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

Blog Subscription Form

  • Email Notifications
    Go

Have You Seen This?

Archives

  • 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.

    ...
  • U.S. Debt Crisis End-Game Looms in 3-5 Years

    Today, the national debt has mushroomed to almost $16.5 trillion. It has exploded by over 60% just since President Obama took office, when it was at $10 trillion. At the end of 2012, our national debt exceeded 100% of GDP (104%) for the first time since WWII. By the end of Obama’s second term, our national debt will top $20 trillion at the rate it’s growing.

    We all know that at some point, this massive Ponzi scheme will come to an end. The only reason it has gotten to this point is because the US dollar is the world’s “reserve currency” which enables our government to print as much money as it wants. This will end only when foreign buyers of our debt decide to turn off the spigots. The only question is when.

    Last week, one of the most respected research groups in the world predicted that the US likely has only 3-5 years before the wheels fall off and the world is thrust into a major financial crisis, possibly even a depression.

    We’ll talk about all of these things as we go along today. But before we go there, let’s take a brief look at the economy before tomorrow’s advance (first) estimate of 4Q GDP.

    ...
    Filed under: , , ,
  • Gun Control & How To Play Upcoming Debt Battles

    As you probably know, the Republican leadership in the House decided last Friday to cave in to Obama on the debt ceiling issue (ie – no spending cuts). This week, they hope to pass a temporary extension of the debt ceiling until April 15, during which time they hope the Senate will adopt a new federal budget for the first time in almost four years.

    If somehow the Senate passes a new budget, and the House approves it, then it’s possible that all three upcoming debt battles could go away. I would NOT count on that! I don’t think Senate Majority Leader Harry Reid will spearhead a drive to pass a new budget and if not, all three debt battles could still play out.

    If I am right, then a lot of market turmoil still lies ahead over the next few months. Near the end of last week’s E-Letter, I alluded to an investment strategy that could position many of you to take advantage of the debt battles we will likely face just ahead. I’ll get specific today.

    However, before we get to that discussion of how to potentially take advantage of the upcoming debt battles, I have some commentary on President Obama’s sweeping gun control initiatives that he announced last week, in the wake of the Sandy Hook Elementary School massacre on December 14. While we expected that Obama would seize upon the Sandy Hook tragedy to put forth new gun control laws, we did not know that they would be the most wide-sweeping regulations in more than a generation.

    ...
  • Obama Claims We Don’t Have A Spending Problem

    Most of the forecasters I subscribe to expect economic growth to average only 1-2% in the first half of 2013. Most believe that 4Q GDP fell sharply from the 3.1% rate in the 3Q of last year, largely due to fears about the fiscal cliff. They also expect growth to improve modestly in the second half of this year to 2% or slightly higher. That’s not too optimistic.

    One reason is that the end of the payroll tax holiday on December 31 means that workers’ pay went down by 2% on January 1, thus adding more headwinds to the economy this year. A person earning $50,000 a year before taxes, for example, will pay an additional $1,000 or more to the government this year.

    Add to that the fact that we are sure to have another nasty debt ceiling battle next month, which will once again be unsettling to consumers who drive the economy. We all remember the fiasco in the summer of 2011 when the Dow plunged over 2,000 points. For these reasons and others, at least the first half of 2013 could be very dicey.

    Actually there are three debt battles – the so called “trifecta” – that lie ahead. In addition to the debt ceiling battle, there is also the sequester/automatic spending cuts on March 1 and the “continuing resolution” to fund the government in the absence of a formal budget passed by Congress. That happens in late March. We will look at all three of these upcoming battles below.

    Today we’ll also touch on the pork-laden fiscal cliff bill that passed on New Year’s Day. And we will ponder the question of whether the US has a “spending problem” or a “taxing problem.” Let’s start with this last one first.

    ...
  • Finally, a Solution to the Income Investing Dilemma

    This week, I'm going to address a topic that our surveys show is on the minds of many investors - income. In our 2012 survey, it came out loud and clear that many of my clients and readers are interested in producing income from their portfolios. Plus, there are others who are interested in income-type investments because such programs usually have the goal of preserving principal while also providing better returns than fixed income investments.

    This week, I'm going to discuss the plight of income investors in today's low-interest environment and what they can do about it. I'll also unveil a new investment geared specifically toward conservative growth and producing income - the Managed Income Strategy offered by Hanlon Investment Management. If you need an income from your nest egg or are seeking a conservative growth investment that takes risk management very seriously, the Managed Income Strategy may be just what you're looking for.

