Quote of the Day

November 3, 2015
CNBC: Jay Leno on turning sea water to fuel

Roughly 71 percent of the Earth's surface is covered by water, with the oceans holding the majority of it. So it would be incredibly useful if scientists could somehow convert all that sea water into fuel.

Yes, it would be incredibly useful. In fact, it would be even more incredibly useful if scientists could somehow convert *all* the world's remaining forests into giant matches. Just think of the possibilities if scientists could someday do both!

Well, by using the current process, it takes more energy to extract the fuel than you actually get out of it.

Bah! It shouldn't stop us from converting all the world's sea water into fuel though. We just need to find more fuel!

Forehead. Desk. Whack. Whack. Whack.

Stress Test Failure

October 29, 2015
CNBC: Job-related stress reduces workers' lifespans: study

You job may be killing you.

Me stressed out just reading that. Me worried about CNBC writer's lifespan. Me wish me had editor for this blog sometimes. But hey, at least writing on this blog is not me job. That make me feel a bit better. It do. It really do.

Shame on me. Bad Mark! Bad! Bad! ;)

Quote of the Day

October 28, 2015
Owning Half of Japan's ETF Market Might Not Be Enough for Kuroda

With 3 trillion yen ($25 billion) a year in existing firepower, the BOJ has accumulated an ETF stash that accounted for 52 percent of the entire market at the end of September, figures from Tokyo’s stock exchange show.

I'm just thankful that there won't be any long-term unintended consequences from this, especially if the United States someday feels the need to do it too, lol. Sigh.

You Won't Believe the 10 Controversial Things These Millennials Did to Go Viral

July 15, 2015
The Onion: Word ‘Millennials’ Forced Into Headline To Boost Pageviews

At press time, Gein had managed to garner even more pageviews for the post by shrewdly squeezing the terms “controversial,” “viral,” and “you won’t believe” into the headline as well.

What? No list of 10 things to seal the deal?

Monday afternoon clickbait, baby. That's what I'm talking about. Hahaha! :)

Great News for Yesterday's Panicked Coca-Cola Investors

October 21, 2015
Coca-Cola (KO) Stock Collapses, Foreign Exchange Dents Quarterly Sales, Jim Cramer's Take

NEW YORK (TheStreet) -- The Coca-Cola Co. (KO) shares are tumbling 1.4% to $41.70 on Wednesday morning after the beverage maker reported its third quarter fiscal 2015 financial results. Earnings beat, but revenue fell short of estimates.

After yesterday's brutal and unprecedented 1.4% collapse in the price of Coca-Cola stock to $41.70, the company closed today at $43.24. That's a 3.7% rally from yesterday's gut-wrenching panic and represents a true miracle in the face of overwhelming collapsing adversity. Further, the stock now trades within 4% of its 52-week high of $45.00.

In other news, I'm collapsing on the couch right now in sympathy. Please do not call 911 on my behalf. I think I'll manage to pull through once I've played video game or two on my iPhone. I do appreciate your concern though.

Only a sarcastic fool would believe that the Age of Sarcasm has ended. It's just getting started! Hahaha! :)

This is not investment advice. Other than to say that I never pay for Coca-Cola products at anywhere near full price in grocery stores, I am a Coca-Cola stock price agnostic.

Quote of the Day

July 28, 2015
How much money you need to save each day to become a millionaire by age 65

The chart assumes you're starting with zero dollars invested. It also assumes a 12% annual return.

It also doesn't concern itself with taxation, unicorns that will appear in the magical garden that you've created for yourself, the impact of monkeys flying out of your bottom, or the melt time of snowballs in hell. Other than that, the assumptions all seem fairly sound though.

In my experience, the person who starts with zero dollars has no problem at all generating 12% annual returns. Heck, that first penny provides infinite growth, and that next penny doubles the money from there.

Don't forget the most important rule of all. Once you have two pennies you can evenly diversify your investments into both stocks and bonds. One penny each! With the 30-year treasury currently yielding 2.86%, you'll probably need to focus on stocks that yield just 21.14% to hit your 12% target overall.

Easy peasy.

Say, was this article written before the recent stock market turmoil? Just curious.

The Sarcasm Report v.249

October 21, 2015
Money and millennials group behind I-122

SEATTLE -- With exactly two weeks until ballots are due, millennials are targeting millennials in an effort to get out the vote in favor of I-122, nicknamed the "honest elections" initiative.

Honest elections initiative? Awesome! What could possibly go wrong with a nickname like that?

...create a new system in which registered voters can receive up to $100 of so-called "democracy vouchers" to support the candidate of their choice.

Paid for with even higher property taxes! Woohoo! Seriously.

Psst. Hey, buddy. Give you twenty bucks for your "honest elections" hundred dollar voucher. And that goes for any other hundred dollar vouchers you manage to find too. Honest.

Oh, Mark. That's just you being cynical. Get with the program and embrace the honesty inherent in the "honest elections" system!

Can we expect double the political robocalls if the initiative passes? First, they will want to remind us  to spend the vouchers on their campaign. Once that is done, we will be reminded again to vote. That sounds f%^king fantastic!

I'm really going to regret not living inside the Seattle city limits if this one passes! If there is one thing I love most, it is being continually hounded by politicians and their rabid followers looking for money and votes! And politicians looking for "free money" democracy vouchers will no doubt bring out the very best in people! I have no doubt about that!!

This concludes today's sarcasm report. It's extra heavy on the sarcasm with hints of unintended corruption consequences. Yum!

Corporate Guarantee of the Day

October 21, 2015
Subway starts measuring 'footlong' subs in response to lawsuit

Subway is putting its "footlong" subs up to a tape measure to guarantee the subs are actually what they advertise: 12-inches long.

Finally! It's a corporate guarantee that we can count on!

Subway maintains in the settlement agreement that due to variability in food production and the baking process, it "will never be able to guarantee that each loaf of bread will always be exactly 12 inches or greater in length after baking."

Or not, lol. Sigh.

In honor of this guarantee, I promise to never mention Jared again when talking about Subway in polite conversation. Yes, you heard me right. Jared will never be mentioned again. I promise! The last thing anyone wants to do is think about Jared when eating one of their sandwiches. You know, because of what Jared did.

Oops. I think my promise is getting off to a very poor start. Sorry about that! ;)

CNBC's Silly Statistical Chart

October 21, 2015
CNBC: American wage earners became more unequal last year

Visualized as a curve showing the percentage of all earnings brought home by people in each earnings bracket, the distribution of earnings has become flatter — continuing a trend that has been ongoing for the last 25 years. That indicates that Americans are less likely to earn the same as their neighbor than in the past.

The #1 reason, by a very wide margin, that the chart has become flatter is inflation. If wages were to double evenly for every working American, what once fit nicely in the one $20,000.00 to $24,999.99 bucket would then fit nicely in the $40,000.00 to $44,999.99 bucket *and* the $45,000.00 to $49,999.99 bucket. When one bucket turns into two buckets we would expect the chart to become twice as flat.

Claiming that the reason the chart is flatter is due to income inequality is a bit like claiming that the reason the room is lit is due to the burning candle, while simultaneously ignoring the raging fire in the fireplace, the overhead lights, the windows exposed to the direct sunlight, and the flash grenade presumably set off by the "criminal statistics" police, lol. Sigh.

There has been rising income equality in this country, but that chart does an extremely poor job of showing it.

Lies, damned lies, and statistics, baby. That's what I'm talking about.

Easy Money Couldn't Save Fresh & Easy

October 21, 2015
Fresh & Easy begins closing down operations

Fresh & Easy doesn't have enough cash and couldn't obtain financing to continue operating the business, Wonnacott said.

Oh, the irony.

Quote of the Day

October 15, 2015
US dethroned as world's billionaire capital

Released Thursday, the report found China produced nearly five billionaires a week during the year ended Aug. 14.

That's all fine and dandy, but what is the morally empty Chinese billionaire to physically empty newly constructed Chinese city ratio? Now that's a statistic I would love to know, lol. Sigh.

Global wealth inequality, baby. That's what I'm talking about.

Savings Bond News

This is just a reminder that the rates and terms may change on November 1st for EE Savings Bonds. (The rates and terms have the potential to change every six months for newly issued bonds.)

While others scramble to partake of the "massive" interest that short-term treasury bills may soon offer in a perfect world, I am preparing to make yet another purchase of EE Savings Bonds before the November 1st deadline.

On the one hand, the 0.3% rate currently offered is something that I do not really wish to lock in for the long-term.

