Showing posts with label Stock Market. Show all posts
Showing posts with label Stock Market. Show all posts

February 12, 2021

Forecast 2021 By Andy Blumenthal




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February 7, 2021

Did You Sell Your GameStop?


Well, I couldn't resist. 

Around midday today, I peaked my head into the local GameStop.

There wasn't 1 single customer in the store. 

Not 1!

There were two workers.

When I asked if they had any GameStop stock. 

The manager said he had been offered some when he got promoted, but unfortunately turned it down. 

Well the stock was a manic bubble for a short time these last few weeks, and it could've made him a bundle. 

Based on what you see today, do you think you should own GameStop?  ;-)

(Credit Photo: Andy Blumenthal)


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January 31, 2021

GameStop Is What I Call A Sh*t Store

For those of you who have been in GameStop, you know what I mean. 

Let's face it, it's a sh*t store!

They have videogames (some that I like) that you can buy online for half the price and crappy toys and collectables (i.e. "made in China" trinkets)!

Hey, I think you can get some action hero socks on sale for $5. 

The company makes nothing!

Their intellectual property is virtually nill!

Their assets are some leases in strip malls and shopping centers that have less and less traffic due to e-Commerce and Covid!

For those who drove the stock up from a year-low of $2.57 to a high this week of $483.98, congrats on showing that the market can be completely irrational and manipulated by the social media masses. 

Like right before the dot.com bubble of 2000, showoff your brokerage statements and brag about your beefy balances, I remember the local yocals from the barber shop doing the same back then--when everyone was a stock maven and becoming a multimillion from the likes of Pets.com.

But GameStop and AMC (another almost dead company unable to face Netflix, Amazon Prime movies, and all the other streaming plus Covid) are probably worth in concept less than good 'ol Pets.com or the Tulip Mania of the 17th century (at least flowers are beautiful). 

This will end in tears for the ever "greater fool" who's following the herd.  

Let's hope they and the spiraling, out of control national debt don't take down all of us with them!  ;-)

(Credit Photo: Andy Blumenthal)

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July 26, 2020

Planning Ha Ha

Man Plans and G-d Laughs!
So in retrospect, in 2015, not a single person got the answer right to 'where do you se yourself 5 years from now?'

Where you gonna be in 2020?

Stuck at home for almost the entire year!

But you are a fortune teller and are so smart you should've rolled your dice in the ever exploding  bubble of a stock market.

Oh, that's right, you did!  ;-)

(Credit Photo: Andy Blumenthal)
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May 11, 2020

Stock Market Pinocchio Style


Look folks, Pinocchio's nose is getting longer by the minute.

The market continues on a tear, even while the economy is heading in the other direction. 

I know people have been conditioned to buy on the dips, but I'm not sure that applies while we're in the middle (or maybe still just in the beginning) of a pandemic that has claimed 286,000 lives in just over 2 months (and that's with a global shutdown)!

Somehow, there is a notion that when things start to reopen that all the problems will just magically go away, including the $3 trillion we just added to our national debt, all the bankruptcies being declared, and all the job losses that are becoming permanent. 

If you believe this, perhaps you'd like to buy the Brooklyn Bridge.

The greater fool theory is alive and well.  ;-)

(Credit Graphic: Andy Blumenthal)
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May 7, 2020

The Coronavirus Stock Market

I believe this photo best summarizes where we are with the Coronavirus stock market.

As they say:
Don't count your chicken before they hatch.

This market has gotten way ahead of itself and the pending economic realities of the Coronavirus and the consequences of the trillions of response fund debt. 

Remember:

- The virus does not yet have a vaccine, and it is mutating and may become even more virulent!

- The deaths continue to soar in the U.S. with now over 75,000 dead in just two months.

- The deaths involve much pain and suffering both for the victim and his/her grieving loved ones. 

- The unemployment is at all time highs since the Great Depression. 

- Companies are starting to move from temporary layoffs to permanent firings and contraction, and many eventually to bankruptcy. 

- Profitability and gross domestic product are way down and may be even worse in the next quarter.

- Price Earning ratios are around their 10-year highs even looking out toward a possible 2021 recovery. 

- Restarting the economy does not mean a return to what was as the extreme trauma from the pandemic, shutdown, and social distancing rebalance us to a "new normal."

