Browse by Tags

Forecasts & Trends

Blog Subscription Form

  • Email Notifications
    Go

Archives

  • Looming Retirement Crisis – Boomers In Big Trouble!

    Let’s face it, we all know this country is facing a retirement crisis. The first of the Baby Boomers turned 65 and started retiring in 2011. The number of Boomers retiring each year will rise rapidly over the next decade or more. Before the end of this decade, Boomers will be turning age 65 at the rate of 8,000 per day.

    This massive retirement of Baby Boomers will stretch our health care and health delivery systems to the max and beyond. Our public safety net – entitlements – has long been poorly managed, ill-thought-out and threadbare. Imagine what will happen as tens of millions of Boomers retire.

    Yet the worst part of all is that so few people or families have saved anywhere near enough for retirement. According to a survey conducted earlier this year, 60% of workers have saved less than $25,000 for their retirement. And 36% have saved less than $1,000. This is appalling!

    Another new study found that 43% of Baby Boomers are at risk of running out of money in retirement. And this number is almost certainly understated because, as I will discuss below, many Boomers are untruthful about their assets when responding to retirement surveys. The point is, most Boomers are far, far behind in saving for their retirement.

    Given the magnitude of the coming retirement crisis, it will be a continuing theme I will be writing about periodically in the months and years ahead. I hope to present you with some ideas for saving more for retirement and, of course, making more on your investments.

    In that regard, I will be unveiling a new investment strategy that has me more excited than I’ve been in years! The risk/reward profile of this strategy is very impressive. We call it “ALPHA ADVANTAGE.” Trust me, you’re going to like what you see. I’ll talk a little more about it at the end of today’s E-Letter, but the details, including the performance, etc., will be unveiled in a special E-Mail to all clients and readers tomorrow. You don’t want to miss it!

    ...
  • U.S. Household Net Worth Hits New Record High

    The Federal Reserve announced last Thursday that US household net worth reached a new record high by the end of last year – at $80.7 trillion. The Fed said the new record was made possible largely due to vaulting stock prices, increased home values and Americans paying off more of their debts.

    Much of the surge in net worth went to affluent families and older Americans. Both groups are less likely to spend their gains and more likely to save and build more net worth – which is not particularly good for the economy unless it translates into new jobs.

    Meanwhile, many Americans continue to pay down their debts, a trend referred to as “deleveraging.”  Total household debt fell from near $13 trillion in 2008 to just under $11 trillion in 2012. For better or worse, that trend seems to have reversed in 2013 as more Americans started to take on debt again. We’ll discuss the details as we go along today.

    We also take a look at why the economic recovery is still sluggish, some four years after it officially began. Specifically, we’ll compare the current recovery with the average of the last 10 economic recoveries to determine the size of our so-called “growth deficit.”

    ...
  • 2013 Federal Budget Deficit Plunges – How, Why?

    It was so tempting to devote today’s E-Letter to a discussion about all of the scandals plaguing the Obama adminstration in recent weeks. In fact, some of my staff were very disappointed that I chose not to go there. My feeling was that the airwaves are so saturated with coverage of the Obama scandals, you might not want to see even more piling on from me, as much as I would like to. (There are some very good stories on the latest scandals in SPECIAL ARTICLES below.)

    Today, we’ll focus on the latest news that this year’s federal budget deficit will likely be significantly lower than previously estimated by the Congressional Budget Office, and the reasons why that is. But let us not be fooled into thinking that falling deficits are a permanent thing. No, in fact, the deficits and the national debt will continue a troubling increase over the next decade and even longer.

    We’ll also discuss the subject of our nation’s “unfunded liabilities” which now stand at a staggering $123 trillion, which is rarely ever mentioned by the media. And there are several other interesting points I will touch on today, but I don’t want to give everything away in this introduction. So please read on.

    ...
    Filed under: ,
  • On Obama’s 2013 Budget & the Crisis in Greece

    Today we begin by looking at President Obama's new federal budget request for FY2013, which begins on October 1. To the surprise of no one, he's asking for a record $3.8 trillion to spend in 2013. Also to the surprise of no one, his new budget calls for a myriad of tax increases, especially on families making over $250,000 a year. The budget does include some spending cuts, but remember that in Washington, a slowdown in funding growth qualifies as a spending cut.

    The federal budget deficit for 2012 is now estimated to be $1.3 trillion, marking four consecutive trillion-dollar budget deficits under Obama. But wait, the deficit for 2013 is only supposed to be $901 billion. Obama's new budget offers projections for the next decade, and the budget deficit never falls below $500 billion over the next 10 years.

    Next, we turn to Greece and the latest passage of a new round of austerity measures, spending cuts and more government layoffs in order to qualify for a new EU/IMF bailout loan of €130 billion ($173 billion). The loan will ensure that Greece does not default next month when a big bond bill comes due. While €130 billion should tide Greece over for awhile, the struggling nation will need more bailout money before year-end. It remains to be seen how long the EU nations will continue to write checks.

