So Much for Cheap Credit Going Forward!

The Rich Get Richer and the Poor Get Poorer

Currently, we not only have Wall Street taking advantage of Main Street, but now have Washington, D.C. getting richer while most of the country subsidies those federal workers living there.  Case in point, the Federal Reserve Bank of St. Louis reports that the median annual income of Washington, D.C. is more than $65,000 while the national median income is approximately $50,000. 

I have a recommendation for the current administration, who seem to be so concerned with income inequality.  Thin the ranks of the federal workers in Washington, D.C., which would go a long way to eliminate income inequality.

No Bubble Here, Right?

New home prices have never been more unaffordable at a stunning 6.7x average salary.  Thank you, Mr. Bernanke.  You learned your lessons very well from Greenspan where new home prices were only 6x average salary under his Fed tenure.  And, mortgage rates are only 50% of what they were when Greenspan left his post as Fed Chairman.  But, no bubble is visible, right?

What is the $DJIA's Relative Strength Saying About its Future Price Direction?

The rising RSI has penetrated its rising trend line that has been in force since 2009.  What is the proverbial bottom-line?  If past trends hold, $DJIA might be heading to 5,800, or decline of at least 64% from its current levels.  (See the following chart.)

$SLV's "Unthinkable" Downside Price Objective

Psychological 3% Rate on 10-year TSY Note

Interest rates are heading higher.  No, rates have been rising since August of 2012.  However, the psychological 3% rate on the 10-year Treasury Note is what everyone is focusing on today.  Currently, the rate is at 2.93%.  However, from following chart, one can discern that the 10-year rate reached its low last August.  So, what can an investor expect going forward?  Rates on all kinds of borrowings will go up, such as car loans, credit cards, home loans.  Also, once that 3%  psychological level is penetrated, I expect stocks to suffer big time.

 

You are Kidding, Right?

Would you buy health insurance because of this ad with a guy in pajamas talking about insurance?  I don't think so!  But, our government must think so because you, taxpayer, have been footing the bills for such ads.  (I would say that this ad begs the following question: "Should the federal government be spending $684 million on marketing ads for Obamacare?")  

Now, if you believe that health insurance should be the main holiday topic this year, you can go to the following site, Health Care for the Holidays, for step-by-step instructions.  As a matter of fact, the site puts forth "four steps" on how to have a holiday health care conversation.  (No, I am not kidding. This is an actual site with four specific steps for your holiday conversation.)

Percentage of Subprime Auto Loans -- Unbelievable

I am always amazed at how little we learn from history, especially history just five years old. Today, nonprime, subprime, and deep subprime new auto loans make-up 26% (2013 Third Quarter) of all new vehicle financing, which, of course, is one out every 3.85 loans are highly risky.  (Subprime lending includes borrowers with credit scores below 520.)  Worse yet, the subprime loans for used vehicles comprise 55% of the market in the third quarter of 2013.  But, then again, no need to worry about subprime lending, because this time is different.  Right?   

Will the Fed Announce Its "Taper" Intentions Tomorrow?

Wall Street is waiting to see what the Fed will do about its future purchasing plans for tapering $85 billion worth of mortgage-backed securities and Treasury bonds per month, or a trillion dollars per year.  I, for one, don't believe that the Fed has the nerve to taper (cut back on its security purchases) at this time.  Or, should I say Wall Street will not allow the Fed to taper just yet?  Wall Street just likes that $1 trillion per year just a little too much.  My guess is the so-called "taper" will occur sometime during the first quarter of 2014.

Dionysus Exiquus: The Answers

Dionysus Exiguus was a member of the Scythian monk community.  He is known as the inventor of the Anno Domini (AD) era (year of the Lord), which is used to number the years of both the Gregorian and Julian calendars.  However, what has probably been lost in history is his major role in the reason why Christians celebrate Christmas! 

