Errold. F. Moody Jr.

click above for bio

Financial and Economic Daily Commentary 2019

Knowledge makes obsolete the inequities that ignorance and prejudice justify

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

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

BUSINESS WEEK: "For an Expert, Click here"  

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

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

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

Losses limited to about 12% for recessions

Patent Pending
  ain 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

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



Revolutionary Method for Asset Allocation- Increase Returns, Reduce Risk

September 2018


October 2018

Have you sold your Equities yet???

December 2018

Rebuttal to NY Times Retirement article. Terrible Advice & High Risk

February 2019

The essence of investment management entails the management of risk, not the management of returns."

Benjamin Graham 

You shouldn’t own common stocks if a 50% decrease in their value in a short period of time would cause you acute distress

Warren Buffet

EFM- But the losses can be longer than a short term

S&P 500  2000















17 percent of all 18 to 24 year-olds, or 2.3 million people, in the nation’s largest cities and counties are out of work. Nationally, there are 5 million such young people.

Only 36 percent worked in the past year, compared to 69 percent of all young adults. Twenty percent left high school before completion, and another forty-three percent report that a high school diploma is their highest level of educational attainment. Only 17 percent are in school, compared to 53 percent of all young adults.

The relative size of the young adult out-of-work population varies considerably by geography but tracks with the general economic and demographic characteristics of places. They make up a full one-third of all young adults in Detroit, and about one-quarter in the Bronx in New York City, several counties in California, and in Hidalgo County, Texas. These places have fairly low employment rates and levels of educational attainment, and tend to specialize in industries that do not require college degrees, such as agriculture, manufacturing, and distribution and logistics. On the other end, 10 percent or less of the young adult population is out of work in cities like Boston and Seattle, as well as in Wake County, North Carolina (encompassing Raleigh), Hennepin County, Minnesota (encompassing Minneapolis), and Denton County, Texas in the Dallas-Fort Worth region. These places all have high employment rates and levels of education, and specialize in sectors requiring higher levels of education, such as professional, scientific, and technical services.

Figure 2
prime example of what happens in  America  that has, as one article described, arguably one of the least effective systems for preparing non-college bound youth for the workforce in the Western World.”


So what do we do? There is no shortage of ideas and examples of how to reform education and training, and promote stronger pathways into the workforce. They include:

  • Re-engagement centers to connect young people without a high school diploma to education and training options
  • More job training programs tailored to local economic conditions
  • Better options to help people with low literacy and math prepare for job training or post-secondary education
  • Continued focus on reforms and supports to ensure that students who enroll in college complete college

What we lack is a sense of urgency, political will, and imagination.

EFM- And money. So nothing much is going to happen. If, for whatever reason, some kid does not get a HS dilpoma, their life may be wasted.

By combining a Short-Term Accident Only product with a Short-Term Accident and Sickness or a Long-Term Accident and Sickness policy, you can extend your clients’ coverage so they receive benefits starting Day One in case of an accident.


You can combine a Short-Term Accident Only policy with a 0-day elimination period and a Long- Term Accident and Sickness policy with a 90-day elimination period.

This gives the client a 0-day accident/90-day sickness elimination period. The Short-Term Accident only policy would feature a three month Benefit Period in order to help keep the premiums reasonable while the Long-Term Accident and Sickness policy could have a benefit anywhere from two years up to age 67.

Short-Term Accident Only Long-Term Accident and Sickness
0-day Elimination Period 90-day Elimination Period
3-month Benefit Period 2 years – To-age-67 Benefit Period

As long as the two products don’t overlap, there are numerous potential variations available to your clients.

Lack of savings paints a disconcerting picture about financial preparedness in America with nearly a third (30%) of U.S. adults aged 18+ within three paychecks of needing to either borrow money or skip paying one or more bills.

“The annual study found:

  • More than one in five (22%) Americans have less than $5,000 saved for retirement, and 15% have no retirement savings at all. That’s an improvement from 2018 when 31% had less than $5,000 saved and 21% had no retirement savings at all.
  • While 10,000 Baby Boomers turn 65 every day, nearly one in five (17%) have less than $5,000 saved for retirement and 20% have less than $5,000 in personal savings. For Gen X, the numbers are greater — 21% have less than $5,000 saved for retirement and 22% have less than $5,000 in personal savings.
  • More than half (56%) of Americans don’t know how much they’ll need to retire comfortably.
  • More than a fifth (22%) of non-retired U.S. adults believe it is not at all likely that Social Security will be available when they retire.
  • On average, people think there is a 45% chance they will outlive their savings, and 41% have taken no steps to address it.

Among those who say they expect to work past age 65 out of necessity, the top three reasons why include:

“I won’t have enough saved to retire comfortably” (78%)

“I do not feel like Social Security will take care of my needs” (56%)

“I am concerned about rising costs like healthcare” (49%)

For those expecting to work past 65 by choice, the top three reasons why include:

“I enjoy my job/career and would like to continue” (58%)

“I want additional disposable income” (46%)

“It is a social outlet that will help me stay active/prevent boredom” (39%)

6/16: Being paid to invest with 0 or negative fees

understand the purpose of “Zero” fee or “Negative” fee funds. There simply is only one purpose: build market share.

