At their peak in February 2007, U.S. and foreign-owned companies sold automobiles in America at an annual pace of 16.6 million units.

Last month, their sales pace plunged to 9.3 million, a decline of
44 percent (including the best performers like Toyota and Honda).

Again, as with housing, we saw a tiny uptick in the prior month, hailed by high officials as a “sign” of improvement. Yet, as with housing, it was weaker than all prior “signs of a turn” over the past 26 months – each of which was followed by a sharper plunge.

Any lights at the end to Detroit’s dark tunnel? Only those of three speeding freight trains:

• The Chrysler bankruptcy, despite all the talk of a “quick and easy” procedure, is not only frightening U.S. car buyers away from the Chrysler brand, it’s also scaring them from other U.S. and foreign makers. And it’s not only hurting auto dealers and parts suppliers, but also smacking auto lenders. Meanwhile …
  
  
• GMAC, the nation’s largest auto lender, is already in its death throes, with the government now estimating it could suffer additional losses of a whopping $9.2 billion over the next two years. Will the Obama administration bail it out? Perhaps. But it would still have to downsize its operations, throwing another monkey wrench into General Motors’ sales. Meanwhile …
  
  
• General Motors is now sinking even more rapidly toward bankruptcy than it was just a few months ago. According to last week’s New York Times column, G.M., Leaking Cash, Faces Bigger Chance of Bankruptcy …

“Even after receiving $15.4 billion in federal loans, General Motors is once again on the brink of financial collapse.

“The automaker’s first-quarter earnings released Thursday showed that G.M. was losing more money and sales than it was in late December, when the government began its bailout.

“With its cash reserves down to the bare minimum and its revenue plunging, G.M. seems more certain each day to be heading toward a bankruptcy filing. …

“The company’s chief financial officer, Ray Young, called the drop … ‘a staggering number,’ and said consumers were showing increasing concern about G.M. products because of the potential for bankruptcy.”

General Motors’ CFO added: “Once you start losing revenues, you get yourself into a vicious cycle from which you cannot recover.”

Sound familiar? It should. It’s the same vicious cycle I’ve been warning about for many moons – falling revenues prompting mass layoffs, and mass layoffs driving down revenues.

Storm #4
Biggest Decline in Consumer
Credit Ever Recorded!

Any economist counting on the consumer to get things going again had better go back for some more Rorschach tests …

… because you don’t need a therapist to interpret the image depicted in my chart below. It shows very clearly how the nation’s lenders are dumping consumers and making a mad dash for the exits:

In the third quarter of 2007, banks dished out $44 billion in net new loans on credit cards, autos, and other consumer credit (excluding mortgages).

Then, just 12 months later, in the third quarter of 2008, that giant credit machine collapsed to a meager $8.7 billion, a decline of 80 percent!

But the collapse didn’t end there. In last year’s fourth quarter, not only did new credit disappear, but lenders actually pulled out of the consumer credit market to the tune of $19.5 billion.

And they did it AGAIN in the first quarter of this year, pulling out another $12.2 billion.

It is the biggest collapse in consumer credit ever recorded.

Now do you see why I’m recommending a shrink for any economist fixated on a recovery?

They know how important credit is. They know that few Americans have the savings to splurge on consumer goods. And they’re tired of knowing that a recovery is virtually impossible without credit.

And yet here we are, with the biggest-ever collapse in consumer credit – and they’re still searching for the “signs”!

Storm #5
Big Banks!

Whether the government lets big banks fail or not, the impact on the economy is similar: A massive contraction of bank loans and credit, sabotaging attempts to revive credit flows and stimulate the economy.

Reason: These banks must build capital quickly, and the only realistic way to do so is by cutting back on their lending.

The official stress test results released Thursday on 19 U.S. bank holding companies were supposed to help determine exactly how much capital they’ll need, and the total came to $75 billion.

That’s no small amount. But the stress tests will go down in history as the world’s most elaborate effort to paint lipstick on a pig.

To show you why, first, let me provide our analysis based on data from TheStreet.com Ratings, the Comptroller of the Currency (OCC), and the banks’ first-quarter financial statements. Then I’ll show you why I believe the official results grossly underestimate how much capital the banks will need and how much pressure they’ll be under to slash lending.

