Monday, March 31, 2014

Michael Lewis Says That The U.S. stock market Is rigged?.........DO NOT MISS THIS VIDEO CLIP!

Michael Lewis, The Single Best Financial Journalist In History, Says That The U.S. stock market Is rigged?

The United States stock market, the most iconic market in global capitalism is rigged.

Who are the victims?

Everybody who has an investment in the stock market.



The next book from Michael Lewis comes out Monday, and it's called "Flash Boys." It's all about the world of high-frequency trading, the controversial approach to making money on Wall Street using algorithms, computers, advanced coding, and other techniques to get around human opponents.

Lewis was on "60 Minutes" last night, and over the next several days there will be a lot of attention paid to the book.

A Significant Chink In The Markets Armor Is Beginning To Show.......AN ABSOLUTE MUST READ!

A Significant Chink In The Markets Armor Is Beginning To Show

Since the beginning of 2013, the market has been seen as invulnerable. Despite issues in the Euro zone, rising turmoil in the Mideast, riots and political clashes, rising oil prices and weak economic data - these issues bounced off the markets will little effect.  The markets craved "bad news" as it provided insurance that the Federal Reserve would continue its"liquidity drip." 

With reduced levels of support from the Federal Reserve, the liquidity available to run the "carry trade" becomes an issue for the momentum driven sectors of the market.  

The chart below shows the number of stocks on bullish buy signals.

While the broader market has risen sharply over the last year, there has been deterioration in the number of stocks on buy signals.  Historically, such an event has been coincident with the onset of market declines in the intermediate term. However, due to the excessive injections of liquidity from the Fed, the markets marched upward despite less participation from its constituents.

Another indicator worth watching is the number of net new highs in the market.

This indicator has also been on the decline which, like the bullish percent indicator, has normally been consistent with short to intermediate term market corrections.

A "canary in the coal mine" is the recent gross under performance by the "momentum stocks" over the last year.  Biotech, Netflix (NFLX), Linked-In (LNKD), Price Line (PCLN) and others all share a common attribute - very low outstanding share floats.  These stocks are excellent candidates for high frequency trading programs that can capitalize on "low float stocks" to push prices significantly higher. 

That capability, combined with massive amounts of liquidity via the Fed, have pushed these stocks into the stratosphere. However, as shown in the chart below, these issues are now grossly under performing the broader market as valuations levels reach extremes while liquidity is slowly being drained from the financial markets.

It's the absolutely classic first sign of the rollover.

I agree with that statement. It is worth taking note that previous "bullet proof" areas of the market are now beginning to take hits.  

During the last five years, it really has not mattered much where you invested your money.  The great thing about highly correlated markets, as shown in the next chart, everyone is a "genius" when the tide is rising. 

The dark side to highly correlated markets, when the eventual correction does come, it leaves investors with no place to hide.

Some of the biggest negative annual returns eventually followed 30% up years. The current levels of margin debt, bullish sentiment, and institutional activity are indicative of an extremely optimistic view of the market. What is important to remember is that margin debt "fuels" major market reversions as "margin calls" lead to increased selling pressure to meet required settlements.  Unfortunately, since margin debt is a function of portfolio collateral, when the collateral is reduced it requires more forced selling to meet margin requirements.

If the market declines further, the problem is quickly exacerbated.  This is one of the main reasons why the market reversions in 2001, and 2008, were so steep. High levels of margin debt, like we are currently seeing are the right type of  catalyst that could ignite a selling panic. Given the length of current economic expansion and the level of extension of the markets above their long term moving averages, the Fed extraction of liquidity potentially increases the risk of a significant correction or crash.

It is important to understand that it is always just a function of "when" a mean reverting event will occur.  Unfortunately for many investors who fail to understand the "risk" they have undertaken within their portfolios, when that time comes it will matter "a lot."

RETIREMENT, Americans Biggest Fear............

Retirement, Americans Biggest Fear

What is our biggest fear? Embarrassment? Death? Public speaking? According to an Allianz Life Insurance poll, the greatest fear of older Americans is outlasting their savings. We fear living longer than our bank accounts by a margin of 22%.


Life Expectancies For Men (National Average: 76)

Life Expectancies For Women (National Average: 80)

There's a Good Chance You Will Outlive Your Money

"Consider this bleak picture: A typical 65-year-old couple with $1 million in tax-free 
municipal bonds wants to retire. They plan to withdraw 4 percent of their savings a year – a common, rule-of-thumb draw down. But under current conditions, if they spend that $40,000 a year, adjusted for inflation, there is a 72 percent probability that they will run through their bond portfolio before they die. …

If they withdrew 3 percent, or $30,000, a year, rather than that standard rate of 4 percent, inflation-adjusted, there is still a one-in-three chance that they will outlive their money, under current market conditions." AND CONDITIONS ARE GOING TO GET WORSE NOT BETTER!