- A second and third wave of Coronavirus may be as bad or even worse than the first. 

- The two biggest global economies of the U.S. and China are facing a deteriorating and toxic relationship.

- The lingering $3,000,000,000,000 that we just added to our National Debt is going to increasingly strangle our future economic outlook. 

- The election is in November and brings increasing instability and likely volatility. 

In summary, the term used by former Fed Chairman, Alan Greenspan of "irrational exuberance" seems like a gross understatement when it comes to our current stock market.  

Get ready to see the froth come painfully off this drunken market--these eggs are about ready to crack.  ;-)

(Credit Photo: Andy Blumenthal)
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March 24, 2020

Enough! Coronavirus Already

Day G-d's knows what of being locked down for this global Coronavirus outbreak. 

I am soooo SICK of Coronavirus!

It's time to slay this Covid-19 and get this world back to normal. 

Sure, I am extremely grateful for every day of health and certainly not to be in the lousy hospital.

But life has got to be about more than Coronavirus. 

It's not Armageddon, but slow water torture or death by a thousand cuts. 

The repetitiveness is mind-numbing, repulsive already. 

The news is boring, snoring everyone to tears. 

The fear is morphing into unintended complacency.

The "rescue plan" everyone knows is more pork barrel politics.

The wild gyrations of the stock market is nonstop ticker tape Vegas style. 

Even the grocery and toilet paper hoarding has got to have an end in sight.

It's not that Coronavirus isn't serious and important, but what about everything else in the world.

Can we start to give some attention to life again? ;-)

(Credit Photo: Andy Blumenthal)
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January 6, 2019

From Tulips to Cryptocurrency

There always seem to be another mania. 

From the Tulips Mania in 1637, when a tulip went for more than 10x what a skilled workman earned in an entire year!

To Cryptocurrency in 2018, which is down about 80% from its $20,000 peak losing $700,000,000,000. 

In between, we had the gold rush, the great depression, the tech/dot-com bubble, and the housing/mortgage crisis, and many more I am sure. 

There seems to always be something for people to get excited about in an "irrational exuberance" type of way, as former Federal Reserve Chair, Alan Greenspan put it.

Is it boredom, big dreams, unadulterated greed, the desire to "get rich quick" and easy, the belief that you've discovered the Holy Grail or is it just people being stupid. 

Either way, we have a way of getting ourselves in trouble, some "losing their shirts."

Not sure who said it, but there isn't an easy fix to your life. 

There are small and big problems, and then there is you trying to fix them (with G-d's help). 

As to bitcoins and tulips, they ain't worth what you think they are. ;-)

(Source Graphic: Andy Blumenthal with photos from Pixabay). 
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June 3, 2016

613 Stock Market

Someone challenged today about the number 613 (mystical, holy number of commandments in the Torah).

They said, "I would argue that you can pick any 3 digit number and get the same results."

They went on asking that it be "No variations in sequence, no breaks between numbers, no mathematics."

So here is perhaps an answer from Heaven--check out the closing change down in the S&P 500 today: Exactly 6.13!

You're turn. ;-)

(Source Photo: Andy Blumenthal with attribution to CNBC)

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January 2, 2016

Market Watch 2016

I took this photo in the mall on New Years Day--yes, the stores were actually open on the holiday.

And Macy's was having a blowout sale with racks and racks of "80% Off Original Price[s]."

We were laughing saying what's next--99% Off and then even 100% off! 

So you think the economy is healthy with fire sales like these on the very first day of the new calendar year--when we still have another 364 days to make our year end sales quotas...

With turbulence around the globe brewing from Iran, Syria, Russia, North Korea, Yemen, Sudan, Nigeria, ISIS, and more...anyone care to say (pending) crisis.

How about commodities--my bet--that are in the toilet (and have been for years now)--do you really think no one needs iron, aluminum, nickel, lead, cooper, potash, oil, gas, coal, diamonds, and gold anymore? 

Then the Wall Street Journal warned again today about the overall investment marketplace, asking "How do you invest when everything is expensive? [at 25 times cyclically adjusted earnings--now that's a fancy term]?

We've been down this road before in the bubble bursts and recessions of 2001 and 2008.

