Gauging The Gauges (Part Three)

As in any new year there comes a time when one must decide where, or why, one is going to proceed in any direction. Which was the underlying premise for writing this series. (links to: Part One or Part Two)

It’s one thing to set off on a course. It’s quite fool-headed to assume any gauge never needs to be adjusted or reset as to provide true readings. Assuming anything heralded across the media landscape is accurate without your own due diligence may cost you more than you bargained for.

There is probably no better example for this than the recent scientific expedition that were convinced they would find and record evidence of dwindling ice in the Antarctic.  All based on their beliefs, reasoning, and thinking, fortified by their models and gauges.

So sure and trusting of those gauges, they charted a vessel and set course for the Pole to record the devastation. Problem? So much ice – so thick, not only did their ship become ice-bound, the ice breaker sent to rescue them became stranded!

All appearances suggests someone never checked to verify if their gauge for ice being present was accurate or not. Even in this day of satellite technology – no one bothered to verify? If scientists can be so foolish, you think economists can’t fall into the same group think? (Please spare me the climate hate mail)

Just look at probably one of the foremost indicators or gauges used by everyone across the media as well as the so-called “smart crowd.” The unemployment number. (UE#)

All of the sudden I noticed media outlets changing their interpretation of the UE# in unison. Seemingly it has morphed overnight from one of the most accurate barometers for economic activity to suddenly a “questionable gauge.” Why?

Well of course, or as usual, pure politics. And this is where all the earlier playing, or spinning as its know to be can now actually work against the very people who need clarity more than ever. The unemployed themselves.

The UE# has always been gamed no matter who has been in office. However, since the financial crisis of 2008 that game has never been “played” as it seems of late. The evidence for that is how long UE emergency insurance payments have been going on. We are now approaching 5 years of benefit extensions. (I’m not stating for, or against. I’m just arguing perspective and possible impact, nothing more.)

The reason this number is far more important today in 2014 than previously is two-fold. First: The Federal Reserve policy of tapering their quantitative easing policy  has been tested. They actually began tapering. One must remember one of the foremost criteria for that decision was the UE#’s which recently printed 7%. The lowest since the crisis.

The dreaded idea of tapering was seen by nearly all of the financial media as well as Wall Street itself as “highly unlikely.” In my opinion, “unlikely” can no longer be viewed in the same paradigm. Which changes everything the markets have relied upon as an “accurate gauge” for what will happen next policy wise.

On the political side a new budget was signed into law the other day. What was noticeably absent? Further emergency unemployment payments effecting nearly 1.5 Million people immediately. i.e., No further benefits or payments.

What affect this will have on the psyche of the public at large is anyone’s guess for this 1.5 million persons are the first to lose immediate help. I remind you there are millions upon millions coming along that have been receiving benefits that will face this same dilemma.

Is a 7% UE# today the equivalent of a 7% job market say only 6 years ago? What happens to the businesses where these people live? Their landlords, grocers, city government, et al – when suddenly millions of people are suddenly found with ZERO income? And the issue doesn’t stop there.

Both sides of the political aisle have and still are using the current UE# as a gauge on whether or not emergency benefits should go on. Problem for both including everyone else is most haven’t a clue of how, or what that number truly represents any longer.

If people are now dropped abruptly from the roles of counted UE, the rate can actually fall even lower showing a seemingly better number. (e.g. 6.9% or lower)  And what does that do for policy calculations not only in Congress, but at the Federal Reserve? For if the Fed. changes anything in policy direction either way, Wall Street or the financial market as a whole can react in ways no gauge may have predicted.

I’ve been stressing the following example for years now. It seems both the political as well as the media are finally coming around to understanding what they’ve been willfully ignoring, along with its implications.

  • “Let’s say there are 1000 jobs with 1 person in each. If you lay off 100 people you would have an unemployment rate of 10%. If at the next report the companies that laid off those 100 workers now state those workers are not going to be rehired because – those jobs will no longer be available; (i.e.,Whether by attrition or a shuttering) You will now have a base line of 900 jobs for the next report. So by the Government’s calculation and reporting criteria the next unemployment report would show a 0% rate meaning 100% or full employment because the pool of available jobs is now smaller (meaning 900 instead of 1000) and they are all currently filled.”

For the 100 people who lost their job this type of math is what infuriates them, and with good reason.

Over the last 5 years this earlier gauge of economic health has been adulterated with years of chronically unemployed falling from the roles never before seen since the depression years. Yet, the number itself still holds monetary decision-making hostage as to implementing or discontinuing policies as if it were infallible or incorruptible.

Gauging what numbers, or what to do with those numbers, is a requisite for clear thinking. However, knowing if your gauges are reading correctly?
That’s a paramount requisite for an entrepreneur.

© 2014 Mark St.Cyr

Gauging The Gauges (Part Two)

As I stated in “Part One” of this series, the issue I believe that will determine whether or not bumps in the road will remain just that. Or, will a now complacent financial market realize not only are the gauges faulty but rather; will not be able to give any advance warnings other than an “idiot light.” For as anyone familiar with cars, once the light goes on – the damage has already happened.

Another one of the so-called market gauges that has been at the forefront of both the good, as well as the bad, is housing. Currently the financial media is once again all abuzz quoting anything related to housing. However, just as when you look at a gauge for tell-tale signs good or bad. You have to have the intellectual honesty as to compare one report, or one year vs another – truthfully.

Let me make my argument this way: A house for what ever the reason is always assumed to be purchased by a family and lived in. Regardless of earnings, loan terms, what ever. The next economic assumption is once they purchase, they’ll move into and live in it with their family. Immediately integrating into the community via schools, shopping, etc. The economic impact is to be felt throughout the micro-market surrounding them.

Multiply this for simple math by 10 homes in a surrounding area, and one can clearly see the multiplier effect. Anyone with some true business acumen can see (and try to gauge) what, where, why, or how things might progress further and both invest, or make plans in other businesses to support this market.

You would, as had been done for years, use previous data points, models, etc. as to try in computing risk or rewards. However, is this latest set of data points that everyone is now using as a “See..See! Sales are booming! Just look at the numbers.” even relevant to calculate the above’s example for economic impact? For my take: Absolutely not.

Currently the housing market is once again gaining steam. But – for quite possibly the worst of all reasons. Where once the money to purchase these homes (whether one likes who, how, or why) was ultimately for a great many families to live in. The most recent rash of purchases are being made by “all cash buyers.” At first blush this sounds wonderful. However, all cash buyers turns out to be a two-fold problem.

First, many of these buyers are not interested in anything else except some form of vehicle where they can place their money other than in a bank. Second: They more often than not don’t care who rents or stays in the home. While sometimes – being left vacant is all the better. They’ll just pay a management company to maintain it. The economic impact of such a purchase in a community? It can be argued the impact is negative rather than positive.

Next, it seems Wall Street has found a better way to slice and dice the housing market once again. This time? Screw slicing and dicing mortgages. Buy the homes outright at forced foreclosure sales and screw the existing owner out into the street. Or: Offer to rent it back to them at a figure above the mortgage price they couldn’t afford that put it into foreclosure in the first place.

