New Video – “How to Recruit Great People: Without wasting your time!”

Filed under: GENERAL — Kerry Johnson @ 7:27 pm  

Have you ever recruited anyone? Was it a nightmare taking weeks? Or a great experience that maximized your time? That all depends on how you recruited and selected. The problem is that 70% of resumes have lies and the other 28% don’t have the right traits. But just the same, you have to wade through them all to find the gem. Would you like to bypass all that wasted time and go right to the 3 best candidates? The Answer is “Virtual Voice Mail.” to find out more, listen to this 6 minute video. “How to Recruit Great People: Without wasting your time!” http://www.kerryjohnson.com/vi deo2.html Excerpted from the 60 minute video, “How to Recruit, Train, and Retain Great People.” From “America’s Business Psychologist.”

Please also share this with any colleagues you think can use it. As always, if sending this video to you is not appropriate, let me know.

Kerry Johnson, MBA, Ph.D.
Phone: 714-368-3650
Email: Kerry@kerryJohnson.com

P.S. –  Do you need a great speaker for your next conference? Also is your production not where you want it to be? Are you completely committed to making more money without working more hours? Perhaps Peak Performance Coaching: How to increase your business by 80% in 8 weeks can help. Call us at 714-368-3650 for a free evaluation of your strengths and weaknesses and whether you are a candidate.


Weekly Coaching Update with Dr. Kerry Johnson

Filed under: GENERAL — Kerry Johnson @ 7:26 pm  

I just heard an interview with David Stockman, OMB director under Ronald Reagan. It is both thoughtful and nerve wracking. If you think the current bull market will last forever, don’t listen to this interview. But if your goal is to protect your clients no matter what happens in retirement, this is a must listen.

David Stockman Interview

If you haven’t already taken advantage of iCoach/Advisor, please do starting now. It is a great way to make 2013 the best year of your career.


Market Month: May 2013
The Markets

Despite some bumps along the way, both the S&P 500 and the Dow industrials soared to new all-time records, and the Nasdaq set a new closing high for the year. The Dow followed its best week of 2013 with its worst week of 2013, while the S&P surpassed its previous record close on the last day of the month. The small caps of the Russell 2000 saw their worst week since June 2012, which contributed to the index’s first monthly loss since October. The announcement of fresh monetary stimulus in Japan and hints that the eurozone might begin to refocus on growth as well as austerity helped the Global Dow beat the domestic indices decisively, though it continued to lag them for the year.

A one-day loss of $140 an ounce sent gold to lows not seen since early 2011, though it subsequently regained more than half of the month’s loss to end at almost $1,470 an ounce. Silver also lost roughly 14% during the month, while oil prices fell below $90 a barrel. Demand for Treasuries sent the 10-year yield down as prices rose.
Market/Index 2012 Close Prior Month As of 4/30 Month Change YTD Change
DJIA                 13104.14 14578.54 14839.80 1.79% 13.25%
Nasdaq             3019.51 3267.52 3328.79 1.88% 10.24%
S&P 500           1426.19 1569.19 1597.57 1.81% 12.02%
Russell 2000   849.35 951.54 947.46 -.43% 11.55%
Global Dow     1995.96 2108.55 2178.44 3.31% 9.14%
Fed. Funds      .25% .25% .25% 0 bps 0 bps
10-year Treasuries 1.78% 1.87% 1.70% -17 bps -8 bps

Equities data reflect price changes, not total return.
The Month in Review

The U.S. economy grew 2.5% during the first quarter of 2013, according to the Bureau of Economic Analysis. However, that pace was weaker than expected, and growth for the previous quarter was revised downward to a paltry 0.4%. Gains in consumer spending, business inventories and capital investments, exports, and residential investment were partly offset by lower exports and government spending cuts at federal, state, and local levels.
The unemployment rate fell slightly to 7.6%, according to the Bureau of Labor Statistics’ April report for March. However, the 88,000 new jobs represented the slowest job growth in almost a year, and much of the decline in the unemployment rate resulted from half a million people leaving the workforce.

The housing market continued to be a cornerstone of economic recovery. The 20 cities of the S&P/Case-Shiller index saw home prices that were 9.3% higher than a year earlier. New home sales were up 1.5% in March, and 18.5% higher than the same time last year, according to the Commerce Department. The National Association of Realtors® said sales of existing homes were up 10.3% from a year ago, though tight inventories cut sales by 0.6% for the month. And a 7% increase for the month put new residential construction at its highest level since 2008; the Commerce Department said that’s almost 47% higher than a year earlier.

Lower energy costs after a sharp run-up the month before helped cut inflation at both the consumer and wholesale levels. The Bureau of Labor Statistics said a 0.2% monthly decline cut the annual consumer inflation rate to 1.5%. Wholesale prices were down 0.6% for the month, and the 1.1% year-over-year increase was the smallest since last July.

Lower gas prices also affected U.S. retail sales, which the Commerce Department said were down 0.4% for the month but 2.8% higher than a year earlier. Consumer spending also rose 0.2% during the month, though it was the smallest increase in three months and higher utility bills were responsible for much of it.

