State John Kerry - In America, "you have a right to be (as)
stupid (as) you want to be."
(But too many Americans are abusing the privilege)
"our economics are based on an
unjustified faith in rational expectations, market efficiencies
and the techniques of modern finance"
“The events of the past few years have revealed limits in economists’ understanding of the economy..."
“Extreme economic events have often challenged existing views of how the economy works and exposed shortcomings in the collective knowledge of economists,”
You must not believe everything you think
language intentionally designed to influence rather than inform is now ubiquitous in the business of sports and politics and markets
Why? Because it works.
Hatred is too strong an emotion to waste on someone you don't even like
Be careful who you call your friends. I'd rather have four quarters than one hundred pennies.
– Al Capone
Investing is not easy. Anyone thinking that it is, is stupid
There is no sense in being precise when you do not know what you are talking about.
John von Neumann
“ . . . there is always a well-known solution to every human problem — neat, plausible, and wrong.”
Henry Louis “H. L.” Mencken
“As skill improves, performance becomes more consistent, and therefore luck becomes more important.”
Former Dallas Federal Reserve President Richard Fisher
reason the professors teach nonsense is that if they didn’t, what would
they teach the rest of the semester?
Teaching people formulas that don’t really work in real life is a disaster for the world.”
“The expected rarely occurs and never in the expected manner.”
– Vernon A. Walters
Nations rise and fall with the quality of their leaders, and their leaders succeed and fail based upon who they are at their core – what they believe, how they think, and what they do. Nothing shapes a leader or a society like their education or lack thereof. Let me be clear: when I refer to an education, I’m not referencing earning a degree, I’m talking about developing a rich intellect – they are not always one and the same.
"If you see fraud and don't shout fraud, you are a fraud"
“We really can’t forecast all that well, and yet we pretend that we can, but we really can’t.”
Fail with honor rather
than succeed by fraud
. I do not base my forecasts on mathematical models or some finely honed methodology, but on my sense of where the economic world stands today and where I think it might likely be in the near future.
Actually, I’m going to spend the first few pages demonstrating that the mathematical models used to forecast GDP and all sorts of interesting economic events are basically nonsense.
“The essence of investment management entails the management of risk, not the management of returns.
“If you are not confused about the economy, you don’t understand it very well.”
The least competent are the most certain of their skills
"In equity markets, high-frequency traders (HFTs) ... account for a larger share of transactions. "Indeed, trading in the U.S. nowadays is concentrated at the beginning and the last hour of the trading day, when HFTs are most active; for the rest of the day, markets are illiquid, with few transactions."
The key to success is the ability to fake sincerity.
“I think the reason why we got into such idiocy in investment management is best illustrated by a story that I tell about the guy who sold fishing tackle. I asked him, “My God, they’re purple and green. Do fish really take these lures?” And he said, “Mister, I don’t sell to fish.”
It’s difficult to put in the hard work of reading a great work of literature, when we spend our time writing in 140 characters.
“You cannot manage returns but you can manage risk”
Peter L. Bernstein
There is an important
methodological point here — distrust conclusions reached primarily on the
basis of model results. Models are estimated or parameterized on the basis
of historical data. They can be expected to go wrong whenever the world
changes in important ways.
you think is much less important than how you think.”
“Doubt is not a pleasant condition, but certainty is absurd.”
Many aspects of investing are fun, but your future wealth isn’t a game. You should manage it in the most cold-blooded fashion. Emotion, pride, ego, dreams, and nightmares have nothing to do with the process, although some investors rely on little else. It is in this sense that volatility really matters
Make everything as simple as possible, but not simpler
“We observe the world how it is today and make these very simple projections and turn them into a terrible scenario. “This approach fails to take into account that the world is changing.”
World Bank’s Social Protection and Labor Global Practice.
The most glaring problem with current risk tolerance questionnaires is its failure to add any perspective and context to what the risk score means.
Markets are supposd to be be based on informed consumers making rational choices. Instead, the point of marketing is to create uninformed consumers who will make irrational choices often against their best interests
not cease to exist because they are ignored.
A lie can travel halfway around the world while the truth is getting its boots on.
A wise man can
learn more from a foolish question that a fool can learn from a
The power to understand and predict the quantities of the world should not be restricted to those with a freakish knack for manipulating abstract symbols...
