Confessions Of An Ex-Stockbroker

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The stock market is on a cliff. When it falls, it will not only erase the riches on Wall Street but your hard-earned savings. It is called deflation, and it will impact all of us.

I have a pretty good idea about stock market crashes because I have experienced four of them. The first was in 1987. The second was in 1989. The third was in 2001, and the last was in 2008. The monster crash for stocks is still to come.

The fundamentals both for the banking system and the economy and our dysfunctional Federal government will not allow current record stock prices to persist.

As major stock indexes reach all-time highs, there is the disjoint between the value of equity prices and the economic realities that will eventually have to support prices.

We live in a time Oscar Wilde described more than a century ago: “Nowadays people know the price of everything and the value of nothing.”

Everyone seems to know the price of the Dow Jones industrial average. Friends and family ask me how much higher the stock market will go. Few ask if it will go lower, while many offer their own stock tip.

It’s no different from 1929 when legendary investment guru Bernard Baruch said: “When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich, it is time to remind yourself that there is no more dangerous illusion than the belief that one can get something for nothing.”

When I suggest that the market is heading lower, people wave me off.

What most people seem to understand is that Big Board stocks keep setting records. Both the Dow and the broader-based Standard & Poor’s 500 Index are at all-time highs.

The S&P has gained 10 percent in three months. The Dow is up more than 11 percent. Yet the U.S. unemployment rate is close to 8 percent. America lost 8.9 million jobs in four years and has gained back only half of them.

The economic recovery exists only on paper because of massive cash injections by the Federal Reserve.

Only trillions of dollars’ worth of freshly printed money has prevented the United States from falling into an economic abyss.

But printing new money does not equate to creating new wealth. All the Fed has done is provided a cancer patient with copious amounts of morphine. It is a feel-no-pain regiment for the markets. But the cancer is still there.

Two things dictate investment behavior: greed and fear. For the past year, greed has consumed any fears.

I Wished I Had Sold Used Cars

In the spring of 1996, I was in an office on the eighth floor of the Washington Mutual Building in Spokane, Wash.

I was working for one of the largest brokerage companies in the country.

Each day on my desk there were Securities and Exchange Commission compliance books and stacks of practice exams to help me pass a registered investment adviser exam. Once I passed it, I could dispense investment advice to all.

To get the job, I passed the aptitude test by saying that 2 plus 2 equaled 4. I believe that the brokers who were fast-tracked said 2 plus 2 equaled 16.

Over the next six months, I studied securities laws that dated back to the 1930s. I also spent time in the lunchroom learning from seasoned brokers about ways to get around these laws.

Below sums up my experience as a stockbroker in training:

Question: How many stock brokers does it take to screw in a light bulb?

Correct answer: Two. One to take out the bulb and drop it, another to try to sell it before it crashes (fully knowing that it’s already burned out).

The advanced test for certified investment advisers was this:

Question: How many investment brokers does it take to screw in a light bulb?

Correct answer: Good God! It burned out! Sell every share of GE!

I remember the 6 a.m. Monday meetings in the conference room.

It was there that we received a call from the company’s grand poobah, Ralph Acampora. His name was synonymous with the dot-com bubble.

Acampora’s biography states: “He was an industry leader in technical analysis and a regular on popular weekly TV shows such as Wall Street Week with Louis Rukeyser. His opinions about the market were reported by major national newspapers.”

I had been writing about investments for well more than a decade, so I knew about bullish Acampora and his never-ending expectations for higher stock prices.

The world said Acampora was a genius, which made it all the harder for me to understand his Monday morning call to arms. I suspected Acampora was not really trying to sell value to Prudential customers. But every Monday the sales team was given its orders.

One time, I interrupted the post conference meeting by suggesting resource stock. A group of 15 brokers looked at me like I was a heretic.

After several Mondays of listening to Acampora clairvoyance in picking stock market winners, I went to my manager.

I asked him why Acampora was telling us to pitch such stocks. The manager explained to me that Prudential had an inventory of stocks and that they had to be sold every week.

It hit me. My job was never to give quality investment advice. I was being trained to generate revenue for Prudential. I was a used car salesman. Even worse, I wasn’t even providing anything as useful as a used car.

I passed my exams for Prudential and the SEC. Once I did that, I was registered to attend a two-week sales boot camp in California. If I survived that, then I could push any stock, bond or mutual fund I wanted.

I decided to quit. That was the only time in my 55 years that quitting felt right.

In 2013, nothing has changed. Wall Street is richer than ever, and big analysts have more lives than wrinkled movie stars. They can make the same mistakes over and get richer for it.

Bestselling author Nassim Taleb addresses this absurdity: “People who were driving a school bus blindfolded (and crashed it) should never be given a new school bus.”

Action to take: Sell all Big Board stocks immediately. Move money into physical gold, silver, Treasury bills (despite their low returns) and hold physical cash in a safe dry place. Speculators believe the only game in town is blue chip stocks. Take it from an old ex-stockbroker.

Yours in good times and bad,

–John Myers
Editor, Myers Energy & Gold Report

John Myers

is editor of Myers’ Energy and Gold Report. The son of C.V. Myers, the original publisher of Oilweek Magazine, John has worked with two of the world’s largest investment publishers, Phillips and Agora. He was the original editor for Outstanding Investments and has more than 20 years experience as an investment writer. John is a graduate of the University of Calgary. He has worked for Prudential Securities in Spokane, Wash., as a registered investment advisor. His office location in Calgary, Alberta, is just minutes away from the headquarters of some of the biggest players in today’s energy markets. This gives him personal access to everyone from oil CEOs to roughnecks, where he learns secrets from oil insiders he passes on to his subscribers. Plus, during his years in Spokane he cultivated a network of relationships with mining insiders in Idaho, Oregon and Washington.

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  • Mike in MI

    I have not read John Myers’ accounts. I Have My Own Account to relate regarding the stock markets.

    Back in the ’60’s I was working for a Hotelier in a mid-west town. I did odd jobs,

    cleaned, delivered food trays, fended off homos, audited the desk and ran truckers in and out to their terminals to earn college.money. I was young and enjoyed talking with the adults because they were often sources of wisdom and laughs that were unobtainable otherwise.