On the other hand, a bond that is guaranteed to double in price in 20 years is equivalent to earning a 3.53% annual yield, which is a full percent higher than what the comparable 20-year treasury is currently yielding. Further, since EE Savings Bonds are tax deferred, buying them lowers my current income and therefore gives me a slightly larger subsidy on my government sponsored health care insurance.

This is not professional investment advice. We know this because in all the time I've owned Savings Bonds (since 2000), I can't ever recall hearing about them on CNBC. It's almost like Wall Street can't make any money off of me if I buy bonds directly from the government. Go figure.

So, here we go again. This is not my first EE Savings Bond rodeo. I've bought them in the past and held my nose when I did it. I'm holding my nose a lot less on those past purchases these days. Thanks ZIRP and tame inflation for not giving me any buyer's remorse so far!

In related news, I may buy I-Bonds as well. I'm going to wait until November 1st though, on the off chance the long-term fixed rate moves higher than the current 0.0%. I see little reason to lock in the absolute floor as long as there is a is a glimmer of hope. Realistically, the glimmer is extremely tiny though. I'd say there is a very high probability that the rate will stay 0.0% on November 1st. But we can all hope, right? That's especially true when holding out hope can't actually hurt me, as in this case.

EE Savings Bonds may or may not offer a good value right now, but I can say this with absolute conviction. They offer tremendous value relative to the 20-year treasury, and these days I'll take what I can get. Sigh.

Everything you need to know about Savings Bonds can be found at TreasuryDirect. It has been well worth my time to learn. Might be worth yours as well. No promises though. The future, as always, is hard to predict.

Bond Market Would Crash Tomorrow If Not for Me

Hey, I'm just doing my part as a bond investor to keep the financial markets stable.

October 21, 2015
10 bold stock market predictions for 2016

Now who thinks rates will rise soon? Raise your hands. Ah, that’s everybody in the room.

Long-term rates? My hands are not raised. If everyone truly believed that long-term interest rates would soon rise then nobody would own long-term bonds, myself included. Funny how that works. It's economics, not rocket science.

Put another way, markets can't function properly if everybody has exactly the same opinion.

“They can only move in one direction and that is up,” Johnson notes. “I believe that bond investors would be well-served to shorten the duration of their bonds — that is, move from longer-term to shorter-term bonds — in anticipation of rising rates.”

The 30-year treasury yield is currently 2.91%. I think most reasonable Japanese investors living in ZIRP would understand that long-term interest rates still have two directions that they can move.

Fortunately, American ZIRP is nothing at all like Japanese ZIRP. They fell into it after their housing bubble popped whereas we fell into it after our housing bubble popped. See? That's two entirely different things, lol. Sigh.

As a side note, if I got a dollar every time I was told to shorten the duration of my bonds since retiring in 1999, then I could definitely afford a movie and a nice dinner. That's assuming that I did not actually take the advice, of course.

This is not investment advice. I can say that I bought many individual long-term bonds with the intent to hold to maturity, have never sold any of them, and have never regretted the decision. Go figure.

Quote of the Day

October 19, 2015
HONEYWELL CEO: 'This feels a lot different than it did in 2001 or 2008'

Additionally, Cote thinks the economy is better positioned if the slowdown persists.

This is your captain. Some of you may be wondering why we have chosen to fly at stall speed over the Rocky Mountains. Well, we took a vote up here in the cockpit. Of those not currently unconscious, 100% felt that the plane would be better positioned to handle any unexpected turbulence if we cut power to several of the engines. Please enjoy what's left of your flight!

A Pirate of a Cat a Bein'

Hahaha!! :)

The Crock of @#$% Report v.032

October 17, 2015
Frank Zorrilla, The Truth.

Chasing what was just hot and ditching what has been cold will burn you 9.9 out 10 times.

If that truly burns investors 99% of the time as is claimed, then we have just found a simple way to easily make massive sums of money in the stock market! We shall always short what was just hot and always embrace that which has been cold! Woohoo!

Apple stock sure started running hot about 5 years ago. Meanwhile, Radio Shack really, really started running cold. How much money would we have made selling Apple and buying Radio Shack? What? Not that much? Interesting. But is there a turnaround plan? Is there a quick comeback in the works?

October 16, 2015
Radio Shack makes quick comeback from bizarre accident

Yes! I knew it! As investors, this "accident" hasn't burned us yet!

“We are open for business. Come and see our new look,” he joked.

Joked? What?

Despite taking two-and-a-half tons of SUV through its front window Wednesday afternoon, Radio Shack was open for business as usual Thursday morning.

Ah, due to unexpectedly heavy traffic, Radio Shack was forced to do some much needed renovations, lol. Sigh.

In all seriousness, anyone who claims they have found a way investors are burned 99% of the time is also claiming they have found a way to make money 99% of the time. Good luck on that. You're going to need it.

If it was so easy making money in Wall Street's casino following simple little rules like this, then the major investment banks wouldn't feel the need to use advanced trading algorithms to compete with you. They'd simply ditch what has been hot and embrace what has been cold. 99% success. Easy peasy.

There are no simple ways to avoid pain when gambling. Anyone who says otherwise is more than likely trying to sell you something. That's the absolute truth as I see it.

The Conundrum of the Century

October 15, 2015
In Reversal, Obama Says U.S. Soldiers Will Stay in Afghanistan to 2017

WASHINGTON — President Obama halted the withdrawal of American military forces from Afghanistan on Thursday, announcing that the United States will keep thousands of troops in the country through the end of his term in 2017 and indefinitely prolonging the American role in a war that has already lasted 14 years.

1. How can the Fed raise interest rates if we can't even remove our troops from Afghanistan?

2. How can we remove our troops from Afghanistan if the Fed can't even raise interest rates?

We're trapped in a never-ending paradox! ;)

The Future Is Here in Financial News Article Automation

October 16, 2015
Wal-Mart Stores Inc (NYSE:WMT) Had Its PT Lowered by 16.67% at BMO Capital Markets to $55.00

According to data compiled by Thomson Reuters, Wal-Mart Stores Inc (NYSE:WMT)’s stock is covered by 21 equity analysts across the Street, with 0 analysts giving it a Sell rating, 0 a Buy rating, while 0 consider it a Hold.

0 of me believes a sentient being could have written that without at least commenting on its silliness, lol. Sigh.

Shades of Nothingburger

October 16, 2015
The nagging question for investors: Is 2% enough?

1. The 10-year Treasury yield (^TNX) has retreated to 2.02%, on soft inflation measures, depressed global yields, the quest for safety and waning expectations of a Federal Reserve rate hike this year.

2. In a notable bit of symmetry, the dividend yield on the S&P 500 index (^GSCP) is now in the same zone, at 2.15%.

Now you just need to find an overpriced wealth management professional who charges you 1% per year and advises you to put your money in a mix of treasury bond and stock market funds that also charge 1% fees.

The future's so bright, I gotta wear shades of nothingburger! Woohoo!

Not gloomy enough for you? Expected better of me? Not a problem!

Two words: underfunded pensions.

0.5 Cents per Hour

That's how much I've spent on the video game Real Racing 3 for the iPhone so far this year.

That's 1,061 hours of game play for $5.46 (an initial accelerator game pack helped get me started and removed in-game advertising, including sales tax). I have no choice but to declare this my favorite video game of all time, based solely on the number of hours played.

I'm still just addicted as ever. The price per hour should only go down from here, which is good because 1/2 a penny per hour seems a bit excessive for high quality entertainment these days. ;)

Is it any wonder newspapers and movie theaters are struggling? Seriously.

In the eyes of a gamer such as myself, this is real prosperity. No doubt about it. Too bad we can't carry it over to property taxes and health care expenses.

I do believe that it will someday carry over to tuition though. It should only take one seriously gifted physics professor to create online physics courses for the entire country. Right? In theory, that should be an incredibly cheap learning environment. Perhaps even 0.5 cents per hour too. Just sayin'.

The Onion Indirectly Explains the Lack of Corporate Wage Inflation

October 15, 2015
The Onion: Never-Before-Heard Buzzword Flying Around Office Can’t Be Good

“I don’t know if or when they’ll reveal what ‘platforming’ is, but I do know for sure that it’s going to make us utterly miserable, take over our lives for the foreseeable future, and probably get a bunch of us fired.”

Constant fear of new corporate buzzwords, baby. That's what I'm talking about.

Four Billion Pounds

That's how many pounds of food U.S. food banks are expecting to give away this year to help support this strong and resilient economy.

As an added bonus, once everyone is well-fed we can expect a huge uptick in the purchases of single family homes in suburbia. Well, assuming that "fogging the mirror" will soon be the only requirement to qualify for a new mortgage again.

Investment idea? White paint and wood! Let's make America great again by painting picket fences white, hoarding them, then selling them at a huge markup once the massive demand finally hits!