    It also remains to be seen what will happen in Greece's national elections in April. Given the massive demonstrations and torching of buildings that happened over the weekend, today's Greek leaders are almost certain to be kicked out of office. If they are replaced and the new leaders reverse the austerity programs, then Greece will default and withdraw from the EU. If that happens, it will be very ugly!

    ...
  • European Debt Crisis - Is This Really The End?

    I have written a great deal about the European debt crisis over the last several months. Today I thought I would give you the latest analysis of the crisis from The Economist, the widely respected, London-based forecasting giant. I've been reading the Economist for almost 30 years, and I think you'll find their latest views on the European crisis interesting (if not scary).

    Following the analysis from The Economist, we take a look at how some of the world's largest banks are preparing for what could be the end of the euro. While most large European banks are in denial about the possible end of the euro, other large banks around the world are scrambling to reduce their exposure. I have also linked to a very good article on this very subject at the end of today's E-Letter.

    Next, now that the Super Committee has failed, the automatic spending cuts of $1.2 trillion over a decade are set to kick in starting in January 2013. The media is warning that such draconian cuts will devastate the Defense Department. Well guess what? $1.2 trillion over 10 years is only $120 billion a year. The federal budget is projected to increase by more than $120 billion a year over the next decade. In that case, there will be no net new spending cuts, just a slowing of the rate of increase. That's the dirty little secret the media is not telling us!

    Finally, if this extremely volatile stock market has rattled your nerves, I have a suggestion for you. I suggest that you consider investing with Metropolitan Capital Strategies, one of my favorite professional money managers. Metropolitan has the option of going 100% to cash (money market) in extremely volatile times such as we see today. We are hosting a free live WEBINAR with Metropolitan Capital Strategies this Thursday, December 1 at 2:00 EST.  I highly recommend that you join us!

    ...
  • More Americans on Government Dole Than Ever

    IN THIS ISSUE:

    1. GDP Growth in the 1Q Was Disappointing

    2. The Fed's Decision & the Press Conference

    3. Editorial: A Tale of Two Recessions

    4. Reliance on Uncle Sam Hits a Record

    5. Unemployment Devastates Savings - and Benefits

    Introduction


    Our main topic this week is a new report from USA TODAY which found that Americans depended more on government assistance in 2010 than at any other time in the nation’s history, based on federal data. A record 18.3% of the nation's total personal income in 2010 was a payment from the government for Social Security, Medicare, food stamps, unemployment benefits and other programs.

    Yet before I get into our main topic, there has been some important news on the economy and the Fed since last week's letter. Last Thursday's initial report on 1Q GDP was considerably weaker than expected. The government reported that 1Q GDP rose at an anemic annualized rate of only 1.8%, as compared to 3.1% in the 4Q of 2010.

    The Fed's monetary policy committee met last week and decided that the latest round of quantitative easing (QE2) will end in June as scheduled, and that no new QE3 is in the works. They also announced that short-term interest rates will remain near zero for an extended period. And Fed Chairman Bernanke continued to maintain that he believes rising inflation is temporary. I'll have more details below.

    ...
  • America's National Debt Tops $13 Trillion

    With relatively little fanfare in the media, the US national debt cruised above $13 trillion last month. The federal budget deficit for fiscal 2010 is projected to reach a record $1.5 trillion by September 30, and will be above $1 trillion in fiscal 2011 as well. President Obama's own budget projections show that our national debt will swell by almost $10 trillion more over the next 10 years.

    This out-of-control spending has caused both the International Monetary Fund (IMF) and the Bank for International Settlements (BIS) to formally call for the Obama administration to curb its budget deficits. In response, President Obama has created a 'Debt Commission' to study ways to reduce the deficits. Don't be surprised if this commission concludes that the only way to fix the problem is a 'Value-Added Tax' (VAT).

    ...
  • Europe's Trillion-Dollar Bailout - Can It Work

    On April 12, the International Monetary Fund (IMF) increased the capacity of its emergency lending fund from $50 billion to $550 billion, a ten-fold increase. Less than a month later, the European Union announced a near $1 trillion bailout fund to aid Greece and any other countries in Europe that may get into trouble. At the same time, the EU announced that the IMF will be chipping in apprx. one-third ($321 billion) of the near $1 trillion bailout. Since the US is the IMF's largest contributor, this means that US taxpayers will be footing part of the bill to bailout Greece and possibly other European countries. Isn't that just dandy! And it gets even worse, so be sure to read on.