Manufacturing data was mixed. The Fed said Q1 industrial production saw its biggest gain in a year. However, the Empire State and Philly Fed manufacturing surveys saw monthly declines, and the Institute for Supply Management found growth slowing in both the manufacturing and services sectors. Also, the Commerce Department said a drop in spending on commercial aircraft cut durable goods orders 5.7%; it was the second monthly dip in three months.
The Bank of Japan announced a massive expansion of its quantitative easing efforts to try to drag the country out of the deflation that has plagued it for years. Meanwhile, there were signals that Europe might be easing its push for austerity as Ireland, Portugal, and Spain were granted more time to meet deficit reduction targets.

The Chinese economy showed weaker-than-expected growth during the first quarter. According to China’s National Bureau of Statistics, gross domestic product rose 7.7% rather than the 7.9% the quarter before.

Eye on the Month Ahead

The equities rally could face a challenge from any “sell in May, go away” sentiment and/or potential economic fallout from the sequester’s budget cuts. Any fresh clarity from the Fed about the timing of quantitative easing’s end also could have an impact.

Key dates and data releases: FOMC announcement, U.S. manufacturing, construction spending, auto sales (5/1); balance of trade, business productivity/labor costs (5/2); unemployment/payrolls, U.S. services sector, factory orders (5/3); retail sales, business inventories (5/13); import/export prices (5/14); wholesale prices, industrial production, Empire State manufacturing survey, international capital flows (5/15); consumer prices, housing starts, Philly Fed manufacturing survey (5/16); leading economic indicators, options expiration (5/17); home resales, FOMC minutes (5/22); new home sales (5/23); durable goods orders (5/24); home prices, Dallas Fed manufacturing survey (5/28); revised estimate of Q1 GDP (5/30); personal income/spending (5/31).

Market update compliments of Coaching Client Fady Chaccour.


Weekly Coaching Update with Dr. Kerry Johnson

Filed under: GENERAL — Kerry Johnson @ 2:21 pm  

This Week’s Peak Performance Coaching Report and Current Economic Outlook
As you communicate with your clients and help them make sense of the current economic conditions, here are some talking points that will make your conversations more relevant and informed.

If you haven’t signed up for iCoach/Advisor please let us know today. This program will keep help you track your business plan, input your RPC appts, openers, closers, and sales to keep you organized. It will even provide skill building videos to help you increase your closing rates. If you are a coaching client, it is free. If you aren’t, you can get a free 2 week trial to see if it is right for you. Call us today at 714-368-3650 to get a username and password.

The article below contains important information you need to explain the “Fiscal Cliff” coming in January 2013. Please incorporate this into your 3 month calls. If you are diligent in calling your A and B clients every 3 months and use the 3 month call script, your business will increase 36% this year. Just on this one technique alone. If you aren’t getting this kind of result, talk to your coach and review this process.
Dr. Kerry Johnson


By Robert Schroeder
WASHINGTON (MarketWatch) — The U.S. economy will contract instead of expanding in
2013 if scheduled tax hikes and spending cuts go into effect in January, the
Congressional Budget Office warned on Wednesday.

In a fresh warning about the so-called “fiscal cliff,” the nonpartisan CBO
reiterated that the U.S. economy will go into a recession next year if the Bush-era
tax cuts expire and automatic spending cuts take effect. Read the CBO report.

In its latest report, the CBO predicts that the U.S. economy will grow at a 2.1%
clip in 2012, but fall by 0.5% between the fourth quarter of 2012 and the fourth
quarter of 2013 under the fiscal cliff scenario.

Previously, the CBO said growth would be 0.5% in 2013 under the fiscal cliff. In its
new report it said the “underlying strength” of the economy is weaker.

The report will serve as a stern warning to members of Congress, who are expected to
try to work out an arrangement to avoid the spending cuts and tax hikes.

It will also provide new fodder for the presidential campaign, in which President
Barack Obama and Republican challenger Mitt Romney have made tax cuts and reducing
deficits a central argument on the campaign trail.

The CBO said unemployment would jump to around 9% in the second half of 2013 from
its current 8.3% if the tax increases and spending cuts play out.

Rep. Jeb Hensarling, a Texas Republican, said that the report is confirmation that
Obama “has put America on a path of slower growth and fewer jobs.”

Rep. Chris Van Hollen, a Maryland Democrat, said that job creation is an effective
way to cut the deficit and urged Congress to pass Obama’s policies.

“President Obama has a plan to create jobs, stabilize debt, protect Medicare and
Social Security, and replace the damaging, indiscriminate cuts from the sequester
with a targeted, balanced approach to deficit reduction,” Van Hollen said.


This Week’s Peak Performance Coaching Report and Current Economic Outlook

Filed under: GENERAL — Kerry Johnson @ 5:41 pm  


If you haven’t signed up for iCoach/Advisor please let us know today. This program will keep help you track your business plan, input your RPC appts, openers, closers, and sales to keep you organized. It will even provide skill building videos to help you increase your closing rates. If you are a coaching client, it is free. If you aren’t, you can get a free 2 week trial to see if it is right for you. Call us today at 714-368-3650 to get a username and password.

