FORBES- "You'll find some great information."BUSINESS WEEK: "For an Expert, Click here"
“It’s not the Fed’s job to stop people from losing money.”
Jay Powell- head of the Federal Reserve
5/21: Did not indicate the insurance company. Assuming it is at least A rated, that's not a bad return for just two years. But check CDs anyway
We believe we live in a meritocracy, where anyone with the gumption, grit, and determination can make it, no matter what obstacles lie in their way. But with income inequality at an all-time high in the US and most other developed countries, people are starting to question whether or not meritocracy exists at all. A 2015 Harvard Institute of Politics poll found that 48% of millennials believe the American dream is dead
what about those who are wealthy today? Did they really earn their place through the sweat of their brow, the cut of their jib, the brains in their head, and their unwavering determination? The answer is a definitive no. Rather than being gifted or special, the greatest determinant in acquiring vast wealth is merely being fortunate
Three professors took a computer model and fill it with aspects surrounding human talent. Then after feeding these into the machine, they showed it the ways in which people use those talents to advance themselves. Talent was defined as having intelligence, skills, a mindset for risk-taking, and so on.
After a 40-year period, researchers set about determining who were the most successful and what led them to become so. . Yet, the results could’ve been easily predicted. The computer spit out what’s known as the power law, or the 80:20 rule. A famous concept in economics, the power law says no matter what economy you look at, almost everywhere, 20% of the people own 80% of the wealth. What's more, luck was the single greatest determinant in wealth acquisition.
“The largely dominant meritocratic paradigm of highly competitive Western cultures, is rooted in the belief that success is due mainly, if not exclusively, to personal qualities such as talent, intelligence, skills, smartness, efforts, willfulness, hard work or risk-taking.” While the authors admit that we do portend some of a person’s success to luck, more often than not, we downplay the role external forces play, though they may be the most significant.
Researchers found that the vast majority of the top 20% aren’t the most talented. Rather, they’re exceedingly average. “Maximum success never coincides with the maximum talent, and vice-versa,”
top 8 billionaires own more wealth than the bottom 3 some-odd
billion people in the world. (EFM- 6 are in America)
If the core consumer price index moves above 2.25%, “then you’ve got to believe that the entire inflation narrative is going to change” for the Federal Reserve, said DoubleLine Capital CEO and Chief Investment Officer Jeffrey Gundlach ,
5/20: Artificial intelligence
The pink shaded items are relevant to investments.
A central aspect of AI is Integrated Reasoning, with the scope for Adaptation and Evolution. This means an AI can learn expert investment rationales and adapt or generalize them to future investment environments. This is analogous to generalized Knowledge Discovery of systematic rules, where an AI can scour very large databases, say Bloomberg or Factset, for investments that can lead to objective outcomes consistent with guiding rationales.
AI differs in almost every respect from the ubiquitous factor-driven investing of traditional quants that now accounts for around $1.5 trillion in total AUM.
While factor-driven investing views the world through a simplified, linear-constrained lens, AI can retain more information about the world to inform decisions. AI can integrate myriad perspectives into each investment decision through the Collective Behavior of different rules or models, synthesizing the most pertinent information to guide decision making.
Compared to a stylized and simple traditional quant strategy, AI has more in common with a human-driven, fundamental approach
A coupon bond makes a series of payments over its life, and so fixed-income investors need a measure of the average maturity of the bond's promised cash flow to serve as a summary statistic of the effective maturity of the bond. Such investors also need a measure that can be used as a guide to the sensitivity of a bond to interest rate changes, since price sensitivity tends to increase with time to maturity.
Good detail- not easy
5/20: Most religious states
5/18: Nothing special here to be noted save for the fact that Japan is missing yet another target- just as it has for the last couple decades. I just cannot see including it in any rational allocation.
Japanese inflation is moving further away from the Bank of Japan's 2% target. Core inflation, which excludes fresh food, rose by just 0.7% in the year to April, down from the 0.9% print in March, Japanese government data showed.
5/18: How high will it go???
oil and gasoline prices have continued to rally this week,
with Brent breaking, albeit briefly, the
psychologically important $80 mark and gasoline prices
moving towards $3 as driving season approaches
Friday, May 18th 2018
Oil prices took a breather on Friday, with Brent sitting just shy of $80 per barrel. The Venezuelan election on Sunday could be the next near-term catalyst for the oil market.
