Master Financial Education

Financial and Economic Daily Commentary 2018
The  most intensive and extensive on the Web
Knowledge makes obsolete the inequities that ignorance and prejudice justify
Errold. F. Moody Jr.

click above for bio



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

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

BUSINESS WEEK: "For an Expert, Click here"  

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

This is my latest article for Linkedin


10/18: Robo calls- see how bad they are in your area code. 

NBC News found through data analysis that the number of robocalls placed nationwide increased 50 percent from February to July of 2018 and remains the top consumer complaint to the Federal Communications Commission. Americans received 13 robocalls, on average, in September. And in one state, nearly 70.

many services provide a “neighbor spoofing” function, which makes automated calls appear to be coming from the recipient's area code.

“Spoofing is very easy,. “You can do that in a day.”

10/18: National Do Not Call Registry

It will stop legitimate callers but not the worst offenders

10/18: Risks of elderly driving

Driving a car is a symbol of independence and competence and is closely tied to an individual’s identity. It also represents freedom and control and allows older adults to gain easy access to social connections, health care, shopping, activities and even employment. At some point, however, it is predictable that driving skills will deteriorate and individuals will lose the ability to safely operate a vehicle. Even though age alone does not determine when a person needs to stop driving, the decision must be balanced with personal and public safety. Driving beyond one’s ability brings an increased safety risk or even life-threatening situations to all members of society. Statistics show that older drivers are more likely than others to receive traffic citations for failing to yield, making improper left turns, and running red lights or stop signs, which are all indications of a decrease in driving skills. Understandably, dealing with impaired older drivers is a delicate issue.

The road to driving cessation is anything but smooth. Each year, hundreds of thousands of older drivers across the country must face the end of their driving years and become transportation dependent. Unfortunately, finding other means of transportation has not noticeably improved in recent years, leading to a reluctance among older drivers to give up driving privileges and of families to remove the car keys. The primary issue facing older drivers is how to adapt to changes in driving performance while maintaining necessary mobility. Despite being a complicated issue, this process can be more successful when there is a partnership between the physician, older driver, family or caregiver.

Dramatic headlines like these have ignited national media debates and triggered the pressing need for more testing and evaluation of elderly drivers, especially with the swell of the Baby Boomer generation: “Family of four killed by an 80-year-old man driving the wrong way on Highway 169.  86-year-old driver killed 10 people when his vehicle plowed through a farmers’ market in southern California. 93-year-old man crashed his car into a Wal-Mart store, sending six people to the hospital and injuring a 1-year-old child.”

According to the Hartford Insurance Corporation, statistics of older drivers show that after age 75, there is a higher risk of being involved in a collision for every mile driven. The rate of risk is nearly equal to the risk of younger drivers ages 16 to 24. The rate of fatalities increases slightly after age 65 and significantly after age 75. Although older persons with health issues can be satisfactory drivers, they have a higher likelihood of injury or death in an accident.

Undoubtedly, an older adult’s sense of independence vs. driving risk equals a very sensitive and emotionally charged topic. Older adults may agree with the decline of their driving ability, yet feel a sense of loss, blame others, attempt to minimize and justify, and ultimately may feel depressed at the thought of giving up driving privileges. Driving is an earned privilege and in order to continue to drive safely, guidelines and regulations must be in place to evaluate and support older drivers. 

Dementia and Driving Cessation

Alzheimer’s disease and driving safety is of particular concern to society. Alzheimer’s disease (AD) is the most common cause of dementia in later life and is a progressive and degenerative brain disease. In the process of driving, different regions of the brain cooperate to receive sensory information through vision and hearing, and a series of decisions are made instantly to successfully navigate. The progression of AD can be unpredictable and affect judgment, reasoning, reaction time and problem-solving. For those diagnosed with Alzheimer's disease, it is not a matter of if retirement from driving will be necessary, but when. Is it any wonder that driving safety is compromised when changes are occurring in the brain? Where dementia is concerned, driving retirement is an inevitable endpoint for which active communication and planning among drivers, family, and health professionals are essential.

Current statistics from the Alzheimer’s Association indicate that 5.3 million Americans have Alzheimer’s disease (AD) and this number is expected to rise to 11-16 million by the year 2050. Many people in the very early stages of Alzheimer’s can continue to drive; however, they are at an increased risk and driving skills will predictably worsen over time. The Alzheimer’s Association’s position on driving and dementia supports a state licensing procedure that allows for added reporting by key individuals coupled with a fair, knowledgeable, medical review process.

Overall, the assessment of driving fitness in aging individuals, and especially those with dementia, is not clear cut and remains an emerging and evolving field today.

Physician’s Role in Driving Cessation

While most older drivers are safe, this population is more prone to vehicle accidents due to decreased senses, chronic illness and medication-related issues. The three primary functions that are necessary for driving and need to be evaluated are: vision, perception, and motor function. As the number of older drivers rises, patients and their families will increasingly turn to the physicians for guidance on safe driving. This partnership seems to be a key to more effective decision-making and the opinions of doctors vs. family are often valued by older drivers. Physicians are in a forefront position to address physical, sensory and cognitive changes in their aging patients. They can also help patients maintain mobility through proper counseling and referrals to driver evaluation programs. This referral may avoid unnecessary conflict when the doctor, family members or caregivers, and older drivers have differing opinions. (It should be noted that driver evaluation programs are usually not covered by insurance and may require an out-of-pocket cost.)

Not all doctors agree that they are the best source for making final decisions about driving. Physicians may not be able to detect driving problems based on office visits and physical examinations alone. Family members should work with doctors and share observations about driving behavior and health issues to help older adults limit their driving or stop driving altogether. Ultimately, counseling for driving retirement and identifying alternative methods of transportation should be discussed early on in the care process, prior to a crisis. Each state has an Area Agency on Aging program that can be contacted for information, and referrals can be made to a social worker or community agency that provides transportation services.

Resources do exist to help physicians assess older adults with memory impairments, weigh the legal and ethical responsibilities, broach the topic of driving retirement and move toward workable plans. The Hartford Insurance Corporation, for example, offers two free publications that make excellent patient handouts: At the Crossroads: A Guide to Alzheimer's Disease, Dementia and Driving and We Need to Talk: Family Conversations with Older Drivers.

These resources reveal warning signs and offer practical tips, sound advice, communication starters, and planning forms. Other resources can be found through the Alzheimer's Association. Physicians can also refer to the laws and reporting requirements for unsafe drivers in their state and work proactively with patients and their families or caregivers to achieve driving retirement before serious problems occur. Ultimately, assessing and counseling patients about their fitness to drive should be part of the medical practice for all patients as they age and face health changes. 

Driver’s Role in Driving Cessation

 “How will you know when it is time to stop driving?” was a question posed to older adults in a research study. Responses included “When the stress level from my driving gets high enough, I’ll probably throw my keys away” and “When you scare the living daylights out of yourself, that’s when it’s time to stop.” These responses are clues to a lack of insight and regard for the social responsibility of holding a driver’s license and the critical need for education, evaluation and planning.

Realizing one can no longer drive can lead to social isolation and a loss of personal or spousal independence, self-sufficiency, and even employment. In general, older drivers want to decide for themselves when to quit, a decision that often stems from the progression of medical conditions that affect vision, physical abilities, perceptions and, consequently, driving skills. There are many things that an older adult can do to be a safe driver and to participate in his or her own driving cessation.

The Centers for Disease Control and Prevention suggest that older adults:

  • Exercise regularly to increase strength and flexibility.
  • Limit driving only to daytime, low traffic, short radius, clear weather
  • Plan the safest route before driving and find well-lit streets, intersections with left turn arrows, and easy parking.
  • Ask the doctor or pharmacist to review medicines—both prescription and over-the counter—to reduce side effects and interactions.
  • Have eyes checked by an eye doctor at least once a year. Wear glasses and corrective lenses as required.
  • Preplan and consider alternative sources and costs for transportation and volunteer to be a passenger

Family’s or Caregiver’s Role in Driving Cessation

Initially, it may seem cruel to take an older person's driving privilege away; however, genuine concern for older drivers means much more than simply crossing fingers in hopes that they will be safe behind the wheel. Families need to be vigilant about observing the driving behavior of older family members. One key question to be answered that gives rise to driving concerns is “Would you feel safe riding along with your older parent driving or having your child ride along with your parent?” If the answer is “no,” then the issue needs to be addressed openly and in a spirit of love and support. Taking an elder’s driving privileges away is not an easy decision and may need to be done in gradual steps. Offering rides, enlisting a volunteer driver program, experiencing public transportation together, encouraging vehicle storage during winter months, utilizing driver evaluation programs and other creative options, short of removing the keys, can be possible solutions during this time of transition.

Driving safety should be discussed long before driving becomes a problem. According to the Hartford Insurance survey, car accidents, near misses, dents in the vehicle and health changes all provide the chance to talk about driving skills. Early, occasional and honest conversations establish a pattern of open dialogue and can reinforce driving safety issues. Appealing to the love of children or grandchildren can instill the thought that their inability to drive safely could lead to the loss of an innocent life. Family members or caregivers can also form a united front with doctors and friends to help older drivers make the best driving decisions. If evaluations and suggestions have been made and no amount of rational discussion has convinced the senior to cease driving, then an anonymous report can be made to the Department of Motor Vehicles in each state.

According to the Alzheimer’s Association, strategies that may lead to driving cessation when less drastic measures fail include:

  1. Family meetings to discuss issues and concerns
  2. Disabling or removing the car
  3. Filing down the keys
  4. Placing an “Expired” sticker over the driver’s license
  5. Cancelling the vehicle registration
  6. Preventing the older driver from renewing his or her driver's license
  7. Speaking with the driver’s doctor to write a prescription not to drive, or to schedule a formal driving assessment

Finally, it is suggested that family members learn about the warning signs of driving problems, assess independence vs. the public safety, observe the older driver behind the wheel or ride along, discuss concerns with a physician, and explore alternative transportation options. Solutions There are a multitude of solutions and recommendations that can be made in support of older drivers. Public education and awareness is at the forefront. An educational program that includes both classroom and on the road instruction can improve knowledge and enhance driving skills.

The AAA Foundation provides several safe driving Web sites with tools for seniors and their loved ones to assess the ability to continue driving safely.  These include and  They also sponsor a series of Senior Driver Expos around the country where seniors and their loved ones can learn about senior driving and mobility challenges and have a hands-on opportunity to sample AAA's suite of research-based senior driver resources. Information on the Expos is available at

AARP offers an excellent driver safety program that addresses defensive driving and age-related changes, and provides tools to help judge driving fitness. Expanding this program or even requiring participation seems to be a viable entry point for tackling the challenges of driving with the aging population.

CarFit is an educational program that helps older adults check how well their personal vehicles "fit" them and if the safety features are compatible with their physical characteristics. This includes height of the car seat, mirrors, head restraints, seat belts, and proper access to the pedals. CarFit events are scheduled throughout the country and a team of trained technicians and/or health professionals work with each participant to ensure their cars are properly adjusted for their comfort and safety.

Modification of driving policies to extend periods of safe driving is another solution. Older drivers nearing the end of their safe driving years could ‘retire’ from driving gradually, rather than ‘give up’ the driver’s license.  An older adult can be encouraged to relinquish the driver’s license and be issued a photo identification card at the local driver’s bureau.

