FOLLOW THE FLOW

THE FLOW

I am resting, on the beach, out of the river’s flow

It still flows, but without me

On the beach, Mondays and Sundays are the same

In the flow, I was painfully tossed about

There I cried out in a voice almost moaning

Who am I and where am I going

On the beach, there is stillness and peace

 

I have been here once or twice before

But only for a while, then tossed back in the flow

Where I become immobilized, without control

Battered and disabled by ambition, now I see

Into the flow and over a cliff in a waterfall

In painful agony I cried out, yes I can

Yes I can do what, control the flow?

 

You only control the flow in your dreams

The flow controls you, not the other way around

On the beach, I can just watch the flow

Danger! I can feel the flow pulling me back in

Stay calm, take a deep breath

The flows movement is temporal, stillness is reality

I have come a long way to achieve this beach

 

Out of the frozen tundra I have come

How long can I stay in a state of grace on the beach?

This is what it is like to live without stress

Maybe I can just dip a toe in the flow

Oops! I am being swept up by the current

Ambition and desire are sucking me back in

No, rise above, Rise above, Rise above!

 

Here, I am above the flow, even above the beach

Here, the veil of Maya and Neith are finally lifted

Here, I am connected to a collective spiritual experience

Here, I have arrived at fulfillment

Here, time ceases to flow with the flow

Here, movement and stillness have no meaning

Here above the flow, we are One

 

Wow! Look at that river flow

The flow is turning wheels and the wheels are churning lives

It is just a game, but people think it’s real

In the flow there is no rest, there is no winning

There is only the flow, ever onward

But from here above, it looks so silly

Being above, is even better than on the beach

 

So many are in the flow, some as tears

If I were to return, it would be different for me now

The new me, would be eager to teach what I have learned

Should I take another trip down the rapids?

Maybe I should try and reach higher instead?

Actually, Here there is no higher

Here, salvation is  self evident

 

The sirens of the flow beckon me back

Why? To make the world a better place?

Maybe I can ease the burden of others?

There are no easy answers, but I can help, I can try

This time I am better prepared to enter the flow

This time I have seen it from above, I understand

Look out. Here I come again!

CARL M BIRKELBACH

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THREE DISTOPIAN MOVIES

THREE DYSTOPIAN MOVIES

My last post was about three dystopian books, but how about three dystopian movies? Rollerball introduces us to what it will be like when corporations are allowed to operate without regulations and without boarders.  The Citizens United ruling by the Supreme Court, says corporations are ‘people.’ If that is true they are sociopaths  that only look out for their own interests. The Handmaid’s Tale, gives us an idea what the US would look like under a Christian fundamentalist dominated government. The Alfa white males dominate. In Elysium. the earth and its multitudes are destined to perish in pollution, drought and rising seas while the oligarchy live above in orbit.

Rollerball. 1975 movie called Rollerball. It stars James Caan as the sports hero Jonathan, Maude Adams as his ex-wife and John Houseman as Mr. Bartholomew, a high-level executive of the Energy Corporation. The film takes place in 2018, where the word is run as a global corporate state. The Energy Corporation is a global energy monopoly based in Houston, which controls access to all transportation, housing, communication and food on a global basis. Energy Corporation sponsors Jonathan’s team. Jonathan’s wife, Maud Adams was taken away from Jonathan by a corporate executive, which simply exerted his power and took her. The game Rollerball is a substitute for all team sports and for warfare. It is designed to bring euphoria to the masses. While the purpose of the sport is entertainment, Mr. Bartholomew, describes it as having a “distinct social purpose”: to show the futility of individual effort. In order to defeat the individual star Jonathan, The Energy Corporation simply changes the rules, so that Rollerball soon degrades into senseless violence, which nullifies any individual effort with humiliation. In the movie Jonathan emerges victorious against the Big Corporation.  This seems unlikely!”

Handmaid’s Tale, a 1985 book and now a TV Special, The Handmaid’s Tale, a work of  fiction by Canadian author Margaret Atwood. The novel is set in a near-future in New England, in a totalitarian theocracy, which has overthrown the United States government. The Handmaid’s Tale is set in the Republic of Gilead, a theocratic military dictatorship formed within the borders of what was formerly the United States of America. It begins with a staged attack that kills the President and most of Congress with a Christian fundamentalist revolutionary uprising, called the “Sons of Jacob”.   The revolution suspends the United States Constitution, under the pretext of restoring order. The new regime, the Republic of Gilead, forms a new militarized hierarchical regime, based on Old Testament-inspired social and religious fanaticism, which creates newly created social classes, with only the elite ruling. In this society, human rights are severely limited and women’s rights are even more curtailed, as women are forbidden to read. The story is told in the first person by a woman called Offred. The character is one of a class of women kept by the ruling class for reproductive purposes and known as ‘handmaids’.”

Elysium. The 2013 film offers deliberate social commentary, which explores political and sociological themes such as immigration, overpopulationhealth careworker exploitation, the justice system, and social class issues. In 2154, Earth  most of the earth’s citizens live in poverty, on the edge of starvation, and with little technology and medical care. The rich and powerful live on Elysium — a gigantic space habitat located in Earth’s orbit. Elysium is technologically advanced with some of its technology including Med-Bays: medical machines that can cure all diseases, reverse the aging process, and regenerate new body parts. A long-running feud exists between the wealthy residents of Elysium and the citizens of Earth. The earth and its multitudes are destined to perish in pollution, drought and rising seas.”

