Calm before the next storm. What to do, what to expect. Update June 14, 2010

Marc's Notes:
The news items continually coming across my desk show every public entity effectually bankrupt. Cities are hemorrhaging debt as city officials learned the deficit spending trade well from our National Government. The word “bond” never should have been invented.
States from coast to coast are broke, mired in debt in amounts that boggle the mind.
Pensions of many large companies are so underwater, only trick accounting is hiding the real damage. This “trick” accounting is used by banks, companies, even our government. It now runs the gamut anywhere there is big money. Except your tax return. You are not allowed to use the same accounting all these other entities are allowed to use. Try that and off to prison you probably go. It’s a sham and disgraceful. The hiding of assets in “special purpose vehicles”. This accounting trick in used by most of the big banks, European Governments in the Greece bailout, OUR government in the entire off sheet liabilities, most pensions plans of large companies, and many large companies. These “special purpose vehicles”, like in the case of the European Bailout, spend the money but don’t list the spent money on the books. (Don’t you wish you could do that). The “invoice” is put in a sort of “limbo’ in another book keeping entry, sometimes even another subsidiary, and it sits there, literally unaccounted for, until the problem hopefully “goes away”. If our government, the European government, half the European countries, most of our large pensions plans, many large firms and many large banks had to “really account’ for all the bad debt according to “real” accounting methods required on our tax returns, it would rock the world. It would show most of these entities far past bankrupt. It would literally collapse the economy just on the news. REALLY.

It’s terrible that the only reason we limp along today is through “hide the envelope” accounting, basically lies, deceit, false accounting and downright fraud on a massive scale.

To top it off, the banking cartel, threatening us with economic meltdown last year, got the government, thorough blackmail, to give THEM the biggest blank check of our money, handed to these crooks without strings. This is blatant theft of our money. A massive rip off of the American People. The banks have convinced and received literally TRILLIONS of our money, a grata, just handed over to them. Plain and simple theft. And it’s not over. Watch the next meltdown. The banks aren’t finished. Look for more checks, free loans, more bailouts, more crookery. And in the midst of this turndown, where millions are out of work, on food stamps, broke and homeless, these same banks have the audacity to post the biggest profits in history. And pay themselves billions, yes BILLIONS in bonuses. Just read the statements. Where do you think they got all that money to gamble with? If they were on the verge of bankruptcy, a few short months later, they turn billions in profits and pay billions in bonuses. Do you think that sounds NORMAL? Do you think that sounds RIGHT?

How much more will we allow? Mark my words, and as also said by Thomas Jefferson:
"If the American people ever allow private banks to control the issue of their money,
first by inflation and then by deflation, the banks and corporations that will
grow up around them (around the banks), will deprive the people of their property
until their children will wake up homeless on the continent their fathers conquered."

Now you tell me. Does that sound familiar in what is happening? And your government is now bought and paid for by these same banks.

“When deceit and thievery becomes common place among your largest institutions, men will instill a system to legally allow it”.

Markets:
Treading water around 10,000 DOW. The line in the sand. Fundamentally the economy is faltering. Stimulus money is running out and that means your “recovery” which never was is also running out. The recovery was only debt spending, and much like a bad brother in law using your credit cards, it appeared he was ok until the credit ran out. And that’s exactly what is happening now. The credit is drying up and so down we go again. When that happens, look for more stimulus money, more bailouts, basically more debt.
Unfortunately we will end up going down again only have more debt to pay off.

IN THE SAME FUNK WITH AN EVEN HIGHER DEBT LOAD.

The lemmings are being led to slaughter. Company insiders are dumping stock at a rate of 3000 shares sold to every one bought according to one report I just read. This is the highest sell/ buy ration anyone has ever claimed if my memory serves me right.

With Greece contagion, debt contagion, bad books, bad unemployment, bad real estate figures, everyone broke or broker, and all covered up with fraudulent accounting used on a massive scale, the clock is ticking. You can’t hide or extend or pretend forever. Mark my words. Not to be a doom or gloomer, but as I see it, you will not believe what is coming.

Most likely another downturn is heading our way, this one probably faster then the fall in 2009. The FEDS will fight another downturn with … guess what… more spending, so a war between collapsing debt and FED spending will ensue, with most likely inflation in certain areas ( gone to the supermarket lately?) and collapsing assets in another. (Real estate, commercial real estate, bonds, stocks and the debt markets).

Rising interest rates HERE in the US will signal the beginning of the end, so refinance and lock in low rates now. Adjustable mortgages or other adjustable debt will murder you.  Those that can afford to, keep some debt on a fixed rate as an inflation hedge. If they inflate the money supply, they will inflate your debt away magically!

Holdings:
Set mental stops in most stocks if you hold more the  20% or more of  your money in the markets. Markets are still on RED ALERT and could crater on any major news.
Add physical gold and silver anytime for insurance. Keep most of your money in US SHORT TERM DEBT for now like savings accounts or short term treasuries.
(See our dividend payers list or Dream Portfolio for listings of what to buy).
Add interest rate funds and a few gold stocks or funds. (Again see website portfolios)
Get money offshore. (See Swiss Annuities)
Get some contrary funds for downside profits.
Oil- do not add at this time except our dividend energy stocks.
Natural Gas: Rising nicely. Hold.

Gamblers: Add BP and sell the short term covered calls against your stock. They are rich and can turn you 10% a month as long as BP can survive.
Sell close to the money calls expiring in the current month you buy the stock in.

Consults:
Email me. Mini 1.5 hour consults are up for grabs for a quick look at what you have and are a fraction of the full consult fee.
Full consults take 3.5 hours for those with a lot of money in the markets. You can read about what that is on the website.

Upcoming show this Thursday at 12:00 PM PST  KVMR FM. 89.5  105.1 or on the web at www.kvmr.org.

All for now,
Marc