Turning Point?

Turning point? I don't know. However, the risk favors the bears. I'm short. Let's see what happens next year. Have a safe night. Happy New Year!

S&P 500

Christmas Eve Quote Of The Day

“It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”

-Thomas Sowell

Merry Christmas from Harry Reid!!!

According to the latest news, Harry Reid has the 60 votes needed to pass Obamacare. While the legislation itself is not available for reading to my knowledge, the Congressional Budget Office did report on it December 19. I parse that CBO report here, so we know what is about to happen to us.

The CBO does not make the accounting all that easy, despite its many tables of numbers. The number Democrats like to cite is that this plan will reduce the deficit by $132 billion over the ten years from 2010 to 2019.

Imagine that: more people insured and the deficit reduced. How do they do that? The short answer is over $1 trillion in Medicare cuts and tax increases. For the longer story, read on.

First, the ten-year cost of insuring 27 million more people is $871 billion. But that money is not evenly spread over the ten years. The CBO does not make this part totally clear; that cost comes mostly after 2015. In those later years (mostly after Obama is no longer president, even if elected to a second term), the cost per year is easily $165 billion. Call it over $6,000 per person insured per year.

As a sanity check on that number, my current high-deductible plan costs $4,000 to cover my family of four, or $1,000 per person covered. A "Cadillac" comprehensive plan might be more like $16,000 for a family of four, or $4,000 per person per year. So the federal government will spend over six times as much as my high-deductible plan, and 50% more than even a generous comprehensive one. So much for efficiency.

That is the gain part of the bill. Now for the pain. Below is the tally of spending cuts and taxes, all over the ten years of 2010-2019.

• "Spending changes" (e.g., Medicare cuts): $483 billion.
• Excise tax on high-premium plans: $149 billion.
• Savings from "other sources" (like penalties for being uninsured): $108 billion.
• Other "revenues": $264 billion.

Add up those numbers and you get $1,004 billion. Subtract that from the $871 billion gross cost and you get $132 billion in "deficit reduction" (with a $1 billion round-off error).

Let me repeat. You get "deficit reduction" by cutting Medicare and raising taxes by more than $1 trillion: Medicare and other program cuts of $483 billion, and an extra $521 billion in new taxes and fees.

The cuts include cuts across Medicare, Medicaid, and the Children's Health Insurance Program: $186 billion from permanent reductions in payment rates for fee-for-service, $118 billion for payment rate reductions based on bids submitted, and $43 billion from reducing payments to hospitals that serve low-income patients. In all, it's a $483-billion cut from Medicare, Medicaid and CHIP.

Can you imagine what the Democrats would say if a Republican proposed such a thing? You don't have to imagine. Here is what Senator Max Baucus, one of Obamacare's architects, said when President Bush proposed smaller cuts.

This administration ought to know that five years' worth of Medicare and Medicaid cuts totaling $200 billion are dead on arrival with me and with most of the Congress.

The "other revenues" include extra taxes on drugs, medical devices, and health insurance providers ($101 billion), and also a hospital insurance tax ($87 billion).

As in all predictions of revenues from tax changes, the CBO assumes no real change in behavior. If, for example, people with high-premium plans choose to not have such plans any more rather than pay the extra taxes, the predicted revenue will not show up. Raise your hand if you really think the federal government is going to raise over $500 billion in revenue with these new taxes and fees.

The "deficit reduction" comes in the earlier years: $111 billion of the $132 billion reduction comes in the first five years (2010-2014). That is because the taxes start early, but insuring the uninsured comes later, mostly after President Obama is long gone from office. By 2019, the "deficit reduction" will be only $16 billion, per the CBO. The overall deficit will be over $1 trillion by then, and the federal debt held by the public will be over $17 trillion.

In short, this legislation, even if you believe the CBO's numbers, does nothing to solve the debt crisis, despite President Obama's hyperbolic claims.

This plan will strengthen Medicare and extend the life of that program. And because it gets rid of the waste and inefficiencies in our health care system, this will be the largest deficit reduction plan in over a decade.

The CBO's own numbers indicate that this "largest deficit reduction" is within the round-off error of its estimates: just over 1% of the projected deficit in 2019.

So much for federal government spending and taxing. What about the states and the private sector? Here is what the CBO says.

... the legislation contains several intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). The total cost of those mandates to state, local and tribal governments and the private sector would greatly exceed the thresholds established in UMRA ...

Like what?

... the legislation would require individuals to obtain acceptable health insurance coverage...

The legislation also would penalize medium-sized and large employers that did not offer health insurance...

The legislation would impose a number of mandates, including requirements on issuers of health insurance, standards governing health information, and nutrition labeling requirements.

But at least no "public option," right?

[This legislation would replace] a 'public plan' that would be run by the Department of Health and Human Services with ‘multi-state' plans that would be offered under contract with the Office of Personnel Management ...

Are we sure that means no "public option"? Do multiple "multi-state" plans under OPM sound that much better than one federal plan under HHS? The devil is in the details, and this legislation is about 2,000 pages of such details.

