The Organic Movement and our right to know what we’re eating!

Happy Friday,

I must say that I am really excited to see the expansive nature of the “Organic Movement” (for lack of a better term).  Many years ago we scoffed at “the Co-opp” labeling the people who shopped there as “hippies.” Maybe because it was a familiar feeling.  But now more and more of us are realizing that there is more to this “Organic Movement” that previously thought.

Let’s see if we understand this; Organic means the food is grown without being genetically modified (more on this later in the rant), it has been grown without any pesticides, chemicals, antibiotics, or non-natural processes… in other words healthy?

Being a trained Chef and having cooked all my life it is my firm belief that our bodies are designed to digest and process foods that are made naturally.  They have been conditioned to do so for centuries. When you introduce a foreign substance (GMO foods. processed and chemically altered) the body has to stop, and figure out how to process and what to do with the new substance.  The only way around this is to either grow your own or eat organically grown meat and produce.

The problem with this is that it is more expensive.  Why is that you ask?  Well if you really think about it, if we hadn’t processed our food so the producing companies could make more money we wouldn’t be in this predicament.  I’ve stated this before, that everything in our society if you think about it revolved around two things; Money and power.  The more money you have the more power you get and vice versa.  The food companies live by this principal.  It’s all about making a product faster, easier, and cheaper.  That way they make more money.  Now there’s nothing wrong with this principal as long as it does no harm to anyone.

Way back when…  I was a college student at UC Davis majoring in Genetic Engineering before there was a Genetic Engineering major.  I had to go to the Dean and write my own.  But I digress…  I point this out because part of the reason I changed my major was that I would have dreams of curing Cancer, and at the same time creating blond-haired blue-eyed babies.  You see there is a Ying and Yang or balance to everything we do.  There are consequences to our actions.

I’m sure you’ve no doubt used a product called Crisco Shortening.  Crisco is a brand of shortening, which is basically making oil into a solid through hydrogenation, and was introduced in June 1911 by Procter & Gamble.  It was the first shortening to be made entirely of vegetable oil.  Consumption of trans-fats through “partial” hydrogenation we have recently learned, increases the risk of coronary heart disease by raising levels of “bad cholesterol”) LDL, and lowering levels of the “good cholesterol” HDL.  The point of this is that back in 1911 this was not known and Crisco pretty much replaced Butter and Lard (natural Pork Fat) as the “safe” alternative.  Crisco is now made without Trans-Fat.

Here’s the problem with genetically altered plants.  They alter them so they will be resistant to pesticides and herbicides or poisons that kill weeds and insects.  When a plant is resistant you spray or soak the plant with Roundup or multiple pesticides and herbicides.  But you can’t wash off what gets into the plant or the poison that was injected into the plant to make it resistant in the first place.

You’ve no doubt heard of the company Monsanto.  Well they are pretty much at the center of all of this mess.  They have been altering the DNA of many plants and substances for many years. They are the leading producer of genetically engineered (GE) seed and of the herbicide labeled “Roundup” and In 2007 Roundup was the most used herbicide in the United States agricultural sector, with 180 to 185 million pounds.  The company also formerly manufactured controversial products such as the insecticide DDT, PCBs, Agent Orange, and recombinant bovine somatotropin (a.k.a. bovine growth hormone).

Monsanto’s genetically engineered, herbicide-resistant alfalfa is virtually guaranteed to contaminate the alfalfa fed to even organic animals; guaranteed to lead to massive poisoning of farm workers and destruction of the essential soil food web by the toxic herbicide, Roundup.

This past Saturday thousands took to streets across the world’s cities to protest the use of GMO products, with giant Monsanto being the main target. Over 50 countries have been taking part in the march for world food day, and across 47 different US states.  Costco now has a whole section of the store devoted to Organic products.  If you’ve ever been in a Whole Foods Market you know it is an amazing place to shop and it’s getting busier every day as we realize how important it is to eat healthy.

Whole Foods has recognized consumers’ right to know about GMOs.  In March, Whole Foods Market set a deadline that all products in their US and Canadian stores must be labeled to indicate whether they contain genetically modified organisms (GMOs) by 2018.

We have for far too long been denied basic information which would enable us to make safe, healthy food choices.  Monsanto and the rest of the biotech industry have been deceiving consumers since they first conspired more than 20 years ago with the U.S. Food & Drug Administration to falsely convince consumers that genetically modified foods are no different than foods that don’t contain organisms created by manipulating DNA in laboratories or by injecting seeds with bacteria and pesticides.

