Episode-822- Mike Gasior on The Current Economic Reality for Jan. 2012

Mike  Gasior has held a host of securities licenses and industry designations. He has authored ten textbooks on investments and the investment markets, and over 700,000 people worldwide read his monthly newsletter.

His breakthrough radio program “Big Money with Mike Gasior”, which aired worldwide on the VoiceAmerica Radio Network, was one the first shows ever to focus on the needs, concerns and issues faced by the world’s largest investors and Mike is a regular guest on the “Naked Short Club” show in London.

Mike is also a prepper and a good friend of the TSP Community.  Today he joins us to discuss…

  • What MF Global was really all about and how it might matter to you
  • Why people should really be mad at Wall Street other then simple “corporate greed”
  • What is high velocity trading and why should you care
  • Why people are now paying a premium for a “shorter cable” LITERALLY
  • Three movies you should see to better understand the current situation
  • Mike’s view on municipal defaults and where we disagree
  • The real danger we have right no is that we don’t know what’s next
  • Why prepping is the best solution in Mikes view right now

Additional Resources for Today’s Show

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25 Responses to Episode-822- Mike Gasior on The Current Economic Reality for Jan. 2012

  1. Mike, if you are reading this or Jack; I don’t see your Big Money Podcast on Prepardness Radio Network anymore. Are you still doing this or is it elsewhere?

    • Hey Brent, and thank you for noticing. I was never sure if there was much of an audience for that show. The answer is no….I stopped doing it. But Jack and I have discussed me perhaps making a contribution over here. We just haven’t figured out exactly what that would mean. I’d love to hear what you guys would like discussed though.

      Cheers!

      Mike

      • Mike, that was my Friday night staple there!
        When I first heard you and Jack speak on his podcast, I managed to find you there. I live in Canada, but the financial issues are still the same, since we occupy the same continent. I would like to hear more about how we got to where we are today, ie economic policies post WWII, since that is when it seemed to accelerate. Also issues as to what to consider doing with one’s financial assets vis-a-vis preservation of value , not necessarily where to invest. I am pretty self sufficient up here in PEI. Live in a log home, heat with wood, garden etc. So I like your perspective since you are in a somewhat similar situation. Plus the added bonus of your past experience in the financial industry

  2. Well Brent…you embarrass me with your shameless flattery.

    I just posted my first blog post in a long time about the declining credit quality of the industrialized “Western” economies at the same time the emerging countries are closing the gap.

    Most Americans know that we got downgraded last August by Standard & Poors, but many don’t know that Russia has been upgraded 3 times in the past 10 years while Italy has been downgraded 5 times.

    Or that the ratings agencies consider Portugal and Turkey the same with regard to risk. You can read the whole thing here:

    http://afs-seminars.com/blog/

    • Just listened to this episode, Jack, you have to get Mike on at least once a month. Mike, regarding the tractor, I have a Ford/New Holland (Model 1920) and am considering a PTO generator. They come in at about 15kw for 1,500 cdn up here used. I have a 7000 watt propane generator, and a smaller 1500 watt coleman sport. As well as 1.5kw of solar and six surrette s530 batteries and an outback VFX 2400 inverter/charger, so I am taking my cash and turning into hard assets that produce. Great show guys

  3. Good show. A quick comment regarding my recent refinance experience. We had a 30 year fixed with Wells Fargo. Have been paying extra each month for the past 5 years. Wells Fargo had a no-cost refinance deal – we went to a 15 year fixed (no change in payment thanks to the extra we have paid along the way). We did nothing other than fill out the required forms, have them notarized, and send them in – done deal. No re-appraisal, nothing. I suspect it was part of a pre-arranged deal to package mortgages though, as we made only one payment to Wells Fargo under the new terms before the mortgage was sold to Fannie May? I’ve had mortgages sold before, but never of this happening within a month of re-financing?

