Financial Education Investing Retirement Research

Daily Commentary
http://www.efmoody.com/gripes.html
Master Financial Education Errold F. Moody Jr.

PhD, MSFP, MBA, LLB, BSCE 352 228 4523
Knowledge makes obsolete the inequities that ignorance and prejudice justify
Below are sections that have been created over time Caution- I do not have the time to update these so use at your discretion. It is this daily commentary that is my major focus now.
401(k)
FINANCIAL PLANNING ARBITRATION and LITIGATION CHARITABLE STRATEGIES INVESTMENTS COLLEGE PLANNING ESTATE PLANNING REAL ESTATE ETHICS RETIREMENT
INSURANCE and ANNUITIES LONG TERM CARE & AGING
I have asked Errold Moody to provide a brief example of what he has actually found on behalf of a client who engaged his services to review the insurance contracts which funded the client's estate plan. You will be amazed. In my 30 years in the business, I have never seen an authoritative, objective, prudent expert speak so clearly on the use of insurance. What Errold can do is unique in the industry. Steven Winks
Secretary of State John Kerry - In America, "you have a right to be (as) stupid (as) you want to be." (But too many Americans are abusing the privilege)
Why did our systems fail and why will they continue to do so? From Paul Volcker- our economics are based on an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance
"Great spirits have always encountered violent opposition from mediocre minds."
Albert Einstein
11/21:
1. The Role of Emotions on Risk Preferences: An Experimental Analysis Date: 2013-10-29 By: Anna Conte (Westminster Business School, University of Westminster, London, and Strategic Interaction Group, Max Planck Institute of Economics, Jena) M. Vittoria Levati (Strategic Interaction Group, Max Planck Institute of Economics, Jena, and Department of Economics, University of Verona) Chiara Nardi (Department of Economics, University of Verona) URL: http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2013-046&r=cbe
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In the last decades, there has been a large volume of research showing that emotions do have relevant effects on decision-making. We contribute to this literature by experimentally investigating the impact of four specific emotional states - joviality, sadness, fear, and anger - on risk attitudes. In order to do so, we fit two models of behaviour under risk: the Expected Utility model (EU) and the Rank Dependent Expected Utility model (RDEU), assuming several functional forms of the weighting function. Our results indicate that all emotional states instigate risk-seeking behaviour. Furthermore, we show that there are some differences across gender and across participants' experience in lab experiments.
1. I am sorry - Honest and Fake Apologies Date: 2013-04-30 By: Verena Utikal (Department of Economics, University of Erlangen-Nrnberg, Germany) URL: http://d.repec.org/n?u=RePEc:knz:dpteco:1318&r=cbe Apologies have a positive effect on forgiveness. Nevertheless not all people apologize after an offense. In a laboratory experiment we test whether lying aversion can explain this behavior by comparing honest and fake apologies. First, we show that even an honest apology comes along with a cost for some people. Second, costs for fake apologies are even higher. Fake apologies are less likely than honest apologies and consist of different wording and content. Receivers understand apologies as a signal for honesty. Following, forgiveness after an honest apology is more likely than after a fake apology.
1. The Dow is Killing Me: Risky Health Behaviors and the Stock Market Date: 2013-06 By: Chad Cotti (University of Connecticut) Richard A. Dunn (Texas A&M University) Nathan Tefft (University of Washington) URL: http://d.repec.org/n?u=RePEc:zwi:wpaper:20&r=cbe We investigate how risky health behaviors and self - reported health vary with the Dow Jones Industrial Average (DJIA) and during stock market crashes. Because stock market indices are leading indicators of economic performance, this research contributes to our understanding of the macroeconomic determinants of health. Existing studies typically rely on the unemployment rate to proxy for economic performance, but this measure captures only one of many channels through which the economic environment may influence individual health decisions. We find that large, negative monthly DJIA returns, decreases in the level of the DJIA, and stock market crashes are widely associated with worsening self-reported mental health and more cigarette smoking, binge drinking, and fatal car accidents involving alcohol. These results are consistent with predictions from rational addiction models and have implications for research on the assoc iation between consumption and stock prices.
11/20: Larry Summers at the IMF Brilliant insight 11/20: WHAT A WASTE$8.5 trillion in taxpayer money doled out by Congress to the Pentagon since 1996, the first year it was supposed to be audited, has never been accounted for.
11/20:
Music Videos from the 50s & Early 60s
11/19:
Advisors Should Use This Tactic To Maximize A Deployed Soldiers Income (The Wall Street Journal) Advisors can help maximize a deployed soldier's income by depositing it in the Department of Defense's Savings Deposit Program (SDP), The soldier's income would be tax free and the SDP guarantees a 10% annual interest rate. "The key is to frontload these accounts so that you can get as much of that 10% interest as you can," 11/19:
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11/19:
Investors Who Want To Pursue Active Management Need To Be Able To Stomach Short-Term Underperformance (Vanguard) Vanguard's Jack Bogle championed passive investing, where investors aim to track the performance of a major index like the S&P 500. A new white paper from Brian R. Wimmer, Sandeep S. Chhabra and Daniel W. Wallick at Vanguard looked at 1,540 actively managed U.S. domestic equity mutual funds that were available to investors in 1998 and studied their performance over the next 15 years.The authors found that of the 1,540 funds, 55%, or 842, survived the 15-year period; 700 funds were merged or liquidated; and 18%, or 275 funds, "survived and outperformed their style benchmarks." "Furthermore, our analysis illustrated that nearly all the funds that beat their benchmarks over that 15-year period suffered at least five individual years of underperformance," they write. "Our findings strongly suggest that investors should refrain from using short-term performance as the primary criterion for divesting (or investing in) an active mutual fund." Instead, they argue that investors should only consider active management if they are willing to weather "numerous and potentially extended periods during which their fund will lag its benchmark." EFM- the issue is this. All articles talk about the stock market as (essentially) the only investment to use. When times are tough, they look to alternative investments (non correlated) and hedging to offset teh drop. But what is wrong with NOT being invested. Use short term annuities (right now 3.5% for five years. I wouldn't use them yet but a GDP under 2% bodes some very bad times.
11/18: Alzheimers
The longer you postpone retirement, the lower your risk of Alzheimer's disease or other types of dementia may be. This finding comes from a French study of more than 400,000 retirees. For each additional year of work, the risk of dementia dropped by 3.2 percent, researcher Carole Dufouil, Ph.D., reported at the Alzheimer's Association International Conference in Boston July 15, 2013. The French investigators reviewed records on retirees, most of whom had been self-employed as shopkeepers or craftsmen, to establish the risks of dementia linked to age at retirement. After adjusting for other risk factors, the study showed that individuals who retired at 65 were 14.6 percent less likely to develop Alzheimer's disease than those retiring at 60. To make sure that a shaky mental state hadn't been responsible for retirement, the researchers analyzed their data to eliminate people who developed dementia within five or 10 years of retirement. The upside of continuing to work include the mental challenges, social connections and physical activity involved, all of which can lower the risk of Alzheimer's, Dr. Dufouil said.
11/17: Anne Hathaway vs. Berkshire Hathaway on February 28, 2011, during the annual hubbub and media excitement of the U.S. movie industrys Academy Awards when actress Anne Hathaway hosted the event televised worldwide, stock prices
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of Berkshire Hathaway rose by 2.94%. of BRK.B stock, shows only one of many instances where the curves of Ms. Hathaways career have shaped the stock price of this particular conglomerate. 11/17: My supercomputer can beat your supercomputer" High-frequency (HF) trading firms represent approximately 2% of the nearly 20,000 trading firms operating in the U.S. markets, but since 2009 have accounted for over 70% of the volume in U.S. equity markets and are approaching a similar level of volume in futures markets. This enhanced velocity has shortened the timeline of finance from days to hours to nanoseconds. The accelerated velocity means not only faster trade executions but also faster investment turnovers. At the end of World War II, the average holding period for a stock was four years. By 2000, it was eight months; by 2008, two months; and by 2011, twenty-two seconds. Although the original Watson computer contained $3 million worth of hardware alone, IBM is now releasing a new server that can be purchased for about $67,000 complete. It includes a scaled-down version of the brain IBM engineered to build Watson. Reuters publishes 9,000 pages of financial news every day. Wall Street analysts produce five research documents every minute. Financial services professionals receive hundreds of emails a day. And these firms have access to data about millions of transactions. The ability to consume vast amounts of information to identify patterns and formulate subsequent hypotheses naturally makes Watson-style computing an excellent solution to making informed decisions about investment choices, trading patterns, and risk management. The markets never rest. Almost all new developments eventually become incorporated into the collective intelligence of the market itself. Only in the rarest of circumstances is it possible for financial forecasters to stick to the tried-and-true methods of the past. For the most part, it is essential to stay ahead of the curve. 11/17: spurious dominates (Taleb)
How Noise Explodes Faster than Data To the observer, every day will seem wierder than the previous one. It has always been absolutely silly to be
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exposed the news. Things are worse today thanks to the web. Source Effect News Wierder and wierder events reported on the front pages Big Data More spurious "statistical" relationships that eventually fail to replicate, with more accentuated effects and more statistical "significance" (sic) Track Records Greater performance for (temporary) "star" traders
We are getting more information, but with constant consciouness, desk space, or visibility. Google News, Bloomberg News, etc. have space for, say, <100 items at any point in time. But there are millions of events every day. As the world is more connected, with the global dominating over the local, the number of sources of news is multiplying. But your consciousness remains limited. So we are experiencing a winner-takeall effect in information: like a large movie theatre with a small door. Likewise we are getting more data. The size of the door is remaining constant, the theater is getting larger. The winner-take-all effects in information space corresponds to more noise, less signal. In other words the spurious dominates. Similarity with the Fooled by Randomness Bottleneck This is similar to the idea that the more spurious returns dominate finance as the number of players get large, and swamp the more solid ones. Start with the idea (see Taleb 2001), that as a population of operators in a profession marked by a high degrees of randomness increases, the number of stellar results, and stellar for completely random reasons, gets larger. The spurious tail is therefore the number of persons who rise to the top for no reasons other than mere luck, with subsequent rationalizations, analyses, explanations, and attributions. The performance in the spurious tail is only a matter of number of participants, the base population of those who tried. Assuming a symmetric market, if one has for base population 1 million persons with zero skills and ability to predict starting Year 1, there should be 500K spurious winners Year 2, 250K Year 3, 125K Year 4, etc. One can easily see that the size of the winning population in, say, Year 10 depends on the size of the base population Year 1; doubling the initial population would double the straight winners. Injecting skills in the form of better-than-random abilities to predict does not change the story by much. (Note that this idea has been severely plagiarized by someone, about which a bit more soon). Because of scalability, the top, say 300, managers get the bulk of the allocations, with the lions share going to the top 30. So it is obvious that the winner-take-all effect causes distortions: say there are m initial participants
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and the top k managers selected, the result will be km managers in play. As the base population gets larger, that is, N increases linearly, we push into the tail probabilities. Here read skills for information, noise for spurious performance, and translate the problem into information and news. The paradox: This is quite paradoxical as we are accustomed to the opposite effect, namely that a large increases in sample size reduces the effect of sampling error; here the narrowness of M puts sampling error on steroids. 11/17: reverse mortgages
AARP has estimated that only 1 percent of older Americans use them. In 2012, the average loan size was $158,228, and 54,676 Americans got one. That is less than half the loans made in the peak year, 2009
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11/17: Prone to a bubble???

Mortgage lenders are resorting to risky pre-crisis lending practices by offering loans to borrowers with very small deposits, prompting fears of a wave of repossessions if house prices start to fall. There are now 33 lenders offering mortgages to borrowers with a deposit of just five per cent, the highest number since 2006 and an 18 per cent increase on last year
11/16: A billion here, a billion there.............................

The Pension Benefit Guaranty Corporations deficit increased to about $36 billion in FY 2013, due largely to the declining financial condition of multiemployer plans.
11/16: May not be bad considering that Yellen may keep rates low for some time to come
Guaranteed for 5 Years
Yr 1 / 3.40% Yrs 2-5
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11/16: Young caregivers

There are approximately 1.4 million young people in the country between the ages of 8 and 18 caring for an ailing parent or relative.
11/16:
1. Can Simple Informational Nudges Increase Employee Participation in a 401(k) Plan? Date: 2013-10 By: Robert L. Clark Jennifer A. Maki Melinda Sandler Morrill URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:19591&r=cbe We report results from a field experiment in which a randomized subset of newly hired workers at a large financial institution received a flyer containing information about the employers 401(k) plan and the value of contributions compounding over a career. Younger workers who received the flyer were significantly more likely to begin contributing to the plan relative to their peers in the control group. Many workers do not participate in their employers supplemental retirement savings programs, even though these programs offer substantial tax advantages and immediate returns due to matching contributions. From a survey of new hires we find that many workers choose not to contribute to the plan because they have other financial priorities. However, some non-participants lack the financial literacy to appreciate the benefit. These findings indicate that simple informational interventions can nudge workers to participa te in retirement saving plans and enhance individual well-being and retirement income security.
11/16:
Affordable Care Act
11/16:
Lessen The Squeeze: Caregiver Coping Skills
By
Carolyn K. Schultz
According to the Alzheimers Association (2000), 5.75 million Americans are in the Sandwich Generation of caring for both children and parents, and women represent the majority of caregivers for family members. As a certified long-term care specialist, daughter, mother and Sandwich Generation member, Ive experienced first-hand the impact an event requiring long-term care can have on young families and caregivers. I officially became a member of the Sandwich Generation in 1995 when my daughter was two years-old and my father suffered a debilitating stroke. Together with my family, we encountered some of the most stressful moments, but discovered some of our familys biggest blessings. Before my fathers stroke, my parents living a half-a-mile away and a very flexible employer were part of my perfect situation. After my father had his stroke, my perfect situation quickly changed. Immediately, my mother took on responsibility for his care, practically living at the hospital and rehab center with him for five months, with no time for herself or anyone else. It was about a year after my fathers death in 2005 that my sisters, brother and I truly realized the physical and emotional toll this event had on my mother and our entire family. Today I am fortunate that I can bring a few of the lessons I learned during that time to the table when I try to help families understand the importance of protecting their futures. Ive found the majority of people are challenged to consider how an event requiring long-term care could impact their lives, but all it takes is a real life story to help them realize the potential repercussions to themselves and their families. I recommend a few things you can do to prepare for and live your lives while taking on a caregiver role. Plan Ahead Preparing well in advance to meet your own needs and those of your loved ones should undoubtedly be your first step. No matter how difficult it can be, you need to commit yourselves to having a conversation with your parents. I believe its the best gift you can give them. Many well-meaning parents and children avoid the conversation because they dont want to consider the impact. The truth is a conversation can eliminate feelings of guilt, burden and the potential of conflict. Look for opportunities to have a conversation by asking about a friend, relative or acquaintance who is going through a long-term care situation and ask what if? questions. Remember to listen carefully and ask questions if the responses are not clear. Dont try to tackle the issue in one conversation. Instead make a plan to think about the options and set a goal for continuing to share information. If your parents
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havent considered it, find out if they would be interested in purchasing long-term care insurance. Next, have a conversation with your spouse. Developing a plan is best done when youre healthy and you can objectively review your options. Also, many people dont realize that its easier to be approved for long-term care insurance and pay for it when youre earning an income and healthy. Know Your Resources Well-intentioned families are taking the brunt of the care demands upon themselves or at least delegating it to one member. Take a look around your workplace and youll see many colleagues are caring for elderly relatives, either because they lack the financial resources or are not aware of the many alternative care-giving options. Although the Family Medical Leave Act guarantees most U.S. workers up to 12 weeks time off a year, this time is unpaid. To help employees stay productive and balance the needs of family with work, many are offering referral services to inform workers about where they can find caregivers, legal advice and extended leaves of absence. If you arent up to speed on your employee benefits package, schedule a quick update session to see if new options are being considered. Many employers are now offering long-term care insurance to employees and their immediate family members. In some cases, this arrangement allows people to obtain a discount on the premium. Ask some questions. Who knows, maybe youll find a new way to save money and make the most of the programs currently available to you. Sometimes The Small Things Make A Big Difference Looking back, I am still amazed at the countless number of cards, visitors and kind gestures of friendship bestowed upon my family by our neighbors, friends and members of our church. You hear all the time that its better to make a real offer to do something specific rather than say If theres anything I can do to help just call. Make small requests of those who offer help to ease your burden. What may seem like a small effort to one person could be a tremendous relief to another. I remember my dads longtime barber just showing up at the hospital during the first three weeks and cutting my dads hair and shaving his neck, which he continued to do on a regular basis thereafter. He just took it upon himself to make sure it got done, and his gesture made my dad feel good. Stay Healthy If youre not taking care of yourself, how can you take care of others? For me this is a lifelong goal and something Im always trying to improve. The easiest excuse for grabbing fast food, skipping the usual morning walk or letting yourself get rundown can be in the guise of saving time, but it could also be at the expense of your health. Start small and set goals. Stash some healthy snacks in the refrigerator at work and home. Try to limit your fast food dashboard dining. And take time for you, to read, to relax, to pamper yourself. Far from being selfish, these times are crucial for your wellbeing. Learn to Set Limits Some of the same skills and strategies you use at work such as planning, organizing, communicating, setting limits and delegating can be used effectively on the home-front for achieving a satisfying, fulfilling and well-balanced life both personally and professionally. Although those of us sandwiched between care for our children and care for our parents cannot change this fact, we can do a better job of preparing for the job of caring for our parents before the need arises.
11/16: The splitting of the Senate (now in convenient GIF form)

From 1989 to 2013. The further apart they are, the more the dissension.
11/16:
Diabetes battle 'being lost' as cases hit record 382 million The vast majority have type 2 diabetes - the kind linked to obesity and lack of exercise - and the epidemic is spreading as more people in the developing world adopt Western, urban lifestyles. The latest estimate from the International Diabetes Federation is equivalent to a global prevalence rate of 8.4 percent of the adult population and compares to 371 million cases in 2012. By 2035, the organization predicts the number of cases will have soared by 55 percent to 592 million.
11/16: Euro going nowhere