And no "death panels" either, right?

The legislation also would establish an Independent Payment Advisory Board, which would be required, under certain circumstances, to recommend changes to the Medicare program to limit the rate of growth in that program's spending. Those recommendations would go into effect automatically unless blocked by subsequent legislative action.

I hope you are comforted. When that "advisory" board says no expensive cancer drug for you -- cheap pain pills only -- you can still hope that "subsequent legislative action" is taken to reverse that decision. That is to say that the only thing that prevents the "advisory board" from being a "death panel" is the hope that Congress will override it.

Could we please find a death panel to pull the plug on health care legislation?

Randall Hoven can be contacted at randall.hoven@gmail.com or via his web site, randallhoven.com

From www.americanthinker.com

Model Portfolio Update - 12/21/2009

The market is STILL trading in a range. I can see two scenarios playing out at the moment.

• 1) We drop hard in the next week and begin the next down leg of the bear market
• 2) We bust out of the top of the trading range and set new highs going into the new year in a blow off top.
  

I feel like I am leaning toward scenario #2. The dollar has rallied over the last two weeks and the market has stood firm and hasn't given up an inch. Stock market bears are MIA and with the dollar likely to take a breather over the next few weeks I believe we could see a good rally into the end of the year.

Because we could fall from here I am lightly positioned short. If we do rally from here I will greatly expand my short allocation; if we fall from here I will short into any bounces along the way. Here is a look at the portfolio right now:

http://apps.facebook.com/kaching/portfolio/516251517/holdings

Here is a list of potential shorts I have complied from various locations:

ED, CNP, X, CENX, CI, LUV, MRVL, AXP, CAL, CMS, CMCSA, D, DAL, DUK, LOW, MHP, PCG, PEG, XLU, XEL, UAUA, BA, USO, GE, DOW, FXB, NBG

So we wait. With only a small amount of my portfolio invested I can wait for awhile. I'll post another update when soemthing dramatically changes.

mmmm...I love government manipulation

2010 Master's Canceled! Winner Already Announced!

The bad thing about this joke is the fact that I wouldn't be surprised if it actually came true.

This leads me to a small observation I made yesterday. I was searching the comment section on one of my favorite websites, Slope of Hope, and thought one of the responses to a post was very well done. The creator of the website, Tim Knight, who I greatly admire, posted what he thought about government manipulation in the stock market:

"Doubting Manipulation's Efficacy - I was skeptical that the government could manipulate the markets, mainly because I figured if it was so easy, the collapse in 2008 wouldn't have happened in the first place. It seems that the government simply got caught with its pants down, but once they had the tools in place, they can make the market do whatever they want. Sad, but true, and important to recognize."

This statement seems perfectly logical, and it very well could be, but what caught my attention was a comment about this post made by tzzx that made a lot of sense.

"I disagree that the government got "caught with their pants down" in 2008. The 'crash' of 2008 went exactly as planned.

-Goldman and JPMorgan got rid of their rivals Bear Stearns and Lehman.
-Wall St, bankers effectively blackmailed the Congress into giving them Trillions of taxpayer dollars no strings attached with threats of systemic collapse if they didn't go along.
-The voter outrage delivered a landlslide for Obama and a fillibuster proof majority for the socialists (which is what the Billionaires like Soros and Buffet wanted).
-Oh, and the forced selling due to margin calls in 2008 allowed Goldman to buy stocks at fire sale prices from distressed hedgies right before this year's non-stop melt-up.
- Not to mention the Fed popped the Oil price bubble, which had been a major thorn in their side in 2007 and early 2008.

Just ask yourself who benefited immensely from the "crash" of 2008 and then ask yourself if you really think the powers that be got "caught with their pants down"?"

Think about it. Either way both Tim Knight and tzzx are admitting that they believe the government works to manipulate the stock market. I believe to disagree on that point would be foolish. I'll try to dig up some more information on these speculations sometime later in the week.

Quote of the day...

End of the fall semester is upon us and here is a few quotes that will cheer up anyone staying up all night memorizing formulas, doing 10 degree binomial options by hand, valuing currency swaps, and estimating volatility for the BSOPM all while drifting through the la-la land of modern financial academia. Where money is cheap and there's always an unlimited risk-free lender of last resort. Arbitrage opportunities are abundant and investors are risk averse utility-maximizing investors who have homogeneous expectations with no taxes or transactions costs. I imagine this place to be somehow a combination of these three images...






Anyways, here you go:

"The important thing is not to stop questioning. Curiosity has its own reason for existing."
- Albert Einstein

"Imagination is more important than knowledge. Knowledge is limited; imagination encircles the world."
- Albert Einstein

"Education is what remains after one has forgotten everything he learned in school."
- Albert Einstein

"It is not so very important for a person to learn facts. For that he does not really need a college. He can learn them from books. The value of an education in a liberal arts college is not the learning of many facts but the training of the mind to think something that cannot be learned from textbooks."
- Albert Einstein

"Never memorize something that you can look up."
- Albert Einstein

Historical S&P PE Ratio vs. Historical Inflation Adjusted S&P 500

This chart might be hard to read but it is very interesting. On the top is the S&P 500 (inflation adjusted) On the bottom is the PE ratio during this time. The green squares are the time period when the PE is under 10 and the red squares are time periods where the PE is above 20. Looking at the past cycles you would expect PE to fall to the 5-10 range

Quote of the day...