The Markets

After six straight weeks of gains, equities took a bit of a breather at month’s end. The S&P spent the last half of the month bumping its head up against its year-to-date high of 1419 but never quite managed to close above it, while both the Dow and the Nasdaq ended the month a little over 1% away from their 2012 highs. It was the third consecutive month of gains for all three indices. Meanwhile, the Global Dow was aided by the previous month’s promises to protect the euro at all costs.

Oil prices shot up almost 10% to roughly $96 a barrel, fueled by hopes for additional easing by the Federal Reserve, reassuring words out of the Eurozone, and concerns about Middle East supplies. Along with problems at several refineries, that helped spike gas prices in advance of the Labor Day weekend. Gold prices rose almost 5% to $1,685 an ounce, helped by a slightly weaker dollar.

Market/Index 2011 Close               Prior Month               As of 8/31  Month        Change        YTD Change
DJIA      12217.56                              13008.68                     13090.76 .                     63%             7.15%
Nasdaq 2605.15                                2939.52                        3066.96                         4.34%        17.73%
S&P 500 1257.60                              1379.32                         1406.57                          1.98%        11.85%
Russell 2000 740.92                        786.94                            812.09                          3.20%         9.61%
Global Dow 1801.60                       1834.34                          1869.92                          1.94%          3.79%
Fed. Funds .25%                                      .25%                                .25%                            0 bps            0 bps
10-year Treasuries 1.89%                     1.51%                               1.57%                            6 bps          32 bps

Equities data reflect price changes, not total return.
The Month in Review

Federal Reserve Chairman Ben Bernanke said the Fed is ready to supply fresh economic support if needed, but stopped short of promising specific additional measures at the Federal Open Market Committee’s September 13 meeting. Meanwhile, Spanish and Italian bond yields eased a bit, though there was little concrete follow-up to European Central Bank President Mario Draghi’s promise to do whatever it takes to preserve the euro.

The U.S. economy grew at an annual rate of 1.7% in the second quarter rather than the 1.5% previously estimated by the Bureau of Economic Analysis. That’s slightly higher than previously thought, but also slightly lower than Q1’s 2% growth. Corporate after-tax profits were up 1.1% from the previous quarter, and 3.3% higher than a year ago.

The U.S. economy added a net 163,000 new jobs. According to the Bureau of Labor Statistics, that’s a bit higher than the 151,000 monthly average for 2012. The private sector added 172,000 jobs, while government employers cut roughly 9,000 positions. However, because more people once again sought work and were therefore counted in the statistics, the unemployment rate edged up from 8.2% to 8.3%.
Falling energy prices helped keep inflation in check; both the annual consumer and wholesale inflation rates continued to slow, hitting 1.4% and 0.5% respectively. However, the summer’s widespread drought led the U.S. Department of Agriculture to cut its estimate of the nation’s corn crop by 17%. That would make the fall harvest the worst in nearly two decades and potentially increase the price of corn used in processed foods, as livestock and poultry feed, and as the fuel ethanol.

Slower Chinese manufacturing growth led to speculation that there might be additional efforts to stimulate the economy there. There also were signs of slower growth in Germany, the Eurozone’s key economic driver. Meanwhile, U.S. manufacturing data was mixed; the Federal Reserve said industrial production was up 0.6% and utilization of the nation’s manufacturing capacity hit its highest level since April 2008. However, contraction was seen in both the Institute for Supply Management’s manufacturing survey and in several of the Fed’s regional divisions.

The housing market began to show signs of life. Sales of new single-family homes rebounded 3.6% in July, putting them 25.3% higher than July 2011, according to the Commerce Department. The National Association of Realtors® said home resales also went up 2.3% in July and were 8.6% higher than last July, while housing starts fell 1.1% after a 6.8% increase during the previous month. Finally, home prices saw improvement; the year-over-year change in the S&P/Case-Shiller 20-city index (+0.5%) was positive for the first time in almost two years, with a 2.3% gain for the month putting prices 6% higher than the recent low seen in March.

Consumer spending, which accounts for an estimated 70% of the U.S. economy, saw its biggest monthly increase since February (0.4%), but the Commerce Department said the increased spending outpaced the 0.3% gain in income. Retail sales also were up 0.8% in July; the first increase in four months put them 4.1% higher than a year ago.
Sixteen years after it almost went bankrupt, Apple became the largest U.S. company in history as its market cap hit $623.52 billion.
In its semiannual budgetary report, the nonpartisan Congressional Budget Office said that scheduled tax increases and federal spending cuts would likely push the U.S. economy into recession next year, cutting real GDP by 0.5% and pushing the unemployment rate to more than 9% by December 2013. Even without the changes, the CBO forecast a relatively sluggish 1.7% increase in GDP and a continued 8% unemployment rate.

Eye on the Month Ahead

Light summer trading volumes will likely be replaced by traders’ efforts to position themselves for the end of the quarter. A German court’s ruling on the country’s participation in Europe’s bailout mechanism, currently anticipated to be announced around September 12, could affect investor sentiment; so could a report on the stability of Spanish banks. Investors also will keep an eye on the September 13 Fed announcement to see if additional economic stimulus is on the horizon.