These savvy marketers know full well incessant media reports have vilified fees, even legitimate ones. This has created a “low fee” bandwagon, drawing investors from other, perhaps more critical, factors when making investment decisions. (Incidentally, the same thing is happening with “ESG”-centric investment products. In fact, I’d be willing to wager you can get away with purposely charging a premium fee as long as the product has the ESG seal of approval.)

6/16:Consumer price index shows muted US inflation

The US consumer price index in May rose 0.1% compared with April and 1.8% compared with May 2018, according to the Labor Department. Continued softening of inflation might push the Federal Reserve toward an interest-rate cut to head off an economic downturn.

EFM- and remember they were going to raise rates at least 4 times this year. Quite a turnaround.

6/16:US budget deficit soared in first 8 months of fiscal year

The US budget deficit for the first eight months of fiscal 2019 was $738.6 billion, 38.8% higher than the amount for the same period in fiscal 2018, according to the Treasury Department. The deficit increased 41.5% last month compared with May 2018.

EFM- WE cannot survive with debt this large and getting larger.

nasa caffeine spider study wide

EFM- I suppose this will be inevitable since ROBOs are effectively that same. This is the height of irresponsibility. But it will garner millions of customers

6/16: As if you don't have enough to worry about
6/16: Iran may be the culprit that hit the oil tankers. But then this
A missile fired by Houthi rebels struck the arrivals hall of an airport in southwestern Saudi Arabia on Wednesday, injuring 26 people,

6/16: OIL

Friday, June 14th, 2019

Oil prices spiked in early trading on Thursday by more than 4 percent on news from the Gulf of Oman of a tanker attack, but benchmark prices gave up some of those gains as the day wore on. In early trading on Friday, crude oil was mostly flat, as traders seemed to return to focus on fundamentals. A falling rig count then caused prices to climb.

Tensions skyrocket on tanker attacks. Two oil tankers were
attacked on Thursday in the Gulf of Oman, and the U.S. government says Iran is to blame. Iran denies the charges, saying that the U.S. is waging a war of disinformation. U.S. Central Command released a video that apparently showed an Iranian patrol boat removing an unexploded mine from one of the tankers. But some experts say it is not enough evidence to jump to conclusions. Still, with tensions on the rise, the possibility of an all-out military conflict is higher than at any point in recent memory. At the same time, officials in both Tehran and Washington said that they want to avoid war. Oil prices have mostly shrugged off the news, as fears of an economic recession and cratering demand are offsetting what would normally be a major upside risk to prices. 

Tanker insurance costs to rise.
The risks to shipping in the Persian Gulf could lead to ballooning costs for insurance for oil tankers. “Owners that currently have their vessels in the area are checking and trying to find out more about security, crewing, insurance and legal aspects,” a London-based broker told
the FT


Survey: CEO economic outlook is lowest since Trump took office

Confidence about the US economic outlook among US CEOs has fallen to the lowest level since Donald Trump became president, according to a Business Roundtable survey. CEOs still expect healthy capital investment and hiring, but "uncertainty about US trade policy, softening global growth conditions and inaction on other pressing public policy issues are a concern,"

EFM- don't forget Iran attacking oil ships

6/16: Overheating and the elderly

Summer weather can pose special health risks to older adults and people with chronic medical conditions. It is critically important that adults particularly susceptible to hyperthermia and other heat-related illnesses know how to safeguard against problems.

Hyperthermia is caused by a failure of the heat-regulating mechanisms of the body. Heat fatigue, heat syncope (sudden dizziness after prolonged exposure to the heat), heat cramps, heat exhaustion and heat stroke are forms of hyperthermia. Older adults are at risk for these conditions, and this risk can increase with the combination of higher temperature, individual lifestyle and general health.

Lifestyle factors can include not drinking enough fluids, living in housing without air conditioning, lack of mobility and access to transportation, overdressing, visiting overcrowded places and not understanding how to respond to hot weather conditions. Older people, particularly those with chronic medical conditions, should stay indoors in cooler spaces on hot and humid days, especially when an air pollution alert is in effect.

People without air conditioners should go to places that do have air conditioning, such as senior centers, shopping malls, movie theaters and libraries. Cooling centers, which may be set up by local public health agencies, religious groups and social service organizations in many communities, are another option.

Factors that increase the risk of hyperthermia may include:

  • Dehydration
  • High blood pressure or other health conditions that require changes in diet. For example, people on salt-restricted diets may be at increased risk. However, salt pills should not be used without first consulting a doctor.
  • Heart, lung and kidney diseases, as well as any illness that causes general weakness or fever.
  • Use of multiple medications. It is important, however, to continue to take prescribed medication and discuss possible problems with a physician.
  • Reduced sweating, caused by medications such as diuretics, sedatives, tranquilizers and certain heart and blood pressure drugs.
  • Age-related changes to the skin such as poor blood circulation and inefficient sweat glands.
  • Being substantially overweight or underweight.
  • Alcohol use

Heat stroke is a life-threatening form of hyperthermia. It occurs when the body is overwhelmed by heat and unable to control its temperature. Signs and symptoms of heat stroke include a significant increase in body temperature (generally above 104 degrees Fahrenheit), changes in mental status (like confusion or combativeness,) strong rapid pulse, lack of sweating, dry flushed skin, feeling faint, staggering or coma. Seek immediate emergency medical attention for a person with heat stroke symptoms, especially an older adult.