CLASSIC DYSTOPIAN BOOKS

Following are 3 classic dystopian books that under current conditions are worth reading again. 1984 has class hierarchy  of 2% upper class, 13% Middle class and 85% poor  becoming a reality and asks the question can 2+2=5  Brave New World The common good has fallen away to ‘winners take all’ attitude. Governments are protecting the privileged and the rest are considered outsiders. Fahrenheit 451 has the masses being distracted by entertainment of virtual reality technology and drugged out on opiates. A fanciest dictatorship orders all books banned and to be burnt because he says, they cause unhappiness and mental illness because of conflicting opinions.

1984 by George Orwell

In 1984, London is a grim city in the totalitarian state of Oceania where Big Brother is always watching you and the Thought Police can practically read your mind. Winston Smith is a man in grave danger for the simple reason that his memory still functions. Drawn into a forbidden love affair, Winston finds the courage to join a secret revolutionary organization called The Brotherhood, dedicated to the destruction of the Party. Together with his beloved Julia, he hazards his life in a deadly match against the powers that be.

The class hierarchy of Oceania has three levels:

  • (I) the upper-class Inner Party, the elite ruling minority, who make up 2% of the population.
  • (II) the middle-class Outer Party, who make up 13% of the population.
  • (III) the lower-class Proletariat, who make up 85% of the population and represent the uneducated working class.

As the government, the Party controls the population with four ministries:

  • The Ministry of Peacedeals with war and defense.
  • The Ministry of Plentydeals with economic affairs (rationing and starvation).
  • The Ministry of Lovedeals with law and order (torture and brainwashing).
  • The Ministry of Truthdeals with news, entertainment, education and art (propaganda).
  • The Thought Police  stamps out anyone who does not fully conform to their regime and constant surveillance, through devices such as (Telescreens two-way televisions. (Watch out for Google ‘alexa’)

Nineteen Eighty-Four popularized the adjective Orwellian, which describes official deception, secret surveillance, brazenly misleading terminology, and manipulation of recorded history by a totalitarian or authoritarian state.

There are some similarities between now and 1984:  1) The US has been in constant war since 1776 (except for 36 years). 2) After 3000 lies documented by the New York Times ‘alternative truth’ has entered our vocabulary. 2+2 does not equal 5 as Winston Smith finally believed! 3) China, Russia, North Korea and the Saudi Arabia (remember the oil embargo) are now our friends and Canada, France and the rest of G6 are now our enemies. 4) With Presidential authoritarianism and worldwide fascism, George Orwell’s 1984 is taking on a new life with extraordinary relevance and renewed popularity. 5) The class hierarchy of 1984 of 2% upper class, 13% Middle class and 85% poor is becoming a reality. Though the year 1984 now exists in the past, Orwell’s novel remains an urgent call for the individual willing to speak truth to power.

“Orwell saw, to his credit, that the act of falsifying reality is only secondarily a way of changing perceptions. It is, above all, a way of asserting power.”—The New Yorker

“Who controls the past controls the future. Who controls the present controls the past.”
― George Orwell1984

Brave New World  by  Aldous Huxley

Published in 1932, it propounds that economic chaos and unemployment will cause a radical reaction in the form of an international scientific empire that manufactures its citizens in the laboratory on a eugenic basis, without the need for human intercourse.

The World State is built upon the principles of Henry Ford‘s assembly line: mass production, homogeneity, predictability, and consumption of disposable consumer goods. While the World State lacks any supernatural-based religions, Ford himself is revered as the creator of their society but not as a deity, and characters celebrate Ford Day and swear oaths by his name (e.g., “By Ford!”). The novel’s Gregorian calendar year is AD 2540, but it is referred to in the book as AF 632 (After Ford)

From birth, members of every class are indoctrinated by recorded voices repeating slogans while they sleep (called “hypnopædia” in the book) to believe their own class is superior, but that the other classes perform needed functions. Any residual unhappiness is resolved by his society’s methods of keeping its citizens peaceful, which includes their constant consumption of a soothing drug called soma.

This books relevance to today is the drinking of the common ‘kool-aide’ of Corporate indoctrination “If it good for the corporation it must be good for the nation’ Formerly ‘What’s good for General Motors is good for the country. The common good has fallen away to a ‘winners take all’ attitude. Governments are protecting the privileged and the rest are considered outsiders.

Hitler’s ‘master race’ is definitely implied. The biological techniques used to control the populace in Brave New World did not include genetic engineering because Huxley wrote the book before the structure of DNA was known. Now the upper class has access for it’s children through superior education and personal contacts. However, if you can afford it ,why not enhance the embryo?

-“If you want a vision of the future, imagine a boot stamping on a human face – forever.”George Orwell

 

Fahrenheit 451 by Ray Bradury

A new movie based on the 1953 on the book of the same name by Ray Bradbury is now on HBO. It is a good reminder of what can happens when a fanciest dictatorship orders all books banned and to be burnt because he says, they cause unhappiness and mental illness because of conflicting opinions. All is fake-news except that which comes from the dictator. There was no objection by the populous as their entertainment requirements required only a short visual attention span and have no interest in in-depth media investigative reporting or in reading of literature. The masses were being distracted by entertainment of virtual reality technology and drugged out on opiates.

The term ‘Bonfire of the vanities,’ refers to the bonfire on February, 7 1497, when supporters of the Dominican friar Girolamo Savonarola collected and publicly burned thousands of objects such as cosmetics, art, and books in Florence, Italy, More recently we have had Nazi book burning, Joseph Stalin’s ‘Great Purge, Mao’s ‘Red Guard’ and many attempts in the US to censorship, including in 1987, when the Florida Panama City School Board banned Fahrenheit 451 from their library. Hopefully, the message of this book and movie is a preventer of a dystopian future and not a predictor.