The solution to our predicament is more complicated than simply changing a number in a computer projection. 

Retirees need to look beyond the old retirement formulas if they want their money to last.

The old formula was simple: Retirees could expect a 6% return on their portfolios, factor in a 2% rate of inflation, and still net a 4% return to live off of without touching their principal. That was easy when CDs and high-quality bonds could be counted on for at least 6%.

The foundation of that formula was the adage, "live off the interest and never touch the principal." For several generations it was nothing short of gospel. If your principal remained intact, you never had to worry about running out of money. With our current level of debt at every level the above is not possible. Add in the demographics of the largest generation the world has ever known, retiring and government promises become worthless and a bad situation becomes much worse.

RETIREMENT The Retirement Wave Is Just Starting!......Graphically Breathtaking!





The Retirement Wave Is Just Starting!

Graphically, the trend is breathtaking.

This is not a chart of a dot-com stock circa 1999.

This is the annual increase in the number of Americans turning 65 — the number is going to be at least 1.5 million per year for at least the next fifteen years.

Sunday, March 30, 2014






Prayers For Strength
James 5:16 - Confess your faults one to another, and pray one for another, that ye may be healed. The effectual fervent prayer of a righteous man availeth much.

Ephesians 6:18 - Praying always with all prayer and supplication in the Spirit, and watching thereunto with all perseverance and supplication for all saints;

1 Timothy 2:1 - I exhort therefore, that, first of all, supplications, prayers, intercessions, and giving of thanks, be made for all men;

Colossians 1:9 - For this cause we also, since the day we heard it, do not cease to pray for you, and to desire that ye might be filled with the knowledge of his will in all wisdom and spiritual understanding;

Philippians 4:6 - Be careful for nothing; but in every thing by prayer and supplication with thanksgiving let your requests be made known unto God.

Matthew 5:44 - But I say unto you, Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you;

2 Thessalonians 3:1 - Finally, brethren, pray for us, that the word of the Lord may have free course, and be glorified, even as it is with you:

Romans 15:30 - Now I beseech you, brethren, for the Lord Jesus Christ's sake, and for the love of the Spirit, that ye strive together with me in your prayers to God for me;

Colossians 4:2 - Continue in prayer, and watch in the same with thanksgiving;

Colossians 4:3 - Withal praying also for us, that God would open unto us a door of utterance, to speak the mystery of Christ, for which I am also in bonds:

1 Thessalonians 5:25 - Brethren, pray for us.

Prayer – secret, fervent, believing prayer – lies at the root of all personal godliness.

Prayer is not monologue, but dialogue. Gods voice in response to mine is its most essential part.

Our prayer and God’s mercy are like two buckets in a well; while one ascends, the other descends.

Don’t pray when you feel like it. Have an appointment with the Lord and keep it. A man is powerful on his knees.


James 1:5 
If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him.

James 3:17 
But the wisdom from above is first pure, then peaceable, gentle, open to reason, full of mercy and good fruits, impartial and sincere.

Ephesians 5:15-17 
Look carefully then how you walk, not as unwise but as wise, making the best use of the time, because the days are evil. Therefore do not be foolish, but understand what the will of the Lord is.

Proverbs 3:13-18
Blessed is the one who finds wisdom, and the one who gets understanding, for the gain from her is better than gain from silver and her profit better than gold. She is more precious than jewels, and nothing you desire can compare with her. Long life is in her right hand; in her left hand are riches and honor. Her ways are ways of pleasantness, and all her paths are peace.

Proverbs 10:23
Doing wrong is like a joke to a fool, but wisdom is pleasure to a man of understanding.

Proverbs 12:15
The way of a fool is right in his own eyes, but a wise man listens to advice.

Proverbs 18:15
An intelligent heart acquires knowledge, and the ear of the wise seeks knowledge.


Worrying Accomplishes Absolutely Nothing.

I don't know about you, but I don't have any time to waste these days. And worrying is a waste of very precious time. Worrying won't help you solve a problem or bring about a solution, so why waste your time and energy on it?

Matthew 6:27-29 
Can all your worries add a single moment to your life? And why worry about your clothing? Look at the lilies of the field and how they grow. They don't work or make their clothing, yet Solomon in all his glory was not dressed as beautifully as they are. 

Worrying is Not Good for You.

