Market Volatility and Your Retirement Plan

By TD Ameritrade

There are three near-certainties in the investing world: Markets go up, markets go down, and over time, markets have gone up. Sounds simple, doesn’t it? The challenge comes with timing. Can you stomach the ups and downs? What happens if a lengthy down stretch hits at an inopportune time?
Most retirement portfolios are structured to withstand the ebbs and flows, and even deep dives, in the markets. Still, if you’re in retirement or near it, the volatility could put you in a constant state of panic or make you realize real quick that your risk tolerance is much less merciful than you once thought.
If that’s the case, stay calm. “It’s always important to invest with a rational perspective, not an emotional one,” says Matt Sadowsky, director of retirement and annuities for TD Ameritrade. “Responding to a market correction with an emotional reaction is a bad way to handle your portfolio. Don’t sell everything because of fear.”
Your “rational” approach might look like this:
Assess the Real Situation
Nobody likes to lose money on a position or take a realized loss, but know the difference, Sadowsky says. An unrealized loss—or the loss you see on your monthly statements—is not the real McCoy. An unrealized loss is the disparity between what you bought the stock for and what it’s trading at. A realized loss is the actual dollars-and-cents dent from subtracting the sale price from the purchase price. If you can sit tight, that gap could narrow.
Rebalance the Mix
“But if you’re still worked up by the gyrations of the stock market, then you should reassess if the portfolio is properly balanced relative to the amount of risk you want to take,” Sadowsky says.
That might mean taking a more conservative approach—examples might include an 80-20 or 70-30 mix of bonds and stocks—which may need to be rebalanced if market conditions change. Or it could involve moving toward more defensive sectors like health care and utilities. It might also entail a higher proportion of bonds with higher credit ratings that, because of their perceived lower risk of default, typically carry lower interest rates.
Keep in mind that rebalancing could generate capital gains or losses that might have tax implications that challenge your retirement-funding needs. Consult with your tax professional before you act.
Jump on Opportunity
With market muddle may come opportunity. Some investors look with fresh eyes to favorite stocks that are falling because the markets are responding to outside forces like the economic stress from China this summer or currency fluctuations abroad. Retirement professionals say not to change your risk tolerance by putting your retirement funds in jeopardy, but if you can afford to and want to take on more stock, you might do so judiciously.
You might also want to use a down period to convert traditional Individual Retirement Accounts (IRAs) to Roth IRAs. “When you have your assets in a traditional IRA that has been significantly reduced by the market downturn, that might be a time to consider converting into a Roth IRA , where you’re paying taxes on the lower amount that’s being converted,” Sadowsky says. “You have to consider if you want to pay those taxes now or later. I would rather pay taxes when I have a lower tax rate and a lower asset value. Keep in mind that converting a Traditional IRA to a Roth is not for everyone. Again, here’s a reminder to consult with your tax advisor before converting.”
Rethink Your Withdrawal Strategy
“The 4% rule is a rule of thumb, not a law,” Sadowsky says. If you’re following that general canon of withdrawing 4% annually from your portfolio, adjusted for inflation, remember the ratios will change with a pullback.
For example, 4% of a $1 million account is roughly $3,300 monthly. If that account falls 20% and you don’t change the amount of dollars drawn down, you’re now looking at a 5% take down on an $800,000 account.
“Consider the longevity of your portfolio by setting a safe withdrawal rate when market valuations are low,” he says. “In a boom market, you might be more conservative.”
Turn to Cash?
Yes, cash is king, particularly in times when you don’t want to sell stocks at a loss or in a downturn.
Many financial professionals suggest that investors have at least six months’ worth of expenses covered (but up to a year’s worth if you want to be conservative) with cash in an emergency fund.
Though trading in the stock market has often been likened to gambling, remember that it’s not. Gambling is a zero-sum game, taking money from losers to give to winners. There’s no gain. Buying stock is an investment in a company, a piece of the action with “winnings” that will rise and fall with the fundamentals and management of the company—not to mention the overall economy. Remember, too, that the markets rise and fall.
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All investing involves risks, including loss of principal.
Commentary provided for educational purposes only.
Past performance is no guarantee of future results or investment success.Asset allocation and diversification do not guarantee against investment losses. TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.

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April will decide the market's fate

 

Getty Images

When we turned bullish in mid February, many were looking for the market to crash. While many of the bears are now capitulating and turning bullish, the potential for the market to drop to the 1700s on the S&P has not completely dissipated, and the next several weeks will tell us if we are heading to 2500 from here, or if we have to drop down to the 1700s before we rally to the 2500 region.
While the market did not follow through early this past week in the most bullish expectation I had, at no time have we broken support, and we ended the week striking the 2050-2060 target I wanted to hit.
Without any break of support, I still see the potential to head up to the 2080SPX region as early as this week. As usual, the question is the path. As long as the market remains over 2035SPX, the path can be a more direct one, which can see us strike 2080 by the middle of the week. However, if we break 2035SPX early this coming week, then we will likely drop to retest the 1995-2005SPX support region, and as long as it holds, we will then likely rally up to the 2080SPX region to complete wave iii off the February lows.

