Saturday, February 28, 2015

The Age of Despair

June 11, 2013
13 Things That Seem Like Scams But Are Actually Really Great

People are always on the lookout for scams. You kind of have to be, these days.

These days, we do kind of have to be on the lookout for scams. I can't speak for you, but I kind of miss the old days. I remember them fondly. It was a time before the massive accounting scandal at my former employer. It was a time before the dotcom and housing bubbles. It was a time before my telephone became a Fraud of the Month access point.

Speaking of which, has anyone noticed that the Do Not Call list is a complete joke? Politicians exempt themselves. They can and do call as often as they like. Well, they don't actually call personally. Their computers do. Politicians are way too busy doing political stuff to speak to the peons directly, unless a news camera is involved of course. May the best automated politician win.

Businesses all over the country call us too. Apparently all it takes to get a call is to have done business with a business which has done business with a business. That really limits the field, lol. Sigh.

How about charities? The Do Not Call list doesn't apply to them either, which is great because there is nothing I enjoy more than giving to the charities that call me most. Reward that good behavior I say. Let's form a virtuous cycle of the more I give the more my phone rings. Awesome.

As surprising as it might seem, the criminal scammers don't respect the Do Not Call list either. I know. Shocking. That's probably 10% of my incoming calls these days. Did I mention that I miss the old days?

Welcome to the new normal. Ethical behavior is so yesterday. As the ability to make money off of money continues to dwindle (as seen in long-term treasury yields and the popularity of TV shows such as Mad Money and Fast Money), I very much doubt that trend reverses. Everyone "needs" to hit their numbers, be it a politician, a pension fund, a business pushing Candy Crush, or simply a telephone scam artist.

The end won't justify the means though. Sigh.

Thursday, February 26, 2015

Anecdotal Evidence That You Are Smart

December 18, 2014
Are you a worrier? Then you're more likely to be smart: People prone to anxiety have higher levels of intelligence

Worriers can be kept awake at night replaying the day, or imagining all the possible worst case scenarios in their lives.

If you make a habit of reading blogs about fake prosperity because you are as worried about the future as I am, then congratulations!

If you are an eternal optimist who was just tricked into reading a fake prosperity blog by one of your worrying friends then, well, sorry about that. Continue to take comfort that we live in the best world of all possible worlds. You must therefore be here for a reason. ;)

Wednesday, February 25, 2015

Quote of the Day

February 25, 2015
What rising interest rates mean for the rest of us

One takeaway from Federal Reserve Chairwoman Janet Yellen’s recent testimony before Congress is that she and her colleagues are feeling pretty good about the direction of the economy – good enough to “at some point” consider increasing interest rates.

That's funny because I was just about to write a post titled, "What My Olympic Gold Victory in Stair Climbing Would Mean for the Rest of You."

I'm feeling pretty good about the direction of my stair climbing (only seem to climb up so far) - good enough to "at some point" consider looking into some sort of "Special" Olympics for stair climbing. That's at some point. I might consider it. Maybe. Who knows?

And since I might consider it at some point, I just wanted to make sure the rest of you were setting aside some time to watch me compete and win. Once again, feeling pretty good about my chances at some point, all things considered.

I'm also looking into the possibility of tracking down and capturing a Sasquatch at some point. It's something I may consider once I have attained the Olympic Gold. First things first though.

In all seriousness, at some point Yellen might consider raising interest rates? Wow. That's quite the lock on the rising interest rate environment. Forgive me for not holding my breath in anxious anticipation. As Japan is well aware, ZIRP is apparently the gift that just keeps on giving.

Sunday, February 22, 2015

How to Get an NFL Quarterback to Notice You

February 19, 2015
NFL QB Kaepernick eviscerates Twitter troll -- or does he?

He tweeted: "ab workout won't help find open receiver."

I think that tweet is short, simple, effective, witty, and hilarious. It prompted Kaepernick to reply not once, not twice, but three times. Perhaps he felt he could fight quality with quantity? In any event, score one for the troll, lol.

Tuesday, February 17, 2015

The Sarcasm Report v.207

February 17, 2015
Large student debt load limits young Americans' home-buying

"Student loan delinquencies and repayment problems appear to be reducing borrowers' ability to form their own households," said Donghoon Lee, a research officer at the bank.

This is yet another crazy theory in a long list of crazy theories. Where's the proof? Call me an optimist but is it not possible that debt problems are leading to even greater household formation? Does living in a cardboard box count? How about households living in cars?

Americans are also struggling with auto loans, the report showed, but are doing a better job keeping up with all their other debts.

