When Will the Music Stop - Cutter Financial Group, LLC

Page Ten-A
Friday, May 10, 2013
The Falmouth Enterprise
Cutter Family Finances
WORD
PLAY
Status Quo
By Arthur Silverstein
This legal phrase, like several others from the Latin, has entered
the common language because it is so useful (even if it may not be
heard on a daily basis). Its literal translation is “condition in which
[something is],” but it simply means ‘the present conditions (or situation).’ One may hear it used on occasion as “status quo ante,” the
‘situation before [some other event].’ When wars were concluded,
treaties would often refer to the “status quo ante bellum,” requiring
troops to be withdrawn and other factors to go back to prewar conditions. The word derives from the verb stare, ‘to stand,’ and we have
taken status directly from the Latin, to mean ‘the position, standing,
or condition’ of a person or thing. Stature is literally ‘standing upright’ (as is a statue), and is used figuratively, together with status, to
indicate the ‘high esteem’ in which someone is viewed by others.
State and estate are etymological doublets, originally with the
same basic meaning. State is by far the more complex term; it refers to anything which may claim physical, political, psychological,
or moral ‘standing.’ We speak of “the United States”; of “a state of
mind”; of “a state of grace”; and of “a state of affairs.” In chemistry
we have “a state of equilibrium”; in physics atoms exist “in a state of
minimum energy”; on a cruise ship, one sleeps in a stateroom; and
in politics we speak of statesmen, city-states, sovereign states, state
visits, and of royalty who used to “travel in state.”
An estate, on the other hand, usually refers to a significant dwelling on a large piece of land, although one’s estate refers also to the
sum total of one’s assets. Also, (borrowed from the French), we speak
of newspaper reporters as members of “the Fourth Estate.” (The
original three were the Church, the Nobility, and the Commons.)
The Greek stasis was literally ‘a standing still.’ This was extended
in such words as hemostasis to indicate the ‘slowing or stopping [of
a flow]’—of blood, in this case. It was applied further to indicate an
instrument employed to stop or to regulate a flow (as in hemostat,
rheostat, and thermostat). In medicine, a metastasis derives from a
Greek term meaning literally ‘to cause to stand elsewhere’; it refers to a tumor or infection that spreads from its primary location.
Ecstasy is literally ‘standing outside [of one’s self],’ i.e., ‘rapture,
entrancing joy.’ Something static is merely ‘standing still,’ although
the word was later adapted in early radio to describe ‘electrical
interference’ with a signal. As first employed, statistics referred
merely to the collections of facts about a state and its inhabitants;
it has since developed into the name of a profession engaged in the
manipulation of numbers and the analysis of their significance.
A statute is something that is ‘caused to stand, set up,’ as a law.
From this we have substitute (‘standing in place of’); destitute (‘set
down, forsaken’); constitute (‘set up, established’—like our Constitution); restitute (‘set back, restored’); and prostitute (‘one who is set in
front, exposed publicly’). The prostate was given this name by anatomists, to indicate that it ‘stands before [the bladder].’ The Latin
obstetrix was a ‘midwife’—literally ‘she who stands before [birth].’
Thus an obstetrician is a physician specialized in midwifery.
We come, finally, to the word stadium, which has a fascinating history. It, as well as the words discussed above, all derive from an
Indo-European root sta-, ‘to stand.’ It became in ancient Greece a
stadion, a fixed unit of length for races (about 200 yards). This then
became the name for ‘foot-races’ in general, and afterward for the
stadium in which races and other games are held. Related to this are
such words as stage (‘a place to stand upon’), stable (in both senses),
stall, stool, and even constable.
(Arthur Silverstein may be reached at [email protected])
*OHN3CAVOTTO
&LOORCOVERING#ONTRACTOR
3INCE
#ERAMICs0ORCELAINs(ARDWOODS
2ElNISHs,AMINATESs0%2'/
s6INYLs6#4s#ARPET
&REE%STIMATESs&ULLY)NSURED
When Will The Music Stop?
By JEFFREY CUTTER
I have received many emails from our
readers asking
me to comment
on the Dow
hitting 15,000
last week after writing my
April 14 column, “You’ve Been Warned.” So
here I go.
Most of my readers know me as
pretty much of a straight shooter.
Love me because I will tell you the
truth; hate me because I will tell
you the truth. Either way, you will
hear the truth.
Well, it’s happened. The Dow
broke through the 15,000 mark.
And I am furious.
I am furious at the Federal
Reserve, the European Central
Bank (ECB), and the Bank of Japan (BoJ); I will refer to these
entities as the “banksters.” Each
entity has had a role in this drive
to inflate equities despite dismal
economic numbers. These central
banks inflate these equities while
deflating the value of savers and
bondholders with historically low
interest rates.