The near-stagnation of the eurozone economy underlines the fragility of the recovery and the growing dangers of a damaging bout of
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deflation in the region.
11/16: PROBABILITY AND RISK IN THE REAL WORLD Taleb (Mathematicians and economists only- toughest stuff you will ever read) Turkey and Inverse Turkey (from the Glossary for Antifragile): The turkey is fed by the butcher for a thousand days, and every day the turkey pronounces with increased statistical confidence that the butcher "will never hurt it"until Thanksgiving, which brings a Black Swan revision of belief for the turkey. Indeed not a good day to be a turkey. The inverse turkey error is the mirror confusion, not seeing opportunities pronouncing that one has evidence that someone digging for gold or searching for cures will "never find" anything because he didnt find anything in the past. What we have just formulated is the philosophical problem of induction (more precisely of enumerative induction.) To this version of Bertrand Russels chicken we add: mathematical difficulties, fat tails, and sucker problems. Fat tails are not about the incidence of low probability events, but the contributions of events away from the "center" of the distribution to the total properties.
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the Black Swan problem has been misunderstood. We are saying neither that there must be more volatility in our complexified world nor that there must be more outliers. Indeed, we may well have fewer such events but it has been shown that, under the mechanisms of fat tails, their impact gets larger and larger and more and more unpredictable. The main cause is globalization and the spread of winner-take-all effects across variables (just think of the Google effect), as well as effect of the increased physical and electronic connectivity in the world, causing the weakening of island effect a well established fact in ecology by which isolated areas tend to have more varieties of species per square meter than larger ones. In addition, while physical events such as earthquakes and tsunamis may not have changed much in incidence and severity over the last 65 million years (when the dominant species on our planet, the dinosaurs, had a very bad day), their effect is compounded by interconnectivity.
11/16:
Quality Assisted Living on a Budget
The trick is to make sure that youre not compromising quality of care for a lower price. Here are some tips to help you find affordable assisted living facilities that can be trusted to care for your older loved one: 1. Look Outside of Your Ideal Location Assisted living communities are in accordance with the old real estate mantra that cost is all about, location, location, and location. Communities in areas with lower land value are less expensive. If you live in a big city, explore communities in the suburbs or in more affordable neighborhoods. 2. Ask About Move-in Incentives Assisted living communities may have an official price, but its usually not set in stone. The communities work hard to keep their occupancy high, and very often they offer significant discounts to encourage families to choose their community. These incentives can take many forms, including discounting rent, waiving the entry fee, and rent freezes. Dont be afraid to ask about these incentives and even to negotiate the price. 3. Consider a Smaller Living Space such as a Studio or Semi-Private Apartment Naturally, larger apartments are more expensive. If you have a low-budget, look at smaller living spaces rather than one-bedroom apartments. Nursing home and assisted living residents whose care is paid for by Medicaid almost always have to share rooms in any event, so whether youre looking for affordable private pay options, or using Medicaid, it may not be possible to leave this option off the table. 4. Look at Inspection Reports You cant determine the quality of care at a community by superficial appearances. A posh and luxurious community may have a history of sub-standard care, while an older, more tired looking community may in fact offer outstanding care. Viewing inspections reports may help you find a diamond in the rough. Find your local Long-Term Care Ombudsman and ask them about the histories of communities that you are considering. Many states also maintain searchable databases of licensed assisted living communities and their inspections reports.
11/14: Now in 3D This will change manufacturing as we knew it. The few jobs in pure manufacturing will be fewer still. Actually it will change the world since cheap parts will be made anyplace.
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Rolls-Royce plans 3D printing for jet engine parts

Rolls-Royce is gearing up to use 3D printing technology to produce components for its jet engines, as a means of speeding up production and making more lightweight parts
11/14: HOT!!! THIS HAS BEEN THE 7TH HOTTEST YEAR SINCE 1850 11/13: We accept more latitude in our society as time goes on. The repercussions are staggering as more and more rationalizations about what was indecent or unacceptable behavior becomes the norm.
Gun violence is on the rise in US movies and has more than tripled since 1985 in those rated as acceptable for teenagers 13 and older. Per Patrick Moynihan in 1993- In this pattern, a growth in deviancy makes possible a transfer of resources, including prestige, to those who control the deviant population. This control would be jeopardized if any serious effort were made to reduce the deviancy in question. This leads to assorted strategies for re-defining the behavior in question as not all that deviant, really. 111/13: Economic Vulnerability and Financial Fragility William R. Emmons and Bryan J. Noeth The recent financial crisis and recession inflicted substantial economic and financial harm on millions of families, but the effects were not uniform across the population. The hardest-hit groups included individuals or families who were the young, the less educated, and members of a minority group. Unemployment rates among all these groups increased sharply and remain elevated more than four years into the recovery (Bureau of Labor Statistics, various years; Figure 1).1 Unfortunately, many families with the greatest exposure to the economic dislocations of the recent recession also had very risky balance sheets beforehand that were characterized by low levels of liquid assets, high portfolio concentrations in housing, and relatively high balance-sheet leverage. The authors argue that economic vulnerability and risky balance sheets are correlated because they derive from common factors. These factors include a low stock of human capital, inexperience (relative youth), and, in some cases, the legacy of discrimination in housing, education, and employment. Innate cognitive ability interacts with formal education and on-the-job experience to build human capital, while the legacy of discrimination may attenuate the translation of cognitive ability and education into human capital. Acquiring financial knowledge of risk management also requires time and experience and is more valuable to those with high levels of human capital and savings available to invest. Given the combination of these factors, individuals and families who are young, less cognitively able, and/or members of historically disadvantaged minorities are more likely to be economically vulnerable and to hold risky balance sheets because they lack financial knowledge and experience. Moreover, balance sheets of economically vulnerable families before the recent recession were especially risky after a decade of financial liberalization and innovation that increased the access of such families to homeownership and historically high leverage. Economically vulnerable families should avoid doubling down with risky balance sheets to enhance their future household financial stability.
11/13: Insomnia: The Caregiver's Role A growing number of seniors today face the difficulty of sleep disorders, commonly referred to as insomnia. Up to 30% of the elderly experience infrequent sleep patterns, apnea (the stoppage of breath), and waking up too early. Insomnia results in depression, constant fatigue, and even a decline in health in some people. The causes of sleep disorder are many and varied, including chronic pain and previous illness, high doses of medication, lifestyle changes, and anxiety and depression. All can play a part in triggering sleep loss and unless changed can damage your loved ones sleep cycle permanently. Caregivers usually must face a change in their own life when dealing with insomnia, and while it can be controlled, it often takes time. If your loved one has already begun sleeping less and waking up at odd hours, you may need to seek assistance from health care professionals who can assist you in the best treatment. Consider the following: Check their medication to see if the side effects include difficulty falling asleep. You can discuss this with their doctor. Often it can be as simple as discontinuing one medication for another that does not have the same effect. Restrict eating and drinking before they go to bed, so they do not wake up needlessly throughout the night to use the bathroom.
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Make sure they get up around the same time every day so they can set a pattern to follow. Make sure they do not drink colas or coffees that have caffeine and can keep them up at night. Try to limit smoking to a minimum, as the effects can hamper breathing at nighttime in bed. Take them for walks and regular exercise outings. Instead of watching television, if they are able, you may advise them to read a book or newspaper to relax their mind. Make sure their phone is off and their room is as dark to provide no distraction to sleep. Remain calm and supportive if they struggle with getting up at night, and try to keep them composed. Reduce stress levels as much as possible before they go to bed so they can have a clear mind and little to no anxiety. Be willing to work with them and encourage them to try other methods to correct their sleeping problems. Resist the temptation to use over the counter sleeping aids that are intended only for short-term sleeping problems and if used for any length of time, the body will build a resistance to them, causing further problems.
Back in the Day! 11/13: Long Term Care costs nationally Average about $85,000 11/13: Has to stop: Home values nationwide have been growing at a breakneck pace for much of 2013 and are predicted to finish the year up an average of 6.7 percent compared with the end of 2012, Panelists said they expect appreciation rates to slow to roughly 4.3 percent next year, on average, eventually falling to 3.4 percent by 2018.
11/11: Here kitty, kitty, kitty,

