This issue of Views from the Crows Nest is being published two days early given our current
weekday workload. We'd rather be too early than too late, if not exactly on time.
"Beware the Ides of March" was the warning to Julius Caesar about the date of the
assassination conspiracy that was fomenting at the epicentre of The Roman Empire in
44 B.C. Caesar had started to believe the spin of the Political Elites about his status as
a demagogue, and was clearly in love with himself.
Blinded by ego, Caesar was oblivious to the mounting dissention within the ranks of the Roman political aristocracy, so why heed an obscure warning from a soothsayer? Indeed, pride cometh before the fall.
Caesar's trusted advisor and friend Marcus Junius Brutus was the man assigned to do the deed with the dagger. As with most politicians in history, Brutus and the other Senatorial conspirators were more concerned about keeping the current political order in place, because they benefitted from the structure; life was very good for them.
Maintaining their family's own elite status was their first concern, perpetuation of The Empire's political structure was secondary, and lofty ideals like morality, public service and friendship came in a very distant third on their list of priorities. The public figurehead was and always will be less critical than maintenance of the power and wealth of the ruling elite within any society. "Let them eat iPad"
The assassination of Caesar holds many lessons for today, including: the threat of Elitism to the rest of us, the risk of being the leader when the empire is crumbling, and how ego can make us acutely vulnerable to dangers we simply do not perceive.
Fate can sometimes be a cruel mistress, or not. Raised poor, President Obama's brain got him into Harvard where he was groomed for politics and welcomed into The Establishment's periphery. Your author may have met the young Obama during his time at Harvard Law, as he is exactly six years older, to the day.
Had my parents been able to afford the $48,000 per year that foreign students were charged back in 1985, perhaps that acceptance letter on maroon letterhead wouldn't have been tossed in a Kansas landfill. By the way, March Madness is about to ramp up, and memories of 1988 and 2008 are fresh. GO KANSAS JAYHAWKS!
What seemed cruel at the time - poverty - was a great blessing, because your author would have been exposed to all the things he perceived at the time he wanted but could not have. Today life is wonderful, with an embarrassment of riches: a large diverse family, a handful of very dear friends, and intelligent, sincere Clients who heed warnings, including those that public officials in Hawaii issued in advance of Friday's tsunami. Thanks for getting to safety M & J. Our first ever round of golf in Maui with you is on us...perhaps in 2012?
Perhaps it's your author's personal affection for the public man himself or simply a perception of history conspiring against him; I do not know. While we abhor the thought of it, your author perceives that Barack Obama is in increasing danger from within.
The Money Club wants to keep up their financial voodoo while the real economy is gasping for breath, and the military-industrial complex is itching to deploy a few ordinances on surgically selected targets within places like Libya. Better yet, Yemen is a veritable Petri dish for culturing radicalized Al Qaeda jihadists, so why not launch a pre-emptive strike there?
Why is War such a popular option?
While Barack Hussein Obama is definitely a silver-tongued orator, we cannot sense any insincerity in his words or body language, leading us to believe he is merely inexperienced in financial matters and therefore overly influenced by his close advisors. Even his long-time confidantes may well be on the fringe of The Establishment, resisting the constant pressure emanating from the dark corridors of American power. Does that mean he is sincere and intelligent but merely naive?
In his succession speech, President Eisenhower warned of the increasing power and influence of the American military-industrial complex. The election of the handsome young John F Kennedy was a revolutionary step forward in American politics. Never before had an Irish Catholic been elected to the White House, but at least he was a boozing philanderer, so he had enough flaws to be acceptable to the elites while he was useful.
JFK's charisma and charm were an unstoppable force in 1960. He showed nerves of steel during the Cuban Missile Crisis, staring down the equally charismatic young Fidel Castro. It's widely believed he was strongly opposed dumping the Gold Standard. It is widely documented that JFK was vehemently against getting involved in Vietnam, and to funding America's foreign military escapades with borrowed money, which would have been impossible under the pre-1971 Gold Standard...unless taxes were raised.
For most families globally the price of oil is an expense, not an investment. Continued resistance by Mr Obama to launching air attacks on Arab nations with enough oil and influence to drive up crude prices raises risk to both the fragile economy and Mr Obama himself. We sincerely hope that the parallels between JFK and BHO end here, but your author's intuition whispers otherwise. In politics you should keep your friends close and your enemies closer. "Et Tu, Hillary?"
Mr. James Dines refers to it as the Anti-Change Concept and mainstream psychology calls it Normalcy Bias. Regardless of its label, we know that humans hate change, and will only act quickly when things are obviously and undeniably bad, i.e. during a Crisis. Even if things are actually bad but people can temporarily ignore or are not yet personally affected by a pending Crisis, the majority of the population will continue on with their daily lives...until a Crisis is upon them.
When it comes to demographic issues, our society is facing very new and different challenges. As usual, governments are well behind the curve, adapting slowly and clumsily to the realities of Aging and Health. Taking personal responsibility for our own health and finances is one of our core corporate values, but how do you do that?
We are pleased to be the first - and currently only - wealth management firm in Canada to provide skilled medically-based consulting services on Aging and Health as part of our comprehensive Client offerings. Click Here for More Information about upcoming workshops. These workshops are FREE for our Clients. It's all about planning ahead to avoid or minimize the effects of Health Crisis.
