When the Stock Market Bubble will Burst

Posted on May 27, 2014 by MN Gordon

U.S. markets were closed yesterday in observance of Memorial Day.  But, nonetheless, we peered through our Economic Prism for hints and clues of what’s to come.  There are no bones about it.  We believe the bull market’s end is nigh.  And if it isn’t, it should be.

We’ve detailed various rationales…like stock valuations and average bull market durations.  We’ve made countless observations of the rough waters the economy is sailing into.  Corporate earnings are doomed.

Still, day after day, stocks continue to rise.  Higher, further, longer than we possibly could have imagined.  We can hardly believe our eyes.

Could we live in a world with only upside and no downside?  Could risk be no more?  Not unless you believe the impossible.

For with each passing day that the bull market marches on, we know it is one day closer to its end.  Moreover, the higher stocks go the harder their landing will ultimately be. Continue reading →

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Scientific Management of the Economy is Absurd

Posted on May 23, 2014 by MN Gordon

A Fed insider shattered the glass and pulled the fire alarm this week.

“A strengthening U.S. economy may force the central bank to hike rates ‘sooner rather than later’ to stay ahead of inflation,” Philadelphia Federal Reserve President Charles Plosser said on Tuesday.

Meanwhile, top Fed head Janet Yellen offered the New York University graduating class some commencement words at Yankee Stadium.  According to Yellen, success is determined more by grit and passion than sheer ability.  As an example, she noted former Fed Chair Ben Bernanke’s grit as the main quality that compelled him to bailout the financial system when it frosted over like the Alaskan tundra a few years back.

In Yellen’s mind, Bernanke’s mass counterfeiting operations were a mass success.  As taxpayers, savers, and working stiffs with young children, we find such bosh to be utterly insulting.  Like when we heard the condescending line from former Treasury Secretary Timothy Geithner, “We did save the economy, but we lost the country doing it,” we get a sharp pain in our gut. Continue reading →

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To The Class of 2014

Posted on May 20, 2014 by MN Gordon

Commencement season is here.  Though no trade school or remedial academy invited us to address their graduates, we won’t let that get in the way.  What follows, free of charge, are several observations, opinions, and suggestions, we’ve prepared for this year’s graduating class…

Congratulations!  Now that you’ve successfully completed your academic studies you will begin your real world education at the school of hard knocks.  All of you are enrolled.  Some of you will be up to the challenge.

You will quickly discover that what you learned in college has ill prepared you for your next endeavor.  What’s more, the world you’ve been told you are entering – an abundance of opportunity and high paying jobs – only exists in fragments, if at all.  On top of that your elders have stacked the deck against you…you’ll be paying for their retirement and yours.

Where to begin?

First off, the school of hard knocks is not a four year program. Continue reading →

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A Symbol of Death for Stocks

Posted on May 16, 2014 by MN Gordon

We’re spoiled for material.  Each and every day we check the headlines with glee.  Not only are we eager to see what’s happening…we’re eager to discover the latest canard.

For instance, last fall something called Balloon Dog sold at a Christie’s auction for $58.4 million.  Balloon Dog, if you’ve never heard of it, is a stainless steel art project designed to look like a gigantic twisty balloon dog.  How cool is that?  And there’s meaning behind it too…

“I’ve always enjoyed balloon animals because their like us,” articulated artist and Balloon Dog creator Jeff Koons.  “We’re balloons.  You take a breath and you inhale, it’s an optimism.  You exhale, and it’s kind of a symbol of death.”

No doubt, the mania for art is inhaling with optimism.  Earlier this week, Christie’s held another auction.  Apparently, $745 million worth of paintings and sculptures were sold off…the highest total for a single Christie’s auction, not accounting for inflation.  More importantly, and demonstrating the gigantic global wealth transfer from west to east over the last decade, half the buying was done by Xin Li, deputy chairman of Christie’s Asia. Continue reading →

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