Trends & News

I thought this deal was ABSURD, but pensions are piling in…

We have been talking about the pension crisis for years now. It’s without a doubt one of the biggest, financial disasters.

These pools of capital, responsible for paying out retirement benefits, are terribly underfunded. So anyone depending on a pension in their retirement years should seriously consider a Plan B – and sooner rather than later.

We aren’t alone in sounding the alarm on pensions.

The World Economic Forum reported that in[...] Click here to continue reading
  • Simon Black
  • December 7, 2018
  • Dorado, Puerto Rico

This banking scandal is awful… even for Wells Fargo

I guess none of this should surprise me anymore.

Our old friends at Wells Fargo are involved in yet another banking scandal. And this one is really bad… people wrongfully lost their homes and ended up on the street.

But before I get into the details of this particularly atrocious mishap, let’s have a quick recap of Wells’ “greatest hits.”

Back in April, Wells was hit with a $1 billion fine for[...] Click here to continue reading
  • Simon Black
  • December 6, 2018
  • Dorado, Puerto Rico

Lenin would be so proud

Several years ago back in 2004-2006, if you had a pulse, you could borrow money from a bank to buy a house.

In fact, bank lending standards were so loose back then that there were some infamous cases of people who DIDN’T have a pulse who were still able to borrow money.

That’s right. Some banks were so irresponsible that they actually loaned money to dead people.

Of course, it turned out[...] Click here to continue reading
  • Simon Black
  • December 4, 2018
  • Dorado, Puerto Rico

Government now wants to seize your car for going 5 MPH over the limit

[Editor's note: While Simon is traveling today, other members of the Sovereign Man team penned today's missive.]

We’ve discussed this on and off for several years now. Civil asset forfeiture is a legal process that allows the government to seize assets and cash from citizens without any due process or judicial oversight.

You don’t even have to be charged with a crime. You are assumed guilty unless you can somehow prove your innocence.
[...] Click here to continue reading
  • Simon Black
  • November 30, 2018
  • Denver, United States

Three strikes against Social Security’s already dismal batting average

[Editor's note: While Simon is traveling today, other members of the Sovereign Man team penned today's missive.]

This doesn’t make front page news… But it should.

Every year, cost of living adjustments increase Social Security benefits.

Over the past decade, payouts have increased by an average of 1.66% per year, according to the Social Security Administration (SSA).

But for 2019, the increase will be 2.8% to keep pace with inflation.

[...] Click here to continue reading
  • Sovereign Man
  • November 28, 2018
  • Dorado, Puerto Rico

Local government foils evil terrorist entrepreneurs once and for all

Tens of thousands of years ago, humankind was practically an endangered species.

Our early proto-ancestors had little means to protect against the harsh elements or defend against terrifying predators.

And finding enough food was a constant challenge.

Tribes of humans would roam from place to place, foraging for whatever they could eat until they had exhausted nature’s resources… and then be forced to move on to a new location.

And the[...] Click here to continue reading
  • Simon Black
  • November 15, 2018
  • Dorado Beach, Puerto Rico

Trouble brewing in Hong Kong

Hong Kong has for decades been one of the most stable places in the world.

When the British took Hong Kong over in the late 1800s, it was nothing more than an irrelevant backwater made up of fishing villages and illiterate fishermen.

But after a few decades, it became one of the most prosperous places in the world.

And that wasn’t an accident. Hong Kong allowed unbridled capitalism to dominate and it[...] Click here to continue reading
  • Simon Black
  • November 12, 2018
  • Dorado Beach, Puerto Rico

Want a free $100K a year? Quit your job and move here…

According to the latest jobs report, averages wages for US workers increased 3.1% - the strongest growth since 2009.

 Median individual income in the US is now around $31,000, which means the typical American put an extra $1,000 in their pocket last year.

That’s solid extra cash.

But if you really want to see your wages grow, quit your job and become homeless.

 Just be sure you move to San Francisco.
[...] Click here to continue reading
  • Simon Black
  • November 9, 2018
  • Bangkok, Thailand

Here are all the ways inflation is happening today

Something strange happened in the markets last month that signals trouble ahead…


When stocks fell from their September highs, you would have expected investors to run for cover in the world’s safe-haven asset – US Treasurys.


But that’s not what happened.


While stocks were plunging, Treasurys also fell. Yields on 30-year Treasurys increased to 3.4% from 3.22% (and yields have already more than doubled from their 2016 lows).


It’s a sign that the market is[...]

Click here to continue reading
  • Simon Black
  • November 8, 2018
  • Manila, Philippines

Detroit police murder a family’s dogs in their own home

This one is pretty disturbing.