Coming to Rome sometime between 500 AD and 525 AD, Dionysus Exiguus arrived upon the time of the Solstice festival celebrating the birthday of the sun.  He witnessed all of Rome in celebration and revelry.  Wreaths of greenery were hung on the doors of homes as emblems of the sun.  Everyone exchanged gifts and debauchery parties were everywhere.

Learning that these practices in Rome were in honor of the ancient sun idol (Mithras), Dionysus Exiguus was shocked and dismayed.  Reasoning that it was impossible to stand in the way of such, or even change this so-called pagan holiday, he sought to change the meaning for it by claiming it to be the celebration of the birth of the Messiah.  Thus, the celebration of Christmas was born.

Who Was Dionysus Exiguus and What Was His Claim to Fame?

Answer: ?

What Has Caused the Debasement of the U.S. Dollar?

Since 1913, the dollar has lost nearly 90% of its value, as measured in terms of the Swiss Franc, and the purchasing power of that dollar has collapsed, as measured by the CPI.  Why?  The significance of 1913 was the creation of the Federal Reserve System.  The significance of 1971 was when President Nixon took the nation off the gold standard.  Up until 1971, the growth of the money supply (creation of dollars in circulation) was directly tied to the amount of gold that the U.S. held.  In other words, the gold standard was a constraint on our central banker, Fed, to create dollars.  The only way that more dollars could be created was by having more gold.  Today, the Fed has no constraint on its ability to create dollars.  It's monetary policy of QEs has enlarged it balance sheet by close to $4 trillion.  That is, the creation of money out of thin air!  The consequences of such actions were for the dollar's value to plummet against the Swiss Franc and the destruction of the purchasing power of the U.S. dollar.

Bulls Gone Mad!

Currently, we have 4x as many bulls as bears, which is a record high.  From the following chart, it simply implies that now may be a good time to lighten-up on those equity positions in the portfolio, or get out of equities completely.

Ryan-Murray Budget Deal: A Total Mockery of Fiscal Contraint

Let me be perfectly clear that this so-called budget deal is nothing but a farce.  This budget deal does nothing to solve our out-of-control federal spending and our ever-increasing national debt.  As a matter of fact, this deal will cause federal spending to increase by $45 billion when spending was scheduled to drop by approximately $20 billion through sequestration.  Also, the Ryan-Murray deal promises to reduce the deficit by $28 billion over the next ten years.  However, the federal government will spend around $40 trillion over the next ten years.  The math tells me that deficit reduction amount equates to 0.007% of federal spending over the ten-year period.  What a joke!  To add further insult to economic sanity, the Ryan-Murray deal will add something like $8 trillion to our national debt over this time horizon for a total of $25 trillion. 

Silver: Update From My Post of December 4

From my post, dated December 4, which was entitled, "Silver: Dollar Cost Averaging," I stated that the momentum indicators for $SLV were extremely oversold at these price levels ($19).  Further, I went on to say that a bounce within its current Stage 4 Selling Phase could result in $SLV rising between $22-$24.  So far, so good.  See the following chart.

Dichotomy Between Earnings and Prices

Fundamental analysis, as an investment tool, states that the price of any financial asset is the present value (PV) of expected cash flows.  In regard to equities (stocks), that would be a firm's earnings.  Higher the firm's earnings should result in higher price for the firm's stock.  Well, there is definitely a disconnect between a firms earnings and its price.  (See the following chart.)  Since the 2007 peak in EBITDA (earnings before interest, taxes, depreciation, and amortization), the S&P 500's EBITDA has fallen 7%, but the S&P 500 has risen 15%.  Therefore, from the perspective of a value investor, who uses fundamental analysis, this market, as measured by the S&P 500, is not cheap.  Why the dichotomy?  Look no further than the Fed's QE policies, which has created this monster equity bubble.

U.S. Treasury "Out" Of GM For $10.5 Billion Loss on its Original Investment

The U.S. Treasury has finally sold its last holdings of GM for a total loss of $10.5 billion.  Thank you, once again, U.S. Taxpayer for your most gracious generosity.  Your utter kindness makes me speechless at a time like this!  At least all is not loss, because our government can now take the proceeds from the sale and double-down its investment in "Obamacare." 

