InvestWithAlex.com 

Subscribe Today
My Account

Posts

Posted on

Harvard Economist Starts A Run On His Bank of America. Should You Follow?

 PBS Writes: Is your money safe at the bank? An economist says ‘no’ and withdraws his

bank run investwithalex

Why do I risk starting a run on Bank of America by withdrawing my money and presuming that many fellow depositors will read this and rush to withdraw too? Because they pay me zero interest. Thus, even an infinitesimal chance Bank of America will not repay me in full, whenever I ask, switches the cost-benefit conclusion from stay to flee.

Let me explain: Currently, I receive zero dollars in interest on my $1,000,000. The reason I had the money in Bank of America was to keep it safe. However, the potential cost to keeping my money in Bank of America is that the bank may be unwilling or unable to return my money.

Read The Rest Of The Article Here

After reading this article I am seriously considering running into my bank later on today and screaming out “Give me all of my money Bi*%#@, NOW”. It’s just my hope that they won’t misinterpret my demand for my own money and give me all the money in the vault. I don’t’ think the FBI would appreciate my sense of humor. (On the side note, I wonder how many keywords this paragraph has set off at the NSA).

Anyhow, I actually tried to withdraw a fairly large amount of money at my local branch of Bank of America a few years ago. Without giving it a second thought I walked in and asked for a miserly $125,000 in cash. With a smile of course. They gave a deer in a headlights look, the same kind of look I would expect if I was trying to cash in about $20 Billion, and then proceeded to tell me “I am sorry, we don’t have that kind of money on hand, would you like us to request that for you and you can come pick it up in 2 days. “

WTF? You have a huge vault and you don’t have $125,000 in cash on hand? That is not good.

Listen, the article above is right on the money when it comes to our banking system and highly recommend that you read it in its entirety.  The bottom line is, the American banking system is only as stable as the perception of stability associated with it. The banks, by their greedy nature, have lent out all of the money they have had.

If there is a run on the banks, no commercial bank in the US today will be able to meet its obligations to the depositors. Surely, the government will backstop, but that’s not the main point here.

The main point is that the banks are not paying any interest on deposits.  Thanks to the FED and their interest rates policies, you would be lucky to get 0.05% APY on your saving account.  That doesn’t sound fair, does it?  I don’t know why Obama and Bernanke/Yellen hate our senior citizens on fixed income so much.

Now, based on my mathematical timing work,  I reject the notion of the “PermaBears” and “Gold Bugs” that our economy and our markets will completely collapse, there will be a banking holiday and we will all be shooting rabbits for food.  Again, it is not going to happen.   

While I believe your money is inherently save at this juncture, I do agree with the premise of taking your money out of the banking system and trying to get a higher yield elsewhere. That is, if you want. 

So, what should you do?

1. Never have more than the FDIC insured amount on deposit at any given bank. If you do, you are a stupid wanker just asking for trouble.

2. Open a safety deposit box and store some cash there.   Always have a substantial amount of cash on hand.  If you want to take the diversification to the extreme open bank accounts in Hong Kong or Singapore and store your cash there.

Then what?

Do nothing. Just sit on it. Yes, I can give you some tips of what to do if you would like to earn higher yields, but that would come with additional risk.  Believe it or not, I think the US Dollar is substantially undervalued and will do very well over the next few years while financial markets around the world come down to the tune of 40-60%. Including the US.

Having large quantities of cash at the bottom of the bear market will allow you to come in and buy wonderful companies at huge discounts and that is how you make a lot of money over the next 5 years or so.  

BTW, I gave the same advice to my clients in 2006-2007 and that worked out pretty well.  

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Book Formlead Big

Harvard Economist Starts A Run On His Bank of America. Should You Follow? Google

Posted on

Why Is National Association of Realtors Trying To Destroy America …..Again

 CNBC Writes: Pending homes plunge, surprising economists

evil realtos investwithalex

Signed contracts to buy existing homes dropped 8.7 percent in December as abnormally cold weather hit much of the U.S., according to a new report from the National Association of Realtors.

The plunge caught economists by surprise. Economists polled by Reuters had forecast pending home sales would tick up 0.3 percent.

This pending home sales index fell to 92.4 from a downwardly revised 101.2 in November. These signed contracts are an indicator of sales in January and February, and are at the lowest level since October 2011.

“Home prices rising faster than income is also giving pause to some potential buyers, while at the same time a lack of inventory means insufficient choice. Although it could take several months for us to get a clearer read on market momentum, job growth and pent-up demand are positive factors,” said the association’s chief economist, Lawrence Yun.