"The refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was probably the prime cause of the REVOLUTION."
-Benjamin Franklin

unfortunately "taxation without representation" rhymes and the rest is history (misleading history)....

AUDIT THE FED PASSES IN HOUSE OF REPRESENTIVES!!!

This is huge, we're short on time to expand but we will later.....

if you want more now check out Washington's blog

http://www.washingtonsblog.com/2009/12/fed-audit-provision-passes-house.html

(vote in our new poll on what could happen)

Just a funny thought....what does Bernie Madoff do in prison?

Sometimes I just wonder what it would like to be in prison. It would be horrible right? Men making moves toward you, either for a fight or homosexual activity or both. Just scary in my opinion.

So what happens to a billionaire when he goes to prison?

Can he buy a pass out of harms way?

Does he still eat the horrible meals, do the physical labor?

Does he work in the kitchen? Or does he work in the laundry department?

I imagine it looks something like this:


Has he been accepted by the penal community? What does Madoff REALLY do in prison?

HE GETS STONED!

Yes, apparently the hard life of incarceration isn't to bad for Bernie Madoff. He enjoys male companionship, delicious wraps, and his fair share of marijuana. Maybe we should all start a ponzi scheme right?


Yes....it's true, Bernie still lives the "high" life.


So while Mr. Madoff waste away in prison what is the economy doing? I'll leave you with one chart to make your own interpretation.

The U.S. Dollar to Stocks Ratio Breaking Down?

I have believed for awhile now that when the dollar rallied stocks would crater. However, the negative correlation between the dollar and stocks has started to breakdown over the last few days. This is not to say that stocks can't fall. I am merely pointing out that my evaluation of the equity markets might need a second look.

What to do?

I love my short positions. I am just not sure if we don't have another, short lived rally brewing behind closed doors. I may pick up a few long positions today to hedge against the potential of another push higher.

U.S. Dollar Futures Daily Chart

The U.S. Dollar has been screaming higher over the past week.

S&P 500 Futures Daily Chart

The S&P 500 "should" have dropped. But, it has been trading in a tight range.

I will post another update if I do decide to hedge my short exposure. Until then we graciously wait for Mr. Market to pick a direction. He has been rather stubborn the past month. Seems as if he learned some of his flip-flopping skills from politicians. Wait? Could it be that the government is secretly manipulating the stock market? No, it couldn't be. Could it?


Have a good day!

The Federal Reserve Needs Audited.....peroid

Short-Term oil & gold rally?

A couple charts to ponder on, I'm just trying to figure out some wave counts...

Greece a preview of what's to come shortly to the S&P 500?

I think maybe Greece can be used as a leading indicator of what is to come....here we have a textbook 5 waves down in impulsive fashion...

Athens General Shares

Rick Santelli: "I give this one an F"

As I mentioned earlier today in this post:

Really, where do you think the spending is coming from to prop us this economy? It sure isn't coming from you and I. It is coming from the government. Have you noticed the explosion in Federal and State contracts? This is how the economy is staying alive. What happens when the government can't borrow anymore money to spend? China already doesn't want to loan us anymore. I don't really think the oil states do either. Check out this chart. Once our credit card is cut off and the federal spending stops we are in for a rude awakening.

Today's 30 year treasury auction, according to CNBC's Rick Santelli, was a failure. We tendered $31 billion in treasuries today and only $13 billion was accepted! Wow, isn't that great for a "risk free" investment. Check out this spike in 30 year yields during the auction. The government's cost of borrowing is starting to grow people. This kind of borrowing and spending ABSOLUTELY cannot last forever. When it stops....watch out.

30 Year Treasury Yield

30 Year Treasury Auction Results

source: ZeroHedge

Model Portfolio Update - 12/10/2009

For some reason or another the website I use to manage my model portfolio has changed their policies. I will now have to use another site, through facebook (yeah I know), to manage the portfolio. I will have to reestablish my positions for the coming down move, so this could take awhile. Anyway, there is some good that has come out of this. I can continue to use a portfolio that I have been managing for awhile on facebook, so my track record is a little longer and easier for you to evaluate.

Here is the link to the new portfolio:

http://apps.facebook.com/kaching/portfolio/516251517/holdings

Market Update:

Nothing has really changed. The market seems to be grinding away in a distribution phase. We are either forming a rounded top or are setting ourselves up for one more push higher. If we do push higher I believe it will be with force, but it will be short lived. I will maintain my short positions, as I don't see any remaining upside being to dramatic. Hold on. I smell something big brewing in the coming weeks.