    ...
  • The Mother of All Budget Deficits

    President Obama unveiled his fiscal year 2011 federal budget last week, and it is another whopper. If approved, he would spend a record $3.83 trillion and run a deficit of at least another $1.3 trillion. The actual deficit could be much higher because his assumptions about the economy are considerably too optimistic in my opinion and that of many economists. Obama's new budget projections now show that the budget deficit for FY2010, which ends on September 30, will be much higher than previously forecast - a whopping $1.6 trillion. This week, we will examine the implications of trillion dollar deficits as far as the eye can see.

    ...
  • The Economy & What To Expect In 2010

    This week, we start by looking at the latest economic data, and how hard it is to get a new job if you become unemployed. We also examine President Obama's new 'jobs program' that would spend what's left of last year's TARP money that was supposed to be repaid to taxpayers. Next, we look at the Democrats' move to raise the national debt ceiling, and what they really have in mind for the debt limit in January.

    Following that, we will look at the disappointing holiday spending levels - as if anyone is surprised. On the plus side, there was at least a little encouraging news on the housing front over the last couple of weeks. Finally, we take a look at some of the forecasts for 2010 - hint, they are all over the board.

    As always, thank you for taking the time to read this weekly E-Letter, and I especially appreciate your comments and suggestions. Happy New Year everyone!!

    ...
  • Is America On The Road To Financial Ruin?

    Last Wednesday, President Obama announced the most sweeping financial industry reforms since the Securities and Exchange Commission was created in 1934. Obama unveiled new proposals that would refashion the federal rules governing almost every corner of finance, and will push the government and the Federal Reserve much more deeply into banks and the private markets. I will discuss these massive changes and tell you why I do not believe they will be good for the markets or investors, for the most part. We will also look at some new polls which indicate that more Americans are worried about President Obama's trillion dollar deficits than they are about the recession. Lastly, we will look at the latest economic numbers and what they mean. Let's jump right in....
  • Obama On Course To Double National Debt

    Based on the Obama administration's own spending forecasts, the US national debt is projected to double over the next 10 years. Currently at over $11.4 trillion, the national debt is projected to balloon to at least $22.5 trillion over the next 10 years, according to the non-partisan Congressional Budget Office. The CBO now forecasts the fiscal 2009 budget deficit at a record $1.845 trillion alone, with another deficit of $1.4 trillion in fiscal 2010. If our national debt in fact doubles in the next 10 years (and it could more than double), this will be bad news for the US dollar and interest rates, which in turn is bad news for stocks. As you might expect, the liberal media is not talking about these new debt numbers, so I will lay it all out for you this week. Feel free to pass this week's E-Letter on to others - we need to get out the word!...
  • Have We Turned The Corner On The Recession?

    While the global recession and credit crisis are still in full swing, at least we have finally seen a few positive economic reports of late. Specifically, we have seen some good news in the housing sector where new and existing home sales actually increased nicely in February, following months and months of decline. We also saw an unexpected jump in durable goods orders for last month. These reports, along with the nice jump in the stock markets, have led several noted forecasters to suggest that we've seen the bottom in the recession and the worst of the credit crisis. I am not so convinced.

    We will also take a close look at Treasury Secretary Geithner's latest bank bailout plan that would partner government and private investors in a scheme to take toxic assets off of the banks' books, but there is no guarantee that this new plan will work. We'll also examine the Fed's latest plans to buy Treasury debt and more toxic assets from banks. Next, we'll examine the latest report from the Congressional Budget Office regarding President Obama's record large budget for 2010, which the CBO says will result in a massive $2.3 trillion deficit. Can I say, I told you so?

    It's a lot to cover in one letter, but I trust you will find it interesting....
  • Why The Stock Markets Are Collapsing

    The US economy is in the worst recession since the Great Depression, and the latest economic reports have been even worse than expected. The US stock markets continue to collapse, with the Dow and the S&P 500 down well over 50% since the peak in October 2007. It is estimated that $10 trillion in wealth has disappeared in the US alone as a result of the stock market bust. Investors around the world are asking WHY? In my opinion, a big reason why the markets are collapsing is the trillions of dollars in new federal spending that President Obama has enacted. Plus, his record $3.55 trillion federal budget for 2010 will likely result in a deficit of over $2 trillion for fiscal 2010. I believe that this enormous spending, plus his other liberal plans that he intends to put in place this year, are serving to drive stock prices much lower than what should be happening. This is a lot to cover in one letter, so let's get started....
  • Throwing Trillions Around Like Crazy

    President Obama will sign into law the largest single spending bill un US history, $787 billion, today in Denver. No one knows if it will work. Last Tuesday, Treasury Secretary Tim Geithner announced a massive bank bailout plan that will spend $1.5-$2 trillion or more, but he failed to provide many details on how this rescue package will work. The stock markets have been in a tailspin ever since. There is growing talk of nationalizing many of our large banks. While I'm against nationalization, I have included a very interesting article by Dr. Nouriel Roubini, a well-known economist. I think you should read it, if for no other reason than to be informed on the subject....