Errold. F. Moody Jr.
click above for bio

Financial and Economic Daily Commentary 2018

Knowledge makes obsolete the inequities that ignorance and prejudice justify




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"  

From an adviser: It is a daily read for me. Clearly biased towards the client.
Great perspectives and links to thought provoking material. Greatly appreciated

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

Morality, Sexism, Ethics, Corrupt Equilibrium

Critical reference to the limited fiduciary capabilities in the planning industry (and more) and why they may/will remain as such given sophomoric DOL rules and flaccid organizational enforcement. Specific commentary to sexism and ethical and moral lapses of society impacting women. Not the standard drivel

Analysis for investors and advisers. The economic changes from the Great Recession caused major adjustments in investing. One of the major issues is the flip flop of the correlations in bond funds versus equities  coupled with a truly lower return and an increased overall risk. It will take a lot more effort to provide adequate return for those in need and the discussion will address pros and cons particularly for retirement purpose Emphasis on risk, Click for full article. 

“It’s not the Fed’s job to stop people from losing money.”

Jay Powell- President of the Federal Reserve

A Detailed Timeline of the 2008 Financial Crisis


Revolutionary Method for Asset Allocation- Increase Returns, Reduce Risk

September 2018


October 2018

11/19: A copy of the full IRS document is available here.

There will be a quiz

Numbers for Life Insurance and Estate Planning

1. Unified Credit Against Estate Tax

To $11.4 million for a decedent dying in 2019, from $5.6 million for a decedent dying in 2018.

2. Interest on a Certain Portion of the Estate Tax Payable in Installments

The dollar amount used to determine the “2% portion,” for calculating interest, will increase to $1.55 million, from $1.52 million.

3. Valuation of Qualified Real Property in the Decedent’s Gross Estate

For 2019, for an executor who chooses to use the special-use valuation method described in Section 2032A of the Internal Revenue Code, the limit on the total decrease in the resulting property value is $1.16 million. That’s up from $1.14 million for 2018.

4. Gift Tax Exclusion

The exclusion for 2019 will be $15,000 for gifts to any person, and $155,000 for gifts to a spouse who is not a citizen of the United States. That compares with 2018 limits of $15,000 for gifts to any person, and $152,000 for gifts to a non-U.S. citizen spouse.

Numbers for Health Insurance and Benefits

5. Cafeteria plans

The dollar limit for voluntary employee salary reductions for contributions to health flexible spending arrangements (FSAs) will increase to $2,700, from $2,650.

6. Medical Savings Accounts

The MSA is the ancestor of the HSA, and of the health reimbursement arrangement.

An MSA holder is supposed to combine high-deductible health coverage with a special savings account.

For 2019, the acceptable deductible ranges will be $2,350 to $3,500 for self-only coverage, and $4,650 to $7,000 for family coverage, For 2018, the acceptable deductible ranges are $2,300 to $3,450 for self-only coverage, and $4,600 to $6,850 for family coverage.

The maximum annual out-of-pocket expense limits will increase to $4,650 for individuals and $8,550 for families, from $4,600 for individuals and $8,400 for families.

7. Qualified Small Employer Health Reimbursement Arrangement

The maximum eligible employer reimbursement amounts for this program will increase to $5,150 for individual coverage and from $10,450 for family coverage, from $5,050 for individual coverage and $10,250 for family coverage.

8. Requirement to Maintain Minimum Essential Coverage

For the past few years, the IRS has imposed an Affordable Care Act penalty on many individuals who failed to have what the government has classified as “minimum essential coverage” (MEC), or solid major medical coverage. For 2018, the base “applicable dollar amount” for calculating the penalty is $695. But Section 11081 of the Tax Cuts and Jobs Act of 2017 set the penalty at $0 for taxable years beginning after Dec. 31, 2018. “Accordingly,” the IRS says in the new revenue procedure, “this amount is not included in this revenue procedure.”

9. Affordable Care Act Premium Tax Credit Subsidy Clawbacks

The ACA premium tax credit subsidy helps low-income and moderate-income people pay for private individual and family major medical coverage purchased through the ACA public exchange system.

Most people who use the subsidy take it in the form of an “advance premium tax credit” (APTC) subsidy, based on how much money they might earn during a year. After the year ends, when the APTC users file their taxes and find out how much they actually earned, those APTC users are supposed to get extra money back from the government, if they earned less than expected.

The government is supposed to claw back cash from APTC users who earned more than expected and received too much APTC subsidy help.

The ACA tries to limit APTC clawback pain, by setting limits on how much the government can claw back from low-income and moderate-income APTC users, based on the assumption that few low-income and moderate-income have thousands of spare dollars they can use to pay big, unexpected tax bills. The limits depend on how much the APTC users earn when compared with the federal poverty level (FPL).

Here’s what will happen to the clawback limits.


  • Household income under 200% FPL: will hold steady at $300.
  • Household income 200% to 299% FPL: to $800, from $775.
  • Household income 300% to 399% FPL: to $1,325, from $1,300.


  • Household income under 200% FPL: will hold steady at $600.
  • Household income 200% to 299% FPL: to $1,600, from $1,550.
  • Household income 300% to 399% FPL: to $2,650, from $2,600.

Numbers for Long-Term Care Planners

10. Eligible Long-Term Care Premiums

Clients who have high enough medical bills to benefit from itemizing their medical expenses can include at least some of their private long-term care insurance premiums in their medical expense total.

The amounts that can be included in the medial expense total vary by age.

Here’s how the 2019 “includible” premium levels compare with the 2018 levels:

  • 40 or under: will hold steady at $420.
  • More than 40 and up to 50: will increase to $790, from $780.
  • More than 50 and up to 60: will increase to $1,580, from $1,560.
  • More than 60 and up to 70: will increase to $4,220, from $4,160.
  • 70 and older: will increase to $5,270, from $5,200.

11. The Qualified Long-Term Care Insurance Contract or Life Insurance Contract Per Diem Limitation

The dollar limit on the benefits will increase to $370 per day, from $360 per day.