The Alzheimer’s Association proposes several driving assessment and evaluation options. Among them are a vision screening by an optometrist, cognitive performance testing (CPT) by an occupational therapist, motor function screening by a physical or occupational therapist, and a behind the wheel assessment by a driver rehabilitation specialist. Poor performances on these types of tests have been correlated with poor driving outcomes in older adults, especially those with dementia. Requiring a driving test after a certain age to include both a written test and a road test may be an option considered by each state.  Finally, continued input and guidance will be necessary from AARP, state licensing programs, transportation planners, and policymakers to meet the needs of our aging driving population.

It is appropriate to regard driving as an earned privilege and independent skill that is subject to change in later life. In general, having an attitude of constant adjustment until an older individual has to face the actual moment of driving cessation seems to be a positive approach. Without recognizing the magnitude of this transition, improving the quality of life in old age will be compromised. Keeping our nation’s roads safe while supporting older drivers is a notable goal to set now and for the future.

                                                   Family Day

10/18: Standards of Conduct for Investment Professionals: Overlapping Protections for Broker-Dealer Retirement Customers

"[If] Regulation BI and Form CRS (Client Relationship Summary), at least structurally, are adopted by the SEC as proposed; and ... ERISA regulation reverts as expected to its pre-June 9, 2017 state.... there would be four bodies of nationally applicable regulation broadly imposing standards of conduct on [broker-dealers] in the retirement space: [1] The federal securities law administered by the SEC; [2] The rules of the Financial Industry Regulatory Authority (FINRA); [3] The prohibited transaction excise tax provision of the Internal Revenue Code (IRC); and [4] The fiduciary standards and prohibited transaction rules of ERISA enforced by the DOL."

10/18: Employees Decrease Retirement Savings and Financial Wellness Due to Health Costs

"Approximately one-half of workers (47%) report having experienced an increase in health care costs in the past year, about the same percentage since 2015. Of those reporting cost increases, 24% state they have decreased their contributions to retirement plans, and 41% have decreased their contributions to other savings. Thirty percent have delayed retirement, and 17% have taken a loan or withdrawal from a retirement plan."

10/18: 7 Myths about Millennials


Thinking Money

10/18:  The Drive Toward Universal Health Coverage

Universal health coverage is a social goal that enables everyone to receive the quality health care they need, irrespective of ability to pay, without suffering financial hardship in the process. To move toward that goal, policy makers should address three main considerations: the population to be covered, the health services to be provided, and the financing mechanism to be used. Successful cases show that to achieve universal health coverage, a change of perspective is essential, from seeing health care benefits as a contingent good to considering them as an essential public service. While expanding the demand for health care is necessary, improving the quantity and quality of the supply of health services is essential. Getting diverse stakeholders to cooperate, making cost-efficient and people-centered choices, and ensuring fiscal sustainability are needed to expand health coverage for everyone who needs it.

10/17: "More than Schooling: Understanding Gender Differences in the Labor Market When Measures of Skill are Available" Free Download
World Bank Policy Research Working Paper No. 8588

DILENI GUNEWARDENA, University of Peradeniya
Brookings Institution
World Bank

This paper uses measures of cognitive and noncognitive skills in an expanded definition of human capital to examine how schooling and skills differ between men and women and how those differences relate to gender gaps in earnings across nine middle-income countries. The analysis finds that post-secondary schooling and cognitive skills are more important for women's earnings at the lower end and middle of the earnings distribution, and that men and women have positive returns to openness to new experiences and risk-taking behavior and negative returns to hostile attribution bias. Especially at the lower end of the earnings distribution, women are disadvantaged not so much by having lower human capital than men, but by institutional factors such as wage structures that reward women's human capital systematically less than men's.


"Bank Runs and Moral Hazard: A Review of Deposit Insurance" Free Download
World Bank Policy Research Working Paper No. 8589

DENIZ ANGINER, World Bank Research
World Bank

Deposit insurance is a widely adopted policy to promote financial stability in the banking sector. Deposit insurance helps ensure depositors' confidence in the financial system and prevents contagious bank runs, but it also comes with an unintended consequence of encouraging banks to take on excessive risk. This paper reviews the economic costs and benefits of deposit insurance and highlights the importance of institutions and specific design features for how well deposit insurance schemes work in practice.

10/17: "The Future of Work: Race With-Not Against-The Machine" Free Download
World Bank: Research & Policy Briefs Paper No. 129680

LAY LIAN CHUAH, World Bank - Development Research Group (DECRG)
World Bank - Research Department
Osteuropa-Institut (OEI), Government of the Federal Republic of Germany - Institute for Employment Research (IAB), University of Regensburg - Department of Economics and Econometrics

Will the revolution in digital and information technologies make us obsolete? Will jobs be lost and never replaced? Will wages drop to intolerable levels? History and economic theory and evidence suggest that in the long term, such fears are misplaced. However, in the short and medium term, dislocation can be severe for certain types of work, places, and populations. In the transition period, policies are needed to facilitate labor market flexibility and mobility, introduce and strengthen safety nets and social protection, and improve education and training.

EFM-I do not believe the correct policies will be written or followed. Humans will lose the race to artificial intelligence. AI may lose it to environmental decay. Winner is Mother Earth who will still be pissed that she inherited a mess.  


  • Understanding how people spend as they age can help financial advisors and their clients build better retirement plans, craft more effective investment strategies and attain more successful retirement outcomes.
  • On average, spending is highest for households led by 45-year-olds; households led by older individuals spend less. While this pattern holds for the majority of households, spending patterns do vary.
  • Research shows that most retirees fall into one of four spending profiles: foodie, homebody, globetrotter or health care spender.
  • Financial advisors need to ask the right questions to create accurate profiles of their clients and adjust their retirement plans accordingly. Inquiring about housing, desire to travel and concerns about health care expenses are good places to start.

EFM- A formal budget needs to be done as the first part of planning, When you figure out what you can do with a reasonable budget, then you determine how much money is available and determine the risk scenario after that. Don't want to spend the time doing a budget? Take a hike! No budget- then the plan is more highly suspect than ever.

10/16: Mental Health

 half of all mental illnesses begin by the age of 14 and three-quarters by the mid-20s.

Prevention starts with an awareness of the signs and symptoms of mental illness.

10/16: OIL

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. nuclear plant
outages were relatively low throughout the summer, but spiked last month. Nuclear plants tend to go offline for maintenance, often during spring and winter months and often to coincide with the refueling cycle, but the 14.5 GW that went offline in September was larger and earlier than usual. 

-    The temporary shutdown of a plant related to Hurricane Florence magnified the disruptions. 

-    The outages put more pressure on natural gas to pick up the slack, and with natural gas inventories already at their lowest levels since 2005 heading into winter, the nuclear outages helped tighten the gas market and push up prices. 

“My biggest problem with modernity may lie in the growing separation of the ethical and the legal.

Nassim Taleb

10/16: Country’s fiscal path is “unsustainable.”

So says Bob the Squirrel? Nope- Jay Powell head to the FED

“Longer term, we’re not on a sustainable fiscal path, we haven’t been for many years,” Powell said. With rising fiscal debt, some economists have cautioned that the market could be susceptible to a drop from future declines in demand. “There’s the possibility of some supply side effects that we’ll see emerge,” Powell acknowledged.

Powell also said that we’ll have to wait and see whether new tariffs drive inflation or simply increase price levels globally. It’s too early to see the effects of trade policy changes in the data, he said.

But Powell concluded by reiterating his positive analysis of the economy. “This is a good time to be working,” he said, “this is the top of the cycle.”

10/16: Census 2017

Census Bureau data released Wednesday shows the median household income increased in 2017 to $61,372 — the third straight year of growth — while the poverty rate dipped slightly to 12.3 percent, relatively unchanged from 2016. But despite the 1.8 percent growth in the median household income last year from 2016, it was not as impressive as the growth seen in the previous two years.

The new data also shows that the percentage of Americans without health insurance coverage remained at 8.8 percent, or about 28.5 million people, which was relatively unchanged from 2016. 


"Mortality Risk, Insurance, and the Value of Life" Fee Download
NBER Working Paper No. w25055

DANIEL BAUER, University of Alabama
University of Southern California
University of Illinois at Urbana-Champaign

We develop and apply a generalized framework for valuing health and longevity improvements that departs from conventional assumptions of full annuitization and deterministic mortality. In contrast to conventional theory, we find a given mortality improvement may be worth more, not less, to patients facing shorter lives. Using real-world data, we calculate that severe illness can increase the value of statistical life by over $1 million. This result reconciles an anomaly in the research on preferences for life-extension. Moreover, our framework can value the prevention of mortality and of illness. We calculate that treating illness is up to an order of magnitude more valuable to consumers than prevention, even when both extend life equally. This asymmetry helps explain low observed investment in preventive care. Finally, we show that retirement annuities boost aggregate demand for life-extension. For instance, Social Security adds $11.5 trillion (10.5 percent) to the value of post-1940 longevity gains.

10/16:  Understanding The Impact of Life Events on Long-Term/Retirement Savings

Excellent charts


"Marketing Mutual Funds" Fee Download
NBER Working Paper No. w25056

NIKOLAI L. ROUSSANOV, University of Pennsylvania - The Wharton School, National Bureau of Economic Research (NBER)
University of Pennsylvania - The Wharton School
University of Southern California - Marshall School of Business

Marketing and distribution expenses are responsible for about a third of the cost of active management in the mutual fund industry. We develop and estimate a structural model of mutual fund marketing with learning about unobserved skill and costly investor search. Our estimates suggest that marketing is nearly as important as performance and fees for determining fund size. Eliminating marketing substantially improves welfare, as capital shifts towards cheaper funds and competition decreases fees. Average alpha increases as active funds shrink, and capital allocation becomes more closely aligned with manager skill net of fees. Declining investor search costs over time imply a reduction in marketing expenses and management fees as well as a shift towards passive investing, as observed empirically.

10/15: 15 of the most dangerous places to live

15 Most Dangerous Places to Live

  1. Brazil (ranked 68th overall). “I don't feel safe and the economy is suffering a bad period," says an Italian expat. "I would like to feel safer.”
  2. South Africa (67 overall). “Crime is rampant due to the economic situation, so one has to take greater care over personal security,” says a British expat. “There is a political instability and it has an impact on all aspects of life," says another British expat.
  3. Kenya (66 overall). “You can't just go outside and go for a walk wherever or whenever you want," says a British expat. "You have to be more cautious.”
  4. Peru (65 overall). Malte Zeeck says, “Almost one-third of expats in Peru (32%) rate their personal safety negatively, whereas globally just nine percent rate it negatively.”
  5. Turkey (64 overall). An Azerbaijani expat says, “It is not safe to go out at dark time and difficult to come back home after midnight, so that I usually have to be back by 10 p.m. at the latest.”
  6. Argentina (63 overall). A Brazilian expat points out the “huge inflation and huge corruption. This country is getting worse every day. Every day more expensive. Every day more insecure.”
  7. India (62 overall). A Zambian expat says, “In India females in general are not really safe. In some parts of India, it is not even safe for ladies to walk or be alone.”
  8. Egypt (61 overall)Malte Zeeck says, “Safety and politics play a significant role in the country’s ranking. In fact, only 64 percent of the expat feel safe in Egypt, which is 18 percent less than the global average (82%).”
  9. Dominican Republic (60 overall)A U.S. expat says, “There is a lack of security and the need for private security at all times.”
  10. Colombia (59 overall). A Georgian expat says, “There is insecurity. No personal safety. Robberies are very common and I have to watch out for my stuff all the time. Also, I am restricted to walking outside to certain hours. You need to know the neighborhoods very well.”
  11. Philippines (58 overall). A U.S. expat says, “The lack of security and the unstable politics worry me.”
  12. Mexico (57 overall). A German expat says, “There are real issues of insecurity due to conflicts and government problems.” A U.S. expat says, “I don't feel completely safe. I also feel as though I stand out as a foreigner.”
  13. USA (56 overall). A German expat says, “There is a higher degree of gun violence and violence in general than in my home country.” Another German expat says, “The undercurrent of violence and the current administration are my main concerns.” A British expat says, “I do not like the current political climate, the lack of gun control and the prevalence of school shootings.”
  14. Myanmar (55 overall). An Australian expat says, “There are many issues that go unresolved. The government is still very much corrupt, disregarding the overall population’s safety and well-being.”
  15. Indonesia (54 overall). A Swedish expat says, “I don’t like the political development in the country.”

