Tell Your Financial Adviser "F' Off for 2016"

Man - it never stops amazing me how people just like you will give away money for free and trust some asshole who couldn't care a less about making you a profit with your hard earned money. 

Once again the wonderful world of USA Hedge Fund Managers have once again come out with a loss for 2015 and the only thing their clients get is an "I'm Sorry". Think about it for one second. If you are lucky enough to be a credited investor and can get into a hedge fund you would think you would at least trail the S&P. But not these assholes this year. Once again you lose they win and worse yet, if we see redemption calls ramping up like I think they will, the entire market gets screwed and these assholes running these hedge funds make out like bandits. 

It is amazing that hedge funds like Greenlight Capital, Pershing Square and Glenview are missing the easy calls and losing money for their clients. I continue and will continue to preach that if you are going to invest in the stock market no matter how big or small, do your damn homework. Don't ever assume some financial adviser is going to give two shits about your return once you hand over your hard earned money. Stand up for your hard earned money and learn how to invest in the stock market. I have preached for years that you if are going to enter this market you will need know your investments and watch your money like a hawk. There is absolutely no reason you need a financial adviser unless your are wealthy enough to plan tax break investing, etc... http://video.cnbc.com/gallery/?video=3000442307&play=1

Fire your financial adviser this year and take control of your own money. Stick to what you know. Avoid all mutual funds (high ass fees) and pick stocks that you know have value and provide products and services that people want and use. Recently a young investor asked me what to invest in and I turned the question back to him and said what do you believe in? He could not answer this simple and easy question. What do you believe in? What companies do you find value in and use their products or services? 

For me and the Bonehead Investor community I stand by my investments in companies that provide world class products and services. For me companies like Apple http://www.apple.com/ and NetFlix are amazing investments for now and the future! https://www.netflix.com/

Stand up and take back your financial freedom! Don't be a sucker for Wall Street! Be a Bonehead Investor! 

 

Careful Out There! Sharks are in the water......

Constant data is coming out that 2014 is going to be another "resilient" year. Take this write up from USA Today - Can mighty Wall Street Bull keep charging in 2014? or this recent work from Forbes - Will the Bull Market extend in 2104?. As much as I would like to say and  make money in a Bull market, I am more concerned that we will see a very rocky market built on Algorithmic Trading - Algorithmic Trading that kills the normal investor.

If you are a Bonehead Investor you know my motto - Day Trading is great for the day... But trying to time the market with computers doing the work now, you will get killed. This goes back to my picks for 2104. I am hell bent on VNQ and EDF to protect my money in this kind of a rocky market. (VNQ & EDV). I pick these two positions to protect in the event of a market pull back and more important a Federal Reserve surprise. If we look at the data on housing today and the true unemployment number you can quickly see why I have protected my money in these investments. Housing Market - February Housing. Unemployment - Unemployment.

Don't get caught up in the noise of the talking heads and  your broker. Defend your money yourself with good education and an understanding of the market. Be a Bonehead investor and win!

The Bailout.

Well it is getting close to the hour of the bailout. Will it happen? Most likely yes. Will it matter? In my humble opinion it will not. The damage has been done.

For those of you who follow me you know my greatest fear is that the average US citizen has zero savings. Most, in fact, about 96% of the US can't make it a week without a paycheck. How will this bailout help them. It won't.

Once and only if the few banks that will be around can get back to lending, the lending requirements will be like climbing Mt. Everest. Think about this for a moment. The average US consumer credit score is between 690 to 720. Banks were charging huge interest rates to these consumers when they could lend. What do you think it will be like when they start lending again? The average consumer will not qualify for a loan. This will soon be a painful wake up call for America.

To compound this problem the consumers who do have credit are now being notified that their credit lines are closed and until they can pay what they owe they have no available credit. So what is the consumer to do? No credit and no savings makes for a messy problem. Food, gas, heat, shelter all cost money.