If you suspect that someone is suffering from a heat-related illness:

  • Get the person out of the heat and into a shady, air-conditioned or other cool place. Urge them to lie down.
  • If you suspect heat stroke, call 911.
  • Encourage the individual to shower, bathe or sponge off with cool water if it is safe to do so.
  • Apply a cold, wet cloth to the wrists, neck, armpits, and/or groin. These are places where blood passes close to the surface of the skin, and the cold cloths can help cool the blood.
  • If the person can swallow safely, offer fluids such as water, fruit and vegetable juices. Avoid alcohol and caffeine.

The Low Income Home Energy Assistance Program (LIHEAP) within the Administration for Children and Families in the U.S. Department of Health and Human Services helps eligible households pay for home cooling and heating costs. People interested in applying for assistance should contact their local or state LIHEAP agency.

About the National Institute on Aging: The NIA leads the federal effort supporting and conducting research on aging and the medical, social, and behavioral issues of older people. The Institute’s broad scientific program seeks to understand the nature of aging and to extend the healthy, active years of life. 

About the National Institutes of Health (NIH): NIH, the nation's medical research agency, includes 27 Institutes and Centers and is a component of the U.S. Department of Health and Human Services. NIH is the primary federal agency conducting and supporting basic, clinical, and translational medical research, and is investigating the causes, treatments, and cures for both common and rare diseases.

First Time Doing Marketing - Dilbert by Scott Adams


6/16: Buffet's yardstick

Buffett Yardstick, plots the total value of the stock market against the overall size of the economy. What makes it so valuable is that it’s good at telling investors what to expect from equities going forward.

Felder says investors are paying such a high price for stocks that they are likely to receive basically nothing in return in the coming decade, and that includes dividends.

“At the same time that potential returns look so poor, the potential for risk may be greater than it has been in generations,” he wrote, pointing out that investors have been piling on margin debt lately to increase their exposure to an overheated market.

6/16: Bombings on oil tankers

Two oil tankers came under attack on Thursday in the Gulf of Oman, forcing their crews to abandon ship and setting at least one vessel ablaze, a month after four tankers were damaged in the same waterway, a vital thoroughfare for much of the world’s oil products.

6/16: Harry Markowitz's "Individual versus Institutional Investing"

"I only recently became fully aware that the CFP® designation for financial planners only teaches about MPT when it comes to investing. MPT teaches how to operate a mutual fund company. It doesn’t teach how individual households should build investment strategies to meet their lifetime financial planning goals"

6/16: 30% Of Americans Are Within Three Paychecks Of Needing To Borrow Money Or Skip Paying One Or More Bills

22% of US Adults Have Less Than $5,000 Saved for Retirement and 46% Expect to Work Past the Age of 65

6/16: Modern Portfolio Theory- S Huxley
MPT for individuals, especially retirees, is like trying to fit a square peg into a round hole - even Markowitz recognized it.  It is a classic case of Kahneman's "theory-induced blindness,"

6/16: Europe slowing
Markets’ expectations are growing that the guardians of the single currency will have to confront the question of whether to launch a further round of monetary stimulus. ABN Amro’s Nick Kounis predicts that the bank will have to restart the expansion of its €2.6tn quantitative easing programme.

The previous round of projections, in March, showed growth rising 1.1 per cent this year, 1.6 per cent in 2020 and 1.5 per cent in 2021. Inflation is set to hit 1.2 per cent this year, 1.5 per cent in 2020 and 1.6 per cent the following year. No big downgrades are likely this time around. However, the fall in inflation expectations and the intensification of the global trade war are likely to lead Mr Lane to emphasise that the risks to the economy are tilted to the downside.

“Something has to be done about inflation expectations, which have plummeted to near all-time lows,” said Erik Nielsen, chief economist at UniCredit. “If I were in their shoes, I would now try to shock the market back to believing in their ability to get inflation back toward 2 per cent.”

ETF: The U.S. is considering the same thing. But it is tough to do when rates are still so low
6/16: Hong Kong

But this supposed consensus has not held. As China’s government has grown more confident at home and globally, it has also asserted incrementally greater control over Hong Kong. The ultra-rich city’s political and legal systems, rather than becoming more democratic over time, have become gradually more Chinese. The change isn’t yet transformative — Hong Kong is still Hong Kong — but the trajectory seems pretty clear.

Each incremental step toward Chinese rule has drawn protest from many Hong Kongers, most recently over an agreement that would allow mainland China to extradite people from Hong Kong.

The goal of protesters is to stop the extradition agreement but, more than that, to preserve Hong Kong’s separate system. Beijing’s goal, meanwhile, seems to be to gradually absorb Hong Kong into the mainland’s political control.

