John Ransom - Dow Drops, Erasing Year Gains
Posted: 3/11/2015 3:26:00 PM EST
The Dow Jones industrials dropped 337 points yesterday essentially erasing all the gaines that it made made this year. But I'm not going where you think I'm going with this sermon. Here's where I'm going with it: Who cares?
Markets don't go straight up nor do they go straight down. When we look at historic returns that 3% loss or 14% gain is never a linear progression. In fact as late as last July the stock market wiped out gains for the year by the end of the month. Yet still somehow the market managed to eke out a 13% gain for the year. The stock market is a 15 year proposition. If you're not willing to wait 15 years for that investment, you might want to either re-examine your expectations or re-examine your risk tolerance.

Catch more of the best money advice and monetary commentary by me daily 10am PT, 1pm ET at WealthEd.com


Ever wonder how politicians make their money in the stock markets? I can help you unlock that secret. Studies show that members of Congress and their staff enjoy HUGE benefits over average investors when it comes to the stock market.

Get your FREE report from me, John Ransom, on how to make money on what insiders know right here: http://www.FreeRansomReport.com


Michael Schaus - In Other News: Lois Lerner Has New Personal Hero: Hillary Clinton
Posted: 3/11/2015 12:24:00 PM EST

Here are some other highlights and headlines that I noticed over at Ransom Notes Radio:

Hillary Clinton tried to explain her decision to use a private email system by pointing out that a private system was simply more “convenient”. Because, really, why would anyone be expected to slightly inconvenience themselves in the name of national security?

(Breitbart)

There is now speculation that Hillary Clinton may have not only deleted many of her “personal” emails, but the hard drive itself might have been destroyed. Do you feel like Lois Lerner has a new personal hero?

(New York Times)

Russia says it has every right to deploy nuclear weapons to the Crimea peninsula. It looks like Hillary’s reset button has been converted to a launch button.

(Free Beacon)

A Judge has ordered a man to stop smoking cigarettes in his own house. With the exception of Hillary Clinton’s email server, there really isn’t any privacy left in this world.

(Fox 31)

The EPA is warning that coffee might soon be a thing of the past because of global warming. (They really will blame anything on global warming, won’t they?) I’m sure that somehow, this all George W. Bush’s fault.

(Washington Times)

A petition on the White House website is asking Obama to charge 47 Senators with treason for signing that open letter to Iran… Because charging nearly half of the US Senate with treason (for embarrassing the President) is clearly a move dedicated to protecting the American experiment. Right?

(Weasel Zippers)

Oh, and not that it matters, but John Kerry just mentioned that the negotiations with Iran are “not legally binding”. Aside from the fact that this is exactly what Tom Cotton’s “treasonous” letter explained, it also raises a pretty big follow-up question: “If the deal is not binding, then what’s the point?”

(Weasel Zippers)

John Ransom - Confidence Wanes in Recovery
Posted: 3/11/2015 12:23:00 PM EST

The Gallup organization said today that economic confidence in the country remains in negative territory for the third week in a row. 46% of those sampled said the economy was getting better well 50% set the economy was getting worse. The scores are the lowest in three months. And it continues to highlight the present political problems going on in Washington DC. Despite several months of headlines trumpeting strong job creation at the main street level most people have been left behind. After years of monetary policy substituting for fiscal policy who really is that much better off? While it's true that this isn't the worst time in history economically for the country, it certainly isn't great --as I think most Democrats and Republicans would agree.

Catch more of the best money advice and monetary commentary by me daily 10am PT, 1pm ET at WealthEd.com


Ever wonder how politicians make their money in the stock markets? I can help you unlock that secret. Studies show that members of Congress and their staff enjoy HUGE benefits over average investors when it comes to the stock market.

Get your FREE report from me, John Ransom, on how to make money on what insiders know right here: http://www.FreeRansomReport.com


John Ransom - Happy Birthday Bull Market
Posted: 3/10/2015 3:01:00 PM EST

Well happy birthday to you. 

Bull Market you turned six years old yesterday and your mom and I could not be prouder. 

Okay well truthfully we could be a little prouder. 

There was that trillion dollars stimulus package back in 2009 that really didn't do anything. 

Then of course you almost put solar out of business after getting all that money from the government that you wasted. 

Then there was that time the fed spent $4 trillion bond buybacks so you could continue going up. 

And then there's those low low interest rates you insist on having. 

But enough of that. Let's put all of that behind us Bull Market. 

All we ask is that you just keep growing up. Really.

Michael Schaus - In Other News: Dems Call GOP “Traitors” for Refusing to Wear “I Heart Iran” T-Shirts
Posted: 3/10/2015 12:30:00 PM EST

Here are some other highlights and headlines that I noticed over at Ransom Notes Radio:

Democrats are calling Republicans “traitors” after a group of Senate Republicans crafted a letter to Iran explaining that Obama does not have authority to make a “deal” with the Ayatollahs… Did they forget about Pelosi’s field trip to Syria in 2007?

