not the Fed’s job to stop people from losing money.”
President of the Federal Reserve
Siegel, professor of finance at the Wharton School and author
for the Long Run,” says 5.5% is the “new normal” return
for stocks after adjusting for inflation.
incorporates a 2% dividend and 3.5% earnings per share, 2.5%
of which is due to buybacks. The 5.5% real return is
equivalent to a price-to-earnings ratio of 18, which is the
current P/E for the S&P 500 based on future earnings (12
EFM- note this is the real rate of
return. Add 3% inflation and you have 8.5%. Seems high to me.
stock market has completely recovered from the financial
crisis, and then some. Stocks are now worth almost 60 percent
more than when the crisis began in 2007, according to a
inflation-adjusted measure from Moody’s Analytics. But wealthy
households own the bulk of stocks. Most Americans are much
more dependent on their houses. That’s why the net worth of
the median household is still about 20 percent lower than it
was in early 2007. When television commentators drone
on about the Dow, they’re not talking about a good measure of
most people’s wealth.
9/18: And a confirming of the above
from the NY Times
financial crisis didn’t just kill the dream of getting rich
from your day job. It also put an end to a fundamental
belief of the middle class: that owning a home was always a
good idea because prices moved in only one direction — up.
The bubble, while it lasted, gave millions in the middle class
a sense of validation of their financial acumen, and made them
feel as if they had done the Right Thing.
theory, if you lost your job, or suffered some other kind of
financial setback, you could always sell into a real estate
market that was forever rising. Ever-higher home prices became
a steam valve, and the “greater fool” theory substituted for
any conventional measure of value.
kindling for the fire that consumed Wall Street and nearly
the entire economy was mortgages that should never have been
taken out in the first place. Homeowners figured the
more house the better, whether or not their income could
support the monthly payment, while greedy banks and middlemen
were all too happy to encourage them.
EFM- this is a thorn in Trump's
many problems. What if Kavanaugh's vote is delayed. What could
happen with Mueller's investigation. We still haven't had an
agreement with Canada. Will Turkey cause a riff with Trump. How
many Syrians will die by Russia's 'cleansing'. Maybe we will win
a trade war but China needs to prove its muscles and we might
unemployment rate has also become less meaningful than it once
was. In recent decades, the number of idle working-age
They are not working, not looking for work, not going to
school and not taking care of children. Many of them would
like to work, but they can’t find a decent-paying job and
have given up looking. They are
in the official unemployment rate.
and Public Corruption: Crack Based Evidence from
USC-INET Research Paper No. 18-10
ALESSANDRO FLAMINI, University
BABAK JAHANSHAHI, University of Edinburgh - School of
KAMIAR MOHADDES, University of Cambridge - Faculty of
Economics and Politics, University of Cambridge - Girton
drugs foster public corruption? To estimate the causal
effect of drugs
on public corruption in California, we adopt the synthetic
control method and
exploit the fact that crack cocaine markets emerged
asynchronously across the
United States. We focus on California because crack arrived
here in 1981,
before reaching any other state. Our results show that
public corruption more
than tripled in California in the first three years
following the arrival of
crack cocaine. We argue that this resulted from the
of illegal drugs: a large trade-off between profits and law
enforcement, due to
a cheap technology and rigid demand. Such a trade-off
fosters a convergence of
interests between criminals and corrupted public officials
resulting in a
positive causal impact of illegal drugs on corruption.
EFM- And now Marijuana is legal.
9/17: Social Security
could see the largest cost-of-living increase in seven years
in 2019 at 2.8%,
EFM- Curious as to what they will
do with the next mess. Going with passive funds is not back but
using bonds when interest rages are rising is a no no. .
9/17: Hurry, hurry! Excess money!!!
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Florence threatens more than a million homes without flood
By WTOP / CNN
Most people in the path of Florence don’t have flood
insurance, and many won’t
have the money to rebuild if their homes are damaged or
destroyed by the
storm’s onslaught of water.
Much of the damage from Florence will be caused by rainfall.
tropical storm, which was downgraded from a Category 1
hurricane Friday, could
bring flooding far beyond the North and South Carolina
But most homes in the Carolinas don’t have federal flood
which is offered by FEMA. Of the 7 million homes in the two
states, only about
340,000, or 5%, are covered under the federal program.
The only homeowners required to purchase the insurance are
those who live in
federally declared flood zones and have federally guaranteed
Even in those areas, some homes aren’t covered. Some
homeowners don’t have a
mortgage, and in other cases the owners have let the flood
insurance lapse and
the mortgage lender doesn’t know.
considering the extent of flooding, most homeowners will not
have insurance and will not have money to rebuild and the area
will remain devastated by vacant lots forever.
will probably be the issue with Houston. Buyers are now going
to radically change where to buy. The value of homes will
change a lot.
is understood about loss aversion (the tendency for losses to
have greater hedonic impact than comparable gains), but open
remain. First, there is debate about whether loss aversion is
best understood as the byproduct of a single system within the
brain that treats losses
and gains asymmetrically or the interaction of separate
deliberative and emotional systems. Second, some have
questioned whether loss aversion
alone is the best account for the endowment effect.
