Paying Bills

This guest post from Lewis Beck

I have started paying all of my bills online. It is so much easier and it keeps me more organized. I used to have a stack of bills that came in the mail and I would have to use several stamps and mail each bill back. Sometimes, if I was out of stamps, I would end up mailing my bills back late because I would forget to go buy more stamps. If my bills were late, I would be charged a late fee. When I pay bills online can do it immediately and I do not have to worry about if the bill is going to be late. I also just get an email when the bill is due, so I do not have to worry about getting so much mail that just sits on my counter. I do not have to worry about late fees or stamps. It is so much easier to pay my bills online. I am so glad that I have Satelite Internet Oregon. It has made my life much less complicated and I do not know what I would do without the internet.

4th Quarter GDP Up 2.8%; 1.9% from Inventory Build; Checklist for Peace and Prosperity

US markets opened the day with news that the first estimate of 4th quarter 2011 GDP came in at 2.8%, a tad shy of the 3.0% (and many higher) estimates from the punditry. That bit of reality got stocks off to a ragged start and the choppiness continued throughout the day with the NASDAQ the only positive index for the bulk of the session.

The saddest part of the GDP breakout was that 1.9% of the 2.8% gain came from inventory build, which, as experienced in years past, will be quickly pushed out the door in the first quarter of 2012 and not fully replaced. That sets up an extraordinary condition through the first quarter: that of teetering on the brink of GDP contraction. Everyone is aware of the situation, which is why trading volumes have been so weak and stocks now being used as short-term bets rather than investments.

Still, the always-bullish crowd on Wall Street still, according to the January Barometer, believes there are better days ahead. That is until the bad days come, which they surely will. The aforementioned barometer is an old adage that purports that market direction, as dictated by the change in the month of January, will remain the same throughout the year. Last year, January was strong, just as this year, but we ended the year flat, and, after April, and especially after July, it was mostly downhill, so, take the sage guidance of the January Barometer with as many grains of salt as your risk appetite will allow.

Full year 2011 GDP was a grand 1.575%. And that's probably a stretch.

Muddle, muddle, toil and trouble,

Huddle, huddle, masses under the bubble.

America's economy is not growing and that's a good thing, though only for selected groups, like those who have seen it coming all along, nascent Nihilists and, of course, those at the top of the food chain (damn bankers).

Finally, here's my checklist for peace and prosperity in one's life:

• Paid for (free and clear) house to live in
Nice stacks of Precious Metals Guns & ammo Food in storage Garden Plenty of cash for six months expenses Solid understanding of the situation Don't give a rat's behind about upcoming elections Severe, deep-seated hatred of banks and government A business that keeps churning cash Clear conscience

Options include, sex slave, big dog to scare potential intruders, smokes (all kinds), liquor (you'll need it), home-brewing, wine-making or still (best of all worlds, all three), neighbors who may not fully comprehend the situ, but still are not a-holes, working computer(s). A nice collection of good books is always recommended.

Note that anything I-related, phone, pad, whatever, are not even optional. They're just future junk.

Since anybody who reads this blog is probably a notch or four above the teeming masses, we, as a group, should be exceptionally pleased that the system hasn't gone full retard into the eventual collapse, yet. Gives us more time to prepare for Armageddon, should it come, though we will be best prepared to fight off the zombies.

My advice: stick to your plan and work it. Hard. Tell those who think you're nuts (98% of population) to F-off. Fight like a gladiator for every penny and never lose faith in your own unique human ability, which knows only the limits you put on it.

Life is good and getting better for those who are prepared. The heck with the rest of the idiots.

Finally, two ideas in just four short words to mull over the weekend: Ron Paul. Short Google.