As was the case in California’s Proposition 37 campaign, biotech companies funneled cash into Washington to support the no on I-522 side of things.  Bayer Crop Science, DuPont, Dow, Grocery Manufactures Association and, of course, Monsanto, have all pitched in. Dow’s contribution of just $23,531 is at the low end of the spectrum, just a slight percentage of the $4,834,411 Monsanto has kicked in—the top donation.  To no surprise the measure was defeated.  Money and power wins again.

I think it will come down to this: Those with clean products will voluntarily label them and those with GMO processed ingredients will not.  That is the only way we will know.

I’ll get off my soapbox now.  Eat healthy!


Bill Bartok

The Government Shutdown Part 2, Where do we go from here?

OK, so many have asked the question; What will it take to solve this debate and how do we get out of this mess?  I will attempt to answer this question in Part 2 of my blog on the current Government shutdown.

I won’t tell you which political party I am “associated” with, but suffice it to say there are parts of the Republican “Agenda” that I agree with and parts that I do not.  And the same for the Democratic agenda, I don’t know why we have to fall into these two parties and go along with everything they stand for.  Can’t we choose what we believe in?  I do agree that our politicians should have to balance a budget and must do whatever is necessary to achieve that.  I also believe that many philosophys that work on a small scale do not necessarily work on a large scale.

In my last article I mentioned that I’ve seen very little change in the last five years and the economy has grown by an anemic 2.0% during this time.  What is the current administration doing to rebuild the economy and create jobs other than throw money at it and hope?  You’ve no doubt heard the saying; “The definition of Insanity is doing the same thing over and over hoping for a different result.”  Well by this definition our politicians are insane.  When will it end?  Maybe the next election?

Yes, I think it will take until the next Presidential election before we see any major changes.  This is based on a few factors which I will elaborate upon.  It amazes me that the power of charisma can have such an affect.   Charisma is defined as a compelling attractiveness or charm that can inspire devotion in others.  Basically this means we will blindly follow someone with charisma pretty much without question.  Kennedy, Reagan, Clinton had it, and now Obama.   This is the only rational explanation I can come up with because the current presidential administration has been so hypocritical from day 1 (see Part 1), saying one thing and acting another.  And they are not questioned, and got re-elected.  Are you better off than you were FIVE years ago?  Are we as an economy better off that we were five years ago (other than the Stock Market but more on this later).  I’ve been writing an economic commentary during this time and I haven’t seen any changes.  Oh, my mistake, we have a nationalized “affordable” health care plan (that’s another rant).

In the first four years of his presidency the president said he keeps a check list of promises he made during the campaign in his pocket. He must have very large pockets.  Obama said his administration had accomplished 70% of the things he said he was going to do.  The watchdog organization has been keeping track and puts Obama’s list of promises at a staggering 506, of those they say the president has kept 122, or 24 %. Coincidentally, of the 25 selected as the most significant promises, says Obama has followed through on six, for a ‘promise-kept percentage’ of 24%.

I realize that each politician is out to get a little “something” for their donors, I mean voters.  But we have to stop spending more than we’re bringing in.  It IS really that simple.  If we borrow money as a nation we should have a direct plan for how it will be paid back.  In the last 12 years we have almost tripled the national debt through deficit spending or spending more than you bring in in revenue.  Something that took over 250 years to build, we tripled in just 12 years.  So how long are we going to let this go on?  My prediction is that our current politicians will continue to exhibit the same behavior and let’s face it, if we haven’t questioned it over the last five years (actually much longer that that) why would we question it now.  That will put the national debt, or what our children will be faced with, at over 20 Trillion dollars.  Oh, how did Mr. Obama put it in 2009, “That is ‘trillion’ with a ‘T”?  And THIS is what the next President will inherit.

We also have an aging population and the biggest percent of spenders, or the drivers of growth in the economy are the baby boomers and they are way past their peak earning/spending years.  In fact they are entering retirement age and spending less.  I say age because many (most) cannot retire when they planned because they do not have the income to overcome their expenses.  So where is the growth going to come from?  And what happens when the Stock Market wakes up from its dream and realizes that is has nearly doubled on false pretenses and we don’t have the growth to sustain values at current levels?  I’m not trying to be a doomsayer here but this bothers me.  One thing that should save interest rates from rising will be the correction in the stock market.  When money flows out of stocks it typically flows into bonds raising prices and lowering yields.

OK so, it’s Oct. 17, the government is still shut down and now Congress is about to default on its loans because Republicans and Democrats are still playing chicken with the country’s money. Now what?  We’re at the point that everything’s connected, government funding, the debt ceiling and spending, and so the best way out, I believe, and the only way for everybody to find an acceptable long-term solution is to lock all politicians in a conference room at say a Holiday Inn (nothing fancy after all they work for the people right) until they can balance the Country’s budget.  Now THAT would be sequestering!  And if there is a deficit, a plan will be in place to bring it in balance.  If you don’t have the money… you can’t purchase anything.  How difficult is that?