(NBC News)

Harry Reid is even suggesting that Senate Republicans are “empowering” the Ayatollahs in Iran… Remind me again who’s trying to lift sanctions and give Iran a path to nuclear technology?

(The Hill)

Hillary Clinton decided it was about time to hold a press conference to answer questions regarding correspondence during her time as Secretary of State. Somehow, it just didn’t seem right to email the press a formal statement.

(Politico)

On second thought... Yes. Yes, President Obama did exchange emails with Hillary; but he didn’t really know the details of her account. I guess he just assumed ClintonEmail.com was the standard domain for the State Department.

(Washington Times)

Stupid global warming: Giant chunks of ice are washing ashore near Cape Cod. I don’t remember being warned about this in Al Gore’s documentary.

(CBS)

There’s a growing trend in the UK for parents to call in the police to discipline their children. Because, really, aren’t cops just a taxpayer funded replacement for parenting?

(The Times)

The White House is being forced back into the courtroom after a judge claims the Administration lied to him about their executive action on immigration. For example: They said it was Constitutional.

(Breitbart)

John Ransom - Average Refund from IRS: $3120
Posted: 3/10/2015 11:58:00 AM EST

$3120. That's the amount of the average refund so far issued by the IRS, according to Motley Fool. 

40 million American so far have filed returns with 83% of them getting refunds totaling about $125 billion. Which begs the question what will you do with that money? 


Ever wonder how politicians make their money in the stock markets? I can help you unlock that secret. Studies show that members of Congress and their staff enjoy HUGE benefits over average investors when it comes to the stock market. Get your FREE report from me, John Ransom, on how to make money on what insiders know right here: http://www.FreeRansomReport.com


If you have earned income of course it's not too early to consider putting it into some sort of a retirement plan for the 2015 tax season. If you have variable-rate debt it's not a bad idea to pay down some of that debt. You can also put money into a 529 plan.

Michael Schaus - In Other News: Nevada Blocks Gun Owning Couple from Adopting
Posted: 3/9/2015 12:34:00 PM EST

Here are some other highlights and headlines that I noticed over at Ransom Notes Radio:

The Congressional Budget Office is now saying that Obamacare premiums are about to see a sharp upward spike. Sure, the “Affordable Care Act” might cost you more money each year; but that’s a sacrifice Democrats are willing to have you make.

(Washington Times)

The advisor to the President of Iran has described his country as an "Empire”, and claimed that Baghdad is the true capital… Do you think this is a legitimate piece of John Kerry’s negotiations with Tehran?

(Weasel Zippers)

The ACLU has decided to defend the use of the name “Redskins” for Washington’s professional football team. How bad are things really getting when the ACLU starts looking like the conservative in an argument?

(Wall Street Journal)

A Nevada couple has been blocked from adopting a child because the couple have concealed carry permits. In Nevada, you can either be a foster parent or exercise your Second Amendment rights. But not both, apparently.

(Fox News)

A top selling study guide for the Advanced Placement high school course on European history lists the KKK and Clarence Thomas as examples of modern day Fascists. Of course, accuracy in high school curriculum isn’t really as important as making sure kids walk away hating Republicans.

(Daily Caller)

The San Francisco area is proposing a law that would compel the Catholic Archdiocese to change catholic-school curriculum to be more “inclusive” of gay marriage, homosexuality, and contraceptives. Because the 1st Amendment was clearly crafted in such a way that government could dictate church policy. Right?

(Fox News)

John Ransom - Oil Market Perspectives
Posted: 3/8/2015 12:01:00 AM EST

Below you will find a report on the oil patch from my friends at Lucia Capital Management. I am not an affiliated person with Lucia Capital Management or Lucia Securities LLC.

You can watch me daily on their show Bucket Strategy Investing, which helps you put your money into short, medium and long-term buckets to help you get from here through retirement.

After falling 60% from a peak of $108 per barrel in mid-June, the price of U.S. crude oil (West Texas Intermediate) reached a low of $44 per barrel and has been range bound between roughly $45 and $55 during the past few months. Oil companies, investors, and even members of the Organization of Petroleum Exporting Countries (OPEC) appear to be scrambling to determine whether this is an inflection point or just a stop on the way to the bottom. While we cannot predict the future, we are taking this opportunity to put the current situation in context and provide our perspective.

The two charts below tell a great deal about the current oil price environment. Production in the U.S. peaked at an annual average rate of 9.6 million barrels of oil per day in 1970 and had declined to 5.0 million barrels per day in 2008, just as the “shale revolution” was gaining traction. Through the application of horizontal drilling and fracture stimulation technology, new supplies of oil were accessed from unconventional reservoirs such as shale. As a result, the trend was reversed, and U.S. production increased at a significant pace during the past five years, surpassing 9.2 million barrels of oil per day in early 2015.