If You Like It

Math Question From "Common Core"

The problem, which to me is incomprehensible, comes from a Houghton Mifflin Assessment Guide.  Therefore, we must be teaching our children to make up answers when there is not enough data to arrive at a logical solution.  However, if our children come up with a process in arriving at a solution to any incomprehensible question, I guess it would be counted as correct.  This math question appears among a larger set of basically similar math problems here. The above problem involving Juanita appears on page AG102.

U.S. Secretary of Education, Arne Duncan, has promised to improve education quality by pushing for the implementation of the Common Core State Standards Initiative with the likes of the above math question.  Does any of this sound familiar to the likes of the "Affordable Health Care Act," or better known as Obamacare?  It simply tells me that the federal government is not very good at doing anything.

Watch the Pro-Gun, Daniel Defense Ad the NFL Won't Run During the Super Bowl

Way too much sex, violence, and assault rifles.  Then again, you will have to judge for yourself if the NFL made the right decision.

Car and Student Loans Account for 95% of All Consumer Credit Issued in Past Year

Now, let me get this straight. 95% of all "Consumer Loans" were issued to students, who have no credit score and no future job prospects, and individuals, who purchased new cars with a credit score below 659, which, which-by-the way, is considered sub-prime.  Oh, this is going to end so very well.  Once again, I know what you are thinking; and I agree.  Why?  Because none of my economic/financial rants matters to anyone until they matter to everyone.

What is the Real "Unemployment Rate in the U.S.?

Well, the BLS reported earlier today that the unemployment rate for November is currently at 7% (U3), which is down from the October rate of 7.3% (U3).  Does anyone really believe that 7% rate besides Wall Street?  Simply look at the following chart, which is provided by "ShadowStats,"for what the true unemployment rate happens to be in this country.  No, the rate is not 7%, nor 12.5% (U6) but closer to 24% (Solid Blue Line)!

Please Buy the Excess Merchandise (Inventory)

Over the past year, nominal GDP has risen $534 billion of which 56%, or $300 billion was due to nothing else but inventory hoarding by businesses.  The problem with inventory hoarding is that at some point it will have to be "unhoarded," usually at much lower prices, which will comprised corporate profit margins and reduce GDP growth.

Silver: Dollar-Cost Averaging

Complete Extinction of Bears on Wall Street

 

If I am reading the above chart correctly, just maybe the "Bulls" should not get too excited, because previous market tops correspond to today's current readings. Just take a look for yourself.  But, I know most of you are saying, but this time is different, because the Fed has our back.  That is, one giant "PUT" at current prices.  However, if you look at the history of this ratio, it has happened 15 times in the last 24 years with stocks falling 79% of the time in the following 3 months.  



Have a Public Pension? You May Want to be Concerned!

Detroit's bankruptcy has been ruled legal.  Let the haircuts begin.  That is, pensioners will likely receive something like "eleven cents on the dollar."  The courts ruled that pensions are not protected by state constitutions.  Why?  Because federal bankruptcy laws trump state constitutional laws when it comes to bankruptcy.  Article 1, Section 8 of our Constitution states as follows: "To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States."  In other words, pensions are just like any other debt when it comes to bankruptcy.  Take heed pensioners of California and Illinois.  You are next in line!  Like I been saying for the past several years that if you have a pension in Illinois see if you can take a lump-sum distribution and get the "you know what" out of the state.

Will the Real Economy Place Stand Up!



No, it is not the S&P 500.  S&P 500 is simply suppose to make you feel better because of the wealth effect caused by the Fed's QEs.  Keep-in-mind that what goes up must come down!

