The Court that rules the World

A parallel legal universe, open only to corporations and largely invisible to everyone else, helps executives convicted of crimes escape punishment.

 Imagine a private, global super court that empowers corporations to bend countries to their will. Say a nation tries to prosecute a corrupt CEO or ban dangerous pollution. Imagine that a company could turn to this super court and sue the whole country for daring to interfere with its profits, demanding hundreds of millions or even billions of dollars as retribution. Imagine that this court is so powerful that nations often must heed its rulings as if they came from their own supreme courts, with no meaningful way to appeal. That it operates unconstrained by precedent or any significant public oversight, often keeping its proceedings and sometimes even its decisions secret. That the people who decide its cases are largely elite Western corporate attorneys who have a vested interest in expanding the court’s authority because they profit from it directly, arguing cases one day and then sitting in judgment another. That some of them half-jokingly refer to themselves as “The Club” or “The Mafia.”

DYI Comments: That is exactly why these trade deals are kept so secret to further the aims of having global corporations tax free and for the top brass having diplomatic immunity from prosecution. Thank goodness the word is getting out - there is a possibility to put a stop to this non-sense.

DYI    

South Korea girds for housing glut

Developers, egged-on by interest rates at all-time lows, are building apartments at a record pace, one bright spot in an otherwise sluggish economy. 

But the home-building boom has fueled a surge in borrowing. South Korea’s household debt, already the highest among emerging markets, threatens to choke off consumer spending and has prompted the government to step in to prevent a damaging crash. 

In places like Yongin, the flood of new apartments also means resale prices could suffer.

Birth Rate 

Country	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
South Korea	1.72	1.72	1.72	1.56	1.56	1.26	1.27	1.28	1.2	1.21	1.22	1.23	1.23	1.24	1.25

DYI Comments:  South Korea is now hamstrung by two significant events: 

1.) A huge debt bubble that is about to burst and that in of itself will bring down the economy into a long term recession similar to the U.S.  

2.) A falloff of their birth rate.  Replacement is 2.1 children per women of child bearing age and as you can see from the chart above they are way below that number.  As their elderly pass on South Korea's population momentum will slow to a craw and if the birth rate remains below replacement their overall population will decline.

These two events is what happened to Japan.  A debt bubble popped and a population bust. Its so simple; less buyers and more properties available equals declining prices.  This is what is in store for South Korea as most demographers see no end in sight for their below birth rate.

Anyone who believes that the world will be massively overpopulated are not following the numbers. By the year 2070 or so the world's population will be decline.  Even central Africa populations birth rate despite high is moving downward.

DYI       

ELECTION 2016

DHS ELECTION TAKEOVER? AGENCY ITSELF WAS HACKED

As the Department of Homeland Security contemplates taking possibly unconstitutional power over the U.S. election system due to the threat of hackers, citizens should consider the fact that the agency itself was the victim of a major cyber intrusion that stole sensitive personal information of thousands of its employees, contends a former DHS officer. 

The fear, Haney points out, is that the DHS could overrule powers given to local and state governments to mange their own elections under Article 1, Section 4 of the U.S. Constitution, not to mention the powers afforded states in the 10th Amendment.

DYI Comments:  Want to stop hacking dead in its tracks?  The solution is simple "PAPER BALLOTS!"  Will tabulation of our elections take longer?  Yes it will.  A small price for great rewards as it is hack proof plus a complete audit trail.  Most Central European countries have gone back to paper ballots for exactly the reasons just mentioned.  Also from a constitutional basis it is another outrageous (among many) Federal power grabs.  The Fed's overreach needs to be beaten back not only will it increase our freedom but will allow our economy to grow without the American public dragging a Federal anchor of rules, regulations, and costs behind them.  If left unchecked and the Fed's "manage" our elections a few years down the road they will institute a vetting process for potential politicians.  At first it will be stated that it is to keep out the crooks - for our protection, of course - but in the end it will be an ideology test.  Only those who are pro federal government, big business, one world government types will make the cut.  Except for the one world types that is exactly what China is doing to Hong Kong.

What needs to take place is for Americans to demand paper ballots ending large scale voter fraud. Then we need Governors who have the political will to "kick the Feds out" even if they are cut off from Washington DC's money.  Once enough Governors do this it will become harder and harder for the Feds to justify their spending and taxation.  This will have a push down effect on the size and cost of the Federal government.

Our founding fathers knew that to maintain freedom you needed a decentralized government.  With the Fed's being the smallest in size, then the States a bit larger, then at the local level is where the real power would be.  At the local level the people have far greater access to their government.  In the smaller towns spur of the moment one on one conversations is almost a daily affair.

