Stupidbowl I:
The very first Stupidbowl was held on DATE 0011 ND, otherwise known as New Years Day. World Wide Coverage was broadcast by CNN who paid $16 Trillion (the equivalent of our National Debt) for the exclusive rights. Pre-coverage was held during the day with the John Madden of Business (Ali Veshi) slamming Congress for being incredibly stupid. Announcer Anderson Cooper discussed strategy with top analysts Ali Madden, Dana Bash, and Wolf Blitzer prior to the game, and interviewed some of the “key” players. A new and exciting scoreboard was installed just days before by Jerry Jones, the Cowboys Owner, General Manager, and number one “Sports Idiot”. It was a “Texas” sized scoreboard that covered 80% of the screen.

The game began slowly as Congress was not well prepared for the game of their lives. Due to the Christmas holiday, they didn’t have much time to review past game film as usual. About 7:15 into the second quarter, the incredibly large scoreboard first appeared showing the vote totals. The Democrats took the early lead, and went into the locker room at half time with a comfortable cushion. During half time, the Senate got together to celebrate their almost unanimous passing of the Fiscal Cliff Bill. A special half time ceremony honored Vice President Joe Biden and Senator Mitch McConnell for their historic handshake that got the deal done in record time. They were the Max McGee’s of Stupidbowl I.. Just like Max in Superbowl I, they drank heavy the night before the game, but scored a key touchdown anyway.

The second half started off with a bang. The Republicans recovered an “On Sides” kickoff and scored fast to get back into the game. Then on the next drive, while Anderson was speaking to his colleagues, he stopped in his tracks to tell us the exciting news that so and so Congressman just voted “YAY”. “This could be a game changer” he said., and, it was. The Democrats went on to win the game, but like European Soccer, it took “Extra Time” to get in the final 100 votes in. For some reason, the game didn’t end when the clock ran out rendering the crowd as clueless as the players.

Final Score: Yay’s: 257 Nay’s 167

Stupidbowl II: The Debt Ceiling Hearings: To take place sometime in Orion or Horologium (February). Get your tickets now on Stubhub.

The Bank Fees You Haven’t Heard About:
Everyone has been talking about Bank Fees for the last number of years. Great investigative reporters like Mike Taibbe have been writing about Banks in Rolling Stone and in books and talking about it on Bill Maher for years. But, there is one fee that no one seems to be talking about and it should be illegal. It’s the hidden fee, and sometimes enormous fee, that some banks like Wells Fargo charge you for writing a check from their online Bill Pay system.

You may not be aware of this, but ND became aware of it a year ago when he sent a check to his friend to hold as a security deposit for his new home. He told his friend to just keep it on his desk until it had to be paid. Upon reviewing his bank account online, ND discovered that Wells Fargo had taken out the amount from his account the very same day he requested the personal check be written. A check to a person is written just as if you wrote it out from your checkbook and mailed it yourself. There is no electronic transfer of funds like there is to a credit card company or utility (which we will get to in a moment). This is not only wrong, but criminal.

Before online banking, a check had to clear before the funds were taken out of your bank account. This was the way the system worked, and it worked properly. In most cases, a hold was put on your account until the check was cleared. If it didn’t, you were charged a fee for it. However, now Wells Fargo had ND’s money for over a month, and ND did not, even though the check sat on his friend’s desk and was never deposited. So, Wells Fargo had use of these funds to do whatever they wanted with for a very long period of time. This should be fraud and theft.

The answer their representatives gave ND did not hold water so ND decided to find another bank. In his search, he discovered that some banks do this, some banks don’t, and almost everyone that works for any bank, even for 20 years, had no idea if their bank did this or not. His research ended up teaching a banker, who had 20 years in the business, something she hadn’t known. And, he ended up switching to PNC because unlike Wells Fargo, they do not take the funds out of your account until the check actually does clear. To test it, ND sent some personal checks online to his daughter. By doing this he found his answer. PNC did not take out the money.