In the absence of regulation, someone will always be willing to exploit our irrational tendencies, leading to a “phishing equilibrium” in which individuals are harmed.
Phishing for Phools; George Akerlof and Robert Shiller
“Essentially, all models are wrong, but some are useful.”
George E.P. Box
A Single Death is a Tragedy; a Million Deaths is a Statistic
There are decades where nothing happens; and there are weeks where decades happen.
Great spirits have always encountered violent opposition from mediocre minds
China fixes its currency at the lowest level in six years - The People's Bank of China fixed the yuan at 6.7885, its weakest since September 2010, amid worries President-elect Donald Trump could name China as a currency manipulator.
As if it weren’t enough to deal with forgetfulness and confusion while caring for your loved-one with Alzheimer’s, but aggressiveness, wandering and paranoia can really put you over the edge. Managing your loved-one’s difficult behavior is your true testament of love and devotion. You know it isn’t their fault, it is their disease that is making them scream, cry or yell terrible things out at you. Who ever said patience is a virtue, didn’t care for a loved-one with Alzheimer’s or dementia. Perhaps a caregiver’s only defense is to understand how to react to difficult behaviors and be ready for them.
Difficult behaviors can be broken down into the following categories: Wandering, Sleeping and Eating Problems, Agitation, Paranoia and difficulty with personal tasks. This is not to say these categories are the only forms of behavioral problems displayed by people living with Alzheimer’s, but their remedies may intersect other problems.
Wandering is not an uncommon hallmark of Alzheimer’s disease or dementia. Stress in the variety of noise, clutter or crowding can cause your loved-one to wander. The best idea is to reduce excess stress. A person living with Alzheimer’s disease should be settled in a quiet, clean, and spacious environment. This will eliminate many of the unwanted stressors, which could cause your loved-one to wander. Other reasons why your loved-one may wander include: Feelings of being lost, boredom, need to use the restroom or medication side effects.
In order to prevent your loved-one from feeling lost or foreign to his or her environment, provide them with familiar objects and reassure them quite frequently that they are at home or in a safe place. Maybe a family photo or an award he or she has won always jogs their memory so keep it close by. If your loved-one displays signs of boredom, give them a task of limited difficulty. This will keep them entertained but won’t frustrate them. Folding laundry is a great activity for people living with Alzheimer’s or dementia.
It is possible that your loved-one is wandering because they need to use the bathroom. In which case, place elaborate signs or pictures on bathroom doors to help guide them. Also, it is a good idea for you to implement regular toilet times. This will keep both of you on schedule. If your loved-one is wandering due to medication side effects, contact their physician to initiate a change in prescription or to lower the dosage. Wandering can be a dangerous behavior. Caregivers should contact their local Alzheimer’s Association to obtain information about ‘The Wanderers Program’ in their area.
People living with Alzheimer’s or dementia often experience sleeping and eating problems. Common causes for these problems include: discomfort, medication, pain, dehydration, depression and excessive sleeping or eating.
Feeling discomfort can sometimes not be conveyed by your loved-one depending upon the severity of the disease but it can cause eating and sleeping disturbances. Frequently monitor your loved-one’s room temperature, lighting, noise level, and chair or bed position. If you think your loved-one’s medications could be curbing his or her appetite or ability to sleep, speak to their doctor about changing or eliminating prescriptions.
Pain can be a factor in eating or sleeping disturbances. Again, sometimes a person with Alzheimer’s or dementia cannot express their feelings; if you sense a change in appetite or sleeping pattern has suddenly occurred without due cause, set an appointment for a medical examination. Dehydration is a known factor of sleeping and eating disturbances. Make sure your loved-one is drinking plenty of water. Place a pitcher filled with water near your loved-one at all times. Remind them it is there frequently and check to make sure it remains somewhat full. Too full can result in another problem- slip and falls.
If you feel your loved-one is showing signs of depression, have him or her evaluated by their physician. Anti-depressants or bedtime sedatives may be a productive treatment option. Depression can also cause excessive sleeping or eating. In which case, increase their exposure to light and reduce or eliminate nap time or snack time.
Behavioral problems are defined as patient responses, which are considered noxious to staff, other patients, the patient himself, or family (Burgio, Jones, Butler, & Engel, l988). Behavioral problems have a profound impact on quality of care, staff, morale and the day-to-day operation of the long-term care institution
Wells Fargo is eligible for up to $1.5 billion in bailout funds over the next seven years. JPMorgan and Bank of America could receive $1.1 billion and $964 million respectively.