Key dates and data releases: U.S. manufacturing sector, construction spending (9/4); labor productivity/costs (9/5); U.S. services sector (9/6); unemployment/payrolls (9/7); balance of trade (9/11); import/export prices (9/12); Federal Open Market Committee announcement, wholesale inflation (9/13); consumer inflation, retail sales, industrial production, business inventories (9/14); Empire State manufacturing survey (9/17); international capital flows (9/18); housing starts, home resales (9/19); Philadelphia Fed manufacturing survey (9/20); quadruple witching options expiration (9/21); home prices (9/25); new home sales (9/26); final estimate of Q2 gross domestic product, durable goods orders (9/27); personal income/spending (9/28).
(Market Update provided by Peak Performance Coaching Coaching Client Fady Chaccour)


This Week’s Peak Performance Coaching Report and Current Economic Outlook

Filed under: GENERAL — Kerry Johnson @ 4:38 pm  

A New Twist on Gaining More Appointments at Your Events
One of My Clients, Eric Peterson, used me to speak at a BANC event last Thursday in Des Moines, Iowa. At that meeting he was able to book 21 appointments, the most I have ever seen at a client event.

The secret it seems, was who he invited. Along with approximately 25 clients who brought a guests, Eric had the brilliance of also inviting prospects. These were people who had either been at a past seminar or seen Eric in his office but didn’t buy. This week as I have been speaking to my coaching clients, most tell me they have lists of several hundred prospects that fit this category. When my first book came out in 1985, the publisher at Simon & Schuster told me it would take three exposures to get someone to buy a book. It now takes seven. I really believe in the drip method, but I also think we need to be more proactive. Inviting past prospects to your BANC and Messina events seems to double the appointments. Talk to your coach about this concept this week. For the price of a few extra meals, you will be able to dramatically increase your appointments and sales.

Economic Update
The Eurozone
Equities followed up on a disappointing April with a troubled May, the worst month for the Dow Industrials in two years and one that pushed the Global Dow into negative territory for the year. As problems in Europe mounted, more investors sought security in sovereign debt that seemed to offer at least some refuge from the difficulties of Greece and Spain. That demand pushed the yield on 10-year U.S. Treasury bonds to 1.63%–the lowest level seen in decades–while short-term German debt was auctioned with a coupon rate of zero.

Concern about the euro’s stability pushed its value from $1.32 at the beginning of the month to under $1.25. As the dollar strengthened, oil prices plummeted to roughly $87 a barrel from nearly $105 at the end of April, and gold lost roughly 7% to end the month around $1,563 an ounce.

Market/Index 2011 Close-Prior Month-As of 5/31-Month-Change-YTD Change*
DJIA 12217.56 13213.63 12393.45 -6.21% 1.44%
Nasdaq 2605.15 3046.36 2827.34 -7.19% 8.53%
S&P 500 1257.60 1397.91 1310.33 -6.27% 4.19%
Russell 2000 740.92 816.87 761.82 -6.74% 2.82%
Global Dow 1801.60 1940.16 1742.87 -10.17% -3.26%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treas 1.89% 1.95% 1.59% -36 bps -30 bps

Popular frustration with eurozone austerity programs began hitting home in Europe with Socialist François Hollande’s election as France’s president and the rise of anti-austerity political parties in Greece. After those parties failed to form a coalition government, new elections were scheduled for June 17 as concern mounted that an anti-austerity government might default or try to renegotiate the terms of Greece’s bailout. Eurozone leaders continued to insist they want to avoid a “Grexit” and some began raising the possibility of a jointly backed “eurobond.” However, the uncertainty plus currency flows out of the country’s banks led to increased worries about the impact of a default or exit on other countries.

As Spanish banks received another credit rating downgrade, the government in Madrid was hit with new bailout demands from Spain’s fourth-largest bank as well as one of its regional governments. Anxiety about the banks’ stability and the government’s resources to help them pushed the yield on the country’s benchmark 10-year bond from 5.8% to 6.6% over the course of the month.

Unemployment increased to 8.2%, according to the Bureau of Labor Statistics’ May report. The drop was largely the result of only 65,000 jobs created and more people leaving the workforce. The economy created only 115,000 new jobs the prior month; that’s substantially lower than the 154,000 jobs added the previous month or the 252,000 monthly average between December and February.

U.S. economic growth was even slower during the first quarter of 2012 than the Bureau of Economic Analysis’s 2.2% initial estimate. The revised gross domestic product figure was 1.9%, substantially lower than the previous quarter’s 3%. Consumer spending picked up 2.9% in Q1, but business spending was off.

Home sales statistics were more encouraging than in recent months. Fueled by record low mortgage rates–lender Freddie Mac said the rate for a 30-year fixed loan hit 3.75%–sales of both new and existing homes jumped more than 3.3% in April, according to the Commerce Department and the National Association of Realtors®.