The Federal Reserve and Wall Street Complicit in Robbing You of $400 Billion of Interest Income Per Year

You, "Main Street" are being robbed of $400 billion a year thanks to the "Zero Interest Rate Policy" of the Fed's "Quantitative Easing" program.  That is according to the FDIC's Quarterly Banking Profile, which states as follows:

“Chief among the data points to be noted is that net interest expense, which is the money paid to depositors at banks, continues to fall.  While all banks earned about $118 billion in interest income last quarter, they paid just $13 billion to depositors, a graphic example of the “financial repression” used by the Fed to subsidize the US banking industry.  Via QE, the Fed is subsidizing all banks to the tune of over $100 billion per quarter in artificially depressed interest cost and income to depositors of all stripes.

Prior to the 2007 financial crisis, total interest expense for all US banks was over $100 billion every three months and interest income was almost $200 billion.  In order to maintain the net interest margin for banks at +/- $100 billion per quarter, the Fed is robbing US savers, including companies, investors and the elderly, of almost the same amount each quarter in badly needed income.”

This Fed policy has done nothing to assist "Main Street," but it has enhanced "Wall Street," especially those "Too Big to Fail Banks!"  Speaking of banks, the concentration (financial power) of the number of banks has been staggering since 1986.  In 1986, we had a total of 18,000 banks in the U.S.  Today, the number of banks is 6, 891, or a decline of 62%.  In other words, the "Too Big to Fail Banks" have become larger and the small banks have either merged or exited the industry, which has reduced competition and harmed "Main Street."

Why the Upcoming Depression is Going to be a Whole Lot Worse than the Depression of the 1930s

Taxpayers are the Fools, Working Is Stupid

Just ask Lucy from Austin, TX. 

Don't Forget to Set Your Scales Back

It's amazing on how this simple trick really works until you try to put your clothes on.  On a more serious note, do you know why we observe Thanksgiving?  Read on and may learn something new today.

The civil war between 1860 and 1865 is the original reason for the observance known today as “Thanksgiving Day.”  (I wonder how many people know that fact?)  A Presidential Proclamation was made in October 1865 by Lincoln’s successor, Andrew Johnson.  His proclamation established the national observance of this secular day, but academia has promoted the idea that the Pilgrims were somehow responsible for it.

  

The Pilgrims were a pious people who were looking for a new life away from religious persecution.  They had a great deal in common with the "Quakers" (Society of Friends) that developed later in the 17th century.  Both sects promoted a separation from the pagan influences that still remained in Protestantism.

   

Below is the proclamation made by the President Andrew Johnson for the observance of Thanksgiving Day, with the reason given. 

(October 28, 1865):

“Whereas it has pleased Almighty God during the year which is now coming to an end to relieve our beloved country from the fearful scourge of civil war and to permit us to secure the blessings of peace, unity, and harmony, with a great enlargement of civil liberty; and

Whereas our Heavenly Father has also during the year graciously averted from us the calamities of foreign war, pestilence, and famine, while our granaries are full of the fruits of an abundant season; and

Whereas righteousness exalted a nation, while sin is a reproach to any people:  Now, therefore, be it known that I, Andrew Johnson, President of the United States, do hereby recommend to the people thereof that they do set apart and observe the first Thursday of December next as a day of national thanksgiving to the Creator of the Universe for these great deliverances and blessings.  (Note: date was changed during the early 20^th century) And I do further recommend that on that occasion the whole people make confession of our national sins against His infinite goodness, and with one heart and one mind implore the divine guidance in the ways of national virtue and holiness.

In testimony whereof I have hereunto set my hand and caused the seal of the United States to be affixed.  Done at the city of Washington, this 28th day of October, A.D. 1865, and of the Independence of the United States of America the ninetieth.”

In addition, President Lincoln made the following proclamation in 1864:

"It has pleased Almighty God to prolong our national life another year, defending us with His guardian care against unfriendly designs from abroad and vouchsafing to us in His mercy many and signal victories over the enemy, who is of our own household.  It has also pleased our Heavenly Father to favor as well our citizens in their homes as our soldiers in their camps and our sailors on the rivers and seas with unusual health.  He has largely augmented our free population by emancipation and by immigration, while He has opened to use new sources of wealth and has crowned the labor of our workingmen in every department of industry with abundant rewards.  Moreover, He has been pleased to animate and inspire our minds and hearts with fortitude, courage, and resolution sufficient for the great trial of civil war into which we have been brought by our adherence as a nation to the cause of freedom and humanity, and to afford to us reasonable hopes of an ultimate and happy deliverance from all our dangers and afflictions:

