Where did America Go?
I want to start tonight's little letter with a small news blurb. Here it is:
07:48 AM The White House turns to short sales to help stem the foreclosure crisis, allowing delinquent borrowers to sell their homes for less than the amount owed and forcing banks to forgive the difference. To speed the process, the government will hand out cash to both mortgage servicers and homeowners
So, let's just get this straight. A zillion people got conned into the idea that houses only go up, so they decided to "get in" while they could. During 2004/5 and 6 people paid up 4 and 5 times what housed were worth. It was the greatest orgy of RE buying ever seen. Most couldn't afford it, but they figured "hey it only goes up, so what's the risk?" Well now they see that they don't always go up, they can come down and down hard, so they're trapped. That is called "risk".
But something very peculiar happened to America over the past 30 years. It seems no one can be responsible for themselves any more. It's never anyone's fault, there's always some one to blame. So, of course the people that got screwed screamed that they didn't know their rates would adjust higher, or their house would fall in value, or what have you and sure enough here's the leftist, socialist administration willing to bail them all out. Let me suggest something here. IF you were smart enough to hunt down an outfit that would allow you to buy a home you could not afford, and smart enough to know how to lie on the application, I feel you were probably smart enough to know that your rate would reset higher and you still couldn't afford it.
Did you notice the words "forcing banks to forgive the difference". Excuse me? As the banks go ahead and forgive billions between what the house is now worth and what they paid, doesn't that mean billions just "vanish?" It does. And considering that we have already seen 26 banks go belly up this year, won't that mean more will go belly up? It does. And isn't the FDIC basically bankrupt? It is. So, who's going to make up the difference? Oh, that would be you and me...again.
Do you guys want to know why we are going to be in a depression over the next few years? Because of BS like this. Instead of taking the big hits, taking the short term pain, they'll continue to do everything under the sun to give the impression they can keep the economy sound, and meanwhile our nation is bankrupt. Broke. Insolvent. When you send "bad" money into garbage like this, it crowds out the "good" money that should be going to creating productive businesses, expansions, capital goods purchases, etc. Can the economy expand without productive cash flow? No, it can't.
But this was to be expected. With the November mid term elections coming, I told you all that they would do every and anything to make it look like the economy is sound so "they" get re-elected. They figure that if they pump enough money into the system and put enough fingers in the dykes, that maybe people will forget their agendas, and vote them back in. Frankly 90% of both sides of the aisle needs to get their pink slips, but that's just pure fantasy on my part. I'll be happy if we can at least get "some" of them out of there.
Look at this Lunatic Pelosi. Word has it that she said "you have the pass the health care reform bill in order to find out what's in it" Am I trippin here? Why are they still pressing for "carbon caps" when it's pretty much evident that the whole man made global warming thing was the worlds biggest scam?? Why did it take this long for ESPN to produce an article saying how Obama might use his executive power to ban all recreational fishing in our Country?? I've been telling you all about that agenda for two years and everyone yawned. Now it's sitting on the Presidents desk. Think there's an agenda there? Think PEW foundation, think PETA, think UN, think "world council on sustainable resouces". Think "force" people to buy their fish protein from farms in Asia and a handful of factory ship commercials.
Yes they're going to pump money into this economy. Not because it can be saved, it CAN NOT. They'll do it to save their own hides and try and remain in power. Month after month I've shown you floor traders from Chicago telling you flat out the market is manipulated, controlled, not free any more. That's the big scam folks. Run the market up, make the average "joe" think things aren't so bad. Keep the present roster of mutant politicians in office. It is all one gigantic fraudulent mess.
So it's no shock that they're going to let people sell their houses for big losses and make the banks eat the difference. Want to know why? They'll simply bail the banks out with the FDIC, who will go to Uncle Sam for more money. Guess who's money it is? Yours, mine, all of ours. So, the bottom line is that once again, just like the big bank bail outs that YOU paid for, the idiot reckless slob that thought he was Donald Trump and going to flip houses, is going to get "taken care of" by our pot of national debt.
I will ask again, what happened to America? Where did it go? What was it that caused our people to stop being brave hearted, and allowed this place to become a nanny state rivaling England?? Did we get so fat dumb and happy that apathy took over and no one really cared? I think there's a lot of that there, yes. I also think it's all been part of a long reaching plan by the socialist minded to create a socialistic society here. Don't forget folks the US was unique. People were free, people were brave, and we were the greatest nation on earth. The other 99% of the global population was either envious, or despised us.
I cannot wait to see what manner of lunacy they come up with between now and the elections. How much more will banks and outfits like AIG, and FNM and FRE be given? How long will banks be allowed to "mark assets to model" instead of mark to market? How many more bizzaro schemes to make the foreclosure nightmare seem less dangerous? I really can't wait to see what type of bail out madness they come up with as Commercial real estate snowballs down the hill of disaster.