Should we actually rally up toward the 2080SPX region, I would expect to see us drop back to at least the 2027SPX region in a wave iv, as outlined in the green count on the 60-minute chart linked below. As long as the market remains over 1995-2005 support on all pullbacks into April, that will set us up to challenge the prior all-time highs in the SPX. But I do not believe we will breach the 2015 market high by much, if at all, which will then lead to a wave (2) pullback in a few months from now, which if it holds support, sets us up to rally to 2500-2600 in the SPX going into 2017.
Alternatively, if the market breaks below the 1995-2005SPX support at any point in time over the next month, it will be a strong signal that the market has not moved back into a long-term bullish posture, and I would expect that we will be testing the 1700 region later this year, as we continue within primary wave 4.
I warned in January and February of this year that we have a potential setup for a global melt up in emerging markets, commodities and U.S. equities, and much has followed through as expected so far. While we still have much to do on the upside over the next two months to confirm this case, by the summer, we will know if the market is setting up for a major bullish move into the second half of the year, or if we will be mired in a primary wave 4 into the fall, with the 1700's still being seen before the global melt up begins.
See charts illustrating the wave counts on the S&P 500 and Russell 2000.

Opinion: Government debt could bring China’s credit party to a halt

Markets ignore coming glut of new bonds from local governments

Reuters

China's central bank Gov. Zhou Xiaochuan warns of growing corporate debt burdens, but the biggest (and mostly hidden) problems may be with government debt.

HONG KONG (MarketWatch) — China’s economy may have run out of growth before it ran out of credit, but no one told its companies.
One of the biggest China puzzles today is the seemingly never-ending ability of its corporates to access new supplies of credit, without running into trouble or someone saying no.
Some analysts warn that we are looking in the wrong place for distress; it could be building in the government bond market.

This year, China’s easy money policy has been most graphically on display through an unprecedented overseas buying spree by its companies. The latest Chinese company throwing its checkbook around is insurer Anbang with a $13.1 billion cash offer for Starwood Hotels and Resorts HOT, +4.49%   . Earlier ChemChina broke China’s record for outbound merger and acquisition activity with an offer to buy Syngenta SYNN, -0.23%  in cash for $44.1 billion.

China's Aviation Dreams Hit Turbulence

(4:21) Beijing has long wanted to develop an advanced aerospace industry capable of rivaling Western giants such as Airbus and Boeing. Here is a look back at some of China's efforts so far.

In fact, in the first three months of this year, China outbound M&A activity has rocketed to $102.7 billion, almost equal to the record total of $107.5 billion for the whole of 2015, according to data from Dealogic.
Heavily geared balance sheets appear no hindrance to connected mainland companies being able to access funding.
On Monday, Shanghai shares SHCOMP, -0.60%  rallied after more, cheaper money was promised to China’s brokers for margin financing.
Yet it was possible to detect a hint of caution from the central bank governor at the weekend after the chorus of upbeat commentaries on the economy from China’s leaders in recent weeks.
Zhou Xiaochuan said that “lending as a share of [gross domestic product], especially corporate lending as a share of GDP, is too high” and also that a high leverage ratio is more prone to macroeconomic risk. Corporate gearing in China is now widely estimated at some 160% of GDP.
It is these kinds of concerns that have led Moody’s to downgrade the outlook on China’s sovereign rating at the beginning of March.
Other analysts are also turning their attention to central government debt — which has long been viewed as manageable — as these funding needs could emerge as a new fault line of distress.
Societe Generale said in a new report the government bond market faces an unprecedented supply glut due to combined local and central government bond issuance.
As the market has yet to factor in this exponential growth in government paper, it could lead to disruption, which could potentially spill over into the corporate bond market, they warn.
The upswing in issuance is due to an expanded local government debt swap program (where bad loans from special funding vehicles were swapped for debt) and central and local government fiscal deficits. In total, SG calculates this year could see a total net issuance of 7.58 trillion yuan, up by 2.66 trillion yuan from 2015.
And this paper will keep coming. The latest audit report put the amount of local government debt eligible for being swapped into bonds at a massive 15.4 trillion yuan.
SG says the market does not appear to be pricing in the supply risk in the mid- to long-term end of the market. This could lead to a steepening of the curve when the market pays more attention to the supply.
This potential fallout in the government bond market from the local authority debt cleanup shows that the central government backstop is unlikely to be painless.
Any follow-through, such as higher yields, is likely to have a negative impact on the corporate bond market.
China’s corporate bond market has already been attracting attention as a potential area of stress in recent weeks after an issuance spree amid expectations of increasing defaults.
The added strain with reliance on bond issuance is finding buyers. China’s corporate bond market has benefitted from a switch of retail money away from equities this year, yet it could still be vulnerable to further asset relocation.
Chinese regulators do appear to recognize they need more bond buyers.
Last month, the People’s Bank of China (PBoC) stated that it would allow medium- to long-term foreign institutional investors to access China’s interbank bond market without any quota restriction.
This initiative could get a push if international bond indices include Chinese bonds. Last week J.P. Morgan said it was considering adding China’s government bonds to the J.P. Morgan Government Bond Index-Emerging Markets Global Diversified index.
Still, finding foreign buyers to keep China’s debt party going might look a stretch. They will need more than index inclusion to overcome various concerns from the value of the yuan to transparency.
Within China’s opaque system of state capitalism, it is always difficult to connect the dots on who owns assets, and who is ultimately responsible for debt.
If ultimately that debt stress appears in the government bond market, once again look for the yuan USDCNH, +0.0786%   to come under pressure.

Unlike in housing bubble, home buyers now put off by rising prices

By AndreaRiquier

Would-be home buyers see high prices as a deterrent, not an incentive to get in the market

Shutterstock.com

No bubble here....

