Bear Time, My Fellow Investors?

Preliminary GDP Surges 4% for the Second Quarter 2014

 

Four percent growth in GDP is wonderful news.  But, wait a minute!  Shouldn't we be also looking at the internals of the data and not just the headlines?  Yes, of course, but then again who wants to be depressed with the truth?  I know, go ahead and call me "Mr. Kill Joy!"

Now for the truth, which is always in the details.  Over the past year, GDP rose by $675 billion.  However, 52%, or $351 billion, was due to nothing else but increase inventory stuffing at businesses in anticipation that it will be sold.  (See, if you increase the stock of inventory, GDP automatically rises.) Well, good luck with that business mindset. I don't see that the consumer is financially able to take all the inventory off the shelves.

Price of Electricity Climbs to All-Time Record

Thank you, EPA.  For the first time ever, the average price for a KWH of electricity in the United States has broken through the 14-cent mark, climbing to a record 14.3 cents in June 2014, according to data released by the Bureau of Labor Statistics (BLS).  The previous high was 13.7 cents per KWH. (See the following graph.)

Do You Know the Difference Between the "West Bank and the Gaza Strip?"

A very succinct article describing the differences and similarities between the political factions of the "West Bank and Gaza" can be read at the International Business Times.

Delinquent Non-Mortgage Debt in America

According to a recent study by the Urban Institute, approximately 77 million Americans, or 35% of adults with a credit file, have a report of debt in collections.  In other words, every third person you pass on the street is going to have debt in collections.  Debt in collections involves a non-mortgage bill, such as a credit card balance, medical or utility bill that is more than 180 days past due and has been given to a collection agency. (In regard to the collection industry, it now employs approximately 140,000 workers and recover about $50 billion each year.)

America's Lost Decade of Wealth!

According to a new study by the Russell Sage Foundation, the inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36% decline. What the heck has happen to our nation? I, for one, no longer know it. I simply know its name.

GM Announces Another 718,000 Recalls

So what else is new?  Another week and another recall by GM.  Well, to be honest, it has been three weeks since the last recall, not one week.  Of this batch of the 717,950 cars recalled, all were new models built in 2010 and later, such as  Camaro, Equinox, Caprice, Regal.  This brings the grand total of recalls year to date to a 29,200,000 around the globe, which is well over three time the total number of cars sold in the past three years.  My thought is that we should have just left GM stay in bankruptcy and go through a reorganization without a government bailout.

Was Flight MH-17 Diverted Over Restricted Airspace?

Recent MH-17 flight paths, as tracked by Flightaware, show that while all ten most recent paths pass safely well south of the Donetsk region, and cross the zone above the Sea of Azov, it was only today's tragic flight that passed straight overhead Donetsk. (See the following flight paths.)  Therefore, according to Zero Hedge, "the key questions one should ask before casting blame, is why did the pilot divert from his usual flight plan, why did he fly above restricted airspace, and just what, if any instructions, did Kiev air control give the pilot in the minutes before the tragic explosion?"

The Federal Reserve is not Your Friend!

Since 2009, the Federal Reserve's QE data show that it has done little, if anything, to assist Main Street (You) but instead has bailed out banks (Wall Street), enriched the wealthy, and increased income inequality.

Sin City is Screwed

"Lake Mead, the man-made reservoir that supplies 90% of the water for 2 million people in the Las Vegas area, has been reduced by drought to the lowest level since it was filled in 1937, according to the federal government. This shortfall is not only endangering the water supplies to the residents but to the 43 million annual visitors to the Las Vegas area." 

If you live there, you might want to consider selling your home, if you can, and leave.

What is the Worst State in America to Live in According to its Residents?

According to Gallup, Illinois is the winner, or should I say loser.  Why anyone would want to live in this state is beyond me, especially with all its financial problems and excessive taxation.