We find that …

• Seven institutions – JPMorgan Chase & Co., Citigroup, Wells Fargo & Co., Goldman Sachs Group, GMAC LLC, SunTrust Banks, Inc., and Fifth Third Bancorp – are at risk of failure and may have to cut back lending dramatically to stay alive.
  
  
• Eight institutions – Bank of America, Morgan Stanley, PNC Financial Services Group, US Bancorp, BB&T Corp., Regions Financial Corp., American Express Co., and Keycorp – are borderline, meaning they could be at risk of failure with worsening economic or financial conditions and will also have to cut back on lending.
  
  
• Only four institutions – MetLife, Bank of NY Mellon Corp., Capital One Financial Corp., and State Street Corp. – appear to have adequate capital to withstand worsening conditions. But even they may voluntarily cut back their lending in an attempt to maintain their current financial health.

Moreover, of the $11.6 trillion in assets held by the 19 institutions, those likely to cut back dramatically represent $6.56 trillion, or 56.5 percent, of the assets; while borderline institutions hold $4 trillion, or 34.7 percent.

Only $1 trillion – just 8.8 percent – of the assets are held by institutions with adequate capital, based on our analysis.

In contrast, the government is trying to persuade us that most have plenty of capital … the rest can easily raise it … and none will have to slash lending in a way that would sabotage the prospects for an economic recovery.

So what explains this vast discrepancy between the official conclusions and ours?

The simple answer: Three unmistakable deceptions in the government’s stress tests …

First deception: The assumptions.

To come up with estimates of future losses, the government assumed what they call “a more adverse” scenario. But their more adverse scenario is actually less adverse than the current reality!

Hard to believe? Then just look at their own numbers in the chart the Fed published recently:

• Their “more adverse” scenario is predicated on the presumption that the GDP will contract no more than 3.3 percent this year. But in actuality, the GDP is already contracting at an annual pace of 6.1 percent!
  
  
• Their “more adverse” scenario also assumes that unemployment will average 8.9 percent this year. But unemployment has already reached 8.9 percent in April, and no one – not even economists fixated on recovery signs – is anticipating anything but a further rise.

Either they’re delusional. Or they’re cheating at solitaire.

Second deception: No mention of systemic risk!

The banking regulators have published two major white papers on the stress tests – “Design and Implementation” plus “Overview of Results.” However, in these papers, they have failed to even mention the greatest risk of all: systemic risk.

This is the risk that …

• A few key players in highly leveraged instruments like derivatives could default on their trades.
  
  
• These defaults could set off a series of failures, with the most severe impacts felt by banks that hold the largest share of the derivatives in the country.

This is the giant risk that the Government Accountability Office (GAO) wrote about in its landmark 1994 study, “Financial Derivatives: Actions Needed to Protect the Financial System,” warning of “a chain reaction of market withdrawals, possible firm failures, and a systemic crisis.”

This is the giant risk that triggered the collapse of Bear Sterns, the failure of Lehman Brothers, and the $180 billion bailout of America’s largest insurer, AIG.

It’s the giant risk that AIG executives themselves wrote about in their recent memorandum, “AIG: Is The Risk Systemic?,” warning of a “cascading impact on a number of life insurers already weakened by credit losses” … and “a chain reaction of enormous proportion.”

It’s the giant risk that the International Monetary Fund is most concerned about when it warns of another $3 trillion in global losses due to the banking crisis.

It’s the giant risk that prompted former Treasury Secretary Henry Paulson to literally drop to his knees last September, begging Congress for $700 billion in bailout funds for the banking industry.

Since that day, the U.S. economy has suffered the worst back-to-back GDP declines in over 50 years, burning the nation’s fuse even closer to a blow-up.

And yet, suddenly, in a massive undertaking that was supposed to accurately evaluate the banks’ exposure to these dangers, it’s also the giant risk that has been scrupulously scrubbed from 59 pages of official white papers, a half dozen press releases, plus multiple public pronouncements – all about the stress tests, all without a single mention of systemic risk.

This omission is both deliberate and unforgivable.

It means the stress tests have failed to fairly evaluate the credit exposure of each bank to defaults by their trading partners. And it means the tests are creating a false sense of security for investors and the public that can only lead to greater mistrust, more loss of confidence, even panic.

The omission is especially misleading for large banks that dominate the derivatives market … would be at ground zero in any meltdown … and would therefore be among the first to suffer massive losses.

