The Market can be Fickle
So we have watched the market rebound slightly and now head into the historical slowdown months of June – October. As you may remember I have long said that the small rebound we have experienced is a simple manipulation and not truly the beginnings of a bull run. I searched and researched to find any commentary about the incredibly coincidental Q1 profits at Citi=Bank, Wells Fargo etc… simply wanted to make sure that I was not becoming a conspiracy crackpot.
Well this week John Mauldin in his newsletter made some interesting comments:
Banks are not yet lending, and the past quarter's positive performance was mostly accounting gimmicks. Citigroup, for instance, said they made $1.6 billion. They did this by booking a one-time gain of $2.7 billion, because the value of Citigroup bonds have fallen (!), giving them the theoretical possibility of buying back their debt at a discount. And with consumer and credit card loans showing more weakness, Citi decided to REDUCE its loan loss reserves, allowing it to show another $1.3 billion in profit. And then there was the profit of $400 million from the new mark-to-market rules, which allowed them to produce a profit on "impaired assets." Without all these games, there would have been a loss of $2.8 billion.
Accounting gimmicks is a very apt analysis. As we learned with Enron talented accountants can make books and statements say anything they want. Just as the Fed can print money at will key accounting firms can create magnificent fiction. The real concern however is that your money is based upon non-fiction and paper gains do nothing for your future. Just ask those who were invested with Bernie Madoff if paper gains hold any true value.
There are many sound investments in the market place, yet more so then ever you need to focus on clear transparency and proper due diligence. You certainly cannot afford to invest money based upon the tip of the week, or the friend of a friend of a friend. Even when dealing with financial advisors you will need to ask the key questions to determine if they are simply making biased recommendations. Your financial health is more important than ever before as we are in an investment environment like never before. The money managers and investment advisors are seeking to regain their own losses. Your losses in many cases are a secondary concern. It is for these reasons that you need a non-biased totally objective 3rd party to review and identify your financial pathway.
Take a look at www.advocacy.bz and find out how to ensure clear transparency, full disclosure and the due diligence necessary to make smart decisions with money.
www.advocacy.bz
Saturday, May 2, 2009
Tuesday, April 28, 2009
The Brillance Of BIG Government!
BIG Government at Work
In this image taken with a cell phone by Jason McLane, the primary presidential aircraft, a Boeing 747 known as Air Force One when the president is aboard, flies low over New York Harbor, followed by an F-16 chase plane during a federal government photo op Monday, April 27, 2009. (AP)
I'm sorry to interrupt our series on Financial tools to bring this bulletin in incredible stupidity!
Apparently the Obama administration felt that photo ops could double as terrorist fire drills. They certainly were able to see how quickly buildings in NYC could be evacuated. From a sheer terror perspective this event probably could hit a solid 6 on the Richter scale. Did they really believe that a Low flying Boeing jet (AF one!) followed by a Fighter plane might not cause some concern for witnesses? Even if this would have been appropriately announced it is at best in bad taste. The reason it wasn’t fully announced is clearly no one in NYC would have granted the permission for this gigantic act of stupidity. Of all places to take a low flying plane, one would assume lower Manhattan would be off limits. Surely, a small amount of common sense would have suggested not to recreate something like this. While our incredibly ignorant leadership has debated torture, they go and do something like this which is in a sense torturous. It tortures common sensibility, and it causes undue duress on many who lived through a frightfully shocking event like 9/11. Now many of those very survivors are subjected to a PHOTO OP that basically recreates the event. Apologies on this are not even a remote reconciliation for such incredible stupidity. This one requires financial remuneration. Those who were victimized by this stupidity should ask the Government for financial recourse. Hs anyone considered the potential for injury, panic and even death as people raced around trying to evacuate buildings? If one person would have died from this incredible stupidity the entire Federal Government would have to be accountable. The lack of thought behind this is a real concern. What group of idiots could have possibly sat around a table and came up with the idea to do a low fly by in LOWER MANHATTAN! How could anyone possibly have a high level government position of leadership and be highly compensated to come up with ignorance like this? No apologies, terminations are in order, anyone who sat in the meetings and somehow thought this was a viable idea needs to be FIRED immediately. All of us need to question what kind of fools we are putting in positions of power. I can’t think of any CEO or business leader who would have thought this type of stunt to be acceptable. Even the most greed driven sociopaths would have backed off a stupid idea like this. As much as you say you have seen it all, believe me you haven’t, and I can’t even imagine what kind of stupidity is next.
http://www.advocacy.bz/
Monday, April 27, 2009
Now is the time to be Selling ANNUITIES!
Now Is the Time to Be Selling Annuities!
Headlines like these swamp my email box. Also the magic silver bullet offers for agents, advisors etc… also do. What does this mean for the buying public? First let me say that Annuities are one of the great planning tools available and as long as the proper suitability factors are discussed and reviewed it is something that every senior should know about!
