December 2014 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

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  • Handing Down Your Legacy - A Special Gift For Readers

    As we prepare to celebrate the New Year, now is a good time to make sure that your affairs are in order and all of your financial information is recorded in one convenient electronic file that can be updated or changed at any time. And we believe we have developed the best program on the market today to do so.

    Today I am going to address several important financial planning issues everyone should consider, whether you’re young, old or somewhere in between. I will also tell you how you can receive our free E-booklet entitled, “Handing Down Your Legacy” that will help your loved ones manage your finances after your death. Sadly, this is often much more of a difficult burden than most people realize, but it doesn’t have to be that way.

    Our Handing Down Your Legacy is a convenient electronic document that makes it easy to put all of your important information in one place and makes it easy to update. There are several products on the market that allow you to consolidate all of your financial information in one place, but we developed Handing Down Your Legacy to allow you to include not only your investment records but also your final wishes.

    We believe our product is simply the most comprehensive and easy to use program available today. And best of all, it is absolutely FREE and there is no obligation on your part. So do yourself a favor and download Handing Down Your Legacy today. And make it your New Year’s resolution to complete it as soon as possible. Also, feel free to forward this E-Letter to your family and friends who may also benefit from this useful resource.

    HAPPY NEW YEAR!!!

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  • Government Spent $29,000 Per US Household in 2014

    A new study from The Heritage Foundation found that out-of-control spending in Washington amounted to more than $29,000 per household in fiscal year 2014. Today, I will reprint the highlights of that excellent report. As you will see below, government spending has topped $3.5 trillion in each of the six years that President Obama has been in office.

    The budget deficit for FY2009 more than tripled to over $1.5 trillion, thanks in large part to Obama’s $800+ billion “stimulus program” which did little to create new jobs or spark the economy. Budget deficits remained above $1 trillion for 2010, 2011 and 2012. While deficits have come down significantly in the last two years, our debt trajectory remains on a collision course as the latest Heritage Foundation study illustrates.

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  • Plunging Oil Prices Spark Fears of Global Recession

    Today, we touch on several bases. No doubt everyone reading this noticed that stocks tanked last week, and now seem to be moving in lockstep with oil prices. While consumers welcome cheaper gas and heating oil prices, there is a growing fear that the collapse in oil prices may be a harbinger of a global recession.

    Despite worries that the oil price plunge is pulling down stock prices, the latest Reuters/University of Michigan Consumer Sentiment Index soared to a near eight-year high this month. Expectations for a better job market helped power the Index from 88.8 in November to 93.8 this month, well above expectations.

    Finally, I am sad to report that our national debt topped $18 trillion on November 28 according to the Treasury Department. It was not widely reported by the mainstream media, of course. While our annual budget deficits have come down significantly from the first four years of the Obama administration, we are still on-track to hit a whopping $20+ trillion national debt by 2019.

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  • November Jobs Report Wasn’t So Great After All

    Today we'll take a close look at the November employment report last Friday, which was a positive surprise.  The 321,000 new jobs added last month was the highest reading since January 2012 and was substantially above the pre-report consensus of 230,000. The headline unemployment rate remained at 5.8%. The question is, will such job growth continue, or was this a one-month, seasonal anomaly?

    Yet not all of the news in the November jobs report was positive. While the headline new jobs number was 321,000, a deeper dive into the data reveals that there were only 4,000 more Americans working in November than in October (details to follow). Full-time jobs declined by 150,000, while lower-paying part-time positions increased by 77,000 – that’s not good.

    President Obama praised the jobs report and suggested that the economy is nearing full employment. The truth is, the economy is still far from full employment. The unemployment rate would have to fall to 5% or lower for that to happen, and it is not expected to do so anytime soon.

    And speaking of the president, rumors are swirling in Washington that Obama is seriously considering new sanctions against Israel, our strongest ally in the Middle East. The Obama administration is opposed to Israel’s decision to build new homes in East Jerusalem, and that this construction“undermines the peace process.” Now, apparently, they are considering sanctions against Israel. That is preposterous!

    Finally, our recent live webinar with Wellesley Investment Advisors is now available for viewing on our website. Wellesley invests exclusively in convertible bonds and is the only convertible manager we recommend. Whether you are knowledgeable about convertible bonds or not, I highly recommend that you watch this presentation.

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  • On The Economy, Oil Prices & Obama’s Temper Tantrum

    Today we'll touch on several bases, as I'm often known to do. We will start with the latest news on the economy, which is decidedly upbeat, with GDP coming in well above-trend for the last two quarters. The question is whether the latest two quarters of above-average growth are a sign of more good things to come, or are they just the catch-up results of the disappointing 1Q decline due to the severe winter weather?

    Even with the strong growth in the 2Q and 3Q, if we look back further, say to 2010, GDP growth over that period is still below trend at around 2.5% - which is unexceptional. So it remains to be seen if the economy is fully back on track.

    Some argue that the surge in the economy of late is largely the result of the huge decline in oil and gasoline prices. No doubt that has been a significant factor. Some analysts estimate that the drop in oil prices from above $100 a barrel to $67 is the equivalent of a $125 billion tax cut, which is a significant boost to the economy. And most forecasters believe that oil prices will remain low for some time to come, as I will discuss today.

    Finally, I can't help but comment on the deluge of unpopular actions taken by President Obama in just the last month. Unlike most recent presidents who suffered such a defeat in the mid-terms – including Reagan, Clinton and Bush(43) – and then compromised with the opposition, Obama is doubling-down on his unpopular policies. Even worse, he says he's not done yet and promised to veto any bill to build the Keystone XL pipeline.

    To me, this rash of controversial decisions amounts to a “temper tantrum” on the part of the president, in reaction to the drubbing that the Democrats suffered in the mid-term elections. I'll share my thoughts on why this is happening now as we go along today.

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