Tag Archives: dawn j bennett

The Stock Market and President Trump

In a recent interview on Financial Myth Busting, Dawn J. Bennett and Jordan Goodman, a financial journalist, radio show host and author, discuss the stock market and Trump’s presidency.

According to Bennett, the stock market certainly hasn’t been a free market. It’s been controlled by central banks, and as a result, people have opted out, mutual and hedge funds have closed, and no one can make money in the market.

“In order to take this market off remote control, it’s going to have to be on its own, and certainly corporate earnings and revenues haven’t been as strong as they were eight years ago, so I don’t know what will happen at that point. That is going to affect American’s pocket books,” said Bennett.

According to Goodman, the DOW has been up 8% since the election— one of the biggest gains we’ve seen in a while between election and inauguration— and this anticipates what’s to come.

“If regulations come down, if corporate tax rates come down, if we repatriate a lot of the two and half trillion dollars sitting overseas and bring that back here, and corporations either invest it here or buy back stock or raise dividends, these are all positive for the U.S. economy, and that’s what the stock market’s been anticipating,” he said.

He continued, “There’s going to be winners and losers, though. The winners avoid his Tweets and the losers get tweeted to death, whether it be a drug company or General Motors or Boeing or whoever it may be. In the Tweet market, you never know who’s going to get hit next. Overall, if you get corporate earnings up, which I think all of his policies will do, that supports higher stock prices. We’ve been floating around 20,000 in the DOW for a while here, but I’m predicting we’re going to end 2017 at about 23,000. I think we have a lot of room to go up.”

Despite this optimistic view, Goodman said he is most concerned about trade wars with China, Mexico and Japan.

“He [Trump] has very strong rhetoric, and maybe that’s a bargaining ploy, and maybe it will work,” Goodman said. “Maybe we’ll get better deals, maybe our trade deficit will come down with these countries, but I think the opposite could happen.”

He continued, “If we don’t get a deal we want, and he does put a 35 percent tariff on them, they’re clearly going to retaliate and make it hard for American goods to go there as well. That’s my biggest economic concern. Then politically, I’m concerned about wars. In the South China Sea, or if we move the embassy in Tel Aviv to Jerusalem and that causes a Middle East war. Those are the kind of things I’m most concerned about on the down side. He didn’t get elected in China, so the Chinese aren’t his constituency. So that’s what I’m most concerned about is getting into trade wars.”

 

Financial Myth Busting with Dawn J. Bennett: Dick Sim, Global Entrepreneur

Dawn J. Bennett, host of Financial Myth Busting, recently interviewed Dim Sim a global entrepreneur and author, on her show. In his interview with Bennett, Sim discusses the coming clash we’re going to have between the United States, the European Union, the Middle East and Africa, as well as the geopolitical changes that these disparities are fueling.

Bennett says America is fighting for its existence on an economic, cultural and physical front. On the economic front, Bennett says she thinks the government has to get out of the way. Sim says he thinks the government is part of the problem, especially for certain segments of society.

“Lately, in the last decade or so, economic growth has been weak and there’s large segments of our society, the bulk of them working people, who are really suffering,” says Sim. “We still have a bunch of people that do really well: the big business people, the big politicians, the think tanks, those people that are surrounded and interact with them they are doing very well. So we have a sort of fragmented society and that’s part of what we saw with the Trump force. So we’re sinking the bottom of our society, economically, but that’s connected to cultural issues.”

At the same time, there’s the mass migration out of the Middle East, which presents a moral quandary. As Bennett describes it, “You don’t want to drown your country with refugees who don’t fit in and don’t contribute but you also don’t want to sit there as thousands of migrants drown while trying to escape oppression by fleeing across the Mediterranean.”

Sim says we have a moral obligation to help these people who are suffering around the world, but we need to be selective about who we bring over here.  He explains the biggest contribution is all the technology that’s been industrialized since the Second World War came out of the United Sates, and this has immense implications in terms of wealth in the United States but also throughout the world in terms of relieving global poverty and suffering. He says we need to continue performing this high-value technical work and need immigration policies that support that.

“We can’t help everyone and we need to keep doing what we do because the world needs what the U.S. does in terms of inventing new technology in agriculture, computers, software, medical technology,” Sim says. “And we have a particular way our society is organized structurally but also culturally that does that. We don’t often talk about that and we don’t teach it to our children. It’s a very precious reality that we need to care more about and protect more.”

