In this interview Tony Robbins meets with two very successful students, Frank Kern and John Reese. Both of them are self-made multi millionaires who made their fortunes by selling products on the Internet. What’s particularly interesting about both of them is that neither had any “real” education. Neither one finished college and they both went from being broke to becoming wealthy.

And they still continue to thrive in today’s economy. So the purpose of this interview is to uncover the traits that successful people have in common. Specifically, the traits that cause them to take massive action and follow through. As you’ll see, the solution is really quite simple and available to us all.

Interview with Tony Robbins, Frank Kern, and John Reese

Only Great Minds Can Read This..

2009-08-23T05:07:00.002-05:00

Only great minds can read this.

This is weird, but interesting!

fi yuo cna raed tihs, yuo hvae a sgtrane mnid too

Cna yuo raed tihs? Olny 55 plepoe out of 100 can.

i cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdanieg. The phaonmneal pweor of the hmuan mnid, aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno't mtaetr in waht oerdr the ltteres in a wrod are, the olny iproamtnt tihng is taht the frsit and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it whotuit a pboerlm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Azanmig huh? yaeh and I awlyas tghuhot slpeling was ipmorantt!

As of Friday August 14, 2009, FDIC is Bankrupt

2009-08-20T08:34:00.006-05:00

It was eventually going to happen, despite what all the financial gurus and experts out in the market were saying. Here is a clip from an email that I got from an expert in the financial arena.

As of Friday August 14, 2009, FDIC is Bankrupt

As late as in the end of April just before the release of the bank stress tests, … After three new bank failures last Friday (The Friday before last), the FDIC’s Deposit Insurance Fund (DIF) diminished by another $185 million for a total remaining balance of $648.1 million…

Tonight's Bank Failures (Last Friday):

Dwelling House Savings and Loan Association, Pittsburgh, Pennsylvania
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $6.8 million.

Colonial Bank, Montgomery, Alabama
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $2.8 billion.

Union Bank, National Association, Gilbert, Arizona
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $61 million.

Community Bank of Arizona, Phoenix, Arizona
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $25.5 million.

Community Bank of Nevada, Las Vegas, Nevada
The cost to the FDIC's Deposit Insurance Fund is estimated to be $781.5 million.

If indeed $641 million was all that remained of the DIF, the FDIC is now bankrupt. Of the $641 million left, Community bank used up 781.5 million and Colonial Bank $2.8 billion. Moreover, according to analysts at the Royal Bank of Canada the U.S still has banking failures in the thousands to face before the crisis is over.

http://globaleconomicanalysis.blogspot.com/2009/08/as-of-friday-august-14-2009-fdic-is.html

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Glen Beck Speaks - Do You Trust Our Government?

2009-08-18T22:23:00.009-05:00

Did you know that you may question ever logging into another government website again? Is there a workaround to this law on the books?

Watch the video below and then commit to doing government work on public computers at your local library. If you borrow someone's computer you will put them at risk. So think creatively; not selfishly.

Help to create a buzz. You may not know what you can do to fight this but someone else might. Someone else might know people that you do not. Someone else might have knowledge that you don't have. Someone else might find a passion that you cannot.

Lets work together and at the very least --> be informed!

As a side note, most of the individuals that donate cars are middle to upper class. Which means the government has the right to backup and analyze any and all information from the citizens that are more established. Protect your money by protecting your information.

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The American Economy.. Its Safe Right?

2009-08-17T15:05:00.002-05:00

This depends largely on what you consider to be the American Economy? Are you referring to the economy that exist within the United States or the economy that is being purchased by foreign countries at huge discounts? One spectator might very well be convinced that we are no longer able to consider ourselves an American Economy. It’s all based on ownership right? Doesn't ownership of an asset empower the owner to control that asset? Let me give you an example. Let’s say that John takes a loan from a bank to purchase his dream car but he does not physically have the title of ownership in his possession, then whose car is it really? Is it John's car or the bank's car? So why then does John run around town telling everyone 'hey look at my new BMW'? Does John really have full control of his car, as long as he still owes the bank for it?