In 2012, some 58.3 percent of cats were fat. 11/11: TaxesThe basic standard deduction will increase to $12,400 for married couples filing jointly from $12,200 for 2013. It will be $6,200 for singles and married people filing separately, up from $6,100 for this year. Nearly two-thirds of all filers typically choose the standard deduction. But before you do so, check to see if you would be better off itemizing your deductions (such as charitable gifts and interest payments) on Schedule A of Form 1040. It's tempting to choose the standard deduction since it's simpler. But you may be able to cut your tax bill by itemizing. The maximum amount of the "earned income tax credit," designed to help the working poor, will be $6,143 for joint filers with three or more qualifying children. That's up from $6,044 for 2013. To see if you're eligible, visit irs.gov. The personal exemption amount will be $3,950, up from $3,900 for 2013. But the amount begins to phase out once your income exceeds a certain level. For 2014, the phaseout (often known as PEP, for personal-exemption phaseout) will begin with adjusted gross income of $254,200 for most singles, or $305,050 for married couples filing jointly. It typically will phase out completely at $376,700 for singles, or $427,550 for joint filers. Many filers also face limits on itemized-deduction amounts. Limits for the 2014 tax year will begin with adjusted gross income of $254,200 for most singles, or $305,050 for joint filers. This provision often is known in tax circles as "Pease," after a former member of Congress. There are many other changes, including estate-tax numbers. The estate tax exemption will increase to $5,340,000 next year from $5,250,000 this year. But the annual gift-tax exclusion will remain unchanged at $14,000.
11/10: Getting Lower Costs on Health Coverage 11/10:
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11/10: Travel Guidelines For People With Memory Disorders: Part One by Geri Richards Hall, PhD, ARNP, CNS, FAAN Many people enjoy travel as a form of recreation, relaxation, and an opportunity to learn. While travel may be a positive experience for most people, it poses special problems for people with dementing illnesses, for example, Alzheimer's disease, multi-infarct dementia, Parkinson's disease, Pick's disease, or injury that results in disabling intellectual impairment. People with dementia have ever-increasing trouble with changes of pace, changes in location, fatigue, groups of people, changes of time zone, and noise. In a familiar environment, there are many environmental cues that help a person with dementia to remain moored in reality. A favorite chair, a well-learned TV control, and a familiar floor plan are taken for granted. Unfamiliar places, however, lack these well-known moorings and result in increased confusion, anxiety, and fear. Even places that once were familiar, such as a winter home, can seem new or alien, triggering fear or anger. Caregivers who are planning to travel need to plan trips carefully in advance, using both travel and healthcare professionals to determine the best possible methods to cause the least distress to your loved one. The following guidelines have been developed to assist you with travel planning. After reading the guidelines, you might want to discuss them with either your physician or your local chapter of the Alzheimer's Association. Using them can enhance the success of the trip. What can be done in case of emergency? Do you know of medical services in the areas you travel to? Do you need to take special medications with you in case of agitation? Having a plan can save hours of stress and panic. What are the care receiver's limitations and strengths? As a general rule, the more advanced the disease, the more difficult travel will be. For example, care receivers who are still relatively independent and care for themselves will have fewer problems with travel than someone who requires direction to bathe and change their clothing. Also, people with behavioral problems such as paranoia or delusions (missed perceptions, fears, or fixed false beliefs or thoughts) have a more difficult time even when intellectual skills are relatively good. As a rule, someone who requires assistance with bathing, changing clothing, dressing, and toileting will have significant difficulty even with short, simple overnight trips. At time when it may be easier for retired people to visit adult children who work, it may be better to have the children visit youeven if it means paying for their travel. Care receivers who exhibit any of the following behaviors should avoid overnight travel unless in an emergency:
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Become physically or verbally aggressive Missed perceptions, have paranoid thoughts, hallucinations, or delusions (for example, think people steal from them) Become confused during or after social outings Wake at night confused Have poorly managed incontinence (or who require special assistance or equipment with feeding if public dining rooms must be used) Have episodes where they do not recognize their caregiver Fall Yell, scream, or cry spontaneously Resist or argue with their caregiver's directions Wander or pace Demand to leave social settings or restaurants early Are easily frightened, confused or agitated Are unable to communicate their needs to others Have unstable medical conditions Assess the caregiver's limitations There are also caregiver-related issues to be considered. Caregivers should avoid traveling with their impaired person if they (the caregiver) have any of the following characteristics: Become upset or can not manage well during a crisis Are embarrassed when their loved one acts out or does something embarrassing Have unstable or complicated health problems Are embarrassed to go into an opposite sex restrooms to supervise their loved one Are unable to manage in high stress situations or with little sleep Insist on maintaining strict honesty and argue with their loved one about mistakes and missed perceptions Are not able or willing to make significant adaptations during the tripoften at a moment's noticeto meet their loved one's changing needs, including canceling the travel mid-trip. Don't think they want to take the trip but will do it for their loved one Think there will be no change in their loved one's behavior during the trip Are not willing to plan well in advance. Resist seeking help as needed, thinking they can manage on their own. Think that trips to familiar places (such as an adult
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child's home or cabin) will be 'just like it used to be' because it's 'familiar and fun.' The Trip While travel may be enjoyable, getting to your destination is generally not relaxing. The following are principles to consider when planning the trip: The process of 'getting there' should be as short and simple as possible. Plan a trip that involves as few changes as possible. Trips should be to a single destination, rather than a series of visits. For example, you would want to travel to a wedding and home, but not take three months stopping at friends' homes along the way. Stick with the familiar. Vacation in ways your loved one was accustomed to before the onset of the disease. Consider a shorter trip. Day or weekend trips may be a better alternative, particularly if you are unsure of your loved one's reaction to travel. If everything goes well, go for a longer visit. If your loved one has not traveled in six months, schedule a 'trial' overnight stay nearby home to see if your loved one can still tolerate travel. Gather necessary papers and documents, including insurance cards, passports, physician's phone number, medication refills, and the care receiver's medical record. Do not expect your loved one to carry these documents or tickets. l Rest periods should be built into the travel schedule. Planning too many activities, such as meals in a restaurant, can lead to late night confusion or agitation. Do not plan activities for the night you arrive. Save travel for your loved one's best time of day. Use services specifically designated for people with disabilities. Spend as little time as possible in areas with large groups of more than 20 people, loud noises, or lots of activity (for example, airport gate areas). Avoid busy places and situations that will cause anxiety for your loved one. Never expect the person with dementia to travel alone. Do not expect travel employees (flight attendants, gate personnel) to care for or supervise your loved one. Always have the care receiver carry identification. Expect your loved one to become more confused, agitated, or behaviorally difficult during the trip. Assist with menus and choices. Do not expect other members of a tour to volunteer or be agreeable if you need help with your loved one. Advise hotels, airlines, tour operators, or people you are visiting that you are traveling with someone with memory impairment. Be specific about your safety concerns and special needs. If you are staying in a private home, guest home, or bed and breakfast, do not surprise your overnight host with your loved one's condition. Explain it fully, well in advance. Do not think they won't notice. Don't be upset if they feel they cannot handle the visitespecially if there are children in the home. Never travel without a full set of reservations. Always provide family members with an itinerary and call home regularly. Make a list of the daily routine and special items you need to take with you. Always have the person with memory loss identified, preferably with a bracelet your loved one cannot misplace. Use good judgment when telling your loved one about the trip. Discussing it too far in advance may produce anxiety and agitation. Be flexible. Have a contingency plan that allows you to leave early if your loved one becomes ill, agitated, or wants to go home. Keep your sense of humor and laugh at all the things that happen. They will be part of a wonderful memory of your travels together. If the trip is prolonged, develop a list of medical professionals and Alzheimer's Association chapters along your route. lNever leave your loved one alone or ask strangers to watch him/her. A person who does not know your loved one or the disease will not know how to react in a difficult situation.
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Avoid traveling at peak travel seasons such as Thanksgiving and Christmas Take medications with you to manage stomach upset, diarrhea, or other temporary problems caused by changes in food and water. Know how to get help and who can help in countries where you do not speak the language. Check the Yellow Pages to see if there is a travel agent in your area specializing in planning trips for people with disabilities. If so, use the specialized service.
11/8: Global Burden of Disease
11/8: Student debt Student debt has skyrocketed over the past decade, quadrupling from just $240 billion in 2003 to more than $1 trillion today.1 If current borrowing patterns continue, student debt levels will reach $2 trillion in 2025.2 Average debt levels have risen rapidly as well: two-thirds (66 percent) of college seniors now graduate with an average of $26,600 in student loans,3 up from 41 percent in 1989.4 The rise of this debt-for-diploma system over the past decade was largely caused by the sharp decline in state funding for higher education, which has fallen by 25 percent since its peak in 2000.
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11/8: Systemic Risk Identification, Modelling, Analysis, and Monitoring: An Integrated Approach Date: By: URL: 2013-10 Antoaneta Sergueiva http://d.repec.org/n?u=RePEc:arx:papers:1310.6486&r=rmg
Research capacity is critical in understanding systemic risk and informing new regulation. Banking regulation has not kept pace with all the complexities of financial innovation. The academic literature on systemic risk is rapidly expanding. The majority of papers analyse a single source or a consolidated source of risk and its effect. A fraction of publications quantify systemic risk measures or formulate penalties for systemically important financial institutions that are of practical regulatory relevance. The challenges facing systemic risk evaluation and regulation still persist, as the definition of systemic risk is somewhat unsettled and that affects attempts to provide solutions. Our understanding of systemic risk is evolving and the awareness of data relevance is rising gradually; this challenge is reflected in the focus of major international research initiatives. There is a consensus that the direct and indirect costs of a systemic crisis are enormous as opposed to preventing it, and that without regulation the externalities will not be prevented; but there is no consensus yet on the extent and detail of regulation, and research expectations are to facilitate the regulatory process. This report outlines an integrated approach for systemic risk evaluation based on multiple types of interbank exposures through innovative modelling approaches as tensorial multilayer networks, suggests how to relate underlying economic data and how to extend the network to cover financial market information. We reason about data requirements and time scale effects, and outline a multi-model hypernetwork of systemic risk knowledge as a scenario analysis and policy support tool. The argument is that logical steps forward would incorporate the range of risk sources and their interrelated effects as contributions towards an overall systemic risk indicator, would perform an integral analysis of ...
11/8: Want to move abroad? This map shows the best and worst countries to be an expatriate.
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China and Thailand are the two best countries to be an expatriate, according to a recent study by British bank HSBC that looked at economic opportunities and quality of life for expats in 34 countries. They're followed by small, rich countries known for their globalized business classes. In descending order, they are: Switzerland, the Cayman Islands, Bahrain and Singapore. The worst of these 34 countries to be an expat is Egypt, which has seen xenophobia rise considerably since this summer's military coup and wave of populist nationalism. Also at the bottom of the list is much of Western Europe, which the report says is often too expensive for expats. In descending order: France, Spain, the United Kingdom, Italy and second-to-last is Ireland.
:11/7 Buy sell agreement review
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I have learned a new trick 11/7: Robert Shiller's cyclically-adjusted price-earnings (CAPE) ratio. CAPE is calculated by taking the S&P 500 and dividing it by the average of ten years worth of earnings. If the ratio is above the long-term average of around 16x, the stock market is considered expensive. Currently, the CAPE is at 24.42x,
11/7: Immunizations and Developmental Milestones for Your Child from Birth Through 6 Years Old
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11/6: Bubble, bubble- (Mauldin) A chart that outlines how an instigator of QE believes QEs end will impact asset prices. The Bank of England published it in Q3 2011, and it tells the story of their expectation that while QE was in operation there would be a massive rise in real asset prices, but that this would dissipate and unwind over time, starting at the point at which the asset purchases were complete
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One day, all the debt will come due, and it will end with a bang. We are building a bigger time bomb with $500 billion a year in debt coming due between 2018 and 2020, at a point in time when the bonds might not be able to be refinanced as easily as they are today. Government bonds are not even safe because if they revert to the average yield seen between 2000 and 2010, ten year treasuries would be down 23 percent. If there is so much downside risk in normal treasuries, riskier high yield is even more mispriced,. We may look back and say the real bubble is debt.
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Why are we seeing so many bubbles right now? One reason is that the economy is weak and inflation is low. The growth in the money supply doesnt go to driving up prices for goods like toothpaste, haircuts, or cars. It goes to drive up prices of real estate, bonds, and stocks. Excess liquidity is money created beyond what the real economy needs. In technical terms, Marshallian K is the difference between growth in the money supply and nominal GDP. The measure is the surplus of money that is not absorbed by the real economy. The term is named after the great English economist Alfred Marshall. When the money supply is growing faster than nominal GDP, then excess liquidity tends to flow to financial assets. However, if the money supply is growing more slowly than nominal GDP, then the real economy absorbs more available liquidity. Thats one reason why stocks go up so much when the economy is weak but the money supply is rising. Economists and investors have spilled a lot of ink describing bubbles, yet central bankers and investors never seem to learn and people get caught up in them. Peter Bernstein in Against the Gods states that the evidence reveals repeated patterns of irrationality, inconsistency, and incompetence in the ways human beings arrive at decisions and choices when faced with uncertainty.
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Bubbles happen again and again. The same basic ingredients are found every time: fueled initially by well-founded economic fundamentals, investors develop a self-fulfilling optimism by herding that leads to an unsustainable accelerating increase in prices. And each time people are surprised that a bubble has happened. As billionaire investor George Soros once said about financial cycles: The only surprise is that we are always surprised. The conclusion from repeated experiments shows that it doesnt matter if people live through one bubble or even two, theyll likely fall for bubbles again. The smarter people learn from bubbles. But they dont learn to avoid them; they participate again and simply think theyre smart enough to know when to get out. This has been showed many times in trading experiments conducted by Vernon Smith, a professor at George Mason University who shared in the 2002 Nobel Prize in Economics. As Smith said, The subjects are very optimistic that theyll be able to smell the turning point. They always report that theyre surprised by how quickly it turns and how hard it is to get out at anything like a favorable price.
11/6: p/e ratios= Since 1990, the P/E multiple of the S&P 500 has appreciated by about 2% a year; in 2013, the S&P's P/E has increased by 18%! not everything which can be measured counts, and not everything which counts can be measured. Einstein 11/6: "The Panic/Euphoria Model is sending a clear warning sign of substantial complacency. "The investment communitys mindset is widely monitored and investors anecdotally have become more bullish in conversations and meetings looking to an expected traditional late-year seasonal rally, despite a better than 20% move year-to-date."
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11/6: Too high"All 10 sectors of the S&P have posted double-digit gains year-to-date, a rare market trait considering that it has been nearly 20 years since all 10 sectors of the S&P have registered annual gains of 10% or more," he added. "Indeed, the last and only time it happened was in 1995, following the equity blood bath in 1994, when the Federal Reserve brutally raised the Fed Funds rate six times." The S&P 500 is up 25% year-to-date. The lagging sectors include telecoms and utilities, which are each up by around 15%. there is nothing so disturbing to ones well-being and judgment as to see a friend get rich. Kindleberger 11/6: OIL- Fracking is the answer
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11/5: .I.R.A. assets totaled $5.7 trillion at the end of March, a large chunk of which comes from rollovers from 401(k)s and other employersponsored plans. The Labor Department estimates that another $3.8 trillion was held in 401(k) type plans at the end of June; a significant part of that will continue to pour into I.R.A.s in the future.
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11/5: 11/5:
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11/5: A capital expenditure (Capex) is money invested by a company to acquire or upgrade fixed, physical, non-consumable assets, such as buildings and equipment
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11:5-
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11/5: Roubini Quote : "The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. " 11/5: A Model of Non-Belief in the Law of Large Numbers Date: 2013-09-17 By: URL: Collin Raymond Daniel J. Benjamin Matthew Rabin http://d.repec.org/n?u=RePEc:oxf:wpaper:672&r=cbe
People believe that, even in very large samples, proportions of binary signals might depart significantly from the population mean. We model this "non-belief in the Law of Large Numbers" by assuming that a person believes that proportions in any given sample might be determined by a rate different than the true rate. In prediction, a non-believer expects the distribution of signals will have fat tails, more so for larger samples. In inference, a non-believer remains uncertain and influenced by priors even after observing an arbitrarily large sample. We explore implications for beliefs and behavior in a variety of economic settings.
11/4:Who takes risks when and why: Determinants of changes in investor risk taking
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This is what I disagree with-
Risk Taking = f
(Return Expectations ;
Risk Attitude ;
Risk Expectations
EFM- The problem is that all articles note the risk expectations. What does that mean??? I submit that it is the risk of loss that must be addressed first and foremost. Expectations are a subject to all sorts of whims and errors, herd behavior and more. However, if one knew the risk of loss UPFRONT, the attitude would unquestionably change to a more factual element that required a more objective view of economics and questioning not simply the fact that the expectations would now be different but by a probably by a wide margin. You do know how to do a risk of loss, don't you?????? Another hypotheses- "Risk attitudes are fairly stable over time." They should not be. At least for the professional advisor. The market is now up over 23% for the year. Nothing fundamental substantiates that. I can't say when a recession is going to happen but it will be another major shock. 11/4 Market (NYT) there hasnt been a significant market correction defined as a drop in average share prices of more than 10 percent since a 19.4 percent decline in the S.& P. 500 in 2011. (After stock prices drop 20 percent, a correction becomes a bear market, in Wall Street parlance.) And since the start of 2012, the market has never been in negative territory for a calendar year. Since the market nadir in March 2009, the S.& P. 500 has already returned more than 180 percent, including dividends. Under conditions like that, its been hard not to make money, if youve been wise or lucky enough to have had money in the stock market. EFM- Not necessarily wise per se but recognizing that the market does not have to make sense (see dotcom) and sometimes momentum investing takes a long time to run its course. But there is a huge risk with GDP so low for so long. 11/4:
11/3: Really bad newsPublic investment in the US has hit its lowest level since demobilisation after the second world war because of Republican success in stymieing President Barack Obamas push for more spending on infrastructure, science and education.
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The last is mandatory, the second is necessary and the first is because our bridges, highways, etc are in a terrible state and have been left to rot far too long.
11/4: Herding, Trend Chasing and Market Volatility 2013-10-01 Corrado Di Guilmi (Economics Discipline Group, UTS Business School, University of Technology, Sydney) Xue-Zhong He (Finance Discipline Group, UTS Business School, University of Technology, Sydney) Kai Li (Finance Discipline Group, UTS Business School, University of Technology, Sydney)
Date: By:
URL: http://d.repec.org/n?u=RePEc:uts:rpaper:337&r=fmk We introduce a heterogeneous agent asset pricing model in continuoustime to show that trend chasing, switching and herding all contribute to market volatility in price and return and volatility clustering, but their impact are different. On the one hand, the fluctuations of market price and return and the level of the significant autocorrelations (ACs) of the absolute and squared returns increase with herding and trend chasing based on long time horizon. On the other hand, the switching reduces the return volatility and an initial increase in switching reduces the price volatility and increases the level of the significant ACs, but the effect becomes opposite when the switching increases further. We also show that market noise plays more important role than fundamental noise on the power-law behavior. 11/4: Climate change "climate-related hazards constitute an additional burden." The report says scientists have high confidence especially in what it calls certain "key risks": People dying from warming- and sea rise-related flooding, especially in big cities. Famine because of temperature and rain changes, especially for poorer nations. Farmers going broke because of lack of water. Infrastructure failures because of extreme weather. Dangerous and deadly heat waves worsening. Certain land and marine ecosystems failing. Scientists say the global economy may continue to grow, but once the global temperature hits about 3 degrees Fahrenheit warmer than now, it could lead to worldwide economic losses between 0.2 and 2.0 percent of income For North America, the highest risks over the long term are from wildfires, heat waves and flooding. Water too much and too little and heat are the biggest risks for Europe, South America and Asia, with South America and Asia having to deal with drought-related food shortages. Africa gets those risks and more: starvation, pests and disease. Australia and New Zealand get the unique risk of losing their coral reef ecosystems, and small island nations have to be worried about being inundated by rising seas. 11/3: Biases and Implicit Knowledge
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Date: By: URL:
2013-09-29 Cunningham, Thomas http://d.repec.org/n?u=RePEc:pra:mprapa:50292&r=cbe
A common explanation for biases in judgment and choice has been to postulate two separate processes in the brain: a System 1 that generates judgments automatically, but using only a subset of the information available, and a System 2 that uses the entire information set, but is only occasionally activated. This theory faces two important problems: that inconsistent judgments often persist even with high incentives, and that inconsistencies often disappear in within-subject studies. In this paper I argue that these behaviors are due to the existence of implicit knowledge, in the sense that our automatic judgments (System 1) incorporate information which is not directly available to our reflective system (System 2). System 2 therefore faces a signal extraction problem, and information will not always be efficiently aggregated. The model predicts that biases will exist whenever there is an interaction betwe en the information private to System 1 and that private to System 2. Additionally it can explain other puzzling features of judgment: that judgments become consistent when they are made jointly, that biases diminish with experience, and that people are bad at predicting their own future judgments. Because System 1 and System 2 have perfectly aligned preferences, welfare is well-defined in this model, and it allows for a precise treatment of eliciting preferences in the presence of framing effects.
11/3: Managed Payout Funds vs.Annuity-Like Products Managed payout funds are often compared to annuity products or annuity-like products such as guaranteed minimum withdrawal benefits (GMWBs). There are key differences, however. In particular, annuity participants generally relinquish their retirement account (and access to its value during life) in return for guaranteed payments. A GMWB is an insurance product, owned by the investor, that provides guaranteed income for a retirees life as long as the retiree does not withdraw more than a specified percentage from the fund each year; if the retiree opts for larger withdrawals, the lifetime income guarantee is forfeited. Managed payout funds allow investors to withdraw more than the payout (or their entire investment) at any time, but this liquidity benefit is offset by the loss of the anticipated payout. While managed payout funds seek to provide steady income to investors, such payouts will generally rise and fall depending on market conditions. It is possible for a managed payout fund to suffer substantial investment losses and simultaneously experience additional asset reductions
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as a result of distributions to shareholders. Thus, managed payout funds are a useful investment tool when combined with more certain sources of retirement income. For example, it may be prudent for a retiree to buy an annuity or GMWB to cover fixed costs and invest in a managed payout fund for discretionary spending that can be scaled back if the fund underperforms. Types of Managed Payout Funds Managed payout funds generally fall into two categories: those that pay out indefinitely and those that pay out for a set term and then liquidate (i.e., reverse target date funds). A principal difference between these types of funds is that the income for the indefinite payout funds will tend to vary more than the reverse target date type funds. Indefinite Payout Funds. Indefinite payout funds function as you would expect. They are designed to pay out monthly income for an indefinite period of time. Schwab Funds and Vanguard Funds typify this type of funds. Schwab offers three types of monthly payout funds: moderate payout, enhanced payout and maximum payout. Each fund type has the same investment objective: to seek to provide current income and, as a secondary investment objective, capital appreciation. Each fund is also a fund of funds, meaning that its principal investment strategy is to invest in other Schwab funds, which are a mixture of equity, fixed income and money market funds. The main difference among the three funds is the target asset allocation used to achieve the investment objective suggested by the name of each fund. The funds principal risks are linked to those of the underlying funds and the advisers ability to manage the fund to produce the monthly payout goal. The Schwab maximum payout fund aims to provide monthly income in the ranges of 1-5% in a low interest environment and 5-8% in a high interest rate environment. The other two funds aim for progressively lower percentages. Vanguard also offers three different managed payout funds. Their investment objectives are to make monthly distributions of cash while seeking to provide inflation protection and capital appreciation. Vanguards managed payout funds operate similarly to that of the three Schwab funds in that they have different asset allocation strategies geared to their distribution goals. They, too, are funds of funds, and their principal risks are similar to that of the Schwab managed payout funds. The monthly distribution goals range from 3-7% depending on the fund. Reverse Target Date Funds. Fidelitys and PIMCOs fund offerings are examples of reverse target date funds. Essentially, these funds aim to pay out all of their principal and earnings by a date certain, thus the monthly income paid to investors is a combination of both principal and earnings. Fidelity has at least 14 of these funds with target liquidation dates ranging from 2016 to 2042. The allocations become more conservative over time. The Fidelity funds invest in all types of affiliated funds, in contrast to PIMCOs two managed income funds that liquidate in 2019 and 2029, respectively, and seek to invest at least 90% of
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their assets in laddered inflation-indexed Treasury bonds. PIMCOs investment objectives are to provide consistent real (inflation-adjusted) distributions through the maturity of the fund. The Fidelity managed payout funds investment objectives seek total return through a combination of current income and capital growth, but their returns are not inflation adjusted like the PIMCO funds. Each of these reverse target date funds aims to make distributions that gradually increase over time to the date of maturity of the fund. A main difference between the reverse target date funds and traditional target date funds is that the former seeks to provide monthly income for the investor through retirement, whereas traditional target date funds are designed to provide the investor with assets by the time of retirement. Conclusions Managed payout funds are relatively new and are only starting to gain traction in the market as investors and their advisers become more knowledgeable about how to use them. Generally, they are not necessarily intended to be an investors sole source of income because their monthly income is not guaranteed. They are probably most useful for investors who have other sources of steady income, whether they be annuities, GMWBs, pensions or other sources. 11/3: A Sharper Ratio: A General Measure for Correctly Ranking Non-Normal Investment Risks Date: By: 2013-10 Kent Smetters Xingtan Zhang
URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:19500&r=rmg While the Sharpe ratio is still the dominant measure for ranking risky assets, a substantial effort has been made over the past three decades to find a way to account for non-Normally distributed risks. This paper derives a generalized ranking measure which, under a regularity condition, correctly ranks risks relative to the original investor problem for a broad probability space. Moreover, like the Sharpe ratio, the generalized measure maintains wealth separation for the broad HARA utility class. Besides being effective in the presence of fat tails, the generalized measure is also a foundation for multi-asset class portfolio optimization due to its ability to pairwise rank two risks following two different probability distributions. This paper also explores the theoretical foundations of risk ranking, including proving a key impossibility theorem: any ranking measure that is valid for non-Normal distributions canno t generically be free from investor preferences. Finally, this paper shows that the generalized ratio provides substantially more ranking power than simpler approximation measures that have sometimes been used in the past to account for non-Normal higher moments, even if those approximations are extended to include an infinite number of higher moments. 11/3: Negative Equity and Housing Investment, Andrew Haughwout, Sarah Sutherland, and Joseph Tracy Using Consumer Expenditure Survey data from 2007-12, the authors find that on average negative equity households reduce their housing investments by around 75 percent.
11/3: Introducing Expected Returns into Risk Parity Portfolios: A New Framework for Tactical and Strategic Asset Allocation 2013-07-01 Roncalli, Thierry http://d.repec.org/n?u=RePEc:pra:mprapa:49821&r=rmg
Date: By: URL:
Risk parity is an allocation method used to build diversified portfolios that does not rely on any assumptions of expected returns, thus placing risk management at the heart of the strategy. This explains why risk parity became a popular investment model after the global financial crisis in 2008. However, risk parity has also been criticized because it focuses on managing risk concentration rather than portfolio performance, and is therefore seen as being closer to passive management than active management. In this article, we show how to
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introduce assumptions of expected returns into risk parity portfolios. To do this, we consider a generalized risk measure that takes into account both the portfolio return and volatility. However, the trade-off between performance and volatility contributions creates some difficulty, while the risk budgeting problem must be clearly defined. After deriving the theoretical properties of su ch risk budgeting portfolios, we apply this new model to asset allocation. First, we consider long-term investment policy and the determination of strategic asset allocation. We then consider dynamic allocation and show how to build risk parity funds that depend on expected returns.
11/3: Credit Risk and the Instability of the Financial System: an Ensemble Approach Date: By: 2013-09 Thilo A. Schmitt Desislava Chetalova Rudi Sch\"afer Thomas Guhr
http://d.repec.org/n?u=RePEc:arx:papers:1309.5245&r=rmg URL: The instability of the financial system as experienced in recent years and in previous periods is often linked to credit defaults, i.e., to the failure of obligors to make promised payments. Given the large number of credit contracts, this problem is amenable to be treated with approaches developed in statistical physics. We introduce the idea of ensemble averaging and thereby uncover generic features of credit risk. We then show that the often advertised concept of diversification, i.e., reducing the risk by distributing it, is deeply flawed when it comes to credit risk. The risk of extreme losses remain due to the ever present correlations, implying a substantial and persistent intrinsic danger to the financial system.
11/3: Systemic Risk Monitoring ("SysMo") ToolkitA User Guide Date: 2013-07-17 Nicolas R. Blancher Srobona Mitra Hanan Morsy Akira Otani Tiago Severo Laura Valderrama http://d.repec.org/n?u=RePEc:imf:imfwpa:13/168&r=rmg
By:
URL:
There has recently been a proliferation of new quantitative tools as part of various initiatives to improve the monitoring of systemic risk. The "SysMo" project takes stock of the current toolkit used at the IMF for this purpose. It offers detailed and practical guidance on the use of current systemic risk monitoring tools on the basis of six key questions policymakers are likely to ask. It provides "how-to" guidance to select and interpret monitoring tools; a continuously updated inventory of key categories of tools ("Tools Binder"); and suggestions on how to operationalize systemic risk monitoring, including through a systemic risk "Dashboard." In doing so, the project cuts across various country-specific circumstances and makes a preliminary assessment of the adequacy and limitations of the current toolkit. 11/3: Loved Ones Matter: Family Effects and Stock Market Participation Date: By: URL: 2013-09-19 Hellstrm, Jrgen (Ume School of Business and Economics) Zetterdahl, Emma (Department of Economics, Ume School of Business and Economics) Hanes, Niklas (Department of Economics, Ume School of Business and Economics) http://d.repec.org/n?u=RePEc:hhs:umnees:0865&r=cbe
In this paper new and detailed empirical evidence on the impact of family on individuals stock market participation decision is provided. Since influence is likely to vary systematically over different types of individuals the heterogeneous effect of social interaction, in a setting including both community as well as within-family effects, is further examined. The main results indicate that individuals likelihood for subsequent participation increases (decreases) following positive (negative) parental and partner stock market experiences. The effect of social interaction is further found to be of relatively greater importance for individuals with relatively lower levels of financial literacy and for individuals with an on average higher level of interpersonal trust. In terms of gender, both male and female participation is positively affected by family influence, while community effects mainly pertain to males.
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11/3: Near-Coincident Indicators of Systemic Stress Date: By: URL: 2013-05-17 Ivailo Arsov Elie Canetti Laura E. Kodres Srobona Mitra http://d.repec.org/n?u=RePEc:imf:imfwpa:13/115&r=rmg
The G-20 Data Gaps Initiative has called for the IMF to develop standard measures of tail risk, which we identify in this paper with systemic risk. To understand the conditions under which tail risk is present, it is first necessary to develop a measure of what constitutes a systemic stress, or tail, event. We develop such a measure and uses it to assess the performance of eleven near-term systemic risk indicators as early warning of distress among top financial institutions in the United States and the euro area. Two indicators perform particularly well in both regions, and a couple of other simple indicators do well across a number of criteria. We also find that the sizes of institutions do not necessarily correspond with their contribution to spillover risk. Some practical guidance for policies is provided. 11/3: Rating Through-the-Cycle: What does the Concept Imply for Rating Stability and Accuracy? 2013-03-08 John Kiff Michael Kisser Liliana Schumacher
Date: By:
URL: http://d.repec.org/n?u=RePEc:imf:imfwpa:13/64&r=rmg Credit rating agencies face a difficult trade-off between delivering both accurate and stable ratings. In particular, its users have consistently expressed a preference for rating stability, driven by the transactions costs induced by trading when ratings change frequently. Rating agencies generally assign ratings on a through-the-cycle basis whereas banks' internal valuations are often based on a point-in-time performance, that is they are related to the current value of the rated entity's or instrument's underlying assets. This paper compares the two approaches and assesses their impact on rating stability and accuracy. We find that while through-the-cycle ratings are initially more stable, they are prone to rating cliff effects and also suffer from inferior performance in predicting future defaults. This is because they are typically smooth and delay rating changes. Using a through-the-crisis methodology that uses a mo re stringent stress test goes halfway toward mitigating cliff effects, but is still prone to discretionary rating change delays. 11/3:
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11/3: The Cost of Constraints: Risk Management, Agency Theory and Asset Prices Date: By: URL: 2013-09 Alankar, Ashwin (AllianceBernstein) Blausten, Peter (Oak Hill Advisors) Scholes, Myron S. (Stanford University and Stamos Capital Management) http://d.repec.org/n?u=RePEc:ecl:stabus:2135&r=rmg
Traditional academic literature has relied on so-called "limits to arbitrage" theories to explain why investment managers are unable to eliminate the effects of investor "irrational" preferences (either the asset-pricing anomalies or the behavioral finance literature) on asset pricing. We demonstrate, however, that investment managers may not eliminate the observed asset-pricing anomalies because they may contribute to their existence. We show that if managers face constraints such as a "tracking-error constraint," coupled with the need to hold liquidity to meet redemptions or to actively-manage investments, they optimally hold higher-volatility securities in their portfolios. Investment constraints, such as tracking-error constraints, however, reduce the principal-agent problems inherent in delegated asset management and serve as effective risk-control tools. Liquidity reserves allow managers to meet redemptions or redep loy risks efficiently. We prove that investment managers will combine a portfolio of active risks (a so-called "alpha portfolio") for a given level of liquidity with a hedging portfolio designed to control tracking error. As the demand for either liquidity or active management increases presumably because of confidence in alpha, the cost of maintaining the tracking-error constraint increases in that the investment managers must finance these demands by selling more lower-volatility securities and holding more higher volatility securities. With more demand for the "alpha" portfolio, managers are forced to buy more of the tracking-error control portfolio. Investment managers and their investors are willing to hold inefficient portfolios and to give up returns, if necessary, to control the tracking-error of their portfolios. Given the liquidity and tracking-error constraints, investment managers concentrate more of their holdings in higher volatility (higher beta) securities. E mpirically, we show that active investment managers, such as mutual funds, hold portfolios that concentrate in higher volatility securities. Moreover, when they change their holdings of their "alpha" portfolios (reduce or increase their tracking error by choice), the relative prices of higher volatility stocks change according to the predictions of the model. That is, if investment managers move closer to a market portfolio, the prices of lower-volatility stocks rise more than the prices of higher-volatility stocks given changes in the prices of other market factors. 11/3:99.9% really?
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Date: By:
2013-10-09 Kiema, Ilkka (University of Helsinki) Jokivuolle, Esa (Bank of Finland Research)
URL: http://d.repec.org/n?u=RePEc:hhs:bofrdp:2013_025&r=rmg The aim of the Internal Ratings Based Approach (IRBA) of Basel II was that capital suffices for unexpected losses with at least a 99.9% probability. However, because only a fraction of the required regulatory capital (a quarter to a half) had to be loss absorbing capital, the actual solvency probabilities may have been much lower, as the global financial crisis illustrates. Our estimates suggest that under Basel II IRBA the loss-absorbing capital of an average-quality portfolio bank suffices for unexpected losses with a 95%-99% probability. This translates into an expected bank failure rate as high as once in twenty years. Even if the bank's interest income is incorporated into our model, the expected failure rate is still substantial. We show that the expected failure rate increases with loan portfolio riskiness. Our calculations may be viewed as a measure of regulatory "self-delusion" included in Basel II capital requir ements. 11/3: DRIVING COSTS PER TYPE OF VEHICLE aaa
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11/3: 11/3: Deciding for Others Reduces Loss Aversion Date: By: 2013-09-17 Andersson, Ola (Research Institute of Industrial Economics (IFN)) Holm, Hkan J. (Lund University) Tyran, Jean-Robert (University of Vienna) Wengstrm, Erik (Lund University)
URL: http://d.repec.org/n?u=RePEc:hhs:iuiwop:0976&r=cbe We study risk taking on behalf of others, both with and without potential losses. A large-scale incentivized experiment is conducted with subjects randomly drawn from the Danish population. On average, decision makers take the same risks for other people as for themselves when losses are excluded. In contrast, when losses are possible, decisions on behalf of others are more risky. Using structural estimation, we show that this increase in risk stems from a decrease in loss aversion when others are affected by their choices. Keywords: 11/3 Why Blame? Date: By: 2013 Mehmet Gurdal Joshua B. Miller Aldo Rustichini Risk taking; Loss aversion; Experiment
URL: http://d.repec.org/n?u=RePEc:igi:igierp:494&r=cbe We provide experimental evidence that subjects blame others based on events they are not responsible for. In our experiment an agent chooses between a lottery and a safe asset; payment from the chosen option goes to a principal who then decides how much to allocate between the agent and a third party. We observe widespread blame: regardless of their choice, agents are blamed by principals for the outcome of the lottery, an event they are not responsible for. We provide an explanation of this apparently irrational behavior with a delegated-expertise principal-agent model, the subjects salient perturbation of the environment. JEL Classification Numbers: C92; D63; C79. Keywords: Experiments; Rationality; Fairness
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11/3: 11/3: Finance of Retirement & Pensions

