Wednesday, October 31, 2018

10 ways to waste money

Good to be back after a couple of weeks on vacation. It looks like the market is attempting a rally. We'll see how it goes.

From Schwab, good points on how to (not) waste your money.

10 Easy Ways to Waste Your Money

Note: If you haven't voted in the mid-term elections, you should. Advice received from one of my financial advisor sources, Gary Halbert

Two months ago, it looked like the Democrats would retake majority control of the House in a so-called “Blue Wave.” They only need to pick-off 23 Republican seats to do so. As I wrote in my Blog on September 27, presidents with an approval rating below 50% lose an average of 37 seats in the House in midterm elections. 
The Dems were looking very good.
But then came the embarrassing fiasco of Judge Brett Kavanaugh’s Supreme Court nomination. The Democrats went way over the top in trying to defeat Judge Kavanaugh, made a spectacle of themselves on national TV and changed the whole election dynamic. Now the election hangs in the balance. The much-heralded Blue Wave no longer looks likely.
Why is this so important? If the Democrats take over control of the House (and possibly the Senate), they have made it clear that they will initiate impeachment proceedings against President Trump and try to reverse his tax cuts and deregulation efforts. If successful this would be very bad news for the economy.

That sums it up pretty well. 

Wednesday, October 10, 2018

Trades for Wednesday, Oct 10, 2018

NGX18 (Natural Gas December 2018)

Sell 2 contracts short at 3.346
Buy 2 contracts to close at 3.316
Profit: $600.00

(This trade took 20 minutes from open to close. Sometimes you have to be fast). 

Watching gold and oil, but no other trades placed today. 

DJIA down 800 points, but no reason to panic

The Dow30 dropped about 3% today, which is just over 800 points. Seems like a lot in one day and it is. Not the biggest drop ever in terms of percentage. You have to realize the Dow reached a new high just last week. 

I had reported yesterday before market open a weakness in the market. 

A market correction is 10 percent and a bear market is considered when a market drops 20 percent from its high. We're only about 5 percent off the highs. 

The Dow would have to drop a total of nearly 2,700 points to reach correction level. Still have about 1,300 points to get to that level. The chart below shows we're not even as low as the market was on July 30 of this year. 

It's hard to say what will happen in the next few days. Right now (11 PM CDT) the futures market has leveled off at about 25,300, so it seems for now the selling has stopped. Same with the SP500 and NASDAQ.  Will have see what happens early tomorrow. 

The drop in equities looks like investors moving into safer assets, like money markets, etc. Gold was up some, but has also leveled off in the futures markets. And that same money may move back into the market. Time will tell. 

Professional investors will look for buying opportunities if this proves to be just a small move downward. 

Medical Care: A Monster that is Devouring the American Economy

From the Hillsdale College publication Imprimis, "A Short History of American Medical Care.


"In 1930, Americans spent $2.8 billion on health care—$23 per person and 3.5 percent of the Gross Domestic Product. In 2015 we spent about $3 trillion—$9,536 per person and 15 percent of GDP. Adjusted for inflation, this means that per capita medical costs in the United States have risen by a factor of 30 in 90 years."

"....So it is clear that there is something terribly wrong with how health care is financed in our country. And a consensus on how to fix the problem—how to provide Americans the best medicine money can buy for the least amount of money that will buy it—has proved elusive. But the history of American medical care, considered in the light of some simple but ineluctable economic laws, can help point the way. For it turns out that the engines of medical inflation were deeply, and innocently, inserted into the health care system just as the medical revolution began."

"....But it [medical care] has also become a monster that is devouring the American economy."

"Is there a way out?"

"One possible answer, certainly, is a national health care service, such as that pioneered in Great Britain after World War II. But our federal government already runs three single-payer systems—Medicare, the Veterans Health Administration, and the Indian Health Service—each of which is in a shambles, noted for fraud, waste, and corruption. Why would we want to turn over all of American medicine to those who have proved themselves incompetent to run large parts of it?"

"A far better and cheaper alternative would be to reform the economics of the present system."

Read the full article here.

Tuesday, October 9, 2018

Politicians Care More About Illegal Immigrants and Elections than Disabled Veterans

How some politicians use your tax dollars. From TownHall.

