Sunday, March 23, 2008

Wednesday, March 19, 2008

Everything Seems Fine Until Suddenly It Isn't......

"When optimisim toward a market continues unrestrained despite deteriorating conditions, the only possible resolution is a "light-switch" type of reversal. When bulls have committed capital to a market and borrowed more to keep investing, and when the rising prices fund even more borrowing to keep them going, there is simply no cushion when the trend reverses. There is no cash on the sidelines waiting to scoop up bargains; it has all gone into investments and the loans that back them. Additionally, there is no contingent of bears waiting for an entry point, and there are no short positions to cover. So there is nothing to stem a free fall."

Thursday, March 13, 2008

State Of U.S. Economy

From John Browne (Senior Market Strategist for Euro Pacific Capital)

"The real financial implications of imprudent lending and borrowing and the rising level of U.S. government debt did not go unnoticed by the foreign exchange markets. The U.S. dollar began a dramatic decline, depreciating by more than 20% percent against the Euro in the past two years.

Now, the whole vast economic model of abundant liquidity and excessive leverage is moving in reverse. The liquidity boom has morphed into an insolvency crisis, aggravated by a fall in asset values. American consumer demand is falling dramatically. In a consumer economy, where 72 percent of GDP is comprised of consumption, American domestic corporate profits and stock markets look set for dramatic falls, leading to margin calls and yet more forced asset sales.

In short, a great ‘de-leveraging’ has embraced the American economy. The massive and excessive liquidity is now being squeezed out of the price of most assets. Investors, who remain owners of leveraged American domestic assets, stand to be hit hard--very hard. This financial suffering will be made worse as investors realize the effects of taxation, inflation and the debasement of their dollar currency upon any positive nominal returns they salvage.

The astute investor can insulate himself from this mounting financial dilemma. He should diversify immediately out of U.S. dollar-based assets into high (total return) yielding assets denominated in strengthening currencies of ‘producer’ nations such as those of Switzerland, Australia and Canada. In light of current conditions, it is then and only then that the astute investor is likely to become richer, not poorer."

Tuesday, March 11, 2008

FEDERAL RESERVE - 5 PART SERIES - MUST WATCH

Part 1:

Part 2:

Part 3:

Part 4:

Part 5:

Avoid Gossip - Avoid lashon hara

Christianity and Judaism consider gossip spoken without a constructive purpose (known in Hebrew as lashon hara) as a sin. Speaking negatively about people, even if retelling true facts, counts as sinful, as it demeans the dignity of man — both the speaker and the subject of the gossip. According to Proverbs 18:8: "The words of a gossip are like choice morsels: they go down to a man's innermost parts."

Lashon hara generally refers to true statements, written or spoken; untrue gossip is even more strictly prohibited. Thus, while truth is generally a defense against slander or libel, it is not a defense against lashon hara.

The main prohibition against lashon hara is derived from Leviticus 19:16 [1] : "Thou shalt not go up and down as a talebearer among thy people; neither shalt thou stand idly by the blood of thy neighbour: I am the LORD."

Christianity condemns all kinds of gossip. The Epistle to the Romans associates gossips ("backbiters") with a list of sins including sexual immorality and with murder:
28 And even as they did not like to retain God in their knowledge, God gave them over to a reprobate mind, to do those things which are not convenient; 29 Being filled with all unrighteousness, fornication, wickedness, covetousness, maliciousness; full of envy, murder, debate, deceit, malignity; whisperers, 30 Backbiters, haters of God, despiteful, proud, boasters, inventors of evil things, disobedient to parents, 31 Without understanding, covenantbreakers, without natural affection, implacable, unmerciful: 32 Who knowing the judgment of God, that they which commit such things are worthy of death, not only do the same, but have pleasure in them that do them. (Romans 1:28-32)

Monday, March 10, 2008

The Forty Martyrs of Sebaste

In the year 320, Constantine was Emperor of the West and Licinius of the East. Licinius, under pressure from Constantine, had agreed to legalize Christianity in his territory, and the two made an alliance (cemented by the marriage of Licinius to Constantia the sister of Constantine), but now Licinius broke the alliance and made a new attempt to suppress Christianity. He ordered his soldiers to repudiate it on pain of death. In the "Thundering Legion," stationed near Sebaste in Armenia (now Sivas in Turkey), forty soldiers refused, and when promises, threats, and beatings failed to shake them, they were stripped naked one evening and herded onto the middle of a frozen lake, and told, "You may come ashore when you are ready to deny your faith." To tempt them, fires were built on shore, with warm baths, blankets, clothing, and hot food and drink close by. The mother of the youngest soldier was present and encouraged her son from the bank. As night deepened, thirty-nine men stood firm, while one broke and ran to the shore. However, one of the soldiers standing guard on shore was so moved by the steadfastness of the Christians that he stripped off his clothes and ran out to join them. They welcomed him into their company, and so the number of the martyrs remained at forty, and by morning, all were dead of exposure. (One source says that the few in whom a little life remained were stabbed to death at dawn.)

"I'll bet you a lot more than a penny"

Peter Schiff predicts the housing bust and coming recession on CNBC in August of 2006 and is laughed off the show.

Note: Peter Schiff is an economic advisor to Ron Paul.

Thursday, March 6, 2008

Giggles

A grade school teacher was asking students what their parents did for a living. "Tim, you're first," she said. "What does your mother do all day?"

Tim stood up and proudly said, "She's a doctor."

"That's wonderful. How about you, Amie?" Amie shyly stood up, scuffed her feet and said, "My father is a mailman."

"Thank you, Amie," said the teacher. "What about your father, Billy?"

Billy proudly stood up and announced, "My daddy plays piano in a whorehouse."

The teacher was aghast and promptly changed the subject to geography. Later that day she went to Billy's house and rang the bell. Billy''s father answered the door. The teacher explained what his son had said and demanded an explanation.

Billy''s father said, "I'm actually an attorney, but how can I explain a thing like that to a seven-year-old?"

Wednesday, March 5, 2008

Why Warren Buffet isn't buying the U.S. Dollar

America's growing trade deficit is selling the nation out from under us. Here's a way to fix the problem -- and we need to do it now.

Tuesday, March 4, 2008

Ask.com seeks makeover as women's site

Dad's favorite search engine takes a turn...no homo.

Mar. 4, 2008 (Thomson Financial delivered by Newstex) --

SAN FRANCISCO (AP) - In a dramatic about-face, Ask.com is abandoning its effort to outshine Internet search leader Google Inc. (NASDAQ:GOOG) and will instead focus on a narrower market consisting of married women looking for help managing their lives.

Rest of article...

How do stock prices work?

While stock market movements often seem to have to no basis in reality, especially in the short term, there are only three factors driving stock market returns:
1. Dividends: The income generated by stocks adds to total return.
2. Earnings growth: The value of a stock can be viewed as a multiple of its earnings. As long as company earnings grow, even if the price-earnings ratio that investors place on that stock remains unchanged, the value of the stock increases.
3. Change in the Price-Earnings Ratio: Investors may be willing to pay a higher or lower price-earnings ratio tomorrow than today. If the price-earnings ratio increases, that increased valuation will contribute to total return.

We can quantify how each of these three components have contributed to stock market returns over time. For example, over the past approximately 100 years, stocks have delivered about 10% annually with the following breakdown:
Contribution to average annual return
Earnings growth: 5.0%
Change in P-E:0.9%
Dividends:4.5%

Source: PrudentBear.com (Great Site)