Potential Causes of Crisis:

-Sovereign default (Dubai, Greece, Spain, Latvia...etc..)
-Weak holiday sales figures
-Federal Reserve tightening monetary policy (reverse repurchase agreements)

Something is brewing. Investors are at complacency levels not seen since the top in October 2007 and nothing has changed to fix our economy. We slapped a band-aid on the bleeding last fall. However, that band-aid can only last for so long. The following chart shows exactly why it is ludicrous to think that we are out of this mess. Deleveraging is nasty, and it hasn't even started yet.

Really, where do you think the spending is coming from to prop us this economy? It sure isn't coming from you and I. It is coming from the government. Have you noticed the explosion in Federal and State contracts? This is how the economy is staying alive. What happens when the government can't borrow anymore money to spend? China already doesn't want to loan us anymore. I don't really think the oil states do either. Check out this chart. Once our credit card is cut off and the federal spending stops we are in for a rude awakening.

Total Federal Government Debt

Short term update:

I'm feeling this path as shown, but this short term market is hard as hell to trade in.... Still very bearish in the intermediate and long-term.

Is the risk trade still on?

I believe small cap stocks have seen their peak. Yes, there could be more upside; however, small caps are now lagging the broad market. This is a sign that market participants are starting to shy away from risk. Combine that with the 82:1 recent insider selling to buying ratio and you have the recipe for a market top. I would be weary of new long positions at this point.

Russell 2000 Small Cap Index

Dow Jones Industrial Average

These look familiar?

Do these two charts look familiar?

1999-2004 Nasdaq Bubble Collapse

1929-1934 (Dow Jones Industrials Crash)

These two charts have a striking resemblance. If we are indeed following the same market cycle that we followed during the Great Depression it is now 1938 and the market is getting ready to retrace 40% after a huge rally. Let's see what these charts look like after 1934 and 2004.

2004-2009 (Nasdaq Composite)

1934-1939 (Dow Jones Industrials)

The similarities are astounding. One cannot deny that their could be a connection between these two market environments. So, if these charts look the same what could be next? Let's take a look out to 1945.

1938-1945 (Dow Jones Industrials)

Looks like if history repeats itself we are looking at another nasty pullback in the market fairly soon. I believe this comparison is somewhat correct. Yes, history doesn't repeat itself, but it sure does rhyme. I look for a bottom in the stock market sometime around 2012. Any coincidence to when humans expect the world to end? That kind of pessimism is what it takes to form stock market bottoms. Kind of like when Hitler looked as if he would take over the world in 1942, right? Think about it.

The similarities are undeniable. However, always do your own due diligence. Good trading!

Why listen to the media? Be a contrarian!

I've had many people ask the question, "why not buy gold?". I have responded, "well we are going to have deflation." Most people will immediately conclude that I must be delirious or not know what I'm talking about because I am 21 years of age and that doesn't qualify me as an educated individual. They say, "well the news says we all need to be worried about inflation." This is ludicrous. Do you always believe what's reported on the news? Remember this article from CNN on September 4, 2002?:

Experts: Iraq has tons of chemical weapons

WASHINGTON (CNN) -- As some in the Bush administration press the case for a pre-emptive strike against Iraq, weapons experts say there is mounting evidence that Iraqi President Saddam Hussein has amassed large stocks of chemical and biological weapons he is hiding from a possible U.S. military attack.

As we all know that was a scam and a half. What about investing? How good are the mainstream investing services at say, predicting the price of gold. As of right now all of them are screaming, "BUY GOLD!!!" Let's take a look a their track record. The picture below is the cover of Barron's Commodities Corner from February 12th 2001.

As you can see Barron's wasn't very bullish on Gold in early 2001. They were telling people to sell gold, get out before the next big plunge. How did they do? Not very good. Let's check out a chart of gold prices.


As you can see gold bottomed exactly 4 days after the Barron's article came out. Anyone selling gold because of this article made a rather large mistake. Let's see how gold has performed since that day.



As you can see since February 16th 2001 gold has rallied 425%. Barron's really made a good call. Not! The point I'm trying to emphasize is just because people on TV tell you to do something doesn't mean you should do it. They are wrong more often than not. Why? Because they broadcast stories late. They jump onto trends after they have exhausted themselves. The media is not forward looking. They report what is happening now, not what is likely to happen in the future, and because of that they are of no value to me.

When the media tells me to buy gold I immediately want to sell gold. Investing 101, buy low and sell high. Gold is toying with all time highs as we speak. I want to be a seller right here.

Great Elliott Wave Video

Intermediate Term Update:

With as much Wall Street pull as our blog gets you can tell the reaction in the futures market of my short term update around 6:15 this morning; /es fell almost 1%.(Had to be the blog post right?) Here is my intermediate prediction for S&P futures.



Short term dollar chart.

Short term update:

Nice diamond top forming on S&P 500 futures.... Price target is around 1070 (highlighted circle) which I expect to see really soon. (today or tomorrow).

