Financial Fridays: The WTF! On This Stock Market ‘Crash’

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Shit, I'm about to break all the rules of selling and marketing but I don't care. People need to stop being fooled. It has to end.

I write every day. I publish something here and on my email list maybe 5-6 times a week.

These emails are very important to me and they are about 500-2000 words. Short, to the point, life lesson, anecdote, and what I love to do more than anything in the world.

The emails go for free to about 200,000 people a day.

But there are some messages people need to know to further enhance the work they are doing, whether its financial or starting a business, or part of my daily practice of physical mental emotional and spiritual health.

I put my heart into that also.

So I write up to 10,000 words once a month for that. That's probably too much. Almost like a mini-book. But it won't fit into a Facebook status update.

For instance, this month, I write about 20 reasons for the crash and I found a super guest writer to basically write the BIBLE of angel investing.

And I have about 10 people helping me research, do the tech infrastructure for this, etc. And the whole thing I sell for about $5 and some renewal rate a year from now with money back guarantees.

But I'm not writing this to sell. If the guys I work with find out (and they will once I hit publish), they will probably be upset at me.

I'm sorry: Jeff, Mark, Adam, Dillon, Tim, Emily, Mae, Mary, David, Garin, Peter, Ksusha, Dominic. Don't buy it. I don't care.

I just want to tell people how much BS the news vomits every day and how it's effected the markets.

Instead of the 20 reasons I wrote this month, let me give the 3 or 4 most important (all 20 took up 5000 words, with another 5000 words on angel investing).

A) CHINA

China growth is slowing. So the Wall Street Journal, which I used to write for, is saying "Chinese economy reeling".

Oh my god. Please please please. Stop that.

China is GROWING. It used to grow 10% per year because it was communism and 2 billion people were farmers.

Now it's "going down" to 7%.

Horrors! The world is over.

But what if it continues?

Who cares!?

Guess how much we "sell" to China per year. I put "sell" in quotes because newspapers make it sound fancy and say we "export". BS economics writers.

Less than 1% of our Gross National Product is sales is to China.

So even if CHINA DISAPPEARED COMPLETELY the US would still have a growing economy.

Oh, did I mention China is not disappearing. It's GROWING. At a faster rate than the United States.

B) INTEREST RATES MIGHT RISE

Are you kidding me?

Let me explain simply please.

The Fed lends money to banks. When the Fed rate is low, savings rates are low.

When savings rates are low, people put money in higher risk stocks than in savings.

When savings rates are high (7%+) people put money in their savings account because its safer (it really is).

That’s why people say “when interest rates go up, stocks go down.”

Oh my god! (sorry for the repeat).

The Fed Rate is at 0.25% and has been for six years.

They SHOULD raise it to 0.5% or even 2%. Nobody is saying, “Oh, now I should move out of the stock market and get 2% savings rates.

And, by the way, the Fed only raises rates when every indicator suggests that companies are growing at a fast rate.

Let’s look at recent times the Fed raised rates. Through most of the 90s (the markets went straight up). 1999, the Nasdaq 100 went up almost 100% over the next year (and value stocks continued to go higher ever after the crash).

From 2002–2007 the Fed raised rates every chance it could get. The market went constantly up.

And none of that was from such a low base of 0.25%.

So newspapers, PLEASE STOP LYING

C) IS THIS LIKE 2009?

In March, 2009, the market hit an all-time low.

Fortunately, I ended it and saved the world. No kidding.

I lived at 40 Broad Street, directly across from the New York Stock Exchange.

On March 9 I went out and bought 100s of Hershey’s chocolate bars.

Chocolate makes people feel like they are in love. And willing to take risks.

All of the traders walking into the exchange were depressed. They were all looking at the ground.

I started to approach with my chocolates. At first the guards stood up and gripped their guns. Dogs were barking.

But then I handed out chocolates. Traders would look up, smile, and take the chocolate. Nobody refused me.

And yes, that day was the bottom of the market. I documented on Twitter before I started handing out and when I was done.

It’s not bragging if it’s true.

BUT, I can’t take all the credit.

People blame the 2009 crash on the housing crash. This is not true.

Housing prices peaked in 2006. The housing crash was only one small piece of the puzzle in the 2009 crash.

I won’t get into all the details of how banks account for mortgage debt.

But basically, the FASB (financial accounting services board) changed the rules mid-flight on how banks should account for their debt. It was a horrendously strict rule change that forced banks out of business.

When did they make this rule change? Late 2007, at the peak of the market. Then the real crash happened: the banking crisis.

Everyone begged them to change the rules back. When did they change it back? March, 2009. Coincidence? The market went straight up.

In my newsletter coming out on September 1 I give 20. I wish I could give all 20 here but there’s not enough space.

But three is enough. We covered the main issues: China, Interest rates, and the post-traumatic stress everyone is feeling about 2009.

I admit I simplified but this is just a simple post. I’m happy to answer questions and I go into more detail elsewhere.

Finally I called a friend of mine who is the head of wealth management at one of the largest (top 3) banks in the world. He’s the real deal and I just make status updates.

He said, “our traders saw everything. Hedge funds trying to protect their fees would automatically trigger millions of sell orders and that kept triggering sell orders. But now it’s done.”

I get it. I used to run a hedge fund. This is how it works.

I don’t know if it’s done. Everyone says the “market crashed”.

Guess what. The market is FLAT in the past 12 months. What crash? So it can go up or down from here.

But here’s what we know at the very least:

  1. It’s not about China!
  2. It’s not about the Federal Reserves Interest Rate!
  3. And it’s nothing like 2009!

I wish I had room for all 17 items. But if all you know are these three, avoid the newspapers, take a deep breath and relax.

The world is a hard place to live in.

People always say, “you’re the average of the 5 people you spend time with”.

But this is true also: “you’re the average of the five things you read”.

If all you do is read newspapers (and the major ones lie the most) then you will mis-informed and in a constant state of anxiety.

I know I was until I STOPPED reading them. Then I felt free.

And then I ate chocolate. And then I fell in love.

[Oh, and so Jeff, Mark, Adam, Mae, Mary, Emily, Tim, David, Dillon, Garin, Peter, Ksusha, Dominic:

Don’t kill me, here’s the link to the $5 offer where you get my book for free, the other 17 reasons, the text on angel investing, and all my back and forward issues, with a full money back guarantee.

http://bit.ly/1JBxYhu

Believe me, I don’t make anything on $5 and you can get your money back the second you download everything anyway. Or wait for September 1 when that 10,000 word letter goes out. Then get take your $5 back.

Go for it. (sorry Jeff. Please don’t be mad. This will help people). ]

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