Worst case? We can sell them to the government to install on our southern border if the terrorist s%^t hits the fan again. Even bigger markup! Everyone loves fences! Woohoo!

August 13, 2015
Even with economy growing, food banks struggle to meet greater demand

U.S. food banks are expected to give away about 4 billion pounds of food this year, more than double the amount provided a decade ago, according to Feeding America, the nation's primary food bank network. The group gave away 3.8 billion in 2013.

Quote of the Day

October 15, 2015
Investopedia: Effect of Fed Fund Rate Hikes on the Housing Market

With inflation rates and housing prices making up 30% of the consumer price index (CPI), they are the most significant factors in terms of whether mortgage rates increase in the future.

1. Some might argue that inflation rates do not make up any of the consumer price index since the consumer price index is a price index and not an inflation rate index. Of course, you can calculate an inflation rate by using the data in the index. That's not the same thing though. This is all just a technicality that novice hecklers might dwell on.

2. Some might argue that inflation rates make up the full 100% (not just 30%) of the inflation rate calculated by using the consumer price index data. Some might therefore even ask what the other 70% would be if it isn't related to inflation rates. This is a more serious problem that advanced hecklers might focus on.

3. Some might argue that house prices make up 0% of the consumer price index since house prices aren't included in it, only the rental prices of housing (which is clearly not the same thing). This is the realm of expert heckling. It takes a keen understanding of the CPI to dwell on this major flaw.

4. Some might argue that I am a complete idiot for continuing to read these articles day after day when they just keep repeating the same things over and over. We know there will be another article just like it appearing shortly that will tell us all we would want to know about how changing interest rates will affect us. This is what a master heckler would tell us.

Why do I do it? I have no idea. It certainly isn't because I expect to read great advice. Perhaps the clickbait links are most effective when there is something to be heckled within them? Perhaps it is targeting me? The more silly articles I click on the more silly articles are generated? Perhaps it is by design and I am like the lab rat in a maze? Could be. Seriously.

The Stock Market Is Finally Risk-Free Again

October 14, 2015
Bill Miller: Now is a perfect time to buy US stocks

There are no reasons to be bearish about the U.S. stock market, value investor Bill Miller told CNBC on Wednesday.

Things haven't looked this risk-free since that time we were heading into the Great Recession. Isn't that right, Mr. Miller?

December 10, 2008
The Stock Picker's Defeat

Mr. Miller was in his element a year ago when troubles in the housing market began infecting financial markets. Working from his well-worn playbook, he snapped up American International Group Inc., Wachovia Corp., Bear Stearns Cos. and Freddie Mac. As the shares continued to fall, he argued that investors were overreacting. He kept buying.

What he saw as an opportunity turned into the biggest market crash since the Great Depression. Many Value Trust holdings were more or less wiped out. After 15 years of placing savvy bets against the herd, Mr. Miller had been trampled by it.

Leverage That Debt!

Investopedia: Should Retirees Still Have Mortgages?

A retiree paying 4% interest on his mortgage is ill-advised to pay it off by liquidating an investment account that provides returns of 10%. It is better to keep both accounts as they are and enjoy the 6% spread, which is tantamount to profit for the retiree.

I have prepared a comprehensive list of all safe investments guaranteed to yield 10% returns well into the distant future and am providing it at absolutely no cost to you. Enjoy!


[This Section Intentionally Left Blank]


Invest accordingly!

One Way to Know That Our Economy Isn't Healthy

Buying a House Before an Interest Rate Hike

However, since at least the mid-1980s, a rising interest rate has normally coincided with a healthier economy.

The yield on the 10-year treasury has fallen from 11.38% in January of 1985 to just 2.04% today. For those keeping track at home, that's a whopping 9.34% drop.

Therefore, if a rising interest rate is normally associated with a healthier economy then for the love of all that is holy, please take this economy behind the woodshed and "Old Yellen" it. It's just not right to keep watching it suffer!

Hey, I'm just going with what I am told. Don't blame the messenger, lol. Sigh.

First World Problem of the Day

October 13, 2015
Aunt sues nephew, 12, for breaking her wrist during greeting

"I live in Manhattan in a third-floor walkup so it has been very difficult," Connell said. "And we all know how crowded it is in Manhattan."

We do know how crowded it is. You go, girl.

And if walking up stairs with an injured wrist wasn’t difficult enough, the after-effects on Connell’s social life have been disastrous.

Two whole flights of stairs with an injured wrist? Oh, the humanity! How does she endure? Has any human ever known such suffering?

“I was at a party recently and it was difficult to hold my hors d’oeuvres plate,” she added.

Just when I thought it couldn't get any worse! I can't even begin to imagine the horror.

Hopefully, the equivalent of 35 man-years of Chinese factory wages ($127,000) can somehow right the wrong of an 8-year-old boy (at the time of the incident) a bit too anxious to hug his loving aunt.

Fed Seems Determined to Entice Savers to Hoard Hard Goods to Somehow Support Our Service Economy During Next Crisis

October 12, 2015
Fed officials seem ready to deploy negative rates in next crisis

For instance, $100 in the bank would be worth only $98 after a certain period.

Oh, yeah. That will definitely entice me to spend the money frivolously on the discretionary purchases that keep this economy rolling. Count on it. Hell, might even get my hair cut once a week instead of every few months.

Too much sarcasm? Seems excessive again!

Is it any wonder that I still find value in long-term treasury inflation-protected securities (TIPS)? Pry them from my cold dead fingers I say.

Special note to short-term savers still holding out hope for the long-term future. Good luck on that.

This is not investment advice.

Thoughts on the Dam Prosperity

October 7, 2015
4 Hidden Causes of Dam Failures

Historic trends haven’t always been the best predictors of what’s possible in the future. - John France, National Dam Practice Leader with the international firm AECOM and a member of the American Society of Civil Engineers

Yeah, yeah. We're all well aware that past dam performance is not necessarily indicative of future dam returns! The trend is your friend though, right up until the point of catastrophic dam failure, lol. Sigh.

The American Society of Civil Engineers gives the nation’s dams an overall grade of D...

Junk bonds and dams, it's all good until it isn't.

The Sarcasm Report v.248

October 11, 2015
Don't even think of being a tech VC if you're over age 48

What will happen if I think about it?

VCs are at their prime before the age of 47 or 48, according to a study...

This is bad news for me since I'm the age of 50 or 51.

“Almost 85 to 90 percent of all series A and series B successful outcomes have always been done by a venture capitalist under the age of 47 to 48,” Palihapitiya said.

Ah, some good news. I'm "almost" aged 0 to 48. I have "always been" able to say that with "almost" 85 to 90 percent confidence.

Lies, damned lies, and statistics, baby. That's what I'm talking about.

In all seriousness, what's up with the fuzzy numbers? Is this National Obfuscate the Statistics Month? Imagine if you were driving on the highway and saw a sign that said:

Speed Limit

47 mph or 48 mph
Almost 85 to 90 Percent Chance

Always Been That Way

I can't speak for you, but I'd get the f^*k out of that state ASAP! ;)

A Timeless Proverb Updated for 21st Century Sensibilities

October 11, 2015
Dos and Don'ts for Late-Start Retirement Savers

Thus, accumulators who need their retirement assets to grow have no choice but to steer a healthy share of their portfolios toward stocks...

A bird in the hand is worth two in the bush, unless you desperately "need" more than one bird. Feeling lucky?

Lockhart Uses Jedi "Fedspeak" Mind Powers

October 9, 2015
Fed's Lockhart still sees 2015 rate hike despite recent red flags

The economy remains on a satisfactory track and ... I see a (rate) liftoff decision later this year at the October or December FOMC meetings as likely appropriate. - Atlanta Fed President Dennis Lockhart

Trader Tom: Hey, did you hear that Lockhart still sees a rate hike later this year?

Tradet Jon: No, I heard that he still sees a rate hike decision later this year.

Trader Tom: Isn't that the same thing?

Trader Jon: Not exactly. There's a pretty big difference between a rate hike and a rate hike decision. That's why seasoned traders always parse the text.

Trader Tom: You know, this makes sense. Making rate hike decisions at interest rate decision meetings would certainly seem appropriate. I just assumed they were making rate hike decisions at every meeting.

Trader Jon: Been trading long?

Trader Tom: Started trading this year.

Trader Jon: Went long biotechs in late July?

Trader Tom: Yeah, how did you know?

Free Lunch!

October 7, 2015
Urban Outfitters' Fall Strategy: Asking Employees To Work For Free

As you can see, URBN is explicitly asking its salaried employees to “pick, pack and prepare packages”—an actual job!—for free, with the only rewards being lunch and transportation.