    One day I met a driver who was obviously not the run-of-the-mill person who populated truck cabs. He was refined and well mannered, with a finesse of speech and demeanor that caught me when I picked him up.

    As goodness provided, I also delivered him, alone, back to his terminal. Quite abnormally and point-blank I asked what set him apart.

    He related a story of fine rearing and financial investigations that implicated companies of some powerful political families in engineering the stock crash of 1929. He was on the run from them and told me about this because he expected to be dead soon. He warned me to not get involved in the stock market because it is rigged and a facade for evil in the name of “the cause of Capitalism”.

    I never saw him again, which was not normal because routes brought people back to the hotel.
    Play the market and you may as well play at a casino. When they want it they’ll take it from you. Anybody remember 2008 … August?
    How many of you complained to your Congressman? Did it change anything? They know you can’t gt a tally of the calls made or complaints lodged. So, what do they care?
    The Tea Party, if it’s legit, needs to set up a call network or monitoring outfit. Otherwise, they’re just another screw-job.

    • Okie Girl

      The Tea Party HAS a call network, it’s called “FreedomWorks.” And they’re more powerful than you might think.

      • Right Brain Thinker

        And they are owned by the Koch brothers and the plutocracy and no longer speak for the original TP. They are being used.

        • Capitalist at Birth

          Dupe or Comrade?

    • GALT

      Trust me…….no one engineered anything……..collective greed or fear, and stupidity will give you chaos every time…..you all do this HERE every
      day……and today is one of the more “stupid” ones.

      • John woodbury

        Excuse me highness Galt but why is it all you looney leftist are so condescending and Narcissistic?

        • GALT

          You should not use words you do not understand……

          “The Master said….If names are not correct, language is not in accordance with the truth of things. If language is not in accordance with the truth of things, affairs cannot be carried on to success……..Therefor a superior man considers it necessary that the names he uses may be spoken appropriately. What the superior man requires, is just that in his words, there may be nothing incorrect.”

          “The Master said,…..Without knowing the force of words, it is impossible to know men.”

          Confucious 551 -479 B.C.

  • FreedomFighter

    “Sell all Big Board stocks immediately. Move money into physical gold, silver”
    Sage advice. Not much time left either.
    Laus Deo
    Semper FI

    • GALT

      Nothing sage about it………but lets see if this helps…..if inflation and hyperinflation make currency (dollars ) worth less, and commodities
      more expensive……..then deflation does what?

      What you need to do is pay off debts as quickly as possible, and any value
      a commodity is perceived to have will fall in terms of “currency”…….?

      Economics is BS anyway, but its sad when you can’t even keep the BS
      straight………..but if this scenario were actually the correct doom and gloom one……..debt instruments would be the proper investments, bonds, treasuries, etc…………..as well as long term options shorting the market…..

      • FreedomFighter

        As China, Russia and India buy as much gold and silver as they can, Galt says NO NO NO dont buy it, as the FED use billions of dollars to pump up the stock market, for the DUMP (theft of money), called “pump and dump”, the Euro crumbles, Cypris gets robbed by bankers, and DHS sends notice to banks they can take deposited gold and silver from the lock boxs and can take any amount of your checking and savings (once deposited the bank owns it)…
        GALT you really just cant be that stupid.
        Laus Deo
        Semper FI

        • GALT

          So you are THAT stupid? You don’t know what deflation is?

          Think it was an accident you have been designated a “willfully ignorant, functional illiterate”?

          Haven’t learned yet that when you see my name seek to comprehend what you are being told….failing that, learn to be quiet…….

          And please. do not hallucinate…….if you have problem, you need to complain to the “idiot” that wrote the article……if you have “evidence”…..it refutes the “article”…….not my explanation
          of what deflation IS!!!!!

          In fact, spotting the “contradiction” should have been the FIRST
          and ONLY post here……..

          • John woodbury

            Galt, yes you are right about deflation, but so is MR. Myers. The reason there is not runaway inflation in this country is the “new” money is not hitting the streets, it is being given to the very banks who almost derailed the car last time to play with on the stock market. This is a situation that can not continue, our to big to fail banks will fail and soon. The stock market will crash and soon. You are a looney lefty kool-aid drinker all the time.

          • GALT

            Dear w.i.f.i. mushroom, (woodbury)

            1.) It is not possible for us both to be right about the effects of
            deflation…….so there are no buts…….

            2.) Your “explanation” of why there is not “hyperinflation” is not
            relevant as to the preceding point…….nor is it particularly accurate.

            3.) The “situation”…..( which was Inconceivable in foresight )
            has been in place since 2007,….( and which can not continue )
            will continue…….meanwhile the “prediction” that it can not continue as well as the “reason” why it can not……has been
            all over the place………so the only thing that is “consistent”
            is the fact that……it will happen “any day now”…….and for the “mushrooms” of PLD……buying gold, silver, etc is a solution,
            which for this particular “scenario” is completely WRONG.

            4.) While Myer’s offers “anecdotal evidence” via his “confession” and his ability to discern the actual REALITY of
            what a “stock broker” did ( and does ) regardless of who he is employed by……..is not “evidence” that he has any “understanding” of markets or investing, then or now,
            but his advice regarding “gold” might have something to
            do with his “perceived self interest” as indicated by his
            “Gold and Energy Report”………( which you just got for free and is worth every penny you didn’t pay for it ).

            5.) What the “future” of the stock market is…..will NOT be
            determined by the actions of “individual investors” of the
            type that would actually listen to anyone like Myer’s…….
            because the REALITY here is……..the money to actually
            cause this type of move…..is not available to this “sector”
            of the economy……it is already concentrated at the top, and
            invested in “institutionalized” funds……

            So while I appreciate your interest in responding and offering your opinion……. ( not really ) in the future, if you wish to discuss things with ME, you might find it to be a more productive exercise if you took the time to “comprehend”
            what was being said……..rather than attempting to defend
            an “article” which contradicts itself at the outset, and a “reply”
            which does exactly the same thing…….while this type of
            “reaction” is quite common here…….it is not particularly
            INTELLIGENT…….of course this does presume that your
            goal was to actually attempt to “offer” a “logically reasoned”
            ” a.k.a. intelligent ” opinion?