This is definitely true. As a taxpayer, I'm doing a fantastic job keeping up with the federal government debt. Would you believe that they haven't even sent me a bill for my share of the $18 trillion yet? Further, as a holder of long-term government bonds I'm actually paid to wait for a bill that may never come. Good times.

Perhaps the government intends to someday send the bill to my grandchildren? Good luck on that. I don't even have children, much less grandchildren. And why is that? Maybe I studied Japan after their housing bust in the early 1990s, looked at the rising cost of college, and/or extrapolated forward our rising national debt. Perhaps puppies were a viable alternative in an uncertain world, lol. Sigh.

I hope you realize that I'm only half joking. Our pets *are* our kids. The real beauty of it is that we never expect our kids to leave the nest, rack up college debt, and then look for work in an increasingly competitive world. Who needs that kind of pressure? So, our kids tend to just hang out on the couch and sleep a lot.

September 18, 2013
The Onion: I’m Just A Free Spirit Who Is Entirely Financially Dependent On Others

For example, sometimes I’ll tell the person whose couch I’m crashing on that I’m going to look for a job, and then I don’t, and then I just sort of hang out all day taking it easy, and then I fall asleep. That certainly wasn’t in the day planner, but so what? I had a great time and nobody was hurt, except for maybe the person who desperately wants me out of his apartment.

Oh, man. Small world. If he was a puppy then we would consider adopting him. Perfect easy going disposition!

Seven Questions of the Day

Jeremy Siegel is at it again, bless his heart.

Four years ago he warned us about the Great American Bond Bubble. He told us that bond yields were far too low to protect us from rising interest rates. For the record, and using the best hindsight analysis this side of the Mississippi, we can clearly see four years of additional ZIRP have occurred. The rising interest rate environment failed to materialize. Big shocker. Fortunately, as he was warning I was buying. 2011 was one of the biggest bond trading years of my life. I backed up the truck on 30-year TIPS with intent to hold to maturity. Still holding! No complaints!

So what is this wizard of Wall Street saying now?

February 17, 2015
Siegel: Need better growth before rate hike

F#%*^ing hilarious! If we cannot get the kind of growth he needs to see with a rapidly falling unemployment rate then how can we ever get it? I have news for him. Growth probably won't be picking up once the unemployment rate can fall no further. That should be obvious to all. I therefore offer the following as my questions of the day.

1. What is the true value of a Wharton School Economics degree?
2. Why does Jeremy Siegel appear so often on CNBC?
3. Can every Wharton School graduate expect to appear on CNBC?
4. If not, will Starbucks be hiring?
5. How much additional training will that require?
6. Will coffee prepared by an Ivy League barista taste any better?
7. How much longer will the era of economic sarcasm last?

Monday, February 16, 2015

The Sarcasm Report v.206

February 16, 2015
Slow productivity growth could hurt the economy

Could hurt it? Could not hurt it? Which is it? Hard to say. Let's seek out the reasoning.

In the short term, low productivity growth is a good thing for the labor market. With the production potential of each employee limited, businesses must hire more workers to meet growing demand.

Oh, the humanity! Somebody needs to do something before every worker is hired! The economy clearly cannot tolerate that level of pain!

Ultimately, a less productive, slower-growing economy means less hiring.

Indeed. Once every worker is hired then it will be very difficult to hire more workers. We will run out. It does not take a rocket scientist to see that we should not allow this to happen! Basic math will not be denied!

This is why I implore you to sign my "Up with robots! Down with humans!" productivity miracle petition! We must never, under any circumstances, allow corporate profits to fall! Labor must never achieve anything more than modest pricing power!

Can't you see what a fully employed workforce would do to the housing market? Nothing good, let me tell you. No, sir. Best to replace every worker with a fully mechanized and automated robot and then convert every existing housing unit into a robot storage facility. And what do we do with the leftover humans? More homeless shelters! Expand the food stamp program even further! Genius!

Prosperity, baby. That's what I'm talking about.

Quote of the Day

February 8, 2015
China's imports slump, capping dismal Jan trade performance

"It's a very strange data print." - Andrew Polk

Dr. Strange has just the prescription for what is ailing the Chinese economic miracle.

More cowbell.

Sunday, February 15, 2015

The Billionaire of Bag Holding

February 6, 2015
Eike Batista is now a 'negative billionaire'

According to Bloomberg's Billionaires Index, Batista, who was worth $35 billion in 2012, now owes $1.2 billion.

This mythical creature was first seen in Advanced Dungeons & Dragons in my youth. The barrier between myth and reality has just been blurred, lol. Sigh.

In all seriousness, I'm guessing that he regrets not embracing capital preservation strategies. Easy come, easy go.

