Master Financial Education

Financial Planning Daily Commentary 2017
The  most intensive and extensive on the Web

E. F. Moody Jr.

click above for bio


USA Today- "This is a high-powered personal bookmark list that spans the spectrum of the truly useful."

FORBES- "You'll find some great information."

BUSINESS WEEK: "For an Expert, Click here" 

SP 500
World Statistical data

Investor/Investing Risk of Loss: Identify, Manage and Limit Investment
Risk of Loss on Mutual Funds and ETFs

Four Phase Process that will change the investment dichotomy for 75% of Middle and Lower Income investors overall and up to 90% for 401k Investors 

Losses limited to about 12% for recessions

Patent Pending

11/21: Morality, sexism, ethics.

I taught ethics for a number of years. The main term for a lot of poor behavior was "moral egoism: or "situational ethics". Basically whatever is good for you, your family, business, neighborhood etc. was justified.  The offset to this is called a "veil of ignorance" where you look objectively at your actions to determine if they really are correct. That you could show these actions to your family, priest etc. Long time readers know I have bucked the financial industry's  'code of ethics' etc. for decades. Effectively you are guilty of an infraction if and only if preceded by a governmental agency for having done wrong (SEC, FINRA, State departments of insurance, federal and state courts, etc.). But without prior actions by such entities, you have not committed a wrong and therefore could continue as before. As such, as a whistle blower, you can be ostracized quickly and suffer consequences. So it is easy to understand why so few women were willing to push the issue of sexism since the 'anointed one(s) can see to it that you are a lower class stool pigeon and need to suffer at the hands of a more powerful being (generally called schmucks.). Charlie Rose quickly fired a staffer when she brought an allegation against him. Trump was going to sue all the women who made statements against him but once in office, nada, nothing, zilch, zero. I cannot state that the women are absolutely right, but too many allegations tends to show the intent and actions of a real life transgressor.  The scenario looks the similar for More (republican) but Trump completely reverses himself for less of a transgression with Franken (democrat). This is a very difficult play going on but there are enough women. a slew of allegations and enough reporters doing masterful work uncovering wrongs Women can change society if they push enough for gender equality

This commentary now takes a slightly unique observation of sexism. Men may love their wife, mother, daughters and the like  but once outside that circle, I don't think they respect women that much. Part of the reason is an old cultural problem that women are not that smart, they have physical/mental limitations for a few days per month and so on. As to  who is smarter- it is women. Look at college today and their are more women than men getting degrees. As far as my work is concerned. women took more effort than men in planning because they asked more questions. Well. that is supposed to be what should actually occur. So far the women are winning.
As stated, women have periods once a month and that amounts to a  human frailty in some minds. OK- but men have a bigger problem for 30 days a month and the impact is insidious. . What is it?
C'mon ladies, you know what it is.

Male ego. It is one of the most mind numbing lacks of forethought imaginable. On many issues (like personal finance) it is like talking to a stump. And it is inbred. When confronted by a 'problem', men fight, flight or freeze. Women tend and befriend. While the male's quick  reaction to danger might have served him well eons ago with saber tooth tigers and large hamsters, the instinct remains. But the aggressive nature of men is the cause of 99 44/100% of all inflicted deaths our world has seen. Men have found a way of hiding specious reasoning generally with men of the same suasion, AKA like Trump with the 'locker room' banter recorded on the bus. As such  men may find these recent faults as simply men being men- or in Rose's case when  one female employee noted- "Oh, it's just Charlie being Charlie."  Not good enough. Not even close..

The element of faulty IMmoral egoism is embedded in our system. Clinton showed you can cause serious problems with the sexual escapades, but so what? He went on to making MILLIONS after his presidency. I submit that allowed a lot of men to impose all sorts of illicit sexual activity (and a number of non sexual questionable activities) because if it is all right for a president, why can't I do it?  Finally the case of  Cosby  broke a barrier that women had to break  themselves. Women now have the opportunity to keep pressure on the elite (it will slowly filter down to the mediocre) and force/require/intimidate men (in particular) to toe an ethical line henceforth. It will cause a lot of anguish (I believe) in outing a lot of sexual miscreants (schmucks) who will not infect our children into the belief that moral egoism can run everything. It's awfully close now but maybe it can be turned back. It may now be quite obvious the ball is in their court so it is up to them..................... 

11/21" And its getting worse


World Markets Update

by Jill Mislinski, Nov 20

All eight indexes on our world watch list have posted gains for 2017 through November 20. The top performer thus far is Hong Kong's Hang Seng with a gain of 33.0%, followed by India's BSE SENSEX at 25.43%. In third is Tokyo's Nikkei with 16.47%.

“It’s a terrible disease that devastates both those who have it and their loved ones,” the philanthropist wrote Monday on his blog. “This is something I know a lot about, because men in my family have suffered from Alzheimer’s. I know how awful it is to watch people you love struggle as the disease robs them of their mental capacity, and there is nothing you can do about it. It feels a lot like you’re experiencing a gradual death of the person that you knew. My family history isn’t the sole reason behind my interest in Alzheimer’s. But my personal experience has exposed me to how hopeless it feels when you or a loved one gets the disease.”

EFM- It is the death of the mind before the death of the body

And people almost always know they are losing it. To watch someone die slowly before your eyes...................................

  1. Individual and group preferences over risk: does group size matter?




Morone, Andrea ; Temerario, Tiziana ; Nemore, Francesco

In this paper we investigated group size impact on risk aversion when a majority rule is applied. Drawing on the widely used Holt and Laury’s (2002) lottery pairs, we observed a risky shift for both individual and groups regardless of their size. However, groups choices are shown to be closer to the risk-neutrality prediction. More interestingly, whereas smaller groups attitudes can be safely approximated by individual choices, larger groups reveal a statistically different risk-loving attitude. This risky shift becomes more prominent as group size increases.


Preferences; Group; Risk Attitude; Majority Rule; Laboratory.


C91 C92 D1


  1. Thinking fast, thinking badly




Natalia Jimenez (Universidad de Granada (Spain)) ; Ismael Rodriguez-Lara (Middlesex University London (United Kingdom)) ; Jean-Robert Tyran (Department of Economics, University of Copenhagen and University of Vienna (Austria)) ; Erik Wengström (University of Lund (Sweden))

We test for the construct validity of the cognitive reflection test (CRT) by eliciting response times. We find that incorrect answers to the CRT are quicker than correct answers. At the individual level, we classify subjects into impulsive and reflective, depending on whether they choose the incorrect intuitive answer or the correct answer the majority of the time. We show that impulsive subjects complete the test quicker than reflective subjects.


cognitive ability, cognitive reflection, response time, intuitive behavior, reflective behavior




Many men will absorb the lessons of late 2017 to be not about the threat they’ve posed to women but about the threat that women pose to them. So there will be more — perhaps unconscious — hesitancy about hiring women, less eagerness to invite them to lunch, or send them on work trips with men; men will be warier of mentoring women.

The only real solution may be one that is hardest to envision: equality.

Rebecca Traister

  1. 11Risk-taking on Behalf of Others




Kristoffer W. Eriksen ; Ola Kvaløy ; Miguel Luzuriaga

We present an experimental study on how people take risk on behalf of others. We use three different elicitation methods, and study how each subject makes decisions both on behalf of own money and on behalf of another individual’s money. We find a weak tendency of lower risk-taking with others’ money compared to own money. However, subjects believe that other participants take more risk with other people’s money than with their own. At the same time, subjects on average think that others are more risk averse than themselves. The data also reveals that subjects are quite inconsistent when making risk decisions on behalf of others, indicating random behavior. A large majority of subjects alternates between taking more risk, less risk or the same amount of risk with other people’s money compared to own money.


risk-taking, other people’s money, beliefs, preferences, experiment


  1. Behavioral Biases in Marketing




Guhl, Daniel (Humboldt University Berlin) ; Klapper, Daniel (Humboldt University Berlin) ; Massner, Katharina (LMU) ; Spann, Martin (LMU) ; Stich, Lucas (LMU) ; Yegoryan, Narine (Humboldt University Berlin)

Psychology and economics (the mixture of which is known as behavioral economics) are two fundamental disciplines underlying marketing. Various marketing studies document the non-rational behavior of consumers, even though behavioral biases might not always be consistently termed or formally described. In this review, we identify empirical research that studies behavioral biases in marketing. We summarize the key findings according to three classes of deviations (i.e., non-standard preferences, non-standard beliefs, and non-standard decision-making) and the marketing mix instruments (i.e., product, price, place, and promotion). We thereby introduce marketing researchers to the theoretical foundation of and terminology used in behavioral economics. For scholars from behavioral economics, we provide ready access to the rich empirical, applied marketing literature. We conclude with important managerial implications resulting from the behavioral biases of consumers, and we present avenues for future research.


marketing; behavioral economics; behavioral biases; review;


China is building the world’s fastest wind tunnel to simulate hypersonic flight at speeds of up to 12 kilometres per second.

A hypersonic vehicle flying at this speed from China could reach the west coast of the United States in less than 14 minutes.

Zhao Wei, a senior scientist working on the project, said researchers aimed to have the facility up and running by around 2020 to meet the pressing demand of China’s hypersonic weapon development programme.

"It will boost the engineering application of hypersonic technology, mostly in military sectors, by duplicating the environment of extreme hypersonic flights, so problems can be discovered and solved on the ground

The escape velocity, or the minimum speed needed to leave the Earth, is 11 kilometers per second.

  1. Potterian Economics




Daniel Levy (International School of Economics at Tbilisi State University; Department of Economics, Bar-Ilan University; Department of Economics, Emory University; Rimini Center for Economic Analysis, ITALY;) ; Avichai Snir (Department of Banking and Finance, Netanya Academic College, Netanya 42365, ISRAEL)

Recent studies in psychology and neuroscience find that fictional works exert strong influence on readers and shape their opinions and worldviews. We study the Potterian economy, which we compare to economic models, to assess how Harry Potter books affect economic literacy. We find that some principles of Potterian economics are consistent with economists’ models. Many others, however, are distorted and contain numerous inaccuracies, which contradict professional economists’ views and insights, and contribute to the general public’s biases, ignorance, and lack of understanding of economics.


Economic and Financial Literacy, Political Economy, Public Choice, Rent Seeking, Folk Economics, Harry Potter, Social Organization of Economic Activity, Literature, Fiction, Potterian Economy, Potterian Economics, Popular Opinion



"Women's Entrepreneurship: How to Measure the Gap between New Female and Male Entrepreneurs?" Free Download
World Bank Policy Research Working Paper No. 8242

World Bank
World Bank

This paper analyzes data on female and male entrepreneurship that were collected by the World Bank Group's Entrepreneurship Database. Recognizing the importance of a differentiated approach to entrepreneurship in terms of legal entities, the data on female and male business owners are collected at the level of limited liability companies and sole proprietorships. Forty-four of the 143 economies that participated in the Entrepreneurship project provided some sex-disaggregated data for 2016. The paper finds that the gender gap in business ownership remains high in many economies around the world. In the majority of the analyzed economies, less than one-third of new limited liability company owners are women. Although sole proprietorships are more frequently used by female entrepreneurs, only three economies have similar or equal number of women business owners relative to men. The gap in female entrepreneurship is especially apparent in low-income economies, where women are much less likely than men to start a new business. The paper also provides new insights into the relationship between female entrepreneurship and various institutional factors, including women's financial inclusion, the gender gap in education, and legal rights disparities. The analysis suggests a need to expand the collection of sex-disaggregated data, to trace the economies' progress in narrowing the existing gender gap in entrepreneurship.

