This is positive right?

WASHINGTON (AP) — Lenders are ramping up efforts to avoid home foreclosures, but a report by bank regulators says more than half of borrowers who get help fall behind again. More than 50 percent of homeowners with loans modified in the first half of last year had missed at least two months of payments a year later, the federal Office of the Comptroller of the Currency and the Office of Thrift Supervision said Wednesday.

From the ‘USA Today’:

You don’t have $100 to buy groceries. Which would cost you more? A.) Taking out a payday loan with a 450% APR or B.) Overdrawing your debit card and paying the $27 fee? Answer: B. The $27 fee on your debit card would equal a 704% interest rate. Note: Assume a 14 day repayment period and an average $17.25 fee per $100 for a payday loan. Annual percentage rate (APR) calculated by taking transaction revenue divided by amount borrowed, multiplied by 365, then divided by the loan term.

This is the news today on the front page of USA Today Money section.

Shout out to Victor Niederhoffer for posting my review of Michael Moore’s new film.

Jeff Tucker reviews “Broke” at Mises.org:

Broke, a new documentary by Michael Covel, offers an extremely engaging look at what went wrong with the macroeconomy but in a very interesting way: he provides close examinations of several microeconomic sectors that affect the financial well being of the household.

Most impressive is his contemporary history of the housing bust. Most of the energy of the film seems to have been focused on this area, and it is the most successful part of the film. Covel illustrates the vast gulf that separates the promise from the reality. It is especially interesting to see the film maker’s conversations with real estate brokers, lenders, and homeowners on their way to foreclosure.

I was also thrilled to see his relentless hammering of the financial press, especially the television press. He argues that the talking heads on CNBC (he really has it in for Jim Cramer) and elsewhere are as clueless as anyone about why stocks go up and down or what you should do with your money. He puts guests on his own camera where they admit that what they say may or may not be useful but the main purpose of these shows is not to help viewers with their finances but rather to keep people glued to the set: in other words, this is entertainment. This point can’t be made enough and it applies more broadly than financial news. A vast majority of viewers, and this includes even smart people, continue to be under the impression than the news industry is about distributing news as versus the driving need to provide a compelling time suck.

In another section, he takes a look at state lotteries to show what a scam they are, and compares them to the poker industry in which individuals can in fact win money. Guess which of the two government loves? Which of the two is government always regulating and banning? Very interesting point here.

He concludes with a satisfying attack on the “buy and hold” investment strategy, which he sees as nothing but broker-promoted propaganda to keep you from ever selling stocks. In contrast, truly savvy investors and poker players understand that the well-orchestrated sell order is the key to long-term profits. One point I found interesting: he shows that the largest earners in the poker industry are not the people who win the most hands.

Nothing in the film contradicts Austrian theory, and one portion shows the way that the Federal Reserve compounded the problems of the housing boom through crazy interest-rate manipulations that overstimulated investment. I would have liked to see more of this. This section is much too short, and I would have liked to hear and see more, but of course I’m a viewer with a bias.

While the film seems to lack a bit of overarching theoretical focus and periodically seems to lose its analytical drive, it is still an excellent corrective to a wide range of myths out there, such as the one that claims government can solve the problems of the bust or that you can trust the media or large firms to give sound economic advise.

If there is an overarching theory to the film–would that he would have made this more explicit–it is that there is no one who knows the future, despite every promise. This is the job of serious entrepreneurs, and some of them are very good at it. While this film will not help anyone become such a person, it might help some people who might otherwise be taken in by the myriad phonies out there trying to hawk their wares.

Source: Mises.org.

John B. Watson, psychologist, and founder of “Behaviorism” once offered:

“Men are built, not born. Give me the baby, and I’ll make it climb and use its hands in constructing buildings of stone or wood. I’ll make it a thief, a gunman or a dope fiend. The possibilities of shaping in any direction are almost endless.”

I thought of this quotation today due a phone call. The caller wanted to know why the Turtles today have differences in performance. Two issues for consideration:

1. Some Turtles like Jerry Parker have chosen a path of less risk and less return. Some like Tom Shanks have stayed true to their higher risk/reward roots. Even though they have made different choices they are BOTH still trend following Turtle traders!
2. Beyond risk/reward choices, chapters 11, 12, 13 and the afterword of my book lay out a clear picture why some Turtles made it and some did not.

Eric Crittenden, Research Director for Blackstar Funds, LLC, offered some new research stating:

The non-random behavior of declining stock prices….argues for the use of a ’stop loss’ or ’sell discipline’.

Read the research (PDF).

Obama is speaking now. He just said something about eliminating boom/bust cycles along with eliminating future economic meltdowns. Nice try Mr. President.