One morning, we decided we wanted to do brunch in Palo Alto. When we got there, we realized their weekly farmers market was happening. Naturally, we had to check out the goods (and come home with some flowers).
Early in the morning, Jerub-Baal (that is, Gideon) and all his men camped at the spring of Harod. The camp of Midian was north of them in the valley near the hill of Moreh. The Lord said to Gideon, "You have too many men. I cannot deliver Midian into their hands, or Israel would boast against me, ‘My own strength has saved me.’ Now announce to the army, ‘Anyone who trembles with fear may turn back and leave Mount Gilead.’" So twenty-two thousand men left, while ten thousand remained. But the Lord said to Gideon, "There are still too many men. Take them down to the water, and I will thin them out for you there. If I say, ‘This one shall go with you,’ he shall go; but if I say, ‘This one shall not go with you,’ he shall not go." So Gideon took the men down to the water. There the Lord told him, "Separate those who lap the water with their tongues as a dog laps from those who kneel down to drink." Three hundred of them drank from cupped hands, lapping like dogs. All the rest got down on their knees to drink. The Lord said to Gideon, "With the three hundred men that lapped I will save you and give the Midianites into your hands. Let all the others go home." So Gideon sent the rest of the Israelites home but kept the three hundred, who took over the provisions and trumpets of the others. Judges 7:1-8
i love how God works. just as He had an out of the box victory plan for Joshua at Jericho, He has an out of the box victory plan for Gideon.
its not usual battle strategy to send most of your men home. most military advisors would advise to man up, weapon up and that there is strength in numbers. they would seriously question sending ANYONE home. let alone reducing their army to just 300 against such a formidable enemy.
Realistically, numerically, logically and physically, Gideon’s army was not going to win the battle. However, when you bring God into the mix, the normal is pushed aside and the supernatural comes into being.
but it was God’s strategy and Gideon was obedient to listen to it and to do it.
Obedience isn’t some mysterious thing. It is saying “Yes” to the things God asks us. They may be things from The Bible. They may be more direct and personal things that God asks of us… to go here… to serve there… to give this… to not do that… to read this… to sacrifice that… Sometimes obedience doesn’t make sense… well not to our eyes, or the eyes of those around us. But to God who knows our steps and the perfect path to walk… it makes perfect sense and is part of the jigsaw of our life…
Obedience can be painful. Obedience can strike at the heart of the things we want to hold onto the most. It can cause us to walk in a direction we hadn’t planned on, and maybe even don’t want to. Obedience can put you in a circumstance and place that stretches your heart and faith. Obedience is an expression of my faith. I believe and trust in God, therefore i obey Him and go where He leads and do what He says.
”You will never attain to the mountain of internal peace If you govern yourself according to your own will. This self nature of your soul must be conquered. Your directions, your judgement, your disposition to rebel must be subjected and reduced to ashes. How? In the fire of obedience, for it is there that you will find out if you are truly a follower of Divine love or self love.
One of God’s servants once said:
It would be better that you gather dung by obedience than be caught up into the third heaven by your own will.
What is true obedience? Obedience, to be perfect, must be voluntary; it must be pure and cheerful. But most of all it must be internal. I would add that it must also be blind and preserving.
Molinos from 100 Days in the Secret Place
His pleasure is not in the strength of the horse, nor his delight in the legs of a man; the LORD delights in those who fear him, who put their hope in his unfailing love. Psalm 147:10-11
and when you look at who left: it was those afraid and those who “drunk unwisely” – those who were not aware of where they were or their purpose as an army, those who were not alert to the seasons and times. those that positioned themselves properly stayed and were part of this amazing victory. their lives were changed from that point as they were the men God used to bring deliverance to their people.
this passage also reminds me that whatever enemy i face in my life – what every opposition or trial – that God has a strategy for me to get through it victoriously. it may take some change and some sacrifice and some surrendering and some obedience, but if i follow Him, He will lead and guide me.
“No temptation has seized you except what is common to man. And God is faithful; he will not let you be tempted beyond what you can bear. But when you are tempted, he will also provide a way out so that you can stand up under it.” 1 Corinthians 10:13 NIVUK
It is God who arms me with strength and makes my way perfect. He makes my feet like the feet of a deer; he enables me to stand on the heights. He trains my hands for battle; my arms can bend a bow of bronze. psalm 18:32-34
“It was just after midnight, after the changing of the guard, when Gideon and the one hundred men with him reached the outer edge of the Midianite camp. Suddenly, they blew the horns and broke their clay jars. Then all three groups blew their horns and broke their jars. They held the blazing torches in their left hands and the horns in their right hands and shouted, “A sword for the LORD and for Gideon!” Each man stood at his position around the camp and watched as all the Midianites rushed around in a panic, shouting as they ran. When the three hundred Israelites blew their horns, the LORD caused the warriors in the camp to fight against each other with their swords.” Judges 7:19-22 NLT
A prophetic lady Sandy Warner wrote the following in 2001 (see her website www.thequickenedword.com)the following is just a segment that has always stuck with me since reading it, but I wanted to highlight the part about jars of clay.