The continuous flow of funds is a remnant of the $700 bailout effort, known as the Troubled Asset Relief Program or TARP, put in place during the financial crisis. Some of that money, about $28 million, was carved out to help distressed homeowners by paying banks to lower their interest rates and monthly payments.The program, the Home Affordable Modification Program, has undergone several revamps over the last few years and fallen short of helping the 3 million to 4 million homeowners the Obama administration initially hoped. But it continues to operate -- HAMP will accept its last homeowner application at the end of this year -- and big banks continue to be paid for helping.
Life After CaregivingBy Sandra O’Connell
The only way for me to survive is for the two people I love the most
to die.” When I wrote those words, I was unable to foresee a future
without the endless demands of caregiving. At the time, my beloved
husband, Rev. Ralph Minker, and my mother were each suffering from a
form of dementia. He was diagnosed with Alzheimer’s disease at age 69;
Mom had vascular dementia, not uncommon for someone in her ninth
decade. In the midst of the great balancing act that is the
caregiver’s reality, another kind of life seems impossible. And when
it is over (YES, caregiving does end), there are new challenges in
finding a life not consumed by your loved one’s illness.
The intense pain and anguish of those years is behind me now. A “new normal” has emerged from the days when caregiving ended. Now I find contentment, if not joy. I laugh more than I cry. And at last, I have recovered my health. The journey has not been a straight line.
Detours abound for depression, resentment, loneliness and grief. Finally, there come moments—hours and then days, and at last, weeks and months—when the stress of those years does not dominate my life. Perhaps my experience will help those trying to find their way to a new normal after being a caregiver. There is no right or wrong way—each journey is individual. I only suggest a few guidelines to adapt as your own.
FIND YOUR OWN WAY TO GRIEVE
The overwhelming feeling of most caregivers in the initial stage of loss is not grief, but relief. When my husband died, the days of repeated questions, skirmishes over meals and getting dressed, the sadness of watching his growing confusion, and the nights of interrupted sleep ended. For caregivers of someone with memory issues, relief will often trump grief. The person you once knew has been fading away for several years. With illnesses such as stroke or cancer, there is relief that the physical suffering is over, mixed with your loss. Most approaches to grief counseling don’t cover the unique feelings that come after years of caregiving.
I did not find it particularly useful, although a few of the books did offer helpful nuggets of advice. But then, so was lying on the couch in a semi-catatonic state for hours on end, although after a while that did get boring. It helps to not add guilt over feelings of relief to the grieving process. Eventually the pain of grief abates. Here are my suggestions to help the process:
Grief, however, does not vanish. Occasionally, without warning, like
an errant wave, the pain of loss will tromp you. Each successive wave
tends to subside more quickly and leave less damage.
REGAIN YOUR HEALTH
Your body has most likely paid a price for your turn at caregiving: high blood pressure, incipient heart problems, rising sugar levels, weight gain (or loss), poor sleep and depression are among the calling cards it may leave behind. Now is the time to put YOU at the top of the priority list. Even if you sought support, went to yoga, took walks and had breaks, the stress of long-term caregiving wears away at your psyche and your body. No one with any real-world experience will deny what the researchers have well documented: long-term caring for a person with serious illness is a source of chronic stress, which is not good for your health.
No need to attack everything at once. I set small goals for weight loss and a moderate increase in exercise. After three years of effort, which included multiple ups and downs (and losing 30 pounds), I was able to stop the cholesterol medication and relinquish anti-depressants. Each success fueled my ability to be more active and take on a new challenge, such as volunteering at a local museum. In turn, feeling healthier gave me enough energy to do what is truly healing: engage with my community, develop new interests and friends, and spend time with people who care about you.
BUILD A NEW NORMAL
After the death of her husband and daughter, Joan Didion wrote in The Year of Magical Thinking, “I wanted to scream. I wanted my husband back.” Magical thinking, indeed. We all want our life back, the life we had before cancer, before the stroke, before ALS, before Alzheimer’s. Building a life with meaning and relationships is the challenge faced by each person after caregiving. Accept that it will not be the life you enjoyed before the illness. If you are still working, your time will quickly be consumed by the rhythm of daily life. You are changed in some ways.