There is close to 1 million Real Estate Agents in the US. I think it’s time we give a serious consideration to rounding them all up and shipping them to Siberia.  Maybe we can make some sort of a deal with Mr. Putin in exchange for oil or natural gas.  For all I care, let them sell pine trees to hungry bears in Taiga and get paid with berries. We should start with Lawrence Yun.

Come on!!! Does anyone even believe NAR fools anymore.  Keep in mind, NAR  is the same organization that was cheering the housing bubble all the way until it blew up and killed all of those poor souls in Florida, California and Nevada who couldn’t fog a mirror yet each had 10 houses to their name. Now they are blaming the “cold weather” for a severe plunge of 8.7%.  Jesus Christ, I guess it was too cold for all of those Chinese investors and hedge funds with bags full of money to buy real estate in southern states.  

Unlike NAR, dear reader, I will not insult your intelligence.  You see, in my October post  “I am Calling For A Real Estate Top Here“, I clearly outlined a case for why the real estate market is finishing its “Dead Cat Bounce” and is about to roll over to continue its bear market that started in 2007.

What is a dead cat bounce? Allow me to present a powerful illustration I worked on for 2 days.

Dead-cat-bounce-graph-yahoo-finance

Such bounces exist, once again, to fool the masses. They act to suck people back in with the promise that the worst is over.  Fools rush back in only to have the trap snap shot right behind them.  On Friday I wrote about Hedge Funds funneling money to plumbers and dentists so they can become “landlords”. If that doesn’t scream out “Market Top”, nothing else will and you are on your own.

Today’s real estate market is not the function of economy, jobs, supply/demand, family formation or any other crap real estate propaganda machine (aka NAR) would like you to believe. It is a function of credit and speculation.

It is has been artificially driven up by over $3 TRILLION of monopoly’s money being pumped into our economy by Uncle Ben.  No, not the Uncle Ben that sells rice, but the one at the FED.

When the credit bubble goes, you will find the real estate bubble collapsing along with it…..again. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Why Is National Association of  Realtors Trying To Destroy America …..Again Google

Posted on

Weekly Investment Update and Summary. February 1st, 2014. InvestWithAlex.com

daily chart Jan31, 2014

Continue to maintain a LONG/HOLD position.

Weekly Summary: 

Even thou the market had a number of significant down days during the week, the Dow Jones ended up down only -180 points or (-1.14%). Both the Nasdaq and the S&P fared much better. Loosing only -24 points (-0.59%) and -7.7 points (-0.43%) respectively. 

If this week can teach us anything, its that volatility is back. Every trading session was opened up with a fairly large gap. With Fridays gap being close to 200 points on the DOW. What does that mean?

It means the cyclical composition of the market has shifted from a general uptrend exhibited in 2013 and for the large part since the start of this bull market leg in March of 2009 to a bear market leg identified here last week. 

Again, my mathematical timing work had confirmed that the DOW Jones topped out on December 31st, 2013 at precisely 16,576, ushering in the new bear market leg that will take us into the 2017 cyclical bear market bottom. 

Now, most market participants believe that the decline since the start of the year is nothing more than a simple correction that is long overdue.  While I disagree we still have to wait for a technical confirmation before taking our short position to profit from the bear market leg.  Such confirmation must come from a short term bottom here, subsequent bounce and resumption of the bear move thereafter. 

Our model portfolio established at the beginning of the year has been in cash this entire time @10 Year Note, helping us avoid the decline. For our previous investments, we continue to maintain our LONG/HOLD position without adding anything new. Once the bear market confirmation arrives we will get out immediately and go short. 

If you recall, I have mentioned that the market opened up large gaps on the way down from 16,400. At this stage it is highly probable that the market will bounce back to those levels before resuming the bear market let once the bottom of this correction is set. When will that happen. Please see our Mathematical & Timing analysis below.  

Fundamental Analysis: 

As you know, my fundamental case remains fairly straight forward and clear cut. All stocks and most other markets (credit and real estate) are substantially overvalued due to massive infusion of credit by the FED over the last few years and pure speculation. I am acutely aware and as most market commentators point out, based on the P/E ratio of 18.5 and some other metrics that the market is not overpriced and is within its historic range. At lest suggesting that there is no need to worry about any sort of a decline. 

s&p ratio

However, everyone is missing the elephant in the room. The earnings for most corporations have been “juiced up” to the tenth degree by the same credit infusion. If you take the credit and those earnings out, the P/E ratio is likely to be in the 50-100 range. Making this market not only overpriced, but putting it in the “are you fucking kidding me overpriced” category. 

