August 14, 2013
- “Laying the foundation for a constitutional challenge”: What’s up with the 3-D printed gun, one year later
- Borrowing from the future: The depressing numbers on 401(k) loans… and one very promising number for your own retirement
- You can profit from the perma-slump in Europe: The biggest fire sale in history just got bigger
- Ouch: Entrepreneur punished for mocking the regulators who put him out of business
- The 5 taken to task in the mailbag… readers share more “Affordable” Care Act fallout… the president’s “giant middle finger”… and more!
Defense Distributed, Cody Wilson’s 3-D-printed pistol project, turned a year old this month…
August 2012 was also when, if you recall, we first mentioned Wilson’s 3-D printed gun project.
Back then, Defense Distributed was a small libertarian student partnership inspired by the FP-45 Liberator — a small, one-shot pistol manufactured by General Motors during WWII.
A year later, it’s a national hot-button issue.
“As you might be aware,” a cordial Wilson told The Washington Post in a recent interview, “the State Department had requested that I take these plans down while they determine whether they have the regulatory jurisdiction to control the information…”
After completing a large filing with the State Department and the Department of Defense Trade
Controls, Cody enlisted the help of four attorneys from big civil liberties groups — which at this time he chooses to keep anonymous.
When asked if he planned to file a lawsuit challenging the State Department’s request, Wilson confirmed he would… if need be.
“There’s no indication that we need to yet,” he told the Post. “I want to kind of minimize the ‘challenging’ rhetoric right now in the press, but we’ve had it studied by a number of people; we’ve seen what the constitutional challenges would need to be in the event that this kind of gross authority is asserted.
“We’re definitely being careful on laying the foundation for a constitutional challenge,” he went on, “but I’m not trying to say that ‘Yeah, we’re ready to go to court.'”
While the Feds are growing greys trying to plug the loopholes created by 3-D printing, Cody is focused on bigger and better things: “I’m excited about the SLA patents and the SLS patents expiring,” he says. “FDM won’t be the only thing people are using.”
Whoa, that’s a lot of acronyms. Let’s back up and see what Wilson’s amped up about…
Patents on two of the most advanced 3-D printing processes are set to expire in February of next year. These include selective laser sintering (SLS), the lowest-cost 3-D printing technology, and stereolithography (SLA), the original 3-D printing technology.
Here at our Baltimore HQ, we have the fused deposition modeling (FDM) machine, a “first gen” in the Maker world, the patents of which expired years ago.
As you can see below, we used it just last week to print our own version of Wilson’s “Liberator.”
Click the “play” button to see the implications…
What happened when FDM’s patents expired? “As soon as the patents expired,” Duann Scott, “design evangelist” of the 3-D printing pioneer Shapeways, told tech-blog Quartz, “everything exploded and went open source, and now there are hundreds of FDM machines on the market.”
[Ed. Note: Hundreds, if not thousands, of startups and blue chips are awaiting the expiration date for these key patents. When it hits, they’ll be free to market and sell their own versions of the technology, which we’re sure many of them have already developed. Luckily, you have plenty of time to get in before this happens. Click here for our tech whiz’s free presentation on why 3-D printing and why now.]
The summer doldrums are in full swing: The few traders on duty can scarcely rouse themselves to react to anything, in any asset class.
Retail bellwether Macy’s delivered an earnings “miss,” and the Labor Department reported wholesale prices were unchanged in July. Literally every economist among dozens polled by Bloomberg expected at least a 0.1% increase.
Together you’d think the two developments would ease any concerns about the Fed “tapering” its bond purchases/money printing in September… but the major stock indexes continue their lazy drift downward. At last check, the S&P has shed five points, to 1,689.
Crude traders can barely react to the bloody crackdown in Egypt; West Texas Intermediate is actually down a bit, to $106.36.
Gold is recovering yesterday’s losses — currently $1,333. But as Greg Guenthner counseled on Monday, the longer-term downtrend remains intact unless the Midas metal can punch through $1,350.
Silver continues to show signs of life, though — at $21.70, it’s near a two-month high.
Americans are still raiding their retirement savings at a higher rate than before the Panic of 2008.