So, what's the bottom line? Well, they can do as they want, trying to make things look rosy. But mother nature will not be denied her day, and once the elections are over, I see nothing that will prevent mother nature from taking us down. We overbuilt, overspent, over indebted, and the piper wants his due. I think he's going to get it. Stay long those precious metals. If you don't have any get some.
Now I want to back track a bit. Most of you don't know what I'm talking about concerning our rights as people to simply take a kid fishing. Well, I'm well versed in the matter and it's NOT just about PETA and the Pew foundation. It's not just about extremist eco nazi's. This is a global push folks. But for a moment just consider something. If you take just the coastal states that border salt water, the amount spent by the casual fisherman is in the billions of dollars per year. They drive to the shore, (fuel and gas taxes) they eat at the local diner, they buy all manner of rods, reels, boats, motors. They go to marinas and buy polish and wax, and bait and you name it. The ripple effects are enormous. We're talking tens of billions of dollars in revenues.
Here is the ESPN article that's making the buzz.
http://sports.espn.go.com/outdoors/saltwater/news/story?id=4975762
Frankly it's sort of lame. I have much better documentation straight from NOAA, telling us flat out what their agenda is. The total ban of recreational fishing is the plan and they labeled it "Vision 2020" Yes they think they know there will be economic fall out. But guess what? Economic fall out is all part of the globalists plans. Whether you want to believe it, or stick your head back in the latest version of "dumb and dumber" the Euro zone was a "test run" to make the entire world a one world Government. Wrecking more of America's economy is of very little consequence to these people.
Just consider this for a moment. In just the past 7 years, we opened a war with Iraq. We opened a war with Afghanistan. We saw the single biggest Real Estate bubble on earth. We saw the single greatest credit expansion on earth. We saw America laden with more debt than in her entire life span combined. We are on track to dismantle more defunct banks than the Great Depression. Our FDIC is broke. Our Social net via Social Security is broke. We were introduced to cap and trade. Healthcare. Pockets of forced immunizations. We saw the EPA declare our breath a deadly poison. We have seen sovereign debt disasters. The dubai spectacle. The Greek spectacle. We have seen more devastating developments, and wickedly vile agendas in just the past 7 years than I can recall in my 52 year old life. Is this by accident? Not on your life.
Stay long precious metals. There are quite a few incredible things coming at us in the next 1 -2 years, and where the chips all fall is not written in stone. But what is written is that Gold and silver will always see you through. Consider it.
Now onto the market.
An odd day for sure. Usually Wednesdays are "reversal days" meaning that what ever happened on Monday and Tuesday gets reversed on Wednesday. Well that's great if say Monday and Tuesday are big down days and Wed we get a run up, or vice versa. But what if Monday and Tuesday are "flat?" Well then Wednesday is like a lost child, able to wander aimlessly. That's what happened today. We ended the day mixed but basically flat.
Now there's probably fifteen different ways to look at this market right now. We are just 130 points away from the "highs" set in January. Some will figure that we're just pausing, building a base for the next leg higher. Some will suggest we're "topping out" while others will have their own pet theories about what's going on.
Allow me to let you in on a little secret. The ONLY reason it's so very hard to know if this market is willing to bust through the old highs or just stall our and fall, is because of the manipulation that goes on every day. The "unknown' buyer of futures that moves the market 50 points in 2 minutes and staves off disaster. Frankly the mutual funds are out of money. They're basically fully invested. So that can't drive us much higher. Where's the ammo come from?? Has the retail investor pulled his money out of the safe deposit box and gone wild? Uhm, no, the facts show they're still trying to buy the safety of bonds.
We should be out of gas here very soon. Well over a month ago we said we'd see the market get to about 10,600 and it has. But now it's stuttering, struggling. Sure we could pop and run over the old highs. Markets have a way of being insane longer than you can be solvent. But also know that the market will always do what punishes the most amount of people. So, it wouldn't be so odd to see it pop over the old highs, which would get a lot of people excited about a whole new bull market, drag in a heapload more people and then roll right over and crush them. Actually that makes about the most sense.
In the meantime we've been playing cautious, but having fun none the less. We sold our shares of AAPL today for a 9 dollar a share gain in just a week. We got 1.50 in CLNE, and 2.66 in FCX. Our open positions are all green, and looking decent. So, it's definitely a market you can make money in if you play it right. For tomorrow I think they'll try their best to inch us higher, trying to get us back to those old highs. Stay tuned it's all grand fun!
See you all on Sunday
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