10/15: Talking Trash

Jamaica, which is among at least 20 Caribbean and Latin American nations banning — or in discussions to ban — the importation, manufacture and distribution of single-use plastic bags, straws and Styrofoam.

the world consumes each year up to 5 trillion plastic bags made from a petroleum-based product that takes 500 years to degrade. A World Bank report found that close to 420,000 tons of plastic waste entered the Caribbean Sea in 2010, with that amount expected to rise to 790,000 tons by 2025.

EFM- The climate is now a major talking point. But unless followed up by citizens and politicians.................

Image may contain: 1 person

Somebody put googly eyes on this statute. Great idea. Instead of removing some 'offensive' statues, let's just add googly eyes and save a lot of money. And have a heck of a laugh since it is just plain funny

10/15: Yo fatty

 nearly one-third of young Americans are now too overweight to join up, a worrying statistic for military officials already facing recruitment challenges.

obesity is one of the top reasons why a stunning 71 percent of Americans aged 17-24 do not meet the military's sign-up requirements.

"Given the high percentage of American youth who are too overweight to serve, recruiting challenges will continue unless measures are taken to encourage a healthy lifestyle beginning at a young age, (EFM- like that ain't gonna happen. What about immigrants? Hardly any of those are fat.  They are in shape because they walked a long way to get to the border. )

Other factors such as prior drug use or a lack of academic qualifications are also taking a toll.

2.2 billion people worldwide are believed to be overweight, and more than one in 10 people are obese, fueling a global health crisis that claims millions of lives every year.

Of the world's most populous countries, the United States leads the way in terms of obesity among children and young adults, at 13 percent.

10/14: 12 cities where clients should fear a housing bubble the most

During the third quarter of 2018, U.S. home prices hit their lowest level of affordability since 2008. More than three-quarters of the 440 counties analyzed in the survey posted an affordability index below their historical averages.

"Rising mortgage rates have pushed home prices to the least affordable level we've seen in 10 years, both nationally and at the local level,” . “Close to one-third of the U.S. population now lives in counties where buying a median-priced home requires at least $100,000 in annual income.”

12: Boulder Colorado

11. Boise City, Idaho

10: Santa Rosa, CA

9. Houston TX

8. Ft. Collins, CO

7. Honolulu, HI

6. Greely CO

5. Dallas Ft. Worth, TX

4. San Jose, CA

3. New York

2. Denver, CO

1. San Francisco, CA

10/14: Food for 9 billion people? Not hardly

The food system is a major driver of climate change, changes in land use, depletion of freshwater resources, and pollution of aquatic and terrestrial ecosystems through excessive nitrogen and phosphorus inputs. Here we show that between 2010 and 2050, as a result of expected changes in population and income levels, the environmental effects of the food system could increase by 50–90% in the absence of technological changes and dedicated mitigation measures, reaching levels that are beyond the planetary boundaries that define a safe operating space for humanity. We analyse several options for reducing the environmental effects of the food system, including dietary changes towards healthier, more plant-based diets, improvements in technologies and management, and reductions in food loss and waste. We find that no single measure is enough to keep these effects within all planetary boundaries simultaneously, and that a synergistic combination of measures will be needed to sufficiently mitigate the projected increase in environmental pressures.

EFM_ read additional commentary below. Unfortunately, the world will not make the changes needed- and the ones they do do will be too late to make a significant difference.

researchers analysed several options that could keep the food system within environmental limits. They found:

  • Climate change cannot be sufficiently mitigated without dietary changes towards more plant-based diets. Adopting more plant-based “flexitarian” diets globally could reduce the greenhouse gas emissions of the food system by more than half, and also reduce other environmental impacts, such as those from fertilizer application and the use of cropland and freshwater, by a tenth to a quarter.
  • In addition to dietary changes, improving management practices and technologies in agriculture is required to limit pressures on agricultural land, freshwater extraction, and fertilizer use. Increasing agricultural yields from existing cropland, balancing application and recycling of fertilizers, and improving water management, could, along with other measures, reduce those impacts by around half.
  • Finally, halving food loss and waste is needed for keeping the food system within environmental limits. Halving food loss and waste could, if globally achieved, reduce environmental impacts by up to a sixth (16%).

“Many of the solutions we analysed are being implemented in some parts of the world, but it will need strong global co-ordination and rapid upscale to make their effects felt,” says Springmann.

“Improving farming technologies and management practices will require increasing investment in research and public infrastructure, the right incentive schemes for farmers, including support mechanisms to adopt best available practices, and better regulation, for example of fertilizer use and water quality,” says Line Gordon, executive director of the Stockholm Resilience Centre and an author on the report.

Fabrice de Clerck, director of science at EAT says, “Tackling food loss and waste will require measures across the entire food chain, from storage, and transport, over food packaging and labelling to changes in legislation and business behaviour that promote zero-waste supply chains.”

“When it comes to diets, comprehensive policy and business approaches are essential to make dietary changes towards healthy and more plant-based diets possible and attractive for a large number of people. Important aspects include school and workplace programmes, economic incentives and labelling, and aligning national dietary guidelines with the current scientific evidence on healthy eating and the environmental impacts of our diet,

10/14: 401k loan defaults

A growing number of people are defaulting on loans taken against their 401(k) retirement accounts, with the loss amount nearly 3% of $7.8 trillion in 401(k) accounts.

10/14:IPCC climate report

"This report is not about whether the planet can withstand another half-degree increase in temperature. It is about understanding whether we can withstand it. Small temperature changes can have far-reaching impacts on our ability to survive on this planet."


Yes, you read it correctly

Every building

“If you see fraud and do not say fraud, you are a fraud.”

Nassim Taleb

(But if you call it, do not expect anyone to care)




10/14: Philippine exportation

Since the nineteen-seventies, the government of the Philippines has promoted labor exportation as a strategy for relieving poverty and alleviating the national debt. A tenth of the population now works abroad, supporting nearly half of the country’s households and leaving some nine million Filipino children missing a parent.

10/14: Master Limited Partnerships:

in 2015, MLPs lost an average of 35% according to Morningstar

The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome.

Peter Bernstein

10/14: Climate change for the worse. This will happen before 2030. It will kill a lot of animals (that obviously includes us humans)

Arctic soils contain hundreds of billions of tons of carbon, in the form of frozen and only partially decomposed plants. As the region heats up, much of this carbon is likely to be released into the atmosphere, where it will trap more heat—another feedback loop. In the Arctic Ocean, vast stores of methane lie buried under frozen sediments. If these stores, too, are released, the resulting warming is likely to be catastrophic. “The risk of an Arctic seabed methane pulse is one of the greatest immediate risks facing the human race, 

EFM:  Rising temperatures will kill most life on earth. Just you wait.

Newborns today will have shortened lifetimes due to the stress of a world in decay. The very wealthy will have enclaves to live longer but those will be gone by 2075/2100

10/14: The Power and Limitations of Monte Carlo Simulations 

EFM- Estimates are all over the place. That is normal. One has to do some homework to know what to use. But in none of the articles have I ever seen the large losses (2000 and 2008 for example) and which a current standard Monte Carlo would use to be a folly. You can and should reduce large losses to about 15%. And over a 30 year period, there would be at least 3 recessions; more likely 4 recessions and possibly 5. I'd opt for just 4 and 5. The economic and political world is in too much flux (and too many weapons and too much cruelty). The 15% will essentially eliminate the Sequence of Returns problem.

10/14: If you make more or less than someone else.

According to one theory, the so-called rational-updating model, people assess their salaries in terms of opportunities. If they discover that they are being paid less than their co-workers, they will “update” their projections about future earnings and conclude that their prospects of a raise are good. Conversely, people who learn that they earn more than their co-workers will be discouraged by that news. They’ll update their expectations in the opposite direction.

According to a rival theory, people respond to inequity not rationally but emotionally. If they discover that they’re being paid less than their colleagues, they won’t see this as a signal to expect a raise but as evidence that they are underappreciated. (The researchers refer to this as the “relative income” model.) By this theory, people who learn that their salaries are at the low end will be pissed. Those who discover that they’re at the high end will be gratified.

EFM- I'd pick door number 2.

10/14: Property Casualty Insurance and Artificial Intelligence

Traditionally, processing an insurance claim is a long tedious process. With the use of AI, we are seeing a speedier process. A homeowner whose house has been damaged in a hurricane can fill in the claim form online, or using a mobile app, upload pictures of the damage, and submit the claim. The system can start the claim process and forward it to a representative, or if it’s a simple claim, assess the damage, process the claim, and pay or deny the claim. This can be done without getting the producer or a customer service representative involved.

There are insurance experts who believe that the impact of AI on producers in the insurance industry will be negligible but I beg to differ. History shows (the Industrial Revolution and the Internet) that when new technology is introduced in society everything changes. With all of the smart devices collecting and consuming data, and machines analyzing said data and offering valid reasoning and options I don’t see why they won’t be able to analyze a client’s needs offer different insurance options based on those needs and sell the client an insurance policy.

10/14: Monte Carlo simulations

A Monte Carlo simulation allows an analyst to determine the size of the portfolio required at retirement to support the desired retirement lifestyle and other desired gifts and bequests. She factors in a distribution of reinvestment rates, inflation rates, asset class returns, tax rates and even possible life spans. The result is a distribution of portfolio sizes with the probabilities of supporting the client's desired spending needs.

The analyst next uses the Monte Carlo simulation to determine the expected value and distribution of a portfolio at the owner's retirement date. The simulation allows the analyst to take a multi-period view, and factor in path dependency; the portfolio value and asset allocation at every period depends on the returns and volatility in the preceding period. The analyst uses various asset allocations with varying degrees of risk, different correlations between assets and a distribution of a large number of factors including the savings in each period and the retirement date, to arrive at a distribution of portfolios along with the probability of arriving at the desired portfolio value at retirement. The clients' different spending rates and life span can be factored in to determine the probability the clients will run out of funds (the probability of ruin or longevity risk) before their deaths. 

A client's risk and return profile is the most important factor influencing portfolio management decisions. The client's required returns are a function of her retirement and spending goals; her risk profile is determined by her ability and willingness to take risks. More often than not the return and risk profile of clients are not in sync with each other; for example, the level of risk acceptable to them it may make it impossible or very difficult to attain the desired return. Moreover, a minimum amount may be needed before retirement to achieve her goals, and the clients' lifestyle would not allow for the savings, or she may be reluctant to change it.

