Dear Congressional Wealth Destruction Followers,
Today was just an awful day in the stock market. The S&P 500 Index was down -3.1% while the Dow Jones Industrials, down -2.6%, broke 10,000 intraday. Today was a good example of why many of the largest down days occur while Congress is in session.
First, they voted to raise the debt ceiling of the Federal government by $1.9 trillion to $14.3 trillion -- which is in excess of our nominal GDP -- to accomodate the President's $3.8 trillion bunker busting budget. Moody’s reacted by reiterating their view that the US is starting to jeopardize its AAA debt rating. On top of all this, the sovereign debt of a number of European nations increasingly appears to be in jeopardy thanks to government mismanagement of their own.
To pretend that it is fiscally responsible, Congress, after raising the debt limit, talked up re-adoption of “pay go” rules, which is Congressional double speak for not launching new government programs without taxes to cover them, as if existing programs don’t grow faster than the economy. (When cancer cells metastasize, they too grow faster than their hosts.)
Finally, there is a growing awareness that the birth/death model used to concoct official government figures somehow inadvertently overlooked up to a million extra unemployed people last year--materially understating our unemployment numbers.
Congress was in session, and the Congressional Effect Fund was out of the broad equity market. If you are concerned about political risk and its impact upon the stock market, we believe now is a good time to invest a portion of your funds in CEFFX. The Fund can be purchased online through a number of financial institutions (Schwab, TD Ameritrade, E*Trade, Scottrade) or online directly from Matrix Capital, the Fund distributor by clicking here.
If you are a financial institution not listed and would like to find out how to offer the Congressional Effect Fund, please contact us.
Eric T. Singer
Congressional Effect Management
420 Lexington Avenue
New York, NY 10170
The Congressional Effect Fund (symbol: CEFFX) seeks to avoid market destabilizing uncertainty and the effects of news of potentially wealth damaging legislation by investing in the market (via the S&P 500 Index) only when Congress is on recess, and primarily in interest bearing instruments when Congress is in session.
The Congressional Effect Fund is the culmination of my many years of frustration with government folly, and I am delighted to have launched and be managing a vehicle I hope will reward investors and, in so doing, also highlight the deleterious effects of poor Congressional action. It is my sincerest hope that strong investor support of this endeavor will promote and further freedom in America as our founding fathers intended.
If you need assistance completing the investment application, or have additional questions about the Fund, please do not hesitate to contact me directly. Or, you may contact the Fund's distributor, Matrix Capital Group at 1.888.553.4233.
Investments in mutual funds involve risks. Read the prospectus and consider the Fund's investment objectives, risks, charges and expenses carefully before investing or sending money. Past performance does not guarantee future results. Investment return and value will fluctuate so that when redeemed, shares may be worth more or less than the original cost.