Free lunch*! Woohoo!

* To qualify, you need to work one 6-hour shift unpaid. Limit 2 free lunches per day. Offer void where currently prohibited by law and/or ethics.

Quote of the Day

October 8, 2015
The Onion: Nation’s Financial Advisors Recommend Capturing Magical Creature That Grants Wishes

“Far beyond budgeting or managing a portfolio of stocks and bonds, tricking one of these mystical beings into becoming one’s wish-granting servant is the most prudent, and frankly for most Americans, the most practical way of securing long-term solvency and a comfortable standard of living.”

The Sarcasm Report v.247

October 7, 2015
Cramer on Yum earnings: ‘This is inexplicable’

CNBC's Jim Cramer said Wednesday he is baffled by Yum Brands' latest earnings miss.

If this was a drinking game and you had to drink a shot of Vodka every time something baffled Jim Cramer, then just think how sober you might be!

That's assuming you still have a functional liver after his "Winners of the New World" article back in 2000, of course. ;)

Quote of the Day

October 7, 2015
Volkswagen dealer: Biggest fraud I have ever seen

"Dealer and customer satisfaction is a top priority for Volkswagen, as such, we have been actively working with our National Dealer Council to address the immediate needs of our nationwide dealer body," said Jeannine Ginivan, a spokeswoman for VW of America.

A top priority? Sure. Is it *the* top priority though? Well, it's kind of hard to say, what with so many top priorities to pick and choose from, lol. Sigh.

It really reminds me of the day I quit my job. The general manager was not pleased. I told him that I didn't believe employees were a priority. He said that employees are the #1 priority, it's just that other things are more important right now. Hilarious! (In that gallows humor kind of way.)

Oh, sure. I could have found something amusing about fraud in the article to make the quote of the day. Score one for sentimental value though.

Two Things to See When in Dubai

1. Burj Khalifa. At 829.8 meters, it is currently the tallest building in the world.

2. $400,000 Lamborghini Aventador. It apparently tends to burn if the novice driver repeatedly revs the engine without the adequate cooling that 100+ mph airflow would provide.



Burn baby, burn. ;)

Our Economy Is a Tragicomedy

October 6, 2015
Ex-Fed's Fisher: Bernanke wrong on inflation

"This is a four-act Shakespearean play," Fisher continued. "We don't know if it's a comedy or a tragedy."

If it is a comedy, then it will surely be a tragedy. If it's a tragedy, then the joke's on us.

They Can Not Say

October 6, 2015
Boy, 11, accused of killing 8-year-old girl with shotgun

They can not say whether he had any mental problems right now, but the state Department of Children's Services is investigating.

The lips simply need to move up and down while air is expelled over the vocal chords. Oh, yeah. And make sure the tongue flaps around a bit. Always works for me when trying to say something!

That's assuming that the 11-year-old boy actually did shoot the 8-year-old girl in the chest with a shotgun for not letting him see her puppies, of course.

As a gun owner, shame on the parents for not keeping the shotgun secured from their children. Shame on them. Shame.

The Wisdom of Ian

October 5, 2015
Cramer: Why I'm rethinking my view on the market

From the comments:

I don't hate Cramer like so many do, if any of us tried to do what he does we'd be ridiculed all the time too, but I agree with all of you that his daily flip flopping is a little ridiculous. I'm also pretty sure a long time ago he told people/us to "have conviction", but sadly this is something he seems to lack. - Ian

Traders beware. Looks to get ugly out there today for those long the stock market now that Cramer is bullish yet again, lol. Sigh.

Quote of the Day

October 6, 2015
Fed can't fix stagnant middle-income wages: Koesterich

We know there's no global growth, or not much of it, and we're going back into an environment where investors are taking some solace in very easy money. - BlackRock's Russ Koesterich

Normalized Investment Advice Propaganda

October 5, 2015
How Near-Retirees Can Ride Out Market Volatility

1. Bear markets are normal and market volatility is here to stay.

2. This is normal stuff — don’t panic.

3. Explain to them that this is normal and their plan assumes market declines that will happened from time to time.

4. Market declines and corrections are normal.

Trapped in ZIRP for nearly 7 years so far? It's all perfectly normal.

Breaking News: The Fed Is on Hold Until at Least 2015!

You heard it here first!

October 5, 2015
Reuters: Wall St. rises as Fed seen holding off rate hike till 2015

2015? Seriously? Step aside Nostradamus! There's a new fortune teller in town!

I'm guessing this headline gets fixed soon. Too bad. This mainstream prediction is the first "sure thing" I've seen since starting this blog. Hahaha! :)

Update:

(This story corrects headline to say "2016" not "2015")

Party poopers! ;)

Interest Rates Rise as Interest Rates Not Expected to Rise

October 5, 2015
Stocks jump as expectations ease of U.S. rate hike; oil gains

1. Stocks are rising because interest rates are not expected to rise.

October 5, 2015
BOND REPORT: Treasurys Under Selling Pressure, As Global Stocks Rally

2. Interest rates are rising as stocks are rising.

Therefore, interest rates are rising as interest rates are not expected to rise.

Put another way, it's safe to sell bonds to buy stocks as long as interest rates stay low. Interest rates will stay low as long as investors don't sell bonds to buy stocks.

Hey, don't blame the messenger if this twisted logic all seems a tad bit circular. I'm just trying to make sense of the headlines. ;)

There's a Sucker Punch Born Every Minute

June 1, 2015


I'm not, but I found a terrific financial advisor at Interactive Brokers Investors' Marketplace. He manages my account and built the perfect portfolio for me. Put me into a couple of hedge funds that are doing great.

That was then. This is now.

October 2, 2015
REFILE-U.S. hedge funds brace for worst year since financial crisis

September's sucker punch in the biotech sector, on top of a grim August when global markets tumbled due to fears about slowing growth in China, have pushed many hedge fund managers deep into the red.

Perhaps Interactive Brokers and the hedge funds should have hedged their bets. Just sayin'.

Quote of the Day

October 3, 2015
Does Downsizing in Retirement Still Make Sense?

From the comments:

If you borrowed at least 60% of your home value at a rate at least 1% below what your money earns elsewhere and didn't bother to count your primary residence as an asset but a wash, none of this matters. - vram47

Much danger, there is when borrowing money to invest elsewhere in retirement. Back the empire may strike. Yes, hmmm.

Headline of the Year

October 1, 2015
Nunchuk-wielding shampoo thief charged in bus-based sword attack

A Seattle woman fresh from jail after a nunchuk attack is now accused of chasing a stranger off a King County Metro bus – with a sword.

The end times are definitely upon us, lol. Sigh.

Two Quotes of the Day!

That's right! It's a twofer!

September 30, 2015
Why You Should Buy a Home Right Now

If you’re considering buying a house to act as rental income, doing so when rates are low is one of the most important factors to the success of your investment. We don’t know where interest rates will go in the future. They could fall even lower or rebound to pre-recession figures, but right now is a good time to bet on the housing market.

Indeed! Those who bought rental properties in 1981 when the 10-year treasury yield was north of 15% are probably still kicking themselves for making the purchase. But who could have guessed they'd be given so many decades to refinance at lower rates? And who would have guessed the 1980s and 1990s would be so prosperous? Oh, wait. Never mind. I think my logic is all messed up.

September 30, 2015
Four reasons the market won't crash

As for stock prices, I remain troubled by near record-high corporate profit margins, which create the illusion of a market that is cheaper than it really is. As margins revert closer to the long-term average, stock prices may indeed need to come down more to reflect the slowdown in earnings growth. However, the S&P 500 has now retreated about 12 percent from its all-time high, with certain sectors like energy and materials getting hit harder.

As the front of the car's bumper wraps around the telephone pole, the passenger has to ask, "Are we going to crash?" The driver replies, "Going to crash? Well, technically no. The telephone pole has lowered our speed considerably. Hell, I'm not even sure the car will be drivable in the future. Hey, great news! The airbags are finally deploying!"

Goldman Sachs Just Convinced Me to Wager My Entire Retirement Nest Egg

October 1, 2015
How to make 7 times your money in Apple: Goldman

With a headline like that, how can I lose?

Because Apple shares have to rise above $115 by more than the $5.70 being laid out, this represents a bet that the stock will rise above $120.70 in four months, or more than 9 percent above Wednesday's closing price.

For Goldman, this appears a distinct possibility.

Baby needs new shoes! 7 times my money or bust! Bet it all on the distinct possibility!!

This is almost as good a bet as that time I was at the horse races. The horse's name was Goldman's Sax. Its odds were also 7 to 1. Music to my ears! I didn't win that time but this has got to be fate!! Things happen for a reason!!