This is the correct way to do it. Anything else is flat out theft. So, when it comes to paying your rent check online, be aware that Wells Fargo and other banks have use of your money until your landlord actually deposits your check which could be a week or longer. This is called using the float, but there should be no float here. The only float is sailing away with your money that you could and should be juggling and using, not them. When it comes to electronic payments with credit card companies, utilities, and other businesses that accept them, the payment goes into their account a lot faster because it’s automatic. But, even that takes a couple of days, so you still shouldn’t be charged for the funds until it actually has cleared.

Why does this matter to you? Well, first of all, it allows many people who live month to month and have to carefully watch their budget to take a different route with juggling their monthly bills. If you pay your landlord from your bank’s electronic Bill Pay system and your bank takes the money the day you send it, then you aren’t having use of that money until it gets sent, deposited, and cleared. Can you think of other uses for your money during this critical month end period where money is tight? The fee is an opportunity cost and even an interest fee. You lose the opportunity to use that money for something else during that period, and you lose any interest on the money in your account if it’s an interest bearing account. But, the banks that do this to you have much more to gain. They are making potentially millions of dollars a month this way, if not more. Just think of all the customers who write electronic checks. Wells Fargo, for instance, has millions of customers who bank online. Even if those customers write one electronic check per month, Wells Fargo is making use of those many millions of dollars during the float period. They can invest this money and use it for many other purposes. This is how they rip you off. PNC on the other hand, is a bank that doesn’t do this. Some do, some don’t.

So, why isn’t this being discussed and why isn’t there a law to stop it and penalties for banks like Wells Fargo? Most likely because government enforcement hasn’t quite caught up with advances in technology and never will. In every area of technology, the criminals in the cyber age we live in will always be ahead of the enforcers. As ND mentioned before; there are way too many Lex Luthors in the world and not enough Supermen. THINK ABOUT IT! But, in this case, DO SOMETHING ABOUT IT too! Check your bank. Check your online statements. See if you have been a victim of this hidden crime, and change banks if you have been. But, before you do, do your research and find out if your potential new bank does it the way Wells Fargo does, or the way PNC does. Chances are your banker won’t have a clue, so you’ll need to talk to the online banking division and make sure. And, while you’re at it, call or write your congressperson to help them change the law!

Go for the Gold:
Is Gold a good investment still at its current price of $1,660 per ounce? The answer to that depends upon your age, circumstances, and risk tolerance. Gold rose from $120 per ounce in January, 1977 to an astounding $850 per ounce in January, 1980. Today, that $850 per ounce is equivalent, by most standards, to a gold price of over $2,500 or $3,000 per ounce. At the same time, interest rates were over 20%. This incredible combination of extremely high interest rates and gold prices had never been seen before.

Jimmy Carter was our president and it was an election year. Even the defeat of the Russians by the U.S. Olympic Hockey team and the peaceful release of the hostages from Iran without a war (that many wanted Jimmy to go into) or any deaths couldn’t keep Jimmy his job. Why? It’s the Economy Stupid! So, Enter Ronald Reagan; Enter Reaganomics; Enter Deregulation, and Enter incredible good times on Wall Street, enormous greed, insider trading, white collar crime, and enormous false growth that ultimately led to two major economic crashes and some of the biggest brokerage firms in the world to fold; the crash of 1987 and the economic crisis of 2008. And, let’s not forget about the weapons he supplied to Osama Bin Laden to try and help Afghanistan defeat the Russian invasion. How did that work out? So what have we learned since or from history? Obviously, not very much. When you watch the Academy Award winning documentary about the great financial crisis of 2008, “Inside Job”, and you should, you may do what ND did after the show. Get “Mad as Hell. Why? Because a few incredibly powerful and rich criminals took down the world and had to answer to no one. Not one of them was ever arrested, jailed, or fined and all of them walked away with many millions; over $350 big ones for Dick Fuld, the incredibly arrogant, greedy, and narcissistic psycopath CEO of Lehman Brothers.

