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Submitted by Joseph Calhoun via Alhambra Investment Partners,

Most people who have called themselves bears over the last couple of years had a pretty simple equation to justify their bearishness – High Present Valuations = Low Future Returns. And today’s valuations – the valuations of two years ago – were so high that future returns would be very low and probably, possibly, at some point, negative. The argument was that stock prices were too high to justify the risk of owning a normal allocation, say 60% of the portfolio for the typical moderate risk investor. I made that valuation argument myself in one of these weekly missives in the middle of 2013 so I’ve taken even more flak than the average bear. It has not been a pleasant two years for the bears to say the least.

If you define a bear market by the size of the decline, what we’ve seen so far does not qualify. Indeed, what the stock market has done this year, as volatile as it has been, only briefly qualified as a correction, a drop of 10%, and now doesn’t even do that term justice. Of course, these things are not confined by the calendar and if you measure from the peak last May the S&P 500 is down just over 10%. As you move away from the US blue chips the damage gets larger; the equal weight version of the S&P 500 is down over 13%. The Russell 2000 small cap index is in full blow bear territory, down just over 20% since peaking last June. The EAFE international index is almost there, down 18% since last May and about the same since it first peaked in June of 2014.

The definition of a correction as down 10% and a bear market as down 20% though are just arbitrary numbers agreed upon by no one and everyone. And those thresholds, despite recent history, are met quite frequently. 10% corrections come around every couple of years and most of them are over before most investors get a statement that might scare them into doing something stupid. 20% bear markets are also pretty routine, coming along roughly 1 year out of 4. Corrections and bear markets are generally over pretty quickly, even the ones that turn into financial crises. The 2008 bear market, from peak to trough, lasted 17 months; it only felt like a lifetime.

The real enemy of investors is not these fairly routine 10 or 20% downturns. The real enemy is the bear market that is associated with a recession or crisis, the one that knocks your equity block down by 40 or 50%. And actually it isn’t even the depth that is the real enemy. For most investors the enemy is time. Whether you are a younger investor still accumulating assets or a pre-retiree about to depend on your nest egg for income or a retiree already doing so, bear markets eat up your most precious commodity – time. Recovering from large drawdowns when you are young is obviously easier – if you stick to a plan and don’t get laid off in the recession that caused it. But if you are about to retire, a bear market may mean you have to keep working for a few more years, putting a little tarnish on your golden years. If you are already retired it may mean something even more devastating – running out of money before you run out of years.

It would obviously be ideal to be able to just sell all your stocks right at the top and avoid these big drawdowns, preserving your capital for the next bull market. Unfortunately, ideal is not available in the investment world and we have to accept something less than perfection. High valuations, such as have existed in the US stock market the last few years, are one way we identify markets where the risk/reward ratio is starting to get out of kilter. The valuation bears, who have taken so much abuse the last two years, were, in retrospect, generally right. Future returns have not been anywhere near what they would need to be to justify a full allocation to stocks. At its low last week the bear market in the small cap Russell 2000 had wiped out all the price gains since the spring of 2013. That doesn’t mean you shouldn’t have owned any since then; there were 30% gains from there to the top. But you certainly could have owned less than you normally would, less than your normal allocation and hopefully rebalanced along the way, selling some at those high prices. Those were high risk gains and owning less would have still produced a good, risk adjusted return. For some reason it is hard for some investors to grasp that investing is not an all or nothing endeavor.

The S&P 500 at its low last week had given up all price gains since December 2013. And the gains from those late 2013 levels to the peak were only 17% and I would argue obtained only at very high risk to your capital. What should be learned from this episode is that valuation tells you about risk but it doesn’t tell you an awful lot about immediate reward; valuation is a lousy timing tool. Stocks that are overvalued can and do become even more overvalued. But ultimately, valuation matters and either fundamentals have to grow into the stock price or the stock price has to fall to the fundamentals. Reality, or the perception of it, can only be distorted by monetary policy, not actually altered.

So, is this already a bear market? If we are measuring it for the S&P 500 in terms of price the answer is no. But in terms of time? I think, for a lot of people, we’re already there. For most people it’s been two years of no gains and for some more adventurous investors, a lot worse. Investors who have had any exposure to oil or commodities, whether through the stocks of their producers or directly, are doing a lot worse than the S&P 500. Any investor who had the temerity to diversify their portfolio with small caps, international stocks, commodities or junk bonds, their reward was lower returns, greater risk realized. Heck even for those who managed to confine themselves to the S&P 500, they’ve now gone over 18 months only picking up a paltry dividend. In short, the trend has changed, the inflection point between trending higher and trending lower is long gone. If you’re still looking for it, I’m sorry to be the one to tell you but you missed it.