Dow 12,660.46, -74.17 (0.58%)
NASDAQ 2,816.55, +11.27 (0.40%)
S&P 500 1,316.32, -2.11 (0.16%)
NYSE Composite 7,876.60, -7.30 (0.09%)
NASDAQ Volume 1,685,430,875
NYSE Volume 3,822,956,000
Combined NYSE & NASDAQ Advance - Decline: 3540-1981
Combined NYSE & NASDAQ New highs - New lows: 235-18 (still extreme, but stalling out)
WTI crude oil: 99.56, -0.14
Gold: 1,732.20, +5.50
Silver: 33.79, +0.05

Welcome to the Age of Financial Repression; Markets Fall, Metals Gain

This was truly a strange day in US equity markets. On the heels of Wednesday's Fed announcement that the federal funds rate would stay at 0-0.25% until the latter part of 2014 (read: as long as we need ZIRP to keep the economy from collapse) and blow-out earnings from Caterpillar (CAT), stocks opened sharply higher, but then nose-dived right at 10:00 am, after the Commerce Dept. reported that new home sales in December fell by 2.2%, to an annualized rate of 307,000. Additionally, the median price of a new house purchased last month declined 12.8% from a year ago. 2010 now stands complete as the worst year for new home sales since records began being kept in 1963.

On top of the earlier-reported initial unemployment claims spiking back up to 377,000 from an upwardly-revised 356,000 last week, not even the hope of endless largesse from the Federal Reserve could keep stocks in positive territory. All major indices ended in the red. By contrast, gold and silver posted solid gains.

A term one won't be hearing much on mainstream media is "financial repression," and if it sounds harsh, it's because it is, and it is the reality of much of today's economic world.

Here's a definition of Financial Repression from Investopedia:

A term that describes measures by which governments channel funds to themselves as a form of debt reduction. This concept was introduced in 1973 by Stanford economists Edward S. Shaw and Ronald I. McKinnon. Financial repression can include such measures as directed lending to the government, caps on interest rates, regulation of capital movement between countries and a tighter association between government and banks. The term was initially used in response to the emerging market financial systems during the 1960s, '70s and '80s.

Bingo. Another term for the collusion of business and government is fascism.

Welcome to the new world order. For a glimpse of who and what are destroying the value of capital and thus, your money, just take some time to view the goings-on at the World Economic Forum in Davos, Switzerland. Surely, George Soros, Mark Zuckerman, Jamie Dimon and a gaggle of billionaires have the worming men and women of the world's best interests at heart.

Dow 12,734.63, -22.33 (0.18%)
NASDAQ 2,805.28, -13.03 (0.46%)
S&P 500 1,318.43, -7.62 (0.57%)
NYSE Composite 7,883.90, -30.91 (0.39%)
NASDAQ Volume 2,061,939,750
NYSE Volume 4,521,722,000
Combined NYSE & NASDAQ Advance - Decline: 2651-2944
Combined NYSE & NASDAQ New highs - New lows: 332-21 (very extreme)
WTI crude oil: 99.70, +0.30
Gold: 1,726.70, +26.60
Silver: 33.74, +0.62

Fed to Keep Rates Low Through Late 2014; Most Investors Pleased

Ending the first FOMC rate policy meeting of 2012 with a bang, the Federal Reserve announced today no change in their target federal funds rate of 0-0.25%, but the major announcement was that they would keep this same, historically-low rate in effect through "late 2014." The rapid results of the Fed's announcement that they would keep monetary policy ridiculously easy for the next three years were felt immediately in all markets.

The dollar dropped like a rock against most other currencies, especially the Euro.

Bond yields fall dramatically.

Stocks turned from mildly negative to ferociously positive.

Gold, silver, crude oil and most other commodities spiked higher.

Those were the winners. The losers were just about anybody on a fixed income, which includes not only those on Social Security or retirement pensions, but also most workers in the private sector, which has experienced flat to lower labor prices for most of the past decade.

Therein lies the fallacy of the Fed's dual mandate of providing stable prices and full employment. Obviously, on both measures, the Fed has failed badly over recent years and is now in a no-win situation without much flexibility to react to real-time events and unforeseen circumstances.

With yields on money market funds and certificates of deposit at or near record lows, the Fed is encouraging risk, though Americans, still saddled with too much household debt, many with underwater mortgages to go along with stagnant wages, still aren't fully in the mood - nor do many have the wherewithal - to spend freely and get the economy out of the dolorous regime of 1-3% growth.