Now, therefore, I, Abraham Lincoln, President of the United States, do hereby appoint and set apart the last Thursday in November next as a day which I desire to be observed by all my fellow-citizens, wherever they may then be, as a day of thanksgiving and praise to Almighty God, the beneficent Creator and Ruler of the Universe.  And I do further recommend to my fellow-citizens aforesaid that on that occasion they do reverently humble themselves in the dust and from thence offer up penitent and fervent prayers and supplications to the Great Disposer of Events for a return of the inestimable blessings of peace, union, and harmony throughout the land which it has pleased Him to assign as a dwelling place for ourselves and for our posterity throughout all generations.

In testimony whereof I have hereunto set my hand and caused the seal of the United States to be affixed. 

Done at the city of Washington, this 20th day of October, A.D. 1864, and of the Independence of the United States the eighty-ninth."

 

Bitcoin (Digital Currency) Now Worth More Than Gold

You know that this is not going to end well when Bitcoin, digital currency, is selling for what gold is (1 unit of Bitcoin = $1,242).  Just look at that "parabolic" rise in Bitcoin.  It is hard to believe that individuals actually believe that a digital unit code currency is worth the same as an ounce of physical gold.  Can anyone say, insanity/mania?  And, Bitcoin is not the only digital currency; it has 37 brothers and sisters that one can purchase.  I don't know about you, but I will take the physical gold any day over all those digital currencies.

Are Long-Term Gasoline Prices Heading Up or Down?

 

I would not be concerned about the recent 5% jump in prices.  Yes, no one wants to pay higher prices at the pump.  However, I would be more interested in looking at the price action over the past three years, and see if one can ascertain about prices going forward.  That is, look at the above chart and notice the "Lower Price Tops" going back to 2011.  This type of "chart pattern" is referred to as a "descending-horizontal triangle," which bearish (good for consumer) for gasoline prices.  Currently, support for gasoline at the pump is approximately $3.15 on average throughout the U.S., or approximately $2.40 for the wholesale gasoline futures.  If the support at $3.15 is taken out, that would usher in weaker prices at the pump, which is exactly what I expect to happen.  Why?  Because we are in a "deflationary environment," and it is going to get a whole lot worse.  In other words, forget about inflation for the time being, worry about "DEFLATION" on all asset prices!



Why is This Man Smiling?

The man in the picture is Mike Duke, who just retired as CEO of Wal-Mart.  The reason for his smile is that his retirement package, to which he is now entitled, is a whopping $113 million, or about 6,182 times greater than the average 401(k) balance of a typical Wal-Mart worker.  To say the least, Mike Duke will not be your typical Wal-Mart shopper this holiday season.

No "Bears" to be Found

Executive Order #6102

President Franklin Roosevelt signed Executive Order #6102 requiring all gold to be handed over to the government.  The government gave everyone approximately one month from April 3, 1933 to May 1, 1933 to return all gold coins, gold bullion and gold certificates to the Federal Reserve in exchange for $20.67 per ounce.  Failure to do this was punishable by a $10,000 fine, which is equivalent to over $150,000 in today's dollars and/or up to ten years in prison.  Wow!  Could it happen again?  This, of course, is a rhetorical question, and you already know the answer.

Medicaid Consequences of Obamacare

If you have ever enrolled in Medicaid or are contemplating signing up for it, please read on.  “The current law will result in your house and other financial assets being seized to pay all Medicaid-incurred expenses if and when you die.  Sorry, but that is the current law.  Therefore, make sure you spend and/or give away all equity you have to the limit of your ability if you are currently on Medicaid or have ever used this program.  Now, if you have Medicaid or ever have used it, the reverse mortgage strategy makes perfect financial sense, especially for older Americans.”  Why?  You definitely want to draw down the size of those financial assets to make sure Obamacare (federal government) cannot seize those assets upon your death.  In other words, there really is no such thing as a free lunch.

