Weekly Wrap

Man, I don't know what to say? Every fundamental and logical reason points to a stock market that should be tumbling, but instead, the S&P 500 Index closed above 1700 at the end of this week. It's just way too crazy.

Our Government is totally dysfunctional, the economy is stagnant, the job market is disintegrating, corporations are increasing their stranglehold on the poor and middle class, judges and politicians are slowly marginalizing our civil rights, and we're still continuing to lose our homes, our pensions, and our safety nets.

And even the cash-rich corporations sitting in the driver's seat are reporting disappointing earnings this quarter. There's absolutely no good reason why the stock markets should be at these levels.

Yet, there are crazy optimistic investors who continue to see the glass as half-full, and continue to tolerate the criminals in their efforts to destroy our way of life. Perhaps it's true that the wealthiest 10% of Americans own >90% of the stock market. Who else would take on such risk? If you can figure it out, more power to you.

Regardless, those who've continued to invest in low-cost, diversified, stock market index funds, have been in the driver's seat for the past five years, and have seen their portfolios gain tremendously.

At least the stock market appreciates my efforts at promoting a Boglehead approach to investing.

Happy Halloween | Say Your Prayers

I spent so much time | Believing all the lies | To keep the dream alive
Now it makes me sad | It makes me mad at truth | For loving what was you

Money For Nothing | Inside The Federal Reserve

As the global financial system continues to falter, the Federal Reserve finds itself at a crossroads. The choices it makes will greatly influence the kind of world our children and grandchildren inherit. How can the Federal Reserve steer our nation toward a more sustainable path?

How can the American people – who the Fed was created to serve – influence an institution whose inner workings they may not understand?

Money for Nothing: Inside the Federal Reserve is an independent, non-partisan documentary film that examines America's central bank from the inside out - in a critical yet balanced way.


"Money For Nothing" Official Theatrical Trailer from Liberty Street Films on Vimeo.

Weekly Wrap | Where I Stand

It's been a few months since I've posted anything of meaning (if ever) here, so I thought I would check in, rehash my position, and document my performance for the record.

Again, I'm still fully invested in cash since last September. Unfortunately, I still have little faith in our criminalized financial system (and also our economic and political systems) and am fully expecting unbridled greed and corruption to lead to another Great Recession-like crash, or even worse.

Although I still monitor the markets and our economy daily, I haven't invested in nor traded individual stocks since I've moved into cash. As a whole, I view the markets as not only being corrupted, but being way overvalued to invest in, and much too risky to "play around" in even if they weren't.

IMO, the only reason stocks markets have continued their ascent is because of Fed intervention and manipulation, and because most of the money being actively invested/traded is held by the 10% of population located at the top of the economic pyramid whom invest with hedge funds, HFTs, and other investment managers whose jobs depend upon generating alpha. I call them "the herd".

Economically, the continuing spin coming out of both Washington and the financial sector is one of an improving economy, but I see just the opposite.

Corporations are still producing relatively record level profits, but it's mainly occurring at the expense of workers and consumers. That's unsustainable, as the gap (and discontent) between the extremely rich and the rest of us widens daily. Any improvement in consumer spending comes at the expense of increased borrowing/debt.

The unemployment situation isn't improving either. The current administration's spin is to manipulate the data so that it "seems" like it's the job market is improving (e.g. including/excluding certain employment classifications), but not everyone is being fooled. Part-time and temp work is increasing while full time employment, wages, and benefits are decreasing. This spin, too, is unsustainable.

Again, I see nothing on the horizon to reverse both the economic and unemployment trends.

The Obama administration is leaving it up to the corporations to reverse unemployment, but yet they continue to enable corporate welfare and the shifting of jobs overseas (e.g. TPP).

And now that the administration has recently sold out to "compromising" with the GOP, they're also enabling efforts to widen inequality and oppress average Americans' rights (e.g. cuts in social welfare programs, unconstitutional surveillance, and an increasing police state).

These types of oppression work against increasing average Americans' faith in the system.

Yet, in the face of everything that I've mentioned, and after I moved my entire portfolio out of the stock markets, they've still managed to gain around 20% since the beginning of this year.

The S&P 500 Index closed out this week at 1692, remaining near record-level highs.

Even after everything I've said and done, at this point, it's all moot. I'm being left behind. My ability to mystically predict market movements, at least short-term market movements, has failed me - for now.

Dr. Doom on Asian Markets

Someone is manipulating the strings again, and it's causing the herd to stampede from the Japanese stock markets. So, who's the first person the media interviews when things quickly take a turn for the worse? That's right, Dr. Doom. Here's a breaking news video of his initial reaction to that stampede.

Weekly Wrap

Holy bass and treble Batman! There was significant volatility in the markets this past week, and the S&P 500 Index ended the week with a 2.1% loss to close at 1555. Very unusual.

Is this an aberration in record stock market returns or is there some type of mischief going on?

Just what is it that caused the VIX to become so volatile this past week? Could it be that corporate profits aren't coming in as what many economists "expected"? Could it be worry that GDP won't be as good as we thought it would be? Could it simply be a problem with HFT machinations.. or could it be something concerning those minstrels at the Federal Reserve Bank?