Research from Aon Hewitt shows that 12.5% of 401(k) participants took out a new loan in 2012. The percentage has been falling since it peaked in 2010… but it remains higher than before the market and the economy went into a tailspin nearly five years ago…
Nearly every financial adviser says a 401(k) loan is a horrible idea… but more than 25% of 401(k) participants have a loan outstanding. “It’s still better than losing your house or having cars repossessed,” one adviser tells The Wall Street Journal… but presumably, most of those borrowers aren’t in such dire straits.
[Ed. Note: As you know, we’ve been conducting an informal survey this week — asking readers how big a nest egg they’d need to live the retirement of their dreams. We encouraged you to dream big… and the average number that came back to us was $4.512 million.
If you’re not there yet, our latest project can help you get a lot closer to that number — and in a short amount of time, too. It involves a subniche of the markets that Wall Street’s movers and shakers can’t touch.
We’re capping participation in this project at only 250 readers. So if you even think you’d be interested, keep an eye on your inbox tomorrow morning at 10 a.m. EDT. The subject line will say, “Open Call for the 30-Day Retirement Plan.”]
The inventory on Chris Mayer’s “biggest fire sale in history” just got bigger again.
In January 2012, Chris told us European banks would have to unload $1.8 trillion in assets over the following ten years.
“There is no better, more reliable way to make money than to buy something from someone who has to sell,” he said at the time. “Bankers are the best people in the world to buy from” — as Chris would know from his banking days. By July of last year, the number had soared to $3.8 trillion.
Now an analysis from the Royal Bank of Scotland has upped the figure yet again to $4.24 trillion. And it’s shortened the time horizon; the banks will have to unload these assets by 2018.
A new factor is in play: Not only do the banks need to raise cash to stay solvent, but they need to raise even more cash to meet capital requirements under the “Basel III” regulations issued in 2011 by the Bank for International Settlements.
“There is too much debt still across Europe’s economies and the manifestation of that is on bank balance sheets,” Berenberg Bank analyst James Chappell tells the Financial Times. “The major issue is that the banks still don’t have enough capital to write down those loans.”
Hence, the biggest fire sale in history. Usually, such opportunities are limited to the megabucks crowd. But from the outset, Chris identified a way for you the retail investor to take advantage. His readers are already up 64%… and he sees much more upside to come.
In fact, his suggested fire-sale play is one of five stocks he says you can salt away for the next decade and potentially grow your money 20-fold. To learn more about this lazy man’s road to riches, follow this link.
Object lesson in government regulation, big business version: If you’ve got the urge to merge in an already-concentrated industry, act early.
In recent years, United Airlines swallowed up Continental, Delta took over Northwest and Southwest absorbed AirTran. Now the Justice Department is suing to block the planned merger of American Airlines and US Airways.
You snooze, you lose.
“The DOJ approved all other airline mergers in recent years, so the lawsuit was unexpected,” says Dan Amoss. “This merger was, apparently, the last straw. The DOJ said the legacy airlines ‘increasingly prefer tacit coordination over full-throated competition.’
“US Airways executives foolishly gloated that further consolidation would boost industry profits. This grabbed the DOJ’s attention. Attorney General Eric Holder must not have enjoyed watching another industry (aside from banks) painting him as a pushover in the eyes of the public.”
What’s next for airline stocks? Dan explores in today’s 5 Min. PRO. In 2011, Dan’s readers made 95% gains selling short American Airlines stock during its decline from $6.60 to 35 cents.
Object lesson in government regulation, entrepreneur version: If you’re going to purposely piss off the regulators, expect the regulators to come after your personal assets.
Last year ,we chronicled the demise of Buckyballs — “adult desk toys made up of BB-size magnets” is how we described them. The Consumer Product Safety Commission decided they posed a swallowing hazard to children and moved to ban them.
The maker of Buckyballs sued the CPSC and lost. By year-end, CEO Craig Zucker had sold off his remaining inventory and shuttered the business.
End of story, right?
Wrong. While Zucker waged his court battle last year, he promoted his product with ads that mocked the regulators…
Now the ugly postscript: The CPSC has named Zucker personally as a respondent in its ongoing recall proceeding.
“For the first time,” says an analysis from the Gibson Dunn law firm, “the CPSC is pursuing individual and personal liability against an executive for a company’s alleged violations of the Consumer Product Safety Act.”