What Happens When the $INDU Reaches Point E, or 16,000 +/- 200?

It's All About Wall Street, Not Main Street!

 I have been posting for quite sometime about the true intent of quantitative easing (QE) by the FED was to benefit Wall Street and not Main Street.  Well, in today's Wall Street Journal, a former Fed official, Andrew Huszar had this to say: "I can only say: I'm sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed's first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I've come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time." 

Wow.  What a confession!  But, wait, he goes on to say: "It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash."

And, the impact to date of all this QE to the tune of the Fed's $4 trillion investment.  Well, the Fed's ROI has been to increase GDP by a mere 0.25%, or $40 billion.  But, the stock prices of those Wall Street banks have seen their stock prices more than "triple" since March 2009.  These institutions are the so-called "Too-Big-Too-Fail" money center banks.  These banks, which are only .2% of all the banks in the U.S., control in excess of 70% of all U.S. Bank assets.  To say the least, the Fed has accomplished its mission of enhancing the wealth of Wall Street Banks at the direct expense of Main Street. 

$INDU Heading Back Down to its 50-Day EMA

Twitter (TWTR)

Twitter just opened-up 75% from its IPO price, which beats Facebook on its opening day.  As of now, Facebook (FB) has a "market cap" of $117 billion; and Twitter (TWTR) has a current "market cap" of around $30 billion.  Can anyone say "irrational exuberance?"  But, then again, with the likes of Bernanke and soon to be Yellen in the "Quantitative Easing" driving seat, the current market believes that it's rational exuberance. 

Gold Continues to Trade Within a Stage 4 Selling Phase

Affordable Care Act (Obamacare) Includes Incentives for Individuals to Work Less and Earn Less Money

Under the Affordable Care Act (ACA), if your 2014 income is between 138% and 400% of the "Federal Poverty Level" for your household size, you can purchase health insurance on a state-run exchange and receive a federal tax subsidy to offset all or part of your premium.  "Because of the manner in which ACA defines who gets subsidies and who doesn’t, there is a huge “cliff effect” at 400% of the federal poverty line (FPL).  If you make a penny more, you won’t receive health care subsidies. If you make a penny less, you could receive thousands in subsidies.  Therefore, what is the result?  Rational people who are right around the 400% FPL threshold will choose to work less in order to increase their income after paying for health insurance."

As an example, in California, a couple earning $64,000 (412% of the FPL) a year would not qualify for health care subsidies.  A bronze plan for them through Kaiser would cost them about $1,300 each month, or $15,600 a year.  But, if that same family earned just $2,000 less, or $62,000 (399% of FPL) it would qualify for over $14,000 in annual health care subsidies, dropping their premiums for that same Kaiser plan to less than $100 per month.  Therefore, the after-insurance income for the couple earning $64,000 is $48,400.  The after-insurance income for the couple making $62,000, which is just under the 400% FPL threshold, is $60,800. I don't know about you, but $60,800 in spendable income is better than $48,400! 

Why is this knowledge relevant to your financial well being?  Because it makes no sense for a couple on the FPL bubble to work harder to earn a little extra money.  In other words, the ACA would severely punish them for their desire to increase their income, which translates into less GDP growth.

The Henry J. Kaiser Family Foundation has a great Affordable Care Act subsidy calculator. Click here for a direct link to the site.

Well, You Can't Win Them All!

What Will it Cost You in the Obamacare Exchanges?

Total U.S. Debt Soars Over $17 Trillion

I don't know what all the fuss was about, right?  Hey, another trillion here and there, and soon we will be talking about some real serious debt.  But, in the mean time, our debt level is just barely over $17 trillion.  Enjoy your weekend!  (The above Table III-C was taken from the Daily Treasury Statement.) 

