From Bad to Worse!  

"... foreigners dumping dollars, the housing market collapsing ... why there's so much profitable movement in the markets one hardly knows what to trade next!"

>>>  Click here to read Stubby's latest posts!  <<<
 

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Risk Disclaimer!

There is risk in all forms of investing (like trading baseball cards or contributing to Social Security). Things could go horribly wrong at any moment. As Stubby says:

'Lose everything you've worked hard for through a series of bone-headed investments and you could be forced to go on the dole and take it easy for the rest of your life, with American taxpayers who haven't figured out how to milk the system yet paying for every penny of your housing, food, furniture, transportation and prescriptions 100% paid for in full!' <<< click here for a real life example! >>>

So please, for the sake of the children, don't let a disaster as lucrative as this happen to you. Take a minute and read our risk disclaimer.
 

Posts, Stumps & Rails

This page is really deep so be sure to scroll down for lots more good stuff!
 

 

From Bad To Worse!
A widening trade deficit, rising inflation, foreigners dumping dollars, the housing market collapsing ... Heavens!, there's so much profitable movement in the markets that one hardly knows what to trade next. Here's just some of the latest action.

► Sub-Prime Mortgage Market to 'Implode'
► Top Investor Sees U.S. Property Crash
► Safe Ground in a Housing Market Meltdown?
► China And The 1 Trillion Dollars (For Starters)
► Debt Pyramid Threatens to Topple Markets
► Foreclosures May Hit 1.5 Million in U.S. Housing Bust
► Fed Warned Of Foreclosure Crisis As Loan Growth Slows
► The Housing Bubble Starts to Burst
► The Coming Entitlement Meltdown -- by Rep Ron Paul
► European Stocks Extend Last Week's Rout; Rio Tinto, Total Drop
► Japan Stocks Fall by the Most in Almost 9 Months
► Russian Stock Market Plunges On Monday Opening
► Investors On Edge After Week of Turmoil
► Investors Using Margin Debt Hits $285.6 Billion Record

 

 

 

U.S. Dollar Drops Against Counterfeit U.S. Dollar
From TheOnion.com we read:

 

At the close of trading Monday, the U.S. dollar dipped to a record low of $.60 against the counterfeit U.S. dollar, which also outpaced the dollar against the euro and the yen.

 

We don't even accept regular U.S. dollars anymore," said Union, NJ 7-Eleven manager Rick Grove, echoing the sentiments of merchants nationwide. "We've gotten stung a few times taking in the real ones. I always tell my cashiers, if it feels fake to the touch, and you can't see both sides when you hold it up to the light, it's fine.

Concerned about further devaluation of standard U.S. currency, Federal Reserve Chairman Ben Bernanke has suggested that Congress outlaw counterfeit bills entirely."

 

 

Secret Maneuverings of the Plunge Protection Team

 

Are your finances feeling stopped up? Are your trades getting stopped out? Whatever you may have heard about the 'Plunge Protection Team,' please take it from ol' Stubby that it can't possibly be true, otherwise we would have been told all about it on the CIABCNNBCBS news network. So please do not let the fact that there are currently 775,000 Google links on the subject influence you to conduct any further research. Thank you.

 

Hooray, The 'Dollar' Is Doomed!
I am just so gosh darned excited about the collapse of the U.S. 'dollar' that I can barely keep my mouse under control.

What an investment opportunity! Folks, it doesn't get much better than this. The gubmint has promised us that they're going to drive the 'dollar' all the way into the basement, and for once they're keeping their word. Here's the scoop (try to contain yourself)...

Budgeted outlays for Fiscal Year 2006 were $2,709 billion. That's $2.7 trillion, or a little over SEVEN BILLION A DAY ($7,421,917,808 to be precise), which breaks down to $5,154,109 a minute. FIVE MILLION A MINUTE! Budget figures here.

This means it takes just 3 hours and 14 minutes for the government to spend one billion. And the Democrats (Socialists On Steroids = SOS) can be counted on to speed things up even faster, which means we can all profit from the collapse that much sooner! Here's how...