Alternative accounts, based on the differential focus induced
by buying versus selling, the
order in which buyers and sellers consider positive and
negative aspects of the good, the extent to which ownership
induces liking, and the desire
to avoid making a bad deal, have been proposed. Third, it
is unclear whether losses are actually experienced more
intensely than comparable gains,
or whether people simply behave as if they were. Some have
argued that loss aversion is nothing more than an affective
forecasting error, while
others have argued that there are many situations in which
losses are actually more impactful than comparable gains. This
review synthesizes the
insights that behavioral researchers and neuroeconomists have
contributed to each debate, and highlights potential avenues
for future research.
9/17: This is an area I have
touched on previously but now with Florence (and Houston) it
will gather a lot of steam towards redirecting housing dollars
Hurricane Florence is
forcing more than a million people on the
US East Coast to flee from their homes. Coastal
flooding and erosion is a real threat
to property, the local economy, and life.
Coastal populations are growing faster, but one
scientist warns people should relocate away from the
household earnings are finally stretching back to
their pre-recession heights. But feeling secure and
comfortable isn’t only a measure of how much money you have.
It’s also a measure of how much you have compared with others.
many, that is one reason that recent financial progress may
seem overshadowed by the gains they’ve missed out on and a
needling sense that they’ve lost ground.
new research illustrates, two groups in particular have
stalled: whites without a college degree, and blacks and
Hispanics with one. Both are being far outpaced by
Bigger They Are, The Harder They Fall: The Decline of the
White Working Class
essay explores the intersection of race, ethnicity and
education, which we use as a proxy for class. We examine five
measures of well-being between 1989 and 2016, the range
spanned by the Federal Reserve’s Survey of Consumer Finances.
document three main findings:
- Large racial and ethnic gaps in
a range of measures of well-being lessened solely because
of improvements for nonwhite families without college
degrees.Over time, nonwhite working class
families—those without a four-year college degree—became
more similar to working class non-Hispanic whites in terms
of family income and wealth. This also was true of the
likelihood of being a homeowner, of being married or
cohabiting and of reporting good or excellent health.
families headed by someone with a four-year college degree
who identified as non-Hispanic black or Hispanic of any
race fell further behind similarly educated white families
on all of those measures. More families are working class
than college educated, so declining gaps are evident in
the population as a whole.
- The white working class has
declined both in size and relative well-being. Uniquely
among major socioeconomic groups, the white working class
decreased in absolute numbers and population share in recent
decades. At the same time, the five measures of well-being
we tracked all deteriorated for the white working class
relative to the overall population. The shares of all income
earned and wealth owned by the white working class fell even
faster than their population share. (See Figure 1.)
- Neither race nor education is
sufficient alone to explain the decline of the white
working class. White college
graduate families are doing very well, suggesting that
factors related to identifying as white are not sufficient
to explain the decline. Education and class also don’t
provide a full explanation: Hispanic and black working class
families made some progress on many measures, while the
white working class regressed.
more plausible explanation for the decline of the white
working class is their diminishing set of advantages
relative to nonwhite working class families in terms of
high school graduation rates, access to relatively
high-paying jobs, and freedom from explicit workplace
The Shift from
Active to Passive Investing : Potential
Risks to Financial Stability?
Kenechukwu E. Anadu;
Mathias S. Kruttli;
Patrick E. McCabe;
Chae Hee Shin
past couple of decades have seen a significant shift
in assets from active to passive investment
strategies. We examine the potential effects of this
shift for financial stability through four different
channels: (1) effects on investment funds’
liquidity transformation and redemption risks; (2)
passive strategies that amplify market volatility;
(3) increases in asset-management industry
concentration; and (4) the effects on valuations,
volatility, and comovement of assets that are
included in indexes. Overall, the shift from
active to passive investment strategies appears to
be increasing some types of risk while diminishing
others: The shift has probably reduced
liquidity transformation risks, although some
passive strategies amplify market volatility, and
passive-fund growth is increasing asset-management
industry concentration. We find mixed evidence that
passive investing is contributing to the comovement
of assets. Finally, we use our framework to assess
how financial stability risks are likely to evolve
if the shift to passive investing continues, noting
that some of the repercussions of passive investing
ultimately may slow its growth.
management ; Passive investing ; Index investing ;
Indexing ; Mutual fund ; Exchange-traded fund ;
Leveraged and inverse exchange-traded products ;
Financial stability ; Systemic risk ; Market
volatility ; Inclusion effects ; Daily rebalancing
G10 G11 G20 G23 G32 L1
9/14: Considering what I am hearing
and seeing about the potential devastation from Florence, the
cleanup et al could take a point (or more) away from the GDP.
In the field of psychology, the Dunning–Kruger
effect is a cognitive bias in which people of low
ability have illusory superiority and mistakenly assess
their cognitive ability as greater than it is.
The cognitive bias of illusory
superiority comes from the inability of low-ability
people to recognize their lack of ability; without the
self-awareness of metacognition, low-ability people cannot
objectively evaluate their actual competence or
On the other hand, people of high
ability incorrectly assume that tasks that are easy for them
are also easy for other people. And so, are (doctors)
especially guilty of this effect?
