Finance

Thank you to Larry Kudlow for straightening us out.  

He’s finally gotten to the bottom of it, establishing the source of our economic instability. We were mistaken, when we thought it might be,  

    * oil at $125 a barrel, gas prices rising to over $4 a gallon;
    * a plummeting dollar;
    * food prices skyrocketing, worldwide starvation, riots;
    * 12 billion dollars a week spent on a War that no one wants;
    * a U.S. economy kept afloat by foreign investors, our distressed corporate and financial assets purchased by anonymous sovereign wealth funds;
    * actions of the Treasury/Fed/Investment Banking systematically destroy trillions in economic value;
    * foreclosures at record levels, housing market continues to contract…

Sure, 80% of Americans have lower relative household income than they did in 1973, but those folks are not Larry’s cup of tea. He’s a market guy.

Larry knows the real source of our dilemma. You see, he was an advisor to Ronald Reagan. He is the staunch supply-sider, the resident expert on tinkle - down economic theory. He knows our real problem is the mere possibility, the mere spectre of….

….Barack Obama.  

Larry describes the Obama administration’s enormous tax increases, bloated social programs, no-growth economy. But there’s a problem, Larry…we remember election rhetoric. We remember, “read my lips, no more new taxes.”    

So, thanks anyway, Larry. You serve an important purpose for us - clarity. When we want to identify the problem, we look to you.  

Thanks for the 411, Larry.

It becomes apparent as the green revolution evolves, that we have to be careful who we listen to.

The Motley Fool, the stockpicker / online blogger, is running a green investing series in advance of Earth Day on April 22. The MF perspective re: green investing focuses on long-term shareholder value, but so be it. Pretty one-dimensional, but we get a habitable planet in the process.

The companies that Motley Fool highlights boggle the noodle, though. Some of these companies, held up as progressive, have a checkered eco-past, some have troubling human rights records.

The Motley Fool articles applaud Coca-Cola (NYSE: KO) and its recycling campaigns, General Electric's (NYSE: GE) Ecomagination cornerstones, and Disney's (NYSE: DIS) environmental policies.

But Coke has a history of international anti-union activities including murders of union officials in Colombia; see www.killercoke.com or this Businessweek article

Check out Marc Sussman's Money Matters every Saturday on Air America 

There’s a great amount of research being done on the emotional and psychological impact that money has in our lives. Any day now, Barnes & Noble will announce their “Money & Happiness” section. We’ll see the different ways that we are affected, but first let’s get some basic facts out of the way.

Investor psychology

Psychology affects investor returns, more than any other factor. Studies have shown that losing a dollar bothers us 2.5 times as much as making a dollar.

It’s the reason that during a five - year run, when the market averaged 12.5%, the average investor earned only 2.5%. Why? Buying high (comfort) vs. selling low (fear).

Brain Damage study

A recent study evaluated individuals with a certain kind of brain damage. Affected was the portion of their brain that experienced fear. This study determined that these individuals made far better investors than those without this damage. They didn’t make decisions based on fear, or comfort…their feelings were effectively taken out of the equation.

But there are things that we don’t see about value and money. Here’s a cross-section of scenarios.

visit bonddad blog for more on the economy

Either we're in a recession or we're about to start one. Either way, the latest expansion is over. While there may be some question about when it happened (the expansion, that is) the reality is it was the least impressive expansion since WWII. Below I will explain why.

Before I move forward, let me address specifically any readers who still think the last expansion was "the Greatest Story Never Told." I am going to use facts to demonstrate why the latest expansion was terrible. If you don't like the facts please feel free to present you own facts. In fact, please do so. But please only use facts from reliable sources. Reliable sources would be the government agencies that collect and present this data. To sit at this table, you must bring data (properly adjusted for inflation) that is from sources used by all economists not from sources whose credibility is non-existent.

That being said (and I can't believe I even have to address this issue).

Let's start with the consumer side of the equation. First , job growth during this expansion is the weakest of any recovery since WWII. (This information comes from the National Bureau of Economic Research and the Bureau of Labor Statistics)

Marc Sussman is a certified financial planner and a 29 year veteran of the financial services industry. With an insider’s understanding of the brokerage, insurance and mutual fund industry, he advocates for change; for a shift in orientation from sales to service; from revenue-driven tunnel vision, to a focus on client needs, as well as on the issues that are bigger than all of us. Marc hosts Money Message which airs every Saturday. Email Marc here feedback@marcsussman.com.

Forty in a
funk

Marc:

I’m
40 years old, and I recently moved back in with my parents, after ending
a long-term relationship. I’ve never been able to get my head above
water financially. I can’t seem to put any money away, I keep having
the same issues over and over again, and the only thing that raises
my spirits is shopping. I feel like my life is slipping away.

Maureen

 

Dear Maureen;