I am not really furious at the
“banksters” who are causing a
huge bubble as I wrote about in
my April 14 article. I am extremely
upset because I know what comes
next, and what it means to everyday investors. I wrote on April 14
that our economy is an economy
of bubbles such as the tech rec of
2000 to 2002 and the housing bubble of 2007 to 2009.
Let me introduce Hyman Minsky to our story. Old Hyman was
a prominent economist who died
in 1996. He believed that a boom
(bubble) leads to euphoria, which
leads to profit taking and ultimately ends in panic. As a boom
(bubble) leads to euphoria, Minsky
said, banks and other commercial
lenders extend credit to ever-more
dubious borrowers, often creating new financial instruments to
do the job. During the 1980s, junk
bonds played that role. More recently, it was the securitization of
mortgages, which enabled banks
to provide home loans without
worrying if they would ever be repaid. Now it’s the central banks!
Mr. Minsky said that over a
course of time, stability, or the lack
of volatility, creates instability.
His theory is that people become
accustomed to the status quo (or
the new normal) and then take on
more risk than they should.
So what is the media saying?
“The markets are going up again”?
Of course they are. The Fed is
printing $85 billion a month to
make sure of it.
We hear nothing about bad manufacturing and trade numbers unless you are a financial junkie like
me. No worries, the markets are
going up again anyway; the Fed is
making sure of it.
How about the Economic Union
reporting a negative GDP? You
bet! On May 3 they said their recession will be deeper than expected.
No worries, the ECB is printing
money, and voila, the markets are
going up again.
We have seen this before; we
know this game. Whatever happens, wherever on the planet it
happens, the markets won’t go
down because the Fed doesn’t
want them to. Well, right up until
the game of musical chairs stops.
Right up until the system falls
apart, popping our bubble.
Right up until people realize
that we added jobs, but fewer jobs
than the number of people who
joined the labor force.
Right up until people realize
that we added 278,000 part-time
jobs because people couldn’t find
full-time work.
Right up until people realize
that unemployment in the EU is
now over 12 percent and going
higher.
Right up until people recognize
that the EU is in recession.
But until then, the markets are
marching higher, propped up
by the central banks around the
world, who continually tell us not
to worry, because they’re here to
make sure nothing bad ever happens.
The longer this situation goes
on, the worse the eventual downturn becomes. This is what makes
me so furious.
No one in the governments
wants to acknowledge the actual
size and scope of the debt bubble
that really has not gone away, it’s
just masked by trillions of newly
printed yens, dollars and euros.
Yes, we crossed 15,000 last week,
but our future is unclear. How long
will people live in euphoria before it turns into panic? How long
can central banks keep the music
playing before it eventually stops?
I honestly don’t know, but I don’t
want to be the guy who is not fast
enough to get a chair!
My suggestion to you, my readers, is to review your current investment philosophy. Are you still
in a buy-and-hold portfolio? Are
you still hearing “just ride it out,
you’re in it for the long haul”?
Think about what happened in the
last downturn from 2007 to 2009;
what did your portfolio look like?
Can you go through that again?
Take charge and ask questions;
talk to your advisor. Seek opportunities that will be defensive in bad
times and opportunistic in good.
Our goal must be to make money
while we can. Yet be vigilant, stay
alert, and anticipate as we watch
for the signs to get out.
I will do my best to keep you informed because you, my readers,
deserve more.
Jeffrey Cutter, CPA, PFS from Cutter Financial Group (www.cutterfinancialgroup.com) provides Private
Wealth and Financial Management
Through Low Risk, Low Volatility
Successful Investment Solutions. He
can be reached at jeff@cutterfinanci
algroup.com.
Investment advice is offered by
Horter Investment Management,
LLC, a Registered Investment Adviser. Insurance and annuity products
are sold separately through Cutter
Financial. Securities transactions
for Horter Investment Management
clients are placed through Pershing
Advisor Solutions, Trust Company of
America, Jefferson National Monument Advisor, Fidelity, and Security
Benefit Life.
PEOPLE FOR CATS
By JOAN D. KING
Did you enjoy the nice warm spring days last week? We all did,
including the fleas and ticks. These little pests can wreak havoc on
your cat. The flea bite sets off an allergic reaction causing your cat to
scratch, which often damages fur and skin. If enough fleas attack the
cat and enough blood is lost, this will lead to anemia. Fleas also cause
tapeworms. This combination can be deadly for small kittens.
The best way to control flea problems is prevention. It is important
to give your cat a “spot on” topical treatment every
month if she goes outdoors and during the summer
months if she stays in. Indoor cats can get fleas from
the dog or children who bring them in on their clothing.