Although adequate self-esteem is essential for psychological
health, people with high but fragile self-esteem have been
shown to exhibit defensive, often aggressive behavior when
their self-esteem is threatened. (EFM- does that ring a
bell???) We measured physician narcissism (as a proxy for high
but fragile self-esteem) and used a subtle manipulation to
examine how physicians who varied in levels of narcissism
responded to an ego threat. We found that physicians high in
narcissism, as compared with those lower in narcissism, were more
likely to respond to ego threat by attempting to bolster their
self-image. Concerned about self-image, physicians in this
situation may be insufficiently receptive to new information
and instead attempt to justify initial opinions
narcissism is predictive of aggressiveness and hostility under
conditions of ego threat (see Bushman & Baumeister, 1998),
we hypothesize that physicians characterized by high levels of
narcissism will respond to a manipulation that induces
self-doubt in a defensive, exaggeratedly self-confident fashion
Our findings describe a different,
but potentially related phenomenon: the ways that subtle
events that shake a physician’s confidence (e.g., a new piece
of evidence in a complex diagnostic dilemma) may fail to be
appropriately incorporated because of the threat that they may
pose to a physician’s ego. Numerous clinical instances
abound in which physicians must navigate uncertainty, such as
when to refer a patient for a second opinion, when to pursue an
additional test, or when to change the course of
treatment,implicitly or explicitly acknowledging a prior
decision. In each case, physicians must manage potential threats
to their own self-esteem and common pitfalls of
clinical reasoning (Redelmeier, 2005) while serving the
interests of their patients. Our findings raise the question of
whether, in these settings,
some physicians manage threats to their self-esteem by
reacting with greater confidence than
is appropriate, given the available clinical evidence.
9/14: No deal Brexit
Mark Carney, Bank of England
governor, has delivered a “chilling” warning to Theresa May’s
cabinet that a no-deal Brexit could lead to economic chaos,
including a property crash that could see house prices fall by
a third. Mr Carney told ministers that in the scenario of a
disorderly Brexit, the BoE would not be able to avert a crisis
by cutting interest rates — as it did after the 2016
referendum vote — and that inflation and unemployment would
EFM- Could this lead to an
international instability and a worldwide recession? Quite
possibly since emerging market are stumbling.Russia does
definitely have economic problems and though I read a lot on
China, I just don't know would happen with them.
Trump preparing for Hurricane
services research division presented
US consumers aged 18+ with a list of commonly used financial
and investment terms to gauge a public level of understanding.
Respondents self-evaluated how thoroughly they understand the
given terms. For some of the terms, a working and ongoing
understanding of the concept is important to routine saving
the one that bothers me is the expense ratio. It's real easy
to teach but I don't know if the 53% have ever attended an
investment class run by someone who knows what they are
data showed that the foreign-born population in the U.S. had
reached its highest share since 1910,
with Asians representing the largest group.
EFM- Nice to leave clues. Hope she
wasn't a breeder.
fool can criticize, condemn and complain—and most fools do.
But it takes character and self-control to be understanding
factors that could explain the decline in widows’ poverty: 1)
women’s rising levels of education; 2) their increased
attachment to the labor force; and 3) increasing marital
“selection” – i.e., the notion that while marriage used to be
equally distributed, it is becoming less common among those
with lower socioeconomic status. The project explores
what share of the decline in poverty can be explained by these
factors and also projects the role of these factors in the
paper found that:
rise in education and labor force participation explain most
of the decline in widows’ average poverty rate from 20
percent in 1994 to 13 percent in 2014.
far, marital selection has not been a driving force in the
decline in widows’ poverty.
projections suggest that widows’ poverty will continue to
fall over the next 15 years.
the future, up to half of this reduction could be explained
by the increasing selection of women into marriage.
The policy implications of the findings are:
the projected decline in widows’ poverty may allow
policymakers to shift some of their focus to more vulnerable
groups, widows will remain poorer than married women.
the effect on widows of any change that would bring fiscal
balance to the Social Security program will continue to be
the tropical Pacific, Super Typhoon Mangkhut is the most
intense tropical cyclone in the world, packing 173 mph
I cannot fathom 52 inches of rain. By the sounds of it
tonight, there might be over 40" of rain in the Carolinas.
The slow storm will make up a lower wind by dumping massive
amounts of rain
GOP's “tax reform 2.0" aims to make permanent the tax
cuts for individuals that President Trump signed into law in
December 2017, including the law's temporary reductions in
individual filers’ rates, a doubling of the Child Tax
Credit, and cuts to the estate tax paid by a small fraction
of the wealthiest families.9/12:
was wrong from the get go. This
more than $2 trillion to the federal deficit over a decade.The
average American worker does not get that much- it is the
wealthier that do well. But nobody does well with another 2
trillion to our debt; Our debt will break us by 2030.
Climate change will not be attacked now and the long
wait until it does will lead our world into chaos (2050).
in three girls in India is a child's bride
are now at least three million people in Idlib. Half of this
population is displaced from other areas in Syria,
and nearly a quarter of a million were displaced this year.
People are living in overcrowded camps, in dire need of food,
water and health care, with no electricity, no running water
and no sewerage system.
The Russians and the government want to clear out the
insurgence. Thousands will die. But the U.S. simply says do
not use gas. Apparently killing them in 'normal' fashion will
pass muster but the gas is a no no.
civilization has passed a milestone
is a principle from philosophy. Suppose there exist two
explanations for an occurrence. In this case the simpler one
is usually better. Another way of saying it is that the more
assumptions you have to make, the more unlikely an
9/11: And she is absolutely
Christine Lagarde has warned
the escalating US-China trade war could
deliver a “shock” to already struggling
emerging markets, raising the prospect that a
crisis ripping through Argentina and Turkey
could spread across the developing world.
