With record spending, record deficits, with higher taxes for the "wealthy" and business, with the bailouts and handouts, where will we be in five years?
Where will be be with inflation? 3% or 10%
With unemployment? 3% or 10%
With the cost of gasoline? $1.50 or $4.50?
With medical expenses? More affordable or less so?
The Dow Jones Industrial Average? Still less than 8,000, or a big recovery to over 12,000?
Here are my predictions:
Inflation - 2008 averaged 3.85% for the year. There has been a dip in the consumer price index into negative values over the last several months due to the recession. This dip is likely to extend through the middle 2009. However, by 2014 there is a good chance CPI will exceed 8% to 10%. Sidebar: I visited an "investment advisor" today (a current hobby) who asked several questions typical of the diagnostic questions investment advisors ask. One question he posed, as serious as could be: "What do you think the rate of inflation will be?" I answered: "There are Phd's in economics earning $200,000 a year working for Bank of America who can't answer that question" as I was thinking to myself "YOU'RE the expert - why are you asking ME that question - how many sows can dance on the head of a pin?" Then I asked him: "What do YOU think the rate of inflation will be?" He answered, "Let's assume 3%." I'm guessing the lower we guess the rate of inflation, the better the performance of his recommended investment products will seem. Since last years' rate of inflation ended at 3.85%, I'm wondering if he is an advisor to be trusted.
Unemployment- The nationwide unemployment rate is now at 7.6%: many states lower; industrial states higher. The rate will increase to between 9 and 10% by the end of this year, peak in 2010 at around 12% and settle to 7 to 8% by 2014.
Cost of gasoline - Now hovering around $1.90 for regular, the price will gradually rise to $2.50 by the end of the year, and reach between $3.00 and $4.00 a gallon by 2014 due to additional taxes and declining value of the dollar. Alternative energy sources and supplies will not significantly effect the market until beyond five years. Even then, their prices will not necessarily be cheaper. In fact, if alternative sources were cheaper, the market place would have already made these alternatives available to us.
Medical expenses - Due to an aging demographic, the simple "supply/demand" equation for health care services for the elderly, medical costs will rise significantly over the next five years, likely 30% to 40% higher by 2014. No government subsidized health insurance program will be able to keep pace with rising costs. Any such program will lower health care quality at great taxpayer expense.
The DOW - Experts suggest that the stock markets typically recover 6 to 12 months ahead of the overall economy. The DOW is now hovering around 7,200. By next year it will still be below 8,500. By 2014 the market may again reach 12,000. Much of this gain will be a result of inflation.
I would like to hear your prognistications to see how they compare with my guesses.
The poll, below, asks your opinion about inflation...
This next survey question allows you to provide more than one answer...
Thursday, February 26, 2009
Sunday, February 22, 2009
Gates of Vienna: Geert Wilders’ Speech in Rome
Geert Wilders, a member of the Dutch Parliament, gave a speech in Rome a few days ago about the nature of Islam and the epidemic of suppression of free speech growing in Europe. Gates of Vienna: Geert Wilders’ Speech in Rome
This is one of the clearest and most succinct expressions of the dangers faced by Europe and the US from the new Islamic revolution.
This is one of the clearest and most succinct expressions of the dangers faced by Europe and the US from the new Islamic revolution.
Thursday, February 19, 2009
Israels' Livni: “We must be an alternative of hope and go into opposition”
OMG. Livni is parroting the rhetoric of Obama. "We must be an alternative of hope..." she pleads. With Obama, we now have the hope of socialism; the hope of entitlement for those who don't want to be responsible for their own actions; the hope of eliminating the intelligence tools we need to keep our nation safe, and the hope of being overrun by welfare-sucking illegal aliens who threaten both our economy and our security.
What hope does Livni promise?
Hope for negotiating with a terrorist government that proclaims its aversion to treaties and which proclaims in its charter its mission to eliminate Israel and Jews? Hope that the jihadi Islamists on its border will miraculously give up their 1,400 years of Quranic doctrine and become peace loving neighbors of their "beloved" Jewish compatriots? That leads not to "hope" but to the same old same old.