          • John woodbury

            Ah, yes grasshopper, “My momma says, ‘Stupid is as stupid does.'”

          • GALT

            Clearly she understood, your “willfully ignorant, functional illiteracy” was going to cause you problems later in life.

            You should have paid more attention to her.

            All is not lost. Both your comprehension and ignorance can be remedied, given time and eventually you may begin to learn and think for yourself using logical reasoning in conjunction with fact based knowledge.

            Continued and insistent “willful ignorance” on the other hand,
            can be potentially dangerous to both yourself and others, so
            one would hope that you will choose not to continue to be so irresponsible in the future?

  • Right Brain Thinker

    A great line——–“People who
    were driving a school bus blindfolded (and crashed it) should never be
    given a new school bus.”

    John speaks much truth here—-you can be sure that the “greedy rich” have already taken the steps necessary to see that they will come out on top when the bubble bursts.

  • SeekingUnderstanding

    “Move money into physical gold, silver, Treasury bills (despite their low returns) and hold physical cash in a safe dry place.” Do you mean not to buy Gold and Silver ETF’s, but hold it in your hand metal and and hold it in your hand dollar bills? I would also exchange dollars for Chilean Pesos or Norwegian Kroners and if you can afford it, buy a productive farm land with livestock and a fast running creek.

    • ItsMe

      If an ETF fails you will have nothing for your investment. They won’t send you the gold or silver that you are allegedly invested in.

    • John woodbury

      Or RMB (Chinese currency, the new reserve currency that will knock the Dollar on it ass.)

  • Flashy

    Mr. Myers….you cite four ‘crashes”. When in all actuality there has been one…the one created by the MBS scandal and meltdown. the others you cite were over-reactive corrections which stabilized and the market was back within a few months.

    i guess you were one of those guys who took nothing from your morning meetings and gave nothing of substance for others to pick up on. Otherwise, you’d at least have learned and gotten a different stylist than the guy on the crate sitting on the corner.

    Basics Mr. Myers..basics. What we have inherited from the financial mismanagement and manipulations of the various “insiders” of administrations..beginning with the darling of the Conservatives…the second worst of all time presidents..Reagan…is a two tiered structure of the economy. There are two economies at work. One..the industrialists, is booming. THAT is what the market reflects. the other, the one which has been spit on and subjected to what ‘trickles down’ from above…a burden bestowed by Reagan, is the Middle Class … the real job creators of this Nation.

    You cite the printing of money as the Big Sin. Really? ya looked over the ponds and see what’s happening to Europe and Asia of late? Practicing austerity and flirting with a triple recession, stagnation, entrenched underemployment? give that a good long hard look Mr. Myers.

    Look at the number of companies locating to the US from BOTH Asia and Europe. Yes..coming here because they see the potential for our economy to pick up ..an economy which is even now leading the way even though hamstrung by the extremists preaching bad economics for political purposes…sacrificing our nation for the sake of playing to the fears and ignorance of the wacked out crowd unable to understand Econ 101.

    Look at the social stability of China as the cracks show even through the censorship. Look at the growing alternative energy industries which are helping alleviate the effects of a costly, outmoded fossil fuel source. And most important Mr. Myers…you bet against America…bad bet. You and your ilk are betting against America, yet you seem to think this makes you a “patriot’.

    What will drive this economy from here on out? very simply…America’s small business. to you, a small business may be those having multi-millions in sales and a few hundred employees. Not so. Small business, those companies and businesses with 5, 10, 15 employees…those single entrepreneurs…those are the small business people who are chomping at the bit ready to take on the world, spit in the eye of the storm, pull their pants up and throw themselves fully into the battle on the offense.

    mr. Myers, that is why you, your fellows, along with the extremists and wacked out lunatics comprising the TP and the American Taliban..are being marginalized and pushed into the far corners of the room away from the policy making and debate. Offering no solutions, offering nothing but fear, anger and ignorance…and most of all..you are betting against America…a bet which is a sure loser.

    • hungry4food

      Flashy one thing you are not considering …. that we in the USA are 100 %
      DEPENDENT on Foreign Parts supplies and those Parts you see in your
      daily life you know the Made in China or any where but the USA means we
      are nothing but a Paper dollar trade economy to these foreign producers
      who can reject the Paper dollar and Cause GREAT Harm to the USA by
      cutting off these parts supplies , let that sink in a little bit and
      ponder what that will means to your food production , your Electrical
      needs etc etc ????? We DO NOT Make any Parts anymore we ONLY ASSEMBLE
      Imported Parts … what do you think will happen if these Foreign
      Suppliers decide the way to SCREW the USA into the ground is to cut off
      these Parts for a Little while , What do you think will happen to the
      cost of Existing supply in the USA .. Think about that for a Minute
      please >>>>>> THINK >>>>>>THINK
      >>>>>

      • Flashy

        Really? Here’s the facts. Goods made in the US are more tech and longer lasting than mere trinkets. if you look, you can buy darn near anything that is made in the US. Consumers AND companies are looking at US made goods as they tend to be a little bit more expensive, but longer lasting, more durable, and more efficient. Overall, the better deal. (I cite as two companies which are good investments IMO…Starbucks and Caterpillar)

        Retailers such as Wal mart don’t want the consumer to do anything but price shop..the lower the cost, the better. And buying a second and a third as the utility is used up. Where the by far better deal is the US made product.

        Now, you want to price shop and say ‘nothing is made in the US anymore”..such is your mistake. And you’ll pay for it.

        Now..here is a very interesting result of a study performed concerning American made product, labor, and quality. Companies who place quality of product high on their business model are locating to labor and trade union states. They adhere to the European model. I cite as a simple example appliance manufacturers. Krups and Bosche are by far bearing the reputation as making a good product in appliances. Whirlpool, Maytag and Viking are US appliance manufacturers. kow where their top of the line models are built? Yep…the US. In union states. In new factories. Know where the cheap models are built? yep…Asia and the South US…low labor, not as highly skilled, non union …ie cheap..

        Think about that …

        • hungry4food

          Flashy , LOL LOL what you said here is absolutely a LIE !!! Everything you said is a LIE !!!!

