Tag Archives: Stock Market

THE WEEK

Donald and Ted

There’s a lot of discussion about whether Senator Ted Cruz can run for president, due to the fact that he was born in Canada.   A few years ago, a similar concern was expressed about Barack Obama, with many convinced he was born in Kenya and therefore unqualified to run for president.

FWIW, when I went to the US Embassy in Ghana to register the births of our three children, all born outside of the United States between 1976 and 1981, I was informed that they had all the rights of any child born on American soil, “up to and including running for President of the United States.”

They were considered “natural born citizens” because their mother is an American citizen.

On this basis, President Obama, Senator Cruz and Senator John McCain all qualify even though they were born overseas, or maybe born overseas in the case of the current president.

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“In 2013 alone, 117,423 migrants from Muslim-majority countries were permanently resettled within the United States— having been given lawful permanent resident status.   Additionally in 2013, the United States voluntarily admitted an extra 122,921 temporary migrants from Muslim countries as foreign students and foreign workers as well as 39,932 refugees and asylees from Muslim countries.

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Thus, twelve years after the September 11th hijackers were invited into the country on temporary visas, the US decided to admit 280,276 migrants from Muslim countries within a single fiscal year.” – Breitbart, Julia Haha, September 15th, 2015.

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President Obama took pains in his State of the Union speech Tuesday to warn Americans not to exaggerate the threat from terrorists,” notes a Journal editorial.   But after a spate of attacks from Paris to San Bernardino to Jakarta, what “Americans want from their next President is someone who will give them fewer reasons to fear being murdered while getting coffee.”   (WSJ, Morning Editorial Report, James Freeman, “Hillary and Ted’s Big Problem”)

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In Europe, reaction to the massive influx of refugees is increasing as people experience the full significance.   One thousand young men from North Africa and the Middle East congregated in the main public area around Cologne Cathedral on New Years Eve where dozens of German women were groped and sexually assaulted. Chancellor Merkel has condemned what happened and promised those convicted would be sent to their country of origin.   The anti-Muslim PEGIDA movement has been holding rallies and now has a British branch, committed to ending the growing Islamization of the West.

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Meanwhile, the 70-year-old ban on Hitler’s Mein Kampf (My Struggle) has been lifted in Germany and a new annotated version of the book has become available.  Sales have been greater than expected.   The new publication contains the full text of the original, with scholarly notes commenting on what was written.   It is hoped that this will turn people against right-wing ideas, but the law of unintended consequences may lead to a different outcome.

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Former British Prime Minister Tony Blair has called for a European Army, adding his voice in support of a development that is already taking place, with more European countries cooperating on defense.

The issue of Europe is uppermost on the minds of many in Britain at this time, with a referendum on future membership of the EU set for later this year.   Pro-EU politicians are trying to scare people by claiming that the EU has prevented conflict in Europe in recent decades. Fourteen leading British academics and historians have issued a statement saying that it is, in fact, NATO that has prevented major conflict in Europe since World War II.   This debate could intensify.   Many EU members are also members of NATO, which includes the US and Canada. But, if the EU successfully puts together its own powerful military force, the two organizations may go their separate ways.

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The British parliament is debating today, Monday, a petition signed by well over half a million people to ban Donald Trump from visiting the United Kingdom following his anti-Islamic comments.   A second pro-Trump petition has been signed by fewer people.   It seems like the Donald is dividing the UK as much as the US.   If the ban is approved by Members of the British Parliament, what will happen to the western alliance should he become president?

More immediately, what will happen to the $1 billion investment he promised Scotland?

Surprisingly, Piers Morgan came out in support of Mr. Trump on a popular British radio program.   The audience did not applaud.

The unanswered question here is why so many people on both sides of the Atlantic are determined to see a lot more Muslim immigrants arriving on their shores.   Their thinking is totally different from that of previous generations.

It’s going to be difficult to overcome political correctness on both sides of the Atlantic!

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Talking of the Atlantic, notably absent from the ocean right now are cargo ships – a sure sign the global economy is slowing.   For centuries, there have been ships crossing the ocean every single day. But right now there’s a lull.   Another sure sign of global inactivity is the fall in the oil price.   The price of oil is determined by supply and demand, as is everything else.   There’s more oil available now thanks to fracking and, from today, the lifting of sanctions on Iran. But there’s also less demand, with China’s economy weakening by the day and a deteriorating standard of living faced by most Americans, the world’s biggest consumers.