The logical assumption is that if you are a “good” driver, you will qualify for lower auto insurance rates. It turns out that there is also an exception to this rule if you are currently insurance by a smaller, “non-standard” insurance company and live in a lower-income community. The Consumer Federation of America reached this conclusion from recent research and premium quotes. It’s always important to review your insurance options prior to renewal of your auto insurance policy.


11/19: Tony Steuer

Retirement Health Care Costs and Long Term Care:

A 65-year-old, healthy couple can expect to spend $266,600 over the course of their retirement on Medicare premiums alone, according to HealthView Services. An estimate from Fidelity is a little less: $245,000. Neither include out-of-pocket expenses or long-term care costs. Genworth recently published their annual cost of care survey which shows that the national median monthly cost for home health care service is $4,000, adult day health care is $1,517, assisted living facility is $3,750 and a nursing home is $7,148 for a semi-private room ($8,121 for a private room). Keep in mind that this is average and costs in your area will be different. It’s important to note that the odds of needing some type of long term care are about 50% (depending on which study you use) and though this is from 2012, these 40 must-know statistics about long term care insurance are still useful.

11/19: Tony Steuer

Will Insurance Companies Be Able To Weather Climate Change?

There is some differing opinions on whether insuring against weather natural disasters could reach unaffordable levels for households and companies, with the potential damage being so unpredictable that it may be impossible to model which would be an unacceptable risk to insurers. For a closer look check out: Big Insurers Brace for Perilous Future as Climate Risks Escalate.



Household Debt And Credit Report: Up $116B in Q3, Another Peak

by Jill Mislinski, Nov 15

Household debt increased by $116 billion (0.9%) to $12.96 trillion in Q3. There were increases in mortgage, auto, credit card, and student loan debt and a modest decline in balances on home equity lines of credit.

11/16: A concise explanation of why Saudi Arabia is important (NYT)

Ever since the 2011 Arab Spring uprisings collapsed into chaos, a faction within Washington’s small but influential network of foreign policy think tanks have gathered around an idea: the United States must be more forceful in supporting Saudi Arabia and its allies.

This idea isn’t universal, but it is a common position, echoed at downtown policy conferences, cable news panels and off-record dinners with policymakers and members of Congress.

The basic theory is three-fold:

(1) Saudi Arabia is invested in the status quo and so will block changes that could destabilize the region or hurt American interests.

(2) Saudi Arabia opposes Islamist political parties, which have tended to do well in Arab elections, and so can be relied upon to suppress Islamists.

(3) Saudi Arabia is locked in a regional proxy conflict with Iran, so helping the Saudis will hurt the Iranians, thereby containing Iran and containing the proxy war.

Saudi Arabia is not popular in the United States, what with being an authoritarian theocracy that beheads dissidents, relegates women to second-class status and has funded Islamist extremists. So supporters of a pro-Saudi line typically do not single it out by name, but instead refer to “our Gulf allies,” which in practice means Saudi Arabia and a handful of smaller states that generally follow Saudi Arabia’s lead on the matters listed above.

Octopus Candle holder
You know you want one for Christmas

11/16: Winter and the elderly

In addition to common, year-round domestic hazards, each season presents its own set of potential issues for the health of seniors. As colder temperatures set in, many new threats to seniors’ health and safety emerge. To help ensure seniors’ safety through the winter, it’s important to consider potential threats both inside and outside the home and make preparations that promote safety while allowing seniors to enjoy as much independence as possible. Seniors that require in-home care frequently do not have family in close enough proximity to prepare for winter and assist with the preventative tasks that are needed throughout the season, meaning much of this work will be completed by professional caregivers. There are a handful of common threats caregivers can plan ahead for to make sure seniors’ homes are fully equipped to handle the chilly winter season.

As colder temperatures tend to chase people indoors, it’s important to make sure the home is prepared for the season. Caregivers should make sure seniors and their families schedule inspections and maintenance for furnaces and fireplaces to ensure they’re in safe condition and ready to use. Elders, especially those with cardiac issues, are vulnerable to health problems that can arise from being too cold, including dehydration. Setting the thermostat at the recommended 68 degrees will prevent these issues. With regular use of these heating methods, a few other potential dangers emerge. It’s a good idea to keep fire extinguishers near all heat sources in case a malfunction starts a blaze. Make sure smoke alarms and carbon monoxide detectors are installed on every floor of the home and check them to ensure all are working and have fresh batteries. Carbon monoxide is especially dangerous, as it’s practically undetectable without a monitoring device.

Caregivers should also make sure seniors’ homes are prepared with emergency kits in case a major winter storm causes power outages or strands them inside the home for an extended period without assistance. Winter emergency kits should include necessities such as a flashlight, backup batteries, a radio and warm blankets. Homes should also be stocked with enough non-perishable food and bottled water to last for several days until scheduled in-home visits can resume. Condition-specific care also necessitates seniors’ homes have a seven-day supply of prescription medications.

Falls are one of the most prominent threats to seniors’ health throughout the year, and the colder months present unique falling hazards both inside and outside the home. Make sure there are non-slip mats inside doors to prevent falls that can be caused by wet or snowy shoes. It’s also a good idea to store shoes on floor mats once inside the home to prevent puddles from accumulating on the floor due to melting snow and ice. Put the lights near entry ways on timers and make sure they’re set to turn on before the early sunsets that accompany the winter months to make sure seniors are able to the areas around doorways and avoid potential tripping or slipping hazards.

Outside the home, there are several maintenance tasks that should be completed both at the beginning and as needed throughout the season to mitigate safety hazards. Rain gutters should be clear of leaves and other obstructions that came accumulate throughout the fall. Gutters that are partially or completely blocked by leaves and other debris can overflow and cause damage to the home or create puddles on the ground, which freeze in cold weather and create dangerous conditions on sidewalks and near entryways. As winter storms hit throughout the season, it’s important to clear ice and snow from sidewalks, steps and driveways on an ongoing basis to eliminate slippery conditions that create dangerous falls. It’s also important to spread salt on outdoor areas where seniors walk to prevent dangerous ice patches from forming.

Because most seniors spend less time outdoors and are less active during the winter, they often lack vitamin D and take on a greater risk of catching colds. Even if seniors do spend enough time outdoors, winter sunlight is not strong enough for the body to make a sufficient amount of vitamin D for most people who live north of Atlanta. For this reason, ensuring seniors maintain a health, balanced diet. Foods that are rich in vitamin D include beef, fish, milk, yogurt and breakfast staples such as orange juice, egg yolks, oatmeal and cereal. Pudding made with milk is a tasty treat that can be an easy way to get seniors to consume more vitamin D.

When seniors are outside the home, it’s important that they’re dressed properly for winter conditions. Keeping them bundled up in layered, loose-fitting clothing and wear warm hats and waterproof gloves or mittens can help stave off dangerous winter maladies such as hypothermia, pneumonia and bronchitis. Making sure seniors are equipped to stay warm when outdoors is a good way to encourage them to spend at least some time outside when possible. Fresh air and sun light can go a long way toward improving seniors’ mood, which has a positive impact on their physical health as well.

If seniors are still driving on their own, it’s important to prepare their vehicle for winter as well. Cars should be inspected by a qualified mechanic to make sure they’re in good working condition to minimize the risk seniors become stranded in cold weather. Mechanics should check the car’s heating system and defrosters to make sure they works well, and cars should be equipped with snow tires and winter windshield solution to help melt ice. Seniors should also have a working cell phone and know how to use it in case they get stuck in the car and need to call for help.

While it’s important for everyone to be ready to deal with dangerous winter conditions, seniors are especially vulnerable to the dangers that come from cold, icy weather. Taking the time to think ahead and make sure seniors are prepared to remain happy and healthy until spring.


Compare Reviews for Textbook Rental Companies

The cost of buying books for a semester in college can easily reach hundreds of dollars. Online textbook rental tends to be more affordable and can make shopping for textbooks more convenient.

You can rent your required books, have them delivered directly to your home or dormitory and then return them at your convenience or at the end of a set period. Most people who use online textbook rental services are college or university students who rent required course texts at the beginning of a semester or term and return them after final exams.

11/15: Cold weather and the elderly

In many areas of the country, cold weather is an old-forgotten nemesis that reappears this time of year. When caring for those with disabilities and seniors, caregivers must take some simple precautions to ensure a loved one’s safety this winter season.

Temperature control

The U.S. Centers for Disease Control and Prevention says that 600 Americans die each year from hypothermia, half of whom are older than age 65. Hypothermia occurs when a person’s body temperature drops from the normal 98.6 degrees to 95 degrees or below. Seniors and those with disabilities are at a greater risk if conditions such as arthritis and a variety of medications diminish their response to cold temperatures.

Layering is not just a fashion trend; it serves a purpose, especially for those susceptible to dangerous temperatures and if a home is prone to drafts. Use lighter layers of clothes nearest the body and make them easily removable and also a non-hassle to put back on. Layers trap warm air between each layer, keeping the body warmer.

When outside, keep a loved one's exposed skin covered, including head, face, ears, hands and feet. A couple things to remember: use mittens versus gloves, since they allow the fingers to touch and generate heat. Next, make sure a loved one's clothes are loose fitting, since tight clothes keep blood from flowing and minimize the production of body heat. Proper footwear is also something a caregiver should examine and see is proper for the season.

Maintaining an even, warm house temperature is essential during the cold weather season. A caregiver should make sure the thermostat is easy to read, perhaps with large digital numbers, so a loved one can check it frequently. The National Institute of Health recommends at least 68 to 70 degrees as a standard, and says that even mild cold temperatures such as 60 to 65 degrees can cause a hypothermia risk for seniors.

Stay Safe

Many times, cold weather is the cause of power outages. Both darkness and cold are situations a loved one does not want to find themselves in without some preparation and knowledge of what to do.

Many people with disabilities and seniors rely on powered devices for medical care such as oxygen or for mobility. Have emergency numbers easily accessible and an emergency kit with easy-to-use items available at all times. A generator is a great source of backup power. A caregiver should walk their loved one through its use and the emergency plan before such a situation arises.

For many loved ones, travel is hard during the cold winter months. A caregiver can be an advocate by eliminating any unnecessary travel, shopping for their loved one and encouraging family members and friends to visit at the loved one’s home. Take advantage of the nicer, sunny days and don’t push medical appointments that can be put off if the cold is too extreme or snow too deep. Another option for medical appointments is for a caregiver to look into a visiting physician service if travel is too difficult.