As to whether this will turn into recession and another big, bad, bear, that is something that can’t be said with a high degree of confidence right now. Certainly the odds of it are rising as the shale industry continues its slow motion train wreck. The only thing booming in the oil patch are oil and gas bankruptcy firms. Credit spreads are blowing out all over the place from investment grade to the junkiest of junk. The HY spread moved over 8 last week which is nearly as high as the European crisis of 2011 and higher than the onset of recession in late 2007 and early 2001. Baa spreads, the lowest of investment grade, also continue to move wider, worse than 2011 now and a lot worse than late 2007. Make no mistake, credit leads the business cycle just as George Soros’ theory of reflexivity predicts. It is not that economic conditions deteriorate pushing spreads wider; it is that spreads move wider causing economic conditions to deteriorate. So, as spreads widen, the odds of recession rise.

It would be easy to just say that these things are sufficient and recession is inevitable but that isn’t how this works. There are no immutable laws in this business. Things that haven’t happened before do happen; things that haven’t happened in a long time, do happen again. Baa spreads got this high in 2012 without a recession; so did junk bond spreads. And I have to say, there are some situations that are starting to get very interesting from an investment standpoint. We may have seen the low in crude oil last week when we touched the mid-20s. Not for sure yet but that may have been the first stab at finding a bottom. Prices in the 20s or 30s don’t just make shale unprofitable, it makes large swaths of the planet’s known reserves unprofitable to extract. It will take a while to work down inventories but it sure seems likely that there will be some money made on the long side of oil or oil stocks somewhere down the pike.

For now, though I think it is still time for investors to maintain a conservative stance. Momentum indicators – short, intermediate and long term – are all still pointing lower. As I pointed out last week, sentiment is negative enough to produce a bounce so last week’s start may continue in the coming week. But turning those long term momentum indicators around will take time or a heroic rally that seems unlikely. Whether it is a bear market in price or just one that needs more time, it doesn’t appear to be over yet.

via Zero Hedge http://ift.tt/1WHeMrD Tyler Durden

During the lest Democratic debate on January 17, Hillary Clinton made several populist comments that aimed to show she is “one of the people” and that, like all other candidates, she would aggressively pursue not only bank fraud, but would go after bankers themselves. As we tweeted at the time, these were some of her more prominent soundbites:

• “no bank should be too big to fail and no individual too powerful to jail”
• “I am going to defend president Obama for taking on Wall Street and getting results”
• “I go after the big banks, I am the one the hedge funds are up against”
• “we are at least having a vigorous debate about reining in Wall Street”

And then there is the reality: as none other than the NYT reported two days ago, Goldman Sachs alone paid Hillary $675,000 for three speeches in three different states, a fact Hillary’s main challenger, Bernie Sanders, has highlighted repeatedly.

 

As the topic of her speeches, covered her extensively over the past year, has gained prominence, on Friday, Clinton was asked by New Hampshire Public Radio how the “average person should view the hefty speaking fees?”

“I spoke to a wide array of groups who wanted to hear what I thought about the world coming off of my time as secretary of state,” Clinton said, defending her decision to make money from speaking fees. “I happen to think we need more conversation about what’s going on in the world.”

Very well paid conversations as the following list of her 92 private speeches raking in $21.7 million in just the past three years reveals:

Of course, calling these “speeches” a bribe and payment for future goodwill, would not look very good for a candidate who is so desperate to appear as “one of the people” so Hillary decides to pander to the stupidity of Americans: “I think groups that want to talk and ask questions and hear about that are actually trying to educate themselves because we’re living in a really complicated world.”

But at the end of the day, the question is whether Hillary – the person many believe is the most likely next US president – promised banks, and especially Goldman Sachs, something very different from what he is telling the American people now.

In an attempt to get some clarity, the Intercept’s Lee Fang, approached Hillary after she spoke at a town hall in Manchester, New Hampshire, on Friday, and asked her if she would release the transcripts of her paid speeches to Goldman Sachs.

Her response: “ha ha ha ha ha“

via Zero Hedge http://ift.tt/1S3AWoS Tyler Durden

24 hours after it started, the Blizzard of 2016, aka Snowmageddon, aka Snowtorious B.I.G., is over.