Right now the United States’ chief concern is terrorists coming in, but that’s not really the big issue, according to Sim.

“The big issue is the evidence in Europe is that Muslims—not all Muslims but a lot of those who come to Europe—they do not assimilate, they set up communities that are self-segregated and they continue to live by the values of conservative Islam,” Sim explains. “And these values, in terms of the treatment of women, gays—you know, you’ve got sexual crimes honor killings, female genital mutilation, a bunch of stuff that are unacceptable in the west but they continue in Europe. We have these issues on a much smaller scale in the United States.”

He continues, “The cultural issues are tearing Europe apart. The long-term issue is the lack of assimilation and the United States should learn from Europe. It’s not a question of—we believe so much in freedom of religion that it’s very, very difficult for Americans to say ‘Well, I wish we can discriminate against Islam.’ The way to think about Islam is not as a religion, but as a way of organizing a complete society.”

To view the complete interview, click here.

Millennials and Their Political Views

Dawn J. Bennett, founder and CEO of Bennett Group Financial Services, recently interviewed Chris Koopman on her radio show Financial Myth Busting with Dawn J. Bennett. Koopman is a Senior Research Fellow with Project for the Study of American Capitalism at the Mercatus Center at George Mason University, where he specializes in regulation competition and innovation. He is also a contributor at the Hill and was named to Forbes 30 Under 30 for law and policy.

In his interview with Dawn J. Bennett, Koopman discusses millennials and their view of politics. According to Koopman, what’s really important about millennials as a political force is the generation now matches baby boomers as the largest demographic in the electorate. Therefore, how millennials think, feel and vote really matters and should be taken seriously.

“I think that’s why in this past election there were a lot of questions about how do millennials feel about the future of capitalism and how do they feel about the future of free market,” said Koopman. “And more often than not, millennials are being pegged as embracing socialism but I think it’s more about distrust and just growing frustration with the current system more so than capitalism per se.”

Koopman said that as a generation, millennials are told they live in a capitalist system. While that’s mostly true, many fundamental pieces of the system don’t represent a free market system.

“Millennials are getting the raw end of that deal,” he said. “They don’t like it and therefore when people ask them how they feel about capitalism they respond that they don’t like it.”

Earlier in the year, a survey was released in which one-third of millennials identified supporting socialism, while less than half said they supported capitalism.

“I think this sort of reinforced this idea millennials don’t understand the world that we live in and we’re sort of chasing dreams as opposed to living in any sort of reality about our current situation,” said Koopman. “But I think that kind of misses the mark when you put it into the context that millennials live in.”

He continued, “You know, we look at the current system, and what have we known? Nothing but Wall Street bailouts, corporate greed, political scandals, tax codes riddled with loopholes for the wealthy and well-connected. And for the bulk of millennials this is all we’ve ever known. So when people ask us how we feel about it of course we’re going to come out with a resounding negative response.”

Koopman has written that surveys show millennials are heavily in favor of the term “free market,” over “government-managed economy.” He believes these findings show that millennials are much more free market than they’re given credit for. To put it into context, he referenced occupational licensing. The millennial generation, more than any other prior generation, had to beg for permission to practice their chosen profession. One in three of millennials has to get an occupational license, compared to five percent just one or two generations ago. This is the type of thing that has become embedded in the system and attributed to capitalism, he explained.

“So it’s not that we’re misinformed. It’s not that we’re lazy or unable to think for ourselves. It’s that we’re frustrated,” Koopman said. “You compare us to other generations at this same age and we’re poorer, we’re more in debt and more out of work.”

He continued, “And I think you go back to the 2016 election… and look at some of the numbers that are coming up and see that 10 percent of millennials that voted, voted third party. You have this desire in an entire generation to find a different approach, a different way, because they’re just flat-out tired and frustrated with the current system as it stands.”

Dawn J. Bennett: The Five Stages of Deutsche Bank Grief

Financial expert Dawn J. Bennett recently wrote an article titled, “The Five Stages of Deutsche Bank Grief,” in which she discusses the potential collapse of Deutsche Bank. According to Bennett, Elisabeth Kübler-Ross’s famous five stages of grief can be seen in the markets. In their usual order, the five stages are denial, anger, bargaining, depression and acceptance.