The fear factor though has taken over; first Dateline NBC ran an incredibly one-sided and poorly designed program on annuities. Again, they went for the so-called sizzle and left out most of the facts. Not to mention they ran a fixed game as they had ringers in the show. They did not take a totally non-biased fully objective observation of annuities. But quite frankly, that would have been a VERY boring show and certainly wouldn’t have done anything for ratings. Misinformation is always more glamorous and between NBC and incompetent sales people there is plenty of misinformation to go around.
The greatest danger in today’s ever changing market place is incompetence. By basing your decisions about important financial vehicles totally with misinformation basically gives you no chance of making a smart decision about money. And, the market place is ripe with myth, innuendo and misinformation. You would hope that the media would simply stick with facts and try to help consumers simply weed out bad information. Unfortunately in the race for ratings and sizzle most media has joined the ranks of the purveyors of misinformation (and I use that phrase lightly). The Insurance industry is under some tremendous strain with their bond investment portfolios and these for the first time have created a very unique challenge to the Insurance industry that has long been the beacon of GUARANTEES!
Annuities are wonderful contracts that offer guarantees of principal, guarantees of lifelong income and many tax advantages such as tax deferral. Those guarantees have long been backed by the wonderful concept of legal reserves. Amazingly the irresponsibility of the Banking institutions has even jeopardized the sanctity of the golden goose of Legal reserves within the insurance industry (I will expand this thought in a future blog).
For the first time Annuity contracts will be subject to the law of supply and demand. Yes, there are actually insurance carriers that have to limit the amount of annuity premiums they make available this year. For that reason, it is more important then ever which companies one chooses to have a life long contract with. There are IMPORTANT questions that every potential annuitant needs to ask. Due to this incompetent advice is NOW MORE DANGEROUS then ever before. A flim-flam sales person can put your entire retirement income at risk with poor advice and a poorly designed annuity contract.
Yet, this does not mean you need to avoid annuities, on the contrary you need to look more closely at this financial tool then ever before. This is the ONLY financial weapon in the arsenal that deals in GUARANTEES! For that simple reason alone you need to review this option closely.
In review though you will need to look for totally objective professionals to help you weed out the BAD players in this market place. There will be a surplus of bad players and their sales forces will be legion. Yet in the midst of it all will be sound, true and objective advice. I would like to think that sound information and the best interest of the client will win out.
www.advocacy.bz
Headlines like these swamp my email box. Also the magic silver bullet offers for agents, advisors etc… also do. What does this mean for the buying public? First let me say that Annuities are one of the great planning tools available and as long as the proper suitability factors are discussed and reviewed it is something that every senior should know about!
The fear factor though has taken over; first Dateline NBC ran an incredibly one-sided and poorly designed program on annuities. Again, they went for the so-called sizzle and left out most of the facts. Not to mention they ran a fixed game as they had ringers in the show. They did not take a totally non-biased fully objective observation of annuities. But quite frankly, that would have been a VERY boring show and certainly wouldn’t have done anything for ratings. Misinformation is always more glamorous and between NBC and incompetent sales people there is plenty of misinformation to go around.
The greatest danger in today’s ever changing market place is incompetence. By basing your decisions about important financial vehicles totally with misinformation basically gives you no chance of making a smart decision about money. And, the market place is ripe with myth, innuendo and misinformation. You would hope that the media would simply stick with facts and try to help consumers simply weed out bad information. Unfortunately in the race for ratings and sizzle most media has joined the ranks of the purveyors of misinformation (and I use that phrase lightly). The Insurance industry is under some tremendous strain with their bond investment portfolios and these for the first time have created a very unique challenge to the Insurance industry that has long been the beacon of GUARANTEES!
Annuities are wonderful contracts that offer guarantees of principal, guarantees of lifelong income and many tax advantages such as tax deferral. Those guarantees have long been backed by the wonderful concept of legal reserves. Amazingly the irresponsibility of the Banking institutions has even jeopardized the sanctity of the golden goose of Legal reserves within the insurance industry (I will expand this thought in a future blog).
For the first time Annuity contracts will be subject to the law of supply and demand. Yes, there are actually insurance carriers that have to limit the amount of annuity premiums they make available this year. For that reason, it is more important then ever which companies one chooses to have a life long contract with. There are IMPORTANT questions that every potential annuitant needs to ask. Due to this incompetent advice is NOW MORE DANGEROUS then ever before. A flim-flam sales person can put your entire retirement income at risk with poor advice and a poorly designed annuity contract.
Yet, this does not mean you need to avoid annuities, on the contrary you need to look more closely at this financial tool then ever before. This is the ONLY financial weapon in the arsenal that deals in GUARANTEES! For that simple reason alone you need to review this option closely.
In review though you will need to look for totally objective professionals to help you weed out the BAD players in this market place. There will be a surplus of bad players and their sales forces will be legion. Yet in the midst of it all will be sound, true and objective advice. I would like to think that sound information and the best interest of the client will win out.
www.advocacy.bz
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