Here we are on Sunday and some 85 million Americans did indeed get “slammed” under an epic blizzard which has now moved beyond the realm of the “potential” and now encapsulates an actual, GDP-sapping winter extravaganza.

“Winter Storm Jonas is the largest snowstorm on record for Harrisburg, Pennsylvania; Baltimore; and JFK Airport in New York City, with all of those locations receiving over 2 feet of snow,” the Weather Channel reports, adding that “snowfall totals from the storm topped out near 40 inches in parts of West Virginia and at least 14 states in total received more than a foot of snow from the storm.”

In short, the entire eastern seaboard is now free to report triple-adjusted Q1 GDP data thanks to the havoc Jonas will most assuredly wreak on comps for America’s “prosperous” retail and services sectors.

The result of the storm: some 25.1 inches of snow in New York City’s Central Park, the National Weather Service said on Saturday, ranking it No.3 among the city’s worst snow storms. The following are the five worst snowstorms to hit the largest city in the United States before this week, according to the NWS:

• 26.9 inches (68.3 cm), Feb. 11-12, 2006
• 25.8 inches (65.5 cm), Dec. 26-27, 1947
• 21.0 inches (53.3 cm), March 12-14, 1888
• 20.9 inches (53.1 cm), Feb. 25-26, 2010
• 20.2 inches (51.3 cm), Jan. 7-8, 1996

The deepest snowfall from the blizzard paralyzing the U.S. East Coast has been recorded at 40 inches (102 cm) in Glengary, West Virginia, the National Weather Service said. It said about 28.3 inches (72 cm) had fallen at Dulles International Airport, 26 miles (42 km) west of Washington as of Saturday evening, one of the capital’s biggest storms.

Here are the latest images from the aftermath:

We smell some “residual seasonality” in America’s future.

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A troubling preview of what’s ahead from Morgan Stanley’s chief cross-asset strategist Andrew Sheets.

What To Make Of It All?

There are still 240 trading days left in 2016, and plenty of questions that need answers. How bad is the global economy? Is oil the driver of markets or a convenient excuse? How much bad news is really in the price? What could realistically improve things, tactically or strategically?

Let’s start with what we know. Global growth is weak, and our 2016 GDP forecasts remain around 0.2pp below consensus in both DM and EM. But it is important to distinguish between below-trend growth (our forecast) and the recession fears gripping markets. While recent data have been poor, and financial conditions have tightened, a wide variety of indicators still lead us to believe that a US or global recession is not the base case. We will be closely watching US 4Q GDP, due to be released next Friday, which our tracking estimate places at just +0.1%.

If the growth outlook has moved less than the market, maybe the blame lies with oil? Brent was down 25% for the year through Wednesday, and the high correlation between oil and equity prices in this sell-off has implied a level of causation.

We are more sceptical. Falling oil isn’t the economic positive that many (including ourselves) assumed a year ago, but its decline looks more like a symptom of other issues (growth concerns, a lack of risk appetite, a stronger dollar) than the cause. The details of the equity decline also challenge the idea of oil driving markets; year-to-date, European healthcare is down almost as much as European energy. Japan equities, which have little energy exposure, have been a global underperformer.

So what is holding back risk appetite? A major overhang remains the question of how China will manage its currency. CNY is near the lower end of a range that has existed since August, a range our economists expect to hold through mid-year. But keeping the currency stable is being challenged by USD strength, and makes it more difficult for China to ease policy to support growth. We think this issue, above all others, is the main macro dilemma facing markets in 2016.

Could anything help? Look out for Wednesday’s FOMC meeting. Markets are concerned about both continued tightening and a US recession. They likely only need to worry about one. Were the Fed to remind the market that it remains data-dependent, it could temporarily alleviate some of the pressure on USD (and CNY), and address concerns regarding a policy mistake. We note that the rate market is already pricing in fewer than two hikes for all of this year. After a relative dovish ECB last Thursday, and with a BoJ meeting next Thursday-Friday, this could shape up as a big seven days for DM central banks.

Central banks won’t be the only things to watch between now and month-end. January has seen the largest monthly gap between stock and bond returns since October 2008 (around 11%). Any stock/bond allocation set at the start of 2016 is now off-benchmark as a result, raising the question of portfolio rebalancing flows. Given the c.US$36 trillion that sits in global pension mandates, even small adjustments could be meaningful.