Deutsche Bank has a high risk-taking culture and the risk of its collapse is real. The bank is connected to a number of other banks and institutions, including the 200 institutions just from its hedge fund business. If the bank fails, it will create a domino effect and have much larger and more intense impact than Lehman Brothers. Deutsche Bank’s assets are approximately $1.9 trillion, and they have a balance sheet about equal to Germany’s gross domestic product (GDP).

As things progress and more retail depositors start to worry and pull out, Bennett says the bank only has a few options— none of which are good. These options include:

  1. To sell their equity to provide much-needed liquidity.
  2. To approach the European Central Bank (ECB) for a liquidity bridge, an option opposed by Chancellor Angela Merkel and denied by the ECB for Greek and Italian banks.
  3. To eliminate billions in unsecured claims and deposits, which could result in a full-blown, systemic bank run with depositors rushing to withdraw their savings.

“And here we are, mired in the throes of Kubler-Ross’s stages of grief,” says Bennett. “We saw denial as the market wanted to go higher on the belief that there would surely be some sort of bail-out, but ultimately going negative. If Germany does bail out Deutsche Bank when it advocated so strongly against similarly helping Greece and Italy, there may well be a full-blown political mutiny in Europe, and the ECB certainly wouldn’t be happy. Of course, the next stage is anger, and that’s easy to see. ‘Who let this situation get so bad? Who can we blame?’ Bargaining follows, as investors look for a way to walk away and take their losses without being hurt further. After that comes the depression of seeing all that money just gone, something we remember all too clearly from 2008 and 2009, when many investors lost from 25 to even 70 percent of their portfolios.”

Bennett says the most important thing is how the acceptance stage is handled. This is the time to determine how to rebuild, she says.

“Systemically, of course, this is a matter for governments and institutions, but markets are made of individuals, and how we each respond is a critical element in how the global economy will respond,” says Bennett. “If we take a defensive position, focus on assets like gold and silver that are likeliest to hold real value in a collapse or crisis, and then rebuild while demanding free markets that are actually free before we opt back in to the ‘system’ that looks set to fail yet again, then these five stages will not have been in vain.”

 

 

Dawn J. Bennett & John Browne Discuss Apple’s EU Tax Penalty

Dawn J. Bennett, host of Financial Myth Busting with Dawn J. Bennett, recently interviewed John Browne, a former distinguished member of British Parliament who served on the Treasury Select Committee and as the Chairman of the Conservative Small Business Committee. Today, Browne is a Senior Economic Consultant at Euro Pacific Capital.

In his interview with Dawn J. Bennett, Browne discusses a recent article he published titled, “Apple Tax Grab by EU Invades IRS Airspace.” The article explains how the EU has ordered that the Irish government granted Apple undue tax benefits and that the European Commission issued a penalty to Apple of $14.5 billion plus interest, making it the biggest tax penalty ever.

The European Commission is moving to withdraw the boundaries Ireland had set up to draw in the world’s largest corporations. According to Browne, the issue is very complex.

“Perhaps with an eye on the vast amounts of U.S. corporate cash that’s sitting in Ireland which doesn’t want to come to the United States and pay 35% tax, the European Union may have decided that Ireland was in effect offering Apple a sweetheart deal that amounted to state aid which is actually illegal under the EU rules,” said Browne.”

He continued, “The unelected European Commission dreamt up a theoretical, additional retroactive tax that Ireland must charge Apple, but the Irish government and Apple—the largest tax payer in Ireland—both state categorically that there was no sweetheart deal and are appealing the case to the European Court which will probably take three or four years, but the European Court is notoriously subject to political pressure, so the eyes of the corporate and individual taxpayers of the whole world will be focused on this Court’s decision because it’s to oppose a retroactive new tax. It will be revolutionary for taxpayers throughout the world.”

The EU’s ruling threatens the country’s reputation as a low tax nation, according to Browne. These companies that have come to Ireland for the low tax have created high-paying jobs, particularly in the high-tech industry, and contribute greatly to the nation’s economic growth and prosperity. Additionally, the ruling challenges the freedom of the country to make its own tax rates.

