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THE INNER CIRCLE BRIEFING: WHERE THINGS ARE NAMED FOR WHAT THEY ARE - POLITICALLY CORRECT OR NOT
"Political correctness is a doctrine, fostered by a delusional, illogical minority, and rabidly promoted by an unscrupulous mainstream media, which holds forth the proposition that it is entirely possible to pick up a turd by the clean end."
~ from a Mountaineer; the definition of "political correctness" by this year´s winner of the annual contest at Texas A&M University calling for the most appropriate definition of a contemporary term.
Dear Mountaineers,
I enjoyed the aforementioned gem of a definition for "political correctness". Obviously, it´s generally a good thing to be sensitive and tactful in our daily lives. There is no benefit in trampling around on everyone´s soft spots, weaknesses, or differences. However, political correctness has become a widely accepted principle that can stifle any and all attempts of open discussion.
Certain things have to be called for what they are, politically correct or not. I think the A&M contest winner nailed it!
My commentary today is a short one as we are busy getting ready for our annual Bahamas Inner Circle Briefing and the FreedomFest World Economic Summit (WES) that follows. I look forward to both events. It´s an annual meeting of friends, clients, international investors and a bunch of Mountaineers.
While our Inner Circle Briefing is sold out, there is certainly still room at the WES. I recommend you have a look at the WES program and sign up. The topics discussed this year are most timely, and the roster of speakers is excellent.
To register for the World Economic Summit, you should contact Tami Holland, the conference coordinator, as soon as possible. I hope to see you there!!!
Am I in this decade or the next?!?!
Just one short note before I get back to preparations for our Briefing next week...
In our last Update, I briefly commented on my dilemma of finding appropriate names for the new and the old decades, respectively. I settled for calling the last decade the "Weak Decade"; the one ahead, I believe, can be summed up best by calling it "The Great Unknown".
However, I was caught off-guard when we received the following e-mail by one of our esteemed Mountaineers: "Thanks for your newsletter. If you assume that a baby is not one year old until the end of its first year, you will quickly understand that this decade ends at the end of 2010, not the beginning. As ever Philip V.H.".
Is it possible that the two decades in question have no names AND have actually not even started -- or ended -- yet?!?! Possibly, they´re just trying to slip by unnoticed.
Nevertheless, Philip, I thank you for your feedback. For me and most others, the new millennium -- and therefore the first decade of the new millennium -- started on January 1, 2000. At least that is when I really remember seeing all of the fireworks. Since that illustrious moment, 10 years have passed and thus a ‘full decade´ from 2000 to 2009. Just to be completely sure, I checked on Wikipedia.
Either way, I think that if you missed celebrating New Year´s Eve adequately this year, in full respect of "The Great Unknown", I´m sure it´s still early enough to follow up on that. And maybe, if you make it to the Bahamas next week, we can raise a glass and share a toast!
Sincerely,
Your "Swiss Mountain Guide"
Frank R. Suess |
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THE STATE OF US EMPLOYMENT AND REAL ESTATE IN A FEW TELLING CHARTS
The following charts paint a dire picture for the jobs and real estate markets in the US, and consequently for the "recovery" currently underway in America and around the world. These numbers are a signal of just how bad the REAL economy was last year...and continues to be this year.
If we are fortunate enough to see a real and SUSTAINABLE recovery, it should not be expected to be a quick nor a steep one!
Official numbers & charts
According to Reuters, US employers slashed 85,000 jobs in December of last year, keeping the official Labor Department unemployment rate at roughly 10%. This puts yet more pressure on Obama´s Administration to once again ‘stimulate´ the economy.
"The jobs numbers ... are a reminder that the road to recovery is never straight. What this underscores, though, is that we have to continue to explore every avenue to accelerate the return to hiring," Obama said, announcing new investments in clean energy.
The Scariest Jobs Chart Ever
Fox News host Glenn Beck presented a chart that he called the "scariest jobs chart ever".
The chart, which was put together by Calculated Risk, demonstrates that the jobs decline as a percentage of the workforce is the worst since the Great Depression, matching the sharp but short drop in 1948, as the war machine wound down.
Equally important, the duration of these job losses, as well as the lack of a sharp recovery (at least so far), suggests that the problem will be with us for a long time. We´re now 24 months into this decline, and we´re still at the bottom. By this point in most previous recessions, we had already recovered all of the lost jobs.
The US real estate market is still "unhealthy"
The real estate market in America is still suppressed.
Vacancy rates are at all-time highs and record heights. According to Reuters, the US office vacany rate has hit a 15-year high at 17%, the US apartment vacancy rate a 30-year high and US shopping center vacancies are at all-time highs!
Meanwhile, US residential construction spending was off slightly in November, and is now only 5.8% above the bottom earlier in 2009. Non-residential appeared flat in November, but that was only because of a downward revision to October spending. The collapse in non-residential construction spending continues.
The following chart shows private residential and non-residential construction spending since 1993. Private residential construction spending is now 62.9% below the peak of early 2006 while private non-residential construction spending is 22.5% below the peak of October 2008. Note that this chart displays nominal dollars. It is NOT inflation adjusted.
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RETIREMENT TRAP IS UNDERWAY - AMERICANS, BE PREPARED TO GET OUT OF THE WAY!
Ron Holland, co-editor of Moutain Vision, has recently been talking a lot about what he calls the "US Retirement Trap". He is finalizing a special report on the topic - he calls it his TRAP REPORT.
We will be sharing this special report with our Mountaineers in the next few weeks by posting it on the Mountain Vision website. The articles from Bloomberg, Business Week and other mainstream press (discussed in the link below) certainly confirm the urgency of the topic.