Worrying is destructive to us in many ways. It becomes a mental burden that can even cause us to grow physically sick.

Proverbs 12:25 
Worry weighs a person down; an encouraging word cheers a person up. 

Worrying is the Opposite of Trusting God.

The energy that we spend worrying can be put to much better use in prayer. 

Here's a little formula to remember: Worry replaced by Prayer equals Trust.

Matthew 6:30 
And if God cares so wonderfully for wildflowers that are here today and thrown into the fire tomorrow, he will certainly care for you. Why do you have so little faith?

Philippians 4:6-7 
Don't worry about anything; instead, pray about everything. Tell God what you need, and thank him for all he has done. Then you will experience God’s peace, which exceeds anything we can understand. His peace will guard your hearts and minds as you live in Christ Jesus. 

Worrying Puts Your Focus in the Wrong Direction.

When we keep our eyes focused on God, we remember his love for us and we realize we truly have nothing to worry about. God has a wonderful plan for our lives, and part of that plan includes taking care of us. Especially in the difficult times, when it seems like God doesn't care, we can put our trust in the Lord and focus on his kingdom. God will take care of our every need.

Matthew 6:25 
That is why I tell you not to worry about everyday life-whether you have enough food and drink, or enough clothes to wear. Isn't life more than food, and your body more than clothing?

Matthew 6:31-33 
So don't worry about these things, saying, 'What will we eat? What will we drink? What will we wear?' These things dominate the thoughts of unbelievers, but your heavenly Father already knows all your needs. Seek the Kingdom of God above all else, and live righteously, and he will give you everything you need. 

1 Peter 5:7 
Give all your worries and cares to God, for he cares about you. 

Obedience Always Brings Blessing............

Obedience Always Brings Blessing

Though he were a Son, yet learned he obedience by the things which he suffered;

And being made perfect, he became the author of eternal salvation unto all them that obey him.

                                                                                                                                                     Heb. 5:8–9

For my yoke is easy, and my burden is light.

                                                          Matt. 11:29–30

And through your offspring all nations on earth will be blessed, because you have obeyed me.

                                                                                                                                             Genesis 22:18

If you listen carefully to what he says and do all that I say, I will be an enemy to your enemies and will oppose those who oppose you.
                                                                                                                                                                                                                           Exodus 23:22

Oh, that their hearts would be inclined to fear me and keep all my commands always, so that it might go well with them and their children forever!
                                                                                                                                                                                                                                  Deuteronomy 5:29

Know therefore that the LORD your God is God; he is the faithful God, keeping his covenant of love to a thousand generations of those who love him and keep his commands.                                                                                                                                                                                                                                                                                                                                        Deuteronomy 7:9

Our willingness to comply with the commandments of God is a witness of our faith in Him and our love for Him.

The only way to experience all that God has for us is to walk in complete obedience. Then we can be sure not to miss any good thing He desires for our lives. Obedience always brings blessing.

When obedience doesn’t lead to an expected result, look for one or more of these less obvious ways God may be working in your life.

1. An Adjustment of our Priorities

God uses disappointment to realign our focus. We might have set our eyes on something that was not His will or not yet in His timing. Or maybe we assigned too much importance to a worldly goal that is of little value to God.

2. Spiritual Insight to His character

When life takes an unexpected turn, we are wise to ask what God may be trying to teach us about Himself.

3. Greater Dependence on God

We cannot live the Christian life apart from the work of the Holy Spirit, who empowers us to obey God. But we frequently take back control of our lives, thinking we can manage without Him. Life’s difficulties remind us how much we need the Lord.

4. Opportunities to Prove the Lord’s Faithfulness

People notice how you respond to life’s tragedies and disappointments. When you allow God to carry you through difficulty, your life becomes a testimony of His power and goodness.

5. Greater Hunger for His Word

When things don’t go well, we are more likely to dig deeper into the Bible, searching for answers, peace, and encouragement. King David wrote, “It is good for me that I was afflicted, that I may learn Your statutes” (Ps. 119:71).

6. Peace and Joy

Regardless of the situation, we can be content and even happy. Why? Because our contentment is based upon trust in God, not possessions, achievements, or circumstances.

“May the God of hope fill you with all joy and peace in believing, so that you will abound in hope by the power of the Holy Spirit.” Do you need supernatural joy, peace, and hope right now? If so, ask the Spirit to renew your mind and lift your countenance.

                                                                                                Romans 15:13

Thank You for the promise that obedience always brings blessing. Open my eyes to the less obvious ways You desire to bless me. Enable me to grow spiritually so that I will value the things You value.