While not faced with reconstructing your life, you should pay more attention to your own needs. For others, post-caregiving will involve major change, such as dealing with reduced finances, perhaps moving to a new home or new city.
Take the time to make these decisions with care. Focus on what you want and need, not others’ expectations. To re-engage with life, ask yourself what would:
Eventually, day-by-day and step-by-step, a new normal will emerge.
The experience of caregiving will always be a part of who you are, but
the experience needn’t define your future.
AMA Caregiver Self-Assessment Questionnaire
Bereavement after Caregiving, by Schulz, Hebert, and Boerner. Pamphlet from National Institutes of Health
Alzheimer’s Association Caregiver Center
Lincoln found that only 19 percent of the survey participants who said they had talked about long-term care planning with a financial advisor had talked about life insurance with a chronic illness rider. Only 17 percent had talked with an advisor about annuity-LTC hybrids, and just 13 percent had discussed life-LTC hybrids.One lingering barrier may simply be that some of the advisors who do have an interest in long-term care planning lack the professional certifications they need to talk about other options,
Peter Backus (University of Manchester& Barcelona Institute of Economics (IEB)) ; María Cubel (Universitat de Barcelona) ; Matej Guid (University of Ljubljana) ; Santiago Sánchez-Pages (Universitat de Barcelona) ; Enrique Lopez Manas (Google Developer Expert)
There is a growing literature looking at how men and women respond differently to competition. We contribute to this literature by studying gender differences in performance in a high-stakes and male dominated competitive environment, expert chess tournaments. Our findings show that women underperform compared to men of the same ability and that the gender composition of games drives this effect. Using within player variation in the conditionally random gender of their opponent, we find that women earn significantly worse outcomes against male opponents. We examine the mechanisms through which this effect operates by using a unique measure of within game quality of play. We find that the gender composition effect is driven by women playing worse against men, rather than by men playing better against women. The gender of the opponent does not affect a male player’s quality of play. We also find that men persist longer against women before resigning. These results suggest that the gender composition of competitions affects the behavior of both men and women in ways that are detrimental to the performance of women. Lastly, we study the effect of competitive pressure and find that players’ quality of play deteriorates when stakes increase, though we find no differential effect over the gender composition of games.
In a 2012 study from the State Street Center for Applied Research, in which investors were asked about their financial acumen.
“Nearly two-thirds rated their financial sophistication as advanced,” said Mirtha Kastrapeli, a senior research analyst at State Street. “This seemed a little optimistic, so in our 2014 study, The Folklore of Finance, we ran a financial literacy exam. The average score was just 61 percent, barely a passing grade. This disconnect between actual and perceived financial sophistication, she explains, is evidence of how widespread the overconfidence bias is.”study participants were directed to make predictions about real-life events, then were asked periodically to recall the events and their predictions after the fact. His findings? Participants consistently misremembered their forecasts, in ways that made them look smarter. Too often we look back not in anger but in awe, at least of our own capacities.
Data on individual trades in prediction markets relating to the 2008 and 2012 US Presidential elections reveal that traders vary enormously in their behavior. This contrasts with the standard prediction-market models, which assume relatively homogeneous participants who differ only in their beliefs and wealth. We show that risk-lovers have particularly strong distortionary effects on market outcomes even when beliefs are symmetrically distributed around the truth. Simulations of a model which allows traders to have different motives and tastes for risk indicate that including such traders produce the market outcomes we observe, such as herding, persistent contrariness, a skewed profits' distribution and favorite-long-shot bias. The attraction of such markets to risk-lovers means that caution must be exercised when using prediction-market prices for forecasting
Let’s now consider how rebalancing has played out over the past 46 years, from Jan. 1, 1970, to Dec. 31, 2015. Specifically, we will examine the performance of a seven-asset portfolio that includes large-cap U.S. stocks, small-cap U.S. stocks, non-U.S. developed stocks, real estate, commodities, U.S. bonds and cash. Each asset class was equally weighted with an allocation of 14.29%.
One version of the seven-asset portfolio was never rebalanced, and the other version was rebalanced annually at the end of each year. The big question: Did rebalancing produce a performance advantage? To determine this, we measured the performance of both seven-asset portfolios over 27 rolling 20-year periods to control for time-period bias. Taxation was not considered, which implies that the accounts in this analysis were tax-sheltered.