But of course this won’t happen and they will raise the debt ceiling and open/fund the government and continue raising the debt because that’s what they’ve done for the last five years and it doesn’t seem to bother anyone enough to do anything about it.  And they can’t come to an agreement on how to get us out of the predicament we’re in.  Unless… we elect different politicians in the next election.  And Hope…


Bill Bartok

Mortgage Advisor MLO# 445991

The nicest compliment I can receive is the referral of your family, friends and co-workers.

The Government Shutdown

OK, so I’ve tried to remain neutral thus far because I realize that many of you are from “both sides of the isle.”  I will still attempt to remain in the middle so I can see both sides, and I welcome your comments.  After all, that’s what compromise is all about.  Right?

My wife Gina and I were in the kitchen the other morning and she was making Crêpes because well, that’s what our daughter wanted for breakfast (she’s 13 and a freshman in High School).  What does this have to do with the Government’s issues you ask?  Well it has to do with compromise and being willing to learn something new.  And also being willing to see the others side, or understanding their point of view.

You see, from my point of view, I am a trained Chef (bet you didn’t know that) and have run a restaurant, and made Crêpes from scratch so I know how to make them.  I asked her if she would like my advice and she promptly replied NO!   I naturally got upset.  How could someone not want to learn something new if it was possible?  Why wouldn’t you take a chance that someone else might have a better way.  After all that’s how I learned how to make Crêpes in Culinary school.

So I thought about it for a while and realized that she just wanted to make it “her” way without anyone telling her it was wrong.  This is totally her right (while I may still not understand the resistance to learn) she is entitled to it.  She made the Crêpes and they turned out great (a bit thick for Crêpes) but the bottom line was we enjoyed them and had a wonderful breakfast.  But I digress…  Now back to the story.

The basic reason our Government is currently shut down is because our politicians cannot agree on a balanced budget and we are spending way more than we’re taking in.  The republicans want some effort towards balancing the budget (deficit reduction through spending cuts) and President Obama says he will not negotiate just pass the budget anyway.

A balanced budget, (particularly that of a government), is a budget with revenues equal to expenditures, and neither a budget deficit nor a budget surplus.  This seems fairly obvious right?  To be fair, Dwight Eisenhower was the last Republican President to preside over a balanced budget.  He had a balanced budget in 1956 and 1957. Since then, there have been two presidents to preside over balanced budgets, LBJ in 1969 and Clinton in 1998 through 2001. During the last 40 years there have been five budget surpluses, all five were under Democratic Presidents: 1969, 1998, 1999, 2000, and 2001.  The National Debt in 2001 was approximately 5.7 Trillion Dollars and the budget was balanced?

In the last 12 years we have almost tripled the national debt through deficit spending.  Something that took over 250 years to build, we tripled in just 12 years.  So how long are we going to let this go on?  We are passing a debt on to our future generations that they cannot possibly repay.  What bothers me, and again please correct me if I’m wrong, is that we’ve seen this repeatedly over the past five years with no signs of change.  Our politicians can’t agree so the deficit keeps growing and they have to continually raise the debt ceiling (the maximum allowable government debt).  Every year President Obama has been in office, there have been deficits of $1 trillion — adding $7 TRILLION DOLLARS to the debt.  I just want to know what the plan is for paying it down/off (as in our credit cards).

Interestingly enough, in a February 23, 2009 blog post, after he was in office, President Obama promised that by the end of his first term, he would cut in half the massive federal deficit “we’ve inherited.”  And he said “we’ll do it in a new way: honestly and candidly.”  Obama did make that promise that day, saying, “Today I’m pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we’ve long neglected.  But I refuse to leave our children with a debt that they cannot repay, and that means taking responsibility right now, in this administration, for getting our spending under control.”

Being fair to the current Obama administration the president in 2009 inherited a $1.3 trillion deficit.  My question…  What happened?  I would question any President who made this promise and five years later not only didn’t fulfill the promise but made the situation worse.  And why are we not questioning this?  Where’s the Media on this one?

OK so back to the current shutdown; I understand the Republican point which is we need to cut spending and at least get back “on track” to balancing the budget.  But how do we do that?  It’s an interesting ploy… If you’re a Republican and you want to repeal “Obamacare” (which can’t be done under the current administration, another story) you delay its implementation for a year at which time we have a new election and possibly elect a Republican President who can the repeal the national healthcare law.  Also if you’re looking for a budget cut, you look for the biggest expense first right?