Just short those green coupons in your wallet. Meaning, trade 'em all the way down. Remember, a strong trend in either direction can make you a lot of money, and this is one Shwarzenegger of a strong trend. There are lots of ways to do this. Perhaps the easiest is to buy shares in a mutual fund that goes UP when the dollar index goes DOWN. The Rydex family of mutual funds has a lovely doubly leveraged inverse 'weakening dollar fund' that goes up twice as fast as the dollar index goes down, so you get twice the bang for half the buck!

Don't miss the boat on this one. The Federal Reserve Note has been on a one way trip to oblivion ever since Tricky Dick "I Am Not A Crook' Nixon took us off the gold standard in 1971, and it looks like the coaster is really starting to pick up speed these days. So fasten those seatbelts, don't forget to remove false teeth and any loose jewelry, and hop on.

Finally, to leave things on a positive note, since I'm often accused of being a pessimist, I'd like to leave you with some upbeat, motivational reading to disprove these nefarious and unfair allegations. Read and enjoy...

Doomsday Dick and the Plague of Frogs
The Second Great Depression
Why The Dollar Is In Trouble
More Room For The Dollar to Fall
Central Banks Cutting Holdings Of U.S. Dollar
 

Mortgage Lender Implode-O-Meter Site

More carnage here: US Mortgage Crisis Goes Into Meltdown
And here! Mortgage Defaults Start To Spread
It's getting ugly, folks. I hope you've been shorting the stock of some of these sub-prime lenders. Remember, it's always a great way to make money when a market collapses.

 

Inflationary Bonfire by The Mogambo Guru
"Jim Willie of the Hat Trick Letter expresses a lot of people's worst fears when he says, 'Global monetary growth is mammoth, a confirmation of my claim that we have already entered the Weimar Modern Era of unbridled money growth. Never in the history of central bankers has the hidden coordination, influenced pressure, gargantuan money creation, doctored statistics, and interference with financial markets been so broad, so deep, and so profound. My allegation is clear, that we now live in Weimar times. Collectively, they have abused the privilege of printing money, and in doing so, have guaranteed a gold bull market'."
 

 

Real Housing Data

From the 02-20-2007 issue of The Daily Pfennig.
"... U.S. housing starts collapsed 14.3% in January, reversing December's rise... Starts were 3.8% lower than in January 2006. Single-family housing starts fell 11.2% to a 1.108 million rate, also the slowest since 1997. Multi-family starts fell 24.1% to an annual rate of 300K. Building permits, a precursor to future housing market activity, fell to 1.568 million, partly reversing December's rise."

 

Costs of War in Iraq
Click here to see the cost in your community

Does the government have the money to pay for the 'Forever War'? No. So where does it get it? It prints it. But won't that promote inflation? Yep.

The Euro, Gold And The Dollar
"My how modern imperialism has evolved. We no longer send armies to plunder and loot foreign lands of their gold and silver. Now, we send bankers ..."  read article here
 

 

Texas Congressman Ron Paul On M-3, Gold, Stagflation, the 2nd Amendment, Bretton-Woods and More!

During this candid interview on Google Video Presidential candidate Ron Paul mentions that there are actually members of the Banking Committee who still believe the U.S. dollar is backed by gold. Ha, ha, ha, ha, ha, ha, hee, hee, hee, heh, heh, heh, chuckle, chuckle, stopping to wipe my eyes, heh, heh, whew, that's a good one.

 

 

 

Insiders Dumping Stock Shares Hand Over Fist
Who knows more about their own businesses than corporate insiders? Fasten your seat belt and check out the chart below.

 

The higher the red line the greater the insider selling. The higher the blue line the greater the insider buying. Almost without fail, insider buying has peaked just as the market bottomed and has plummeted just as the market peaked. If you didn't know better, you'd think they know something you don't.

Right now insiders are dumping shares in their own companies at the greatest rate in 19 years. Thousands of insiders are selling at a ratio of 100 selling to 1 buying. If this isn't the mother of all bearish statistics, I don't know what is.

On January 18, 2007 Chuck Butler, Vice President of EverBank wrote in his free daily email, the Daily Pfennig, "Foreign Investors reduced their net purchases of equities to just $1.7 Billion (from $23.2 Billion in October) So... despite the gains in the S&P since November, it appears that Foreigners weren't buying... Only U.S. investors are buying equities... There's a message there..."

The message is that this market is going to correct and when it does, it's probably going to be ugly.
 