Legislative Advocacy Efforts

12. Reporting Exception Limit

The IRS offers a reporting exception for some tax-exempt organizations with nondeductible lobbying expenditures.

The reporting exception limit will increase to $117 or less for 2019, from $115 or less for 2018.

11/18: Climate

Late in 2017, a United Nations agency announced that the number of chronically malnourished people in the world, after a decade of decline, had started to grow again—by thirty-eight million, to a total of eight hundred and fifteen million, “largely due to the proliferation of violent conflicts and climate-related shocks.” In June, 2018, the Food and Agriculture Organization of the U.N. found that child labor, after years of falling, was growing, “driven in part by an increase in conflicts and climate-induced disasters.”

There are at least four other episodes in the earth’s half-billion-year history of animal life when CO2 has poured into the atmosphere in greater volumes, but perhaps never at greater speeds. Even at the end of the Permian Age, when huge injections of CO2 from volcanoes burning through coal deposits culminated in “The Great Dying,” the CO2 content of the atmosphere grew at perhaps a tenth of the current pace. Two centuries ago, the concentration of CO2 in the atmosphere was two hundred and seventy-five parts per million; it has now topped four hundred parts per million and is rising more than two parts per million each year. The extra heat that we trap near the planet every day is equivalent to the heat from four hundred thousand bombs the size of the one that was dropped on Hiroshima.

As a result, in the past thirty years we’ve seen all twenty of the hottest years ever recorded. The melting of ice caps and glaciers and the rising levels of our oceans and seas, initially predicted for the end of the century, have occurred decades early.

About a third of the carbon responsible for changes has come from the United States.

Until now, human beings have been spreading, from our beginnings in Africa, out across the globe—slowly at first, and then much faster. But a period of contraction is setting in as we lose parts of the habitable earth. Sometimes our retreat will be hasty and violent; the effort to evacuate the blazing California towns along narrow roads was so chaotic that many people died in their cars. But most of the pullback will be slower, starting along the world’s coastlines. Each year, another twenty-four thousand people abandon Vietnam’s sublimely fertile Mekong Delta as crop fields are polluted with salt. As sea ice melts along the Alaskan coast, there is nothing to protect towns, cities, and native villages from the waves. In Mexico Beach, Florida, which was all but eradicated by Hurricane Michael, a resident told the Washington Post, “The older people can’t rebuild; it’s too late in their lives. Who is going to be left? Who is going to care?”

damage caused by rising sea levels will cost the world as much as fourteen trillion dollars a year by 2100. “Like it or not, we will retreat from most of the world’s non-urban shorelines in the not very distant future,”
“We can plan now and retreat in a strategic and calculated fashion, or we can worry about it later and retreat in tactical disarray in response to devastating storms. In other words, we can walk away methodically, or we can flee in panic.

Nine of the ten deadliest heat waves in human history have occurred since 2000.

The summer of 2018 was the hottest ever measured in certain areas. For a couple of days in June, temperatures in cities in Pakistan and Iran peaked at slightly above a hundred and twenty-nine degrees Fahrenheit, the highest reliably recorded temperatures ever measured. The same heat wave, nearer the shore of the Persian Gulf and the Gulf of Oman, combined triple-digit temperatures with soaring humidity levels to produce a heat index of more than a hundred and forty degrees Fahrenheit. June 26th was the warmest night in history, with the mercury in one Omani city remaining above a hundred and nine degrees Fahrenheit until morning. In July, a heat wave in Montreal killed more than seventy people, and Death Valley, which often sets American records, registered the hottest month ever seen on our planet.

increased heat and humidity have reduced the amount of work people can do outdoors by ten per cent, a figure that is predicted to double by 2050.

 when temperatures passed thirty-five degrees Celsius (ninety-five degrees Fahrenheit) and the humidity was higher than ninety per cent, even in “well-ventilated shaded conditions,” sweating slows down, and humans can survive only “for a few hours,

By 2070, tropical regions that now get one day of truly oppressive humid heat a year can expect between a hundred and two hundred and fifty days, if the current levels of greenhouse-gas emissions continue.

We have already managed to kill off sixty per cent of the world’s wildlife since 1970 by destroying their habitats, and now higher temperatures are starting to take their toll.

as the number of days that reach eighty-six degrees Fahrenheit or higher increases, corn and soybean yields across the U.S. grain belt could fall by between twenty-two and forty-nine per cent. We’ve already overpumped the aquifers that lie beneath most of the world’s breadbaskets; without the means to irrigate, we may encounter a repeat of the nineteen-thirties, when droughts and deep plowing led to the Dust Bowl—this time with no way of fixing the problem.

In November, 2016, Stephen Hawking gave humanity a deadline of a thousand years to leave Earth. Six months later, he revised the timetable to a century. In June, 2017, he told an audience that “spreading out may be the only thing that saves us from ourselves.”

EFM-I expect a major decline in life expectancy starting in 2035 as certain parts of the rural countryside become uninhabitable due to lack of water. Worldwide violence will increase. There will be at least one pandemic by 2035. And the list goes on. By 2050 it will be clear that mankind is dying out.

11/18: My reply to an advisor regarding My Patent Pending Process

Per his comments- "If you are an equity portfolio manager, then you are expected to have virtually 100% of funds invested in stocks." 

Disagree- it is being a risk manager first and foremost. I state that the idea of a static definition- albeit held universally- of always being invested is foolhardy, archaic and just plain wrong. The inverted yield curves for both 2000 and 2008 should have exposed- and did- MAJOR problems in the economy (though they could have been wrong as I submit). Nonetheless, when a certain loss accrues past a correction (10% to 15%), it is not only prudent but mandatory that exposure to equities be initially reduced and then to zero as things gets worse. If one had used just the S&P 500, the losses would be about 12%. Use of other mutual funds and some ETFs would have been greater since they would/should have lost more by the time the 12% S&P mark had been reached. I am not restricted by the term 'invested' as I am by the necessity of controlling risk. Hence your quote, 
"So you are saying you can find stocks funds that only fall 12-15% when the rest of the market falls 50%? That alone is impressive but difficult to believe -IF FULLY INVESTED".... is not a philosophy that I have adhered to for decades (though admittedly it took some time/experience to make the Process fluid.)