“Who controls the past controls the future. Who controls the present controls the past.”
― George Orwell1984

Carl M Birkelbach 6/9/2018

 

THE INVESTMENT STRATEGY LETTER #722

500 days

Only Modest Growth: After 500 days of the Trump administration, they are bragging about a booming economy and a record low employment rate. However, looking a little closer at these statistics, first quarter growth was only at about 2% (about the same as before Trump) and the unemployment rate had already fallen to about 4% (now 3.8%). This modest growth is in spite of a massive simulative $1.5 trillion tax cut to the very rich and corporations. However, statistics so far indicate that 80% of the tax saving are being used for non-productive use, such as stock buybacks.

Trump Popularity has Grown: After 500 days on the job President Trump popularity has grown to above 40%. However, we see a polarized country if we look at recent statistics more closely.  In a recent Gallup poll reported in the New York Times today; when asked  the question “Overall, what kind of moral leadership do you think President Trump provides?”  72% of Republicans said “Strong,’ compared to 37% of Independents and at only 8% of Democrats. The polarization is even more evident of those who consider Trump’s moral leadership as ‘Weak’; 13% of Republicans, 69% of the Independents and 91% of the Democrats.

Trump’s distractions ignore the Big Picture: It seems the more the Democratic criticize Trump, the more his base dig in their feet.  Are we are being ‘distracted’ by President Trump’s  daily celebrity theatrics, while the harmful side effects of oligarchy capitalism and globalization have created distress on Middle Class, who find themselves increasingly replaced with automation and lower priced labor? We have taken our eye off the ball, as 80 people own 40% of the world’s wealth and the Walton’s are wealthier than the bottom 40% of Americans and all income growth goes to the top 1% The Middle Class is in trouble with 50% of the population unable to meet a $400 emergency. I continue to believe that this economic inequality will reach a tipping point, where all boats will sink. This means the stock market. 

We will probably soon face a Constitutional Crisis as The President will resist the outcome of the Muller Investigation. It won’t be pretty!

Let’s stop concentrating on Trump’s distracting antics and look at the Big Picture!  (The Democrats would be smart to never mention Trumps name again and just mention what needs to be fixed.)

The Big Picture: (Things we need to fix)

  • A new study predicts that up to a third of all American jobs will be lost to automation within the next 13 years. A new era of globalization, multiculturalism, multiracialism, automation and a carbon free economy is descending on us. We must address these challenges, as an opportunity!
  • Between 1980 and 2017, most of the income growth has gone to the top 1%. This process has transferred approximately $1 trillion a year from the bottom 90% of income earners, to the top 1%. This is unsustainable and all boats will sink.
  • The US has the highest ‘poverty rate’ among developed nations at 16% and 21% for children. That’s 1 out of five children living in poverty!
  • The US ranks 44th in Health Care and has the highest infant mortality rate among developed nations.  All the industrialized nations have universal healthcare for their citizens, so can we!
  • The US ranks 35th in meeting basic human needs
  • The US ranks 19th in basic education and 40th in math skills, 25th in science and 24th in reading skills. We need to level the playing field by offering our children a first-rate education.
  • In the US there are 6,000 families being evicted every day.
  • Over 50,000 people die of overdose every year.
  • The Pentagon has said that they are defenseless against ‘climate change’ and it “presents a clear and present danger” to the country. Rising seas and drought will change the world. The Departments of the Environment has been gutted. We have withdrawn for The Paris environmental agreement.
  • Our infrastructure is dangerously deteriorating!
  • Putin will stop at nothing to maintain his totalitarian system, including cyber attacks on us. He has plans to hack our bank accounts, to undermine our media and influence our elections.
  • With student debt above $1.3 trillion dollars, our young graduates have become indentured servants to their debt. In addition, Middle-Class consumers have taken on almost $1 trillion in credit card debt, while ‘Big Banks’ charge exorbitant interest rates of 15% to 25%. The Department of Consumer protection has been gutted.
  • The public is saddened by the treatment of DOCA and the treatment of those seeking asylum, as children are separated and 1,500 children are missing. This divides America. We need to pass a reasonable immigration bill!
  • Expect a Trade War.  The Smoot–Hawley Tariff signed into law on June 17, 1930 raised US tariffs on over 20,000 imported goods and reduced our export by 80% by 1932.
  • The top 1% and large corporations, through Citizens United and their lobbyists have exploited of the political system and have formed an oligarchy that has built up powerful defenses against competition and income equality. Thus, we are quickly becoming ‘The Land of Only the Privileged’. Repeal Citizens United!
  • We need to correct the Gerrymandering of voting districts.  Gerrymandering is the manipulation of voting boundaries favoring one party over the other. With a database, politicians can create a district where they can predict the voting behavior of each potential district. This must be corrected.
  • We need to set term limits for our Senators, Congressmen and for the Supreme Court, for the same reason we have a two term limit for the Presidency; power tends to corrupt.
  • We need to bring back the Glass Stiegel Act. Without it, banks can act unethically between their banking and Investment Banking functions.
  • We need to expand the Voting Rights Act, to make it easier for citizens to register and to vote.
  • We now have many people working at a minimum wage of $7.50 an hour, making them virtually slave labor. We need to set the minimum wage at $15.
  • We need to pass legislation to regulate automatic weapons, recognize global warming and regulate our banks so as to prevent them from getting the world into another financial crisis.

Don’t give up hope: as Churchill said, “You can always count on Americans to do the right thing – after they’ve tried everything else.”