 

Is A U.S. Military Attack On Iran Looming?

:: John Pilger: The War In Iran Begins

:: US Military Strike On Iran Seen By April ’07
 

If so, it may be time to back up the truck and buy call options on the Oil Service Holders Index (OIH), or on individual oil stocks like Apache (APA).

With crude oil recently oversold and a late season cold snap underway, the oil market is moving up already. But if the missiles start cruising in from the Gulf of Hormuz, oil could go vertical for a while.

 

 

If You Ever Had Trouble Understanding Allopathic Medicine...

 

Watch This Video!

 

Allopathic medicine when applied to trauma is state of the art, no question about it. If you've just been hit by a speeding semi and 1/2 of you is lying on the other side of the turnpike, you'll be pleased to know that doctors today can stitch, glue, transplant, staple, sew and screw just about any part of you to any other part and make you whole once again. Pretty much, anyway.

But if you've got a bothersome or even chronic health issue and have some time on your side, you might consider getting a new pair of track shoes and running as fast as you can in the opposite direction from the nearest hospital.

Stubby's general term for allopathic medicine is 'Jiffy Lube.' Got an illness? Let's put you up on the lift and see if we can't remove something. If that doesn't work, we'll poison it. If that doesn't work we'll drug you. If that doesn't work, we'll poison you and we'll drug you. If that doesn't work, we'll switch drugs or maybe up the dose. Maybe even give you two drugs, then remove something else while we're at it. If none of that works we'll label you terminal and call in a hospice counselor. See you later.

Every drug known to man is toxic to the body. Why? Because it's exogenous, meaning it's foreign to the system. When you ingest a prescription drug, the body immediately goes into defense mode. Some metabolic pathways are quickly accelerated while others are slowed (or shut) down, all in an effort to detoxify, neutralize or outright expel the intruder.

If as a consequence of this drastic action by the body your blood pressure should drop, the prescription is called a blood pressure drug. But that's only because all drugs cause measurable effects. The predominant effect is the one the drug is prescribed for. The rest are just called 'side effects.' But they're all side effects. If one of those secondary side effects bothers you, they give you another drug to mask the symptoms. Deus ex machina.

Think about it logically. All healing occurs from the inside out. The only thing that can heal you is you. There is nothing a doctor can do to heal you. Sure, they can treat you, but only you can heal yourself. In fact, no doctor in the history of the human race has ever healed anyone.

If you're 9 years old and cut yourself, what does your body do? It scabs over the wound, fights any potential infection and grows new skin cells.  f you're 90 years old and cut yourself, what does your body do? It scabs over the wound, fights any potential infection and grows new skin cells. It never forgets.

Stubby has a family member in his late 80's who had a hip replacement operation about 10 years ago. Why did he need one? Because he had osteoporosis. Why did he have osteoporosis? Because he eats a horrendous diet that is virtually devoid of whole food nutrition.

Like everyone alive, his body needs calcium to maintain a normal sodium-calcium balance in his cells. Since his body wasn't getting any useable calcium in his food it did the only thing left: it robbed the calcium from his bones.

Over time his bones became weak and brittle. Being a weight and load bearing joint, the hip was the first to fail. So the medical mechanics at Jiffy Lube cut him open and gave him a shiny new stainless steel hip, paid for by the U.S. taxpayer through Medicaid, a popular modern federal free cheese wealth distribution program.

The new hip worked pretty well after he recovered from the pain and misery of the surgery. It lasted about 10 years. Last year he had a 2nd hip replacement operation. Guess which hip? Yep, the same one. Out with the old and in with the new. This time he got a cesium plated hip. Wow, now that's progress.

Has anyone in the entire medical food chain yet explained to the gentleman the problem with his metabolism and its relationship to his diet? Nope. If he lives long enough he'll probably have another hip replacement. Maybe the government should ship him some actual free cheese. At least it's got some calcium in it.

Where is the motivation on the part of anyone in the 'establishment' to help educate him? Doctors don't make money when you're healthy. If doctors believed in health there'd be a big bowl of fresh fruit in the waiting room, not all those drug flyers and brochures.

 

It's Looking More Like a Major Turning Point for Gold

With the big drop in the gold price over the past couple of weeks it looks like the Big Boyz have flushed the scaredy cats out of the precious metals market once again, meaning it's probably a good time to back up the truck and load up on some more gold and silver.

