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The “Autopilot Market.” That’s what we’ve had for the past six-plus years.
We’ve recovered from every minor stumble.
We’ve bounced sharply after every deeper pullback.
We’ve hardly seen a 10%+ correction along the way, much less a serious decline of 20% or more.
And who’s to thank (or blame, as the case may be)? The world’s central bankers/planners.
They’ve swooped to the rescue at every significant sign of turmoil – promising more interest rate cuts, more money printing, more cheap liquidity, more currency manipulation, more of everything. Investors came to accept that level of intervention and the control over the markets, and wrapped themselves in the warm security blanket it provided.
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| China’s central planners brought out the ‘bazooka’ to stop the losses on the stock market but to little avail. |
That’s why what’s happening in markets now is so worrisome, dangerous and potentially HUGE in terms of signaling a serious trend change.
Take China. After the stock market started tanking there, the central planners and central government started firing off every “bazooka” they had in their arsenal. Bans on large insider sales, added liquidity for brokers to buy stock, direct purchases of equities from a government-backed fund, the suspension of IPOs – you name it, they did it.
But what happened? After a brief bounce, stocks tanked anyway! They just plunged by the second-most in any single day, ever.
Now, compare that response in China to what happened several years ago here when then-Federal Reserve Chairman Ben Bernanke first launched QE. Or even three years ago across the Atlantic when European Central Bank President Mario Draghi said he would do “whatever it takes” to hold the euro currency union together.
Both events marked significant, confidence-building, volatility-taming bottoms. The markets were soon off to the races again, resuming their up-and-to-the-right rally with nary a scratch.
Could the deterioration we’re seeing now – among market sectors like transports or materials … “China proxy” investments like copper and the Australian and Canadian dollars … and even the Russell 2000 Index — be signaling a sea change? Are central bankers losing control of the autopilot system, just like their central planning forebears did in planned economies in the past?
Boy would that be a change of pace! It would be yet another signal that my Bloody Wednesday forecasts are coming true, and that things are going to get a lot more volatile and scary in the weeks and months ahead.
Indeed, while I don’t expect the Fed to hike rates tomorrow at the conclusion of their current policy meeting, I do believe we could see them move as soon as the September 16-17 gathering. History also shows that once the Fed starts hiking, it keeps doing so for several meetings and percentage points. That means we’re in for even more Bloody Wednesdays in 2016 and beyond.
| “Could the deterioration we’re seeing now be signaling a sea change?” |
I’ve already been recommending steps to prepare: Eliminating long-term bonds from your portfolios, avoiding the most rate-sensitive sectors of the stock market, sticking only with the highest-rated stocks in powerful sectors experiencing their own private bull markets, and dabbling (gingerly) in the most beaten-down, dirt cheap stocks that already reflect a huge amount of pessimism.
More recently, I have also taken profits off the table and raised cash in order to reflect the increased market turmoil. And I’m looking at other strategies that would make sense if the market’s autopilot truly is failing, and the great bull market that began in 2009 is now ready to crash and burn. So definitely stay tuned for more updates and guidance at this important moment in time!
What do you think? Is the autopilot market over? Have the Fed and its counterparts overseas lost control of asset pricing? Does that mean we’re in for a lot more turmoil, and if so, how are you adapting? Definitely share your thoughts on these important topics at the Money and Markets website when you have a minute.
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Meanwhile, some of you are concerned about the possibility of significant turmoil – and are already weighing in.
Reader Kurt said: “I’m sure you’ve read Larry Edelson’s economic forecast for much of the remaining decade concerning the U.S., Asia, and Europe. He plainly sees a domino effect for financial collapse starting with possibly Japan, then ending of course with the United States. But I believe 20,000 is possible before a major correction.”
At the same time, Reader Chuck B. shared these thoughts about what’s going on in China: “The markets began what should have been a normal correction to digest the big run-up they’ve had. The bureaucrats stepped in and took pretty drastic measures, which caused a pause in the correction.
“Then some investors may have realized: ‘If the government can do that to the big investors, what is to keep them from doing it to me?’ Maybe that has something to do with Monday’s market drop. Americans might want to understand something like that could happen to them also.”