5/18: Fur babies-
A new survey of 1,519 millennials shows just how important pets are to their lives, and just how much that love impacts their wallets. Of those surveyed, 72 percent own pets, most of whom (67 percent) warmly consider these pets as their “fur babies.”
5/18: Ebola: A World Health Organization official called the first urban case in the Congo “a game changer.”
EFM- I have been waiting for an epidemic for several years now. It will be on a global scale and kill over a 100 million. Outrageous?? Read Bill Gates commentary on same
Incentives to Delay Retirement Benefit Both Employers and
According to the U.S. Bureau of Labor Statistics, one-third of the U.S. labor force is 50 or older. As more employees begin to reach the traditional retirement age, employers need to examine their policies and procedures to address the potential loss of talented and experienced workers.
Encouraging employees to delay retirement not only improves their financial security in retirement but it also keeps experienced and productive employees on the job. While 4 in 10 current workers expect to work in retirement, current retirees are not showing a desire to work for pay. Only 17 percent of retirees are still working for pay, and only 13 percent of retirees not currently doing so say it’s possible they will return to work. LIMRA Secure Retirement Institute (LIMRA SRI) research shows that if employers start using incentives, more employees are likely to stay working. Working longer can have significant financial benefits, retirement delays of as little as 3-6 months have the same impact on standards of living in retirement as saving an additional 1 percentage point of income over 30 years1.
The study, Selecting the Right Carrots: How Employers Can Incent Employees to Delay Retirement, highlights flexible hours, part-time or consulting-based employment, flexible location and financial rewards top employees’ list of desired incentives to delay retirement. LIMRA SRI finds that on average, workers who receive all of their desired incentives say they would work an additional 14 years. (EFM- sounds hard to believe)
Allowing employees the flexibility to work outside of the office is the most valued and could result in those employees working an additional 15 year, on average. The next most valued incentives are having flexible hours and getting financial rewards. Employees who can have flexible work hours or financial incentives to work longer are likely to work an additional 13 year, on average. Allowing employees to drop to part-time or work as a consultant, on average, adds an additional 12 working years to the employee’s commitment to the company.
5/18: Long term care policies
Mass Mutual to hike some LTC premiums by 77%
Some 54,000 holders of long-term care insurance policies issued by Mass Mutual Life Insurance face premium hikes of about 77%, according to a request the carrier has made to state regulators asking for the increase.
5/18: Advising for a correction
More than three-fourths (83%) of RIAs and fee-based advisors said that their clients are concerned about a correction.
The vast majority (87%) have prepared clients’ portfolios for a correction—with top three solutions including holding more cash (53%), buying more international stocks (24%), and using more liquid alternatives (24%).
focused on the importance of a long-term plan, RIAs and
fee-based advisors say they will remain nimble in response to a
– 45% would manage portfolios more actively versus passively
– 45% would invest portfolios more aggressively versus conservatively
– 59% would increase equity exposure
Likewise, more than two-thirds (67%) say that now is a good time to invest in the market—with more than half (51%) saying stocks are appropriately valued, while more than one-third (36%) believe stocks are still overvalued.
EFM- The above is really not applicable for average investors since few would have additional funds to invest. They are already strapped. And I bet the majority of the liquid assets have no track record
auto-enrollment started in 2012, pension participation in the
UK has reached record high levels. Auto-enrollment had brought
9.5 million people into pensions, according to the UK’s Office
for National Statistics. As of 2017, nearly three-quarters of
employees (73%) “had an active workplace pension scheme,” up
from less than 47% in 2012,
“As of yet there appears to be no clear plan to increase them further beyond 8%. Even at this level, for many people, it will not deliver a meaningful pension income at retirement and will call into question the validity of the policy and consumer appreciation of it,”
5/17: Looking good
5/17: $100 per barrel?? Probably
believe the Iran story puts oil on a $100 per barrel
trajectory by next year
does that do to inflation? Wouldn't that increase absorb"all"
the tax benefits the new tax law provided. Would The FED keep
raising rates?? (doubtful)
autocratic president, Nicolás Maduro, is widely expected to
win another term Sunday in a country that is fast becoming
a failed state. The economy, public services, security
and health care have all but collapsed in Venezuela, where the
currency is so worthless that you could wallpaper a building
with bills for less than the cost of paint.