EFM- Sounds just great but most times the simulation is based on what has happened in the past. And it will include losses of the 49%, 57% et al. Therefore the end result is that you will have a lower amount you can take each year over your lifetime. If, however, the recessionary losses are no more than 15%- what the Process explains above- the extra return will help annual payouts immeasurably.

Immigrants are more likely to work (and to be working-age); they also tend to hold different occupations and educational degrees than natives. By the second generation (the native-born children of immigrants), though, the economic outcomes of immigrant communities exhibit striking convergence toward those of native communities.[1]

In 2017 immigrants made up nearly 14 percent of the U.S. population, a sharp increase from historically low rates of the 1960s and 1970s, but a level commonly reached in the 19th century. Given native-born Americans’ relatively low birth rates, immigrants and their children now provide essentially all the net prime-age population growth in the United States.

These basic facts suggest that immigrants are taking on a larger role in the U.S. economy. This role is not precisely the same as that of native-born Americans: immigrants tend to work in different jobs with different skill levels. However, despite the size of the foreign-born population, immigrants tend to have relatively small impacts on the wages of native-born workers. At the same time, immigrants generally have positive impacts on both government finances and the innovation that leads to productivity growth.

Fact 1: The foreign-born share of the U.S. population has returned to its late-19th-century level.

Immigrants have always been part of the American story, though immigration has waxed and waned over time. Immigration during the second half of the 19th century lifted the foreign-born share of the population to 14 percent. Starting in the 1910s, however, immigration to the United States fell precipitously, and the foreign-born share of the population reached a historic low of 4.7 percent in 1970.

This drop occurred in large part because of policy changes that limited immigration into the United States. Beginning with late-19th-century and early-20th-century policies that were directed against immigrants from particular countries—for example, the Chinese Exclusion Act of 1882—the federal government then implemented comprehensive national origin quotas and other restrictions, reducing total immigration inflows from more than 1 million immigrants annually in the late 1910s to only 165,000 by 1924 (Abramitzky and Boustan 2017; Martin 2010). Economic turmoil during the Great Depression and two world wars also contributed to declining immigration and a lower foreign-born fraction through the middle of the 20th century (Blau and Mackie 2017).

In the second half of the 20th century, a series of immigration reforms—including the 1965 Immigration and Nationality Act—repealed national origin quotas and implemented family reunification and skilled immigration policies. In 1986 amnesty was provided to many people who were living in the United States without documentation (Clark, Hatton, and Williamson 2007). Unauthorized immigration was estimated at about 500,000 in the early 2000s, but has since dropped sharply to a roughly zero net inflow (Blau and Mackie 2017).

The foreign-born fraction of the population rose steadily from 1970 to its 2017 level of 13.7 percent. From 2001–14, legal immigration rose to roughly 1 million per year, marking a return to the level of the early 20th century, but now representing a much smaller share of the total U.S. population. Today, there is a wide variation of the foreign-born population across states, ranging from under 5 percent in parts of the Southeast and Midwest to over 20 percent in California, Florida, New Jersey, and New York (Bureau of Labor Statistics [BLS] 2017; authors’ calculations).

Figure 1. Foreign-Born Share of U.S. Population

Fact 2: The rising foreign-born share is driven by both immigration flows and low fertility of native-born individuals.

Though the foreign-born fraction has risen to its late-19th-century levels, the net migration rate is just half the level that prevailed around 1900 (Blau and Mackie 2017). With declining native-born population growth in recent years, even a diminished level of net migration has been enough to raise the foreign-born fraction (see figure 2a).

Figure 2b shows that recent growth in the number of prime-age children of immigrants has continued at more than 3 percent, supporting overall U.S. population growth. By contrast, the population growth rate of prime-age children of native parents has fallen from an average of 0.2 percent over the 1995–2005 period to an average of –0.5 percent over the 2006–17 period. The population growth of first-generation immigrants remains relatively high—1.8 percent on average from 2006 to 2017—but has fallen as net migration has slowed. Thus, the continued rise of the foreign-born share of the population since 1990 does not reflect a surge in immigration but rather a slowing migration rate combined with slowing growth in the population of children of natives.

From 1960 to 2016 the U.S. total fertility rate fell from 3.65 to 1.80 (World Bank n.d.). Demographers and economists believe that this decline was driven by a collection of factors, including enhanced access to contraceptive technology, changing norms, and the rising opportunity cost of raising children (Bailey 2010). As women’s labor market opportunities improve, child-rearing becomes relatively more expensive. Feyrer, Sacerdote, and Stern (2008) note that in countries where women have outside options but men share little of the child-care responsibilities, fertility has fallen even more.

Population growth is important for both fiscal stability and robust economic growth. Social Security and Medicare become more difficult to fund as the working-age population declines relative to the elderly population. (See fact 11 for a broader discussion of immigrants’ fiscal impacts.) Moreover, overall economic growth depends to an important extent on a growing labor force (see fact 8).

Figure 2. Prime-Age Population Growth Rates by Nativity & by Parents' Nativity

Fact 3: About three-quarters of the foreign-born population are naturalized citizens or authorized residents.

There are many ways in which immigrants come to the United States and participate in this country’s economic and social life. As of 2014 many in the foreign-born population had achieved U.S. citizenship (43.6 percent), while others had legal permanent resident status (26.9 percent), and still others were temporary residents with authorization to live in the country (4.0 percent). The remaining 25.5 percent of foreign-born residents are estimated to be unauthorized immigrants, as shown in figure 3. This is down from an estimated 28 percent in 2009 (Passel and Cohn 2011).

Unauthorized immigrants are the focus of intense policy and research attention. Some characteristics of these immigrants may be surprising: for example, more than 75 percent of all unauthorized immigrants have lived in the United States for more than 10 years. This marks a sharp increase from 2007, when an estimated 44.5 percent were at least 10-year residents. Moreover, only 18.9 percent of unauthorized immigrants are estimated to be 24 or younger, and 75.1 percent are in the prime working-age (25–54) group (Baker 2017).

There has also been special policy attention paid to those who entered the United States as children, including the Deferred Action for Childhood Arrivals (DACA) policy introduced in 2012 to allow temporary partial legal status to those who came to the United States as children, who are now 15–31 years old, who have committed no crimes, and who have been in the United States continuously since 2007. Roughly 800,000 people have used the program and estimates suggest 1.3 million were eligible (about 10 percent of the undocumented population) (Robertson 2018). Other proposed legislation—the American Hope Act—could affect as many as 3.5 million people (a third of the undocumented population) (Batalova et al. 2017).

The terms of immigrants’ residency are important for their labor market outcomes, and potentially for the impacts they have on native-born workers. Without authorized status and documentation, foreign-born residents likely have little bargaining power in the workforce and are exposed to a higher risk of mistreatment (Shierholz 2018).

Figure 3. Foreign-Born Population by Legal Status

Fact 4: 80 percent of immigrants today come from Asia or Latin America, while in 1910 more than 80 percent of immigrants came from Europe.

Fact 5: Immigrants are 4 times more likely than children of native-born parents to have less than a high school degree, but are almost twice as likely to have a doctorate.

The educational attainment of immigrants is much more variable than that of native-born individuals: there are more immigrants with less than a high school degree, but also more immigrants with a master’s degree or doctorate (relative to children of native-born parents), as shown in figure 5. This reflects the diversity of background that characterizes immigrants. Of all prime-age foreign-born persons in the United States with a postsecondary degree, 58.0 percent are from Asian countries, while 51.2 percent of all prime-age foreign-born persons with a high school degree or less are from Mexico (BLS 2017; authors’ calculations).

Immigrants to the United States are likely more positively selected on education and prospects for labor market success relative to nonimmigrants (Abramitzky and Boustan 2017; Chiswick 1999). This selection may have increased since 2000, with disproportionate growth in the highly educated foreign-born population (Peri 2017). A few features of the United States contribute to this tendency: first, the relatively limited social safety net available to immigrants makes the United States a less attractive destination for those with poor labor market prospects. Second, the United States is characterized by more wage inequality than many alternative destinations, with higher rewards available for high-skilled than for low-skilled workers. Third, the high cost of migration (due in large part to the physical distance separating the United States from most countries of origin) discourages many would-be immigrants who do not expect large labor market returns (Borjas 1999; Clark, Hatton, and Williamson 2007; Fix and Passel 2002).

Regardless of the characteristics of their parents, children of immigrants tend to attain educational outcomes that are like those of natives, but with higher rates of college and postgraduate attainment than observed for children of natives (Chiswick and DebBurman 2004).[3] For example, figure 5 shows that children of immigrants receive all degrees at roughly the rate of children of native parents, though the former have a slightly higher propensity to have either less than a high school degree or an advanced degree.

Figure 5. Educational Attainment of Immigrants, Children of Immigrants, and Children of Natives

Fact 6: Immigrants are much more likely than others to work in construction or service occupations, but children of immigrants work in roughly the same occupations as the children of natives.

Differences in educational outcomes for foreign-born and native-born Americans are accompanied by occupational differences. The dark blue and light green bars in figure 6 show the fraction of immigrant workers and children of native-born workers, respectively, in a given occupational group. Immigrant workers are 39 percent less likely to work in office and administrative support positions and 31 percent less likely to work in management, while being 113 percent more likely to work in construction.

At the same time, immigrant workers accounted for 39 percent of the 1980–2010 increase in overall science, technology, engineering, and mathematics (STEM) employment, rising to 29 percent of STEM workers in 2010. By contrast, high-skilled native-born workers tended to enter occupations that require more communications and interpersonal skills (Jaimovich and Siu 2017). Among high-skilled immigrants, degree of English proficiency predicts occupational choice (Chiswick and Taengnoi 2008).

Another barrier to entry in some occupations consists of occupational licensing requirements, which can necessitate that immigrants engage in costly duplication of training and experience (White House 2015).

The gaps shown in figure 6 tend to diminish across generations. There are almost no appreciable differences in occupations between the children of immigrants and children of natives.

The entrepreneurial behavior of foreign- and native-born individuals also appears to be similar. While immigrants are more likely to be self-employed, they are not more likely to start businesses with substantial employment: immigrant workers at each education level are roughly as likely as native-born people to own businesses that employ at least 10 workers (BLS 2017; authors’ calculations).

Figure 6. Occupations of Immigrants, Children of Immigrants, and Children of Natives

Fact 7: Prime-age foreign-born men work at a higher rate than native-born men, but foreign-born women work at a lower rate than native-born women.

Immigrants 16 and older work at a higher rate than native-born individuals (BLS 2017; authors’ calculations), but this belies sharp

Fact 8: Output in the economy is higher and grows faster with more immigrants.

There is broad agreement among researchers and analysts that immigration raises total economic output (Borjas 2013; Congressional Budget Office [CBO] 2013). By increasing the number of workers in the labor force, immigrants enhance the productive capacity of the U.S. economy. One estimate suggests that the total annual contribution of foreign-born workers is roughly $2 trillion, or about 10 percent of annual GDP (Blau and Mackie 2017 citing Borjas 2013); the contribution of unauthorized immigrants is estimated to be about 2.6 percent of GDP (Edwards and Ortega 2016; authors’ calculations). As shown in figure 8, providing documented status to many current unauthorized immigrants (which should increase their productivity by allowing better job matching) and allowing more immigration would increase annual GDP growth by 0.33 percentage points over the next decade, while removing all current unauthorized immigrants would lower annual GDP growth by 0.27 percentage points during that same period (CBO 2013, 2018; Penn Wharton Budget Model 2017).