Portfolio Update - 12/7/2007

I don't see much happening this week. More than likely we will experience more sideways trading action as the market decides where it wants to go. Short term we could have another spike up. However, I believe we will turn lower for the intermediate term within the next 5-6 trading days.

Strategy:

Today I will buy a large chunk of SPY (S&P 500 ETF) to hedge against my short portfolio. If and when I believe the market has turned lower for good I will cut my hedge and go completely short. The best place to be at this point is neutral, waiting for the market to resolve lower.

Check out the portfolio here:

http://www.kaching.com/portfolio/83948/holdings


good trading

Government's With Highest Default Probabilities

Portfolio Update - 12/4/2009

Well, I've been managing a portfolio for a couple of weeks now. Sorry the updates haven't been posted like I had hoped, but now that I have a little more time I can start posting more consistently. Here is the link to see my portfolio:

http://www.kaching.com/portfolio/83948/holdings

There you can see my portfolio holdings and my performance against the S&P 500.

Currently we are still betting on a sudden change in the market's intermediate term trend. I still very strongly believe that the U.S. Dollar is going to see a massive rally and with that the stock market will take a tremendous hit, eventually seeing new lows.

I am positioned with a large portion of my portfolio long the U.S. dollar and long-term U.S. treasuries. I also am short a few financial and commodity related companies that I feel will be hurt in a deflationary environment.

I am, however, going to maintain a large portion of my portfolio in cash. If I sense a continuation of the current market rally I can use this cash to buy a position in the S&P 500 to hedge my short exposure and minimize losses.

Quote of the day...

"A little government and a little luck are necessary in life, but only a fool trusts either of them."
--P. J. O’Rourke

Quote of the day...

Paying taxes is necessary to remain free; don’t confuse this with slavery where people have to purchase their freedom…

My Portfolio

Here is a link where anyone can see a portfolio I manage.

http://www.kaching.com/portfolio/83948/holdings

More about this next week when I have more time after I am finished studying for and taking the GMAT.

Quote of the day...

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.
-Ronald Reagan (1986)

Money as Debt 2!!!

If you like the earlier post of Money as Debt here is Money as Debt 2....

Update on U.S. Dollar

Things are going as planned....

Here is an update of the U.S. Dollar chart I posted a few weeks ago. I had called for a continued fall in the dollar to the uptrend line. Looks like that was dead on. We are now sitting on that uptrend line.

U.S. Dollar Index

A turn in the dollar is imminent. With the turn in the dollar will come a turn in the stock market and we will position ourselves accordingly with a long position in the dollar and short positions in the stock market.

I Love Watching Bankers Get Grilled Over Bailouts

Congressman Alan Grayson tears up former Citigroup CEO Vikram Pandit over the bailout his company received last fall. Just watching these videos shows the shear fraud that has been perpetrated on the American people. We need more men like Mr. Grayson in Congress to ask the tough questions and get the to bottom of this mess. This entails Ending the Fed.

A Little Comedic Relief

The Best Commercial Ever

Don't Fear Speaking Out Against The Government

"There is no nation on earth powerful enough to accomplish our overthrow. Our destruction, should it come at all, will be from another quarter. From the inattention of the people to the concerns of their government, from their carelessness and negligence. I must confess that I do apprehend some danger. I fear that they may place too implicit a confidence in their public servants and fail properly to scrutinize their conduct; that in this way they may be made the dupes of designing men and become the instruments of their own undoing."

-Daniel Webster

Maybe we, Americans, should take a cue from Representative Joe Wilson. We need to speak out against our government. There is something clearly wrong in the country. The monetary system is by far the greatest fraud perpetrated upon the American people in history. As evidenced by this video:





We need to stand up and demand change. A reform of the monetary system could make it possible for everyone to have a chance in life. It could end our national debt. It could potentially end poverty in the United States (without paying taxes for welfare). It could also end the needs for 40% tax rates. No longer would we have to lose our wealth through both taxes and inflation. Let's return to the sound money of the Constitution.

There is a reason the Founding Fathers set up our money system the way they did.

Here is where it says in the Constitution that the powers the Federal Reserve exercises are unconstitutional and downright illegal:

Article 1. Section. 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

• To borrow Money on the credit of the United States; (Congress does this, but so does the Federal Reserve...a PRIVATE banking institution)

• To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; (Congress does not have the power to coin our money anymore...The Federal Reserve does...a PRIVATE banking institution, and they charge us interest to use our OWN money!!!)

• To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years; (How long have we been in Afghanistan and Iraq? 6 years going on 7? Wow!!)

Article 1. Section . 9. No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time. (First of all, The Federal Reserve has NEVER been audited. The Federal Reserve, on a daily basis, prints and distributes U.S. dollars all over the world. In one instance, detailed by the video below, The Federal Rerserve gave $3,000 dollars for every man, woman, and child in New Zealand to the Central Bank of New Zealand.)