Good observations. Larry and I talk all the time, and we both share concerns about major market turmoil in the months ahead. As for China, the key going forward is whether policymakers are truly losing control of markets there AND here. That would mean it’s “Buckle your seatbelts” time for the second half of the year.
If I didn’t get to your comments here, or you haven’t added your thoughts to the discussion yet, make sure you head over to the website and do so now.
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Consumer confidence dropped sharply 90.9 in July from 99.8 in June. That missed the average forecast of 100, and was the lowest reading for the Conference Board index since September 2014.
The American Dream of homeownership is continuing to die a long, slow death, according to the Census Bureau. It found the U.S. homeownership rate sank further to 63.4% in the second quarter. That was down from 63.7% a quarter earlier, and the worst level going all the way back to 1967.
I blame tighter mortgage standards, lackluster income growth, and insufficient down payment funds among younger buyers, not to mention high student debt loads. Then there’s the lingering psychological damage of the housing bust, and the desire for more mobility among the typical first-time buyer demographic. Renting keeps them from being tied down – a desirable situation given the fact “jobs for life” are a distant memory these days.
President Obama’s nuclear deal with Iran is attracting a heck of a lot of scrutiny in Congress. His representatives, including chief negotiator and Secretary of State John Kerry, spoke before a House committee today in an attempt to sell lawmakers on it. Congress will have a chance to vote “yes” or “no” on the deal in several weeks – though Obama has threatened to veto their vote if the deal is rejected.
The all-male club of NFL coaches will finally get its first female member. Jen Welter is joining the Arizona Cardinals staff as an inside linebacker trainer, after stints as a coach and player in the Indoor Football League in Texas.
If you were in Congress, would you vote for or against the Iranian deal? What do you think about America’s slumping homeownership rate? Any of these other stories you want to comment on? Then here’s the link where you can get the conversation going.
Until next time,
Mike Larson
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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My husband will be 59 in the end of September . Most of our savings is in a 401 from a previous employer that he had worked for . He is employed but has to wait another month before rolling his money into that companies 401 plan . My question is would that be a wise idea to do since the stock market has already been losing . I know with most IRA’s you pay a yearly fee on them and are taxed . So we don’t know what to do since he’s not quite old enough to just take the money out of his 401 without losing at least 100,000. If you could please reply I would appreciate it . Our only other investments are just cash and a few acres of land . When my husband got laid off after 29 years with previous employer we sold our stock in that company and paid off our automobiles so we have 0 debt other than basic things . Thank you ! Anice Cameron
You seem to be very confused about taxes, investing and rollover IRAs. Instead of reading this pessimistic website you should be taking a crash course in taxes and investing, or better yet, hire a financial adviser who will work by the hour and/or an income tax adviser.
First of all, you are conflating the decision about where to keep your old 401(k) with how to invest it.
Second, you think that at age 59 you can “just take the money out” of a 401(k). It is true you can avoid a penalty by waiting (I thought it was 59 1/2, but I could be wrong), but you will pay income taxes on the withdrawal, so normally you should avoid withdrawals during your working years.
Third, you say “I know with most IRA’s you pay a yearly fee on them and are taxed.” Many companies offer IRA’s without fees, and the whole point of IRA’s is that you avoid taxes until you withdraw. Vanguard and Fidelity probably offer a better choice of funds to invest in than your current employer’s 401(k), and I’m pretty sure they don’t charge you just to have an account. (Every mutual fund will have some management fee, whether it’s in a 401(k) or not.) On the other hand, if you aren’t reasonably sophisticated at investing, the choices at Vanguard or Fidelity could be totally overwhelming.
Fourth, you were invested in the stock of the company your husband worked for. I hope they gave you the stock, but if you paid for a meaningful stock position you took on insane risk, as the stock was likely to tank if the company was shrinking.
Fifth, you say the market “has already been losing.” What market are you talking about? Energy, gold, materials, China and Australia are down, and this website predicts eminent disaster, but all major averages in the US are very close to all-time highs.
If you want to time the market, go to timingpundit.com and follow the system there. Trying to time the market based on macro views of the economy and interest rates etc. is a fool’s errand.
