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12.28.2014 Financial Intelligence Report Bookmark

Somebody Is Wrong

Considering that we’re “smack-dab” in the middle of the Holiday season, I don’t think it would be appropriate for me to sound off on some of the really deep issues that we’re going to need to discuss this year. For now everyone should be enjoying their Holiday season, sharing good times with family and friends, and doing their best to remember the good things in their lives.

That said however, the fact is that “someone” is wrong about things. Either the cheer leading, rah-rah TV people are right and the economy is healing, things are getting better and the nation is about to see a new 10 year expansion….or they’re wrong and the so called doom and gloomers are right. They both can’t be.
Somebody Is Wrong

Considering that we’re “smack-dab” in the middle of the Holiday season, I don’t think it would be appropriate for me to sound off on some of the really deep issues that we’re going to need to discuss this year. For now everyone should be enjoying their Holiday season, sharing good times with family and friends, and doing their best to remember the good things in their lives.

That said however, the fact is that “someone” is wrong about things. Either the cheer leading, rah-rah TV people are right and the economy is healing, things are getting better and the nation is about to see a new 10 year expansion….or they’re wrong and the so called doom and gloomers are right. They both can’t be.

We are also going to have to talk about the idea of “perceptions”. In other words, from what view are you making the claim that things are either good or bad? If you happen to be a multi-millionaire, your view of how things are going could be considerably different than the 25 year old, loaded with college debt, who can’t find a job.  If you happen to be one of the top 5% of folks, I’m pretty sure you are “dancing in the aisles” with the way things are going. If you’re in the bottom 20%, I have a feeling you’re not celebrating the Holidays with the same type of cheer.

The year ahead is going to be so very interesting, and from a multitude of angles. Ponder for a moment our current race relations. Can you remember a time when they were worse? How’s that going to play out? How about the police situation? Never before have we seen such a militarized homegrown police presence. Not since the 60’s can I remember such organized protests against them either.

Yin-yang, rich-poor, white-black, the contrasts are growing daily. I just finished reading an article about some of the tweets that “kids” have posted concerning the presents they got for Christmas. Most of them reeked of spoiled brat-whining as they blasted their parents for not giving them the X-box or Iphone they wanted. One went as far as saying that they hated their parents for not giving them the goodies they wanted. They were “entitled” to them. How amazing is that, when in any big city USA there’s kids at the local food pantry just happy to have something to eat for a day.  

Someone is wrong folks. I was watching CNBC the other day and another in a long line of cheerleading talking heads was on; being his cocky old self and proclaiming we were in the “sweet spot” and probably only 5 years into a 20 year bull market. Yet one wonders what kind of sweet spot we’re in, when the politicians allow Citi to craft the language in the spending bill that puts 300 trillion worth of derivative exposure, right on the backs of the taxpayers, instead of on the criminal bankers themselves?

Over in Japan, they went full “stupid” with their money printing experiment. Instead of the robust recovery and growing economy that idiots like Krugman said would result, what has indeed happened is that businesses are shutting down, inflation is soaring and wages have fallen like a rock. Yet we’re told daily that the US is the light on the hill and all will be well here. Someone’s wrong however. Aren’t we trillions in the hole too? We are. Aren’t our wages stagnant for the last decade? They are. Aren’t part time jobs the only one’s being created? You bet.  

One of the biggest problems a newsletter writer finds himself in is trying to expose the truth about things, without a significant portion of the readership considering him nuts, or “out there”. It is a problem I’ve contended with for 20 years.  Why is that? Because someone is wrong folks, and most will side with the idea that the news coming from the major media outlets “must” be the truth, while the things the newsletter guy is saying is conspiracy nut, crazy talk.  

Yet finally, after all these years more and more people are “coming around” to the concept that all us newsletter guys aren’t nuts after all, and maybe, just maybe they’ve been conned by the media. Bravo! Realizing that you’ve probably been duped is step one. But even that is problematic. First, what if the deceptions are so incredibly big that again you can’t believe it, or “won’t” believe it?  Second, what the hell are you going to do about any of it?