Why is ND telling you all of this? Well, for one reason, you must use history as a guideline to anything in life, but particularly the financial markets. It used to be, years ago, that historical charts and activity was a pretty good indicator, at least for general market concepts and modern portfolio theory. For example, we used to be on the gold standard until Nixon took us off. Then gold started trading as a commodity. People, particularly traders, started speculating on it instead of buying and hording actual gold and using it as a hedge against inflation. This was the start of deregulation which has over time caused the historical concept of the stock market and financial markets in general to act very differently than they did for the previous 70 or 80 years. Then came further deregulation, more derivative securities, more speculation, global trading markets that interacted with each other, computerized trading, CDO’s, the collapse of the real estate market, the big bang crash, and then puff, a scramble for the average person to have any clue as to what to do with his/her money.

One thing history taught us was pretty common knowledge; that the price of gold was inversely proportional to the price of the equity indexes and inflation. So, if times got tough and the stock market looked like it was going down, and inflation loomed, it was a great idea to buy gold as a hedge. It usually didn’t fail, and the opposite was true as well; that gold would go down when inflation was low and the stock market was booming. But, over the past 10 years that long time historical axiom is not true any more. We have seen gold rise and rise while the stock market has done the same and inflation has been low. If you ask all the experts why, you will get a wide variety of answers, none of which have had enough historical data to be true or certain.

In fact, when it comes to the markets and YOUR money, your best bet is to learn as much as you can, and use a discount brokerage firm like Schwab, TD Ameritrade, E*Trade, Scottrade, Fidelity and others to manage your own money. You not only will be in charge of your future, you will definitely not be calling a securities lawyer when your money has somehow vanished into thin air. There is no one better than you when it comes to managing your finances and investments. So, get crackin’. There are lots of excellent tools, books, and websites to help you, including these discount brokerage sites as well as many available to professionals that ND has used for many years, but the best place to start if you don’t have much experience or knowledge is Yahoo! Finance. You can learn a lot.

Just get started and read, read, read, but don’t believe everything you read or that there are any “experts” out there that can tell you what’s going to happen next in the markets. If ND can’t do it, then no one can. And, he’s seen enough to tell you that you would be very wise to learn how to manage your own money. Hopefully, you’ll learn some things from ND too. He has a lot of experience in the professional arena of finance, and like the rest of us, has learned the hard way. Be cautious, but don’t be afraid. No one became rich without taking any risks, but, many have lost fortunes taking too much. So understand where you are in life; understand where you are going and your needs; put enough away for a rainy day; and plot a course of action with the rest (if you still have any). But, before you jump in the water, please get your feet wet. Trade and Invest with paper money first and use Watch Lists before you use real hard earned money. And, make sure you learn how to use their stock and mutual fund screening tools, as well as other good ones available, and read daily about overall market conditions, things that affect the markets short and long term, and what’s going on around the globe that can affect your investments. Yahoo! Finance is one of the best places to do this, no matter what anyone tells you. It always has been. Don’t look for answers from others. Don’t follow the masses either. Learn, learn, learn to manage your own money. It will pay off in the long run.

That brings us back to our question. Why is ND talking so much about gold and what does all of this other stuff have to do with it? The answer is simple. There are tons of investments out there. There are tons of ways to lose your shirt. There are tons of ways to make it back. But, not much is certain. One thing that is close to certain, however, is that we will see inflation rise one day. In fact, it’s something that ND talks about today on his StatisTRIX channel, because inflation is actually a lot higher than the stats show. Another is that while gold is relatively high, it still can go a long way from here. Just look what happened in the late ‘70’s. By conservative standards, if the $850 price of gold in 1980 was equivalent to $2,500 today, that is a factor of 2.94 or triple when adjusted for inflation. If the same pattern continues, then gold will be worth almost $5,000 30 years from now. Using this formula, at $1,650 per ounce, the equivalent in 1980 for the current price of gold would be approximately $550 per ounce, which was high, but still far below the $850 gold reached. That’s a 36% discount.

When gold was at $900 an ounce a couple of years ago, most including ND thought it was way too high to jump in then. It seemed very risky. But since then, in only two years, it has returned over 40%. Not bad at all, huh? Where can you get that kind of return today? So, ND is just saying, keep gold in mind. Jump in on the dips and opportunities, and invest for the long term not a quick return, because there is a very good chance it will go up, particularly if you have a very long term outlook and just hold on and buy more on dips. All provided that world’s governments don’t go back to any gold standard and mess with the current free market system. There’s always risk involved with reward.