Finally, some brief notes on valuations, especially in light of rising growth concerns. Global equities now trade on 13.5x forward earnings, near the 10-year median. Over the last 25 years, US equities have traded at a higher forward P/E 63% of the time, while EU equities have been more expensive 53% of the time. Longer-dated US BBB rated credit trades at +255bp. The average spread during a recession, going back to 1925, is +246bp. US high yield spreads averaged around 800bp over the 2001-02 US recession. They are already near these levels today. While valuations have improved across many assets, we think that credit is discounting the greatest risk of recession.

via Zero Hedge http://ift.tt/1PsppyT Tyler Durden

Source: thecommentator.com

Certain countries are starting to feel the pain of the low oil prices. In a previous column, we already warned you about the potential problems in Saudi Arabia that might spill over to the USA. Saudi Arabia was quickly moving towards a government deficit of almost 22% of the GDP, resulting in a shortage of $150B on the total budget in 2015.

Keep in mind that preliminary expectation was based on an oil price of $40-45 per barrel and as the oil price has continued to fall, Saudi Arabia’s finances have gotten worse by the week (and even by the day).

But Saudi Arabia isn’t the only country that is feeling a huge impact from the low oil prices, as Russia for instance might have some more issues to dig itself out of the current government deficit hole. Whereas Saudi Arabia was smart enough to put quite a bit of cash in its sovereign wealth fund (which was the third largest in the world) to reduce the impact of the economic shocks, the Russian economy isn’t as well-prepared as the Saudi Arabian economy.

Even though Russia says it has been preparing for an average oil price of approximately 40-60 dollars per barrel during the next several years, we remain unconvinced about the country’s readiness to indeed be able to cope with a continuously low oil price, and it’s really hard to imagine the country can indeed survive it at all.

Source: Bricplusnews.com

Indeed, at the Davos forum in Switzerland, Russia has quietly tried to open the door with the international community to try to find a way to reduce the pressure on the Russian economy, and the government officials are hoping to see for instance the European Union become more flexible with the economic sanctions as that will very likely be the only way to avert a horrible economic crisis (and potential collapse of the country’s entire  economic and financial system).

Since the beginning of this year, the Russian Ruble has lost approximately 10% of its value, indicating the market is also becoming increasingly reluctant to believe Russia’s expectations, and the low oil price has sent the Russian Ruble tumbling as the currency lost approximately 60% of its value since May last year. Not only will the government budget deficit be much higher than anticipated (the expected $50B deficit was based on an oil price of $50/barrel, whilst the current oil price is trading quite a bit lower than that level.

Source: Google Finance

In our opinion, Russia has approximately 12-18 months left at the current oil price before the country reaches a point of no return , as its foreign reserves are dwindling due to the lower oil revenues. And that could actually be a dangerous situation, as Putin isn’t exactly the kind of person who’d be sitting on his hands when the economy is collapsing. And a bear that’s being backed into a corner can do something dangerous to draw the attention of the population away from the failing economy.

The best cure for low oil prices are low oil prices, that’s for sure, but is Russia able to wait for these higher oil prices? It’s not just Russia’s oil sector that is depending on the oil price, but the entire economy. Saudi Arabia’s government deficit is worse, that’s true, but the country has a much bigger war chest to wait this one out, whilst Russia is already seeing the bottom of its foreign currency treasury.

Source: crudeoilpeak.info

And oh yes, the last time we saw the oil price plunging like this (and staying at a low level for a prolonged period of time), it actually was the start of the Soviet Union falling apart.

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There’s a time when the operation of the machine becomes so odious,
makes you so sick at heart,
that you can’t take part,
you can’t even passively take part.

 

And you’ve got to put your bodies upon the gears,
and upon the wheels,
upon the levers,
upon all the apparatus,
and you’ve got to make it stop.

And you’ve got to indicate to the people who run it,
to the people who own it,
that unless you’re free,
the machine will be prevented from working at all!!

 

Mario Savio, excerpt from “The Machine Speech”, Sproul Hall, University of California at Berkeley, December 2, 1964

I love that speech.  I love that particular excerpt.  It’s a timeless, universal message that speaks for itself, but if so inclined do take the time to investigate the back-story to understand the context.

It serves as the muse for this latest offering from your old friend, Chumba.  It is a fitting prologue to this writing, itself a prologue to a longer article, still being prepared, that goes into more detail.  It embodies the spirit in which I undertook the actions of which you are about to read.  But for the sake of pressing concerns, in particular a global marketplace in meltdown, that might lead some to erroneously believe the end is nigh, I present to you this (perhaps cautionary) note, so as to hopefully help prevent unnecessary grief and heartache from premature execution of SHTF planning.