“We’ve all got to wait for this Court’s decision to even have a view on that, but if the Court decides in favor of the unelected European Commission, I think it will be awfully tempting for Ireland to join Great Britain in exiting the European Union and coming back much closer to Britain, outside the EU,” said Browne.

There are also many other companies that have done the same as Apple in using Ireland as their headquarters. Browne explained that if the Court rules in favor of the European Commission, then businesses like Amazon, Google, Starbucks and Microsoft will be on the line. He noted that in addition to the low tax rate, Ireland is attractive because it’s an English speaking country that uses English law, which is the same as American law. Also, they have close relationships with the U.S. and former UK Commonwealth and colonial countries, such as Canada, Australia, South Africa, and India.

The Problem with Socialism

Dawn J. Bennett, founder and CEO of Bennett Group Financial Services, recently interviewed Tom DiLorenzo on Financial Myth Busting with Dawn J. Bennett. DiLorenzo is an economics professor at Loyola University Maryland Sellinger School of Business and the bestselling author of The Problem with Socialism. In his interview with Dawn J. Bennett, DiLorenzo discusses his bestselling book and the numerous issues with socialism.

Socialism in Scandinavia

DiLorenzo’s book debunks the common myth that Scandinavian countries are proof socialism can work, an argument that Bernie Sanders made in an earlier Democratic debate.

According to DiLorenzo, while Sweden was one of the most prosperous countries in the world from the late 19th century until about the 1940s and had the highest per capital income growth of any country during that time, the nation destroyed its job growth.

“They started nationalizing some of their industries; they adopted a very large welfare state, and a heavily progressive income tax. That was their version of socialism,” explained DiLorenzo. “As a result, Sweden did not create one single net new job from 1950 until 2005, according to the Swedish Economic Association. They destroyed job growth. So Bernie Sanders had got it all wrong. The only reason why Sweden was once prosperous is capitalism, and not socialism. Socialism killed prosperity in Sweden.”

Socialism and the Environment

DiLorenzo also disproves the popular misconception that socialism is better for the environment, compared to a loosely regulated free market.  A chapter in his book, “How Socialism Causes Pollution,” is dedicated to this poor argument.

“The basic theory of the cause of pollution is that it’s unregulated free markets, and the pursuit of profit leads to pollution,” DiLorenzo tells Bennett. “Well, the socialist countries of the Soviet empire outlawed profit seeking for 70 years. So when we had the collapse of socialism all around the world in the late 80s, early 90s, and people were finally able to go and look around these formerly closed societies, they found that they had the worst ecological catastrophes in the whole planet, far worse than anything we’ve ever seen here.”

He continued, “There was even a book written called Ecocide in the USSR, ecological suicide. We heard about things such as boats on the Volga River having signs on them saying don’t throw cigarettes overboard, the river may catch on fire, because there were so many chemicals floating down the river. The problem was the absence of property rights. When nobody owns property they tend not to take really good care of it. To relate to that idea ask yourself who takes better care of cars; people who rent cars, or people who own their own cars? If the society has an absence of property rights then you really have a lot more ecological damage than you do in a capitalist society. Besides that, the wealthier countries are always healthier and cleaner.”

To view DiLorenzo’s full interview on Financial Myth Busting, click here.

 

Dawn J. Bennett & Jeff Snider Discuss the Federal Funds Rate Hike

Dawn J. Bennett, host of Financial Myth Busting with Dawn J. Bennett, recently interviewed Jeff Snider on her radio show. Snider is the Head of Global Research for Alhambra Investment Partners and has authored and published several detailed investment reports that clash with the established opinion presented by the media.  In his interview with Dawn J. Bennett, Snider discusses his take on the federal funds rate hike.

On the subject of the rate hike, Snider says he doesn’t think the market is ready for what’s occurring. “I don’t think the market is ready for pretty much anything that’s going on right now. Any small change, and it seems like everybody’s nervous about what that may be. And I think with monetary policy it’s probably that much more amplified given that there’s so much uncertainty about what it might mean as far as accommodation and main stream views of what accommodation actually is or might be,” he explains.

Bennett notes that a policy error might actually end all the bubbles and allow the U.S. to almost reboot the system, and Snider agrees.

“I actually think that what the Federal Reserve actually does is largely irrelevant,” says Snider. “And the Fed doesn’t actually have any direct control over even the money supply. And mostly what they’re doing is just policy communication.”