You can learn how to buy gold many ways from Yahoo! Finance. We won’t get into it here. Regarding other investments, you should also research ETF’s (Exchange Traded Funds) and other kinds of mutual funds and investments (both equity and fixed income) that are paying high dividends with low risk. And, you should research and try to find unique stocks to buy that have good potential for the future in industries that are likely to survive and thrive no matter what, but particularly as the economy improves. One thing you should not do however, in any form of life, is ND’s Saying today. Don’t follow the masses because “The Masses Are Asses”. Blaze your own trail in life, and try to be a contrarian investor.

When the masses are all in, it’s time to get out. When the masses are all out, it’s time to get in. This was so true in 1999 when everyone was trading online and NASDAQ was booming with hundreds, if not thousands, of Internet companies. When ND went into his garage to talk to his electrician who just happened to be trading on his laptop in his truck and asking ND for advice, ND knew this was the sign from above to get out of the market. And, soon after, in March, 2000 NASDAQ came crashing down. The same thing happened many hundreds of years ago in Holland with Tulips. So, this is nothing new. Learn from history, learn to think for yourself and do your homework, and blaze your own trail in life, or you are as doomed as all the Sheep who followed Jim Jones to their mass suicide in Jonestown.

We’ll be talking about all of this and more in future editions of Nostradennis.com, The Magazine of the Future. Good luck, and remember, no one is an expert on where things will go, and ND does not make predictions, so you and only you are responsible for your money. The more you learn though, from the most trusted sources, the better off you will be.

Computerized Trading: (The newest way to screw the individual investor): In his many years in the financial information industry, ND has continually seen many new and creative ways for the Fat Cats to try and screw the individual investor. This is nothing new though. From the time currency was created, and money became the root of all evil, man has tried to find “Inside Information” to make more. It’s called “Inside Information” because that’s where it resides; inside a criminal’s head. It only becomes criminal though when he acts on that information to make a gain, or tells someone else his secret so they can make a bundle. It’s been going on since the beginning of man. In fact, I’m sure dinosaurs had their own inside information to gain something like food, where their enemies are hiding, or even where the tar was on Wilshire Boulevard, the oldest thoroughfare in the U.S.A. You can be certain of one thing; as long as there is money, and as long as people want it, they will find ways to take it from you. Yes, life is not fair, and no one is really looking out for you. If they were, then Congressmen and Congresswomen wouldn’t have traded “legally” on their “Inside Information” for years to accumulate massive amounts of wealth until the story final broke on 60 Minutes and new legislation was passed. Yes, your very own congressman or congresswoman, whose sole purpose is to protect you from things like this, found a way to legally avoid the law that was set up to protect you and get very wealthy in the process! Go figure.

Here is Steve Kroft from 60 Minutes talking about the response they got from the story they aired in November, 2011 about Insider Trading in Congress and The Stock Act. You can research it all yourself or find the full story on 60 Minutes.

In the ‘80’s, Inside Information was so rampant that it got out of hand. Many men like Ivan Boesky became legendary; first for what was considered their brilliant method at picking stocks and making money, but later for turning out to be worse than the character he was portrayed as in the great movie, Wall Street; Gordon Gekko. He didn’t know anything. He wasn’t even in finance or investing. But, he did know how to network and pull the wool over many people’s eyes. And, in the ‘80s it was big news if you could beat the stock market. You became a King. In fact, ND’s company was the one company that tracked the performance on money managers, and each quarter these money managers were listed on the front page of the Wall Street Journal. So, it was great publicity and big news if you made the top quartile or even better, the top 10. This too led to greed; the need to be the best; the need to feed the ego; the need to win! Of course, there were legends being born at that time as well through hard work and brainpower that were very honest. The two best were Peter Lynch, who managed the Fidelity Magellan Fund to incredible returns year after year simply with the philosophy of buying companies that you shop at and like. And, there was Warren Buffet whose Berkshire Hathaway B shares traded for $6,000 a share, which sounded like a lot, but went to $60,000 a share not too long after that.