Can’t afford it? No problem, here’s the Sheriff with your eviction papers. Many might say, “Well, they probably couldn’t afford it in the first place. Or, that’s the way of the world.” Yes, that may or may not be true however, there was one story on Bloomberg TV® about a couple being evicted under this scenario that just didn’t sit well with me.

The real issue that caught my ear was this: They had been trying to work through the mortgage modification process when all of a sudden during that process, they were notified that their mortgage holder sold their foreclosure where an “all cash buyer” bought it sight unseen then, abruptly foreclosed.

Yes, all legal, yet it just reeks of Mr. Potter in the classic, “It’s a wonderful life.” (Dec. 1946 RKO Radio Pictures) Could the timing actually be any more coincidental? But I digress.

Many of these “all cash buyers” are investment firms buying up real estate, then packaging the assets under an umbrella as to form some type of “investment vehicle.” Then they sell (or dump) those shares into a market fueled with a Federal Reserve funded printing frenzy of free money which is desperately (and usually quite foolishly) seeking anything with even the remotest of a promise of future yield. This is a recipe for disaster in my view.

Buying and slicing up the these assets that supposedly in the future will generate rental and price appreciation values based on the metrics that were used previously; is just the same as trying to say you have enough fuel in the tank to make it home because your old car went another 25 miles when the gauge read empty.

Problem is – this new car hasn’t been put to that test yet. And saying this gauge will work and read the same as the old one because, “They’re both fuel gauges and work the same way.” will get you in a lot of trouble. (Especially if her father is 6’5″ and works for the Sanitation Bureau.)

So my point here is this – today’s latest housing boon is not what we would have used to gauge further or more importantly greater economic impact to the overall economy as we did just a few years ago.

No, the impact of 10 homes in the latter scenario as compared to the earlier have two very different impacts. Not only monetarily but an even greater, more important social or psychological impact in the affected area.

For it’s not the robust sales that mean much to any given area as much as what those homes and families that dwell in them do to the area. For anyone with experience knows…
You don’t buy the house – You buy the neighborhood!

Seeing friends or family members lose their homes, or move out leaving a vacant, (or worse) rented property to people who could care less about the neighbors – is a recipe for failure. And that’s not going to do anyone any good now or in the future. For what it’s surely not – is some recipe for growth. You can have great neighborhood home sales – and still kill the neighborhood.

Quite possibly this is going to resolve itself as the latest gauge for an impending disaster.
That any idiot should have noticed was lit.

© 2014 Mark St.Cyr

Gauging The Gauges (Part 1)

As we put 2013 into the rear view mirror and focus our attention towards the horizon in front of us. I believe this coming year will be full of far more surprises than the preceding. And, quite possibly, even rival the past five. Why?

As of today there has been many mantras that have held firm. i.e., “Don’t fight the Fed.,” “Just buy the dip,” The trend is your friend,” etc. Anyone going against this school of thought in both intellectual argument as well as monetary positioning has found themselves on the wrong side. Even though the argument for holding such a view or position can be intellectually made. The results so far have shown in dramatic fashion; there are times intelligence – means nothing.

An example of this is described elegantly in Nassim Nicholas Taleb’s tour de force, Antifragile: Things that gain from disorder. (Nov. 2012 Random House) In it, he once again gives his example of the black swan. (I’m paraphrasing)
“Centuries of arguments that were based on the reasoning and so-called proof by the intellectuals that black swans didn’t exist, were laid to waste with just one sighting.” This example shows quite vividly that dogma – is not proof. Which is precisely what I believe the mantras posted above will prove to be in the end. Just when is anyone’s guess.

Of course prudence and diligence in trying to be positioned for that guess is all one can do. However, to make that “guess” one has to not only look at the gauges; one must know whether or not those gauges are accurate. Just because one believes their eyes are wide open doesn’t mean they aren’t running blind. This is where I feel 2014 will prove more difficult to many from politicians, to business leaders and financial players. Or, more importantly, the population at large.

Change, real change takes place this year in a myriad of ways. Across all sectors public as well as private that have not been at play since the financial crisis of 2009 was addressed. Today, we have traded in the previous vehicle for a different one, while many are assuming the gauges on this dashboard read exactly as the previous. They don’t and here’s why…

First: The Federal Reserve (Fed.) shocked many with their decision to actually begin tapering their monetary program by $10 Billion dollars a month. Some say this is chump change in the larger picture. Fair point however, that’s $120 Billion dollars that is no longer going to be funneled into the markets. If that figure isn’t large enough how about the 5 to 1, or 10 to 1, or even 15, 20 to 1 leverage that we know takes place in the financial markets. Quick math dictates you quite possibly be looking at $600 Billion on the low side to as much as $2.5 TRILLION or more on the high side no longer sloshing in and around the markets looking for a home (any home!) in a search for yield. Can you say Twitter®?

The issue doesn’t stop there. Every so-called “smart crowd” across the financial media is touting this is a good sign based on blah, blah, blah. Emerging markets are picking up the slack, China this, China that. All I’ll say is, did anyone see what is currently transpiring in China’s money market funding the day the Fed. announced the dreaded taper? All heck is now breaking loose. Why is this something that is quite possibly more important than China’s economic data?

Well if one remembers anything about the financial crisis in 2009, it wasn’t until the “breaking of the buck” in the money markets when all bets were off. Too many forget or disregard that point. What happens if China doesn’t respond to their growing crisis correctly? This is a new issue where there is no gauge – only an “idiot light.” And just like those indicators, once they lit up, the damage was already done. Was the taper the initial factor here? Hard to know but one needs to find a way to correctly gauge what effect corresponds from here on in.

Next is healthcare. Regardless of what I’ve heard or read one thing is clear too me. Less than 1 in 1 million have any idea about what will transpire this year for their healthcare coverage. The debacle that has happened since the roll out is miniscule in both its disruption or cancellations of policies. Employer provided insurance which dwarfs privately purchased plans goes into effect this year. With all the changes, turmoil, and confusion with new compliance regulations and more, businesses will feel either compelled or complacent in dropping employer-provided coverage. Period.

If you want to argue not true, then my guess is you’ve either never owned a business where you were responsible for meeting payroll or, you’ve never held a position high enough in any business where that decision fell at your level.

To help make this point a little more clear, one has to think of what’s transpiring from the position of both a small business owners perspective, as well as the larger corporate entity with a boardroom level decision-making structure.

They may make their decisions based on differing criteria yet the outcome will be the same regardless of criteria or process. (I can make this assessment because I’ve been at the helm of both the small and larger corporate entity with sales nearing $100 million annually)

When an owner is faced with the prospect of an expense – any expense – that not only can rise by double-digit percentages but rather double, triple, or more at any time. There’s only one thing that can be done to help ensure survival of that business. Find a way to remove it – immediately.

Some will say this won’t happen. I’ll contend the ones that say that haven’t an understanding of what it takes to truly run, and be in charge of a business.

When your accountant tells you your profit margin can’t absorb a 10% raise in any given expense let alone an exponential one, followed by your attorney advising you that; he can’t give you any advise because the law is changing day to day, and at will, so your only knowable protection against fines or suit is to discontinue the practice and possibly give a stipend letting the employees shop for their own. That’s exactly what will be done by the vast majority.