Well, don't you good investors of Gotham City fret about it any longer.

The current administration won't stand for any stock market reversals old chum, and has sent in the plunge protection team and their drone to correct this chaos. Stay tuned next week, same Bat-time, same Bat-channel, to see if we'll be singing a different tune.

April Fools

The herd thinks it's safe, how about you? Still want to wade into the pool?

Donor-Advised Funds

If you've been smart enough to allocate your savings appropriately, invest using index funds, and not have touched it during the 2008 crash, then at this time you'd be outperforming the vast majority of active investment managers. Congratulations!

But, now that stock markets have recovered and reached new heights, and your index fund savings have surpassed pre-recessionary highs, what are you going to do with all of your new found gains?

Do you want to be a miser? You can't take it all with you when you go.

Consider giving some of your savings away to a good cause. Now is the right time to give it away.



A donor-advised fund is a philanthropic vehicle established as a public charity. It allows donors to make charitable contributions into the fund and receive an immediate tax benefit.

Donors can then invest those contributions among the various type of investment choices offered by the fund, recommend grants from the fund to charities of the donor's choice, and to donate at times determined by the donor.

Along with being allowed to personally-manage my investment contributions to the fund, the most appealing aspect of a donor-advised fund to me, is that I can donate to a charity without constantly being bombarded with telephone calls, emails, and postal mail requests for more donations, even after I ask not to be contacted. The fund serves as my intermediary. Learn more at Vanguard.

Weekly Wrap | It's A Jungle Out There

It's been a while since I've posted a weekly wrap, so it's about time to let my zero readership know what's been going on with my positions and my forecasts, and to keep track about how the stock markets have been performing for my own records.

As I'm sure everyone knows already, the markets have performed well over the past couple of months, especially including this past week. The S&P 500 Index closed out this week at 1551, up 8.8% year to date, and the DJIA has passed pre-recessionary levels to close at record highs.

Economically this week, the jobless rate fell to 7.7% for the first time since December 2008, and job growth outpaced expectations. But there are still many mixed results being reported, including last quarter's "unexpected" -0.1% GDP rate (later revised to +0.1).

Personally, I haven't been posting about market movements because nothing about my portfolio has changed. I sold my position in DEG, and have some open sell orders for a few long-term microcap banks stocks that I've owned for many years, but I'm still sitting fully in cash as I reported back in September 2012. As of this writing, the S&P 500 Index is about 100 basis points ahead of when I moved into cash. So, it looks as though I'm being left behind.

But short-term appearances can be deceiving. Although the stock markets have been rising, nothing concerning my views and opinions has changed. Although the mainstream media seems to be trying to convince the public to invest in stocks right now, I think just the opposite, that it's a good time to get out of stocks.

While my timing may be off, I still fully believe that it's going down, and I'm prepared to stay invested in cash until that happens. I could be wrong now - but I don't think so. Like always, time will tell.

Inequality For All

I happen to think that our three branches of government have already been captured and assimilated by major corporate interests and the 0.1% of the population at the top of economic pyramid. Unfortunately, I've become so cynical that I believe a corrupted system won't change until it fails first.

But, in case you may be one of those people who believes that change can be accomplished before failure, the following soon-to-be released documentary may appeal to you.

Robert Reich, secretary of Labor in the Clinton administration, and director Jacob Kornbluth discuss economic inequality in America in their Sundance film "Inequality for All."

Bill Moyers | Crony Capitalism

Bill explains how last week’s fiscal cliff deal gave tens of billions in tax breaks to Wall Street and corporations -- what even the Wall Street Journal calls a “crony capitalist blowout.”


Bill Moyers Essay: The 'Crony Capitalist Blowout' from BillMoyers.com on Vimeo.

Weekly Wrap | The New Year

It's a New Year now and time to start it out with a weekly wrap. As anyone keeping up with the Oracle of Burbank would know, I exited the stock markets in mid-September after the Fed announced QE3, and moved my entire portfolio into cash.

At that time, my intuition told me that the stock markets reached their highs for the year and that I would exit the markets for the rest of the year. As it turned out, my prediction for 2012 market peak was correct. But after the S&P 500 index pulled back around 100 points from it's yearly high, my prediction for more market pain didn't fully materialize.

Little by little, the stock markets absorbed the punishment, avoided the knockout punch, fought back hard, and pulled out a victory at year end as a result of the fiscal cliff being addressed. For the first end of the trading week in 2013, the stock markets reached new heights.

The S&P 500 index closed out this week at 1466, slightly ahead of the mark when I bailed out.



It looks like my original feces thesis that the current administration will do anything to avoid both an economic and market catastrophe is still in effect. So, does this mean that I'm going to jump back into stocks so as to not be "left behind"? Of course not.

There are very little actual market forces at work helping stocks climb back to their pre-recessionary levels. Stocks are at these heights only because of both Federal Reserve and political intervention. The markets are still highly speculative and full of unnecessary risk. So, I'm going to remain in cash.