Not only have I finally exceeded the net worth of a billionaire from 2012, but we all have. Congratulations everyone! We've won! Let's continue to party like it's 1999! What's the worst that could happen? Woohoo!

Wednesday, February 11, 2015

Quote of the Day

February 10, 2015
Despite Commodity Rout, Material Sector at All-Time High

People often ask us why we rely on objective, quantitative models to identify investment opportunities as opposed to popular theory, forecasts or intuition.

That's funny. When I started this blog, I was often asked why I didn't rely on the opinions of popular celebrities, fortune telling, or astrology. I'd just shrug my shoulders. At some point, the questions became unbearable. Why did so many people often ask me this?

You might find this hard to believe as well, but do you know what else people often asked me? They wanted to know how I became the King of Prussia. Why did they often ask me this? It makes no sense! I don't even live in Pennsylvania!

In all seriousness, if I find it hard to believe the first sentence of an article, then I tend to stop reading. This was one of those times. Should you be able to get past it, then please let me know if there was anything noteworthy and/or more believable in the rest of it.

Further, if you have ever asked any investment professional at any point in your life why he/she doesn't just rely on intuition then I'd like to hear your story. There are apparently many of you out there. Or not. Like I said, I'm finding the claim difficult to believe.

It's kind of like what I would expect to hear from a used car salesman. People often ask me how this car dealership became the most trusted in all the country. Yeah, people often ask that. Right.

You know what people really should ask me? How did I become so cynical? Why is it so hard to trust the advice of investment professionals? I would probably respond by saying that there was massive accounting fraud at the place I last worked. Yeah, that's probably exactly what I would say, because it is absolutely true. Seriously.

They say all that it takes for evil to thrive is for good people to do nothing. I say that all it takes for lies to thrive is for good people to do nothing. It starts with white lies to make a good sales pitch and then slowly the white begins to vanish.

This probably explains how empires fall. Rome did not fall in a day. It started somewhere, maybe even with a seemingly harmless stretch of the truth. You know, like maybe someone mentioned that investment returns may slow but it wasn't anything to really worry about over the long-term. Just stay the course and you should be fine. There's certainly no reason to stop gorging on food. Will you be attending the orgy later this evening? As always, it's right after the gladiator fights in the coliseum. We've reached a new all-time high plateau of prosperity! This is a time to celebrate!! What's the worst that could happen?

Tuesday, February 10, 2015

The Sarcasm Report v.205

February 7, 2015
Stock Market Video Analysis 2/7/15

If you are an investor this action has been confusing and frustrating.

As a long-term investor, the first 25 trading days of 2015 weren't just confusing and frustrating, they were also frightening and suicidal. I am fortunate to have survived them. They rank right up there with the Great Depression and Great Recession. Why are we not hearing more about the unprecedented wave of stock brokers flinging themselves from skyscrapers just to end the insanity? It shall remain a mystery for now.

The volatility we have experienced this year make the case for why you need to be trading with at least a portion of your portfolio...

This is definitely something I need to do. Unfortunately, there are other things I need to do first. There's the upcoming time share event where I am guaranteed to win a prize just for attending. There's the trip to Vegas to improve my cash flow using a can't lose gambling strategy fine tuned for the roulette tables. There's that seminar at a local airport hotel which will teach me the inner workings of the can't lose real estate industry. I also need to respond to a Nigerian Prince who, in exchange for my help, will be compensating me generously. And lastly, I have a really good feeling about today's upcoming lottery ticket purchase. My psychic advisor says that I can expect to win big at some point if I just keep at it.

...learn how to trade correctly,...

Very few people realize that if you trade and lose, then you are not trading correctly. This is an important thing to consider before participating in any form of legalized gambling. You need a system that can't lose, perhaps one which analyzes squigly lines on a chart to accurately predict the future.

...take a trial to Alphatrends and receive detailed stock trading ideas every day.

Take a trial? Hold on buddy. Nobody said anything about litigation. I'm just trying to make free money off your advice without having to work or compensate you in any way. If there is some sort of potential criminal activity on my part for gaming the sure thing system, then count me out.

That said, daily stock market ideas are enticing. If there's one thing the Internet lacks, it is an endless supply of daily opinions about the stock market. I do what I can to fill the void but it would be very helpful if more people would share their opinions as well. After spending the vast majority of my days reading the comments of financial message boards, it would be refreshing indeed to have more ideas sent directly to me. You have no idea how much I would be willing to pay for that! It's a totally untapped market filled with exciting new opportunities!