          LOL LOL ok Maytag moved to Mexico Years ago ,

          Maytag Moves to Mexico

          http://inthesetimes.com/article/1790/

          Even Whirlpool is GONE , you give people miss Information like everything is Blooming because of OBAMA and its a Lie !!!!! http://crooksandliars.com/susie-madrak/american-brand-name-heads-mexico-afte

          Caterpillar imports their parts line and ONLY assembles , they Import the Raw materials we do not Forge a Stick of steel anymore we Import everything in the Raw material categories !! Starbucks Imports their stuff they make their product with common Man are you living in the Here and NOW ????

          • WTS/JAY

            Flashy, the “Consummate-liar”!

          • Flashy

            Your Maytag article is dated 2004. Whirlpool announced in 2011 it’s building a new plant in Tennesee and one in texas. Caterpillar has over 80% of its components in its products (INCLUDING the steel) from US sources, Ford buys most of its materials in the US, Starbucks…take a gander at the products in its stores..ask about their machines which make the coffee…they just placed a $450 mil order over 5 years with US manufacturers for its product lines.

            Source: Fortune Mag, Forbes, Barron’s and the WSJ.

            Facts..great things when you want to smack talk and show your ignorance… Suck an egg …

          • hungry4food

            They assemble Parts Imported from foreign suppliers all of them do it , Bethlehem steel was the last steel mill and it shut down in 2004 .

            Now Obama is going to do what Bush did again and crash the housing market with Unsustainable lending ,

            Obama wants banks to make home loans to people with poor credit ,
            http://fellowshipofminds.wordpress.com/2013/04/03/obama-wants-banks-to-make-home-loans-to-people-with-poor-credit/

          • Flashy

            Wow..you truly are deciding to be ignorant and spread disdain for the United States.

            If there are no more steel mills in the US, i’d better go to the local steel mill here and tell ‘em they’re $1 billion dollar company with its US mills doesn’t exist. As well…from the NYTs April 2012 which ran a story about steel manufacturing coming back hard and fast due a lot to the policies of this administration favoring heavy manufacturing and the attacks against importing cheap, inferior, foreign steel. .

            “The Ohio steel industry, led by a drilling boom in the gas and oil industry and a resuscitated demand for cars and light trucks, is growing again. Steel makers across the state are racing to keep pace with plans to add a total of two million square feet of production space at a cost of $1.5 billion.”

          • hungry4food

            Flashy you are twisting the truth to fit your Leaders agenda of trying to seem relevant in the Position of Shape Shifter -in-Chief while waiting for the Debt to capitulate into a Collapse of the capital system you and he HATE so MUCH because it is the Ultimate Challenging system of economics that bring out the BEST in Innovation , the BEST in Sustainability because of advancing Innovation beyond the Dictations of a Ideology that if settles into the Control of Government will OPPRESS to Control the Citizenry !!!!

            The Biggest Oppressor of Humanity EVER has BEEN GOVERNMENT and is always a result of the Idealism’s that settle into the Bureaucracy through the Academia , and this is what we have yet again going on in our world today with the elite Thinking the world is OVER Populated and they need to Oppress its advancement !!!!!

            Now getting back to Imported goods versus Domestic produced , this is whats Out of balance and costing the People in the USA a decline of wages and Self reliance and Obama is not bettering this with trade policies that will balance this out , look at GDP , Less than a half of a % point last month HELLO are you paying attention ????

            Go to the 4th page in this report and read on through it and the next page and understand that the US Steel Industry is Screaming at Obama to balance the Trade Rules so they can be Competitive with Imports that are Being dumped into the USA with Currency manipulated Products both in raw and Finished form !!!! http://www.steel.org/~/media/Files/AISI/Reports/2012-13%20Profile.pdf

        • SavaDude

          Think about this:

          Illinois alone has 800 BILLION dollars in unfunded liability. What is that liability you say?
          Union pensions for public employees. Soon go the way of Detroit, which collapsed into near BK for the same reason.
          California’s biggest liability? Unfunded pension obligations.
          That list is growing every day, and will continue to do so as the unions continue to demand more money, more benefits as they strangle the life businesses and the public.
          Yep, keep printing money. That isn’t a sin! It will work!
          Ask FDR and his treasury secretary how will that worked…

          • GALT

            It worked perfectly……it created the middle class…..something that never existed before in this country and an anomally that
            Ronald Reagan ended in 1982………

          • John woodbury

            God, Galt, what a frigged looney leftist revisionist you are. Look up Haverhill, Mass once the shoe capital of America, and see how those Unions worked to better peoples’ lives. Also FDR’s policies did not build the middle class…the effect of WW2 did. We were the only freaking nation with industry left. We shipped our goods every where, and then shared the profits with everyone in the nation. So, get over it, FDR extended the Depression. WW2 ended it.

          • GALT

            No need for me to look it up…..since I grew up there.

            But you are rambling again…..

            Look up Haverhill, Mass once the shoe capital of America, and see how those Unions worked to better peoples’ lives.

            That statement seems to be giving “unions” some credit for
            the “improvement” of labor conditions and wages……which
            in turn is “contradicted” by the rest of your post…..so
            once again…..your “ignorance of history” is rendered
            mute by the “self contradiction”….and if you really
            didn’t mean that unions had a “positive” effect……then your
            entire post is “ignorant”…… to correct this see…..

            Of course actually “reading” the book is the only way to
            actually begin to correct your ignorance…..

        • Nomad

          Unfortunately many people live paycheck to paycheck. They want quality, but paying forward means credit card debt at 13-25%. So they opt for cheap now. The US wants this model because our economy expands on debt. Politicians can give a rats if we build anything in America. We are a 75% Consumer based economy. Manufacturing equates to stability, prosperity and an educated population which only the elite want for themselves. A dumbed down society is easier to control until pushed to the point we are today. That is when this model collapses.

        • hungry4food

          Flashy Obama is a Plutocrat in the Pocket of the Plutocrat Globalist elite who Import and Product DUMP overloading the USA markets with Foreign Goods killing off the Industry with Currency manipulated valued goods that are kept low to Cause the Giant Sucking sound Ross Perot said would happen if we did these trade policies that have been nothing but a Tool for the Obama supporters who are Environmentalist extremists who wanted to De-develop the developed world !!!!!