Article 1. Section 10. No State Shall...coin Money; emit Bills of Credit; make anything but gold and silver Coin a Tender in Payment of Debts.... (Granted, carrying gold and silver is a hassle, but a dollar bill can easily be back by gold or silver. President Kennedy tried it in 1963, check out executive order 11110, dollar bills today are not backed by anything, they are debt created out of thin air by a bank, watch the video if you do not understand this.)

Our Founding Fathers warned us about always protecting the control of our money. They hated central banking with a passion and feared it. Were their fears founded? Did they have a reason to hate the banks? I think so. As evidence I give you these quotes to consider:

"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

-Thomas Jefferson

"The refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was probably the prime cause of the revolution."

-Benjamin Franklin

"The bold effort the present (central) bank had made to control the government ... are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it."

-Andrew Jackson

"If Congress has the right under the Constitution to issue paper money, it was given to be used by themselves, not to be delegated to individuals or corporations."

-Andrew Jackson

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States"

-Sen. Barry Goldwater (Rep. AR)

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill."

-Congressman Charles A. Lingbergh Sr., 1913

"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it".

-Congressman Louis T. McFadden, 1932

"We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."

-Robert A. Hamphill, Atlanta Federal Reserve Bank

"The regional Federal Reserve banks are not government agencies. ...but are independent, privately owned and locally controlled corporations."

-Lewis vs. United States, 680 F. 2nd 1239 9th Circuit 1982

Let's stand up and do something about this diabolical institution!! Vote for Ron Paul in 2012!!

We need to End The Fed!!!

http://endthefedusa.ning.com/ - End The Fed website

http://www.govtrack.us/congress/bill.xpd?bill=h111-1207 - Support Ron Paul's Audit The Fed Bill, call your congressman and demand cosponsorship!!!

Portfolio Update - 11/13/2009 - Think Housing Has Bottomed? Guess Again!!

Portfolio Update: Sorry for the slow updates. However, nothing has changed. We are still in cash and awaiting a final bottom in the dollar and a final high in the stock market. In times of transition, like this. It is prudent to stay in cash and listen to what the market has to say, rather than making any rash decisions to "chase the market higher". No new positions will be taken today. Let's wait and see what comes our way next week.

Check out the graph and paragraph about the housing market at the bottom of this post.

Allocation: 100% Cash


Trades I'm pondering:

1) Long U.S. Dollar (UUP)

2) Short Gold (GLD)

3) Short Macy's (M)

4) Short Mylan (MYL)

5) Short Freeport McMoran (FCX)

Monthly Mortgage Rate Resets

The second wave of the housing crisis is upon us. Notice in the graph how the current stock market rally has taken place as monthly mortgage rate resets have been steadily falling. As of right now we have settled into a bottom in the reset market and mortgage resets will steadily start rising from here. Subprime is over. However the option adjustable rate and alt-a mortgages are going to start resetting to higher rates (reflecting the increased risk of default by most borrowers). This could send the housing market into another tailspin, much like 2007-2008. In my opinion this will be the catalyst for the coming start market crash I have been predicting.

Here is what James J. Saccacio, chief executive officer of RealtyTrac, had to say:

“Rising unemployment and a new variety of mortgage resets continued to gradually shift the nation's foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave. While toxic subprime mortgages drove much of that first wave of foreclosures, high unemployment and exotic Alt-A and Option ARMs are spreading the foreclosure flood to more metro areas in 2009”

This news of a shift in the character of foreclosure activity comes precisely in tandem with the beginning of the predictable second wave of the housing market decline. The pleasant lull in the reset schedule is decidedly behind us. As always do your own due diligence on any investment you may make.

Everyone in the world needs to watch this video

The understanding of the facts portrayed in this video is by far the most important thing needed to save this country. I encourage everyone to watch this video and show it to those who you care about. It is not political, it is just the facts. Our country, and the world for that matter, are slaves to the banks. If you think I am lying, then watch the movie and we can debate it. Please. Educate yourself. You'll be glad you did.

"The inability of the Colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the PRIME reason for the Revolutionary War."

-Benjamin Franklin

The "Pandemic" That Cried Wolf....

I apologize for the length of this post but this is a MUST READ POST!!!

“Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.”
-Milton Friedman American economist, statistician, public intellectual, and a recipient of the Nobel Memorial Prize in Economics

We need to clarify our position on the swine flu. As you probably know we are not doctors so don’t base your health decisions off this post or any posts for that matter. We have heard kids in public school system are being pressured into signing a contract to agree to take the immunization shot which is disturbing considering the source.

Flu Facts
•In a normal year Center for Disease Control and Prevention (CDC) estimates 36,000 people die from Influenza and over 200,000 are hospitalized EACH YEAR. Source
•So far this year the H1N1 has accounted for only 44,555 cases resulting in 1,588 deaths; this is a death rate of 5.19 per million with 267.89 Cases per million in the US. Source

This numbers come from the CDC which is considered a very reliable source but a three-month-long investigation by CBS News revealed some very different facts. The CBS study found that H1N1 flu cases are NOT as prevalent as feared. The CBS article states:

"If you've been diagnosed "probable" or "presumed" 2009 H1N1 or "swine flu" in recent months, you may be surprised to know this: odds are you didn't have H1N1 flu. In fact, you probably didn't have flu at all."
"The results reveal a pattern that surprised a number of health care professionals we consulted. The vast majority of cases were negative for H1N1 as well as seasonal flu, despite the fact that many states were specifically testing patients deemed to be most likely to have H1N1 flu, based on symptoms and risk factors, such as travel to Mexico."