On the Democratic side we have a President who is standing by his belief that he “will not negotiate” and blames the Republicans for the whole mess.  While I understand his stance (after all they’re trying to derail his “legacy”), NOT willing to compromise not only goes against every campaign promise he made, but it simply is not politics. The Obama administration is betting that at some point, the GOP will understand that its position is futile. And while that’s a fairly big bet, the aides believe that all other options are flawed.

We also have another issue looming on the short term horizon; The National Debt has reached its limit and unless Congress votes to raise it again the Government will not be able to pay its bills namely interest payments on its Treasury Bonds effectively defaulting on debt.  The republicans are attempting to use this to get the democrats to reduce spending.  In fact, the Democrats of the 1980s repeatedly used the debt ceiling issue to force President Reagan not to increase defense spending.  And Obama himself used the issue of the debt ceiling in his battle against President George W. Bush’s tax cuts.  In 2006, then-Sen. Obama stated in a floor speech in the senate; “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. … I therefore intend to oppose the effort to increase America’s debt limit.” “Over the past five years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is  ‘trillion’ with a ‘T.’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers.”

If we’re going to raise the debt limit, we need to deal with the drivers of our debt and deficits.  According to the Congressional Research Service, Congress voted 53 times from 1978 to 2013 to change the debt ceiling. The debt ceiling has increased to almost $17 trillion from $752 billion. Of these 53 votes, 29 occurred in a Congress run by Democrats, 17 in a split Congress, and seven in a Republican-controlled Congress.

I’m not against Obama just to be against him.  I would feel this way if it were Republican or Democrat and they had mad promises and statements and then completely went the other way.  I have seen very little change in the last five years and the economy has grown by an anemic 2.0% during this time.  What is the current administration doing to rebuild the economy and create jobs other than throw money at it and hope?  You’ve no doubt heard the saying; “The definition of Insanity is doing the same thing over and over hoping for a different result.”  Well by this definition our politicians are insane.  When will it end?  Maybe the next election?


Bill Bartok

Mortgage Advisor

NMLS# 445991

The Weekly Rap! “A lesson in Economics 101 Revisited.” Friday Sept 19th, 2013

The National Debt is currently: $16,945,767,524,687.00

I’ve titled today’s commentary/rant “A lesson in Economics 101 Revisited.”  I’m going to deviate from the usual summary of the week’s economic indices because well, there really isn’t that much change, and this weeks Fed meeting and their subsequent announcement really has me at a quandary.

The Feds feeding the Market with cash is the equivalent to giving an addict Crack.  It will appease them and make them feel better about the current situation, but eventually the supply will have to be cut off and the addict will come crashing down.  This is why the markets are reacting to the Feds decisions rather than economic news.  Stocks “normally” rise when the economic news is good because growth means more profits.  But lately it’s been the opposite.  Stocks have been reacting negatively to “good” news because it could mean the Fed will cut off the “supply.”

Ok, here is the usual numbers:  The Dow last traded at 15,526.  The S&P 500 is trading at 1,713.  Gold is trading at $1,330 an ounce, while oil futures at $104.46 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.79/Gal.

Bond prices soared this week following the Fed Gods meeting. Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.72%.  30-year Treasury Bond yields last traded at 3.75%.  Rates on 30-year fixed-rate conventional mortgages are at 4.5% this week. MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

Well the moment arrived.  After a months-long buildup, the Fed Gods announced that they decided against scaling back their controversial bond-buying program.  By a 9-to-1 vote, the Fed chose to keep buying $85 billion a month in debt and said it would wait for more evidence of economic progress.  Will investors remain calm?  Can the economy handle higher interest rates?   What happens to the program under a new Fed Chairman, or Chairwoman? Read text of FOMC statement.  For details Read on…

The no move by the Fed had markets reacting violently. The Dow rose 93 points, or 0.6%, to 15624, a sharp reversal after being down about 40 points minutes before the Fed announcement was released. The S&P 500 jumped 0.8% to 1717, a fresh intraday record high.  The benchmark 10-year Treasury yield fell to 2.771% after sitting at 2.867% before the announcement hit the wires.  Precious metals are spiking on the news with gold rising 2.9% to $1,346.80, while silver also added about 3% to $22.41.

Fiscal fears: the Fed cited restraint from fiscal policy in two places, a clear reference to the coming fight in Congress about averting a shutdown and raising the federal borrowing limit. AGAIN!  The new language shows the Fed “taking into account the extent of federal fiscal retrenchment.”  In other words, it depends on what Congress does in the way of balancing the budget (deficit spending and raising the national debt) vs. spending cuts.  Because our politicians couldn’t agree on how to do this we had mandatory cuts (sequester) put into place which very well could be a reason for the pull back in the economy.