Time after time, politicians favor illegal immigrants and the big businesses who profit from immigrants’ less-costly labor because it helps them win elections.

A recent example is Democratic California gubernatorial candidate Gavin Newsom, the state’s current lieutenant governor and the former mayor of San Francisco. He’s openly campaigning on a plan to create a universal health care system that would also pay for all health care services for illegal immigrants.

“I did universal health care when I was mayor, fully implemented regardless of pre-existing conditions, ability to pay, and regardless of your immigration status,” Newsom said in August.

“San Francisco has the only universal plan for undocumented residents in America,” he added. “I am very proud of that.”

Rather than spend money helping to reduce crime, fund education programs, or tackle California’s $1 trillion in unfunded pension liabilities, Newsom would rather pay the health care bills of people who shouldn’t be in the state in the first place.

The problem isn’t only limited to California Democrats, either. After countless promises to enact real border security measures, Republicans in Congress have repeatedly failed to fulfill their commitment—a truly despicable failure, especially in light of the fact that President Trump has made it abundantly clear that he’s more than willing to fix America’s border crisis.

Stock market continues to show weakness

(Update: As of 9:45 am CDT, markets have reversed and are slighty higher. SP500 up about 9)

Despite showing some strength yesterday afternoon, market futures are down as of 7:35 am CDT. The DJIA is off about 100 points, the SP500 down about 11 and the NASDAQ is down about 31 points. 

Investors Business Daily had this to say yesterday:

"Stocks bounced Monday, giving the market some hope that its sell-off might be at least pausing, if not ending. The S&P 500 looked bearish at midday, when the index fell below its 50-day moving average. But a wave of afternoon buying sent the S&P 500 off its lows and into the highs of the day. The index closed nearly unchanged and back above its 50-day line"
"The market's backdrop remains favorable, with the U.S. economy still humming, unemployment at a 49-year low, consumer confidence high and corporate profits still reaping the benefits of a big tax cut.
The downside is that the Federal Reserve seems set on raising interest rates to keep the expansion from overheating. Fed Chairman Jerome Powell last week sounded hawkish on the economy, which fueled expectations that 2019 may bring even more rate hikes."
If you haven't already, it might be time to think about moving from stocks to money market funds. I already have about 35% of my long-term portfolio in cash or money markets and may switch some more. It's always good to have some dry powder -- just in case.

Monday, October 8, 2018

Trades for Monday, Oct 8, 2018

Gold (GCZ18)
Bought 1 Contract: 1194.4
Stopped out at: 1191.8
Profit / (Loss): ($260.00)
Note: Demand zone did not hold

Natural Gas (NGX18)
Bought 1 Contract: 3.265
Stopped out at: 3.235
Profit / (Loss): ($303.00)
Note: Demand zone did not hold

Gold (CGZ18)
Bought 2 Contracts: 1186.90
Closed at 1193.00
Profit / Loss $1,214.00

Profit for day: $648.00

Sunday, October 7, 2018

The climate change agenda is political and economic, not scientific.

Note: This may be my first and last article on climate change, unless something new comes up that deals with economics. The entire movement is based more on politics than science. The estimated cost of "fixing" our climate is estimated to be between $11 trillion and $100 trillion. It will hurt the poor more than the rich. Carbon dioxide (CO2) is not a pollutant. It only accounts for .041 percent by volume of the atmosphere and is at one of the lowest concentrations when geologic time periods are studied. Water vapor has more influence. Should we ban this also?

When someone says the "debate is over" and the "science is settled" I know there is something else going on. I do not deny the climate is changing or that we need to be good stewards of our planet. Other than that, it's probably biggest hoax of all time. I've spend countless hours and days reading and studying the literature. The science IS NOT settled. 

Those pushing for aggressive government intervention in the name of fighting climate change often claim that “the science is settled” and dismiss any dissenters as “deniers.” The so-called “consensus” is codified in the periodic reports issued by the Intergovernmental Panel on Climate Change (IPCC). The alarmist camp’s repeated references to “peer-review” and the number of organizations behind the IPCC are rhetorically very effective; they have done a great PR job in making it look as if their political solutions really do flow naturally from what the scientists in white lab coats are reporting. But allegations from IPCC authors show that politics and not science drive the process at the IPCC.