The words we use are very powerful. If we choose to not use the correct vocabulary in our daily events, how then do we expect to identify truth from fiction on large scale events; events such as the economy?

If we accept bailout money from outside countries that have a strong interest in owning the American banking system in conjunction with an already overwhelming national debt. Is it then really still our economy? Ponder the scenario ‘what if we cannot pay back the loans’? What happens to John's car if he doesn't pay his loan back? Most of us would agree that the bank will take back John's car as collateral on the loan. What do you think will happen when we as a country cannot pay back the 11 trillion dollar national debt that we owe? Or even more frightening 'JUST THE INTEREST? You got it! The countries that loaned us the money will take their collateral to secure their holdings. This collateral is ownership in some of the major American financial institutions that play an integral part in what we call The American Economy.

What does this mean? Who can speculate? Many experts believe that our laws and rights will begin to adjust to the laws of our new owners. After all that is what they are most accustomed too. And from their perspective that is what works. After all their ways have not gotten them into our position, so their way must be right, right? So it makes sense that they would believe in their own laws and begin to enforce them.

So now let me ask you. Who is in favor of more bailouts? Who is in favor of loosing our economy to abroad? As Obama so elegantly puts it "Its Time For Change".

Let’s just hope this change is good for the US Economy and not the Global Economy.

Your House Got You Down?

2009-08-06T04:27:00.002-05:00

The industry coins that home ownership is the best investment that we can have. If its such a great investment, than why are so many people trying to get rid of it?

Lets take a look at this picture in a little more detail.

The government encourages home ownership because they reap large revenues from the property tax.
The property developers encourage home ownership because each 'sale' puts more money in their pockets.
Property Investors encourage home ownership because they reap in large profits from your speculation.
Banks encourage home ownership because of the large 'interest bearing' profits that they make from your lack of patience.
Employers encourage home ownership because they reap large consistent profits knowing that you are now limited in offers from their competition.
Insurance companies encourage home ownership because by law most homes must have insurance without limits of equity.

Are you getting the picture yet? NO ONE CARES ABOUT YOU!

We all love that favorite radio station WII FM "Whats In It For Me" . If you want to know what a good investment is, then define it by leverage.

How much leverage is your house giving you? Lower taxes? Less insurance? Lower utility bills? Less labor trading work days? Lower cost maintenance? How about a bigger house? Maybe that will give you more leverage? Maybe that will put more money in your pocket? Maybe that will give you more time to learn to invest? More money reserves to multiply?

After all, property values only go up, right? Well at least your investment is protected from the risks of a bad economy, right? No chance of loosing decades of your life to a mortgage default. The banks wouldn't want to profit from your misfortune right?

Ownership does not really exist, only control does. Are you in control?

Think about it...

The Fourth Credit Bureau?

2009-08-05T17:57:00.001-05:00

Many people think there are only three major consumer credit bureaus.

Experian
TransUnion
Equifax

But this is in fact NOT TRUE! Did you know that there is a fourth consumer credit bureau? Below is the link you can use to get a copy of your credit report and make sure you are in good standing. Don't let this little industry secret keep you from your financial goals.
Innovis Credit Report

Gas Meters - Can You Trust Them?

2009-08-05T04:03:00.000-05:00

Often we run through our daily busy lives trying to manage the details of our life. Details such as gas meters from our trusted convenience shops often do not cross our mind as a money hole. Did you know that many convenience stores do not check their meters frequently? Did you know that many convenience stores even intentionally and fraudulently adjust their gas meters? How many times have you been taken and not even known it. In today's economy we are holding tightly to our money and it seems everyone else is trying to hold on tightly to our money as well. Spend the next month doing a little math before you drive away after filling up your tank. I recommend getting an even 10 gallons. If the price on the meter reads $2.25 per gallon then you should show a final price of $22.50.

So for now on, make a personal commitment to yourself to stop the gas meter at 1o gallons and do a quick math check before pumping more gas into your vehicle. If the math does not match up, then stop pumping gas and insist on an adjustment to the amount you have paid.

When you think of the money you can save with this little trick over the course of a year, its a great strategy to have in your toolkit. And better yet, demand that the meter be fixed and save someone else from this misfortune.