There’s a paradox in Monday’s existing-home sales data.
Sales slid 7.1% to the lowest pace since November, the National Association of Realtors said. NAR has warned for many months that low levels of supply, which are pushing prices ever higher, will eventually cripple the market.
February’s decline may be a sign that the Realtors’ fears are coming true, although it may still turn out to be a temporary blip caused by weather, new closing regulations, and the difficulties of adjusting data to account for all those anomalies.

Still, as NAR Chief Economist Lawrence Yun said in a statement, “the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers.”
That may sound obvious: if you can’t afford the few limited options available on the market, you’d probably give up too. It also tracks with a survey NAR published last week, which found that the share of current renters who say now is a good time to buy fell in the most recent quarter.
But it’s worth remembering, as Yun pointed out in a press conference Monday morning, that it wasn’t too long ago that higher prices drew more buyers in, rather than shutting them out.

That phenomenon was documented by Robert Shiller, one of the creators of the S&P/Case-Shiller home price index and a Nobel Prize winner for his research on asset price psychology.
In a 2007 paper, Shiller described the bubble mentality as “a feedback mechanism operating through public observations of price increases and public expectations of future price increases. The feedback can also be described as a social epidemic, where certain public conceptions and ideas lead to emotional speculative interest in the markets and, therefore, to prices increase.”
A few paragraphs later, Shiller wrote, “That the recent speculative boom has generated high expectations for future home price increases is indisputable.”
That’s vastly different than the world we live in now. In the February Fannie Mae Home Purchase Sentiment Index, survey respondents said they expect home prices to rise 1.7%. One year ago, respondents forecast prices would rise 2.5%.
In the 12 months to February, the actual price gain was 4.4%, NAR said Monday, but in recent months the yearly increase has been as high as 8.2%.
Homeowners are also less confident about the value of the equity they have in their homes. That means they’re no longer cashing out to finance other spending, as they did in the bubble years.
But it also means they may not understand how much their homes could command on the market, making them less likely to list and worsening the supply problem.

This is the simple mathematical reason why Osborne’s strategy will lead to financial ruin

The reason why Osborne’s plans were always going to come unstuck is a function of simple arithmetic.
Assume my spending remains constant at 100. To fund that spending I must have receipts, every year, of 100. Over five years to fund spending of 500 I must have income of 500. That five years is important because it’s the time horizon over which we plan our nation’s spending.
If my income is not 100 a year but 85, I have a problem. You might think, and rightly so, that I am 15 short. This Government has been 15 short.
What it has done, to hide that truth, is accelerate a whole bunch of 15s from later years into earlier years to hide the shortfall. Which is fine in earlier years – your budget looks balanced – but it leaves you in those later years with a shortfall of 30: the 15 you had anyway and the further shortfall consequential on you taking 15 from those later years for use in earlier years. Instead of having 85 you’ll only have 70. It’s not that complicated: if you spend tomorrow’s money today, you won’t have it tomorrow.
For a number of years, this is what we’ve been doing. On an extraordinary scale. Did you see those italics? Good, because I’m going to come back to them. And we’re now looking at a whole bunch of 70s.
Read more

World Trade Coming To Virtual Stand Still! Some Truckers Stuck For A Week At A Time For Product To Haul. Economy Is In Shambles And Only Appears To Look Strong Because Of The Hot Money That Is Holding It Up

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WORLD TRADE COMING TO VIRTUAL STAND STILL! SOME TRUCKERS STUCK FOR A WEEK AT A TIME FOR PRODUCT TO HAUL-WHEN THE TRUCKS STOP RUNNING, SO DO AMERICAN HOUSEHOLDS
I import from China and I just received a container of products. I personally know the delivery driver.
We had a considerable delay because he had to drive 65 miles to get a container chassis from Maersk Line. This is unheard of because they always have a lot of chassis at the Chicago rail head. I asked him what was up because it is not peak volume time for anyone.
The delivery driver is part of a company that also imports a lot of products. I asked if they were experiencing any shipping problems out of China (because we have had issues). He said they had a container waiting for 7 weeks because Maersk had cancelled 35 sailings. I know the world economy is bad but 35 sailings is a lot….

http://www.stevequayle.com/index.php?s=33&d=1724

Website tracking shipping from satellites:

http://www.marinetraffic.com/en/ais/home/centerx:-53/centery:54/zoom:3
Economy is in shambles and only appears to look strong because of the hot money that is holding it up

Central bankers have been on a massive Gold Buying Spree led by Russia and China. One must remember that not only is Putin ex-KGB, but he is also an economist and holds a black belt in judo. Judo teaches you to use your opponent’s momentum to defeat him or her, and that appears to be what Putin is doing.

Ability hits the mark where presumption overshoots and diffidence falls short. John Henry Newman Central bankers have been on a massive Gold Buying Spree led by Russia and China.
One must remember that not only Putin is ex-KGB officer, but he is also an economist and holds a black belt in judo. Judo teaches you to use your opponent’s momentum to defeat him or her, and that appears to be what Putin is doing. He has this administration running circles, by the time they figure out what he is up to, it is too late to do anything. Putin and China can see that the writing is on the wall that the days of US holding the top spot are numbered.