ONLINE STANFORD COURSE 11/3: Free Credit Reports Online DIFERENT THAN CREDIT SCORES 11/3
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11/3: Comovement of Corporate Bonds and Equities Date: 2013-07
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By: URL:
Bao, Jack (OH State University) Hou, Kewei (OH State University) http://d.repec.org/n?u=RePEc:ecl:ohidic:2013-11&r=fmk
We study heterogeneity in the comovement of corporate bonds and equities, both at the bond level and at the firm level. Using an extended Merton model, we illustrate that corporate bonds that mature late relative to the rest of the bonds in its issuer's maturity structure should have stronger comovement with equities. In contrast, endogenous default models suggest that a bond's position in its issuer's maturity structure has little relation with the strength of the comovement between bonds and equities. Empirically, we find results consistent with the prediction of the extended Merton model. In addition, we find that comovement between bonds and equities is stronger for firms with higher credit risk as proxied by the book-to-market ratio and distance-to-default even after controlling for ratings. Our evidence suggests that market participants are able to assess credit quality at a more granular level than ratings.
11/2: No change
The 2014 Roth IRA limits and Roth 401k contribution limits were just announced, so you can start planning your contributions. The 2014 limits will stay the same for both the Roth 401k and the Roth IRA. The 401k limits and IRA limits are determined based on inflation, but can only increase in $500 increments. The 2014 social security wage base increased even though the Roth 401k limits and Roth IRA limits stayed the same. I highlight the Roth IRA and the Roth 401k because they are my favorite retirement plans; although the limits for traditional 401ks and IRAs are the same as the Roth 401k and Roth IRAs.
2013 & 2014 Contributions

Here are the official contribution limits from the IRS:
Roth 401k Contributions Maximum Catch-up 50 and over Roth IRA Contributions Maximum Catch-up 50 and over
2013 $ 17,500 $ 5,500 2013 $ 5,500 $ 1,000
2014 $ 17,500 $ 5,500 2014 $ 5,500 $ 1,000
You can make your 2014 contributions as early as January 1, 2014 for the whole year. If you contribute 2014 Roth IRA money between January 1 and April 15, be sure to designate calendar year 2014 if you have already contributed the maximum for 2013. To maximize your IRA investments, make sure you arent paying extra fees in your IRA. You can transfer your IRA to Scottrade to avoid annual fees.
Roth IRA Income Limits

You may contribute the full amount this year to your Roth IRA if your 2013 income is below $112,000 for singles ($178,000 for married). You may make partial contributions until your income hits $127,000 ($188,000 for married). If your income is above that, you cannot contribute to a Roth IRA. If you are interested, there is a workaround called the Backdoor Roth IRA if your income is above the limits.
2013 Contribution Deadlines

You can still make 2013 contributions before the end of the year for your 401k. The deadline for 2013 IRA contributions is April 15, 2014, the same as the tax deadline.
More Helpful Roth Topics

To Roth 401k or Not to Roth 401k? Can You Have a Roth 401k and a Roth IRA at the Same Time? How to Make Early Roth IRA Withdrawals How to Track Your Roth IRA Contributions and Why You Need To!
Written by Madison
11/2:
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Hoisington Investment Management Quarterly Review and Outlook

Third Quarter 2013
Federal Reserve Failures The Fed's capabilities to engineer changes in economic growth and inflation are asymmetric. It has been historically documented that central bank tools are well suited to fight excess demand and rampant inflation. The Fed showed great resolve in containing the fast price increases in the aftermath of World Wars I and II and the Korean War. Later, in the late 1970s and early 1980s, rampant inflation was brought under control by a determined and persistent Federal Reserve. However, when an economy is excessively over-indebted and disinflationary factors have forced central banks to make overnight interest rates as close to zero as possible, central bank policy has repeatedly proved powerless to further move inflation or growth metrics. The periods between 1927 and 1939 in the U.S. (and elsewhere) and from 1989 to the present in Japan are clear examples of the impotence of central bank policy actions during periods of over-indebtedness. Four considerations suggest the Fed will continue to be unsuccessful in engineering stronger growth and higher inflation with their continuation of the current program of Large Scale Asset Purchases (LSAP). First, the Fed's forecasts have consistently been overly optimistic, indicating that their knowledge of how LSAP operates is flawed. LSAP obviously is not working in the way they had hoped, and they are unable to make needed course corrections. Second, debt levels in the U.S. are so excessive that monetary policy's traditional transmission mechanism is defunct. Third, recent scholarly studies, all employing different rigorous analytical methods, indicate LSAP is ineffective. Fourth, declining velocity deprives the Fed of the ability to have a measurable influence on aggregate economic activity and is an alternative way of confirming the validity of the aforementioned academic studies. The Fed's Forecasts First, if the Fed were consistently getting the economy right, then we could conclude that their understanding of current economic conditions is sound. However, if they regularly err, then it is valid to argue that they are misunderstanding the way their actions affect the economy. During the current expansion the Fed's forecasts for real GDP and inflation have been consistently above the actual outcomes. Late last year, the midpoint of the Fed's central tendency forecast projected an increase in real GDP of 2.7% for 2013. This estimate could miss the mark by nearly 50%. One possible reason why the Fed has consistently erred on the high side in their growth forecasts is that they assume higher stock prices will lead to higher spending via the so-called wealth effect. The Fed's ad hoc analysis on this subject has been wrong and is in conflict with econometric studies. The studies suggest that when wealth rises or falls consumer spending does not generally respond, or if it does respond it does so feebly. During the run-up of stock and home prices over the past three years, the year-over- year growth in consumer spending has actually decelerated sharply from over 5% in early 2011 to just 2.9% in the four quarters ending Q2 (Chart 1). Reliance on the wealth effect played a major role in the Fed's poor economic forecasts. LSAP has not been able to spur growth and achieve the Fed's forecasts to date and certainly undermines the Fed's continued assurances that this time will truly be different.
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Excessive Debt Second, another impediment to LSAP's success is the Fed's failure to consider that excessive debt levels block the main channel of monetary influence on economic activity. Scholarly studies published in the past three years document that economic growth slows when public and private debt exceeds 260% to 275% of GDP. In the U.S., from 1870 until the late 1990s, real GDP grew by 3.7% per annum. It was during 2000 that total debt breached the 260% level. Since 2000 growth has averaged a much slower 1.8% per annum. When total debt moved into this counterproductive zone, other far reaching and unintended consequences became evident. The standard of living, as measured by real median household income, began to stagnate and now stands at the lowest point since 1995. Additionally, since the start of the current economic expansion, real median household income has fallen 4.3%, a totally unprecedented occurrence. Moreover, both the wealth and income divides have seriously worsened. Over-indebtedness is the primary reason for slower growth, and unfortunately the Fed's activities to date have had only negative, unintended consequences. Scholarly Studies on Large Scale Asset Purchases The third item that points toward monetary ineffectiveness is the academic research indicating that LSAP is a losing proposition. The United States now has had five years of experience with which to evaluate the efficacy of LSAP, during which time the Fed's balance sheet has increased a record fourfold. Undeniably, the Fed has conducted an all-out effort to restore normal economic conditions. While monetary policy works with a lag, the LSAP has been in place since 2008 with no measurable benefit. This lapse of time is now far greater than even the longest of the lags measured in the extensive body of scholarly work regarding monetary policy. Three different studies by respected academicians have independently concluded that indeed these efforts have failed. These studies, employing various approaches, have demonstrated that LSAP cannot shift the Aggregate Demand (AD) Curve (Chart 2). The AD curve intersects the Aggregate Supply Curve to determine the aggregate price level and real GDP and thus nominal GDP. The AD curve is unresponsive to monetary actions. Therefore the price level and real GDP, and thus nominal GDP, are stuck. In this circumstance, the actions of the Fed are irrelevant.
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The papers we reference were presented at the Jackson Hole Monetary Conference in August 2013. The first is by Robert E. Hall, one of the world's leading econometricians and a member of the prestigious NBER Cycle Dating Committee. He wrote, "The combination of low investment and low consumption resulted in an extraordinary decline in output demand, which called for a markedly negative real interest rate, one unattainable because the zero lower bound on the nominal interest rate coupled with low inflation put a lower bound on the real rate at only a slightly negative level." Dr. Hall also wrote the following about the large increase in reserves to finance quantitative easing: "An expansion of reserves contracts the economy." In other words, not only has the Fed not improved matters, they have actually made economic conditions worse with their experimentation. Additionally, he presented evidence that forward guidance and GDP targeting both have serious problems and that central bankers should focus on requiring more capital at banks and more rigorous stress testing. The next paper is by Hyun Song Shin, another outstanding monetary theorist and econometrician and holder of an endowed chair at Princeton University. He looked at the weighted-average effective one year rate for loans with moderate risk at all commercial banks, the effective Fed Funds rate and the spread between the two in order to evaluate Dr. Hall's study. He also evaluated comparable figures in Europe. In both the U.S. and Europe these spreads increased, supporting Hall's analysis. Dr. Shin also examined quantities such as total credit to U.S. non-financial businesses. He found that lending to non-corporate businesses, which rely on the banks, has been essentially stagnant. Dr. Shin states, "The trouble is that job creation is done most by new businesses, which tend to be small." Thus, he found "disturbing implications for the effectiveness of central bank asset purchases" and supported Hall's conclusions. Dr. Shin argued that we should not forget how we got into this mess in the first place when he wrote, "Things were not right in the financial system before the crisis, leverage was too high, and the banking sector had become too large." For us, this insight is highly relevant since aggregate debt levels relative to GDP are greater now than in 2007. Dr. Shin, like Dr. Hall, expressed extreme doubts that forward guidance was effective in bringing down longer-term interest rates. The last paper is by Arvind Krishnamurthy of Northwestern University and Annette Vissing- Jorgensen of the University of California, Berkeley. They uncovered evidence that the Fed's LSAP program had little "portfolio balance" impact on other interest rates and was not macro stimulus. A limited benefit did result from mortgage- backed securities purchases due to announcement effects, but even this small plus may be erased once the still unknown exit costs are included. Drs. Krishnamurthy and Vissing-Jorgensen also criticized the Fed for not having a clear policy rule or strategy for asset purchases. They argued that the absence of concrete guidance as to the goal of asset purchases, which has been vaguely defined as aimed toward substantial improvement in the outlook for the labor market, neutralizes their impact and complicates an eventual exit. Further, they wrote, "Without such a framework, investors do not know the conditions under which (asset buys) will occur or be unwound." For Krishnamurthy and Vissing-Jorgensen, this "undercuts the efficacy of policy targeted at longterm asset values." Money Velocity The fourth problem the Fed faces in their LSAP program is their inability to control the velocity of money. The AD curve is planned expenditures for nominal GDP. Nominal GDP is equal to the velocity of money (V) multiplied by the stock of money (M), thus GDP = M x V. This is Irving Fisher's equation of exchange, one of the important pillars of macroeconomics. V peaked in 1997, as private and public debt were quickly approaching the nonproductive zone (Chart 3). Since then V has plunged. The level of V in the second quarter is at its lowest level in six decades. By allowing high debt levels to accumulate from the 1990s until 2007, the Fed laid the foundation for rendering
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monetary policy ineffectual. Thus, Fisher was correct when he argued in 1933 that declining velocity would be a symptom of extreme indebtedness just as much as weak aggregate demand. Fisher was able to make this connection because he understood Eugen von Bhm-Bawerk's brilliant insight t hat debt is future consumption denied. Also, we have the benefit of Hyman Minsky's observation that debt must be able to generate an income stream to repay principal and interest, thereby explaining that there is such a thing as good (productive) debt as opposed to bad (non-productive) debt. Therefore, the decline in money velocity when there are very high levels of debt to GDP should not be surprising. Moreover, as debt levels increase so does the risk that it will be unable to generate the income stream required to pay principal and interest.
Unintended Consequences The relentless Fed purchasing of massive amounts of securities has produced no positive economic developments but has had significant negative, unintended consequences. For example, resource allocation in the banking system can be affected. Banks have a limited amount of capital with which to take risks with their portfolio. With this capital, they have two broad options. First, they can confine their portfolio to their historical lower risk role of commercial banking operations the making of loans and standard investments. However, with interest rates at extremely low levels the profit potential from such endeavors is minimal. Second, they can allocate resources to their proprietary trading desks to engage in leveraged financial or commodity market speculation. By their very nature these activities are potentially far more profitable, but also much riskier. Therefore, when resources are allocated to the riskier alternative in the face of limited bank capital , fewer resources are available for traditional lending. This deprives the economy of the funds needed for economic growth even though the banks may be able to temporarily improve their earnings by aggressive risk taking. Perversely, confirming the point made by Dr. Hall, a rise in stock prices generated by excess reserves may deprive, rather than supply, funds needed for economic growth. Determining with certainty whether funds are being deprived is difficult, but a visible piece of evidence confirms that this is occurring. This factor is the unprecedented downward trend in the money multiplier. The money multiplier is the link between the monetary base (highpowered money) and the money supply (M2). The money multiplier is calculated by dividing the base into M2. Today, the monetary base is $3.5 trillion, and M2 stands at $10.8 trillion. By dividing the monetary base into M2, the money multiplier is 3.1. In 2008, prior to the Fed's massive expansion of the monetary base, the money multiplier stood at 9.3, meaning that $1 of base supported $9.30 of M2. If reserves created by LSAP were spreading throughout the economy in the traditional manner, then the money multiplier should be more stable. However, if those reserves were essentially funding speculative activity, then reserves would remain with the large banks, and the money multiplier would fall. This is the current condition. The September 2013 level of 3.1 is the lowest in the entire 100-year history of the Federal Reserve (Chart 4). Until the last five years, the money multiplier never dropped below the old historical low of 4.5 reached in late 1940. Thus, LSAP may have produced the unintended consequence of actually reducing economic growth. Stock market investors benefited, but this did not carry through to the broader economy. The net result is that LSAP worsened the gap between high and low income households. When policy makers try untested theories, unknown risks are almost impossible to anticipate.
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Interest Rates Economic growth should be very poor in the final months of 2013. Growth is unlikely to exceed 1%, even less than the already anemic 1.6% rate of growth in the past four quarters. Marked improvement in 2014 is also questionable. Nominal interest rates have increased this year, and real yields have risen even more sharply because the inflation rate has dropped significantly. Due to the recognition and implementation lags, only half of the $275 billion 2013 tax increase will have been registered by the end of the year, with the remaining impact occurring in 2014 and 2015. Currently, many of the taxes and other cost burdens of the Affordable Care Act are in the process of being shifted from corporations and profitable small businesses to households, thus serving as a de facto tax increase. In such conditions, the broadest measures of inflation, which are barely exceeding 1%, should weaken further. Since LSAP does not constitute macro- stimulus, its continuation is equall y meaningless. Therefore, the decision of the Fed not to taper is inconsequential for the outlook for economic growth. We expect the downward trend in long- term Treasury bond yields to resurface as these weaker growth and softer inflationary conditions persist. Van R. Hoisington Lacy H. Hunt, Ph.D. 11/3: Well, only one of the two commentaries is correct. I like the one above
Fed stays course on bond buying