A big safety issue in wintertime is falls. A caregiver can help prevent this common injury-causing scenario by keeping sidewalks and door entryways clear. Think of things that might cause a loved one to go outside? The mail? Pets? Appointments? A caregiver can be available or have someone nearby to assist with these daily tasks while the weather is less-than-desirable.

Don’t worry, be happy

Cabin fever isn’t just for newlyweds taking refuge in a north woods cabin. Many seniors struggle immensely with this season of isolation and Vitamin D deprivation.

Remind a loved one to drink plenty of water, eat well and exercise indoors as much as possible. Many senior-friendly exercise videos are available.

Encourage socialization by inviting friends and family who are able to travel for a visit. "Brain" games such as word and number puzzles and simply reading the daily paper help a loved one maintain a sense of connection during the long winter months.

Keeping warm isn't the only thing on a caregiver's to-do list during the cold season. Ensuring a loved one is safe and content are also important and will make for a faster, happier winter for all.

bodies of 26 teenagers were found floating in the Mediterranean Sea. The corpses were sent to Salerno, Italy, where autopsies are being conducted to determine the details of their deaths. The girls were probably victims of sex trafficking, originally picked up in southern Nigeria, held in Libya and then sent to Italian shores in dinghies. Aid workers suspect that, like many African girls trafficked before them, they were tortured and raped.

More than a week after the bodies of these 26 girls were found, we know only that they were 14 to 18 years old — nothing about the lives they led. The horrible reality is that they will most likely remain nameless, never identified or claimed.

“When Syrian families arrive from Libya, they have been through a lot, but they haven’t faced the same kind of abuse these Nigerian girls have,” Mr. Rotunno said. When Syrians die at sea, he explained, they tend to be identified more quickly because they are with relatives or people who know them, unlike African women and girls, who typically travel alone.

Since the 1980s, tens of thousands of girls from the area around Benin City, in southern Nigeria, have been taken to Italy, where they are forced into prostitution. Over the past three years, according to the United Nations’ International Organization for Migration, Italy has seen a nearly 600 percent increase in the number of potential sex-trafficking victims arriving by sea. Last year, 1,100 Nigerian girls made the trip; some 80 percent of them are thought to be trafficking victims.

Since the 1980s, tens of thousands of girls from the area around Benin City, in southern Nigeria, have been taken to Italy, where they are forced into prostitution. Over the past three years, according to the United Nations’ International Organization for Migration, Italy has seen a nearly 600 percent increase in the number of potential sex-trafficking victims arriving by sea. Last year, 1,100 Nigerian girls made the trip; some 80 percent of them are thought to be trafficking victims.

Family caregivers report more positive emotions despite half feeling stressed or worried and care recipients report more positive emotions despite 6 out of 10 feeling less independent. The survey also found that family caregivers who felt more prepared to take on their role were more likely to report positive emotions than negative.

Key findings from the survey include:

  • For family caregivers, positive emotions such as being pleased about helping a loved one (91%) far outweigh negative feelings. 
    • However, over half are stressed (51%) or worried (51%) and many are overwhelmed (40%).  
  • 4 in 10 family caregivers say they were not prepared to take on their role. 
    • Among those who were prepared, only 16 percent say they were "very prepared."
  • Family caregivers who felt prepared for their role were more positive.
    • Seventy-nine percent of those who felt prepared were more likely to report they were happy compared with only 57 percent of those who felt unprepared.
    • Eighty-four percent of prepared respondents felt comfortable with their role versus 60 percent of unprepared respondents.
  • Most care recipients feel a sense of gratitude (89%) along with other positive emotions.   
    • However, nearly six in ten (59%) say they feel less independent since accepting help.


11/15: Student loans are now the largest source of household debt after mortgages. The tide of rising defaults is also a lucrative business.

11/15:  I know this is true because I have counted those flying around me now.
For each person on earth, there are 17 million flies.

11/15:  Thanksgiving with Dysphagia

Thanksgiving is the holiday most focused on gathering around the table with family and friends to share a sumptuous feast.  My father-in-law, Rodger, was never one to miss a meal. He ate breakfast, lunch, and supper at precisely the same time every day. He grew up on a farm in Italy. Like most Italians he had a very healthy appetite. 

When advancing Parkinson’s disease and dementia triggered severe swallowing problems I knew I had to be creative. Everything he ate had to be pureed and any liquids had to be thickened to the consistency of honey. I bought a food processor and experimented with ways prepare him tasty versions of the things he loved to eat. I showed him that the mushy stuff he insisted wasn’t food was the same thing he used to eat. I had him watch me mash the potatoes, prepare the vegetables, and put them in the food processor.

“This is real food,” he finally admitted.  “But it’s not as good. I need the real, real food.”

I wanted to serve him roast chicken, a baked potato and fresh green beans with a slice of apple pie with ice cream for dessert.  He should have been able to eat anything he wanted. But the danger was too great.

I made a lot of thick soups and stews full of vegetables and beans. Flavor and nutrition were my main focus and when the peas turned the pureed chicken stew green I told him it was one of my Irish specialties. He ate it all.

When Thanksgiving came and the house filled with wonderful of aroma of roasting turkey and baking pies I made sure he was able to enjoy as many of his favorite dishes as possible.

Here is my recipe for A Dysphagia Thanksgiving:

Turkey – I tried pureeing both dark and white meat turkey and found it too grainy so I used a well-known brand of junior baby food and pureed it further to remove all lumps.

1 cup homemade stuffing – Place in food processor with 2 tablespoons of homemade gravy. Puree until smooth, making sure all the lumps are removed. (Add gravy one teaspoon at a time as needed.)

½ cup mashed potatoes – mash or puree to remove all lumps.  Add gravy to the potatoes for flavor. 

½ cup creamed spinach – puree until very smooth

For dessert – remove crust from one slice of pumpkin pie, top with whipped cream. 

At the end of the meal he said, “This is just like my wife used to make.” I knew it wasn’t true but as long as he enjoyed it there was reason to be truly thankful.

An estimated 15 million people in the United States have the current diagnosis of     Dysphagia.  Patients with Dysphagia are at high risk for aspiration pneumonia, which weakens them and can lead to death.  Nearly 60,000 people die each year from complications associated with swallowing disorders

EFM= I realize that including these articles  may seem unnecessary. But they are needed since if you know someone who is old or you figure on getting old, you will run into these same situations and you need to be prepared in solving the problems. More importantly is that you are aware of the implications and can bring in those that can help. Being ignorant is no excuse. Being conveniently stupid is another phrase for it. 

11/15: Ageism

Employees are NOT commodities, they don’t depreciate with Age.

"Rothification" Likely to Reduce Retirement Saving"

by Alicia H. Munnell and Gal Wettstein

The brief’s key findings are:

  • As part of tax reform, Congress considered changes to 401(k)s that would require most new contributions to go to a Roth, rather than a traditional, account.
  • This budget gimmick would help pay for tax cuts because Roths are taxed up-front, rather than in retirement.
  • Such a change, however, could also affect how much people save.
    • Some could save more by keeping their contribution steady.
    • Some may save the same by reducing their contribution to maintain their take-home pay.
    • But many, especially those who have lower incomes or are cash-strapped, may overreact and save much less.
  • Rather than risk disrupting the retirement savings system, a better idea is to focus on actions to boost saving and expand access to workplace retirement plans. 


11/15: Just interesting stuff on wind power. Why 2 blades, 3 blades and not a fourth.  Saw a lot of them in California.

Q. The wind turbines that generate electricity seem to have just three blades, or sometimes two. Why so few?

A. As many as 90 percent of the turbines in use now have three blades. But experiments are still underway to determine what number of blades works best in terms of efficiency, durability and economy.

When the wind shifts, the three-blade design minimizes vibration or “chatter.” A two-blade system is subject to considerable chatter when the blades are in the horizontal position, with associated wear and tear on the turbine. The chatter is sometimes audible.

A design with only one blade would actually be the most aerodynamically efficient, but the single blade would move very fast, producing objectionable noise, and it wears out the assembly more quickly.

Adding a fourth blade increases energy production by only a small percentage, and the added expense is comparatively large.

Finally, many people consider the three-blade turbine to be the most aesthetically pleasing design.

New Calculator: Solo 401(k) Contribution Limits

11/14: Genworth

Compare Long Term Care Costs Across the United States

The national median yearly cost of care for home health aides is $49,192, up 6.17% this year. Retirees opting to receive home care can expect to pay caretakers up to $21.50 an hour.

11/14: We will never meet all the air quality  standards. Before the ink dried on the post below, this popped up.

Greenhouse gas emissions to hit new high Stronger Chinese economic growth will push global greenhouse gas emissions to a record high in 2017 after remaining flat for three years, dashing tentative hopes of a turning point in the world’s efforts to curb climate change. A new report by the Global Carbon Project, an international research consortium, predicts that carbon dioxide emissions from fossil fuels and industry will rise 2 per cent this year. The report was released at the UN climate change meeting in Bonn on Monday. (

Frankly, I think the human race is dead meat if it does not do something dramatically by 2020 (just TWO years away). But I would bet it will not happen

11/14: Ans, of course, their parents know what they are doing.

In 2010, when Roberto Garcia—recently fired and scraping by on unemployment checks—told his girlfriend that he wanted to take up a career playing the computer game World of Warcraft, it sounded like an adolescent fantasy. Today, Garcia is one of the stars of Twitch, a streaming platform where, every month, a hundred million visitors watch other people play video games, some for hours every day. Taylor Clark introduces us to America’s e-sports celebrities, who can make seven-figure salaries but have to play around the clock to keep their fans, in some cases nearly dying of overwork.

EFM= I simply cannot grasp 100 million. But it represents our kids civilization for decades. Not a comfy future.

11/14: Higher Education Plan Sponsors Ramp Up Use of Investment Policy Statements
"In light of a stronger focus on fiduciary responsibilities, more than three-fourths of higher education plan sponsors have implemented an investment policy statement, compared to 60% in 2015 ... 7% of respondents offer fewer than 10 investment options, while 31% offer 11 to 15 options. Just 12% of higher education plans offer between 16 and 20 investment options, generally considered to be the ideal number for accommodating -- but not overwhelming -- participants with choice."

Better pick me up than coffee
11/13" United stopped flying

New Delhi’s air quality is consistently ranked among the world’s worst. But a perfect storm of problems is exacerbating the problem to potentially deadly levels. Farmers who have recently harvested crops in neighboring states are illegally burning their fields, sending smoke into the air. Construction projects and pollution from vehicles in a city that lacks adequate public transportation are making things worse.

This week, the smog was 10 times worse than reigning pollution champion Beijing, where air-quality problems have reached Olympic proportions. Some parts of New Delhi have pollution 40 times the World Health Organization-recommended safe level.