I gave up on anything South America decades ago. If it isn't
this country, it's another one (Columbia strike a bell?). Far
too difficult for investing. Or living..................
is obsessed with a very narrow definition of efficiency,
beyond which it can see no other virtues.
this efficiency obsession also leads conservatives to defend
free market capitalism on fallacious grounds. In truth free
markets are not really efficient at all.
The missing metric here is semi-random variation. Truly free markets trade efficiency for a costly process of market-tested innovation heavily reliant on dumb luck. The reason this inefficient process is necessary is that, though we pretend otherwise, no one knows anything about anything: most of the achievements of consumer capitalism were never planned; they are explicable only in retrospect, if at all.
our leaders seek to conceal the truth and we as people
become accepting of
alternative realities that are no longer grounded in facts,
then as an American people we are on a pathway to
relinquishing our freedom,"
the Dow Jones Industrial Average was created in the late
1890s, it has produced an annualized gain of just 1.4% in
the six months before midterm elections, in contrast to a
21.8% annualized return in the six months thereafter.
5/17: Medical mystery
Despite the record of things getting better for most people most of the time, pessimism isn’t just more common than optimism, it also sounds smarter. It’s intellectually captivating, and paid more attention to than the optimist who is often viewed as an oblivious sucker.
The crisis was merciless to companies that allowed market instincts and inherent biases to drive risk-taking to levels that were clearly unsustainable in the end. Chastened by the experience, the crisis spawned a decade of introspection, regulation and analysis by market participants and policymakers about many things thought to have sparked the crisis.
True but until most recently with my material, risk was little
more than an esoteric term without adequate specificity. Of
course the ones who started the mess probably couldn't care
less. Unfortunately those who had to care (about losses)
kidded themselves into a financial euphoria iwhere the
industry was complicit in denying or obscuring the depth it
could sink to. Maybe some new but there was so much money
being made that ..................
Many industry observers may feel that the current environment for risk-taking is a vastly different place from the boom years, partly due to a myriad of banking and regulatory changes
there has been some effort but most of it fleeting and
certainly without specificity (obviously I like the word). The
point being that the vast audience of the public has no clue
to the risk that they are taking and, hence, are going with
the flow. On the other side, those that also did get pummeled
pulled out and lost years and years of growth. Well, the
Process allows both to see what is going on, the expsoure they
are taking (maybe about 75% less than a buy and hold) with an
opportunity for growth thereafter triggered by a government
this comment from the article really pisses me off, "
The great behavioral scientists of our era – Kahneman, Tversky, Shiller and Thaler – have shed light on the nature of bias and how it plays a direct role in risk-taking by individuals and firms. In the years preceding the crisis, herd mentality and recency and confirmation biases all accelerated, reflecting the unusually benign economic environment during that same period. What’s more, senior management, boards of directors and investors in asset-backed securities (including many nontraditional mortgage borrowers) were afflicted with a range of biases that colored their views on the relative riskiness of the mortgage business in ways that would not be well understood until after the crisis."
The euphoria from the press et al nudged consumers into a
false sense of free money. However, were the consumers- at
least- given specific material identifying the losses they
could expect, many would have recognized the folly. And this
may be where I am completely bonkers- (judge your
comments of today's economic mess)- wouldn't consumers want to
know where they stand in regards to overall investment risk,
how much they WILL lose. and what they could do to offset the
probabilities? Since the industry hates me, I think I am on
the right track. But maybe consumers are going to be just to
difficult to move and it is a waste of time.
It is important to remind our newer staff of what the signs of abnormal risk-taking look like by having them simulate these experiences in realistic risk war-game scenarios. Beyond sensitizing risk professionals to behavioral responses to risk, better training needs to occur across the industry. Few of us have formal training in risk management, which makes it even more important to build effective training programs to ensure our risk talent has the technical tools and domain expertise to do their job well over the entire business cycle.
and yield curve correlation
leading up to the 1990 recession, there was virtually no inversion in the yield curve. Moreover, in last two recessions, there is an interesting trend. In Charts II and III, we find the yield curve was inverted 12-months prior, but 30 days before each recession began, the slope was normal. This trend was more drastic prior to the Great Recession of 2008. It seems the yield curve has been a less reliable predictor of recession since the late 1980s.
Why hasn’t the yield curve inverted prior to recessions in recent decades like it did before 1990? I believe technology is a key reason. With the advent of the computer age, the Fed can obtain more accurate data, more quickly than it could in the past.