Is now really the time for the Federal Reserve to be raising interest rates (and what a nifty ripple effect that will have in both slowing our economy down and raising our interest payments on our already ballooning $18 trillion national debt)?

Oh, technology to the rescue again and again...it's possible with everything from virtual reality to robotics and artificial intelligence on the cusp...or maybe not this time around. ;-)

(Source Photo: Andy Blumenthal)
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October 24, 2015

Where's The Value?

So I don't know how I feel about this or maybe I do. 

The Wall Street Journal reports today that from the 10 largest companies by market capitalization:

1) The top 3 are technology companies

- Apple $679B
- Alphabet (Google's Parent) $489B
- Microsoft $422B

2) Moreover, a full 5 (half) of the top 10 are technology companies

That includes the 3 above and the other 2 below:

- Facebook $288B
- Amazon $280B

As a technology person, I am thrilled at the impact that IT has on our society. 

We are no longer the same thanks to our Apple iPhones, Google Search, Microsoft's business tools like Outlook, Office and SharePoint, Facebook's social networking, and Amazon's online shopping. 

But to think that these information capabilities outweigh by value everything else in society that we need as people is somewhat astounding.

For example, the other 5 of the top 10 companies are:

- Exxon Mobil (Oil and Gas) $346B 
- Berkshire Hathaway (Insurance, Utilities, Clothing, Building Products, Retail, Flight Services) $340B
- General Electric (Power and Water, Oil and Gas, Energy Management, Aviation, Healthcare, Transportation) $298B
- Wells Fargo (World's Largest Bank) $280B
- Johnson and Johnson (Pharmaceuticals) $278B

So when you add these behemoths up--this is what we have:

The 5 top technology companies are worth $2.158T

Vs.

The top 5 traditional companies from all the other industries combined are worth only $1.542T

Net it out:

The largest representative IT companies are worth $616B or 40% more than the other major companies combined.

(In fact, just the top 3 IT companies at $1.56T are worth more than the top 5 other companies at $1.542T.) 

Sure IT growth has been on a tear for the last couple of decades and we love everything futuristic it brings us. 

But isn't it a little scary to think that the companies that meet all our other needs from food, clothing, shelter, medicine, transportation, energy, finance, retail, etc. isn't worth more to us than just the IT alone. 

Perhaps adding it up from a value perspective just doesn't add up in a real life perspective. 

I love technology and want more and more of it, but man does not live by technology alone. ;-)

(Source Photo: Andy Blumenthal)
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September 14, 2015

The Unbelievable Stupidity Of Raising Interest Rates

Interest rates have been near zero since the recession of 2008.

That supposedly to stimulate the economy. 

However, aside from a stock market bubble again, not sure we have a much stimulated economy.

We have a false low on the unemployment rate, while the the true percentage of the labor force working is the lowest in almost 40 years!

Moreover, manufacturing is down almost 40% from the 1979 peak with a loss of over 7.2M jobs

Commodities are at firesale prices as demand is sluggish and there is short-term oversupply. 

And innovation is facing a global slowdown

So people are out of work, we're not making things, demand is depressing prices, and even ideas are few and far between--not too rosy a picture, regardless of what some politicians may have you believe. 

Let's not forget that we have an over $18 trillion federal debt, and this is projected to grow ever greater as we borrow to fund social entitlements such as social security, medicare, etc. 

In this scenario, why would the Federal Reserve ever want to raise interest rates?

Well, if they don't raise rates, then they can't lower them later again when the economy really stalls out and goes into deep recession. 

Hence, this is seen as a tool for their financial toolkit--and if there are no tools with which to manipulate the economy, then there is no need for a (neutered) Federal Reserve. 

But think for a second what happens when the Fed raises rates, it's going to slow the economy even further than the chug chug chug economy that we are already dealing with. 

Maybe even more important, it will raise the amount of interest payments we must folk over on the trillions of dollars of debt we owe.  

Simply put, when we raise interest rates, we pay more interest on our already astronomically high national debt, and this pushes our national deficit up even higher as we borrow more to pay the interest on the previous debt. 

If you did this with your credit cards, you'd probably be looking at the equivalent of debtor's prison sooner or later. 