Personally, Stubby prefers silver since it's still way out of whack (a technical term) with its historical 1:15 ratio to gold. How far back do we have to go to give meaning to the term 'historical'? Try Mesopotamia.

With gold currently trading at at $626.30 and silver at $12.83 let's punch those numbers into the Windoze calculator and see what we get. Hmmm ... looks like a silver:gold ratio of 1:48.815276695245518316445830085737, but let's round down to 1:48.

Now, if we divide 48 by 15 (the historical norm), we get 9.6, which means silver is 9.6 times out of whack. To summarize, when the day comes that gold leaves Earth orbit, silver should go to the moon. How will you know when that day arrives?

1. Every other piece of 4th class (junk) mail will be a brochure to buy some inflated gold commemorative coin from some obscure shipwreck.

2. The Franklin Mint will feature Elvis on a once-ounce medallion.

3. Your neighbors will be melting down Grandma's silver set.

4. Your friends will be walking around cocktail parties (North of the Mason Dixon Line) and barbecues (South of the M.D.) wearing antique gold coins as neck pendants (the 'Mr. T Starter Kit').

5. The cover of Time Magazine will feature a golden bull clawing at Wall Street.

This is when the public will be buying with both fists -- at the very last minute, and at the highest possible price. Of course they'll need someone to buy from, which is when Stubby will step in to perform a valuable public service and punch the SELL button.

Meanwhile, until that glorious day arrives, every cram down by the Boyz is another opportunity to back up the truck! Further developments as they occur...

 

 

Are Americans Really This Dumb?

This video would be hilarious if it weren't so depressing. There is little doubt that the producer deliberately weeded out the very worst interviews to make things appear this bad, although Stubby would remind you that by very definition of the term average intelligence, fully one-half of the populace falls below. It is interesting to note that, without a doubt, these folks all passed through some form of secondary education, most likely a 13-year period of incarceration in a federal education camp. Remember: These people decide (by voting) who will hold tomorrow's political office and, indirectly, which countries will get bombed next. I need a drink.
 

 

Pelosi & Her Brassiere Brigade
Our favorite female constitutionalist, Devvy Kidd, just delivered an ideological reality slap to Nancy Pelosi in a stunning article that shows that not only can women parallel park, they can even out think 99% of the men! Devvy writes,

'Pelosi's crowning will be one of the darkest days for freedom and liberty in this country and another gigantic step towards communism, fascism and further weaning the American people into total dependency on mother government.'

Ouch! Now, that's gonna' leave a mark! Hey, speaking of Ms. Pelosi, check this out...

 

Pelosi to Give Illegal Aliens U.S. Social Security & Healthcare

Question: Will this secretive move by the gubmint cause the Social Security program to collapse years later, or years earlier? As we used to say as kids, 'Three guesses, and the first two don't count!'

Pssst... Stubby suggests that we all move to Mexico, renounce our citizenship, then sneak back into the U.S. as illegals so we can be taken care of by U.S. taxpayers for the rest of our lives!

 

 

Trade Gold All the Way UP and the 'Dollar' All The Way DOWN
Ben Stein may be the smartest man in the world, so when Ben says the dollar is headed down, that's the way Stubby plans to play it.

But just in case you're still harboring any doubt as to the eventual long term fate of fiat currencies, try the chart below on for size (we found it here).

Makes you want to hedge your stocks, bonds, CDs, frequent flyer miles, pizza coupons and other paper holdings with at least a little precious metal, doesn't it?

 

 

Still not convinced? Just below is a graph showing an 88% decline in purchasing power of the U.S. 'dollar' since just 1950. 

 

 

Do you think this tendency is going to end any time soon? If you do, we've got some lovely swampland we'd love to sell you.

 

 

Below we see the effect of eliminating the gold standard in 1933. Ever since then, the 'dollar' has no longer been backed by anything of substance, but by the 'good faith and credit' of the United States (translation: the willingness of one fool to pass it on to the next).
 

 

When the U.S. went off the gold standard, the Consumer Price Index went nearly vertical. That's what happens when real money is replaced with virtual money.