Iran is not trustworthy.
Iran refers to America as the great Satan and threatens all the time to destroy us.
Iran is the direct sponsor of terrorism all over the world.
How can you expect them to honor the agreement especially if the inspections are not enforceable?
Are our politicians to blind to see that this agreement is only for the benefit of Iran and it does not protect the USA and the rest of the Satans from their terrorist ambitions.
Do we need a nuclear bomb to go off in the USA for you to understand the gravity of the situation. Yes we should keep the sanctions in place and negotiate a valid agreement.
Right on jerry seems like poeple can’t look down the road and see that Iran would start a war with nuks.it’s like driving and looking right in front of u and not looking out a little ways off.no too the deal. …
“Iran is the direct sponsor of terrorism all over the world.”
Perhaps you read some John Perkins, and then decide whose kettle is really blacker.
Lang.
It is scaring the idea of another nuclear power. But how can you stop it, when Israel, Pakistan and India are allowed to have it?,
You seem to be forgetting who is the only country on the planet who has ever actually detonated a nuclear device over a city populated by 255,000 civilians, of which 80,000 died in the first split second. Another 200,000 or so died in the next 50 years from all kinds of cancers.
Lang.
I think that this.deal will work. The other option is war. We can’t win another war. Work with the pieople of Iran the build a more.open friendly relationship. Talk.is better than coffins.
Russia is send war planes into our Calif. Coast and off Alaska 4 th of July. Iran hates us and states so. Obama puts a red line and every one crosses over it. We better start showing some strong power..Or it won’t just be a red line every one seems to be crossing.
Chamberlain proved your point in 1938 when talk with Nazi Germany brought “peace in our time”.
The more the central banks support low interest rates and the stock market it only means a bigger bust is coming.
I will bet the Federal reserve is very worried about this but is boxed into a corner.
“I will bet the Federal reserve is very worried about this…”
Worried? I don’t think so.
Read “The Creature From Jekyll Island.”
Here’s a Link:
http://www.pdf-archive.com/2011/12/28/creature-from-jekyll-island-by-g-edward-griffin/creature-from-jekyll-island-by-g-edward-griffin.pdf
Alice Roll the 401 plan tax free into a self directed IRA. They might charge you $25 per year as a maintenance fee but like a 401 it is tax free until you withdraw funds from it. You will be obliged to start withdrawing funds at age 70 1/2 and pay tax on only what you withdraw. The IRA CAN hold your funds in a savings account. Stocks, gold, whatever you wish. The 401 will probably put in a risky Fund and you have lost control.
Tax deferred not tax free. The tax ho’s will still get their pounds of flesh.
Seems to me the only option, other than the deal, is war. I wish persons opposed to the deal would present some alternative other than war. I support the deal.
Iran has a very large young population and they are arguably our best friends in the middle east.
There wont be a war, other than the Usual ‘ War of Words’.
Remember Saddam? Delusional Tyrant who promised ‘death to America’ if they attacked.
And unfortunately in war, lives are lost. But where was Saddam in the end? Cowering in a rat hole….
Do You really think Iran would have a different fate if they were to start launching missiles?
As far as ‘best friends in the middle east’, well No, I don’t agree with that.
I have an Iranian friend, who escaped Iran just before the Ayatollah took over.
He described Iran as being quite similar to the American way of life, until the Shah was disposed of .
Many of his family and friends didn’t have the Monetary means to escape Iran.
But he says Tehran was a Modern Metropolis, very similar to the U.S., until the changing of the Guard…
The Majority are not Flag Burners as portrayed by the glimpses that the Media displays.
There are thugs in places, but not Everywhere!
We should not confuse the general public, with those in places of power….
I worked in Tehran for an Iranian engineering consulting firm from 1975 until 1979 and these were the best four years in my life. It was the misbehavior of the Shaw’s family that brought an end to it. He could not control his family and cronies. I was in Indonesia when Suharto was removed and in Nepal just before the Kings departure. Same situation. I worked in Peshawar and Abatobad Pakistan from 1992 until 1994 and Sri Lanka during the Tamil Tiger war from 1994 to 1997. What this has tought me is that stability is what is required for progress to be made. But the world is not round, it is like a giant pendulum; it swings from extreme to extreme. The greed of mankind prevents stability.