So what if Apple is down today! That will just make the eventual victory that much sweeter!

Sweet Sixteen

I got my very first mobile phone (iPhone) back in January.

Today marks a new milestone. I just blocked my 16th caller! Woohoo! I feel all grown up now!

I thought I would take this opportunity to share a tip for other newbies about to get their first mobile phone.

Never, under any circumstances, share your number with anyone other than friends or family.

I never did. Think where I'd be now if I had!

Incoming call... 7:30am this morning... didn't recognize it... Bam!... You're blocked!!

Didn't even have to give it a second thought!

The receptionist at my dentist saw me browsing the Internet in the waiting room recently, came over to me, and asked if he could update their records with my mobile phone number. I said I'd really prefer not. That's my very friendly way of saying that he could pry the phone number from my cold, dead fingers, lol. Sigh.

See what you've done Congress? Your Do Not Call list is a complete joke! This is what semi-rational people do when all else fails!

And lastly, guess who I least want to have my phone number heading into 2016? I'll give you a hint. It rhymes with erection! I can just feel the wave of political calls trying to get all up in my business. I'll pass, thank you very much. They excluded themselves from the Do Not Call list! Is that really what the American public wants?

Congressional asswipes, baby. That's what I'm talking about.

"I think earnings are misstated and sort of a complete mirage."

September 30, 2015
Carl Icahn: I think markets are overpriced, earnings are misstated

"I think earnings are misstated and sort of a complete mirage," he said Wednesday.

On the Illusion of Prosperity blog, we are not believers in mirage theories!

Oops. I just got a text from my lawyer. He warns me not to use "we" when there is only one of me. He also states that I should not swear to disbelief in mirage theories under oath. He's concerned that illusions and mirages might be similar in the eyes of the law. Imaginary lawyers. Whatcha gonna do?

First World Problem of the Day

Early this morning I went to Planet Fitness to exercise. When I arrived, there was a guy practicing/tuning a trumpet. I didn't give it much thought but after 30 minutes I felt the need to say something about it. It was loud enough that the notes were sneaking through my headphones as I nearly blissfully listened to Spotify.

Should I say something? Or not? I don't know his situation. What if he's the owner? I'd definitely want to say something. What if he's just some guy down on his luck and living out of his car? I don't think I'd want to say anything. In the end, I figured the truth probably lied somewhere between the two extremes.

Do I talk to the employee about it? I don't know. Seems kind of cowardly. I wasn't looking to get anyone in trouble. This is the same employee who warned me when I joined not to listen to music so that others could hear it. I appreciated that. And yet, everyone could hear that trumpet. Very confusing. And when I say everyone, I mean the trumpet player, another person working out, the one employee, and me. It was 3am. Not many people there.

Perhaps it was best just to ask the trumpet player to play softer and explain that I could hear it through my headphones. I decided to do that, even though I know how nearly impossible it would be to play a trumpet softly. He was very nice about it. He stopped and then left.

I exercised for another 90 minutes, took a shower, and as I was walking out the door I decided to ask the employee what the story was. He said the guy lives in his car and he lets him play when there aren't many people around. He tends to do it once every few weeks.

Damn. That was one of the scenarios that actually went through my head before I complained.

Moral of the Story

Complaining about first world problems, especially to those with bigger problems, may end up making you feel like a schmuck.

Why did I do it? It rarely ends well. At best, a tiny violin should play. At worst, well, yeah. Been there, done that. Today!

Live and let live. I really try to live by that but every now and then I lose my way.

Quote of the Day

September 30, 2015
How to draw down your retirement savings

When markets are in a downturn, "great, tighten the belt," Ward said. Conversely, a strong market can enable retirees to draw down a bit more, since they will still be leaving plenty of savings in the portfolio.

Markets have been in a downturn this year. Great, tighten the belt. And if enough people tighten the belts, the markets will continue the downturn.

Where might it end? Great Depression II tightens the rust belt?

Aren't death spirals fun? Many financial experts like to talk about the wealth effect. What they don't often say is that it can easily work in both directions. Sigh.

10 Jobs Hiring Older Workers

September 21, 2015
MSN Money: 10 jobs hiring older workers

This article has offered up some real job prosperity for those aged 50 and over (like me). No doubt about it. Check out the wages that our lifetime of experience can generate!

Median Hourly Wage

1. $12.19
2. $12.81
3. $12.72
4. $11.74
5. $11.24
6. $12.72
7. $11.16
8. $11.51
9. $11.90
10. $23.14

If you are like me, then I know what you are thinking. Job #10 please!! It might not match the pay of a CEO, but it is certainly vastly superior to the rest in the list!

That's the Bridge Tender job. If you have a lot of bridge tending experience and live in a city with thousands of bridges then I would encourage you to apply. The federal, state, and local governments are practically giving these jobs away!

Forehead. Desk. Whack. Depressing. Whack. Depressing. Whack. Depressing. Sigh.

Quote of the Day

September 28, 2015
JC Penney: When the Ceiling Becomes the Floor

Shares of J.C. Penney (JCP) have gained 50% this year, which means it’s time for an analyst upgrade.

History shows that the best time to upgrade a stock is right after it has risen the equivalent of 15 years of 30-year treasury bond interest in just one year.

In related news, JC Penney is currently trading down 2.96% as I type this. No worries. That's only 1 year of 30-year treasury bond interest. If it continues to fall at its current rate, there won't be a downgrade for a fortnight (14 days), lol. Sigh.

Analysts and generally crappy timing, baby. That's what I'm talking about.

This is not investment advice. I have no opinion on where this stock goes from here. I can say this though. I'm certainly not buying JC Penney based on a Wall Street analyst opinion. If it was such a sure thing, why would they tell me? Generosity? A willingness to offer free profitable advice to their fellow man? Did Henry Blodget teach us nothing?

"Considerable Margins of Safety"

December 29, 2014
Why I'm Backing A Brilliant 2015 For BHP Billiton plc, Glencore plc And Rio Tinto plc

However, it is mostly as a result of the considerable margins of safety that are currently on offer through BHP, Rio Tinto and Glencore that I’m bullish on their share price prospects for 2015. It could be a stunning year for investors in all three companies.

Glencore? Brilliant 2015? Stunning year? Got TASER?

Of course, finding the most appealing stocks for next year is not an easy task. That's especially the case if, like most private investors, you lack the time to trawl through the FTSE looking for the best opportunities.

All that time spent trawling and all he's got to show for it is an old tire, a washcloth, a waterlogged sneaker, and a selfie with his "best opportunities" treasure, lol. Sigh.

September 28, 2015
Glencore craters 29% as analysts fear debt will ‘evaporate’ stock’s value

Glencore GLEN, -29.42% GLCNF, -27.70% shares have now lost 76% in value year-to-date, as the miner and trader struggles with weak results, slumping metals prices and broader concerns about its balance sheet.

Excessive debt and leverage. Whatcha gonna do?

Quote of the Day

September 28, 2015
One strategist admits he was wrong about oil stocks and thinks this admission could make him wrong again

"Firstly, we are downgrading energy from overweight to market-weight," Parker writes. "We made a really bad call by going overweight energy at the beginning of this year... We are clearly burned by our wrong overweight, and worry that this downgrade could be the beginning of an energy rally."

This is the very same strategist from Morgan Stanley who just told us that all we think we know is wrong.

It's official. Today is Opposite Day, lol. Sigh.

The Sarcasm Report v.246

September 28, 2015
Morgan Stanley's stock market guru explains why everything you know is worthless

Everything you think you know is wrong.

Here is something I thought I knew. Morgan Stanley didn't understand risk heading into the Great Recession.

August 22, 2011
Morgan Stanley at Brink of Collapse Got $107 Billion From Fed

Aug. 23 (Bloomberg) -- As markets convulsed in September 2008, Morgan Stanley Treasurer David Wong briefed the Federal Reserve on a “dark” scenario in which the U.S. firm would need at least $10 billion of emergency loans from the central bank.

It got 10 times darker by month’s end. Morgan Stanley borrowed $107.3 billion, the most of any bank, according to data compiled by Bloomberg News using information released in response to Freedom of Information Act requests, related court orders and an act of Congress.

Pretentious asswipes.

I thought it was wrong to swear on this blog, but apparently I was mistaken. What can I say? Everything we thought we knew is wrong.

The Planet Fitness Report v.001

August 6, 2015
5 things to know about Planet Fitness

Planet Fitness, Inc. priced its initial public offering at $16 a share late Wednesday, the high end of its guidance range. The company sold 13.5 million shares to raise $216 million. Shares will start trading later Thursday on the New York Stock Exchange under the symbol “PLNT.”

