Michael Pento serves as the President and founder of Pento Portfolio Strategies. He is a well-established specialist in the Austrian School of economics and a. The Heel Realization trope as used in popular culture. Few things are more crushing than realizing that you're one of the bad guys. You might exclaim My God. Welcome back to Mid-Week Meditations, Lifehacker’s weekly dip into the pool of stoic wisdom, and how you can use its waters to reflect on and improve your life. Pento Portfolio Strategies LLC . Pension Plans July 1. Illinois officials have been frantically working on a massive 5- billion- dollar tax increase to stop the major rating agencies from downgrading their debt to junk. Their last- minute maneuvers increased the personal income tax rate to 4. Illinois is on record as having unfunded pension liabilities amounting to $1. Moody's believes that number is closer to $2. And the state's annual pension obligation is now looming around 2. But Illinois is not alone in its fiscal woes. As of the fiscal year 2. Now that you have the new Raspberry Pi 3, a chart mapping out the GPIO Pins would be handy wouldn't it? We thought so and created this quick guide! Find out more information on the used GMR "PHANTOM ONE" CNC ROUTER (ATC) available on EX-FACTORY. Includes links to photos, literature, and videos. Sometimes outside car thermometers are so inaccurate that they feel like random number generators. They’re basically the worst feature of the car, next to the car. For every life we save? Damn right it's worth. Serial killers are usually white, heterosexual, males in their twenties and thirties with low self-esteem. Their methodical rampages are always sexually motivated. Glue Tools Phantom Serial NumberGASB). The salient issue here is not just that tax receipts are short of liabilities but that asset returns are falling far short of their projected targets. This highlights the fundamental flaw in governmental pension accounting: the belief that a liability can be appropriately estimated by using whatever fairy tale return an accountant needs to make the numbers work. This process expects that all returns will mirror the best years and doesn't consider market volatility, let alone a recession and bear market. Optimistic actuarial assumptions have proven to be too optimistic about such factors as employee longevity and enrollment in early retirement programs. Pension fund managers have been underweight U. S. This has left their exposure to equities at the lowest levels since the 1. Pension fund managers prudence has led them to invest in things like Treasury bonds and . Many private companies learned a long time ago that defined benefit pension plans were unsustainable and replaced them with a 4. K. Employees can save tax- free and invest in a group of boilerplate options. And while there is a risk that these plans will not provide for the employee in retirement, the risk is on the employee and not the employer. Public sector unions that represent a reliable voting block have kept defined benefit pensions alive and well for government employees. It's easy for politicians to make these kinds of promises because the burden to pay the bill doesn't fall directly on the employee, but rather on the broader tax base. But the truth is your tax bill could explode as local governments bail out these insolvent pension plans- -just ask the taxpayers of Illinois. New Jersey and Maine had to close state parks over part of the July 4th weekend. And in debt- strapped Puerto Rico, where the teachers' pensions are expected to run out next year, tax payers are on the hook for more than $4. Moving on to Social Security and Medicare, whose . And this phantom interest income is allowing it to be accounted for as cash flow positive thru 2. But beginning in 2. Trust Fund itself until it is depleted in 2. In total, the unfunded liability for Medicare is just under $5. Social Security is nearly $2. CATO Institute. Things are going to get much worse before they get any better. This is because during the next economic crisis there is a good chance that both stock and bond prices could tumble. Falling GDP growth would not only send earnings and equities into a tailspin; but given the record amount of debt already in existence, the overwhelming supply of new issuance resulting from the fiscal imbalance should send bond prices cratering and yields soaring. This would occur just in time to hit employees' 4. The combined demise of Social Security, Medicare, and Public/Private Pension Plans is a toxic combination, to say the least. Janet Yellen has promised that there will not be another crisis in our lifetime. Her hubris and naivet. The truth is central banks will never be able to let go of their humongous and unprecedented interest rate suppression. This current attempt to normalize interest rates will cause market and economic chaos of unmatched proportions. Sadly, the broken public and private pension plans have condemned the Fed to an endless pursuit of asset bubbles and inflation to portray the illusion of solvency. Michael Pento produces the weekly podcast . Will Trump Fire Yellen or Vice Versa July 5th, 2. Citigroup's Economic Surprise Index just hit its lowest level since August 2. But this level of disappointment has ironically emboldened the Fed to step up its hawkish monetary rhetoric. The truth is that the hard economic data is grossly missing analyst estimates to the downside as the economy inexorably grinds towards recession. This anemic growth and inflation data should have been sufficient to stay the Fed's hand for the rest of this year and cause it to forgo the unwinding of its balance sheet. But that's not what's happening. Yellen and Co. But why is the Fed suddenly in such a rush to normalize interest rates and its balance sheet? Perhaps it is because Ms. Yellen wants to fire Trump before she hears his favorite mantra, . A Q1 GDP print of just 1. FOMC from a hawkish stance. And a lack of evidence for a Q2 rebound in the data hasn't done so either. April housing data was very weak: New home sales in the single family category were down 1. And even though