I am for the Iran deal. We should not be making enemies; this deal may prevent a war.
I’m sorry but money markets and the FED are no longer the worry for Seniors. Those of who retired after many years of planning and saving better have good health because this Administration has made it so that no matter how good your insurance always was, the healthcare industry has now been impowered to bankrupt us!!!
Why would we even think twice about approving the Iranian deal. They have promised to annihilate Israel, and the promised inspections of their nuclear sites is wishy washy. It’s like trusting N. Korea, and see what they are doing now. A big con job to make our secretary of state and Obama future heros.
When Countries like Iran ‘rattle the sabre’, it is basically for them finding a place in the World.
Some people choose to go through life as antagonists, as to find people who try to pacify them and get things in exchange for behaving…
North Korea is quite opposite from South Korea, but South Korea (On their Border) is still living life.
Israel, surrounded by Enemies (still there, living life).
Tribes will war, but in the end….
Iran was considered the America of the Middle East, until some Radical Extremists took control of the country 37 years ago.
America even supplied Iran with weapons at one point.
The Media is a Very Powerful tool, among Fools who believe everything they choose to show on the box.
If any nation could have Destroyed America, it would have been the USSR, back in the Cold War Period.
President Reagan spent so much building our Nuclear Arsenal, it became clear to the Soviet Union that launching some ICBM’s at the United States, would have resulted in both Nations being Wiped from the face of the Earth.
PROPAGANDA makes the World go round (and sells Newspapers).
As far as the FED and other Central Banks go, they seem to have acquired the Ability to keep the Charade going.
My guess is, the Worlds Population has never been so Intertwined in history, as it is now.
People are unable to rise up (in any significant way) to take the ‘Masters of the Universe’ down.
The majority will complain about being squeezed tighter and tighter by the Rulers, but any attempt to Overthrow the Developed Tyrannical Governments will be met like a fly swatter to the fly….
So, unless You have the Means to relocate to a far away land, which is less oppressive, just face the facts. the American way of Life from the 50’s, 60’s, 70’s and 80’s is Over.
We may be ‘Free’ from Leaders like Khamenei and Kim Jong-un, but face it, anyone growing up in the United States a few Decades ago had a lot more ‘Freedom’
Doesn’t it seem strange how Much Security has Grown over the last 25 Years?
Remember seeing Your Family leave at an airport and being able to just walk up to the Boarding Area, with No Metal Detectors / and Cavity Searches?
I would have thought it would have been Much easier for Terrorists to wreak havoc 30 years ago, but No, Nothing comes to mind…
So, THIS is the Progress we have made as a Civilization?
If I were a member of congress, I would “no” for the nuclear deal because: 1- The Ayatollah has repeatedly said that having nuclear weapons was against Islam, (Therefore if they ever got them, it would be a reason to attack them verbally to the Iranian people, and if absolutely needed, to attack them militarily.) 2- Removing sanctions against an enemy that continues to call the USA evil is against logic. They will not trust us regardless, so why should we help them economically. 3- They can easily buy the nuclear weapons from N. Korea if and when the would want them. We’re just giving them the money to outsource their nuclear arsenal. 4- If they ever decide to use just 1 nuclear weapon, they know that THEY would be wiped from the face of the earth with the amount of nuclear weapons the USA has.
After everything you said about voting ‘no’, the #4 is all that matters to keep Iran in check.
I’m pretty sure that the Leaders of Iran Know that they would be wiped from the face of the Earth if they were to fire off a Nuke.
Do they really want to risk being Annihilated by actually doing more than just Talk?
Regardless of How the Media portrays the ‘News’, all is not what it seems.
If the News showed some Gangbangers killing each other in L.A., does that mean it is not safe to visit L.A.?
You ever notice those countries that hate the U.S., burning a flag and Shouting “Death to America” are filled with Youths ‘Smiling’, like they are performing on stage?