“WEAK INSTRUMENT – A BROKEN CLAY JAR The instruments that the Lord used to defeat these Midianites are amazing. They carried hidden fire inside clay jars which they brought into the enemy’s camp. It was not until these jars were broken that their torches blazed. Of course the jars of clay are us and the light is Jesus Christ and His fiery passion within us. When we are broken and vulnerable before the Lord and before our enemies, we are in the place where God wants us to SHINE.
2 Corinthians 4:7 “For it is the God who commanded light to shine out of darkness, who has shone in our hearts to give the light of the knowledge of the glory of God in the face of Jesus Christ. But we have this treasure in earthen vessels, that the excellence of the power may be of God and not of us.” (2 Cor 4:5-7 NKJV)
I’m sure many of you heard the quick clip on NPR the other morning about Theodor Geisel (aka Dr. Seuss)’s road to publication. It was, for me, extremely timely and another example of being in the right place at the right time.
Dr Seuss had finished his manuscript for And To Think That I Saw It On Mulberry Street about a little boy imagining what he would tell his father about his disappointingly uneventful walk home. He had submitted it to twenty-seven publishing houses, all of whom had summarily rejected it. He was walking down the street in New York City, ready to toss the manuscript and try his hand at another career, when he happened to bump into an old acquaintance who happened to work in publishing who agreed, probably out of a weary sense of obligation, to look at the work. And, well, the rest is history.
Just think for a moment of a world without Dr. Seuss. Sure, you could say he’s just another talented children’s author, but he was also quite revolutionary. He tackled issues of racism (The Sneetches) and environmentalism (The Lorax) long before it was popular to do so. The Lorax, for one, has stood the test of time; as relevant a creed for anti-consumerism and environmental protection today as it was forty years ago. He made reading cool (I Can Read With My Eyes Shut) and gave students everywhere something to reach for and dream of (Oh, The Places You’ll Go!).
So, I imagine that boy, the one from Mulberry Street, standing instead on the same street where some unknown named Theodor Geisel stood chatting with some other unknown, two boring men in suits engaged in a brief conversation. And that little boy would have looked away, searching for something more exciting, more remarkable to witness, never realizing the magic of what was happening right before his eyes.
Early in the morning Joshua and all the Israelites set out from Shittim and went to the Jordan, where they camped before crossing over. After three days the officers went throughout the camp, giving orders to the people: "When you see the ark of the covenant of the Lord your God, and the Levitical priests carrying it, you are to move out from your positions and follow it. Then you will know which way to go, since you have never been this way before. But keep a distance of about two thousand cubits between you and the ark; do not go near it." Joshua told the people, "Consecrate yourselves, for tomorrow the Lord will do amazing things among you. Tell the priests who carry the ark of the covenant: ‘When you reach the edge of the Jordan’s waters, go and stand in the river.’" Joshua 3:1-5, 8
this was THE MOMENT. they were at the river jordan, prepared and ready to cross over. this generation had lived THEIR WHOLE LIFE with this as their goal and purpose. their parents and the previous generation had died for their unbelief and lack of faith. they had BEEN HERE before but refused to cross over and believe God and possess the Promised Land.
God gave Joshua a plan for how to cross the river. The priests were to carry the ark – the visible vessel of the presence of God – the nations MOST precious “possession” into the river. the river in flood. the raging river. they were to walk INTO it. and then God would move so they could cross.
their parents and the generation before had walked through waters before. but this was a new generation, who had yes seen God do amazing things, but still… walk into a flooded river?
it wasn’t until the priests walked into the river and got their feet wet that then God parted the river and stopped the river flowing. they didn’t stand on the bank and look at it and command it stop flowing and THEN step out into a dry path – they had a wet path of a flooded river to step into. but they took that step of faith in obedience to the command of God and the river stopped and they crossed then on dry land. The Bible said that the priests had to get their feet wet. At some point they had to make a decision to trust God. Joshua was not there as they faced the raging river. It was the priests leading the way, carrying the ark. Joshua would be following with the people. The priests had to trust God, and God was with them.