there was a small bounce back in housing data in May, Pending Home Sales have fallen three months in a row and were down 0. May. Retail sales dropped, 0. May; while the key metric for business productivity, core capital goods orders, fell 0. It's not just economic growth indicators that are disappointing, but also evidence of disinflation abound everywhere. Commodity prices are also illustrating signs of deflation. The CRB Index is down 1. WTI crude oil is in a bear market. Further evidence of deflation is seen in the fact that the spread between long and short- term Treasury Yields are contracting. There has been a six- month decline in C& I loan growth and the household survey within the Non- farm Payroll report turned negative in May. The Household Survey is a leading indicator for the Establishment Survey and the overall employment condition. Wall Street's currently favorite narrative is one of strong earnings growth. But according to Fact. Set, nearly half of Q2's projected 6. EPS growth is from energy. Excluding this sector, EPS growth is projected to be just 3. The projected average price of WTI crude for Q3 is $5. With the oil price now hovering around $4. EPS growth from energy will turn into a big drag unless crude turns around quickly. The economy should continue to move further away from the Fed's growth, and inflation targets as its previous monetary tightening starts to bite. But one last nail in the coffin for Fed hawks will be an NFP report sub 5. K. The odds are very high that such a weak print on jobs will occur before the next hiking opportunity on Sept. In addition, if the S& P falls more than 1. Fed policy from hawkish to dovish is virtually assured. From there it will turn to panic as the economy and stock market meltdown. I say meltdown because, at 2. S& P 5. 00 is the 2nd most expensive in history. But this particular overvalued market exists in the context of a weak and slowing economy; coupled with a tightening monetary policy that has been in place since the Fed started to reduce the amount of its $8. Dec 2. 01. 3. And, most importantly, the coming market crash and recession will occur with the balance sheets of the Treasury and Fed already extremely stretched. Hence, an extrication from this recession will not happen quickly or easily. All of the above makes this the most dangerous market ever. This crash and ensuing economic downturn, which given history, logic and the data should happen soon; will alter the Fed's current stance on monetary policy. But it will happen too late to preclude a very steep decline in GDP. Therefore, if Mr. Trump cannot push through his tax cutting agenda rather quickly it may be both Ms. Yellen and the Republicans that find themselves moving out of D. C. Michael Pento produces the weekly podcast . Raise the Inflation Target and Put a Date on It! That's the direction some high- profile economist and former members on the FOMC want to go. According to these academics, including Narayana Kocherlakota the former president of the Federal Reserve Bank of Minneapolis from 2. They want to put a time horizon on it as well. In other words, they want to raise the inflation target higher than the current 2% level, and then place a firm date as to when that inflation goal must be achieved. Their rational for doing both actions is to reduce the level of real interest rates, which they somehow believe is the progenitor for viable GDP growth. You see, once the Fed has taken the nominal Fed Funds Rate to zero, there isn't much more room to the downside unless these money manipulators assent to negative nominal interest rates. But charging banks to hold excess reserves is fraught with danger, and so far this idea has been eschewed in this country and has been proven ineffectual in Europe. The Fed wants the flexibility to make real interest rates more negative than the minus 2% that would be achieved at the zero- bound rate when using the current 2% inflation target. The next recession could be just around the corner and the Fed is thinking about ways to stimulate the economy given the fact that the amount of ammunition- -the number of rate cuts until the F. F. R. With very little leeway available to reduce borrowing costs, these mainstream academics want to facilitate more negative real interest rates by ensuring inflation is higher right from the start. The math is simple: a three percent (or higher) inflation rate would equate to at least a minus three percent real F. F. R. But as to why these Keynesian academics are so convinced a lower real interest rate is better for economic growth is never clearly explained. Probably because it is a nonsensical tenet and the biggest fallacy in all of central bank group think. Their spurious logic dictates that a lower unemployment rate is the primary cause of rising rates of inflation and that a higher rate of inflation is supportive for lowering the unemployment rate. Exactly how this simple model arrives at that conclusion is never cogently explained; other than the mistaken belief that inflation and growth are synonymous terms. Adorable Kitten Mysteriously Appears Inside Tesla Bumper. Imagine you’re this guy. You wake up on a Saturday morning, and your Tesla is meowing. You do not have a cat. But there is definitely a cat inside of your car’s bumper. What do you do? Make a You. Tube video, obviously. This is a true story. You. Tube user “S U” woke up on a Saturday morning, and his Tesla Model X was meowing. He does not have a cat, but (as the video he later uploaded to the internet quite clearly shows) there was definitely a cat inside his car’s bumper. He recorded a video as proof—and guaranteed viral internet success—and then took the car to the Tesla service station, where a Tesla professional removed an adorable kitten from the chassis. It’s unclear how the cat got there. Because Elon Musk tweeted about the incident, however, it seems entirely possible that the Tesla founder is somehow behind it. After all, who wouldn’t want an environmentally friendly electric vehicle that also spawns kittens without warning?
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