The once held premise that employees will leave no longer can or will be gauged as once before. Why? Because the companies they would have applied to will be doing, or contemplating the same.

Add onto this the previously under reported “49” rule also becomes forefront in any business decisions. (Under 50 employees the mandate to provide insurance is negated.)
Along with the same for 35 hour workers. Again, the under reporting of this phenom will be brought front and center this year. It was treated or regarded as some inconsequential news story during the past two years. Today – it’s law. Businesses regard anything and everything with a whole lot more diligence, and act accordingly, once anything is now deemed law. The effect this has on the economy is entirely unknown.

If a persons premium can rise from as little as $10.00 per month to as much as monthly premiums doubling or tripling where one is talking $100’s of dollars. Once again if you use simple math based on the number of possible people effected you again talking about $100’s of Billions of dollars annually coming right out of the economy – this year alone.

Some will disregard the significance of such increase. But lest I remind you – there are many, very hard working, financially prudent families where an extra $20.00 throws their household budget into chaos. For many it doesn’t take much to put them over the edge or into a crisis. Every dollar is accounted for and needed. Keep that in mind.

What does all this do to the prices or pricing of anything else in the economy? Does Walmart® sales go down? Does 401K contributions go down? Or, worse – redeemed? Do car sales continue higher if a health insurance payment rises this year at the equivalent of a car payment? Will 2013’s gauges even work in the new 2014 model? Hard to tell, we’re going to have to wait and see.

© 2014 Mark St. Cyr

Airing A Few Thoughts

First: Beyonce’
Currently she is all the buzz with releasing her newest album available in album form only, reminiscent of the 1970’s where you had to buy the whole, not pick and choose single songs. It’s been so far a great success. Why? She released it directly via iTunes® with no foreknowledge as to the release date, as well as no media campaign blitz that is currently the norm. She made the announcement only via her social media connections and web site where her fans picked up the ball (or album) and ran with it. However, the reporting on how she has shown you now don’t need marketing per se’ as one once did is a little disingenuous if not bordering on the absurd in my book.

The push to show how “social media” is now the new king or queen maker looks a little over done and over hyped. Using this as the proof positive “social media” marking event or point misses the mark. Actually this doesn’t show anything more than a perfectly executed one-off timing event which in itself – is marketing. (Don’t let me be misunderstood, I do think it was brilliant in idea and execution)

To say Beyonce’ didn’t market this release, or to say, because “no advertising” campaign was used to promote it, disingenuously tries to banish the facts that she is, for lack of a better term, a marketing promotional machine. (Although watching her perform does leave one questioning the machine or human analogy.)

What she has brought to light is what Seth Godin has been championing for over a decade now: Permission marketing, along with building a Tribe.
She has earned the right from her Tribe to communicate with them directly via social media and her own site. Also, she has earned permission to ask if they would like to purchase something she is selling. This is not something that came to light today because she’s suddenly a “social media sensation.” This is a direct result from years of the tireless work ethic, endless interviews or promotions, a relentless touring schedule, and more. What she is now demonstrating are the results available to someone where the power of distribution and more has moved into the performers or entrepreneurs side of the ledger, other than at the mercy of the “corporate elite.”

For it to be spun as if now any performer can just replicate the same tomorrow is a fools errand. The social media aspect as to move a fan base to action comes – after – not before the hard work of building that tribe. Along with gaining the trust of that very tribe as to gain permission to offer them something for sale. For if it were the other way around: We would be talking about the newest release made by a cat from LOLCats because after all, they are still the social media stars with so many “hits” it would make Beyonce’ blush.

Next: Phones on planes.

Well…the first thing that crossed my mind when typing the above was a vision of the movie, Snakes on Plane. (2006 New Line Cinema) For me personally; making, taking, or speaking on a cell phone is as normal to me as chatting with someone in public. It has nothing to do with the act, for we all do the equivalent everyday ourselves when we’re talking to someone at diner, traveling with a companion whether it be a car, train, boat, or more.
What has everyone (including myself) wrought with fear is being next to that person we’ve all been next to, or heard 100 yards away speaking on their phone as if there were connected by string – not technology. Where the louder you yelled, the greater the clarity. (It wasn’t for string vibration efficiency. It was you could actually hear the other kid via the screaming!)

There is nothing wrong with conversing on a phone as long as etiquette in voice modulation is your first concern. Just as if conversing to someone in the next seat about the weather, no one is going to think twice nor bat an eye. Yet, if you were to use pro-fain language where everyone around you is within earshot along with laughing and making a ruckus due to your conversation. Does it matter if there’s a phone involved or not? Hardly.

The reason why most will have their blood run cold as to whether or not they allow phone usage on flights is for that exact reason. Today, it’s also nearly impossible for anyone – including flight crew – to bring to the attention of the disturbing adults as to tone it down without a tirade of insults or worse being thrown by the “offended” party.
In this day and age where people have little to no social skills (yet they are proficient in “look at me” social skills on-line) we all know there are going to be issues. And – none of us want to be there when the inevitable fireworks happen.

For my part, I’m considering visiting NetJets® which is headquartered exactly 2.5 miles from my current residence. Because believe it or not, although traveling First Class may have its benefits: The first people you’ll hear at the back of the plane on phones won’t be coming from the rear of the plane rather…

It’ll be coming from someone seated next to me at the front.

© 2013 Mark St.Cyr

Capitulate Doesn’t Mean Joining Other Side

Here’s the definition courtesy of the Oxford Dictionary®:
capitulate: verb
Cease to resist an opponent or an unwelcome demand; surrender: The patriots had to capitulate to the enemy forces.

When one joins the other side after waging a war or conflict against it. They don’t call you a “capitulator.” They use a term far more harsh.

Why I’m making this statement crystal clear is to emphasize what I’m noting and reading once again throughout the financial media. Where investors of once held high regard for either being contrarian or short side investors (aka Bears) are throwing in the towel sighting they can not compete (as in making profits for their members) and in so doing they are now giving rise to the notion, “If you can’t beat’em – join’em!”

The reasoning’s for why they are taking this new-found stance not only has me shaking my head. It has me waving a finger at the same time. What I seem to be hearing or reading is more CYA (cover your arse) than anything else remotely insightful.

The latest example of this is none other than Hugh Hendry’s latest letter on throwing in the towel. Now before I launch let me express, I have had a great respect for Mr. Hendry over the years. I have watched many an interview, read many a letter, listened closely to many of his analysis on markets, their causalities, and have seen him as an unabashed “willing to call bull-crap – bull-crap” force. No matter whom was trying to spread it before him.

I did then – as well as still do, hold his financial insights and acumen in very high regard. However, it was his latest letter to investors and its tone in which I took particular issue with. (You can read if in full here) And here’s why…

If one is to take at face value the tenure and tone of the letter. One can’t help wondering where was this thinking 3 months, six months, a year or more ago? And that is the crux of my whole contention that we are not talking capitulation, rather something entirely different.

Here’s is a statement attributed to Mr. Hendry that I just can’t seem to get my hands around: “Crashing is the least of my concerns. I can deal with that, but I cannot risk my reputation because we are in this virtuous loop where the market is trending.”