Quote of the Day

February 10, 2015
Tracing the Connections between Economic Growth, Capital Markets, and Demography

“Brace yourself for slower economic growth,” Arnott warned. “If we demand 3% growth from our political elite, when normal GDP growth should be 1% or maybe 2%, they will create the illusion of growth with massive deficit spending and front-end load our future growth.”

An illusion of growth? Seriously? Crazy talk! Our political elite would never stand for such a thing! They would never pander to the short-term will of corporate America or the population in general. I think it is safe to say that I have the utmost respect for these fine upstanding individuals. I willingly place my future in their wise and benevolent hands.

Too much sarcasm? I'm apparently testing the limits again, lol. Sigh.

Saturday, February 7, 2015

We Are Addicted to Debt (Musical Tribute)

The following chart shows the annual growth rate of consumer credit minus the annual growth rate of wage and salary disbursements.

Click to enlarge.

We're "high" above the median. Isn't that wonderfully euphoric?

1. Over the ultra long-term, only 0% (or less) is sustainable.
2. If you thought the Great Recession taught us a lesson, think again.
3. Way to go Greenspan, Bernanke, and Yellen! Confidence abounds!
4. Now what?

Source Data:
St. Louis Fed: Custom Chart

Thursday, February 5, 2015

The Third Easiest Way to Have Ten Million Dollars

The easiest way is to start with ten million dollars, especially now that interest rates are so low. I think that's just a given.

The second easiest way is to print it. It's just paper. No big deal if you work for the Fed.

The third easiest way is to invest $40 in a company just after World War I that once put highly addictive cocaine and sugar in their products but has since replaced these ingredients with high fructose corn syrup. Let's see. Unless you invested as a baby, that would put you over 100 years old right now. Enjoy your ten million dollar windfall!

January 7, 2014
Warren Buffett Tells You How to Turn $40 Into $10 Million

Warren Buffett is perhaps the greatest investor of all time, and he has a simple solution that could help an individual turn $40 into $10 million.

In case you haven't guessed, the advice is to buy Coca Cola in 1919. Very useful. Some might argue that this is just a plan you should be following when picking stocks in the modern age though. Okay, I'll bite.

We'll want to buy the stock of a company right after a world war. Since Albert Einstein once said that World War IV would be fought with sticks and stones then I suggest we patiently wait for Sticks & Stones Inc. to appear, lol. Sigh.

Investing in Coca Cola 17 years ago certainly wasn't a good plan. The stock price is currently where it peaked in 1998. No joke.

That's okay though. They may have a fantastic marketing idea for the future. Will there be a new propaganda campaign? One that highlights the merits of Newest Coke over New Coke and Classic Coke? Or for that matter, competing carbonated beverages in general? There are so many to choose from!

February 5, 2015
Coke duped into tweeting Nazi propaganda

Coke suspended its #MakeItHappy automated social campaign after Gawker, a gossip and media blog, concocted a prank that had the soft-drink giant inadvertently tweeting out lines from Adolf Hitler's autobiographical manifesto, Mein Kampf.

Genius! Never saw that coming! How do I invest in this innovative company as it attempts to relive the success of previous world wars? I want to get in on the ground floor before the next person does! $40 is chump change! Put me down for $80! Twenty million dollars here I come! Mwuhahaha!

This is neither investment advice nor Nazi propaganda advice. You know this because we do not live in a society that condones torture, unless terrorism is involved. Look, what I'm trying to say is that this is not a police state yet. I'm therefore still comfortable typing gallows humor. Okay, maybe not 100% comfortable. Somebody needs to heckle though or we may all someday lose the ability to heckle. So do your civic duty! Heckle often! It's not like there are a shortage of reasons!!

The Power of Confound Interest

February 4, 2015
Taking Stock of Bonds, From Junk to Treasuries

On the other end of the bond-risk spectrum lie Treasuries. And long-dated Treasuries last year were up roughly 30%, confounding the conventional wisdom that proclaimed at the beginning of last year that the sector was dead because of expectations of rising rates. Instead, long-term rates fell during the year and long-term Treasuries trounced the broader stock market.

Conventional wisdom is to wisdom what confidence game is to game.

(The only real game in a confidence game is what a predator would call prey, lol. Sigh.)

Wednesday, February 4, 2015

A Not So Cunning Plan

February 2, 2015
Attempt to pay property taxes in $1 bills lands man in jail

The bills were said to be folded so tightly it “required tax office personnel approximately six minutes to unfold each bill.”

It's unfortunate that he did not create a flock of Origami birds instead. The humor might have prevented criminal trespass and resisting arrest charges.

As a side note, if you know going in that you are in a**hole mode then:

1. If asked to leave, then leave.
2. If placed under arrest, then don't resist.

Nothing good ever seems to come from the alternatives. Go figure.