One more thing: The President has outrageously called some immigrants ‘animals.’ This is a similar attitude of what Hitler thought about the Jews and what some Southerners thought about their slaves. The inappropriate casual sexual and racial remarks made by the President have given permission to similar remarks made by his core followers. America is better than this! This hurts our nation’s soul and is an attack on the ‘core values’ of who we are, or at the very least, who we should be.

 ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

THE INVESTMENT STRATEGY LETTER #721

Books that address OUR New Challenges:

With the fall of the Berlin wall in 1991 and the end of the Soviet Union, the consensus though in the US was that capitalism and the western concept of the market place had won. As last, humanity was moving toward the “Omega Point’ of philosopher/monk Pierre Teilhard de Chardin where enlightenment, reason and civility would prevail.

Instead, we face which seems like an endless cycle of greed, inequality, dishonesty, bigotry, intolerance, theocracy and authoritarianism. We are being ‘distracted’ by President Trump’s (kleptocrats) daily celebrity theatrics, while the harmful side effects of oligarchy capitalism and globalization have created distress on Middle Class, who find themselves increasingly replaced with automation and lower priced labor. We have taken our eye off the ball as 80 people own 50% of the worlds wealth and the Walton’s are wealthier than the bottom 40% of Americans and all income growth goes to the top 1% The Middle class is in trouble with 50% of the population unable to meet a $400 emergency. I continue to believe that this economic inequality will reach a tripping point, where all boats will sink.

Watch the stock of Deutsche Bank to see what the stock market will do. The bank has laundered Russian oligarchy  money and Trump owes the bank (maybe) $200 billion. Today they announced they are  cutting 10,000 jobs. This year the stocks is down from $20 a share to a new low $11.18 a share. Follow the money!

While some of these problems are systemic, there are two outside influences that have conspired to change our governing process. 1) One side comes from the far-left of the Koch brothers and their Cato Institute and the Mercer family and their now defunct Cambridge Analytic and their associates that have plans to subvert the will of the democratic majority and tilt the playing field forever in favor of the rich and powerful. 2) The other influence comes from the totalitarianism and the oligarchy of Russia and other authoritarian governments that are leaning to the far right, where fascism is winning over individualism and equality. Everything Russia does is to undermine Western (demonic) structures and government, so their form of government of gross inequality appears preferable to their people. Russia’s Putin has hacked our bank accounts, undermined our media with fake news and influence our elections. Whether we know it or not, our country is under attack and so is Europe (Italy)!

As long as there are no current policies to deal with automation, globalization and the two outside influence  of oligarchy and fascism and the other issues raised by the books listed below, there appears to be an unstable environment for the stock market. 

New books that I have just read and that I highly recommend:

Democracy in Chains by Nancy MacLean explains in detail how the Koch brothers and the Mercers are executing  a plan to divide us through our fear of multiculturalism and racial differences.The Road to Unfreedom by Robert Snyder which explains how Putin is executing a plan to have us loose faith in our institutions (Presidency, the rule of law, the safety of our identity and our financial information) though cyber attacks. Can Democracy Survive Global Capitalism by Robert Kuttner describes how Fascism is winning through out the world and how the US oligarchy and corporations have captured the machinery of the government to promote it.

Three books that I have just read which hope for a positive outcome: Hope in the Dark by Rebecca Solnit; Enlightenment Now by Steven Pinker and  The Soul of America by Jon Meacham; While the American story has not always—or even often—been heroic, we have been sustained by a belief in progress even in the gloomiest of times., “The good news is that we have come through such darkness before”—as, time and again, Lincoln’s better angels have found a way to prevail.

Also books I am reading now  Evicted: Poverty and Profit in the America City by Matthew Desmond (6,500 evictions every day!); How Democracies Die by Steven Levitsky; The Common Good by Robert Reich;

Just Published:: War vs Peace by Ronan Farrow: tells how diplomacy of the state department is being replaced by military policy; Us vs Them by Ian Bremmer: Tells how we are being distracted from solutions of automation and globalization.  Tailspin by Steven Brill. How the aristocracy and oligarchy are perpetuating a ‘take it all ‘ policy that will make our economic system dysfunctional.

A novel: Ready Player One by Ernest Cline that presents a virtual reality world of the future, (Also a movie)

Carl M. Birkelbach

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

New Books

New books that I have just read that I highly recommend:                                Democracy in Chains by Nancy MacLean explains in detail how the Koch brothers and the Mercers are executing  a plan to divide us through our fear of multiculturalism and racial differences.The Road to Unfreedom by Robert Snyder which explains how Putin is executing a plan to have us loose faith in our institutions (Presidency, the rule of law, the safety of our identity and our financial information) though cyber attacks. Can Democracy Survive Global Capitalism by Robert Kuttner describes how Fascism is winning through out the world and how the US oligarchy and corporations have captured the machinery of the government to promote it. and The Soul of America by Jon Meacham; While the American story has not always—or even often—been heroic, we have been sustained by a belief in progress even in the gloomiest of times., “The good news is that we have come through such darkness before”—as, time and again, Lincoln’s better angels have found a way to prevail.

Two book that I have just read with a positive attitude:Hope in the Dark by Rebecca Solnit; Enlightenment Now by Steven Pinker

Also books I am reading now  Evicted:Poverty and Profit in the America City by Matthew Desmond; How Democracies Die by Steven Levitsky; The Common Good by Robert Reich;

Just Published:: War vs Peace by Ronan Farrow:that tell s how diplomacy of the state department is being replaced by military policy; Us vs Them by Ian Bremmer: tells how we are being distracted from solutions of automation and globalization.  Tailspin by Steven Brill how the aristocracy and oligarchy are perpetuating a take it all that will make our economic system dis-function.