In an interview with the
Financial Times, the IMF managing director
cited the “uncertainty [and] lack of
confidence already produced by the threats
against trade, even before it materialises”,
as one of the main dangers facing the
today’s newsletter, we will take a quick look at some of the
critical figures and data in the energy markets this
We will then look at some of the key market movers early this
week before providing you with the latest analysis of the top
news events taking place in the global energy complex over the
past few days. We hope you enjoy.
markets are set to become much tighter in the next couple of
months, and more and more analysts are now expecting a major
oil price rally in November as a direct result of sanctions on
Iran. Our researchers have identified a number of unique
opportunities in energy markets. Find out how to
profit from the next oil price shock.
of the Week
- Hurricane Florence is barreling towards
the east coast, aiming at North and South Carolina. The EIA
has a mapping tool
that allows for adding layers to see various pieces of energy
infrastructure that may be affected by the storm.
- At the time of this writing, Hurricane
Florence was a Category 4 storm, and it is possible it could
strengthen to a Category 5 before it makes landfall.
- The storm could be devastating, but from
an oil market perspective, there is little in the storm’s path
that would reverberate more broadly – no major oil refineries,
no upstream production. As a result, there shouldn’t be any
supply-side issues, other than localized fuel problems at the
retail end during the storm.
- If anything, the storm could cut into
demand as millions of people put everything on hold.
state experienced the worst flooding since 1924,
leaving over 500 people dead or missing.
Climate change? What about Florence? Worst to hit in
almost 30 years. The outer banks will be devastated. Will they
rebuild? How much will the Federal Government pay out to
rebuild in that area that will get clobbered again?
9/11: If they get Trump to do
this- I am all for it.
now, President Trump largely has resisted punishing
China for its human rights record, or even accusing
it of widespread violations. If approved, the
penalties would fuel an already bitter standoff with
Beijing over trade and pressure on North Korea’s
Americans Say Life Insurance Discounts Would
Motivate Them to Stay Healthy
Majority of consumers likely to maintain weight level and
get regular check-ups if offered premium discounts
discounts can be a powerful incentive for Americans to
maintain healthier lifestyles, according to a new survey.
Nine out of ten consumers (92%) would be motivated to
maintain a specific weight level and four out of five (81%)
say they would be more likely to have an annual check-up if
offered a life insurance discount or incentive.
EFM- I know everyone likes a
discount but I do not know how it would be applied. Term
insurance is cheapest and if a company offered a discount, it
would lower overall company returns which tend to be low anyway
(though some would disagree). Do they put a list price on it
and give a discount if you pay cash???
With other policies- which are very
hard to discern- they could leave out a rider, reduce coverage,
The bottom line is I think they
have to look for other incentives. One way- which might be tough
to prove- is if they lost x weight, the could get a better rate.
However they already do it for stopping smoking.
and Rising Interest Rates Weigh on Business Executives’ View
of U.S. Economy
of respondents say they would see an unfavorable impact on
their business from tougher trade policies by U.S.
the second quarter in a row, business executives are reining
in their optimism about the U.S. economy, in part because of
the potential impact of trade and tariff policies and rising
interest rates, according to the third-quarter AICPA
Economic Outlook Survey, which polls chief executive
officers, chief financial officers, controllers and other
certified public accountants in U.S. companies who hold
executive and senior management accounting roles.
EFM- Trade war DOES hurt many small
businesses since the need lower cost products (directly or
as used to make their stuff) from China et al in order to stay
in business. Higher interest rates will be needed to keep
inflation in check. It should rise due to full employment and
people being willing to buy more.
asked participants to identify three of the most common
and important warning lights in a vehicle: a tire
pressure warning light, a coolant temperature warning light,
and an oil pressure warning light.
most shocking statistic found that 73% of
Americans don’t know what their oil pressure warning
study also found that 40% risk
engine failure because they don’t understand their coolant
temperature warning light.
coolant warning light notifies the driver that the coolant
temperature is higher than normal, meaning the engine is near
overheating. Driving with this warning sign on for an extended
period of time is extremely dangerous, and could wind up costing
drivershundreds if not thousands of dollars in repairs.
it comes to tire pressure warnings, the study found that 30% unknowingly
risk driving at an unsafe tire pressure.
9/10: From last week
Bonds represented by the Bloomberg Barclays US Aggregate Bond
TR USD. This chart is for illustrative purposes only and does
not represent the performance of any specific security. Past
performance cannot guarantee future results
9/10: A very good idea since
this next downturn could be quite severe
Fed weighs capital
Reserve officials are debating the merits of
requiring US banks to hold additional capital while the
economy is good so they will have funds available if the
economy sours. Some say the tool isn't needed,
while others say it will help the Fed avoid having to raise
interest rates aggressively.
9/10:Summers: Stress test
conclusion "comically absurd"
(Rob Kim/Getty Images)
Federal Reserve's conclusion from the latest stress test
that no major bank holding company "would have any capital
deficiency" during a deep recession "is a comically absurd
conclusion," former US Treasury Secretary Lawrence
Summers says. "The fact that that assertion continues to be
made has to undercut whatever credibility one would
otherwise attach to the very substantial efforts that have
been made to strengthen financial regulation," he says.