Business, generally, though there are pockets of severe conditions, are content to keep grinding on, though innovation and new enterprise creation has been somewhat stifled, though not to the degree it has been, especially during the forlorn days of late 2008 and early 2009.

Conditions are generally much better than back then, as major banks have largely re-capitalized, households have paid down a good portion of debt and governments - outside of the petulant federal one - have tightened budgets though labor reductions, better spending discipline and capital controls. The final pieces to the puzzle of a sustained, vibrant recovery rest squarely upon the shoulders of the federal government, which must seriously tackle the issues of Fannie Mae and Freddie Mac, reducing the annual deficit (a balanced budget, or something close to it, would be a welcome change), restructuring the tax code, reducing needless regulations and implementing fundamental changes in entitlement programs.

The federal government's list of dirty laundry is long and unlikely to be resolved to any great extent in the background of a presidential election year. That is not the Fed's problem, just as the profligate spending of many of the European nations should not be an epidemic for the ECB, though that is exactly what it has become.

The Fed is doing just about everything it can to make the business environment friendly and accommodative while the federal government, though gridlock and ideological differences, fights, kicking and screaming at any and every notion of change.

Americans, on the other hand, are ready for change in a more positive direction, a theme repeatedly stressed in Tuesday night's State of the Union address by President Obama, who outlined a number of measures to get government working for the people again at the federal level, such notions quickly dismissed by political commentators and opponent Republicans as mere politicking.

Sadly, the politics of Washington, DC will not allow for any substantive changes for at least another year, meaning that Americans are stuck with what they've been handed, like it or not, making the matter of improving one's economic conditions a paramount requirement for each individual and family.

How, though can individuals help the economy grow?

Perhaps through being wiser shoppers, better disciplined managers of their own finances and smarter stewards of their own assets, which is not limited to just stocks, bonds, retirement accounts and real estate, but must include a dedication to some basic American principles, such as working hard, saving (though that is tough, but necessary), and making progress and innovation in one's chosen career path.

Working Americans, must shoulder much of the burden, as usual, though the lot of most working Americans (the 80-90% of the labor force with jobs) isn't really all that bad presently, it's the future - along with the repayment of past debts - about which most are overly concerned.

Considering that the worst of the recession is well behind us by now and that the Fed has signaled that conditions are unlikely to change much in the coming three years, the real issue is that of confidence, in one's job, one's future and in America.

It is up to everyone to see to it that the federal government is brought into line with the wishes of the middle class. It's not enough to deride the rich for not paying their fair share of taxes. More emphasis must be placed upon the well-entrenched welfare state. The poor aren't pulling their weight very well, either.

It's not enough to vote for the candidates of choice in November. It is the duty of all Americans to inquire and to become informed about government policies, resist them if necessary, protest them if they are wrong and change them if possible.

The Federal Reserve or the federal government will not make the needed changes to bring America back to a system of individual rights and fairness without hearing from each of us, all of us. It is long past time for Americans to take matters into their own hands, deal with the vagueries and inconsistencies of institutions and turn the tide. We are at an important point of change in our history and individuals must make the difference.

Dow 12,758.85, +83.10 (0.66%)
NASDAQ 2,818.31, +31.67 (1.14%)
S&P 500 1,326.06, +11.41 (0.87%)
NYSE Composite 7,914.81, +74.16 (0.95%)
NASDAQ Volume 1,954,827,375
NYSE Volume 4,410,711,500
Combined NYSE & NASDAQ Advance - Decline: 4049-1578
Combined NYSE & NASDAQ New highs - New lows: 239-20
WTI crude oil: 99.40, +0.45
Gold: 1,710.90, +46.40
Silver: 33.28, +1.30

Stocks lower as Europe Weighs Heavily on Risk Assets

Stocks simply stalled out today as the euphoria over a new year continued to wear thin and the realities of Europe took center place in the minds of investors, traders, cheaters, liars and assorted money moguls.