Smog has grounded planes in major cities before, but typically because the thick haze dangerously obscured pilots’ vision.

EFM- we are out of the Paris accord. No matter, I do not see the world correcting the pollution much by 2050. Mother Earth is apt to spit on the human race (volcanoes. floods, rap music) as a test that failed. An extras 1/5 billion more people won't help. A nice plague might provide some 'relief'.  There will be a few hundred thousand left  in 2100 but not enough to worry about as far as Big Mama is concerned.

11/13: Here comes the water

the main international assessments, until recently, forecast relatively modest rises in sea level: three feet, perhaps, by century’s end. That’s enough to cause major problems, but perhaps not insuperable ones — richer cities could probably build seawalls and other barriers to keep themselves above the surface. Yet new assessments of the disintegration of glaciers, and more data from deep in the Earth’s past, have convinced many scientists that we could be looking at double or triple that rate of sea level rise in the course of the century.

EFM- So who is going to pay for these  barriers et al? We will be another trillion or so in debt by 2050. Do we erect 10 foot wall to save New Orleans? How much for New Jersey, New York. Do we put major barrier around Miami? Too later. The rich can build huge barriers to keep the riff raff out but after awhile most will drown
Yea I know that is harsh. But we don't have the resources nor the money. We never will. Politics will slow any progress though Trump has already taken that route. The other countries will take forever to do anything and most will, yet again, look to a bailout by the U.S.As they say, ":we screwed the pooch."

  “If you want truth to go around the world you must hire an express
train to pull it; but if you want a lie to go around the world,
it will fly; it is light as a feather and a breath will carry it.
Charles Haddon Spurgeon
11/13: PTSD 

In a 2008 study, the RAND Corporation estimated that P.T.S.D. affected fourteen per cent of those who served in Iraq and Afghanistan. Symptoms of the disorder range from minor insomnia to debilitating flashbacks, and studies of veterans suggest that the likelihood of developing P.T.S.D. increases with each combat deployment

P.T.S.D. as “the persistence into civilian life, after danger, of the valid adaptations you made to stay alive when other people were trying to kill you.” In an interview last year, Kyle observed, “There’s no way you can go in, kill people, see people blown up and maimed and everything, and not come out with some stress”; however, he added, acknowledging P.T.S.D. was “hugely frowned on” by most SEALs. Another psychiatrist, who works at a military hospital, said of special operators, “Their culture is still that you don’t show any signs of weakness. You have to believe you’re invincible and better than anyone else. Narcissism is reinforced in that culture. They’re very bright and they’re in top physical shape. All they do is train.” He added, “They’re trained to sight someone and shoot them in the head and see the bullet shatter the whole head. They’re trained not to flinch.”

11/13: Retirement amounts from Ron Surz


Median Income

Retirement Savings Benchmark

Percentage on Track

Percentage Behind



Started a retirement fund























EFM- Lots of charts out there like this. Valid? OK if one wants to keep funds invested for a lifetime and go through innumerable recessions with losses around 50% each time. If you use my suggestion, you would have losses about 12%. Which is better????

Backtest Portfolio Asset Allocation  (Keep this handy- lots of available stats. Though will it help much when there is a recession? Do any type of testing you want but there is nothing that will indicate what the Risk of Loss might be in a recession, (except as noted above. Need joint venture  partner for marketing.)

This online portfolio backtesting tool allows you to construct one or more portfolios based on the selected mutual funds, ETFs and stocks to analyze and backtest portfolio returns, risk characteristics, standard deviation, annual returns and rolling returns. The results include a visualization of the portfolio growth chart and rolling returns, CAGR, standard deviation, Sharpe ratio, Sortino ratio, annual returns and inflation adjusted returns. A periodic contribution or withdrawal can also be specified together with the preferred portfolio rebalancing strategy. You can also analyze and compare asset class based lazy portfolios with a longer time horizon starting from 1972.


Great visuals and stats. This is one you have to keep for reference

11/12: TDF (Target Date Funds) are generally a ripoff

Last year, TDFs accounted for more than $850 billion in assets. That figure has ballooned in the 10 years since the Pension Protection Act allowed TDFs to be used as alternative investments within retirement plans. By 2020, financial analysts at Cerulli Associates project that TDFs will capture 90 percent of all 401(k) inflows.

As the eldest groups of TDF holders retire, rising rates threaten the value of their fixed-income allocations, and the managers of these funds can’t always account for the risks that increasing bond allocations carry. Paradoxically, in the current market climate, plan participants might fare better if their TDF falls off its path.

Yet Morningstar claims that when TDFs deviate from their paths to boost returns in response to changing market conditions, it actually costs investors between 11 and 15 basis points a year.

EFM- (that's 0.1% to 0.15%) That's negligible to an added return of, let's say..5%. How could you tell if they might do that. Look at past history. No past history?? Then why did you buy it.? Or maybe they didn't know risk.

When Living With Your Aging Parent Isn’t Working Out

The new living situation was taking a toll on the couple’s marriage as tension over roles and privacy increased.

The scenario is usually twice as bad with senile dementia/Alzheimers.

Yep, a coffin with Air Conditioning and WiFi
I think there is also a Facebook page for the Dead
What happens when the electricity goes out. Do they get sick?

$300 Billion War Beneath the Street: Fighting to Replace America’s Water Pipes

By 2020, the average age of the 1.6 million miles of water and sewer pipes in the United States will hit 45 years. Cast iron pipes in at least 600 towns and counties are more than a century old, according to industry estimates. And though Congress banned lead water pipes three decades ago, more than 10 million older ones remain, ready to leach lead and other contaminants into drinking water from something as simple as a change in water source.
EFM- This is part of the infrastructure that needs replacing/repair now. But where does the money come from? Not a clue. And this on top of roads and bridges, sewers, electricity grids and on and on. Will all this get done by 2050? Not a chance. It will be plug and  paste to hold stuff together. It is just one of a myriad of problems that will get worse. Should it be included in the new tax overhaul? Sure but it would never pass. So the infrastructure can will be kicked down the alley for the children of the next generation. .

11/12"  WWII

of every five German soldiers killed in the war died on the Eastern Front.
Only 20 percent of the males born in the Soviet Union in 1923 survived the war.
Only one out of every four men serving on U-boats survived.
The Siege of Stalingrad resulted in more Russian deaths (military and civilian) Than the United States and Britain sustained (combined) in all of World War II
 The mortality rate for Russian POWs in German camps was 85 percent.
 Total casualties for World War II totaled between 50 - 70 million people, 80 percent of which came from only four countries - Russia, China, Germany and Poland.  Over 50 percent of the casualties were civilians, with the majority of those being women and children

Stalin killed anyone who tried to desert in battle. If they tried, the were killed by the commanding officers. They just kept throwing human chattel at the Germans and simply overwhelmed them. If the Germans won over the USSR, it is debatable that the allies  would have won. EXCEPT that we had nuclear weapons. But I read that the only bombs that were built at that time wee the two we dropped on Japan. 

Another article's statistic indicated that the Soviet Union lost 18 million. However as the marched toward Germain, they killed thousands they hated in Hungary, Ukraine, Slovenia et al. Never saw anything that gave a full number/estimate.

11/10: Oil Price and commentary

Appears to be one of the best sites on the subject

11/9: From Sunguard


Today, when companies want to embrace transformation, some start by launching their moonshots on the edge (radically innovative projects away from the core business), but those at corporate level are often struggling to unlock the organisation’s explorative mindset: they keep looking out to the future only as an extrapolation of the past. The most difficult task for them is to shift from a “know-it-all” to a “learn-it-all” mindset, because constant learning means accepting your own vulnerability. Corporate innovation can find inspiration in reading the adventures of the 16th century Jesuits."

11/9: Life Expectancy: The boom in native population in the early 19th century was remarkable considering the low life expectancies of the time. By one estimate, a white man who had reached his 20th birthday could expect to live just another 19 years. A white woman at 20 would live, on average, only a total of 38.8 years. If measuring from birth, which counted infant mortality, life expectancy would have been even lower. A white family in the early 19th century would typically have seven or eight children, but one would die by age one and another before age 21. And, of course, for slaves, childhood deaths were higher and life expectancy was even lower. About one in three African American children died, and only half lived to adulthood.

Disease was rampant during this time. During the War of 1812, which concluded in 1815, more soldiers died from disease than from fighting. The main causes of death for adults during this period were malaria and tuberculosis, while children most commonly died from measles, mumps, and whooping cough, all preventable today.

  Some other nice trivia on the early U.S. population (about 1750 to early 1900s)

11/9: Corrupt equilibrium   (Don't ever forget this. It rationalizes all types of immoral, unethical and illegal behavior) 

Social scientists who study corruption say the one critical thing to understand is that it is perpetuated by a “corrupt equilibrium.”When people see bribery tolerated, even rewarded, they begin to assume it is the way things are done in that system. They realize that speaking out would mean taking on a whole system of powerful people, not just a single bad actor. And so, fearful of the consequences, they stay silent. And so the equilibrium perpetuates itself.

EFM- Apparently I was not bright enough to see the consequences. You can get ostracized quickly when you call out the miscreants-

Ben Kentish, a reporter for The Independent, a British newspaper, wrote that harassment was widely known, but that lawmakers kept silent about their abusive colleagues because “the sense of loyalty to their party and their colleagues, or to their own political ambitions, trumped their concern for junior parliamentary staff.” Junior staff members, he said, kept silent because they feared for their jobs.

The Long-Term Costs In the case of corruption, the cost of a damaging equilibrium can be measured in bribes paid, economies distorted, witnesses silenced. And in the case of harassment and assault, it can be measured in bodies and minds damaged, careers destroyed and trust shattered.

But because they infect whole systems, they also cause damage when they are finally broken.

When systems protect bad behavior, they ultimately put themselves at risk.

EFM- true but only if they REALLY get caught

11/9: Opiods

Every day across the country, nearly 100 people die from overdoses of opioids, powerful narcotic painkillers that attach to cells and dull pain, slow breathing and bring on an overall sense of calm and satisfaction. Since 1999, the rate of fatal prescription opioid overdoses in the U.S. has quadrupled. In 2015, drug overdoses claimed more lives than car accidents and gun violence and rivaled the HIV/AIDS crisis at its peak. The toll, as the White House commission on the crisis put it, is the equivalent of the 9/11 attacks every three weeks

11/9:Stand-alone long-term care insurance accounted for only about 5.3% of the 2016 LTC product market.

11/9: Saudi Arabia. The headlines say it all. This could be very costly for the U.S. if the backing sours.