Economic conditions: the Fed is also clear that it wants to see more improvement in the economy before it starts pulling back.  That helps address the inevitable question it would have faced about why it’s pulling back if the economy is still struggling. In a press conference, Fed Chairman Ben Bernanke said the bank might still scale back its purchases before the end of the year, but it will depend on whether growth and the pace of hiring show greater strength.  “We could begin later this year, but even if we do that, the subsequent steps will be dependent on continued progress in the economy,” Bernanke said. “So we are tied to the data. We don’t have a fixed calendar schedule.”

The Fed has been trying to get that message across for some time, to get markets to respond to economic data rather than hanging on every word from the central bank.  But we still don’t know for sure the Fed’s reaction function; that is, understanding what will trigger the Fed to taper actually allows investors to respond to economic conditions.

Speaking of the economy and growth; although the Fed cut its U.S. growth forecast for 2013 for a third time, the bank expects the economy to accelerate in 2014 and 2015.  But I haven’t seen anything yet on how they perceive where the growth in the economy to be coming from.  In other words what plan do they have or see to get growth (GDP) back to a level (4.00% to 6.5% minimum), which is what it will take on a consistent basis for employment to pick up and the unemployment rate to come down.  We have been in a 2.00% growth pattern for the last few years (and the stock market has doubled in this time, but that’s a different story).  I just don’t see anything on the immediate horizon that’s going to get us the growth we’ll need to make the Fed stop its aggressive policy. The bottom line is that unemployment is too high and progress or growth is too slow.

Continued support, but a warning: the Fed reiterated that “asset purchases are not on a preset course” and future decisions will depend on the Fed’s “economic outlook as well as its assessment of the likely efficacy and costs of such purchases.”  Let’s look at this for a moment: The Fed has to be assessing the “cost” of their purchases and wondering just how they can get out of the corner they’ve backed themselves into.  That “corner” is that markets (both stock and Bond) have been trading based on the Fed adding 85 Billion dollars into the economy each month.  So what happens if they stop and there’s nothing positive in the economy to pick up the slack?  The Markets correct.  That’s what happens.

America’s economy has not shrunk since Q2 of 2009.  Yet, if the Congressional Budget Office’s estimates of just 1.4% real GDP growth this year prove true, America will have experienced its worst four consecutive growth years of GDP in the Bureau of Economic Analysis’ data going back to 1930.  Even if 2008 (-0.3%) and 2009’s (-3.1%) negative annual GDP percentages are dropped (something undone for the other periods) and only the 2010-13 period is averaged, the result is just 1.95%, still over a full percentage point below the previous decade’s.  During the time frame when the Fed started purchasing bonds Nov 2008, the Dow (stocks) have gone from 8,032 to 15,709 (Wednesday).  That’s an increase of 95.5%, all while the economy has failed to grow above 2%.  So what does that tell you???

If you know anyone who can benefit from my services, please call me.  My greatest goal is to see clients and friends happy.  I guess that’s why I love providing mortgage financing.  It’s an immediate gratification when you can help someone purchase a home, or lower their payment on their existing home.

Please visit my website at:


Bill Bartok

Mortgage Advisor

NMLS# 445991

Our processed food supply and GMO labeling

Hello everyone:

I am a firm believer that our bodies know how to process foods in their natural state.  This is due to many years (generations) of learning.  When we have to process a new “chemical” or “species,” the body has to figure out what to do with it and how it affects the rest of our system.

The big problem with our food supply is that we have no idea of how much “processing” goes on between farm and store anymore.  We have always processed our food; this is an activity that is uniquely human. We chop, soak, cook and ferment our food, as well as grind and dry; these are all types of processing.

Farmers and artisans, bread makers, cheese makers, distillers, and so forth, processed the raw ingredients into delicious foods that retained their nutritional content over many months or years.  Unfortunately, in modern times, we have substituted local artisanal processing with factory and industrial processing, which actually diminishes the quality of the food, rather than making it more nutritious and digestible. Industrial processing depends upon sugar, white flour, processed and hydrogenated oils, synthetic food additives and vitamins, heat treatment and the extrusion of grains.  Why does almost every food product contain added salt, sugar, and “additives” in one form or another?  We’ve tricked ourselves into believing those seldom-mentioned additives or long lists of synthetic chemicals make food taste better – but more on this later.  I want to touch on another food related-topic that’s gotten a lot of press lately (thankfully), Genetically Modified Organisms (GMO).