But maybe you're still not convinced that you should own gold? Then take a gander at this chart of the Dow / Gold ratio. Click here for the web site where we found this.

 

 

The graph shows how many units of the Dow Jones it has taken to buy one unit of gold.

Today Stubby notes that the Mighty Dow closed at 12,514.98. Spot gold closed at 611.60. That's a ratio of 20.46:1. Let's call it 20:1 to keep things simple. That means that it currently takes about 20 units of the Dow to buy a single unit of gold.

The bold green trend line in the middle is the general historical uptrend of the ratio, meaning that over time it's taking, on average, increasing units of Dow to buy one unit of gold (showing net inflation over time).

Notice that the past three times the Dow/gold ratio rose it made a succession of higher highs as indicated by the top trend line. Each time thereafter the ratio dropped through the middle of the chart and hit the lower rising trend line (purple).

The last time it hit the upper trend line was in 2000. If history repeats itself -- and it certainly looks like we're heading in that direction -- the ratio could touch the lower trend line at a ratio of somewhere around 4:1.

Let's stops and think what this means. If by magic the Dow were to remain where it is right now, gold would have to rise 500% from its current level (i.e., up 5 times) to over $3,000 per ounce to come into a 4:1 ratio with the Dow.

If the Dow dropped as much as 50% from its current altitude, say, to around 6,000, gold would still have to rise 250% to $around 1,500 per ounce.

Even if the Dow lopped off a full 75% and plummeted all the way down to 3,000, gold would still have to rise about 50% to around $750 an ounce.

So the three scenarios see gold rising by about 500%, 250% or 50%, respectively. Stubby will be happy to take any one of those!

For more background and perspective on the Dow / gold ratio click here and here.

Pelosi Declares Herself 'Most Powerful Woman In America'

 

While Stubby cringes to see a coven of professed collectivists steering the Ship of America, he can only cheer the salubrious effects that their entirely predictably tax-and-spend policies will have on Stubby's favorite markets!

What can we expect from the 'go-fast Socialists'? (just in case you hadn't figured it out yet, the Republicans are the 'go-slower Socialists'). We can expect the 'dollar' to go into the toilet even faster, that's what!

Which means our Rydex doubly leveraged inverse weakening dollar fund should do even better, even quicker! Yahoo! Plus, gold and silver should head up even faster, and even earlier, too! Yippee! Plus, inflationary policy aided and abetted by a Fed that may well lower rates to keep the pot boiling a little longer should cause the stock market to head to all time new highs, which will be great for Stubby's stocks! Yee-haaaaw!

So, you see, having a band of declared Marxists running our constitutional republic isn't always a bad thing. This way, the economic catastrophe to come will come all the sooner, which means we can hasten the purge that will follow the binge!

They say the only thing new under the sun is the history you don't know, to which Stubby can only add, 'Isn't it wonderful how history ALWAYS manages to repeat itself!?'

 

 

Stubby News Break!
Capitol Hill observers were aghast last night to learn that Jerry 'The Fixer' Ford had pushed up the lid on his $100,000 burnished walnut sarcophagus long enough to explain to the closest Marine security guard...

'Hey, did you know I never really did pardon Dick Nixon since the prerequisite to pardon is conviction? Yet Nixon had never been tried, let alone convicted of anything.'

Chuckling, Ford went on to explain that what he had actually granted 'Tricky Dick' was amnesty, for which there is no provision in the Constitution.

The catatonic sentry is since said to have been transported to the same CIA facility that 'treated' Squeaky Fromme prior to her attempt on Ford's life.

A quick press release from the Rockefeller Foundation confirms that Nelson never had any interest in sequencing his way into the Oval Office and that the Rockefeller's prior grant funding of the CIA shrink who treated Ms. Fromme was purely coincidental.

Insiders report that a stun grenade was tossed into the casket which has since been nailed, screwed, glued and welded shut. An Abrams tank has been parked over the grave site and a bell with a string connected to the burial vault in case Mr. Ford has any requests from the afterlife that may be in keeping with his perquisites as former Commander-in-Chief.

Count on Stubby for further developments as they break. We now return you to your regularly scheduled programming.

