The Poor Get Poorer

You are not going to believe this one.  At least, I was saddened and shocked.  Then again, I realize that the "poor among us" do make poor financial decisions; but governments at all levels are taking undue advantage of those that are ill equipped to make sound financial decisions.  Now, to the substance of this post.  According to new studies, households earning $13,000 per year spend almost $1,170 per year on lottery tickets, which is 9% of their total income.  Yet, states rely more and more on measures that target these individuals to buy lottery tickets, which makes the poor more dependent on government through food stamps and medicaid.  

In another study, lottery ticket sales in North Carolina, South Carolina, California, Texas and Connecticut found that per capita lottery sales are consistently higher in the poorest counties and tickets are more likely to be purchased by unemployed individuals.

In a very perverse way, the government wants to take more money from the productive end of society, who do invest wisely and create jobs to grow the economy, and give it to those individuals who do not make good financial decisions.  Go figure!

 

Food Stamp & Medicaid Enrollments: The New American Paradigm

The following chart is brought to you with compliments of the Pennsylvania Department of Public Welfare.  No further comment is necessary, except multiply this chart by a factor of 49 other states.

Electronic Benefit Transfer (EBT) Card, or Food Stamp Card

The U.S. Department of Agriculture reported that a record 47,102,780 individuals received food stamps in the month of November, or 1 out of seven Americans.  That number exceeds the combined populations of 24 states and the District of Columbia. 

From a perspective of history, the number of individuals on food stamps has skyrocketed from 31.9 million in 2009 to the current record high 47.1 million. By comparison, in 1969 just 2.8 million Americans received food stamps. 

Last year, the food stamp program (officially known as the Supplemental Nutrition Assistance Program or SNAP) cost taxpayers $72 billion, more than double the $30 billion spent four years ago.

My rhetorical question for the day is simply does anyone really believe that our economy is getting better when 1 out of 7 individuals in America are on the SNAP?  

By the way, I really like the overall design of the EBT card.  Really patriotic, isn't it? 

Mark This Date for Potential Economic/Financial Disaster

Forget about the end of the world based on the Mayan calendar (December 21, 2012); instead focus on the pending Shemitah on the sunset of September 13, 2015.

Those of you that have been following my blog postings over the past several years know that I consider the next four years (2013 to 2016) to be extremely unsettling for your financial health.  The reason, of course, is that a 7.5-year stock market cycle is pointing to a devastating "Bear Market” starting in the fourth quarter of 2012 through 2016.  Downside price objective for this 7.5-year cycles is "1,000" on the DJIA ($INDU), which is the objective based on a massive "Head and Shoulder Top" formation from 1998. 

Now, back to the Shemitah, every 7^th year, the Shemitah, on the 29^th day of the Hebrew month of Elul, occurs.  Elul is the twelfth month of the Jewish civil year, or the sixth month of the ecclesiastical year in the Jewish calendar, August and September.  The next Shemitah occurs September 13, 2015.  Also, on that date, we have Yom Teruah (Feast of the Trumpets) and ten days later we have Yom Kaphar.  (I will let you do the research on these two significant Hebrew festivals and what they mean.)  By the way, I don’t consider it a coincidence that the greatest stock market “point crash” occurred on the 29^th day of the month of Elul (September 2008).  And, let us not forget the stock crash caused by the events of “9/11.”  When did that stock market crash occur?  On the 29^th day of the month of Elul, which was the exact day of the Shemitah.

In conjunction with the Shemitah on September 13, 2015, we have an unusual astronomical phenomenon; a blood, red moon is expected on the evening of Elul 29, 2015 (September 13).  From Scriptures, you may want to read Joel 2:30-31, Acts: 2:20, and Revelation 6:12 to discern the significance of the “blood, red moon.”  While doing this research on the aforementioned verses, read Matthew 24.

Once again, you have been forewarned.  However, with all due sadness, I believe that “none of this will matter to anyone until it matters to everyone.”  But, by then, it will be too late.

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How Many Ounces of Gold or Silver Should One Own?

See the link to Casey Research to determine the number of ounces required based on your monthly expenditures.  The tables are approximately in the middle of the article, entitled, "Ounces of Gold Needed and Ounces of Silver Needed." 

