I've come to believe Congressmen must be different, genetically, than the rest of us. Shame is completely missing from their DNA. After losing hundreds of billions of dollars buying fraudulent mortgages at the behest of their masters in Congress (Barney Frank, Chris Dodd), Fannie and Freddie finally tightened their lending standards for new condos in March. (That's right. It took them until March 2009 to tighten their condo lending standards.) To get a loan for a condo, the building needed to have other tenants (be 70% sold) and the other residents had to be current on their condo association fees. Specifically, 85% of residents had to be current. These rules are designed to make sure Fannie and Freddie aren't making loans to speculators buying new condos in empty buildings.
The rules seem pretty reasonable. We don't need the government to be in the business of financing condo construction in the middle of a huge glut of condos. But guess who is complaining about the new lending standards? Barney Frank. Frank says the new rules are too onerous. He's asking Fannie and Freddie to "make the appropriate adjustments" to their lending standards.
For the last several years, I've been warning you the whole global-warming nonsense is nothing more than a huge power grab by governments around the world. Sure enough, the U.S. Environmental Protection Agency (EPA) has now ruled carbon emissions are a threat to the world (because of global warming), and a bill pending in Congress would impose a "cap and trade" system of taxes and credits for carbon emissions. Ironically, the bill is now being held up by the House Agriculture Committee Chairman Collin Peterson. He represents farmers in Minnesota.
What's his problem? Well, it turns out plowing the ground releases carbon and the EPA would force farmers to pay a tax on plowing. (I'm not making this up.) In all, the EPA expects to see $24 billion in taxes from farmers. Peterson wants money from the cap-and-trade bill to pay farmers not to plow. (Again, I'm not making this up...) Just wait until the EPA wants to tax you and me for breathing...
It seems Mexico is a little ahead of us when it comes to being fed up with politics. There's a popular movement down there to simply vote "no" in the upcoming July 5 election. Word is spreading on the Internet and YouTube, not on the news networks. The campaign seeks to invalidate the entire democratic process by revealing that none of the candidates are acceptable. The Mexicans have finally figured out that democracy in an age of mass media is a giant fraud. Sooner or later, Americans are going to realize it, too. Your vote doesn't count – not when the population is manipulated with enormous advertising budgets and not when you decide to vote against a large, nontax-paying majority.
On March 9, the very day the S&P 500 bottomed, Dan Ferris sent an update to his Extreme Value subscribers reiterating a "buy" rating on his World Dominator Portfolio. This portfolio consists of the biggest and safest companies in the world... One of them was technology giant Microsoft (MSFT), which hit a 12-year low on the day of Dan's recommendation. Two months later, Dan wrote in another update to subscribers:
Microsoft generated $12.9 billion of free cash flow in the first nine months of its 2009 fiscal year, which ends June 30, 2009. It could easily generate another $16 billion like it did last year. The stock currently trades at 11 times free cash flow. (Cheap, cheap, cheap, said the budgie!) That said, the stock is insanely cheap, and I think you should BUY Microsoft (Nasdaq: MSFT).
Microsoft has been on a tear since hitting a 12-year low of $15.15 on March 9, gaining 57%...
Dan's other World Dominators are the perfect way to make sure your portfolio grows safely while the economy goes haywire... These companies have proven they can thrive in any environment. To access the nine stocks in Dan's World Dominator Portfolio (six of them are still buys), click here...
Where are the customers' yachts? Days after repaying its $10 billion federal TARP loan, Goldman Sachs announced it will likely pay the biggest annual bonuses in its 140-year history. Goldman is reaping windfall profits due to decreased competition (no more Bear Stearns or Lehman Brothers) and increased debt issuance by companies and the government (the bank estimates the government will issue $3.25 trillion of debt before September, as a prime broker of U.S. government bonds, Goldman will make hundreds of millions of dollars).
The bank is on course to have its most profitable year in history and subsequently will pay out the largest bonuses in history. After blockbuster first-quarter earnings of $1.66 billion, Goldman said it would set aside half of its earnings to reward employees.
This is exactly why you should never invest in a Wall Street bank. They exist for the sole purpose of enriching the employees... not the shareholders. How can you possibly treat the shareholder well when 50% of your gross profit is paid out as compensation? These massive bonuses based on short-term financial goals encourage employees to take outrageous risks – often with massive leverage. We've seen what happens when these bets go awry...
Part of OBAMA!'s massive stimulus is to grant $5 billion to states where welfare is on the rise or spending on unemployment subsidies is increasing. The states got the message... Welfare caseloads in 23 of the 30 largest states (accounting for more than 88% of the country's population) are above year-ago levels. Not surprisingly, the largest number of welfare cases are in the states with the highest unemployment. From the Wall Street Journal...