    ...
  • Fiscal Cliff Battle - Obama Won Big; Next Step - Abolish the Debt Ceiling?

    First, let me wish everyone a Happy New Year! I hope your holidays were joyous for you and yours. 2013 will no doubt be another challenging year, both for the economy and the financial markets.

    Second, many of you receiving today’s blog posting are not subscribers to my blog… at least not yet. Since I did not send my regular Tuesday E-Letter out the last two weeks due to the holidays, I decided to send everyone my weekly blog that goes out on Thursdays (and sometimes more often if there is late-breaking news).

    As for the fiscal cliff battle, virtually everyone believes it was a big win for President Obama. He succeeded in getting almost everything he wanted, and did so without any spending cuts. Most conservatives believe the bill that just passed in Congress is a disaster and are angry that more Republicans didn’t vote against it. Count me as one of them!

    Let’s take a look at the highlights (or lowlights) of the bill that passed in both houses of Congress on Tuesday.

    ...
  • US Birth Rate Hits New Low - A Nation of Singles

    One of the issues I have been focused on for the last several years has been the trend in demographics in the US and in developed countries in general. Our populations are getting older – we all know that. But the reasons why our populations are getting older are not widely understood by many Americans. Those reasons include the falling birth rate, the falling fertility rate, the falling marriage rate and the explosion in singles – people who never marry.

    The US birth rate fell to a record low in 2011. The marriage rate is tumbling as well. And the number of single Americans is now at a record high. The implications of these developments are troubling, not only for the economy, but also for the investment markets and the continual expansion of the federal government. Government debt has spiraled out of control in recent years, and the demographics suggest that this trend will continue as we care for an aging population.

    Today, we will look at some new information on demographic trends in the US and in the West in general that should concern you – and all Americans for that matter. This will be a continuing theme in my E-Letters in the months and years ahead. Let’s get started.

    ...
  • Why America Will Miss the Bush Tax Cuts

    As I discussed in my blog last Thursday, I believe that President Obama is more than happy to see us go over the "fiscal cliff" at the end of this year. Many, including Fed Chairman Ben Bernanke and the CBO, believe that if we go over the fiscal cliff, the combination of tax increases and mandatory spending cuts will send the economy back into a recession next year. At the same time, the stock markets could get hit very hard.

    The president has laid blame for the fiscal cliff (and everything else wrong in America) on President George W. Bush and the Republicans in the House. He has also said that the Bush tax cuts caused our deficits to soar out of control, even though he now says he wants to keep those same tax cuts for all but the “millionaires and billionaires” (defined as individuals making over $200,000 and families making over $250,000 a year).

    The mainstream media have been so critical and dishonest about the effects of the Bush tax cuts that most Americans don’t know about the benefits of lower tax rates, even though they have been in place for a decade or more. I just read the most informative article on the Bush tax cuts that I have seen anywhere. The article is by Peter Ferrara at Forbes.com. I have reprinted it for you below.

    But before we get to that, let’s take a look at the latest economic reports which have been a mixed bag once again.

    ...
  • The US Bond Bubble Continues to Mushroom

    It was very tempting today to focus entirely on the “fiscal cliff” especially now that it is very clear that President Obama is more than willing to take us over it. Treasury Secretary Geithner made it clear to congressional leaders last week that the president will insist on his proposals for dealing with the fiscal cliff, which include $1.6 trillion in tax increases, very little in spending cuts (that may never happen) and the permanent end of the debt ceiling.

    Yet talk about the fiscal cliff is everywhere in the media 24/7. So rather than repeat what you probably already know, let’s revisit a topic that should be near and dear to almost everyone who reads my E-Letters. That would be the bond market bubble. If we do go over the fiscal cliff, that could be bearish for bonds. Fortunately, I have an “alternative” that has the potential to make money if the bond bubble bursts.

    Keep in mind that JPMorgan Chase estimates that a mere 1% rise in long-term interest rates will result in up to a 20% loss of value in long-dated bonds, including Treasury bonds. This is a topic that should be on every investor’s mind.

    ...
  • On The Economy & Capitalism vs. Socialism

    Today we look at a Pew Research Center survey that polled Americans for their feelings about capitalism versus socialism. The survey included all races, different ages and various income groups. I think it’s safe to say, this survey will SHOCK YOU!