Wal-Mart: Is the Top in Place?

Wal-Mart (WMT) missed its revenue expectations for the quarter of $114.9 billion when it reported revenues of $113.9 billion.  And, of course, the market did not like it. Stock is off 4%+.  WMT, also, lowered its EPS from $4.94 to a lower range of $4.88. 

My immediate assessment for WMT is another 10% correction in price to $61 from its current level of $68.  As the bear case takes hold, WMT looks like a $53 stock, or 23% from the current levels.  Eventually, over the next couple of years, WMT should take out its February 2009 low at $42, which is a decline of approximately 40% from its current price of $68.  And, it would not surprise me to see WMT trading below $35.  (See the following chart.)

Pentagon Spends $1.5 Million to Develop New Beef Jerky

Yes, our "Pentagon" spent $1,500,000 of your tax dollars to develop a special new roll-up beef jerky, which was funded by taking money out of a weapons program.  Now, I love my jerky but give me a break.  And, what does beef jerky have to do with national defense?  Answer: Absolutely nothing! The "Pentagon takes money out of a weapon's program to develop jerky that rolls-up.  Wait, this one is just a good as the jerky development, or should I say just as "sad."  The Office of Naval Research helped spawn "Caffeine Zone 2," which is an iPhone application that tells people how to schedule their coffee breaks. 

A "Bounce" in the DJIA?

Where in the United States Could You Live on Social Security?

 $1,130.33 is the average monthly Social Security Benefit that retirees receive from the government.  Assuming that you worked 40 hours per week that equates to a wage of $6.40/hour, which is less than the Federal minimum wage of $7.25.

www.GlobeLifeInsurance.com

Three Bearish Pieces are in Place for Further Market Weakness

Students Petition the Government to Refund Student Loans for Worthless Diplomas

Well, I knew this was coming to taxpayers across America.  That is, a petition to "provide university graduates the ability to trade their Diplomas back for 100% tuition refunds."  The petitions states as follows:

"Because of the inability of recent college graduates to find gainful employment in order to repay their college debt, and since this college debt cannot be eliminated in bankruptcy, and most of the recent additions to the job market have been in service related industries, the Obama administration should take up the cause of reducing college debt and hold those accountable responsible."

You may sign the petition by clicking on "We the People, Your Voice in Government."

Social-Economic Trends: Anarchy

Euro-zone youth unemployment overall has risen to 23.3%; with Greek youth unemployment at 58% and Spain at 54.2%.  Folks, this is a chart that portends to "anarchy" in Europe.  And, yes, it can and will happen in the United States.

In regard to the United States, the unemployment rate for workers under the age of 25, according to the Economic Policy Institute, is 16.4%! What about the unemployment rate for high school graduates in the United States?  Answer: 31.1%! What about unemployment rates for high school graduates by race/ethnicity?  Answer: Blacks (49.1%), Hispanics (33.8%), and Whites (25.6%). 

Once again, you have been forewarned!

Is the Top In for the S&P 500?

Re-Election of President Obama: Investment Perspective Going Forward

Today’s election was merely a choice of who was going to be the Captain of the Hindenburg or Titanic.  Both of which ended in complete disasters.  Now, let’s review my election forecast going back to June 2011, especially my comments made on September 13, 2012.

1.     On June 15, 2011 in my post entitled, “First Presidential Forecast,” I made the following comments: “In making any kind of forecast is definitely a risky business, but to forecast the 2012 Presidential election is insane.  However, I feel that I maybe on to something, insane or not.  Now, if the stock market is higher in 2012, President Obama is more than likely to win.  The strategy that I will be using is simply my S&P 500 EMA Strategy of the 15-week EMA to 40-week EMA.  If the 15-week EMA is above the 40-week EMA, Obama wins.  On the other hand, if the 15-EMA is less than the 40-week EMA, he loses.  Currently, President Obama wins, because the 15-week EMA > 40-week EMA.  However, the key is what will the EMA strategy be saying in 2012.  Stay tuned.”  Well, the 15-week EMA has stayed above the 40-week EMA.  Enough said.  President Obama is re-elected.