CBS reports that in late July 2009 the CDC advised states to STOP testing for H1N1 flu, and they also stopped counting individual cases. Their rationale for this, according to CBS News, was that it was a waste of resources to test for H1N1 flu because it was already confirmed as an epidemic. So just like that virtually every person who visited their physician with flu-like symptoms since late July was assumed to have H1N1, with no testing necessary because, after all, there's an epidemic. It's interesting to note that at the same time as the CDC decided the H1N1 epidemic warranted no further testing for cases due to its epidemic status, Finnish health authorities actually downgraded the threat of swine flu. Link

Source

The graph above shows that a lot of people are being told they probably have the swine flu when they actually do not. This is propagating a “pandemic” that is not a pandemic. We all know the WHO has declared the H1N1 a pandemic but just how reliable is the WHO’s pandemic rating system? Let’s start off with a couple dates.


•On April 29th, twelve days after those two first cases were discovered WHO announced a Level 5 Worldwide state of alert for the prevention of a pandemic. What does this mean? Level 5 is quite high, which is one below the highest level possible. Level 6 means the pandemic is already happening. 1 ½ months later WHO announces Level 6, the maximum level, initiating a global pandemic of H1N1. Some might say ask: Why isn’t there a pandemic every year, if the yearly virus is worse than this new virus? The answer is: in May 2009 the WHO changed the definition of “pandemic” (link) from its then current definition of an infection by an infectious agent simultaneously present in different countries at the same time and with a significant mortality ratio to the proportion of the infected population. They removed from the definition, this mortality characteristic. Therefore the new definition went to describe the pandemic as a simultaneous infection present in various countries and carrying an infectious agent showing any novelty characteristic, thus leaving us unable to know the type of immunity present within the population. This is a definition I’m quoting from the British Medical Journal. Changing the definition of such strong emotional words is a logical fallacy of epic proportions but not in the scope of this article. I cringe to say this but we’ll assume it’s blatantly obvious and move on.
•April 26, 2009, USA declares a Public Health National Emergency based on twenty cases of infection and zero deaths.(part 1)
•October 23, 2009, President Barrack Obama finalizes the declared the swine flu outbreak a national emergency, empowering the health secretary to suspend federal requirements and speed up treatment. His declaration authorizes Health and Human Services Secretary Kathleen Sebelius to bypass normal federal regulations so health officials can respond more quickly to the outbreak. (part 2)
•WHO is an International Organization that normally issues recommendations. Then it’s assumed that each sovereign country applies or not the recommendations following its own criteria, its own circumstances, and its own internal research. Now, in case of a pandemic, WHO can give orders. Well, you may ask, what terrible thing may arrive? Well, the mandatory vaccination, which if you refuse could result in a fine up to $1000/day, or you go to prison. Forced vaccinations leave you with absolutely no choice and are one of the ultimate violations of our personal freedoms regarding our decisions about what we put in our own bodies.




This brings us to the vaccine. A source at the NIH admitted that the vaccine(s) were one of the fastest human vaccines in development, according to CBS correspondent Sharyl Atkinson. In order to get these vaccines to market so quickly, the United States government granted "liability protection" to swine flu vaccine manufacturers. This protection allowed the drug companies to fast-track production by adding unlicensed components. In other words you will be taking a vaccine has been licensed without normal safety regulations - and if you suffer adverse reactions, the drug manufacturer is immune from legal liability. This unprecedented power to experiment on the population was given to the drug manufacturers with the passing of the 2006 Public Readiness and Emergency Preparedness Act (the PREP Act). This act allows the DHHS Secretary to invoke almost complete immunity from liability for manufacturers of vaccines and drugs used to combat a declared public health emergency, which the "swine flu pandemic" qualifies as. The most problematic aspect of the PREP Act is that it removes all financial incentive to make a safe product. In fact, vaccine makers now have a negative incentive to test it for safety, because if they are aware of problems, then they could potentially be held liable for willful misconduct! As long as they can prove they "didn't know" of any problem, they will not be liable for damages. Hence it's in their best interest to know as little as possible about the adverse reactions it might cause. It seems unimaginable, but you and your children are now being enlisted as an unpaid human trial subjects for experimental, fast-tracked vaccines like the swine flu vaccine. Source


The risks of these, and the current fast-tracked swine flu vaccine, are truly unknown at this time. Source

There are some concerns with some of the ingredients found in the vaccines and some are very troubling. Some shots will contain the mercury-based preservative thimerosal, which some believe to be harmful to children. The CDC claims there is no evidence of this. However, a US Congressional Report on Mercury in Medicine, released in 2003, claimed that there is a link between thimerosal and the development of autism, along with other brain development disorders. Additionally, some vaccines use squalene, an immune adjuvent that causes the immune system to react in a powerful and unnatural way. The purpose is to reduce the amount of vaccine needed per dose. The American Journal of Pathology published a study in 2000 which cited a possible link between adjuvants and arthritis and other chronic inflammatory diseases. Critics claim the use of adjuvants was another unsafe result of the vaccine being rushed out the door. Source

According to Dr. Kent Holtorf, an infectious disease expert, the vaccines with thimerosal has 25,000 times the amount of mercury then would be considered toxic by the FDA if it were in food or water. Remember since this is an “epidemic” it does not have to pass normal FDA standards.