The first 20-year period was from Jan. 1, 1970, to Dec. 31, 1989. A total of $7,000 was invested into each seven-asset portfolio at the start of each year (representing $1,000 into each). The ending value of the non-rebalanced portfolio on Dec. 31, 1989, was $776,509, compared to $786,952 for the annually rebalanced portfolio, producing a rebalancing advantage of $10,443.
Over the next rolling 20-year period (from 1971 to 1990), annual rebalancing produced a $36,749 advantage over the non-rebalanced portfolio (see graph, Rebalancing by the Numbers).
We observe a rebalancing advantage in 78% of the 27 rolling 20-year periods. The average advantage was $13,722. The largest rebalancing advantage was $36,749 over the 20-year period from 1971 to 1990. The largest rebalancing disadvantage of -$24,631 occurred during the period from 1980 to 1999.
The requirement that a financial advisor must “Know Your Client”, including his/her tolerance for taking risks, is a universal requirement amongst investment regulators around the world.
Yet a recent survey of the global landscape for best practices in risk profiling by Canadian financial planning software provider PlanPlus reveals a disturbing lack of quality risk tolerance questionnaires (RTQ) and support tools for financial advisors. In part, this appears to be driven by the fact that regulators articulate the principle of “know your client’s risk tolerance” but provide little guidance on how it should be done to ensure that it’s right. And to a large extent, the problem stems from the reality that neither regulators, academics, nor advisors themselves, even have agreement on exactly what key factors of a client’s “risk profile” should be evaluated in the first place.
Nonetheless, a growing base of academic research is beginning to articulate a clear risk profiling framework, from recognizing the separation of risk tolerance from risk capacity, the role of risk perception (and misperceptions) on client behavior, and how “risk composure” (the stability of a client’s perceptions of risk) itself can vary from one cline to the next. Of course, just because these factors can be identified doesn’t make them easy to measure with a questionnaire, especially when it comes to “subjective” abstract traits like risk tolerance. On the other hand, the research suggests that financial advisors just trying to interview clients about risk may not be doing a better job, either.
In the end, the optimal approach may eventually be a combination of both, where psychometrically designed risk tolerance questionnaires assess a client’s willingness to pursue risky trade-offs, and the financial advisor can then assess the client’s risk capacity, financial goals, and ability to achieve their objectives given the constraint of their tolerance. And ultimately, an effective risk tolerance questionnaire may not only make it easier to properly match investment solutions to a client’s needs, but also make it easier to manage client risk perceptions and investment expectations on an ongoing basis. Or at least identify which clients are most likely to be challenged when the next bear market comes along!
Assessing a client’s risk tolerance, as a part of providing investment management advice or investment product recommendations, is universally recognized as essential by regulators around the globe.
Notably, though, there’s a wide range of perspectives amongst regulators about what, exactly, “risk tolerance” actually is, how it should be measured, what factors are and are not relevant, and how those factors should be weighted when evaluating if an investment recommendation was appropriate or not.
To understand the landscape, the Ontario Securities Commission of Canada engaged PlanPlus (a leading financial planning software provider in Canada that has a global footprint, albeit little presence in the US) to assemble a research team that would compare Canadian practices on risk tolerance assessments to the best practices globally.
Unfortunately, though, what the researchers found was that most regulators around the world are “principles-based” in requiring that advisors understand and assess the client’s risk profile – an essential step fulfill any advisor’s “Know Your Client” (KYC) obligations – yet provide little guidance about how, exactly, that should be done.
Of course, if there was a clear and universally accepted academic framework for evaluating risk tolerance, this might not necessarily be an issue. For instance, in the U.S., an investment fiduciary has an obligation to provide the advice that a prudent expert would have given a similar client in similar circumstances. And although this principles-based “prudent expert” standard isn’t explicitly defined, the courts have recognized it to mean that the expert should have followed the principles of the academic Modern Portfolio Theory framework. Yet when it comes to risk tolerance, regulators have provided a principles-based expectation and obligation on advisors to make an assessment, but without any acknowledgement of the missing academic framework that would/should clarify how advisors actually do it.