GMOs are plants or animals that have been genetically engineered with DNA from bacteria, viruses or other plants and animals. These experimental combinations of genes from different species cannot occur in nature or in traditional crossbreeding.  This is done to usually gain a higher crop yield or to make the crop resistant to pesticides like Roundup.  This way farmers can spray their crop with Roundup or other weed killers and not harm the crop – or so food companies say. Many times the crop is modified with a bacterium which, once embedded within a plant’s DNA, cannot simply be washed off. Do we really want our food soaked in poison, or genetically altered so deeply as to not be listed on the ingredients – but altered just the same?

There are four major crops that are currently genetically modified to a high degree: Soy, Corn, Canola (oil), and Sugar Beets.  Canola oil is derived from a genetically altered Rapeseed plant which, in its natural state, is poisonous.  And manufacturers had to label it Canola (Canadian Oil) because consumers would not purchase Rapeseed oil.

Yet as a growing population demands more and more food, food producers are grafting and altering the genes of more than just the four above crops. The future of orange crops are now at risk, and “pig genes” may be considered part of the solution. This is due in part to stave off Asian jumping lice and the bacteria that they carry, which has been devastating Florida’s orange crop since 2005. It has been determined by University of Florida agricultural analysts that the Asian bug and bacteria has cost Florida $4.5 billion and 8,000 jobs between 2006 and 2012.  But is this justification for genetically altering the makeup of the Orange?  And will they label the product to inform vegetarians?

To be fair, there are many benefits to genetic engineering (it was once my Major in collage). I would just like to know if the food I am purchasing is genetically altered and with what, and just how “processed” it is.  The problem today is that the manufacturers don’t want us to know because we may not purchase their product, leading to their making less money.  And let’s face it, everything today is about money. More on this later.  That’s my opinion and I’m sticking to it.


So just where is economy headed? The Fed and Wall Street economists seem upbeat about things. Are you?

I don’t enjoy writing about negative things, I mean who does, but sometimes you just have to put it out there.  Our media says we are in a “recovery” incessantly. We are told that because the stock market is rising, because housing is enjoying a few signs of life (at bankruptcy prices), and because cars are selling better than the terrible rate they sold at last year, that the U.S. economy is doing well. It’s my opinion that it’s a mirage.

Let’s see: While the economy has grown at a lackluster 2% (GDP), the stock market has doubled, the Federal budget is spending about 1 TRILLION dollars more than it’s taking in, The Fed is purchasing just over 1 TRILLION dollars in treasuries and mortgages per year in an attempt to stimulate growth, and we have an aging population.

The older population, persons 65 years or older, numbered 39.6 million in 2009.  They represented 12.9% of the U.S. population, about one in every eight Americans. By 2030, there will be about 72.1 million older persons, 19% of the population. A consistently older population over the age of 65 will put a severe strain on Federal programs such as Medicare and Social Security.

What worries me the most is that while some people have saved adequately for retirement, between one-fifth and two-thirds of today’s seniors haven’t saved enough, leaving them to rely heavily on Medicare and Social Security — programs that, along with Medicaid, now account for about 40 percent of all Federal spending.  The Baby Boomers are past their spending years entering retirement and growth in the economy requires spending which employs workers which pays taxes.  Who are the spenders going to be going forward?

The nation’s gross national product rose from about $200,000 million in 1940 to $300,000 million in 1950 and to more than $500,000 million in 1960. At the same time, the jump in postwar births, known as the “baby boom,” increased the number of consumers which in turn created more spending. More and more Americans joined the middle class.  But we aren’t living in the same time period.  In the 1950’s and 1960’s most families had a house, a car, and one wage earner.  Just try that today.

Our current National Debt is in the stratosphere, growing every second, with no signs of stopping and no plans for repayment.  The higher it gets the higher percentage of income (tax dollars) are needed just to pay the interest.  For a precursor, just look at a few European countries such as Greece and Italy.

I really don’t know what will actually trigger this but my bet would be on a stock market correction.  Many pensions are currently underfunded and when asset values drop (401K, IRA savings) consumers stop spending.  I really hope someone can open the publics eyes and come up with a solution.  I for one am out of the stock market.  To be continued…  Please comment with your thoughts.

Bill Bartok

The Origins of Father’s Day

The campaign to celebrate the nation’s fathers did not meet with the same enthusiasm–perhaps because, as one florist explained, “fathers haven’t the same sentimental appeal that mothers have” or in other words people don’t send or buy flowers for fathers.  On July 5, 1908, a West Virginia church sponsored the nation’s first event explicitly in honor of fathers, a Sunday sermon in memory of the 362 men who had died in the previous December’s explosions at the Fairmont Coal Company mines in Monongah, but it was a one-time commemoration and not an annual holiday.