 

'Performance Investor Group' Model Stock Portfolio

► Performance update here

On December 20th (see post below) our highly sensitive stock market directional indicators signaled an impending reversal. Over the past 10 days these signals have become even clearer. Now that Santa has left town and most of the market is going sideways, we're starting to close out open positions in our model portfolio. If and when the drop comes we'll go to cash and catch the resumption of the rally on the other side. We're showing cumulative total profits of 416.4% for 2006, so it's been a pretty good year (actually, the model started on November 18, 2005, so it's been a pretty good 58 weeks).

 

DIGNITY DISCLAIMER: A few of you wrote to ask if there was any meaning to the acronym behind our name, Performance Investor Group, to which we can only reply that it would be above our dignity to address such affronts to our character. Suffice it to say that we continue to root for our subscribers and intend to bring home even more bacon in 2007.
 

Diggin' On James Brown
As you may have heard, James Brown, leader of 'The Famous Flames,' the 'Godfather of Soul' and 'The Hardest Working Man In Show Business' has passed from this mortal coil. Many years ago in a different life, Stubby played the electric bass (a Fender Telecaster neck screwed onto a Precision body) in an R&B cover band called 'J.B. & Water' which featured a singer named (what else?) J.B., a quintessential front man who could faithfully emulate all of Brown's squeals, grunts and moves. The 'Water' played every dive, dump and toilet from one end of Massachusetts' North Shore to the other and Stubby has never had as much fun since. By midnight folks would be packed in like sardines, bumpin', jumpin', even dancin' on top of the tables. If you've never been in a night club like that, you've missed an essential element of live music, not to mention a million cubic yards of second hand smoke. To this day Stubby can still hum the bass lines to classics like 'It's A Brand New Day So Let A Man Come In And Do The Popcorn.' Stubby has no idea what that song title means, but J.B. delivered it with conviction and Stubby nailed down the bass lines like a jack hammer. Now that James Brown is gone, it's hard to imagine him sharing the same Heaven with Ludwig von Beehoven, but at least they'll have two things in common: really cool pompadour hair do's and the 12-tone diatonic scale. In the following video we hear James Brown working out at the beginning of his career trajectory. If you can remain seated while listening to this you need a double shot of Ensure.

 

 

A Primer on Exchange Traded Funds

ETFs have all of the advantages of mutual funds with none of the disadvantages (front loading, early termination penalties), which is why Stubby likes to trade them. Here's another good overview we found at YouTube.

Touring the Stock Market With Stubby & Ward
If you ever wondered how a modern stock transaction is placed, you need to watch this! Pssst... keep a close eye on the 'Specialist' whose 'records and books are continually checked by the exchange'... heh, heh... sure, no doubt to make sure you get taken good and care of.  Hey, isn't that Ward Cleaver down there on the floor? We always wondered what he actually did for a living to keep June looking so good in those pearls at the breakfast table.

 

Stubby Wishes You a Heartfelt Merry Christmas!

"May the corpulent pagan elf in the red tutu bring you and yours all the material excesses of a strong, retail-driven fourth quarter."

 

Seasons Greetings From the Legal Department

From us ("the wishor") to you ("hereinafter called the "wishee"), please accept without obligation, implied or implicit, our best wishes for an environmentally conscious, socially responsible, politically correct, low stress, non-addictive, gender neutral celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasions and/or traditions of others, or their choice not to practice religious or secular traditions at all, and; a materialistically successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year 2001, but with due respect for the calendars of choice of other cultures or sects, and having regard to the race, creed, colour, age, physical ability, religious faith, choice of computer platform or dietary preference of the wishee.

By accepting this greeting you are bound by these terms that-

* This greeting is subject to further clarification or withdrawal;
* This greeting is freely transferable provided that no alteration shall be made to the original greeting and that the proprietary rights of the wishor are acknowledged;
* This greeting implies no promise by the wishor to actually implement any of the wishes;
* This greeting may not be enforceable in certain jurisdictions and/or the restrictions herein may not be binding upon certain wishees in certain jurisdictions and is revocable at the sole discretion of the wishor;
* This greeting is warranted to perform as reasonably may be expected within the usual application of good tidings, for a period of one year or until the issuance of a subsequent holiday greeting, whichever comes first;
* The wishor warrants this greeting only for the limited replacement of this wish or issuance of a new wish at the sole discretion of the wishor;
* Any references in this greeting to "the Lord", "Father Christmas", "Our Saviour", or any other festive figures, whether actual or fictitious, dead or alive, shall not imply any endorsement by or from them in respect of this greeting, and all proprietary rights in any referenced third party names and images are hereby acknowledged.