Rather than feed the Fed's toolbox with interest rate bumps and drops, why not keep rates low as long as they can stay low, reducing our interest payments, and curtailing our national deficit and debt. 

What about the stock bubble...that's a lesson investors will be learning about in their own good time--it's the stock market, stupid. ;-)

(Source Photo: Andy Blumenthal)
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December 20, 2014

2014 The Bad News Goes On

What a 2014 it's been as the world continues it's descent into madness.  

If Ebola, the War with Hamas in Gaza, the shoot down of Malaysian Airlines Flight MH17 killing 298 including 80 children and 15 crew, the intransigence of Iran on Nuclear Weapons, employment still near a 30-year low, the National Debt hitting over $18 trillion (and growing $2.43 billion a day!) and the suicide of comedian, Robin Williams wasn't enough...

- Criminal Records: 1 in 3 adult Americans (i.e. 80 million people) now have a criminal record...hmm, if the average family has around 2.5 people then just about 1 person per household has a criminal record. Are you starting to look around you now?


- Economy: Uber, yes, it's a online "ride-sharing" (i.e. taxi) service, but after it's recent IPO, Uber is worth over $41 billion dollars (more than Delta, Charles Schwab, Salesforce.com, and Kraft Foods). Someone's getting taken for a ride. Is this even surprising considering the S&P is priced over 27 times average 10-year earnings (while the historical average is only 16), the result of pumping the economy with short term easy money policies.  


- Cyber Attacks: After a blithering cyber attack by North Korea, Sony withdraws the release of the movie, The Interview, surrendering to cyber terror, and putting us all at greater risk in the future because cyber crime does pay!


- Islamic Terrorism: While ISIS advances in Syria and Iraq, 132 school children (mostly ages 6-18) plus 9 adults massacred by the Taliban this week in Peshawar, many shot in the head and others lit on fire with gasoline and burnt to death so they are unrecognizable. This only 9 months after the April kidnapping by Boko Haram of more than 280 schoolgirls in Nigeria, which was repeated this week with the kidnapping of another 185 woman and children.


- Russian Militarism: The Great Bear is back with a vengeance as Putin continues driving Russian nationalism and buildup of advanced weapons, including WMD (e.g. nukes), aircraft, submarines, and ICBMs to counter alleged "Western Aggression." And despite, the rubbles' massive decline, Putin promises an economic comeback within 2 years--he'll wait out the West and hold Crimea hostage and spoil it for everything it's worth


So where are we going next--more hell on Earth or at some point a turnaround towards heaven again?   


(Source Photo: Andy Blumenthal)

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October 7, 2014

The Games Organizations Play

So HP, under Meg Whitman, is breaking up into a PC/printing company and an enterprise products and services firm.

Um...well of course it’s the right thing to do to focus each and release the great value of these two companies.

Only, just a few years ago, under Carly Fiorina, HP a printer and enterprise products company combined with Compaq, a PC company, in order to gain the size and clout to succeed in the ever-competitive technology marketplace.

The B.S. of corporate America—everything and the opposite--to try and do something, almost anything, to try and raise the share prices of those strategically stalled companies.

From Meg Whitman, CEO of HP:

- October 2011--“Together we are stronger!”

- Then today, 3 years later--“Being nimble is the only path to winning.”

Yeah, whatever.

Merge, split—wash, rinse, repeat…fool the fools.

HP is still HP—especially compared to Apple, Amazon, Google, and even now Lenovo. ;-)

(Source Photo: here with attribution to Angie Harms)

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January 21, 2014

Care To Be Curious?

Here's three topics for the curious of mind today:

- Are we technologically safer?  As we attempt to beef up IT security, we continue to be technologically insecure. Just this last week, BBC reported how a fridge was part of 100,000 devices used to send out 750,000 pieces of spam. Yes, a fridge, and there was also a television involved--sounds like the beginning of a bad joke, right? But this is our reality these days...Proofpoint, a cloud computing and security company said "Many of these devices are poorly protected at best, and consumers have virtually no way to detect or fix infections when they do occur."