The US Federal Reserve said the worlds largest economy is still expanding at a moderate pace in a statement that suggests a slowing of asset purchases in December or January is still under consideration. The rate-setting Federal Open Market Committee made no changes to policy at its October meeting, keeping its asset purchases steady at $85bn a month, but the statement implied it does not see a lot of damage from a three-week government shutdown earlier this month.
11/2 Dementia and Incontinence Treatment By Sandra Ray, Staff Writer
Dementia is a devastating disease that affects approximately 24 million people worldwide; its most common form, Alzheimers disease, affects more than 4.5 million people in the U.S. according to the Alzheimers Association. The disease slowly robs individuals of their memory, cognitive functioning, and eventually renders the person almost completely dependent upon others for their daily care. Though the causes are not completely understood, caregivers feel the strain of the disease daily as they help those
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affected with dementia to navigate the simplest of tasks such as getting dressed or eating meals. Urinary and fecal incontinence can also be present in those who are affected with dementia. Though this loss in bodily functioning may be inevitable, it can be uncomfortable and embarrassing to the patient and the caregiver. Incontinence can be caused by a variety of issues, and it may help to understand some of those causes to help the household cope with it. The National Association for Continence (www.nafc.org) relates that most people wait an average of seven years before seeking treatment. This delay in seeking help often exacerbates an already stressful situation for both patients and caregivers. Urinary Incontinence In its simplest form, urinary incontinence is when someone does not have complete control over when he or she urinates. It may appear due to several reasons, and to make certain which one it is, the patient should be examined by a physician as soon as possible. Stress Incontinence - women who have had a baby or two may understand this type of incontinence the best. A forceful sneeze or cough may cause urine leakage since the muscles in the pelvic region can be loosened by childbirth. Normally Kegel exercises (tightening and releasing the pelvic muscles several times per day) can provide some strengthening, although it may not work for all women. Urge Incontinence - the urge to urinate may develop suddenly, resulting in urine leakage. Many people who have this type of incontinence are not given ample warning to get to the bathroom in time before leakage occurs. It is fairly common in the elderly, although it can be a sign of a bladder or kidney infection. If an infection is causing the incontinence, antibiotics can generally clear up the condition within a short period of time. Overflow Incontinence - this type of incontinence is more common in men than women and results from an overfull bladder that does not empty effectively. It results in urine leaking on almost a continual basis. A blockage in the urinary tract system is generally the cause, like an enlarged prostate or other obstruction. A physical exam is a must for this type of incontinence in order to accurately diagnose and treat the condition. Functional Incontinence - in this type of incontinence loss of bladder control is caused by other conditions. For example, the person who is arthritic and does not move well may develop incontinence due to their inability to get to the bathroom in time. As dementia develops over time, this type of incontinence may be more prevalent and possibly more frustrating to treat since the cause is a symptom of the underlying disease and not easily attributed to an infection or other issue. Bowel Incontinence This type of incontinence causes a great deal of distress for many persons with dementia and their caregivers. Bowel incontinence can be partial when only a small amount of liquid waste leaks before toileting. Complete incontinence results when the person is unable to control any aspect of the bowel movement. Seeking Treatment In order to understand why someone has developed incontinence, a medical exam is definitely in order. Since there may be special complications due to dementia, it is best to start with the patients primary physician since he or she is most familiar with the patient and their health history. He may order a visit to a urologist, a specialist in urinary conditions for men and women. It is important to remember, however, that a urologist is a surgeon and may not focus on non-surgical solutions, like the ones that will be discussed later. When visiting the doctor, bring a description of how incontinence is affecting the patients life, including an overview of their daily routine. Some doctors recommend keeping a continence diary to provide a four or five day snapshot of what is happening at home. Be prepared to answer questions like the ones suggested by the National Association for Continence. The questions below are only a few from their suggestions. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. How much water does the patient drink every day? What foods is the patient eating? Does the patient have any control over urination? Is the problem better or worse during the daytime or at night? Is it linked to a physical condition (inability to move quickly, for example)? When did the incontinence first appear? Is the patient upset by their incontinence? How many episodes does the patient have and in what time period? Does the patient understand the signal or urge to urinate or are they unaware of the need? Is there a burning or painful sensation when the patient needs to urinate?
Treatment Options
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If the incontinence is due to an underlying medical condition, such as a urinary tract infection or a bowel obstruction, treatment can range from antibiotics to surgical intervention. The decision, of course, will be based on the severity of the condition and the best course of action for the patient. It is important to remember that incontinence is not a disease, but rather a symptom of an underlying issue that has developed with the patient. If a medical condition is readily ruled out, the doctor may move on to other options like medications that treat the bladders urge to urinate or the frequency with which the bladder sends the alarm to the body that urination is about to occur. These medications are generally anticholinergics and have the effect of reducing frequent urges to urinate when the patient is unable to make it to a toilet fast enough. These urges may be made worse by the dementia since the signal that urination is about to occur may be misunderstood or misinterpreted by the patient. Recently, however, researchers with the Wake Forest University School of Medicine uncovered a serious problem with older anticholinergic medications and medicines that are used to lessen the mental decline in cognitive functioning in some dementia patients. In many patients, the anticholinergic medications that treat incontinence interfere or counteract the medications that are also treating dementia. In other words, patients with dementia may experience a more rapid decline in mental functioning while taking anticholinergic medications. For these patients, treating the incontinence with medication is worse than finding alternative solutions for working with the issue. There are newer anticholinergic medications that were developed since the studys original test results in 2003 and 2004 which may or may not have this effect. This is perhaps the best reason to discuss any medications that a dementia patient takes with their primary doctor before starting a new treatment course. There are other non-medication or surgical methods that can be used to treat incontinence at home. Adaptive clothing may be able to help if functional incontinence is an issue. Replacing hard-to-manipulate buttons and snaps with Velcro and zippers may be a quick fix if it appears that the patient is aware of the incontinence and wants to correct it without too much intervention on the part of the caregiver. This approach gives the patient more control over their environment and encourages independence. It also affords the patient the most privacy which is often a serious source of angst for many patients. There are also incontinence products for all ages and sizes that may be helpful, although the patient may have difficulty understanding their use and disposal. Communicating the need for these products may be a challenge, and the caregiver may need to explain their use more than one time in order for the patient to understand. Other methods may be home modifications or adding a portable toilet chair to the room(s) where the patient spends most of his or her time. This method is relatively easy to implement, although it may need some additional explanation since patients with dementia wonder why the caregiver is altering the living situation or the layout of a particular room. Any approach that changes the daily routine of a dementia patient drastically should be undertaken thoughtfully and with as much input from the patient as possible. The doctor may also recommend changes in diet, both fluid and foods, that can help treat incontinence. If bowel movements are not regular or consistent, then changing foods in the diet may make a significant improvement within a relatively short period of time. The patient may or may not resist such changes, especially if he or she has developed a resistance or affinity to particular foods due to dementia. It is important to discuss dietary changes with a physician or dietician so the patient is still eating balanced meals and snacks. Fluid intake should also be closely monitored. Caregivers of dementia patients should understand that incontinence may be an inevitable part of the overall cognitive decline. As a person loses awareness of their surroundings, lifestyle, and loved ones, it is not surprising that loss of bodily functioning will also occur. It may be a tremendous source of frustration for both the caregiver and the patient. Communicating the incontinence issues early with the patients healthcare team can help reduce some of the frustration that the household may have with the issue. Even though it can be an uncomfortable subject, it is important that the full needs of the patient be addressed. The sooner incontinence is addressed, the quicker the patient and the caregiver can begin to work with options that may reduce the frustration or embarrassment that is involved. Debt is future consumption denied. 11/2:
United States GDP Growth Rate

The Gross Domestic Product (GDP) in the United States expanded 2.50 percent in the second quarter of 2013 over the previous quarter. GDP Growth Rate in the United States is reported by the Bureau of Economic Analysis. From 1947 until 2013, the United States GDP Growth Rate averaged 3.2 Percent reaching an all time high of 17.2 Percent in March of 1950 and a record low of -10.4 Percent in March of 1958. The United States has one of the most diversified and most technologically advanced economies in the world.
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Finance, insurance, real estate, rental, leasing, health care, social assistance, professional, business and educational services account for more than 40 percent of GDP. Retail and wholesale trade creates another 12 percent of the wealth. The government related services fuel 13 percent of GDP. Utilities, transportation and warehousing and information account for 10 percent of the GDP. Manufacturing, mining, and construction constitute 17 percent of the output. Agriculture accounts for only 1.5 percent of the GDP, yet due to use of advance technologies, the United States is a net exporter of food. This page contains - United States GDP Growth Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news
10/30: DRUG REHAB ALLTREATMENT.COM IS A DRUG REHAB CENTER DIRECTORY AND SUBSTANCE ABUSE INFORMATION RESOURCE. OUR WEBSITE IS DEDICATED TO EDUCATING OUR USERS ABOUT DRUG AND ALCOHOL ADDICTION.
1-/30: Social Security Benefits For Caregivers People all over the country are helping their moms save as much as $3,600 per year on the costs of prescription drugs. You can too! We all know the high cost of medicine can be a burden on mothers who have limited income and resources, said Michael W. Grochowski, Regional Commissioner for Social Security in the Kansas City Region. This Mothers Day tell your loved ones about the extra help that is available to pay part of their Medicare prescription drug costs and then help them apply. This extra help could be worth as much as $3,600 per year. To figure out whether your mother is eligible, Social Security needs to know her income and the value of her savings, investments and real estate (other than the home she lives in). To qualify for the extra help, she must be receiving Medicare and also have: Income limited to $15,600 for an individual or $21,000 for a married couple living together. Even if her annual income is higher, she still may be able to get some help with monthly premiums, annual deductibles and prescription copayments. Some examples where income may be higher include if she or her spouse: Support other family members who live with them; 0 Have earnings from work; or 1 Live in Alaska or Hawaii; and Resources limited to $11,990 for an individual or $23,970 for a married couple living together. Resources include such things as bank accounts, stocks and bonds. We do not count her house and car as resources. Social Security has an easytouse online application at socialsecurity.gov that you can help complete for your mom. In fact, anyone family members, friends and caregivers can help her complete an application. She can also apply by phone at 18007721213 (TTY 18003250778). Or go to the nearest local Social Security office. 10/29: WOW= Academic research published by the Review of Financial Studies in 2009 found the average British mutual fund charged 2.21 percent of its clients assets annually, compared with 1.04 percent in the U.S 10/29: Fannie Mae, Freddie Mac Eliminating Pension Plans Starting Dec. 31 "The companies plan to transition employees into new retirement accounts, such as 401(k)s, by offering a series of payments over the next five years. 'FHFA has directed us to make these changes to manage the cost of the retirement benefits at a more predictable rate and to limit long-term liabilities,' 10/28: Fees Alternative funds, on average, cost 1.77 percent of assets, according to Morningstar, compared with 1.28 percent for the average actively managed mutual fund. Hedge funds, however, generally charge up to 2 percent of assets and 20 percent of your profits.
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This year, 55 new alternative funds have been introduced, bringing the total number of funds to about 400. 10/30 People with End-Stage Alzheimers Need More Palliative Care By Jennifer B. Buckley ( A new study released, suggests more than 50% of people living with end-stage Dementia caused by Alzheimers Disease or Vascular Dementia, will die within 6 months of developing pneumonia or fracturing a hip. Similar to cancer, end-stage dementia is a terminal illness and the study encourages a more palliative or comfort approach to care rather than having the patient endure invasive testing and treatments if they receive a poor prognosis. The study was conducted by researchers at the Mount Sinai School of Medicine in Manhattan and published in the Journal of the American Medical Association. The approach to treatment should ultimately be left to the caregiver or loved one as the person with advanced dementia or Alzheimers disease is probably mentally incapable to make the decision. End-stage dementia affects 1.8 million Americans and is categorized by a patients inability to recognize friends or family members, perform daily tasks like, dressing or bathing, or lack communicative skills. Many people with advanced stage Alzheimers experience repeated infections and other complications and physicians do not have enough research currently, to treat patients for these common conditions. The study compared 216 advanced dementia patients and cognitively intact adults, which were hospitalized for either pneumonia or a fractured hip, and examined their six- month survival. Pneumonia and hip fractures were chosen because they are common in both groups and associated with notable pain and discomfort. The results of the study concluded a high six-month mortality rate for people with end-stage dementia compared with the cognitively intact adults when admitted into the hospital for pneumonia (53% compared with 13%) and for hip fractures (55% compared with 12%). Both groups of patients received almost identical care practices in their hospital stay including; painful diagnostic and therapeutic procedures which can be extremely frightening for an end-stage dementia patient who doesnt understand what is happening to him or her. However, the patients with end-stage dementia received less pain medication than the cognitively intact adults. The under treatment of pain in dementia patients likely results from the fact that these patients often cannot communicate what they are feeling or that they are in pain, according to Dr. R. Sean Morrison, Assistant Professor, The Lillian and Benjamin Hertzberg Palliative Care Institute at Mount Sinai. Doctors and nurses sometimes dont realize these patients are in pain so standing orders for pain medication such as morphine should be given, meaning with or without the expressed interest of the patient. This new evidence will help to persuade doctors and caregivers to view pneumonia or hip fractures as a terminal illness in advanced stage Alzheimers patients, even with aggressive treatment. Therefore, communication about the course of treatment should be established between the physician and caregiver, weighing the patients level of comfort against life-prolonging treatments. Caregivers, caring for a loved-one with end-stage dementia or Alzheimers, should communicate interest to their doctors about more comprehensive palliative care. This will ensure more comfort for their loved-one during their end-of-life care. 10/3: Lawmakers still get a check, even in shutdown mode Someone want to tell me how that makes sense? From the president on down, they should feel the impact of no pay just like all the rest. Morons Or maybe we are the morons for selecting children to the office 10/3: Obamacare
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getting insurance through Obamacare can basically be boiled down to five questions. 1) Are you insured by the government? 2) Are you insured by an employer? 3) How much does your family earn? 4) is that less than 400 percent of the poverty line, or $92,000 for a family of four? 5) Did your state accept the Medicaid expansion? 10/3: The Health Insurance Marketplace
Enroll now in a plan that covers essential benefits, pre-existing conditions, and more. Plus, see if you qualify for lower costs.
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10/2:c A recent history of Americas debt ceiling, in one interactive graphic\ Since 1980, the debt ceiling has been raised 42 times. It was raised 17 times under Ronald Reagan, four times under Bill Clinton and seven times under George W. Bush. Congress is currently in a contentious debate with the White House on whether to raise the ceiling again by mid-October, which would be the sixth increase under Barack Obama. Bars indicate the debt each month of the year. 10/1: NOT VERY BRIGHT a new study from the Finra Investor Education Foundation surveyed more than 2,000 investors, age 40 and older. It found that more than 80 percent of them had been approached with potentially fraudulent offers and that 40 percent of all respondents were unable to spot classic red flags of fraud implicit warnings that they were in danger of being fleeced. When it comes to financial fraud, America is a nation at risk, said Gerri Walsh, president of the foundation, in an interview. Investment pitches are all around us, and many of them are scams. Whats more, she said, The ability of most Americans to spot these persuasion techniques is dismal.
Magnificant display
10/1: The Global AgeWatch Index ranks countries by how well their ageing populations are faring. It is based on four domains that are key enablers of older people's wellbeing: income, health, employment and education, and enabling environment. Download the Index Insight report, view the Global AgeWatch country ranking table
9/25: debt ceiling:
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a measure of how worried investors are that the United States will default on its debts. Note the trend over the last several months, and note how, on Monday, it changed. 9/25:
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RED IS TIGHTENING, ORANGE IS NO BIAS GREEN IS FOR EASING 9/24: Not good and certainly a reason for the non taper
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9/23: Lapse rate LTC- Underwriters anticipated that 5% to 6% of policy holders would let their plans lapse. In reality, it was closer to 1% to 2% 9/23: ADL= bathing, dressing, eating, maintaining continence, toileting and transferring from bed to chair
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9/23: Hedging Heres the thing about hedge fund managers: Its all about the money making it and preserving it. That mission differs from financial advisors who, in addition to making money for their clients, serve as human lightning rods that absorb the emotional and spiritual dislocation associated with having and keeping wealth. Since hedge fund managers have one thing to do and charge dearly for it at 2% of assets and 20% of gains, more than any other financial advisor or asset manager youd think that they would be excellent at making money for clients. It turns out that at least as an industry theyre not. The strategy, marked by the holding of long and short positions to hedge against loss in down markets, turned in a very anemic 4% this year through Aug. 9 (this according to a study by Goldman Sachs referenced in a recent Wall Street Journal article). The prolonged bull market has been unkind to hedge fund managers; the S&P 500 lapped hedge funds with 20% returns in the same time period.
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9/23: LTC the average couple retiring in 2013 will spend about $220,000 on medical care. Meanwhile, almost 70% of people age 65 will eventually require some level of services to meet their personal care needs over an extended period of time, a new type of insurance known as a combination policy. Combinations are sold as life insurance but can be applied towards long-term care. Such policies will cover a year or two of nursing home care, or a longer period of in-home care, but will pay out the unused principal as a death benefit to the clients heirs. An added benefit is that they are usually guaranteed against rate increases. 9/23 And the heavy hitters did nothing wrong
JPMorgan hit with $9 !" in fines o#er $whale$ trade