6/13: Reverse mortgages are not bad per se. But many things offered to the poor tends to be suspect. These people needed a lot more independent assistance beforehand

unscrupulous lenders targeted lower-income, black neighborhoods and encouraged elderly homeowners to borrow money while glossing over the risks and requirements.

USA TODAY found that reverse mortgages end in foreclosure six times more often in predominantly black neighborhoods than in neighborhoods that are 80% white.  

Even comparing only poorer areas, black neighborhoods fare worse. In ZIP codes where most residents make less than $40,000, the analysis found reverse mortgage foreclosure rates were six times higher in black neighborhoods than in white ones.

The foreclosure disparity resembles a more familiar scenario from the late 2000s, when subprime lenders targeted specific neighborhoods with risky loans doomed to fail, according to the nation’s lead reverse mortgage researcher.

6/13The demonstrations in Hong Kong- Investopedia

Besides the obvious risks to human life and safety, the protest and police reaction has had a financial impact on the Hong Kong markets as well. As you can see in the following chart, The Hang Seng index, which reflects the value of more than half of the value of stocks listed on the Hong Kong exchange, is down nearly 2% for the day while the Hong Kong Dollar has rallied significantly. It may not seem like this should have a big impact on the markets, but it could turn into a much larger issue for traders. It’s especially worrying because the index includes stocks with focused exposure to Hong Kong and China itself.

6/13: Correlation

Correlation statistically measures the degree of relationship between two variables in terms of a number that lies between +1 and -1. When it comes to diversified portfolios, correlation represents the degree of relationship between the price movements of different assets included in the portfolio. A correlation of +1 means that prices move in tandem; a correlation of -1 means that prices move in opposite directions. A correlation of 0 means that the price movements of assets are totally uncorrelated; in other words, the price movement of one asset has no effect on the price movement of the other asset.

In actual practice, it's difficult to find a pair of assets that have a perfect positive correlation of +1, a perfect negative correlation of -1 or even a perfect neutral correlation of 0. In fact, a correlation between different pairs of assets could be any one of the numerous possibilities lying between +1 and -1 (for example, +0.62 or -0.30). Each number thus tells you how far or how close you are from that perfect 0 where two variables are totally uncorrelated. So, if the correlation between Asset A and Asset B is 0.35 and the correlation between Asset A and Asset C is 0.25, then you can say that Asset A is more correlated with Asset B than it is with Asset C.

While choosing assets for your portfolio, you have to choose from a wide range of permutations and combinations. No matter how you play your hand in a portfolio of many assets, some of the assets would be positively correlated, some would be negatively correlated, and the correlation of the rest could be scattered around zero.

EFM- How can one do this with a sense of viability? Is the correlation based on one day, a month, a year, 5 years????? Tough to figure out

Other benefits of group long-term care insurance include:

· Full portability. Employees can take the coverage with them when they change jobs or retire, one of the most attractive features of group long-term care insurance. 
· Fewer underwriting requirements. Because group long-term care insurance is, in part, underwritten at the group level, fewer underwriting requirements are needed at the individual level for employees during initial enrollment.
· Online enrollment. Consumers can learn more about long-term care insurance, estimate costs and apply online. 
· Easier payment options. Employees can pay premiums by payroll deduction, if offered by the employer, or via electronic funds transfer or direct bill.
· Affordability. In most employer group plan designs, employees can start small, buying a modest amount of long-term care insurance, then add to their coverage over time as their budgets permit.

Almost 40% of Americans lack confidence they will ever save enough money to retire. That number climbs even higher among older Americans, age 54 or more.

On average, monthly benefits for a retired worker from the Social Security Administration are $1,468.39 or only about $17,600 per year.

6/12: Women, Marriage, and the National Retirement Risk Index”

Women are spending a growing share of their lives single, so it is useful to consider how their marital history affects their retirement preparedness.
  • While married women have much higher household earnings and wealth, they are more at risk of failing to maintain their standard of living in retirement. 
  • This surprising result is driven by two-earner couples who:
    • get less from Social Security relative to their earnings due to the decline of the spousal benefit; and
    • save less in 401(k)s since often only one spouse has coverage.
  • These findings highlight the need for expanding coverage to all households and underscore the value of Social Security to single women.
6/12: OIL

Chart of the Week

-        In 2018, U.S. coal production
fell to 756 million short tonnes, the second-lowest total since 1978 and down from a peak of 1,172 million short tonnes in 2008.

-    Production and consumption have fallen in tandem. Consumption dropped to just 687 million short tonnes last year, a four-decade low.

-    The vast majority of coal consumed is used for electricity generation. The ongoing shuttering of coal-fired power plants likely ensures steady declines for both production and consumption of coal for years to come.  


Illinois Budget Woes: Still Smoking

The state’s decision to legalize gambling and marijuana helps immediate problems but delays the state’s inevitable financial collapse

EFM-But if they smoke enough, they won't care

Kayak festival(?) in China
I know what I am looking at. I just cannot believe it

6/11: Regulators must scrutinize advice by insurance agents

"An unpoliced market." That's how one investor advocate described the practice of insurance agents who are not licensed to conduct securities transactions advising investors to roll over 401(k) funds into insurance products.