A novel: Ready Player One by Ernest Cline that presents a virtual reality world of the future,

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

THE LONE BEAR LETTER #12

All time high of 26,617 projected in 2011

I finished writing my book entitled Investment Handbook for Volatile Markets on September 17, 2011 (see the post online above). The Dow Industrial Averages, were at that time at 11, 485. My original thought was that the market would go up to around the 18,000 area and then stop. That’s why I wrote my Lone Bear Letter on January 23, 2015 when the Dow industrials was at 17, 672. I was right for a while. However, after the Trump election, the markets went up over 25% (without my approval). As noted below my projections (Fibonacci) on September 17, 2011 were for the Dow to go as high as 26,701. Well, it did go to as high as 26, 617 before correcting. Sorry, I missed picking the all-time high in 2011, by a mire 84 points. Not that bad huh? However is it an all time high?

DOW JONES INDUSTRIAL AVERAGE  UPSIDE RESISTANCE ZONES

Fibonacci projections made 2011 in the Investment Handbook for Volatile Markets

1st Resistance 2nd Resistance 3rd Resistance 4th Resistance  5thResistance
14,198 14,198 14,198 14,198 14,198
-6,470 -6,470 -6,470 -6,470 -6,470
=7,728 7,728 7,728 7,728 7,728
X38.2% X50% X61.8% X 100% X1 61.8%
=2,752 3,864 4,776 7,728 12,503
+14,198 14,198 14,198 14,198 14,198
=17,150 18,062 18,974 21,926 26,701

  Will the Dow high of 26,701 become an All Time High?

Yes, I believe the markets have topped, for the same reasons that I gave in ISL #717 through #719. The Federal Reserve still has for a $$Four and a half trillion dollars of bonds to sell back to the marketplace (quantitative tightening)and the  banks still have $350 trillion in derivatives ($65 Trillion in 2008). This has been like a bomb ready to go off. In addition there have been financial problems with the (yet to be determine)  XIV volatility Index (down 93%). Everyone is blaming the sell off on higher interest rates. I don’t think so. My hunch is that we are reaching a Constructional Crisis with the Trump Russia Investigation! Muller may hav the evidence , but I doubt if the Congress will act and I am sure Trump will not resign causing a Constitutioal Crisis.. That has the potential of being very disruptive to the markets!

The markets will tell us. A Bear Market acts like this: down 500 on Friday, Panic on Monday down 1,200, recovery on Tuesday, panic on Wednesday and Thursday and today the matket +330. A  good sogn. However, if weakness continues next week, watch out below. My current first phase downside Dow, projection is down to 17,000 –18,000, then to 13,000. This would bring a huge Democratic victory in November.

This is what the democrats should say about the State of The Union!

The State of the Union is polarized with partisanship, while our citizens are in danger of losing their upward mobility and an equal opportunity for success.  For many, the “American Dream” is quickly fading and so is the prospect that our children will be better off than us. Many cannot afford health care or college and are paid a wage that cannot provide for their family’s stability.  The nation is also facing a moral decay, where tweets have replaced diplomacy, spin has replaced integrity and hubris has replaced compassion.

Many of our citizens are struggling!  This is why! 1) Between 1980 and 2017, most of the income growth has gone to the top 1%. This process has transferred approximately $1 trillion a year from the bottom 90% of income earners, to the top 1%. One family, the Walton’s who underpay their employees; earn more income each year, than the bottom 40%, or 130 million people. 2) With productivity up, there have been little increase in working wages and yet CEO pay has gone up from 65 times, to 250 to 500 times the average worker’s pay. 3) Small businesses and entrepreneurs, who employee 90% of the nation’s people, are being squeezed out of business, by unfair advantages given to large corporations. 4)  With student debt above $1.3 trillion dollars, our young graduates have become indenture servants to their debt. 5) In addition, Middle-Class consumers have taken on almost $1 trillion in credit card debt, with ‘Big Banks’ charging exorbitant interest rates of 15% to 25%. This is unacceptable!

The current Republican Administration and Congress cares little about what the public needs, or what is the right thing to do. They consider their big money donors, as their constituency.  Donor power now rules over public opinion and the only major changes that have been made are to make the rich richer! The top 1% and large corporations, through their lawyers, accountants and the exploitation of the political system, have formed an oligarchy that has built up powerful defenses against competition and income equality. If things don’t change, the billionaires will become trillionaires and our large corporations will eliminate most small business competition and will operate without borders, becoming independent of the marketplace and regulations. Thus, we are quickly becoming ‘The Land of Only the Privileged’.

We must face this reality: ‘Big Business’ has been created to earn a profit from the public, not to benefit the public. That is their nature. Therefore; we need to eliminate the ‘Citizens United’ ruling, where Corporations, as political donors, are treated like people. If Corporations are people, most are only concerned about profit and lack a conscience.

It will not be easy to level the playing field, as the ruling oligarchy reaches deep into our political system. This is not what our Founding Fathers intended. This winner-take-all attitude has created justifiable anger and threatens our jobs, civility and our economic system. We live in a consumer oriented society, driven by a healthy Middle Class. However, how many tooth brushes and cars can each of the top 1% buy? Not enough to keep our economy growing and stable.

We need to make these political changes. 1) We need to correct the gerrymandering of voting districts.  Gerrymandering is the manipulation of voting boundaries favoring one party over the other. With a database, politicians can create a district where they can predict the voting behavior of each potential district. This must be corrected. 2) We need to set term limits for our Senators, Congressmen and for the Supreme Court, for the same reason we have a two term limit for the Presidency; power tends to corrupt. 3) We need to bring back the Glass Stiegel Act. Without it, banks can act unethically between their banking and Investment Banking functions. 4) We need to pass legislation to regulate automatic weapons, recognize global warming and regulate our banks so as to prevent them from getting the world into another 2008 type financial crisis. 5) We need to expand the Voting Rights Act, to make it easier for citizens to register and to vote.