US and UK authorities hit JPMorgan Chase will pay $920m in fines on for wrongdoing related to the London whale trading losses, which saw the largest US bank by assets lose $6bn. Jamie Dimon, chief executive, and his top lieutenants, .A London-based executive was the most senior JPMorgan employee to be singled out, accused of not responding properly to regulator enquiries.
: 9/23: Looking better but most of the economy is built on sand. See budget deficit, pension liabilities, poor versus rich. 1. How will your firms total production for the third quarter compare with that of the second quarter? Expected Third Quarter Production Growth: % of firms Increase of more than 6% 12.5% Increase of 2-6% 20.0% Increase of less than 2% 23.8% Total increase No change 13.8% Decrease of less than 2% 6.3% Decrease of 2-6% 11.3% Decrease of more than 6% 18.8% Total decrease Average growth expected for all firms: 1.6%*
avoided specific criticism
56.3%
28.8%
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2. For the upcoming fourth quarter, what growth do you expect for production at your plant compared with third quarter growth? Significant acceleration 5.0% Some acceleration 21.3% Slight acceleration 17.5% Subtotal: Acceleraton 43.8% No change 25.0% Slight deceleration 11.3% Some deceleration 11.3% Significant deceleration 7.5% Subtotal: Deceleration 30.1% * Firms provided more precise growth rates than shown in table. Percentages may not add to 100 percent because not all firms answered all questions. 9/22: When we talk about death and certain atrocities, war, etc. it is somewhat hypocritical.
Every day in America, another 27 people die as a result of drunk driving crashes..
9/18: 1. Stock Investments for Old-Age: Less Return, More Risk, and Unexpected Timing Date: 2013 By: Dirk Ulbricht URL: http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1324&r=rmg Returns merely based on one purchasing price of an asset are uninformative for people regularly contributing to their old-age provision. Here, each purchase has an influence on the outcome. Still, they are commonly used in finance literature, giving an overly optimistic view of expected long-term stock market returns and risks. Moreover, around business cycle turning points when volatility is high, these differences are accentuated so that the timing of market entries and exists differ substantially. This article compares risk and returns for regular and lump-sum investors for all possible intervals of investments in the Dow Jones Industrial Average ranging from one to 480 months from January 1934 to April 2013. Moreover, the optimal timing for the two types of investors in the run-up to business cycle turning points are contrasted. Lump-sum returns for forty year-horizons overstate regular contributors yields by 1.4 perc entage points implying a forty percent higher terminal value. The Sharpe ratio of lump-sum investments is about 260 percent higher than for regular contributors, and the risk of negative returns disappears for horizons that are six years shorter. Increasing contributions deteriorate risk and returns. While lump-sum investors have eight months more time to switch to riskless assets before a contraction, regular contributors may return five months earlier to the stock market than lump-sum investors.
9/18: Home Inspectors nationally 9/18: Unequal
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9/18: 1. Time Varying Risk Aversion Date: 2013 By: Luigi Guiso (EIEF and CEPR) Paola Sapienza (Northwestern University, NBER and CEPR) Luigi Zingales (University of Chicago, NBER and CEPR) URL: http://d.repec.org/n?u=RePEc:eie:wpaper:1322&r=rmg We use a repeated survey of a large sample of clients of an Italian bank to measure possible changes in investors risk aversion following the 2008 financial crisis. We find that both a qualitative and a quantitative measure of risk aversion increase substantially after the crisis. These changes are correlated with changes in portfolio choices, but do not seem to be correlated with standard factors that affect risk aversion, such as wealth, consumption habit, and background risk. This opens the possibility that psychological factors might be driving it. To test whether a scary experience (as the financial crisis) can trigger large increases in risk aversion, we conduct a lab experiment. We find that indeed students who watched a scary video have a certainty equivalent that is 27% lower than the ones who did not. Following a sharp drop in stock prices,a fear model predicts that individuals should sell stocks, while the habit model has the opposite implications; people should actively buy stocks to bring the risky assets to the new optimal level. We show that after the drop in stock prices in 2008 individuals rebalanced their portfolio in a way consistent to a fear model.
9/17: Slow- too slow "According to the February 2013 CBO estimates, for example, potential growth of the labor supply has been irregularly slowing from 2.5% annual growth from 1974-1981 to only 0.8% from 2002-12 and is projected to slow further to only 0.6% over the next five years," says Feroli. "The slowdown in potential labor force growth has been accompanied by a similar slowdown in actual labor supply." while working-age population growth stood at 0.92% in 2012, the Census Bureau estimates that average growth over the next five years will
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fall further to 0.74%, and by 2050 (based on best estimates for birth rates, death rates, and net migration), 0.51%. 9/17: The percentage of American workers expecting to work after turning 65 has risen more than three-fold since 1991, with 25% adjusting their timetable in just the past year, according to EBRI. More than a third (36%) of workers plan to work past 65, up from 11% in 1991 with 7% indicating that they have no plans to retire at all. Of the 25% who adjusted their retirement age this year, 88% indicated that they would work longer. 9/17: Abnoraml GDP growth
9/17: 1. Time Varying Risk Aversion Date: 2013 By: Luigi Guiso (EIEF and CEPR) Paola Sapienza (Northwestern University, NBER and CEPR) Luigi Zingales (University of Chicago, NBER and CEPR) URL: http://d.repec.org/n?u=RePEc:eie:wpaper:1322&r=cbe We use a repeated survey of a large sample of clients of an Italian bank to measure possible changes in investors risk aversion following the 2008 financial crisis. We find that both a qualitative and a quantitative measure of risk aversion increase substantially after the crisis. These changes are correlated with changes in portfolio choices, but do not seem to be correlated with standard factors that affect risk aversion, such as wealth, consumption habit, and background risk. This opens the possibility that psychological factors might be driving it. To test whether a scary experience (as the financial crisis) can trigger large increases in risk aversion, we conduct a lab experiment. We find that indeed students who watched a scary video have a certainty equivalent that is 27% lower than the ones who did not. Following a sharp drop in stock prices,a fear model predicts that individuals should sell stocks, while the habit model has the opposite implications; people should actively buy stocks to bring the risky assets to the new optimal level. We show that after the drop in stock prices in 2008 individuals rebalanced their portfolio in a way consistent to a fear model.
1. Physical Activity and Thinking: An Investigation of their Relationship Date: 2013 By: Todd McElroy David L. Dickinson Nathan Stroh Christopher A. Dickinson URL: http://d.repec.org/n?u=RePEc:apl:wpaper:13-17&r=cbe Physical activity level is becoming more recognized as a primary factor in overall human health and obesity. Humans possess a number of traits that influence their physical activity level. We examined whether having a high or low desire to engage in challenging mental activity predicted differences in daily physical activity levels. We recruited 30 high need for cognition (NFC) individuals and 30 low-NFC individuals and measured their physical activity level in 30-second epochs over a 1-week period. Low-NFC individuals were more physically active overall but this difference was most pronounced during the 5-day work week and lessened during the weekend. Awareness of this physical activity deficit and its negative consequences may encourage high-NFC
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individuals to be proactive and adopt lifestyle changes to increase their physical activity levels. Key Words: Daily activity, Cognition, Obesity, Risk
9/16: pension gap (Mauldin)
the $4.1 trillion funding shortfall includes only state-run pensions, meaning that funding gaps at local levels of government are not included. Many cities and counties invest their funds with state pension plans rather than managing them separately, but the best estimatet was that if you included all the separately managed city and county pensions, it might increase the total amount by anywhere from 10 to 20%.
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Unfunded liabilities have the potential to become just as big a problem as subprime credit or European sovereign debt. The problems are mounting, and while in most areas they can be dealt with today, the longer the solutions are put off, the less possible they will be. Either taxpayers will have to pay more, or benefits will have to be changed, or other services that people expect from local governments will have to be severely curtailed.
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9:16: Not happy the public is not convinced that the economy is on the mend. Only one-third say the economic system is more secure now than in 2008, and 52 percent say they disapprove of Obama's handling of the economy, according to a Pew Research Center poll. There is still plenty of pain to justify their pessimism. 1. Despite job growth, the unemployment rate remains high at 7.3 percent. Though the rate has fallen, one of the reasons is because some people have dropped out of the labor force and no longer are counted as job seekers. The income gap between the very rich and the rest of the population is the biggest since 1928. 9/16: Obesity LIZ NEPORENT More than 36 percent of Americans are now considered obese, according to the U.S. Centers for Disease Control and Prevention. An additional 34 percent are considered overweight. 1. These statistics are quoted so often that many people may no longer find them surprising. Yet what may still be surprising is how far the effects of obesity reach beyond clothing size and cardiovascular risks. In addition to health, it can also impact other aspects of your life, including family relationships and income. Read on to learn about seven ways carrying those extra pounds may be influencing the way you live. More Migraines A new study published in the journal Neurology revealed what a real headache carrying extra weight can be. Johns Hopkins researchers surveyed nearly 4,000 people to find that the higher their body mass index, the greater their chances were of having episodic migraines. Those who were obese were 81 percent more likely to experience at least 14 migraine headaches each month compared to people who were a healthy weight. Obese women over the age of 50 suffered from chronic headaches the most. More Cancer The National Cancer Institute associates 34,000 new cases of cancer in men and 50,000 in women each year with obesity. Right now the link between excess weight and cancer is purely circumstantial and not necessarily cause-and-effect, but experts have floated some theories as to why more body fat tracks with higher rates of cancer. "It could be that excess fat cells increase hormonal activity or they increase growth factors that lead to tumor growth," said Dr. Raul Seballos, vice chairman of preventive medicine at the Cleveland Clinic. Obese people are at higher risk for all cancers, Seballos said. They are often diagnosed in later stages of cancer than thinner people and are more likely to die from the disease. Some emerging data looking at weight-loss surgery patients suggests that some of this risk can be diminished by losing weight. Infertility Increases Overweight women have a harder time getting pregnant. One Indian study of 300 morbidly obese women found that over 90 percent of them developed polycystic ovarian disease, a condition associated with infertility, over a three-year period. As with cancer, the association between obesity and infertility isn't entirely clear.
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"Obesity is an inflammatory state and that alone might decrease fertility," noted Dr. Marc Bessler, director of the Center for Weight Loss and Metabolic Surgery at New York Presbyterian Hospital at Columbia University Medical Center. "It may also be the result of hormone changes produced by the fatty tissue." Bessler said that many of his heavier patients experienced difficulty getting pregnant. And many infertility clinics don't accept female patients with high body mass indexes given their diminished chances of conceiving. However, Bessler said some of his patients become pregnant just months after weight-loss surgery once they had dropped a few pounds. Premature Birth Risk For heavier women who do get pregnant, the worries aren't over. A new study in the Journal of the American Medical Association found that obesity increases a woman's chance of having a pre-term baby, especially when her body mass index is 35 or higher. The study's authors speculate that having too much fat may inflame and weaken the uterine and cervical membranes. Whatever the reason, it can have devastating effects. Premature birth is the leading cause of infant death and long-term disabilities. Less Shuteye Sleep and excess weight do not make good bedfellows. Nearly 80 percent of older, obese Americans report having problems with sleep, a recent American Sleep Foundation survey found. Poor sleep contributes to a host of diseases including diabetes, heart disease and, ironically, obesity itself. Numerous studies link short sleep to expanding waistlines, including the Harvard Nurses' Study, which found that those who slumbered less than five hours a night were 15 percent more likely to gain weight than those who enjoyed at least seven hours of sleep. Dr. Donald Hensrud, a nutritionist and preventive medicine expert in the department of endocrinology, diabetes, metabolism and nutrition at the Mayo Clinic, said one of the most immediate health dangers for many obese people is sleep apnea, a condition in which a person gasps or stops breathing momentarily while asleep. "Sleep apnea can be caused by increased fat around the neck area that presses down and closes off the soft tissues of the airways while a person is lying down, especially on his back," Hensrud said. "This means the person does not get good quality sleep, has less oxygen in the blood stream, and the heart has to work harder." Tough Love Though fat people are often the butt of the joke, obesity stigma is no laughing matter. A Yale study found that weight is the number one reason people are bullied at any age and those who are bullied have lower self-esteem, higher levels of depression and increased risk of suicide. The main source of ridicule, according to the Yale researchers: Loved ones. "More than 40 percent of children who seek treatment for weight loss say they have been bullied or teased by a family member," said the study's lead author, Rebecca Puhl. "When we asked obese women who stigmatized them the most, 72 percent said it was someone in their family." Puhl said discussions with loved ones about their burgeoning weight often come across as judgmental and derogatory, even when intentions are good. However, offering support and encouragement is the most effective approach to help someone struggling to drop off pounds. Medical Gap The number two source of stigma, after loved ones? Puhl said her studies have found that 67 percent of overweight men and women report being shamed or bullied in the doctor's office. And 50 percent of doctors found that fat patients were "awkward, ugly, weak-willed and unlikely to comply with treatment" while 24 percent of nurses said they were repulsed by their obese patients. A negative reception from a healthcare provider is especially detrimental to obese people, Puhl stressed, because they already contend with a greater number of health problems than average. "Besides jeopardizing discussions between patients and healthcare providers, someone who is obese is more likely to avoid the doctor altogether even when they have a problem," she said. However Puhl noted that the knife cuts both ways. Her studies reveal that people are less apt to follow doctor's orders and more likely to switch to a new provider if their physician is overweight. Shrinking Wallet Wider waistbands seem to widen the pay gap. One George Washington University School of Public Health study found a strong connection between greater obesity and shrinking wages. Examining data from the 2004 National Longitudinal Survey of Youth, the researchers discovered that wages among the obese were $8,666 less for females and $4,772 lower for males compared with their thinner counterparts. In 2008, the researchers found wages were $5,826 less for obese females -- a 14.6 percent penalty over normal-weight females. Slimmer females, especially, do seem to have fatter wallets. In a University of Florida study, women who weighed 25 pounds less than the group average, earned $15,572 a year more than women of normal weight and women who tipped the scales at 25 pounds above the average weight earned an average of $13,847 less than an average-weight female. They found no such disparity among men. 9/16: I am not going to argue with you- or am I?
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9/15: Want to live long???
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9/15: Consumer confidence Normally I use the numbers with care but you cannot dimiss this drop The preliminary results from the University of Michigan's September consumer confidence survey are out. 1. The headline index dropped to 76.8 from August's 82.1 reading. Economists predicted a tick down to 82.0. The economic conditions sub-index fell to 91.8 from 95.2, while the economic outlook sub-index fell to 67.2 from 73.7. Inflation expectations one year ahead rose to 3.2% from 3.0%, while inflation expectations five years ahead edged up to 3.0% from 2.9%. 9/15: the New Normal got to read this. It identifies what I have been saying for a long time. We're not in Kansas anymore toto
As life expectancies have increased over the last centuryand will likely continue to increase in the coming decadesthe fractions of senior citizens in the populations soared. Their averages from 1950-2010 are roughly 10-15 percent in developed countries and Russia, and a scant 4-5 percent in the remaining emerging countries; by 2010, they ranged between 13-23 percent in the developed countries plus Russia, and between 5-8 percent in emerging countries. Continuing the trend, in 2050, these numbers jump to 21-36 percent and 14-25 percent in developed and emerging countries, respectively. Note that the demographic profiles in emerging countries in 2050 will be very similar to those of the developed world today. To get a hint of how severely out-of-sample these numbers are, notice in Figure 4 that the fraction of senior citizens in the United States in 2050 will be more than six standard deviations away from its 1950-2010 historical average ([21.2 percent-10.9 percent]/1.7 percent). Other countries will experience a similar magnitude of transition in future years; in some cases, more extreme.
9/15: Life settlements
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9/15: LTC
Unum exited in 2009 Allianz exited in November 2009 Guardian exited in February of 2011 MetLife exited in December of 2010 Prudential exited in March of 2012 SunLife exited Linked Benefits in 2011 John Hancock exited Single Pay Linked Benefits in 2011
9/15: What an upswing
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9/12: Rich
9/12: 401k participation They have not worked, are not working today nor will they work in the future.
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9/12: Though the rich are taking advantage of the opportunity
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9/11:
:9/9:
Table 7. The 30 occupations with the fastest projected employment growth, 2010-20
Table 7. The 30 occupations with the fastest projected employment growth, 2010-20 (In thousands) Occupation Occupational group Employment 2010 2020
C Numbe
Personal care aides Home health aides Biomedical engineers Helpers--brickmasons, blockmasons, stonemasons, and tile and marble setters Helpers--carpenters Veterinary technologists and technicians Reinforcing iron and rebar workers Physical therapist assistants Helpers--pipelayers, plumbers, pipefitters, and steamfitters Meeting, convention, and event planners Diagnostic medical sonographers Occupational therapy assistants Physical therapist aides Glaziers Interpreters and translators Medical secretaries Market research analysts and marketing specialists Marriage and family therapists Brickmasons and blockmasons Physical therapists
Personal Care and Service Occupations Healthcare Support Occupations Architecture and Engineering Occupations Construction and Extraction Occupations Construction and Extraction Occupations Healthcare Practitioners and Technical Occupations Construction and Extraction Occupations Healthcare Support Occupations Construction and Extraction Occupations Business and Financial Operations Occupations Healthcare Practitioners and Technical Occupations Healthcare Support Occupations Healthcare Support Occupations Construction and Extraction Occupations Arts, Design, Entertainment, Sports, and Media Occupations Office and Administrative Support Occupations Business and Financial Operations Occupations Community and Social Service Occupations Construction and Extraction Occupations Healthcare Practitioners and Technical Occupations Healthcare Practitioners and Technical Occupations Installation, Maintenance, and Repair Occupations
861.0 1,468.0 1,017.7 1,723.9 15.7 25.4 29.4 46.5 80.2 19.1 67.4 57.9 71.6 53.7 28.5 47.0 41.9 47.0 72.4 121.9 28.4 98.2 84.2 102.9 77.1 40.8 67.3 59.6
607. 706. 9.
17. 25.
41. 9.
30.
26.
31.
23. 12. 20.
17.
58.4 508.7 282.7 36.0 89.2
83.1 718.9 399.3 50.8 125.3
24. 210.
116. 14. 36.
198.6
276.0
77.
Dental hygienists Bicycle repairers
181.8 9.9
250.3 13.6
68.
3.
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Audiologists
Healthcare Practitioners and Technical Occupations Community and Social Service Occupations Construction and Extraction Occupations Business and Financial Operations Occupations Life, Physical, and Social Science Occupations Community and Social Service Occupations Construction and Extraction Occupations Healthcare Practitioners and Technical Occupations
13.0 63.4 15.6 185.4 100.0 120.3 4.1
17.8 86.6 21.4 252.9 136.5 163.9 5.6
4.
Health educators Stonemasons Cost estimators Medical scientists, except epidemiologists Mental health counselors Pile-driver operators Veterinarians
23. 5.
67. 36.
43. 1.
61.4
83.4
22.
1 Represents the typical education level needed to enter the occupation. 2 Indicates if work experience in a related occupation is commonly considered necessary by employers for entry, or is a co 3 Indicates the typical on-the-job training needed to attain competency in the occupation. NOTE: For more information about the education, work experience, and on-the-job training categories assigned to occupatio
9/9: Dying: 70% of state residents want to die at home, and national polls have registered even higher proportions. But in fact, nationally, less than a quarter of us do. Two-fifths die in hospitals, and a tragic one-fifth in intensive care, where deaths are often harrowing. This is an amazing disconnect in a society that prides itself on freedom of choice.
a quarter of Medicare's $550 billion annual budget pays for medical treatment in the last year of life. Almost a third of Medicare patients have surgery in their last year of life, and nearly one in five in their last month of life. In their last year of life, one-third to one-half of Medicare patients spend time in an intensive care unit, where 10 days of futile flailing can cost as much as $323,000. Medical overtreatment costs the U.S. health care system an estimated $158 billion to $226 billion a year.
9/9: investment returns.
This disconnect has ruinous economic costs. About
Nominal versus real
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These are the forecasts that Grantham makes for real (inflation-adjusted) returns over the next seven years:
Notice that if you had a "balanced portfolio," equally distributed among the six equity-asset classes, your total annual real return would be in the 1.5% range. Using the same balanced approach with bonds, your total return would be 0.1%. 9/9: Underemployment The underemployment rate, which includes those people who have given up looking for work or who have part-time jobs because they cant get full-time jobs, still sits near 14%! 9/8: 1. The correlation puzzle: The interaction of bond and risk correlation Date: 2013 By: Bethke, Sebastian Kempf, Alexander Trapp, Monika URL: http://d.repec.org/n?u=RePEc:zbw:cfrwps:1306&r=fmk Diversification benefits depend on the correlation between assets. Unfortunately, asset correlation increases when it is most needed (actually least wanted ). We examine bond correlation using a broad sample of US corporate bonds. We find bond correlation to be higher during the financial crisis in 2008. Increased bond correlation results from higher correlation between corporate bond risk factors. Risk factor correlation increases when investor sentiment worsens. This suggests that corporate bond investors change their perception of risk factors, which results in higher risk factor correlation and finally higher bond correlation. --
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9/8:
The World's Biggest Mutual Fund Takes a $41 Billion Hit
Bill Gross's famous bond fund has shrunk 14 percent since May 2013, when the Fed first indicated it may start tightening
9/8: The jobs number number is out and it is weak. 1. There were just 169K new jobs created in August. Private payrolls came in at 152,000 new jobs vs. expectations of 180,000. What's worse. Last month was revised SHARPLY down from 162 to 104K. That is quite ominous. The unemployment rate did, however, drop to 7.3%, but that's basically just due to continued exodus from the workforce
9/8: 1. Window dressing in mutual funds Date: 2013
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By: Agarwal, Vikas Gay, Gerald D. Ling, Leng URL: http://d.repec.org/n?u=RePEc:zbw:cfrwps:1107r2&r=fmk We provide a rationale for window dressing where investors respond to conflicting signals of managerial ability inferred from a fund's performance and its disclosed portfolio holdings. We contend that window dressers take a risky bet on their performance during a reporting delay period, which affects investors' interpretation of the two conflicting signals and hence their capital allocations. Conditional on good (bad) performance, window dressers benefit from higher (lower) investor flows as compared to non-window dressers. We find that window dressers have poor past performance, possess little skill, and engage in excessive portfolio churning. These characteristics, in turn, result in worse short- and long-term future performance. --
Ah, the joys and freedom of skiing 9/8: How to Tell Your Loved One It Is Alzheimers Disease By Daniel Paris, MSW
There are a number of takes on telling the person with Alzheimers disease (AD) the truth. I would propose a couple of things to keep in mind: 1. Ask yourself how much your loved one will understand of the explanation. Sometimes they can understand and retain a lot of the information (you have a disease of the brain, etc...); sometimes all they can understand is that they have "some memory loss;" sometimes they are unable to get any of it. Remember, the cognitive impairments of AD affect not only their ability to comprehend information, but also their ability to communicate.
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2. Often someone with Alzheimers knows something is wrong, they just can't figure out what. Are they stupid or going crazy, they may wonder. Finding out there is something wrong that is a legitimate disease beyond their control can actually be comforting at times in this light. 3. There are some people who will never accept what you tell them due to denial, resistance, the disease, etc. Complicating this can be a host of personality or cultural traits pre-AD. There are times when telling the person can do more harm than good. Because of this, you can't force them to understand if they are unable or unwilling. 4. This is an individual decision; you should think about the type of person your loved one is, and how the Alzheimers disease has impaired them. You can always try beginning the conversation and see how it goes. If they become very upset and if it doesnt work, there is a good chance they will not remember the conversation. 5. Finally, if you are certain your loved one should know, be ready to repeat yourself numerous times as they will probably not remember what you said.
The attack of alien Duckies Where are the Avengers when you need them??? 9/8: Pimco has been stressing the following key investment considerations: Investors should gradually "kick out" from riding a central-bank wave that will prove more unstable and less effective. They should focus on investment opportunities away from the wave: those associated with its "costs and risks," and those that arise from the inevitable technical overshoots that will occur in certain markets (particularly those subject to considerable but volatile crossover investment interest, including segments of emerging markets). They should expect asset-class variances and covariances to become more volatile and less predictable. They should be more cautious in their expectations of risk-adjusted returns going forward. They should evolve their risk management to extend well beyond asset-class diversification, including cost-effective tail-risk hedging where appropriate. Given that the world is changing, they should guard against falling hostage to outdated benchmarks, guidelines and investment labels. Finally, they should resist the illusionary safety of old comfort zones, and do so through greater awareness of the limitations imposed by inadequate framing, unconscious biases, active inertia and overly narrow cognitive diversity.
9/8
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9/8: 669,000 and 373,000. The first figure is the number of heroin users in 2012, according to a new federal survey. The second is the number of heroin users in 2007. 9/6: Long Term health Care Benefit Plan Any life insurance policy can be converted to pay for long term care, as a long term care benefit plan Cash value is not a factor in determining the conversion value of a life insurance policy and the policy conversion is not limited to the issuing carrier. The Long Term Care Benefit Plan converts the death benefit of any form of in-force life insurance policy into an irrevocable long term care benefit account that will pay a monthly amount direct to the long term care provider. Once a policy is converted by the owner, the Long Term Care Benefit payments begin immediately and the enrollee is relieved of any responsibility to pay any more premiums. The benefit plan is an irrevocable long term care funding account administered by a third party ensuring the funds are protected for the recipient of care, and it also has the added protection for the enrollee of providing a final expense benefit to help cover funeral expenses. Lastly, if the insured should pass away before the benefit amount is exhausted, then any remaining balance is paid to the family or named beneficiary as a final lump sum payment. 9/6: Share of workers age 2661 participating in an employer-based retirement plan, by age group, 19892010 9/6: Better
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9/6: Pensions vs 401ks 9/6:Retirement assets and household net worth as a percent of personal disposable income, 19892010 9/5: Lower incomes- incomes went up in the 1980s and 1990s but stagnated from 2000 to 2007. The median income fell sharply during the 2007-2009 recession and 2. has yet to recover. The new study, which will be published as part of a Russell Sage Foundation book later this year, breaks down income trends since 1979 into various causal factors, then projects how demographic changes will affect median income through 2050. The biggest factor helping to boost incomes between 1979 and 2000 was the growing percentage of women in the workforce, along with rising earnings for those women. Starting around 2000, however, the contribution of female workers to income growth plateaued. Around the same time, male earnings began to fall, detracting from income growth. Two other trends will exert powerful influence on incomes in the future: the aging workforce and the growth of minoritiesespecially Hispanics as a percentage of the overall population. As the baby boomers retire, the U.S. population will become top-heavy with a larger portion of lower-earning seniors. And since average earnings for blacks and Hispanics are lower than the national earnings average, the median income will fall as lower earners become a greater percentage of the workforce. These trends alone could reduce the median income by 0.43 percentage points per year between now and 2020, 0.52 points per year between 2020 and 2030, and 0.2 points per year between 2030 and 2040. By then, most baby boomers will have headed to the great planned community in the sky, and the aging of the workforce will ease. But the changing racial makeup of the country will still cut median income by 0.24 points annually between 2040 and 2050. 9/5 (Oxymoron)
: Don't Fall for the Financial Scams Disguised as Wisdom! 9/5: It will get worse
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9/5:
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Bad hair day 9/4:
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9/4: 9/4
: 9/4: Date US Inflation Rate
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Jul 1, 2013 Jan 1, 2013 Jan 1, 2012 Jan 1, 2011 Jan 1, 2010 Jan 1, 2009 Jan 1, 2008 Jan 1, 2007 Jan 1, 2006 Jan 1, 2005
1.96% 1.59% 2.93% 1.63% 2.63% 0.03% 4.28% 2.08% 3.99% 2.97%
9/3: Yea right- this makes sense
World History in 500 slides in two minutes. Fascinating