Our economy is in shambles and only appears to look strong because of the hot money that is holding it up. Regarding illusions, it is a perfect illusion and for now, the masses have bought it, but Russia and China have not.

http://sputniknews.com/blogs/20160311/1036155953/us-russia-china-gold.html#ixzz43M84C6rI
IMF’s Lagarde Says Negative Rates Have Helped Global Economy
http://finance.yahoo.com/news/imfs-lagarde-says-negative-rates-112936086.html
Negative Interest Rates is outright theft of Capital and wealth that is the latest plunder of the citizens by the Public Sector Syndicate. It does not help an economy just as the other Keynesian Economics of Stimulus and QEs does not help any economy as they just destroy the wealth and monetize the debt. The criminals of the Public Sector Syndicate including the Central Banks, IMF, etc. have created and enabled all depressions and recessions since their inception or establishment. The crime and corruption of the Public Sector Syndicate is the cancer that has bankrupted every nation in the World today.

Well That Didn’t Work

This sudden failure of easy money to produce the usual result is potentially huge, because the only thing standing in the way of a debt-driven implosion of the global economy (global because this time around emerging countries are as over-indebted as rich ones) is a belief that what worked in the past will keep working. If it doesn’t — that is, if negative interest rates start strengthening rather than weakening currencies — then this game is over. And a new one, with rules no one understands, has begun.

http://dollarcollapse.com/monetary-policy-2/well-that-didnt-work/

Wolf

The Administration’s response to the popped real estate bubble was to blow the bubble back up, and now younger buyers are getting priced out of the market. Unexpectedly.

CHOCOLATE RATION INCREASED: Previously Owned U.S. Home Sales Decline More Than Forecast.

Closings on existing homes, which usually take place a month or two after a contract is signed, decreased 7.1 percent to a three-month low 5.08 million annual rate after a 5.47 million pace in January, the National Association of Realtors said Monday. Sales were weaker than the most pessimistic forecast in a Bloomberg survey of economists.
Faster growth in residential real estate is being hampered by a limited selection of available properties that has led to higher offering prices. While mortgage rates are attractive, affordability remains an issue for potential first-time and lower-income buyers whose participation would help broaden the market’s improvement.
“This number seems to suggest the trend may be a little weaker than we thought,” said David Sloan, senior economist at 4cast Inc. in New York. “Supply is fairly limited, so that is a restraint on sales.”

The Administration’s response to the popped real estate bubble was to blow the bubble back up, and now younger buyers are getting priced out of the market.

Unexpectedly.
Owning a home does not make you a success, it is a sign of success.
Subsidizing home ownership or otherwise making those with poor credit able to attain a home loan is going to do nothing except create another housing bubble.

SG

Recession Sign Is In Play And Has 81% Accuracy

(Jeff Cox)  Since corporate profits turned negative in mid-2015, Wall Street has pondered whether it’s just a passing phase or a signal of something worse. History strongly suggests the latter.
Recessions have followed consecutive quarters of earnings declines 81 percent of the time, according to an analysis from JPMorgan Chase strategists, who said they combed through 115 years of records for their findings.
The news gets worse: Of the remaining 19 percent of the time, recession was only avoided through either monetary or fiscal stimulus. With theFederal Reserve holding limited easing options and a deeply dysfunctional Washington thwarting a fiscal boost, the prospects for help are not good.
The warning comes amid a stock market hovering around correction territory and a mixed economic picture. Citigroup this week warned of escalating risks for a global recession, though data Thursday ondurable goods orders suggested the manufacturing sector may be shaking off a contraction phase. Fed officials in recent days have beentalking down recession risks.
“Absent a pickup in consumption and further weakening in the U.S. dollar, we continue to see rising risk of earnings recession in the U.S.” JPMorgan’s equity strategy team said in a note to clients.
Corporate earnings began to weaken significantly in the third quarter of 2015. The drop became more pronounced in the nearly completed fourth quarter reporting season, which is likely to see a drop of 3.6 percent.
Worse, future estimates are declining, indicating the damage won’t end until at least the third quarter of 2016. First-quarter profits are likely to fall 6.5 percent, while the second quarter is expected to show a 1.1 percent drop, according to FactSet. Sales already are well into recession territory, with four consecutive quarterly declines.
Despite the mounting problems, JPMorgan still only assigns a one-third chance of recession this year, though the probability seems to be rising. The firm said its Qualitative Macro Index measuring business conditions shows “a cycle that remains in contraction (weak and decelerating) over the coming months.”
The index’s reading is consistent with a bear market 64 percent of the time and has been below the current level just four times since 1980, each occasion signaling a recession. Those cycles also featured the Fed raising rates in the face of inflation — the central bank is currently in the early stages of what is expected to be a gradual tightening cycle — though the target funds rate was much higher, averaging 2.7 percent compared with the current 0.38 percent.
For investors, the ramifications are substantial.
A QMI at current levels has signaled a bear market 34 percent of the time. The four readings below generated average peak-to-trough plunges of 35 percent in the S&P 500.
As such, JPMorgan is advising significant shifts in positioning.
In what it calls a “fairly unique” backdrop, the firm is advocating a move to a balance between momentum and value, with a focus on emerging market and commodity-linked stocks, as well as multinationals and dividends. It is advising limited exposure to discretionary, tech and health care or at least moving toward “reasonably priced sub-industries.”
“Absent a more material pickup in top-line growth or U.S. dollar weakening, margin compression is likely to intensify on sluggish productivity, tightening labor markets and rising wages, as well as increasing credit costs,” the firm said in the note. “More so, at 6.6 years old the current cycle appears to be suffering from age-related degeneration.”