This article declares that "Miss Livni’s decision leaves Mr Netanyahu at the helm of hard line government which would, at best, face paralysis over progress towards a peace settlement." The author of the article stupidly and naively assumes that a "peace settlement" with Hamas and other neighboring Islamists is the way to go. One can only hope that a peace settlement that gives away more of Israel's real estate in exchange for more deceit and takiya will be forever paralyzed.
Winning battles and winning wars and completing military tasks to eliminate the ongoing, cruel and pervasive threats is the way to go. Livni is just another two ton elephant tied to the stake of history who believes Israels precarious and tortured existence cannot be improved. That is the opposite of "an alternative of hope." That is the status quo. "Hope" is more than that.
Israels only future does not have to be under perpetual threat from its Islamo fascist neighbors. Netanyahu and his majority coalition offer a much better hope that believes Israel is worthy and capable of eliminating its threats.
What hope does Livni promise?
Hope for negotiating with a terrorist government that proclaims its aversion to treaties and which proclaims in its charter its mission to eliminate Israel and Jews? Hope that the jihadi Islamists on its border will miraculously give up their 1,400 years of Quranic doctrine and become peace loving neighbors of their "beloved" Jewish compatriots? That leads not to "hope" but to the same old same old.
This article declares that "Miss Livni’s decision leaves Mr Netanyahu at the helm of hard line government which would, at best, face paralysis over progress towards a peace settlement." The author of the article stupidly and naively assumes that a "peace settlement" with Hamas and other neighboring Islamists is the way to go. One can only hope that a peace settlement that gives away more of Israel's real estate in exchange for more deceit and takiya will be forever paralyzed.
Winning battles and winning wars and completing military tasks to eliminate the ongoing, cruel and pervasive threats is the way to go. Livni is just another two ton elephant tied to the stake of history who believes Israels precarious and tortured existence cannot be improved. That is the opposite of "an alternative of hope." That is the status quo. "Hope" is more than that.
Israels only future does not have to be under perpetual threat from its Islamo fascist neighbors. Netanyahu and his majority coalition offer a much better hope that believes Israel is worthy and capable of eliminating its threats.
Sunday, February 15, 2009
Gee - do you really think God might judge nations and people afterall?
Remember after 9-11 how certain right wing religious commentators and several Immans representing the Muslim community suggested that the terrorist massacre in New Yonk and the Pentagon just might be Gods' (or Allah's) judgement on a corrupt nation? Remember how the "reasonable" among us criticized and ridiculed all who would dare suggest such a thing? That might be the only time that Christians and Muslims agreed on anything.
Does God really judge and mete out justice to nations and peoples who turn their backs by not honoring at least most of his standards (morality) He established? Or are we to believe that is all an outdated fable?
Are there consequences to selfish, careless, lazy, or immoral behavior of either individuals or societies? Islamic religion certainly believes this. Reviewing some of the central tenants of Islam, such as the "honor killings" depicted here should provide a wakeup call to the "clueless about the real Islam" among us.
Islam is a hyper-moral religion that interprets God's judgement not as patient and loving, but as vengeful and immediate. Its principle leaders of our day, as in the years of its founding, believe Allah demands believers to mete out immediate "justice" according to their Koranic requirements (Sharia law). Sharia law is the system of government that promulgated 9-11 and that instigates hundreds of terrorist acts every month around the planet - justice on behalf of Allah. That is how Islam sees it - Allahs justice against an immoral and corrupt society.
I believe the God of Israel and of Christianity is a different God from Allah. In His justice, He is loving, patient and kind. But He is just. He is just in a different manner from Allah. Allah, who more closely matches the stereotypical Satan, the devil, the Son of Perdition, the rebelious one who forces his will on his subjects, apparently missed the classes on "love", "patience", and "free will."
If there is such a thing as "immorality" and "sin" and "corruption", God needs to be just, eventually, in cleaning things up in His creation. He lets such behaviors prevail for awhile - sometimes for a few days, years, or even decades or centuries, depending on the magnitude and seriousness of the behavior. But He does prevail with His justice.
The population growth of those who practice Islam in Europe is mushrooming - greatly outpacing the rate of population growth of all other religions combined. It is estimated that in several European countries, Muslims will constitute a majority within the next decade or two. When Islam is the majority religion, Sharia law is the form of government of all. Forget about a "loving, patient, and kind" God at that point. Forget about "free will" and liberty. Things will get cleaned up in a hurry in a most unpleasant manner.