God will make a way where there is no way. He can open the way into the Promised Land. No matter what the obstacle – raging river – mountain range – difficulties and relationship issues, unemployment, qualification etc – God can make a way. He is the river splitter and the mountain mover. God can and will do amazing things in and through our lives.
it took faith and trust for the priests and the people to prepare and step out. we move into new things and new seasons and new lands by faith. by trusting in God. by surrendering to His ways and will. the people could have built giant river crossing rafts or constructed a bridge or waited for the river to decrease in size with a change of season – but THIS was the TIME and GOD knew the WAY. faith follows God. faith follows God into the river.
this action not only showed the people God’s power but validated Joshua’s leadership. “Now the LORD said to Joshua, "This day I will begin to exalt you in the sight of all Israel, that they may know that just as I have been with Moses, I will be with you.” v7. If God calls you, He will qualify you. if God appoints you, He will anoint you. Trust in God to establish you in your position and serve Him. God is WITH US. because God is WITH US we can do anything He calls us to.
When its time for us to cross over the Jordan, sometimes God doesn’t give us all the details because He wants us to rely on Him all the way in childlike obedience.
"I can promise you God has more than enough for every one of us if we just let him direct our steps." – James Robison
even if those steps are directing us into a flooded river.
what flooded river do you need to step into today? what is God calling you to step out into today?
Now when all the nation had finished crossing the Jordan, the LORD spoke to Joshua, saying, "Take for yourselves twelve men from the people, one man from each tribe, and command them, saying, ‘Take up for yourselves twelve stones from here out of the middle of the Jordan, from the place where the priests’ feet are standing firm, and carry them over with you and lay them down in the lodging place where you will lodge tonight.’" So Joshua called the twelve men whom he had appointed from the sons of Israel, one man from each tribe; and Joshua said to them, "Cross again to the ark of the LORD your God into the middle of the Jordan, and each of you take up a stone on his shoulder, according to the number of the tribes of the sons of Israel. Let this be a sign among you, so that when your children ask later, saying, ‘What do these stones mean to you?’ then you shall say to them, ‘Because the waters of the Jordan were cut off before the ark of the covenant of the LORD; when it crossed the Jordan, the waters of the Jordan were cut off.’ So these stones shall become a memorial to the sons of Israel forever." Joshua 4:1-7
remember.
do not forget.
Psalm 78:7 Then they would put their trust in God and would not forget his deeds but would keep his commands.
Psalm 103:2 Praise the LORD, O my soul, and forget not all his benefits
Psalm 119:93 I will never forget your precepts, for by them you have preserved my life.
Psalm 77:11 I will remember the deeds of the LORD; yes, I will remember your miracles of long ago.
Psalm 53:5-7 My soul will be satisfied as with the richest of foods; with singing lips my mouth will praise you.On my bed I remember you; I think of you through the watches of the night. Because you are my help, I sing in the shadow of your wings.
Psalm 78:9-11, 41-43 The men of Ephraim, though armed with bows, turned back on the day of battle; they did not keep God’s covenant and refused to live by his law. They forgot what he had done, the wonders he had shown them. Again and again they put God to the test; they vexed the Holy One of Israel. They did not remember his power— the day he redeemed them from the oppressor, the day he displayed his miraculous signs in Egypt, his wonders in the region of Zoan.
people in the bible are credited for remembering God and stirring their heart to faith by remembering His great deeds and faithfulness in their past.
and people are discredited for forgetting His ways and forgetting His deeds and mercy and love and miracles.
those that remembered lived by faith and went onwards into victory in life.
those who forgot, did not.
sometimes we need the memorial stones and reminders to remember HOW BIG GOD IS. He is the God that split the Red Sea, delivered them from Egypt, fed them morning and night, thundered on the mountain, and dried up the River Jordan. He is BIG and CREATIVE and POWERFUL and MIGHTY.
how often though do we reduce God in our own minds – how often do we forget and forget His creativity and WITH US-NESS and His timing and His purposes?
i want to be someone who remembers the good things God has done in my life, and have those things as memorial stones – reminders i can touch and see – that stir my heart to faith.
the visual reminder of the memorial stones triggered people to talk about what God had done – and how if He could do it then, He could do it now. it was a visual trigger to prompt discussions to stir faith.
do not forget the faithfulness and reality of God.
there will be hard times when it seems God is far away, in those times memorial stones and reminders help us remember the difficult obstacles God has got us through before. though we may not FEEL like it we can have FAITH despite the circumstance.
help me remember O God
Joshua erected a monument at The Gilgal, using the twelve stones that they had taken from the Jordan. And then he told the People of Israel, "In the days to come, when your children ask their fathers, ‘What are these stones doing here?’ tell your children this: ‘Israel crossed over this Jordan on dry ground.’ "Yes, God, your God, dried up the Jordan’s waters for you until you had crossed, just as God, your God, did at the Red Sea, which had dried up before us until we had crossed. This was so that everybody on earth would recognize how strong God’s rescuing hand is and so that you would hold God in solemn reverence always." Joshua 4 MSG
We visited Pacific Grove one morning. Lovely small town next to Monterey. First up was a sanctuary for Monarch butterflies (a brief resting spot for them as they travel south). An FYI: a 35mm lens is definitely the wrong lens to bring to a butterfly sanctuary. There were hundreds of butterflies high up in the trees, but it’s impossible to tell with a wide angle lens.