Stolen Democracy

Stolen Democracy from Zane Henry Productions on Vimeo.

Student Loan Defaults Hit $121 Billion; 40% Of All Borrowers Not Making Payments

(DETROIT)  Federal student loan defaults have hit an astounding $121 billion, with about 40 percent of all borrowers not currently making any payments, according to a government report.
“This is a slow-moving disaster,” Jason Delisle, director of the Federal Education Budget Project at New America, told the Detroit Free Press. “Why no hearings on Capitol Hill? Why isn’t the administration talking about it more?”
The U.S. Department of Education highlighted the report in a self-congratulatory news release about an increase in the number of students who are enrolling in income-based repayment programs. In December 2015, there were 4.6 million borrowers using income-based repayment plans, which represents a 48 percent increase from the year prior, and a 140 percent increase from two years ago, according to the news site.
“Today’s analysis suggests that the administration’s efforts to help struggling borrowers are having a positive impact,” U.S. Education Secretary John King Jr. said. “While we see promising signs of progress, we know we have to work to do to ensure that every borrower in distress has a clear path to avoid default. And I will continue to fight to ensure that students have access to an affordable education that helps them get ahead, rather than drowning in debt.”
Many folks, however, simply don’t have the money to make their payments, the Free Press reports.
Detroit 26-year-old Gail Menesko told the news site a divorce forced her to quit cosmetology school to care for her two children, and it’s been nearly a year since she made a payment on her student loans.
“I want to pay, but other things are a priority now,” she said.
Menesko is now in default, a category reserved for borrowers who don’t make a payment in more than 270 days.
“Twenty percent of all federal load borrowers have defaulted on their loans, according to new data released by the federal government last week,” the Free Press reports. “That translates into $121 billion of loans in default. That same data show 40 percent of all borrowers are not making any payments, and are in some sort of forbearance, delinquency or default.”
Market Watch highlighted other interesting threads in the federal student loan data.
“Despite more programs available to federal student loan borrowers to manage their loans, borrowers are still struggling. In fact, between October 1 and December 31, 2015, private debt collection companies hired by the Department of Education garnished more than $176 million in wages from defaulted student loan borrowers in order to pay back their debts …,” the news site reports.
“These are people who can’t afford to pay their student loans and they’ve garnished $176 million in three months from them,” Chris Hicks, a student debt researcher and consultant for progressive organizations, told Market Watch. “You have to wonder what conditions people are living in when they’re seeing that much of their wages garnished.”
In more extreme cases, debt collectors hired by the federal government have used the U.S. Marshals to arrest student loan defaulters and haul them into court to answer for their debts.
Houston resident Paul Aker told Fox 26 he was arrested at his house in February by Marshals in full combat gear, who dragged him to a federal court building over an unpaid $1,500 student loan debt from 1987.
And source with the Marshals office told the news site Aker’s arrest is just the beginning.
“I was told by sources with the U.S. Marshals Service that they have 1,200 to 1,500 more arrests right here in our community that they will make for old student loan debt,” Fox News reporter Isiah Carey said

A cashless society makes negative interest rates possible, which moves the taxing and spending power to the federal reserve

MEGAN MCARDLE: The Decline Of Cash And The Rise Of Government Power.

What’s not to like? Very little. Except, and I’m afraid it’s a rather large exception, the amount of power that this gives the government over its citizens.
Consider the online gamblers who lost their money in overseas operations when the government froze their accounts. Now, what they were doing was indisputably illegal in these here United States, and I am not claiming that they were somehow deeply wronged. But consider how immense the power that was conferred upon the government by the electronic payments system; at a word, your money could simply vanish.
Now consider what might happen if the government made a mistake. When I was just starting out as a journalist, the State of New York swooped down and seized all the money out of one of my bank accounts. It turned out — much later, after a series of telephone calls — that they had lost my tax return for the year that I had resided in both Illinois and New York, discovered income on my federal tax return that had not appeared on my New York State tax return, sent some letters to that effect to an old address I hadn’t lived at for some time, and neatly lifted all the money out of my bank. It took months to get it back.
I didn’t starve, merely fretted. In our world of cash, friends and family can help out someone in a situation like that. In a cashless society, the government might intercept any transaction in which someone tried to lend money to the accused.
Unmonitored resources like cash create opportunities for criminals. But they also create a sort of cushion between ordinary people and a government with extraordinary powers. Removing that cushion leaves people who aren’t criminals vulnerable to intrusion into every remote corner of their lives.
We probably won’t notice how much this power grows every time we swipe a card instead of paying cash. The danger is that by the time we do notice, it will be too late. If we want to move toward a cashless society — and apparently we do — then we also need to think seriously about limiting the ability of the government to use the payments system as an instrument to control the behavior of its citizens.

I think that every citizen should have a once-in-a-lifetime option to have the bureaucrat of his/her choice fired, whipped through the streets naked, and forbidden to hold public employment ever again. This in terrorem effect would significantly reduce government misbehavior. Sure, there will be the occasional injustice, but think of the overall social benefit.