He continued, “If you look at the Federal funds market itself, it’s a shell of what it used to be. The Federal funds rate for that matter is basically irrelevant. There’s very little volume in Federal funds at all. So when they’re raising or lowering the Federal funds rate, it’s more about trying to signal psychology and market sentiment than anything else. So I don’t think they actually much control over the market.”

Snider suggests that the Federal Reserve needs to let the markets decide what the correct value of money is and where stability is. He says Federal Reserve Chair Janet Yellen must understand that stability is the most important factor here— not just the artificial centralized stability the Feds try to impose, but real monetary stability.

He continued, “We used to talk about things like the strong dollar. The strong dollar had nothing to do with whether it goes up or down, the strong dollar was the fact that the financial system and the economic system were stable enough that nobody went through convertibility and allowed the dollar to remain as the bedrock association of the economy. We don’t have that anymore, in fact everything that the Federal Reserve does or any other central bank does is the opposite of stability. So that’s where it all needs to start. We need to have monetary stability. We don’t need to worry about what the Federal Reserve is debating in each and every policy meeting, that should be the farthest thing from investors’ minds when they think about what they’re doing insofar as their portfolios.”

To view Snider’s complete interview with Dawn J. Bennett, click here.

 

 

 

Gold Exceeds Its 15-Month High

shutterstock_186030554Gold recently exceeded its 15-month high of $1300. The last time gold broke surpassed that height was on September 29, 2010. According to financial analyst Dawn J. Bennett, there is enough momentum for the metal’s value to keep going up. On Monday, May 2, RBC Capital Markets reported the market’s upward trend could push it over $1400.

So, why is gold continuing to increase from its 15-month high? Dawn Bennett believes the answer is simple:

“Investors are seeing the truth behind our so-called recovery, which is that it’s just not a recovery,” says Bennett. “They are acknowledging the signs that we may be on the brink of an even greater collapse, despite the words coming from media pundits, government stuffed shirts, and the Federal Reserve. And in the face of deranged markets, the draw of gold is clear. Gold and silver have held many roles over history, but one significant one has always been as a hedge against turbulent markets.”

She continued, “These days, the role of gold as a currency, competing against the dollar, the euro, the yen, the yuan, is coming back into focus as well: there is a gold-backed cryptocurrency (think Bitcoin) called the Hayek, and the IMF is backing some loans with gold as security against fiat currency.”

Though the media reports the U.S. is outside of the meltdown in “global markets”, that is not the case. Dawn Bennett notes that central banks, including the Federal Reserve, have inflated asset bubbles through credit, housing, and equity manipulations. Billions of dollars have been borrowed by U.S. corporations at barely 1%, so they can buy back shares of their own stock. This is responsible for almost 50% of the stock market’s recent increases. Not to mention, the U.S. consumes more than it produces and is trillions and trillions of dollars in debt and unfunded liabilities.

Dawn J. Bennett believes gold and silver are in a unique position at this time. While they can be used as currency, wealth, and a hedge bet, they can also serve as insurance, says Bennett. This means insurance against loss of wealth, potential violent turbulence in collapsing markets, and fiscally foolish governments.

“And as with any kind of insurance, you can buy it and hope never to need it. Now is the time to do the research and search for opportunities and protective strategies,” Bennett explains. “If you do your homework and can be comfortable with the fact that gold and silver can be volatile, consider putting 5 to 10% of your portfolio in gold and silver coins, or other investments in this historic and lasting asset.

Dawn J. Bennett Writes Article Highlighting the War on Cash

Dawn J. Bennett, CEO of and Founder of Bennett Financial Services and host of Financial Myth Busting, recently wrote an article titled, “Yellen’s ‘Solid Ground’ and the War on Cash”. In her article, Bennett explains that while Janet Yellen of the Federal Reserve says our economy is on “solid ground”, that couldn’t be further from the truth. According to Bennett:

  • S. factory orders have been on the decline on a year-over-year basis for 16 consecutive months, which hasn’t occurred in 60 years without a recession.
  • First quarter corporate earnings are projected to be down 8.5% over first quarter 2015, the fourth quarter in a row of year-over-year declines.
  • S&P earnings are down 18.5% from their 2014 high.
  • Corporate debt defaults have risen to the highest level since 2009.
  • S. oil rig count is at a 41-year low.
  • Job cut announcements from U.S. firms were up 32% for the first quarter 2016 over first quarter 2015.
  • Consumers have accumulated more new credit card debit during the fourth quarter 2015 than during the entire years of 2009, 2010, and 2011.
  • America has $19 trillion in federal debt, which has increased $100 million each hour since President Obama’s inauguration.