You do not have to accept all of Summer's arguments, but you
have to read his comments and digest the focus he addresses.
He is that good
9/10: Stop breathing and think
Antifragile: Things That Gain from Disorder:
“Complex systems are full of interdependencies — hard to
detect — and nonlinear responses. ‘Nonlinear’ means that
when you double the dose of, say, a medication, or when
you double the number of employees in a factory, you don’t
get twice the initial effect, but rather a lot more or a
The stock market is a complex system where in the short term
there are few if any interdependencies between decisions and
outcomes. In the short run stock prices are driven by
thousands of random variables. Stock market
participants have different risk tolerances and emotional
aptitudes, and diverse time horizons ranging from
milliseconds (for high-speed traders) to years (for
In other words, predicting where a stock price will be in a day,
a month or even a year is not much different from
prognosticating whether the ball on a roulette wheel will
land on red or black. In the longer run, however, good
decisions should pay off because fundamentals will shine
through — just as was the case with buying Microsoft in 1992
and not buying GoPro in 2014. But in the short run there is
no correlation between good decisions and results. None!
you look at your portfolio, think of the Microsoft and GoPro
examples above. The performance of your stocks in the short
run tells you absolutely nothing about what you own or about
the quality of your decisions. You may own a portfolio of
Microsofts, and its value is still going down because at this
juncture the market doesn’t care about Microsofts. Or maybe
you stuffed your retirement fund with overpriced fads that may
not be around a year from now. But in the longer run, which
always lies out there past the short run, time discovers
truth, as Seneca said.
EFM- whether you are a short term
or long term investor, you still do not want to lose a big chunk
of money. Losing 50% of your monies 3 to 4 times every 30 years
due to a recession is absolute folly. Many people never regained
their past losses
Japan, the world's third-largest
economy after the US and China, is a major trading partner for
the US, with automobile imports particularly important.
Major Japanese brands like Toyota
and Honda send more than 8 million cars to the US each year, and
manufacture close to 4 million within the US. Last year, more
than $40 billion of Japanese autos entered the country.
has previously lamented that imported vehicles are a threat
to national security
Toyota includes a North Korean under every hood.
US Navy Pre-Flight School developed a scientific method to
fall asleep day or night, in any conditions, in under two
minutes. "After six weeks of practice, 96 percent of
pilots could fall asleep in two minutes or less. Even
after drinking coffee, with machine gunfire being played in
first step is to blank your mind.
To do this, it's recommended you relax all of the muscles in
your face. Then, drop your shoulders and relax your arms.
Breathe out and relax your chest, and then also relax your legs,
all in that sequence.
the next 10 seconds, you'll then want to clear your mind of
everything. Either imagine you're lying in a pitch-black room
on a comfy couch or, if you're struggling, saying the words
"don't think" over and over again can supposedly help.
people following the debate could be forgiven for thinking
this is solely a conversation about the help offered to the
poor. This is not the case. An increasing share of
spending on the safety net goes to families above the
poverty line. Low-income and even middle-income families are
also more reliant on means-tested transfers than in the
go through various phases
of sleep, which
form part of multiple cycles. When you engage in rapid eye
movement (REM) sleep, you dream, and perhaps sleep-walk or
talk, but this only makes up a small portion of your
presumably nocturnal activities
that falls away immediately after just one less night of sleep
is those all-important cognitive reasoning and retention
functions. From grammatical reasoning and spatial planning to
memory recall activities, our abilities begin to drop off to
appears that there’s far less activity going on in the frontal
and parietal lobes,
which deal with problem-solving and decision making. As noted
by a landmark 2017
review on the subject, your visual
cortical regions also show an increasingly reduced signal over
time during visual working memory tasks. Reaction times and
learning also fall by the wayside.
brain’s reward system is also shown to be sensitive to SD,
which can cause changes in how a person seeks out risks,
sensations, and takes impulsive actions. Essentially, the more
SD you experience, the more of a clumsy fool you’re likely to
what happened the overall percentages of adults ages 20 and
older who fit into the three major weight categories included
in the new adult weight data update, between the 2013-2014
survey wave and the 2015-2016 wave:
(BMI from 25 kg/m2 to
just under 30 kg/m2): Fell
to 31.6%, from 32.5%.
from 30 kg/m2 to
just under 40 kg/m2): Increased
to 39.6%, from 37.7%.
obese (BMI of 40 kg/m2 or
higher): Held steady at 7.7%.
adult men and adult women, the changes in the percentage who
were either overweight or severely obese were within the
margin of error. That means that, from the standpoint of
someone interested in statistics, the male and female
overweight rate and severe obesity rate were about the same in
both the 2013-2014 and 2015-2016 survey waves.
for adult women, the obesity rate hovered around 41% in both
adult men, the obesity rate increased by a substantial amount:
to 37.9%, from 35%.
charts show that U.S. adult obesity rates increased gradually
between the 1960-1962 wave and the 1976-1980 wave for both men
and women; increased rapidly from the 1976-1980 wave to the
2003-2004; and has been moving up and down, but generally
upward, since the 2003-2004 wave.
the update on children, tables show that the percentage of all
children ages 2 to 19 who were classified as overweight, obese
or severely obese held steady at about 40%.
percentage of children ages 12 to 19 classified as obese held
steady at about 21%.
percentage of children ages 6 to 11 classified as obese stood
at 18.4% in the 2015-2016 survey wave. The change between the
2013-2014 and the 2015-2016 wave was within the margin of
percentage of children ages 2 to 5 classified as obese jumped
to 13.9%, from 9.4%. That increase was far larger than the
margin of error, which was 1.3% for 2013-2014 and 1.1% for
boys ages 2 to 5, the obesity rate increased to 14.3%, from
girls in that age group, the obesity rate increased to 13.5%,
analysts did not discuss the reasons behind the increase in
the obesity rate for children ages 2 to 5.
