Archive for October, 2015

Mission Creepy: U.S. Puts Boots On The Ground Russia Is Bombing

Courtesy of John Rubino.

Russia’s decision to bomb pretty much everyone opposed to Syria’s Assad regime — including the guys the US was training and funding — startled the West last month. But at least we didn’t have any personnel there at the time, right?

Well, that might be about to change:

Obama orders US special forces to ‘assist’ fight against Isis in Syria

(Guardian) – Barack Obama has ordered up to 50 special operations troops to Syria, US officials announced on Friday, in an apparent breach of a promise not to put US “boots on the ground”, to fight Islamic State militants in the country.

The Pentagon has also been “consulting” with the Iraqi prime minister, Haider al-Abadi, to establish a special operations taskforce to fight Isis “leaders and networks” across the Syrian border in Iraq, a senior administration official told the Guardian on Friday.

But the White House insisted that its overall strategy to combat Isis remained the same and said the special forces troops would be helping coordinate local ground forces in the north of the country and other non-specified “coalition efforts” to counter Isis rather than engaging in major ground operations.

“The decision the president has made is to further intensify our support for our forces who have made progress against Isis,” the White House spokesman, Josh Earnest, said at a news conference.

The move came as diplomats worked in Vienna to restart talks on a political transition that would remove Syrian president Bashar al-Assad. At the discussions with leaders from Russia, Saudi Arabia and Iran, the US secretary of state, John Kerry, framed the troop announcement as part of a shifting policy that included this major diplomatic push to initiate talks that would bring about a political transition in Syria.

“We are intensifying our counter-Daesh campaign and we are intensifying our diplomatic efforts to end the conflict,” Kerry said, using the Arabic acronym for Isis. “That is why President Obama made an announcement about stepping up the fight against Daesh.”

The injection of US special forces in Syria seemed at odds with earlier statements Obama has made about not placing troops in the country.

Barack Obama in


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The Empty Bus

Courtesy of ZeroHedge. View original post here.

Submitted by Tim Knight from Slope of Hope.

From the Slope of Hope: With all the grousing and grumbling I do here, I thought I’d change my tone and write up a genuinely positive, optimistic post. This has to do with what I think will be a tectonic shift over the next twenty years: transportation.

As dull as that sounds, I think the changes that take place in how we get people (or cargo) from point “A” to point “B” are going to be more profound that Amazon, Facebook, and the iPhone put together. My insight, if you want to be generous enough to call it that, is spawned from a couple of (as is typical for me – - negative) observations I make on a periodic basis.

The first observation is one I make almost daily: in spite of the relative wealth of the San Francisco peninsula, there are buses all over the place. Some of them are the fabled “white buses” that tote highly-paid twenty-somethings from Google and Facebook back to their residences in San Francisco. But most of them are the large (and sometimes double-length) VTA buses that drive all over the Santa Clara valley, and there is one thing I notice about virtually every one of them: they’re empty or near-empty. As they rumble by, I typically see two or three people sitting in a bus that holds 50 to 100 people.

The other observation I have is that the people driving these buses are really, really, really overpaid. Many of them make six figures. One fellow mentioned in this article was clearing almost $200,000. For driving a bus. This is about as close to “unskilled labor’ as I can imagine. It’s mindless, boring work. And very, very lucrative. (Thank you, civic employee unions!)…
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Analyst Warns Of Turbulence: “Geopolitical Dislocations Could Result In Key Resource Supplies Disappearing”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Mac Slavo via SHTFPlan.com,

Some of the world’s biggest investors have been taking significant positions in the commodity resource sector as of late, most notably in gold. With geopolitical tension and fear of economic breakdown reaching a near boiling point, it’s not difficult to see why. Instability pervades the entire system, encompassing everything from financial markets to social safety nets. And while it is easy to ignore the seriousness of current events because stock markets remain at record highs and mainstream pundits continue to toe the recovery line, the fact is that an unexpected and seemingly minor event could well send the entire world into a tailspin.

According to analyst John Kaiser, this is exactly what we need to be concerned with. In a candid interview with Future Money Trends Kaiser explains just how political dislocations could result in supply lines to critical commodities like food, copper, zinc and gold being cut – even without a major war – should the United States, Russia and China continue to bump heads.


(Watch at Future Money Trends or Youtube)

Forget about the big, giant macro-economic increases in overall global GDP, but instead let’s look at the turbulence we’re starting to see where China is asserting itself in the South China Sea area… where Putin is eyeing its lost colonies in Europe and Central Asia and thinking maybe we should re-establish the Soviet empire… where we see instability in the middle east.