9/3 Small business a stimulator?????????? recent research indicates the conventional wisdom that small businesses are responsible for all or most net job growth is not correct. For example, Haltiwanger et al. (2010) find that after controlling for firm age, there is no systematic relationship between net job growth and firm size. They find that historically the most important contributor to whether a firm grows or not is its age, rather than its size. The process of young firms (which do tend to start out small) growing into larger firms is the true contributor to job growth. Others such as Hurst and Pugsley (2011) back up this finding, noting that the vast majority of small firms start small and do not grow significantly. Furthermore, small firms are disproportionately concentrated in areas of the economy that tend to have lower productivity growth, including doctors offices, small shopkeepers, restaurants, the building trades, etc.
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9/2: 9/1: Very interesting decoupling Certainly not a good omen Or more colloquially- it sucks.
9/1: Bogle: Buy And Hold Works Despite Prospect Of 50% Decline I TRULY DISAGREE It should not take long to play out 9/1: Home sales New home sales plunged 13.4% month-over-month in July to an annualized pace of 394,000 units in July. 1. Economists polled by Bloomberg were looking for new home sales to fall 2% to an annualized pace of 487,000 units. There was also a huge downward revision to June's number. New home sales climbed a more modest 3.6% to 455,000 units, down from the initial reading of an 8.3% rise to 497,000 units.
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9/1: Under water: More than three million U.S. borrowers have risen above water on their mortgages so far this year, thanks to swift home price appreciation, according to a new report from online real estate company Zillow. 2. The negative home equity rate fell in the second quarter of this year, the fifth straight quarterly drop, but it is still alarmingly high and continues to hamper the housing recovery. Currently, 23.8 percent of homeowners with a mortgage, or approximately 12.2 million, owe more than their homes are worth, down from 15.3 million one year ago, according to the report. Some, however, are still so far underwater that even with fast-rising prices, it will take years for them to see any home equity. Nationwide, more than half of all underwater borrowers are in in the red by 20 percent or more, and roughly one in seven owes more than twice what their home is worth. 2. The numbers seem incredible, given that home prices are up about 12 percent year-over-year, according to the latest S&P/Case-Shiller home price index for June, but that same index shows prices nationally are still off 23 percent from their peak in 2006. In some of the hardest hit housing markets, home values are still down around 30 percent from their recent peaks.
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Wheeeeeeeeeeeee 9/1: Wealth, Asset Allocation and Changes in Wealth for Households Age 60-69 Quintiles Mean Financial Assets Lowest 20% Next20% Middle20 Next20% $31 Asset Allocation Stocks 0% $2,918 18% $33,876 43% $161,852 57%
Highest 20% $903,213 72%
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Bonds 0% Short-Term Deposits 100% (Like in a bank CD or Savings account) Actual change in Wealth (nominal) Oct 07Mar 09 0% Oct 07Jun 13 0% Given Historical Returns Anticipated Change in Nominal Wealth should Have been for period Oct 07 June 13 0%
5% 77%
12% 45%
13% 30%
13% 15%
-9% +3%
-21% + 6%
-29% + 7%
-36% + 7%
+6%
+15%
+20%
+25%
9/1:End-of-Life Medical Costs Vary Widely

Medical expenses increase unpredictably with age, so the crystal ball gets very hazy when trying to foretell how much youll need in retirement.
study helps clear things up: a single older American spends about $39,000 on average for medical care in the final five years of life, or about $7,800 a year.
For couples in which one spouse has died, $51,000 was spent during that spouses final years, or about $10,000 annually.
These out-of-pocket expenses, which were reported by surviving spouses and family members, are for health care not covered by Medicare: insurance premiums, hospital and physician copayments and deductibles, and expenses for medications, nursing homes, and in-home care.
The data also show that the financial burden on older people varies greatly, not just depending on marital status but also income. High earners
spend more than $100,000 in their last five years, reflecting the large amounts paid out by those who need and can afford long-term care. The authors conclude: end-of-life medical expenses subject a significant minority of older Americans to considerable financial risk.
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Their evidence: 43 percent of the people they studied had accumulated medical bills during their last years exceeded the value of their financial assets, excluding home equity
9/1: Life Settlements These can work though I still prefer the policies to be shopped. Nonetheless, look at the Medicaid settlement
Case Study #1: 80 year old Male, 10m NYL policy with 512k Premiums and 13k CSV Life Expectancies, AVS 103 months & 21st 115 months Client took the policy out to cover estate taxes and due to loss in estate size no longer needed coverage Life Settlement Offer 1.2m
Case Study #2: 66 year old Male, Lincoln 5m policy with 137k Premiums and 2k CSV Life Expectancies, AVS 185 months & 21st 113 months Due to Financial obligations the client had to surrender the policy Life Settlement Offer 500k
Case Study #3: 69 year old Male, 3m Phoenix policy with 102k Premiums and 7k CSV Life Expectancy 69 months Client no longer needed coverage Life Settlement Offer 950k
Medicaid Life Settlement case study: A pair of $300,000 non-convertible term life policies A husband and wife owned $300,000 term life policies on each other. They were beyond the policy conversion deadline and the premiums had become too expensive for them to maintain. There was no market for two non-convertible term life insurance policies so the husband and wife decided to stop paying premiums and let them lapse. When they approached LIS, the policies were in grace and within days of lapsing, but their agent was aware of the Life Care Funding program and reached out to us to see if there was anything we could do with these non-convertible term policies. LIS worked with Life Care Funding to quickly assess the situation and analyze their health care needs. Life Care Funding determined that they would be eligible to enroll in the Life Care Benefit to help them pay for homecare services for the next three-five years. Knowing that they would be able to sell the policies to enroll in the program, the premiums were paid and the polices were restored to in-force status. Once the policies were re-instated, the closing process was completed quickly so that they could enroll in the Benefit program and they were set up with a Homecare company from the Life Care Funding network to begin giving them the healthcare they need. In less than 45 days, both policies were settled and the couple enrolled in the benefit program that would cover their long term care needs for years-- using policies that were rescued just a day before lapsing. 9/1: I am going to stop eating food-grocery prices should go up between 1.5 and 2.5% this year.
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Make up your mind 9/1: Much uncertainty: (FT) The next few months promise to be particularly tricky and volatile for markets, with uncertainty coming from the US, Europe, Japan and the Middle East. In the US, the Federal Reserve is expected to signal at its September policy meeting its appetite for tapering its exceptional support for markets and the economy. In deciding whether and by how much to alter its $85bn of monthly purchases of market securities, and in placing greater relative emphasis on forward policy guidance in the policy mix, central bankers may also provide us with greater details on the why. In particular, on the balance between positive reasons (because the economy is improving on a sustainable basis) and negative ones (because of worries about the collateral damage and unintended consequences of prolonged reliance on this experimental monetary policy). The market implications of the two are quite different, particularly for emerging markets. Having been on the receiving end of significant private capital flows prompted by the Feds quantitative easing, these markets require credible signals of solid growth prospects. Otherwise, both the prospect and reality of destabilising capital outflows increase the risks of internal policy slippages and an unbalanced policy mix, a phenomenon that is already evident in some countries. September may also bring news of the next chairman of the Federal Reserve. With Ben Bernanke expected to step down in January at the end of his second term, markets will carefully assess the scope for policy continuity at the central bank particularly at a time when investors have repeatedly relied on the Fed put to disconnect high asset prices from sluggish fundamentals. Then there is Americas highly polarised Congress. When they return from their summer recess, lawmakers will be unable to avoid for long two important pieces of legislation: the immediate one required for the continued functioning of the government; and that needed to avoid a technical sovereign default a few months down the road. In both cases, there are already noisy political trade-offs in play; and they have less to do with merit and more with the manoeuvrings of an unusually polarised Congress. The situation across the Atlantic is also quite uncertain. With German elections in September, and with few wishing to undermine Chancellor Angela Merkels likely victory, several national and regional initiatives have been placed on hold. This summer pause has reduced policy disagreements; but at the cost of heavily burdening the autumn policy agenda facing officials who have repeatedly proven reluctant to take prompt decisions absent crisis-like conditions. This European uncertainty relates to more than discussions on the four legs of a robust eurozone namely, supplementing monetary union with closer fiscal, banking and political integration. Officials also face politically-complex decisions on three particularly tricky programme reviews (Cyprus, Greece and Portugal). In each case, they need to find ways to increase funding and reduce the burden of debt. In Japan, delays in unveiling the third policy arrow are undermining the policy pivot implemented by the Bank of Japan at the behest of Prime Minister Shinzo Abe. Judging from the recent sell-off in Japanese equities and the behaviour of the currency, markets are already signalling that Japans policy experiment will falter if exceptional monetary and fiscal stimulus is not accompanied quickly by structural reforms. Given also the disproportionate damage to emerging markets, we should expect all this to reignite some tensions at the multilateral level ahead of the September G20 Summit in Russia and the early-October IMF/World Bank annual meetings in Washington.
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9/1:
9/1: Scientists create human mini-brain However I believe the size is still much greater than most humans, so why bother. 8/29: Pensions and risk"Among 224 large corporate pensions studied by Fitch, plans were on average 8.5% invested in illiquid 'Level 3' assets, a significant boost from 7.8% at the end of the year-earlier period. Some 66 of those plans held illiquid assets worth more than 10% of their plans, which Fitch says is concerning. 'Plans with more than 10% of assets in Level 3 assets may call for further investigation, because these include relatively illiquid holdings,' 8/29: Debt is not going away: The unsustainable nature of defined benefit contribution plans is the primary budget challenge for local governments even though local revenue growth is improving This next upcoming recession will bury a lot of municipalites 8/29: Michael Doglas and Zeta Jones are separating. Now maybe I will have a chance with her. 8/29: Recovery of the S&P total return
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8/29: Maybe I will be wrong, but.......... I picked up the 2000 debacle with the inverted yield curve and my clients missed almost all the resulting chaos. I piicked up 2008 debacle in late 2006 and clients missed almost all of 2008. Wondered in late 2007 if I was going to be wrong but... These efforts were not about returns. They are about risk. That really is what matters but is not taught hardly anyplace. In 2011 I was right about the extensive risk and did well with returns over 6% with next to no volatility. In 2012 I was right about the high risk but not even close to getting the returns of the market. I just could not commit to what I felt was a very high risk in equities. And an absolute mess with bonds. A lot had to do with the past history (though never absolutely correct) that with a GDP under 2%, there should have been a recession. Current comments said that this is the lowest GDP ever without a recession. In 2013, I was still right about risk (my opinion of course) but still did not do well in overall returns. I am now wondering what is coming up in September and what will happen. If the market stays strong in spite of everything, well, it willl show me that I have to do more analyses on risk and maybe have to change my orientation of the risk/reward issue overall. It will be interesting- once again. But I repeat, the analyses has to be about risk first and foremost. One analsyst noted that there is a 25% chance that the ceasing by the FED will simply allow good times to go on. 25% it will just be economic stagnation
50% of a double dip recession.

8/28: Let's just stay the course. Or maybe not
When the facts change, I change my mind. What do you do sir?

