All Investment at Risk Now - Former IRS Auditor Michael McCune

All Investment at Risk Now

Do you have any money in the bank? Do you have any currency investments for retirement, including the employer-operated type? Do you have any kind of an investment portfolio for any purpose? If you do, this essay is directed at you.

We all know the stock markets fell rapidly on Friday after the Brexit vote. Just as rapidly my inbox was stuffed with promotions from various investment know-it-alls from around the globe advising me that they and they alone had the answers to "protecting my wealth." Pardon me while I get rid of the queasy feeling in my stomach...

There much better. I have a couple of unpolite things to say to those smart people and will start with a couple of headlines from last week, one from Thursday and one from Friday--the day of and the day after the British vote.

 

From Thomson Reuters on Thursday, "Brexit Vote Is Moment of Truth for the Last Remaining Bears". On Friday, from Bloomberg, came "Nightmare Coming True for Stock Bulls Blindsided in Brexit Shock".

Before the ballots were counted, Reuters' report centered on the fact the vote represented high noon for "the few fund managers still brave enough to hold short positions, betting that share prices will fall" when Britain votes to stay in the European Union. The story was filled with quotes from this or that expert about how Bears were about to go extinct. We'll get to some of those in a moment.

After the ballots were counted, the Bloomberg piece on Bulls getting ripped apart noted, "In a rout worsened by a mistimed bout of investor optimism..." before expanding the details of the world-wide equities' plunge. Bloomberg's piece also contained many quotes from world investment strategists.

The problem is many of the quoted people are the ones holding onto the kite string that your investment adviser (the kite) is listening to before he advises you or invests what you have placed with him. A blind monkey throwing darts from a spinning platform would be just about as helpful.

Where all these know-it-alls went so badly wrong is in two parts.

First, just as in the current American Presidential campaign, they under-rated the common man's anger held over from the Great Recession. All of the political machinations did nothing, N-O-T-H-I-N-G!!! to help the guy at the bottom of the economic food chain. He got taxed more, he got more regulation, he was told of how this would eventually help his financial position but none of these hardships helped him. They did help the Establishment (political) and the Elites (Uber-rich) maintain their lifestyles. Second, the Establishment continued to harp and promote Diversity over their national interests through political correctness which went against the common man's base learnings he received in his youth. Every country, not matter its position, promotes itself in its education system to maintain stability from within. The common man can see the error of this when set against a planned Diversity agenda. Combined these two items produced a record British turnout and set the fall of the Establishment (and the attending national currencies) as we've known them our whole life.

So the experts got it wrong--even the expert bookies in the United Kingdom.

Back to the experts who were quoted before the ballots were counted.

David Lewis, senior VP at FIS Astec Analytics said, "Short sellers are reducing their exposures to a blue-chip market bounce expected after the Thursday vote." JPMorgan put out a warning note to its client base that it was "reducing short positions, as has been the norm since the first of the year. There is a very distinct move from being net short to net covered since March. This can be interpreted as a reduction in risk appetite. The reduction took place across most sectors, the only exception being utilities." Then there was governmental expert data from Britain's Financial Conduct Authority. The FCA showed only 134 asset managers globally held less than 430 short positions worth just over .5% of (British) company value on the day of the vote. None of those short holders were sure enough to make a comment but the report noted that when the stock prices rise, these short sellers risk huge losses.

Now to the experts quoted after the vote. 

Neil Sutherland, a money manager at Schroders in New York, said, "The market had front-loaded a lot of the rally [and were still holding those positions]. The expectation was the 'Remain' camp would win. It was to by asymmetrical." Michael Corcelli, chief investment officer at Alexander Alternative Capital, "My company began selling S&P calls to fund. I did not think this would work. I thought this bet was a loss of premium until I settled in to watch the news. My company made money but I lost 23 bps." Then there was Dubravko Lakos-Bujas, JPMorgan's head of equity strategy and global quant research, "Equity divestiture could reach $300 billion nearly immediately. The bigger unknown is the second order effects which could manifest themselves through various potential channels."

I've sat in on some measured information-swap financial meetings. Whenever they begin to toss in this or that factor--which has not been used before--or take out this or that factor that has been traditionally included before settling down to the myriad "what if" scenarios, I tune them out because I know something is amiss with their premises. They are starting from the fact the government will keep the economy moving--which is the basis for the globalist movement.

Instead I look at the adjustments the discussion leaders have had to make to the normal equation parameters. It is those adjusted factors, in or out, that I focus on. Why are they not performing as well as usual or why are they now being included?

I've found that when an adviser stops talking in plain language. when he finds tedious, professorial answers suffice more than plain language, it is time to remove yourself from investments.

What has happened from the central bankers to the established government elitists is they've drunk the Kool-Aid. What's worse is the FDIC-regulated people who the average guy turns to, is in on drinking the Kool-Aid. He's relying--to a great extent--on government-generated data and reports. Those bureaucrats are clueless in too many cases and their bosses are too far invested in the game to allow the truth to slip past without some spin supporting government's position.

There was another report I noted from Clarity Financial. It was titled, "Why the Next Decade Will Foil Financial Plans". It included a factor from the Federal Reserve. The Fed is shooting for a 2% growth but in this equation, to get to a positive 1.5%, it was forced to use a 4% growth factor.

Despite what you've been told, despite the narratives you read, the financial world relies entirely on government policy and fiat support to show growth. When the government receives a shakeup--like the EU and Great Britain are now facing--all bets are off and your investments are at risk.

After all, if both Bears and Bulls are endangered what's left but politicians?

"I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man."--Thomas Jefferson