Posts Tagged ‘investment’
President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.
Under the plan, a taxpayer’s tax-preferred retirement account, like an IRA, could not finance more than $205,000 per year of retirement – or right around $3 million this year.
Read more by Karl Denninger at market-ticker.org
I’ve laid this out before but it’s time to do it again, because it’s coming folks.
The recent ditty on how “nobody needs more than $3m for retirement”, defined as “whatever you need to get a $200,000 annuity”, is just one facet of how this will play out.
Since I started writing The Ticker I have been repeatedly asked where one should put their assets to evade confiscation, whether through outright acts of theft, devaluation or any other means.
Read more by Karl Denninger at market-ticker.org
–SNIP– You probably thought the Dodd-Frank Act was all about reining in greedy big banks and Wall Street predators.
Well then, what is the Consumer Financial Protection Bureau it established doing planning to “help” people manage the $19.4 trillion they’ve managed to save for their retirement?
CFPB director and longtime Democratic politician Richard Cordray earlier this month told Bloomberg News that managing retirement savings is “one of the things we’ve been exploring … in terms of whether and what authority we have.”
Every such new creature legislated into existence by our elected officials wastes little time before seeking to expand its power — always with the best intentions, of course.
There always ends up being an excuse to do things the law doesn’t give you any authority for, and the CFPB’s Office for Older Americans being headed by another big government Democrat, Hubert H. Humphrey III, is further cause for worry.
What business, exactly, does a U.S. government that has rung up over $16.6 trillion in red ink have giving consumers advice on how to save money?
Read more at IBD
Savers are most important because without savings, there are no entrepreneurs. This can’t be stressed enough. Amid downturns the last thing a wise central banker would ever do is distort the cost of credit to levels lower than what the market would otherwise bear. Bernanke’s actions tell savers that they won’t be compensated for restoring the capital base, and as a result they’ll continue to hide.
Interest rates must be allowed to reach their natural level free of Fed distortion. If that means they rise, that’s a positive signal; one telling savers that they’ll be properly compensated for taking on more risk. Just as rent controls on apartments lead to scarcity of same, so do price controls on interest rates lead to credit scarcity no matter headline rates of interest.
If you love borrowers and borrowing, you must similarly love savers and saving. The Fed acts as though savers don’t matter, and the result is tight credit for everyone not a massive business or the federal government.
Read more by John Tamny at RealClearMarkets.com
His career in public service has ended up being remarkably lucrative.
Try this thought experiment. Imagine that someone grows up in poverty, works his way through law school by holding the night shift as a Capitol Hill policeman, and spends all but two years of his career as a public servant. Now imagine that this person’s current salary — and he’s at the top of his game — is $193,400. You probably wouldn’t expect him to have millions in stocks, bonds, and real estate.
But, surprise, he does, if he’s our Senate majority leader, whose net worth is between 3 and 10 million dollars, according to OpenSecrets.org. When Harry Reid entered the Nevada legislature in 1982, his net worth was listed as between $1 million and $1.5 million “or more,” according to the Las Vegas Review-Journal. So, since inquiring minds inquire, let’s try to figure out how Reid’s career in public service ended up being so lucrative. He hasn’t released his tax returns, which makes this an imperfect science, but looking at a few of his investments helps to show how he amassed his wealth.
In 2004, the senator made $700,000 off a land deal that was, to say the least, unorthodox.
Read more by Betsy Woodruff at National Review
Previously we showed that when it comes to Wall Street’s returns, the 8% market return benchmark that every first year analyst finds in Ibbotson’s is for naive amateurs. With corporate lobbying returning anywhere between 5,900% and 77,500%, the real money is to be made in the buying and selling of politicians. Yet in our day and age, when information propagates rapidly and when political muppets can be exposed for the Wall Street purchased frauds they are, lobbying is getting increasingly more complicated. Which leaves one other high returning “investment”, which unlike lobbying is completely riskless when one is a Wall Street firm: crime. But not just any crime, the type of crime where a firm settles “without admitting or denying guilt” and in the process is slapped with a fine that barely covers the government’s legal fees. Case in point: U.S. v. Morgan Stanley, U.S. District Court, Southern District of New York Case #11-6875, where MS was punished with the epic disgorgement penalty of $4.8 million. Of course, the fact that Morgan Stanley, who did not admit wrongdoing, generated profits of $21.6 million, is merely a triviality. But a useful one: it allows to calculate that on Wall Street crime does pay, and the IRR is in give or take 350%.