Please note, that is exactly what happened when the P/E ratio shot up to over 124 in May of 2009 even though the market had lost over 50% since October of 2007. When earning disappear (as they will), today’s valuations will look astronomical.   

Macroeconomic Analysis: 

It doesn’t matter where you look, we have the same cancer spreading across the globe. Massive credit expansion juiced up the FED. This week the Fed announced a further cut in QE from $75 Billion to $65 Billion due to perceived “Economic Strength”. I have argued for a long time that the FED will be unable to withdraw this support without a massive blow up one way or another. We already starting to see strain show up in emerging markets. 

With our mathematical work confirming the bear market over the next 3 years, this plays very well into our scenario. The bottom line is, our economy is driven by credit and will deflate on a large scale as soon as the credit intervention goes away (as it is now) and/or the velocity of credit slows down (as it is now). 

Technical Analysis: 

Technical picture remains murky. 

Long-Term: The trend is still up. Market action in January could be viewed as a simple correction in an ongoing bull market. 

Short-Term: The trend is down as the market structure turned bearish. Please see my timing analysis for further instructions. 

Overall, we must wait for a confirmation before taking a short position. 

Mathematical & Timing Analysis: 

There is a number of important mathematical turning points arriving over the weekend and next week. Will these points signal the end of the bear move and a reversal into an anticipated rebound? I believe so. As soon as the rebound completes we should see the market roll over the resume a bear market leg in March of this year.  

Time Targets: Coming Next Week.

Price Targets: Coming Next Week 

CONCLUSION: 

If you are out of the market as we have been, stay out. If you are still fully invested consider liquidating your positions as we go through a rebound over the next few weeks. Once the rebound plays itself out and the market confirms the next bear leg down, I would recommend going short at that time. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Book Formlead Big

Google

Posted on

What You Ought To Know About America’s Unemployment Problem

post-unemployment

Reuters Writes: Help wanted: Obama calls on CEOs to help fix jobless problem

WASHINGTON, Jan 31 (Reuters) – President Barack Obama will meet on Friday with a group of chief executive officers who have agreed to make sure their companies do not rule out hiring people just because their resumes show they have been out of work for a while.

More than 300 companies have agreed to a one-page list of “best practices” for recruiting and hiring people from the ranks of the long-term unemployed – a group that has struggled to find work in spite of an otherwise improved economy. “It’s saying that those who are long-term unemployed should get a fair shot,” said Gene Sperling, Obama’s top economic advisor.

The U.S. jobless rate has remained stubbornly high at 6.7 percent, but Sperling told reporters the rate would be closer to 5 percent were it not for the roadblocks to finding work for those unemployed for six months or more.

Read The Rest Of The Article Here

The whole notion of Obama calling on CEO’s to “help fix jobless problem” is an idiotic notion to begin with. A PR stunt. It’s identical to throwing fire crackers at a massive cargo ship and expecting any sort of a result.

The unemployment problem is a function of the overall economy. Business will start hiring when they hit capacity and start growing again. You might scratch your head and ask, well, isn’t our economy is growing fast? At least that’s what the media keeps telling us.  

NO. Again, the recovery you see is artificial. Driven by credit and speculation. Even the primary beneficiaries of this so called recovery (financial institutions able to borrow money for free) are for the most part not hiring. Why? It’s a complex issue. For some it has to do with technological improvements, for others with outsourcing and even robotics.

Yet, the main issue remains. There is no “TRUE” economic growth and too much uncertainty to warrant any kind of a hiring binge. By anyone.

Then there is the big issue of 6.7% unemployment. The number excludes those who have given up looking for work and those who are underemployed (part time, but want full time). If you add both categories into the pool, the true unemployment number is likely to be between 15-20%. That is a massive problem for the economy that is “supposedly” back to its pre 2007 levels.

Is there a solution? I don’t see it. If anything, the situation is about to get a lot worse. As my stock market work clearly indicates we are on verge of a severe bear market and another economic recession.

This will do nothing but make the unemployment problem a lot worse.     

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Google

Posted on

The Secret Behind What Drives The Stock Market

InvestWithAlex Wisdom 17

Today’s 5 Minute Podcast Covers The Following Topics:

Reader’s Question: “The economy is doing very well right now and the fundamentals are good. What would be the catalyst for the bear market you talk about? ” – Peter. 

    • The secret behind what drives the stock market. 
    • Why most people get it wrong when it comes to forecasting.  
    • The natural cycles behind all economic and market developments. 
    • How this one little thing can double your portfolio performance virtually overnight. 

Please tweet me your questions @investwithalex

Did you enjoy this podcast? If so, please review it on iTunes and share it with your friends as we try to get traction. Gratitude!!!

Posted on

NASA Announces Plans To Send The US Economy To The Moon

economic_forecasting

Daily Ticker Writes: The economy is only going to get stronger

Zandi has a bullish outlook on the U.S. economy: he’s forecasting 3% GDP growth this year and 4% growth in 2015.

“The U.S. economy is set to experience much stronger growth as the middle of the decade approaches,” he writes in his latest macro outlook. “Businesses are highly profitable and very competitive, households have reduced debt and are saving more, and the banking system is well-capitalized and liquid.”

Zandi says better economic growth will also lead to more jobs. He estimates that 3 million new workers will be hired in 2015, up from 2.25 million in 2013 and 2012. That would mean the economy returns to full employment (a federal jobless rate of 5.5% to 6%) by 2016.

“The job market is headed in right direction,” Zandi says. “Broadly speaking the economy is performing steadily better.”

Read The Rest Of The Article Here

I am not sure who this Zandi, but one thing is for sure. If you are to believe his forecast you will be in for a beating. By the market that is.

The article above is garbage. Again, I am dumb founded that most economist and market practitioners don’t understand our current economic environment. Perhaps I was dropped on my head as a child a few too many times and see things differently. Thanks Mom!!!

Anyhow, the economic growth we see today is not real. It is driven by massive infusion of credit and speculation. That’s it. Further, there is no point to perpetuate any growth or forecast into the future. Since it is all “artificial”, it will vanish into thin air as soon as the speculative bubble driven by credit pops.

People always ask me what the catalyst will be for such an event. They are missing the point.  Typically there is no catalyst. Let me give you an example. Was there a catalyst for 2007-09 decline? NO.  The market simply started to go down in October of 2007, slowly at first, then accelerating later.  It was the stock market that drove the economy into the ground and not the other way around.  

Point being, for the most part there is no external catalyst. The market itself is the catalyst. It is the market that drives the fundamentals. Most people miss this very important point. As such, the market will go down when its ready to go down.

Based on my mathematical work that time is already upon us.   

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Book Formlead Big

Google

Posted on

Stock Market Update, January 30th, 2014. InvestWithAlex.com

Daily Chart January 30, 2014

Summary: Continue to maintain a LONG/HOLD position.

1/30/2014 – The roller coaster ride continues with the Dow Jones ending the day up +110 points or (+0.70%). With gap ups and downs galore.

It is definitely starting to feel like the volatility is coming back into the market. While VIX index is still sitting at relatively lows levels, the market is starting to exhibit signs….  Continue reading “Stock Market Update, January 30th, 2014. InvestWithAlex.com”

Posted on

Brand New Real Estate Market Ponzi Scheme. Will You Buy In?

The New York Times Writes: Wall Street’s New Housing Bonanza

house of cards

Wall Street’s latest trillion-dollar idea involves slicing and dicing debt tied to single-family homes and selling the bonds to investors around the world.

That might sound a lot like the activities that at one point set off a global financial crisis. But there is a twist this time. Investment bankers and lawyers are now lining up to finance investors, from big private equity firms to plumbers and dentists moonlighting as landlords, who are buying up foreclosed houses and renting them out.

The latest company to test this emerging frontier in securitization is American Homes 4 Rent. The company talked to prospective investors at a conference in Las Vegas last week about selling securities tied to $500 million of debt, according to people briefed on the matter.

 “The investment and lending opportunities are immense and perhaps just beginning,” Jade Rahmani, a real estate analyst with Keefe, Bruyette & Woods, wrote in a recent report.

In just the last two years, large investors have bought as many as 200,000 single-family houses and are now renting them out, according to the K.B.W. report.

Read The Rest Of The Article Here

by Alex Dvorkin 

If you were searching for evidence that our nationwide housing market recovery has been driven by speculators and massive credit, wonder no more.  Massive flood of capital from the FED’s into financial institutions has created all sorts of stupidities. This is one of them.

Trust me. Hedge funds providing massive amounts of capital “to plumbers and dentists moonlighting as landlords” is not as brilliant as it sounds.  As a matter of fact, it is fucking stupid. The only thing it will lead to is massive losses down the road for everyone involved. Big losses for hedge funds, for plumbers and dentists, for the FED, for the overall US Economy and for the average Joe with a house and a mortgage.

No one is talking about the elephant in the room.  Overall and after taking expenses associated with being a landlord into consideration, no one is making any money. There is no yield. Everyone is betting on capital appreciation to make a profit. I am afraid such capital appreciation will never arrive. Please see my Real Estate Market Top article here.

You also have to read between the lines to see the massive system wide risk. For instance, why the fuck would hedge funds who are awash with free cash from the FED invest in plumbers and dentists who would in turn become landlords?  For two reasons..