 

click here for an urgent message from Santa

 

Stubby Early Stock Warning System Goes Code Red!

Two of Stubby's proprietary market indicators have just flashed a warning to exit the U.S. stock market to the long side, protect profits, and get the heck out of Dodge. Click the links below to see screen shots of each indicator:

New Oscillating Sensitive Trend Reaction And Directionally Advanced Market Undulation System (NOSTRADAMUS)
On this spark chart we see momentum heading lower with the green line failing to make new highs.

Stubby Market Advancement Reversal Timer (SMART)
This is Stubby's master market indicator and can be seen sharply breaking down.

Could these be early warning signs of a long overdue but possibly mild retracement, or the start of a serious down leg and the end of life as we know it?

Dunno. But one way or another, stocks are probably about to drop for a while from here, although we may get a final upside bounce over the next few weeks to lull in another few million small investors seeking some easy money from the 'Santa Claus Really.'

Stubby's going to try to make a few bux on this move by buying some ETFs such as Profunds' Ultra Dow 30 (DXD) and Ultra S&P 500 (SDS) that take doubly leveraged short positions. In other words, if the Dow and the S&P drop, Stubby will make money at twice that the underlying indexes drop, which makes Mrs. Stubby happy and allows him to continue living here!

Although Stubby is not licensed to give financial advice which means that you should totally ignore everything he says, he has been heard to whisper under his breath that folks with money sitting in a 401(k) being managed by some anonymous bean counter down the hall with a B.A. in Business Administration who is getting their latest investment tips from MSNBC, Barrons, Fortune, Inc. Magazine, Jim Cramer or other equally (although unintentionally) contrarian sources might seriously consider rebalancing their portfolios with some short side exposure!

Stubby echoes his 7 year old son when he says: "It's never too early to avoid taking a bath!"
 

Why We Don't Have Paper Money

The delegates to the U.S. Constitution who met in Philadelphia in the hot summer of 1787 agreed, by vote, forever to deny to Congress the power 'to emit bills' which, in their day, meant to print paper money.

As Stubby is fond of pointing out, this is why we don't have paper money today!  Wait a minute... you mean you thought those green coupons in your wallet are real money?  more...

 

Stock Market Lingo: Get With the Program
If you're going to be a successful investor, it's imperative that you 'get with the program' and learn to speak the language. The following financial and investing terms have been compiled as a public service by Stubby Candles who never stops thinking of new ways to serve you. How would you like to be cooked?  more...

 

 

Kontratiev Winter: Is the World Coming to an End?

A phenomenon began in America under the administration of Ronald Reagan. It was under the watch of this much eulogized fiscal 'conservative' that the U.S. inflationary debt curve hit the afterburners and began a nearly vertical climb. Now that the U.S. is functionally bankrupt, if judged by the same accepted accounting practices that are routinely applied to business, we must pose the following, hopefully, non-rhetorical question: Is The World Coming to an End? (financially speaking, that is) more...

 

The Truth About Stock Brokers
Would you buy a used stock from this guy?

The last time you received a call from your stockbroker with a 'hot tip' did you ever stop to ask yourself, 'Why am I taking investment advice from a guy who sits in a cubicle all day and earns $50,000 a year?' Sure, some brokers are excellent, but certainly your retirement is too important to leave to a glorified salesperson. Since so many investors deal with one or more stock brokers and hang onto their every word of investment advice, we thought we'd borrow the pin the real estate market just landed on and pop another balloon.  more...

 

How to Retire Wealthy On $1 a Day
Perhaps you think it's difficult to accumulate a hefty retirement savings on a modest income. But not if you take into account the power of compound interest acting over time. This is nothing less than the 'Bankers Secret', except that it works against you when you're in debt. What if you could get it working for you? more...

 

What Makes Economists Tick?
Click here to see economists in action! Be sure to move your mouse around inside the box. Wait a minute ... are those financial planners?

Stubby asks: 'Do terms like 'inverted yield curve' or 'macroeconomic integration' mean anything in your neck of the woods? Do these terms make you money? Do theses terms make economists money? Do these terms make anyone money?'