As regards, "how do these funds performs in regular or bull markets (esp if not fully invested)": I found an impartial and non investing government statistic that signals the economy has reached a turning point and investing might be good (never any guarantees). This stopped/reduced any emotion,unease and certainly 'unscientific' method of getting back in. So the investment in equities after 2010 were all fund equities that whatever you or any advisor would want to use or change or.... As far as taxes are concerned- if I am wrong about the change, clients would be taxed in a taxable account. If I am right, the losses sustained might be 50%+. But since I am almost solely addressing unemotional risk, the adjustment seems prudent. 

Here is an article on Linkedin: 

My effort was to find a straight forward and understandable method that would provide a long term benefit to the 90% of consumer who are clueless to investing and could use a simple Process that is focused on reducing unnecessary risk.


"Saving Regret" Free Download
NBER Working Paper No. w25238

AXEL H. BÖRSCH-SUPAN, Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)
Max Planck Society for the Advancement of the Sciences - Munich Center for the Economics of Aging (MEA)
RAND Corporation, State University of New York at Stony Brook - College of Arts and Science - Department of Economics, National Bureau of Economic Research (NBER)
Email: mhurd@RAND.ORG
RAND Corporation

We define saving regret as the wish in hindsight to have saved more earlier in life. We measured saving regret and possible determinants in a survey of a probability sample of those aged 60-79. We investigate two main causes of saving regret: procrastination along with other psychological traits, and the role of shocks, both positive and negative. We find high levels of saving regret but relatively little of the variation is explained by procrastination and psychological factors. Shocks such as unemployment, health and divorce explain much more of the variation. The results have important implications for retirement saving policies.


11/18: The Differences Between Medicare and Veterans Benefits

It’s important to be aware of your aging loved one’s health benefits before you visit their doctor. While many people think that Medicare and Veteran’s Affairs (VA) benefits work together, the plans do not overlap.

Only some benefits work at specific doctors’ offices. For example, VA benefits only cover healthcare at VA facilities and Medicare only covers care at Medicare-assigned facilities.


Survey: On average, Americans now want to retire at 62

A survey for MassMutual found that Americans know when they would like to retire, but nearly half of them have not figured out how much money they will need. The average age at which Americans expect to retire is 62, but only 56% say they have made calculations to determine how much money they should save before retirement.

EFM Very few will retire at 62. The changes in the world after 2035 won't allow it.


Oil prices rose on Friday morning as markets hope OPEC and partners will take action to reverse bearish sentiment.

Friday, November 16, 2018

Oil prices posted some gains on Thursday and in early trading on Friday, rising on the hope that OPEC+ might agree to a production cut in early December.


11/15: From a reader

Can I Get a Mortgage if I’m Retired?


A Guide to Downsizing for Seniors and Their Loved Ones


Should You Own or Rent a Home in Retirement?


How to Save for a Down Payment on a House


Saving for a Home Post-Bankruptcy: A Three-Step Guide for Families


7 Home Improvement & Remodeling Ideas That Increase Home Value (And What To Avoid)


How to Deter Burglars: Keeping Potential Robbers Away From Your Home

11/14: North Korea

Looks like the romance is fading. NK has an additional 19 sites that are doing more construction for missiles. And since Trump has already pissed off England, Iran, Canada, France, Germany- and who knows how many more-  he can now turn his attention to Melania and her needs. But he is sure to get rid of Kelly and a bunch of others soon so that should make him feel better.

The While House is in dire need of a leader

11/14: OIL- With prices coming down, will rigs be shut??

In today’s newsletter, we will take a quick look at some of the critical figures and data in the energy markets this week. 

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.

-    The IEA says that the petrochemical industry will drive crude oil demand forward over the next 20 years.

-    The developing world is set to experience more than 5 mb/d of demand increase from passenger vehicles, but that is mostly offset by demand destruction in rich countries. 

-    That leaves heavy trucks and petrochemicals as the main sources of demand growth

-    As a result, the IEA does not see overall peak oil demand until 2040.


"Women on Board: Does the Gender Diversity Reduce Default Risk?" Free Download
9th Conference on Financial Markets and Corporate Governance (FMCG) 2018

SEARAT ALI, Griffith University, Griffith Business School, Department of Accounting, Finance and Economics, Students
Griffith University - Department of Accounting, Finance and Economics
J.J. SU,
Griffith University

We provide the first comprehensive and robust evidence on the causal effect of boardroom gender diversity on default risk for 831non-financial Australian firms over the period from 2008 to 2013. We show that the proportion of female directors have an overall negative effect on default risk. The inverse effect of gender diversity on default risk is robust to alternative measures of gender diversity and default risk, and to alternative econometric specifications including the control for time-invariant firm characteristics, instrumental variable approach, propensity score matching, difference-in-differences, models based on changes in variables, and dynamic panel data estimation techniques. We also find that gender diversity reduces default risk through the mechanism of decreased information asymmetry (i.e., improved information environment). Further, we show that the inverse effect of gender diversity on default risk is stronger for firms with weak external governance and strong internal governance, suggesting that gender diversity could act as partial substitute for weak external governance quality but complementary for internal governance quality. Since the benefits of adding more females to boards are under current discussion, these findings will enrich the regulatory debate and also provide a guideline to investors and firms in designing appropriate trading strategies and governance structures, respectively. Overall, our results support the recent calls for more females sitting on corporate boards.

11/12: Men dying

Men die on average five years earlier than women, according to the US Centers for Disease Control and Prevention.

Prostate and testicular cancer contribute to the disparity. Also, four out of five people who kill themselves are men

11/12: Risk Tolerance and Circumstances

An investor’s risk attitude is a stable characteristic, like a personality trait, but risk-taking behavior can change based on the investor’s age, recent market events, and life experiences. These factors change investors’ perceptions of the risks. Differences in risk tolerance between men and women or in different circumstances trace back to emotional as much as rational considerations. Financial advisers should consider all of these factors when advising clients and can use four simple steps to incorporate best practices: be aware, educate, nudge, and hand hold.

The term risk tolerance is defined and used in different ways. Whether risk tolerance is a stable characteristic of a given investor or also takes into account external circumstances (e.g., economic shocks or the domain of the decision) depends on how it is defined and measured. This brief focuses on a definition of risk tolerance prevalent in the practitioner community—namely, an investor’s willingness to take perceived risk or the trade-off an investor is willing to make between the perceived risk and expected return of different investment choices. This definition derives from a psychological interpretation of the risk–return framework of classical portfolio theory. It treats risk tolerance as an attitude toward risk and decouples this pure attitudinal variable from the perceptions of risks and returns—psychological variables in their own right and distinct from the expected value and variance of the distribution of possible outcomes.

EFM- Wrong  Risk should be (and is by me for decades) by how much you can lose (mutual funds and ETFs- which are the main investments used by 90%+ of Americans) during a recession.

My formula provides an approximation of what could be lost by most funds and ETS (with histories- cannot work with newly minted investments). Client is then asked- how much do you want to lose?' That is a definitive risk acceptance or denial based on numbers not esoteric banalities from a client questionnaire. . Steps three and four of my Process identified above then shows how investors can reduce risk to 12% to maybe 15% (depends on the funds selected.) The Process has nothing to do with selection. The Process (step 4) then shows the time to get back in based on an independent statistic.

11/12: Does race matter? Of course. How about just a name inferring same?

A 'team'  sent 6,500 emails to randomly selected professors from 259 US universities. The sender of the email was a fictional, out-of-town, prospective PhD student who expressed interest in the professor’s graduate program and sought his or her guidance. The emails were identical and impeccably written, varying only in the name of the senders, which included Meredith Roberts, Lamar Washington, Juanita Martinez, Raj Singh and Chang Huang. We used 20 different names in 10 different race-gender categories; some could be perceived as white and male, some could not. (Our study examined another issue related to the timing of the request, but for the findings reported here, the prospective student was requesting a meeting for the following week.)

Overall, 67 percent of the faculty members responded; of those, more than half agreed to meet with the fictional student. (As soon as the professor wrote back, we immediately canceled the meeting.) However, professors were more responsive to white males compared to other students in almost every discipline and across all types of universities and bias was most severe at private universities and in disciplines paying higher faculty salaries (with business showing the most bias). Even when the student and the faculty member shared a race or gender, we saw the same levels of bias. The only exception was Chinese students writing to Chinese professors; they received more responses. Nonetheless, Chinese students were the most discriminated-against group in our study.

EFM- somewhat surprised when faculty and student were of the same race or gender, there still was bias. I would have liked to know WHY? Is THAT much bias programmed in our society. Seems likely.

“America is only 1 generation away from losing its’ freedom."

Ronald Regan

11/12: This has to stop-

Medicare is paying 80 percent more than other nations for drugs.

11/12: Deficit: The federal government is projected to issue $1.34 trillion of new debt in 2018 — its most since the depths of the Great Recession — according to Treasury Department projections released Monday.

This will ultimately put us into a very bad corner and devatate the economy.

11/12: Only partly right

How 401(k)s Can Help Recruit and Retain Employees
by Roger Lee / Workforce

Four in five employees indicate they want benefits and perks more than a pay raise, and a 401(k) ranks in the top five requested benefits, according to a recent Glassdoor survey. On top of that, when it comes to millennials, benefits are particularly appealing – 90 percent of employees 18 to 34 years old say they would prefer benefits over pay.

Attracting, recruiting and retaining employees is a costly and time-consuming process. That’s why it’s imperative to bring in top candidates and hire them with the intent of keeping them at your company as long as possible.
Here are three ways a high-quality 401(k) can help your recruiting and retention efforts:
1. Attract top talent and build high-performing teams
2. Tip the balance in your company’s favor
3. Increase employee retention

EFM- the missing part is solid information/knowledge on investing. They are not getting it. Check losses in 2000 (49%) and 2008 (57%). Should not have exceeded roughly 15%. -f

11/12: What people spend out-of-pocket on healthcare in 23 states
Morgan Haefner / Becker's Hospital CFO Report

In 2017, patients in Utah faced the highest out-of-pocket healthcare costs compared to 22 other states, according to a report from global think tank JPMorgan Chase Institute. The report analyzed data on 4.7 million Chase customers in 23 states between January 2013 and December 2017. Researchers found the average annual out-of-pocket healthcare spending climbed 8.5 percent in 2017 compared to the year prior.

Here is how average annual out-of-pocket spending stacked up among the 23 states featured in the report, listed from highest to lowest:

Utah: $863.70
Colorado: $797.30
Connecticut: $782.20
Texas: $730.10
New Jersey: $702

11/12:Individuals Not Seeking Help for the Hardest Retirement Concerns

A study found the top financial tasks individuals need help with include choosing when to retire, choosing appropriate investments and developing a strategy to withdraw from multiple accounts. Read more >

EFM- Or they end up using their parents, friends, co-workers et al for advice. In a way I cannot blame them since finding a planner is extremely difficult. You should at least get one who has had experience with the last mess of 2008 and preferably for 2000 as well. Means at least 15 years experience. That's good for a start.


Median Household Incomes by Age Bracket: 1967-2017
by Jill Mislinski, 10/19/18


Earlier this week, we updated our commentary on household income distribution to include the Census Bureau's release of the 2017 annual data. Our focus was on arithmetic mean (average) household incomes by quintile (and the top 5%) over the 50+ year history of this data series. The analysis offered some fascinating insights into U.S. household incomes.


Read More


11/12: Human activity has decimated global wildlife, reducing species counts by an average of 60% over the last four decades,

Tracking populations of more than 4,000 mammal, bird, fish, reptile and amphibian species, the WWF researchers found staggering declines between 1970 and 2014. These reductions are thought to be directly linked to human activity since current rates of species extinction are now 100 to 1,000 times higher than before human pressures became a factor.

11/12: Living Planet Report

Full Report

11/12: Apparently China can't Read

China's Reversal of Rhino and Tiger Parts Ban Alarms Activists

The move marks a major about-face for China, which has taken steps to curb its image as fueling the slaughter and illicit sale of endangered animals

11/12: SEC advisory panel wants 'fiduciary' in Reg BEST INTEREST

An article meant to clarify the use of fiduciary by the SEC. Go ahead and see if you can make sense out of it. I really couldn't. Imagine how consumers will get confused


Longevity Concerns Inform Education Opportunities

Increased life expectancy among Americans—which currently stands at 76 years for men and 81 for women—has extended the average retirement period to 18 years, and it highlights the need for individuals to have a comprehensive plan for saving and investing, according to BMO Wealth Management U.S. A survey of more than 500 Americans age 55 and older finds top concerns about a lengthy retirement are health care costs and quality of life (46%), being a burden on family members (45%), and running out of money during retirement (44%). BMO says individuals should know to plan for living beyond the average life expectancy and what medical expenses to expect, among other things. Read more >

EFM- you should however see life expectancy stagnate by 2035 and even drop thereafter. Why? Climate change will change the world negatively and irreparably by man. Mother Earth is pissed. 

11/11: When it rained in WWI, none of the soldiers on either side came out to fight. And that is why we should give Trump a pass for not going to the cemetery.


11/11: Earth is warming much faster

Nearly a quarter of the Northern Hemisphere's landmass sits above permafrost. Trapped in this frozen soil and vegetation is more than twice the carbon found in the atmosphere.

As fossil-fuel burning warms the Earth, this ground is thawing, allowing microbes to consume buried organic matter and release carbon dioxide and shorter-lived methane, which is 25 times as potent a greenhouse gas as CO2.

 If a region's active layer stops freezing consistently, consequences can be swift. Once unfrozen, soil microbes in the active layer can decompose organic material and release greenhouse gases year-round—not just in summer. And it exposes permafrost below to more heat so that layer, too, can begin thawing and releasing gases.

11/11: More climate changes

Once lush, El Salvador is dangerously close to running dry

The country's shrinking water supply is in jeopardy as weak regulation, lagging services, and climate variability fuel a complex crisis.


11/11: Oil

Oil fell below the $60 level, a day after slipping into a bear market. That means U.S. crude is now down by around 20% since early October as rising supply and concerns of an economic slowdown pressure prices. Fresh U.S. sanctions are unlikely to cut as much oil out of the market as initially expected with Washington granting temporary exemptions to Iran's biggest buyers. American production has also reached a new record high of 11.6M bbl/day.

11/11: More +Oil

Oil prices have hit a multi-month low as bearish sentiment takes over markets and OPEC considers reimplementing a production cut deal

11/9: Long Term Care and veterans

More than 40 million people in the United States serve as unpaid caregivers, usually for an aging parent or a grandparent.

Not only do they lack compensation, but they spend on average one-fifth of their income on caregiving expenses, according to a recent report by AARP. These out-of-pocket expenses keep them from saving for their own retirement.

Surprisingly, one-fourth of those unpaid caregivers are Millennials, trying to balance their work and family obligations and handle the financial stress of paying out of pocket to support a parent or grandparent while still paying off student loans.

In all likelihood, the number of unpaid caregivers will continue to grow as the elderly population doubles over the next generation.

But for veterans or their surviving spouses, there may be some relief. VA Pension benefits -- commonly called Aid and Attendance (A&A) benefits -- help veterans and their surviving spouses pay for in-home care, assisted living-, memory- or nursing care as well as medical supplies and medicines.

These pension benefits are available to former service members (who are older than 65 or completely disabled) or their surviving spouses. Additionally, the service member must have been discharged (not dishonorably) after at least 90 days of consecutive, active-duty service with at least one of those days during a wartime period.

A&A applicants must meet limited asset requirements. The net worth limit is $123,600 for 2018 and is indexed for inflation. Net worth does not generally include the veteran’s primary residence or vehicle. It does include assets in bank accounts, stocks, bonds and commercial or secondary property holdings as well as one year’s Income for VA Purposes (IVAP).

When calculating IVAP, veterans and surviving spouses can deduct certain unreimbursed monthly care expenses. These include skilled nursing, assisted living costs, and long-term care and health insurance premiums. They also include in-home care provided by a non-spouse relative.

By applying for A&A, you could help defray the costs of your own care and compensate your relatives so they do not have to defer their own retirement planning or deepen their debt.

The AARP study, Millennials: The Emerging Generation of Family Caregivers, found that millennials spend 21 hours per week on caregiving duties. Nearly three quarters of them, 73 percent, work also. More than half, 54 percent, say their work or career prospects have been negatively affected by their caregiving commitments. The average respondent reported spending $6,800 per year of their own income on caregiving expenses.

Figures were similar for older caregivers in a 2016 AARP study. That study found that more than three quarters, 78 percent paid out-of-pocket for caregiving expenses. On average family caregivers spent $6,954 per year. This amounted to nearly 20 percent of their annual income on average.

More than half of employed caregivers, 56 percent, said caregiving affected their work. Due to their caregiving responsibilities, respondents said they worked different hours, fewer/more hours, or took time off (whether paid or unpaid).

Many family caregivers also cut back on other spending because of caregiving obligations. One in six reduced contributions to their retirement savings and almost half cut back on leisure spending such as eating out or vacations.

If you are concerned about costly long-term care and the effect it could have on your family’s future financial prospects, consult with a trusted, VA-approved elder law attorney. An attorney can help you determine your options to not only pay for your care but help your family stay out of debt.

11/9:  Coastal homes caught in wave of climate gentrification

Sea levels are rising, and that could be causing waves of unexpected house price increases in poorer coastal areas.

The rich will buy the homes since they are able to pay for higher insurance. The article also noted that in areas like New Orleans, the poor neighborhoods did not rebuild so the rich could buy into newly built  homes in an exclusive area.

But certain areas remain in critical ocean areas and their prices have gone down by up to 10%

11/9: Another  big one bites the dust (life insurance)

Voya Financial Inc. VOYA 2.82% is the latest U.S. life insurer to exit a business that was once a core part: life insurance sold to individuals.

The company will keep its existing block of life-insurance policies and pay out claims as they come due.

The move follows the withdrawal by MetLife Inc. from sales of new life policies to individuals last year. Then the largest U.S. life insurer by assets, MetLife hived off much of its U.S. retail life-insurance operations into a new company named Brighthouse Financial Inc. Brighthouse became a publicly traded company in August of 2017.

Both Voya and MetLife continue to sell life insurance to employers through group-benefit arrangements. But those and many other insurers face a sluggish environment for selling these policies directly to American families, many of whom are more concerned about outliving their savings than dying prematurely. Voya has a large business selling 401(k) and other tax-advantaged retirement-savings programs.

11/8:  Rising Costs Could Threaten Puerto Rico’s Building Boom

EFM- that's a no brainer article. But costs for the Carolinas, Texas, et al are also rising. The U.S. will leave a lot of areas free of more building simply because more dramatic storms will be coming. Puerto Rico- I am not sure they will ever get back to where they were- which wasn't that great to begin with.

But if we can spend a few hundred million on our Army to roll out some barb wire due to a rampant invasion by a massing hoard of immigrants  carrying children for 1000's of miles with no shelter, ............................

11/8: Coprolalia

an occasional characteristic of Tourette’s syndrome in which the sufferer involuntarily utters socially inappropriate remarks. It's now called Trumpette syndrome

Also called Trumpolalia- though this disease is where the sufferer intends on uttering such remarks and defending it as something else. Will last until death. Even after if some tweets are left in storage for use later on. Called  Narcissimolalia.

(As stated, not all his issues are bad- and I never said they were. But I have stated he is a schmuck many times. The stuff about McCain and women was just insufferable. And unforgivable for me)  

11/8: Why the Federal Budget Deficit Keeps Getting Bigger

USA Today: Why the Federal Budget Deficit Keeps Getting Bigger


Lear Capital Research(Nov 5 2018)

Across the nation, American families have to keep their budgets balanced in order to make ends meet. But the same has never been true of the U.S. federal government, which has routinely run budget deficits by spending more than it brings in through taxes and other revenue sources.

Budget deficits have been a bipartisan effort, with Republicans and Democrats trading positions of power in Congress and the White House without having found any permanent resolutions to the issue.

And a couple of answers

Martin Armstrong Warns Politicians Are Creating The Worst Economic Crash In History | Zero Hedge


Zero Hedge(Nov 5 2018)

'Politicians have totally and completely misunderstood the trends within the global economy and as a result, they are actually creating one of the worst economic debacles in history...

Yellen says rising US deficit unsustainable: 'If I had a magic wand, I would raise taxes' 30 2018)

The United States is taking on too much debt right now, a problem that is will only worsen moving forward, former Federal Reserve Chair Janet Yellen said Tuesday.

"If I had a magic wand, I would raise taxes and cut retirement spending," Yellen told CNBC's Steve Liesman at the Charles Schwab Impact conference in Washington, D.C., who characterized the U.S. debt path as "unsustainable."

11/7: Here Come The Robos

Charles Schwab has published a new report, “The Rise of Robo: Americans’ Perspectives and Predictions on the use of Digital Advice,

Despite the benefits of automation with a robo advisor, it is clear that Americans still see value in the ability to interact with a person when needed. Seventy-one percent of people want a robo advisor that also has access to human advice and nearly half (45 percent) not using a robo advisor today would be more likely to use one if it has quick and easy access to human support. Even among millennials, 79 percent want a robo advisor that also provides access to human advice.

Beyond investing, 42 percent of boomers are more comfortable relying on technology than people to answer questions and solve problems, and boomers also report that technology has helped them improve their financial lives: 51 percent say technology gives them more confidence of mind when it comes to finances and 44 percent say technology has helped them reach financial goals. Although robo advice is often thought of as a tool primarily for younger investors, older generations see the appeal as well. In fact, nearly half of baby boomers using a robo advisor today say the service is perfect for their life stage. Among all boomers, 62 percent agree that robo advice takes the emotion out of investing, nearly half (49 percent) say it helps them maintain a diversified portfolio, and 46 percent trust robo advisors to provide more transparent financial advice.

11/7: Climate change

Extreme Weather and the Jet Stream

What Happens in the Arctic Doesn't Stay There

Daniel Swain, a climate scientist at UCLA and the National Center for Atmospheric Research who was not involved with the new research, said the study has some "compelling new evidence on the link between amplified Arctic warming and extreme mid-latitude weather during the summer months."

What happens in the Arctic doesn't stay there. Increased melting of reflective sea ice in summer exposes more dark-colored ocean to absorb heat, and that heats the surrounding land. As Arctic warming races ahead of the rest of the global average, the temperature contrasts that drive the jet stream are reduced, and the river of wind more frequently twists into sharp and slow-moving or stationary waves.

"When the jet stream enters this wavy state, extreme weather tends to occur on either side of the amplified ridges and troughs as the storm track becomes locked in place," Swain said. Then, specific regions experience long periods of cool and stormy or, contrarily, hot and dry weather, he added.

11/7: OIL- the U.S. is doing GREAT

In today’s newsletter, we will take a quick look at some of the critical figures and data in the energy markets this week. 

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.

-    U.S. monthly oil production jumped to 11.3 million barrels per day in August, a new all-time record high. Production in Texas topped 4.6 mb/d in August.

-    The jump was enough to make the U.S. the largest oil producer in the world, overtaking Russia’s 11.2 mb/d. 

-    Pipeline constraints and other bottlenecks were expected to slow development. “However, industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow at a higher rate than EIA expected,” the EIA wrote in a report.

11/7: Emotional first Aid Kit for Caregivers

  1. Smile, it’s not funny how often we forget to do this simple act and how well it lifts our spirits 
  2. Call someone who makes you feel good, especially if you haven’t spoken with them in a long time
  3. Have a bite of something sinfully delicious, while being conscious your own dietary limitations. When was the last time you treated yourself to a snack?
  4. Take a bubble bath, once you make sure that your loved one is safe and secure, nothing expresses caregiver self-care better than a leisurely bubble bath
  5. Read, pick up that novel or re-read that motivating poem. When was the last time you turned off the television, turned down the phone and read something nice? (P.S. this tip goes very well with tip number 3.)
  6. Get a massage. It’s like taking a mini vacation. It will relax you and take care of all the tension you build up every day.
  7. Buy yourself some flowers. You deserve it and the sight and smell of something beautiful and fragrant will give you a reason to smile (see number 1).
  8. Take a walk at a pace that allows you to feel the energy of the wind washing over you.
  9. Go shopping buy something “just for you”, something that makes you feel special.
  10. Go online. You can explore different places, find new friends and learn new things. Make the Internet your getaway even when you can’t get out of the house.

11/7: Alzheimers

Approximately 5.5 million Americans have Alzheimer disease or dementia.
Results of a study published in the Journal of Law, Medicine & Ethics indicate that individuals who have knowledge of their Alzheimer disease biomarker status may possibly be exposed to adverse long-term care insurance coverage decisions.

11/7: Priming

Priming studies suggest that decisions can be influenced by apparently irrelevant actions or events that took place just before the cusp of choice. They have been a boom area in psychology over the past decade, and some of their insights have already made it out of the lab and into the toolkits of policy wonks keen on “nudging” the populace.

11/7: The killing of Khashoggi has brought the atrocity of Yemen to the surface. If his death can stop the killing, then he certainly did not die in vain. He may have done more good for humanity than anyone this year. Unfortunately, as of this morning, more bombing is going on

How the War in Yemen Became a Bloody Stalemate — and the Worst Humanitarian Crisis in the World.He may have done more good for humaity

Saudi Arabia thought a bombing campaign would quickly crush its enemies in Yemen. But three years later, the Houthis refuse to give up, even as 14 million people face starvation.

11/7: Managing Lung Disease

The lungs oversee the body’s oxygen needs by taking in air deep into their corridors (called bronchi), allowing for oxygen and carbon dioxide to filter in and out of the blood. The dance of oxygen exchange becomes more complicated with inhaled pollutants of different kinds, such as tobacco smoke, pollution and congestion from infections.

Our lungs also help the body’s metabolic process, releasing more carbon dioxide in situations where the kidneys need help keeping the body’s acid and alkaline quantities balanced. They can release more or less carbon dioxide if needed in a given situation.

Each body system works with the other to keep the body in a state of health. Illness can be acute (short term) or chronic (recurrent). Each disease has its own definition of acute or chronic. Lung disease can be caused by restrictive conditions such as spinal curvature, or obstructive conditions like emphysema. Lung disease is often a mixture of more than one condition, and both restrictive and obstructive conditions can occur at the same time.


The National Institute of Health estimates that 12 million people have been diagnosed with Chronic Obstructive Pulmonary Disease (COPD).The term COPD is a general designation for a group of lung diseases that includes asthma, chronic bronchitis, emphysema and bronchiectasis.

COPD causes shortness of breath, and problems with mucus clearing and oxygen exchange from the lungs to the blood vessels. Each of the diseases that fall under the COPD classification creates different changes in the lung tissue, but essentially similar symptoms and challenges. Air flow is not only obstructed from going deep into the lungs. The ability to exhale properly hampers the next breath coming in.

The airways can collapse because the smaller airways “flop” closed when exhaling. The closed airway may need medication to open them up, or an altered breathing pattern that lets the air flow out more smoothly. Ideally, a combination of the two provides consistent help. The trapping of air prevents easy exchange of oxygen and carbon dioxide, and the “dance” that occurs when a new breath carries in fresh air causes “old” air to block the entry of “new” air. It’s similar to people needing to exit an elevator before others can get in.


Individuals diagnosed in early stages of COPD may have an easier time adapting to lifestyle changes to assist with management of the disease. Eliminating smoking is a first course of action; and the earlier one starts, the simpler it may be.

Therapies like pulmonary rehabilitation are designed to adapt to the current state of health, and provide great benefits at any stage of diagnosis. Pulmonary rehabilitation by competent professionals includes breathing exercises, education on energy conservation and supervised exercise to improve stamina.

In all cases, COPD increases the amount of work it takes to breathe. Conserving energy, especially in later stages, improves breathing and the body’s ability to transfer oxygen. By supplying the body’s oxygen needs adequately, everything from digestion to sleep is positively affected.


Family members and loved ones can have a difficult time with COPD diagnosis, treatment and day-to-day activities. Meals and medication schedules may have to be changed to assist the loved one with maintaining their health. Where meds and meals could be delayed or possibly skipped until a “convenient” time, a stricter schedule may have to be adhered to, delaying family activities.

Friends may not understand a progressive intolerance to certain odors from cleaning solutions, pets or colognes. The COPD patient may have adapted to exposure to some environments, but once diagnosed and advised on making changes, it may be less tolerable.

Mrs. Valorie Bender has been diagnosed with COPD, specifically emphysema. She and her husband Michael had a number of adaptations to make during the first few years after her diagnosis.“Michael is a lot taller than me. If he sprayed air freshener or any kind of spray, I knew to stay out of the room until he was done.” Any spray releasing aerosol will have droplets that can be breathed in. Mrs. Bender learned to stay away from the area until the droplets had settled to avoid the mist penetrating her lungs.

She goes on to explain that adapting to COPD comes over time, and requires some creative thinking. With over a foot difference in height between the Benders, they are able to spot smokers to steer both of them away from second-hand smoke.“You have to be careful of people’s feelings” she indicates. Smokers, with or without a cigarette, carry the odor on their breath or clothing. The second- hand smoke can irritate lungs and trigger the need to use an inhaler. Preceding that would be a “coughing fit.”

Smokers may be used to strangers “commenting” on smoking by faking an intense cough. Mrs. Bender has chosen the middle path of dealing with this by avoiding the situation as much as possible. Family members may forget from time to time, or a new individual may be brought into their circle, requiring fancy footwork in being direct but kind. As her husband and caregiver, Michael Bender’s biggest adjustment was identifying what actions might be needed.“Michael had to learn not to panic when I went into a coughing attack.”


Loved ones with COPD may dig their heels in when it comes to adapting. Caregivers may feel obliged to push the situation. To eliminate stress on both parties, a middle ground is a better path.

When Valorie Bender’s “coughing fits” started, Michael learned to stay as calm as possible and just observe Valorie’s actions. If her handheld inhaler was needed, he could help by getting it for her, or help her to a chair to sit down until the coughing spasm passed. As they began to accept their roles in coping with COPD, caregiver and care receiver panic diminished. Michael learned the general “flow” of her coughing spasm, and that not all episodes are an emergency. Valorie, as the COPD patient, has adapted to letting herself get through the cough experience at her own rate, rather than push herself to “hurry up and get better so as not to panic Michael.”

The Benders have developed a lifestyle that may have limitations they didn’t have before Mrs. Bender’s diagnosis. Their changed lifestyle takes their mutual mental, emotional and physical well-being into the spotlight. Developing coping skills and creative management of activities has improved their relationship and mutual health.

11/6: Very interesting- but would need more investigation

Loss Attitudes in the U.S. Population: Evidence from Dynamically Optimized Sequential Experimentation (DOSE)

Jonathan Chapman, Erik Snowberg, Stephanie Wang and Colin Camerer

No 7262, CESifo Working Paper Series from CESifo Group Munich

Abstract: We introduce DOSE - Dynamically Optimized Sequential Experimentation - and use it to estimate individual-level loss aversion in a representative sample of the U.S. population (N = 2,000). DOSE elicitations are more accurate, more stable across time, and faster to administer than standard methods. We find that around 50% of the U.S. population is loss tolerant. This is counter to earlier findings, which mostly come from lab/student samples, that a strong majority of participants are loss averse. Loss attitudes are correlated with cognitive ability: loss aversion is more prevalent in people with high cognitive ability, and loss tolerance is more common in those with low cognitive ability. We also use DOSE to document facts about risk and time preferences, indicating a high potential for DOSE in future research.

Keywords: dynamic experiments; DOSE; loss aversion; risk preferences; time preferences (search for similar items in EconPapers)
JEL-codes: C81 C90 D81 D90 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc 
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Downloads: (external link) (application/pdf)


1.   Cost-Benefit Analysis in Reasoning


Larbi Alaoui; Antonio Penta


When an individual thinks about a problem, his decision to reason further may involve a tradeoff between cognitive costs and a notion of value. But it is not obvious that this is always the case, and the value of reasoning is not well-defined. This paper analyzes the primitive properties of the reasoning process that must hold for the decision to stop thinking to be represented by a cost-benefit analysis. We find that the properties that characterize the cost-benefit representation are weak and intuitive, suggesting that such a representation is justified for a large class of problems. We then provide additional properties that give more structure to the value of reasoning function, including ‘value of information’ and ‘maximum gain’ representations. We show how our model applies to a variety of settings, including contexts involving sequential heuristics in choice, response time, reasoning in games and research. Our model can also be used to understand economically relevant patterns of behavior for which the cost-benefit approach does not seem to hold. These include choking under pressure and (over)thinking aversion.


cognition and incentives, Choice theory, reasoning, fact-free learning, sequential heuristics


D01 D03 D80 D83




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1.   The causal effect of trust


Björn Bartling; Ernst Fehr; David Huffman; Nick Netzer


Trust affects almost all human relationships – in families, organizations, markets and politics. However, identifying the conditions under which trust, defined as people's beliefs in the trustworthiness of others, has a causal effect on the efficiency of human interactions has proven to be difficult. We show experimentally and theoretically that trust indeed has a causal effect. The duration of the effect depends, however, on whether initial trust variations are supported by multiple equilibria. We study a repeated principal-agent game with multiple equilibria and document empirically that an efficient equilibrium is selected if principals believe that agents are trustworthy, while players coordinate on an inefficient equilibrium if principals believe that agents are untrustworthy. Yet, if we change the institutional environment such that there is a unique equilibrium, initial variations in trust have short-run effects only. Moreover, if we weaken contract enforcement in the latter environment, exogenous variations in trust do not even have a short-run effect. The institutional environment thus appears to be key for whether trust has causal effects and whether the effects are transient or persistent.


Trust, causality, equilibrium selection, belief distortions, incomplete contracts, screening, institutions


C91 D02 D91 E02




11/6: Absolutely true

"Computer Vision and Real Estate: Do Looks Matter and Do Incentives Determine Looks" Fee Download
NBER Working Paper No. w25174

EDWARD L. GLAESER, Harvard University - Department of Economics, Brookings Institution, National Bureau of Economic Research (NBER)
Harvard University
Massachusetts Institute of Technology (MIT)

How much does the appearance of a house, or its neighbors, impact its price? (EFM- a LOT) Do events that impact the incentives facing homeowners, like foreclosure, impact the maintenance and appearance of a home? Using computer vision techniques, we find that a one standard deviation improvement in the appearance of a home in Boston is associated with a .16 log point increase in the home’s value, or about $68,000 at the sample mean. The additional predictive power created by images is small relative to location and basic home variables, but external images do outperform variables collected by in-person home assessors. A home’s value increases by .4 log points, when its neighbor’s visually predicted value increases by one log point, and more visible neighbors have a larger price impact than less visible neighbors. Homes that went through foreclosure during the 2008-09 financial crisis experienced a .04 log point decline in their appearance-related value, relative to comparable homes, suggesting that foreclosures reduced the incentives to maintain the housing stock. We do not find more depreciation of appearance in rental properties, or more upgrading of appearance by owners before resale.

EFM Buy a whole mess of posies or whatever is colorful and plant them around the house- particularly the front. If the paint is bad, consider repainting. It will bring in more money due to the enhanced curb appeal. Bake cookies, a turkey, use popcorn- the smell makes it feel like home. Use throw rugs over a bad carpet. The buyers know it will need to be replaced but the coverage helps dull the senses. First and foremost- CURB APPEAL

11/6: Another important economic issue