The economic effects of new workers are likely different over the short and long run. In the short run, a large increase or decrease in the number of immigrants would likely cause disruption: an increase could overwhelm available infrastructure or possibly put downward pressure on wages for native-born workers until capital accumulation or technology usage can adjust (Borjas 2013), while a decrease could harm businesses with fixed staffing needs, or lead to underutilization of housing and other similar capital (Saiz 2007; White House 2013).

Immigrants and natives are not perfectly interchangeable in terms of their economic effects: immigrants bring a somewhat different mix of skills to the labor market than do native workers, as detailed previously in this document. High-skilled immigration is particularly likely to increase innovation (see fact 10). In addition to these supply-side effects, immigrants also generate demand for goods and services that contribute to economic growth.

However, these positive impacts on innovation and growth do not necessarily mean that additional immigration raises per capita income in the United States (Friedberg and Hunt 1995). For example, if immigrant workers were on average less productive than native-born workers, additional immigration would reduce per capita GDP while increasing total economic output. Similarly, immigration may or may not lead to improved outcomes for native workers and for U.S. government finances; we discuss both concerns in subsequent facts. Most estimates suggest that immigration has a small positive impact on GDP over and above the income of immigrants themselves (Blau and Mackie 2017; Borjas 2013).

Figure 8. Real GDP Growth Projections for Selected Immigration Scenarios, 2018–28

Fact 9: Most estimates show a small impact of immigration on low-skilled native-born wages.

It is uncontroversial that immigrants increase both the labor force and economic output. However, it is less obvious whether immigrants might lower wages for some native-born workers (Friedberg and Hunt 1995). In particular, low-wage native-born workers might be expected to suffer from the increased labor supply of low-skilled competitors from abroad, given that many immigrants tend to have lower skills than the overall native population (see figure 5).

Other adjustments could mute this impact. Firms could rearrange their operations to accommodate more workers and produce proportionally greater output, particularly over the long run (Friedberg and Hunt 1995). Firms appear to adjust technology and capital based on immigration and the skill mix of the local population (Lewis 2011). Foreign-born and native-born workers may be imperfect substitutes, even when they possess similar educational backgrounds (Ottaviano and Peri 2012).

In addition, the impact of low-skilled immigrants may be diluted (i.e., shared across the entire national labor market) as native workers and firms respond by rearranging themselves across the rest of the country (Card 1990). Foreign-born workers appear to be especially responsive to economic shocks as they search for employment: Mexican low-skilled men are more apt to move toward places with improving labor market prospects (Cadena and Kovak 2016). Finally, immigrants—low-skilled or high-skilled—contribute to labor demand as well as labor supply to the extent that they consume goods and services in addition to becoming entrepreneurs (White House 2013).

It is therefore an empirical question whether low-skilled immigration actually depresses wages for low-skilled natives. The consensus of the empirical literature is that this does not occur to any substantial extent (see figure 9, which presents estimates used in the National Academies of Sciences, Engineering, and Medicine consensus report). Most estimates in figure 9 show an impact on low-skilled native-born wages of 0 percent to –1 percent. Another recent estimate of the impact on low-skilled natives (Ottaviano and Peri 2012) estimated a slightly positive impact on wages (between 0.6 and 1.7 percent). Furthermore, the impacts on wages of native-born workers with more education are generally estimated to be positive, such that most estimates find the overall impact on native workers is positive (Blau and Mackie 2017; Kerr and Kerr 2011; Ottaviano and Peri 2012).

Figure 9. Estimates of Immigration Effects on Wages for Low-Skilled Native-Born Workers

Fact 10: High-skilled immigration increases innovation.

As discussed in fact 6, the kind of work that immigrants do is often different than that of native-born workers. In particular, immigrants are more likely to possess college and advanced degrees, and more likely to work in STEM fields. This in turn leads to disproportionate immigrant contributions to innovation.

One useful proxy for innovation is the acquisition of patents. Immigrants to the United States tend to generate more patentable technologies than natives: though they constitute only 18 percent of the 25 and older workforce, immigrants obtain 28 percent of high-quality patents (defined as those granted by all three major patent offices). Immigrants are also more likely to become Nobel laureates in physics, chemistry, and physiology or medicine (Shambaugh, Nunn, and Portman 2017).

Presenting estimates from Hunt and Gauthier-Loiselle (2010), figure 10a shows the direct impact of high-skilled immigrants on patenting per capita based on their higher propensity to patent. Increasing the share of college-educated immigrants in the population by one percentage point increases patents per capita by 6 percent. This impact is roughly twice as large for those with advanced degrees.

Figure 10b shows the total impact—which includes both the direct impact as well as any spillovers to the productivity of native-born workers—of an increase in the high-skilled immigrant share of the population. Hunt and Gauthier-Loiselle find that spillovers are substantial and positive. A one percentage point–increase in the college-educated or advanced degree-holding immigrant shares of the U.S. population are estimated to produce a 12.3 percent or 27.0 percent increase in patenting per capita, respectively.

In an examination of foreign-born graduate students, Chellaraj, Maskus, and Mattoo (2008) also find positive spillovers for native-born innovation. Research examining short-run fluctuations in the number of H-1B visas similarly concludes that immigrants add to aggregate innovation, although estimates of spillovers for innovative activities of native-born workers are smaller or nonexistent (Kerr and Lincoln 2010).

Figure 10a. and 10b. Direct and Total Effect of High-Skilled Immigration on Patenting, by Educational Attainment

Fact 11: Immigrants contribute positively to government finances over the long run, and high-skilled immigrants make especially large contributions.

With its complicated system of taxes and transfers, the United States is affected in a variety of different ways by the arrival of immigrants. Figure 11 provides estimates of immigrants’ fiscal impacts (including the fiscal impacts of their descendants), shown separately by level of educational attainment. These estimates include direct spending on individuals through the social safety net or other programs as well as taxes paid. The estimates do not include public expenditures on categories like public safety, national defense, and interest on the debt, because these expenses do not necessarily increase as the population rises. If those expenses were included, the fiscal impact of each category of foreign-born and native-born workers would be more negative, but the overall pattern would remain the same.

Workers with more education and higher salaries tend to pay more taxes relative to their use of government programs, and that is reflected in the more-positive fiscal impacts of highskilled individuals. Looking separately at revenue and outlay implications, most of the variation in immigrant fiscal impact across education levels is due to differences in the amount of taxes paid (Blau and Mackie 2017, 444–60). Moreover, recent immigrants have tended to experience better labor market outcomes than the overall immigrant population; in part this is due to the more-recent arrivals being better educated, which leads to them having an even more-positive fiscal impact (Orrenius 2017).

Across the educational categories, the foreign-born population is estimated to have a slightly more-positive fiscal impact in nearly every category. For the foreign-born population as a whole, per capita expenditure on cash welfare assistance, Supplemental Nutrition Assistance Program (SNAP; formerly known as the Food Stamp Program), Supplemental Security Income (SSI), Medicaid, Medicare, and Social Security are all lower than for native-born individuals, even when restricting the comparison to age- and income-eligible individuals (Nowrasteh and Orr 2018).

Figure 11. Net Fiscal Contribution of an Additional Resident, by Nativity and Educational Attainment

Fact 12: Immigration in the United States does not increase crime rates.

Immigrants to the United States are considerably less likely than natives to commit crimes or to be incarcerated. As shown in figure 12a, ecent immigrants are much less likely to be institutionalized (a proxy for incarceration that also includes those in health-care institutions like mental institutions, hospitals, and drug treatment centers) at every age.

Why do immigrants have fewer interactions with the criminal justice system? Immigrants are subject to various kinds of formal and informal screening. In other words, institutions and incentives often cause the United States to receive migrants who are advantaged relative to their origin-country counterparts (Abramitzky and Boustan 2017) and less disposed to commit crimes. At the time of Butcher and Piehl’s analysis, deportation was not a major factor; rather, self-selection of low-crime-propensity immigrants into the United States appears to have been the driver (Butcher and Piehl 2007).[4]

There is an important caveat to this account: recent immigrants have had less time to be arrested and imprisoned in the United States than have natives. In other words, there may be a somewhat smaller gap in their criminal activity versus natives, but the U.S. criminal justice system has had less time to detain and incarcerate them (Butcher and Piehl 2007). Figure 12b therefore looks more specifically at the criminal justice interactions of native-born and foreign-born adults over a narrower window of time. It shows that 30- to 36-year-old immigrants are less likely to have been recently arrested, incarcerated, charged, or convicted of a crime when compared to natives, confirming the broader pattern of figure 12a. Research examining quasi-random variation in Mexican immigration has also found no causal impact on U.S. crime rates (Chalfin 2014).

In addition to the broader question of how immigrants as a group affect crime and incarceration rates, it is important to understand how changes in the legal status of immigrants can affect criminal justice outcomes. Evidence suggests that providing legal resident status to unauthorized immigrants causes a reduction in crime (Baker 2015). This is associated with improvements in immigrants’ employment opportunities and a corresponding increase in the opportunity cost of crime. Conversely, restricting access to legal employment for unauthorized immigrants leads to an increased crime rate, particularly for offenses that help to generate income (Freedman, Owens, and Bohn 2018). In total, unauthorized immigration does not seem to have a significant effect on rates of violent crime (Green 2016; Light and Miller 2018).

Figure 12a. Institutionalization Rate, by Age and Nativity and Figure 12b. Criminal Justice Interactions, by Nativity

A survey found that nearly two-thirds of more than 430 U.S. firms in China say the duties Trump placed on billions of dollars of Chinese imports this summer have hurt their businesses.

Nearly half of respondents — who work in retail, food and manufacturing — say production costs have climbed, and 42 percent said they have noticed a decreased demand for their goods.

Just 6 percent, meanwhile, said they would consider moving factories to U.S. soil.

10/12: Modern Portfolio Theory- Investopedia

MPT suggests that it is possible to construct an "efficient frontier" of optimal portfolios, offering the maximum possible expected return for a given level of risk. It suggests that it is not enough to look at the expected risk and return of one particular stock. By investing in more than one stock, an investor can reap the benefits of diversification, particularly a reduction in the riskiness of the portfolio. MPT quantifies the benefits of diversification, also known as not putting all of your eggs in one basket.

10/12: #METOO India

scores of Indian women — many of them journalists — have taken to Twitter to detail their experiences of sexual harassment and violation at the hands of senior figures in the media and entertainment industries and, in one case, a government official. The repercussions in recent days have included public apologies, resignations, and the sudden closure of a prominent Bollywood production house after one of its co-founders was accused of sexual assault.

EFM- If this really takes off in India it will change the entire social structure in the country. Have not seen a similar comment regarding China. Can you imagine what would happen there? I don't think the government could quell all the complaints.

10/12: State-by-State Guide to Taxes

10/12: Cough, sputter, spew

An Environmental Protection Agency panel that advises the agency’s leadership on the latest scientific information about soot in the atmosphere will close next year.

10/12: Correction?  Not yet.

While the benchmark S&P 500 has fallen nearly 5% over the past week, the damage is actually much more widespread. Two-thirds of the stocks in the index are actually down more than 10% from their recent highs, which means they meet the traditional definition of a correction, according to analysis from CNBC.

CNBC also found that, as of Wednesday's market close, 142 stocks in the S&P 500 were in a bear market — meaning they'd dropped 20% from recent peaks. That's 28% of the index.

EFM: You generally wait for the entire S&P to fall 10%.

10/12:College:  textbook-specific video guides for undergraduate science and math classes. We also created a library of thousands of practice problems to help students really grasp concepts they’re stuck on


My thoughts about the climate.

We will not do what is necessary to fix this problem. By the time 2030 comes along, we should have lost New Orleans, parts of New Jersey and downtown New York, sections of Florida, a lot of the Carolina shores, Miami....the list goes on. Think about this- we have had a of talk on the necessity of fixing the U.S. roads, bridges, infrastructures. We are we? Nowhere. This will not get done by 2030 and the stop gap measures due to climate will reach numbers that make our deficit look small. Mother earth- or maybe AI- will take over by then and we can kiss our way of life. One pandemic should occur by 2030 and a worse one after that.



10/10: Kenneth French site

A large number of papers for research purposes

10/10: Death

I have a friend in my community who has been beset with health issues- primarily due to diabetes. She had both feet partially amputated but could still walk- though tentatively. But depression got a hold and she spiraled downward. She refused to take care of herself. But enough was enough and I called the police to come so that they could determine she be directly sent to a facility. We found the body Monday. Probably died of a fast moving gangrene

What is also sad was that her 401k had her ex as beneficiary. She detested him but it was not unusual to put down 'somebody' to complete the form and then change it later. And then they never do.

10/10: Life Insurance Settlement Guide

Delta river in Iceland (surreal, isn't it)

10/9: The economies of every state and DC

Here is the full list with comments

Business Insider combined six measures of labor-market and general economic health for all the states and the District of Columbia. They are the unemployment rate, job growth, per-capita GDP, GDP growth, average weekly wages, and wage growth. By putting all those on a common scale and combining them, we came up with an overall score for each state's economy.

10/9: Oil

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.

Chart of the Week

-    The EIA’s
chart above highlights the fact that the precise path from a hurricane in the Gulf of Mexico can have a bigger impact on oil industry operations than the strength of the hurricane. 
-    Hurricane Nate, a Category 1 storm, passed through the Mississippi Canyon lease area in the Gulf of Mexico last year, causing significant disruptions. 
-    Meanwhile, Hurricane Harvey, a devastating Category 4 storm that disrupted a lot of refining operations onshore, had only a minor impact on Gulf of Mexico production, because it passed by areas of concentrated drilling. 

10/9: Mortgages in retirement

“Among the oldest Boomer homeowners, who were age 65 to 69 in 2015, slightly less than 50 percent were mortgage-free, down 10 percentage points compared with Silent Generation homeowners of the same age in 2000,”

10/9:  In 2017, the world emitted the most greenhouse gases in a single year in human history.

10/8: Stats 10 years after recession (some repeated)

Key findings of the report include:

People don’t understand what caused the financial crisis, remain in the dark about performance:

  • 79% say they don’t fully understand what happened during or caused the financial crisis
  • Roughly half of people think the S&P 500 has not gone up at all in the past 10 years, and 18% think it’s actually gone down since 2008
  • Despite this lack of understanding, Wall Street’s reputation took a hit: 83% don’t think Wall Street is any more ethical than it was in 2008

The crisis has had a lasting impact on financial behavior

  • The average reported loss was less than $5,000, but the hit may have lasting effects on saving and investing habits
  • More than 1 in 4 people stopped saving for retirement or contributing to their 401(k)
  • 2 in 3 say they invest less today than they did in 2008
  • 29% of respondents said they are making a concerted effort to save more today than they were in 2008

Those who invested and lost are the most likely to feel recovered and optimistic

  • 80% of people investing in 2008 lost money, but feel more recovered than their non-investing counterparts: 41% feel fully recovered
  • Half are investing as much or more than they did 10 years ago, and nearly a quarter consider themselves even more risk tolerant

10/8: More numbers on returns that will dull your senses.   EFM-I don't think that there is a person alive that could grasp all these statistics. I certainly cannot- and state it is an impossible task. The summary of the article is........

"The bottom line is that when developing your investment policy statement, you must be sure that your portfolio doesn’t take more risk than you have the ability, willingness and need to take."

EFM- And just what is that? I do not see any specific numbers or at least a gauge for the funds you are using. See the article linked above.

 "You must also be sure that you understand and accept the nature of the risks you are going to have to live with over time. The appropriate warning is that most battles are won in the preparation stage, not on the battlefield."

EFM- yet there are no numerical calculators that provide a potential risk of loss range in case of a recession- except mine.

"If you don’t understand the nature of the risks, when they do show up, you will be unable to keep your head while all about you are losing theirs, and it’s far more likely your stomach will take over. And I’ve yet to meet a stomach that makes good decisions. The result will likely be that your well-developed plan will end up in the trash heap of emotions. Forewarned is forearmed."

EFM- understanding the risks you are taking?? The industry has provided NOTHING. My Process defines the loss, how to keep losses to about 12% no matter how bad the recession is. And a defined date to get back in- or read the article and tell me what it says and why. Unbelievable mess.

10/7: More instability in the Mid East

Journalist and Saudi Arabia critic Jamal Khashoggi was believed to have been killed at the Saudi Consulate in Istanbul

EFM- Is this a prelude to another war?????

10/7: More gas emissions and more plastic

A sharp increase in greenhouse gas emissions from the petrochemical industry — which includes plastic, fertilizer and pharmaceutical companies — threatens to erode climate benefits from reductions in other sectors,

“When we look at the years to come, the petrochemical sector is by far the largest driver of global oil demand growth, much higher than cars, much higher than trucks, aviation, and shipping,”

Petrochemicals are currently the largest industrial energy consumer and the third-largest industrial emitter of greenhouse gas emissions. The report found that direct greenhouse gas emissions from petrochemicals would increase 20 percent by 2030 and 30 percent by 2050.

The main driver of the petrochemical industry’s growing climate footprint, according to the report, will be plastics. Worldwide, roughly 300 million metric tons of plastic are produced each year.

The predicted increase in petrochemicals will also be driven by an increase in fertilizer. As developing countries, especially those with larger populations, increase their wealth, they will quite likely increase the use of fertilizer, much of which is produced from natural gas.

The report estimates that by 2030, roughly seven percent of increased demand in natural gas will come from petrochemical companies.

EFM- The world will not come close to stopping emissions by 2030. And by then, far to late to do most anything so mother earth will provide more storms, more heat, etc, etc. and bash humans mercilessly.

10/7: Algorithms:

In (the authors) ... years of working as a mathematician with data and algorithms, I’ve come to believe that analyzing how an algorithm works is the only way to objectively judge whether it is trustworthy. Algorithms are a lot like magical illusions. At first they appear to be nothing short of wizardry, but as soon as you know how the trick is done, the mystery evaporates. There’s often something laughably simple (or reckless) hiding behind the facade.

There’s no doubting the profound positive impact that algorithms have had on our lives. The ones we’ve built to date boast a bewilderingly impressive list of accomplishments. They can help us diagnose breast cancer, catch serial killers and avoid plane crashes. But in our hurry to automate, we seem to have swapped one problem for another. Algorithms—useful and impressive as they are—have already left us with a tangle of complications.

Our reluctance to question the power of a machine has handed junk algorithms the power to make life-changing decisions, and unleashed a modern snake-oil salesman willing to trade on myths and profit from gullibility.

The inherent problems of algorithms are magnified when they are paired with humans and our ready acceptance of artificial authority.

But maybe that’s precisely the point. Perhaps thinking of algorithms as some kind of authority is where we went wrong.

Even when algorithms aren’t involved, -. Wherever you look, in whatever sphere you examine, you’ll find some kind of bias if you delve deep enough.

Imagine if we accepted that perfection doesn’t exist. Algorithms will make mistakes. Algorithms will be unfair. In time, they will improve. But admitting that algorithms, like humans, have flaws should diminish our blind trust of their authority and lead to fewer mistakes. In my view, the best algorithms take their makers into account at every stage. They recognize our tendency to overtrust machines. They embrace their own uncertainty.

10/7: Social security

Unless something’s done to shore up Social Security, monthly checks could get cut 23% by 2034.

Medicare’s hospital insurance fund will be depleted in 2026, three years earlier than it forecast a year ago. That means come 2026, unless changes are made, the program will only be able to pay about 91% of costs.

 Last year, there were 2.8 workers for every Social Security recipient; in 2007 that ratio was 3.3.
some 61.5 million people receive retirement or disability benefits from Social Security and 58.4 million receive Medicare

10/7: Some think China will capitulate to the U.S. very soon on tariffs. I don't think so. It will hurt China's trade but since they built all those islands in the South China sea with nary an intervention by us, they probably figure they are on a roll...............

A full-blown trade war becomes our new base case scenario for 2019," a JPMorgan team wrote. "There is no clear sign of mitigating confrontation between China and the US in the near term."

10/7: Another View Of Risk Shows More Downside Today Than Upside

Read the article- it will take a couple of minutes

 EFM- In the real world of investing, it is wrong. But only if you have read my material on the Process (above)

The stock market is really about risk- nothing new there. But my point is if you want to be an investor, you have to accept the daily/monthly swings that can bounce value all over the place. BUT when the risk breaks barriers, then you reduce risk- even down to zero- because very few people can afford a 50% take down during a recession. And a completely lost issue in almost all articles and any Monte Carlo runs is that you cannot be assured that a loss will be made up before you run out of money. The additional risk of being a 'loser' is an emotion that a family can handle emotionally. But that is rarely mentioned in articles. It is true that the followups to a recession have been strong. But that statistic- in this economy coupled with political and national/international stupidity-  negates history.  

10/7:  Statistics

Say that Disease X has a prevalence of 1 in 1,000 (meaning that 1 out of every 1,000 people will have it), and the test to detect it has a false-positive rate of 5 percent (meaning 5 of every 100 subjects test positive for the ailment even though they don’t really have it). If a patient’s test result comes back positive, what are the chances that she actually has the disease? In a 2014 study, researchers found that almost half of doctors surveyed said patients who tested positive had a 95 percent chance of having Disease X.


 Imagine 1,000 people, all with the same chance of having Disease X. We already know that just one of them has the disease. But a 5 percent false-positive rate means that 50 of the remaining 999 would test positive for it nonetheless. That means 51 people would have positive results, but only one of those would really have the illness. So if your test comes back positive, your true chance of having the disease is actually 1 out of 51, or 2 percent — a heck of a lot lower than 95 percent.

In a study (the author) published last year with several colleagues, we reviewed the treatment of 177 patients who were admitted to hospitals with a wide range of problems, from broken bones to severe intestinal pain, to see how necessary their tests were, as judged by the latest medical guidelines. We found that nearly 90 percent of the patients received at least one unnecessary test and that, overall, nearly one-third of all the tests were superfluous. When patients receive tests that aren’t needed, there is a reasonable chance that doctors are using the results to make choices about treatment; by definition, these choices have a higher danger of being flawed.

In another paper, from 2016, my colleagues and I interviewed more than 100 doctors to gauge their understanding of the risks and benefits of 10 common medical tests or treatments. We found that nearly 80 percent of our subjects overestimated the benefits. Strangely, the doctors themselves acknowledged this, with two-thirds rating themselves as not confident in their understanding of tests and probability. Eight out of 10 said they rarely, if ever, talked to patients about the probability of test results being accurate.

medical schools offer limited instruction on how to understand test results, which means many doctors are not equipped to do this well. Even when medical students have short classroom instruction in test interpretation, it is rarely taught in a clinic with actual patients.

Patients should realize that doctors, even quite capable ones, may not fully understand the statistical underpinning of the tests they use. In essence, your doctor may have a blind spot, an unconscious tendency to have too much trust in a test.