In other words, the DEBT TRAP is producing a RETIREMENT TRAP. The US Treasury is saying this to Americans: "To prevent a Treasury market collapse, we will force YOU to buy Treasuries in your retirement accounts".
According to Bloomberg, "retiree annuities may be promoted by Obama aides". A better translation: since the US debt is rising exponentially and there´s nobody left to buy US treasuries and fund the US debt, US retirement funds will have to come to the rescue, like it or not.
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NEWS BRIEFS
Are Swiss Annuities Better than Life Insurance?
In their January 12th newsletter, Kevin Drost of Asset Strategies International Inc. (ASI) discussed some of the benefits and caveats of Swiss annuities and related topics in response to some of his client´s questions. A good overview.
To learn more, you can call BFI or contact Mr. Drost of ASI at 1-800-831-0007. You can also email Kevin at kdrost@assetstrategies.com.
Go to Story
The Growing Influx of Wealth into Switzerland - Money Talks, but Wealth Whispers
Despite all of the recent negative press and Swiss-bashing, the wealth pilgrimage to Switzerland continues unabated. Switzerland has been, and continues to be, subject to a growing influx of the rich and the super-rich. This influx definitely has its benefits for the country during these difficult economic times. However, not all Swiss are in favor of the development. For instance, the increasing scarcity of land and real estate, coupled with rising prices despite the financial crisis of late, is not seen as all good.
The article linked below, courtesy of the Times, discusses how wealthy Brits are heading for Switzerland, getting away from the traffic, the pollution, claustrophobic big cities AND high taxes. And, it is not only the Brits.
Go to Story
Swiss Steer Clear of Proposed US Bank Levy
Switzerland´s refusal to introduce a United States-style bank tax has drawn speculation about possible competitive advantages for the Swiss financial sector.
UBS and Credit Suisse would almost certainly be forced to contribute to the proposed US levy, but they and other Swiss institutions would not face the same decision-making shackles as US counterparts.
Go to Story
Court Rules UBS Data Transfer to US Illegal
A Swiss court has ruled that the handing over of confidential UBS bank details to United States investigators by the Swiss authorities last year was illegal.
The federal administrative court said the Swiss Financial and Market Supervisory Authority (FINMA) abused its power when it ordered that details of 285 account holders suspected of tax evasion in the US be sent to Washington.
Go to Story
Greece - a Euro Time Bomb?
From Germany´s Der Spiegel magazine: "As economic indicators have improved, concern about the financial crisis has abated. But the next big problem could be approaching. Greece´s public deficit is skyrocketing and the country may become insolvent. The effect on Europe´s common currency could be dire."
According to Josef Ackermann, the CEO of Deutsche Bank, there are still a number of risks and "time bombs" that threaten the current "economic recovery". He names Greece as one such time bomb; a threat for the Euro and a threat for EU economies. Rumors of Greece´s exclusion from the Eurozone are probably exactly that: rumors. However, the prospect of sovereign defaults is a topic that will keep our attention throughout 2010 and beyond.
Go to Story
Unofficial US Problem Bank List Growing to 576
The link below displays an unofficial list of problem banks in America. We came across this list while reviewing the Calculated Risk Website, which has recently come to fame when Glen Beck presented the "Scariest Jobs Chart Ever" (see earlier Telling Charts story).
As of last week, the Problem Bank List, which is compiled from regulator press releases or from public news sources, grew to 576 banks with assets of US$ 304.8 billion. Obviously, the data is not reliable and hardly accurate...and certainly NOT COMPLETE. It does however appear to give a good indication about the continuing dismal state of the American banking industry. For Mountaineers with funds in America, it might be worth reviewing the list.
Go to Story
The AIG Bailout Fiasco Keeps Getting Worse
The AIG bailout isn´t going away, much as Treasury Secretary Tim Geithner might like it to. The US$180 billion fiasco was back in the news Thursday, after Bloomberg reported that the Federal Reserve Bank of New York prodded the troubled insurer at the end of 2008 to withhold some gory details of its bailout deal from the public.
The instructions came at a time when Geithner, who is now the Treasury secretary, led the New York Fed. Along with Fed chief Ben Bernanke and former Treasury Secretary Henry Paulson, Geithner was one of the key architects of the federal response to the economic meltdown of 2008.
Go to Story
Detroit in Ruins - a Look at the Final Result of More Government!
The following video from YouTube provides a good review of Detroit history, about how Detroit was on top in the 50´s, and by using ‘good government plans´, it now is at the bottom.
For someone in Switzerland, watching this movie, it is difficult to believe that this is about a city in America. Detroit is known for American cars and technology. However, the pictures remind us of the third world - at its worst.
The point made by the video: This is what government intervention, in bed with the unions, threatens to convert all of the country into unless they are stopped. All the bailouts and government intervention is not helping the people, or the city. The smart people in Detroit have moved or are moving out. Only the mess is left behind. Bad policies, bad results, a fungus-like disaster that is difficult to cure once it goes too far.
Go to Story
Global Warming - Reality or Myth? Only Time Will Tell.
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| © Copyright 2010, by BFI Capital Group AG, Bahnhofstrasse 29, 6300 Zug, Switzerland, website: www.bficapital.com. The MOUNTAIN VISION UPDATE is published by BFI Capital Group (‘BFI’). Quotation is allowed if credit is given. Although every care has been taken in the preparation of Mountain Vision, BFI does not guarantee and cannot be held responsible for the accuracy of any statistic, statement or representation made. We recommend that you consult qualified professional advisors to determine the applicability of this information and opinion. The publisher is not a registered investment advisor. Readers should not view MOUNTAIN VISION as offering personalized legal or investment advice. |
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