The Monarch grove sanctuary…
And then we walked around the coast of Pacific Grove before heading home. A nicely foggy morning.
(PS: Some of you mentioned VSCO presets on my pics — yup, I got them for Christmas! I actually didn’t use them on my previous post (the coffee break one), but I have used them on this post.)
Good morning. A nice Veteran’s Day rally on Friday had the SPY closing up on the week after a serious down move on Wednesday following a spike in Italian debt rates to well over the supposed 7% danger level. The SPY closed up 1.18 (.9%) at 126.66, with the ranges being a low of 122.86 on Wednesday after a high of 128.02 on Tuesday. The VIX was up slightly (.11) to close at 30.15, but had a spike to 36.43 during Wednesday’s sharp sell-off. In general the market remained driven by news from Europe, but it does seem that, in the absence of bad news out of Europe, the direction appears positive. There is a clear, but slight, improvement in a lot of the economic numbers recently, most notably some steady increases in private sector hiring. The issue, however, given the extreme amount of stimulus on the Federal level, is whether the positive movement is sufficient given the amount of stimulus applied. Simply put, and this is the question of the decade, is whether the economy will “catch fire” quickly enough and become self-sustaining in time for the stimulus to be withdrawn before we are overcome by the debt burden. How that question is eventually answered by reality probably defines U.S. economic history for the next generation at least. Right now all of us have an opinion, but I think we are in uncharted waters and no one really knows.
I think the economic problems are morphing quite rapidly into moral issues, and in some ways I am more concerned with those types of problems than the economic ones. The connections are tricky, but in some ways the moral issues, or surely the gravity of the moral issues and their prosecution and punishment (if any, for the properly connected) tend to change given the economic times. Let’s say, for instance, that some nefarious person steals 200 lb. of ground beef from a Costco. If caught (and there is a question of whether anyone — especially our police– even care enough to look for him or her) the penalty is probably getting fired (if an employee) and maybe a prosecution with probation if anyone really pushed it. I suspect the police would tell Costco to tighten their security, and care less and less if it continues to happen. What, however, if we were heading out on a ship (maybe even a warship) that was to be at sea for a month and that 200 lb. of ground beef represented 20% or more of our meals? After working on deck for 10 hours in a rough sea, only to find that there was no dinner because some “enterprising soul” sold the chow, the story is a lot less humorous or forgivable. I would wager you would not want to be that “enterprising soul” when discovered, he may find out that sharks get hungry too. Even though the “crime” is the same as maybe that same person used to do every month at Costco the relevance and seriousness has changed because of the situation.
Along the same lines it really surprises me how the groups that benefit from the “largess” of government and the imbalances present in many Corporate Board Rooms do not seem to be sensing the situation changing and at least being more careful doing their usual nefarious deeds. The City of Chicago, rather than even pausing in their almost rabid race to reward donors and pay for absurd City employee gambits, have kept people busy even trying to keep up with a rash of new taxes and fees. It is almost like it is a race to steal the average person’s last nickel, and they seem to have no fear whatsoever of a backlash. The latest, in addition to cameras, dog license fee increases, possible $1,200 for ten-inch weeds on your property, etc. is a proposed water bill of $1,000 per year by the end of the decade. Or maybe by the time the outrage happens (if ever) they feel they will have stolen enough to leave flush. Plus there is always that possibility that the outrage will be just the “vote with your feet” variety and it will be never even be felt other than in a stray column or two by a do-gooder. On the State level, the new corporate tax increases (to 7%) have been accompanied by both outrage, and some firms getting them lowered (or waived) in return for some sort of political quid pro quo (and I do not mean just jobs). On the Federal level (in addition to the myriad of give-away programs already announced), we have the Campaigner in Chief talking about adding $1 billion in funding to hire health care workers, where the money would go to doctors, community groups, local governments, etc. the exact same groups that are historically rife with corruption (but will vote for him). What does anyone think the real opinion the average political hack has for the average citizen, some sort of doddering fool that not only expects, but also relishes getting lied to and fleeced? What was the line in Animal House? “Thank you sir, may I have another?” Is it going to take an armed revolt to stop this someday? I am the most non-violent man there is, but I am swiftly coming to the conclusion that most of the current political “people” we have passing out our collective wealth are not going to stop their current ways because someone writes an op ed piece or the last election got a little closer. It will just make them steal more and faster.