GR

Another Financial Institution Joins The Rebellion, Stockpiles Cash And Gold

(Simon Black)  Last year, amid all the madness in financial markets, financial historian and strategist Russell Napier joked about creating a “European high-yield capital guarantee fund.”
His “high-yield” fund was nothing more than a secure room filled with physical cash, and a guy standing outside with a gun to guard it.
As jokes tend to be, this was a sad reflection on reality.
Though physical cash bears no interest, it is considered “high yield” compared to bank balances and government bonds that carry negative rates.
Napier’s joke is now coming true.
Earlier this week, the CEO of Munich Re, the largest reinsurance company in the world, announced that they would start holding 8-digit sums of physical cash and gold in their vaults.
Insurance companies tend to be boring, staid institutions that follow the rules and play the game along with the rest of the financial establishment.
But this move from Munich Re is an all-out rebellion against the central banks who are destroying the financial system with negative interest rates.
A few months ago I wrote to you about the different forms of money in our financial system.
Physical cash, which each of us knows and understands well, is one form of money.
Bank deposits are another form of money, and one that is almost exclusively digital. The days where banks held customer deposits in cash inside their vaults are long gone.
Instead, the vast majority of the consumer financial system today is electronic. Credit card payments, bank transfers, etc. all take place in the cloud.
In reality your savings account balance is nothing more than an entry in a bank’s database, stored on a server somewhere in a building with no windows.
So while cash exists in the physical world, bank balances exist only in the digital world.
These are two fundamentally different forms of money. And at the moment they have a 1:1 exchange rate.
You see this every time you go to the ATM machine or make a cash deposit at your local bank. $1 in cash is the same as $1 in your savings account.
But that 1:1 exchange rate is not set in stone. It absolutely can break down.
Think about it—back in 2013 when the government of Cyprus froze ALL of its citizens’ bank accounts, bank balances became instantly worthless.
It didn’t matter how much money you have in your account. If you can’t access, it isn’t worth squat.
Cash became enormously valuable; having the money in your hand was worth far more than a frozen bank account, and demand for physical cash soared.
This is what we’re seeing now.
Negative interest rates are pushing people out of the financial system. Munich Re is only the latest example.
A few weeks ago, I told you about the German Savings Bank Association advising its member banks to hold physical cash in their vaults, instead of paying negative interest to the European Central Bank.
Demand for cash is increasing. More importantly, the rebellion against negative interest rates and central bank madness is increasing.
And this trend has the clear potential to break that 1:1 exchange rate between physical cash and bank balances.
But by the time it happens, it will be too late to get your hands on cash. That’s why holding some now is an absolute no-brainer.
Bear in mind, there are still risks, so holding cash not a 100% solution.
Civil Asset Forfeiture is on the rise and the calls to ban cash are growing louder all the time.
But in conjunction with precious metals and an account at a highly liquid, well-capitalized foreign bank, you can radically reduce the risks that this insane financial system poses to your savings and livelihood.

Progressives Whiffing on Talking Point About the Rich and Taxes

When the corporate rich don’t pay their fair share of taxes, it leaves us more vulnerable to attack. (Photo: J. Stephen Conn / Flickr Commons)

Progressives are missing an obvious talking point regarding the rich, corporate and otherwise, and national security. You always hear that tax evasion by the rich could fund needs such as education and poverty in the United States. But another area is being shortchanged as well. I addressed this in a 2012 post titled Low Tax Rates for the Rich Harm Not Only the Economy, But Defense, which I present here, updated.
In a Counterpunch article titled Starving the Real Beast, sociologist Darwin BondGraham wrote:

The war machine has begun to eat itself for the sake of preserving hyper-inequalities resulting directly from the less progressive tax code instituted a decade prior, and the multitude of shelters capital now hides behind.

See what he’s saying here? By paying minimal taxes, the rich and corporations are depriving defense of funds (or forcing their reallocation to defense from other budget needs). BondGraham again (emphasis added):

Whether the Right realizes their folly at this point is not yet clear. After a decade of record breaking tax cuts for the wealthy, and economic deregulation … leading to explosive inequality and a historic crash of over-leveraged and debt ridden markets, the American plutocracy has not only [driven] millions into poverty, they have now gone so far as to undermine the budgetary and organizational basis of the military establishment upon which a larger global system of inequality, which they benefit from, rests.

Yes, you read that right. Put aside for a moment that a decreased defense budget is a key component of the progressive agenda. The point is that the rich, generally conservative and advocating a defense program on steroids, are creating a huge obstacle to the implementation of one of their key initiatives — a bloated national-security apparatus.
Thus, BondGraham provided progressives with a stunning talking point — one seldom seen (never, in my case). It might be worded something like this:

When the corporate rich don’t pay their fair share of taxes, it leaves us more vulnerable to attack.

It should make it more difficult for the conservative media to continue to propagate traditional conservative issues such as tax cuts for the rich and deregulation. Of course, this is the election year that has shown how little those goals mean to rank-and-file Republicans anyway.

Meanwhile, less and less moored to the United States and able to afford their own security, perhaps the rich are becoming as uninvested emotionally in U.S. national security as they are financially.
This piece was reprinted from Foreign Policy In Focus by RINF Alternative News with permission.

The Incompetence of Central Banks – Monetary Enslavement & Never Ending Debt

 

In this video, Josh Sigurdson is joined by John Sneisen, author and economic analyst who breaks down the absolute incompetence of central banks and centrally planned economies. The recent dramatically low interest rates and the negative interest rates beginning to unfold world wide as the government and private central banks rob the people’s bank accounts, how paper money is doomed to fail and how it’s all by design.
We use examples from around the world and talk about the past and future of the Federal Reserve (Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen) as well as Mario Draghi’s insane destruction of the European economy through the European Central Bank.
You want to know why there are so many poor people? You want to know why jobs are low while taxes and inflation are constantly on the rise to devastating levels? Look no further!
We at WAM are all about bringing you information that will keep you and your family safe. It may be our opinions but you can see that we have the info to back us up! Insure yourself!

Make sure to subscribe to World Alternative Media to stay informed as the global economy slowly but surely collapses.
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Video edited by Josh Sigurdson
Featuring:
John Thore Stub Sneisen
Josh Sigurdson
Graphics by Bryan Foerster & Josh Sigurdson
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2016
“Find the truth, be the change.”

We Searched Hillary’s Emails & Her Relationship With Rothschild/Rockefeller is Now on Full Display

Source: Claire Bernish

Hillary Clinton has been deemed a sure bet for the White House, as it’s widely speculated the inflammatory Donald Trump and socialist-leaning Bernie Sanders stray too far from establishment politics to be truly electable. But it wasn’t until an examination using Wikileaks searchable archive of Clinton’s emails that the establishment’s love of the Democratic warhawk became truly apparent.
Buried in thousands of the former Secretary of State’s emails sent via her personal server, are intimations of her close relationship with the infamous Rothschild banking family and hints for a potential Rockefeller-State partnership.
Lynn Forester de Rothschild wrote an email on April 18, 2010, in which she tells Hillary she would “love to catch up” — and “I remain your loyal adoring pal.” Clinton responds “let’s make that happen,” and signs her response, “Much love, H.”
On September 23, 2010, Clinton emailed Lynn Forester de Rothschild (an email chain marked by heavy redaction) saying, “I was trying to reach you to tell you and Teddy that I asked Tony Blair to go to Israel as part of our full court press on keeping the Middle East negotiations going …”
Rothschild responds, thanking Clinton for “personally reaching out to us,” and adds, “You are the best, and we remain your biggest fans.”
A January 9, 2012, email discusses a conference on the environment set to take place at Jacob Rothschild’s “historic estate, Waddesdon.”
On New Year’s Eve 2012, Lynn Forester de Rothschild sent an email to Clinton “praying for” her speedy recovery. “And, my email box is lighting up with all the PUMA’s and their 18M prayers for Hillary campaign,” states the email, which is signed, “Love,  Lynn, Evelyn, Ben and Jake.”
An email to Clinton, dated October 15, 2009, from Melanne Verveer — former director of Pres. Obama’s State Department office for Global Women’s Issues and longtime Clinton family insider — states:
“Speaking at UNESCO Monday with the new director on the unfinished Beijing agenda [REDACTED] called to say she wants to give us several million dollars to subsidize a fund to give an annual award for innovation in empowering women that would be a rockefeller-State [sic] partnership.”
Then, on March 10, 2012, Verveer hints at least at a possible locale for Hillary’s future endeavors:
“I forgot to tell you that Judith Rodin offered you a suite of offices after you leave State for your own use at Rockefeller Fdtn, if you’re interested –with no strings attached. She also said they’d be happy to provide you with a month at their center in Bellagio if you just want to read and write in a beautiful place.”
Though none of the emails The Free Thought Project examined appeared overtly damning — thanks, in part, to sometimes heavy redaction — the evidence of Clinton’s comfort with the establishment lends credence to theories of her being the ‘chosen’ candidate.
Numerous emails evidence Hillary’s staff carefully monitoring — and even manipulating — mainstream news outlets as well. Lynn F. de Rothschild told Hillary in August 2009 about a fluff piece journalist Les Gelb was eager to pen for Parade Magazine. Other emails show an almost paranoid eye Clinton kept trained on the Tea Party and its journalists and mouthpieces.
To reiterate, nothing particularly damning in itself was found in this admittedly cursory search — but the relationships these emails document, alone, evidence Hillary’s concrete establishment roots. While Trump infuriates the GOP and Sanders’ popular support lacks translation into delegate votes, perhaps these documents support the popular theory Hillary Clinton will be the next president — no matter what.

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China acquiring USA one company at a time

image: http://www.wnd.com/files/2016/03/whirlpool_logo.jpg
What’s the best way for a country like China to exert its influence over the U.S. economy? Acquire American-owned companies like Chinese-owned Haier just did when they purchased General Electric’s (GE) appliance business for $5.4 billion.

So much for American independence and authentic Independence Day celebrations on July 4th.
America can no longer claim to be an independent nation when our manufacturing base is under foreign ownership or foreign control. After all, ownership equals control, and control equals sovereignty. We lose our sovereignty as a nation when foreign companies buy our land, factories, and companies.
How so? Because the more Chinese and other foreign companies establish ownership of American assets, plants and factories, the more they have the right to demand how our U.S economy is run, because how it is run affects them, too.
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So since GE’s appliance business (not the entire company) is now under foreign ownership and therefore foreign control, what options are left for patriotic American consumers who want to keep profits, jobs, and tax revenue within the borders of the United States?
Whirlpool just happens to be the only remaining major American-owned appliance company in the United States, and we need to support them with our consumer dollars when we shop for appliances. Whirlpool owns such popular brands as Maytag, Amana, KitchenAid, and Jenn-Air.
Check out the best of Roger Simmermaker, in “How Americans Can Buy American” and “My Company ‘Tis of Thee” in the WND Superstore.
The only type of consumer appliance that Whirlpool does not make in America (and virtually no appliance company makes in America) is the consumer microwave oven (Amana makes commercial microwaves in the USA). I have an American-made microwave oven from a company called Dacor. I did pay (and you would too) a significant amount of money above and beyond your traditional microwave oven (like Whirlpool), but I look at it not as an extra cost, but rather an investment in America.
Whirlpool has nine manufacturing plants in the Unites States:

• Freezers are made in Ottawa, Ohio
• Ranges are made in Tulsa, Oklahoma
• Dishwashers are made in Findlay, Ohio
• Washers are made in Clyde, Ohio
• Dryers are made in Marion, Ohio
• Refrigerators are made in Amana, Iowa
• Portables are made in Greenville, Ohio
• Cooking products are made in Cleveland, Tennessee (a 400,000 sq. ft. distribution center and one million sq. ft. manufacturing plant, which is the world’s largest premium cooking manufacturing plant).

Whirlpool employs 15,000 manufacturing workers in the U.S. and 22,000 American employees overall.
Chairman and CEO Jeff Fettig joined Whirlpool in 1981 as an operations associate and worked his way up the Whirlpool ranks over the years. It’s great to know that when you buy Whirlpool products (like I do) that the CEO of the company actually cares about the country where his company is based, which is evident when he said, “Our U.S. presence is, and always will be, the foundation of our global enterprise. We are very confident in the future of U.S. manufacturing and proud to have more U.S. manufacturing employees than all of our major competitors combined.”
It is one thing for a corporate CEO to talk the patriotic talk, but Jeff Fettig’s company walks the patriotic walk, which is evident by their nine domestic factories.
Another example that shows evidence that Whirlpool is patriotic-minded company is the fact that the company recently (December 2015) asked the federal government to impose tariffs on clothes washers made in China by South Korean-owned Samsung and LG. Whirlpool didn’t close American factories to move to China to join their foreign-owned and foreign-made competition. They made a bold statement that they want to stay in the USA and get tariff protection so they don’t have to put their American workers in unemployment lines.
Three years ago, Whirlpool asked our government to slap tariffs on other companies (LG and Samsung included) that they perceived were selling appliances below the cost of production in the USA from Mexico (a practice called dumping – which is illegal). Our government concluded Whirlpool was right, and imposed import tariffs as high as 72.4 percent.
The Whirlpool refrigerator I bought in 2008 (which is still running of course) has a sticker with this information proudly affixed inside next to an American flag logo: Whirlpool World Class appliances built with American Pride. Employing more U.S. workers than any other major appliance maker. Designed, Engineered & Assembled in the USA.
Chinese-owned Haier does produce some appliances in the USA, but all profits accrue to Chinese owners, Chinese investors, and Chinese stockholders. Taxes on those profits are paid to the Chinese treasury. The point is even if a given product is made in the USA, we still send profits and tax revenue to the country that owns the brand.
It’s ironic that Chinese-owned Haier is buying GE’s appliance business at least partly with money that used to be ours. Many Americans have purchased Haier products, often not knowing and maybe not even caring who owned the company or where it was based.
Now Haier is buying a popular American brand name with the money we sent them, and all future profits from the selling of GE appliances will accrue to China. More wealth gets siphoned out of the country, and we become poorer as a nation because of it.
Every purchase produces paychecks for someone. Let’s make sure our purchases produce paychecks for American workers (employed by American-based companies) and not workers in foreign countries who pay no taxes to America.
Check out the best of Roger Simmermaker, in “How Americans Can Buy American” and “My Company ‘Tis of Thee” in the WND Superstore.

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SUDDENLY IT ALL BECOMES CLEAR

by James Quinn

Another Tech Company Laying Off 50% Of Its Staff

Boom and bust is the best way to describe tech companies, and LivingSocial is a prime example of another company that makes no money but continues to get massive handouts from companies like Amazon. The end is near  for these cash coffins as a massive bubble is on the horizon.
According to this re/code report the once ecommerce darling is laying off 50% of its staff in a struggle to stay alive.

LivingSocial is laying off around 280 employees in the latest move aimed at trying to stanch the bleeding at the one-time e-commerce darling and Groupon foe.
The layoffs account for between 50 percent and 60 percent of the current staff, though around 120 of those jobs in customer service will be replaced through outsourcing. LivingSocial will employ around 200 to 225 people after the cuts.
In an interview, CEO Gautam Thakar said the company has gotten its legacy voucher-deals business to break even, and wants to allot all future investments to its new, so-called “card-linking” discount business.
That product, which is being tested in three cities, allows LivingSocial customers to get discounts at participating restaurants simply by paying for a meal with a credit card they have registered with LivingSocial. Restaurants control when they offer discounts and how big they are. He said the company has signed up three times the number of restaurants in these cities for the new offering as it had for its traditional voucher business.
Thakar said he is interested in raising new funding for the company from outside investors and would use some of those funds to expand the new business into new cities and new categories beyond dining.
The CEO told Re/code that the cuts are not an attempt to dress the company up for a sale, but said he “might be open” to those conversations if they arose during the process of trying to secure new investments.
The company has raised more than $900 million to date from Amazon, J.P. Morgan and Lightspeed Venture Partners.
The Washington, D.C.-based company has now cut nearly 900 jobs over three rounds of layoffs since Thakar took over for founder Tim O’Shaughnessy 18 months ago.

Photo Credit  Danny Eugene