  4. great podcast … have any of you heard of CAFR, Comprehensive Annual Financial Report? or Walter Burien or Clint Richardson? apologize if you think this is spam. I just can’t get past Jack saying these Corporations are bankrupt when you look and listen to Burien and Richardson. it’s bloody interesting. :D

    Cheers

  5. Hey Jack you could make Mike and Steven Harris monthly or bi-weekly guests. I would be up for that.

  6. Great show,
    You think things are scary there, check out the situation in Hungary where I am, for scary. Oh well, I suppose it is a novelty living in a country with a ‘junk’ credit rating.
    Maybe a premonition of things that have to happen there as well. One major problem is that 75% of mortgages are in Swiss Francs, the Hungarian forint is going through the floor meaning people are really, really struggling to pay off their mortgages as well as having no savings at all.
    For me, it isn’t too bad at the moment as I don’t have a mortgage, have four years of firewood stacked, have a garden and all the things Jack talks about every day.
    Thanks for the cash is king tip, which is basically what I’m following – even though it is getting smaller every day and possibly not too safe even in a bank. Have set google alerts for ‘bank run’.
    Interesting times

  7. Mike,

    Great podcast, as usual. DH (the financial wiz in our house) is right on board with everything y’all talked about. How much better would our economy be if even 20% of the Sheeple listened to the advice and followed it? Keep on trucking, man!

  8. About the idea to let people with good credit refinance at a lower rate, govt needs to stay out. Libetarians shouldn’t be espousing govt intervention. We should be saying govt is the problem, getting govt out is the solution. Jack might be smarter then most, but he is not smarter then the free market. We don’t need govt to solve things, we need govt to stop making thins worse. People want to say, “if govt did this, things would be better”. Govt shouldnt be doing interfering.

    Jmo for what it’s worth.

    • as a fellow libertarian (and trying to stay ‘apolitical’)..

      the ‘proper place’ of government IMO is to protect the individual from predation by the more powerful, and to act as a caretaker for resources (natural and man made) shared by ‘we the people’.

      this sounds nice and simple, but even for a libertarian it gets messy in a hurry when you start getting practical about what ‘protecting the individual’ means.

      Specifically I’m talking about access to critical resources. (the example usually given is someone who ‘owns’ the only well in the middle of the desert..should he be able to charge whatever he wants (free market) for the water? even if it means people die of thirst?) In this case we’re talking about access to money or credit.

      The ‘powerful’ in this case (the Fed & Banks) have a near monopoly on money creation, at least in the volumes needed for mortgages. They are using the monopoly to prey upon those seeking or needing credit.

      There is no way for another player to ‘enter the market’ and introduce competition. That being the case, how are ‘market forces’ going to correct the problem?

      (if you have an answer.. I’d love to know!)

  9. I heard a commerical encouraging people to buy municipal bonds today.. it had the same ‘sound’ as the ‘cash for gold’ commercials.

    I laughed out loud.

    The whole pitch was ‘triple tax free’! Don’t you want tax free?!

    time to unload the garbage on the suckers..

  10. I just wanted to share a good interview all about MF Global. http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/01/04/ann-barnhardt/financial-house-of-cards

    This is an interview with Ann Barnhardt. She is very passionate about her view.

  11. This has been a terrific conversation.

    I’m going to suggest to Jack that he and I do a full show on the mechanics and details of just the municipal bond market. I think it would be very educational and enlightening.

    The reason I mention it is because there are LOTS of municipal bonds that are very likely excellent investments. You just need to know what you’re doing.

    Cheers!

    Mike Gasior

    • The comment abt the commercial wasn’t implying ‘all bonds are bad’.. just that buying anything from an infomercial, fm storage food, to gold/silver, to bonds.. without at least some extra due diligence.. isn’t terribly bright.

      That being said, municipal bonds still seem risky. You could argue that states won’t be ‘allowed’ to default on municipal bonds, or that city/county level bonds on critical infrastructure (water, power, sewer) would ultimately be paid.. but if a local government entity loses their state and federal tax money, they still have to choose to pay current expenses (police, fire, themselves ) vs long term debt.