I used their local facilities in the past a few times as a guest (my girlfriend had a membership). As far as gyms go, I liked it.

I joined last week. Including taxes, the start up fee, the annual membership fee, and monthly fee, it will cost me roughly $200 for the first year. I think it is a pretty good value, especially if it keeps me motivated. I can't say if my particular membership will be a good value for them though.

I've used their exercise equipment for 10 hours in one week. Assuming I keep the pace (definitely not a given), that's 520 hours in a year. I have never resold a piece of exercise equipment. I use them until they die. I paid roughly $2000 for a high quality stair climber about 15 years ago. It was a good investment but it's dying. It developed a squeak and nothing I have tried has fixed it. I bring this up because 520 hours on exercise equipment is a lot of wear and tear.

One thing that always motivates me is getting my money's worth when I buy something.

I intend to do just that at Planet Fitness. It's four miles from where I live. It will cost me about $4 each visit (wear and tear, gasoline). That expense dwarfs the membership costs. I wonder how many factor that in? In order to justify the trip, I want to exercise a lot when I am there. That's why I intend to use their equipment for two full hours.

I also intend to visit often. I'm paying Planet Fitness whether I use their facilities or not. I'm therefore choosing, as a night owl, to visit at 3am in the morning each weekday. Or does that make me a morning person? Beats me, lol. But hey, it's working. I've been 5 times and enjoyed it. I do 30 minutes on a recumbent bike (moderate resistance), 30 minutes on the treadmill (2 mph, 11% incline), 30 minutes on the bike, and then 30 more minutes on the treadmill. The routine burns between 900 and 1000 calories in total. Should improve as I lose weight and get into better shape, not that it should matter. That's a lot of exercise and a lot of calories. I feel it.

The real savings will come in other ways though. It's been a rough two years. First, I had that horrible ankle sprain two summers ago. Last year I got Shingles. This year I was just plain lazy. So began the blood pressure medication. Enough is enough. I want off of it. I refuse to become obese. At my age (51), nothing good could come from that.

So anyway, that's my plan. One week down. I'm 6'3" and 230 pounds. Barring injury or illness, I'm not stopping until I see 200. No excuses. I figure if I put it in writing here, then I will feel obligated to do it. Thanks support team!

I don't know what my other long-term goals with Planet Fitness are. This may be just a one year and done situation. I may just be using them as a motivating kick start. Next summer I hope to be doing more hiking. The treadmill should prepare me well for that.

And lastly, I feel really good about this. Hello exercise endorphins. Seriously, I just got back from exercising this morning. Riding the wave, baby. That's what I'm talking about. Life is good. :)

Warning: Volkswagen CEO Pledges to Do Everything to Win Back Your Trust

September 25, 2015
The Latest: New VW boss vows to win back public's trust

Incoming Volkswagen CEO Matthias Mueller is pledging to do everything to win back the trust of the public in the wake of the emissions scandal that erupted in the U.S.

1. Many CEOs in his position might try to earn back your trust. He intends to win it!
2. He will do everything to win!

Be careful gambling your trust with this guy in a high stakes poker game. He seems to be using the same tactics that got Volkswagen into trouble in the first place. They did everything to pass those emissions tests! Everything!

If you have three aces and lose to four aces, there's only one deck, and nothing is wild, then don't come crying to me, lol. Sigh.

In all seriousness, will do everything to win? Oh, yeah. I can feel the trust building. Not.

Quote of the Day

September 24, 2015
The Onion: CEO Has Big Ideas To Grow Company’s Problems

"I was initially skeptical of any aggressive growth strategy given the current size of our company’s problems, but after hearing Adam outline his proposals, I’m now completely confident that we can double the size of our problems over the next quarter."

Rumor has it that his main proposal involved merging with Volkswagen. He seems to be a day late and a dollar short though. That ship has sailed. ;)

I Wish I Could Lock in a Dismal Return

I'm serious. If I could lock in a dismal return then I would put my entire retirement nest egg in it. Don't believe me? Well, maybe I can convince you just how awesome dismal returns can be!

September 24, 2015
Millions of boomers are making this big retirement mistake

The trouble is that the bond market, a traditional safe haven for retirees and near-retirees, has had dismal returns since the recession.

Had you bought the 30-year treasury in June of 2009 (the end date of the Great Recession), then you'd be sitting on a bond yielding 4.5% right now. That's nearly 3% higher than what the consumer price index has been doing since then. A 3% real yield? In a safe haven? If that's considered dismal, then sign me up!

But wait, that's not all! You would be sitting on a 4.5% bond that some other investors might be willing to sell a kidney to own right now. In other words, the price of that bond has gone up big time.

So, yeah. I would love to lock in a similar dismal return going forward. No doubt about it.

Unfortunately, based on recent stock market action, we seem to be entering a worse than dismal returns environment. If that's the case, then locking in an actual dismal return might still be attractive. Got 0.0% I-Bonds? I do. Might even buy more in November. Sigh.

Despair.com: Despair

It's always darkest just before it goes pitch black.

CAT Got Your Tongue?

September 24, 2015
Caterpillar to cut up to 10k jobs; lowers guidance

The company also noted in its restructuring announcement that 2015 is the company's third consecutive down year for sales and revenues-and 2016 "would mark the first time in Caterpillar's 90-year history that sales and revenues have decreased four years in a row."

For those keeping track at home, 90 years ago was 1925. Why is it important? It was before the Great Depression. What an awesome record to break! Sigh.

This strong and resilient economy has made me nearly speechless. That's right. CAT's got my tongue! Badum-ching.

The 30-year treasury yield is back down to 2.88% as I type this. Behold the rising long-term interest rate environment in all its glory, lol. Sigh.

The Two Most Popular Long-Term Interest Rate Camps

Camp 1: "Eventually, Interest Rates Will Rise"

January 17, 2014
A couple of frugal years before pensions kick in will do the trick

Eventually, interest rates will rise. Bonds, which are the core of annuities, will pay more. Annuities will raise their payouts and, given that much of what they pay – especially later in life when death is closer – is untaxed return of capital, they will be more attractive.

Good luck on that theory. The 30-year treasury yields about 0.75% less now. 2014 was a great year for bond prices. Go figure.

Camp 2: "Interest Rates Will Rise Eventually"

June 17, 2014
Why You Shouldn't Be Afraid of Rising Interest Rates

NEW YORK (TheStreet) -- There is no question interest rates will rise eventually. When they do, interest rate-sensitive investments like bonds and bond funds will likely fall, perhaps even sharply.

Wasn't really afraid of rising rates. As a long-term saver, I was much more worried about falling rates. The 30-year treasury yields about 0.5% less now. Go figure.

So here's my question. It takes two opposite camps to make a market. For every seller there must be a buyer. Where is the opposite camp? Why aren't they talking? Must it fall on me? Well, okay.

Camp 3: "Eventually, We'll Be Stuck in ZIRP Again"

There, I said it. Behold the elephant in the room. If we did it once then we can do it again. Eternity is a long time.

Hey, if the rising interest rate theorists can use the word eventually to make their case then so can I. Eventually can take an eternity. Hell, eventually our sun will exhaust its fuel. Better dump those solar company stocks now before it is too late, lol. Sigh.

Seriously, if you have to use the word eventually to make your case then you better not be offering timing advice.

If everyone knew for sure that long-term interest rates would rise from here, then everyone would be selling them. To whom though if everyone is selling? Gotta have a buyer in order to sell! This isn't rocket science!

There are no free lunches. There is no trade that is guaranteed to pay off. If there was then we could all get rich betting on the obvious.

Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. - George Soros

Today's Puzzle: Four Secrets

September 23, 2015
Time: 4 Secrets to Graduating From College With No Debt

You can live with your parents, work year round, cut expenses, take classes while still in high school, attend a cheaper college, and receive financial aid and/or scholarships?

Shocking!!

That's six things, but only four of them are secrets? Which ones? I gotta tell you, I'm stumped.

It might have something to do with going to college in the early 1980s. Times have changed. It's a different era now.

For what it is worth, my trick to graduate debt free was to live with my parents (who helped support me), work year round (one year of it), cut expenses, take classes while still in high school (just a couple), attend a cheaper college, and receive a scholarship. Seriously.

Time has uncovered 30-year-old secrets, handed down through generations and then nearly lost forever. They must be very proud. Now if they could just find Jimmy Hoffa!

Hey, live by the click bait, die by the click bait. Secrets? Bah!!

Quote of the Day

September 23, 2015
Why millions of Americans are raiding their retirement savings

Some 41% of post-crash skeptics have stopped saving; 77% have no confidence in financial institutions; and 67% view the markets as risky.