2018 Evolution Revolution report says 82% of discretionary
accounts are owned by people who fall into the
non-high-net-worth category. The report also noted an
"increase in the number of advisers reporting charging fixed
And The Familial Risk
workers and women are more likely to be worried about life
insurance, less likely to understand its financial
benefits provider Unum (NYSE: UNM) finds that nearly half
(45 percent) of 25-34-year-olds reported feeling stressed
or worried when thinking about life insurance, compared to
just 29 percent of those 35-49.
Oil prices look set to see their largest weekly
decrease since July as an unexpected build in
gasoline inventories pointed towards the end of
driving season and a fall in demand
September 7th, 2018
are set for their largest weekly loss since July,
due to fears of emerging market contagion and some
bearish data from the EIA.
EIA report, oil prices fall. Crude
oil prices fell sharply this week after the EIA
revealed a surprising build in gasoline
inventories, suggesting that peak summer driving
season has come to a close and could usher in a
softer period of demand. The news overshadowed a
strong decline in crude oil inventories.
Arabia ramps up oil shipments to United
States. Saudi oil
exports to the U.S. jumped above 1 million barrels
per day last week (four-week average) for the
first time since 2017, according to EIA data.
Shipments are also up 250,000 bpd compared to May,
perhaps an indication that Saudi Arabia is
responding to political pressure
from the American lawmakers.
buying Ocean Rig for $2.7 billion. Transocean
(NYSE: RIG) announced a move
to take over Ocean
Rig (NASDAQ: ORIG), a rival
offshore drilling contractor, for $2.7 billion.
The deal will give Transocean twice as many
deepwater rigs and drillships as its nearest
competitor, according to the Houston Chronicle.
The acquisition is also a sign of the faith that
Transocean has in the growth of the offshore
drilling sector (more below), which has lagged
onshore shale, for instance. "Adding Ocean Rig's
premium assets to our industry-leading fleet ...
better positions us to capitalize on what, we
believe, is an imminent recovery in the
ultra-deepwater market," Transocean President and
Chief Executive Jeremy Thigpen said.
activity shows signs of rebound.
A recent report from IHS Markit projects that
global demand for mobile offshore drilling rigs
by 13 percent through 2020 as the oil industry
steps up offshore exploration. IHS says there will
be demand for an average of 521 rigs in 2020 up
from 453 this year.
Hughes selected for offshore Saudi fields.
Saudi Aramco awarded
Baker Hughes a major services contract to help
boost production at the Marjan oil field. Saudi
Arabia is aiming to boost production capacity by 1
million barrels per day by 2023 at a handful of
offshore fields in order to offset declines from
giants team up for new Permian pipeline. Energy
Transfer Partners (NYSE: ETP),
Midstream Partners (NYSE: MMP),
Group, (TLV: DLEKG) and MPLX (NYSE: MPLX) have decided
to jointly fund the “Permian Gulf Coast Pipeline,”
another major conduit that will connect the
Permian to the Gulf Coast. The target in-service
date is mid-2020. The announcement adds yet
another pipeline to the mix – there are already
several projects in the works to expand midstream
capacity from West Texas.
Halliburton warn of Permian slowdown. The
CEOs of Schlumberger
(NYSE: SLB) and Halliburton
(NYSE: HAL) admitted
this week at an industry conference that they are
seeing activity in the Permian slowdown. Pipeline
constraints have not yet curtailed production
growth, but the oilfield service companies, who
are on the frontlines and have a good vantage
point on drilling activity, have already felt the
impact. “These challenges will likely have a
dampening effect on production growth, wellhead
prices and investment levels in the coming year,”
Schlumberger’s CEO Paal Kibsgaard said at the
Barclays conference in New York. Also, Kibsgaard
said that the assumption that Permian production
will grow at a 1.5-mb/d annual rate is “starting
to be called into question.”
President to build country’s largest oil
president-elect Andres Manuel Lopez Obrador (AMLO)
offered more details on his plans to build a new
oil refinery. “It will be a refinery that will
produce 400,000 barrels per day of gasoline with
an approximate cost of $8 billion that we want to
build in three years,” Lopez Obrador told a group
of business leaders, according to Reuters.
Meanwhile, Bloomberg reports
that AMLO may not suspend future oil auctions
downgraded. Bank of
America Merrill Lynch downgraded
(NYSE: CVX) to “neutral” from
“buy” because the bank says that the renewal on
several of Chevron’s key projects in Asia may be
harder to obtain than some think. Specifically,
BofAML cited Chevron’s “emerging uncertainties
around spending and PSC [production sharing
contract] renewals [and] a more selective sector
view that acknowledges the tailwind from the
commodity as largely played out.” Several “key
production sharing contracts” expire in 2021-2023.
launches predictive maintenance campaign. Chevron
(NYSE: CVX) announced the
beginning of a predictive maintenance campaign,
equipping refineries and oil fields with sensors,
cloud computing, data analytics and a variety of
other technologies often referred to as
“predictive analytics,” that promise to precisely
predict when assets need maintenance and head off
problems before they arise. These suite of new
technologies could potentially save oil companies
millions of dollars. “In the past, we had to
figure out how equipment was performing,”
Chevron’s Chief Information Officer Bill Braun
told the Wall Street Journal.
