| Saturday, June 1st, 2013 | | | | | | 30,000 Tweets Can't Be Wrong | | | - Huffing bubbles and other market euphoria...
- From bank profits to Fed policy... This week's reckoning ran the gamut...
- Plus, a clarification on our New Trade of the Decade, and plenty more...
| | | | | | | For some investors, crime pays extremely well?
Thanks to Shannon A. Wren, a Florida drag racer with a history of alleged amphetamine use...
Who brokered the sale of more than $15.8 million in computer parts to the U.S. government and U.S. companies...
And thanks to Colin McCash, age 31, and his gang of thieves who robbed two Loomis security guards and mercilessly shot one of the guards as he prepared to refill an ATM...
Fast-acting investors could soon see gains of $13,233% or more!
Which also means they could be drinking Champagne and eating Beluga caviar every night for the remainder of their lives.
Want to join them?
Click here to find out how. | | | | | | Peter Coyne, turning to the twittersphere for some answers...
 | | Peter Coyne | Not a bad week. The markets compensated for a restful Memorial Day with a hoppin' Tuesday through Friday.
Jonas Elmerraji, editor of Storm Signals, offered his opinion of the rally in the broader markets so far this year:
"This broad-based stock rally has been impressive in 2013 -- as I write, the S&P 500 index is up 15% year to date," said Jonas. "That's almost as good as the rally in small stocks over the same period."
Naturally, some people will speculate on whether such rallies are elements of that oft-used "b-word." It didn't take long for us to stumble on this quote:
"There's been a lot of talk recently about a bubble appearing within equities due to the fact the markets are pushing multiyear highs." wrote Paul Hawtin at MarketWatch.
We place ourselves in that cohort. Not because of dogma, but because of a bubbly quality in the air. In fact, there seem to be more people in that cohort than we figured.
For what it's worth, Hawtin put together an algorithm that suggests that other people smell a bubble too. It tracked the number of times people on Twitter posted finance-related tweets with the word "bubble."
The numbers are eye-catching from any angle.
Since November 2012, the number of tweets related to financial bubbles has spiked more than 17,000%...to just under 30,000 tweets this past month.
Heh. Maybe there's a bubble in bubble-related tweets. But truth be told, we can't really make heads or tails of the data.
As Hawtin explains, "The question is are these people just tweeting about 'bubble' rumors they have picked up from the media or do they genuinely have concerns about an overheated equity market?"
We don't have a good answer for that... but the broader point is that bubbles are on people's mind. It begs the larger question: Should you chance it?
"This is the question all traders and investment managers want the answer to," Hawtin muses. "Bubbles are great trading opportunities; however, they can be dangerous."
It's like Sir Isaac Newton said: "I can calculate the movement of the stars, but not the madness of men."
Why chance it?
[Ed. Note: If you already think trading a bubble is a dubious proposition, you might want to pivot to planning for the aftermath of what we call the "mother of all financial bubbles." It's not a pretty picture -- 911 calls go unanswered, police patrols get cut back, fire departments are strained, etc. Sure, there are more pleasant things to think of... but they don't sell insurance once you need it. Click here to watch Daily Reckoning co-founder Bill Bonner explain the details.]
This weekend, we're in Nevada, the Silver State. Ironically, we're visiting a gold mine site in Relief Canyon with our own resource gurus Byron King and Matt Insley. On Monday, we'll come back with a full report of the happenings.
It was a short week due to the Memorial Day holiday last Monday. As such, you'll find the top four essays of the week listed below, instead of our usual five.
This week, we covered, among other things, the profitability of the banking industry, unsustainable Fed monetary policy and the potential train wreck for American retirement.
Beyond, we return with our new-and-improved Daily Reckoning mailbag. As you'll notice it's starting to show signs of life. Be sure to check it out. And if you've got something you'd like share with us, feel free to drop us a line, right here: dr@dailyreckoning.com | | | | | | | The Embarrassing FACT We Found on Page 210 of the White House Budget...