Want to hurt your little head about trying to figure out what to take in retirement? Frankly I don't think much will help here but this is what the mainstream industry is looking at. .
5/16:The Financial Literacy Gender Gap (Finra)
than one in five of the funds sold to retail investors in
Europe in the past three years outperformed their benchmark
after fees were taken into account,
only 18 per cent beat their benchmark
“Many managers are unable to compensate for fees because they are not taking enough active risk, so they are
very unlikely to beat their benchmark. This is a structural problem”.
the top-ranked managers of global and European equities, global
bond and flexible balanced funds, measured by returns over three
years, drop out of the top performance decile over the following
12 months. Huge gaps also exist between the best and worst
managers across all fund types, complicating the decisions
facing retail investors.
Many politicians want to redirect huge savings that remain locked in low-yielding bank accounts into useful investments. This task has been made difficult by the failure of financial product providers to give clear information to investors, especially the less financially literate, about fees and charges. “Today, an average consumer is overwhelmed by the sheer complexity and uncertainty associated with investment products. Most households do not invest at all in capital markets or do so very infrequently across their lifetime” said the commission.
Regulators have introduced rules, known as Mifid II, to try to improve transparency. Some fund distributors, private banks, wealth managers and financial advisory firms are cutting their catalogues to ensure they provide suitable products to clients, as required under Mifid.
in Financial Instruments Directive
(the entire text is 7,000 pages long)
today’s newsletter, we will take a quick look at some of the
critical figures and data in the energy markets this
We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.
- The U.S. exported 905,000 bpd of propane in 2017, about half of which went to Asia to be used in petrochemical production.
- Surging demand in Asia for propane has supported investment in propane exports in the U.S.
- About half of U.S. propane production, and the vast majority of exports, occur along the Gulf Coast.
The average asset-weighted expense ratio for a target-date mutual fund series fell to 66 basis points in 2017.
45 pages. "The blueprint covers multiple areas including, but not limited to:  improving competition and ending the gaming of the regulatory process,  supporting better negotiation of drug discounts in government-funded insurance programs,  creating incentives for pharmaceutical companies to lower list prices, and  reducing out-of-pocket spending for patients at the pharmacy and other sites of care.... HHS seeks to identify when developed nations are paying less for drugs than the prices paid by Federal health programs, and correct these inequities through better negotiation.... Through this request for information, HHS seeks comment from interested parties to help shape future policy development and agency action."
There is a reason for everything
sometimes that reason is that you are stupid
5/14: The poor will really get screwed. Many take necessary monies and bet to win the lottery.
The decision could set off a scramble to find a way into what is a billion-dollar business.
5/14 NARIU: Most economists determine whether the economy needs stimulus by comparing current and projected unemployment rates with a measure called the Nairu—the nonaccelerating inflation rate of unemployment (sometimes called the natural rate of unemployment). That number is supposed to mark the dividing line between unemployment so high that it pulls inflation down and unemployment so low that is pushes inflation up. Hence the awkward name.
economists have compared the real interest rate—the funds
rate minus inflation—to another key dividing line: the
neutral (or natural) real interest rate, which Wall Street
calls r* (pronounced “r-star”). : When the real federal
funds rate is above r*, that means money is “tight,” the Fed
is holding back demand and inflation should fall. When the
real federal funds rate is below r*, money is “loose,” the Fed
is pushing demand up, and inflation should rise.
The International Monetary Fund will launch a borrowing database dating back to the 1950s. The IMF has warned the global economy is more indebted, at $164 trillion, than it was before the financial crisis and has urged immediate action.. Banks and other financial services companies will be hopelessly left behind unless they step up and improve their use of data to screen out and stop suspicious transactions
I do not see them making a concerted effort
EFM- This huge debt can decimate us
Inverted yield curve
Fed speak on the yield curve this week.
Bloomberg's Brian Chappatta:
"The fate of the flattening U.S. yield curve now rests
squarely in the words of Federal Reserve officials. Bond
traders have already reached their verdict. The yield
spread between 5- and 30-year Treasuries narrowed last week
to as little as 26.2 basis points, the lowest since August
2007. The prospect of an inverted curve, which has presaged
past recessions, is as strong as ever...