Status changes: After one of the biggest tech IPOs on record, Facebook’s stock price took a nosedive, hurt by both a massive trading snafu the day of the offering and the Securities and Exchange Commission’s subsequent announcement that it would look into whether the offering’s underwriters warned key clients (but not the public) at the last minute about the company’s financial challenges. Meanwhile, J.P. Morgan Chase said trading in credit derivatives had cost the bank an estimated $2 billion or more, and Hewlett-Packard announced it would cut 27,000 jobs over the next two years to compete more effectively in a changing tech environment.

Manufacturing data continued to be somewhat mixed. The Commerce Department said durable goods orders increased for the second time in three months, industrial production was up 1.1%, and manufacturers in the Fed’s New York region reported a strong rebound from the previous month. However, the Philly Fed’s manufacturing survey turned negative for the first time in eight months.

Inflation remained moderate as declines in energy costs helped offset increases in other consumer prices, leaving the Consumer Price Index flat for the month and at 2.3% for the past year. Meanwhile, the Bureau of Labor Statistics said wholesale prices fell 0.2%, putting the year-over-year wholesale inflation rate at 1.9%.

Both consumer spending and personal incomes rose, according to the Bureau of Economic Analysis, while the Commerce Department said retail sales were up 0.1% for the month and 6.4% from the same time last year.

(This update is compliments of in him and him and him Coaching Client and Financial Advisor, Fady Chaccour)



This Week’s Peak Performance Coaching Report and Current Economic Outlook

Filed under: GENERAL — Kerry Johnson @ 3:17 pm  

If you have done a BANC and the Messina monthly events, you already know how many referrals you can get. One client, Steve Hansen, just reported $270K in commissions by doing a single BANC and only 2 Messina meetings. The beauty of these client events is the level of affluent clients you are able to attract. These HNW clients will never go to a public senior seminar. Actually, the only way they will be available to you is through a referred lead. Yet while many clients are reluctant to give you individual referrals, they will bring their HNW friends to a dinner. 60% of your clients will come to your event. 60% of clients will bring their affluent friends and 60% of these affluent guests will book appointments with you. The only “non-60” result are your clients. 35% of your clients will book appointments with you for new business.

The European Crisis
Greece was thought to be only plausibly likely to leave the European common market and currency. But now it looks highly probable. The European Central Bank (ECB) has spent more than $750 Billion in an attempt to rescue Greece. The thought was that if Greece failed, Spain, Italy and Portugal would be next. But it now looks like Greece isn’t willing to keep their part of the rescue bargain. Greece has fired only 15% of it’s public workers in the midst of massive protests. But now Greeks are on the verge of electing a Socialist government. The new likely political elect has made it clear that if the Central European bankers stop making loans, they won’t pay them back. Sort of like how Charles DeGaulle told JFK in 1962 if the US stopped giving France money, they wouldn’t pay back what they already owed.

Since 20% of the US Economy is based on exports to the EU, the current EU recession will put a damper on an already anemic US recovery. Currently the US GDP is crawling at a 1.8% growth rate. But a Greek failure will put that rate at sub 1%. Unemployment is now at 8.1% and adding only 115K jobs a month. The GDP needs a growth rate of 3% just to maintain 8.1% unemployment.  The only reason unemployment isn’t above 10% is that 3 workers have given up looking for employment for every one that claims unemployment insurance. Currently, only 65% of the work force has a job, the lowest level in 60 years.

The US Economic Outlook
The outlook for the near term until January 2013 is volatililty and more of it. The US had 6 days of 4% market swings in the last 12 months, the most in the last 40 years. But the real crisis will occur in January. The Bush tax cuts will sunset and $600 Billion of spending cuts in the military will trigger at the same time. Most economists predict for every 1% increase in taxes, economic growth will decrease by .3%.

Economic Recovery: Government spending vs tax cuts and private growth
The Obama administration’s policy has been to add jobs through government spending. The supply side economics crowd popular in the Reagan administration focused on economic prosperity through tax and spending cuts spurring small business growth. Unless you follow these policies, you may not know the difference. The article below from the Wall Street Journal explains the difference between Romney and Obama economic proponents. This treatise from Stanford’s Edward Lazear will give you talking points for your 3 month client calls.

Discussion of the so-called fiscal cliff—the combination of tax increases and spending cuts that will come in 2013 if Congress and the president don’t act—confuses a number of different issues. The evidence suggests that we should fear the tax hikes, but not necessarily the spending cuts.Anyone who uses the term “fiscal cliff” accepts a Keynesian view of the economy, knowingly or not. Both tax increases and constrained spending are assumed to be bad for the economy.

But there are two other views: that of the budget balancer and that of the supply-sider. Rather than term the impending changes that will occur in 2013 a “fiscal cliff,” the budget balancer thinks of this as “fiscal consolidation.” Tax increases reduce the deficit, as do cuts in government spending. Both are austerity measures that make the government more responsible and, therefore, both are conducive to long-run economic growth.

Those who support the Simpson-Bowles plan subscribe, at least in part, to this view. Various proponents of the plan may place different weights on the tax-increase side or the spending-decrease side because they believe the economic consequence of one or the other is more adverse. But fundamentally, the target is to decrease the deficit. The budget balancer regards both tax increases and spending cuts as moves in the right direction.