The head of the Royal Bank of Scotland warned all customers last week to get out of the Stock Market.   His warning sounded extreme, but what if he’s right?   We should know this week!

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Just remember, with all the uncertainty in global markets and in the Middle East, that Christians should not worry unduly about what’s going on. 34 Therefore do not worry about tomorrow, for tomorrow will worry about its own things.  Sufficient for the day is its own trouble.”  (Matthew 6:34)   The previous verse reminds us of where our primary focus should be at all times: “But seek first the Kingdom of God and His righteousness.”

 

 

 

 

 

 

 

 

 

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SPREADING PROBLEMS

stock-market-down

So much is happening across the globe right now, it’s difficult to know where to start.

It’s Monday morning and the world news is dominated by further falls on stock markets across Asia and Europe.   China’s economy is heading south fast and is dragging other countries down with it.   As the country is the second biggest single economy in the world, it’s not surprising.

It’s not that long ago that China was a third world backwater.   Then, the communist dictatorship allowed free market reforms that led to an incredibly fast growth rate.   Too fast.   And suspiciously fast – could the numbers be trusted?   Now, we know the truth – the reality is not what we thought it was.   Millions of Chinese people are losing their life savings and are naturally angry about it.   If this continues, the Chinese people may conclude the ruling Communist party has “lost the mandate of heaven,” a precursor to significant change.

But change could also come elsewhere as a result of what’s going on.

The average American lost 6% of his retirement fund towards the end of last week.   6% isn’t too bad.   But if this fall continues, people will get more angry and frustrated.   It can only help Donald Trump’s presidential hopes.

Note the following from today’s The Daily Skimm:

“Last week, after some bad economic data from China, global stock markets completely freaked out.   US markets ended up with their worst losses in four years.    And today isn’t looking any better. China’s markets opened even weaker than yesterday, which has triggered a global domino effect.   Think:   Asian and European markets taking tumbles and oil prices way down.

“Right now, the ups and downs of global markets are hinging on two of the least transparent things ever:   the Chinese government and the Federal Reserve.”

It’s time to worry!

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It’s 8.20 AM Eastern time. I just received a news alert from the Wall Street Journal. The headline is: GLOBAL MARKET ROUT CONTINUES.   Stock markets continue to fall around the world.

It’s a good reminder that we should not put our faith in this world and particularly in this world’s money, which is, frankly, worthless paper.

In Matthew 6:19-20 Jesus Christ said the following:

19:  Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal:

20:  But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal:

 

Our retirement funds are certainly set to take a big hit, though how big remains to be seen.   Christians should take encouragement from Christ’s words and not worry as we go through this market “correction.”

It’s now 9.45, the New York Stock Exchange opened a few minutes ago, and we seem to be witnessing a big crash.   The stock exchange is down over 1,000 points, heading rapidly toward a “correction,” usually defined as a drop of 10% or more.   The dollar is also falling against other currencies.   Commentators are saying that this crash started with China, but blame should also go to the high taxes and anti-business policies of the current US Administration.   One lady said:  “They’ve killed the economy!”   Meanwhile, China is using the state pension fund to buy stocks in a hope of keeping up prices, an unwise move that could wipe out pensions for decades.

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It’s really inspiring to hear that three young Americans on vacation in Europe helped save a train full of passengers from an imminent terrorist attack.   Today’s news shows them receiving the “Legion d’Honneur” from France’s President Hollande.

But, you will notice there’s another guy standing with them, an older man who was also part of the rescue.   The much-praised trio was actually a quartet.  The other man was from England.   It would be nice if just one American network would acknowledge his role along with the three Americans.   All four were very courageous and may have saved dozens of lives!

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In this age of mass murders, it’s interesting to note that America, with less than 5% of the world’s people, accounts for almost one third of all mass murders, defined as incidents where four or more people are killed.

OBSERVATIONS II

Puerto rican debt

President Obama has called for urgent action on climate change, to save the environment for our children and grandchildren.