It is wierdly uncanny that the liberals, the "tolerant, open-minded" ones in this and other nations, are the ones who defend Islam the most. They are the ones who deny its recent resurgence of radicalization. Their political philosphy is the one that is enabling Islam, the relgion of intolerance, to gain a foothold and, ultimately, supremacy in western nations. It is wierdly uncanny that the liberals are the ones who's tolerant, inclusionary, "embrace diversity" cultural diversity-loving political philosophy will be most ripped to shreads by the intolerance of Islam and Sharia law.
I have to ask myself where is God in all this? Is Islam really a means by which He will be meting out His justice to rectify our corruption, greed, and denial? Have we morally declined to the extreme point where God feels the need to apply the stronger medicine of "third party" Islamic intolerance on our behaviors? This nations' drift toward the embrace of Islam, most notably via the emerging policies of the Obama administration, strikes me as insanely supernatural - like we are helplessly being sucked into an inescapable vortex.
I find myself increasingly coming down on the side of believing that God includes in his judgement "toolbox" the actions of the unGodly against us. Whether He merely "allows" such things to happen or "directs" them to happen is a useless distinction. The fact is, they happen.
We, as a nation, are traveling ever distant from being in awe and reverance of God. That distance, I fear, will lead us through a difficult and painful vortex of separation before His existence, love, and laws become real to us once again.
Does God really judge and mete out justice to nations and peoples who turn their backs by not honoring at least most of his standards (morality) He established? Or are we to believe that is all an outdated fable?
Are there consequences to selfish, careless, lazy, or immoral behavior of either individuals or societies? Islamic religion certainly believes this. Reviewing some of the central tenants of Islam, such as the "honor killings" depicted here should provide a wakeup call to the "clueless about the real Islam" among us.
Islam is a hyper-moral religion that interprets God's judgement not as patient and loving, but as vengeful and immediate. Its principle leaders of our day, as in the years of its founding, believe Allah demands believers to mete out immediate "justice" according to their Koranic requirements (Sharia law). Sharia law is the system of government that promulgated 9-11 and that instigates hundreds of terrorist acts every month around the planet - justice on behalf of Allah. That is how Islam sees it - Allahs justice against an immoral and corrupt society.
I believe the God of Israel and of Christianity is a different God from Allah. In His justice, He is loving, patient and kind. But He is just. He is just in a different manner from Allah. Allah, who more closely matches the stereotypical Satan, the devil, the Son of Perdition, the rebelious one who forces his will on his subjects, apparently missed the classes on "love", "patience", and "free will."
If there is such a thing as "immorality" and "sin" and "corruption", God needs to be just, eventually, in cleaning things up in His creation. He lets such behaviors prevail for awhile - sometimes for a few days, years, or even decades or centuries, depending on the magnitude and seriousness of the behavior. But He does prevail with His justice.
The population growth of those who practice Islam in Europe is mushrooming - greatly outpacing the rate of population growth of all other religions combined. It is estimated that in several European countries, Muslims will constitute a majority within the next decade or two. When Islam is the majority religion, Sharia law is the form of government of all. Forget about a "loving, patient, and kind" God at that point. Forget about "free will" and liberty. Things will get cleaned up in a hurry in a most unpleasant manner.
It is wierdly uncanny that the liberals, the "tolerant, open-minded" ones in this and other nations, are the ones who defend Islam the most. They are the ones who deny its recent resurgence of radicalization. Their political philosphy is the one that is enabling Islam, the relgion of intolerance, to gain a foothold and, ultimately, supremacy in western nations. It is wierdly uncanny that the liberals are the ones who's tolerant, inclusionary, "embrace diversity" cultural diversity-loving political philosophy will be most ripped to shreads by the intolerance of Islam and Sharia law.
I have to ask myself where is God in all this? Is Islam really a means by which He will be meting out His justice to rectify our corruption, greed, and denial? Have we morally declined to the extreme point where God feels the need to apply the stronger medicine of "third party" Islamic intolerance on our behaviors? This nations' drift toward the embrace of Islam, most notably via the emerging policies of the Obama administration, strikes me as insanely supernatural - like we are helplessly being sucked into an inescapable vortex.