1. What exactly is a post-crash skeptic? One who is skeptical that there was a crash? Or one who is only skeptical because there was a crash?

2. Why did post-crash skeptics stop saving? I'm skeptical these low interest rates will give me the savings I will need in the future so I try to save even more. Does a squirrel stop collecting nuts for the winter if the nuts are sparse? Or does he say "f%^k it" and relax on some van down by the river?

3. 77% have no confidence in financial institutions? None? Why do I suddenly feel like an optimist? I have some confidence. I'm not saying it's much, but it's more than zero, lol. Sigh.

4. 33% don't think that markets are risky? This must get very confusing when "risk on" is mentioned on CNBC, lol. Sigh.

5. If only 23% have any confidence in financial institutions then how can 33% believe that financial markets aren't risky? Now that's a conundrum!

Taking the Group Out of Groupon

September 22, 2015
Groupon is laying off 1,100 employees and shutting down its operations in 7 countries

“We believe that in order for our geographic footprint to be an even bigger advantage, we need to focus our energy and dollars on fewer countries,” Williams said in the blog post.

First get the number of countries down to one, then get the number of customers down to one. Genius!

Quote of the Day

September 22, 2015
Bummer: Stocks badly missing strategists’ mark

The S&P 500 has fallen 4.5 percent this year, badly underperforming Wall Street expectations. If stocks close the year around this level, it will be the first time that the S&P has missed strategists' targets since 2008.

That's a damn fine quote.

Under normal circumstances it definitely would have been the quote of the day. These are not normal circumstances though. We must therefore look to the comments of this article to find perfection.

Is Jeremy Siegel still screeching "Dow 20,000 by year end"? - DONNA_SUMMER

Bingo, lol. Sigh.

Volkswagen's Nick of Fury

September 22, 2015
Volkswagen's US boss: We totally screwed up

On Tuesday, Olaf Lies, a German politician who also sits on Volkswagen's supervisory board, told radio station Deutschlandfunk that he expected heads to roll at the company once it is clear who was responsible for falsifying the U.S. tests.

Let me get this straight. First you tell us that fraud is just a screw up and then a German politician with "Lies" in his name tells us that heads will roll? Seriously?

This sure could make a great Agents of S.H.I.E.L.D. episode, lol. Sigh.

Mad Money: Compare and Contrast the Exuberant Bullishness

Bear Stearns is not in trouble, I mean if anything they are more likely to be taken over. Don't move your money from Bear! That's just being silly! Don't be silly!

That was then. This is now.

September 21, 2015
Cramer: I was wrong—run far away from this stock

Now, look, I got La Quinta wrong. Mea culpa. I should have been more skeptical and less willing to believe the CEO's exuberant bullishness.

Irrational exuberant bullishness, baby. That's what I'm talking about. Booyah.

Quote of the Day

September 21, 2015
Why US manufacturers are nixing the US for China

For us, it's more important to find well-educated, motivated people at the right cost—which, by the way, is probably one quarter of the U.S. cost. - Racho Jordanov, CEO and president of JHL Biotech

That Dog Must Be Fed!

September 21, 2015
Fed’s Lockhart Says Interest-Rate Rise in 2015 Still Very Much on the Table



Very much on the table! :)

How to Make $26.56 Working from Home

September 20, 2015
DraftKings, FanDuel make millions, and give them away, as fantasy revs up

"The money that comes in, we take about a 10-percent cut and we pay out everything else in prizes, so it's really self-funding."

1. Start with one million dollars in net worth.
2. Gamble all of it 100 times on bets that pay 90 cents on the dollar.
3. Try not to spend the remaining $26.56 all in one place.

$1,000,000 x 0.9¹⁰⁰ = $26.56

Behold the power of negative compound interest. Isn't gambling fun?

Corporate Fraud Is Apparently Alive and Well

September 21, 2015
Volkswagen stock drops 20% on US diesel recall probe

Cynthia Giles, an enforcement officer at the EPA, said on Friday the cars in question "contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test".

The feature, which the EPA called a "defeat device," masks the true emissions only during testing. When the cars are on the road, they emit as much as 40 times the level of pollutants allowed under clean air rules meant to ensure public health is protected, Giles said.

Everyone always needs a fraudulent car to drive! They just aren't making any more fraudulent cars!! Buy now or forever be priced out!!!

The Religion Known as Economics

September 20, 2015
Could negative rates be next on the Fed's policy menu?

"Maybe we should have done three times as much QE, but nobody knows what three times QE would have done. By contrast, negative interest rates is right there in standard theory," Kimball said, which means that we can predict its effects by using basic economic models and beliefs.

Praise be! Believe it!!

Right now, when a $100 bill is deposited into an account, $100 is added to that account. However, a central bank could create a situation whereby that $100 deposit only led to a $98 increase in the account.

There won't be ANY unintended consequences from that, let me assure you! People will be filled with optimism and good cheer! Consumer spending will increase dramatically with this new "tax" on savings! Believe it!!

Or not.

March 2, 2015
Bill Gross sees negative rates turning investors into Oliver Twist

“Pension funds and insurance companies are perhaps the most important examples of financial sectors that are threatened by low to negative interest rates. Both sectors have always attempted to immunize their long term liabilities (retirement, health, morbidity) by investing at a similar duration with an attractive yield. Now that negative and in almost all cases low short term rates are expected to persist, long term bonds and similar duration assets do not offer the ability to pay claims 5, 10, 30 years into the future.”

It is a similar story for households, which struggle to save enough money at a high enough rate to pay for education, health care and retirement, he says. “Negative/zero-bound interest rates may exacerbate, instead of stimulate low growth rates in all of these instances, by raising savings and deferring consumption.”

I believe that rational people decrease spending when confronted with reduced earnings on savings. That's certainly what I did when real interest rates fell. I'd like to think that I'm somewhat rational anyway, when I adjust my spending to adapt to the new reality. As a long-term saver and retiree, I don't wish to outlive my nest egg. Go figure.

Know what? It's probably just the crazy talk of a standard economic theory heretic. Never mind. Pretend I didn't say a word. Embrace the future prosperity.

The Sarcasm Report v.245

September 18, 2015
Zacks: The Single Biggest Obstacle to Trading Success

We’ve created such an approach with our new strategy that incorporates Zacks Rank #1s, the top Zacks Ranked Industries, and a special combination of various Growth, Value, and Momentum style inputs that have shown extreme profit potential.

We call this secret formulation the Zacks Black Box Trader.

Best of all, there is no human bias to this computer driven and operated strategy. Just a straightforward, quantitative model that has tested off-the-charts, beating the S&P in 10 out of the last 10 years, more than quadrupling its returns with an average annual gain of 31.8% vs. the S&P's 7.5% over that same time frame. And with less risk while doing so.

It's a new strategy that presumably uses 10 or more years of historical data to accurately predict 10 or more years of historical data.

Color me impressed.

Quote of the Day

September 18, 2015
Cramer: We just avoided a huge disaster

I think you have to take heart the fact that we avoided a potential disaster, which is what could have happened if the Fed had tightened. - Jim Cramer

Please allow me to run his words of wisdom through the NASCAR translator.

This strong and resilient stock car market can handle entering hairpin downturns at 200.0 miles per hour, but don't think for a second that it can handle entering the corners 0.25% faster than that! 200.5 mph would be disastrous!!

CNBC's Doctored Strange Headline Love or: How I Learned to Start Worrying and Embrace the Crash

September 18, 2015
CNBC: This bank just slashed its S&P earnings outlook to zero

No. The bank did not do that. It slashed its S&P earnings GROWTH outlook to zero. Big difference!

September 17, 2015
CNBC: Wells Fargo CEO: Our goal is NOT to make money

No. He did not say that. He said the number one goal was not about making money. It's about serving customers. Once again, big difference!

Can't you just picture the CEO waking up every morning looking for new ways NOT to make money? If that's their goal and they can't succeed at it then they must be the most incompetent bank of all time! All it would take is excessive risk taking, you know, like what was going on heading into the Great Recession, lol. Sigh.

Does CNBC think that we all just fell off the backs of turnip trucks or is September National Click Bait Month? In any event, it's working! WTF am I supposed to do with all these turnips now that the truck has driven away? Oh, wait. I know!

Free turnips for sale! Today only! Buy one free turnip for free and get another free turnip absolutely free! How do I NOT make money? Volume, baby. That's what I'm talking about! Hahaha!!

The Sarcasm Report v.244

September 18, 2015
Honeywell CEO: 'I want to become the Apple of the industrial sector,' and why Tom Brady was wronged

The Apple of the industrial sector, eh? Well, okay. I just hope that you've thought through all the risks.