Think back to the Fall of 2008: the markets were crashing, the financial news media was abuzz with breakdowns of international economic markets.  The world was on the bring of financial armageddon.  Great Britain was feared to be a couple short hours from complete societal collapse.  I was in a state of unreality.  “The world”, I thought, “is ending.”  But I knew all this was coming in advance, and I was prepared.  I was first awakened in 2006 by a geologist I befriended who worked at the environmental testing company in the same complex where my business was.  He used to come chat with me before he took off for the day as I was cleaning up after working in my scrapyard.  As we got to talking about this topic or that, we eventually wandered into territory with which I was unfamiliar.  He began to fill me in on alternate history and conspiracies, and the real reasons behind why things happened.  I wasn’t too impressed with conspiracy theories back then, but I knew the guy was smart and he was definitely credible, so I started to look into the things he was telling me–in particular hidden history of WWII and the JFK assassination–and sure enough there was something to it.  In late 2007, as the real estate market in the States began to falter, he started introducing me to concepts of hard money and the historical cycles that drive the price to (what I now understand to be) bubble highs.

I began to study everything about precious metals and began to understand it’s historical financial role and contemporary importance as the foundation of all financial assets.  I became a True Believer.  It wasn’t until the Fall of 2008 that my friend introduced me to Jim Willy, the “Golden Jackass”, and told me about all the wild predictions he was making, which scared the shit out of me.  It was early September and things were just starting to go haywire.  I went and read all of Jim Willy’s newsletters back to 2008 and was amazed at the accuracy of his forecasts.  And now it was September 2008 and everything he said was going to happen was happening.

On October 3, 2008, I watched the TV in dumbfounded disbelief as the results from the second bail-out measure in Congress came in, and it passed.  The banks were going to be given a free pass, and I was going to be one of the assholes that was expected to pay for it all while the banksters continued to enjoy their hookers and blow.  It was at that moment that I realized: I was a slave.  Everything I had thought or believed up until then was rendered an insulting joke.  America was no land of the free and home of the brave, it was just a fucking slave plantation, and I was one of the niggers.  I vowed right there and then–I didn’t know how–but I was not going to be a slave any longer, and I sure as hell was not going to allow my children grow up to be slaves either.  I was going to break my chains and live as a truly free man.

Ruminating on it for several weeks after, I formalized a plan: I was going to withdraw from the system entirely.  I was no longer going to participate at all in this corrupt system.  I’d long since stopped voting (with the exception of registering Republican in California to help Ron Paul for the 2008 elections, but as we all know now, that was a waste of effort, and I’ve since rescinded my voter registration…more on this and why it’s important another time).  I was also going to default on every last financial obligation I possibly could, when the time was right and proper.  I was not going to file or pay taxes any longer.  And I was not going to seek any license or permit from the government.  I was going to live as a free American, as I was taught I was in the American public schools that I came up through as a child.

I started out with so much courage, so much gumption…so much misconception.  Not only of what I was doing, but why I was doing it, how I was going about it, and most importantly, who I was as a man (key, but again a topic outside the scope of this writing).  The first tangible action I took was to file an extension on my 2008 taxes.  I was intending to not only not pay but to not even file.  I had read up some on dealing with the IRS, but until I figured out a solid plan I figured kicking the can down the road was a good strategy.  I was already delinquent in paying my 2006-2007 taxes because I just didn’t have the money.  My business was doing OK but things started to get tight as the economy began to falter in 2007 and I just didn’t have the funds to pay my (honestly) self-reported tax “obligation”.  I also had a sizable credit card debt.  So it was early in 2009 that I came up with the concept of what I would eventually come to dub the Private Citizens Bailout Facility, a.k.a. the Obama Bailout.  The idea was to do as much damage to the system and the banksters before withdrawing from their corrupt system all together, taking a bunch of loot with me.

Rather than go into detail, here I will only summarize what I did, and the result.  Pay attention.  Some things worked out well; others didn’t, and the results of my jihad were ultimately catastrophic.  I started this journey with a nice house, a business, and a family.  Now I live alone in a warehouse.  So I offer this as much as an cautionary tale as I do an instructive one.  After all is said and done, I would still do the things I did, but I would have done them with a lot more understanding and education, and a lot less bravado and assumptions.  This is not a pursuit for the foolish.  This is serious business.  You put your entire livelihood on the line when you make the kind of decisions I did.  I didn’t care.  I was blinded by anger and betrayal.  I acted recklessly.  I urge you not to follow directly in my footsteps.  If you want to go this route, I suggest you to study my methods, learn from my mistakes, and take a much more measured path towards a goal of true independence from this corrupt system (I will be speaking much more about that topic in future articles).