Ancillary to the dilemma on the Continent, US companies are weighing the potentialities of a pan-European recession, which the IMF clearly defined today in cutting their global growth estimate from 4% to 3.25% for 2012. In case anyone's interested, that 0.75% cut in growth amounts to a drop off of 18.75% in their estimate. Whether the IMF economists just throw darts at a wall in search of a politically correct "number" or actually have ferreted out the world's economy to the penny, the sense of this announcement is pretty clear. Europe is big enough to plunge the rest of the world into a prolonged recession or, at best, a slow growth regime for the next four to five years, which, on top of the past three years of uncertainty, confusion and doubt, doesn't bode well for the rest of 2012 and beyond.

The IMF also lowered their forecast for the 17 nations comprising the Eurozone, from 1.1% growth in September to -0.5% today. In ordinary terms, the IMF is calling for a mild recession in Europe, though anyone who's been following this tableau of financial terror, knows that a mere 0.5% falloff would be a rather welcome outcome.

The Peterson Institute for International Economics (PIIE) has released their January 2012 Policy Brief[PDF]. The 13-page report, authored by Peter Boone and Simon Johnson details most of the pressing issues facing Europe and the viability of the EU itself.

The authors cite five key measures towards the survivability of the Eurozone:

Five measures are needed to enable the euro area to survive: (1) an immediate program to deal with excessive sovereign debt, (2) far more aggressive plans to reduce budget deficits and make peripheral nations hypercompetitive” in the near future, (3) supportive monetary policy from the ECB, (4) the introduction of mechanisms that credibly achieve long-term fiscal sustainability, and (5) institutional change that reduces the scope for excessive leverage and consequent instability in the financial sector.

Let's dissect these five measures one by one.

1) an immediate program to deal with excessive sovereign debt. Like what, actually paying down debt rather than continually issuing more bonds to avoid reality?

2) far more aggressive plans to reduce budget deficits and make peripheral nations hypercompetitive” in the near future. What would Greece and Italy do to become "hypercompetitive?" Eat faster? Dance more wildly? This is ludicrous.

3) supportive monetary policy from the ECB. Somehow, that just doesn't exactly jibe with "excessive sovereign debt" outlined in #1.

4) the introduction of mechanisms that credibly achieve long-term fiscal sustainability. Can you say "gold standard" and "kill the Euro" in the same sentence?

5) institutional change that reduces the scope for excessive leverage and consequent instability in the financial sector. Banks, governments acting rationally? The authors have clearly headed into an alternate dimension.

The off-the-cuff remarks notwithstanding, Johnson and Boone come to the startling conclusion that Europe's problems are not going to be fixed either easily nor soon, saying, in their conclusion, "Europe’s economy remains, therefore, in a dangerous state."

Well, somebody tell the stock jocks that their portfolios are about to shrink.

Elsewhere, Greece talks to get private investors on board for a voluntary "haircut" have stalled out once again, as there continues to be no deal on restructuring Greece's largely unpayable debt, while on Wall Street volume dried up completely in advance of tomorrow's FOMC non-eventful rate policy announcement and subsequent (ZZZZZZZZZZZZ) press conference.

Yes, it was another bang-up session for US equities. Now might be a good time to escape, like the hordes of other individual investors already have, having absolutely no confidence in markets, the government, or the sustainability of our glorious "recovery."

After the bell, the legacy of Steve Jobs lived on just a little longer as Apple (AAPL) delivered bang-up 4th quarter results, while Yahoo (YHOO) missed revenue and earnings estimates for the umpteenth consecutive time. It's very telling that Yahoo hasn't been acquired by now. Apparently, any interested buyers are content to wait until it simply disappears from the internet.

Dow 12,675.75, -33.07 (0.26%)
NASDAQ 2,786.64, +2.47 (0.09%)
S&P 500 1,314.65, -1.35 (0.10%)
NYSE Composite 7,840.65, -14.87 (0.19%)
NASDAQ Volume 1,659,757,875
NYSE Volume 3,671,223,750
Combined NYSE & NASDAQ Advance - Decline: 3138-2409 (lots of UNCH today)
Combined NYSE & NASDAQ New highs - New lows: 141-24
WTI crude oil: 98.95, -0.63
Gold: 1,664.50, -13.80
Silver: 31.98, -0.30