Everyone today knows who these guys are, but back then everyone was trying to be King and many didn’t care how they did it. So, Insider Trading became rampant and Ivan Boesky became the poster boy for Greed, just like Bernie Madoff did recently (we never learn). But, many, many more didn’t get caught, and much Insider Trading still goes on today. Oh yeah, once in a while they’ll take some high profile person like Martha Stewart and make an example out of her hoping it scares people straight. But, the problem isn’t the Martha Stewart’s of the world, or the guy who gets a tip on a merger from his brother-in-law the lawyer. The problem is the professionals. And, the problem is the lack of enforcement. Once again, more Lex Luthor’s than Supermen.

Another big element of Insider Trading back then was the rule that institutional investors, money managers, and research analysts were all allowed to meet with companies to get their quarterly results before it was announced to the general public. I guess the thought was that if they did, these brokers and money managers could help their clients. But, of course that didn’t happen. Why? Because they now had Inside Information and they got greedy and needed to use it to make money for their firms and themselves. So, the clients and individual investors got screwed again. And, many of these firms were actually selling stocks short on this information all while recommending that their clients buy it. Can it get any stranger? Yes, it can. New and complex derivative securities and investments were created out of deregulation to fool the public even more. It was all just a game and continued to be one big game until of course, the world collapsed in 2008. Then it was no joke. And, millions upon millions of people suffered tremendously all because of a few sick greedy bastards who didn’t spend one day in jail and walked away with more money than they’ll ever need in a lifetime. What a system, huh? But, we should have seen it coming. We woke up to the problem some 25 years too late. It was right in front of our noses, but we were all too excited about making money from the sheckles these Fat Cats were throwing at the beggars in the street; us. If everyone is happy, then it’s all fine and dandy. But, when the bow breaks……..

The only thing that gets ND angry is that all these Fat Cats get away with murder. Oh yeah, once in a while someone will go to jail or pay a huge fine or get thrown out of the business, and they will eventually find a big fish like Bernie Madoff to fry, but most don’t get caught, go to jail, or even get fined. Trust me, it goes on much, much more than you can imagine. Don’t be naïve. It’s like the steroid era in baseball. When McGwire and Sosa were having their homerun chase in 1998, everyone was excited and everyone looked the other way because it made everyone happy. But, when the bow breaks….The same thing just happened to Lance Armstrong. It goes on and on and on. Whose next? Why are we continually surprised to hear this kind of news? Can we trust or believe anyone or anything any more? The answer is plain and simple. No. Why? Because it’s all about the money; and, it always was from the beginning of time. THINK ABOUT IT!

So, what’s the latest way all of us get screwed today in the high world of finance? It’s computerized, aka algorithmic, aka program trading. You may not know much about this, but this is taking over the financial markets very rapidly. It’s been a good ten years at least since it came into prominence with electronic markets and the Internet, and it continues to grow rapidly and take market share away from traditional trading. How does it affect you? Well, plain and simple; the answer is time, volume, and execution. They can trade super fast (milliseconds), and in large blocks of shares (potentially millions), moving securities and markets at the speed of light. A bit over two years ago, the market crumbled in minutes simply because of one man’s mechanical error. And, just the other day a big article came out on how the BATS system has cost individual traders at least half a million dollars just by executing the bid/ask price wrong. There’s so much more we all don’t know because it’s all contained in a “Black Box” like the ones found on airplanes. When the markets crash, we should have access to these “Black Boxes” just like try to get when the plane crashes. That’s how this can end up affecting you. And, even if you are investing for the long haul, market and stock price fluctuations can cost you a bundle when you are trying to get in or out.