Oregon's count was up 27% in May from a year earlier; South Carolina's climbed 23% and California's 10% between March 2009 and March 2008. A few big states that had seen declining welfare caseloads just a few months ago now are seeing increases: New York is up 1.2%, Illinois 3% and Wisconsin 3.9%.
So far, only California and Ohio have received grants, but 38 other states and territories plan to apply.
In the mailbag... Lots of you, it seems, forward our paid content. Even more than the 100 or so people my staff identified as being chronic offenders. We got hundreds of e-mails over the weekend from people who fessed up and apologized. I bet none of these people ar
e on our list...
As I told you, we have no desire to fight with our legitimate subscribers. Quite the contrary. We are grateful for your support. If you've been forwarding our e-mails because we're sending them to the wrong address, just change the e-mail address on your account – problem solved. And unless you're forwarding to dozens of people, you're probably not going to pop up on our radar in any case. Our concern is only with the few people who are intentionally stealing from us by forwarding our subscription products to dozens of people, week after week. (Note: We don't object to forwarding any of our free content, including The Digest.)
For example, paid-up subscriber D. Nelson has forwarded our paid content well over 100 times to more than 50 different people in one case. If we think you're guilty of blatant copyright violations, you'll get a letter from us this week asking you one more time to please cease and desist. If you don't stop, our lawyers will be calling. Believe me, we hope it doesn't come to a fight. Nothing fills us with dread quite like sitting down with a bunch of lawyers. But we will do whatever it takes to protect our rights.
"I totally agree that one should not create an additional copy of any copyrighted publication or any other media... It is not a copyright violation to read a book then give it to someone else to enjoy. Therefore I need to ask what is the difference between doing that and sending your newsletter or any part of it to someone who would derive benefit while simultaneously erasing it from one's own computer? If I were to give the newsletter to someone else, he/she would then have it and I would not... If I am incorrect I look forward to your letter of explanation as to why this would not be true." – Paid-up subscriber GLH
Porter comment: Keep in mind, I'm not a lawyer. And I know digital copyright law is still evolving, so I doubt if there's any real legal clarity on the question. But the principle of copyright law is pretty clear: You're not allowed to make a copy of our work without our permission. Forwarding e-mails makes a copy. Please don't do it.
"Perhaps you need to use more than the New York Times as your source for information... I wonder if the reporter who was beheaded would have considered waterboarding an acceptable alternative if the choice had been offered to him, or if the families of people killed on Sept. 11 believe enhanced interrogation techniques are even close to the torture they endured after the planes crashed. If even one life was saved by whatever means were used, I believe it was worth it. Terrorists earn whatever terror they receive." – Paid-up subscriber Nadine Holman
Porter comment: The source documents for all of the information that's publicly available regarding the mistreatment of captives in Afghanistan, Iraq, and Cuba comes exclusively from the Army itself. Soldiers who witnessed these acts and were horrified by them reported them to their superiors and to the media. Redacted versions of these reports are readily available online. The Army itself concluded prisoners routinely received brutal treatment, including being shackled to the ceiling and beaten. Nearly 100 such prisoners died while in custody. Not a single officer has been convicted of any crime in connection with these events.
You seem to believe beating prisoners to death is just fine, if it might save a life. But the whole idea of a volunteer military force is some things are more important than human lives, things worth sacrificing for. Things like liberty, for example. We treat our prisoners with a modicum of human dignity not because they deserve it, but because our nobility requires it. When we allow members of our armed forces to slide into depravity – or worse, when we order them to torture and maim prisoners – we put our entire nation in jeopardy. Americans are not united by race or creed, or even by a homogenous culture. We are united by an idea – an idea that every human being is entitled to certain, unalienable rights. When you undermine that idea – even by torturing people accused of being our enemies – you undermine our entire society.
"Just to be absolutely clear on this point, I am against torture and would point out that during my more than 33 years of active duty in the US Army, I never heard anything that postulated that torture was good or legal. We learned how to treat prisoners IAW the Geneva Convention... not mistreat them. Although I've been retired for 17 years now, I don't know anyone in the Army who condones this activity on the part of soldiers. The abuses at Abu Graib lay directly at the foot of the general officer commanding that installation... Just like the society we serve, we do have those who misbehave, are social outcasts, and criminals. Unfortunately, the percentages of those who fall into these cohorts have probably increased as the standards for enlistment have been relaxed. We should learn from our mistakes. I think for the most part we do..." – Paid-up subscriber James T.
"The Israeli security forces, who are not exactly known as shrinking violets, quit using torture on suspected terrorists because it undermined Israeli society and didn't yield much useful information anyway..." – Paid-up subscriber Jonathan Bernstein
Regards,
Porter Stansberry
Baltimore, Maryland
June 22, 2009