2.     On February 18, 2012 in my post entitled, “And, the 2012 Presidential Winner is … ,” I made the following comments: “Since my post of June 15, 2011, I came across an interesting study that reinforces my aforementioned hypothesis, entitled “Social Mood, Stock Market Performance and U.S. Presidential Elections: A Socionomic Perspective on Voting Results” by Robert Prechter, Deepak Goel, Wayne Parker, and Matthew Lampert, contends that citizens vote in accordance with trends in social mood, and that stock market indexes appear to be the best available indicator to measure social mood.  According to their study, voters really don’t care about jobs numbers, GDP growth, European debt crisis, and the decline in home prices.  Instead, they respond to fluctuations in the stock market.  That is, the value of their stock portfolios and 401K plans.  Therefore, if the Republicans want to capture the White House in November, they better hope that the S&P 500 crashes!”  Well, the stock market did not crash and President Obama was re-elected.

3.     On September 13, 2012 in my post entitled, “And, the Winner of the 2012 Presidential Election is?  President Obama,” I made the following comments: “President Obama is likely to win in his re-election bid based on the performance of the stock market over the past three years.  Therefore, the probability of President Obama being re-elected is high! So, how can one use the above information against the backdrop that the next four years will usher in the largest economic/financial disaster known to man with the DJIA selling for 1,000?  (Yes, the coming economic downturn will be greater than the Great Depression of the 1930s.)  Given the scenario, I don’t consider whomever occupies the White House will win any popular contests.  Remember that over the next four years the expected social mood of this country will change from positive to very “bleak.”  Therefore, the man that occupies the Presidency will undoubtedly be highly despised.  In other words, the proverbial bottom-line is to vote for the candidate you like the least.” 

 4.     On October 29, 2012 in my post entitled, “It’s Still Obama’s Election to Lose,” I made the following comments: “The Elliott Wave Theorist has done extensive research on those factors that influence re-election outcomes of presidential races. Its research revealed that the stock market is an “excellent indicator” of re-election outcomes.  In addition, GDP had a moderately positive relationship to re-election results; and inflation and unemployment rates had “no” significant predictive value.  It tested stock-market performance 1, 2, 3, and 4 years prior to elections and found all of them to be significant.  However, the 3-year time horizon leading up to the re-election was the most significant.  So, where do stand based on the 3-year time horizon?  Given the 3-year time frame, the DJIA has gained approximately 36%.  Even though the economy remains weak, GDP growth between 1% to 2%, the 3-year positive trend is how people feel, as measured by the performance of the DJIA, continues to give the edge to President Obama in his re-election bid.”

America, Is This the Kind of Regulation That You Want?

Buckingham Slate, a Virginia business that dates back to the Civil War, was recently fined by federal regulators with a $4,000 fine over a trash can “lid.”  Yes, that is correct.  According to the Mine Safety and Health Administration's official citation, “the offending can, or more correctly a waste receptacle in the words of the official citation, was not covered.  What's more, the receptacle was full.  It could be smelled. There were flies in and around the receptacle.  And, to crown all, management engaged in aggravated conduct constituting more than ordinary negligence by allowing this "condition to exist."  Therefore, my "tip-of-the-week," don't forget to put the lid on your trash can, because the Mine Safety and Health Administration has just been spotted in your neighborhood. 

Don't Forget!

171,000 (?) Jobs Added In October, Unemployment Rate 7.9%

On Wednesday, October 31, I made the following statement: "The current consensus for the NFP number is approximately +123,000.  However, given the revisions by ADP, my estimate is +85,000 (+/- 30,000)."  

The BLS reported this morning that 171,000 jobs were added in October with the unemployment rate rising to 7.9% from 7.8%.  So, my estimate of 85,000 was way off by 86,000 jobs.  Not so fast! Why?  Because that infamous Birth/Death adjustment came in at adding 90,000 statistical jobs, which by the way these phantom jobs have added 568,000 year to date to the total.  Therefore, if one subtracts off the phantom jobs of 90,000 form the so-called 171,000 jobs added, you arrive at 81,000 jobs added, which is darn close to my forecast of 85,000.