Then you also realize that a lot of metal comes from China… a lot of metal comes from Russia. And if we end up in a shoving match where, say, the United States pushes back in the South China Sea… and Chinese generals get all up in arms and we end up with an incident… well what happens if China suddenly has sanctions going against it… or something similar, that Russia goes beyond messing in the Ukraine and starts taking out Latvia or Estonia?

All of a sudden we have not so much nickel coming from Russia anymore… and similar in China.. Tungsten, 85% of it comes from China… graphite, 85% of it comes from China… 40% of the world’s zinc comes from China.

These types of geopolitical dislocations… they could result in supply simply disappearing.

And because the rest of the world


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Fed Admits “Something’s Going On Here That We Maybe Don’t Understand”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In a somewhat shocking admission of its own un-omnipotence, or perhaps more of a C.Y.A. moment for the inevitable mean-reversion to reality, Reuters reports that San Francisco Fed President John Williams said Friday that low neutral interest rates are a warning sign of possible changes in the U.S. economy that the central bank does not fully understand. With Japan having been there for decades, and the rest of the developed world there for 6 years…

Suddenly, just weeks away from what The Fed would like the market to believe is the first rate hike in almost a decade, Williams decides now it is the time to admit the central planners might be missing a factor (and carefully demands better fiscal policy)… (as Reuters reports)

"I see this as more of a warning, a red flag that there's something going on here that isn't in the models, that we maybe don't understand as well as we think, and we should dig down deep deeper and try to figure this out better," said San Francisco Federal Reserve President John Williams on Friday pointing out that low neutral interest rates are a warning sign of possible changes in the U.S. economy that the central bank does not fully understand.

Williams, who is a voting member of the Fed's policy-setting panel through the end of the year, has said the central bank should begin to raise interest rates soon but thereafter go at a gradual pace; ironically adding that the low neutral interest rate had "pretty significant" implications for monetary policy, and put more focus on fiscal policy as a response.

"If we could come up with better fiscal policy, find a way to have the economy grow faster or have a stronger natural rate of interest, then that takes the pressure off of us to try to come up with other ways to do it, like through a large balance sheet or having a higher inflation target," Williams said. "It also means we don't have to turn to quantitative easing and other policies as much."

As we noted previously, depending on the importance of the credit channel, the Federal Reserve, by pegging the short term rate at zero, have essentially removed one recessionary market mechanism that used to efficiently clear excesses within the…
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Another Black Swan? Turkey Holds Snap Elections Amid NATO-Backed Civil War

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

There’s a potential black swan event taking place in Turkey on Sunday and no one seems to care. That is, the media isn’t devoting nearly enough coverage to Turkish elections considering the impact the outcome will invariably have on the situation in Syria, on the fate of the lira, and on the Pentagon’s strategy with regard to embedding spec ops with the YPG.

As a reminder, Turkey held elections back in June and the outcome did not please President Recep Tayyip Erdogan.

AKP lost its absolute majority in parliament thanks in no small part to a relatively strong showing by the pro-Kurdish HDP and that meant that Erdogan couldn’t move forward with plans to consolidate his power by amending the constitution. Well, if you know anything about Erdogan, you know that he isn’t exactly the type to take these kinds of things lying down, and so, he decided to trade NATO access to Incirlik for Western acquiescence to a crackdown on the PKK.

Of course that’s not how it was pitched to the media.

The official line was that after a suicide bombing in Suruc claimed by ISIS, Ankara decided it was time to go after Islamic State. Not to put too fine a point on it, but that’s a joke. The PKK and many other observers have long contended that Turkey is complicit in allowing money, guns, and personnel to flow across the border into Syria so that ISIS can continue to destabilize the Assad regime which Ankara opposes. In other words, Erdogan has no interest whatsoever in fighting ISIS. What he does have an interest in is starting a new war with the PKK in order to convince voters that the security situation in Turkey is such that only a dictator can get the situation under control – that’s the whole gambit.

So what Erdogan did was this: he obstructed the coalition building process in the wake of June’s elections, started a civil war in order to try and convince voters that supporting HDP was a mistake, then called for new elections in November which he hopes will restore AKP’s absolute majority and allow him to change the constitution. It’s deplorable to the point of absurdity (especially given the recent suicide attack in Ankara) and underscores
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HaPPY HoRRoRWeeN 2015

Courtesy of ZeroHedge. View original post here.

Submitted by williambanzai7.

CENTRAL PLANNING

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DIRTY TRICK OR REFUGEES

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SPACE BUSH

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TRICK OR THIEF

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WHAT BANKS GOT

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WHY SO SYRIAS?