“When you don’t have a connection with people who don’t have a lot, it becomes a lot easier to take away what little they have"

T.J. Ortenzit

10/7:Bad times:

over the last decade and a half, the proportion of family income from wages has dropped from nearly 70 percent to just under 61 percent. It’s an extraordinary shift, driven largely by the investment profits of the very wealthy. In short, the people who possess tradable assets, especially stocks, have enjoyed a recovery that Americans dependent on savings or income from their weekly paycheck have yet to see. Ten years after the financial crisis, getting ahead by going to work every day seems quaint, akin to using the phone book to find a number or renting a video at Blockbuster.

The 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

EFM- the bold print is wrong. I worked for the Irvine Company in Newport Beach, CA in 1970 and when the interest rates went through the roof, the builders just could not sell a house. Had to offer a bunch of free bonuses and more. Most of these felt at that time that we would never see a 10%  mortgage ever again. 

“Be notorious. I have tried prudent planning long enough. From now on I’ll be mad.”

~ Rumi

10/7 Doctors prescribe antibiotics without need nearly half the time

Nearly half of all outpatient antibiotic prescriptions in the United States are given to patients who have not been diagnosed with an infection that should be treated with the bacteria-fighting drugs,

A Northwestern study is among the first to carefully describe prescribing behaviors in outpatient settings, which are the source of roughly 80 percent of all antibiotic prescriptions. The U.S. Centers for Disease Control and Prevention in the past has estimated that a third of outpatient prescriptions are unnecessary.

10/7: A sad commentary: Between 2000 and 2010, an estimated 248,000 American children were married, some as young as 12. Now states all over the country are passing laws to make it harder.

EFM- harder? why not illegal. Nothing before age 18.

10/7: This is hard to believe

One out of every 18 people in Georgia is on probation or parole.

EFM- then again, maybe it isn't so hard to believe given today's society

Has anyone seen my Kid???

10/5: Sinking cities London, Jakarta, Shanghai, Houston and other global cities that are already sinking will become increasingly vulnerable to flooding as a result of global warming, an analysis released by Christian Aid says. The ground beneath Shanghai, for instance, is being pressed down by the sheer weight of the buildings above, while London is slowly sinking due to geological reasons.

EFM- And of course New Orleans which was sinking anyway before the Hurricane. It may be gone by 2030- at least all the Borroughs will be abandoned. 

10/5: Vice President Mike Pence said the United States will not back down from protecting itself against China's aggression.

EFM- Uh, those islands in the south China Sea tell a different tale. Also, some think China will back down on the tariffs. I don't think so and this could be a protracted tariff war

Mexico City-I had no idea it looked like this. But with 21 million people, it is the most populated city in the Western Hemisphere.

10/5: Not recovering from recession

58% of workers and nearly half of employers surveyed said they were still recovering from the Great Recession, and almost a third of workers had borrowed or made early withdrawals from retirement accounts by 2017

10/5: Russia and the Netherlands

The Netherlands has revealed that it disrupted a cyber attack from Russian intelligence agents on the international chemical weapons watchdog and expelled four agents from the country.

EFM- And, of course, Putin knew nothing about this. The agents simply went to the Netherlands to take pictures of the fjords. 

10/5: Subprime Crisis Lingers for Minorities
A decade after the financial crisis, black and Hispanic homeownership rates have reverted to lows not seen since the 1990s.

10/4: New York Times: recommends this post on the Venture Valkyrie blog: “This is so good and makes so much sense. We talk about nutrition, exercise, smoking, alcohol and even sleep when it comes to heart disease. But the role of emotional trauma and difficult childhood experiences are rarely discussed. Yet studies show they’re a huge risk factor.”

10/4:US auto sales plunge as interest rates rise

US auto sales sharply declined in September as interest rates for auto loans rose in tandem with the Federal Reserve's rate increases. With the average price of a new vehicle also increasing, "[b]uying conditions are far less amenable for consumers than they were before,"

EFM- Houses will take a hit for the same reason. And U.S. sellers will pass through the tariffs they have to pay for Chinese goods.

10/4: Most Interesting health care costs

Immigrants covered by private health insurance contributed nearly $25 billion more in premiums in 2014 than was spent on their care.

The study in the journal Health Affairs found that Those in the country without legal status contributed nearly $8 billion toward the surplus.

In contrast, U.S.-born enrollees spent nearly $25 billion more than they paid for in premiums.

In 2014, immigrants and their employers contributed $88.7 billion in private insurance premiums, but spent only $64 billion for care, according to the study’s findings. Of that group, undocumented immigrants alone paid more than $17 billion to private insurers but used only $9.4 billion.

Native-born consumers paid $616 billion in premiums and received nearly $641 billion in insurers’ payments for care. They also consistently outspent immigrants across all age groups. Among enrollees 65 and older, the U.S.-born made a net contribution of nearly $10,000 more toward their care than those born overseas, according to the study.

The researchers reported that, on average, individual immigrants paid $1,123 more for premiums in 2014 than they received in insurance-covered care. U.S. natives instead cost insurers $163 on average.


Nearly Eight in 10 Workers Want to Work in Retirement

Seventy-nine percent of workers want or expect to work in retirement, said Lisa Greenwald, executive vice president with Greenwald & Associates, during a webinar, but only 33% of retirees have worked for pay since retiring. Twenty-one percent of workers expect that working in retirement will provide them with a major source of income, but this is only true for 9% of retirees, Greenwald said. When workers were asked why they would like to work in retirement, 94% said they want to stay active and involved. Eighty-two percent said they enjoy working, 90% want money to buy extra things in retirement, and 74% expect the income will be necessary to make ends meet. Read more >


"Retirement in the Shadow (Banking)" Fee Download
CEPR Discussion Paper No. DP13144

GUILLERMO ORDOÑEZ, University of Pennsylvania - The Ronald O. Perelman Center for Political Science and Economics (PCPSE), National Bureau of Economic Research (NBER)
Einaudi Institute for Economics and Finance (EIEF)

The U.S. economy has recently experienced a large increase in life expectancy and in shadow banking activities. We argue that these two phenomena are intimately related. Agents rely on financial intermediaries to insure consumption during their uncertain life spans after retirement. When they expect to live longer, they rely more heavily on financial intermediaries that are riskier but offer better insurance terms - including shadow banks. We calibrate the model to replicate the level of financial intermediation in 1980, introduce the observed change in life expectancy and show that the demographic transition is critical in accounting for the boom in both shadow banking and credit that preceded the recent U.S. financial crisis. We compare the U.S. experience with a counterfactual without shadow banks and show that they may have contributed around 0.6GDP to output, four times larger than the estimated costs of the crisis.

10/4: "Understanding Euro Area Inflation Dynamics: Why so Low for so Long?" Free Download
IMF Working Paper No. 18/188

YASSER ABDIH, International Monetary Fund (IMF)
International Monetary Fund (IMF)
Banque de France

Despite closing output gaps and tightening labor markets, inflation has remained low in the euro area. Based on an augmented Phillips Curve framework, we find that this phenomenon-sometimes attributed to low global inflation-has been primarily caused by a remarkable persistence of inflation, keeping it low despite the reduction in slack. This feature is shown to be specific to the euro area (in comparison with the United States). Monetary policy needs to stay accommodative to help guide inflation back to target.

10/4: At a boisterous campaign rally Tuesday night, President Donald Trump mocked Christine Blasey Ford

EFM- certain things he has done are fine but overall he is a schmuck.

It's real. Santa Maddalena, Italy

10/4:The bottom 90% are still poorer than they were in 2007

according to numbers put together by researchers at the Federal Reserve, the top 10 percent of working-age households were the only ones who, adjusted for inflation, were richer on average in 2016 than they were in 2007. Everyone else, as you can see above, was somewhere between 17 to 35 percent poorer than they’d been almost a decade before.

So why hasn’t the recovery, which has seen housing prices rebound by 26 percent and stocks by 160 percent from their post-crisis lows, reached less exclusive income groups, too? Well, the question answers itself: Because they don’t own as many houses or stocks as they used to. Part of that, of course, is due to the fact that middle-class families were more likely to have lost their homes during the crash — that’s why their wealth fell further than anyone else’s in the years immediately after — but not as much as you might think. The bigger factor, the researchers found, is that tighter lending standards have made it harder for people to buy a home in the first place. Consider this: Between 2007 and 2016, homeownership fell 12 percentage points among the middle class, 9 percentage points of which was due to people who had never owned a home in the past never buying one during that time. The housing crash, in other words, turned more people into renters, so the housing comeback hasn’t helped nearly as many people as had been hurt.

The bottom 60 percent of households just never owned that many to begin with, but they own even less today. Some of that might be that the Great Recession has scared them off investing, some of it that the not-so-great recovery hasn’t left them with enough money to put into markets even if they wanted to, but a big part of it, according to the researchers, is simply that fewer people have access to 401(k)s than before. They’re either out of work, or can’t find a full-time job that offers those kind of benefits. The result is that a lot of middle-class households have missed out on what’s been one of the great bull markets the past nine years.

10/4: A Blueprint When Feeling Blue: How A Mental Health Diagnosis Can Be Empowering

Nice article.

10/4: "Shocks and Transitions from Career Jobs to Bridge Jobs and Retirement: A New Approach" Free Download
Michigan Retirement Research Center Research Paper No. 2018-380
Stanford University Graduate School of Business Research Paper No. 18-39

JOHN AMERIKS, The Vanguard Group, Inc.
New York University (NYU) - Department of Economics
New York University (NYU) - Department of Economics, National Bureau of Economic Research (NBER)
University of Michigan at Ann Arbor - Department of Economics
University of Michigan at Ann Arbor - Department of Economics, National Bureau of Economic Research (NBER)
Stanford Graduate School of Business

This research provides new empirical evidence on late-life labor market activities of American households from a new survey implemented under the Vanguard Research Initiative. The survey features following innovations: It measures detailed job characteristics not only of a career job but also of post-career bridge jobs; it examines reasons of leaving a career job and whether households would have changed their decisions under counterfactual situations; it examines post-career job search behavior of households. The research finds that, even though a direct transition from a career job to full retirement is still the most common pattern, a significant fraction of older Americans reveal interest in working beyond the career job. Within this sample of older Americans with positive financial assets, 38% of had a post-career bridge job and another 7% of them looked for a post-career employment opportunity. Low health or bad business conditions were the not the main reason for leaving the career job. Yet, for the minority of those who did leave career jobs owing to low health or bad economic conditions, had they counterfactually had better health or economic conditions, they likely would have decided to work longer. Those who work longer on their career job or have a post-career bridge job tend to work fewer hours, have a flexible schedule, and receive lower hourly wages.

10/3: Gallup Pollident

Presidents with an approval rating below 50% lose an average of 37 seats in the House of Representatives in the mid-term elections. President Trump’s approval rating is in the low 40s. Thus, he could lose seats in the Senate too.

10/3: Gary Halbert

, our national debt, including “debt held by the public” and “intergovernmental debt,” now totals $21.51 trillion (the chart below is a little dated). With annual budget deficits of $1 trillion or more, the national debt is on-track to balloon to $30-35 trillion over the next decade.