Most people see a Mob, jumping up and down, and Chanting as they fire up the Stars and Stripes… PROPAGANDA!!!
If there is a vote in congress re the Iran deal (or fleecing as it has been described) and it receives a marjority against, even if not the required two thirds, it will place some presidential candidates in interesting positions, not necessarily in accordance with their own desires.
For years China thrived on off-shored US jobs with below market labor and almost slave like living conditions for their low tech workers. Things were so bad that dorms at factories had to have suicide nets on staircases and no sharp pointing objects. Farm girls were sold by their families into jobs at factories and the personal life was so regulated that they could only date or marry with the company’s rare permission Well that has changed now, China is being undercut by their Asian neighbors. Plus there is starting to be a reaction in this country to imports. Cost increases to US based companies by Chinese companies has been double digit. Plus China is now claiming ownership of industrial equipment either brought from the US or paid for by foreign companies. And bankruptcies in China are breaking down the supply chain.
I would like to see a survey on the Majority of peoples ‘net worth’.
How many people have their wealth as a Mixture of Property / Savings accounts / 401k plans / IRA’s / Brokerage Accounts / Gold, etc… as shown in Percentages.
Most of the people that I know, pretty much count their Net Worth as their House, Some Savings and an employer sponsored 401k plan.
If that is true, it would be Great if we could get some insight into 401k Funds and percentages of allocation for Current Environment.
I personally am comfortable with a 50/50 allocation of stocks and Money Markets (yes, I know MM’s aren’t completely safe – think Lehman), and I will risk forfeiting 50% in gains, if only to protect 50% from a Major selloff…
They say “a rising tide lifts all boats”. Well, I think that the steady rising tide is ending and there isn’t much that central banks can do about it even if they decide to go “all guns a blazin”. So, if certain trends which have been working begin to stutter it’s best not to play them anymore and shift around to newly emerging trends which may mean playing the short side maybe with inverse ETF’s. If there are no clear trends or to much confusion, there is always cash.
The deal makes a lot of sense. Think about the opening to China by Nixon. Had China been hostile to us in public? (Yes: Chinese leaders had repeatedly called “American imperialism” the biggest threat to peace.) Had China been involved on the other side of wars we were involved in and had it supported countries unfriendly with us? (Absolutely.) Did our opening to China result in China simply moving on to figure out how to attack us militarily? No, because it was much more in its interest to have economic relations with us. Iran’s people are much more likely to be on our side than in the long-run: it’s a tech-savvy, well-educated population with large numbers of women graduates and its oil no longer gives it economic autonomy. The lifting of sanctions will set in motion developments that the more conservative leaders will not be able to contain, most of which would go in a western direction.
Women may not have the upper body strength to play most positions in the NFL, but they often have very strong legs. Look at that long goal scored by a member of the US Soccer team recently. It may be that a woman could be a successful punter or FG kicker in the pros.
Hi again Larry. I wish I had your optimism, but I am more of a realist and believe history repeats itself. My thinking and analysis is more in line with at least a 40% plunge in both the DOW and S&P between October 2016 and March 2017, the only good news this may bring is more debt, an increase in both government and corporate bonds, and higher unemployment or should we just say less employed. It will also bring opportunities of buying stocks at a lower price, helps the market recovery, but does little to improve the economy anywhere. I also tend to agree with Larry Edelson with his reasoning of economy, world war, and the pre and post periods. The 2016 U.S. Presidential election is more important than one may think, hot heads using dinosaur brains could be the result of an all out world war, which we may all agree it has already started. Remember, at least a 40% drop in U.S. stocks on the way, and the FED can’t stop it, just change when, and the longer they wait to raise the interest rate, the deeper the plunge will be.
Like it or not, Iran is a sovereign nation, and if she is stupid enough to choose the nuclear path she has as much right to do so as Pakistan or India or Israel – or the United States, for that matter. A treaty will not stop her, if she chooses that path, but it may at least slow her down a bit. Isn’t it worth a chance? The alternative, sooner, more than later, is WAR! The warmongers in Congress are always happy to send someone else’s kids to do the fighting, of course. You’ll never see them on the front lines.