“In the future, the equipment will tell us how
it’s performing. This represents a big shift.”
sued for misleading investors. Prominent
short-seller Andrew Left has sued
(NASDAQ: TSLA) and Elon Musk
for misleading investors when Musk announced his
decision to take Tesla private, only to abandon
the plan. Left argues the scheme was intended to
wants to finalize cooperative agreement in
December. OPEC and its
non-OPEC partners, often collectively referred to
as OPEC+, hope to formalize
a cooperative agreement at the next meeting in
December. The move would be a way of
institutionalizing the ongoing production cut
agreement that began in early 2017, and provide a
framework for indefinite cooperation.
moves ahead on petrochemical project in
U.S.-China trade tensions, ExxonMobil
(NYSE: XOM) has decided
to go ahead with a multibillion-dollar
petrochemical project and gas import terminal in
Aramco considers $1 billion venture fund. Saudi
Aramco is reportedly considering a $1 billion
venture-capital fund to invest in international
technology firms, according to the Wall Street Journal.
The move would be another major initiative to
diversify the Saudi economy.
reading and we’ll see you next week.
In this week’s Inside Opportunities, Martin
Tillier examines an oil major that he believes is
currently trading at a huge discount. Find out why
Martin sees such potential here by signing up for
your free trial of the Oil & Energy Insider
Trump threatens tariffs on $267
billion in Chinese goods, expanding the trade war to
all Chinese imports entering the U.S.
No agreement will mean a lot of small businesses will
get hurt if the cost of supplies, et al is too high and
they cannot pass the higher costs to consumers
9/9: `Retirees: Use Online IRS
Withholding Calculator to Avoid Unexpected Taxes on
tax reform bringing major changes for the year ahead, the
[IRS] today urged retirees to make sure they are paying in
enough tax during the year by using the Withholding
Calculator, available on IRS.gov.... The Tax Cuts and Jobs
Act, enacted in December 2017, changed the way tax is
calculated for most taxpayers including retirees.... For
retirees who receive a monthly pension or annuity check,
this may mean changing the amount of federal income tax they
have withheld. The easiest way to do that is to use the
Withholding Calculator. Though primarily designed for
employees who receive wages, this useful online tool can
also be helpful to those who receive pension or annuity
payments on a regular schedule, usually monthly or
Importance of Life Insurance for Financial Security
the improved economy, employees still have significant
financial concerns. From student loan debt to caregiving
responsibilities, coupled with stagnate wages, today’s
workforce faces many financial issues that cause stress and
loss of productivity throughout the workday
EFM- Just stating a risk which
demands that workers need to recognize: disability
insurance. Tougher contract and expensive compared life
insurance but more necessary.
9/9: Obama's Speech
I wanted McCain to win against
Obama. That said, no matter what I felt subsequently, Obama's
speech on Friday was uplifting and Presidential. If you have not
heard it, go find it. It's not democrat or republican. It is
about civility and decency.
This will keep you busy for a year.
Though `most are dated
of people across the globe do not meet the WHO’s physical
activity guidelines of 75 minutes of vigorous exercise or 150
minutes of moderate exercise per week.
researchers found huge geographic variations in activity
levels, ranging from just 5.5% of people failing to meet
guidelines in Uganda to 67% in Kuwait. Those countries were
part of a larger trend: High-income nations tended to have
lower exercise adherence than low-income countries, in
part because work and transportation is largely sedentary in
developed areas, while activity is built into the daily lives
of people in less-industrialized countries. During the study
period, high-income Western nations saw physical inactivity
rates increase from almost 31% to almost 37%, while rates
remained stable, around 16%, in low-income countries.
9/7: Consumers `and money
$13 Trillion in debt. and37% of American workers aren’t saving
for retirement. The median American household who have savings
has $5200.00 saved, but is $16,000.00 in debt.
14% of Americans are living below poverty level (less than
$24,600.00 per year for a family of 4). The average household
credit card debt is more than
am a high school teacher and I know all of our seniors are
required to take Economics for a semester. They really
learn NOTHING of any value and I didn’t `really learn
anything when I was in high school 12 years ago`
to the Hearing Loss Association of America, one in three
individuals at the age of 65 will suffer from hearing loss.
Hearing loss is identified as the third most prevalent chronic
disability among older adults, behind arthritis and
hypertension, and affects over 36 million Americans.