The supply-sider has a different view from both the Keynesian and the budget balancer. Fundamentally, supply-side advocates focus on the harmful effects of tax increases. Raising tax rates hurts the economy directly because tax hikes reduce incentives to invest and because they punish hard work. As such, tax increases slow growth. But budget cuts work in the right direction by making lower tax revenues sustainable. If spending exceeds revenues, then the government must borrow and this commits future governments to raising taxes in order to service the debt.

Consequently, the supply-sider thinks of 2013 primarily as a tax increase and fears what that will do to the economy. The spending cuts are a positive. Unlike the Keynesians who view the fiscal cliff as being bad on two counts, or the budget balancer who views it as being good on two counts, the supply-sider scores it one-and-one. The tax increases have negative effects on the economy; the controls on spending are a positive side effect of the 2013 sunsets.

Which of the three views is correct? Until recently, most economists believed that fiscal policy was inappropriate for business-cycle management, and that if stimulus was needed at all, monetary policy was the best way. Spending “stimulus” does not have a strong track record in recent decades. There is more ambiguity now about the choice between monetary and fiscal policy, in large part because with interest rates near zero, the effectiveness of monetary policy is thought to be more limited.

But even if a fiscal stimulus has some benefit, the cost of fiscal policy is likely to be very large. In order to stimulate the economy, growth in—not high levels of—government spending is required. To provide a stimulus in 2013 comparable to the 2009 legislated stimulus, we would need to increase government spending by about $250 billion.
But the Keynesian view implies that keeping spending constant at the higher level in 2014 would generate no stimulative growth effect for 2014. Despite the higher level of spending in 2014, we would get no additional growth because there is no increase in spending over the 2013 level. Were we to retreat to current levels of spending, there would be a contractionary effect on the economy as government spending decreases. If we want to delay our day of reckoning, we must keep spending at a higher level for each year that we want to postpone the negative consequences for growth. Given the state of the labor market, this could mean a few years. If we waited four years, we would spend $1 trillion to get $250 billion in stimulus.

On the tax side, there is strong evidence that supports the supply-siders. Christina Romer, President Obama’s first chairwoman of the President’s Council of Economic Advisers, and David Romer document the strong unfavorable effect of increasing tax rates on economic growth (American Economic Review, 2010). They report that an increase in taxes of 1% of gross domestic product lowers GDP by almost 3%. The evidence on government spending also suggests that high spending means lower growth.

For example, Swedish economists Andreas Bergh and Magnus Henrekson (Journal of Economic Surveys 2011) survey a large literature and conclude that an increase in government size by 10 percentage points of GDP is associated with a half to one percentage point lower annual growth rate.

The evidence suggests that we should move away from worry over the impending “fiscal cliff” and focus more heavily on concern about raising taxes. And although some Keynesians may view this as not the best time to control spending growth, promising to change our ways in the future is as credible as Wimpy’s promise to pay on Tuesday for the hamburger that he eats today.



Weekly Client Coaching Update from Dr. Kerry Johnson

Filed under: GENERAL — Kerry Johnson @ 4:19 pm  

The 3 Month Call Script
As you already know by working with our coaching program, calling your A and B clients every 3 months will increase your business by 36% in 30 days. But the real reason you need to take this approach is to fill your monthly Messina meetings. After you do the initial BANC big event, the Messina approach will constantly fill your referral pipeline. But the hardest part is to be consistent and disciplined as you keep your foot on the gas. You already built up steam with the BANC meeting. The Messina meeting will result in the “rule of 60%”. For the price of a dinner, 60% of the clients you invite will come. 60% of the clients will bring guests and 60% of the guests will book appts. While less eventful, 30% of the clients who attend will give you more money. Be disciplined and consistent. This is absolutely the best way to gain massive amounts of high net worth referrals.

The Markets
(commentary provided by our coaching client Fady Chaccour)
The Nasdaq came on strong for the second month in a row (though at a somewhat slower pace than in January) as it briefly hit 3,000 for the first time since 2000. An agreement on a second Greek bailout helped the Global Dow continue to heal; its year-to-date performance is now second only to the Nasdaq’s. Meanwhile, the Dow Industrial Average finally managed to close above the 13,000 level–at least for one day–and recorded its fifth straight month of gains, while the Russell 2000 lagged the large caps for the month.

After regaining some of the ground it lost late last year, gold celebrated the month’s extra day by falling to just over $1,700. Fueled in part by tensions with Iran, oil prices soared as much as 12% at one point before ending the month at $107 a barrel, raising concern about prices at the pump and the potential impact on economic recovery. The euro hit $1.34 at one point–its highest level since Thanksgiving–as eurozone interest rates stabilized a bit, while the yield on 10-year Treasuries nudged upward.

Market/Index 2011             Close                    Prior Month     As of 2/29    Month Change                      YTD Change*
DJIA             12217.56    12632.91                     12952.07                               2.53%                                          6.01%
Nasdaq          2605.15    2813.84                       2966.89                                  5.44%                                         13.89%
S&P 500        1257.60     1312.40                      1365.68                                  4.06%                                         8.59%
Russell 2000 740.92       792.82                         810.94                                  2.29%                                        9.45%
Global Dow  1801.60      1915.01                         1997.44                                4.30%                                       10.87%
Fed. Funds         .25%              .25%                       .25%                                    0 bps                                        0 bps
10-year Treasuries 1.89% 1.83%                         1.98%                                   15 bps                                       9 bps

*Equities data reflect price changes, not total return.
What has happened in the last month

The Bureau of Labor Statistics said U.S. payrolls added 243,000 jobs in January, bringing the unemployment rate down to 8.3%. It was the fifth straight month of lower unemployment.