Chinese Agency Downgrades US Credit Rating

Dagong lowered its ratings for U.S. credit from A to A-, maintaining a negative outlook, the agency said in a statement.  Dagong is far less prominent than its Western competitors including Moody's, Fitch, and Standard and Poor's.  On Tuesday, Fitch issued a "warning," not a down grade to the U.S. credit status if the debt crisis was not resolved.  Of course, the debt crisis has not been resolved, simply put off until February.  Those two agencies, Dagong and Fitch, are foreign rating agencies.  Fitch is a French concern.  I find it very interesting that the two rating agencies that have spoken out about the credit worthiness of the U.S. are foreign entities.  I guess Moody's and Standard and Poor's were too afraid of any negative consequences from our government if they came out with a so-called negative warning. 

Does anyone really believe that at a debt level of $17 trillion plus that our country can continue to go down this path of ever expanding levels of debt, or, for that matter, kick the proverbial "debt can" down the road forever without a resolution?  

American Adults are Dumber than Average

The results are from a study called the "Program for the International Assessment of Adult Competencies,"  and it tested 166,000 people aged 16 to 65 in more than 20 countries.  The study found that in math, reading, and problem solving, American adults scored below the international average.  The results should not be a surprise, since America’s school kids have not measured well compared with international peers. Now, we know that adults don’t either. 

Moody's Offers Different View on Debt Limit

In a memo being circulated on Capitol Hill today, Wednesday, October, 9,  Moody’s Investors Service says that the U.S. Treasury Department is likely to continue paying interest on the government’s debt even if Congress fails to lift the limit on borrowing next week, preserving the nation’s sterling AAA credit rating.  At least someone has read the 14th Amendment of the U.S. Constitution.  I would appreciate it if not only the Administration but Congress pick-up a copy of the U.S. Constitution and read it.  I am sure that there is at least one copy someway to found in Washington, D.C.

Social Security Warns Benefits Could Get Cut

The Social Security Administration has begun warning the public it cannot guarantee full benefit payments if the debt ceiling isn’t increased.  (But the government can pay $47,174 for a mechanical bull.)  The agency made the following statement: “Unlike a federal shutdown which has no impact on the payment of Social Security benefits, failure to raise the debt ceiling puts Social Security benefits at risk.”  Bull!  Our government takes in $250 billion a month, or $3 trillion in a year.  In other words, it has sufficient funds to not only pay its social security obligations but the interest on the debt, medicare & medicaid, veteran's benefits, and defense.  Such a statement being made by the Social Security Administration is nothing but a "Scare Tactic," which is shameful. 

No Bull Here!

On Monday, the U.S. Army contracted to buy a mechanical bull.  The $47,174 contract was awarded on October 7 to Mechanical Bull Sales Inc. of State College, PA.  According to the General Services Administration (GSA) listing, the National Guard of Utah made the request for a “bull which needs to be durable and low maintenance” for its recruiting endeavors.  The National Guard of Utah stated that its old mechanical bull is beyond repair.

He Was Right in 2006 but Not in 2013

The U.S. Treasury takes in approximately $250 billion a month, which is 10 times what the monthly Treasury interest payments are on our debt. The United States will not default on its debt. The 14th Amendment (Sections 4 and 5) of the U.S. Constitution spells out that, as a nation, we must pay off our Treasury debts (interest) first, before we pay anything else.  So, we not only have sufficient revenue coming into the Treasury to pay the interest due but the 14th Amendment, which spells out what must be paid first. 

What to Know if You Opt Out of Buying Health Insurance Under Obamacare

 If one opts out of getting health insurance, one will have to pay a penalty, or I like to refer to it as a tax!  The penalties are not very high to start.  In 2014, the fine to remain uninsured is $95 per person (up to a family maximum of $285, or 1 percent of family income, whichever is greater).  However, the penalty will increase significantly in the next two years, with the tax running as much as $695 per person by 2016.  The family maximum would be as high as $2,085, or 2.5 % of family income, whichever is greater.

One can calculate how much your health insurance premium would cost by using the Kaiser Family Foundation Subsidy Calculator, and then you can compare the tax you would be assessed for having no insurance.