In January 2016, Detroit police were tipped off that someone was selling small quantities of marijuana out of their home.

Given that the City of Detroit’s murder rate exceeds that of Mexico, you’d think that the Police Department would have had bigger fish to fry.

Apparently they didn’t. So the cops obtained a search warrant and went over to the house.

They knocked, waited a moment,[...] Click here to continue reading
  • Simon Black
  • October 30, 2018
  • En Route to Australia

How the government uses its giant facial recognition database

In July 1996, flight TWA 800 exploded in mid-air, 12 minutes after taking off from JFK International Airport in New York. All 230 passengers on board were killed.

It would be four years before an investigation concluded the likely cause of the explosion was a short circuit in the plane’s fuel tank.

But at the time, President Clinton felt the overwhelming need to do something.

People suspected terrorism. So Clinton issued new[...] Click here to continue reading
  • Simon Black
  • October 29, 2018
  • Santiago, Chile

What a bunch of idiots

Tell me this isn’t crazy--

A few days ago the creator of the most famous consumer ‘credit score’ in the United States announced a major overhaul in how it rates borrowers.

Consumers live and die by this ‘FICO score’. A high FICO score means that it’s easy to obtain loans at lower interest rates.

And a bad FICO score (in theory) means that you have a history of not paying your debts…[...] Click here to continue reading
  • Simon Black
  • October 25, 2018
  • Santiago, Chile

Is Netflix being run by the United States Congress?

Shares of Netflix soared today on news the company lost a record $859 million in cash in the third quarter.

Why are investors applauding this egregious destruction of capital?

Well, it’s because investors only look at one number when Netflix reports earnings – subscriber growth.

And on that metric, the company outperformed, adding 6.96 million subscribers, bringing the global total to more than 137 million.

At 137 million subscribers, Netflix has[...] Click here to continue reading
  • Simon Black
  • October 17, 2018
  • Dallas, Texas, USA

These international borders have become “no rights zones”

On June 15, 1215, King John sat in a field in Runnymede, England, surrounded by angry nobles.

His Barons—the big landowners throughout England—had rebelled and seized London, forcing King John to sign an agreement guaranteeing certain rights to the people of England… and restrictions of his power.

This agreement was called the Magna Carta. And it would become one of the most important documents in history.

Centuries later in 1678, Charles II[...] Click here to continue reading
  • Simon Black
  • October 15, 2018
  • Bahia Beach, Puerto Rico

How’s this for crazy: Tesla is still worth more than HONDA

Earlier this year I quoted Chicago-based hedge fund manager John Thompson of Vilas Capital Management-- who has been incredibly vocal (and blunt) about Tesla.

Back in March, Thompson said that he thinks Tesla is going to crash . . .

“. . .partially due to their incompetence in making and delivering the Model 3, partially due to falling demand for the Model S and X, partially due to the extreme valuation, partially due[...] Click here to continue reading
  • Simon Black
  • October 10, 2018
  • Bahia Beach, Puerto Rico

With corruption like this, it’s no wonder so many pension funds are insolvent

Last week, the head of a New York state pension fund found herself a new job.

Vicki Fuller, the former head of New York’s $209 billion fund, now earns $275,000 per year working part time for a natural gas group called The Williams Companies-- good work if you can get it.

It’s noteworthy that when Ms. Fuller ran her state pension fund, she invested $110 million of taxpayer money to buy bonds issued[...] Click here to continue reading
  • Simon Black
  • October 8, 2018
  • Amsterdam, Netherlands

This is the safest 20%+ you will ever make

Yesterday I told you about a still little-known gem in the US tax code known as opportunity zones.

The example I gave you yesterday is-- let’s say you have Apple stock, and you sell today for a total gain of $250,000.

Ordinarily you’d have to pay tax on that gain.

But if you invest that money in a fund that invests in specially designated ‘opportunity zones,’ which are generally underdeveloped areas, you[...] Click here to continue reading
  • Simon Black
  • October 5, 2018
  • Bahia Beach, Puerto Rico

One of the greatest follies from the last crisis is back

Hudson Yards is a gigantic real estate project on New York City’s western edge that will be the most expensive development in US history when it’s completed in 2025.

At $25 billion, the project costs more than the size of the entire economy of Iceland… which is saying a lot given that Hudson Yards is only 28 acres… literally one millionth the size of Iceland.

According to the plan, in seven years (so[...] Click here to continue reading
  • Simon Black
  • October 2, 2018
  • Bahia Beach, Puerto Rico

The world’s greatest investors are sounding the alarm… it’s time to be cautious

Howard Marks is one of the greatest investors in history.