The U.S. economy grew at an annual rate of 3% in Q4 2011, a more rapid pace than the 2.8% initial estimate. Once again, the Bureau of Economic Analysis said inventories were a major contributor, though consumer spending and commercial construction also were up.

Eurozone finance ministers agreed to the terms of a second bailout for Greece, worth €130 billion, after the country’s coalition government approved additional austerity measures and private bondholders (i.e., banks) agreed to swap their Greek sovereign bonds for ones worth almost 54% less. However, the G-20 nations postponed committing more resources for the International Monetary Fund’s contribution to the bailout effort, saying they want to see how European rescue efforts progress.

Moody’s slapped new credit rating downgrades and/or negative outlooks on several European countries, including the United Kingdom and France, because of their exposure to the more troubled countries’ debt.
Congress agreed to extend through the end of 2012 both the 2% payroll tax reduction and long-term unemployment benefits.

Though housing starts, new residential construction, and home resales all improved during the month–they were up 1.5%, 1.5%, and 4.3% respectively–the good news didn’t extend to home prices. The S&P/Case-Shiller national index of home prices hit its lowest point since its mid-2006 peak. Manufacturing data was mixed. The Commerce Department said durable goods orders fell, mostly because of a drop in orders for commercial aircraft, but the Fed’s surveys of the New York and Philadelphia regions hit their highest levels in months.

Inflation at the wholesale level rose 1% in January, putting the rate for the past 12 months at 4.1%. However, not all the increases made their way to the consumer level; according to the Bureau of Labor Statistics, consumer inflation was up 0.2% for the month and 2.9% for the last year. Meanwhile, the Commerce Department said retail sales rose a modest 0.4% in January.

What is likely to happen?
Any suggestion of bailout package problems that might spell trouble for the Greek bond payments due March 20 could spook global markets. Investors also will watch to see if leadership in the equities markets remains with companies that benefit most from the early days of a recovery, and whether that recovery will pick up steam.

Key dates and data releases: auto sales, personal income/spending, U.S. manufacturing, construction spending (3/1); factory orders, U.S. services sector (3/5); labor productivity/costs (3/7); unemployment/payrolls, balance of trade (3/9); retail sales, Federal Open Market Committee announcement (3/13); import/export prices (3/14); wholesale inflation, international capital flows, Philadelphia Fed/Empire State manufacturing surveys (3/15); consumer inflation, industrial production, quadruple witching options expiration (3/16); housing starts (3/20); home resales (3/21); new home sales (3/23); home prices (3/27); durable goods orders (3/28); final Q4 GDP (3/29); personal income/spending (3/30).



Weekly Client Coaching Update from Dr. Kerry Johnson

Filed under: GENERAL — Kerry Johnson @ 10:49 am  

The BANC Event to Build Your Referrals
Many Peak Performance Coaching clients are now using the Circle of Friends approach to increase referrals. One of the most successful is our client Steve Hansen. A Denver producer, Steve just held a BANC program (using me as the speaker)with approximately 35 client households and 14 guests. Within 6 weeks, Steve booked nearly $2 Million in Assets in both managed money and annuities. Even if you take out $500K from one client who may have done business without the BANC approachGreec. Steve is now doing the Messina Method monthly to solidify his dramatically increased production.

A Coming Market Collapse?
Israel is said to be only weeks from a raid to take out Iran’s nuclear weapon installations. For the first time, Germany’s interior minister is recommending that Greece be separated from the EURO common currency. US gas prices have surged more than 100% in the last 3 years. But a another collapse?

Yes, according to respected economists including Dow Theory proponent and author Robert Prechter, Harry Dent, and Gerald Celente, trend forecaster at The Trends Research Institute. Prechter worries about potential chaos caused by people all trying to yank their money out of financial markets at the same time. Even with confidence in elected leaders. The GDP is at a fragile 1.8% growth rate, far below any normal recession recovery. Oil prices are sure to increase even further, especially if there is an Iranian oil shock.

“2012 is when many of the long-simmering socioeconomic and political trends that we have been forecasting and tracking will climax,” Celente noted in his Top 12 Trends 2012 newsletter. In an interview he added: “When money stops flowing to the man on the street, blood starts flowing in the street.”

While bulls are urging investors to get back into stocks, the doomsayers are advising a far different strategy. Dent’s investment advice is simple: “Get out of the way.” He recommends buying short-term U.S. Treasury bills and the U.S. dollar, which will benefit from safe-haven cash flows. He says stocks will fall sharply in value.

Celente’s advice centers on survival. He says buy gold so you don’t lose purchasing power when the value of the dollar plummets. He says buy a gun to protect your family against desperate people in search of food and money. He says plan a getaway to places with more stable finances and governments.