    But before that, let’s take a quick look at the latest economic reports and the consensus view for Thursday’s 3Q GDP report. There is also news that Americans are more optimistic about the economy now than they have been in a decade – but are they really?

    And finally, did you know that the United Nations is planning to hijack the Internet? The UN wants to control the World Wide Web. And it could happen as early as next week. You need to know about this.

    ...
  • ...`Til Debt (Limit) Do Us Part

    Last week I discussed the “fiscal cliff” and the political battle that entails. If lawmakers can’t come together for a solution before the end of the year, the economy is almost certainly headed for a recession or worse in 2013 and beyond.

    But there’s a potentially even bigger battle coming up in the next couple of months. We will hit the debt ceiling/limit just ahead. We all saw what a political nightmare that was in the summer of 2011 when Democrats, Republicans and President Obama were deadlocked and the US credit rating was downgraded for the first time ever.

    Well, get ready for the next battle once the fiscal cliff is dealt with (assuming it is). That’s what we’ll discuss today. What’s most interesting this time around is that the Obama administration is pushing for Congress to repeal the debt ceiling limit altogether. Just get rid of it once and for all, they argue.

    Most conservatives will be outraged when they learn that Obama wants to abolish the debt ceiling, and I might agree. On the other hand, Congress has repeatedly raised the debt ceiling for decades, no matter which party was in power, so it might finally be time to seriously discuss some other alternative.

    Following that discussion, we’ll look at the latest budget deficit numbers for fiscal year 2012 that the CBO released last week. For the fourth consecutive year, the budget deficit topped $1 trillion. The national debt is now a staggering $16.2 trillion.

    HAPPY THANKSGIVING!

    ...
  • Are We Headed Over the "Fiscal Cliff"? Maybe So

    We begin today with some obligatory comments about the election and how we got it wrong. Obviously, I am very discouraged with the outcome of the election. The main mistake Spencer and I made (and others including Gallup, Rasmussen, Pew, Rove, Morris, etc., etc.) in our pre-election analysis was to significantly underestimate the turnout rates among Democrats. The widely-held view that Democrats were unenthused and wouldn’t turn out to vote, as suggested by numerous pollsters, was simply wrong.

    We also we mistakenly believed that the 2008 surge in black, Latino, and young voter turnout would recede in 2012 to “normal” levels, as did most of the major pollsters noted in the previous paragraph. That didn't happen. These high levels of minority and young voter participation are apparently here to stay. Unfortunately, Obama won both the popular vote and the Electoral College comfortably. Following those opening comments, we turn our attention to the so-called "fiscal cliff" that is upon us.

    I'm sure you have heard about the fiscal cliff, but today I will present you with the details, including how much it will affect the economy and how much it will cost you (based on your income level). I will also explain why I think the odds are greater that we will fall off the fiscal cliff this time. Given his election victory, I don't see President Obama willing to compromise much if at all.

    If we do fall off the cliff, a new recession is very likely to happen next year, and that will almost certainly be bearish for stocks. Thus, the stakes are very high in this soon to be knock-down, drag-out!

    ...
  • President Romney, VP Biden - It Could Happen

    On this important Election Day, I wonder if my readers are fully aware of what would happen if the presidential election were to end up tonight in an Electoral College (EC) tie. While it’s a remote possibility, there is a scenario where the Obama/Romney battle could come down to a 269/269 tie. It takes a minimum of 270 EC votes to be declared the president.

    In the case of a tie, the US House of Representatives, under authority of the 12th Amendment, decides who is the winner. With the House under Republican control, there’s no question that they would award the victory to Governor Romney.

    But under the same authority, the Senate gets to pick the vice president. With the Senate controlled by the Democrats, it’s a no-brainer that they would pick Joe Biden. That’s how we could see a Romney-Biden administration. Wouldn’t that be crazy!? While this outcome is unlikely, it is not unprecedented, as I will discuss below on this Election Day.

    Next, did you hear that 500 retired Generals and Admirals from the US Armed Forces ran a full-page ad in the Washington Times yesterday endorsing Governor Romney? I have links to the ad and the story behind it at the end today.

    Before we get to all of that, we will take a look at some of the recent economic numbers. For the first time in a good while, there is some encouraging news out there.

    ...

« First ... < Previous 3 4 5 6 7 Next > ... Last »