I can see that coming from any of the so-called “smart crowd” paraded across the financial media landscape. But, coming from him I was a little taken back. For the situations or analysis he seemed to be outlining doesn’t get realized in an, “A-ha!” type moment from my viewpoint. They were either there and rebuked based on other criteria or – it’s only allowed itself to be spun into some believable – sell-able – hypothesis. I could be totally wrong, or off base. However, that’s the feeling I had as I was reading.

It’s one thing to look at something, think it means one thing or another based on correlations, causation, or other factors only to find what once was – is now not. But, (and it’s a very big but) can you take the correlations, or causation factors that moved markets in the past and transpose those by overlaying them into today’s models where none of the previous influences apply other than name only?
i.e., Is the 7% unemployment figure reported today a true qualitative figure to use and compare as to what 7% unemployment (UE) was 20 years ago? (If you said yes, I have a bridge I would like you to consider investing in.)

Although the UE example above is my own. I couldn’t help looking at all the correlations or calls for causation without viewing them through that prism. And this is not something isolated to Mr. Hendry. This seems to be the underlying principle or vehicle used by many of these last “capitulating” bears. Followed by many with the most over used CYA statement of the year: “We all know this will end badly.”

Personally I am a firm believer in stating you’re wrong. (I’ve stated that case here) However, being wrong for the right reasons is something the professional needs to not only take into their own counsel, they have to deliver that reasoning to others as well. Even if credibility as well as money may be on the line. Anything less and it has all the trappings for giving birth to questioning all the underlying reasoning both past, as well as future.

If investment advisers and others came out and made statements along the lines of:
Listen, I/we’ve been wrong in our timing. Yet, as far as our thinking, it has not changed. But – we seem to be leaving money on the table. What we would like to express now or advise is that we are in perilous, uncharted waters. Anyone who tells you what is going to happen from here with any certainty is embarking in a fools notion. Protecting assets, and the fear of a crash is still a paramount concern. However, for those who want to put any money at risk as to try to capture any remaining momentum. Here’s an idea. And it’s nothing more than that, for we are in uncharted waters. So: Caveat emptor!

I personally can read, understand, and quite possibly invest is such an idea. For the reasoning behind it is understandable. Yet, this is what true capitulation is, is it not?

Stating that we’re now going higher because of momentum based on technical or fundamentals used to gauge previous moves (i.e.,1+1=2 can now mean 1+1= ____what ever you want) is a tad flawed in my thinking.

Again, this is what seems to be the over arching theme from many I still highly regard. (Just because I disagree on this point doesn’t mean I’m right or they’re wrong. Only time will tell.)

There have been many (including myself) who have seen or expected more catastrophe or economic challenges to occur such as Jim Rogers, Harry Dent, Robert Prechter, Jim Chanos, and others. Yet, the call has yet to materialize. However, what I have not seen is capitulation as to say: “Hey, we’ve been wrong so it’s probably more blue sky from here!” No, what they have seemed to capitulate on was that their call on the timing has been off. Nothing more.

Agree or disagree but the reasoning behind the “why” they believe, what they believe, and the analysis behind it, is still as sound as it was when presented. More than not it has shown to give one even more reason as to apply even more caution the longer or further we travel this path.

I mean truly: If I stated famed investor Jim Rogers said something to the effect that he was selling all his gold positions because he feels gold is in a seemingly unstoppable bear market. Where momentum is only to the downside. And, there was nothing else to do other than “capitulate” and sell. Followed with charts, and technicals for selling your gold portfolios based on today’s analysis, as well as today’s fundamental overlays.

Would I have your attention?

Or would you be asking for you money back?

© 2013 Mark St.Cyr

Perspective Is Needed More Than Just Numbers

Like many of you during the holiday break I also had varying conversations on a wide range of topics with either family members or friends. One topic that came up many times was where the stock market would end up by year-end. People gave their differing opinions for both higher and lower guesses. However, what seemed to be missing from any of the discussions was whether the rise was valid or not. In other words, just why was the market at these levels to begin with?

It seemed as if everyone intuitively knew the reason yet, because they knew, they didn’t want to say it. Everyone was happy about their now increased 401k balances but, (and it’s a very big but) they seemed to feel very insecure on discussing anything in greater detail in much the same manner someone who inherited great wealth feels uncomfortable talking to someone who earned theirs.

It seems for lack of a better way to express it. People understood deep down that they could claim no acumen in their stock picking. They just invested in the main indexes and have let it ride. And thanks to the Federal Reserve (Fed.) handing free money to the banks to use, the market has not only gone up, it’s rocketed to heights never before seen in the history of financial markets.

So not to beat a dead horse on such a subject (both you and many others know or have read my dissertations on this very topic) I just couldn’t help myself from interjecting into one conversation where it seemed the amounts of money being discussed represented only numbers such as zeros and decimal points. i.e., “Well the Fed. is pumping in $85 Billion now. They’ll probably cut back to $80 or $75 in the coming months. It’s really not that much of a cut back, it shouldn’t have much of an impact blah, blah, blah.”

Being both a business person and entrepreneur I was taken back on the casualness of the numbers. It’s as if Billions is just loose change. To talk real money we have to now talk Trillions. So as I usually do I added my two cents into the conversation to give some perspective of the difference that’s taking place currently and, what it would take to equal just the dollar value being pumped into the markets. And why this type of intervention in the markets is so perilous.

The main driver is: There’s no real economic underpinning such as job creation, goods and services free-flowing, or market expansions from a GDP expansion. No, what is taking place currently is with all this money pumping, the GDP and other economic benchmarks are contracting. Even Wall Street itself is contracting. And they are the ones getting the money!

So here’s a quick example I used to give perspective. This is not – I repeat – not an endorsement of what I believe we should be spending our money on. It’s just an analogy so one could wrap their heads around the differing circumstances. For if we are talking BIG numbers, you’re going to need BIG things to represent them.

Just talk about military spending and you will get people lining up as if they themselves are going to battle. One side will say we need less spending, the other will say we need more. Again, both sides will be passionate on their beliefs. Many of the reasoning’s will be sound, both for and against. “We need this or, we need that!” Butted against the opposing, “We need to reduce or eliminate this or that!”

All the arguments for or against will be buttressed around the argument of money. One way or another. And that’s a fair point however, let’s put a little perspective here as to get everyone on the same page when it comes to exactly how much money the Federal Reserve is printing and pushing into the financial markets with little to nothing more than an inflated asset class along with no economic activity to support it.

Bring up the subject whether they should or shouldn’t stop or taper and people seem to have no problem with spending or printing the $85 Billion month after month if that’s what it takes. Regardless if they understand what $85 Billion represents or not in any other form. It’s a fools way to look at it in my opinion. So here’s some perspective using items procured through the military.

If the Federal Reserve only cut their quantitative easing (QE) this month from $85 Billion to say $75 Billion. That cut would represent approximately the equivalent of building – FIVE – B2 Stealth Bombers. That’s per month. And that’s the reduction! Currently the Fed. is printing and pushing money into the markets as if we ordered (wait for it….) FORTY TWO brand spanking new B-2 Stealth Bombers – per month!

Let’s not forget Congress cut the building of the B-2 at a little over 25 planes down from the original 100 or so first envisioned because of costs. The Fed. today injects into the markets monthly the monetary equivalent to purchase double the existing force again – every month.