Mike, we are seeing technical, cyclical, demographic, macro-economic and geopolitical signals and canaries in the coal mine that suggest it is ABSOLUTELY time to buckle up the seat belts…In fact, it is quite likely a major bear market has ALREADY begun!
How is it that the President can veto the decision of congress “not” to do something (Iran nuclear agreement)? He can veto bills passed by congress, but how does his veto pass something that congress has disapproved. Is it any wonder that Donald Trump is getting so much support. Both sides of the aisle in Washington are guilty of gamesmanship with the intent of circumventing the constitution, whenever it suits them. God save us from our politicians.
Sell your bonds? This seems contrary to what you’re predicting. When the Fed acts, yes the value of my Microsoft 4.85% bond will initially go down but only temporarily. We will be in a recession, by your predictions, and the chance of inflation will be a negative 0%. In fact, if you follow Shillings work, that bond will be paying handsomely and it’s value will bounce back up very high because companies will not have to offer such a high interest rate with deflation around and my bond will be worth more that the 4.85% it is paying.
iran is the most terrible agreement ever made, it just adds to world war III, we would be much better if lets alone and nothing was done, ICM means inter- contnental missiles, that is for us and europe, iran has said again and again it would destroy israel and us
Well, the propagandites are out in full force here too. Iran has NEVER said it would destroy Israel, OR Europe, OR the U.S. Remember, there are 5 other countries involved in the negotiations, and THEY are going ahead, one way or another. The U.S. will try to keep the U.N. Sanctions in place, but few other nations will follow them if the U.S. torpedoes this deal. That will be one more failure, in a string of failures, from Vietnam to Ukraine, (another raving success story brought to us by Victoria “F*ck the E.U.” Nuland) that will end U.S. hegemony. Face it, Eurasia and the Brics, will have to be accepted into normal commerce sooner or later, and the Yuan WILL ultimately displace the Dollar. America’s attempt to retain worldwide hegemony via the TPP, T-TIP, and the new cold-war with Russia will fail for lack of committed allies. Wake up and small the coffee. Let’s start making peace, and doing business, instead of allowing the neo-cons to drum up another war. If Russia nukes this country, it will take us fifty years to get back on our feet. The neo-cons don’t tell you that!
Husain Obama has gone overboard again on Iran. He continually abandons US friends. I think his final total Jewish alienation will come when he abandons Israel in the Security Counsel!!!!
Wars and civil unrest are the bane of society and mankind. These should be avoided and other solutions sought. Unfortunately, greed is the root of wars and unrest. Greed is also the harbinger of economic turmoil; and thereby economic opportunity. A once in a lifetime opportunity is now unfolding before our eyes. If we can just keep our eyes open and focus on opportunity instead of fear, we stand a chance for a better future. A doozy of an opportunity lies waiting during the next five to eight years. Strive for opportunity, but guard your liberty and life as they are more precious.
Last time….:
It’s incredibly easy to understand why the Fed Chair wants to move to normalize monetary policy, but…if you think that the Chair is going to support the actual raising of interest rates in the face of current economic data, you’re either hallucinating, looking at the wrong data, or shilling for someone.
It would be hard enough for the Chair to raise rates in the face of a continuation of the status quo. But that’s not what we have. The economy is sliding at a steady rate. Right now.
Does your advice to get rid of long term bonds include Savings Bonds EE I have accumulated during my working career. They are still deawing 4% interest.
You guys have been advising getting out of government bonds, does that also include U.S. Savings Bonds?
The term “home ownership†is often misapplied within the debt-peonage system used in this country. What most people own is not a home but rather a mortgage. The Deed or document indicating ownership is filed at the county records along with a copy of the mortgage. This arrangement gives one the right to profit if the numerical value of the house increases and also to pay taxes on the structure as though they were the rightful owner of the property but the real owner is the entity holding the mortgage until such time as it is paid off.
In the last seven years we all saw what happens when the numerical value of the house decreases instead of increases. For a significant percentage of the population, the “System†stops working until the numerical value of the houses starts increasing again.