On Page 210 of Obama's latest budget, we found a fact that should embarrass... or enrage... every single American. It doesn't matter if you're a Republican or a Democrat.
What exactly did we find?
Click here to find out. | | | | | | This Week in the Daily Reckoning...
| | | How to Avoid Part-Time Retirement
By Dennis Miller
The lessons of 2008 are still in the back of our minds. But the Federal Reserve has made it clear that interest rates are going to stay low, so we have to learn to manage the risk to our portfolios as we invest in the market.
Complex Economic Machinery
By Bill Bonner
Unlike a machine, an economy was neither designed by anyone nor built in a factory. There are no plans... no owner's manual. Not made by man... it cannot be repaired by man. But let's look at why this is so.
Banking Profits in a Beaten-Down Market
By Chris Mayer
Ninety percent of all banks were profitable in 2012. And even in the gloomy times of 2008 and 2009, 77% and 70% of all banks still managed profits. A little application of the stock picker's art and you can go far in this industry.
The Brittle Bones of Ben Bernanke
By Dan Amoss
The ultimate essence of fiscal and monetary stimulus amounts to borrowing economic activity from the future. As the future arrives, so does an economic slump. In the slump, many will call for another injection of stimulus. | | | | | | | How to Defend Yourself Against Obama's Fiscal Cliff
With deficits running wild, money printing off the charts and the prices of food, energy and precious metals just starting to rise, there's NEVER been a more important time to read Dr. Ron Paul's "Lost" Gold Bible.
You can get your copy of this "Lost" Gold Bible right now for FREE by following this one simple step...
Click here to find out what it is. | | | | | | The Daily Reckoning's Mailbag...
| | |  | We begin today's mailbag with a question about Bill Bonner's newest "Trade of the Decade":
"Huh? I'm pretty sure that your 'Trade of the Decade' was to buy Japanese stocks and sell USA bonds! Did I miss something?"
The DR: First off, we apologize for the confusion. Longtime readers will note that back in January 2010, when Bill offered the first iteration of his "New Trade of the Decade," he did indeed say to "Sell U.S. Treasury debt/buy Japanese stocks."
But just a few short months later, in May of that same year, he offered what he called "An Even Better Trade of the Decade," wherein he tweaks the short side of the trade a little bit, suggesting instead that you short Japanese bonds, rather than U.S. bonds. And with Japan's recent promise to nearly double its monetary base by the end of next year, that call seems oddly prescient.
All in, we don't trust the security of either country's debt. So you might do well to keep an eye on both of those short options. That said, we apologize again for any confusion.
Another reader wrote in regarding the U.S.' unsustainable QE debacle:
"I think it has become clear to everyone paying attention that the rising stock market is 100% dependent on continuing Fed QE, and when/if they slow down or stop QE, the stock market is going to tank. It might just be a 10-20% sell-off, or it could be a 30-50% or more crash.
"In any case, it appears to me that the Fed is now beginning to talk about the possibility of 'tapering' QE, perhaps in order to gauge the response, in which case it has not been promising. In any case, it seems exceedingly unlikely to me that they will taper, reduce, stop or any other synonym their current QE program in 2014, at least prior to the elections. Causing a stock market crash in the months prior to an election is seen as unduly political, which they try very hard to avoid.
"I think that by now the Fed fully realizes that they have painted themselves into a corner, that QE to infinity is not viable, but that when it stops, or even slows, the market will tank and they will be blamed, so now they are looking for the best way out. My guess is that even if they are lucky and skillful, the result is going to be messy and painful."
The DR: Our sentiments exactly. We've been preparing. You should too... just in case.
[Ed. Note: Your responses are starting to roll in. Still, we're not just shooting the breeze in these pages. We're talking about your financial well-being -- and we want to get your feedback, positive or negative. So what's on your mind? Feel free to send thoughts, comments, complaints, praise, hyperbole and the like to dr@dailyreckoning.com] | | | | | | BE SURE TO ADD dr@dailyreckoning.com to your address book.
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