Low- to moderate-income homebuyers made up 36.6% of mortgage borrowers in 2009, but by 2017, that figure had dropped to 26.3%. Independent mortgage companies are making a larger percentage of home loans as big banks shift away from mortgages.
sudden loss of 75% of a person's retirement savings
increases his or her chances of dying within 20 years by
50%, but the consequences of never saving anything are
worse, according to a study in the Journal of the American
Medical Association. People who have never accumulated any
significant retirement savings are 67% more likely to die
within 20 years,
what happens if they lose 50%. That is what happened in 2000
and 2008. I expect this next recession might even top that.
5/13: This is here as a reminder and as caution- there is a significant possibility that the next recession (probably starting within the next 1.5 years) will be as bad as 2008
Peso panic: After the peso fell to historic lows, Argentine president Mauricio Macri asked the IMF for help. While this is obviously bad news for Argentina, writes Gillian Tett, it serves as a useful reminder of the challenges facing markets around the world. Policymakers need to be sure that the global financial safety net is robust enough to survive more widespread turmoil.
JULIANE BEGENAU, Stanford
University - Graduate School of Business, National Bureau of
Economic Research (NBER)
MARYAM FARBOODI, Princeton University - Bendheim Center for Finance
LAURA VELDKAMP, New York University - Stern School of Business, National Bureau of Economic Research (NBER)
YONG CHEN, Texas
A&M University - Department of Finance
BRYAN T. KELLY, Yale SOM, AQR Capital Management, LLC, National Bureau of Economic Research (NBER)
WEI WU, Texas A&M University - Mays Business School
5/13: A primer for Modern Portfolio Theory
As with any article, you do not know if the material is correct. And while this is from Investopedia, the level of Stock diversification was from 1981. It says 20 stock- around 2000 due to the internet, 24 hour trading and so on, it can be as high as 350. Or it simply is not worthwhile for the novice to buy stocks to make up their portfolio. 5/13: EBRI: More retirees over 75 have outstanding loans
The number of older retirees with debt has hit a record, the Employee Benefit Research Institute says. Nearly 50%half of retirees 75 or older are carrying debt, up from 25% in 1992.
A study by Federal Reserve Board economists finds that changes in US interest rates are hardest on emerging markets that have high inflation and weak financial metrics. "On the dark side, these responses seem to be large, to the point that they suggest that foreign economies -- especially vulnerable, emerging economies -- may react to U.S. monetary shocks more so than the U.S. economy itself," write study authors Matteo Iacoviello and Gaston Navarro.
5/13: Eurozone investor confidence weakened for the fourth straight month in May following a series of soft economic data covering the bloc. The index compiled by Sentix fell to 19.2, from 19.6 in April, and has dropped dramatically from 32.9 at the start of the year. Tensions over trade - like whether the U.S. will slap the eurozone with tariffs - have weighed on sentiment
Black women in the U.S. are three to four times more likely than white women to die from pregnancy complications. And the problem won't get better until doctors acknowledge their own unconscious prejudices, some experts say. “Bias is in the air,” said one mother who nearly died after giving birth to twins. “I didn’t realize that this was a systemic problem until after it happened to me.”
I could 'accept' a slight increase but this is way out of whack
5/13: And then there is this;
One thousand MORE people have been shot in Chicago this year compared with the same time last year, according to police data compiled by the Chicago Tribune. The announcement comes after a particularly violent week in the city that saw eight people killed and at least 40 wounded.
EFM civilization seems to be going backwards
markets have seen a wave of bullish news in the last couple of
weeks, and as tensions
in the Middle East continue to rise and Venezuela falls further into crisis, upward pressure on prices is only increasing.
5/12 The Invincibility Gene - the one that tells you you can climb a ladder and will not fall off. When you are 80'
ELENA ANDREYEVA, University
of Pennsylvania - The Wharton School
GUY DAVID, University of Pennsylvania - Health Care Systems Department
HUMMY SONG, The Wharton School, University of Pennsylvania - Operations, Information and Decisions Department
BRUCE D. MEYER, University
of Chicago - Irving B. Harris Graduate School of Public Policy
Studies, National Bureau of Economic Research (NBER)
DEREK WU, University of Chicago - Irving B. Harris Graduate School of Public Policy Studies
104 year old preferred death to the lack of joy in his life. Article addresses a lot of the elements of euthanasia
5/9: Why the low wages
Consider the share of the prime-age (25-54) population with jobs. While this important and large group of workers has consistently been clawing back their losses since the last recession, they’re still short of where they were. Their employment rate fell more than 5 percentage points in and after the recession (from about 85 to 79 percent), but as the figure below shows, they’ve clawed back 4.4 percentage points of that loss. So 20 percent to go, which translates to 7 million potential workers, i.e., a fair bit of slack.