Examine your cat for fleas on a daily basis. Part
the fur in several places and look for signs of fleas,
small black specks (flea dirt) are actually the fleas’
feces and fleas themselves. A flea comb is an excellent tool. It is a tiny comb with very fine teeth and
can be found at any pet store.
If you find evidence of fleas, shampoo your cat
with pet shampoo, if you can, and apply a topical
treatment once she is dried off and throw out any Misha
bedding she has. You also should vacuum the house.
Continue this treatment every 30 days until the fleas
are gone.
Every cat coming into the shelter gets a flea and worm treatment. We
then monitor the cats every week for signs of fleas.
Our Kitty of the Week is Misha. She is a sweet, 8-year-old tortoiseshell cat who is in need of a loving foster home. She has a chronic irritation of the pancreas, which is under control with medication. She
is a friendly, quiet cat who would love to be the only cat in a home.
Fostering her would mean you would provide the loving, quiet home
while People For Cats provides her food, medicines, and veterinary
bills—a win-win for both you and Misha.
JoJo is another kitty for whom we are seeking a loving foster home.
He needs to be on a diet, as he is very overweight and needs someone
patient enough to teach him how to play.
Our young kitties are 10-month-old sisters Polly, a longhaired tiger
girl, and Bitty, a shorthaired tortoiseshell. Both are
very playful older kittens. They are so very cute and
adorable and get along well with children of all
ages.
Fergie is another beautiful 2-year-old tortoiseshell. She has just been spayed and received all her
shots. She is a very loving kitty. She is related to the
two kittens and mom to the babies due to be ready
in two weeks.
Two-year-old Willow is a very pretty gray-andwhite shorthaired cat. She loves to play but really
loves a quiet household. Her owner died, leaving
Willow and two companion cats. Her companions
have just given birth to darling kittens.
Kitten season is late this year, probably due to
the cold, snowy winter we had. We name our kittens alphabetically and are now greeting the “H” litter; however, only
the “B” litter has been adopted because the other litters are still too
young for adoption. Watch Petfinder.com and PFC’s Facebook page for
when these litters will be ready.
People For Cats is at 44 Beagle Lane in Teaticket, just off Route
28 and behind the Teaticket Post Office. We are open to the public
Wednesdays from 4 to 6 PM and Saturdays from 10 AM to 1 PM or by
appointment. Please call our hotline 508-540-5654 when we are closed
and leave a message. All calls are returned.
All for the love of cats….
i“œÀˆ>Ê>Þ
i>`ˆ˜iÃÊÓä£Î
/…iÊ>“œÕ̅ʘÌiÀ«ÀˆÃi
/ÕiÃ`>Þ]Ê>ÞÊÓn̅
`Êi>`ˆ˜i
Àˆ`>Þ]Ê>ÞÊÓ{̅ʱʙÊ
>«iÊ
œ`Ê-…œ««iÀ
/…ÕÀÃ`>Þ]Ê>ÞÊÎä̅
`Êi>`ˆ˜i
Àˆ`>Þ]Ê>ÞÊÓ{̅ʱÊÎÊ*
AAA LAWN MOWER SERVICE
& SMALL ENGINE REPAIR
7EAREOFFERING%ARLY3PRING3PECIALSON
#OMPLETE4UNE5PAND
3HARPENINGON-/7%23
We Sell New & Used Equipment and will be there after the sale!
&2%%0)#+50&2)$!93,IMITED4IME/NLY
.OWAVAILABLE%THANOL&REE&UEL
Generac Generators Sales/Service
/…iʘÌiÀ«ÀˆÃiÊ܈ÊLiÊÊ
VœÃi`Ê>Ê`>Þʈ˜ÊœLÃiÀÛ>˜ViʜvÊ
i“œÀˆ>Ê>Þ]Ê
œ˜`>Þ]Ê>ÞÊÓÇ̅ʰ
#ALLFORPRICINGONANYTHINGYOUMAYNEEDTUNEDORREPAIRED
4UNEUPSINCLUDESPARKPLUGSOILCHANGEAIRlLTEROILlLTERFUELlLTERBLADESSHARPENED!LLMOVING
PARTSCABLESANDCONTROLSLUBRICATEDANDCHECKEDSTARTERCHARGINGSYTEMANDBATTERIESTESTED
“Have your equipment ready to go”
We tune and repair all brands
and
we sell and service generators.
!UTHORIZED$EALER
All work guaranteed • Pick-up & delivery available
Parts and Service and Warranty Repairs
2AY/LIVER#ERTIlED-ASTER3ERVICE4ECHNICIAN
0INECREST"EACH$RIVE4EATICKET