With regards to autism and vaccines there are different reports studying Amish communities due to their extremely low autism rate (1 in 15,000 compared to the nation average of 1 in 175). Amish tend to be home schooled and do not take vaccines. You can read more here and here. Excerpt: “Dr. Mayer Eisenstein told us he is not aware of any cases of autism in never-vaccinated children; the national rate is 1 in 175, according to the CDC. “We have a fairly large practice,” Eisenstein told us. “We have about 30,000 or 35,000 children that we’ve taken care of over the years, and I don’t think we have a single case of autism in children delivered by us who never received vaccines. “We do have enough of a sample,” Eisenstein said. “The numbers are too large to not see it. We would absolutely know.” Keep in mind Amish refrain from a lot more than vaccines so take the above with a grain of salt.

Conclusion: I am not against vaccines by any means, just unnecessary ones. I think this is an unnecessary vaccine and while it might not seem like this is a big deal I will explain why it could be. Assuming this will be the normal flu season and the normal amount of deaths will occur two possibilities I could easily see happen.

•The Obama administration will say they saved the world from the swine flu when they didn’t. This will give them the benefit of the doubt next year when there’s a new “pandemic” and they have the ability, or will give the states the ability, to mandate vaccines. This of course would be un-American and against everything America stands for. (Freedom if you’ve forgotten)

•The Obama administration, CDC, and WHO will all be ridiculed for their overreaction and will lose their creditability. This is by far the worse of the two scenarios because if/when there is a legitimate pandemic people will assume they are overreacting and ignore their recommendations since they assume the new definition of “pandemic”.

Robbery and the Welfare State

Another great article posted on the Campaign for Liberty website, this article by George C. Leef reviews the book “Stealing from Each Other: How the Welfare State Robs Americans of Money and Spirit" by Edgar K. Browning. Mr. Leef provides a great summary of the book and explains why government “help” is destroying our country economically and socially.

Portfolio Update 11/11/2009

We are still in cash. I believe the dollar could have one more push lower before an explosion higher, accompanied by a large drop in the stock market.

"When in doubt move to cash."

U.S. Dollar Index (DXY)

Allocation: 100% Cash


Trades I'm pondering:

1) Long U.S. Dollar (UUP)

2) Short Gold (GLD)

3) Short Macy's (M)

4) Short Mylan (MYL)

5) Short Freeport McMoran (FCX)

If you want to help the poor try this.....

"Repeal that [welfare] law, and you will soon see a change in their manners. ... Six days shalt thou labor, though one of the old commandments long treated as out of date, will again be looked upon as a respectable precept; industry will increase, and with it plenty among the lower people; their circumstances will mend, and more will be done for their happiness by inuring them to provide for themselves, than could be done by dividing all your estates among them."

-Benjamin Franklin

A Rebuttal to Mr. Anonymous on Healthcare

We appreciate you reading our blog and your opinion on the subject, but while reading the link you posted I’ve found some mistakes you’ve made in your assessment of the article.

You made the comment based on your interpretation of the article, “The Canadian healthcare systems outperform the US system almost across the board according to basically every large scale study ever conducted.” This statement is a direct contradiction to what the author’s state when discussing their findings.

When the article clearly states in its discussion:

“In this systematic review, we demonstrated that although Canadian outcomes were more often superior to US outcomes than the reverse, neither the United States nor Canada can claim hegemony in terms of quality of medical care and the resultant patient-important outcomes.”

You’ve also made the statement that Canada is outperforming the United States (which is clearly a statement that can’t be made since it’s been disproved above) at just over half the cost. The article states “Canada’s single-payer system, which relies on not-for-profit delivery, achieves health outcomes that are at least equal to those in the United States at two-thirds the cost.” The difference between ½ the cost and 2/3 the cost isn’t the problem I have with the statement, the problem is you assume the cost is lower because of socialized medicine. When in reality you’ve failed to take into account that the United States subsidizes the entire WORLD’s research and development when it comes to healthcare. Of course their costs are going to be less; they don’t have to pay for the research, our healthcare costs so much because it’s operated as a BUSINESS, and businesses have to take into account research and development when pricing a product. When a country doesn’t have to take that into account then their profit margins grow for the product, therefore they can lower the cost for the buyer without sacrificing the quality of the product.