          Watch this Video and Learn !!! My Senator is still waiting for a Response from the Plutocrat Obama !!!!!

        • hungry4food

          Obama is allowing trade to Wipe out the USA Sovereignty and this is an Impeachable Offense !!!! http://economyincrisis.org/content/american-trade-policies-are-killing-the-america-economy

      • hungry4food

        Flashy you need to wake up and realize what it is you are supporting , learn the TRUTH PLEASE !!!!!

        Obama 1 Signature Away From Surrendering U.S. Sovereignty To The UN

    • speedle24

      Flashy, what the hell are you talking about? You are confusing the concept of “trickle down” and apparently are starting to believe your own BS. You are somewhat correct about “the job creators of this nation”, but you seem to forget that Reagan’s tax cuts (the trickle down) are what predisposes those with the will (middle class entrepreneurs) to start and expand businesses, and create jobs.

      And “looking over the pond”? Do you truly not understand that addiction printing and borrowing money is the reason that the Europeans are having to implement those nasty “austerity” programs. Good grief man, we are just talking about basic commons sense here. Do you get drunk, go out and crash your car, and then blame your injuries on the tree you hit?

      • Flashy

        Speed…first off..the most massive redistribution of wealth in the History of Man began with the passage of the Reagan Tax Cuts..aka trickle down…aka we all got pi**ed on. Reagan had quite literally no debt when he took office. When he left, we had a huge % of GDP indebted. A two earner family went to being an option for couples..to being a necessity. The whiz bang numbers cited by the Luddite admirers of reagan forget…household income when he came to office was earned by 1.14 per household..when he left, it was 1.6. By 1992, it was 1.7.

        EVEN with two income earners, middle class income stagnated..and continued to stagnate for 30 years. That is the result of Reagan…saddled us with huge debt, and began the redistribution of wealth which is criminal in historical terms. here’s another fact…during the 12 years of Reagan and Bush…the wealth concentration was so vast, so great …the redistribution of assets during that period was exceeded only once in a peacetime situation. The years after the Bolsheviks seized power in Russia.

        There is your Reagan Revolution…you got screwed and weren’t even given Vaseline to ease the pain.

        As far as Europe…are you arguing that had Europe been in a better place economically, that the Cyprian Crisis would have amounted to anything more than a blip on the screen? Same with Greece, same with Spain…all amongst the weakest and smaller economies of the Union.

        Europe did exactly opposite of what the US did in economic policy. Europe tried to follow Japan’s decision in the 90’s (now known in Japan as “the Lost Decade”). And the same results.

        look..Myers, livingston and the other PLD writers can spin it anyway they want…facts are facts. their dire warnings will occur if we contracted and went to an austerity budget right now. We should have one..but not now. The Sequestration is gonna hurt…like it or not. We’ll knock off 0.5-1% in GDP because of it.

        We are going to be forced to contract..because of the wacked out extremist lunatics. Obama is trying to counter by pushing lower lending standards on banks to kick in housing. Get money moving, try and increase wealth to the Middle Class and Small business and hope for the best.

        Whatever happens…Myers is dead wrong. Betting against the US is a sure loser.

        • speedle24

          Flashy, you are a revisionist of the first order. The debt that Reagan accumulated was primarily a result of increased defense spending, which was necessary because of the pitiful state our armed forces were left in by Carter. On balance, those expenditures were well worth it. It seems that the nuclear doomsday cloud that my generation lived under for four decades because of the Soviets was lifted by Reagan’s policies. These are the inarguable facts regarding Reagan’s defense spending.

          So you are blaming the increase in two earner families on Reagan. What crap. It is not even worth discussing your anecdotes because they are irrelevant. One only has to look at the economic conditions in the 70’s vs. the 80’s to draw conclusions of the best economic policies. Your definition of “criminal redistribution of wealth” is when entrepreneurs (the ones who create jobs) become wealthy through the fruits of their own labor, nerve, and resourcefulness. In short, the socialist line.

        • momo

          Flashman, if Obama is pushing lower lending standards on banks to try and jump start housing….didn’t this kind of stupidity get us in trouble in the first place? Lower lending standards, pushed by Barney Frank et al, led to the banks lending to people who couldn’t afford their houses when their ARM mortgaes ticked up in interest. It also led to all those nasty mortgage derivatives that went bust. I guess Warren Buffett was right when he said;”What we learn from history is, we don’t learn from history.”

          • Flashy

            Momo —> if Obama is pushing lower lending standards on banks to try and jump
            start housing….didn’t this kind of stupidity get us in trouble in the
            first place?

            Nope. What got the economy into a shambles and crashing was the deregulation of banks, with the decrease in regulators (referees) who were also politicized by the vetting by the administration. Much like the CIA was.

            Momo…if you look at the lending standards up through around 2003…they were tight, but not onerous. Default ratio’s were well in line with forecasts, the Stated loans were still being used for what they were created for (independent small business people), and UWing was fair and thorough. What sent the market over the cliff was the creation of the MBS and the SEC turning a blind eye.

            A good read into the mentality of Wall Street bond markets is Liars Poker by Michael Lewis. Add in lax oversight … you have the elements of the Crash.

            The government did not hold a gun to the heads of banks to give subprime loans in the 00’s. No bank was ever forced to hand out loans. none…as in zero. And no bank was forced to forecast forward instead of using historical risk rates when bundling MBSs for the securities marketplace.

            What Pres. Obama is proposing is going back to the risk ratio’s of pre 00’s. Instead of an average 700 FICO score, a 30% debt ratio, and 25% down (current numbers), ease off to a 640 or 660 score, a 45% debt ratio and allow 10% down payments.

            Not that risky, historically safe, and opens up the housing market to what it should be. Where people are able to own a home, builders can build, and the multiplier effect of 10-1 can take us into safe economic activity and growth..despite the efforts of the lunatics of the right wing fringe wanting to destroy this nation

          • momo

            It’s never surprising flashman that you continue to revise history. So if up to 2003 lending standards were tight, what happened? Oh, that’s right Barney Frank and his gang got them lowered by crying the banks were racist in their lending practices. The effect was banks started lending money to people who couldn’t afford to be in those houses, but the loans were usually ARMs.