Talk about bad care!!!!`
Hospitals: A Case Study in Waste"
NBER Working Paper No. w24946
LIRAN EINAV, Stanford
University - Department of Economics, National Bureau of
Economic Research (NBER)
substantial waste in U.S. healthcare, but little consensus on
how to identify or combat it. We identify one specific source
of waste: long-term care hospitals (LTCHs). These post-acute
care facilities began as a regulatory carve-out for a few
dozen specialty hospitals, but have expanded into an industry
with over 400 hospitals and $5.4 billion in annual Medicare
spending in 2014. We use the entry of LTCHs into local
hospital markets and an event study design to estimate LTCHs’
impact. We find that most LTCH patients would have
counterfactually received care at Skilled Nursing Facilities
(SNFs) – post-acute care facilities that provide medically
similar care to LTCHs but are paid significantly less – and
that substitution to LTCHs leaves patients unaffected or
worse off on all measurable dimensions. Our results imply
that Medicare could save about $4.6 billion per year – with
no harm to patients – by not allowing for discharge to
AMY FINKELSTEIN, Massachusetts Institute of
Technology (MIT) - Department of Economics, National Bureau
of Economic Research (NBER)
NEALE MAHONEY, University of Chicago Booth School
of Business, National Bureau of Economic Research (NBER)
Boston University Law Review, Vol. 99, 2019
DAVID HORTON, University
of California, Davis - School of Law
of an unsigned “will” as an oxymoron. Since 1837, the Wills
Act has required testators in Anglo-American legal systems
to memorialize their last wishes in a signed writing. But
recently, several American states have adopted an Australian
innovation called harmless error, which validates a botched
attempt to make a will if there is strong evidence that a
testator intended it to be valid. Thus, in these
jurisdictions, the testator’s signature is no longer
mandatory. Meanwhile, decedents have started making wills in
formats that do not permit “wet” signatures, such as
e-mails, text messages and word processing files. These
trends raise the same question: when, if ever, can a
testator assent to a will through her words or conduct? This
Article explores the topic of wills with missing or
unorthodox signatures. It begins by analyzing a neglected
body of precedent on point that spans centuries and
countries. First, before the Wills Act, testators could
bequeath personal property in unsigned writings.
Accordingly, ecclesiastical courts in England and early
American judges routinely decided whether a decedent had
approved of an unexecuted dispositive instrument. Second,
and more recently, dozens of Australian courts have
considered whether to apply harmless error to unsigned and
electronic wills. These cases, which have reached wildly
different conclusions, vividly illustrate the costs and
benefits of relaxing the signature requirement. The Article
then draws insights from the unsigned will jurisprudence to
propose a partial exception to the signature mandate.
Traditional law treats the absence of a signature as
conclusive proof that a decedent lost her nerve or changed
her mind. However, the unsigned will cases reveal that the
true culprit is often the fact that a person passed away or
lost mental capacity shortly before she could put pen to
paper. Accordingly, under what the Article calls the
“momentum theory,” courts should enforce written expressions
of dispositive wishes when there is clear and convincing
evidence that a testator was on the verge of executing a
will that memorialized them. This safe harbor for testators
whose estate planning efforts were interrupted by forces
outside of their control would improve outcomes in several
common (or soon-to-be common) kinds of disputes, including
those involving notes for future wills, drafts that the
testator never read, and digital documents.
Protection for the Business Owner
40 Percent of Americans Don’t Have Any Form of Life
connotations of mortality prevent many from seeing other
benefits of ownership
EFM- Newly married couples should have it. If children are
involved, it is mandatory. 10 and 20 year term is very cheap
for younger people. The kicker is what is generally not
identified- disability insurance. This is definitely more
expensive and the contracts can be tough to follow. But the
odds of a serious disability is far greater than dying.
And the financial nightmare for the family is much greater
since the amount of coverage is limited.
EFM- Yes, it looks great until you
look at the start date. A short term movement in this market is
not unprecedented, and without an extended period of time (at
least three years) you don't bother if you are an 'average'
"Asset Pricing and the Propagation of
ECB Working Paper No. 2150
Contact: IVAN JACCARD
European Central Bank (ECB) -
Directorate General Research
ABSTRACT: This study augments the
neoclassical growth model with a mechanism that creates a
novel transmission channel through which financial shocks
propagate to the real economy. By affecting agents’ ability to
finance consumption expenditures, ` My main finding is
that this mechanism provides a potential explanation for the
co-movement observed during the 2007-2009 financial crisis in
My results also suggest that these
shocks are a plausible source of aggregate risk that could
explain business cycle fluctuations as well as standard asset
pricing puzzles. Finally, introducing this transmission
mechanism into the neoclassical growth model increases the
welfare cost of business cycle fluctuations by several orders
the 2005 Bankruptcy Reform"
NBER Working Paper No. w24934
STEFANIA ALBANESI, University
Bankruptcy Abuse Prevention and Consumer Protection Act
(BAPCPA) is the most important reform of personal bankruptcy
in the United States in recent years. This legislation
overhauled eligibility requirements and increased monetary
costs of filing for bankruptcy. Using administrative credit
file data from a nationally representative panel, we quantify
the effects of the reform on bankruptcy, insolvency, and
foreclosure, we explore the mechanism generating these
responses and examine the consequences for households. We find
that the reform caused a 50% permanent drop in Chapter 7
filings, a 25% permanent rise in insolvency, but had no
effect on Chapter 13 filings. Exploiting the cross-district
variation in filing costs resulting from the reform, we show
that these responses are driven by liquidity constraints
associated with the higher monetary cost of filing for
bankruptcy. We show that insolvency is associated with worse
outcomes than bankruptcy, in terms of access to credit and
credit scores, suggesting that BAPCPA may have removed an
important form of relief for financially distressed
JAROMIR NOSAL, Boston College