Saudi Arabia corruption probe arrests rise to more than 200


Attorney-general says ‘systematic corruption’ totalling $100bn dates back decades

Iran alarmed at rising tensions with Saudi Arabia

 Tehran muzzles hardline newspaper but doubles down on regional ambitions



Arrests of Saudi media moguls raise ownership fears


Concern mounts that Riyadh’s anti-corruption probe puts diversity of coverage at risk

11/9: Wandering


  1. The biggest reason never stated for people with dementia wandering is that this is the way they can self-medicate their anxiety and sense of displacement;
  2. That feeling of displacement drives them to walk out of the front door and straight off down the road, going forward endlessly. It is a feeling that instigates walking and it is dementia which keeps it going. Once people have begun walking,  they tend to be  unlikely to ask for help or directions and they tend to go straight ahead.
  3. Boredom and  restlessness also drive people out of their front doors to find presumably some kind of variety.
You want to know when your person heads for the great outdoors. This doesn’t have to be sophisticated.  The things people I know have used successfully have been:
  • a set of brass bells hanging on a door-handle;
  • that cheap set of buzzer and five activators that you can put on doors. Not at all expensive -- I think around $7 and in most budget stores and hardware places;
  • a warning door chime;
  • an ankle bracelet that sets off a perimeter alarm.
  • Or for the cunning escaper, firmly locked doors, deadbolted and you have the key.  

11/9: The Brazil cabinet, as well as the president and leaders of the other main political parties, form the backdrop to a worryingly anaemic economic performance. 

The bald numbers tell an alarming story: income inequality in Brazil remains among the highest in the world; growth is sluggish, lagging behind less vaunted economies in the region such as Argentina, Mexico, Colombia and Chile; and total factor productivity – a measure of the rate of innovation – has been falling since the turn of the century.

Venezuela is in dire straits, North Korea and the U.S., Spain's fight with Catalonia, Saudi Arabia and Iran, Yemen and just about all the bordering neighbors. The list is almost endless with the U.S. and North Korea maybe the highest concern. But not far behind is Saudi Arabia and the tribal elements heading for a real showdown. This could get very very messy.

I believe this type of animosity will continue for decades with minor resolution. When you consider another 1.5 billion people by  2050  a major war or plague may undue the world. 

11/9: (Too funny not to mention) Qatar airlines had to do an emergency landing due to a thumbprint   A couple were flying and the husband fell asleep. The wife, suspecting hanky panky, got his phone and was able to get his thumb print to unlock it. She found lots of incriminating evidence and started  to hit him. It got so bad Qatar had to land to get them off.

Many men will now never sleep again

 11/8:US President Donald Trump, in partnership with congressional Republicans, is pursuing tax cuts that will blow up the fiscal deficit and add to the public debt, while benefiting the rich at the expense of middle- and working-class Americans. Once again, Trump has not hesitated to betray the people he conned into voting for him.

Republicans in the US Congress have just unveiled a bill that, if enacted, could vastly widen the deficit and increase the public debt by as much as $4 trillion over the next decade.
Worse still, the Republican plan is designed to funnel most of the benefits to the rich. It would lower the corporate tax rate from 35% to 20%, reduce the tax on capital gains (investment profits), eliminate the estate tax, and introduce other changes that benefit the wealthy.
Like the Republicans’ health-care proposals, their tax plan offers little to struggling middle- and working-class households

I concur

11/8: Heart Failure

The number of Americans with heart failure increased to 6.5 million in 2011-2014 from 5.7 million in 2009-2012, according to the American Heart Association.

More than 10 percent of those over age 80 have heart failure, and more patients are living longer with advanced disease. Even as the death rate from heart attacks is falling, the figure for heart failure is rising

Heart patients account for just 15 percent of hospice deaths, while cancer patients make up half

“Unfortunately, when you have patients with a chronic illness like heart failure, everyone thinks someone else will talk about it,” Dr. Stevenson said. “Too often, no one takes ownership of the last stage of the journey with the patient.”

Dr. Ellen Hummel of the University of Michigan, one of a small number of doctors specializing in cardiology palliative care, said the typical patient with cancer will usually experience a “fairly predictable” decline.

“They will be less able to take care of themselves,” she said. “They will be more symptomatic and come back to the hospital more frequently. And once this starts, it will probably continue until they die. Most people can see the end coming.”

But patients with end-stage heart failure are more likely to have wild swings, Dr. Hummel said, veering from feeling better to being terribly ill.

“It is confusing to both the patient and provider. Are they actually dying, or can we rescue them from a particular episode of worsening?”

11/8 Trash islands in Honduras

These were made, obviously, by Mother Earth since humans would  never waste a beautiful resource such as the ocean


"The Economics of PIPEs" Fee Download
NBER Working Paper No. w23967

JONGHA LIM, California State University - Fullerton
Ohio State University (OSU) - Department of Finance
Ohio State University (OSU) - Department of Finance, National Bureau of Economic Research (NBER)

This paper considers a sample of 3,001 private investments in public equities (PIPEs). Issuing firms tend to be small and poorly performing, so have limited access to traditional sources of finance. To attract capital, they offer shares in a PIPE at a substantial discount to the market price, along with warrants and a collection of other rights. Because of the discount at issuance, PIPE returns decline with the holding period, which itself is a function of registration status and liquidity of the shares issued in the PIPE. Assuming that the PIPE investor sells 10% of volume each day following the issuance, the average PIPE investor holds the stock for 384 days and earns an abnormal return of 21.2%. More risky firms tend to raise capital from relatively risk tolerant investors such as hedge funds and private equity funds. PIPEs issued to more constrained firms have higher holding period adjusted returns but these returns are more volatile. The abnormal holding period adjusted returns earned by PIPE investors appear to be compensation for providing capital to otherwise constrained firms.


"The Benefits and Costs of Donor Advised Funds" Fee Download
NBER Working Paper No. w23872

JAMES ANDREONI, University of California, San Diego (UCSD)

Donor Advised Funds (DAFs) are now a major source of charitable donations in the US, responsible for 1 in 10 dollars donated to charity in 2015. In 2016, Fidelity Charitable, whose only mission is to provide DAFS, became the largest charity in the US. Paradoxically, most people have never heard of DAFs or Fidelity Charitable. This leads us to ask, who uses DAFs and why, what is the impact of government tax policy toward DAFs, and could the extra fiscal cost of subsidizing DAFs be balanced out by an extra public gain of new charity resulting from tax policy toward DAFs?

11/7: Financial literacy sucks in England. Welcome to the club   

    The UK Financial Conduct Authority’s recent exposure of the abuses around the 2015 pension freedoms that enable people to cash in their gold-plated pension pots caused few surprises. It has, yet again, pointed the finger at the long-ignored elephant in the room: low financial literacy on the part of pension savers.

    The employee is seen as a “retirement planner” — a proactive individual capable of accessing the right information, making the right decisions, monitoring the outcomes and doing the necessary course corrections. The UK’s pension freedoms rest on this caricature. (EFM- Yep, no problem, sure- but this is the same absurdity with Modern Portfolio Theory where every entity invests without emotion. It is a theory that does not work in real life,

    Nearly half of them didn’t know the annual return on their investments. Nearly 65 per cent didn’t know the fees they were charged “because it’s too difficult to calculate/find out”.

    Other studies show that many are quick to invest in top-performing funds and are just as fast to offload when performance falters. They often overrate their own ability, rely on the wisdom of the crowd and follow the path of least resistance.
    In hindsight, risk has been transferred from those who were unable to manage it to those who don’t understand it. Yet their retirement narrative remains one of high expectations and low preparation.(EFM- that is true in any nation
because they do not know what the real life risk of their portfolio in a recession nor what to do to limit losses to a small percentage of expected. Then again, why would they know if the industry doesn't know either.) nor

The Pension Protection Act (2006) in the US  has achieved more than expected but less than needed. By itself, it cannot shield individuals from the colder winds of ageing demographics or volatile markets. (EFM- true statement but missing the real world of risk and how to effectively negate.)

 governments are taking a more proactive role in promoting financial education to move the needle on retirement preparedness. Jurisdictions as diverse as Australia, Hong Kong, India, the UK and the US have embarked on national programmes. (EFM- they might help but not for risk so retirees will still get screwed.)

   There is much less emphasis on three sets of investment basics: key principles that explain what it is all about; key risks that highlight what can go wrong; and key techniques that are used in allocating assets, monitoring the outcomes and doing the necessary course corrections. (EFM- The industries can highlight recessions as a risk but are not prepared to agree on a specific type of allocation.  I suppose they can monitor outcomes but nary a one has used the inverted yield curve to do so. The course correction is what I developed but nobody seems to care. That said, I submitted my material for a patent and am seeking joint ventures which can really ramp up the marketing)

    In partnership with pension plans, financial advisers and educators at large, they can help craft objective, jargon-free, emotionally inspiring educational material delivered through digital channels. It should focus on real-life case stories and fun-inspired simulations that enjoin users to make decisions under realistic scenarios and present the outcomes as learning points. The aim is to show how what individuals themselves do makes a big difference to retirement outcomes. (EFM- My material is not emotionally inspiring. It is not 'fun". It just works for any group in about an hour.)

It is time to up the game by decoupling marketing from thought leadership.  (EFM- I read more material and listen to major webinars of portfolio theory than anyone- the effort is to find a better use for managing futures, smart beta, and a host of other mind numbing applications that do not include real life risk)

EFM- The article is by the Financial Times. But it is the same as the New York Times, Wall Street Journal, Forbes and on and on. Some areas might help. But just wait the the calamity of the next recession. Their risk aversions will not work well at all. My process would limit losses to about 12%. 2000 was a loss of 49% and 2008 it was 59%, Which is better????

11/7: Here’s How Far the World Is From Meeting Its Climate Goals

EFM- If you have already read my comments about the effort to change our climate by 2050, not a bleeding chance. Here is a great article with active graphs showing just how well we are doing and what needs to be done. Won't happen

From Climate Science Report That Changes Minds? Don’t Bet on It
Researchers have found again and again that attitudes about climate change are shaped far more profoundly by political ideology or by comfort with proposed solutions to global warming than they are by the science itself.

The charts show current, per the Paris agreement and what needs to be done to keep temperature rise to 2%. Includes World, U.S., European Union, China, India. ,

“One year after the Paris Agreement entered into force, we still find ourselves in a situation where we are not doing nearly enough to save hundreds of millions of people from a miserable future,”

EFM- Add in another 1.5 billion people by 2050 and you are going to see massive human death and carnage. Millions will die- but it may be even more calamitous with a plague at least by 2050 and probably 25 years earlier.


  1. The Importance of Peers for Compliance with Norms of Fair Sharing




Simon Gaechter ; Leonie Gerhards ; Daniele Nosenzo

A burgeoning literature in economics has started examining the role of social norms in explaining economic behavior. Surprisingly, the vast majority of this literature has studied social norms in asocial decision settings, where individuals are observed to act in isolation from each other. In this paper we use a large-scale dictator game experiment (N = 850) to show that “peers†can have a profound influence on individuals’ perceptions of norms of fair sharing, which we elicit in an incentive compatible way. However, in contrast to these strong peer effects in social norms of fair sharing, we find limited evidence of the influence of norms and peers on actual sharing behavior. We discuss how these results can be explained by heterogeneity in normative views as well as in willingness to comply with norms.


social norms, norm compliance, peer effects, fair sharing, dictator game, framing, experiments


A13 C92 D03


11//6: Robots and Humans- who will win out

There are comments and articles galore on whether or not robots will change the world and usurp the human race. There are failsafes that could be introduced into robot psyche (is there such a thing?) to make sure we will remain the masters. Nice thought but I think some algorithms will void that. The end result WILL be a country where robots take over all menial work and then just about everything. This article in the New Yorker really depicts how industry will gladly transfer (and have) all sorts of functions that led to wholesale laying off human workers. But they will retain a couple humans to oversee certain breakdowns and repairs.
We are expendable.