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The rapid growth in U.S. production outpaced global demand growth, causing a supply surplus of approximately 1.5 million barrels of oil per day by the end of 2014.1 While OPEC had historically balanced the market by increasing and decreasing supply to align with global demand, this time it decided not to act, and oil prices collapsed as a result. OPEC’s rationale, dictated by its leading producer, Saudi Arabia, appeared to be that cutting its production would only lead to further increases in U.S. supply and thus decrease the organization’s market share and profits.

We believe that the oil market will balance at a price that justifies enough investment in new supply to meet global demand. Given the low cost of production for OPEC and other large suppliers, such as Russia, we believe the price of oil in the near term will default to the marginal cost of the U.S. shale oil supply. In other words, the market will likely stabilize at the price that attracts enough U.S. shale oil investment to balance the market. While this concept is simple on the surface, there are a number of driving forces that make it difficult to predict oil prices.

In contrast to conventional oil production, horizontal shale wells are typically characterized by very high decline rates of approximately 75% during the first year of production. Thus, on the surface it would appear that the current supply glut could be resolved by a slowdown in drilling activity. The current surplus of approximately 1.5 million barrels of oil per day is relatively small compared to aggregate global production of 93 million barrels per day1.

Already we have seen a sharp drop in the number of rigs drilling oil wells in the U.S. The latest data from Baker Hughes, Inc. showed a decline of approximately 40% from the peak in October 2014, going from 1,609 to 986 deployed oil rigs, and the current oil rig count is the lowest it has been since 2011. However, the efficiency of the remaining active rigs is anticipated to increase as the rig count drops, resulting from an increase in the ratio of horizontal to vertical wells and a focus on only the most profitable opportunities.

A growing backlog of drilled but uncompleted wells adds to this complexity, as producers are increasingly delaying completions in hopes of higher oil prices and/or lower completion costs. At the end of 2014, there was a backlog of 750 uncompleted wells in North Dakota’s prolific Bakken Shale play.1 As such, operators in this play could cease drilling for months and continue to increase production by completing new wells that are on standby. Additionally, operators are increasingly devoting capital to re-fracking and squeezing more production out of existing wells as opposed to drilling new wells, a trend that is not captured by the rig count data since drilling rigs are not required to fracture stimulate wells.

Description: \\Wcam01\Desktops\atticus\Desktop\Picture1.png

As shown in the chart above, oil prices are volatile, and significant downturns are frequently met with upswings. Despite the improvements in efficiency and the expected decline in service costs, we do not believe this time to be any different. We believe that low prices may be the cure for low prices, as large oil companies have cut tens of billions of dollars from their capital budgets in recent months, threatening future supply as a result. Despite our expectation for a turnaround, we anticipate significant volatility for an extended period of time and would not be surprised to see oil prices drop further in the next few months as a result of continued oversupply and inadequate storage capacity.

Source: (1) Bloomberg

This material should not be considered an offer to buy or sell any security or the provision of specific investment advice. Opinions expressed here are those of Lucia Capital Management as of March 3, 2015; are subject to change; and may or may not come to pass. Past performance is no guarantee of future results.

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John Ransom - Analysts See $65 Oil
Posted: 3/6/2015 3:29:00 PM EST
First it was that oil would never go below $100. Then it was that oil would definitely hit $40 a barrel. And now analyst at UBS say the magic number is...$65-$70 a barrel. But I'll give them this they do have some reasoning behind their number. Their point is that oil production in the United States has a breakeven price of $60-$65 a barrel.

And since US production can better offset the production from OPEC countries than previously that the breakeven US price will better determine the overall price of oil in the market. But of course as we all know it makes little difference because oil prices and gas prices have nothing whatsoever to do with each other.

Catch more of the best money advice and monetary commentary by me daily 10am PT, 1pm ET at WealthEd.com

John Ransom - Zandi: Less Risk Than in Last 25-30 Years
Posted: 3/6/2015 12:27:00 PM EST
The Labor Department said that 295,000 jobs were created in February and unemployment has moved down to 5.5%. Job creation came in much better than anticipated. And economic conditions in general caused Mark Zandi, chief economist at Moody Analytics, to say: “While there are a lot of risks out there, it feels less risky than in the past 25 to 30 year. It feels really, really good out there.”

Now look, I often criticize economists for stupid predictions on the economy. But in this case I'll criticize Zandi for saying something just flat out dumb. He Is essentially saying that the country risk-wise is in better shape than at any time since 1986.

Remember that time when the Cold War ended and we had peace until 9/11 happened? It was probably a lot less risky then. We know economist are decorated predicting the future, and now we know at least one of them isn't great at history either.

Catch more of the best money advice and monetary commentary by me daily 10am PT, 1pm ET at WealthEd.com

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