Low worker bargaining clout: The reason that has yet to occur in any big way is a function of the uniquely low bargaining clout of many in the U.S. workforce. Unionization is at historical lows, and there’s also more monopolistic concentration among big firms (giving them the upper hand in wage setting), along with eroding labor standards such as low minimum wages and inadequate overtime rules.
EFM- My point is that in the (supposed) valid theory of investment analysis, many are using old methods to try and predict the future. Obviously there will be some correlation of past/future. In the most recent past of 2000 and 2008 with massive losses (49% and 57%) to 85% of the general public, the industry has to recognize it needs new methods and thought processes. To continue to use old rules is accepting the fait compli- but that is generally what the industry is doing. It cannot allow massive losses to investors to continue. Rebalancing is not the best thing to do. Buy and Hold is close to being a relic. So is buying at the drop. 100,000 attempts with Monte Carlo to figure out a 95% viability for a retirement is still based on financial activities even from 1929.
(The problem with old numbers is that they are almost useless going forward. Bond returns will be MUCH lower- same with cash/Tbills./ Equity returns might be 6%+ and high Yield is questionable (my opinion)
Chart of the Week
- The EIA expects nearly 32 gigawatts (GW) of new electricity capacity to come online this year, the largest single-year capacity growth in over a decade.
- To date, wind and solar accounted for 98 percent, or 2 GW, of the capacity additions so far.
- But, the EIA sees 21 GW of new natural gas before the end of 2018, which will mark the first year since 2013 that renewables didn’t make up more than 50 percent of new capacity.
In 2000, about 45 percent of those between 16 and 19 had a job — today it’s 30 percent.
A decade on, have the failures from the crisis been adequately addressed to prevent a future meltdown? There is no simple answer, but an analysis of the evolution of risk-taking behavior and risk talent demonstrates that there is clearly more work to do.
5/8: Retirement and Marriage
A retirement study by Fidelity Investments found that 1 in 3 couples aren’t on the same page when asked to describe their expected lifestyle in retirement.
“Approaching the second half of life is an opportunity to reassess outdated rules, let go of what no longer works and open up to new possibilities,” the authors write. “It takes courage, commitment and compromise. Couples do best when they think ahead, communicate and plan together. Remember, it doesn’t matter how long you have been together, relationships are always a work in progress.”
If you don’t work things out, you risk a divorce, which can derail the best-laid retirement plans.
As of 5/4
Fed. Funds target rate
Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.
5/8: Due to Iran
5/8: If the U.S. is doing well and the Eurozone is almost crashing, what happens next? Dunno
Eurozone investor confidence weakened for the fourth straight month in May following a series of soft economic data covering the bloc. The index compiled by Sentix fell to 19.2, from 19.6 in April, and has dropped dramatically from 32.9 at the start of the year. Tensions over trade - like whether the U.S. will slap the eurozone with tariffs - have weighed on sentiment.
5/8: The robots will cut the number of nurses over time but nurses still will be needed for all us old people
HCA to spend $300M on employee benefits with focus on
Written by Ayla Ellison / Becker's Hospital Review E-Weekly
Nashville, Tenn.-based HCA Healthcare is earmarking $300 million for employee benefits, largely in an attempt to attract nurses, HCA executives told Reuters.
HCA is one of the big winners under recent changes to the U.S. tax code, and the company said in January it would invest the majority of its windfall from the tax overhaul in employee benefits, such as tuition reimbursement and extra family leave, over the next three years.
HCA officials recently told Reuters a top priority of the spending plan is to attract and retain nurses.
The Bureau of Labor Statistics predicts the U.S. nursing field will have more than 1 million vacancies by 2022, leaving hospitals to implement strategies to recruit and retain nurses. The nurse retention push is vital for HCA, as the company plans to grow in states like Texas and Florida, where up to 40 percent of nurses are slated to retire in coming years. Half of HCA's hospitals are in Texas and Florida, and those facilities account for 48 percent of the company's revenue
5/8: Twenty Five Percent!!!!