The rollover market for 401(k) funds is especially tempting right now because so many baby boomers are retiring. In many cases, they have hundreds of thousands — or even millions — of dollars, in their accounts, that they have saved over a lifetime.

Advising rollovers can be a tricky business, even for financial advisers. While in some cases, it might make sense to roll over 401(k) funds into an individual retirement account where other investments might be considered, in other cases it may not. The client's best interest should be made the highest priority.

That may not be happening when an insurance agent is giving the advice. As reporter Greg Iacurci recently pointed out, insurance agents who are advising clients to take funds invested in the stock market out of a 401(k) account to buy insurance products such as annuities are in violation of the law if they are not also licensed to conduct securities transactions.

But enforcement has been spotty at best. The insurance industry is largely regulated by states, and enforcement varies state-by-state. The Securities and Exchange Commission has jurisdiction over nonlicensed individuals conducting securities transactions, but it rarely goes after insurance agents in rollover cases.

EFM- enforcement sucks in CA and FL. Why they have a regulating department is beyond me. And I got the letters to back it up.

Hong Kong

 with global growth looking unsteady, the trade dispute between the U.S. and China back on the boil, and markets jumpy, the risks to the U.S. economy have risen. But President Trump’s recent threat—since defusedto place escalating tariffs on Mexico, followed by Friday’s unexpectedly weak jobs number, were what really moved the needle.

Fed officials this past week made it clear that they are worried, and their dovish comments fueled a 4.7% rally in the S&P 500 over the past four trading sessions. But cheering the Fed for starting to cut rates can be a dangerous thing for investors.

In January 2001, for example, the Fed announced a surprise cut that sent the Nasdaq up 14% in a single day, which remains the index’s largest move since its creation in 1971.

6/11:Mental health parity' is still an elusive goal in U.S. insurance coverage

Politics Graison Dangor / Kaiser Health News

The 2008 Mental Health Parity and Addiction Equity Act required large group health plans that provide benefits for mental health problems to put that coverage on an equal footing with physical illness. Two years later, the Affordable Care Act required small-group and individual health plans sold on the insurance marketplaces to cover mental health services, and do so at levels comparable with medical services. (In 2016, parity rules were also applied to Medicaid managed-care plans, which cover the majority of people in that federal-state health program for low-income residents.)

The laws have been partially successful. Insurers are no longer permitted to write policies that charge higher co-pays or deductibles for mental health care, nor can they set annual or lifetime upper limits on how much they will pay for such care. But advocates for patients say insurance companies still interpret mental health claims more stringently than those for physical illness.

A 200 foot bunny in the Alps.

the study seeks to understand how the habits and behaviors from earlier in life played out in the later years of retirement. The material includes a full report of the findings as well as six highlights reports focused on Millennials, a comparison of financial priorities, family obligations, financial risk concerns, financial fragility, and marital status. Also available is the posted questionnaire including a tabulation of all the results.

This study focuses on Millennials, Gen Xers, Late Boomers, Early Boomers, and the Silent Generation to provide perspectives in understanding how Americans adapt, over the course of their lives, to financial challenges. Key findings include: • All generations recognize the importance of retirement saving and those that have access to a retirement plan are likely to participate. • All of the generations feel a strong connection to family and believe that family members should help each other. Less obligation is felt in the case of a blended family, that is, a family consisting of a couple or individual and children from the current and all previous relationships. • The financial planning perspective of each generation lengthens as they advance in their work lives and then contracts as they draw closer and enter retirement. • Millennials face greater challenges than the groups before them. All generations seem to agree on this. Although it is clear that all generations struggle to get started in adulthood and their financial lives, it seems clear that Millennials are facing a slower path to financial independence and retirement savings because of the educational costs, housing costs, and job conditions they face.
Nevertheless, Millennials and other generations of Americans are highly optimistic. This study presents an important description of the viewpoints, attitudes and beliefs of these generations of adult Americans and can also serve as a useful benchmark to measure how they adapt over the coming years.

Key Findings: Differences and similarities between generations
Similarities between generations • For achieving financial security, all believe the Millennial generation has it harder • All are more likely to describe themselves as savers, thrifty, and investment novices • 45% feel optimistic • Paying bills is a key financial priority • Three in five believe they are on track to a financially secure retirement • All are concerned with paying for long-term care • One-third believe it is important to leave an inheritance • Most agree adult children should help their parents financially and with regular tasks • Few believe parents should help adult children if it means they will harm their own financial future
Differences between generations • Younger generations have shorter financial planning time frames • Confidence in making financial decisions increases with age • Late Boomers are the most likely to be planners • Older generations are more likely to feel in control and satisfied while Millennials feel overwhelmed • Retirement concerns are higher with younger generations • Younger generations are most likely to have debt with Gen Xers most likely to have mortgage debt and Millennials most likely to have student debt • The likelihood of having received an inheritance increases with age • Millennials are most concerned with leaving their children money

Financial Priorities and Behaviors • When it comes to attributes such as saver vs. spender, budget driven vs. not budget driven, and thrifty vs. not thrifty, all generations lean more towards saving money, especially the older generations. • Interestingly, respondents become more of a planner as they age but then decrease. More Late Boomers described themselves as planners than both younger and older generations. • Older generations are more likely to feel positive when reviewing their financial situation, especially in control or satisfied while Millennials are more likely to feel overwhelmed. Yet, an equal share of all generations feel optimistic. • When it comes to current financial priorities, Millennials are more focused on saving for a home than older generations while Gen Xers and Late Boomers focus on saving for retirement. Affording everyday bills is one of the biggest priorities for all generations. To address these priorities, all generations mostly try to stick to a budget. Boomers are more likely than other generations to use an advisor.