In fact, the researchers found that there’s a surprising paucity of any academically research to validate most key concepts associated with a client risk profile. The situation is further complicated by the fact that there isn’t even clear agreement about what all the relevant factors are that should be considered, not to mention how they should be incorporated together to make a recommendation. And what little research has been done is difficult to bring together, because there isn’t even a consistent usage of terms regarding risk tolerance and a client’s overall risk profile!EFM- I do have one. Once I finish with funding, it will grasp the reality of risk.
DAVID DEMING, Harvard
MICHAEL LOVENHEIM, Cornell University - Department of Policy Analysis and Management, National Bureau of Economic Research (NBER)
RICHARD W. PATTERSON, United States Military Academy, Cornell University - Department of Policy Analysis and Management
the impact of online degree programs on the market for U.S. higher
education. Online degree programs increase the competitiveness of
local education markets by providing additional options in areas
that previously only had a small number of brick-and-mortar schools.
We show that local postsecondary institutions in less competitive
markets experienced relative enrollment declines following a
regulatory change in 2006 that increased the market entry and
enrollment of online institutions. Impacts on enrollment were
concentrated among private non-selective institutions, which are
likely to be the closest competitors to online degree programs. We
also find increases in per-student instructional spending among
public institutions. Our results suggest that by increasing
competitive pressure on local schools, online education can be an
important driver of innovation and productivity in U.S. higher
Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Japan's industrial output was unchanged September, falling short of forecasts, in a worrying sign for the economy as the BOJ board gathers to consider monetary policy. Separate data showed retail sales fell more than expected last month, dropping 1.9% from a year earlier, providing further evidence that private consumption remains a drag on growth.EFM- I said that Japan would get better after the fiascos of the late 80s. After all, it was a progressive country that would just rearrange its economy. Over 20 years later and.............nothing.
Seeun Jung (ESSEC Business School - Essec Business School, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics) ; Radu Vranceanu (Economics Department - Essec Business School)
This paper reports results from a real-e ort experiment in which men and women are paired to form a two-member team and asked to execute a real-eff ort task. Each participant receives an equal share of the team's output. Workers who perform better than their partner can punish him/her by imposing a fi ne. We manipulate the teams' gender composition (man-man, man-woman, and woman-woman) to analyze whether an individual's performance and sanctioning behavior depends on his/her gender and the gender interaction within the team. The data show that, on average, men perform slightly better than women. A man's performance will deteriorate when paired with a woman, while a woman's performance will improve when paired with a woman. When underperforming, women are sanctioned more often and more heavily than men; if sanctioned, men tend to improve their performance, while women's performance does not change.
This study examines whether attitudes toward risk and altruism are affected by being in a group or being alone. Subjects in our experiment were requested only to show their faces to other members without any further communication, differing from previous studies. In experiments of both anonymous investments and donations, we found that subjects who made decisions in a group offered significantly lower amounts than individuals who made decisions alone, even controlling for individuals' risk and altruistic preferences. Our results indicate that people are more risk averse and self-interested when they are in a group.
The fall in household wealth would reduce spending and cause a decline in GDP. A rough rule of thumb implies that every $100 decline in wealth leads to a $4 decline in household spending. The return of asset prices to historic levels could therefore imply a decline of $400 billion in consumer spending, equal to about 2.5% of GDP, which would start a process of mutually reinforcing declines in incomes and spending leading to an even greater cumulative impact on GDP.
Overall the report hopes people will learn that the high returns of the past came with a price: lower returns in the future.“If the retirement calculators say we’ll make 6% or 7%, and people saved based on that but only make 3%, they’re going to have a massive shortfall. “They’ll have to work longer or retire with a substantially different standard of living than they thought they would have.”
This new data turns out to be a disappointment. Over the past several years, the health of Americans has deteriorated—particularly that of middle-aged non-Hispanic whites. Among the culprits are drug overdoses, suicide, alcohol poisoning, and liver disease, according to a Princeton University study issued in December.
Partly as a result, the life expectancy for 65-year-olds is now six months shorter than in last year’s actuarial study. Longevity for younger Americans was also affected: A 25-year-old woman last year had a 50/50 chance of reaching age 90.
This year, she is projected to fall about six months short. (The average 25-year-old man is expected to live to 86 years and 11 months, down from 87 years and 8 months in last year's estimates.) Baby boomers, Generation X, and yes, millennials, are all doing worse.