The capital market has a unique ability to flush out bad planning really quickly. The US has been in a bad planning mode for sometime now. The warning bell rang 13 months ago and we ignored the ominous signs that the financial markets were in trouble. Readers this is bad. Very bad.

So now what. My predictions:

• Bailout goes through, barely
• FDIC limit raised to $250k and why? Who has $250k in cash laying around......
• Banks either gobble each other up or we see massive bank failures
  
• Mark to market kills accrued value. Assets will be significantly reduced across the board
  
• The treasury lines and discount window will not be enough to tie banks over or cover "toxic" debt
  
• Financial markets will freeze up again in about 25 days. Enough time to attempt to flush "toxic" bad debt
  
• Short selling banned for another 30 days
  
• More panic sell off by the average 401k holder and small time investor
  
• DOW 7300
  
• Money Markets hit .96 cents for $1. Money Markets will be a thing of the past very soon
  
• Hedge Funds will collapse and then the fun really starts.....
• Once market goes into free fall we will see massive layoff's
  
• Layoff's will have to be funded by State Unemployment
• States will now rush to Federal Government for bridge loans to stabilize their businesses
• Federal Government will have no money to lend
  
• Next, study the history of October 29th, 1929

Our leaders failed the US citizen. But we really failed ourselves by not taking responsibility and live within our means. Good luck.

Citigroup to buy Wachovia banking operations!

My predictions are coming true. So far I am 100%. My next prediction; Fed's get bailout, savings help or whatever you all call this bailout approved. From there we will see a market crash like never before. Think about this, where will all this bad debt go and who will pay for it. You and me my brothers and sisters.

The idea of taking your money out of the bank and putting into your mattress might not be such a bad idea now. My other advice, wait before you invest this next couple of weeks.

By the way Wachovia did fail! It failed shareholders. Check out how much the officers of Wachovia made. They should all be ashamed of themselves......

Press Release: Citigroup will buy Wachovia's banking operations;FDIC says Wachovia didn't fail.

NEW YORK (AP) -- In the latest byproduct of the widening global financial crisis, Citigroup Inc. will acquire the banking operations of Wachovia Corp. in a deal facilitated by the Federal Deposit Insurance Corp.

Citigroup will absorb up to $42 billion of losses in the deal, with the FDIC covering any remaining losses, the government agency said Monday. Citigroup also will grant the FDIC $12 billion in preferred stock and warrants.

The deal greatly expands Citigroup's retail outlets and leaves it among the U.S. banking industry's Big Three along with Bank of America Corp. and J.P. Morgan Chase & Co.

The deal comes after a fevered weekend courtship in which Citigroup and Wells Fargo & Co. both were reportedly studying the books of Wachovia, which was suffering from mounting mortgage losses linked to its ill-timed 2006 acquisition of mortgage lender Golden West Financial Corp.

The FDIC asserted that Wachovia didn't fail, and that all depositors are protected and there will be no cost to the Deposit Insurance Fund.

Federal Reserve Chairman Ben Bernanke, in a statement Monday, said he supports the "timely actions" taken by the FDIC "which demonstrate our government's unwavering commitment to financial and economic stability."

Treasury Secretary Henry Paulson also welcomed the sale of Wachovia to Citigroup, saying it would "mitigate potential market disruptions." Paulson said he agreed with the FDIC and the Fed that a "failure of Wachovia would have posed a systemic risk" to the nation's financial system.

"As I have said before, in this period of market stress, we are committed to taking all actions necessary to protect our financial system and our economy," Paulson said.

The sale of the Wachovia assets comes just days after the government's seizure of Seattle-based Washington Mutual Inc. -- the largest bank failure in U.S. history. As details of its takeover unfolded, Wachovia shares plunged 91 percent in Monday premarket trading to 91 cents. The stock had closed Friday at $10, down 74 percent for the year.

Wachovia has been among the banks hardest hit by the ongoing crisis in the mortgage market. It paid roughly $25 billion for Golden West at the height of the nation's housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments.

I am now Scared! Really Scared!