Here we go:

What I Did: Stopped filing federal and state income tax statements and paying income taxes.

When: 2008-present

Why: Because fuck them.  Also, paying an income tax is voluntary, just as the bureaucrats advertise.  Of course, that statement is a riddle, couched in a lie, ensconced in douchebaggery.  The fact of the matter is taxes are, indeed, voluntary, and go exclusively towards paying off the national debt (in other words, it goes to the banksters).  But if you don’t pay, guess what, you get fucked.  It is in fact possible to unvolunteer to pay taxes, discussion of which is beyond the scope of this screed, but if you’re so inclined, research “IRS revocation of election”.

How It Turned Out: What I learned is that the IRS is a bunch of paper tigers.  I futzed around with them for a couple or three years, sending them letters, notices of intent to sue, challenging their subpoena of my banking records in federal court (setting precedent in my district by the way), entering into the belly of the beast itself and facing off with their agents in the local IRS offices, etc.  Eventually I figured out the easiest way to stay out of the clutches of the IRS was to stop doing business with banks altogether.  After the second bank in as many years closed my accounts because I demanded they honor my privacy and not divulge my records to the IRS (hint: the banks are slave to the IRS master, and will yield to their demands before yours), I decided none of them could be trusted and decided to forgo them altogether.  It took a while but I managed to figure out how to continue to conduct business without a bank account.  It’s not easy, but it’s doable, in particular if you are true to yourself and accept a lowered standard of living in order to honor your convictions, which I did.  I no longer pay income taxes, state or federal, and I do so legally.  The IRS (and other national equivalents) is one of the biggest scams ever perpetrated on the human race.  It is the way they steal your energy through the Matrix.  I will spend some time explaining this in another article, but in the meantime the internet is filled with everything you need to figure this out, if you have eyes to see and ears to hear.

 

What I Did: Cash out my IRA.

When: Late 2009

Why: It was my money, I earned it, and I thought it would be better vested in precious metals. 

How It Turned Out: Pretty well.  I had a small IRA invested in the precious metals sector (mining stocks, index funds, etc.)  I watched with disgust as the precious metals sector was driven down by (what I believed at the time to be) bankster manipulation and the value of my IRA slowly grind down from about $18,000 to $6,000.  I decided that money would be better invested in actual precious metals, so I instructed my brokerage to divest the funds and remit them to me in their entirety.  To my surprise, they did as I ordered, without giving me shit about tax deductions, etc., and to my knowledge the IRS never noticed (but then I ignored all their notices anyway).  My plan was to immediately turn those funds around by investing them in physical metals, but on the week that I requested my disbursement, Vikram Pandit, CEO of Citibank, announced that Citibank would be able to pay off its bailout loan early, resulting in the precious metals sector dumping and the value of my IRA dropping by about $400, which was half an ounce of gold back then.  I was fucking pissed.  So it was particularly gratifying when I utterly destroyed Citibank in court when they came after me to collect on a defaulted credit card balance (see next entry).

What I Did: Requested credit limit increases for, then maxed out and defaulted on all my credit cards.

When: Fall of 2008 through 2011

Why: The banks that issued my credit cards were directly responsible for destroying the economy in which I earned a living to allow me to pay off my credit cards balance, and they got bailed out, so I decided to take my own bailout.

How It Turned Out: Pretty well, actually.  Between my (ex)wife and I we had about $50,000 in credit card debt.  This was not the result of wanton spending.  Aside from legacy wedding expenses (always too much), the only charges I ever put on my cards were business expenses when things were tight.  When the markets began to crash in 2008, you’ll remember that then President Bush (fearless leader that he was) encouraged everyone to continue spending.  The big banks, taking his cue either out of patriotic duty or, more likely, coercion from the Fed, began to loosen their lending standards.  I took full advantage of this and requested credit limit increases from all my credit cards.  Citibank was the most generous.  They increased my limit to $28,000, which was about double my then current balance.  They were almost all too happy to give people more credit with which to spend.  Mind you, I had excellent credit at the time, with a very high credit score, somewhere in the 90th percentile.  I proceeded to acquire all manner of SHTF preps with my credit cards: food, tools, fuel, generators, self-defense items, precious metals, etc.  Some of this was effected with cash advances.  After I was all tapped out, I stopped making payments.  When the banks started calling to remind me I had balances due, I ignored them.  When they started to call to warn of collection activity, I let my auto-attendant run interference for me.  Eventually, between me and my ex-wife, we got sued by five different lenders, and I beat all of them except for Chase, which for some strange reason pulled out all the stops on my $10,000 debt.  That judgment eventually turned into a lien placed on my house, which I eventually lost to Wells Fargo (see entry further down), so they had to pay it.  Citibank, with whom I had a $28,000 balance, took their time in coming after me.  Eventually, they hired some ridiculously incompetent collection agency in San Jose to pursue the debt.  I learned me some law and used an obscure tactic to utterly eviscerate their case, and on the day of trial their attorney approached me before court opened and served me with notice that they dropped the case.  Fuck you, Vikram.