Nearly a quarter of the nation’s homeless population lives in California. In the city centers, tent encampments have become their own neighborhoods,
5/8 Europe inflation staying low while U.S. is hitting its stride at 2%
The ECB doesn’t target core inflation, but will be watching it closely for signs that durable inflationary pressures are building. Yet April’s reading is at the bottom end of a 0.6%-1.2% range that has persisted for five years now. The pickup in growth last year has allowed ECB President Mario Draghi to talk of increased confidence that headline inflation will head toward the central bank’s aim of below, but close to 2%, over the medium term. But that seems as far off as ever.
5/7: Home Prices
The national median list price now rests at $273,663, which is roughly 20% higher than in March 2015. Over that time, the pace at which home list prices have increased has risen nationally. Between 2015 and 2016 the national median listing price only rose 4.8%, but over the last year it increased by 7.4%. And housing analysts have grown increasingly concerned with how sustainable this boom is.
will let a plan cover adult day care services for adults who
need help with either the basic “activities
of daily living,” such
as walking or going to the bathroom, or with “instrumental
activities of daily living,” such
as the ability to cook, clean or shop.
(EFM- Walking is not one of the 6 ADLs. They are eating, bathing, dressing, toileting, continence, transferring)
5/7: Pet insurance
5/6: Wanna buy stock. Think you get a great one? If it goes down, should you buy more- as the colloquial knowledge tells you to??.
The stock value lost by GE in the past 12 months is twice the amount that vanished when Enron Corp. collapsed in 2001 — and more than the combined market capitalization erased by the bankruptcies of Lehman Brothers and General Motors during the financial crisis. Longer term, GE’s market capitalization has fallen more than $460 billion since its 2000 peak.
Actually I do not think much of the article since she starts off by referring to the conventional rule of taking out 4% per year and having a 95% probability to finish your retirement with the money saved. That rule has been dispelled years ago. And as we look at today's market , the rest of the article's commentary about using bonds is fraught with peril.
"No one knows what will happen in the future, but among those
who make forecasts, there is an expectation for lower
returns.” EFM- I agree.
Now take the lower rate but with no bonds, Over time, you will make more money in appreciation than a 70/70, 60/40 split where the equity returns are identical. So now we come to what is called the sequence of returns,
5/6: Sequence of Returns
"Essentially, sequence of returns risk is the probability that a dip in the markets may occur early in retirement. Since most retirees must take withdrawals from their savings to fund retirement, taking withdrawals through a significant down market early in retirement may create a situation where there is not enough remaining in the portfolio to participate in a recovery and put the client back on solid footing."
That sucks and is little more than spewing out of an
outdated rule of thumb that fails real life. It is valid
if someone sat like a lump watching over 3 years (starting
in 2000) as the market dropped 49% and felt no qualms at
all. And that an adviser let him/her. That defies common
sense. Even uncommon sense.
article noted this:
"There are a variety of ways to manage sequence of returns risk in retirement, and they all start with a reasonable expectation of whether the client is actually at risk or not — and if so, to what extent. A client who has 95% of her retirement income needs met through pensions and Social Security and is completely comfortable cutting 5% of spending out of her lifestyle faces essentially no sequence of returns risk. '
EFM- That is cavalier and utter nonsense. And it fails a fiduciary duty (or maybe of just not being stupid) in letting money be lost unnecessarily. It maybe true that this (lost) money really had no specific use or intended beneficiary. But the investor knew or should have known of the recessionary element and that there was no way to provide any data to assure the market would come back in their retirement lifetime. So make an assumption that there was 2,200,000 in invested equity assets for retirement. The $2.000.000 was adequate to provide the income needed. The $200,000 was not needed. So we go into recession starting in 2000. The $2,000,000 goes down to $1,000,000 but "who cares' (depending n the sequence of course) and the $200,000 goes to $100,000. Apparently I'm the only planner (at least as far as I have read) that thinks losing $1,100,000 in a recession that was 100% predicted is absolute folly. And really, really wrong since I also violated the status quo of the proverbial 'buy and hold'. The general assumption is that the market will come back to the $2,000,000- but that is unknown in time and iffy anyway. Apparently the assumption is still that a 95% statistical income is OK since it happened in the past. I 'know' the future should/will/is already radically different than the past and simply don't have the confidence of everything coming out right. . It is unrealistic that an investor would not utilize a simple method of retaining assets rather than leaving large amounts to chance. As far as the $200,000/$100,000 is concerned, a $100,000 saved could have gone to a charity, other beneficiaries, special medical needs. But not lost to incompetence.