I'm not a conspiracy nut. But I have studied comments made by officials of the IPCC who state that their goal is political power, the overthrow of capitalism and the redistribution of world-wide income. 

For example, climate expert William Happer, from Princeton University has stated:  "No chemical compound in the atmosphere has a worse reputation than CO2, thanks to the single-minded demonization of this natural and essential atmospheric gas by advocates of government control and energy production. The incredible list of supposed horrors that increasing carbon dioxide will bring the world is pure belief disguised as science."

Did you know?
  • The reported 97 percent scientific consensus was pulled from thin air?
  • Over 250 skeptical scientists were featured in a Senate Environmental and Public Works Committee report?
  • A former UN IPCC official called global warming "my religion."
  • An analysis found that more than 250 scientific papers about global cooling where published from the 1960s to the 1980s.
  • Science groups that are nearly 100 percent dependent on government funding endorse the "consensus."
  • Ice ages haven occurred when carbon dioxide levels were up to 10 times as high as they are today.
  • Rising temperatures preceded CO2 levels in ice core data.
  • Polar bears are doing so well that climate campaigners have dropped them as their icon.
  • Antarctica is gaining ice.
  • The 1990 UN climate report showed a Medieval Warm Period warmer than the 20th Century.
  • "Hottest year" claims in 2005, 2010, 2015 and 2016 were based on statistically meaningless year-to-year differences essentially within the margin of error.
  • Global warming has seen a slowdown or pause since 1998. 
  • Tampering with the temperature record has been so widespread that the current climate era has been jokingly called the "adjustocene" era.
  • Most computer models - which are based on assumptions -- are not accurate and are based on "faulty" software
  • Scientific American branded a climatologist who changed her mind about global warming a "heretic." Just one example.
  • Leading UN IPCC scientists were caught manipulating the peer review process to create an artificial "consensus."
  • Landfalls of major hurricanes to the United States have declined over the past 140 years.
  • Instances of F3 or larger tornadoes have been in decline since the 1970s.
  • In the 1980s, the UN warned that by the year 2000 "entire nations would be wiped off the face of the Earth" by rising seas.
  • A top UN IPCC official said climate policy is to "redistribute the world's wealth."
  • The Paris Climate Accord would theoretically postpone global warming by four years and cost $100 trillion.
  • Climate skeptics defeated legislation and international treaties -- only to see Obama impose them without the benefit of Congress. 
  • Climate policies are denying life-saving technology to the world's poor. One in three Africans still don't have electricity. 
There's more, but I'm sorry, the science is not settled. That's not how science works. It's how religion works.

Weekly summary of stock markets

(Note: I will attempt to do this on weekends, but I can make no promises. This week focuses on long term weekly charts.  These charts are easily available on the internet.  Try or I generally track markets using ETFs, which contain those stocks in the indexes. And it makes it easy to buy the market like stock. ETFs are DIA (Dow Jones), SPY (SP500), QQQ (Nasdaq), IWM (Russell 2000). 

Long-term trends (Weekly Charts)
Notice the weakness in small caps (IWM and QQQ) vs. large caps (DIA and SPY). May indicate a new trend. Or it may indicate a new buying opportunity in small caps. Sorry, but I do not have a crystal ball that predicts the future. Otherwise, in my opinion, if you own these markets, I'd hold for now. Kind of expensive right now to buy more large caps. Keep your left-over powder (cash) dry in a nice money market fund.  Mine pays 1.9% and I have about 50 percent in cash right now, but have recently moved a small amount into a SP600 small cap ETF (SLYG). 

Nasdaq (QQQ)

SP500 (SPY)

Russell 2000 (IWM)

Dow Jones 30 (DIA)

Time to Vote. But do you know what you're voting for?

(Note: This is not a political blog. But politics do affect economics and personal finance. And voting is both a responsibility and duty. This is a brief summary of what I think are some of the differences are right now between our two parties, from some fairly extensive research on my part. But don't take my word on it. Do your own research on the issues. Just for the record, I'm neither a registered Republican or Democrat, since you don't do that in Texas. I tend toward Libertarian views anyway).