Marks is the founder of the credit investment firm Oaktree Capital Management. And he’s been sharing his insights with the public in his Chairman memos since 1990 (which you can read for free on his website).

Even Warren Buffett stops what he’s doing when Marks releases a new memo… Buffett says it’s “the first thing I open and read.”

Marks’ latest memo,[...] Click here to continue reading
  • Simon Black
  • October 1, 2018
  • Bahia Beach, Puerto Rico

The Return of the Inquisition: Do you confess?

In 279 BC, the vast army of King Pyrrhus of Epirus was met by Roman forces at the Battle of Asculum in southern Italy, in what would be one of the costliest military engagements of ancient history.

Pyrrhus fancied himself the second coming of Alexander the Great and believed that he was a descendant of Achilles.

Many of his peers and contemporaries believed Pyrrhus to be the greatest military commander of all time.
[...] Click here to continue reading
  • Simon Black
  • September 28, 2018
  • Bahia Beach, Puerto Rico

For people with talent and vision, this place has a LOT to offer

It was February 15, 1898. The American Civil War was a distant memory, and the United States had become the largest economy in the world.

Still, something was missing in the Land of the Free: colonies.

More than 100 years before, other leading powers like Spain and Britain had established colonies all over the world back when the US was just an infant.

By the time the US became wealthy and powerful,[...] Click here to continue reading
  • Simon Black
  • September 25, 2018
  • Bahia Beach, Puerto Rico

IRS agent indulges in bizarre fetish in taxpayer’s home

On June 8, 2006, more than a decade ago, armed agents from the Internal Revenue Service arrived at the home of Michael and Shelly Ioane of Atwater, California.

Michael Ioane was suspected of tax fraud, and the IRS agents were there to conduct a search of the premises and look for evidence.

About thirty minutes into the search, Shelly Ioane (the wife, who was not suspected of any crime whatsoever) told the agents[...] Click here to continue reading
  • Simon Black
  • September 24, 2018
  • Bahia Beach, Puerto Rico

How to dodge student debt and get a second passport

This month, college freshmen across the US are settling into their new lives.

For the next four (or five… or maybe even six) years, they’ll be immersed in safe spaces and bombarded with repugnant, hyper-socialist groupthink.

Then, at the end, they’ll walk away with a degree of questionable use… but they’ll also walk away with TONS OF DEBT.

Consumers are on pace to end 2018 with over $4 trillion of debt. And[...] Click here to continue reading
  • Simon Black
  • September 21, 2018
  • Bahia Beach, Puerto Rico

Where you can rent a luxury 2,800 ft. beachfront villa for less than $90/night

Last week I wrote about farmland in South Africa…


And how it’s taken a pounding thanks to a radical politician who is threatening to seize farmland from white farmers without compensation.


While I don’t think it’s time to buy South African farmland yet – that situation can get MUCH worse before bottoming – it’s always smart to keep an eye on a country in crisis.


And today, there’s an ongoing tragedy in Nicaragua – a[...]

Click here to continue reading
  • Simon Black
  • September 20, 2018
  • Bahia Beach, Puerto Rico

This time is different because there’s free tequila…

We poke a lot of fun at the MANY absurdities we see in this current bubble.

As we’ve discussed countless times over the past few years, there are consequences from the fact that central bankers have conjured trillions of dollars out of thin air and pushed down interest rates to zero.

Stock, bonds and real estate are at or near record highs. Bankrupt countries are issuing trillions of dollars of debt with negative[...] Click here to continue reading
  • Simon Black
  • September 18, 2018
  • Bahia Beach, Puerto Rico

Netherlands prosecutes its own citizen for calling Turkish dictator a “Goat F*cker”

It was mid-September in 1683, almost 335 years ago to the day. Turkish forces of the Ottoman Empire surrounded Vienna, one of the most strategic cities in Europe at the time.

Controlling Vienna meant controlling the Danube River, which flows from Western Germany to the Black Sea, providing critical access for the Ottomans to invade the rest of Europe.

So if Vienna fell, Europe would soon follow.

The Holy Roman Emperor, Leopold[...] Click here to continue reading
  • Simon Black
  • September 17, 2018
  • Bahia Beach, Puerto Rico

Ten years after the crisis… they’re doing the same thing and expecting different results

“Holy Crap-- turn on your TV! This is crazy!”

It was Sunday, September 14, 2008. Exactly 10 years ago to the day.

My friend Jeff called me and told me to turn on the television—where I saw dozens of people on the streets of Manhattan filing out of a skyscraper carrying boxes full of their office junk.

They were all employees of Lehman Brothers, one of the largest investment banks in the[...] Click here to continue reading
  • Simon Black
  • September 14, 2018
  • Bahia Beach, Puerto Rico

Elon Musk smoking weed has much more dire consequences than you realize

An insane event on March 2, 2017 likely signaled the top of the current market…

On that day, shares of Snap (SNAP), owner of the popular Snapchat app, went public at a valuation of more than $30 billion.

But it wasn’t the sky-high stock price that made this IPO special. Nor was it the fact that the company’s co-founders, 26-year old Evan Spiegel and 28-year old Bobby Murphy, became multi-billionaires overnight.

What[...] Click here to continue reading
  • Simon Black
  • September 10, 2018
  • Sovereign Valley Farm, Chile

The pension crisis is bigger than the world’s 20 largest economies

If your retirement plans consist entirely of that pension you’ve been promised, it’s time to start looking elsewhere.

As you probably know, pensions are giant pools of capital responsible for paying out retirement benefits to workers.

And right now many pension funds around the world simply don’t have enough assets to cover the retirement obligations they owe to millions of workers.

In the US alone, federal, state, and local governments, pensions are[...] Click here to continue reading
  • Simon Black
  • September 7, 2018
  • Santiago, Chile

Jim Grant’s 10 most important lessons in finance – Part 2

[Editor’s note: Yesterday we published the first installment of a special essay from Jim Grant on the 10 most important lessons learned in his 35 years in finance.]

Today, we continue with the final lessons…

6. Markets are not perfectly efficient. Because the people who operate them aren’t perfectly reasonable. The debate over efficient markets has raged since the birth of public markets. Grant’s comes down on the side of inefficiencies—of lucrative inefficiencies.
[...] Click here to continue reading
  • Simon Black
  • September 6, 2018
  • Santiago, Chile

The 10 most important lessons in finance from a legend in the field

[Editor’s note: Yesterday, we published a podcast we recorded with the legendary financial commentator, Jim Grant.

Jim is the editor of Grant’s Interest Rate Observer – one of the most-respected and followed financial publications in the world. In his 35 years writing Grant’s, Jim has seen a financial cycle or two.

And he’s amassed a network of many of the most important people on Wall Street (who often share their insights in his[...] Click here to continue reading
  • Simon Black
  • September 5, 2018
  • Sovereign Valley Farm, Chile

Market hits new highs on back of Fed announcement, forgetting the Fed is clueless

Hallelujah, the US stock market is once again at an all-time high thanks to a little help from our friends at the Federal Reserve.

Every summer, central bank officials from around the world gather in Jackson Hole, Wyoming (which, if you haven’t been, is REALLY spectacular. Jackson Hole, that is, not the Fed conference.)

The event was held last week. And the main event was a speech from the new(ish) Fed Chairman Jerome[...] Click here to continue reading
  • Simon Black
  • August 29, 2018
  • Santiago, Chile

Fool me once, shame on Elon. Fool me twice. . .

There’s no doubt you know the story…

On August 7, in the middle of the trading day, Tesla founder Elon Musk surprised investors with a tweet saying he was considering taking Tesla private at $420 per share (a $72 billion valuation) with “funding secured.” He quickly followed up with “Investor support is confirmed.”

Shares of Tesla soared 13% to $387 on the cryptic social media update from Tesla’s exalted chief.

The news[...] Click here to continue reading
  • Simon Black
  • August 28, 2018
  • Sovereign Valley Farm, Chile

Some thoughts on the ‘longest bull market ever’

Well, it happened. Yesterday the US stock market broke the all-time record for the longest bull market ever.

This means that the US stock market has been generally rising for nearly a decade straight… or even more specifically, that the market has gone 3,453 days without a 20% correction.

That’s a pretty big milestone. And there’s no end in sight. So it’s possible this market continues marching higher for the foreseeable future.

[...] Click here to continue reading
  • Simon Black
  • August 23, 2018
  • Sovereign Valley Farm, Chile

Digital Nomads: The best city you’ve never been to

[Editor’s note: While Simon is traveling today, other members of the Sovereign Man team penned today’s missive.]

Every year before and after the annual Liberty and Entrepreneurship Camp held in Lithuania, the Sovereign Man team takes some time to travel in Europe.

Vilnius – The capital of Lithuania - by itself is a fantastic place to spend time in. It boasts one of the largest medieval ‘old town’ city centers in Europe.

[...] Click here to continue reading
  • Simon Black
  • August 22, 2018
  • Minsk, Belarus