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THE GREAT GOP PUMPKIN

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TEAM USSA

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SCARY BILDERBERG CLOWN HILLARY





Crude Supertanker Rates Collapse As VLCC ‘Traffic’ To China Lowest In 13 Months

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

A few days ago we warned, confirming Goldman Sachs' earlier analysis that the world was running out of space to store crude distillate products, that China was running out of storage space for crude oil as it dramatically ramped up its Strategic Petroleum Reserve 'buy low' plan. While the brightest indicator at the time was "about 4 million barrels of crude oil stranded in two tankers off an eastern port for nearly two months," this week, the dial went to 11 on the oil-demand-fear-o-meter, as Bloomberg reports supertankers sailing to Chinese ports plunged to its lowest in 13 months, sending the daily rate for shipping crashing. The marginal demand-er of last resort just left the market.

As a reminder, this is what Goldman said: "the build in Atlantic distillate inventories this year has been large, following near-record refinery utilization in both the US and Europe, only modest demand growth, especially relative to gasoline, and increased imports from the East on refinery expansion and rising Chinese exports."

As a result, and despite a cold winter in both Europe and the US last year, European and US distillate storage utilization is reaching historically elevated levels, driving a sharp weakening in heating oil and gasoil time spreads.

Such high distillate storage utilization has two precedents, leading in both cases to storage capacity running out in the springs of 1998 and 2009, pushing runs and crude oil prices and timespreads sharply lower. This raises the question of whether today’s oil market oversupply can rebalance simply through financial stress – prices remaining near their current low level through 2016 – or if operational stress – breaching storage capacity constraints and forcing prices below cash costs like in 1998 and 2009 – is ineluctable.

And then something very unexpected happened: the world quietly hit a tipping point when, according to Reuters, China ran out of space to store oil.

In a report explaining why "oil cargoes bought for state reserve stranded at China port" Reuters notes that "about 4 million barrels of crude oil bought by a Chinese state trader for the country's strategic reserves have been stranded in two tankers off an eastern port for nearly two months due to a lack of storage, two trade sources said."

And now, as Bloomberg reports,

VLCCs sailing


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Mario Draghi Admits Global QE Has Failed: “The Slowdown Is Probably Not Temporary”

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Undoubtedly, the most amusing this about the prospect of more easing from the ECB (as telegraphed by Mario Draghi last week) and the BoJ (where Haruhiko Kuroda just jeopardized his status as monetary madman par excellence by failing to expand stimulus) is that both Europe and Japan both recently slid back into deflation despite trillions in central bank asset purchases. 

In other words, the market expects both Draghi and Kuroda to double- and triple- down on policies that clearly aren’t working when it comes to altering inflation expectations and/or boosting aggregate demand. Indeed, both Goldman and BofAML said as much last week. For those who missed it, here’s Goldman’s take

The subdued and increasingly persistent inflation dynamics that have prevailed in recent years may have eroded central banks’ best line of defence in the face of adverse disinflationary shocks. The energy-price-driven decline in Euro area inflation from 2012 to 2015 has thrown this possibility into even sharper relief.

 

By embarking on unprecedented balance sheet operations and forward guidance, central banks in Europe have sought to ring-fence domestic inflation expectations and signal their intention to maintain monetary conditions easy for a protracted period of time. Mario Draghi himself described the ECB’s asset purchase programme as a way of ensuring that very low (and, at times, negative) inflation does not lead wage- and price-setters to adjust their behaviour to a perceived lower steady-state rate of inflation. However, judging from market-based implied measures of longer-term inflation expectations, the effectiveness of the ECB’s announcements has proved limited so far.

Or, visually:

Meanwhile, many critics have accused the ECB of adopting policies that work at cross purposes with Berlin’s insistence on fiscal rectitude. That is, the more Draghi’s PSPP drives down borrowing costs, the less effective the “market” is at pricing risk which in turn means investors aren’t able to punish governments for budgetary blunders. In other words, Spain, Portugal, and Italy shouldn’t be able to borrow for nothing based on the fundamentals, but thanks to the ECB they can – so why implement reforms? 

And so, ahead of what might fairly be…
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Should America Fight For The Spratlys?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Fred Reed via AntiWar.com,

It appears that Washington, ever a seething cauldron of bright ideas, is looking for a shooting war with China, or perhaps trying to make the Chinese kowtow and back down, the pretext being some rocks in the Pacific in which the United States cannot possibly have a vital national interest. Or, really, any interest. And if the Chinese do not back down?

Years back I went aboard the USS Vincennes, CG-49, a Tico class Aegis boat, then the leading edge of naval technology. It was a magnificent ship, fast, powered by a pair of airliner turbines, and carrying the SPY-1 phased-array radar, very high-tech for its time. The CIC was dark and air-conditioned, glowing with huge screens – impressive for then – displaying all manner of information on targets in the air. Below were Standard missiles, then on a sort of chain drive but in later ships using the Vertical Launch System. It was, as they say in Laredo, Muy Star Wars. (The Vincennes was the ship that later shot down the Iranian airliner.)