is not a new idea or thought. Back in the 90's I did a paper
that showed how a index fund beat a variable annuity just on
the fees. But this paled to insignificance when looking at
the losses for a recession and hence this system has been
utilized for both 2000 and 2008. Why put all the press and
necessity of gaining some 'small' amount over time where you
have 3 o4 recessions in a 30+ year of retirement where one
was hit with 50% losses each time. This next recession could
be as bad as 2008 and nobody can afford to lose large gobs
of money due to gross ineptness coupled with a clear breach
of fiduciary duty.
“Wide diversification is only required when investors do not understand what they are doing.”
5/6: Greek banks are still bad. Will the EU let them take a pass again??
Greece’s four biggest banks would take a €15.5bn hit to their combined capital ratios in a future economic downturn, according to the results of the European Central Bank’s latest stress test of the country’s main lenders.
The ECB’s health check of the Greek banking system is designed to determine if any of the banks need extra equity before the country enters talks on exiting its eight-year bailout programme.
The Greek banks, which have been recapitalised three times since a 2010 debt crisis, are still weighed down by large piles of bad loans, which on average account for about half their balance sheets — higher than any other EU country.
5/6: Don't kill rats (just because this was interesting and should save thousands of lives)
5/6: Boomers. GEN X
Generation X (ages 38-53) consumers worry more about having a
comfortable retirement and becoming disabled than Boomers. In
addition, more than a third of Gen X consumers worry medical
and long-term care expenses could undermine their financial
The 2018 Barometer Study finds more than half Gen X consumers are concerned that they will be able to have a comfortable retirement, compared with just a third of Boomers (ages 54-72). Nearly twice as many Gen X consumers are concerned about becoming disabled, compared with Boomers (45 percent vs. 23 percent).
Research shows Gen X consumers are less likely to have access to a defined benefit plan, which could contribute to their concern about their retirement security. While about half of Boomers enjoy a guaranteed income stream through a pension, more than two thirds of Gen X workers will be responsible for creating retirement income through their savings. It is not surprising that Gen X workers worry about the financial risks of becoming disabled, incurring medical or long-term care expense because these risks could undermine their efforts to save for retirement.
In college, high-profile athletes typically take out insurance policies, meant to assist them financially should their intended source of income fall through due to injury. This happens across all major sports, but especially in high-injury sports like football as well as for the lumbering 7-footers of college basketball.
advisors should start to discuss developing a formal
retirement plan, addressing Gen X consumers’ top concerns of
protecting family income from risk of becoming disabled or
incurring large medical expenses. (Read 4% income above)
Emerging market bond funds
Investors withdrew almost $1bn from global emerging market bond funds for the week ending May 2, according to data from EPFR Global, the largest outflow since February’s market turmoil and the first time the asset class has suffered two consecutive weekly outflows in 16 months. The data underscores the widening fallout from the rise in the dollar. The US currency has risen 2.7 per cent since the start of April against its developed market peers, while JPMorgan’s EM currency gauge is down by 4.2 per cent against the greenback. A stronger dollar raises costs for emerging market companies servicing dollar-denominated debt.
“The minute you get away
from the fundamentals – whether it’s proper technique, work
ethic, or mental preparation –
the bottom can fall out of your game.”
consumers want to learn about guaranteed lifetime income
products such as annuities, only half said they had been
advised about those products and the protections they offer,
according to a study from the Insured Retirement Institute and
AXA US. "This research underscores financial professionals'
pivotal role in helping retirement savers to gain comfort
around their ability to withstand market volatility and the
potential role of high quality annuity products in helping to
achieve financial security,"
show 56 percent of those surveyed are highly pleased with
whomever they consult about finances when that professional
touches on lifetime income. In contrast, only 34 percent of
clients report high approval of their financial professional
if he or she skips over the subject. Furthermore, 60
percent say they aren’t okay with the way in which their
assets are currently allocated to stocks. (EFM and for good
So why does it not happen? Because registered investment
advisors are licensed to sell securities and have no training
(and generally no interest) in understanding annuities and
life insurance. You can also add in disability insurance
and life settlements
Suicide- article on a 104 year old man who has to go to
Switzerland to die. What the Swiss do etc.
5/6: The China trade war