Wednesday, October 25, 2006

New Bible Version Takes Out All References to Money To Make A Point

“A new Bible translation is causing controversy after it cut out difficult parts surrounding economic justice, possessions and money. The new bible version, released by the Western Bible Foundation in the Netherlands, has created a storm by trying to make the Christian gospel more palatable. According to Chairman Mr. De Rijke the foundation has reacted to a growing wish of many churches to be market-oriented and more attractive. "Jesus was very inspiring for our inner health, but we don't need to take his naïve remarks about money seriously. He didn't study economics, obviously." According to De Rijke no serious Christian takes these texts literally.”

This is disturbing.

Let me dissect this one. Christ’s remarks on money were naïve? Christ didn’t study economics? Well Christ didn’t need to study economics and his points about money were very direct and on point. Yes, there are different interpretations based on the meanings of Greek versus how we interpret it today.

This is nothing more than making Christianity easier and watering down what it means to be a Christian. You can't pick and select what should or shouldn't be in the bible. Money is signficant.

Christ was very clear. You cannot have two Gods. You either worship money or God.
Putting money over God is in my opinion the biggest single problem that we have today as Christians. Money has its influence over almost every element of our life. It is easy to put money over God. This is why money is written about more than any other subject in the bible.

Take away the teachings of money and you take away one of the central messages of the bible.

How you manage your relationship with money determines how you manage your relationship with God.

Thursday, October 19, 2006

Tax Issues and a Trusted Source

I get many questions about tax situations through Ask Bob. I want to make sure that you aware of Dan Pilla. He considered the foremost expert on the IRS.

The Associated Press once said, “Dan Pilla knows more about the IRS than the Commissioner.” He has been on Prudent Money numerous times. For those listeners who are dealing with IRS issues, there are several resources.

First, there is Dan’s latest book The IRS Problem Solver. It is one of the most excellent resources that I have found on dealing with the IRS. It covers everything.

Second, Dan has an excellent web-site that is packed full of information along with a consultation service that is very reasonable.

Third, Dan is having a Taxpayer Defense Conference that might interest you.

WHAT WILL YOU LEARN?
1. How to Protect Yourself from Aggressive Audit and Collection Tactics.
2. How to Challenge Tax Audits
3. How to Stop Wage Levies and Bank Levies, and Lift Tax Liens
4. How to Negotiate Reasonable Payment Terms with the IRS.
5. How to use the U.S. Tax Court to Your
6. How to deal with Delinquent Tax Problems.
7. How to Avoid Audits and Enforcement actions.

As a registered attendee, you can receive - at no additional cost - a personal, private consultation with Dan or a member of his private network of attorneys or and accountants who specialize in IRS issues. You will walk away with specific answers to your specific IRS questions and problems. Often, this consultation is all you need to solve your problem.

Monday, October 16, 2006

Goldilocks or the 3 Bears - Major Crossroad for the Markets

There are two theories concerning the future of the economy. One theory could have a devastating impact on the stock market and the other would potentially just be a minor event.

Regardless of your opinion, the majority opinion is that the economy is slowing down. The question is how slow will it go?

There is the soft landing theory. This means that the economy is going to slow down just perfectly without any problems. This is the Goldilocks economy.

Then there is the hard landing. This means that things didn’t go so well and we end up in a recession. This would be the 3 Bears scenarios.

The Goldilocks economy is not much of a threat to the stock market. The hard landing scenario indicates a decline on the average of 30% or more in stocks creating a mean bear market. That is based on historical data.

You definitely want to be standing on the right side of the fence on this one. Keep in mind that out of the last 16 economic slowdowns, only 1 (1994) ended up being a soft landing. I would imagine that the majority were predicted to be the best case scenario. That seems to be status quo for most economists.

Today the question of Goldilocks and the 3 bears is extremely important. The stock market (as represented by the S&P 500) is at a major point. There is a good probability that this ends up being a major stopping point for the 4 year bull market. It is important to watch what the stock market does at this level. Depending on where this market heads over the next 3 to 4 months, it could be a predictor of either the Goldilocks or 3 Bears scenario.

The stock market is a great indicator of the future. Thus if the 3 bears scenario is in our future it should be reflected in the stock market before a recession occurs with a mean bear market. If the stock market continues to act well, then it would be potentially predicting a soft landing for the economy. This would indicate a continuation of a bull market that started back in October 2002.

The moral of the story is - Be Careful How you Eat Your Porage!

Wednesday, October 11, 2006

I Pity The Fool and other Scientific Indicators


I felt compelled to bring you an excerpt from a site that I follow throughout the day http://www.minyanville.com/. I have spoken about the scientific approaches to managing money. This is one of the big time indicators that you can use for the Gold market. Of course, I am just kidding.

This is pretty funny stuff. Mr. T debuted with his reality tv show last night. As one might expect, it didn’t go over very well. It appears that Mr. T and his Gold Chains have some influence over the Gold markets every time he hits milestones in his career.

I bring you the Mr. T Gold Indicator Key


1. 1981 - With gold at all-time high, Mr. T lands role in Major Blockbuster, Rocky III.

2. 1982 - Gold rebounds from sharp sell-off, but peaks as Mr. T lands role in hit TV series The A-Team.

3. 1987 - The A-Team is canceled, its final episode airing in March 1987... a final farewell for Mr. T?

4. 1996 - Mr. T returns to star in comedy cult classic "Spy Hard," as "Helicopter Pilot."

5. 2006 - Mr. T returns to television as star of reality show "I Pity the Fool." Series roundly panned by critics suggesting appetite for society's symbols of gold has peaked.

Monday, October 02, 2006

A Bubble is a Matter of Perception or a Matter of Reality

A Bubble is a matter of perception writes one writer regarding real estate. She claims that real estate is not in a bubble because prices on real estate cannot go down 50% over night.

She writes, “A bubble is a market in which the value of the key asset is inflated based on speculation and psychology. Because of this, true bubble markets can burst overnight when something happens to shatter the perception of value.”

The first part of her sentence describes the residential real estate market. The price of residential real estate became initially inflated because of two reasons. First, the barriers to entry were removed. The mortgage industry made it to where just about anyone could get a mortgage whether they truly qualified or not. Interest rates were falling to historic lows. This increased buying activity.

Second, as a result of the first reason, investors started jumping on the increase in activity and spurred the speculation by flipping houses and properties.

Increased buying increases the prices of the real estate. Thus it was created through cheap money (low interest rates) and easy to get mortgages with choices of payment.

True bubbles can burst overnight. However, it took 25 months for the stock market to deflate from its bubble. That didn’t happen overnight and that was a bubble.

She calls it a corrective cycle. Thus indicating that this is just going to go through normal times and then real estate will start going back up. There is a big difference between this time period and other cycles.

In the past, we weren’t dealing with the irresponsible lending and borrowing that has taken place. Over 2 trillion dollars worth of adjustable rate mortgages will be coming due over the next two years. Just the small amounts of ARM’s that have come due recently, have dramatically increased the foreclosure rate. As this happens, real estate prices should continue to be under pressure. In addition, rising interest rates have also dampened real estate buying.

Buyers typically don’t buy while prices are falling. They wait for a better deal. They also buy much less in rising interest rate environments. Finally, people that walk away from mortgages because of rising interest rates and the inability to pay force pressure on markets. Thus, real estate could fall a lot lower before it starts recovering making it look like a bubble rather than the perception of one.