We are not likely to hear him call for massive reductions in government spending so that our children and grandchildren do not have to pay back the $18 trillion debt the last two generations have accumulated.

This problem is arguably more urgent than climate change.

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We’ve been hearing a lot about Greece recently.  The country has some serious financial problems.  Now Puerto Rico is in default.

“Puerto Rico’s outstanding debt of $72 billion is far bigger than Detroit’s $20 billion bankruptcy two years ago but a fraction of Greece’s $350 billion in obligations.  But unlike Detroit, there’s no law allowing Puerto Rico to declare bankruptcy…..  ’There’s no big daddy to rescue Puerto Rico,’ says Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics.”   (“Puerto Rico defaults on $72bn debt”, USA Today, Tuesday.)

As everyone with a credit card knows, eventually you have to pay the balance.

It’s no different with countries.

How are we, or our grandchildren going to pay off $18 trillion of national debt?   How long before it’s $20 trillion?   Will that be the psychological barrier that prompts the rest of the world to say “Enough!”?

What’s happening in Greece could also happen here.

In Athens, the Stock Market reopened yesterday after a five-week shutdown due to the financial crisis.   Shares fell dramatically, with some investors losing 25% in one day.   Shares of the Greek National Bank, once trading as high as $27.50, dropped to $0.09 Monday.

The general feeling is that the worst is yet to come.

It could also spread to other countries with a heavy debt load.

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Our economic woes are certainly increasing.  One reason is the drought, which is severely affecting some parts of the country and has been for four years.   This has led to many of the uncontrolled fires we are witnessing on the nightly news.

The drought stricken land reminds me of God’s warning to the ancient Israelites, that if they did not obey Him, there would be some serious consequences.

One of those consequences would be drought.   Note:  Deuteronomy 28:23 – “The skies above will be as unyielding as bronze, and the earth beneath will be as hard as iron.”  (New Living Translation)

Is God trying to tell us something?

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I haven’t been able to post any articles for a few days.  This is because all eight grandchildren were staying with us last week.  The four oldest, all girls, are aged 8 to 10; the four youngest, all boys, 2 & 3.   Needless to say, I spent the week pre-occupied with little time to think, let alone write.

But it was fun having them all and we’re looking forward to the next time — over the Labor Day weekend.   Family get-togethers are so very important!

 

 

 

FINANCIAL CHAOS AROUND THE WORLD

Euro crisis

Wednesday was quite a day on financial markets around the globe.

China’s stock market continued to lose considerable value, down about a third in three weeks.   Uncertainty over the future of Greece within the euro rocked European stock exchanges. And a technical glitch caused problems on the New York Stork Exchange, the world’s biggest.

The latter was resolved before the closing bell.   Greece should be resolved by the weekend.   China, the number two economic power, poses the greatest threat to the world’s economy.   There are increasing fears that the Chinese stock markets are one big giant ponzi scheme, with nothing tangible to support them.

Late Thursday Greece handed over proposals to its European partners that will, hopefully, end the crisis affecting the beleaguered country.

Greece was a member of the euro from the very beginning, using the new European banknotes and coinage from day one on January 1st, 2002.   Today, the euro is used by nineteen European countries. Euro notes are used daily by more people than the US dollar.  The two currencies are the two most important currencies in the world and are used as payment for most international trading.

When Greece joined the euro, it was suddenly able to borrow vast amounts of money, which it did. It was not all used wisely.   Following the crash of 2008, the country soon found itself unable to repay its loans. The dream currency had become a nightmare for the Greek people. Austerity was forced on the country by European bankers, making life very difficult for the average citizen.   Austerity led the country into a downward spiral, which has recently been speeding up.

In January, the left-wing Syriza party won the election, promising an end to austerity.    However, European bankers, anxious to get their money back, want to impose greater austerity as a condition for offering Greece more help.   Without help, Greece will not be able to stay in the euro.

Without a doubt, Greek governments have been reckless.   Government employees can retire at 48 on generous pensions. Corruption is rife, as also is tax avoidance.

Germany is owed 68 billion euros by Greece, France 65 billion (add 10% to get the US dollar equivalent).   Other countries have loaned lesser amounts.   Total Greek debt amounts to 323 billion euros.   Greece is asking for a further bailout of 53.5 billion.