Want a better representation? In just 1 year, again just one year, the Federal Reserve has pumped enough money into the markets to have purchased, (Again, wait for it...) FIVE HUNDRED and TEN new B2’s. Remember – we now have somewhere in the mid 20’s. (I used 2 billion for each plane since that’s in line where they were when first ordered, however at that pace would a discount be in order? Just sayin’)

So again to make it clear – that’s just one year in planes. What would it be if we used say the most expensive and technological marvels on the planet? The Nimitz Class Nuclear Powered Aircraft Carrier.

Currently they have an approximate price tag of around $13 to $14 Billion dollars each. Based on the above math QE pumps into the markets the equivalent of purchasing SIX brand new state of the art Nimitz Class Aircraft Carriers – per month!

In just one year the same amount of QE dollars would purchase SEVENTY TWO. Again for a little perspective our current navy stands at around 19 commissioned ships. That’s both old as well as new combined. Once again in just one year, we could replace and expand our entire aircraft carrier fleet with the newest and greatest available nearly 4 times over.

Let’s just throw one more technological marvel in for the fun of it. One of my absolute favorite marvels the world has created. The submarine. Using today’s most advanced example aka “Boomers” or Ohio class. You could build approximately TEN per month at the pace the Fed. is injecting money.

At only $6 to $8 billion a piece that means in one year you could build nearly One Hundred and Twenty brand spanking new technological marvels. Again – in just one year. I believe that would replace all existing vessels also by multiple folds.

Now let me reiterate what I just outlined here again as to get some perspective on not only the dollar amounts but, what those dollar amounts truly entail.

In just 3 years the Federal Reserve has pushed into the financial markets via the QE programs the equivalent in dollar amounts to have purchased 510 B-2 Stealth Bombers, 72 Nimitz Class Air Craft Carriers, 120 Ohio Class Submarines. and I still have nearly 2 more years of money to appropriate where ever or for what ever I desire. i.e., Two TRILLION is still in my pocket left to spend. QE and its equivalents are now nearing 5 years.

I still have plenty left to buy the aircraft, to man them or, the missiles to outfit them. Heck, that’s just if I stop here. So far there is no indication the Fed. is going to stop and there’s also talk that the new Chairperson might be inclined to spend more!

Maybe we should add a few M1 Abrams tanks just for the fun of it. They’re about $7 Million a piece so we can get Oh let’s say TWELVE  THOUSAND a month. Yes that’s 12,000 per month or One Hundred Forty Four Thousand (let that number sink in – 144,000) in a year. Sounds like a bargain when I state it that way doesn’t it? And I would still have a Trillion left if they stopped printing today.

But here’s the real crux of this argument and why I stated it as such. Sure it’s a little hyperbole and the math is not exact. We would never do now nor would anyone ever approve of such a plan. However, think of where GDP and the economic output as to where it would be today as to employ the talent needed to build those marvels. The engineers, the skilled labor, the steel, the copper, the mechanized equipment, the hotels, restaurants, and more to feed those that just supply the day labor, never mind the industrial backbone of supply that would be needed and more.

If one thinks there is a spin-off in trickle up or down money in housing or cars – just think about the economic impact building one of these marvels entails. At the above run rate you probably couldn’t have an unemployment issue. The impact would be far too great across far too many industries. Yet…

The best the Fed. can now show for all it’s pushing of free money into the financial markets is a ball of string it can’t even get the cat to play with. And that’s why all of this is so dangerous to everyone in the end. Because even the cat knows chasing this piece of string is a fool’s errand.

What is indisputable is what would be taking place in this economy in terms of real sustainable growth if that same equivalent of money was transpiring because of real economic principles.

The only thing transpiring currently is “free money” is now flowing into bank coffers and buying up risky assets while having adverse effects as to the velocity of money. All while seeming to be leading us into further and further out into more treacherous waters.

All without the ships and planes to rescue us when we’ll need them most.

© 2013 Mark St.Cyr

If You Thought Patent Trolls Were A Scourge – Meet Their Cousin

Today, a scourge running through businesses across the globe is the now named “patent troll.” For those not that familiar with the term, in a nutshell it means a company, or someone acquires the rights to a patent then scours the landscape looking for any possible infringement that either may or may not be legitimate.

The purpose is to some how bilk money from someone (anyone) either through the courts or, just through the intimidation process of creating a court case where settling is cheaper rather than defending or fighting. i.e., “How much to make this go away?”

Currently it is taking a healthy toll on both innovation as well as balance sheets. But – that’s corporate stuff right? Not like it’s something you should concern yourself with correct? Oh contraire. Meet their newest family member coming to a web site near you. The “Review Troll.” (Yes, I just coined that term.)

Here’s an example of how this game seems to now be taking shape. It goes something like this…

You purchase an item from what you consider to be a legitimate web site or vendor. (“Consider” doesn’t imply they aren’t. They very well can be completely 100% legal, legitimate sellers of goods or services.)
Then for what ever the reasons you are dissatisfied with the transaction. You never received the product, didn’t live up to the description, you couldn’t get anyone to respond to queries, etc.

You then decide as to help others from experiencing what you just went through, you somewhere write or post a negative review of your experience. Believing, you either are helping others or, you were so infuriated you just wanted to get it off your chest. As far as you’re concerned – “It’s over!” However, for the Review Troll –  it’s just begun.

More than likely during the checkout process you just clicked that annoying “You agree to our terms and conditions” that is ubiquitous across the web as to get to the checkout screen. And you, just like most of us, never read them because we feel they’re just boiler plate stuff.

Well, what happens when within that seemingly “boiler plate” dialogue there is to be found a little unnoticed statement where as: You agree not to post any negative reviews or feedback in any form. If you do, you will be required to pay a fine to that company of THOUSANDS of dollars. Followed with: If you refuse to pay – you will be reported to the nation’s top credit bureaus.

Sounds far-fetched correct? Maybe even a little nuts you say as in, “Won’t happen. That has to be illegal or blackmail or something, but what ever it is – it’s wrong!” It would seem not only can it happen, it has happened to a couple in Utah three years after the original incident occurred. Welcome to the new age of the “Review Trolls.” 

For all intents and purposes, I believe these can be a far more debilitating and shocking a revelation on the web than its older family member. Here is a direct link to this the story via KUTV in Salt Lake City. I highly encourage you to view or read it.

In a time where companies and individuals on-line are desperately trying to produce some if not any type of revenue. There will be those out there that will turn to desperate measures, and for some, they will use it as a sword to ward of negative reviews feeling they are within their legitimate rights to do so. This is going to be a mess and I fear will get far worse before it gets better.

Just as in the past companies would send never ordered merchandise to homes and businesses with the seemingly non-threatening note of: “If you like it, keep it and send us a check. If not – just ship it back.” Only to know all too well there would be a myriad of people who would just keep it thinking “Hey I didn’t order this, tough luck on you, I’m keeping it!” Or, “I never received such an item.” Only to then find a torrent of never-ending invoices, then demands, warnings, then suits for penalty to pay. Ruining people’s credit and or good names.