What I think is really funny is that for the last fifty years, in real terms, the amount of time it takes to build a house has steadily gone down as the cost, in numerical terms, of “ownership†has gone steadily up. If the generation that is struggling with student debt and multiple incomes with little hope of home ownership ever figure this out there may be an interesting realignment of values. Or not. Wasn’t it Mark Twain who said “It is easier to fool somebody than it is to convince them that they have been fooledâ€.
Courageous plan by President Obma to wage peace with Iran. It will strengthen the middle class, weaken the power of the mullas and bring the majority of the Iranian people back into the free world fold. Only war mongers and chicken hawks want to scuttle a peace process that benefits the vast majority. Naturally the extreemist on either side won’t be happy but then again … are they ever truly satisified without an enemy.
Peter
Courageous? No! Idealistic? Yes!
There are many bad elements of this deal but there are 2 real issues beyond the specifics of this deal that should be primary in any discussion of this deal.
1) Our closest allies in the region (Israel and Saudi Arabia), who can be most affected by this deal, think this is a very bad deal!
2) Almost all foreign policy decisions and statements this administration has made have been idealistic and been very wrong and have had everything to do with how Obama wants to see the world vs. what the world really is! Examples: ISIS is the JV, Russian reset, Lack of support to Benghazi and ridiculous video excuse cover up or if you believe it was not a cover up a totally incompetent assessment of the situation, Libya as an early diplomatic success, Troop removal from Iraq, etc., etc. .
If you want to live in Obama’s idealistic world, so be it, but this nation needs to have leadership that deals with reality not ideology.
I have worked in business all around the globe including China, India, Australia, Brazil, Poland, and many more and the number one thing that gets businesses in trouble is to develop idealistic plans vs. realistic well developed plans. Unfortunately our current leadership under Obama, whether its national economy or security fits the idealistic vs. realistic mode. God help us!!
Mike: If I was in Congress I would vote down this deal on constitutional grounds. There is a statute that says that if any executive agreement involves national security, it must be interpreted as a treaty, which requires 67 Senators voting in the affirmative for its ratification. Once again our President and his allies in Congress are doing an end round around the Constitution. As for interest rates, I do not think that they should go up until congress and the President start to deal with the structural problems in our economy which are
1: Fiat money
2. excessive taxation and regulation
3. Excessive litigation
4. sub standard education
5. lack of infrastructure maintenance
These problems must be addressed by the Congress and the President, not the Central bank. It is time to audit the Fed and repeal the Humphrey Hawkins act which gave the Fed the dual mandate to target unemployment. The only way for the Feds to for fill the employment mandate is keeping interest rates at sub par levels and excessive money printing. The time for a discussion on going back to the gold standard has arrived. Regards, Robert Calabro.
If Congress votes no, and are not a majority to accept this agreement, does this indicate a war with Iran, where NATO will employ all means possible to eliminate the threat of Iran with a nuclear weapon? If Iran is attacked, with no possible chance afterwards of getting nuclear warheads, what will become of the East? Will this be a case where NATO will get two birds with one stone? Meaning, no further threat from Iran regarding nuclear possession, and no more sponsorship from Iran for terrorist threats too? Possibly so, perhaps?
Confidence is the most important ingredient for a strong economy, and a key part of that is letting markets function the way they are supposed to. Unfortunately the leadership in the U.S., Europe, and now China, don’t see how their constant intervention erodes rather than builds confidence and cause investor to stick their assets in a mattress rather than putting them to work. My only consolation is that recent developments in China show that market forces will ultimately prevail and overwhelm pathetic attempts at manipulation – unfortunately, it will be really messy when that eventually happens.
I see you continue to push the false government propaganda demonizing Russia and Putin. So, if you are going to allow yourselves to be propaganda shills there is no reason to trust anything else you have to say. For those of us who have family and friends in Russia and Crimea we know the truth. And your creditability is in the toilet. Keep pushing the crap that Russia invaded Crimea it is truly laughable.
My greater concern about the MLPs which I have not favored for more than a year in part because of their overuse of credit to pay dividends is their role as canaries in the coal mine. When investors become adverse to high-yield debt and the companies that issue them, the fearfulness and despair typically spills over into less risky instruments.