The next year, a Spokane, Washington woman named Sonora Smart Dodd, one of six children raised by a widower, tried to establish an official equivalent to Mother’s Day for male parents. She went to local churches, the YMCA, shopkeepers and government officials to drum up support for her idea, and she was successful: Washington State celebrated the nation’s first statewide Father’s Day on July 19, 1910.

Slowly, the holiday spread. In 1916, President Wilson honored the day by using telegraph signals to unfurl a flag in Spokane when he pressed a button in Washington, D.C. In 1924, President Calvin Coolidge urged state governments to observe Father’s Day.

However, many men continued to disdain the day. As one historian writes, they “scoffed at the holiday’s sentimental attempts to domesticate manliness with flowers and gift-giving, or they disparaged the proliferation of such holidays as a commercial gimmick to sell more products–often paid for by the father himself.”

I for one am just looking forward to spending the day with my family and maybe enjoying a nice juicy grilled T-bone Steak (½ NY Strip, ½ tenderloin) with a bourbon peppercorn cream sauce and a nice bottle of wine.


The Weekly Rap! Friday June 7th, 2013

The bond market’s month-long plunge has pushed long-term interest rates on mortgages and Treasurys to their highest levels in more than a year.  The Dow last traded at 15,213.  The S&P 500 is trading at 1,6392.  Gold is trading higher at $1,383 an ounce, while oil futures at $96.23 a barrel.  Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.73/Gal.

Yields on 10-year Treasury notes, which move inversely to prices, last traded at 2.15%.  30-year Treasury Bond yields last traded at 3.31%.  Rates on 30-year fixed-rate mortgages stayed a hair above 4% this week. Just a month ago, they were below 3.5%.  Since May 8th Fannie Mae MBS (Mortgage Backed Security) with 3% coupons has fallen nearly 4 points to their lowest levels in a year.  MBS yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. Rising yields mean higher consumer-mortgage rates.

The FNMA 30-year fixed 3.0% coupon, containing 3.25-3.625% mortgages, pretty much the benchmark or how rate sheets are priced these days  is currently trading at 100.28, right where they were a week ago.  Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.  The higher the number (price), the better the rate.

In economic news this week; The big news of the week is the employment report this morning.  The Fed’s stimulus has been a boon to financial markets, so traders have been on edge since Mr. Bernanke’s comments. Today’s report appears to have eased concern among stock investors that the central bank would soon pull back on stimulus as the Dow jumped 1.2% to reclaim the 15000 level.

U.S. employers added 175,000 jobs in May, maintaining the slow but steady gains of recent months and easing worries about a summer slowdown in the U.S. economy. The May payroll increase was in line with the average job gain of 172,000 over the past 12 months.  The unemployment rate rose slightly to 7.6% in May from 7.5% in April, as more people entered the workforce, the Labor Department reported this morning.  A broader measure of unemployment that includes discouraged workers and those forced to work part time was 13.8%.

The report likely keeps the Fed Gods on their current monetary-policy path as they contemplate pulling back on its on their $85-billion-a-month bond-buying program later this year.  Fed Chairman Ben Bernanke said last month that the central bank could start slowing its bond purchases at one of its “next few meetings” if the economy continues to improve.  Has anyone bothered to ask where the Fed is getting the $$$ to be purchasing 85 BILLION of bonds each month???

Construction spending rose a scant 0.4% in April.  Nonresidential construction spending, which includes projects such as health-care facilities, rose 0.7%, while residential construction spending fell 0.2%.  Supported by growing demand and low inventory, home prices continued to run ahead in April, with year-over-year growth hit the fastest pace in more than seven years. Including short sales and other distressed properties, home prices in April grew 3.2% during the month and were up 12.1% from the same period last year.

Businesses in the U.S. weren’t as productive in first quarter as originally believed and worker pay posted the biggest drop since 1947, as companies sought to avoid the full effect of a big tax increase that took effect in January. The growth in productivity from January to March was taken down a few pegs to 0.5% from 0.7%, according to newly revised figures from the Labor Department.  Adjusted for inflation, hourly wages sank 5.2% in the first quarter.

Apparently there is little evidence that cutbacks in federal government spending were slowing down the economy. The Beige Book data (because the report is printed on beige paper, seriously), with the report of steady growth may be one reason that Bernanke has suggested the central bank could reduce the pace of its bond-buying program in a “few” meetings, subject to the economic data.