Because we don’t manufacture much of anything any more in the United States, there is a even more of a focus on what we call Wall Street. But, Wall Street isn’t what it used to be. In fact, they don’t even need the real Wall Street in NYC any more to manage and move markets. These sharks called Hedge Funds, can trade from anywhere in the world all while sitting in their underwear or latest Superhero shirt. Oh, they set up nice offices in cushy little towns like Greenwich and Westport, CT, or Westlake Village, CA, but they don’t really need to mainly because of technology. Most of these firms operate as individual teams within a bigger organization. This is done for many reasons. One, is to allow a small group of people to focus on their little area of specialty, another is to protect themselves from the evils that many of these same specialists are doing, which the heads of the firm don’t want to know about or be part of when it crumbles down, but certainly want the profits before it does and when times are good. Once again, it’s all a little game. The man with the most wins. And, he usually needs and has no accountability.

Thirty years ago, there were real traditional money managers; many of them. They were intelligent people who for the most part did business traditionally by marketing their hard earned results to pension funds and wealthy people who wanted their solid advice. These people had to be smart and there were regulations. They had to pass very rigorous exams and have gone to graduate school for the most part. They were trained well and spent years developing their craft. Then many more people got into the business because they saw it was very lucrative, particularly in the ‘80s after deregulation of the markets. Thousands of mutual funds sprang up from just a small number to invest in all kinds of investments from traditional equity and fixed income funds to overseas emerging markets and finally to what they even called “Socially Responsible” investment funds. What an oxymoron that is, huh? Before all of this, brokerage firms had rules as well. They had a “Chinese Wall” between research and trading, between Investment Banking and Trading, so their customers were protected. And, the stockbroker was considered a smart man that also had to work hard and earn his way and the respect of his clients. But, then again, once upon a time a Cashier had to actually know how to count, do math, and give you the proper change without typing it into a computerized cash register.

As the markets rose and rose, and more greedy people came to Wall Street, and deregulation allowed them to create any kind of products and services that were created with the sole purpose of fooling their own customers, things rapidly changed. And, serious advancements in technology made this rise exponential. Things moved at a very rapid pace in the high world of finance. So fast, that the government and the enforcers had no way to keep up with it. Why? Because the high world of finance, investments, and technology were now all merging and attracting the most brilliant math and science minds in the world. Instead of becoming traditional engineers to help actually make something worthwhile, MIT, Harvard, Stanford, and Carnegie Mellon students alike were attracted to all the Fat Cats and criminals who showed them the easy way to quick money. Not many of them, if even one at all, was attracted to working in Washington, DC. So here we are today. Computerized Trading is the latest and greatest thing and way for all these brilliant minds (many of whom are just puppets for their own Lex Luthor’s) to make a fortune for themselves and their bosses all while moving the markets so fast to get the money before you can. It’s just the modern day way of having that same old “Inside Information”. THINK ABOUT IT!

Recommended Reading: “Griftopia, Matt Taibbe; “One Up On Wall Street”, Peter Lynch; “Liars Poker”, Michael Lewis; “How To Be Your Own Stockbroker”, Charles Schwab; “How to Make Money in Stocks”, William O’Neil.

Recommended Viewing: “Inside Job”; The Academy Award Winning Documentary about the 2008 Financial Collapse; CNBC’s “House of Cards” (view it on Hulu.com), “Wall Street” the Oliver Stone movie starring Charlie Sheen and Michael Douglas.

ND Predictions:

DATE: Dolphinus 15, 0042 ND: Gold hits $12,500 per ounce. Marriages are down. So are divorces.

DATE: Apus 11, 0061 ND: Ear Phone causes computerized trading glitch after trader’s wife tells him to buy some pork bellies on the way home from work. Market drops 43% in three seconds. World is in disarray. The commodities firm of Duke and Duke, run by Eddie Murphy’s grandson goes out of business again.

DATE: Orion 22, 0078 ND: Banks initiate large fees to withdraw your own money from their shapely Victoria Secret “Bot Girl” Tellers. Consumers get to “Kiss” their money goodbye.

DATE: Cetus 21, 0101 ND: Goldman, Sachs, and O’Reilly donates $100 Billion to Uppa U.S. presidential candidate Pope John Paul George Ringo XVI.

DATE: Microscopium 4, 1213 ND: The richest country in the world, Somalia, literally falls off the Fiscal Cliff and right into the Indian Ocean. James Cameron spotted diving for Gold.