Smallmouth Bass Fishing in the Mink River

No, this is not a post about the "Affordable Health Care Act nor the Financial Markets."  Right now it is about my fishing.  Take a look at this little baby, which came in about 20 to 21 inches.  This is the reason why I enjoy Smallmouth Bass fishing in the Mink River, which is located in Northern Wisconsin on the shores of Lake Michigan, on my kayak.

My bait of choice is "Canadian Crawlers."  I use 6 lb. test with a #6 hook (18" from sinker), #6 split shot, and WD-40. Yes, you read that correctly, WD-40.  It is amazing what you can do with the WD-40; that includes catching fish!

What is Your Mink River Estuary?

I have spent the past few weeks on the beautiful Mink River in Northern Wisconsin, specifically Door County, fishing for Smallmouth Bass.  It is a beautify place where one can completely forget the cares of the world.  I hope that you can find and enjoy your own "Mink River Estuary."

Bull-Headed Investors

This is what happens to those investors who refuse to comprehend economic reality of the next four years.  In all honesty, I hope you are not one of them!

Hollande's Prescription for Economic Disaster

Since France's Socialist President François Hollande took office in mid-May, his government has instituted the following economic policies:

1. Decreased the retirement age from 62 to 60.
2. Increased the minimum wage rate by more than inflation. 
3. Created a special 3% tax on dividends.
4. Instituted a maximum tax rate of 75%.

What has been the economic consequences so far from these actions? First, economic growth has evaporated.  (France's national statistical office "Insee" is forecasting a further rise in the jobless rate, from the current 10%.)  Second, an increase in taxes has already slowed down France's economy.  Good job, Hollande.  He is in office a little over a month, and his policies have doomed France.  Why would anyone vote a Socialist into office?  The answer is that you get to spend other people's money!  

Silver: Is Now the Time to Purchase?

Defined Benefit Plans (Pensions)

Pension funds are still using 8% annualized returns as their internal rate of return.  In a zero-interest rate environment, you cannot even come close to approaching that return of 8%, which, of course, forces these funds into risky asset classes, such as stocks and investment grade bonds (BBB).  (Defined benefit plans are underfunded to the amount in excess of $1 trillion.)  Anyone receiving a defined benefit payout better start learning to live on half of that amount, which may not be conservative enough.  Why?  Because those plans will take a haircut of at least 50%, given the potential for an economic melt down over the next four years.  In other words, learn to live with less, not more!

Slaughterhouse Approaches

“Bull Tarts” depend on government handouts and bailouts for their success.  These are the only tools they have left.  Real economic growth is not going to happen for years.

But, perhaps the world is beginning to collectively realize that those Wall Street lies have no substance, and that bailouts are not the basis of prosperity after all. Those bailouts are nothing more than popular delusions put forth by Wall Street that will cause bulls to lose everything in the end.

So keep asking for your financial bailouts and kidding yourselves that all really is ok, “Bull Tarts,” because that slaughterhouse is fast approaching.

Federal Reserve System: Destroying the Function of our Capital Markets

The Fed is destroying the capital markets by pegging and manipulating the price of money (interest rates) and debt capital.  Interest rates signal nothing any more as a mechanism of allocating money between lender and borrower, because interest rates are "zero."  Capital markets are at the heart of the free market, and they are not working.  Why?  Because the Fed is manipulating every aspect of our so-called free market.  And, we all know how well that is working!

Disconnect Among and Between SPX, Oil, and 10-Year Note

America's Welfare State: Electronic Benefit Transfer (EBT) Food Stamp Card

I know I am suppose to be on my "Summer Hiatus," however, I just could not pass on this one.  After reading my post, I believe you will understand why I had to do a post on it.  So, without any further ado, the state of New York would prohibit welfare recipients from spending their tax-funded benefits on cigarettes, alcohol, gambling, and strip clubs under a bill passed overwhelmingly by the state Senate on Tuesday.  Wait, you mean you can not spend other people's money to pay for a lap dance?  What crazy form of inhumane austerity is New York trying to pass?  I hope the Department of Justice (Are you listening, Eric Holder?) looks into this inhumane bill.  (LOL)  But perhaps the scariest scenario is that New Yorkers actually do spend their EBT food stamp money, (no, taxpayers money), at strip clubs.  Is any of this registering with you, American taxpayer? To put it mildly, I was outraged that individuals could use these EBT cards, which are designed to purchase food, to buy cigarettes, alcohol, gambling, and of course visit your local strip clubs.  Click here for the article. 

Summer Hiatus

I will be making only selective posts over the next month as market conditions warrant.

How Would Japan's Topix 28-Year Low Equate to the $INDU?

2012 and 2013 Will Usher in the End of Our Known Economic/Financial System: The Scariest Presentation Ever?

You may want to think twice before viewing this presentation.  But, then again, it just may provide you with the impetus you need to make the necessary changes both mentally and financially to survive the upcoming upheaval.  If you really want to proceed, please click on PRESENTATION.

What Now, DJIA?

The following Point & Figure Chart on $INDU (Dow Jones Industrial Averages) demonstrates what I like about these types of charts.  That is, these types of charts are very easy to read.  You get the feeling from the chart that the trend from up to down is now in place.

The End Game

Since 2008, the general belief is that Bernanke and Fed saved America and the world from the abyss through the outpouring of trillions of dollars into the financial system.  Of course, all that liquidity ended up on Wall Street but not Main Street.  Yes, financial assets are up from March 2009; but your purchasing power has eroded big time.  Employment hasn't recovered.  May’s NFP added just 69,000 jobs on expectations of 150,000, which is a major miss.  (Good job pundits.)  See, all that liquidity added to the economy was simply adding more debt to the economy.  Yes, I expect with today’s NFP numbers and with the world markets collapsing (German Dax is now down over 4%.) that the way is now clear for Bernanke to institute another round of QE, which we should all know by now will also fail!

Of course, no one knows exactly what is on the economic/financial horizon; but I still maintain that during the next four to five years we will experience a social/economic meltdown of mega proportions, such as the following:

1. Unemployment rate of 35% to 50%, which if you look at the unemployment rate for teens in some of our states, we are already at those levels.
2. Majority of banks will fail, just not in the United States but worldwide. (Just look at Europe and some of the bank runs already occurring there.)
3. Governments will default on most of its commitments, just not its sovereign debt.  (Just look at Greece, Spain, and Italy.  And, yes, I believe it will happen here.)
4. We will experience major social unrest throughout the world.  (I believe that is already occurring, Europe.)
5. We will experience a radical political change not only in this country but also Europe.  (I don’t believe that it will make any difference what happens in November.  Who ever the President is, will probably end up being the most despised President to ever serve in that office.)