Read more at ZeroHedge
Everybody has an opinion about trade with China, and here is mine: let’s trade ‘em Ben Bernanke for Fu Ying. Throw in a minor league pitcher if we have to – President Obama comes immediately to mind.
Fu Ying is China’s Vice Foreign Minister, who Friday announced that China would not use its foreign exchange reserves (i.e. dollars) to rescue other countries (i.e. Europe). She explained that “foreign reserves are akin to savings” and not to be squandered by governments. Whoa.
While the U.S. and European central bankers have all promised to infuse defunct European governments with as much cash as it takes for them to become even more defunct, Ms. Fu has decided to “follow market economy principles” instead, which she listed as “safety, liquidity, and proper profitability.” Yes, the “P” word!
Her explanation in China Daily reads like the Daily Paul. She does not believe that Europe can be saved by bankers; she does not believe economic decisions should be driven by political considerations; she does not believe that foreign investments should be made to gain power and leverage over another nation’s affairs. She does not see debt as a pathway to prosperity. Have mercy.
Ms. Fu makes the gibberish spewed by Fed Chairman Bernanke and Treasury Secretary Geithner sound like…gibberish. Our money men lobby the Chinese to strengthen their Yuan to assist us in weakening our dollar, and then we call them currency manipulators when they refuse to play along. We lecture China about lack of transparency while Bernanke is pumping unknown trillions into the western banking cartel in secret.
Read more by Tim Nerenz at Moment of Clarity
In his latest letter, Kings of the Wild Frontier, crushes the optimism of all those, roughly 4 altogether in the entire world whose combined IQ barely breaks into triple digit territory, who believe that the debt ceiling “compromise” does anything at all for US spending patterns, weather it is for total marketable debt, or the $66 trillion in NPV of future liabilities. Gross, however, does show us the 5 ways (well, 4 plus default) that the “debt man walking”, aka Uncle Sam and his tens of trillions of future liabilities, plans to rob from you: dear taxpayer, in order to minimize the present value of these unmanageable future liabilities. To wit:
1. Balance the budget and/or grow out of it
2. Unexpected inflation
3. Currency depreciation
4. Financial repression via low/negative real interest rates
All of these guarantee that investor pocketbooks will be dramatically affected… Adversely. Let’s dig in…
from zerohedge.com on 8/02/2011
From the article “Kings of the Wild Frontier” from PIMCO at http://www.pimco.com/EN/Insights/Pages/Kings-of-the-Wild-Frontier.aspx
* Nothing in the Congressional compromise reached over the weekend makes a significant dent in our $1.5 trillion deficit.
* In addition to an existing nearly $10 trillion of outstanding Treasury debt, the U.S. has a near unfathomable $66 trillion of future liabilities at “net present cost.”
* Aside from outright default, there are numerous ways a government can reduce its future liabilities. They include balancing the budget, unexpected inflation, currency depreciation and financial repression.
On March 6th 2009, the SPX made its intraday low of 666. Gold on that day was $965. Thus, the S&P 500 bought .69 ounces of gold. Today, At the high of gold intraday today and the low of the S&P’s, the S&P 500 bought .72 ounces. Therefore, in gold terms and/or in REAL terms as opposed to NOMINAL, today’s action in the S&P 500 has us basically back to the March ’09 low.
By Peter Boockvar, ritholtz.com, 8/04/2011
Americans’ savings and retirement funds are being destroyed, and they are being systematically impoverished by depreciating or debased nominal dollars.
by Bob Livingston, personalliberty.com, 7/11/2011
Nominal dollars are the everyday paper dollars that we think of and call money. These dollars change every day (depreciate). The value of these dollars goes down constantly as the money printers continue to debase our currency.
The point is that Americans don’t know the difference. They don’t know that their savings and their retirement are being destroyed, and they are being systematically impoverished by depreciating or debased nominal dollars. If this is not all important, I don’t know what is.
Nominal dollars, or depreciating currency, are destroying America. America is a giant Ponzi scheme, no different from Enron. As with Enron, we are locked into an economic death spiral. The U.S. national debt will never be paid off.