Q: How much less does a university economics professor earn today than when s/he was driving a cab?

Here's a good one:

Albert Einstein dies and goes to heaven. Since heaven, for obvious reasons, is a centrally planned economy, St. Peter sheepishly informs him that they have a temporary housing shortage. He'll have to bunk with three other guys for a while.

Of course his new roomies are thrilled. The first one comes up to him and says: "Mr. Einstein, it's an honor to meet you. But I'd like to get to know you better. I have an IQ of 130".

So Einstein says: "Great. After lunch, let's bounce around some ideas on astrophysics I've been working on."

Then the second one comes up to him, and says: "Mr. Einstein, it's an honor. I'd also like to get to know you. I have an IQ of 100." So Einstein says: "Fine. Let me put my grip away, and we'll have a game of chess."

Then the third one walks up, and says: "Hi, Mr. Einstein. I'd also like to get to know you. I'm an economist but I'm afraid I'm not as smart as those other guys; I've only got an IQ of 70."

Einstein says: "So where do you think interest rates are going?"

For some more good jokes about economists click here ... and here.

 

Turn $300 a Month In Credit Card Payments into $1 Million Dollars in Just 13 Years!

First, let's make an assumption as to the size of the credit card balance. The average America family currently carries a combined total of $9,000 on revolving credit cards, such as VISA, MASTERCARD and DISCOVER.

The second assumption we have to make is that the minimum monthly payment on their credit card balance comes to 3% of the total, which historically has been what most card companies have required.

In this example, a 3% minimum monthly payment on a $9,000 balance would come to $300 a month, so that's the figure we'll work with. Let's assume that instead of spending those $300 each month in credit card payments that the family in this example is debt free according to the techniques taught in Two Steps To Wealth.

Let's also assume they can get an average 3% monthly return on their money. Now, if that sounds a little high to you, and perhaps even risky, rest assured that it's not! We will show you in Two Steps To Wealth how easy it can actually be.

Finally, let's also assume that the money will grow tax-deferred in an IRA account, that they never withdraw any of the funds, and we'll ignore the effects of inflation for purposes of this exercise.

So what's the answer? Are you sitting down?

$300 a month grown at 3% a month over just 13 years comes to $1,025,901.65.

So the next time you go to whip out the plastic and charge something you could easily live without, just stop and ask yourself: If I could jump forward 40 years and interview myself, would I agree with this spending decision?
 

The Real Cost of Mutual Funds

For the skinny on mutual funds that you won't get from your thoroughly licensed and highly regulated neighborhood financial planner check out this video we found on YouTube.com.

 

This is why, more and more, Stubby trades Exchange Traded funds (ETFs) which have all the advantages of mutual funds (sector, industry or regional diversification) with none of the disadvantages (front loading and  minimum commitment times, among others).

 

Some of our best profits for our Performance Investor Group research clients have come from ETFs. To see the ETFs we're in now click here and look in the column labeled 'type.' Just this past week we added ETF positions in Taiwan, Thailand and Switzerland. 

 

 

Future Forex Trading Articles Stubby Plans To Write:

Trading Without Looking
Forex: The Long and the Short Of It
It's Lonely at the Top (of a Trend Reversal)
I'm Back in the Straddle Again

Forex Safari: Tracking the Wild Pip
This Trade Ain't Big Enough For the Both of Us
Praise the Lord and Pass the Pips!
Been in a Draw Down For So Long It's Beginnin' to Look Like Up to Me Now
How to Keep Your Pips When All About You Are Losing Theirs
A Pip In Time Saves Nine
I Can't Believe I Traded The Whole Thing!
My Kingdom For A Trend
So Many Pips, So Little Time
Winning All The Time Means Never Having To Say You're Sorry
What Is The Moving Average of Forex Losers Using Moving Averages?
Determining Your Risk Exposure: Because Size Does Matter!
If I Tell You That I Love You Will You Replenish My Trading Account?'
Confessions of a Neanderthal Trader

Retirement Home Trading: Forex or Medicaid?
Trading from the Kitchen Table: Forex Meets Home Schooling
Would Dracula Make a Good Forex Trader?
Why Trading Forex Is Way Better Than Bingo Night at Church