Why I don't use my image on my site.
Though you must admit I have lost weight  and look pretty good here
Probably need a shave

  1. Contests as Selection Mechanisms: The Impact of Risk Aversion




Christoph March ; Marco Sahm

We investigate how individual risk preferences affect the likelihood of selecting the more able contestant within a two-player Tullock contest. Our theoretical model yields two main predictions: First, an increase in the risk aversion of a player worsens her odds unless she already has a sufficiently large advantage. Second, if the prize money is sufficiently large, a less able but less risk averse contestant can achieve an equal or even higher probability of winning than a more able but more risk averse opponent. In a laboratory experiment we confirm both, the non-monotonic impact and the compensating effect of risk aversion on winning probabilities. Our results suggest a novel explanation for the gender gap and the optimality of limited monetary incentives in selection contests.


selection contest, risk aversion, competitive balance, gender gap


C72 D72 J31 K41 M51 M52


11/6: Could become a major issue

Stock options in flux. Bloomberg's Anders Melin: "Stock options, a staple of executive compensation, could cease to exist under the Republican tax plan, which proposes to classify them as deferred pay, or money that’s already earned but received at a later date. The GOP plan could 'cause options to be extinct,' said Ian Levin, a partner at law firm Schulte Roth & Zabel. That could be a sea change, since chief executive officers of S&P 500 companies got one-fifth of their pay in the form of options last year, on average."

11/6: And another unique tax

Endowments in the crosshairs. NYT's Anemona Hartocollis: "The House Republican tax plan released on Thursday includes a 1.4 percent tax on the investment income of private colleges and universities with at least 500 students and assets of $100,000 or more per full-time student. It would not apply to public colleges. The endowments are currently untaxed, as they are considered part of the nonprofit mission of the colleges. The new tax, if it passed, would bring in an estimated $3 billion from 2018 to 2027, one of many new revenue sources Congress is considering to pay for broad tax cuts. Universities criticized the proposed tax Friday as a blunt instrument that would curb their autonomy and reduce support for poor and moderate-income students."

11/6: Workers are retiring later, dying sooner and sicker in-between  

EFM- Read one article and it discusses how the elderly worker is a blessing to companies due to their experience, another indicating they are too expensive, another that industry is really NOT offering employment after the normal retirement age, and so on but this material is most interesting since major studies are showing a slight rise in mortality and worsening health overall.

:"But lifespans aren’t necessarily extending to offer equal time on the beach. Data released last week suggest Americans’ health is declining and millions of middle-age workers face the prospect of shorter, and less active, retirements than their parents enjoyed.

Here are the stats: The U.S. age-adjusted mortality rate — a measure of the number of deaths per year — rose 1.2% from 2014 to 2015, according to the Society of Actuaries. That’s the first year-over-year increase since 2005, and only the second rise greater than 1% since 1980.

life expectancy for pension participants has dropped since its last calculation by 0.2 years. A 65-year-old man can expect to live to 85.6 years, and a woman can expect to make it to 87.6. As a result, the group calculates a typical pension plan’s obligations could fall by 0.7% to 1%.

At the same time that Americans’ life expectancy is stalling, public policy and career tracks mean millions of U.S. workers are waiting longer to call it quits. The age at which people can claim their full Social Security benefits is gradually moving up, from 65 for those retiring in 2002 to 67 in 2027

Americans in their late 50s already have more serious health problems than people at the same ages did 10 to 15 years ago, according to the journal Health Affairs. 

University of Michigan economists HwaJung Choi and Robert Schoeni used survey data to compare middle-age Americans’ health. A key measure is whether people have trouble with an “activity of daily living,” or ADL, such as walking across a room, dressing and bathing themselves, eating, or getting in or out of bed. The study showed the number of middle-age Americans with ADL limitations has jumped: 12.5% of Americans at the current retirement age of 66 had an ADL limitation in their late 50s, up from 8.8% for people with a retirement age of 65.

At the current retirement age of 66, a quarter of Americans age 58 to 60 rated themselves in “poor” or “fair” health. That’s up 2.6 points from the group who could retire with full benefits at 65, the Michigan researchers found.

Cognitive skills have also declined over time. For those with a retirement age of 66, 11% already had some kind of dementia or other cognitive decline at age 58 to 60, according to the study. That’s up from 9.5% of Americans just a few years older, with a retirement age between 65 and 66.

an epidemic of suicide, drug overdoses and alcohol abuse have caused a spike in death rates among middle-age whites.

Higher rates of obesity may also be taking their toll. And Americans may have already seen most of the benefits from previous positive developments that cut the death rate, such as a decline in smoking and medical advances like statins that fight cardiovascular disease

11/6: Flood insurance-  bankrupt

the program was supposed to take the burden off taxpayers but has not, and environmentalists argue that it has become an enabler of construction on flood-prone coastlines, by charging premiums too low to reflect the true cost of building.

The program has other troubles as well. It cannot force vulnerable households to buy insurance, even though they are required by law to have it. Its flood maps can’t keep up with new construction that can change an area’s flood risk. It has spent billions of dollars repairing houses that just flood again. Its records, for instance, show that a house in Spring, Tex., has been repaired 19 times, for a total of $912,732 — even though it is worth only $42,024

“Severe repetitive-loss properties” is FEMA’s term for houses that are flooded again and again. There are tens of thousands of them. While they account for fewer than 1 percent of the government’s policies, they make up more than 10 percent of the insurance claims, according to the Natural Resources Defense Council, which sued FEMA to get the data.

The Trump administration has also proposed creating a new category of properties that are at extreme risk of repeat flooding and that could have their insurance cut off the next time they flooded.

the government program insures more than five million homeowners, that is just a small fraction of the number of people who live on floodplains

Congress in 2012 approved big increases in its premiums. But that caused an uproar when people got their bills. Two years later, Congress rescinded much of the increase.

Then came this season’s hurricanes and the $16 billion bailout

EFM- The government has to stop the bailout. Private insurance will cost a LOT more- and it should. The long term result will be areas that will no longer be acceptable for insurance and the area will revert to a national state. Property values will drop significantly, damaged homes will be razed.

And the list goes on................

11/6: Death by guns going up

More than 33,000 people die in firearm-related deaths in the United States every year, according to an annual average compiled from C.D.C. data. But this threw me nearly two-thirds of which are suicides.

11/5: Death by drugs going up

Deaths by drug overdose in the United States surged last year by more than 17 percent over 2015,most by fentanyl than herion

Preliminary data from the 50 states show that from the fourth quarter of 2015, through the fourth quarter of 2016, the rate of fatal overdoses rose to nearly 20 people per 100,000 from 16.3 per 100,000. The C.D.C. had previously estimated that about 64,000 people died from drug overdoses in 2016, with the highest rates reported in New Hampshire, Kentucky, West Virginia, Ohio and Rhode Island.

EFM- Can this be stopped? Don't think so. You have full employment which means that even low hanging fruit can get a job and (perhaps) have a decent. But if wages stay low as they are currently doing, any extra stress to landing or keeping a job will lead to more drug use. And to that is the issue of robots taking over low skilled jobs. So more young men out of a job and no place to get one. Hence more drug use, violence and more death all around. 

“Enjoy Chernobyl, die later,”

slogan from a tour company to the site of the nuclear disaster.

11/5:Selected Securities

EFM= a yield inversion is not a concern at this point

11/5Climate change driven almost entirely by human action, dire report released by Trump administration finds

The Trump administration released a scientific report detailing the growing threats of climate change. The report stands in stark contrast to the administration's efforts to play down humans' role in global warming, withdraw from an international climate accord and reverse Obama-era policies aimed at curbing America's greenhouse-gas output.

“It is extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century,” the document reports. “For the warming over the last century, there is no convincing alternative explanation supported by the extent of the observational evidence.”

EFM-Will we be able to turn the problem around by 2050? No. When? Maybe 2100 but I do not believe humans will be around  by then. Mother earth will erase most of us via plague. 

The whole report here   13 government agencies agree it's humans


11/5: EFM   

(You should read the article first)

Well I will change the dichotomy of the commentary. It is true that attempting to generate a specific budget/plan over a 30/35 year period, while mandatory to at least start a retirement plan, anything that actually coincides for a period of  five years  is almost assuredly luck. Then you do it all over again given all the new parameters. But the overriding concern is risk. Actually, this is where you start effectively any short OR long term investing. The key for retirement of 30+ years is the "guarantee' of one recession per decade plus an additional 2 for realism. That said, while the timing is unknown, the occurrence is not. And when such recessions do occur, the investor/consumer has been left with dire losses each time with little to no comfort zone that the market will return or when.
The industry has been trying all sorts of alternative products, mostly untested, to hopefully offset in large measure, the losses in equities.. Unfortunately the correlations all tend to move to one and the hazards remain. If there is a savings grace from a product, it usually shows in the languishing returns when times are good.
On the other hand, one can reduce exposure to risk to more than about 12% for a recession. Considering 2000 losses of 49% and 2008 or 57%, that leaves far more liquid funds available to the investors for which, if necessary, they need the monies for whatever misfortunes might occur.
That changes any Monte Carlo by a significant margin since it limits the exposure to massive risk no matter when it may occur. It can change the return over the longer periods since the risk of loss is negated substantially. Therefore retirement now takes a more flattened curve for long periods.  
I have done this for 25 years- though I had to get more specific so that it can be used even by investors alone. The four part process has been submitted for a patent. I am working on a new website and one will be able to try it out- but it is going to take at least two months.
 This is not idle drivel- it works just as stated. It will make retirement planning far easier even given all the guesstimates since it is ONLY involved with risk. No Sharpe Ratio, Beta, Alpha  et al. Just make an allocation with higher risk since the assets will be removed from risk as necessary.
Obviously readers will take this as yet another 'miracle' endeavor. Not so-but follow the rules and it will be valid for 75% of middle and lower income consumers and for 90% of all 401ks.
I expect a lot of vitriol over this and if you wish to reply professionally, you merely need to answer this question- what was a 100% indicator or a recession for 2000 and 2008. If you do not know that, there probably is little need for discourse

11/3: Stents- NO

Heart disease is still the leading killer of Americans — 790,000 people have heart attacks each year — and stenting is a mainstay treatment in virtually every hospital. More than 500,000 heart patients worldwide have stents inserted each year to relieve chest pain, according to the researchers. Other estimates are far higher.