Even though we may not like what is playing out we do need to deal with it the best we can, and even profit if possible. One way might be to shift the bulk of our long-term investments into companies that have had a moral and balanced track record. Maybe in the interest of profit/risk control we should stay away from someone like Goldman Sachs, or the homebuilders that have shown over time that in the good times the insiders make the money and in bad the shareholders shoulder the burden. Or a Nabors (NBR), whose Board decided to give their retiring CEO 20% of the total shareholders cash as a going away present ($100 million). It does not mean that GS or NBR has never been a good buy; I mean maybe we should do our long term investing where there has been balance over time. Maybe a MCD or PG, where (and I do not mean that they are great buys today) the shareholder’s participate, the Board seems to have focus, people seem paid well but properly, etc. In some ways that is one of the goals with PTI’s new Dividend Program, where we are trying (so far with good success) to create a basket of stocks for clients that seem relatively balanced in both leadership and dividend yields, with the hedge being managed by SPY options. We are hoping that what we may give up in basis slippage (it is possible that something bad will happen to one or more of our stocks in this basket that will not be reflected in the overall SPY average) will be more than made up for in overall better returns in these stocks. I will keep everyone up to date as to how this goes in the future. There will always be a way to benefit honestly; hopefully, we just need to keep our eyes open and some powder dry (hard to do at no interest). Trust me, I am not going crazy by saying only the most “moral” should see our money, I am saying that right now we might want to favor those that seem to concern themselves with shareholder well being.
I started by saying that the conundrum is whether the fledgling signs of growth we are seeing is sufficient given the enormity of the stimulus. It is easy to forget or ignore when focusing on a relatively good economic number or when you are a talking head on TV talking up the market, but we are talking about some huge stimulus in the background. I have the Money Supply (adjusted M2) up at an annual pace of 16.8% in the last four months. That is an extraordinary number; I would be surprised if that growth rate was approached in any of the inflation fiascos of the last 40 years (inflation to follow on this mess?). On the fiscal side we have been averaging roughly $100 billion+ per month for close to three years, or roughly $1,000 per household per month the government has been spending (somewhere) on your behalf. Some among us have been extraordinary beneficiaries of this largesse (connected road contractors, Medicaid and Medicare Fraud participants, bar owners in Washington, etc.), but most have just seen their share of the national debt ballooning. In the aggregate, however, it is stimulus, and most would feel it somehow if it were suddenly stopped. There has been a stimulus drain, however, from those pesky state and local governments who have jumped into the Federal “void” and looked to scoop up any available stray dollar, but the offset is somewhat hard to quantify. After all, whatever happens to you and me all state and local politicians and employees they deserve to retire handsomely.
My opinion is that the hole we have dug in terms of debt is greater that the benefits the stimulus has given, and that we are in serious trouble economically. Some of the economic numbers in the U.S. are worse than Italy or Spain. Right now I think we will have to stop the stimulus before it works (if it was ever going to) and it will cause a small but significant contraction, complete with policy-induced inflation. In any case I really hope I am wrong, this is not an argument I want to win. I don’t think Superman’s father was real happy when, as he predicted, his planet did blow up.
So, I think we need to monitor gold very closely, for if the economy does heat up inflation will probably heat up as well. Gold may be “somewhat” of a hedge for that. We also have to trade aggressively the inevitable wild swings as this all unfolds, meaning rolling our protective puts effectively and buying in calls early if they are profitable (we may get the chance to sell them again). Any hint of inflation picking up must be monitored carefully by anyone with long fixed income positions; those positions could deteriorate very rapidly. We also need to be long-term short bonds, but again taking profits along the way should they happen.
Good morning. A nice Veteran’s Day rally on Friday had the SPY closing up on the week after a serious down move on Wednesday following a spike in Italian debt rates to well over the supposed 7% danger level. The SPY closed up 1.18 (.9%) at 126.66, with the ranges being a low of 122.86 on Wednesday after a high of 128.02 on Tuesday. The VIX was up slightly (.11) to close at 30.15, but had a spike to 36.43 during Wednesday’s sharp sell-off. In general the market remained driven by news from Europe, but it does seem that, in the absence of bad news out of Europe, the direction appears positive. There is a clear, but slight, improvement in a lot of the economic numbers recently, most notably some steady increases in private sector hiring. The issue, however, given the extreme amount of stimulus on the Federal level, is whether the positive movement is sufficient given the amount of stimulus applied. Simply put, and this is the question of the decade, is whether the economy will “catch fire” quickly enough and become self-sustaining in time for the stimulus to be withdrawn before we are overcome by the debt burden. How that question is eventually answered by reality probably defines U.S. economic history for the next generation at least. Right now all of us have an opinion, but I think we are in uncharted waters and no one really knows.
