February 2013 - 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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    • Pew: Americans Have Little Will to Cut Spending

      The Pew Research Center released a new national poll on Friday and the results are quite surprising. As the March 1 deadline for a possible budget sequester approaches, the new Pew survey finds limited public support for reducing spending for a wide range of government programs, including defense, entitlements, education and health care.

      What the latest Pew poll shows is that while a majority of Americans say in various polls that they are in favor of smaller government, when it comes to specific spending cuts, they are opposed. The will to cut government spending is just not there. We’ll look at excerpts from the new Pew poll just below.

      We’re just three days away from the dreaded “sequester” that will cut federal programs across-the-board starting on Friday. The Republicans continue to refuse to bow to President Obama’s demands for more new taxes on the “wealthy” in return for a deal to avoid the sequester. But is the sequester really as bad as Obama says? The answer is NO. I’ll tell you why.

      The minutes of the Fed’s January 29-30 policy meeting were released last Wednesday and caused quite a stir in the stock markets. Basically the minutes revealed that some members of the Fed Open Market Committee are becoming concerned about the Fed’s continued record- large purchases of Treasury bonds and mortgage-backed securities. Some feel this program needs to be scaled back or ended altogether. This is very important so be sure to read it.

      Finally, I want to let you know about a new Special Report I have written entitled, “7 Secrets of Successful Investors.” This Report doesn’t dwell on generalizations or old sayings, but rather actual habits of successful investors I have known. To receive this Special Report CLICK HERE. There is also a link to this Special Report at the end of today’s letter.

    • Stock Market Lingers At A Precarious Place

      The Dow Jones Industrial Average has flirted with its all-time of 14,198 twice in February as the Dow managed to rise above the 14,000 mark but then fell back. The S&P 500 Index is not quite as close to its all-time high, but it is within striking distance. There is widespread optimism that both indexes can break-out to new record highs, which would likely spark a new buying surge.

      On the other hand, if the Dow and S&P fail to break out, the result could be a nasty selloff. The stock markets shrugged off the fiscal cliff melodrama at the end of last year and then rallied strongly. But there are reasons to believe that the upcoming "sequester" fight could unsettle the markets and derail the attempt to make new highs. We'll talk about that possibility today.

      Before we go there, we take a look at the latest economic reports. There's good news and bad news - no surprise there. We'll also look at the latest surge in gasoline prices and why that is more bad news for consumers and the economy. And I will summarize the latest economic forecasts from the Congressional Budget Office. Finally, I will give you my thoughts on the issue of raising the minimum wage.

    • The Economy: Worst Five Years Since the Depression

      Tonight, President Obama will give the first State of the Union address of his second term as President of the United States. You can bet that the speech will be full of glowing rhetoric and success stories from his first four years in office.

      What you will definitely NOT hear from him tonight is the fact that the US economy just recorded the worst five years since the Great Depression. That is what you will read below. While the many facts and figures below are disappointing, even depressing, Americans need to know the truth about the real state of our economy and our union.

      Consider what follows as a rebuttal to President Obama’s speech tonight. Feel free to forward this to as many people as you wish.

      Also, today we will revisit the "sequestration" (mandatory budget cuts) on March 1 and the latest on the bond bubble, which may be bursting as you read this. Treasury bond yields have jumped over 30% since the low back in July. I'll recommend what to do now.

    • GDP Report Tanks – Is A Recession Looming?

      We will cover a lot of ground today. We begin with a new report from Goldman Sachs which argues that the US economy will remain the strongest in the world for many more years. The report rebuts claims that America is a nation in decline. This will be a very interesting discussion given that we have $16 trillion in national debt and exploding. Thank you President Obama!

      The upbeat Goldman report was delivered before last Wednesday’s surprising news that the US economy actually declined in the 4Q for the first time since 2Q 2009. While there are reasons to believe that the advance estimate of 4Q GDP (-0.1%) will be revised upward in subsequent reports, the surprise GDP report was not the only bad news in the last few weeks. We’ll take a look at the latest economic reports as we go along today.

      From there, we turn our eyes to the Fed. In December, there were rumors that some members of the Fed Open Market Committee (FOMC) were having doubts about the Fed buying a record $85 billion a month in Treasury bonds and mortgages indefinitely. Some even predicted that the FOMC might vote to end such purchases by the end of this year. Not so, as evidenced by the January Fed policy meeting. The Fed made it clear that the $85 billion in monthly purchases will continue indefinitely (unfortunately).

      Finally, we look at a new poll from Pew Research Center which found – for the first time ever – that a majority of Americans believe that the government is a threat to our personal rights and freedom! This is stunning! I will summarize this new poll which is loaded with eye-opening data.

      It should be an interesting letter. Let's get started.