      I would love to hear a program on this.. =)

  12. Very interesting about computer high speed trading ..

    I tend to think elimination of Glass-stiegel act in the 90’s and deregs that made credit default swaps legal are a very huge part of the problem ..

    Jack, how is it that they manage to keep discussion of the Federal Reserve out of the educational system ? Doesn’t that seem like a conspiracy or means of direct control ? Have you heard of Charlotte Iserbyt who’s father was in the Skull and Bones and she worked high up in the educational system ? She says she was able to connect the dots on these things and how the educational system is directly manipulated on many levels. She has various documents on her web site and had a book out at one time ..

  13. Would like regular dialogs between Jak and Mike.

  14. The discussion of fraud made me think of “Pump and Dump”(http://en.wikipedia.org/wiki/Pump_and_dump). Unfortunately Peter Schiff has been taking about Jonathan Lebed, who is now using the National Inflation Association to do the same thing he is mentioned for in the Wiki article.

  15. What is the 3 movies that Mike recommended for people to watch?

    Rook

  16. Hey Rook and sorry everyone, since I should have put up that list a while back.

    The three movies that everyone should watch that frames the financial crisis (and then afterward you will be ready to grab your pup-tent and head down to occupy Wall Street yourself) are:

    “Too Big to Fail” – This is an HBO movie with a great cast that is based on Adam Sorkins book that tells the inside story of when all hell was breaking lose. Bear Stearns had just failed and this movie picks up with Lehman Brothers and AIG. William Hurt plays Hank Paulson and Paul Giamatti plays Bernanke and there is much more.

    “Inside Job” – This movie won the Academy Award for best documentary two years ago. It’s a little left leaning, but facts are facts. For example, I learned from the movie that when Paulson was made Treasury Secretary, he was allowed to sell all his Goldman Sachs stock for a few hundred million dollars and not pay a dime of capital gains tax since the government required him to do it. Hmmmmm.

    “Margin Call” – A drama that is LOADED with stars, and although it’s fiction, it’s an EXTREMELY accurate representation of the inner workings of a big brokerage firm. Be warned…if the “F” word is offensive to you at all, you should skip the movie since it probably gets used 300 times, which is the only unrealistic part. Because in a real brokerage firm it would have likely been more like 600 time.

    Enjoy all.

    Cheers!

    Mike

  17. Question for Jack:
    I recently lost my house after losing my job in June 2011 and getting a new job at half my salary. The reason I could not get a modification was because I had a second mortgage. If the first modified, they would lose their lien position to the second mortgage company. You would think that Congress would have had the foresight to see this being a problem. Do you think this is the reason so few people were able to get modifications?

    Here’s another one:
    I worked for the same company for 13 years. The whole time that I worked there, I had a side business. Beginning in 08 my business went to hell. When I lost my job I filed for unemployment and was denied because I had this business. It did not matter that this business was providing me with zero dollars to live on. Unemployment insurance is insurance for which my employer pays the premium. The state of NY collected premiums on my behalf fr 13 years even though according to their rules people who are simultaneously employed and self employed will not be eligible for benefits. Insurance fraud?

    And then to rub salt into the wound, when I filed bankruptcy, the trustee ruled that since my business was not profitable, it was not a business. This allowed him to sell my business assets.

    The final blow was discovering that since I owned my vehicle outright, a beat up 06 Dodge Ram truck, in order to keep it I had to pay the difference between the value and the allowed exemption. Since I did not have a business, according to them, I need not need my vehicle.

    To illustrate how unfair this process can be, there was a couple who case was heard right before mine who purchased a brand new Lexus and Aztec, never made a payment, and 2 years later were able to keep their vehicles since they had no equity. All they had to do was start making payments on a modified loan and they could keep their nice new cars.

  18. Thought-provoking. I hope this dorsn’t sound rude but it seemed like the host talked over many of Mike’s comments … I understand there are technological constraints but I wish I had heard more from the guest.

    Will watch for next podcast.