Your Money
When House Minority Leader Nancy Pelosi, D-Calif., said that bonuses stimulated by President Trump’s tax cut were “crumbs” she meant it. And item No. 1 on the Democrats’ agenda will be to repeal the Tax Cuts and Jobs Act. For the 90 percent of Americans who have seen more money in their pockets this year because of tax reform, kiss it goodbye. Republicans want to make the tax changes permanent. However, neither party problem seems to not have the courage to attack run-away government spending, which is a problem. And it will get worse as time goes on. 

Economic growth
One of the first things President Trump did to stimulate the economy was to remove harmful regulations that left our small banks, energy companies and other small and medium businesses treading water to stay afloat, if they had not already drowned. Democrats have admitted that they’ll bring back the regulations President Trump removed. 

National Defense
This is one of the most, if not the most, important obligations of the federal government. It's been my experience after serving 25 years in the military (1971-1996), and through study of history, that during the last 45 years, Democrats have weakened military capability, Republicans have strengthened it. But we also don't need to nation-build or be the world's police force, either. 

Heath Care
Overall, the Affordable Care Act did not help the majority of Americans. For some people, yes. But as I watched my co-worker's premiums go up and up, some losing their insurance plans and doctors, it became quite evident this was bad law based on lies. We need to throw it out and start over. But the Democrats can't or won't, and the Republicans don't have the courage. The goal for the Democrats is a system like the UK or Canada, a government-run, single-payer system. No choices. Do some research on those programs. Do you want your health care to be run like the VA? 

Secure borders and immigration
This is easy. Democrats: Open borders, sanctuary cities, benefits for all, do away with ICE. Pretty much a free for all.  Republicans: Control the borders and reform our broken immigration system. Deport criminals. Don't believe all the propaganda from either party on this issue. A nation without borders or rule-of-law will no longer be a nation. Maybe that's what you want. But I don't think so. 

Our voices on social media and freedom of speech
In 2016 a bill was introduced in the California legislature making it a crime to "deceive or mislead" the public on the risks of climate change. In other words, if you disagree with the current politically-correct belief system, or are a skeptic about climate change, you can be prosecuted and/or sued. Fortunately, saner heads prevailed and the bill died, but just the thought of it should scare the shit out of you. California is run by Democrats. 

Time and time again, we’ve seen Democrats defend censorship on social media platforms. They side with the likes of Facebook CEO Mark Zuckerberg and Twitter CEO Jack Dorsey, who believe that the First Amendment only applies as far as they see fit. Our ability to engage in public discourse on online social media platforms will be restricted by their restrictive set of rules.

And on and on it goes
There are other issues you should investigate, like gun rights, progress for peace, and the stability of government. Democrats have been talking about impeaching Trump if they take control of the Senate and House. After more than two years of investigations, there is still nothing found. This would make our government even less effective in solving real problems. 

I can't (and won't) tell you how to vote, but be informed. Don't be like 47 percent of college students who don't even know how long the terms are for Senators and Representatives.

Friday, October 5, 2018

Ron Howard and Nancy Pelosi on economics.

Everyone thinks they're an expert when it comes to economics. A little re-write of history, and bam! You got us. Or you show your true colors.

I love Ron's movies, but he should stay out of economic issues. Here's what Ron tweeted after the jobs report this morning:

Huh, Ron buddy, it didn't fall apart. We had almost 25 years of good economic growth, a rising stock market, rising wages, and low unemployment.  

Then there is Nancy Pelosi. She really thinks the last tax cut was a "scam" and a "brazen theft." A $2,000 bonus is "crumbs." Remember back when the Democrats temporarily reduced payroll taxes so working people could keep an extra $40 a month. She touted that as a great benefit. 

Nancy Pelosi’s apocalyptic tax-bill delusions

Dear Democrats, Ownership Isn’t Theft

When is keeping more of the money I earn theft? If you can figure that out, let me know. 