I think the economic problems are morphing quite rapidly into moral issues, and in some ways I am more concerned with those types of problems than the economic ones. The connections are tricky, but in some ways the moral issues, or surely the gravity of the moral issues and their prosecution and punishment (if any, for the properly connected) tend to change given the economic times. Let’s say, for instance, that some nefarious person steals 200 lb. of ground beef from a Costco. If caught (and there is a question of whether anyone — especially our police– even care enough to look for him or her) the penalty is probably getting fired (if an employee) and maybe a prosecution with probation if anyone really pushed it. I suspect the police would tell Costco to tighten their security, and care less and less if it continues to happen. What, however, if we were heading out on a ship (maybe even a warship) that was to be at sea for a month and that 200 lb. of ground beef represented 20% or more of our meals? After working on deck for 10 hours in a rough sea, only to find that there was no dinner because some “enterprising soul” sold the chow, the story is a lot less humorous or forgivable. I would wager you would not want to be that “enterprising soul” when discovered, he may find out that sharks get hungry too. Even though the “crime” is the same as maybe that same person used to do every month at Costco the relevance and seriousness has changed because of the situation.
Along the same lines it really surprises me how the groups that benefit from the “largess” of government and the imbalances present in many Corporate Board Rooms do not seem to be sensing the situation changing and at least being more careful doing their usual nefarious deeds. The City of Chicago, rather than even pausing in their almost rabid race to reward donors and pay for absurd City employee gambits, have kept people busy even trying to keep up with a rash of new taxes and fees. It is almost like it is a race to steal the average person’s last nickel, and they seem to have no fear whatsoever of a backlash. The latest, in addition to cameras, dog license fee increases, possible $1,200 for ten-inch weeds on your property, etc. is a proposed water bill of $1,000 per year by the end of the decade. Or maybe by the time the outrage happens (if ever) they feel they will have stolen enough to leave flush. Plus there is always that possibility that the outrage will be just the “vote with your feet” variety and it will be never even be felt other than in a stray column or two by a do-gooder. On the State level, the new corporate tax increases (to 7%) have been accompanied by both outrage, and some firms getting them lowered (or waived) in return for some sort of political quid pro quo (and I do not mean just jobs). On the Federal level (in addition to the myriad of give-away programs already announced), we have the Campaigner in Chief talking about adding $1 billion in funding to hire health care workers, where the money would go to doctors, community groups, local governments, etc. the exact same groups that are historically rife with corruption (but will vote for him). What does anyone think the real opinion the average political hack has for the average citizen, some sort of doddering fool that not only expects, but also relishes getting lied to and fleeced? What was the line in Animal House? “Thank you sir, may I have another?” Is it going to take an armed revolt to stop this someday? I am the most non-violent man there is, but I am swiftly coming to the conclusion that most of the current political “people” we have passing out our collective wealth are not going to stop their current ways because someone writes an op ed piece or the last election got a little closer. It will just make them steal more and faster.
Even though we may not like what is playing out we do need to deal with it the best we can, and even profit if possible. One way might be to shift the bulk of our long-term investments into companies that have had a moral and balanced track record. Maybe in the interest of profit/risk control we should stay away from someone like Goldman Sachs, or the homebuilders that have shown over time that in the good times the insiders make the money and in bad the shareholders shoulder the burden. Or a Nabors (NBR), whose Board decided to give their retiring CEO 20% of the total shareholders cash as a going away present ($100 million). It does not mean that GS or NBR has never been a good buy; I mean maybe we should do our long term investing where there has been balance over time. Maybe a MCD or PG, where (and I do not mean that they are great buys today) the shareholder’s participate, the Board seems to have focus, people seem paid well but properly, etc. In some ways that is one of the goals with PTI’s new Dividend Program, where we are trying (so far with good success) to create a basket of stocks for clients that seem relatively balanced in both leadership and dividend yields, with the hedge being managed by SPY options. We are hoping that what we may give up in basis slippage (it is possible that something bad will happen to one or more of our stocks in this basket that will not be reflected in the overall SPY average) will be more than made up for in overall better returns in these stocks. I will keep everyone up to date as to how this goes in the future. There will always be a way to benefit honestly; hopefully, we just need to keep our eyes open and some powder dry (hard to do at no interest). Trust me, I am not going crazy by saying only the most “moral” should see our money, I am saying that right now we might want to favor those that seem to concern themselves with shareholder well being.