Jobs Jump by 288,000 in June, U.S. Unemployment Rate at 6.1%

CNN had the following headline: "For 288,000 Individuals: You're Hired! Jobs Recovery Seems to Hit its Stride!"  Fox Business: "Dow Strikes 17,000 for the First Time in History After the Unemployment Rate Fell to its Lowest Level in Nearly Six Years!"  Wow!  Wonderful news.  It is only wonderful if you simply focus on the headlines and not the "internals" of the report.

The media simply does not do its research behind these numbers provided by the Bureau of Labor and Statistics (BLS). They simply accept whatever is given to them as facts.  Speaking of facts, let's analyze these so-called wonderful employment numbers. First, if one takes the 12-month change in total employment added and subtract the 12-month change in the addition to the working-age population, your net gain in jobs added is 1,000!  Yes, our economy only created 1,000 jobs over the past 12 months.  Second, if you analyze the BLS's Birth/Death Model, which is a statistical adjustment, not actual number, used by the BLS, this measure added 743,000 so called jobs over the last 12 months.  However, the BLS counts these Birth/Death jobs as real.  Third, the BLS reports that the number of full-time jobs in June tumbled by 523,000, while part-time jobs soared by 799,000!  Fourth, the labor force participation rate remained flat at 62.8%, which is the lowest percentage since 1978.  (The labor force participation rate is the percentage of actual employment plus those looking for employment to the pool of civilian working age population.)

Now, you have the real facts behind today's employment numbers, which you will not get from the media.

Eleven (11) Things You Probably Didn’t Know You Could Buy with Food Stamps

Currently, approximately 48 million individuals are on food stamps. (And this 48 million number is after six years of so called economic growth.) To put this in perspective, 28 million individuals were on food stamps back in 2008.  According to my calculations, that would be a 71% increase.  From a cost perspective, its cost the taxpayers approximately $110 billion a year to fund this program.  Now, don't get me wrong.  I know there are families in true need.  But, I also know that there are major abuses within this program, which need to be closed immediately.  

According to the Daily Caller, the following eleven things are what one could and have purchased with food stamps (EBT cards):

1. Fast Food: Taco Bell is one of many fast food restaurants that accept EBT cards. Guacamole is extra? Who cares? It’s on the taxpayer. 
2. Bail: Convicted felons – like drug dealer Kimball Clark – have reportedly used their EBT as bail money. Clark reportedly instructed someone to go to an ATM to withdraw money from his EBT for bail. Because it’s difficult to trace ATM abuse, many speculate this problem is more widespread and not just found in isolated incidents. 
3. Lingerie: Kiss My Lingerie, an adult store in Gonzales, Louisiana, accepts EBT. Other adult stores have also been known to accept welfare transactions. In this case, officials said the store doesn’t violate the rules for EBT because of discrepancies in the law. 
4. KFC: Well, chicken is a protein, and protein is good for you, right? KFC is another well-known fast food chain that accepts EBT. 
5. Shoes: While Payless Shoe Source is known for their BOGO sales, they’re certainly not the cheapest place to buy shoes. Despite the prices and functionality, they also accept EBT. 
6. Strip clubs: Last year, the New York Post reported that FOIA requests revealed welfare recipients were regularly making EBT withdrawals at the ATMs near and inside infamous porn shops, liquor stores, lounges and hookah parlors. Technically, it also doesn’t break the law because of the “cash assistance program.” 
7. Lobster: There have been multiple cases of this. As long as it’s not tobacco or alcohol, you’re golden. 
8. Starbucks: While corporate stores don’t accept EBT, any Starbucks in a Target or grocery chain is considered a grocery item. So $7.00 for a mocha cookie crumble frappuccino and pumpkin loaf? Go. 
9. Cold hard cash: Some people are in the business of selling their EBT benefits for cash. Craigslist has been a great conduit for these “creative entrepreneurs.” 
10. K-cups: A lot of people don’t buy coffee in this form because it’s too expensive, but it’s not off limits in the world of welfare. 
11. Cupcakes/Gourmet cakes: It’s considered food, no matter the price. Hello, non-essential $45 cake.