Fortunately our Founding Fathers gave us these words; ‘We hold these rights to be self-evident, among which are life, liberty and the pursuit of happiness’.  It is time to fulfill this promise of ‘Life’ with Medicare for everyone. This can be done incrementally, first by giving Medicare to children up to age 12 and also by lowering the beginning of Medicare to age 55.  All the industrialized nations have universal healthcare for their citizens, so can we! To fulfill the promice of ‘Liberty’ of equal opportunity and upward mobility, we need to level the playing field by offering our children a first-rate education. The United States currently ranks only thirty-sixth among the world’s developed nations in education. We can do better. Additionally, for those who qualify, we should offer two year’s free tuition to a community college or a choice of trade or technology school training. Let’s invest in our children’s and in our nation’s future.  To fulfill the promice of the ‘Pursuit of Happiness’, we must offer employees a decent wage that can support the enjoyment of a family life. We believe that there is enough food production so that no one should die of hunger, enough prosperity, that nobody should live in conditions of poverty. We now have many people working at a minimum wage of $7.50 an hour, making them virtually slave labor. We need to set the minimum wage at $15.  

Many of the costs of increased benefits of education and health care will be offset by individual saving for these expenses. However, we will need to increase the taxes on the rich, who actually pay a smaller percentage of their income taxes than those below them and Corporation must pay their fair share. We can also reduce defense spending. Simply put, we must change our priories to what is good for the common good.

Today the United States, as ranked against other nations, is 35th in meeting basic human needs, has the highest first day infant mortality rate and the highest child poverty rate (21%) among industrialized nations. That’s one in every five of our children living in poverty! As a Great Nation, we must do better. Welcome to the Democratic Party’s ‘New Era of Opportunity’! We have to change from stressing our differences, to opening up to our connectedness.  It is time to heal our wounds. We have to be aware of our potential, both individually and as a great nation. A new era of globalization, multiculturalism, multiracialism, automation and a carbon free economy is descending on us. We must address these challenges, as opportunities!

This ‘New Era of Opportunity’ is ready to emerge. The current political setbacks are the last vestiges of a backlash to policies of the past and are a motivator for a change to benefit the common good. It is a typical cycle of decay and renewal. Never give up ‘hope’!  If you do, the dark forces win. Stay in the light. Make ‘hope’ a verb and a call for action. Get out of the grandstands as a spectator and get on the playing field and become activated. Vote in 2018 to welcome in the ‘New Era of Opportunity’.  Vote!

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

2/6/2018

 

 

 

 

 

 

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

THE INVESTMENT STRATEGY LETTER #720

All time high of 26,617 projected in 2011

I finished writing my book entitled investment Handbook for Volatile Markets on September 17, 2011 (see the post online above). The Dow Industrial Averages, were at that time at 11, 485. My original thought was that the market would go up to around the 18,000 area and then stop. That’s why I wrote my Lone Bear Letter on January 23, 2015 when the Dow industrials was at 17, 672. I was right for a while. However, after the Trump election, the markets went up over 25% without my approval. As noted below my projections (Fibonacci) on September 17, 2011 were for the Dow to go as high as 26,701. Well, it did go to as high as 26, 617 before correcting. Sorry, I missed picking the all-time high in 2011, by a mire 84 points. Not that bad huh? However is it an all time high?

!DOW JONES INDUSTRIAL AVERAGE  UPSIDE RESISTANCE ZONES

Fibonacci projections made 2011 in the Investment Handbook for Volatile Markets

1st Resistance 2nd Resistance 3rd Resistance 4th Resistance  5thResistance
14,198 14,198 14,198 14,198 14,198
-6,470 -6,470 -6,470 -6,470 -6,470
=7,728 7,728 7,728 7,728 7,728
X38.2% X50% X61.8% X 100% X1 61.8%
=2,752 3,864 4,776 7,728 12,503
+14,198 14,198 14,198 14,198 14,198
=17,150 18,062 18,974 21,926 26,701

  Will the Dow high of 26,701 become an All Time High?

Yes, I believe the markets have topped, for the same reasons that I gave in ISL #717 through #719. The Federal Reserve still has for a $$Four and a half trillion dollars of bonds to sell back to the marketplace (quantitative tightening)and the  banks still have $350 trillion in derivatives ($65 Trillion in 2008). This has been like a bomb ready to go off. In addition there have been financial problems with the (yet to be determine)  XIV volatility Index (down 93% today). Everyone is blaming the sell off on higher interest rates. I don’t think so. My hunch is that we are reaching a Constructional Crisis with the Trump Russia Investigation!

The markets will tell us. A bear market acts like this: down 500 on Friday, Panic on Monday down 1,200, recovery on Tuesday, volatile on Wednesday and Thursday, then if this pattern repeats, watch out below. My current first phase downside Dow, projection is down to 17,000 –18,000, then to 13,000. This would bring a huge Democratic victory in November.

This is what the democrats should say about the State of The Union!

The State of the Union is polarized with partisanship, while our citizens are in danger of losing their upward mobility and an equal opportunity for success.  For many, the “American Dream” is quickly fading and so is the prospect that our children will be better off than us. Many cannot afford health care or college and are paid a wage that cannot provide for their family’s stability.  The nation is also facing a moral decay, where tweets have replaced diplomacy, spin has replaced integrity and hubris has replaced compassion.