I'm not competitively playing around with someone else's life savings in order to justify a high fee or to impress someone else. This is MY money. I'd rather be left behind, than to be left holding the bag.

Happy New Year!

Happy New Year to everyone, especially to the people running the show.

Doctor Doom's Prediction

I'm not the only cynical dreamer with dour predictions for the stock market. The worst is yet to come for markets and the global economy in 2013, according to New York University economist, Dr. Doom, also known as Nouriel Roubini.

As the good doctor points out, major economies are either in a recession or experiencing slow growth rates, while in the United States, uncertainty surrounding the fiscal cliff — a combination of tax hikes and spending cuts due to strike next year — will roil markets as well.

See for yourselves. He sounds pretty confident in his views during this recent interview -

Betty Remembers Pearl

Betty McIntosh’s account of the attack on Pearl Harbor went unpublished - until today.

Creative Enforcement

This December marks the fifth anniversary of the beginning of the Great Recession, and most of the American public (including me) are still angry about why it happened.

Now, I'm not angry for selfish reasons. Except for the taxpayer-funded bailouts and the continued risk of economic collapse, the Great Recession didn't negatively-affect me financially. I profited from it.

In 2006, I saw what was coming, prepared myself accordingly and profited tremendously from the vast financial crimes that were perpetrated against the American public. Although I tried to warn everyone, I'm not angry simply because I personally lost everything like many others.

I'm angry about how it's affected American society as a whole.

What I'm still angry about is the fact that leaders in Wall Street, the banking industry, the real estate industry, and in collusion with some leaders in our own Government, successfully perpetrated the largest financial crime in American history - and got off Scot-free!

But, what makes me even more angry is that even after five long years, many of the same people are still running the show in Government, and that nothing has really been done to prevent these crimes from being perpetrated again. Enforcement is a joke.

So, with all that's transpired in the past five years, how can any rational person NOT be angry and to be cynical about the future of America? Who would trust such a corrupted system?

Personally, I don't see anything changing for the better until the corrupted are removed from office, the too-big-to-fail risks are addressed, the rules are fixed so they can't be "legally" exploited, and the top perpetrators of these crimes are held criminally-responsible. IMO, that's the only way to restore faith.

Like George Carlin cynically jokes about, perhaps we need to become creative in our enforcement.

Weekly Wrap | It's Going Down

Although there was a pop on Friday afternoon due to news reports about the fiscal cliff possibly being avoided, the S&P 500 fell 20 points from last week, down another 1.4%, to end the week at 1360.

But something else piqued my interest this week. Sometimes you have to look for subtle clues in order to get a sense of market sentiment, and I think I discovered something.

As the stock markets tanked this week, I got a quiet sense of desperate fear being reported through financial mainstream media in the form of "more than usual" bullish and optimistic posts, especially later in the week, in order to stem the flee. The crowning clue was when CBS This Morning stopped airing their usual stock market updates across the bottom of the television screen.

It's like the word is being put out behind the scenes to spin the news in order to get people to focus on anything else but a falling market. Do anything to allay fears and keep investors playing the game. It's not like I can't understand their reasons to do anything to prevent another market meltdown, but I can't see how they're going to succeed. Investors will eventually see through their schemes.

The global slowdown has corporate profits falling, and that doesn't bode well for either stocks or for unemployment levels. And it's not like there's anything on the horizon domestically to cheer about economically, although some people are trying to be cheery. Even The Vanguard Group is putting a positive spin on flat or worsening economic data.

The only bright side anywhere economically is perhaps the housing market, but personally, I see that sector's short term growth leveling out or producing very slow growth at best.

Although the focus in the news has been the fiscal cliff, it isn't the only thing that investors should be worried about. The world has descended into even further chaos since my last post discussing our current problems. Recessions, riots, and violent demonstrations against austerity and corruption are increasing throughout Europe and South America, and we're on the verge of war in the Middle East.

So, you can buy into the spin and be the Huckleberry left holding the bag. But for me, I'm still going to remain in cash, and I'm still expecting even more stock market declines. It's going down.

HFT Via The Colbert Report

Technology is a good thing, right?

Weekly Wrap | King Of The Jungle

Looks like I was right on the mark when I commented that investors were waiting for the results of the Presidential election before making a commitment with their investments. And that commitment was to SELL, loudly. The S&P ended this week down another 2.4%, finishing at 1380.

And I still don't see a good reason for it to change it's course. So, I'm remaining fully invested in cash.

Now, I know what you're thinking. What makes me so certain about my own investments?

How can I, a mere human without fangs or claws, gain an advantage in a market environment full of ferocious predators trying to eat me alive? How can a simple individual investor consistently outwit a pride of lions, to become king of the jungle?

Like I said before, it's about being one with the markets, and staying attuned to what's happening in the jungle around you, understanding the motivations and behaviors of both your predators and their prey, and confidently making the call before the herd stampedes.

That of course, and lots of alcohol.

Voodoo Markets

History always repeats itself. Anyone know what lies in our near future? Anyone? Anyone?