In a blind study, when the researchers tested the patients six weeks later, both groups said they had less chest pain, and they did better than before on treadmill tests.

But there was no real difference between the patients, the researchers found. Those who got the sham procedure did just as well as those who got stents.

11/3: A Guide to Downsizing for Seniors and Their Loved Ones


Elderly Care House Design for Our Old Age


Budget-Friendly Smart Home Accommodations for Seniors and Individuals with Special Needs


Nutritional Needs for Seniors


The 7 Worst Senior Exercises, and What to Do Instead


10 Dating Safety Tips for Senior Women


Healing After a Lifetime of Struggling with Addiction: The Senior’s Guide to Reconnecting with Adult Children


The Elderly and Prescription Drug Misuse and Abuse

11/2:   Dow and S&P reach a combined 104 highs in 2017 so far

EFM- Great numbers but my stomach is queasy. Reminds me of the Dotcom.

11/2: So the rate is now 0.5% in great Britain. This is what makes any guesstimates on the economy so difficult- or even possible. The rates- just a while ago- were even negative in many countries. They are little better now. Will any changes really help? Theoretically yes. But coming off economics that were nonsensical at best, it can collapse the whole system  if just one thing goes wrong, It's a crap shoot- though the current GDP of many counties are now positive.

the Bank of England on Thursday raised its main lending rate for the first time since 2007 as it balances quickly growing inflation with tepid economic growth.

The central bank nudged the rate up by a quarter of a percentage point to 0.5 per cent. The move matched the expectations of most economists.

11/2: The derailment could be in the lofty stock market valuations: To wit, Setting monetary policy against a backdrop of extreme valuations in the stock market will be a priority for the next Fed chief chosen by President Trump. The only time valuations were higher were during the 2000 dotcom bubble and just prior to the 1929 stock market crash that led to the worst recession in American history, the Great Depression

But look at this positive sign

Slight downward trend at end but it might just be noise.

11/2: College expenses

Average Estimated Full-Time Undergraduate Budgets (Enrollment-Weighted) by Sector 2017-18

Public Two-Year In-District Commuter         $17,580

Public Four-Year In-State On-Campus          $25,290

Public Four-Year Out-of-State On-Campus  $40,940

Private Nonprofi­t Four-Year On-Campus     $50,900

The total price of a college education depends on how long a student is enrolled before completing a degree. Many students spend more than four years earning a bachelor’s degree. Average time to degree is longer in public than in private nonprofit institutions.

11/1 Home prices

the August S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.5% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.1% for the last twenty-nine months. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.

The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.5% from the previous month. The nonseasonally adjusted index was up 5.9% year-over-year

Most prices across the rest of the economy are barely moving compared to housing. Over the last year the consumer price index rose 2.2%, driven largely by energy costs. Aside from oil, the only other major item with price gains close to housing was hospital services, which were up 4.6%. Wages climbed 3.6% in the year to August. [Link to source]

EFM- price increases are not as high as the pre-recession mess, but are still too high to stop 'flippers' ( 'buying a property and then selling it rather quickly)(.

Russia and India have emerged as two of the biggest winners in the World Bank’s latest Doing Business rankings, with the institution labelling Moscow an easier place to conduct business than Brussels or Rome, despite the spectre of international sanctions and concerns over corruption

EFM- Something wrong here. Even given the corruption????? .

India has soared from 130 out of 190 in last year’s report to 100th in the world this year, with the bank listing it as one of the 10 most improved economies thanks to a reform push by prime minister Narendra Modi’s government.

EFM- Best I can tell, Modi has done wonders


SEC Says Fiduciary Rule Isn’t a Priority

In what comes as a serious contrast to a number of statements over several months from the head of the SEC, new appointees at the Securities and Exchange Commission said yesterday that working on the fiduciary rule was not a top priority. Two appointees, Hester Peirce and Robert Jackson, both failed to list the rule as a top priority when speaking to the Senate Banking Committee in a nomination hearing this week. However, both did voice their opinions of the rule, saying it was “fundamentally flawed” and that it “should have been done at the SEC”.


Treasury report backs postponing fiduciary rule

A report by the Treasury Department supports a delay in implementation of the Labor Department's fiduciary rule until it has undergone further review by the Labor Department, the Securities and Exchange Commission and state regulators. The report says the Treasury encourages the Labor Department, the SEC and state officials to "evaluate the impacts of a fiduciary rule across markets."


"Il Costo Totale Dell’Investimento in Fondi Comuni (The Total Cost of Investing in Mutual Funds)" Free Download
Bank of Italy Occasional Paper No. 391

European Central Bank (ECB)
Bank of Italy
Bank of Italy

English Abstract: The total costs of investment in an open-end fund include those that are charged on the fund and those directly attributed to subscribers (subscription and redemption fees). Subscriptions of funds characterized by the presence of costs directly attributed to investors have increased significantly in recent years. The paper presents an estimate of the Total Shareholders Cost (TSC) made using the information provided by the investment management companies in the supervisory reports. The estimates obtained show that in the period 2006-2016 the TSC was on average 1.58 per cent of the total assets of funds (1.74 per cent at the end of 2016). Subtracting direct and indirect costs borne by investors, the return on open-end funds is reduced from 3.5 per cent on average to 2 per cent. Based on preliminary results, the presence of subscription and redemption fees reduces the elasticity of subscriptions and redemptions with respect to returns.

“At no other time in my 28 years on Wall Street have I seen this. “My institutional clients are saying one thing and doing another.

During meetings they’re defensive, bearish, cautious.
And after the meeting ends they go and buy stocks, because they have to keep pace with the market.”

Brian Belski, chief investment strategist at BMO Capital Markets Equity Research.

EFM- The market cannot be dictated to by just about anything. It just does what it wants to do and you react accordingly. The current status makes no sense. But think about the Dotcom and tech stocks. Greenspan's comments didn't make a whit of difference in the upsurge. Belski's comments won't make a dent. But sooner or later, something has to give. I just don't know when. That said, the maximum loss  if we start into a recession should be about 12%. if you know what you are doing. If not, losses could exceed 50%. Your choice. Also, if you cannot accept at least a 10% loss as a correction, you are not an investor.

10/31: So much for containing air quality

The concentration of carbon dioxide in the atmosphere surged in 2016 to its highest level in 800,000 years, according to a report released Monday by the United Nation's World Meteorological Organization (WMO).

Last year’s increase was 50% greater than the average yearly increase over the past decade, despite the fact that human-driven emissions of carbon dioxide have remained consistent for the few years.

Average concentrations of CO2 in the atmosphere are now at 403.3ppm (parts per million), up from 400ppm in 2015 and way above the less than 280ppm levels in the atmosphere before the industrial era

My kind of advertising
In the finance world, it is called 'nudging'

10/31: Just plain too high

Stock market gains and abundant job availability propelled the AICPA’s third-quarter Personal Financial Satisfaction Index past its previous high reached in the 2006 fourth quarter, just before the recession.

The third quarter PFSi measured 25.9, up 2.6 points from the previous quarter. The increase was due to a 2.1-point gain in the pleasure index and a 0.5-point loss in the pain index.

“By and large the pleasure index factors have been trending up for some time as we have mostly recovered from the great recession,” Mark Astrinos, member of the AICPA PFS credential committeet.

“While we all benefit from the surge of capital markets and real estate growth, it's prudent that our financial health safeguards remain in place. This means ensuring that you rebalance portfolios to reduce risk and maintaining adequate cash reserves for when economic times are more challenging.”

EFM- rebalance to what? Bonds? Not a chance as interest rates will be rising.

Cash? How much and why. The comment about bad economic times has been uttered for years while the market keeps galloping onward. 

10/31: GDP- Gross domestic product, the measure used to represent the US economy, expanded by a robust 3% in the third quarter, the Commerce Department reported on Friday. That's a second straight quarter of growth above the 2% pace that has persisted for much of the economic recovery, and it's well above Wall Street's expectation of a 2.6% rise.

EFM- I just could  not accept that we were actually doing that well. As Fox Mulder would say- Trust No One. As Trump would say 'fake news'

A few elements of the report should also give economists pause. One thing driving the number higher was a rise in business inventories. That could mean businesses are stocking up in anticipation of growth in demand — or it could mean they're having a harder time moving goods.

"The above-trend growth was largely a consequence of combined contributions of inventory accumulation and net exports ... that is not likely to be repeated on a consistent basis," Ward McCarthy, an economist at Jefferies, wrote in a research note.

At the same time, investment in structures slumped 5.2% and residential investment slipped 6%. Also worrisome, personal disposable income rose just 0.6% adjusted for inflation.

That's "not a great sign as far as the consumption outlook is concerned," Paul Ashworth of Capital Economics wrote. It also left the US savings rate at a decade-low 3.4%, as this chart shows.

Inflation, as measured by the personal consumption expenditures index, registered 1.5% in the third quarter and just 1.3% excluding food and energy — far below the central bank's 2% target.

It signals an economy still running below its potential, with wages struggling to rise despite the good headlines.

The most likely scenario is that after two quarters of stronger growth, the economy will settle back into the same 2% growth pattern that has persisted since the country emerged from the Great Recession in the summer of 2009


Maximum Benefit/Contributions Limits for 2008-2018

As Published by the Internal Revenue Service

Click here to view a PDF version of this page.

2018 2017 2016 2015 2014







Elective Deferrals (401k
& 403b plans)

$18,500 $18,000 $18,000 $18,000 $17,500







Annual Benefit Limit

$220,000 $215,000 $210,000 $210,000 $210,000







Annual Contribution Limit

$55,000 $54,000 $53,000 $53,000 $52,000







Annual Compensation Limit

$275,000 $270,000 $265,000 $265,000 $260,000







457(b) Deferral Limit

$18,500 $18,000 $18,000 $18,000 $17,500







Highly Compensated Threshold

$120,000 $120,000 $120,000 $120,000 $115,000







SIMPLE Contribution Limit

$12,500 $12,500 $12,500 $12,500 $12,000







SEP Coverage

$600 $600 $600 $600 $550







SEP Compensation Limit

$275,000 $270,000 $265,000 $265,000 $260,000







Subject to
Social Security

$128,700 $127,200 $118,500 $118,500 $117,000







Top-Heavy Plan Key Employee Comp

$175,000 $175,000 $170,000 $170,000 $170,000







Catch-Up Contributions



$6,000 $6,000 $5,500







SIMPLE Catch-Up Contributions

$3,000 $3,000 $3,000 $3,000 $2,500







The Elective Deferral Limit is the maximum contribution that can be made on a pre-tax basis to a 401(k) or 403(b) plan (Internal Revenue Code section 402(g)(1)). Some still refer to this as the $7,000 limit (its original setting in 1987).

The 457 Deferral Limit is a similar restriction, applied to certain government plans (457 plans).