Prechter says to keep your powder dry and buy when things get really bad: “When things get really scary, as in early 2009, I get bullish.”

The alternative is also retirement safety in fixed assets that your clients have access to with your help. This is only one view of the coming markets in 2012. But this same trio have aired their views in the Wall Street Journal, USA today and the New York Times. So perhaps we should take them seriously.


Weekly Coaching Update with Dr. Kerry Johnson

Filed under: GENERAL — Kerry Johnson @ 11:32 am  

This Week’s Peak Performance Coaching Report and Current Economic Outlook
As you communicate with your clients and help them make sense of the current economic conditions,
here are some talking points that will make your conversations more relevant and informed.

Keynote Speech in Hong Kong
On December 6, Dr. Johnson gave a keynote speech to more than 300 Hong Kong Chinese at American International Assurance’s National Convention. Even though most of the Cantonese attendees spoke English, translation is always a challenge. The average Chinese family earns $43,000 per year. Contrast that to the American family who makes $48,000 a year, the world seems even smaller. While Hong Kong has 7.2 million people, it is half the size of Manhattan. You can just imagine the traffic delays.

European Slump May Extend to 2031
Some Economists believe this “Great Recession” could last longer than the Great Depression of the 1930s. Three factors may have created this perfect storm.

1 The real estate bubble burst. Home prices may not recover from the 2007 highs for another 20 years.
2 The European Union and the currency that ties it all together, the Euro, is fracturing at an alarming rate. Only Germany and Great Britain seem to be immune from the banking collapse. Economists believe one of two things may happen. Either the Euro will be abandoned as the central currency or Greece and Italy will detach from the European Union.
3 The dollar as a reserve currency is diminishing. One of the reasons why the US economy has suffered less volatility compared to other developed economies is the US dollar status as the reserve currency. Since oil and many other commodities are priced in US dollars, the US has been relatively protected from commodity inflation. But that seems to be changing. China, India, and Russia are all pushing for a basket of reserve currencies, diminishing the dollar’s standing.
4 Moody’s rating service has downgraded seven banks in Italy, two French, four Spanish banks and three Greek banks. The contagion seems to be spreading past the European union borders.

The New Year
I hope you will take the next two weeks to think about the things you like to accomplish both personally and in your business. This is often a key period to do strategic planning, looking ahead to the income you want to gain as well as the growth you would like to attain. Not only should your goals include income, but also the amount of time you want to spend on your business. Many of my coaching clients like you will make decisions in 2012 to take Fridays off as well as one week per quarter. Other clients will choose to keep their income the same while working fewer hours. Whatever your goals, I hope you will consider and evaluate what you want 2012 to be. I can’t think of a better time to do this taking advantage of this holiday.

Please have a wonderful holiday and a great new year!!!




Weekly Coaching Update with Dr. Kerry Johnson

Filed under: GENERAL — Kerry Johnson @ 4:46 pm  

Dozens of New Coaching Clients
Last Week, Dr. Kerry Johnson was a featured speaker at Ed Slott’s Elite IRA Advisor seminar in Phoenix, Arizona. Dr. Kerry spoke on “How to Increase Your Business by 80% within 8 Weeks.” Over three dozen financial advisors signed up for Dr. Kerry’s one on one coaching program. This was a single day record in more than 30 years of coaching.

The US Economy
US stocks last week ended with more than a 2% decrease after horrendous political news and economic chaos in Europe. Yet, the Dow and S&P indexes rallied on Wednesday and Thursday but failed by the end of the week to regain ground. Friday’s losses alone were .5%. The S&P 500 lost 2.5%, while the NASDAQ dropped 1.5% for the week. Just when the world thought the euro zone reached agreement with a $1.4 billion bailout plan was a done deal, Greek Prime Minister George Papandreou surprised with the announcement of a referendum on austerity measures associated with the bailout.

This announcement pushed markets into turbulence since France and Germany not only took so long to reach agreement, but gave the world optimism for more equity stability. As it turned out, perhaps the Greek Prime Minister was crazy like a Fox. Soon after the announced referendum, Greek politicians scrambled to ponder new elections and a new government. Many euro zone watchers thought a referendum would only result in a Greek default. But Papandreou possibly gave Greece more stability with a new coalition government possessing more legitimacy representing the people with a greater political will for austerity.

The Euro Crisis
The European Central Bank delivered an unexpected rate cut Thursday as the new European Common Market chief, Mario Draghi warned of an upcoming mild recession. Unlike his predecessor Jean Claude Trichet, he also warned that the European Central Bank would no longer serve as a lender of last resort to troubled euro zone governments. Draghi predicted near term slow growth with a possible mild recession by the end of 2011.

It’s All about Demographics
While the headlines have been about Libya, Iran, and the euro zone crisis, a much more significant event occurred. The world’s population increased to 7 billion last week, according to United Nations calculations. Europe is a mere 350 million, while the US is an even smaller 300 million. This is not even 1/10 of the world’s population. This indicates that new markets, new ideas, and new investment is likely to incur the greatest future growth and wealth. In fact emerging markets have seen some of the greatest levels of equity price increases.