I started by saying that the conundrum is whether the fledgling signs of growth we are seeing is sufficient given the enormity of the stimulus. It is easy to forget or ignore when focusing on a relatively good economic number or when you are a talking head on TV talking up the market, but we are talking about some huge stimulus in the background. I have the Money Supply (adjusted M2) up at an annual pace of 16.8% in the last four months. That is an extraordinary number; I would be surprised if that growth rate was approached in any of the inflation fiascos of the last 40 years (inflation to follow on this mess?). On the fiscal side we have been averaging roughly $100 billion+ per month for close to three years, or roughly $1,000 per household per month the government has been spending (somewhere) on your behalf. Some among us have been extraordinary beneficiaries of this largesse (connected road contractors, Medicaid and Medicare Fraud participants, bar owners in Washington, etc.), but most have just seen their share of the national debt ballooning. In the aggregate, however, it is stimulus, and most would feel it somehow if it were suddenly stopped. There has been a stimulus drain, however, from those pesky state and local governments who have jumped into the Federal “void” and looked to scoop up any available stray dollar, but the offset is somewhat hard to quantify. After all, whatever happens to you and me all state and local politicians and employees they deserve to retire handsomely.
My opinion is that the hole we have dug in terms of debt is greater that the benefits the stimulus has given, and that we are in serious trouble economically. Some of the economic numbers in the U.S. are worse than Italy or Spain. Right now I think we will have to stop the stimulus before it works (if it was ever going to) and it will cause a small but significant contraction, complete with policy-induced inflation. In any case I really hope I am wrong, this is not an argument I want to win. I don’t think Superman’s father was real happy when, as he predicted, his planet did blow up.
So, I think we need to monitor gold very closely, for if the economy does heat up inflation will probably heat up as well. Gold may be “somewhat” of a hedge for that. We also have to trade aggressively the inevitable wild swings as this all unfolds, meaning rolling our protective puts effectively and buying in calls early if they are profitable (we may get the chance to sell them again). Any hint of inflation picking up must be monitored carefully by anyone with long fixed income positions; those positions could deteriorate very rapidly. We also need to be long-term short bonds, but again taking profits along the way should they happen.
Good morning. A nice Veteran’s Day rally on Friday had the SPY closing up on the week after a serious down move on Wednesday following a spike in Italian debt rates to well over the supposed 7% danger level. The SPY closed up 1.18 (.9%) at 126.66, with the ranges being a low of 122.86 on Wednesday after a high of 128.02 on Tuesday. The VIX was up slightly (.11) to close at 30.15, but had a spike to 36.43 during Wednesday’s sharp sell-off. In general the market remained driven by news from Europe, but it does seem that, in the absence of bad news out of Europe, the direction appears positive. There is a clear, but slight, improvement in a lot of the economic numbers recently, most notably some steady increases in private sector hiring. The issue, however, given the extreme amount of stimulus on the Federal level, is whether the positive movement is sufficient given the amount of stimulus applied. Simply put, and this is the question of the decade, is whether the economy will “catch fire” quickly enough and become self-sustaining in time for the stimulus to be withdrawn before we are overcome by the debt burden. How that question is eventually answered by reality probably defines U.S. economic history for the next generation at least. Right now all of us have an opinion, but I think we are in uncharted waters and no one really knows.
I think the economic problems are morphing quite rapidly into moral issues, and in some ways I am more concerned with those types of problems than the economic ones. The connections are tricky, but in some ways the moral issues, or surely the gravity of the moral issues and their prosecution and punishment (if any, for the properly connected) tend to change given the economic times. Let’s say, for instance, that some nefarious person steals 200 lb. of ground beef from a Costco. If caught (and there is a question of whether anyone — especially our police– even care enough to look for him or her) the penalty is probably getting fired (if an employee) and maybe a prosecution with probation if anyone really pushed it. I suspect the police would tell Costco to tighten their security, and care less and less if it continues to happen. What, however, if we were heading out on a ship (maybe even a warship) that was to be at sea for a month and that 200 lb. of ground beef represented 20% or more of our meals? After working on deck for 10 hours in a rough sea, only to find that there was no dinner because some “enterprising soul” sold the chow, the story is a lot less humorous or forgivable. I would wager you would not want to be that “enterprising soul” when discovered, he may find out that sharks get hungry too. Even though the “crime” is the same as maybe that same person used to do every month at Costco the relevance and seriousness has changed because of the situation.