The prime example: The OCC reports that, at year-end 2008, JPMorgan Chase (JPM) held $87.4 trillion in notional value derivatives, including $8.4 trillion in credit default swaps.

(To see for yourself, click here to download the OCC’s latest report; scroll down to page 22; and check out the top line “JPMorgan Chase Bank NA.” Note: The next to the last column “Total Credit Derivatives” is 99 percent made up of credit default swaps, according to the OCC.)

Why is this such a big problem? For several reasons:

• Although it’s cut back a bit, JPM still has 43.6 percent of all the derivatives held by all U.S. commercial banks, or $17 trillion more than Bank of America and Citibank combined. Among the 19 bank holding companies in the stress tests, that puts JPM closer to ground zero than any other bank.
  
  
• It’s well known that credit default swaps are the highest-risk sector of the derivatives market. And yet, in this sector, JPM has 52.8 percent of the total held by all U.S. commercial banks, or nearly double the total held by BofA and Citi. This puts JPM even closer to ground zero.

• JPM execs insist they’re smart and know how to handle their risks very neatly. But if that were the case, why did they suffer a whopping $2.5 billion loss in their credit default swaps in the fourth quarter? (OCC, page 27, Table 7, line 1, last column.)
  
  
• The OCC also reports that, for each dollar of capital, JPM still has $3.82 in total credit exposure. Mind you, that’s JPM’s exposure to just one kind of risk (defaults by trading partners) in just one kind of instrument (derivatives). In addition, JPM is also assuming market risks in derivatives plus a series of risks in its other investing and lending operations. (OCC, page 13, table at bottom of page, line 1, last column.)
  
  
• Despite all this, in their “more adverse” scenario, the banking regulators estimate JPMorgan Chase’s total “counterparty and trading losses” will not exceed $16.7 billion, a fraction of the true potential losses in a financial crisis.

With the fatal omission of systemic risk from their analysis, the government concludes that JPMorgan Chase is in good shape and does not need any additional capital.

The same omission leads to a similar conclusion for Goldman Sachs, despite the fact that Goldman has over $10 in total credit exposure per dollar of capital, or nearly triple the credit risk of JPMorgan Chase.

The only realistic conclusion: Both these institutions will need huge amounts of capital, driving them to cut back massively on new lending.

Systemic risk is the elephant in the room. Everyone knows it’s there. Everyone understands the dangers. But they’re afraid of the answers. So they dare not ask the questions.

The fundamental answer, though, is clear: Systemic risk is what drove the financial markets into a deep freeze seven months ago; and it was that storm which helped drive the economy into a tailspin.

Today, systemic risk is not gone. If anything, it’s far worse.

Third Deception: Improper influence.

In its white paper, the Federal Reserve admits that the stress tests were based, to a large extent, on each bank’s self-evaluation – not only for loan loss estimates that can be derived from past data, but also for the future performance of trading accounts, which can be far more subjective.

Moreover, each institution was allowed to appeal the final results, and several banks strenuously negotiated for more favorable grades. They even got regulators to accept their projections of future revenues, treating those future revenues almost as if they were cash in the kitty.

In contrast, we never permit the companies we evaluate to influence our evaluation process or our results. To do so would defeat the entire purpose of the exercise. But much like conflicted Wall Street rating agencies, that’s essentially what the bank regulators have done – from start to finish.

Put simply, the stress tests were too easy; the banks took the exams home with cheat sheets; and if they didn’t like their final grade, they could get the examiners to give them a better one.

Yet despite all these fudge factors, the government still estimates these institutions could suffer $600 billion in additional losses over the next two years.

And this is being portrayed as another “sign” of recovery?!

My view: We will have a recovery someday. But only AFTER we honestly recognize the grave mistakes of the past and own up to the hard sacrifices still ahead.

Until that happens, I’m staying the course, investing my own money in a way that protects me from the dangers and gives me an opportunity to profit from the next decline … which, by the way, promises to be the biggest of all.

If you want to follow along with me, check your inbox for an alert that I’ll soon be sending you personally – with the sender name “Martin D. Weiss, Ph.D.”

Good luck and God bless!

Martin

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

As I’ll prove to you in a moment, the hard-nosed reality is that five major economic cyclones are in progress at this very moment.

The storms are not abating. Nor are they changing direction. Quite the contrary, what you see today is, at best, merely a deceptive calm before the next, even larger tempests.

For investors who follow Wall Street, it could be fatal.

For contrarian investors, however, this insanity opens up some of the greatest opportunities in many years: Precisely when we see plunging barometers all around us, we also have a new surge of hype on Wall Street, driving stock prices higher.

Result: The rally has lowered the cost of contrary investments precisely when their prospects are best. Consider the five storms, and you’ll see exactly what I mean …

Storm #1.
Plunging Jobs

On Friday, the Bureau of Labor Statistics announced that job losses were running at a slightly slower pace than in the first quarter. So Wall Street cheered.

But it’s a joke, and the 539,000 additional Americans out of work aren’t laughing.

Nor are the 23 million people – 15.8 percent of the work force – who are officially unemployed … are struggling with lower paying part-time jobs … or have given up looking for work entirely.

Look. In December 2007, there were 138.1 million jobs in America. Now, there are only 132.4 million.

So even if you accept the government’s tally of the narrowest unemployment measure, 5.7 million jobs have been lost.

Plot those figures on a chart and the picture is absolutely unambiguous: Jobs in America are collapsing. Right here and now!

Where’s that “slightly slower pace of collapse” they’re raving about? You’d need a microscope to see it.

Storm #2
U.S. Housing Starts Down 77.6 Percent!

Housing is the nation’s largest industry. With it, the entire global economy boomed in the mid-2000s. Without it, a recovery is next to impossible.

The big picture: Housing starts, the best measure of the industry’s health, peaked at an annual pace of 2.3 million units in early 2006.

Now, they’re running at barely more than a 0.5 million units.

That’s a decline of 77.6 percent – three-quarters of America’s largest single industry wiped out.

Yes, back in February, there was a tiny uptick: Starts rose from 488,000 to 572,000. And everywhere we heard voices cheering the “spectacular” jump in housing starts.

What they didn’t tell you is that the so-called “jump” was actually smaller than six of the seven minor upticks we’ve seen in housing starts since 2006. Nor did you hear them say much when this measure fell anew in March.

Subscriber, this industry is not recovering. It remains in a state of near total collapse.

The only major change: Lenders have given up waiting for a recovery that never comes. So they’re throwing in the towel, unloading huge inventories of foreclosed properties at fire-sale prices. And they’re calling that a “recovery”?

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.

• Level of Education Some studies indicate lower risk profiles for given degree holders, in particular
  those with degrees in engineering, science or math. Savings fall in the range of 10 to 30 percent when available.

• Current Occupation Did you know that teachers and farmers have the lowest risk-associated occupations?
  Farmers might have to press the point, but it’s fairly simple for educators to score discounts of 10 to 30 percent.

• Military Service Many insurance providers, including GEICO, give discounts of 2 to 15 percent to
  military personnel, both active and retired. An additional attractive option is decreased coverage levels during periods of
  deployment when the insured vehicle is placed in storage.

• Age In general, people who are retired can avail themselves of a considerable level of
  discounts. Hartford, for instance, offers a AARP Auto Insurance Program with savings of as much as 45 percent. (Membership in AARP
  can benefit drivers in a number of ways regardless of the insurance company involved. Members should investigate this angle fully
  before negotiating their policies.)

• Continuing Driver’s Training Defensive driving courses and other driver’s safety programs can be used to lower
  premiums with almost all insurers. Normally this is an option people look at after a traffic citation, but the classes can be taken
  at any time for insurance purposes. (Note that these classes can now be taken online or via CD or DVD.

Drivers should also remember to investigate procedure-based discounts like
those awarded to multiple policy holders in a single family (husband, wife, and a teenage driver, for instance.) Family rates on
premiums can lower costs considerably. Also, don’t neglect new programs offered by some insurers for teenage drivers when monitoring
or GPS systems are placed on the car. Car leases may come with a substantially lower insurance premiums, but be aware that this option
has become much more rare as automakers have been forced to retreat from leasing due to the current economic climate.

Above all, insurance customers should conduct their own research and ask as
many questions as needed to be comfortable with the coverage offered. Always comparison shop. Never be uncomfortable about haggling.
Simply telling an agent that you’ve been offered a better rate by the competition can go a long way toward opening up the discounts
you need to get the most affordable coverage possible.

Just remember to shop around and request car insurance quotes from multiple providers…

Consumer confidence is a difficult thing to measure, but the latest Consumer Confidence Index (CCI) from Nationwide Building Society, which is based on a survey of consumer opinion, rates consumer confidence at its lowest in at least four years (the index did not exist before 2004).

The evidence is there: budget supermarkets are boasting their highest profits in years, sales of new cars have fallen 21% in a year, and more established High Street chains such as John Lewis and BHS have announced significant falls in profits. It would seem that consumers are becoming increasingly eager to save money where possible.

Consumer confidence and loan availabity

Traditionally, consumer confidence has primarily been a concern for providers of consumer goods and services. Banks and building societies, meanwhile, can sometimes benefit from reduced consumer confidence: when customers do not spend their money, it stays in their bank accounts, which provides funds for financial institutions to do business with. It also encourages taking out loans to finance more expensive purchases, which earns the lender interest.

However, with the uncertainty surrounding the financial sector at the moment, this situation could change. With a number of banks merging and others reporting large falls in profits, the old cliché of keeping savings under a mattress might not be such an exaggeration.

However, a spokesperson for Think Money said that savings are still very important – not only for financial security, but for the good of their lenders too. “Consumer confidence is important to lenders, because they too rely on continuous business,” she said. “If lots of customers withdraw their savings in a short period of time, the banks could be left with very little money to do anything with, meaning they would have little money left to fund loans and other forms of credit. In a worst-case scenario, they could even fail.

“Our advice to consumers is not to panic and to try to carry on as normal. Take confidence from the fact that lenders are still offering loans to customers, which they simply wouldn’t do if the money wasn’t there.

“The Government’s £50bn rescue plan, combined with the recent half-point base rate drop, will only serve to improve lenders’ ability to offer loans – it may just take a little longer to find the right deal.”

Free Guest post by loan and mortgage specialists www.ThinkMoney.com

Current Dow Jones Industrial Index Value: 8,577.91

Trade Time: 4:04PM / 15/110/2008

We already know that Jim Cramer suggested stock owners should get rid of stock if they need it desperately within the next 5 years. What do you plan to do ?

• Apple Computer Inc. and Oracle Corporation incorporated.
• Elvis Presley died at age 42.
• Egyptian President Anwar Sadat becomes the first Arab leader to officially visit Isreal when he meets with Israeli Prime Minister Menachem Begin, seeking a permanent peace settlement.

I decided to get this written after reading a quote from Whitney Tilson , manager of T2 Partners LLC. He said “Read all of Warren Buffett’s Berkshire-Hathaway shareholder letters . That’s all you need to know.” If you would like to see more summaries like this, let us know !

Long Term vs. Short Term Outlook

While operating earnings were “moderately better” than anticipated the report represents a mixed bag of financial information to stockholders. The actual numbers are not as important as the underlying messages contained within the report. More than once, a reference to keeping a long term outlook vs. short term is plied as a way to deflect possible criticism towards under-performing business units and numbers that are not as favorable.

Of note, textile operations are under-performing, banking is performing as expected and insurance is surging although there are signs of a slowdown in profitability.

Much is made of the way earnings per share and equity capital are viewed when addressing “record” earnings as a new high mark. Taking a more realistic approach in how it is compared to annual equity growth gives credibility to the report in not over-stating the equity position. But this is a double-edged sword. Because of this methodology, the point is made that the current fiscal year does not appear to be in a position to deliver as strong of a financial performance as 1977.

Textile Unit

As for the textile unit, an admission is made to the ineffectiveness of forecasting and with a lack of understanding of the nature of the industry as a whole. The problems appear to be both market driven as well as based on poor management overall. The report does not mince words and makes certain that shareholders know that while profitability is important, so too are the livelihoods of thousands of workers, and the apparently strong efforts by all to bring the division to a profitable position. While this is a nice gesture in keeping the business afloat during this time, it is not a good long term strategy. Sooner or later, the business will have to produce profits, or be faced with the prospect of being sold or dissolved. The problems of marketing and manufacturing are areas of focus in order to turn this unit towards a profitable state.

Insurance Unit

The insurance unit contains the greatest up and down trends among all of the units. While growth and profits are strong, an admission of specific failures over-shadows an otherwise stellar performance. These failures are apparent in certain products and personnel issues. Only one of these is given a possible solution, and that is the personnel issue which is being remedied through a re-organization. The others are not addressed as to their resolution. One is left to assume that a certain amount of ’sins’ are admissible since the P&L sheet is strong.

Tough Times?

The underwriting portion of the insurance unit will be experiencing rough waters because greater than expected costs of operations will impair future profits. This coupled with the fact that rate increases are not keeping abreast with cost increases of 1% per month, portends a foundering outlook. The two areas that are forcing upward pressure on cost are monetary inflation (“the cost of repairing humans and property”) and social inflation (the cost increases realized by an erosion of the boundaries which contain what is covered by insurance policies). These specific increases are a result of liberal societal views backed by jury decisions which affect the insurance industry as a whole.

Again, a stark contrast to good profit news is presented by the realization that a reduction in volume in underwriting will force pressure on the unit to compete in an area that it is not familiar with at this time – price. The goal of which is to keep competition at bay. The wisdom of such a move will play out on its own, but it is has always been very difficult to pull back from a price centric marketing model once a business begins to play in that field.

The homestate operations are well within tolerable limits by producing low loss ratios. The trend is strong and shows that it is a profitable and well-run unit.

A statement is made to the sameness of insurance operations at all companies, but with the difference being the positive effect of the individual managers on the business unit and how fortunate they are to have their current management team in place. This is a powerful testimony to the contributions that individuals make in a given organization.

Investment Principles.

Insurance investments are a large growth area that should be expanded upon. The admission of the stance of keeping long-term strategies when looking at investments will prove wise for overall positive performance in the future.

Then, the report digresses into a history of Berkshire years which illustrates that one financial year does not a company make (or break). Not lost on business savvy persons, this illustration is more an attempt to prevent knee-jerk reactions to short-term trends and to stay the course in order to ultimately get to the point of realizing a favorable return on investment.

Equity holdings are listed for 1977, and much is made of the selection process for marketable equity securities. The report stresses that desirable business are 1) ones which are understood, 2) have favorable long-term prospects, 3) are operated by honest and competent people, 4) are available at attractive prices. These points can and should be applied to the other business units as well. This should make up an overall strategy in obtaining successful businesses in the future.

A distinction is made between corporate acquisition and large stock positions in companies with the understanding that long-term outlook drives these decisions based on excellent market value and dividend returns. The report speaks to ownership of a corporation vs. allowing it to thrive under its present management and how, while somewhat unorthodox, this view results in a better return. It emphasizes up-side potential without the operational costs associated with ownership.

Banking Unit

The banking holdings perform strongly and the outlook is expected to remain so. Finally, equity interest in Blue Chip Stamps was increased. This unit showed solid growth.

The $22.54 earnings per share helps in keeping shareholders content. It is not a great report, but not bad either especially given the economic climate at the time.

About Berkshire Hathaway

Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B) is a conglomerate holding company headquartered in Omaha, Nebraska, U.S., that oversees and manages a number of subsidiary companies. Berkshire Hathaway’s core business is insurance, including property and casualty insurance, reinsurance and specialty nonstandard insurance. The Company averaged an annual return in excess of 21% to its shareholders for the last 42 years while employing large amounts of capital and minimal debt.

Some replies on Yahoo Answers
“Just buy a mutual fund or ETF that invests in Chinese stocks. You will get the benefit of effectively holding the Yuan. D” . Response from Heavy D

I know an indirect way. Buy a mutual fund that invests in Chinese stocks or buy Chinese stocks or buy them both. A rise in the Yuan will translate into a rise in the comparative value of the stocks when translated into U S dollars. Actually, the Chinese stocks will most likely outperform the U S stocks during the next 5, 10 and 20 years so you will potentially receive a double benefit.

Here are a couple of Chinese stocks traded as ADRs: CHL and ACH

Here are a couple of closed end mutual funds currently selling at whopping discounts to net assets: CHN, TDF.
Response from muncie birder

A guest post by Mark J. Smith. Want to be a guest writer on Financial Dominance ? Contact Marcel

People may fail to properly plan for their retirement needs because they focus exclusively on money. Retirement goals aren’t just financial. Knowing the lifestyle you want during retirement is the beginning of a successful wealth management plan. Do you want to tour in an RV, live in a beach house, or move closer to your children and grandchildren during retirement? By starting at the beginning—writing down and sharing your retirement goals with your financial team—you will ensure a completely customized retirement savings plan.

With a retirement goal set you are now ready to determine funding and should consider the following factors:

• In the past thirty years the average life expectancy increased from 73 years old to nearly 80. (Center for Disease Control) We need to plan for seven more years of life than our grandparents did.
• The U.S. inflation has increased 2.57% in the last seven years. (Inflationdata.com) When you retire the cost of living will be higher and each subsequent year of your retirement will require more money to maintain the same lifestyle.
• You can’t depend on Social Security to sustain you during retirement–even for necessities. We recommend that your Social Security checks be used for things you want in retirement, not things you need.
• Delaying retirement savings could hurt you more than you think. If a 25- year-old saves $4,000 per year for 10 years and has an eight percent annual account interest rate, at age 65 her retirement account will total $640,120. Waiting until she is 35 years old and saving the same amount annually with the same interest rate for 30 years, her account will total $408,534 when she is 65. Waiting 10 years to start saving for retirement causes a loss of over $200,000 in this case, even though she saved for 20 extra years! This hypothetical illustration is not intended to reflect actual performance.
• Mortgage vs. savings – Because of the compounding nature of a liquid investment portfolio as compared to the equity in your home, you may ultimately net more money by increasing your savings first than you would if you chose to pay off your home and save afterward. We typically recommend that your net worth consist of approximately 25% in home equity and 75% in retirement savings. Of course, each person’s situation is different.
• Retirement cash flow is a major concern. Make a list of things you will need in retirement—housing, food, insurance, transportation and healthcare. Then make an additional list of things you want to have in retirement—a second home, entertainment or providing charitable donations. Fund at least some of the things you want, in addition to all of the things you need.

Other factors may contribute to a retirement age, including what investments you have made, the stability of your investments, and the sequence of your investment returns. Please contact a financial advisor if you have questions about your retirement planning.

Mark J. Smith CFP®, CPA/PFS, CIMA®, was named one of the top 10 financial advisors in the U.S. by Registered Rep magazine; named the top-ranked independent advisor in Colorado and number 22 in the U.S. by Barron’s; and the Winner’s Circle, an independent advocacy organization, named him one of the top financial planners in the country. Visit www.mj-smith.com for more information on Mark J. Smith and his Colorado-based firm. Securities offered through Raymond James Financial Services Inc. Member FINRA/SIPC.

Will

A will is a legal, signed document that states your wishes regarding disbursement of your property after your death. Making a will when you are healthy and in sound mind, can save your family a lot of time, energy and money when you are dead. If you die intestate, which means without a will, a large chunk of the money from your estate will likely go towards higher legal fees as well as additional taxes. If you’re wondering where is the safest place to keep your will, you could keep a copy of the document in your bank locker. Make sure you appoint an executor to the will and keep your will in a place where this individual or entity will find it easily. The executor of your will could be either an attorney or a family member or even a trust company. In the event of your death, the court will appoint an executor if you have not named one.

Letter of Instruction

It would also be a good idea to leave a letter of instruction, which is a letter informing your family about your last wishes including the funeral or burial arrangements you’d like to have and who you’d like them to notify upon your death. This letter cannot and will not be used as a substitute for a will. It is an informal letter. You could also include details about where your will and other important documents are located, the money that you owe to various people or the money that is owed to you by various people.

Trusts

Contrary to popular notion, trusts can be used by everybody and are not only for the super rich. In fact you should talk to your financial planner or lawyer about creating a trust. Whatever assets you place in your trust will automatically be given to the beneficiaries; there are no probate costs involved. A revocable living trust states who will have control over your assets while you are living as well as when you are dead.

Durable Power of Attorney for Health Care

This legal document ensures that in case you were to become incapacitated, your affairs will be looked after as per your wishes. If you have not named one, the court will appoint someone they deem most appropriate. It is also called a living trust and the person nominated will be responsible for taking care of your health care as well as your financial arrangements.

Legal documentation for website owners

Websites, Terms of service, Privacy Policies and disclaimers

Legal resources and downloads ( 4 affiliate links )

Court Records – a Legal Records Site

Personal/Business Forms & Contracts On All Subjects

Secrets Of Winning The Estate Tax Game. Estate Planning System

Legally keeps wealth in your family, instead of losing it to the IRS.

The Authoritative Guide To Vaccine Legal Exemptions.

For students, parents, immigrants, employees, healthcare professionals, agencies and attorneys.