 

What I Did: Challenged the local city government on obtaining a license for the privilege of operating a business.

When: 2011

Why: The local municipality has the authority to request you obtain a business license, but if you’ll read your local codes closely, you’ll see that (as with everything in this government matrix) they can’t require it: it’s strictly voluntary, and a sham.  My local codes read (and I quote): “This chapter is enacted solely to raise revenue for municipal purposes, and is not intended for regulations”, which, once you understand how to interpret legal speak, means exactly what it says: the chapter in the local municipal codes regarding business licenses is strictly for raising revenue for the city, and confers no authority upon it to require you to obtain a license to earn a living in your chosen profession, trade or enterprise, which is your god-given right. 

How It Turned Out: I received a phone call one day from some pesky clerk at the city that escalated in her threatening to send the police over to my business if I didn’t get a business license.  I called her bluff by literally scoffing at the very suggestion.  She said she would send me a stern letter.  I told her to make sure it was sent certified so I received it.  When I did, spent the rest of the week crafting a 5 page letter that, to this day, I still consider amongst my best writing on American law and the philosophy of a free people.  It was certainly effective, as I never heard from the city again, despite the eye pollution caused by the heaps of scrap on my property.  I proceeded to operate my business (a scrap recycling operation) for the next 4 years, only recently shuttering it due to (among other reasons) the decimation of the commodities market.  I once even ran a punk city cop off my property, correcting his erroneous insistence that he had authority to be on it because “it’s a business” by explaining to him that it was not under license with the city and therefore was not a “business” by the definition he was obligated to follow (I have an audio recording of the encounter).

What I Did: Stopped paying my mortgage

When: Mid-2011

Why: As a result of a series of unfortunate events, to include the disruption of the economy and therefore my ability to earn a decent living thanks to the machinations of the international banksters, as well as a broken ankle suffered from a fall that put me on my ass unable to work for months, my income fell off drastically. 

How It Turned Out: Not well.  If you’ll recall, around 2009-2011 is when the foreclosure crisis was metastasizing; millions of people were being kicked out of their houses by the TBTF banks.  Reacting to pressure to do something, the Obama regime forced banks to offer distressed homeowners loan modifications.  I was one of the less than 10% of homeowners that received a loan modification during that first round of modifications in 2010, which was a slipshod process that wasn’t regulated by any coherent policy as far as I could tell.  It helped me for about 8 months, but the economy continued to worsen and it got to the point where I couldn’t afford to pay even the modified payment.  Sometime in 2011 I started to study some interesting law whereby one could theoretically discharge the mortgage on their house entirely with an archaic commercial law process.  This gave me the courage I needed to flip the bird at the one debt outstanding I had not yet discharged, my mortgage, and game for the ultimate prize.  It is important to understand that at this point I could have sold my house and walked with about $300,000, but I just wasn’t interested in selling my family home of 17 years and moving.  I worked hard for my house, and I loved it, and where it was, and I intended to keep it.  As I researched the law, I came to understand that the mortgage company had no standing to bring a foreclosure action, because they aren’t the holder of the note.  They are merely the servicing agent for the actual note holder, which since about 2001 is usually a trust somewhere in New York, or actually a series of trusts.  The mortgages in those trusts are chopped up into tranches, and those tranches are mixed with other tranches, etc., to where nearly the entirety of all mortgage notes in America are now spread across a nearly untraceable matrix of various securities and investment funds.  The upshot of all of this is that in order to properly foreclose, the bank (really just the servicing agent) has to go get authority from everyone who has a piece of the mortgage, which is virtually millions of people (this is an over-simplification but you get the idea).  To this day the courts are still figuring out the mess.  But back in 2001, I thought it would be an easy scam to call out.  What I didn’t realize is that a) the law upon which I was relying was very archaic, and virtually unknown by modern jurisprudence, and was therefore met with incredulity, and b) the courts would act in cahoots with the banks to help steal homes from their owners for the banks so they could shore up their bottom line with physical assets in order to remain solvent (and then there’s the fact that the pension funds of these judges are heavily invested in Mortgage Backed Securities, i.e. securities backed by mortgages that they were adjudicating on a daily basis by the thousands).  It is one of the biggest conjobs ever in human history, and it’s still playing out.  In any event, I fought to the bitter end, eventually losing my house on a Friday in the Spring.  The sheriff came and took it while I was in a courtroom dealing with a bullshit criminal matter (that I eventually beat).  When I got home, I found my front door had been knocked off it’s hinges and then remounted and screwed shut by the sheriff, who had entered forcefully, suspecting I was going to make an armed stand inside.  My neighbors later told me there were about a dozen armed and armored deputies who entered my house and searched it, SWAT style, making a lot of noise, causing a lot of ruckus, and violating a bunch of my rights in the process.  I was expecting to regain possession within a few days, but to this day I am still fighting to get it back.  Stay tuned.