Finally it was challenged in courts and found an illegal or entrapment like practice and was stopped.  (That’s basically why you have the ability to throw junk mail out without opening it. You can’t be bound without your consent.)

Where this goes from here is anyone’s guess. However, I believe this will get far worse going forward before it gets better. Especially since there is the very real possibility there will be people who will take an attitude similar to what many businesses do today: Right, wrong, doesn’t matter. The first instinct of, “How much to make this go away?”

Which feeds the monster even more.

© 2013 Mark St.Cyr

No Reprieve Will Save The ACA’s Bacon

I was speaking with people when the president made an announcement concerning a temporary fix to the now troubled Affordable Care Act (ACA) aka Obamacare.

When the press conference finished a few inferred from the speech that “Well, guess that fixes things for now.” Personally I was shocked by the reaction because from my point of view. Not only did it not fix anything. I believe it just made a bad situation worse. Let me explain as I did to the others.
(Please save the emails. This has nothing to do about a person, political side, or anything else. It’s about understanding business and its implications.)

What’s currently front and center of the ongoing debate aside from the debacle of the web site roll out is the promise: “If you like your policy – you can keep it.”

As its been reported everywhere, millions of subscribers have been notified their former policies have been cancelled. It doesn’t matter if you feel this is right or wrong. It is what it is. According to the ACA rules and regulations. Those policies could no longer exist as products for sale. Not that they shouldn’t continue selling them. It became illegal when the ACA took effect.

That is such a critical distinction to understand than the idea of “just discontinuing.” Why? Because if you can not continue participating in a business structure or market because it’s no longer legal, not just because of a profit motive or any other reason. The first thing any prudent company will do is to get rid of any and all infrastructure pertaining to that old and now illegal business model.

What many forget is the mandate to discontinue offering such policies was told to the marketplace 3 1/2 years ago. It was then stated that this will be the new law and to adjust or discontinue. So, as businesses will do, they began making the necessary changes.

This is not an insignificant point. The healthcare industry is by some reports 1/6 of the total US economy. For 3 1/2 years you have had nearly $3,000,000,000,000.00 (3 Trillion) per year of yearly market infrastructure moving, adjusting, shrinking, growing, and more all behind the scenes. Never-mind the other parts of the economy that has been impacted and making changes accordingly. i.e., People being reduced to part-time, cutting staff to not hit the 50 employee mark, and more.

The reasons for these changes is because of changes in law. Not market conditions. Changes based on changes in law have far more reaching or permanent implications than plain market conditions. Market conditions allow trials at making something unprofitable profitable. Again, if possible or if one is so daring. Law – means done. There is nothing further to try – it’s illegal now, don’t waste anymore time, money, or any other resources. Period.

Why this distinction in understanding is so important is because many (especially some entrepreneurs which surprised me) think the president’s suggestion that one might be able to continue with ones former plan for another year would take some pressure off of people.

Not only do I feel this is ludicrous. I also believe It can’t be done as suggested. This is not some “flick of a switch” or “just pull the files out of the recycle bins” and say..“No Prob – just send in your check.”  It’s far, far, far, (did I say far?) more complicated. Let me express what I’m trying to convey using this analogy:

Imagine if a new law was introduced and passed that would make the production of bacon using smokehouses or smoke was now illegal. From now on the new law would make it both illegal to make or sell bacon produced in or used via the smoking method.

Only bacon made through the chemical process of injecting the flavoring liquid smoke would now be acceptable. By law. However, companies and consumers would have 3 1/2 years to get ready to comply with the new mandates. What do you think bacon producers are going to begin doing?

Immediately changes would be implemented to reduce stockpiles of supplies and more not needed for the production used in smoking. People that manned the ovens would be put on notice their jobs would be discontinued. Others would immediately begin the process for dismantlement of ovens, smokehouses, and their facilities. Then followed with the selling of real estate, equipment, or more. The specialized equipment used would be either sold or scrapped.

You as a consumer may not even notice all this behind the scenes disruption because stores are still carrying the bacon you now and love. However as the supplies get reduced it still might go by almost unnoticed because if it’s not at one store you can still find some at another.

This will go on until on one fateful day, 3 1/2 years later the law takes effect. Your bacon? Gone. Now it’s not only no longer for sale – any left is thrown into the garbage. Now it’s illegal to produce, sell, or consume. Again – by law.

In an uproar from consumers a decision is made to rescind the mandate for another year till people find a better bacon substitute. Sounds great at first blush. However, the smoke houses, and all the other infrastructure that was used to process the now illegal bacon is gone. And no one, no company, no corporation, no sane entrepreneur would try as to put the infrastructure needed for such a complex product back together along with the monetary investments needed to produce for 1 year. (If you don’t think the process of making bacon is complex, you never worked under USDA inspection.)

Insurance is no different to this analogy. People, infrastructure, real estate, and more have been radically changed over the last 3 1/2 years. New companies have begun in anticipation one product would be no longer available. Others have reduced their staff because they would no longer be able to offer their former products. Doctors, hospitals, and more have changed staffing based on accepting or not accepting new or old services. The list is near endless. Remember – this is 1/6 of the total US economy that has been disrupted. Not just a product offering.

Again this has been taking place over the last 3 1/2 years. It would take that long if not longer as to just try to reinstate things back 50%. But (and it’s a very big but) to make changes of reversion that would be cancelled 12 months later again? Not a chance.

The only good thing out of the above we can take away for now is…

They left bacon alone – at least for now.

© 2013 Mark St.Cyr

How To Retire Retirement Troubles

I’m going to make a bold statement and argument right here, right now. If you want to live your life free from most of the self-imposed anxiety many of you cower under. I’m going to state how you can put it all behind you. If, you’re serious.

I was only going to expound on this point in my next book however, I think far too many of you need to truly think about, and get your arms around it, now rather than later. What is this point? Retirement.

Too many of you are becoming paralyzed by what to do about your future and amplifying those fears by your indecision as to what you should be doing today. So – you do nothing. Rinse, repeat.

I want to give you some real food for thought. Agree or disagree with my premise all you like. All I’m suggesting is that you think. Nothing more. So with that, I’ll just make a brief argument for today.

First off, let’s agree right now to forget about waiting to make any real changes or commitments in one’s life till after the holidays. Or, waiting for the “new year” as to set some arbitrary “goals” that probably less than 1 in a hundred of you will continue by February, let alone the entire year when it comes to anything financial. If it’s serious enough (and I mean any change) that a change should be made. Make it now. If not, you’re just kidding yourself that you’ll do something using dates, symbols, unicorns, or rainbows as inspiration.

If you were bleeding you wouldn’t wait till the clock stuck 10 before applying a bandage. Emotional or worrisome bleeding falls under this same umbrella. If you’re worried or something else. The time is now to apply the remedy is it not?

Today, so many of you are held captive by the over arching fear of “doom” called retirement. Questions are asked of one’s self, i.e., “What if I don’t have enough money?” and more. Stop it! This is not an empowering way in the least of looking at your future. Let alone trying to come up with ideas as to correct it.

For many of you it’ll produce nothing more than knee jerk reactions to a load of bunk spoon feed to you through advertising campaigns designed to invoke those very feelings of anxiety over your future. Again, you have those feelings precisely as a result from being caught up in this ruse set up by the very people who profit by your insecurity. i.e., the financial/investment/media complex et al.

