The Great El Monte Public Pension Swindle

Posted on January 6, 2017 by MN Gordon

There are places in Southern California where, although the sun always shines, they haven’t seen a ray of light for over 50-years.  There’s a no man’s land of urban blight along Interstate 10, from East Los Angeles through the San Gabriel Valley, where cities you’ve never heard of and would never go to, are jumbled together like shipping containers on Terminal Island.  El Monte, California, is one of those places.

How El Monte came to be is a story shared with many of its adjoining San Gabriel Valley cities.  Boom, bust, and rapid transformation from an agricultural area to working class artery of a burgeoning megalopolis, vomited out a multitude of enduring mistakes.  Many of them will never be rectified.

When El Monte was incorporated as a municipality in 1912, the prospects for the place must have seemed limitless.  Here was open and fertile land, ideally situated in a low valley between the San Gabriel and Rio Hondo Rivers.  Equally important, it was ideally situated just several miles from the budding City of Los Angeles. Continue reading →

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Global Recession and Other Visions for 2017

Posted on December 30, 2016 by MN Gordon

Today’s a day for considering new hopes, new dreams, and new hallucinations.  The New Year is here, after all.  Now is the time to turn over a new leaf and start afresh.

Naturally, 2017 will be the year you get exactly what’s coming to you.  Both good and bad.  But what else will happen?

Here we begin by closing our eyes and slowing our breath.  We let our mind role back into the grey matter of our brain.  We wait patiently for new neurological connections to open up.  Then, ever so subtly, visions of the year ahead come into focus.

Will stocks go up or down?  What about gold and Treasury bonds?  Will the economy expand or contract?  Are we fated for World War III?  Who will win the Super Bowl?

These are the questions – and more – we intend to answer.  Obviously, conjuring up visions is more art than science.  But so is Fed monetary policy.

Nonetheless, before we get to it we must first lean upon ancient Chinese Philosopher Lao Tzu for a full disclaimer: “Those who have knowledge, don’t predict.  Those who predict, don’t have knowledge.” Continue reading →

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Wreck the Halls

Posted on December 23, 2016 by MN Gordon

Despite the best efforts of the bulls to make history happen, they’ve been unable to ‘git-r-done.’  At the time of this writing, the DOW is facing another bout of arrested development; it has yet to notch 20,000 for the very first time.

What a feat it will be when this remarkable, but trivial, event comes to pass.  After a near eight year run, the DOW will likely eclipse this exquisitely round numeric threshold in the very near future.  Shouldn’t such an achievement – and the associated wealth effect – have made us all rich?

Apparently not.  For on the other side of the ledger a distinct, yet somehow related milestone is imminently approaching.  The U.S. National Debt is at $19.9 trillion.  Soon it will surpass a round and rotund $20 trillion.

The reality, however, is that the national debt exceeded $20 trillion a long time ago.  In fact, it’s really over 600 percent higher.  Remember, current unfunded liabilities, including Social Security and Medicare, now total over $104.5 trillion.

Added together the national debt and current unfunded liabilities total $124.4 trillion.  Truly, this number is so large it’s near impossible to comprehend. Continue reading →

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Has the Fed Turned “Hawkish?”

Posted on December 16, 2016 by MN Gordon

Stimulus, in a general sense, is something that causes an action or response.  A ringing alarm clock may prompt someone to exit their slumber.  Or a fist to the gut may force someone to gasp for breath.

Stimulus can come in many forms and varieties.  It can come in the form of a stick; do this and you won’t get whacked over the head.  So, too, it can come in the form of a carrot; do that and you’ll get a reward.

Other forms of stimulus can produce a short, burst like, reaction.  The caffeine in a cup of coffee, for instance, will temporarily reduce drowsiness.  Yet once the caffeine wears off, more coffee is needed to sustain the effect.

Former professional baseball player, and all around dirt bag, Jose Canseco knows a thing or two about stimulus.  Not from what someone has taught him.  But from what he learned through real world experience.  He literally wrote the book on it.

His 2006 memoir, Juiced: Wild Times, Rampant ‘Roids, Smash Hits, and How Baseball Got Big, tells the story of how he and other athletes experimented with performance enhancing drugs to stimulate their baseball careers. Continue reading →

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