“If the move succeeds,” writes the Cato Institute’s Walter Olson, “Zucker could be ordered to foot the bill personally for offering consumers full refunds for all products sold, reimbursing retailers for recall costs and various other expenses potentially reaching into the millions.”
It’s a wonder anyone bothers to go into business for himself or herself anymore…
“Just got hit by the first fallout from Obamacare,” a reader writes, “as my wife received a letter from her OB-GYN stating he could no longer have her as a patient on Medicare (she’s 69). The reasons he gave were he was not going to wait an interminable amount of time for…”
The 5: At this point, the email inexplicably cut off. Guess the NSA isn’t fooling around.
We presume the missing word is “payment.”
“I would be interested in more knowledge of the happy Canadian’s satisfaction with their health care,” writes yet another reader piling on to our correspondent from Monday.
“As a hobby, I spent most of this century (retired in 1997) going to gun shows, where you mostly sit around and talk to customers, etc. I started asking back when our president started running for office about their socialized health care. I never got a single one of perhaps 15 Canadian and United Kingdom visitors to say a good word about it. Everyone said, ‘You don’t want it,’ and don’t let them take your guns.
“Especially of interest would be the time he spent on a waiting list for seeing any specialist. That was probably the single most complained about problem, and with the decrease in the numbers of doctors expected under Obamacare, we may experience some of the waiting times they described. Not days or weeks to see a specialist, but months, stretching into a year or more in areas such a neurologist, etc.”
“I really don’t get how The 5 can constantly rail on about Obamacare without going after the insurance industry,” a reader objects.
“They are the massive financial bloodsuckers that have big overhead costs, big executive salaries and bonuses, pay dividends, buy back stock, deny claims and always increase premiums to cover their claims, but never lower rates.
“I’ve worked for 45 years, never been hospitalized, no accidents, am in good health and have paid almost $500,000 in premiums for near-zero medical bills.
“And my auto insurance is the same story. Insurance is an industry that has eliminated competition via favorable legislation and regulations, and can pretty much charge whatever they want. And this is one of the reasons Warren Buffett is a billionaire — he invests only where he can control the game. So how about The 5 tarring the insurance profiteers?
“P.S. Oops, I doubt you will tar them, as they are surely in your portfolio. LOL.”
The 5: Uh, how closely are you reading our output? We don’t think the industry fared too well in our episode a week ago today. And it looks even worse as Addison Wiggin unearths the industry’s cost-shifting scams in yesterday’s Daily Reckoning.
By the way, your editor and his bride just wrote a check for nearly $400 to insure a car we neither own nor lease for six more months. But that’s another story entirely…
“Oh, you know where this Obamaca… err, ACA is headed,” says our final email of the day.
“It’ll be like that agonizing annual visit to the DMV. You’ll grab a number and go sit down. They’ll call out, ‘Room 8, No. 62. Room 8, 62.” The guy sitting next to you will say, ‘I’ve been here four hours and I’m still 16 numbers away.’
“Are you feeling the love yet?”
The 5: The DMV experience is precisely why our friend Jud Anglin spent four months assembling “The Obamacare Antidote: 6 Ways to Get the Best Health Care of Your Life and Save up to $2,000 per Year”… plus two more special reports you don’t want to miss.
Or more to the point, can’t afford to miss. Your life really does depend on it.
Cheers,
Dave Gonigam
The 5 Min. Forecast
P.S. “Giving the concerns of the American public a giant middle finger” is how TechDirt describes the latest absurdity in the NSA spying saga.
On Friday, the president promised an independent group of outside experts would look into the matter.
On Monday, he named Director of National Intelligence James Clapper to lead the panel. The guy who lied to Congress about the scope of the NSA’s snooping.
For real.
Yesterday, the administration realized it would have to, in Beltway parlance, “walk back” the decision.
“The White House said on Tuesday,” reports Yahoo News, “that Director of National Intelligence (DNI) James Clapper won’t choose members of a special committee tasked with reviewing high-tech U.S. spying programs and ferreting out abuses. Clapper also won’t run the study, officials said.”
Feeling better yet?
No?
Best take action, then. Our special report spells out no less than six ways to make yourself invisible to the NSA. Learn how to get your copy right here.