I find myself increasingly coming down on the side of believing that God includes in his judgement "toolbox" the actions of the unGodly against us. Whether He merely "allows" such things to happen or "directs" them to happen is a useless distinction. The fact is, they happen.
We, as a nation, are traveling ever distant from being in awe and reverance of God. That distance, I fear, will lead us through a difficult and painful vortex of separation before His existence, love, and laws become real to us once again.
Sunday, February 08, 2009
Do Financial Advisers Challenge Your Sanity?
I would like to take a moment to challenge the sanity of financial advisers or at least their logical inconsistencies.
Four things I hear incessantly from most if not all financial advisers...
- Buy and hold
- Stay invested in equities
- Past performance is no guarantee of future returns
- It is a mistake to believe that "things are different this time".
I was recently "fired" as a potential client by an advisor selling Variable Annuities because I challenged him on the viability of these cherished commission-generating anachronisms in a crumbling equities market.
Buy and hold may be good advice for folks in their thirties and forties. But not so much for folks in their sixties and seventies. History has shown it takes an average of 5 to 10 years for investors to recover to their former position after a 30 to 40% market decline. Why would an old fart relying on his retirement stash want to gamble away his survival kit in a down market, believing that "history shows the market will recover." The modified old adage is "you can't take posthumous gains with you."
Stay invested in equities. This is a good one. The advisor was talking this one up while trying to convince me that a Variable Annuity requiring NOT LESS THAN 35% of the invested funds to be invested in EQUITIES was the way to go - in this market!!!! You've GOT to be kidding. I reminded him that even BONDS declined in value along with stocks this time. The old balanced portfolio trick relying on bonds going up when stocks go down didn't even work this time. They all tanked. The advice to keep a major chunk of cash in equities is even worse!
The latest pitch designed to bolster the courage of burned investors demonstrates market recoveries after every down market. One example compares post-decline recovery between an account fully invested in equities, and an account fully moved to a fixed 5% investment after initial loss in equities. "See how much more equities recover in 5 years?" the advisor grins with awe. "See how foolish you would be to get out of the equities market?" he warns. All the while I'm thinking, "see how foolish it would be for sixty-year-old retirees to stay in equities when the market is still declining, when no one yet knows how deep the recession/depression will get, and they might not live to see a market recovery?"
Past performance is no guarantee of future returns. This is a required small print warning at the bottom of every investment product ad and salesman's' flyer. Yet every ad and every pitch focuses on past performance. As described above, past performance is illustrated to convince investors that "markets always recover." I don't believe that anything is "always", especially markets. Especially the markets that are showing so many "firsts", so many "this has never happened before's", so many "these companies are too big to fails."
And the clincher coming from one advisor: "You are a fool to believe that "things are different this time", strongly inferring that nothing is new, that recovery ALWAYS occurs like clockwork. Please refer to "these companies are too big to fail", above.
The fool is the one who gives away not only his retirement funds, but his gift of logic and common sense and all the wisdom he has acquired over the past 60 years to one whose full time objective is to get 6 to 10% commission for providing canned, anachronistic, and illogical advice.
There are opportunities in this market. As a young but wise administrative assistant consistently warned me as I left the building to go to meetings: "Be careful out there - there's lions and tigers... and bears...and wolves."
Four things I hear incessantly from most if not all financial advisers...
- Buy and hold
- Stay invested in equities
- Past performance is no guarantee of future returns
- It is a mistake to believe that "things are different this time".
I was recently "fired" as a potential client by an advisor selling Variable Annuities because I challenged him on the viability of these cherished commission-generating anachronisms in a crumbling equities market.
Buy and hold may be good advice for folks in their thirties and forties. But not so much for folks in their sixties and seventies. History has shown it takes an average of 5 to 10 years for investors to recover to their former position after a 30 to 40% market decline. Why would an old fart relying on his retirement stash want to gamble away his survival kit in a down market, believing that "history shows the market will recover." The modified old adage is "you can't take posthumous gains with you."
Stay invested in equities. This is a good one. The advisor was talking this one up while trying to convince me that a Variable Annuity requiring NOT LESS THAN 35% of the invested funds to be invested in EQUITIES was the way to go - in this market!!!! You've GOT to be kidding. I reminded him that even BONDS declined in value along with stocks this time. The old balanced portfolio trick relying on bonds going up when stocks go down didn't even work this time. They all tanked. The advice to keep a major chunk of cash in equities is even worse!