I’m not trying to be controversial or contrarian only for the sake of being different. I want you to really think so I’m going to ask you to ponder some thoughts or questions. You may not have the answers immediately however, from right now roll these thoughts around that noggin of yours till you can answer honestly to yourself. And, I mean honestly, not something you’ll blow off as, “Yeah, but I could never do that. That would be hard!” Or, “Well it would be nice but, I just couldn’t make such a change.” Those types of answers are not honest – they’re excuses. Period.
(Remember this is a thought exercise, I’m not saying, nor trying to allude that I’m some sort of financial adviser.)

So here’s the first part of this thought process as to set up some real questions:

If you use the age 65 as most do today as retirement. That would infer that either you or most people would stop working and need to now live from savings or retirement assets.

OK, so how much do you need if on average a person will live moderately healthy and viable to say age 85? (And many will go far beyond.) $1 million? Sorry, not a chance. In just the last 5 years your payable rate of interest doesn’t even cover today’s inflation rates. And, today, we basically have no inflation. (As per the data sets used)

There was a time you could conceivably receive 5% almost risk free, (Just 5 years ago!) but today? Not a chance. So, to generate the same $50K per year off that $1 million some thought sufficient just 5 years ago. Now needs about $4 or $5 million to generate that same $50K. (Don’t let the weight of that math fall by the way side. It’s imperative to really grasp that example.)

And, forget about the old term “risk free.” That is long gone. There is nothing any longer that is even considered “risk free.” No matter what anyone tells you. So, I need to ask: Do you have enough? Or, well along enough as to not worry? My guess for many will be – no. (Never mind the people who were already retired thinking they were set.)

Fair enough. However, that doesn’t change that you need an answer. You either must figure out how you’re going to amass those millions of $’s now needed over and above your original goal. (Which by all means is very possible, but don’t confuse my main point) Or, you are going to have to do something else. There is no alternative. Just “what” is the all important question. The problem with most is the numbers or calculations seem just so far out of reach the only thing they do is to now ignore it. Which places one back into that vortex producing nothing but more feelings of anxiety or helplessness.

If you want control of your life you are going to have to do something about it. Or, you are not only going to have to live with that nagging fear the rest of your adult life. But, (and it’s a very big but) what can be far worse, that picture you fear in the future actually can be far worse later on down the road than you visualize it today. That’s not an understatement. Just look around you to anyone that put their financial faith and well-being anywhere else other – than in themselves. For some the consequences have been devastating.

Again, understand the true ramifications. Really get it in your gut. This is not a game where nothing bad can happen. The game of life doesn’t play games. That’s not a play on words.

So the question for you is this: What can you do about it? Today, not tomorrow. Right now, that proves once and for all that you’re in control of your life and destiny. Regardless of what happens in the markets, economy, the world, what ever.

Here’s my suggestion for you to contemplate. However, let me be right up front and honest in stating – it is probably the hardest undertaking and self-analysis you’ll ever embark in since reaching adulthood. Because this is where the proverbial rubber hits the road, when one decides, then commits, to improving ones life or future. If you believe I’m just throwing hyperbole out there, I’ll follow it by saying the easier of the choices I propose here is probably earning or acquiring the millions of extra $’s. (Hopefully I have your attention still.)

Here’s my argument to consider…

If you decided today that you would no longer buy into the construct of “retirement” as it is now known. That you would continue to work well past the age of 65 only, that you would be doing work that you loved to do. Work that could, and would, supply you with an income stream that more than covered your expenses. (I mean that generates actual, real, legal tender that is accepted by any bank as a deposit. A vocation – not a hobby. Although some hobbies can be turned into true businesses.)  How much money would you now need to retire that would also last you far into the unforeseen future? Answer: Around zero. Because real retirement is a state of mind – not bank balances.

Your retirement is based on the strength you give you, and your decisions. Not on the strength of your bank balances. And – the last 5 years should be more than proof to anyone that what’s in the bank ain’t always all that reliable.

You don’t need to take my word for this way of thinking. Let me read you a quote from my foremost personal hero some of you may know of, Napoleon Hill. (From his recently discovered and released work Outwitting The Devil ©2011 The Napoleon Hill Foundation – Sterling New York (imprint of Sterling Publishing)

“Material and financial fortunes, when reduced to their most liquid terms, are measurable in terms of bank balances. Bank balances are no stronger than banks.”

So with that in mind I ask you: Where is the prudent place to fortify one’s self against the perils inherent in the “retirement” question?
Solely placing your faith and interest in today’s banks for your security or balances? Or, placing one’s interest, paying compounded dividends, that pay off in more than just solidifying one against future turmoil by putting one’s precious fortune (discretionary time and earning power) directly under and in the total control of one’s self?
(This is not to say I’m advocating for one not to save or contribute to retirement savings. Saving and savings is a prudent requisite for everyone.)

I’ll follow that up with another very bold statement (As if I would state something other?) If you’re brave enough, you can retire (mentally) right now. Ending the emotional roller-coaster of fear you’ve probably been riding with no light at the end of some tunnel. (Yes…I just said that.)

Think deeply about it. Don’t blow it off. I mean really think. The consequences on how you answer it can be profound once you understand the implications contained within.

Let me further illuminate what I’m trying to convey using this example:

No matter where you are in life. Whether 20 something or 50 something. (you can be older there’s no age limit) If what you are currently doing has a cut off date. i.e., mandatory retirement. And, you dislike the job or career path. Why not engage (as in start learning or beginning to build it now) in something you love to do that can provide you a living that covers your expenses. Something that if you were given the opportunity to do or start – you wouldn’t or couldn’t dream of ever not doing? i.e., If you’re currently a _________(fill in the blank) and you must give it up at age 65 however you love fixing lawnmowers with a passion. Start working in what ever spare time you have to build a lawnmower repair business? (The key distinction there is business…not pastime.) You fill in the blank and change the business that fits you. Then…consider the implications.

Add to all this, the satisfaction of knowing that if you ever found or liked something different, (or even better) along the path: You could just change direction and do that. Forever if you want. No retirement what so ever unless you say so. Along with your earning power and the ability for it to increase even further, rather than decreasing with time. Is that alone not worth the price of consideration?

70 – 80 – 90 – 100. Doesn’t matter. As long as you want to continue and can get paid for your work. You continue.

If you can buy into this line of thinking then begin by adding what you need to start such a journey into your life today. And run with it. Run like Forest Gump would run. Just run! Leaving the shackles to fall by the way side not caring how or why they fell. Just run! And don’t look back.

Again, really think about what I just proposed. Put yourself in that moment and contemplate: What it would be like for you? What would that do to your psyche? Not only in the future but rather – right now!

Do movie actors or actresses say “OK, I’m 65 I’m done!” Tell that to Robert De Niro, Morgan Freeman, or any of the others in their latest films. (lest we forget George Burns who still took bookings for his 100th birthday)

How about people such as Jesse James the motorcycle builder? Think at 65 he’s just going to say, “Yep, I’ll just go watch the birds sing now.” I doubt it. Or, forget about all the “stars” per se. How about the local tattoo artist, musician, painter, writer, lawyer, doctor, et al. The ones that truly love what they are doing with a passion. You couldn’t stop them from showing up to their shops if you barred the doors. And, you know this to be true for you’ve seen them for yourselves. You’ve probably even commented silently, “Why are they still doing it?”