- Is our economy healing or hurting? As unemployment fell from 7% to 6.7% last week--an impressive reduction--the overall labor force participation rate didn't rise, but rather sank to 62.8%--its lowest level in 35 years! And while, the Wall Street Journal explains that U.S. employment is simply not keeping up with population growth, the S&P 500 hit a new record high just last Wednesday. Meanwhile, the Fed continues to pour money into the economy, although at a slowing rate (expected to go down next week to only $65B a month), speculation is building whether we have another real bubble brewing, and this one of our own making, perhaps. 

- Is this the lead up to peace or war with Iran? As we continue to seek a long-term deal with Iran on their dangerous nuclear weapons foray, we read from Bret Stephens that Iranian President Rouhani said during his presidential campaign, "Saying 'Death to America" is easy...We need to express 'Death to America' with action." If we are getting a good deal that can truly lead to WMD disarmament of Iran, why did Rouhani tweet, "In #Geneva agreement world powers surrendered to Iranian nation's will." Curious, whether this is for political consumption in Iran or whether he sees the deal as just a stalling tactic leading to a breakout capability in nuclear weapons as well as a way to get some goodies in terms of sanctions relief for his country in the meantime.

What does little kitty cat say about these? ;-)

(Source Photo: Andy Blumenthal)
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October 2, 2013

Government Shutdown - Starbucks

So today is Day #2 of the Federal Government Shutdown. 

This is a picture from the local Starbucks that is typically billowing at lunch time--as you can see it's basically a morgue. 

Unfortunately, hard-working Federal employees, contractors, and local business are feeling the impact!

Even from those that are still working, there is word of "survivor's guilt"--like with a plane crash or other calamity, when those who survive the catastrophe question why they were so fortunate when the others weren't so lucky and perished. 

With both the budget shutdown and the impending debt ceiling showdown--we are facing the perfect storm, with real negotiation and compromise yet to emerge.

With this all, our significant national problems aren't going away--to the contrary, Iran and North Korea are still global nuclear threats, Syria still has chemical weapons, the economy remains on shaky ground (in the paper today, the once high-flying pharmaceutical company Merck is planning to lay off 20%!), the national debt continues to spiral out of control (albeit at a "slower pace"), cybersecurity remains a major national security risk (although Cyber Command continues to stand up its new headquarters and firepower), and so much more. 

Bubble stocks rose again yesterday after an almost 20% one-year return. Not only that, but the safety of gold took a beating again after an almost 40% one-year decline (full disclosure, I am a recent investor in the latter). One has to wonder how long it will take for sanity to prevail once again. 

(Source Photo: Andy Blumenthal)  
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September 27, 2013

Is This The Way It's Supposed To Work?

As talk and warnings escalate about a potential government shutdown next week (not that long since the last time this happened a couple of years ago), one cannot help wonder is this the way government is supposed to work?

The partisanship and fighting has gotten so that either nothing significant gets done or get's done by just one party leaving the other fuming.

The fight over healthcare reform pushed through for better or for worse has come back to haunt the Hill. Aside from a lot of talk about exchanges, I haven't found many people that even really understand the changes or whether it actually benefits them or not. 

The continuing Fed stimulus that many anticipated was going to start tapering off, but hasn't, has left many concerned whether there is another huge economic bubble building and what will happen to stocks, housing, and jobs when the Fed finally does pull back. 

The Sequestration which was never supposed to actually take effect, but was to replaced with more surgical budget cuts, continues to leave the nation vulnerable in terms of potential budget shortfalls for areas of national priority (e.g. defense and so on) and still leaves a mounting national debt (albeit growing at a slower pace). 

The seesaw between the threat of military intervention and the potential for diplomatic solutions with Syria and Iran on no less than weapons of mass destruction have us asking whether these countries are serious, stalling, and really willing to give them all up or just buy time in their efforts to get over the finish line of proliferation, hiding, and burying the stockpiles.

Somehow we seem to be fighting each other more than we are tackling the issues. 

Are we really talking with each other, listening with intent to understand, and seeing what is at stake?

We are playing brinkmanship on critical issues of national security that may leave us holding the toilet paper and plunger as we swirl around the bowl ready for the royal flush. ;-)

(Source Photo: Andy Blumenthal)
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May 30, 2013

Balancing The National Books

Bret Stephens had an interesting opinion piece in the Wall Street Journal (28 May 2013) called "The Retreat Doctrine."