“It is in this environment that we find ourselves, additionally, in the midst of an all-out war on cash,” says Bennett. “Interest rates are negative in Japan and several European countries, and we seem to be trending toward that possibility in the United States. Central banks keep printing more and more money, but that money isn’t tied to any real value. The assumption is that these negative rates will force banks to lend their reserves, and that lending will boost aggregate demand and help struggling economies, but it just isn’t happening. No one’s buying into it. Meddling with interest rates creates an increasing disconnect between supply and demand over time, and the wider that disconnect gets, the more risk there is when things eventually and inevitably realign to reality.”

Bennett notes that governments and financial institutions are continuing to discourage cash. Governments worldwide are putting restrictions on the use of cash, Bennett says, which is supposedly to make life harder for criminals and terrorists. She continued, “Central banks set inflation targets, and inflation is another way that our savings is taken from us. As Alan Greenspan said in 1966, ‘In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.'”

To learn more about Dawn J. Bennett’s views on the war on cash, read the full article here.

The Central Bank Titanic: The Current State of the World’s Central Banks

Dawn J Bennett, CEO and Founder of Bennett Financial Services and host of Financial Myth Busting, recently wrote an article titled, “The Central Bank Titanic,” in regards to the current state of the world’s central banks. Dawn Bennett said, “Despite last Friday’s 300-point run up in the market, January has been a bleak beginning to the year for equities. The Dow is down 5.5 percent year-to-date, the Russell 2000 at negative 8.85 percent, the NASDAQ off 6.84 percent. And truthfully, stocks still can’t be considered cheap. In fact, the Wall Street Journal’s Market Watch recently wrote that the Dow could lose a further 1000 to 5000 points and still not be “cheap” compared with long-term stock valuation measures. In fact, most stocks worldwide are down between 18 and 54 percent from the May 21, 2015 peak of the global equities markets. If history is any guide, it’s likely that February will be a down month as well: since 1957, there have been 20 January months that posted negative returns, and the likelihood of February being negative as well is between 75 and 85 percent.”

So what was the rally about? Month-end set dressing by hedge and mutual fund managers are likely eager to have the appearance of a “win” after such a brutal start to the year. As we’ve seen in the past six years, there was simply “more of the same,” as the Bank of Japan reversed a position announced a week earlier and moved to negative interest rates, joining Switzerland, Sweden, Denmark and the EU.

Dawn Bennett continued, “Let’s unpack that some. The primary role of central banks is to influence capital allocations and spending behavior by adjusting liquidity, and over the past seven years they have gone crazily overboard regarding that objective, engaging in every possible way to influence consumers away from a saving mindset and into purchasing riskier assets. Even given this, net purchases of stocks and bonds have been nearly flat since the middle of 2015. Seeing Japan’s equities markets still faltering, Bank of Japan Governor Haruhiko Kuroda took interest rates into negative territory on Friday, hoping to chase investors into stocks and bonds in order to reach his inflation goals.”

How is this working out? Not well, according to Dawn Bennett.

“Japanese Government Bonds have moved to negative yields, and the Ministry of Finance is expected to announce a decision to call off the sale of 10-Year JGBs for the first time in history. Their stock market continues to fall. Amid these unintended consequences, Kuroda continues to say there is “no limit” to monetary easing, going so far as to say he would invent new tools if going farther negative doesn’t start movement toward his 2 percent inflation goal. The New York Times wrote that “moving to negative interest rates reflects a measure of desperation on the part of the central banks. Their traditional tools have been largely exhausted as most countries interest rates have been pushed to almost nothing.” In fact, that word, “desperation,” has been appearing a lot in this context.”

Read more from Dawn J Bennett here: http://www.releasewire.com/press-releases/dawn-bennett-writes-article-the-central-bank-titanic-regarding-the-current-state-of-the-worlds-central-banks-662763.htm