Maine, Connecticut, Illinois, New Jersey Run Out of Time and Money

Stocks managed to end the week, and the month, without a complete and total collapse, with the Dow actually posting a substantial gain.

However, a Friday turned to Saturday and June to July, at least four states have failed to pass budgets, facing enormous deficits, the worst of the bunch being Illinois, currently with $15 billion in overdue payments backlogged.

In New Jersey and Maine, state governments went into shutdown mode, while Connecticut governor Dannel Malloy took over control of the state's spending after the legislature failed to pass a budget on time.p

In New Jersey, state parks and other public areas were closed on Saturday, sending a painful message to citizens of government overreach on a four-day Independence Day weekend supposedly celebrating freedom.

Illinois was dealt another crushing blow when US District Court Judge Joan Lefkow ruled that the state must begin making larger payments to Medicare providers that are owed billions of dollars.

These developments have been years in the making, from bloated statehouses, county, and city offices which overpay employees, offer golden medical and pension packages that the citizenry pays for in the form of higher taxes, and promotes schools that provide delicious salaries benefits for teachers while providing substandard education to forced-enrolled students.

Cops and firefighters collecting $100,000+ pensions are not unusual in any of these states, and the pensions and medical benefits of government employees overall have caused fiscal crises that could have - and should have - been handled years ago. None of this comes as a surprise, but the outcomes will be different from state to state. Some may plead to the federal government for a bailout of sorts, with the implied proviso that they will give up some of their sovereignty in the process.

Others may choose to raise taxes, implement austerity measures, but eventually, all of them will have to default on over-generous pension promises made to prior government employees. Many will also have to cut pay to current employees, which will prompt reactions from the public service unions, which should be outlawed under federal law, and eventually, if there is any sanity remaining in government at all, will be.

Enjoy what there is of your Independence Day weekend, but bear in mind, the United States of America has reached a turning point, a breaking point. States are reeling from decades of uncontrolled spending and liberal policies and the taxpayers are fleeing or simply giving up.

The policies of overspending which began in Washington, DC, and has trickled down to the states have bled the nation dry and hard choices are already at hand. Whether or not the politicians can muster the courage to make the needed changes - a dubious prospect at best - the American people must respond with vigor.

At the Close, 6/30/17:
Dow: 21,349.63, +62.60 (0.29%)
NASDAQ: 6,140.42, -3.93 (-0.06%)
S&P 500: 2,423.41, +3.71 (0.15%)
NYSE Composite: 11,761.70, +21.72 (0.18%)

Back To School Not For All; Trump Surges

Well, it's still summer for those of us who go by the calendar rather than a Labor Day or back-to-school regimen.

Actually, most of us hated school, didn't we? And work isn't much better, so... retirement?

Good luck with that.

In any case, stocks are confused, but oil dipped to its lowest level in weeks, which should set firre to the bears' feet. They'll be coming out of summer slumber soon enough to catch another downdraft is our guess, even though the Fed dare not raise the federal funds rate next week.

The likelihood of a Trump presidency grows larger with each passing day, which is enough to cause serious sickness across the investing spectrum, although his victory will prove a dynamic positive in the long run.

It's the short term that scares most people.

Wednesday's Woes:
Dow Jones Industrial Average
18,034.77, -31.98 (-0.18%)

NASDAQ
5,173.77, 18.52 (0.36%)

S&P 500
2,125.77, -1.25 (-0.06%)

NYSE Composite
10,511.54, -23.82 (-0.23%)

The World According To Morons

Noting the popularity of the new smart phone game, "Pokemon Go," and its coincident release with fresh all-time highs on the S&P 500 and Dow Industrial Average, it can be safely assured that the civilized nations of planet earth have entered the final stage of self-destruction, in which morons - not zombies - take over the planet.

In some ways, the process of moron-izing the population is already well underway.

We are led to believe that voting for representatives in government actually is an expression of our freedom within a working democracy. When these representatives, from the president and members of congress on down to the local code enforcement officer, are proven to be solely interested in either re-election, amassing a fortune, or advancing their career paths and not working in the public interest we are called cynical or pessimistic.

Year after year, school budgets are increased while the quality of education is diminished. Normally intelligent-looking people vote to pay more in taxes to support a system that fails on a regular basis.

We pay good money for cable TV or other entertainment delivered to our homes or workplaces to watch people who are vastly overpaid do stupid things or play sports.

Investment professionals routinely lose money on investments with our hard-earned money and yet are hailed as experts within the financial community.

The vast majority of people can't raise a decent garden, hammer a nail or turn a screw. Still, they all complain that the infrastructure of the country is falling apart.

These are but a few examples of the lunacy that has nearly completely gripped our nation. The truth is that the people running things - politicians, bankers, CEOs - aren't all that bright. In fact, most of them are morons, versed only in maximizing their incomes, pensions and perks, but we follow them and aren't too overly distraught that they make 50-70 or 500 times what we do.

We should be, but it's getting a little late in the game to do anything about it. Besides, most of your contemporaries are morons with their noses stuck on their "smart" phones, playing the latest game app.

What can be done? Plenty.

Stand up, do something you haven't tried. Fix something that's broken. Pay less for things you usually buy, or just change your buying habits a little. Save the money, a little at a time, which will grow over time into something more substantial.

Stop voting. Period. Just stop. It only encourages bad behavior by the winners and losers alike.

Spending on frivolities is maybe a favorite of yours. As you grow older, you'll discover that spending money - often money you don't already have (credit) - is a behavior to be avoided. Spending on things you don't need, but only want, can be destructive to your finances.

A way to combat the incessant need to spend, foisted upon us by the media, commerce and ad industry, is to institute no-spend days. This can start as an experiment, as in a "No-Spend Sunday," and expanded to multiple days. It's pretty easy to do. Just buy what you'll need for a few days, and then don't spend any money over the next few.

(I'm currently in the midst of a three-out-of-four no-spend days. After a successful no-spend Saturday and Sunday, I realized I needed beer and ice on Monday, so I reluctantly spent $12.76. Today, Tuesday is a no-spend no-brainer).

It's a rewarding habit, as you end up with more cash in your pocket and a sense of accomplishment, when you actually accomplished little, other than not buying anything.

But, of course, morons won't understand this simple concept.

Until next time,

-- Fearless Rick

Today's markets were horribly dull, likely the result of central banks doing most of the trading over the past few weeks, months, years(?). They decided to not goose the markets any more, since they got over the desired all-time highs, for now. That should work until the next financial non-event, like Brexit, scares out the weak hands or causes some Alphas in the herd to take profits.

The S&P traded in a 10-point range over the entire session; the Dow, 75 points; the NASDAQ range was 33 points.

Whoopie!

At the close:
Dow Jones Industrial Average
18,372.12, +24.45 (0.13%)

NASDAQ Composite
5,005.73, -17.09 (-0.34%)

S&P 500
2,152.43, +0.29 (0.01%)

NYSE Composite
10,734.16, +7.38 (0.07%)