In the midst of a Crisis some gifted observers can literally feel the Mass Fear that grips The Herd following Mass Greed. Within Crisis we find both Danger and Opportunity. The Danger is that individuals and groups are vulnerable to being led astray by the public figures they blindly trust, based on an unrealistic sense of hope. When Fear dominates a person or group, very few people make decisions that are truly in their best interests. At the time, we may think we are being wise to follow people that the system says we should trust, but only time will reveal the effects of our decisions.
The significant Opportunity that exists within Crisis often requires us to make choices that are less popular, but unpopular decisions usually yield better results. Some people have a fear of not being liked and chafe at the idea of being associated with those expressing contrarian views. They naively think that there is safety within the mainstream. If you're part of the Herd, you will get the results The Herd produces and experiences. At major inflection points, history teaches us The Herd is almost always wrong. We all live with the effects of our decisions - good, bad or indifferent.
Once we shed the internal baggage of needing to be liked, a new life can begin for all of us. A new energy rises within and we can start to actualize our full potential in whatever we do. Would Sesame Street have ever existed without the passionate oddball brilliance of Jim Henson? Had it not been for his sometimes fiery persistence, the world would never have known such timeless archetypes as Big Bird, Oscar the Grouch, Ernie and Bert and my personal favourite Grover. It may not be easy being green as Jim Henson told us through Kermit the Frog, but when we accept and embrace who we are, great things happen.
On March 2rd, we issued a Market Warning to our subscribers. As Michael Campbell, James Dines, Bob Hoye, Mark Leibovit et al have said in one way or another, "When risk is high, caution is the only prudent course of action." Our portfolio managers remain vigilant for signs of internal market deterioration that could act as an early warning of a more serious decline. They think this will turn out to be a minor technical correction, but the situation in Japan continues to worsen and this could spark Mass Contagion.
When markets are in even a minor downtrend, they're vulnerable to other negative catalysts, and right now there are many risks that could start a Mass Contagion: the financial ripple effects of the recent earthquakes in Japan triggering the "need" for more Quantitative Easing, the Chinese property bubble, that pesky insolvent continent called Europe, temporarily "contained" conflicts across North Africa...or something completed unanticipated. In the shadow of all these other risks, the Money Club continues with its shenanigans.
While the world is a very risky place right now, we have not yet seen a meltdown in equity markets. To some people's surprise, we haven't seen a significant flight tro quality in US Treasuries. Perhaps it's related to the world's biggest bond fund manager declaring his asset class of choice dead and dumping them? Your author can't help but wonder if the great American "Plunge Protection Team" hasn't been called into action to create the impression of continued optimism in Mass Psychology. What happens when it all falls apart?
Our portfolio managers think this current downtrend will find minor support on the S&P 500 at around 1275-79, with medium support at around 1257 (2% lower). IF we experience even one major catalyst that the central planners can't contain and the dominoes start tumbling, then the next support levels are at 1,225 and then 1,180: 3.6 to 9.5% below current levels.
If markets fall to the 1,180 support level, which we currently do NOT believe will happen in the next few weeks, that would represent a decline of 12.1% from the Feb 18 peak, and -9.79% from our latest Market Warning. The current working hypothesis is that this correction will be minor, followed by a subsequent push to new highs somewhere between 1350 and 1380, unless we see significant upside revisions to consensus earnings estimates in the meantime.
Never underestimate Wall Street's willingness to talk up its own book on mainstream media, which they fund through advertising dollars and providing content. In curiously Newtonian fashion, the longer this Bear Market rally runs upward in the face of unsustainable fundamentals, the worse the subsequent decline will be...think of stretching an elastic band.
Preparation for the Storm. Our team is working hard to prepare and position our clients to benefit from the upcoming market opportunities in the equity markets, especially Natural Resources including Precious Metals, and Base Metals, Energy, Rare Earth Elements and Agriculture. Your author believes that significant buying opportunities will be created in these areas during the next major broad market downturn. Perhaps oppotunities in the Uranium space will emerge earlier given Japan's recent earthquake horrific & tragic resultant toxic leak. Why do countries build nuclear power plants on major geological fault lines?
How does it Work? Following "Profiting from the Global Economic Crisis" on February 24th we've been deluged with inquiries about how Larry Berman manages portfolios for our Clients. Those familiar with the outdated Buy and Hold approach recognized immediately that Larry's approach is distinctly different from the Mainstream but asked for more detail on exactly how it works. At our request ETF Capital Management pulled together this video to answer those questions. Please allow a few moments for this video to load.
We apologize for recent delayed responses to e-mail inquiries; our team is working very hard with our portfolio managers to update client documentation to approve lower performance fees and open up the opportunities to benefit from recent portfolio management enhancements. Good fortune favours the prepared, so we prepare like Noah did before the Deluge, and faithfully preach the message of caution with passion.
Down time for life balance and a full night's sleep are rare right now, due to workload...but the positive energy of the people we're meeting is favourable wind in our sails.
Patience and Discipline are accretive to your Wealth; Fear and Greed are destructive.
If you are curious how we may be able to serve your family, please Click Here or call us at 403-517-2234.
Cheers,
Andrew H. Ruhland, CFP, CPCA
President, Integrated Wealth Management Inc.
