Headlines

Politics could dictate who gets a coronavirus vaccine

‘We are fully prepared to take losses’ on virus bailouts, Mnuchin says

Trump ‘taking hydroxychloroquine’.. Cavuto stunned ‘could lose your life’ ...

‘President Tweety’ — Biden dings Trump over social media use

Appellate court orders New York to hold presidential primary, state will drop appeal

Coronavirus live updates: Southwest sees a turning point for travel, Olive Garden customers return

20% of Americans infected by end of year?

William Barr: Probably won’t be criminal probe of Obama, Biden

Senate intelligence panel approves Ratcliffe as spy chief

Most real estate investment trusts are still getting their rent

68% of unemployed ‘eligible for payments higher than lowest earnings’

Speaker of the House fat shames POTUS

A Is for Angst

Angst — may well be the emotion that breeds much of the Trump-derangement feelings that infects our news media and, seemingly, half of the world  ... and causes instability in otherwise stable people (Mitt Romney?) President Donald Trump is unconventional to a fair-thee-well. When expected to do “A” he does  “B” and drives observers nuts. These people experience such strong anxiety over this unconventional behavior that it makes them angry. “Why can’t this man do what he is supposed to do?”

I’m certain that this quirky behavior drove his parents to pack him off to military school when he was young. Didn’t help. He thrived there (see: Washington Post Article) and this apparently set this behavior in concrete. After college he defied his father once again when he moved his family’s real estate operations to Manhattan and was a roaring success ... with some monumental setbacks .. but, in the end, he prevailed. And this told him that he should follow his gut ... which he has ever since done ... for better or worse.

We know why and who hates The Donald, So, who likes this man? For one, they must have a high tolerance for ambiguity. For two, they must believe that Trump has their best interest at heart. And for three, they must have confidence that this man can keep pulling rabbits out of his hat. His performance on the economy so far reinforces this confidence ... as does his survival of the Mueller witch-hunt. And the more the Democrats chew on this impeachment bone, the better he looks.

I can’t really say I “love” Trump, but I have bought into his agenda and admire his spunk. I believe he has shaken this country out of its winning-the-Cold-War-stupor, our anti-terrorism frenzy ... and made us realize that we were ignoring many serious problems. For this alone he deserves a marble monument. He probably won’t win all his current battles ... after all, half the world is biting at his heels. But he is likely to prevail in enough of them that Americans can wipe that big “L” off of our foreheads and get on with rebuilding our nation into what our destiny has manifested.

Where To Invest?

Where does someone stash one's investment funds these days? The choices are becoming very meager for the ordinary investor. Consider the following:

Income Stocks: The prospect of increased interest rates being pushed by the Federal Reserve Bank for this Fall has cast a pall over most income stocks ... particularly utilities. However, seeing that interest rate increases are likely to be small and stretched out, this might suggest that the weakness in these income stocks just might be overdone.

Growth Stocks: Growth stocks have been hot of late as money has been leaving income stocks ... that is until the latest slips by Apple and Microsoft. The stratospheric price-earnings ratios of many of these tech and bio-science companies offer considerable risk for the casual investor.

Government Bonds: Theoretically U.S. Government bonds are a safe investment ... however to earn 2.3% per year on you money for ten years is a pretty meager return ... particularly if one may not get a full return of one's capital if one has the sell this investment before its maturity date.

Municipal Bonds: Federal and often state and local tax free, these securities might be interesting under a Democrat presidential win ... since taxes are likely to go up. However, this may be more than offset by the dangers associated with increasing municipal bankruptcies.

Corporate Bonds: High-yield corporate bonds have been suffering the same fate as high-yield equities ... however, the time may be right for certain convertible debt securities ... but do your research!

Fine Art and Antiques: I believe that the only people who make money in these markets are well-connected dealers.

Gold (and Other Commodities): Gold and most other commodities are now at or near their five-year lows. The excuse given is the strength of the dollar. However I believe other forces are also at work ... including possible hedge fund manipulations of these markets ... and, as they say, you can't eat gold.

Developing Nations: A few years ago developing nations' markets were the place to be. Now, Russia and Brazil ... and more recently China have greatly disappointed.

Savings Accounts: Paying usually well less than 1%, savings accounts should only be used for ready liquidity ... certainly not for income.

Real Estate: The median price of homes in the United States just hit an all-time high  ... primarily due to lack of inventory ... and such prices, insiders say, are not sustainable ... particularly if mortgage rates climb back to more normal levels.

Your Mattress: Gets kinda lumpy.

So, in conclusion, there are not a lot of viable choices ... and I am as befuddled as the next investor ...

Bitcoins

People with excess cash are in a bit of a quandary about where to park it ... forget about current money-market funds or CDs.

Expecting higher interest rates this coming year due to the Federal Reserve Bank's backing off of its quantitative easing, bonds are really not a very good investment at the moment … higher interest rates mean lower bond prices … often more than wiping out any interest income. 

And although the stock market has done very well over 2013, it is unlikely that it will repeat this feat to the same degree in 2014.
  

The next option is real estate.  However, higher interest rates mean higher mortgage rates … and the Fed should also be reducing its mortgage repurchasing program … both meaning that housing is unlikely to keep on the recovery pace that it has enjoyed recently.  (It still might be the best place to put some excess funds however.)

Another popular speculative investment, commodities, also tend to suffer when interest rates go up because the carrying costs of commodity purchases steal much commodity price-increase benefit.

And sovereign currencies are a very dangerous place to invest because the machinations of the world’s central banks are difficult to predict and fraught with shady dealings. 

Even the fine art market, although showing some spectacular recent sales, overall is not doing very well … see: New York Times Article.

What to do?  There are always bitcoins (see: LA Times Article … just kidding.)

And, the last time I looked, you can’t stuff cash into a Tempurpedic mattress …

Cash for Clunkers

One obvious effect of the government getting involved in free enterprise is run-away price inflation. Over the last twenty years the three areas of our economy that have experienced the greatest price increases have been higher education, real estate, and medicine -- all three areas where the government has insinuated itself to "help" things out.

In higher education, easy-to-get student loans, government scholarships, and faculty research grants have fattened to coffers of colleges and universities while at the same time caused tuitions and fees to skyrocket. The (previous) rapid increase in home prices can be directly attributed to the $500,000 family exclusion of capital gains tax on primary residence sales and the government's coercion of banks to finance mortgages to sub-prime borrowers. And, in health care, the tax-deductibility of company-paid health insurance, Medicaid, Medicare, and government-guaranteed health care to all Americans has also caused this sector of our economy to experience escalating costs far beyond the Consumer Price Index.

Now the government is pumping the new car sales market with its $4,500 "cash-for-clunkers" program. After quickly running through the first one billion of our grandchildren's money to pay for this feel-good program, Congress is ready to ante up another $2,0o0,000,000. And I predict that this will not be the end of such give-aways. Surely, our Washington solons will try to buy their way back into to office next year by continuing to pour money into this program. With what results? I safely predict that, before too long, automobile companies and dealers will increase the prices of their cars to sop up every last cent of this government largess ... creating yet another sector of our economy with out-of-control price inflation. Enough!! Let's all go back and read "Atlas Shrugged."