Along the same lines it really surprises me how the groups that benefit from the “largess” of government and the imbalances present in many Corporate Board Rooms do not seem to be sensing the situation changing and at least being more careful doing their usual nefarious deeds. The City of Chicago, rather than even pausing in their almost rabid race to reward donors and pay for absurd City employee gambits, have kept people busy even trying to keep up with a rash of new taxes and fees. It is almost like it is a race to steal the average person’s last nickel, and they seem to have no fear whatsoever of a backlash. The latest, in addition to cameras, dog license fee increases, possible $1,200 for ten-inch weeds on your property, etc. is a proposed water bill of $1,000 per year by the end of the decade. Or maybe by the time the outrage happens (if ever) they feel they will have stolen enough to leave flush. Plus there is always that possibility that the outrage will be just the “vote with your feet” variety and it will be never even be felt other than in a stray column or two by a do-gooder. On the State level, the new corporate tax increases (to 7%) have been accompanied by both outrage, and some firms getting them lowered (or waived) in return for some sort of political quid pro quo (and I do not mean just jobs). On the Federal level (in addition to the myriad of give-away programs already announced), we have the Campaigner in Chief talking about adding $1 billion in funding to hire health care workers, where the money would go to doctors, community groups, local governments, etc. the exact same groups that are historically rife with corruption (but will vote for him). What does anyone think the real opinion the average political hack has for the average citizen, some sort of doddering fool that not only expects, but also relishes getting lied to and fleeced? What was the line in Animal House? “Thank you sir, may I have another?” Is it going to take an armed revolt to stop this someday? I am the most non-violent man there is, but I am swiftly coming to the conclusion that most of the current political “people” we have passing out our collective wealth are not going to stop their current ways because someone writes an op ed piece or the last election got a little closer. It will just make them steal more and faster.
Even though we may not like what is playing out we do need to deal with it the best we can, and even profit if possible. One way might be to shift the bulk of our long-term investments into companies that have had a moral and balanced track record. Maybe in the interest of profit/risk control we should stay away from someone like Goldman Sachs, or the homebuilders that have shown over time that in the good times the insiders make the money and in bad the shareholders shoulder the burden. Or a Nabors (NBR), whose Board decided to give their retiring CEO 20% of the total shareholders cash as a going away present ($100 million). It does not mean that GS or NBR has never been a good buy; I mean maybe we should do our long term investing where there has been balance over time. Maybe a MCD or PG, where (and I do not mean that they are great buys today) the shareholder’s participate, the Board seems to have focus, people seem paid well but properly, etc. In some ways that is one of the goals with PTI’s new Dividend Program, where we are trying (so far with good success) to create a basket of stocks for clients that seem relatively balanced in both leadership and dividend yields, with the hedge being managed by SPY options. We are hoping that what we may give up in basis slippage (it is possible that something bad will happen to one or more of our stocks in this basket that will not be reflected in the overall SPY average) will be more than made up for in overall better returns in these stocks. I will keep everyone up to date as to how this goes in the future. There will always be a way to benefit honestly; hopefully, we just need to keep our eyes open and some powder dry (hard to do at no interest). Trust me, I am not going crazy by saying only the most “moral” should see our money, I am saying that right now we might want to favor those that seem to concern themselves with shareholder well being.
I started by saying that the conundrum is whether the fledgling signs of growth we are seeing is sufficient given the enormity of the stimulus. It is easy to forget or ignore when focusing on a relatively good economic number or when you are a talking head on TV talking up the market, but we are talking about some huge stimulus in the background. I have the Money Supply (adjusted M2) up at an annual pace of 16.8% in the last four months. That is an extraordinary number; I would be surprised if that growth rate was approached in any of the inflation fiascos of the last 40 years (inflation to follow on this mess?). On the fiscal side we have been averaging roughly $100 billion+ per month for close to three years, or roughly $1,000 per household per month the government has been spending (somewhere) on your behalf. Some among us have been extraordinary beneficiaries of this largesse (connected road contractors, Medicaid and Medicare Fraud participants, bar owners in Washington, etc.), but most have just seen their share of the national debt ballooning. In the aggregate, however, it is stimulus, and most would feel it somehow if it were suddenly stopped. There has been a stimulus drain, however, from those pesky state and local governments who have jumped into the Federal “void” and looked to scoop up any available stray dollar, but the offset is somewhat hard to quantify. After all, whatever happens to you and me all state and local politicians and employees they deserve to retire handsomely.
My opinion is that the hole we have dug in terms of debt is greater that the benefits the stimulus has given, and that we are in serious trouble economically. Some of the economic numbers in the U.S. are worse than Italy or Spain. Right now I think we will have to stop the stimulus before it works (if it was ever going to) and it will cause a small but significant contraction, complete with policy-induced inflation. In any case I really hope I am wrong, this is not an argument I want to win. I don’t think Superman’s father was real happy when, as he predicted, his planet did blow up.
So, I think we need to monitor gold very closely, for if the economy does heat up inflation will probably heat up as well. Gold may be “somewhat” of a hedge for that. We also have to trade aggressively the inevitable wild swings as this all unfolds, meaning rolling our protective puts effectively and buying in calls early if they are profitable (we may get the chance to sell them again). Any hint of inflation picking up must be monitored carefully by anyone with long fixed income positions; those positions could deteriorate very rapidly. We also need to be long-term short bonds, but again taking profits along the way should they happen.