True?…or Not True?

Let’s play a little game of “True/Not true.” We ask the question and you answer, “True” or, “Not true.”

1) Two police officers in Colorado lost their jobs and face felony charges for shooting an elk.
2) Two police in Washington State lost their jobs and face felony charges for shooting a man in his bed 16 times.
3) America spends more money on the TSA each year than the nation of Nicaragua earns.
4) Pubic “crabs” are becoming endangered by Brazilian bikini waxes.
5) The sequester that began last Friday will cut the national debt by $85 billion this year.
6) Witches read The Daily Reckoning.

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Trickle Down Stagnation

The Philly Fed manufacturers survey for February plunged from negative 5.8 to negative 12.5, the worst reading in eight months. A big miss from the +1 reading that was expected. Ouch!

Our friends at ZeroHedge point out that hope springs eternal:

“Oddly enough survey participants have been hoping for a brighter future for 4 years now. Expect the sellside penguins to say that this number too should be ignored, just like the initial claims earlier, and the new housing starts yesterday. After all one should ignore all data that does not fit the goalseeked script of a centrally-mandated ‘recovery.’”

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Bernanke-Savant Syndrome

Stocks are on the rise. Gold is on the rise. Bitcoin is on the rise. Everything is up…up…and, away!

The Dow has been on a tear this week, up 300+ points since Tuesday’s low. What’s causing the rally? Is the economy fixed? Have Bernanke’s magic money elixirs finally done their job? Or is collective delusion on the march once again?

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Bond Bears Should Envy Broken Clocks

Broken clocks get a bad rap…at least they are right twice a day. Many are the objects, individuals and/or institutions who are lucky to be right once a day… or even once a year. Consider, for example, those poor souls who continuously predict rising interest rates. These “bond bears” have not been right once in the last 30 years.

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Bond Guru Still Likes Bonds

He has what seems like the easiest job in the world. He manages $4 billion of assets on which he earns fees. And all he does is buy US Treasuries.

His name is Van Hoisington. No man has been more right about interest rates in the last two decades. Van thought they would go down — and has thought so since 1990. So they have. As they fell, the value of Van’s bonds rose. Since he’s been right, his track record is ridiculously good. He has posted a 9.1% annualized return over the last ten years…in a bond fund!

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A Redistributive State of the Union

[Note: This piece was originally published on January 25th, 2012]

Shortly after President Obama was elected, NBC News interviewed a young woman from Detroit named Peggy Joseph. She explained that she was excited about Obama’s election because “I won’t have to worry about putting the gas in my car. I won’t have to worry about paying my mortgage.”

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Student Loans Going the Way of Housing

Colleges are good at getting people enrolled. They get kids lined up with education loans. The money goes to pay exorbitant prices on textbooks. It pays for meal cards. Tuition is crazy high. Parents go along and shell out until their bank accounts are barren.

What colleges are not good at is getting the kids degrees. And those without those degrees have a hard time getting a good job to pay back a student loan. Instead, they fall into delinquency, starting off life saddled with an unpayable debt.

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The Bernanke Shock

The financial world was shocked this month by a demand from Germany’s Bundesbank to repatriate a large portion of its gold reserves held abroad. By 2020, Germany wants 50% of its total gold reserves back in Frankfurt — including 300 tons from the Federal Reserve. The Bundesbank’s announcement comes just three months after the Fed refused to submit to an audit of its holdings on Germany’s behalf. One cannot help but wonder if the refusal triggered the demand.

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S&P On the Kill List

“Paybacks are a bitch,” as they say.

What was Standard & Poor’s thinking back in August 2011, when the ratings agency took the Red, White, and Blue’s AAA rating away? A rating the most powerful government in the history of the world had held for 70 years. S&P downgraded long-term US debt to AA-plus. That score ranks lower than over a dozen governments, including Liechtenstein’s, and is level with Guernsey’s and France’s.

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Budget Cuts in the Irrational Financial System

Gold down another $5 on Friday. Are you tempted to get out of gold now…and get back in, after the dip bottoms out?

Forget it.

The advantage of investing family money rather than personal money is that you have time on your side. You can sit tight and let the big trends make you big money… If you can get them right.

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