1. Everything is extremely overpriced. In bubble territory. The bond market, the stock market and even the real estate market.  They are investing in plumbers because there is nothing else left to invest in.

2. Everyone is playing the game of musical chairs, chasing performance. The money is FREE, so why not. Of course, we know what happens next. The music stops and the real estate sectors gets flushed down the toilet….again.

If this article doesn’t scream “market top” to you, I don’t know what will.  Don’t be fooled by Wall Street once again.  I am just curious to see what will happen to the real estate prices once “investors” decide that being a landlord sucks and begin dumping hundreds of thousands or perhaps millions of properties they have purchased. I wouldn’t be surprised to see 50-70% haircut from today’s real estate prices. Here is my valuation work.

The bottom line is, stay away from this Ponzi Scheme and don’t buy real estate over the next few years.  You can send me a gift basked later. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!

Brand New Real Estate Market Ponzi Scheme. Will You Buy In?

Google

Posted on

TIMED VALUE is ready. Get Your Copy Today

3d Timed Value Cover 2

 

My investment book is finally ready. I am incredibly excited and proud of it. This is a one of a kind book that talks about my “Timed Value” style of investing and my secret mathematical approach to market timing. If you would be interested in learning more about the book please CLICK HERE to get 2 free chapters and further information.

Book summary…. 

Have you ever wondered if it was possible to generate outsized investment returns by timing the stock market and/or individual stocks with great precision?

If you have, this book is for you.  Financial media and most financial professionals would lead you to believe that such a task is impossible.  Yet, Timed Value challenges this traditional assumption head on by presenting a clear cut case that the stock market is not random,  on the contrary, it is precise.

The book starts by discussing the traditional aspects of “Value Investing”, its hidden secrets and problems.  The second part of the book shifts into the timing aspect by showing the reader the exact calculations needed in order to time the market or individual stocks with stunning accuracy.

Further, the author shows “HOW” once the stock market structure is understood in its entirety,  the market or individual stocks can be timed with great precision. Not by some arbitrary technique that cannot be replicated, but through the use of modern science and mathematics. Math doesn’t lie and when the market turns/reverses at exact mathematical points of force,  only one explanation remains. The market is not a randomly volatile instrument, but a mathematically precise tool that baffles the mind. 

As such, this “How & Why” stock market timing masterpiece is a must have book for any true market practitioner or those wanting to improve their overall returns. 

Posted on

How French Economic Policies Are Turning France Into a Fascist State

INS Writes: ‘Jews, Out of France!’

french nazi

Chilling video shows hundreds of anti-Semites on the march in Paris, illustrating the frightening rise of anti-Semitism in France.

It is nothing short of chilling.

A video, taken on the eve of International Holocaust Remembrance Day, shows masses of French protesters marching down a Paristhoroughfare chanting openly anti-Semitic slogans and calling on Jews to get out of France.

Chants include “Jews, France is not yours!” “Jews out of France” and “The story of the gas chambers is bull***!” At one point, in a show of raw, seething hatred, the crowd simply spits out the word “Jew, Jew, Jew!” 

Many of the marchers can be seen giving the “quenelle” inverted Nazi salute popularized by anti-Semitic comedian Dieudonne. The gesture is seen as a way for anti-Semites to give a Nazi salute without incurring the wrath of authorities – although one demonstrator can be seen giving a full-on Nazi salute as well.

Read The Rest Of The Article

I have written about France’s insane economic policies before in France Is Being Flushed Down The Toilet… Just As Predicted.  As such, it should come as no surprise that France is slowly turning into a Nazi Germany.  Maybe not to the extent, but to a degree everyone should be aware of.

If history teaches us anything, it is the economic structure and not the ideology, that leads to genocide and wars. It was the economic devastation that was the primary reason behind the rise of Nazi Germany in the early 1930’s.  Now, the French Socialist Party is hell bent of destroying French economy by taxing the rich and businesses to death. Subsequent economic suffering leads to social unrest and an eventual rise of hate and fascism. We see this very same type of a situation happening in Greece as well.  

Idiotic and uneducated masses always need someone to blame.  Based  on today’s news it looks as if the French hate the Jews. It is my only hope that all the Jews pick up and leave either for the US or Israel.  Just as their exodus devastated every corner of Russia’s economic and scientific community, France should have the privilege to suffer the same faith. Let this be a lesson to those trying to turn their market economies into socialist nanny states.

One thing is for sure, I won’t be visiting France anytime soon. Au revoir connards

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


How French Economic Policies Are Turning France Into a Fascist State