The latest pitch designed to bolster the courage of burned investors demonstrates market recoveries after every down market. One example compares post-decline recovery between an account fully invested in equities, and an account fully moved to a fixed 5% investment after initial loss in equities. "See how much more equities recover in 5 years?" the advisor grins with awe. "See how foolish you would be to get out of the equities market?" he warns. All the while I'm thinking, "see how foolish it would be for sixty-year-old retirees to stay in equities when the market is still declining, when no one yet knows how deep the recession/depression will get, and they might not live to see a market recovery?"
Past performance is no guarantee of future returns. This is a required small print warning at the bottom of every investment product ad and salesman's' flyer. Yet every ad and every pitch focuses on past performance. As described above, past performance is illustrated to convince investors that "markets always recover." I don't believe that anything is "always", especially markets. Especially the markets that are showing so many "firsts", so many "this has never happened before's", so many "these companies are too big to fails."
And the clincher coming from one advisor: "You are a fool to believe that "things are different this time", strongly inferring that nothing is new, that recovery ALWAYS occurs like clockwork. Please refer to "these companies are too big to fail", above.
The fool is the one who gives away not only his retirement funds, but his gift of logic and common sense and all the wisdom he has acquired over the past 60 years to one whose full time objective is to get 6 to 10% commission for providing canned, anachronistic, and illogical advice.
There are opportunities in this market. As a young but wise administrative assistant consistently warned me as I left the building to go to meetings: "Be careful out there - there's lions and tigers... and bears...and wolves."
Wednesday, February 04, 2009
Wall Street: Greed is the Motivating Factor
Wall Street is whining already. But I have to defend Obama on this one. Companies who participate in the bailout (the bailout wasn't forced on them - they begged for it) should not allow their leaders the accustomed compensation.
But, Oppenheimer & Co. analyst Meredith Whitney argues on behalf of rip-off salaries, “No one goes into Wall Street to save the world,” Whitney said today in an interview on Bloomberg Television. “Compensation is the motivating factor.”
Yeah, that's right, Whitney, compensation = greed IS the motivating factor.
The salary caps Obama is talking about are a mere $500,000 per year. Oh, poor deprived money sucking corporate America, you will be deprived of your $2,000,000 salary plus benefits for your crappy performance. Gosh, you didn't "save the world." You not only didn't save the world, you screwed up the world while screwing up your company. And you want to be compensated how much? And obviously most of the analysts on Wall Street are in bed with their greed-hound buddies.
Jealous at their wealth? No, just pissed at the irony and outrageousness of their unbridled greed.
More appropriate would be for remaining corporate execs whose firms receive the government dole to give back last years compensation to the federal government AND agree to limit next years' to $100,000 for every 10 per cent of the taxpayer dole that isn't paid back. If nothing is paid back, they get nothing. If 10% is paid back, they get $100,000, of 60% is paid back, they get $600,000, etc.
I like it.
But, Oppenheimer & Co. analyst Meredith Whitney argues on behalf of rip-off salaries, “No one goes into Wall Street to save the world,” Whitney said today in an interview on Bloomberg Television. “Compensation is the motivating factor.”
Yeah, that's right, Whitney, compensation = greed IS the motivating factor.
The salary caps Obama is talking about are a mere $500,000 per year. Oh, poor deprived money sucking corporate America, you will be deprived of your $2,000,000 salary plus benefits for your crappy performance. Gosh, you didn't "save the world." You not only didn't save the world, you screwed up the world while screwing up your company. And you want to be compensated how much? And obviously most of the analysts on Wall Street are in bed with their greed-hound buddies.
Jealous at their wealth? No, just pissed at the irony and outrageousness of their unbridled greed.
More appropriate would be for remaining corporate execs whose firms receive the government dole to give back last years compensation to the federal government AND agree to limit next years' to $100,000 for every 10 per cent of the taxpayer dole that isn't paid back. If nothing is paid back, they get nothing. If 10% is paid back, they get $100,000, of 60% is paid back, they get $600,000, etc.
I like it.
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