Job growth slumps in September, but the unemployment rate hits the lowest level since 1969

Job creation for September fell to its lowest level in a year though the unemployment rate dropped to a point not seen in nearly 50 years, according to Labor Department figures released Friday.

Nonfarm payrolls rose just 134,000, well below Refinitiv estimates of 185,000 and the worst performance since last September, when a labor strike weighed on the numbers. The unemployment rate fell two-tenths of a percentage point to 3.7 percent, the lowest level since December 1969 and one-tenth of a percentage point below expectations.

A separate measure of unemployment that includes discouraged workers and those holding jobs part-time for economic reasons — sometimes called the "real unemployment rate" — edged higher to 7.5 percent.

Unemployment among black Americans declined three-tenths of a point to 6 percent, slightly above its record low of 5.9 percent achieved in May.

Wednesday, October 3, 2018

Again, another data breach!

I know it's just FaceBook, as awful (who in the hell programmed that mess) as it is, but for those of you who do banking etc online, you must check your accounts several times a week. And have alerts set up. For example, I went shopping at Costco today and by the time I got home, I had an email on my phone alerting me that my card had been used and for how much. Very cool. 

If your bank or financial institution doesn't provide this service, change banks. (I use Chase for most of my day-to-day transactions and Schwab for investing). My credit union also sends me fraud alerts on that account via text (Navy Federal Credit Union). Protect yourself. And check your credit reports every month. Chase allows me to do this for free. (I've frozen my credit accounts so no one can use them to create new accounts.) 

More details on the FaceBook breach from Experian:

  • Facebook announced a data breach on Friday, Sept. 28, in which the personal information of 50 million user accounts was put at risk due to a vulnerability in the social network’s code.
  • Hackers gained the ability to steal “access tokens” that allow users to stay logged into their accounts. Fraudsters could use these to not only take over users’ Facebook profiles, but also to access third-party accounts like Airbnb, Spotify or Uber that use Facebook credentials to log in.
  • Though the access tokens targeted in the attack could potentially be used to log into third-party sites, Facebook announced on Oct. 2 that its investigators don’t believe such third-party sites were affected.
  • Since discovering the breach, Facebook has fixed the vulnerability, informed law enforcement to investigate and reset the access tokens on 90 million accounts as a precautionary measure.
  • See this article for more information.

Tuesday, October 2, 2018

U.S. Deficit Could Make Next Financial Crisis Even Worse

From Gary Halbert's Weekly Newsletter. Sign up for free at

Trillion-dollar deficits are coming back to Washington, and this time they could be here to stay. The White House Office of 

Management and Budget (OMB) projects that the federal budget deficit will top $1 trillion in FY2019 which began yesterday, up from $666 billion for FY2018.

Unlike the trillion dollar budget deficits that occurred during the Obama administration that were temporary and largely the result of the Great Recession, the Trump deficits are projected to exceed $1 trillion permanently. The Congressional Budget Office (CBO) projects the deficit to hit $1.5 trillion by 2028, and that is probably optimistic.

Thanks to the anticipated rise in interest rates coupled with growing debt, the CBO now projects that annual interest costs alone will hit $915 billion by 2028. “That's roughly triple what they are this year in nominal terms and roughly double when measured as a percentage of GDP," the CBO said.

The Trump deficits are the result of changes in federal spending and revenue that will continue to be in place until some future president and Congress decide to reverse them – that is, to increase taxes and/or cut spending on popular programs.

Not only has there been little appetite to do that, many in Congress and the Trump administration seem to be hell-bent on ignoring the deficit and national debt and increasing spending and reducing revenue (more tax cuts) even further.

In conclusion, our national debt, including “debt held by the public” and “intergovernmental debt,” now totals $21.51 trillion (the chart below is a little dated). With annual budget deficits of $1 trillion or more, the national debt is on-track to balloon to $30-35 trillion over the next decade.

For the record, I don’t believe that will happen. At some point, investors will decide that it’s just too risky to own US Treasuries, and we’ll face another financial crisis that could be much worse than 2008-2009.

Top Five Consumer Cyber Security FAQs

By Equifax Business, technology, environmental and economic changes are a part of life, and they are coming faster all the time. All of thes...