Much Ado About Nothing: Sequester Cuts Virtually meaningless in Reality, But Not In Perception or Politics – Published in Noozhawk on Monday, March 4, 2013

We have spent the last several weeks — really, since the “fiscal cliff” debate at the end of December — worrying about the possible negative consequences of the sequester spending cuts. Under the sequester, which went into effect Friday and is the result of 2011 debt-ceiling negotiations, defense and other government spending must be reduced by $85 billion a year over the next 10 years. While $85 billion sounds like…

Obama’s Blame Game is a Non-Starter

Obama continues to blame the GOP, making speeches with apocalyptic remarks aimed at generating public support for his tax and spend policies.  He seems to believe that if he can convince the public that raising taxes so he can continue to spend with no consequences, he can force the GOP to cave in.  He seems to forget that the GOP already gave in on taxes during the Fiscal Cliff debates…

Time Running Out for a Real Solution to U.S. Deficit and Debt – Published in Noozhawk on Monday, February 25, 2013

There is plenty of blame to go around for politicians on both sides of the aisle, but what matters is that we are running out of time. The sequester spending cuts — about $85 billion per year in cuts to defense and a bunch of vital government functions — are set to go into effect Friday, unless Congress and President Barack Obama take action to stop them. Back in the summer of 2011 when…

Gold Approaching “Death Cross;” Similar Fate To Apple

Gold in recent weeks has declines sharply, dropping from around $1,675 at the beginning of February to $1,579 today, or by almost $100 per ounce/almost 6%.  The chart for gold shows that the 50-day moving average is very close to crossing the 200-day moving average.  Should the 50-day cross down through the 200-day, this would be a “death cross,” which is very, very negative.  Apple formed a similar chart pattern…

Three Reasons Why Stocks Should Correct – Published in Noozhawk on Monday, February 4, 2013

With the stock market closing last week at multiyear highs, and very close to all-time highs, investors may question whether this rally can continue. I see three major reasons to believe it won’t. The Dow ended 2012 at 13,104 and ended January at 13,860, resulting in a powerful start to 2013 and a gain of 5.77 percent for the month. The Standard & Poor’s 500 also had a strong start to the year, gaining…

Small Investors Get It Wrong (Again)

There is a widely held belief, which is backed by significant research, that small investors are usually wrong, meaning they buy when they should sell and sell when they should buy. This usually occurs because, at times when stocks are usually the most attractively priced, conditions are very scary: the economy is weak, corporate earnings are down, there is a lot of uncertainty, etc. At times like these, small investors…

Fiscal Cliff Hangover Not the Only Challenge We Face – Published in Noozhawk on Monday, January 7, 2013

The agreement Congress approved to avert the “fiscal cliff” — the expiration of the Bush-era tax cuts and spending cuts that resulted from the debt ceiling debate of 2011 — was more of a kick-the-can Band-Aid, rather than a true solution. The resulting push of spending cuts for two months, and the looming debt-ceiling debate, set the stage for the real war of wills within Congress and with President Barack Obama. In the…

Kick the Can

By now you have all read about the details of the Fiscal Cliff deal struck by Congress and the President.  It should be glaringly obvious to you that all they have done is to pass what amounts to a Band-aid “solution” kicking the can two months down the road, to March 1st.  Republicans have basically allowed the Democrats to win the battle, only to focus their attention on the war…

Despite Overwhelming Challenges of Fiscal Cliff, Additional Problems Threaten Economy – Published in Noozhawk on Monday, December 31, 2012

Those who pay attention to political, economic and financial issues are well aware of the frightening realities of the “fiscal cliff” — the expiration of the Bush-era tax cuts and significant spending cuts set to go into effect on Jan. 1. As of Friday, things were not looking promising regarding any agreement among congressional leaders and President Barack Obama that would avert the consequences of going over the cliff. Unfortunately, we face other problems…

Stocks Likely To Sell-Off Even If There is a Deal on the Fiscal Cliff

Stocks have rebounded sharply from the recent sell-off of about 9%, rising from about 1,350 on the S&P 500 to the current 1,440 or so, or by about 6.7%.  Optimism over a possible deal from Congress and the President on the fiscal Cliff-the expiration of the Bush-era tax cuts and spending cuts set to go into effect January 1, 2013-has been largely responsible for this rally, despite many other serious…