Although there is much talk of the Greek crisis, in a sense this is not about Greece, so much as Germany.   Germany’s conservative government is taking a hard line, refusing to cancel debt or extend further loans.   The Germans want their money back, on time.   Germany’s stance is setting a precedent that will no doubt be repeated if any other country in the eurozone gets into trouble.   Many have pointed out that when Germany was suffering economically after World War II, European finance ministers, including the Greek finance minister, generously cut Germany’s debt by 50%.   If Germany would reciprocate now, Greece would be fine.

The Greek people voted in a referendum a few days ago, rejecting the austerity demands placed on them by Germany and others. However, they still want to remain in the eurozone, which is an apparent contradiction.   If they leave the eurozone, they could restore their former currency, the drachma, but this would cut them off from many of the benefits of the eurozone.   Business loans and mortgages in euros would have to be paid back in ever depreciating drachmas, leading to many foreclosures.  Importers would have to pay upfront in euros, which may be hard to get if Greece leaves the eurozone.

Nobody wants a “Grexit” (a Greek exit from the euro), but it may not be possible to avoid it if the Greeks are unwilling to make the necessary structural changes to keep them in the euro.

This crisis is not the only crisis facing Europe at this time.   The continent is having to work through a number of challenges all at once.

The migrant crisis is the second biggest issue confronting the European Union.   So many people are fleeing from the Middle East and Africa into Europe that social cohesion is becoming a serious issue.   One consequence of this massive movement of people is the rise of right-wing parties opposed to immigration.

Ukraine is a third challenge for Europe.   Russia’s invasion of parts of Ukraine threatens the peace of Europe.

The possibility of Britain leaving the EU comes in at number four.

There’s even a fifth challenge, and that’s the relationship between European countries and the United States.   France and Germany are both upset over the American NSA spying on them and their leaders, even though it’s quite likely they are doing the same to America.

Depending on how each of these issues is resolved, Europe could be very different in the near future.

AFTER THE VOTE

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The pollsters, the pundits and the commentators all got it wrong!

The British election was not a close call.

All the experts predicted the need for a coalition government, that neither the Conservatives nor Labour would get enough seats in parliament to form a government without the help of at least one other party.   There were warnings of a “hung parliament” and a “constitutional crisis.”   Even the Queen left town, advised that her services would not be needed for a few days, that nobody would be ready to accept her appointment as prime minister.

But the Conservatives easily won.

Consequently, three rival party leaders all resigned within the same hour, an historic first.

While David Cameron is pleased with the result, Nicola Sturgeon is likely more pleased.   Her Scottish National Party won 56 of Scotland’s 59 seats.   Independence for Scotland is back on the table.   56 out of 59 does not mean that the majority of Scots want independence.   What it means is that the SNP candidate in each constituency got more votes than anybody else.   This will not, however, deter the SNP from taking the opportunity to bolt as soon as it presents itself.

Labour was the big loser, losing big in Scotland, where it previously held most seats.   Ed Miliband, Labour leader, said his party faced “a surge of nationalism.”

One newspaper described it as “an electoral tsunami” (Independent).   Of note, Mhairi Black defeated a Labour heavyweight and became, at age 20, the youngest Member of Parliament since 1667.

In fact, the single most significant development in the election was Scottish nationalism.

English nationalism was also evident.   Although the United Kingdom Independence Party (UKIP) only won one seat in the new parliament, they received 13% of the popular vote.   That means that more than one in eight voters wants the UK to leave the European Union.   That’s not all – the Conservatives are promising a referendum on the issue.   Many of their supporters also want to exit the Union.

Nick Clegg, outgoing leader of the Liberal Democrats, summed up this rising tide of nationalism by saying, “Fear and grievance have won.”

The Stock Market soared at the news that the Conservatives are back in power and, this time, without the need of support from the Liberal Democrats.   The Conservative – Lib Dem Coalition of the last five years took a near bankrupt economy, turned it around and made it the fastest growing major western economy.   The surge in support for David Cameron’s Conservative Party likely came from voters who didn’t want to risk a return to the economic disaster of the post-2008 crash.