This morning Treasury Secretary Henry Paulson goes on TV and states, "We are going to work through this problem just fine," Paulson said. He urged patience as investors reassess their appetite for risk, saying there isn't a "quick solution" to the matter. "These things take a while to play out," the secretary said. This is pure bull crap! We are in trouble.

Then we get this this morning, "Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Georgia, Nevada and Michigan accounting for the highest foreclosure rates nationwide, a research firm said Tuesday".

In all, 179,599 foreclosure filings were reported during July, up from 92,845 in the year-ago month, according to Irvine-based RealtyTrac Inc. A total of 164,644 foreclosure filings were reported in June.

"While 43 states experienced year-over-year increases in foreclosure activity, just five states — California, Florida, Michigan, Ohio and Georgia — accounted for more than half of the nation's total foreclosure filings," said RealtyTrac Chief Executive James J. Saccacio.

Oh Snap! And let's not forget these little tidbits:

• Countrywide Financial Corp., the nation's largest mortgage lender, said Monday it has eliminated about 500 jobs as it tries to ride out problems from a credit crunch that has rocked the home loan industry.

• In yet another casualty of the fallout in the mortgage industry, the Capital One Financial Corp. said on Monday that it would stop making residential mortgages and close GreenPoint Mortgage, its wholesale mortgage banking unit. They will lay off 1,900.

• HomeBanc, in a statement on its Web site, said it is unable to borrow on its credit facilities and was unable to meet its mortgage loan funding obligations as of Monday. HomeBanc is closed. Countrywide bought the debt and hired the employees. Wait a minute! Isn't Countywide laying off?
  

• After weeks of troubling news and near-silence from official spokesmen, American Home Mortgage Investment Corp. announced Thursday night that it would shutter most of its operations and lay off more than 6,250 workers, including almost all of its 1,460-person Melville staff.

Ya'll think we are OK? What about those safe Money Market Funds? Read on my friends:

• From the online Wall Street Journal: Shares were already lower, but selling in all three indexes picked up after CNBC reported that Sentinel Management Group, a money market fund manager, had asked to halt investor redemption's, suggesting its investors were in a "panic."Sentinel's action "was a pretty drastic thing," said Stephen Carl, head trader at Williams Capital. The news stirred up the fears about the spreading impact of trouble in the credit markets and alternative investments that have dogged Wall Street for weeks. "It's just more of the same," Mr. Carl said.

• Today alone, the 3-month T-bill rate was down by over one full percentage point before recovering a bit.

• The 1-month T-bill rate has plunged from 4.52% last Tuesday to as low as 1.25% today. That's not a typo! It was actually down by more than THREE full percentage points in just four trading days!

Do you think we are safe in our MMF's? How about Vanguard or Fidelity's MMF's?

Sorry ya'll I am scared. If you have been following my post I have stated the last thing we need is the Fed's to ride in and save the day. Ya'll the only thing that will fix and save this market is the capital market process. We have to let it ride out. Our banks and credit lenders have made terrible and even criminal mistakes. Many have made millions on this credit scam. We now have to pay the price.

I am terrible worried that we are only at the tip of the iceberg right now. I predict a huge plunge of up to 100 points soon. How soon? We will see a fall out in the next few weeks. We are starting to see the signs today. Have you been watching the Gold market while all of this is going on?

Seems gold is not moving, yet. Why? Well were about to open the bank window to the world with T-bills at a super low yield rate this week. Guess who will be buying? Yes our friends the Chinese. God this scares me even more. The Chinese are buying up our debt at almost any rate we give them. This is not a good sign for the US market. Debt is going to kill us and it will be a slow painful death of the consumer market. After the sell of the T-bills this week watch the gold market. When you see gold starting to jump $3 to $4 dollars up get ready for the market fall.

What do you and I do in this market? If your long like me just ride it out and watch those MMF's very closely. Are there any good buys right now? I think Starbucks is looking good. Apple looks good but let's see how much of a pullback we get this week.

Stay the course!