Security

September 18, 2015
The Market Ticker: PS: Screw You Too Obama

Had the school and its staff had any reason to believe there was an actual explosive device their first duty would be to evacuate the building and get everyone, including themselves, away from the "believed" bomb -- not sit with it and leave everyone in the building exposed to serious injury or death.

I really want to believe that. I really, really do. I'm only 99% convinced though, and here's why.

It was the 1990s (before 9/11). Several coworkers and I had just attended a Game Developers Conference. We were in a California airport checking through security on our way home. One of my coworkers had something in his carry-on bag that required further attention.

He'd been given a free ping pong ball gun. It was in its original packaging. It was made of clear plastic. You could see all of its internal parts. He intended to surprise his son with it.

He was asked what it was. He said it was a toy ping pong ball gun. He was told to remove it from its packaging. He complied. He was told to fire it at the wall behind us. He complied.

I sighed in relief knowing that security's fears were not fully realized. The ball did not explode or release a deadly cloud of toxins instantly killing all of us in the area. It simply bounced harmlessly off the wall. Whew!

For the sake of argument, I'm therefore not entirely sure what people do when they suspect there may be a bomb. If that was airport security's plan, then I can only imagine what others might do. You know, people without the proper security training, lol. Sigh.

True story. I swear.

Quote of the Day

September 18, 2015
The Wall Street Journal: If Investors Bail, Will Your Bond Fund Flail?

It can easily cost 3% or more to sell less-liquid junk bonds–far more than the trading costs on high-quality corporate or government bonds.

Who thinks the typical "chasing yield" retail investor has a firm grasp of all the risks associated with owning non-investment grade bonds?

Four Things the Fed Should Use Next Time to Communicate Their Rate Hike Decision More Confidently

1. A tin can.
2. Another tin can.
3. Some string.
4. A clown horn.

Hey, I'm not claiming that it would exude confidence. I'm simply claiming, based on how the stock market received the Fed's good news, that it would exude *more* confidence.

What the Fed Sees (Musical Trubute)

September 18, 2015
Here's what the Federal Reserve wants to see before raising interest rates from record lows

Who cares what they want to see? Let's talk instead about what the Fed does see! Their justification for not raising rates was certainly dire. I think it is so dire that it needs a musical tribute, lol. Sigh.



The Fed tried to warn us that the rates would not go high
All the time to warn us so we only bought "strong buys"
They all tried to tell us but I guess we didn't care
We turned our backs and heard the growling bear

All the burning markets weren't just Chinese can't you see?
All the misplaced savings meant that burning stocks weren't cheap
Dividends bought in bulk soon heading for the floor
Burning markets lost forevermore

Greenspan tried to help us find some jobs a while ago
When we finally got them Ben did become our foe
The party Yellen gave for us when we could not pay
Now there's nothing left for us to save

All the burning markets weren't just Chinese can't you see?
All the misplaced savings meant that burning stocks weren't cheap
Dividends bought in bulk soon heading for the floor
Burning markets lost forevermore

Years have passed and we keep thinking, all this ZIRP's a sin
We look back into the past and think of bonds back then
We know that we lost everything we bet that we could win
I guess we should have listened to the Fed

All the burning markets weren't just Chinese can't you see?
All the misplaced savings meant that burning stocks weren't cheap
Dividends bought in bulk soon heading for the floor
Burning markets lost forevermore

Burning markets lost forevermore

If Janet Yellen Was an Air Traffic Controller

Captain: Tower, we've lost an engine of air speed and altitude growth. Over.

Tower: Captain, don't panic. I have a dual mandate to keep you safe. Over.

Captain: Our air speed has fallen and our altitude is falling. Over.

Tower: I need you to drop your nose to increase your air speed. Over.

Captain: Understood. Air speed picking up nicely. Altitude falling rapidly. Over.

Tower: I need you to raise the nose to increase your altitude. Over.

Captain: Understood. Altitude leveling off now. Air speed falling rapidly. Over.

Tower: I need you to drop your nose again to avoid the stall. You also need to raise the nose to maintain your altitude. Over.

Captain: Understood. Tower, the stick broke off. I think I may have applied too much leverage attempting to comply with your instructions. Over.

Tower: No, you are fine. There can never be too much leverage. There is no reason to blame the tower for your excessive risk taking. Nobody could have seen this coming. You are still well positioned for a "soft" landing. Over.

Captain: Understood. We're spiraling to the ground now. It's almost over. Ov...

In all seriousness, there are 7 million fewer unemployed than there were 5 years ago. Growth has been pathetic given how much of a tailwind that should have been.

There are only 8 million unemployed left. What's going to happen to growth once the tailwinds are gone? You'd have to be an extreme optimist to think there are more than a few years left before some sort of landing "unexpectedly" appears. Based on the speed we're approaching the ground, you'd have to be an eternal optimist to think the landing is guaranteed to be soft, or even likely. Sigh.

Don't Pay Off That Student Loan Debt Yet!

September 16, 2015
Don’t pay off your student loans — yet

And since student loan interest rates are usually relatively low, a borrower’s money may be put to better work elsewhere, says Dash. For example, if a borrower is paying 4% in interest on a student loan and is looking at an investment that could provide them with a 6% return, it makes more sense for them to invest that money — as long as they’re comfortable with the risk involved, he said.

Says Stephen Dash, the founder and CEO of Credible, a company in the student loan refinance business.

Why is this "borrow money to buy risk assets" story rarely told near market bottoms? It's both a mystery and a conundrum.

Quote of the Day

September 16, 2015
How the Looming Fed Rate Increase Will Affect Your Retirement

"The rate hike is becoming something like the Great Pumpkin from the Peanuts cartoons ... higher interest rates from the Fed are out there somewhere, but never quite seem to materialize, no matter how patiently we wait," said Lawrence Solomon, a CFP and Director of Investments and Financial Planning at OptiFour Integrated Wealth Management.

Welcome to Great Pumpkin Day!

This We Know

September 17, 2015
When the Fed raises rates, here's what happens

No, when the Fed raised rates in the past, this is what tended to happened in the past. Big difference. You cannot predict the future with 100% accuracy simply by looking at the past.

A rate hike will come and the bull market will stumble, bond yields will climb and the economy will slip into a recession.

This we know.

We don't know that. I can prove it. I don't know it and I am part of the we. Therefore, if I don't know it then we can't know it. It doesn't even matter why I don't know it, but you can probably guess why. I don't know anything about the future with absolute certainty.

I can say with 99% certainty that a rate hike will come. So let's say that it does come, using the "beyond a reasonable doubt" criteria. Could the following happen next?

1. The bull market stumbles.
2. Short rates rise. Duh!
3. Long rates fall though. (Bond yields do *not* climb.)
4. The yield curve inverts. (Often presages a recession.)
5. Recession.

I'm not asking if it will happen. I'm simply asking if it could. If it could happen then we cannot know what the article claims we know.

There's a reason why history is taught in school but future is not.

Picture the first test in future class. The teacher asks what will happen in the year 2020. Little Jimmy thinks he knows the answer. The earth will be encased in a block of ice. Little Jimmy knows something that the teacher does not. Little Jimmy's father is an evil mad scientist and is currently working on a weapon of mass refrigeration.

Won't the teacher feel incredibly stupid when what he thought he knew about the future wasn't correct? Won't he feel especially stupid for giving little Jimmy a failing grade in future class? Never underestimate what a vengeful, proud, evil mad scientist father will do to prove his son right, lol. Sigh.

We cannot "know" the future. Anyone who thinks they can is delusional. Further, anyone who claims to know what long-term interest rates will do in the future is exceptionally delusional. If long-term rates were truly guaranteed to rise then we could all make guaranteed money shorting the hell out of treasuries. Good luck on that sure thing.

The No @#$% Sherlock Report v.004

September 16, 2015
Time for a hike? World’s central bankers speak out

Elvira Nabiullina, Central Bank of Russia Governor:

"There are two scenarios possible that raising interest rates will have, bearing in mind that market players are expecting this particular event and in many ways have priced it into the valuation of their assets. And in this (first) case there are not going to be any dramatic changes in the market environment," she told CNBC.

"But the second probability is also possible – that markets may respond in a very nervous way and then generally speaking, increase global turbulence that may affect the Russian economy as well."

Scenario Summary:

1. No drama.
2. Drama.

This controversial summary is both approved by Vladimir Vladimirovich Putin and backed by modern mathematical set theory. I therefore have no choice but to trust its conclusion with a high degree of confidence.

There may or may not be drama. Like Elvira Nabiullina, I'd literally be willing to stake my life on it.