Retirement Savings & Planning • Six in ten across all generations feel on track in planning for a financially secure retirement. • Most workers are offered a retirement savings plan by their employer with Millennials and Gen Xers offered more than others. Of those that are offered a matching contribution, most contribute enough to qualify for the maximum employer match, especially Late Boomers. Few have borrowed from those savings. • Millennials, Gen Xers, and Late Boomers anticipate retiring at age 65. Early Boomers and Silent Generation most often retire between 60 and 64 years old. • Millennials generally express higher levels of concern for retirement than older generations, especially for inflation and maintaining their standard of living. Roughly three in five of all generations are concerned with having enough to pay for a nursing home or nursing care. • When it comes to current debt, younger generations are more likely to have credit card debt and student loans, especially Millennials. Gen Xers are most likely to have home mortgage debt. Early Boomers and the Silent Generation are more likely than others to have no current debt. • Even with their current debt, less than one in five Boomers and the Silent Generation say their level of debt is complicating their ability to manage their finances. One in three Millennials and one in four Gen Xers say that it is. Despite this, roughly three in five of all generations say they are on track in planning for a financially secure retirement. • Faced with an unexpected expense of $1,000, one in five Millennials and Gen Xers would not be able to cover this expense

Family Obligations • Millennials are least likely to own their home and more likely to rent or live with others without contributing to the cost of housing. The Silent Generation is more likely than others to live alone. • Older generations are more likely to have received an inheritance while Millennials, Gen Xers, and Late Boomers are more likely to anticipate receiving one in the future. Most think leaving an inheritance is at least somewhat important, including at least three in ten of all generations who think it is important or very important. However, older generations are not very concerned about having enough money to leave their children while Millennials and Gen Xers are more concerned. • More than half of all generations are not currently providing financial support to anyone. Those that do are most often supporting adult children, particularly Late Boomers. One in four Millennials are supporting their parents. On the other hand, few are receiving financial support from anyone. Millennials receiving financial support are helped by their parents while the Silent Generation is receiving support from their adult children. • Millennials often agree that parents should help their adult children if they need to. More than older generations, two in three Millennials say parents should contribute to the cost of college and allow their adult children to move back into their home if they have financial difficulties. Despite this reliance, four in five Millennials say that adult children should help their parents financially if there is a need. Interestingly, older generations are more likely than Millennials to say adult children should prioritize their own families over their parents. All generations agree that adult children should help their parents with regular tasks if they are no longer able to do them themselves.

EFM- as one gets older, there is an increase in confidence with financial matters. My position is that it is merely getting old supposedly enforces an ego that is not validated. Why? Because they do not read. And what they may read- or more probable- see on TV or perhaps a 'pretty' video on the internet rarely offers factual data. That is a reason why so many hedged annuities are sold. And why so many people believe - elderly or otherwise- to a buy and hold or buy on the dip- as 'mandatory' positions in investing. It is also the mantra of advisors. It will therefore be the major reason for the next mess coming soon.

6/10Factories throttle back, adding pressure on U.S. economy. American consumers and companies are buying fewer cars, trucks and tractors and building fewer houses, hurting demand for steel parts, washing machines and paint. As a result, factories have shifted into low gear, putting additional pressure on a U.S. economy  already expected to grow more slowly this year.

6/10: But then there is this

Auto makers raise their bets in China. Despite falling car sales, China remains the industry proving ground for electric vehicles as Volkswagen, General Motors and Toyota—plus local startups—pour in.

EFM- So the cars of the future will really be hit by large tariffs. Which consumers will ultimately pay.

Pareto's law is either of the following closely related ideas: Pareto principle or law of the vital few, stating that 80% of the effects come from 20% of the causes Pareto distribution

Pareto distribution

The Pareto distribution, named after the Italian civil engineer, economist, and sociologist Vilfredo Pareto, is a power law probability distribution that is used in description of social, scientific, geophysical, actuarial, and many other types of observable phenomena.

Ain't that the truth!

Employer confidence dropped this month to its lowest level since 2016, according to a survey of businesses, with the prevailing uncertainty now affecting hiring decisions.

In its March Jobs Outlook report, the Recruitment and Employment Confederation (REC) said 41 per cent of respondents expected economic conditions to get worse, compared to 13 per cent who expected them to improve.

This marked a net drop in confidence of 8 per cent on last month, the lowest level since REC began polling in 2016.