DORINE BOUMANS, CESifo
(Center for Economic Studies and Ifo Institute)
JOHANNA GARNITZ, CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute
GUNTHER G. SCHULZE, University of Freiburg - Department of Economics
We examine sources of biased terror perceptions. In particular, we investigate how international experts of the IFO World Economic Survey assess the effect of terror on the world economy and the economy of their own country. The results show that respondents from terror stricken countries have more favorable views on the effect of terror on the word economy (but not on their own countries). Male respondents and those from democratic and richer countries are likewise more optimistic.
Research Affiliates.The company looked at the default settings of 11 retirement calculators, robo-advisers, and surveys of institutional investors. Their average annualized long-term expected return? 6.2 percent. After 1.6 percent was shaved off to allow for a decade of inflation1, the number dropped to 4.6 percent, which was rounded up.For the decade ended Sept. 30, VBINX had an average annual performance of 6.6 percent, and that’s before inflation. Over the next decade, according to the report, “the ubiquitous 60/40 U.S. portfolio has a 0% probability of achieving a 5% or greater annualized real return.”
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $18,000. In addition, the catch-up contribution limit for employees age 50 and older who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,000.
Other limits also remain unchanged. The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) remains unchanged at $120,000, and the dollar limitation on premiums paid with respect to a qualifying longevity annuity contract under Section 1.401(a)(9)-6, A-17(b)(2)(i) of the Income Tax Regulations remains unchanged at $125,000.
The limit on annual contributions to an individual retirement account (IRA) remains unchanged at $5,500. The additional catch-up contribution limit for individuals age 50 and older is not subject to an annual cost-of-living adjustment and remains at $1,000.
However, some limits have changed. Effective January 1, 2017, the limitation on the annual benefit under a defined benefit (DB) plan under Section 415(b)(1)(A) is increased from $210,000 to $215,000. For a participant who separated from service before January 1, 2017, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2016, by 1.0112. The limitation for defined contribution (DC) plans under Section 415(c)(1)(A) is increased in 2017 from $53,000 to $54,000.
The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $265,000 to $270,000.
The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan is increased from $170,000 to $175,000.
The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan (ESOP) subject to a five-year distribution period is increased from $1,070,000 to $1,080,000, while the dollar amount used to determine the lengthening of the five-year distribution period is increased from $210,000 to $215,000.
After a sluggish start to the year, data on Friday are expected to show that the US economy gathered steam in the thirdquarter. Wall Street estimates that GDP rose at a 2.5 per cent pace, a pick-up from the 1.4 per cent rate in the previous quarter. Consumer spending growth isexpected to have slowed sequentially but economists still expect a strong contribution due to auto sales.
The same cannot be said of the UK however, where economic growth is expected to slow to 0.3 per cent year-on-year in the third quarter, following 0.7 per cent growth in the second.10/24:Duration
The curve is created by tracing a line through yields on bonds of different maturities. Normally, longer-maturity debt has higher yields than short-dated securities. When that inverts, it’s seen as a sign the economy is at risk of contracting. In fact, it’s happened before each of the past seven recessions.
While the curve has yet to invert, it’s flattened significantly. Strategists say the shift is the product of disentanglement between financial markets and macro-economics. The gap between yields on two- and 30-year Treasuries touched 1.4 percentage points on Aug. 30, the lowest since 2008.
The percentage of women in the computing workforce is expected to fall to 22% from 24% by 2025 if current trends continue. And that’s down from 37% in 1995. This at a time when there are hundreds of thousands more computing jobs available in the U.S. than college graduates to fill them.Getting more women involved in these high-quality, high-paying jobs would go a long way to helping women’s overall earnings. Currently, the report finds “the salary gap between men and women in U.S. computing roles has widened in recent years from $8,540 in 2011 to $12,661 in 2015.” According to Julie Sweet, Accenture’s group chief executive for North America, women’s cumulative earnings could increase by $299 billion if three times more women pursued computer science careers.
Japan ever escape deflation?
This should come as no surprise to anyone, but Bank of Japan
Governor Haruhiko Kuroda has said that the BOJ may once again push
back its 2% inflation target, which currently sits somewhere in
fiscal 2017. Recall that when Kuroda started his job in early 2013
and began his turbo-charged asset-purchase policy that continues to
this day, he originally hoped that inflation would hit 2% by late
2014 or 2015. Almost four years later, inflation has disappeared
after an initial rise.
Remember when they said that housing prices never fall? Wouldn't
surprise me that prices will tumble.