National Debt

For the record, I don’t believe that will happen. At some point, investors will decide that it’s just too risky to own US Treasuries, and we’ll face another financial crisis that could be much worse than 2008-2009

EFM- Worse than 2008??? Yep

10/3: A very important issue

"A Meta-Analysis of the Decline in the Labor Force Participation Rate" Free Download
Michigan Retirement Research Center Research Paper No. 2018-381

ANANTH SESHADRI, University of Wisconsin - Madison - Department of Economics

This project explores the causes behind the recent decline in the Labor Force Participation (LFP) rate. The analysis examines the evolution of the LFP rate for different demographic groups to gauge the effect of demographic changes. An integral part of the project is an investigation of the flows of workers into and out of the labor force to determine whether the LFP rate has been declining because more workers are leaving or because fewer workers are entering the labor market. The project also studies the evolution of wages and finds that the decline in the LFP rate is often accompanied by a declining real wage, which is indicative of the relative importance of demand versus supply factors.

10/3: Petersen International Underwriters Why is is this here- information about disability insurance and the bold print

Longevity and physical quality of life have been steadily increasing around the world in the last half-century as people have become more health and body conscious, especially among developed nations. Recent trends show that fewer people are using tobacco products in the U.S. and more are exercising on a regular basis. Medical sciences are ever evolving and improving. Prescription medications are extremely prolific and able to address health concerns like never before. Despite all of the positive, American diets and fast-paced lifestyles continue to create serious health concerns in this country.

Saturated fats, sugar and sodium-laden cuisine have helped to make obesity an American epidemic which in turn has given rise to record levels of persons living with diabetes and heart disease.

We recognize that we are all fallible, as we are all human. Your clients have health issues, like anyone else, which may ultimately pose underwriting roadblocks when they decide to take that thoughtful step and apply for disability insurance. Traditional DI carriers tend to be ultra conservative along all facets of their underwriting processes. Our disability products and underwriting methods are more flexible than most companies, allowing long-term income protection offerings to those who would normally be declined by the standard market due to adverse health conditions, risky avocations, foreign residences or hazardous occupations.

Sub-standard health disability cases are a large part of our regular, day-to-day business, and our underwriting standards are the most liberal in the industry. We can offer “own occupation” disability coverage to your clients with cardiovascular issues, cancer history, even to those with chronic conditions like multiple sclerosis and HIV. Our policies offer a variety of benefit options including long-term monthly benefits, lump sum benefits as well as accelerated disability benefits.

Another attribute is that our underwriters don’t subscribe to the Medical Information Bureau (MIB), allowing your clients the freedom and peace of mind knowing that their applications and medical files won’t be shared by Petersen International with other insurance companies and won’t affect any future insurance applications to other carriers.

10/3: Did not expect this

Thinking Money

May feel it is necessary to make more money for education


Suicide is a national health crisis, with one person taking their own life every 12 minutes

Currently, it’s the second leading cause of death for adults ages 25-34 and the fourth leading cause of death for adults ages 35-54, both age groups that comprise the majority of today’s workforce. The correlation between work-related stress and an individual’s mental health is undeniable. Research from AFSP found that among adults who have been employed in the past 12 months, more than one in 10 have missed work days because they were too anxious (14%) or too depressed (16%) to go in.

it’s clear that mental health has an impact on their absenteeism, presenteeism and ultimately, productivity — subsequently impacting a company’s bottom line and costing the U.S. economy over $51 billion, according to Mental Health America.

10/3: OIL

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. natural gas exports
averaged 0.87 billion cubic feet per day (Bcf/d) in the first half of 2018, more than double the 0.34 Bcf/d average in all of 2017.

-    New export terminals have opened up a greater flow of gas from American shores.

-    For instance, Dominion’s (NYSE: D) Cove Point LNG export terminal in Maryland began operations in March 2018. 

-    Another four LNG export terminals are under construction and will enter into service by the end of next year. 

10/3: Foot Drop

The National Institute of Neurological Disorders and Stroke, National Institutes of Health, defines foot drop as “the inability to raise the front part of the foot due to weakness or paralysis of the muscles that lift the foot.” Muscles in the leg cannot raise the foot at the ankle, or the front part of the foot, due to paralysis of muscles that lift the foot.

Consequentially, people who have foot drop scuff their toes along the ground; they may also bend their knees to lift their foot higher than usual to avoid the scuffing, which causes what is called a “steppage” gait. When caused by pressure on the nerves that control the muscles in the leg or by a knee injury, foot drop can be temporary. However, damage to the nerves — and other medical disorders — can cause this to be a permanent condition affecting one or both feet.

  • Nerve injury: Compression of the nerve that controls the muscles involved in lifting the foot, which can happen at the knee or in the lower spine during hip or knee replacement surgery. Additionally, diabetic neuropathy (long-term nerve damage associated with diabetes) can also cause foot drop.
  • Muscle or nerve disorders: Forms of muscular dystrophy (an inherited disease that causes progressive muscle weakness), polio or Charcot-Marie-Tooth disease can cause foot drop.
  • Brain and spinal cord disorders: These include amyotrophic lateral sclerosis (ALS), multiple sclerosis (MS) or stroke.

One neighbor experienced foot drop as the result of a stroke nearly one year ago. I hadn’t seen him in many months; he didn’t want to discuss it. I saw the stroke had affected his left side. While physical therapy helped him lift his leg, it looked like his foot and ankle muscles hadn’t fully recovered.

Toes that point away from the body when the foot is relaxed indicated foot drop. Feet and legs may feel weak; the person may have difficulty walking, or scuffs his or her toes, and trips frequently over the affected foot. To overcome or compensate, the person may lift the knees higher (step gait) so there is less chance of stumbling over the toes. The person may also slap his or her foot down with each step. In some cases, there may be tingling or numbness on the top of the foot, toes and ankle, caused by the particular way of walking, or it can be linked to an underlying cause of foot drop. 

Foot drop is diagnosed during a physical exam. The doctor will ask you to walk and will check leg muscles for weaknesses and may check your shins and the tops of your feet and toes for numbness.

Specific causes of foot drop determine its treatment. Supporting the foot with light-weight leg braces and shoe inserts, called ankle-foot orthotics, is a commonly-used treatment; exercise therapy can strengthen muscles and maintain joint motion, which helps improve gait.

The peroneal nerve controls the muscles that lift the foot. Activities that compress this nerve, such as crossing one’s legs, prolonged kneeling or squatting, or wearing a leg cast, exert pressure on this nerve and increase risk of foot drop.

Electronically stimulating the peroneal nerve during foot fall can be appropriate for some people with foot drop. Surgery fusing the foot and ankle joint, or that transfers tendons from stronger leg muscles, is occasionally performed when there is permanent loss of movement.

Foot drop caused by trauma or nerve damage can show a partial or complete recovery; if a symptom of progressive neurological disorders, foot drop can continue as a lifelong occurrence and will not shorten life expectancy. Treatment depends on the underlying cause, which, if successfully treated, may improve foot drop or cause it to disappear.

Other helpful treatments include an ankle and foot brace or a splint, physical therapy and exercises that strengthen the leg muscles and help maintain knee and ankle range of motion; heel stiffness can be prevented by stretching exercise.

Due to increased risk of falling and tripping, caregivers are reminded to take precautions at home:  keep floors clear of clutter; avoid using throw rugs which can slip; move all electrical cords from walkways and halls; keep rooms and stairways properly lighted; and place fluorescent tape on the tops and bottoms of stairs.

10/2: Hawaii Volcanoes National Park
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Hawai’i Volcanoes National Park has more than 100 miles of trails.


“Paid $20 to get in. Didn't even get to touch lava."

Actual visitor comment.

Yosemite- “BTW, the park shuts off some of the waterfalls after mid summer. This is probably due to dwindling Park Service budgets that are spent on toilet paper. Please protest this fiscal mismanagement by STAYING AWAY from Yosemite!

Also, there are bears in Yosemite. They practice breaking into cars. Do you want a bear to break into your car? STAY AWAY!”

Glacier National Park- “At the time of our visit, half of the road was closed due to snow! Well, there was no snow on the mountains and it being late June, it could not possibly have snowed there! Was there a UFO landing? Pretty fishy.”

Rocky Mountain National Park- "Way overrated. First of all there's wildlife everywhere - who wants to run into a moose on the trail? What if it eats you? And the rangers are all way too friendly. It's like they're completely oblivious to all the suffering in the world. Plus there's not a single Starbucks on any of the trail heads. Finally, too many snow capped mountains. I like to see the horizon at all times. It calms me."

10/3: Suck on this

A Japanese politician who was kicked out of an assembly session last year after bringing her 7-month-old baby to the chambers was forced to leave again — this time, for sucking on a cough drop during assembly.

EFM- idiocy knows no country boundaries

10/3: Are we going to see $100/barrel??

Oil tops $85 a barrel as funds wager on Iran sanction Oil prices climbed above $85 a barrel for the first time in nearly four years as renewed worries about US sanctions on Iran and optimism over global economic growth boosted Brent crude, the international benchmark.

10/3: Bathroom Transfers

Statistics show that many preventable accidents occur in bathrooms. Falls are the top culprit in this category. Wet floors and small spaces are only some of the causes for concern in a bathroom setting. Caregivers must recognize these obstacles before assisting someone they love in the restroom. Ignoring them can be a disaster for both caregiver and the one being cared for.

As an answer to the bathroom-transfer dilemma, many devices and maneuver methods are available to ensure a caregiver’s and their loved one’s safety. It is also important for a caregiver to recognize that nothing is more personal than assisting another with intimate cares. Respect and concern for their loved one’s emotional comfort are as important as their physical care.

At Home Base

Caregivers can establish a large amount of control over bathroom safety while in their own or a loved one’s home. There are two categories a caregiver should consider as preventive safety measures. The first is procedures and the second, products. Many potential problems can be addressed simply by home modification, approach tactics or the use of assistive devices.

Here are some general procedural tips to aid in the completion of a transfer:

  • Do not pull on a person’s arms or under their shoulders.
  • Use a gait belt secured around their waist for assistance.
  • Explain each step of the transfer, then give physical assistance and verbal cues during the movement.
  • Allow a loved one time to comprehend what’s expected and to follow through on their own time.

Bathroom Specifics

Whether the toilet or tub, there are guidelines caregivers can follow for each care performed in the bathroom. Proper transfer techniques can prevent more serious issues down the road, for all parties involved. Many of those discussed are targeted toward the senior population. However, the techniques could be practiced on any age group.

On a toilet, a raised seat or toilet safety frame is recommended to complete the transfer as safely as possible. First, make sure the person is in position, so both of the backs of their legs touch the toilet. Have their arms reach back to grasp a side grab bar, toilet or vanity for support. A caregiver should next assist them to a seated position. A note on toilet seats: If the person’s feet do not touch the floor when seated on the toilet, it is too high, and will put them at a higher risk for falls due to instability.

Many older homes have tubs with a shower attached, while others have a single shower stall. Each can pose different safety risks, especially after water has had its chance to saturate the area! The most transfer-friendly option is of course, a shower stall. If possible, a caregiver should consider replacing an existing tub with a stall and a shower chair. If not feasible, below are some tips for transfers in a tub.

  • Position the person so that the backs of their legs touch the bathtub and are in line with the tub chair.
  • If using a chair, have the person reach and grab the back of the tub chair.
  • The other hand then grabs the side of the tub, or an assistive device
  • The caregiver can slowly lower the person onto the side of the chair.
  • Take the hand on the tub or other device, and place it on the shower chair.
  • Lift the legs up one at a time and swing them into the tub.
  • The person should be positioned in the center of the chair or stool.
  • Reverse to transfer out of tub.