The report said that manufacturing continued to expand in most districts. One area of some concern could be consumer spending.  Instead, the so-called Beige Book released by the Fed, covering the period from early April to late May, said the economy maintained the “modest to moderate” pace that has been in place so far this year.  The report showed that seven of the 12 districts reported only ”slight’ sales growth. Three reported modest or moderate gains. New York reported sales were tepid and Richmond said sales were flat. Residential housing and construction activity was either moderate or strong across the country. Reports about the labor market seemed more upbeat, with hiring “at a measured pace” in several districts and some contacts reporting difficulty in finding qualified workers.

Now here’s what really worries me: Since January 2009 the average growth rate in the economy has been at or below 2.0%.  The Dow has gone from 9,000 to 15,000 a 66% gain in the same time period.  Historically, from 1947 until 2013, the United States GDP Growth Rate averaged 3.2 Percent.  First Q GDP is estimated to be 2.4%.  Does this really warrant a stock market breaking all-time highs?  I begged the question earlier; has anyone bothered to ask where the Fed is getting the $$$ to be purchasing 85 BILLION of bonds each month?  If the Fed is attempting to slow their purchases of Billions each month in bonds, my guess is that it’s not because the economy is growing, it’s because they can’t continue to do it forever.  As we continue to print more $$$ the value of our currency will drop causing further problems.

The US can’t continue to run this way forever.  The more debt we incur (trillions each year) the more of each revenue dollar gets eaten up.  Just try running up your credit cards and see what happens.  This is a house of cards that could so easily fall.  As soon as the stock market realizes this it will correct, and when it does retirement and saving assets drop, consumers spend less, companies’ tighten, layoffs ensue and you have another recession or worse.  I’m not trying to be a gloom-sayer here, but am I the only one who sees this.  The US national Debt is almost 17 TRILLION and climbing with no signs of stopping.  The Fed has been trying to control something we call “free markets” in our capitalistic system, and this can only be “controlled” for some time and eventually it will return to its natural state.  Maybe this is a good thing.  We’ve had our rose colored glasses on for some time now and eventually they will either fall off or be ripped off.  But it probably will be the latter.

If you know anyone who can benefit from my services, please call me.  My greatest goal is to see clients and friends happy.  I guess that’s why I love providing mortgage financing.  It’s an immediate gratification when you can help someone purchase a home, or lower their payment on their existing home.

Bill Bartok

Mortgage Advisor

NMLS# 445991

How do you blog about something when we have people killing children?

I don’t even remember what I was going to blog about after hearing the news this morning that some 20 year old man went into an elementary school and started shooting killing children and teachers.  The difficulty here is that we feel so terrible about something like this that we feel compelled to “do something”  so that it can’t happen again, and we want to blame someone or something because we’re angry.  It’s really hard when the gunman turns the gun on himself because we have to look elsewhere for blame.

Trust me, I wish there was something that could’ve been done but the school had security measures in place and the gunman got in anyway.  And how do we stop someone from committing such a heinous crime when they have no record.  We don’s have laws yet that charge you with a crime BEFORE you commit it.  I think that was a movie though.  When something like this happens we seem to go straight to gun control.  But do you think that someone that would kill another human being especially children, would obey a gun control law???  We have laws against drugs and yet you can still acquire them.  This is a tragedy but I don’t think Gun control is the answer.

Sometimes bad things just happen and there’s nothing we can do about it.  It should make us more thankful for the family and friends we have.  Never take life for granted, it’s just too precious.  cherish the moments you have for they may not be here tomorrow.

“Glee, A show that is promoting Bulimia among our school age children”

I wrote a couple weeks ago that Glee is probably the most hypocritical shows on TV right now popularizing Bullying while trying to act as if they were against it.  The popular kids i.e. the football players and the cheerleaders (that are never out of uniform) are constantly bullying through verbal abuse and throwing slushies (large iced syrupy drinks) in the faces of the unpopular.

Well they’ve stepped it up a notch and are now promoting Bulimia!  The newest character, cheerio Kitty, is acting as if she were her friend,  teaching a “less than popular” character Marley, how to use two fingers to make herself throw-up and also to use laxatives in order to keep her weight down.  Marley’s mother is a very overweight cook in the school kitchen and Kitty constantly reminds her that she will look like her mother if she doesn’t lose weight and these techniques are the only way to do it.  Kitty is also secretly “taking in” or tightening her costume to make it look like Marley needs to lose weight.

Now the producers are making this out to be fun and entertaining,  but isn’t that what our children want these days to be wanted, to be accepted, and to be entertaining?   I really don’t know what the producers are thinking.  Well I do, it’s about ratings!  But if this behavior is popularized on TV, don’t you think that students in REAL schools may attempt to emulate this?  I would love to hear your input.  This is my reality show!  It’s my opinion and I’m sticking to it!