| Fellow Investor, Today is the big day. Politicians have to either agree on something, or the government shuts down. And honestly, my frustration level is so high at our political dysfunction, I'm almost cheering for a shutdown. Of course, I also understand that a forced furlough for some government employees is not something to cheer for. Fortunately for me, I'm a stock market analyst, not a political analyst. So I only have to wade into the political quagmire insofar as it affects the stock market. There was a time when it seemed that the political push toward austerity might actually have teeth and provide some measurable changes to government spending. But it is now clear that, at least for this year, no material changes to spending will occur. And so one of the primary catalysts for stock prices - liquidity - will remain intact. *****The U.S. can't keep running $1.4 trillion deficits every year. But with the lack of political will to truly tackle deficit problems, we will likely require the kind of debt shock that Greece, Ireland and Portugal have experienced before we get serious about balancing our national budget. It seems that very few people take the potential for a debt downgrade on U.S. bonds as realistic. But when you consider that the U.S. has over $14 trillion in current debt, and who-know-how-many-trillions of unfunded liabilities (Social Security, Medicare, unemployment, food stamps, etc.), the potential is certainly there. Interest rates will have to rise at some point. It may not be this year, but it will get more expensive for the U.S. government to pay its debts. And since we have to sell Treasuries to pay current debt, Treasury prices will keep going down (sure, there will be rallies, but the long-term trend is clear). I think the government should simply do a Social Security buyout right now. Give everyone their money back, and simply do away with Social Security altogether. Sure, it would be a massive upfront cost, but it would cut long-term obligations dramatically. | Special opportunity, article continues below.
| An unbelievable 8.2% yield from a Manhattan Bank
Most banks yield less than 1%. But one small, unadvertised Manhattan bank has been paying yields of more than 5% for the past decade.
This bank has nothing to do with Wall Street - and they didn't take a dime in bailout funds. They didn't need to. They borrow low and lend high. And they pay their members the difference.
Click here if you're interested in this old-fashioned bank... |
| I know, such a proposal would have me branded as a wing-nut, but I can handle t... *****On another note, I'm not sure if I've told you that TradeMaster Daily Stock Alerts' Jason Cimpl writes a daily e-letter, called TradeMaster Market Forecast. Every day, Jason takes a detailed technical look at the stock market, discussing current support and resistance levels, index targets, and what sectors are moving. Plus, on a monthly basis, Jason releases a Special Report detailing his Top 10 trades for the month. Stocks from April's Top 10 are up between 8% and a phenomenal 37%! If you're interested in hearing more from Jason, and would like to start getting his free Top 10 reports, you can get on his e-letter list HERE. *****Oil stocks are still not responding to oil prices like we might expect. For one, there is likely a perception that current oil prices are not sustainable. I also suspect that institutional investors are sticking with their seasonal play book on oil stocks. That play book says you sell oil stocks in early Spring and late Fall. And the institutional crowd can be very stubborn when it comes to seasonal trades. If we get a "Sell in May" decline this year (which seems likely if stocks continue to ramp higher during the first weeks of earnings season), oil stocks will be a prime target for bargain shopping. Have a great weekend,  | Ian Wyatt
Editor
Daily Profit |  |
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