The Vincennes. The boxy thing up front is the radar. It is not hardened.

The Vincennes. The boxy thing up front is the radar. It is not hardened.

Being something of a technophile, I took all of this in with admiration, but I thought – what if it gets hit? As a kid in my preteens I had read about the battleships of WWII, the Carolinas but in particular the Iowa class, fast, brutal ships with sixteen-inch belt armor and turrets that an asteroid would bounce off of. The assumption was that ships were going to get hit. They were built to survive and continue fighting.

By contrast, the Vincennes was thin-skinned, hulled with aluminum instead of steel, and the radar, crucial to combat, looked perilously fragile. A single hit with anything serious, or perhaps even a cal .50, but certainly by anything resembling a GAU-8, and she would be hors de combat until refitted.

One hit.

The Iowa, BB-61. I went aboard her at Norfolk at the Navy’s invitation. It altered my appreciation of guns. I came away thinking that if you can’t crawl into it, it isn’t really a gun. And solid: There is a reason why no battleship was sunk after Pearl Harbor.

The Iowa, BB-61. I went aboard her at Norfolk at the Navy’s invitation. It altered my appreciation of guns. I came away thinking that if you can’t crawl into it, it isn’t really a gun. And solid: There is a reason why no battleship was sunk after


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The Quick “Bull” Vs “Bear” Case In 8 Charts

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

“What happens next?” Everyone wants to know the answer, but nobody has it (if they do, they are lying).

Still, one attempt at framing the narrative, comes from BofA’s Savita Subramanian. Here is the 30,000 foot cliff notes version of the two sides of the story.

First, the bear case, or as BofA calls it “an economic shock derails a fragile economy.”

Concern over global growth has become more wide-spread, as suggested by the charts below. We believe that outside of an exogenous geopolitical event, an economic shock would most likely be tied to credit, where signs of stress are building the most.

  • Growth expectations have come down over the past 12 months, per the Global Fund Manager Survey
  • More investors are starting to believe we’re in the “late cycle”
  • There are signs of stress in the high yield market, with distress ratio increasing recently
  • More companies in the S&P 500 are projected to lose money than those with negative EPS 12M ago.

And here is the “4 chart summary” of the bull case, which as usually expected, is “more aligned” with BofA’s economists’ current outlook (which does not foresee a recession any time in the coming decade), where they see stable to improving growth in developed markets. This requires that China’s economy does not collapse. But much of the uncertainty may be reflected is asset process, and we see several reasons to remain positive.

  • Valuations are still below average – see Chart 2 for the normalized P/E
  • Short interest has risen over time and is at the highest levels since 2008
  • Investors are underweight the US by a net 10% (per the Global FMS)
  • Sentiment is still bearish, with our Sell Side Indicator in “Buy” territory (see Chart 12) and cash levels at mutual funds also generating a “Buy” signal per the Global FMS.

A more detailed version of the above to follow tomorrow.





 
 
 

Phil's Favorites

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Digital Currencies

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Zero Hedge

What's Hot In Women's Fashion?

Courtesy of ZeroHedge View original post here.

Via Global Macro Monitor,

Capitalism at its best or worst?

We have a few questions:

1)  Does the Tariff Man get a royalty for the sale of each dress sold, and will that violate the Emolumen...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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The Technical Traders

Is A Price Revaluation Event About To Happen?

Courtesy of Technical Traders

Skilled technical traders must be aware that price is setting up for a breakout or breakdown event with recent Doji, Hammer
and other narrow range price bars.  These types of Japanese Candlestick patterns are warnings that price is coiling into
a tight range and the more we see them in a series, the more likely price is building up some type of explosive price breakout/breakdown move in the near future.  The ES (S&P 500 E-mini futures) chart is a perfect example of these types of price bars on the Daily chart (see below).

Tri-Star Tops, Three River Evening Star patterns, Hammers/Hangmen and Dojis are all very common near extreme price peaks and troughs.  The rea...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Insider Scoop

10 Biggest Price Target Changes For Friday

Courtesy of Benzinga

  • Credit Suisse raised IHS Markit Ltd (NYSE: INFO) price target from $68 to $76. IHS Markit shares closed at $67.75 on Thursday.
  • Wedbush boosted Restoration Hardware Holdings, Inc (NYSE: RH) price target from $170 to $185. RH shares closed at $169.49 on Thursday.
  • Mizuho lifted Seagate Technology PLC (NASDAQ: STX) price target from $46 to $50. Seagate shares closed at $52.94 on Thursday.
  • UBS raised the price target for Weight Watchers Intern...


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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Biotech

The Big Pharma Takeover of Medical Cannabis

Reminder: We are available to chat with Members, comments are found below each post.

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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