If you want your country back then put pressure on Governors to "kick the Fed's out" once that occurs push for more and more of the control at the local level.  This super decentralization makes it very hard to have tyranny just as our founding fathers knew all along.

DYI      

Record 94,708,000 Americans Not in Labor Force; Participation Rate Drops in May

By Susan Jones | June 3, 2016 | 8:49 AM EDT

(CNSNews.com) - A record 94,708,000 Americans were not in the labor force in May -- 664,000 more than in April -- and the labor force participation rate dropped two-tenths of a point to 62.6 percent, near its 38-year low, the Labor Department's Bureau of Labor Statistics reported on Friday. 

When President Obama took office in January 2009, 80,529,000 Americans were not participating in the labor force; since then, 14,179,000 Americans have left the workforce -- some of them retiring and some just quitting because they can't find work.

DYI Comments:  How long will the stock market remain elevated with this massive disconnect between valuations and the real economy is anyone's guess.  As I've stated many times before the Fed's have NOT repealed the business cycle.  When the next recession arrives stocks will come back down to earth by shedding 45% to 60% from peak to trough.  This will be a "run of the mill" decline due to valuation being stretched to the heavens.  Only to be out done by Roaring 20's market top in 1929 and The Great Insanity top in the year 2000!

Better values are ahead!

The Great Wait Continues...

DYI 

Venezuelan President Is Chased by Angry Protesters

By NICHOLAS CASEYSEPT. 3, 2016

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CARACAS, Venezuela — President Nicolás Maduro was chased at a routine political event by a crowd of angry protesters banging on pots and yelling that they were hungry, just days after thousands of Venezuelans took to the streets to call for his ouster, local news media reported on Saturday.

DYI Comments:  So much for the socialist utopia a country with oil reserves cannot even feed their own people.  Low oil prices are not the cause of their despair but total and complete mismanagement of the economy.  Large portions of the economy are owned by the government as exampled by their grocery stores.  No profit incentive ensures shortages and high prices.  Anyone who advocates for socialism has to be out of their mind.  

How many failed countries that follow the path of socialism does it take before this economic system is placed into the junkyard of failed ideas?

DYI        

Germany to tell people to stockpile food and water in case of attacks: FAS

For the first time since the end of the Cold War, the German government plans to tell citizens to stockpile food and water in case of an attack or catastrophe, the Frankfurter Allgemeine Sonntagszeitung newspaper reported on Sunday. 

Germany is currently on high alert after two Islamist attacks and a shooting rampage by a mentally unstable teenager last month. Berlin announced measures earlier this month to spend considerably more on its police and security forces and to create a special unit to counter cyber crime and terrorism. 

"The population will be obliged to hold an individual supply of food for ten days," the newspaper quoted the government's "Concept for Civil Defence" - which has been prepared by the Interior Ministry - as saying.

Do Newly Built Skyscrapers Signal The Top of the Stock Market?

DYI

Global Recession? The Canadian Economy Shrinks At The Fastest Pace Since The Last Financial Crisis

 By Michael Snyder, on August 31st, 2016

Things have not been this bad for the Canadian economy since the last global recession.  During the second quarter of 2016, Canada’s GDP contracted at a 1.6 percent annualized rate.  That was the worst number in seven years, and it was even worse than most analysts were projecting.  This comes at a time when bad news is pouring in from all corners of the global economy.  While things in the United States are still relatively stable for the moment, the same cannot be said for much of the rest of the planet.  Canada in particular has been hit very hard by the collapse in oil prices, and the massive wildfire in northern Alberta back in May certainly did not help things.  

For many years, high oil prices and booming exports enabled the Canadian economy to significantly outperform the U.S. economy.  

But now conditions have changed dramatically, and all of the economic bubbles up in Canada are starting to burst.  This includes the housing bubble, 

as we have seen home sales in the hottest markets such as Vancouver drop through the floor late in the summer.  In fact, it is being reported that home sales during the first two weeks of August in British Columbia were down a whopping 51 percent on a year over year basis. 

Do you remember the housing bubble in the U.S. that helped fuel the last financial crisis?  Well, a very similar bubble is now bursting up in Canada, and some investors have positioned themselves to make a tremendous amount of money when the whole thing comes violently crashing down. 

The truth is that the global debt bubble is at an all-time high, the banks are being more reckless and are more vulnerable than ever before, and troubling economic numbers continue to pour in from all over the planet. 

The stage is certainly set for the next major global economic crisis, and it isn’t going to take much to push the world over the edge.

DYI Comments:  Is Canada the canary in the coal mine?  Very well could be as this recovery -as much as it's been - has been in effect since March of 2009.  Very long in the tooth as the expression goes!  The business cycle has not been repealed I can assure you of that.  With over valued markets and an economy dancing on the head of a pin between slow growth and recession our model portfolio remains very defensive and rightfully so.  Better values are ahead.

  Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 9/1/16

Active Allocation Bands (excluding cash) 0% to 60%

85% - Cash -Short Term Bond Index - VBIRX

15% -Gold- Precious Metals & Mining - VGPMX

 0% -Lt. Bonds- Long Term Bond Index - VBLTX

 0% -Stocks- Total Stock Market Index - VTSAX

[See Disclaimer]

DYI

Pope Francis: Global Warming a ‘Sin,’ Man Can Atone by Recycling and ‘Car-Pooling’

DYI Comments:  Sorry Pope - no can do - global warming is caused by variations in sun spot activity.  Our household recycles but does not car-pool not to atone for any sins it is good for reducing our land fill needs.

This global cooling - warming - climate change has been going on since the 1970's all for the attempt to gin up a world tax base for the one world government types.  Apparently the Pope believes if he goes along with the scam then the Catholic Church will receive some of the largess.  Simple as that!

DYI  

% Allocation Formula

9-1-16
Updated Monthly

% Allocation = 100 – [100 x (Current PE10 – Avg. PE10 / 2)]  /  (Avg.PE10 x 2 – Avg. PE10 / 2)

Current PE10.....26.89

Avg. PE10.........16.69

% Stock Allocation 26% 

Logic behind this approach:

--As the stock market becomes more expensive, a conservative investor's stock allocation should go down. The rationale recognizes the reduced expected future returns for stocks, and the increasing risk. 

--The formula acknowledges the increased likelihood of the market falling from current levels based on historical valuation levels and regression to the median, rather than from volatility. Many agree this is the key to value investing.  

Please note there is controversy regarding the divisor (Avg. PE10).  The average since 1881 as reported by Multpl.com is 16.67.  However, Larry Swedroe and others believe that using a revised Shiller P/E mean of 19.6 , the number since 1960 ( a 53-year period), reflects more modern accounting procedures.

DYI adheres to the long view where over time the legacy (prior 1959) values will be absorbed into the average.  Also it can be said with just as much vigor the last 20 years corporate America has been noted for accounting irregularities.  So....If you use the higher or lower number, or average them, you will be within the guide posts of value.      

  

DYI

This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

The Formula.

A value based allocation strategy

February 19, 2010 by John Kingham

Margin of Safety!

Central Concept of Investment for the purchase of Common Stocks.

"The danger to investors lies in concentrating their purchases in the upper levels of the market..."

Stocks compared to bonds:

Earnings Yield Coverage Ratio - [EYC Ratio]

EYC Ratio = [ (1/PE10) x 100] x 1.1] / Bond Rate

1.75 plus: Safe for large lump sums & DCA

1.30 plus: Safe for DCA

1.29 or less: Mid-Point - Hold stocks and purchase bonds.

1.00 or less: Sell stocks - rebalance portfolio - Re-think stock/bond allocation.

Current EYC Ratio: 1.24

As of 9-1-16
Updated Monthly

PE10 as report by Multpl.com

Bond Rate is the rate as reported by

Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX)

DCA is Dollar Cost Averaging.
Lump Sum any amount greater than yearly salary.

PE10  .........26.89
Bond Rate...3.31%

Over a ten-year period the typical excess of stock earnings power over bond interest may aggregate 4/3 of the price paid. This figure is sufficient to provide a very real margin of safety--which, under favorable conditions, will prevent or minimize a loss......If the purchases are made at the average level of the market over a span of years, the prices paid should carry with them assurance of an adequate margin of safety.  The danger to investors lies in concentrating their purchases in the upper levels of the market.....

Common Sense Investing:
The Papers of Benjamin Graham
Benjamin Graham

9-1-16
Updated Monthly

Secular Market Top - Since January 2000

+  60.0% Dow       

+164.6% Transports 

+135.3% Utilities

+47.8%  S&P 500

+28.1%  Nasdaq

+65.6%  30yr Treasury Bond

+352.8% Gold

  +74.6% Oil
  +60.4% Swiss Franc's

    

From High to Low

+352.8% Gold

+164.6% Transports

+135.3% Utilities

+  74.6% Oil
+  65.6% 30yr Treasury Bond

+  60.4% Swiss Franc's 

+  60.0%  Dow
+  47.8% S&P 500

+  28.1% Nasdaq

It is easily seen that in the year 2000 the Nasdaq was horribly overvalued and gold was on the give away table, such lopsided returns 17 years later!

Also of interest the stodgy 30 year Treasury bond has outperformed the Dow, S&P 500, and Nasdaq since the year 2000.  The modern portfolio crowd back in the year 2000 would find this a very low probability outcome.  Value player's, due to extreme valuations, would have recognized this as the most likely outcome (close to a no-brainer!).