Many of our citizens are struggling!  This is why! 1) Between 1980 and 2017, most of the income growth has gone to the top 1%. This process has transferred approximately $1 trillion a year from the bottom 90% of income earners, to the top 1%. One family, the Walton’s who underpay their employees; earn more income each year, than the bottom 40%, or 130 million people. 2) With productivity up, there have been little increase in working wages and yet CEO pay has gone up from 65 times, to 250 to 500 times the average worker’s pay. 3) Small businesses and entrepreneurs, who employee 90% of the nation’s people, are being squeezed out of business, by unfair advantages given to large corporations. 4)  With student debt above $1.3 trillion dollars, our young graduates have become indenture servants to their debt. 5) In addition, Middle-Class consumers have taken on almost $1 trillion in credit card debt, with ‘Big Banks’ charging exorbitant interest rates of 15% to 25%. This must stop!

The current Republican Administration and Congress cares little about what the public needs, or what is the right thing to do. They consider their big money donors, as their constituency.  Donor power now rules over public opinion and the only changes that have been made are to make the rich richer! The top 1% and large corporations, through their lawyers, accountants and the exploitation of the political system, have formed an oligarchy that has built up powerful defenses against competition and income equality. If things don’t change, the billionaires will become trillionaires and our large corporations will eliminate most small business completion and will operate without borders and become independent of the marketplace and regulations. Thus, we are quickly becoming ‘The Land of Only the Privileged’.”

We must face this reality: ‘Big Business’ has been created to earn a profit from the public, not to benefit the public. That is their nature Therefore; we need to eliminate the ‘Citizens United’ ruling, where Corporations, as political donners, are to be treated like people. If Corporation are people, most lack a conscience and are only concerned about profit.

It will not be easy to level the playing field, as the ruling oligarchy reaches deep into our political system. This is not what our Founding Fathers intended. This winner-take-all attitude has created justifiable anger and threatens our jobs, civility and our economic system. We live in a consumer oriented society, driven by a healthy Middle Class. However, how many tooth brushes and cars can each of the top 1% buy? Not enough to keep our economy growing and stable.

We need to make these political changes. 1) We need to correct the gerrymandering of voting districts.  Gerrymandering is the manipulation of voting boundaries favoring one party over the other. With a database, politicians can create a district where they can predict the voting behavior of each potential district. This must be corrected. 2) We need to set term limits for our Senators, Congressmen and for the Supreme Court, for the same reason we have a two term limit for the Presidency; power tends to corrupt. 3) We need to bring back the Glass Stiegel Act. Without it, banks can act unethically between their banking and Investment Banking functions. 4) We need to pass legislation to regulate automatic weapons, recognize global warming and regulate our banks so as to prevent them from getting the world into another 2008 type financial crisis. 5) We need to expand the Voting Rights Act, to make it easier for citizens to register and to vote.

Fortunately our Founding Fathers gave us these words; ‘We hold these rights to be self-evident, among which are life, liberty and the pursuit of happiness’.  It is time to fulfill this promise of ‘Life’ with Medicare for everyone. This can be done incrementally, first by giving Medicare to children up to age 12 and also by lowering the beginning of Medicare to age 55.  All the industrialized nations have universal healthcare for their citizens, so can we! To fulfill the promice of ‘Liberty’ of equal opportunity and upward mobility, we need to level the playing field by offering our children a first-rate education. The United States currently ranks only thirty-sixth among the world’s developed nations in education. We can do better. Additionally, for those who qualify, we should offer two year’s free tuition to a community college or a choice of trade or technology school training. Let’s invest in our children’s and in our nation’s future.  To fulfill the promice of the ‘Pursuit of Happiness’, we must offer employees a decent wage that can support the enjoyment of a family life. We now have many people working at a minimum wage of $7.50 an hour, making them virtually slave labor. We need to set the minimum wage at $15 an hour. Increasing the minimum wage should increase consumer spending, thereby creating jobs and a stable economy.

Many of the costs of increased benefits of education and health care will be offset by individual saving for these expenses. However, we will need to increase the taxes of the rich, who actually pay a smaller percentage of their income taxes than those below them and Corporation must pay their fair share. We can also reduce defense spending. Simply put, we must change our priories to what is good for the common good.

Today the United States, as ranked against other nations, is 35th in meeting basic human needs, has the highest first day infant mortality rate and the highest child poverty rate (21%) among industrialized nations. That’s one in every five of our children living in poverty! As Great Nation, we must do better. Welcome to the Democratic Party’s ‘New Era of Opportunity’! We have to change from stressing our differences, to opening up to our connectedness.  It is time to heal our wounds. We have to be aware of our potential, both individually and as a great nation. A new era of globalization, multiculturalism, multiracialism, automation and a carbon free economy is descending on us. We must address these challenges, as an opportunity!

This ‘New Era of Opportunity’ is ready to emerge. The current political setbacks are the last vestiges of a backlash to policies of the past and are a motivator for a change to benefit the common good. It is a typical cycle of decay and renewal. Never give up ‘hope’!  If you do, the dark forces win. Stay in the light. Make ‘hope’ a verb and a call for action. Get out of the grandstands as a spectator and get on the playing field and become activated. Vote in 2018 to welcome in the ‘New Era of Opportunity’. Vote democratic!  You can make a difference! Vote!

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Carl does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Carl , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Carl M Birkelkbach

2/6/2018

THE INVESTMENT STRATEGY LETTER #720

EVERY DAY IS A DRAMA! 117 ‘DAZE’ AND COUNTING

Remember those boring days of No Drama Obama? Things have changed and not for the better.Today The New York Times just reports that FBI director Comey has documented that President Trump had asked him to drop the General Flynn file. Obstruction of justice?