The report, which surveyed 600 employers involved in business hiring, also found almost half (49 per cent) of respondents expressed concerns about the availability of permanent candidates, with engineering, technical and health and social care experiencing the greatest concern.

6/9: 1 in 4 cancer survivors is going broke fighting to stay alive

Slide 1 of 100: Bill Bramhall/New York Daily News

I don't care what you see or hear- this is what tariffs do the consumers

Middle-class households feel left behind and have questioned the benefits of economic globalisation. In many OECD countries, middle incomes have grown less than the average and in some they have not grown at all. Technology has automated several middle-skilled jobs that used to be carried out by middle-class workers a few decades ago. The costs of some goods and services such as housing, which are essential for a middle-class lifestyle, have risen faster than earnings and overall inflation. Faced with this, middle classes have reduced their ability to save and in some cases have fallen into debt. This report sheds light on the multiple pressures on the middle class. It analyses the trends of middle-income households through dimensions such as labour occupation, consumption, wealth and debt, as well as perceptions and social attitudes. It also discusses policy initiatives to address the concerns raised by the middle class, by protecting middle-class living standards and financial security in the face of economic challenges.

Most Americans enter retirement as married couples, and one spouse, typically the wife, outlives the other.  Many widows lack the income needed to maintain the standard of living they had when their husbands were alive.  Widows would generally have more adequate incomes if their husbands, who are typically the higher earner in the couple, delayed claiming Social Security.  This project uses the Health and Retirement Study (HRS) to test the extent to which husbands consider their wives’ well-being as widows when making claiming decisions.  It then uses an online experiment to determine whether raising a husband’s awareness of the risks that his widow faces, and how delayed claiming can reduce those risks, affect his claiming behavior.

The paper found that:

  • Husbands do not seem to consider the prospective drop in income experienced by their widows when choosing a Social Security claiming age.
  • Husbands respond instead to immediate concerns such as pension incentives and health conditions.
  • A simple information intervention that highlights the likelihood and consequences of widowhood, and demonstrates how delayed claiming enhances survivor benefits, may be insufficient to change the stated claiming intentions of older husbands.
  • The framing of these information interventions (e.g., presenting the full retirement age as the default) seems to affect claiming at least as much as the content presented.

The policy implications of the findings are:

  • Informing husbands that they can improve their widows’ financial well-being by claiming later may be ineffective in alleviating widows’ poverty.
  • An alternate approach would develop policies to protect widows that at least partially decouple survivor benefits from the husband’s claiming age.
  • For example, one common proposal would set survivor benefits at 75 percent of the couple’s combined Social Security benefit, funded by a reduction in spousal benefits while the husband is still living.


Friday, June 7th, 2019

Oil prices showed some life at the end of this week on news that Saudi Arabia was holding firm on the OPEC+ cuts. Also, there are some glimmers of hope that the Trump administration won’t move forward on its proposed trade war with Mexico. 

Automakers warn Trump on emissions deregulation. The world’s largest automakers
warned the Trump administration that its effort to water-down fuel economy standards for cars and trucks would create “untenable” instability in the manufacturing sector and slash profits for the automotive sector. In a letter signed by 17 car companies, including Ford (NYSE: F) and GM (NYSE: GM), they urged the administration not to move forward with a plan to roll back fuel economy standards. In particular, because California would continue to enforce its own standards, the nationwide fuel economy standards would give way to a patchwork across various states, something the auto industry desperately wants to avoid. 

Saudi Arabia affirms plans to extend cuts. Saudi oil minister Khalid al-Falih said that an OPEC+ extension was all but certain. “I don’t think the question is at all whether we will extend or not,” he
said at a conference in St. Petersburg. “A rollover is almost in the bag for OPEC. The question is to calibrate with non-OPEC if there needs to be an adjustment from the first half.” His comments were the strongest signal yet that the group would extend the production cuts for the rest of the year. 

Putin fine with $60 oil. Russia had been itching to get out of the OPEC+ cuts a few weeks ago, but now appears willing to go along with an extension after the slide in prices. But Russian President Vladimir Putin
said that oil between $60 and $65 is “quite satisfactory.”

I am pretty, oh so pretty.....................

6/7: Active vs. passive target date funds

Currently active target date funds hold $570 billion while passive hold $480 billion in assets across the entire market. Over the past few years nearly all new incoming investments into the target date category have all gone to passive funds.


An Ohio doctor is accused of killing 25 patients. A motive remains a mystery.

One of the largest murder cases in Ohio history, involving a doctor accused of killing 25 patients, will hinge on his colleagues' cooperation and what they can offer up at trial, legal experts say. Prosecutors allege that William Husel ordered excessive doses of opioids for patients in intensive care, which either caused or hastened their deaths.

Husel has previously asserted his Fifth Amendment right against self-incrimination, and if he decides not to testify in the criminal case, many of the holes will have to be filled in by those nurses and in-house pharmacists who took his orders. What those former co-workers reveal may help shed light on something that has so far eluded investigators: a motive.

EFM- The motive was possibly playing god. Or in a deranged mind in offering a relatively painless death to those in very poor health. Can't think of much else. But this was no Dr. Kervokian who got 'permission'.. 