So, there you have it, the short of it.  I said what I was going to do and I did it.  I didn’t just rant about what I wanted to do and worked it out of my system, I actually did it, because I saw it as a duty to resist.  I brought the fight to the enemy.  In the end, I won a few small battles but lost the big ones.  As a result of losing my house, a 90% cut in income, being utterly fucked by a corrupt landlord who stole most of my business property while I was going through my foreclosure battle (which was also a quarter century of my life’s work, but that’s another story), in addition to the rigors of recovery from a broken ankle and, most importantly, a fervid belief that the end of the world as I knew it was near, the world as I knew it did in fact end.  Eventually, my wife, who made a willing and educated decision to go along with the plan, could no longer handle the stress of the war, and she left me.  Aww, poor Chumba.

I regret none of it.  I am exactly where I need to be, based on what I believed.  I’m not going to go into it now, but hear me: I manifested my reality by believing in an apocalyptic event around the date of December 21, 2012.  What happened?  On December 20, 2012, the judge in my foreclosure matter ruled for possession of my house in favor of Wells Fargo and ordered me to be put out.  On December 21, 2012, the judge in my property theft case ruled that he could not grant me the restraining order I sought, and 80% of my business property (and life’s work) went to a rival scrapper, who proceeded to sell it piecemeal thru online auctions and private sales, by scrapping a lot of it, and by throwing away the rest.  I so believed in the theme of a December 21, 2012 end of times that I literally manifested my own personal armageddon.

Consider:

So shall my word be that goeth forth out of my mouth: it shall not return unto me void, but it shall accomplish that which I please, and it shall prosper in the thing whereto I sent it. – Isaiah 55:11, KJV

According to the Bible, these are the words of God.  Since we are made in the image of God, our words (and thoughts) similarly accomplish that which we please, and prosper in the thing to which we send it.  To “prosper” doesn’t necessarily imply a positive result; it just means your word accomplishes that which you intend.  In my case, I intended for the end of the world, and that’s what I manifested for myself, with my own words and thoughts and actions, all collectively accomplishing the subconscious (and, this is key, reckless and unmanaged) thoughts and beliefs that I held, that together shaped the self-fulfilling prophecy of my destiny.  Let those with ears to hear and eyes to see understand my message.  Do not be turned off by the Bible speak.  The Bible is simply an esoteric rendering of universal concepts.  It’s a good book.  It’s when charlatans and crackpots interpret it for their own personal agenda that the meaning gets polluted and adulterated.

Or just ignore me.  But consider further, before we can act, we must first conjure in our mind the will to act, whether it be to take that first step in the morning to get out of bed, or to live a life free of government control.  Your thoughts and intentions will ultimately yield the reality you will eventually find yourself living.  So you doomers, beware: if all you do is seek doom in every last chart, number or financial indicator, surely you will find it.  You will manifest the reality that you most put your thoughts into, and in ways you can never imagine if you’re not careful with them.

The tongue of the wise useth knowledge aright: but the mouth of fools poureth out foolishness. – Proverbs 15:2 (KJV)

 

A fool’s mouth is his ruin, and his lips are a snare to his soul. – Proverbs 18:7 (KJV)

 

Death and life are in the power of the tongue: and they that love it shall eat the fruit thereof. – Proverbs 18:21 (KJV)

 

“All that we are is the result of what we have thought. The mind is everything. What we think, we become.” – Guatama Buddha.

I am Chumbawamba.

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