Most recently, President Trump has sunk the credibility of his close associates of Sean Spicer and General McMasters. In Mister Spicer’s case, he became a spokesman for President Trump in saying that President Trump decided to fire FBI director Comey, because of a State Department recommendation. No sooner were the words out of his mouth, than the President countered this statement by saying that it was ‘his’ idea of fire Comey after all. Last night, General McMasters, the last of the creditable staff, said President Trump did not disclosed classified information to the Russian delegation. This morning, President Trump tweets that he did disclose classified information to the Russians as our ally against Al Qaeda. The update from McMasters is that Trump did share with the Russians highly classified material, but it was wholly appropriate. Neither Trump or his staff or the Republican Party has the temperament, maturity or experience to govern. This is a cartoon that is not funny!

This is certainly a Teflon President. In my opinion he ‘has obstructed justice’ in trying to waylay the investigation of his administration’s complexity with the Russians. He has done so by firing all of the Justice Department attorneys, not disclosing his tax reports, interfering with the House of Representatives investigation by calling its chairman Nenus to the White House and the firing of FBI director Comy, who is leading the FBI investigation into Trump connections with Russia. The latest news is that Trump warned FBI director Comey that he may have taped their conversations. Great just what ‘TrumpGate’ needs, Nixon ‘Watergate’ type recordings of White House conversations. Let’s see what they have to say. Unlikely that Trump will cooperate!

Then, there are new executive orders that will hurt the very constituencies that voted for Trump. One executive order will illuminate over-time wages and allow its workers time off instead of time and a half pay. Another executive order will illuminate the protection of our national monuments. Another will reduce the protection of credit card holder’s private information. Another will illuminate EPA jurisdiction over clean water and air. President Trump has to help of Secretary Sessions, who is working to reinstate mandatory sentences so that his pal’s investment in corporate jailing institutions will pay off. Under the Obama administration, the lessening of jail sentences for minor  violent crimes has reduced the incarcerated population by 20%. Not good for profits of those corporations and pals of Sessions who have invested in this industry. Also, Secretary Sessions, who supposedly has requested himself from the Russian investigation, now is being asked to help recommend a new FBI director.

US markets and world markets hit new highs! Why?

How can the markets throughout the world the making new highs when the Trump administration is in freefall, all our computers are in danger of being hacked, retail businesses are going bankrupt, our healthcare system for the poor and middle class is being attacked, North Korea has the capability of reaching US bases with nuclear missiles, the TrumpCare health plan eliminates federal support of pre-existing conditions while giving $1 trillion to the Republicans riches constituents, Trumps economic plan is aimed at old industries (see the latest Economist Magazine) such as manufacturing  (was 35% of the economy now 7%) and oil  (pipelines will not be needed), that are part of the old economy while new technology and global warming is ignored, while the Federal Reserve has for a Four and a half trillion dollars of bonds to sell back to the marketplace (quantitative tightening), the banks have $350 trillion in derivatives ($65 Trillion in 2008), our President constantly lies to us and the world economies continue in the doldrums? There’s so much cash around in interest rates are so low, it’s the only game in town. It’s all about corporate profits. If you pay your workers more your, stock goes down. If you lay off workers your stock price goes up.

Actually the oligarchy corporate ruling class doesn’t need to help the general welfare anymore. The multitudes of middle class and poor are NO LONGER NEEDED BY THE OLIGARCHY to fight their wars, produce  their products because of automation or even needed to buy their  products. After all, $1 billion invested at 3% returns $100,000 a day. That’s enough for all the daily necessities of being part of the United States new aristocratic royalty! There are now 2000 billionaires in the United States. Do you know what city in the world has the largest amounts of billionaires? Moscow Russia! Our palls and allies? No wonder President Trump admires them.

New Book: The Vanishing American Adult. By Nebraska Republican Senator Benjamin Sasse.

Senator Sasse earned a doctorate in history and before his election in 2014, he was a federal health official and president of Midland University, which is linked with the evangelistic Lutheran Church. He is a conservative Republican who refused to back Trump.  The Senator was critical of Trumps recent firing of FBI director James Coley. His new book is subtitled, ‘Our coming of age crisis and how to rebuild a cultural of self-reliance’, grows out of his experience as a parent of the three children he raises with his wife in Melissa Nebraska. In an interview on  NPR radio, he said they shipped their kids to farms and ranches in Nebraska to learn some big life lessons. He said he wants them to get dirt under their fingernails. He says these experiences will help build scar tissue for the sole. He thinks US parents are doing a bad job of helping our children to understand that they have to develop resiliency. He said preserving and getting through hardships makes you tough. He said that we are failing in a bunch of fundamental ways to distinguish for our children between ‘needs’ and ‘wants’ and are failing to distinguish between ‘production’ and ‘consumption’. He said this book is not an old man screaming get off my lawn! It is a question of how do we do better or please Work on my Lawn. He thinks the category of perpetual adolescents is a new thing and is dangerous. Adolescence he says is about intentionally transforming from childhood into adulthood. Being stuck in adolescence is a Peter Pan to dystonia, as children forget that Neverland is a bad place to be.  He believes it is a good thing for children to learn how to work and to help them find meaning in their work. He states, that it is not natural to have to suffer when we work, as we are made to be productive and yet the worlds we live in has a whole bunch of suffering. And what children need to understand at 10, so that when their 16 years old and 20 years old, they’re moving into a truly semi-independent state, that they have earned through an experience and memory of persevering and having gotten through hardships. He also criticizes Washington DC politicians that seem addicted to their own incumbency.

Carl M Birkelbach 5/16/2017