The Annual Benefit Limit is the maximum annual benefit that can be paid to a participant (IRC section 415). The limit applied is actually the lessor of the dollar limit above or 100% of the participant’s average compensation (generally the high three consecutive years of service). The participant compensation level is also subjected to the Annual Compensation Limit noted above.

The Annual Contribution Limit is the maximum annual contribution amount that can be made to a participant’s account (IRC section 415). This limit is actually expressed as the lessor of the dollar limit or 100% of the participant’s compensation, applied to the combination of employee contributions, employer contributions and forfeitures allocated to a participant’s account.

In calculating contribution allocations, a plan cannot consider any employee compensation in excess of the Annual Compensation Limit (401(a)(17)). This limit is also imposed in determining the Annual Benefit Limit (above). In calculating certain nondiscrimination tests (such as the Actual Deferral Percentage), all participant compensation is limited to this amount, for purposes of the calculation.

The Highly Compensated Threshold (section 414(q)(1)(B)) is the minimum compensation level established to determine highly compensated employees for purposes of nondiscrimination testing.

The SIMPLE Contribution Limit is the maximum annual contribution that can be made to a SIMPLE (Savings Incentive Match Plan for Employees) plan. SIMPLE plans are simplified retirement plans for small businesses that allow employees to make elective contributions, while requiring employers to make matching or nonelective contributions.

SEP Coverage Limit is the minimum earnings level for a self-employed individual to qualify for coverage by a Simplified Employee Pension plan (a special individual retirement account to which the employer makes direct tax-deductible contributions.

The SEP Compensation Limit is applied in determining the maximum contributions made to the plan.

Catch up Contributions, SIMPLE “Catch up” deferral: Under the Economic Growth and Tax Relief Act of 2001 (EGTRRA), certain individuals aged 50 or over can now make so-called ‘catch up’ contributions, in addition to the above limits.

EGTRRA also added the Top-heavy plan key employee compensation limit.

10/30: The world.s nuclear arsenal by country.

it would take 124 warheads, each with a yield of 475 kilotons, to kill one-quarter of the United States population.

10/30: Meet the first-ever robot citizen — a humanoid named Sophia that once said it would 'destroy humans'

In 30 years they will run the world. In less time, we should looking to find a place to live since the divisiveness would have made civilization go down several rungs on the evolutionary scale.But with another 1.5 billion people by 2050, it  will be prime time for a plague, I really thought the bird flu was going to catch on several years ago. And I wouldn't be writing this since it would take a lot of the old people first.

10/29: How is correlation used in modern portfolio theory?

Modern portfolio theory (MPT) emphasizes that investors can diversify away the risk of investment loss by reducing the correlation between the returns from the select securities in their portfolio. The goal is to optimize expected return against a certain level of risk. According to the modern portfolio theorist, investors should measure the correlation coefficients between the returns of different assets and strategically select assets that are less likely to lose value at the same time.1

10/29 How to do risk

Investing should be an exercise encompassing the concept of compound interest. If you introduce large terrible losses into your portfolio, you take away all the goodness of compounding. If you lose a substantial amount of principal capital, you spend years trying to earn back the losses, rather than moving forward from a small loss into a growth scenario. Mathematically, it is better to have slow, steady, stable, upward moving returns, than wild volatility in your return profile.

What I worry about is when markets take an immediate dip down and everyone thinks they will just come back, so the buying commences. Markets do not have to come back. If they are fundamentally strong, there is a good chance markets will recover. However, markets are ruled by emotion in the short run, even though longer term, they are generally driven by fundamentals. If you look at a price chart of any market, pre- and post-the Global Financial Crisis of 2008, on a longer term basis, it looks like a V-shaped recovery. When I was a trader, my mentors told me often, those are the most dangerous. They are dangerous because they lead to bad behaviors in investors thinking that something needs to recover immediately after it has sold-off. It does not have to do so. What if it is a double W-shaped recovery? Or a flat-lined non-recovery?

Also, I am concerned when I see by short-term statements reflecting that what happened in the last couple years, post-crisis, is just going to continue happening for the next couple years. We live in a different investment landscape than what existed a few years ago. We will probably see pockets of volatility on the rise and people should be cognizant of that. I am not saying volatility is bad. In fact, I like volatility because it gives our managers and our team opportunities to enter and exit markets. Investors should understand that what existed in the past might not exist in the future

EFM- siund almost exactly like em. Except this is an institutional investor for a university. Hardly ever hear that risk is first before returns

10/29: Quiz by NYTimes on how bad the opiod crisis is

GREAT INTERACTIVE QUIZ- do it first before looking at graph below

It’s the worst drug overdose epidemic in American history, spurred by rising drug abuse, increased availability of prescription opioids and an influx of potent synthetics like fentanyl and carfentanil. Drug overdoses are now the leading cause of death for Americans under 50.

10/29: Calculating Covariance for Stocks

Many elements of mathematics and statistics are used in evaluating stocks. Covariance calculations can give an investor insight into how two stocks might move together in the future. Looking at historical prices, we can determine if the prices tend to move with each other or opposite each other. This allows you to predict the potential price movement of a two-stock portfolio.


Day ABC Returns (%) XYZ Returns (%)
1 1.1 3
2 1.7 4.2
3 2.1 4.9
4 1.4 4.1
5 0.2 2.5
Table 1: Daily returns for two stocks using the closing prices

From here, we need to calculate the average return for each stock:

For ABC it would be (1.1 + 1.7 + 2.1 + 1.4 + 0.2) / 5 = 1.30

For XYZ it would be (3 + 4.2 + 4.9 + 4.1 + 2.5) / 5 = 3.74

Now, it is a matter of taking the differences between ABC's return and ABC's average return, and multiplying it by the difference between XYZ's return and XYZ's average return. The last step is to divide the result by the sample size and subtract one. If it was the entire population, you could just divide by the population size.

This can be represented by the following equation:

Using our example on ABC and XYZ above, the covariance is calculated as:

= [(1.1 - 1.30) x (3 - 3.74)] + [(1.7 - 1.30) x (4.2 - 3.74)] + [(2.1 - 1.30) x (4.9 - 3.74)] + …

= [0.148] + [0.184] + [0.928] + [0.036] + [1.364]

= 2.66 / (5 - 1)

= 0.665

In this situation, we are using a sample, so we divide by the sample size (five) minus one.

You can see that the covariance between the two stock returns is 0.665. Because this number is positive, it means that the stocks move in the same direction. In other words, when ABC had a high return, XYZ also had a high return. (To learn more, see How Do You Interpret the Magnitude of Covariance Between Two Variables?)

And again

Uses of Covariance

Finding that two stocks have a high or low covariance might not be a useful metric on its own. Covariance can tell how the stocks move together, but to determine the strength of the relationship, we need to look at the correlation. The correlation should therefore be used in conjunction with the covariance, and it is represented by this equation:

A correlation between two variables is the covariance between each divided by the product of each variables standard deviation

where cov (X,Y) = covariance between X and Y

σX = standard deviation of X

σY = standard deviation of Y

The equation above reveals that the correlation between two variables is simply the covariance between both variables divided by the product of the standard deviation of the variables X and Y. While both measures reveal whether two variables are positively or inversely related, the correlation provides additional information by telling you the degree to which both variables move together. The correlation will always have a measurement value between -1 and 1, and it adds a strength value on how the stocks move together. If the correlation is 1, they move perfectly together, and if the correlation is -1, the stocks move perfectly in opposite they move perfectly together, and if the correlation is -1, the stocks move perfectly in opposite directions. If the correlation is 0, then the two stocks move in random directions from each other. In short, covariance just tells you that two variables change the same way, while correlation reveals how a change in one variable effects a change in the other

10/29: How the Epidemic of Drug Overdose Deaths Rippled Across America

Just look at the American chart to show you how quickly this has grown. 

10/29: Spain Moves to Take Control Over Catalonia

EFM- What's the point here? The divisiveness due to race, gender, politics, and anything else you can think of, is driving a wedge between people and countries that will impact and impair our civilization going forward. I was going to say that we had never experienced this before but you would have to count WW1,  WWII  and all the other wars or semi wars we have encountered just in the last couple decades. Like the others, unfortunately, some will never go away . '
Couple this with the other major issues of climate control, gay rights, religion (nothing like have tribal wars for decades under the guise of my god is better than your god), ISIS and terrorism, Russia, North Korea, immigration, migration,  robotics, etc , and, in particular population increase up to another 1.5 BILLION in people by 2050 and the world- or better expressed as Mother Earth- may just decide she has had enough (worldwide epidemic) and cause more uncontrollable devastation that we cannot escape. We have already had the larger hurricanes, and earthquakes, What if California has the major earthquakes in San Francisco that are supposedly overdue. It will not be pretty and the key elements will be known by 2020.
 Hot Seat: Geopolitical Risks in 2017- the first few minutes of the video are illuminating


What is 'Game Theory'

Game theory is the study of human conflict and cooperation within a competitive situation. In some respects, game theory is the science of strategy, or at least the optimal decision-making of independent and competing actors in a strategic setting. The key pioneers of game theory were mathematicians John von Neumann and John Nash, as well as economist Oskar Morgenstern.


Game theory creates a language and formal structure of analysis for making logical decisions in competitive environments. The term “game” can be misleading. Even though game theory applies to recreational games, the concept of “game” simply means any interactive situation in which independent actors share more-or-less formal rules and consequences.

10/27: Changes in U.S. Family Finances from 2013 to 2016: Evidence from the Survey of Consumer Finances

A major Study

Keep for reference

10/26: African-Americans Want More Financial Education from Their Employers
"African-Americans are more likely to say they are behind in saving for retirement, and 41% of survey respondents expressed concerns about making ends meet. Respondents also indicated a greater proclivity to making withdrawals or loans from their 401(k) or other employer-sponsored retirement plan compared with the general population -- 24% vs. 14%, respectively.... Meanwhile, African-Americans were nearly half as likely to worry about the cost of health care as others[.

10/26: Precious metals correlation

10/26: International equities
Consider this paradox: 90% of the world’s listed stocks lie outside the U.S. and 75% of global GDP lies outside the U.S., yet non-U.S. stocks represent less than 50% of the world’s stock market capitalization. Many of the most dynamic, well-managed businesses lie beyond U.S. borders, yet advisors are under-allocating to international equities

EFM- that's just normal behavior. One tends to familiarity. And the U.S. is still the most stable country.

10/26:UK economy grows
British GDP grew 0.4 per cent in the third quarter of 2017, slightly faster than anticipated,The announcement brings year-on-year growth to 1.5 per cent and will probably embolden the Bank of England to raise interest rates next month

EFM- that is a terrible GDP. I don't know why the BofE would want to raise rates now. Because we are? 

But looking globally, we have this:
Healthy US earnings season
The outlook for the world economy is looking rosier thanks to strong earnings statements from some of the biggest US industrial companies such as Caterpillar, United Technologies and General Motors. Companies cited growing China demand as an important factor but reports from North American and European markets were generally positive, too

EFM Use the market while you can but always recognize the risk of loss