He argues that America's retreat militarily from Iraq and Afghanistan may not mean revitalization for us by refocusing on domestic issues, but rather decline by prematurely ending a war with enemies that may not have ended their hatred and hostilities to us. 


Interestingly enough, it is not just on the battlefield that we are retrenching, but on many other fronts as well, for example: economically, we are cutting federal budgets; monetarily, we are anticipating cutting the $85 billion per month bond buying by the Federal Reserve; social entitlements like Social Security and Medicare are on the butcher block, defense cuts are imperiling military programs, and employment cuts have resulted in a labor force participation the lowest in 30 years. 


While many cuts are beneficial in terms of beginning to get our arms around the over $16 trillion deficit we've accumulated and in forestalling another rating downgrade by the big three credit rating firms, it is as Stephens implies, perhaps not a sign of health and renewal, but of national illness and a retrenchment of a global power. 


I remember in Yeshiva learning (Exodus 34:7) about the sins of the fathers being visited on the children and grandchildren--3 and 4 generations--and I always wondered how could a just G-d hold future generations responsible, accountable for what the prior generations did?


But perhaps, the answer is evident here, where we cannot blame G-d for our own actions, where we live big, beyond our means, and cause future generations to pay the piper.  


When the stock market is rallying--up almost 17% year to date and about 27% over the last year, while our GDP growth is only about 2.4% annually, something is very off-Kilter. 


You can argue that retreat is renewal or you can see retrenchment as leading to decline, but either way we will be paying the national bill coming due and all our children will be on the hook for cleaning up after the party is over. ;-)


(Source Photo: Andy Blumenthal)

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November 6, 2011

Desperate For A Meal

I was really moved by an article in The Washington Post (5 November 2011) called "A Hungry Challenge With Food Stamps."
Last week was the launch of the 2nd nationwide Food Stamp Challenge--"part of an interfaith campaign to raise awareness about America's poor."
For one week, Rabbis, Pastors, Imams, and members of Congress (600 people) took part in the program to live on $31.50 a week (or $4.50 per day) for food--the average that an adult gets on the food stamp program.
Intuitively, knowing what food costs these days, it makes no sense!
Even a basic meal from a fast food restaurant costs more than what the Supplemental Nutrition Assistance Program (SNAP) provides for a whole day.
The money for food is so meager that participants in the challenge report being overwhelmed by thoughts of food--"When am I going to eat? What am I going to eat?"
According to the USDA, food stamp usage has risen to the highest level ever, with almost 46,000,000 Americans on the program (that's more than 1 of every 7 people in this country!)
This is up almost 65% from 28,000,000 people in 2008--just 3 years ago.
With the food stamp program, while better than getting no help at all, people are still surviving on limited types of food and meager portions of things such as lentils, cornflakes, eggs, and so on.
It is frightening and humbling to think that any one of us--or our families--could be in that situation--wondering where our next meal is coming from.
I remember as a kid, before the SNAP program issued the food assistance on debit-like cards, seeing people in the supermarket actually tearing off and handing stamps to the cashier--they never seemed to have enough and invariably had to put back groceries. They were noticeably embarrassed, self-conscious, and fearful--often holding children in their arms or by the hand as they tried to work the math of feeding them all with what was obviously not enough.
While I have not participated in such a program as the Food Stamp Challenge, I am awed by those who take the time and effort to see what such hunger feels like and to learn the lessons of empathy, social justice, and charity.
As we enter the last few weeks of deliberation by the Deficit Panel Super Committee, I am afraid at what $4,000,000,000,000 (trillion) in cuts looks like to our nation and how the very real pain coming will be distributed.
With a nation already feeling squeezed by lost jobs, sunken housing values, near zero interest rates on fixed income investments, an rickety stock market, and global economic challenges from abroad, I wonder how our nation can take the deep cuts that we must without going into economic cardiac arrest.
Yet, Moodys and Fitch are waiting in the wings to downgrade our debt, if we do not embrace the tough love or if we fudge the numbers rather the do what our long-term economic health demands.
I pray that G-d helps us through this challenging period for our country and that the people who are hungry today and those that may suffer tomorrow are spared by the almighty in his everlasting mercy.
(Photo Source: here)

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