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The Ticking Time Bomb That Will Wipe Out Virtually Every Pension Fund In America

Are millions of Americans about to see the big, juicy pensions that they were counting on to fund their golden years go up in flames in the biggest financial disaster in U.S. history? When Bloomberg published an editorial entitled “Pension Crisis Too Big for Markets to Ignore“, it simply confirmed what a lot of people already knew to be true.  Pension funds all over America are woefully underfunded, and they have been pouring mind boggling amounts of money into very risky investments such as Internet stocks and commercial mortgages.  Just like with subprime mortgages in 2008, this is a crisis […]

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Traders As Modern Day Hunter-Gatherers

Entering the market is like entering an entirely different world. This world functions nothing like modern society. Modern society has laws and social norms in place to protect you. If you screw up, you have a safety net. People will generally reach out and help. Modern society is cushy. Even people who are disabled, suffering mental illness, or are unable to care for themselves in other ways still get by. (Maybe not as well as we’d always like, but far better than at any other time in the past.) Markets aren’t like modern society. They’re much closer to being like […]

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U.S. Ponzi Retirement Market In Big Trouble, Protect Yourself With Precious Metals

The U.S. Retirement Market is in BIG TROUBLE as annual benefits paid out are now larger than total contributions. Actually, the amount of net withdrawals were the highest in history. When payouts become larger than contributions… then we have the making of the typical PONZI SCHEME. Americans who have invested their hard-earned money into a 401K, had no idea that it was the Greatest Ponzi Scheme in history. Unfortunately, when the markets crack, so will the value of the U.S. Retirement market. On the other hand, Americans who were wise enough to purchase physical precious metals will protect their wealth […]

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Broken America

Is this the beginning of the end for the United States of America?  It has been said that a house divided against itself will surely fall, and today we live in a shattered union.  In all my years, I have never seen so much strife, discord, bitterness and resentment in this country.  Everyone can see what is happening, but nobody can seem to stop it.  Politically, you have got tens of millions of people trying to pull America one way, and you have got tens of millions of people trying to pull it the exact opposite way.  As I discussed […]

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With Friends Like These…

Cartels are a tough thing. The goal is for a small group of influential producers to artificially move a market away from its normal equilibrium, and eventually squeeze more money from buyers to boost profits. Members rely on each other to do their part, be it charging higher prices, holding back supply, or flooding the market to drive out marginal players. At their core, cartels require people who want to steal more profit from buyers through false market signals to believe each member will do its part. There’s an inherent fear involved: If you’re willing to steal from clients, why […]

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Markets as a Range of Reasonable Opinions

The following is from The Philosopher in Drobny’s classic The Invisible Hands (emphasis mine): Some people can trade markets using only numbers, prices on a screen but this approach does not work for me. The numbers have to mean something — I have to understand the fundamental drivers behind the numbers. And while fundamentals are important, they are only one of many important inputs to the process. Just as a Value-at-Risk (VaR) model alone cannot tell you what your overall risk is, economic analysis alone cannot tell you where the bond market should be. Let us use an interest rate […]

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What Do You Do With Dividends?

Income investing is a big part of what I do. It’s rare for me to buy a stock that doesn’t pay a respectable dividend, and I have an entire newsletter – Peak Income – dedicated to finding decent yields in a world where most CDs and savings accounts barely yield anything at all. But you know what’s surprising about all of this? I don’t plan to retire for at least another 20 years, and I have no need for portfolio income today. I’ve instructed my broker to automatically reinvest my dividends in additional shares. I don’t get paper checks, and […]

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Barnier and the Tantalus game

The EU has laid out its negotiating strategy for Brexit. Well, not officially yet, of course – the letter triggering Article 50 won’t be delivered until tomorrow, 29th March. But as is its wont, it has made its intentions clear in the press. In an op-ed in the FT, Michel Barnier, the EU’s chief negotiator, has stated in no uncertain terms how he expects the negotiations to proceed. He identifies three crucial issues that must be resolved before there can be any discussion of future trading arrangements between the EU and UK: the rights of EU citizens living and working […]

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After Dramatic Obamacare Failure, Trump Now Faces A Looming Government Shutdown He May Not Be Able To Prevent

If you thought that the Obamacare debacle was bad, just wait until you see what happens next.  The continuing resolution that is currently funding the government expires on April 28th, and if a new funding agreement is not reached prior to that time, there will be a government shutdown like we witnessed in 2013 starting on April 29th.  Unfortunately, as I will explain below, if a government shutdown happens it may go for a lot longer than just a couple of weeks this time around. April 28th may sound like it is quite some time away, but because the congressional […]

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Is a Total Breakdown in DC the Only Hope for Reform?

Americans who are stuck with exploding health insurance premiums hate Obamacare. Trump won the election based, in part, on his commitment to “repeal and replace” the program. Congressional Republicans passed a repeal bill several times during the Obama years. But, somehow, now that they have a president who would actually sign the bill, it ain’t gonna happen! Instead of simply passing the same repeal, leadership trotted out a “reform” laden with most of the crushingly expensive mandates and big government control that conservatives hated about the Affordable Care Act. It failed when “Freedom Caucus” Republicans insisted on a more genuine […]

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