            The GSEs, Fannie and Freddie, had been under pressure during the Clinton administration to to give more loans to lower income people. Even the mentally challenged W saw that this had to be reformed, but Barney Frank said:”These two entities, Fannie and Freddie, are not facing any kind of financial crisis.”

            I guess if Obama wants to repeat history, he can tell helicopter Ben to get the printing presses ready.

          • Flashy

            Ummm…ya think that in 2003 the BushII/Cheney regime and far right conservatives eased back on regs and oversight? Ya think? Don’t forget, in 2004 Bernard Madoff was selected to sit on the Board of Directors of the Securities Industry Association,and in 2006-07 the SEC reported neither a finding of fraud, nor a referral to the SEC Commissioners for
            legal action against Madoff.

            Momo…whether you want to believe or not, or go off and chase fairy tales…the reason the lending practices loosened so much was simple…there were mountains of money to be made. not a little, not money to be made..but mountains of it.

            Yes, Barney did get his feet dirty in urging for the prohibition on FNMA and Freddie from INVESTING in mortgage related securities past a certain percentage of assets. But that had no effect on the Guarantees..which by law had to be for Prime Loans. It was their business. What brought FNMA and Freddie to the brink was the total crash of the housing market and people walking from homes. Even with the MBS crash, they still could have weathered the storm but for the mass exodus from the obligations for mortgages by homeowners.

            But neither Barney Frank nor the government put a gun to the heads of the banks and said “loan money or else”. There were no regulators who would say ‘stop already. This looks shady”. There were no regulators period.

            C’mon..do you think someone in government told the banks they should have NINJA loans ? (No Income, No job, No Assets. just put down a number). Criminey.

            Momo…the only thing that caused the Housing Crash was minimal regulations, no regulators who would enforce even those minimal regulations, and greed.

    • SavaDude

      Flashy –
      I am one of those small business owners, slowly being regulated out of business by your heroes in Washington.
      I have been to Europe several times in the past 3 years and am leaving for Germany on May 3rd. Their economies are falling apart. I have seen it first hand. People are nervous. Even the liberals favorite shining example of the wonders of socialism – Denmark – has an economy that can no longer sustain their debt.
      We have argued many times, and I will give you credit for your intellect, but I think your real problem is that you are mired in a fantasy and are unable to clear the mud from your eyes and see what is really going on.
      All I can say is I hope your’e right, but you cling to ideology, rather than fact. When facts are presented to you, you ignore them for ideology. So something tells me you are still just smoking the dope of the current administration as we watch America burn.

      • Mike in MI

        Christian – Give up on it my friend.

        He’s a liberal and it may be terminal – for our society.
        He is the inheritor of a genetic mutation that afflicts a small percentage of people in ways that makes them influential beyond their numbers. Certain neurotransmitters, receptor systems or modulators in the brain don’t properly perform and a predictable set of brain patterns and social disrelationships result. Among other things, they tend to have heightened touchy-feely/emotional states, want things to be “fair” (not necessarily JUST), reproduce like rabbits (high exploratory tendencies) and leave fatherless kids all over the place (lack loyalty/family bonds).
        Consequently, their numbers are outstripping normal people. That leaves them and their madness in charge at the polls and raising ever higher levels of stress in every sector of life.
        In a democracy they will always ultimately supercede in numbers and influence because of their lack of decorum. Why else would God have had so many things in the Old Testament that were worthy of death for perpetrators of what God called evil. It doesn’t seem so bad to us. But then it is not in the nature of man to be wise apart from God’s counsel.

  • Oliver_K_Manuel

    Thanks, John, for this story.

    Yes, we are living on borrowed time now. Fear and the instinct of survival drove world leaders to become rulers, rather than servants of the public on 24 Oct 1945:

    http://orach24463.wordpress.com/2013/03/07/fear-and-loathing-of-humans-the-pathology-behind-the-climate-change-movement/.

    Now we don’t know if recent news from the US Department of Energy:

    http://news.yahoo.com/nuclear-board-warns-hanford-tank-003212420.html

    Illustrates a.) Incompetence in science and engineering, or
    b.) Skills in propaganda and manipulation of public opinion

    - Oliver K. Manuel
    Former NASA Principal
    Investigator for Apollo

    • Mike in MI

      O,Manuel – Good day, sir!
      The answer would be “b.)”. Probably by design out of the W.H. by dint of the Sequester Law Obama wrote up. I believe I heard that ding bat Jay Carney say on his press conference yesterday that the law was written in such a way that Congress would be forced to do one or the other of very bad things at about 3 min 50 sec into the PLD video from yesterday.
      So, Obama’s ONLY intent is to make the opposition look bad and make everybody in America hurt and be damaged to the maximum.

      So, I hope all you union people out there at Hanford Nuclear Site layed-off by this manager from Bedlam who is tearing your country apart are glad you supported your Messiah from Hell.
      Speaking of “sequester” go look up what that word means and wonder which meaning this word parcer from Hell, Oblatterer, has in mind for this LEGAL SEQUESTRATION and be afraid, very afraid or be very vigilant because one of these days he’s going to be sending somebody to see you.

      • linda in O.

        You couln’t have said it any better!!!
        I always have said since before the “anointed one”was elected in 08″ he was like the the old devil himself,turning everybody against oneanother and tearing this Great Land down!!!!!!! What in the world can we do?????????Pray!

        • http://cowboybyte.com/ Alondra

          Psychological Warfare and Subversion Strategy

  • Deerinwater

    Hmm? ~ Good for you John! ~ So when was the first time you was aware of actually being right and preforming a meaningful service ?

    I know very little about such things, ~the big board , blue chips is all Greek to me.

    But I do know , that if you swim with sharks ~ ALways swim with friends.

    There has got to be “just enough” survivors to encourage people to attempt it.

    Somebody will always “win”. while many will lose.

    My labor earned dollar might be smaller and worth less ~ but I feel good about the way I earned it. ~

    • Bob666

      Yo Deer,
      when it comes to stocks, for someone to win, another almost always has to lose.

      • Nomad

        Not really. When this is all paper inflation the bubble is king. When it pops nothing is inside. 08 prices tanked, that did not mean somebody was buying in to your losses. People were asking where all the money went? Into thin air.

        • Bob666

          The one thing that I learned many years ago, broker don’t make money unless they can get you to trade and that is not always in your best interest.

      • WTS/JAY

        The game is “rigged”!

  • hungry4food
  • hungry4food
  • Dave

    Lets see… Wall Street, the Banks… they all spend millions of dollars every year on K Street lobbyists, media buys and access to politicians to relax regulations and to put more money in the wealthy’s pocket’s NOW.

    They cause the meltdowns and because they are responosible.. they get…

    bailouts, bonuses, huge salaries paid with your investment money because if they are wrong is a (oops” for them and you lose your life)

    Wall Street is simply legalized gambling for the wealthy and since they get theirs, they could care or less about the rest of the country. that is why their salaries have skyrocketed while the middle class and poor’s have stagnated. Class warfare has been going on since Reagan and the wealthy are winning going away and picking apart this once great country.

  • KG

    You guys are idiots. Sell all of your stocks. Go ahead. If the stock market fails again, then our Government will have to step in and save Capitalism for the THIRD TIME IN ONE HUNDRED YEARS. Gee, Communism only failed once in Russia.

    • Robin Kincaid

      You have a point, KG. If I had actually STAYED IN THE MARKET during all of those “temporary” crashes, the rebound would have propelled me, each time, into millionaire status. This is not Ethiopia, if you have money in the Market that you do not need to live on during the coming “temporary” crash, leave it in and ride it out, period. Now that is good advice. And buying “silver”? That is known as “poor man’s gold” – forget about it.

      • WTS/JAY

        That is the worst advice, EVER!!! Considering the “theft/raping” of the American-tax-payers and the “ponzi-schemes” that have been going on in recent history, a more sensible-advice would be to get your money…? out of the stacked-market and convert it into something tangible…”if you can’t touch it, you don’t own it”!

        • Robin Kincaid

          Sorry you do not know the difference between a quality stock, say, Chevron (CVX), for example, and a “ponzi-scheme” ala Madoff, suggests you shouldn’t be in the stock market. Ditto many mutual funds “sold” to customers who cannot learn to manage their own money. If you have your money in quality companies with very good balance sheets, then you can ride out the severe Market pullbacks and buy more on the Dips. I have been doing this for decades; it really is not that difficult. Diversification is also key.

          • WTS/JAY

            Robin: If you have your money in quality companies with very good balance sheets, then you can ride out the severe Market pullbacks and buy more on the Dips.

            Times have changed, old horse…haven’t you noticed the “changing of the guard”? Time to stop living in the past, “hee-haw” times are over!

            Robin: I have been doing this for decades; it really is not that difficult.

            Oh no no, you’re forgetting…you keep living in the past…oh no no, you’re forgetting…you keep living in the past boy…

          • GALT

            Clearly, in terms of ROI that is a foolish and unnecessary risk and in the current market reality “buy and hold” is the least sophisticated understanding available, and trumps only
            constant and mindless day trading.

            It took a full 20 years for the market to recover its value after
            the 29 crash……..

            BTW this “mantra” of dumping big board stocks in anticipation of a pullback is not original to “Myers”……there are other voices, so this is a “rumor”……..and after, “buy low and sell high”, the common conventional wisdom is ” buy on rumor, sell on fact”, so precipitous action seems unwarranted…….

            To counter your own reasoning, you would have made considerably more money, being out of the market on

            10/11/07…….and then easing your way back in, after 3/5/ 2009

            But it’s your money……and Myers advice is contradictory at best…….since actual deflation would not favor rising values
            of any “commodity”, including gold…….but then he inherited
            his “gold bug” status and customer base from dear old dad….
            and “broken” watches are “right” twice a day……good luck.

    • Tommy

      Captalism doesn’t fail when left alone by the goverment and individual liberty and responsability drives everything. I think a man should be allowed to get as rich as he can they hard work, however if he fails then he alone bears the burden. Communism has failed every time it was tried, that’s the problem with our so called capitalism, the goverment is controlling it, definition of socialism is – state run economy , of course it’s gonna fail if messed with!

      • GALT

        Wake up……..every type of government in combination with every possible economic system has failed…..you may be familiar with
        this subject……it is commonly referred to as …….HISTORY!!!

        • Karolyn

          Bravo Galt!

        • Right Brain Thinker

          And don’t forget that the most successful government/economic system in history has been……..feudalism. Will we try it again?

    • http://cowboybyte.com/ Alondra

      Communism failed in Poland, Czechoslovakia, Hungary, Yugoslavia, China, East Germany …

      Socialism failed in Greece, Spain, Portugal, Ireland and failing across Europe.

      Putin gave insightful advice to the world: AVOIID the Soviet mistake:

      “Excessive INTERVENTION in economic activity and BLIND FAITH in the state’s OMNIPOTENCE is another possible mistake … In the 20th century, the Soviet Union made the state’s role absolute. IN THE LONG RUN, THIS MADE THE SOVIET ECONOMY TOTALLY UNCOMPETITIVE. THIS LESSON COST US DEARLY. I AM SURE NOBODY WANTS TO SEE IT REPEATED.” – Vladimir Putin

      “There is no reason to believe that we can achieve better results by shifting responsibility onto the state.” – Vladimir Putin

      “The unjustified swelling of the budgetary deficit and the accumulation of the national debt are just as destructive as adventurous stock-jobbing (market game).” – Vladimir Putin

      In 2012 elections the Communists have won in America with Obama, but they miserably failed in Russia, received only 17% of the votes.

      As you can see Russian People rejected COMMUN-ism aka “redistribution
      of the wealth” aka “fair share”

      Vladimir Putin was re-elected as President keeping the NWO order out of Russia while America continues to repeat the Soviet mistake.

      P.S. “There is a temptation to expand direct interference of state in economy. In the Soviet Union that became an absolute. We paid a very dear price for that,” – Putin said

      The Kenyan Kriminal does NOT care about the “price”, because American people pay the bill, meanwhile the THIEF-in-chief and his THUGS enriching.