Chinese hackers targeted government personnel associated with US Navy exercises at the time of a contentious international court ruling on the South China Sea, according to a US cyber security company.
The China-based group created an infected document impersonating an official message addressed to personnel visiting the USS Ronald Reagan, a nuclear-powered aircraft carrier that conducted patrols of the South China Sea in July.
Canada's trade minister walked out of talks with Belgium's French-speaking regional government, drawing a last-minute attempt to rescue the free-trade deal between the EU and Canada to a temporary close.
Speaking after fruitless negotiations, Chrystia Freeland said: "It seems obvious for me, and Canada, that the EU is not able to have an international agreement even with a country which has such European values as Canada, and even with a country so kind, and so patient as Canada"
Britain would continue to pay billions of pounds into the EU budget after Brexit to maintain cherished single-market access for the City of London under plans being discussed by Theresa May’s cabinet.
The prime minister’s demand that Britain controls its borders and throws off the jurisdiction of EU judges has led many in London and Brussels to conclude that British-based banks and insurers would inevitably lose the “passporting” rights that allows them to trade freely in Europe.
Beginning with the publication of this Note, we will provide updated estimates of the EBP and the associated model-implied probability of a U.S. recession every month.
Modern portfolio theory is the basis for much of the conventional wisdom that underpins investment decision making. Many core points of modern portfolio theory were captured in the early 1960s by the efficient market hypothesis put forth by Eugene Fama from the University of Chicago. According to Fama’s theory, financial markets are efficient, investors make rational decisions, market participants are sophisticated, informed and act only on available information. Since everyone has the same access to that information, all securities are appropriately priced at any given time. If markets are efficient and current, it means that prices always reflect all information, so there's no way you'll ever be able to buy a stock at a bargain price.
Other snippets of conventional wisdom include the theory that the stock market will return an average of 8% per year (which will result in the value of an investment portfolio doubling every nine years), and that the ultimate goal of investing is to beat a static benchmark index. In theory, it all sounds good. The reality can be a bit different.
This is a common question with no easy answer. “You can’t make money magically appear,” Furman says. Instead, he suggests that you “take a look at what your needs are and will be, what resources you have and find ways to 1stretch those out.”
To do this, you’ll need to consider:
Most people have a “false impression that when they apply for Medi-Cal that anything that is exempt under their application is also exempt from recovery under the Medicaid recovery statutes,” Furman says. This is not the case.
“One of the common misconceptions people have is that they confuse the wording used in Medi-Cal. Often, people confuse eligibility exemptions with recovery exemptions. If their house is exempt, and thus not counted for eligibility determination, it doesn’t mean that it is also exempt from the recovery. This confusion often leads to families having a Medi-Cal recovery lien placed on their home when they thought their home was exempt from the program,” Furman explains.
Unfortunately, your local Medi-Cal or Medicaid office cannot offer advice on how to protect assets.
However, there are legal methods to protect your house from a Medi-Cal lien but there are myriad issues to address with each strategy. Options to protect a home also vary by state, so you should consult with your elder law attorney.
*Actually, when people ask this question they often confuse the language, Furman mentions. When they say ‘living will’ they are actually referring to a ‘living trust.’ “A living will and a living trust are two different legal documents. A living will is a life directive in which you would ask someone to ‘pull the plug’. A living trust is a tool used to avoid probate,” he explains.
You can use a living trust as a tool to avoid probate, but the rules and regulations surrounding living trusts vary by state, so it’s important to talk to your attorney about your unique situation.
Yes, you can.
There are two types of trusts:
No, you aren’t.
With a traditional living trust, change of control only happens upon death or legal incapacity. “You are in control until death (the death of you and your spouse, if applicable) and the living trust is then distributed to the beneficiaries,” Furman explains. “If you are legally incompetent, the successor trustee will assume control of your trust without court involvement,” he concludes.
These elder law topics are significant, and require a discussion of your unique situation with your elder law attorney. You can reach Stuart Furman, Esq. by:
What's more, those who prefer in-home care, like nannies, to childcare centers are shelling out an average of $28,353 a year, equal to about 53% of the median household income or 188% of earnings for minimum-wage workers.
The study also found that the cost of childcare for children under age 4 — also known as infant care — is 12% higher than for older children.
Here are a few reasons why childcare costs are rising, according to the The Care Index report: