4,500 point move in the Dow futures today.

Another 4,500 reasons why John and Sally Lunchbucket are fleeing the public markets.  

This is your wake-up call America................

How's your portfolio at UBS doing?

Oh yea baby....................

CNBC

The Wall Street brokerage turds they trot out to mystify the public with their bullshit is the reason they have to pay them so much to embarass themselves.

I mean really, is anyone surprised?

Teen points gun at cops. Cops shoot and kill teen. Riot breaks out.  What a culture!

TBT

Hillary did to her server what Bill wished Monica did to her blue dress.

Scrubbed it clean!

An older note, still timely. TANSTAAFL

June 24, 2015

Greetings Friends,
 

This summer has been about reflection.  Looking back.  Feeling what was.  This summer marks 20 years since the inception of Native American Advisors, Inc.  It seems like only yesterday I was filling out a myriad of forms with the United States Securities & Exchange Commission to do what I do.   It’s been a great run, greater than I ever imagined.  To do business with so many friends across the world has been a blessed gift.  My job is a hobby that I found a way to get paid for.  Some people play golf.  I come to work.  I am lucky to have what I think is the best job in the world.   This year I have spent plenty of time looking at my life.  How do I want it to end?   And what do I want to leave?  I think of the many great clients I had the privilege to work with over the years that are no longer alive.   I think of the great people I have come to know and how they live their lives.  I have learned so much from each and every one of you!  And yes, I still read obituaries every week in several newspapers.  Life and lives well led are still the greatest learning tools.

The legacy that my wife Pam and I always wanted to provide for our sons, Hunter and Jordan, was to educate them with a set of values and a set of ethics that instill a moral compass and spirituality they can build their lives on.  For me, being reliable, being consistent, being disciplined and being present have always been major fundamentals in my business philosophy.  Some people called me a dreamer.  I’ve had doubters along the way.  I have always tried to be a realist.  No bullshit.   I think I always called it the way I see it.   

Rare is the person who is a realist.  We live in a world of pretend and lies.  Can you fathom that Brian Williams is still making $10,000,000 a year at MSNBC?  A couple of weeks ago I was told by somebody that calling yourself a “realist” just means you’re a pessimist who doesn’t want to admit it to everyone.  I generally tell people who want to engage in conversation about their financial strategy a simple line of “who knows what’s going on, why worry about it” and it shuts them up.  They seem to like that far better than me giving them a quick down and dirty of where we are in the markets and as a nation.  It shows me that ignorance really is bliss!  

From my perch in front of several monitors I see what is coming.  It’s not pretty.  It’s realism.  Here’s why.

The very structure of life in our world is threatened because bankers have undermined the financial system through the creation of debt instead of wealth.  We have collectively borrowed against our children’s future until their very future is in doubt.  The U.S. national debt is over $18 trillion and growing at a rate of over $2,000,000,000 each and every day.  Does that bother you?  It does me.    

The Federal Reserve began lowering interest rates in late 2007 from 5.25% to 2% by September 2008, and then .25% by January 2009. Did that prevent a 50% collapse in stock prices? Did it prevent national housing prices from plummeting by 35% between 2006 and 2010? The main reason stocks bottomed in March of 2009 was the FASB (Financial Standards Accounting Board) bowing to their masters and revoking mark to market accounting which allowed the insolvent Wall Street banks to pretend they were solvent. The combination of fraudulent accounting, zero interest rates and round after round of QE money printing has propelled this mania to epic proportions. Total stock market valuation of $36 trillion now exceeds 200% of GDP. Prior to the Fed bubble blowing era, the total stock market valuation averaged about 50% of GDP.

As I write this, the S&P 500 index currently stands at 2,124, fractionally below its all-time high. It is now 300% above the 2009 low and 34% above the 2008 and 2001 previous highs. Most people believe this is the new normal. They are comfortably numb in their ignorance of facts, reality, the truth, and the inevitability of a massive market correction. When the CNBC crowd and market herd is convinced progress and never ending gains are the norm, the apparent stability and normality always degenerate into instability and extreme anxiety. Today, the stock market is as overvalued as it was in 1929, 2000, and 2007.

As you have seen, facts haven’t mattered, as belief in the infallibility of Federal Reserve bankers, has convinced “professionals” to program their high frequency trading supercomputers to buy the all-time high. If central bankers were really smart and low interest rates guaranteed endless stock market gains, then why did the stock market crash in 2000 and 2008? The Federal Reserve’s monetary policies created the bubbles in 2000, 2007 and today. There was no particular single event which caused the crashes in 2000 and 2008. Extreme overvaluation, created by warped Federal Reserve policies and corrupt Washington D.C. fiscal policies, is what made the previous bubbles burst and will lead the current bubble to rupture.

This is not a dire prediction of doom and gloom, nor is it a "bearish" forecast.  It is just a function of how markets work over time. This time it is "not different."  It’s just being real. 

Here are some facts.  The government tells you the unemployment rate stands at 5.6%.  There are close to 95,000,000 people not working in our country who could be working.  You do that math, it’s real simple.    After three rounds of massive money printing and doubling the national debt it doesn’t take a genius to get this result.  Wall Street has been bailed out by 7 years of nearly zero interest rates and yet the first quarter of 2015 saw our GDP rate contract to 0.07%.  You call that growth?   Inflation is here and now. Look at two things you need, gas and food for starters.  Government tells you inflation is contained.  Meat and eggs are two staples I love and gas was $1.86 when Obama took over.  I see inflation very well.  It’s real.    

The mouthpieces for the vested interests on Wall Street and slithering around the halls of Congress roll out their tired storylines about low interest rates supporting ridiculous valuations and corporate profits remaining permanently high because we’ve entered a new paradigm. I have heard it all before. Taking extreme risks based upon false economic beliefs with delusions of never ending gains produced by Wall Street HFT (High Frequency Trading) super-computers will end in tears.   

As well, stock market structure has changed dramatically since I first walked onto the NYSE floor in 1983. Most market professionals I meet haven’t even read “Flash Boys”.  Sadly, I am still unable at this point to direct order flow to the IEX exchange from my custodian.  The real crime of HFT is that Congress, the SEC and other regulators have allowed a handful of Wall Street firms to assemble a set of market rules that few people understand and virtually nobody at the SEC has a clue how they should work. That it’s rather ugly is too kind. 

Keeping interest rates low will come home to roost.  Their effect on the middle class, retiree savers, and financial market stability is catastrophic and unlike the purported benefits of QE, the negative effects grow (in some cases exponentially).  The end result is an entire class of savers devastated by negative real returns (even as the government is able to sustain what would otherwise be an unsustainable debt burden).    I talk to people every day that think Social Security will save them and young people unable to pull their heads out of their cell phones.  Right, let’s get real, everything is awesome!  Really, it’s not!  

As we’ve seen time and time again, profits have been privatized but losses have been socialized,  (taxpayers bail out the bankers who go on to get even richer) and so when the market distortions created by Fed policies that have served to restore the fortunes of the rich finally blow-up in an even more spectacular collapse, you can count on the fact it will be taxpayers like me, you and Main Street’s John and Sally Lunchbucket that will pay to repair a system broken by the same policies that worked to relegate them to second class citizenship. Put simply: when the bubbles burst, it will add insult to injury for those who suffer most under the financial shenanigans of the Fed.

And let me briefly weigh in on politics. The entire American political system is a con. It’s a sleazy mix of legalized bribes, auctioning off of favors, revolving doors between government agencies and the corporations they enrich.  Frankly, I believe it’s a false choice between two parties that are the same poison sold under different labels.  I don’t think I missed anything other than the slimy lobbyists that spend almost $10,000,000 every working day on lobbying efforts.   And finally, who knew that the central banks, yes, the Fed, would be buying stock markets?  Ask yourself why they are doing this when their mandate is not supposed to do anything with the equity markets?  Who knew they were buying?  The corruption and manipulation is so ingrained into the system that no election will ever bring us back to normal.  That’s really how I see it.  

In closing, I guess only in economics and politics can facts not matter and fantasy become reality.  I hope I am ready for what’s coming when it comes, with my money and yours. 

And I sincerely hope this note finds you well in health and spirit, love and family. 

 

With best wishes,
 

Dean Parisian

 

It really is some funny stuff out there.......

At this point, a rubber bath mat or a colored beach towel would surge in the election polls should they decide to run. 

Doesn't it make you wonder what part of "Take a frickin hike" these conventional politicians aren't getting?

I guess just blame the American public for agreeing to be swindled and manipulated by one liar after another, all of whom promise change yet end up merely perpetrating the broken, corrupt system they inherit.

The Republic is lost.  Look around you today.  Open your eyes.

Come to think of it, if I had some time today I would love to get a film crew out to a busy intersection anywhere in Atlanta and hold up a big sign that says, "FREELOADER, ABLE-BODIED NON-WORKING FOOD STAMP EATING, OBAMA VOTER NEEDS $$$$"

Imagine the hilarity.    The new way to get rich.

Like being a banker getting fed billions upon billion at near zero cost from the FED!

Stephen D. Williamson for Fed Chair!

The very same St. Louis Fed (this time in the form of a white paper by the bank’s vice president Stephen D. Williamson), is out questioning the efficacy of QE when it comes to stoking inflation and boosting economic activity. 

Williamson says the theory behind QE is "not well-developed", and calls the evidence in support of Ben Bernanke’s views on the transmission mechanisms whereby asset purchases affect outcomes "mixed at best."

"All of [the] research is problematic," Williamson continues, as "there is no way to determine whether asset prices move in response to a QE announcement simply because of a signalling effect, whereby QE matters not because of the direct effects of the asset swaps, but because it provides information about future central bank actions with respect to the policy interest rate." In other words, it could be that the market is just reading QE as a signal that rates will stay lower for longer and that read is what drives market behavior, not the actual bond purchases. 

But the most damning critique of Bernanke’s response to the crisis is this:

There is no work, to my knowledge, that establishes a link from QE to the ultimate goals of the Fed inflation and real economic activity. Indeed, casual evidence suggests that QE has been ineffective in increasing inflation. For example, in spite of massive central bank asset purchases in the U.S., the Fed is currently falling short of its 2% inflation target. Further, Switzerland and Japan, which have balance sheets that are much larger than that of the U.S., relative to GDP, have been experiencing very low inflation or deflation.

And then there’s this:

A Taylor-rule central banker may be convinced that lowering the central bank's nominal interest rate target will increase inflation. This can lead to a situation in which the central banker becomes permanently trapped in ZIRP. With the nominal interest rate at zero for a long period of time, inflation is low, and the central banker reasons that maintaining ZIRP will eventually increase the inflation rate. But this never happens and, as long as the central banker adheres to a sufficiently aggressive Taylor rule, ZIRP will continue forever, and the central bank will fall short of its inflation target indefinitely. This idea seems to fit nicely with the recent observed behavior of the worldís central banks.

And this: 

Thus, the Fed's forward guidance experiments after the Great Recession would seem to have done more to sow confusion than to clarify the Fed's policy rule.

So in sum, the vice President of the St. Louis Fed has taken a look around and discovered that in fact, not only have trillions in asset purchases not worked when it comes to creating "healthy" inflation and boosting growth in the US, these asset purchases haven't workedanywhere they've been tried. Furthermore, he's noticed that central bankers that adhere, in a perpetual state of Einsteinian insanity, to the Taylor principle, will never be able to raise rates and finally, he thinks that the more the Fed talks, the more confused the public gets about what it is the central bank intends to do. 

Life in America

It's not illegal when the Feds do it!

Statistics are whatever the government wants them to be at any given time because 99% of the general public accepts what they hear and would never bother to question government credibility.

On the 2nd Anniversary of Missouri Thuggery

My Dad was a Federal Firearms Instructor.   He probably shot more rounds on a pistol range than anyone I know.  Dad was an excellent pistol shooter and one hell of a shot on deer with his 30-06.

I remember one instance when he missed a whitetail deer that was running and after he emptied his rifle I killed it.   I was sure I had thumped the doe in the heart only to get up the hill into a snow bank and see that it had been hammered high in the neck.  So much for my shooting prowess!

Anyway, on the second anniversary of the thuggery over in Ferguson I want to comment on how Dad would have probably handled things back in the day.  Dad had been nearly killed by a sniper while driving in his patrol car and didn't take kindly to having guns pointed his way.

If you point a gun, any kind of gun, at a cop there is a high likelihood of getting shot at, or worse yet, shot, or worse yet, killed.

Point a gun at a cop you probably might or should become victim.

That's the Dad in me talking.   Did I miss anything?

Thursday humor................

WARNING! SCAM ALERT! Be on the lookout for these two women. They are hanging out around the Target and Wal-Mart parking lots.

When you're putting your groceries away they ask you for  a ride to McDonalds!

 They are very convincing and very hot!   Once in your car this one takes her clothes off and starts climbing all over you,while she keeps you busy, the other one takes your wallet.

I've had mine taken on the 7th, 8th, 10th and twice yesterday.  Probably two more times tomorrow. Wal-Mart has wallets for $2.99, but I found some at the dollar store for .99¢ so I bought all they had. These two harlets not only take your wallet, but you never even make it to McDonald's so I've already lost 11lbs. Keep a lookout for them ( I find lunch time and around 5:30 are the best times).

The "new" Bulldawg Nation!

Ferguson a year later.........

Drove across Missouri the other day.   A fine state with no shortage of thugs.

The beat goes on.  Police are neutralized.  Ferguson agitators are in control.

It's coming boys and girls. 

Growing bone on the Ghost Ranch..............

Just the facts America.............

1,876 Black babies are aborted in the United States on average every day of the year, yet not a peep from the Black Lives Matter crowd.

Guess those lives don't matter.