Why? For many it’s because they love it. Sure there may be some that have to, but for the many that still love what they do, the fear that you may be harboring is not part of their thinking. Or better yet – not their burden. They’re living on their terms, not some Madison Avenue, Wall Street centered celluloid representation of what “retirement” is or “should be.”

Again, it doesn’t matter if they have millions of dollars in the bank or not. If they (or you) are still viable, still creating, still earning, they (again, or you) don’t have to shoulder the unwanted burden of: “I don’t or won’t ever have enough to retire. So I’ll live a life of fearing I’ll never have enough.” 

No, they live and continue to produce on their terms. Regardless of any age beliefs far too many impose on themselves. And they love living to do it. But again, that’s the hard part for most to understand and begin striving for. Actually, for many – it’s far harder than trying to earn the millions of $’s they think they need. Although, I’ll say again, “Earning the millions is probably easier for most than changing their thoughts.”

How can I say such a thing? Well to be truthful here’s the real reason…
“Not earning the millions of $’s can be blamed on anything or everything except themselves. Not changing ones thoughts can only be blamed on yourself.”
Which is exactly where the crux of any change lies. Shrug the implications of that statement off at your own peril. Because in the end, that’s all everything in life boils down to.

Where one places both the responsibility and the blame is paramount. Get that part correctly in one’s mind, and the rest falls into place as if magically.

Look hypothetically at what your expenses would be weekly or monthly at age 65. Sit down alone somewhere quiet then imagine doing work you loved that provided income that covered those expenses. i.e., selling X goods, or, providing some service, etc.

You can start moving your life towards that direction immediately for probably little to no money right now. Whether it be part-time from your basement, or just to start learning the necessary skills to do it in the future. (go to tattoo school, or what ever.) And you’re done. You’ve just solved your retirement issues. Because – you’re not retiring. Just retiring from what others believe it is. (Which is an uplifting experience in itself.)

Remember, the person writing this and asking you to think different, is a person that started his career unloading sides of beef from rail trucks to then work his way up the corporate ladder to eventually run one of the largest companies in that field. Then retired at the age of 45 nearly a decade ago while everyone else around him said, “Sure, good luck with that.” All without even graduating high school.

So I not only understand the “change your thinking” process better than most. My life is an open book to tell you, If I can change – so can you. For it’s your thinking that cracks the oyster of life open for you. But only you can do it for you. No one else.

This also gives me the authority to share or to tell you from experience that retirement as many envision it (I was one of these myself) is not what one first dreams, or imagines it to be like. For as another one of my heroes Ozzy Osborne once stated when asked why he was recording another record and launching a world tour after he retired just a few years earlier. He said, “Retirement Sucks!”

I couldn’t agree with him more.

© 2013 Mark St.Cyr

As The World Awaits The Song Bird

As the world holds its collective breath for the opening bell of trading in which Twitter® will release its IPO (symbol TWTR ) upon the financial markets. Regardless if it does good, bad, or indifferent. I just wanted to note a few things for you to ponder because, after all is said and done, regardless of hype, this is a business. And as entrepreneurs it is a requisite that you are able to understand business is business. Yes, hype can play its part however, understanding what is, what is not, where the money is made, and where it is not – is not for parlor games. That is for the financial media to play, not you.

So on that note here are a few items as true entrepreneurs you should find interesting. For those of you that find it startling, I’ll contend you paid too much attention and was lulled into the hype. For those that say, “I thought so.” congratulations, you were thinking as you should.

Below is an excerpt from an article I recently read on the financial blog You can read the entire article here.
It was written by Michael Snyder. (The links contained are his as to back up his statements contained within the post. Not mine.) He notes:

#1 In just a few days, the Twitter IPO is expected to raise close to 2 billion dollars even though Twitter actually lost 64.6 million dollars last quarter and has a long history of not being profitable.

#2 It is being projected that after the IPO Twitter could have a market valuation of more than 13 billion dollars.

#3 Twitter is not expected to make a profit until 2015 at the earliest.

#4 According to CNBC, Pinterest is currently valued at 3.8 billion dollars even though it has never earned a profit.

(He goes on to list 10 more points and more which I highly encourage you to visit and read the full article.)

Never mind what their stock valuations are currently. A stock is not a company. The stock today lives in a world of its own divorced from reality. What I’m talking about here is business. What and how are these enterprises going to generate income as in revenue to support these valuations? Remember, if the markets as I have been pounding my fist over the last few years is based purely by Federal Reserve interactions. Adulterating them beyond the resemblance of the financial markets everyone once understood and could agree on. Then these Wall Street darlings can not only crash to Earth without warning, more than likely the bird that should chirp the loudest will be sprawled out in the bottom of the mine shaft. Not only can it happen in the blink of an eye, that blink is now considered an eternity in today’s stock market.

If you think that’s hyperbole or that my past writings about the warnings of High Frequency Trading (HFT) have been unfounded. I thought I would post a link to a short (under 1 hour) documentary explaining exactly what HFT is and what it has done to financial markets and systems. I was just told of it as it was just released this November 4, 2013.

When I first saw it is was just under 10K views. How this insightful short documentary doesn’t go viral will be beyond me. However, one would be surprised just how many people don’t want to know or understand their own finances. People will do almost anything not to do something, rather than to do something.

As one watches or relaxes after this now over-hyped IPO is brought forward. (So much so they felt the need to increase the initial offering) Watch this film and then put into perspective for yourself what you watched take place both in this IPO as well as some of the past. i.e., Facebook® and others. And ask yourself: Was what took place real market based formation? Built upon such things as fundamental analysis consisting of true revenue, profit, and accounting based on 1+1=2? Or, Nothing but HFT front-running orders in ways that make casino owners blush?

As I’ve again pounded this keyboard over the last few years when nobody would give HFT the time of day warning of its corrupting nature and abilities to adulterate the financial markets in ways never before seen. Along with the “free money” flowing from the Federal Reserve via their quantitative easing policies (QE). It would seem not only was I ahead of the curve, but the bulk of Wall Street itself, still doesn’t get it. (as it’s noted within the documentary itself the figure is upwards of 90%)

The Wall Street Code (Marije Meerman, VPRO)

I for one can’t believe anyone that is either an entrepreneur or works within any organization with the entrepreneurial mindset can look at what is taking place in Silicon Valley today, without shaking their head thinking. “OMG!”

Again, I am not saying these are, or are not, great, creative, disrupting, intellectual wonders that provide value. However I believe social media today will not look anything like the social media we now know of today. So forecasting their valuations years into the future form here with any reasonable calculations is near lunacy. (But that wont stop the parade of analysts nor economist from doing so.)

Just as AOL® and Blackberry® were once kings. They too had IPO’s that were all the rage just a few years back. Now? They have been dethroned and disrobed.

So what I am saying is this: As an entrepreneur, it’s your job to know, understand, and quantify the money, from the nonsense.

© 2013 Mark St.Cyr