Are You Ready?

Posted on December 7, 2012 by MN Gordon

There are fantastic abnormalities taking place in front of our very eyes.  The 10-Year Treasury Note is yielding just 1.58 percent and gold, despite a recent pullback, stubbornly sits above $1,700 per ounce.  In other words, people are simultaneously expecting deflation and inflation.

Then there’s the stock market.  One “analyst” says it’s poised for a fall.  Another says it’s consolidating for its next great run up.  Both are right – and wrong – as far as we can tell.

The S&P 500, if you hadn’t noticed, is below where it was at the turn of the millennium.  Back then everyone knew that, over the long run, stocks always go up.  But these days the long run is understood to be much longer than it was back then.  But how long is the long run?

Over in Japan, for instance, they’re exploring just how long the long run really is.  On January 29, 1989, almost 23-years ago, the NIKKEI 225 closed at 38,916.  Yesterday it closed at 9,545…down over 75-percent after all this time. Continue reading →

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Economic Reduction

Posted on December 4, 2012 by MN Gordon

One of the more aggravating things about the forthcoming tax hikes is the proposed increase to dividend income.  Since 2003 the top tax rate for dividends has been 15 percent.  Under President Obama’s proposed plan dividends will be taxed as ordinary income.  Top income earners will pay 39.6 percent tax on stock dividends.

Unfortunately, this is coming at a time when dividends have never been more essential to capital management and preservation.  The Federal Reserve’s zero interest rate and quantitative easing policies have pushed the yield on the 10-Year Treasury Note down to 1.61 percent…that’s less than the rate of inflation reported by the Bureau of Labor Statistics.  This makes government debt, as an investment option, a guaranteed wealth dissipater.

Thus, over the last several years, high dividend yielding stocks have become indispensable to those saving and investing for retirement.  Regrettably, President Obama wants to strangle this reliable means of investment income…and for what? Continue reading →

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Facing the Facts of Financial Doom

Posted on November 30, 2012 by MN Gordon

Our politicians’ appetite to spend money they don’t have will never be satisfied.  There’s always a boondoggle or meritless program in need of pork.  Likewise, there’s always a politician or representative in need of votes.

Spending other people’s money brings a senator flattery from their constituents.  The voters reward congressmen that deliver federal funds with another term in office.  For the voter believes that, through the ballot box, they can get something for nothing.

Take this whole fiscal cliff debate.  From what we can tell the debate is limited to how much taxes will increase and who will pay them.  We’ve yet to hear much in the way of real spending cuts…the type that would take federal spending from 25 percent of GDP, where it is today, back to 18 percent of GDP, where it was in the 1990s.

But even that seems too high.  Why not cut government down to just 5 percent of GDP?  No doubt, there’d be a lot less paperwork to contend with.

The point is government spending is the real problem.  That’s why raising taxes is not the solution. Continue reading →

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Jerry’s Definitive Moonshot

Posted on November 27, 2012 by MN Gordon

Southern California has wonderful weather.  Within the coastal zone it’s especially wonderful.  The sun shines bright every day, there’s low humidity, and a cool breeze wafts off the Pacific Ocean making things perfectly pleasant.  You just can’t beat it.

But for every sweet smelling rose there’s a stem full of jagged thorns…for every yang there’s always a yin.  Whether we like it or not, that’s how the world works.  In Southern California, the traffic, cost of living, and the large swaths of urban blight fall far short of perfection.

Still, it really isn’t all that bad…there are plenty of things that are plenty worse.  The state government, state taxes, and the collective will of the voter, for example, are categorically abysmal.  They penalize the financial rewards of hard work by taking money from those who’ve earned it.  Then they spend it on money losing enterprises – like bullet trains and public pensions – that vaporize wealth from existence.

There’s no place in the world we can think of, with the possible exception of France, where the scum suckers’ suck with such voracious frenzy. Continue reading →

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