      “If anyone is not willing to work, NEITHER SHOULD HE EAT. For we hear that SOME AMONG YOU WALK IN IDLENESS, NOT BUSY AT WORK, BUT BUSYBODIES” (2Thessalonians

      “A slack hand causes poverty, but the hand of the diligent makes rich.” (Pr. 10)

  • WeroInNM

    Bank “hacks” perpetrated at “nation-state” level!
    http://wethepeopleusa.ning.com/profiles/blogs/bank-hacks-perpetrated-at-nation-state-level
    “Food For Thought”
    Semper Fi!
    Jake

  • Stuart O, CONNOR

    Argue as you wish. Ignore all the evidence in the false belief that you cannot observe history repeating itself. If the nay saying is correct, buy Silver and Gold. If the optimist is correct, buy Silver and Gold. I am correct when I highly suggest…. Buy Silver and Gold.
    Goldbust.com
    MarkStuart

    • GALT

      Except that you can’t possibly BE correct…….

  • WTS/JAY

    Lol, that’s a good one, KG! Got any more 4th grade jokes?

  • GALT

    Last time I checked deflation didn’t erode or erase savings……but having any
    kind of debt is not good…….and any commodity will drop in terms of dollars,
    so since this article begins with a complete contradiction……its value would be?
    Strange that all the doom and gloom people can’t seem to make up
    their minds how this all will end…….. ( the term “minds” is used extremely loosely.)

    • John Myers

      Deflation — the destruction of wealth — does erase savings. The historic case was 1929 after which caused a bank panic and bank failures. It happened again during the Rolling Recession do the early 1980s and again in 1987 when a single day of trading evaporated hundreds of billions in dollars. The deflation of 2008 eliminated trillions of dollars in retirement accounts and real estate values across America and far beyond.

      • GALT

        You will need to expand on that answer………

        Falling real estate values are irrelevant in terms of savings, unless
        there is debt involved….. ( a mortgage )

        Savings in banks accounts are “insured”, so, a bank failure would
        only affect non insured amounts……

        Retirement accounts would be similar to the risk
        involved in any “uninsured investment”………

        But in terms of “currency”…..you know the fiat stuff…..deflation
        actually increases the value of any “savings” physically held
        or insured in a bank account…..

        Conversion of currency to gold, etc……is a wasted step…..

        In any case, the destruction of wealth, was simply the result of
        “free market capitalism” and I thought you were a fan?

        The “wealth was an illusion” to begin with………and that is the
        RISK one takes……..in fact, we are still “unwinding” this even now,
        but the situation is still “stable”…….for reasons already noted,
        and hedging “market positions” on big board stocks, is simple enough……..although I doubt there are many here who are
        vulnerable in this regard……..

        In any case, if you can recommend T.bills……fdic insured accounts
        are equally safe at current levels of what 250, 000 per account…?

        Other than that…….we simply have a semantical difference as
        to what constitutes savings……..as it specifically relates to
        “currency”……….everything else, is essentially an investment
        vehicle subject to the risks associated with it.

        Any and all debt in a deflationary cycle is not a good thing for the
        debtor…….in any case thank you for taking the time to respond, hopefully any differences that remain, …can be easily clarified?

  • jim b

    Um, I’m a little skeptical when someone says they know what the markets going to do, it’s mostly theoretically based on one’s own data interpretation and acceptance/non acceptance of variables that meet their own pre-conclusion. In other words, what a load of crape! His own history debunks the markets value, i.e. the 1970’s, 1980’s, 1990, 20xx all saw some light to severe market ‘crashes’ each resulting in an eventual boom, and it repeats, and repeats. I’ve made some serious bank since 1980, about 100 times more than I put into the market, and why, how could you you may ask? Those low times in the market are great buying opportunities for those of us who just keep staying the course, that’s why! Beware the economist, and beware the market naysayers they are heretics.

  • Karolyn

    Obama, Hagel & Donovan giving back salary portion. Why can’t congressmen???

    http://www.usatoday.com/story/news/politics/2013/04/03/obama-salary-furlough-hagel/2050121/

  • WTS/JAY

    Growing wealth inequality means that the wealthy have nowhere to hide and that events like those in Cyprus will happen in more countries around the world, including developed nations, said Marc Faber, the contrarian investor and publisher of the Gloom, Boom & Doom Report.

    “It will happen everywhere in the world, in Western democracies,” Faber said”Squawk on the Street” on Tuesday. “You have more people that vote for a living than work for a living. I think you have to be prepared to lose 20 to 30 percent. I think you’re lucky if you don’t lose your life.”

    “If you look at what happened in Cyprus, basically people with money will lose part of their wealth, either through expropriation or higher taxation,” he added.

    “The problem is that 92 percent of financial wealth is owned by 5 percent of the population. The majority of people don’t own meaningful stock positions and they don’t benefit from a rise in the stock market. They are being hurt by a rising cost of living and we all know that the real incomes of median households has been going down for the last few years,” he said.

    http://www.cnbc.com/id/100609635

  • http://cowboybyte.com/ Alondra

    Heartbreaking news from Sheriff Mack stating that Sheriff Eugene Crum of Mingo County, West Virginia, was assassinated today.

    Sheriff Crum was shot shortly after noon today near the courthouse in Mingo County. A suspect is in custody. http://www.orlytaitzesq.com/?p=411001

    Is the Kenyan Killing machine at work?

    It JUST HAPPENED that precisely today the KKK (Korrupt Kenyan Kriminal) was in Colorado to push his Gun Control proposals aka ‘People Control’.
    The White House specifically REQUESTED to use the Denver Police Academy facility
    for his speech and use the Police Officers as a backdrop to make it look like the Denver’s Police Department is endorsing his Gun Control proposals.

    What an EVIL filth.

    • Bob666

      Yo Bacon Bits,

      “Is the Kenyan Killing machine at work”?
      are you off your anti psychotic drugs again?????

  • http://be-a.co.uk/stockbroker/ Be A Careers

    There is now a great divide between the stock market prices and the reality. John Myers, an ex-stockbroker and financial expert recalls the last four stock market crashes in 1987, 1989, 2001 and 2008 and he predicts that the monster crash for stocks is yet to come. If the stock market crashes Wall Street will be no more and all the investors will perish with it. Sounds highly like a Cassandra prophesy, does it not?