Jerome Bitun

The unimaginable has happened. America has voted the most unlikely candidate for President and a lot of people got caught by surprise. However, I wasn’t as surprised that Trump won. In fact, I was half expecting it. For all of Trump’s bluster, I already had a feeling he will have a good showing in the polls, maybe a close race with Clinton if Clinton did win. But when it was shown he was leading in the early polls, I knew he was going to win. What surprised me was that the whole country voted Republican. The US congress and senate is now controlled by the Republicans. Last time, congress was controlled by the Republicans but the senate was controlled by the Democrats. This time around, the Democrats were completely demolished. Why? Historically, when the economy is doing badly, the incumbent party almost always losses. Why? Because the people wants change, so the kick out the current party and install a new party to see if they can make things better. If the economy is doing well...

So the US debt deal has been passed and was presented to Obama a few hours before the deadline which Obama signed. The deal increases the US debt limit immediately by $400B and another $500B by February. This avoids a default by the US government. Part of the debt deal is to cut the US deficit by at least $2.1 trillion over 10 years. If you divide that, it's around $200B a year. To put that amount in context, in 2010, the interest alone paid by the US on its debt is $164B. The Department of Defense budget in 2010 is $663.7B. In short, the spending cuts are insignificant. Here's the sad part, the budget cut is not really a cut in spending. According to Presidential hopeful Ron Paul , the budget cut is akin to a family "saving" $100,000 in expenses by deciding not to buy a Lamborghini, and instead getting a fully loaded Mercedes, when really their budget dictates that they need to stick with their perfectly serviceable Honda. I know a lot of people are confused ...

2011 Tax Deadline Just a reminder, you have to file your taxes by April 30, 2011. U.S. Outlook The rating agency S&P 500 issued a warning Monday, April 18, 2011 on US government debt. It said that there is a 33% chance it would lower the United States credit rating from AAA in the next two years if Washington failed to manage the country's debt. This sent the Dow Jones, S&P500 and the TSX lower. S&P said it has little confidence that the White House and Congress will agree on a deficit-reduction plan before the fall 2012 elections. By that time, the measures won't go into effect until the fiscal year 2014. This does not look good for the U.S. The ratings done by the three major ratings agency is very important and the AAA rating is one most sought after rating by both investors and debt issuers. The reason this is important is because most big pension funds, hedge funds and mutual funds have in their mandate to only buy "AAA" rated bonds. If the U.S. lose...

Happy Halloween! Here's a scary story. The 2005 Statistics Canada report says that a man today will live to age 78 and women will live to age 83. Married men tend to live longer than unmarried men. Thanks ladies! So men, be good to your wife. Not only that, we are also living longer and may actually live past 100 years old in the next 30 years. Anyway, imagine yourself being age 65 today. Your $500,000 RRSP last year is now down to $250,000 because of the market drop. During that drop in the market, you panicked and moved all your RRSP into a GIC. So you just realized all the losses and since the market recovered somewhat since March, you did not participate in the recovery. Assuming you live on $25,000 a year, would your $250,000 last? That means there will be 3 years for men and 8 years for women with no other source of income other than the $830 a month of CPP if you qualify for the whole amount and maybe some OAS. What if your income needs is $30,000 a year? Can you imagi...

Saw this site today showing the top 10 foreign holders of U.S. Tresuries. In short, the top 10 nations to which the U.S. owes money. Here's the link to the NY Times with the graphics .