For instance, MOST people are now comfortable enough with the idea that virtually every economic report Uncle Sam puts out is a work of fiction. They realize just about anything coming out of Wall Street is made up baloney. In fact, just this week… Blackrock said in its 2015 investing outlook meeting; that profits are up 85% more than they would be if using GAAP reporting. Think about that for a second. If you applied accepted accounting principles to the S&P earnings reports, they’d be 85% LOWER than we’re told they are.

Now, if Uncle Sam allows Wall Street firms to LIE about their true earnings by a factor of almost 100%,  why would you possibly believe ANYTHING they tell you?  And by that folks, I mean “anything”. From fast and furious to Benghazi, to Russia, to Iraq, to Iran to Palestine, to ANYTHING.  Why would you believe a single word from these psychopaths?  You cannot. Which makes my job sort of tough, because I bring you things that are 100% opposed to the garbage they’re trying to sell you concerning things.

The point being this folks…2015 has the ability to be an incredibly important year for all of us. It’s a year where war could indeed break out in the Ukraine. Where the Euro could crumble. Where the BRICS establish a gold backed currency. Where China takes more importance in global finance. Where Japan implodes. Where race relations elevate to the point of martial law being implemented in areas. Where maybe the derivatives implode and the bankers try and push it all on us. There’s a tremendous amount of incredibly important events that very well could shape 2015. And the one thing you can count on is that the media is going to spin it as their puppet masters tell them to spin it. You will NOT be told the truth concerning any of it.

As always I plan on bringing you the truth on important topics. It will indeed fly in the face of the standard media BS. But while it’s one thing to hear the truth, it is something else to act on it. What are you going to do? What can you do?  To the best of my ability I’ll try and lay out action steps that do indeed help you actually get through these interesting times.

But for today and into the New Year Holiday, try and put these things in the background and enjoy the season. God knows we’ll have a whole year to study and dissect the madness that is indeed our present time. Hopefully you can all ignore the noise and see your way to sharing some good times with friends and family during this Holiday Season.

The Market…

It’s been a sideways grind, but it’s still going up. Despite the less than stellar reports ( and don’t forget they’ve been doctored to be the best they could put out!) we’ve seen them try and keep the rally alive. Yes it’s tired. Yes it’s overbought. Yes it’s extended. But then again as Blackrock told us…it’s based on lies and deceit anyway, so why be surprised?

Considering the Japanese parliament just approved a 3.5 trillion yen stimulus package, it’s fair to say that some form of “happy” will float across the ocean and traders here in the states will figure out more ways to utilize the carry trade.  So we’ve got history on our side, as the last week of the year tends to be “up”, we’ve got lies and manipulations on our side, all biased to the “up” and we’ve got Abe going absolutely insane printing money. Only a Princeton trained economist could think that if printing a few trillion makes things worse, printing up another 4 trillion “has to help”.

So we “should” see the market continue to grind sideways and up. Naturally however, it is times like this when I’m most nervous. I’ve seen this movie before, it showed the first time in late 1990’s. It didn’t end well at all.  When everything points to up… more times than not, we’re greeted with down.

We mentioned a few weeks ago that the safe play was by trading in the ETF space. Why is that? Simple folks… the “market” is rigged to go up. But your individual stock isn’t similarly rigged. So while you might love the XYZ company, if they rotate out of the sector XYZ is in, you can have an ugly day despite the overall market going up.

Think of it like this… there’s ten major sectors in the S&P. So if they hate basic materials one day and pile into health, you might get crushed holding your materials stock. But if they push the other sectors high enough, the overall S&P rises on the day. This is why you can see the SPY which is the ETF for the S&P rise on a day when even big stocks like MMM, MSFT, CSCO, AAPL, etc are down. Wrong sector on the day.

The SPY, DIA, IWM, etc are still doing pretty well. It’s not gang busters, but it shouldn’t be, they’re running on fraud and fumes. That said, it looks like they’ll continue. Oh and by the way, don’t be terribly concerned over a red day here or there. We’re overdue for one so the technicals catch up with the underlying issues.

Have a great weekend folks and we’ll send out a short note on Wednesday just to see how your New Years Eve is shaping up!



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