S&P 500 Index Yearly Returns


  Beginning Price

  Ending Price

  Gain or Loss

  Percent Gain or Loss






























































































































































































































6/6:Research from the Brookings Institution shows how low-income American families will disproportionately suffer the brunt of the Trump tariffs. The AP’s Josh Boak and Jonathan J. Cooper report: “There are two major reasons why the poor face an outsized burden, [senior Brookings fellow Jay Shambaugh] said. First, poorer Americans tend to spend all of their income, while wealthier Americans have enough income left over to save and invest. That leaves the poor more exposed to higher prices from import taxes. Second, the wealthy are more likely to splurge on services such as farm-to-table restaurant meals or gym memberships that are not subject to tariffs at all. But poorer Americans spend a higher percentage of their income on basics such as clothing and groceries that are more likely to be imported and subject to tariffs.”

6/6: Slow shipping

·        Global ship operators that normally begin the summer preparing for peak shipping season instead are bracing for a surge in tariffs. Several of the big container lines that carry the household products, furniture, electronics and other consumer goods that fill retail stores have slimmed their capacity in recent weeks. Executives say they are concerned that recent weakness in shipping rates sends an ominous signal just as some major economies are starting to stumble and trade tensions are rising.

A tariff on nuts????!!!!!

6/6:China has 1.386 billion people, and the U.S. population is around 327 million.

EFM- China will equal us in technical innovation by around 2030 and then surge past us by 2050. Unfortunately for the world, no one really stood up to Mother Earth and try and correct the injuries to our planet and our civilization will go into a major decline after that.

global bond prices have soared, driving interest rates down sharply. Ten-year Treasury bonds are yielding only 2.26 percent as of last Wednesday’s market close, down nearly a full percentage point since November 2018. The outlook for inflation in the years ahead is falling as well, as are the prices of oil and other commodities.

Most significant, the fall in longer-term bond yields has not been matched by a fall in shorter-term rates. For example, a 30-day Treasury bill is yielding 2.35 percent — meaning you can earn more on your money tying it up for a month risk-free than you can tying it up for a full decade.

an inverted yield curve historically it has been viewed as a sign of a recession in the offing. At a minimum, it indicates that bond investors believe the Federal Reserve will soon need to cut interest rates — in effect, that it overshot with those four rate increases last year. (EFM_ I said it would be three raises- maybe I was right?)

There is also a soft underbelly to some of the good economic data of late. Orders for capital goods like business equipment fell 0.9 percent in April, suggesting companies may not be in an expansionary mood. The Institute for Supply Management’s index of activity at manufacturing companies fell sharply in the most recent reading, though it remained in expansion territory.

RE: Trade- But what has happened in the last few weeks involves the specter of a longer, more painful form of damage. There have been signs that the world’s two largest economies might not simply be experiencing some tensions and trading a few tariffs, but could be heading toward a broader split. (EFM_ I didn't think that China would just cave though I thought some agreement might occur)

In a sense, economists may have been analyzing the trade war too narrowly, merely by calculating the cost of tariffs and where those costs may show up.

The potential long-lasting consequences are harder to model.

EFM- we still have IRAN, North Korea, Saudi Arabia, Brexit (maybe all of the EURO), the beginning of Hurricane season and well over 20 Democrats wanting to be president. Which is worse?

The survey also unmasked a real appetite for financial counseling at the workplace. Solid majorities of respondents said that, in preparing for retirement, they would benefit from an employer program to help them plan for healthcare costs (81%), calculate how much they will need to save (79%), balance competing financial goals (70%) and plan for basic day-to-day budgeting (63%).

Student-loan debt also weighs on some workers' minds, particularly for younger employees, the survey found. Fifty-six percent of millennials said they would benefit from a workplace program to help them manage their debt from school, compared with 45% of all respondents.

 80% of workers said that they planned to continue working in some capacity after they retired from their main job. But when researchers put the question to retirees, just 28% said that they actually had worked since retiring.

43% of retirees said that they retired earlier than planned. Most often, that was due to a health issue or structural changes at their company, such as downsizing or a reorganization. Over the years, the median age when workers polled in EBRI's survey said they planned to retire has held steady at 65. But in this year's survey, the average retirement age reported by people who had actually retired was 62.

6/3: This is important----

If Godzilla existed in real life, he wouldn't be able to stand up


Godzilla is bigger than ever in the 2019 'Godzilla King of Monsters,' towering 119 meters tall. At that size, his heart and brain couldn’t function.

Yeah?? Well go tell Godzilla that!!

6 3:Dallas Fed: Inflation has risen to meet 2% target

Economists at the Federal Reserve Bank of Dallas say inflation ticked up to the Fed's 2% target in April. They made the calculation using the Trimmed Mean PCE tool, which they say "provides better real-time signals of the trend in all-items (headline) inflation than does the usual ex-food-and-energy measure," an assertion endorsed by Federal Reserve Bank of New York President John Williams.

EFM: So what happens if inflation goes higher? The FED is supposed to raise rates. But read below