John Maynard keynes RIGHT: Charlie Munger said once that if he does not succeed in changing his view on something significant during a year, he considers that to be a failure
8/28: Driving Dilemmas: Risk vs. Independence By Kristine Dwyer, Staff Writer
Driving a car is a symbol of independence and competence and is closely tied to an individuals identity. It also represents freedom and control and allows older adults to gain easy access to social connections, health care, shopping, activities and even employment. At some point, however, it is predictable that driving skills will deteriorate and individuals will lose the ability to safely operate a vehicle. Even though age alone does not determine when a person needs to stop driving, the decision must be balanced with personal and public safety. Driving beyond ones ability brings an increased safety risk or even life-threatening situations to all members of
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society. Statistics show that older drivers are more likely than others to receive traffic citations for failing to yield, making improper left turns, and running red lights or stop signs, which are all indications of a decrease in driving skills. Understandably, dealing with impaired older drivers is a delicate issue. The road to driving cessation is anything but smooth. Each year, hundreds of thousands of older drivers across the country must face the end of their driving years and become transportation dependent. Unfortunately, finding other means of transportation has not noticeably improved in recent years, leading to a reluctance among older drivers to give up driving privileges and of families to remove the car keys. The primary issue facing older drivers is how to adapt to changes in driving performance while maintaining necessary mobility. Despite being a complicated issue, this process can be more successful when there is a partnership between the physician, older driver, family or caregiver. Dramatic headlines like these have ignited national media debates and triggered the pressing need for more testing and evaluation of elderly drivers, especially with the swell of the Baby Boomer generation: Family of four killed by an 80-year-old man driving the wrong way on Highway 169. 86-year-old driver killed 10 people when his vehicle plowed through a farmers market in southern California. 93-year-old man crashed his car into a Wal-Mart store, sending six people to the hospital and injuring a 1-year-old child. According to the Hartford Insurance Corporation, statistics of older drivers show that after age 75, there is a higher risk of being involved in a collision for every mile driven. The rate of risk is nearly equal to the risk of younger drivers ages 16 to 24. The rate of fatalities increases slightly after age 65 and significantly after age 75. Although older persons with health issues can be satisfactory drivers, they have a higher likelihood of injury or death in an accident. Undoubtedly, an older adults sense of independence vs. driving risk equals a very sensitive and emotionally charged topic. Older adults may agree with the decline of their driving ability, yet feel a sense of loss, blame others, attempt to minimize and justify, and ultimately may feel depressed at the thought of giving up driving privileges. Driving is an earned privilege and in order to continue to drive safely, guidelines and regulations must be in place to evaluate and support older drivers. Dementia and Driving Cessation Alzheimers disease and driving safety is of particular concern to society. Alzheimers disease (AD) is the most common cause of dementia in later life and is a progressive and degenerative brain disease. In the process of driving, different regions of the brain cooperate to receive sensory information through vision and hearing, and a series of decisions are made instantly to successfully navigate. The progression of AD can be unpredictable and affect judgment, reasoning, reaction time and problem-solving. For those diagnosed with Alzheimer's disease, it is not a matter of if retirement from driving will be necessary, but when. Is it any wonder that driving safety is compromised when changes are occurring in the brain? Where dementia is concerned, driving retirement is an inevitable endpoint for which active communication and planning among drivers, family, and health professionals are essential. Current statistics from the Alzheimers Association indicate that 5.3 million Americans have Alzheimers disease (AD) and this number is expected to rise to 11-16 million by the year 2050. Many people in the very early stages of Alzheimers can continue to drive; however, they are at an increased risk and driving skills will predictably worsen over time. The Alzheimers Associations position on driving and dementia supports a state licensing procedure that allows for added reporting by key individuals coupled with a fair, knowledgeable, medical review process. Overall, the assessment of driving fitness in aging individuals, and especially those with dementia, is not clear cut and remains an emerging and evolving field today. Physicians Role in Driving Cessation While most older drivers are safe, this population is more prone to vehicle accidents due to decreased senses, chronic illness and medication-related issues. The three primary functions that are necessary for driving and need to be evaluated are: vision, perception, and motor function. As the number of older drivers rises, patients and their families will increasingly turn to the physicians for guidance on safe driving. This partnership seems to be a key to more effective decision-making and the opinions of doctors vs. family are often valued by older drivers. Physicians are in a forefront position to address physical, sensory and cognitive changes in their aging patients. They can also help patients maintain mobility through proper counseling and referrals to driver evaluation programs. This referral may avoid unnecessary conflict when the doctor, family members or caregivers, and older drivers have differing opinions. (It should be noted that driver evaluation programs are usually not covered by insurance and may require an out-of-pocket cost.) Not all doctors agree that they are the best source for making final decisions about driving. Physicians may not be able to detect driving problems based on office visits and physical examinations alone. Family members should work with doctors and share observations about driving behavior and health issues to help older adults limit their driving or stop driving altogether. Ultimately, counseling for driving retirement and identifying alternative methods of transportation should be discussed early on in the care process, prior to a crisis. Each state has an Area Agency on Aging program that can be contacted for information, and referrals can be made to a social worker or community agency that provides transportation services. Resources do exist to help physicians assess older adults with memory impairments, weigh the legal and ethical responsibilities,
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broach the topic of driving retirement and move toward workable plans. The Hartford Insurance Corporation, for example, offers two free publications that make excellent patient handouts: At the Crossroads: A Guide to Alzheimer's Disease, Dementia and Driving and We Need to Talk: Family Conversations with Older Drivers. These resources reveal warning signs and offer practical tips, sound advice, communication starters, and planning forms. Other resources can be found through the Alzheimer's Association. Physicians can also refer to the laws and reporting requirements for unsafe drivers in their state and work proactively with patients and their families or caregivers to achieve driving retirement before serious problems occur. Ultimately, assessing and counseling patients about their fitness to drive should be part of the medical practice for all patients as they age and face health changes. Drivers Role in Driving Cessation How will you know when it is time to stop driving? was a question posed to older adults in a research study. Responses included When the stress level from my driving gets high enough, Ill probably throw my keys away and When you scare the living daylights out of yourself, thats when its time to stop. These responses are clues to a lack of insight and regard for the social responsibility of holding a drivers license and the critical need for education, evaluation and planning. Realizing one can no longer drive can lead to social isolation and a loss of personal or spousal independence, self-sufficiency, and even employment. In general, older drivers want to decide for themselves when to quit, a decision that often stems from the progression of medical conditions that affect vision, physical abilities, perceptions and, consequently, driving skills. There are many things that an older adult can do to be a safe driver and to participate in his or her own driving cessation. The Centers for Disease Control and Prevention suggest that older adults: Exercise regularly to increase strength and flexibility. Limit driving only to daytime, low traffic, short radius, clear weather Plan the safest route before driving and find well-lit streets, intersections with left turn arrows, and easy parking. Ask the doctor or pharmacist to review medicinesboth prescription and over-the counterto reduce side effects and interactions. Have eyes checked by an eye doctor at least once a year. Wear glasses and corrective lenses as required. Preplan and consider alternative sources and costs for transportation and volunteer to be a passenger Familys or Caregivers Role in Driving Cessation Initially, it may seem cruel to take an older person's driving privilege away; however, genuine concern for older drivers means much more than simply crossing fingers in hopes that they will be safe behind the wheel. Families need to be vigilant about observing the driving behavior of older family members. One key question to be answered that gives rise to driving concerns is Would you feel safe riding along with your older parent driving or having your child ride along with your parent? If the answer is no, then the issue needs to be addressed openly and in a spirit of love and support. Taking an elders driving privileges away is not an easy decision and may need to be done in gradual steps. Offering rides, enlisting a volunteer driver program, experiencing public transportation together, encouraging vehicle storage during winter months, utilizing driver evaluation programs and other creative options, short of removing the keys, can be possible solutions during this time of transition. Driving safety should be discussed long before driving becomes a problem. According to the Hartford Insurance survey, car accidents, near misses, dents in the vehicle and health changes all provide the chance to talk about driving skills. Early, occasional and honest conversations establish a pattern of open dialogue and can reinforce driving safety issues. Appealing to the love of children or grandchildren can instill the thought that their inability to drive safely could lead to the loss of an innocent life. Family members or caregivers can also form a united front with doctors and friends to help older drivers make the best driving decisions. If evaluations and suggestions have been made and no amount of rational discussion has convinced the senior to cease driving, then an anonymous report can be made to the Department of Motor Vehicles in each state. According to the Alzheimers Association, strategies that may lead to driving cessation when less drastic measures fail include: 1. 2. 3. 4. 5. 6. 7. Family meetings to discuss issues and concerns Disabling or removing the car Filing down the keys Placing an Expired sticker over the drivers license Cancelling the vehicle registration Preventing the older driver from renewing his or her driver's license Speaking with the drivers doctor to write a prescription not to drive, or to schedule a formal driving assessment
Finally, it is suggested that family members learn about the warning signs of driving problems, assess independence vs. the public safety, observe the older driver behind the wheel or ride along, discuss concerns with a physician, and explore alternative transportation options. Solutions There are a multitude of solutions and recommendations that can be made in support of older drivers. Public education and
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awareness is at the forefront. An educational program that includes both classroom and on the road instruction can improve knowledge and enhance driving skills. The AAA Foundation provides several safe driving Web sites with tools for seniors and their loved ones to assess the ability to continue driving safely. These include AAAseniors.com and seniordrivers.org. They also sponsor a series of Senior Driver Expos around the country where seniors and their loved ones can learn about senior driving and mobility challenges and have a hands-on opportunity to sample AAA's suite of research-based senior driver resources. Information on the Expos is available at aaaseniors.com/seniordriverexpo. AARP offers an excellent driver safety program that addresses defensive driving and age-related changes, and provides tools to help judge driving fitness. Expanding this program or even requiring participation seems to be a viable entry point for tackling the challenges of driving with the aging population. CarFit is an educational program that helps older adults check how well their personal vehicles "fit" them and if the safety features are compatible with their physical characteristics. This includes height of the car seat, mirrors, head restraints, seat belts, and proper access to the pedals. CarFit events are scheduled throughout the country and a team of trained technicians and/or health professionals work with each participant to ensure their cars are properly adjusted for their comfort and safety. Modification of driving policies to extend periods of safe driving is another solution. Older drivers nearing the end of their safe driving years could retire from driving gradually, rather than give up the drivers license. An older adult can be encouraged to relinquish the drivers license and be issued a photo identification card at the local drivers bureau. The Alzheimers Association proposes several driving assessment and evaluation options. Among them are a vision screening by an optometrist, cognitive performance testing (CPT) by an occupational therapist, motor function screening by a physical or occupational therapist, and a behind the wheel assessment by a driver rehabilitation specialist. Poor performances on these types of tests have been correlated with poor driving outcomes in older adults, especially those with dementia. Requiring a driving test after a certain age to include both a written test and a road test may be an option considered by each state. Finally, continued input and guidance will be necessary from AARP, state licensing programs, transportation planners, and policymakers to meet the needs of our aging driving population. It is appropriate to regard driving as an earned privilege and independent skill that is subject to change in later life. In general, having an attitude of constant adjustment until an older individual has to face the actual moment of driving cessation seems to be a positive approach. Without recognizing the magnitude of this transition, improving the quality of life in old age will be compromised. Keeping our nations roads safe while supporting older drivers is a notable goal to set now and for the future.
8/28: Probably about right Fact: There are currently 74,997 Life Policies with a total Face Amount of $106,495,796,963 sitting in Trust Accounts all over the U.S. Fact: The industry shows that 29,999 of these policies with a total Target Premium of $5,342,789,848 are currently considered "At Risk"!
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Yea, I'm drooling. Whaddya gonna do about it? 8/28: Alzheimer's: Holding On To The Dignity By Brenda Race I think one of the hardest tasks of love for a caregiver to an Alzheimer's patient, is trying to help them maintain their dignity. Dignity is defined as: the quality or state of being worthy, honored or esteemed. As role of the caregiver, we have taken on a task which sometimes seems unbearable. We often rush through what we feel needs to be done, giving little thought to the feelings that remain in those we are caring for. It is so important to remember that this is still a person who has feelings no matter what form they take. I remember when my mom came to live with us how very frustrating it was to find her in the morning with layers and layers of clothes on. I was totally new at taking on the role of caregiver and I made many mistakes along the way. My reaction was to remove all of the extra clothing which sometimes resulted in tears for both of us. Then one day I decided... So what? If she feels comfortable, why should I make her struggle to give them up. She saw nothing wrong with what she was doing. Gradually I started removing some of the clothes in her dresser and she really never noticed. Eventually only one outfit remained for the start of each new day. No more fighting or struggling to take what she saw as perfectly normal. Imagine yourself waking up and not being able to remember many of the normal everyday things, then gradually losing the ability to even perform normal routine acts. All of a sudden someone is trying to tell you how to do everything and when you must do it. My reaction would be one of fear, anger, confusion and agitation. Are we really sure of what they can still process in their minds? Maybe the brain knows what should be done but is just unable to carry it out. How confusing that would be! My mom used to say constantly that she was not a baby and could take care of herself. I would always agree with her and then ask her if it was okay if I helped her. Usually she would say yes but if not then I needed only to leave the room and return a few minutes later to ask again. If the caregiver can remain calm and maintain an unhurried attitude then most of the problems can be worked out and still leave a sense of dignity for your loved one. We must remember that inside that body which is gradually losing its ability to control itself is a real person. A soul still remains of the one you once knew! You need to adapt to their needs, not make them adapt to yours. When you remember this its not hard to treat them as a person who still has needs, someone who had hopes and dreams, someone who feels, someone who is still capable of giving and receiving love. It all comes back to that old sayingwalk a mile in their shoes.how would you like to be treated? Would you want all of your self worth removed? AD removes everything from its victim starting with the simplest to the most complex of lives processes. The least we can do and perhaps the very most is to allow them to maintain the dignity we all deserve! EFM- Many will not like this comment. If I knew I was getting Alzheimers, I would opt out of this world. I disagree that a soul is inside. Alzheimers is the death of the mind before the death of the body. Insidious Also ask, as a consumer and taxpayer- how can we continue to take care of more and more that need more and more care. It is a financial impossibilty.
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8/27: which one will get more press. Miley Cyrus or Syria???? 8/27: Down and out
8/27:
MIB Life Index Reports U.S. Life Insurance Activity off -3.0% in July
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Braintree, MA. (August 13, 2013) - U.S. application activity for individually underwritten life insurance declined -3.0% in July, year-over-year, all ages combined, according to the MIB Life Index. Year-to-date, the Life Index is down -2.4% with declining months in 2013 outnumbering gainers by six to one. July application activity was off -5.5% from that of June, a seasonal trend consistent with the past summer doldrums. July's Index value at approx. 77 is historically low for this month, however seasonal gains typically experienced September through year-end could put the Index into more positive territory.
Application activity for individually underwritten U.S. life insurance in July showed continued decline by age groups with ages 0-44 off -3.7%, ages 45-59 off -3.4%, and ages 60+ flat at -0.2% year-over-year. Year-to-date, ages 0-44 are off -2.7%, ages 45-59 are off -3.4%, and ages 60+ remain flat at +0.1% compared to the same seven month period last year. After finishing 2012 at par or slightly positive in 2012, ages 0-44 and 45-59 have lost their momentum in 2013. The erosion of the 60+ age group is perhaps most noteworthy; remaining sluggish in 2013 after explosive double-digit growth as near as the first quarter of 2012. 8/27: 1. Emotional state and Market Behavior Date: 2013 By: Breaban, A. Noussair, C.N. (Tilburg University, Center for Economic Research) URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:2013031&r=cbe Abstract: We consider the relationship between the emotional state of traders and market prices. We create asset markets with the structure first studied by Smith, Suchanek and Williams (1988), which is known to generate price bubbles and crashes. We analyze participants' facial expressions with facereading software before and while the market is operating. We find that greater positive emotion in facial expressions before the market opens predicts higher prices and larger bubbles. Greater fear predicts lower prices and smaller bubbles. Those traders who remain the most neutral during periods of market volatility achieve the highest earnings. Loss aversion in decision making is correlated with fear, not with other emotions. 8/27: 1. Strategic Self-Ignorance Date: By: 2013-05-28 Thunstrm, Linda (Department of Economics and Finance, University of Wyoming) Nordstrm, Jonas (Department of Economics, Lund University) Shogren, Jason F. (Department of Economics and Finance, University of Wyoming) Ehmke, Mariah (Department of Agricultural and Applied Economics, University of Wyoming) van 't Veld, Klaas (Department of Economics and Finance, University of Wyoming) http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_017&r=cbe
URL:
We examine strategic self-ignorancethe use of ignorance as an excuse to over-indulge in pleasurable activities that may be harmful to ones future self. Our model shows that guilt aversion provides a behavioral rationale for present-biased agents to avoid information about negative future impacts of such activities. We then confront our model with data from an experiment using prepared, restaurant-style mealsa good that is transparent in immediate pleasure (taste) but non-transparent in future harm (calories). Our results support the notion that strategic self-ignorance matters: nearly three of five subjects (58 percent) chose to ignore free information on calorie content, leading at-risk subjects to consume significantly more calories. We also find evidence consistent with our model on the determinants of strategic self-ignorance.
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Ah Cherie 8/27:
Why Did Disability Allowance Rates Rise in the Great Recession?

byNorma B. CoeandMatthew S. Rutledge The CRR Issue in Brief Why Did Disability Insurance Allowance Rates Rise in the Great Recession? has been temporarily removed from our website, because the analysis (using sample data from the Survey of Income and Program Participation) shows allowance rates that consistently differ from the Social Security Administrations more comprehensive administrative data. We will soon release updated findings that focus on the authors major contribution namely, the change in the composition of applicants during the Great Recession. 8/27: 1. Anchoring: A valid explanation for biased forecasts when rational predictions are easily accessible and well incentivized? Date: 2013 By: Meub, Lukas Proeger, Till Bizer, Kilian URL: http://d.repec.org/n?u=RePEc:zbw:cegedp:166&r=cbe Behavioral biases in forecasting, particularly the lack of adjustment from current values and the overall clustering of forecasts, are increasingly explained as resulting from the anchoring heuristic. Nonetheless, the classical anchoring experiments presented in support of this interpretation lack external validity for economic domains, particularly monetary incentives, feedback for learning effects and a rational strategy of unbiased predictions. We introduce an experimental design that implements central aspects of forecasting to close the gap between empirical studies on forecasting quality and the laboratory evidence for anchoring effects. Comprising more than 5,000 individual forecasts by 455 participants, our study shows significant anchoring effects. Without monetary incentives, the share of rational predictions drops from 42% to 15% in the anchor's presence. Monetary incentives reduce the average bias to one-third of its original value. Additionally, the average anchor bias is doubled when task complexity is increased, and is quadrupled when the underlying risk is increased. The variance of forecasts is significantly reduced by the anchor once risk or cognitive load is increased. Subjects with higher cognitive abilities are on average less biased toward the anchor when task complexity is high. The anchoring bias in our repeated game is not influenced by learning effects, although feedback is provided. Our results support the assumption that biased forecasts and their specific variance can be ascribed to anchoring effects. -8/27: 1. The role of emotions on risk aversion: a prospect theory experiment Date: 2013-03
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By: Raymundo M. Campos-Vazquez (El Colegio de Mexico) Emilio Cuilty (El Colegio de Mexico) URL: http://d.repec.org/n?u=RePEc:emx:ceedoc:2013-05&r=cbe This study measures risk and loss aversion using Prospect Theory and the impact of emotions on those parameters. Our controlled experiment at two universities in Mexico City, using uncompensated students as research subjects, found results similar to those obtained by Tanaka et al. (2010). In order to study the role of emotions, we provided subjects with randomly varied information on rising deaths due to drug violence in Mexico and also on youth unemployment. In agreement with previous studies, we find that risk aversion on the gains domain decreases with age and income. We also find that loss aversion decreases with income and is less for students in public universities. With regard to emotions, risk aversion increases with sadness and loss aversion is negatively influenced by anger. On the loss domain, anger dominates sadness. On average, anger reduces loss aversion by half. 8/26: Real profits??? U.S. corporations, on average, currently report a profit of 9.3 cents for every dollar of sales, according to U.S. Commerce Department dataa profit margin of 9.3%. It has gotten only slightly higher than this over the past six decades: In the fourth quarter of 2011, it was 10%. The average since 1952 is 5.9%. 8/26:- i AM GOING TO BE SICK: the average annual HEALTH CARE premium for families and individuals increased to $16,351 and $5,884, respectively, in 2013. Both costs have risen more than twice as fast as wage growth (1.8%) and four times as fast as inflation (1.1%). Health premiums shot up more than 80% over the last decade, the report shows, for both employers and employees. Businesses have seen their costs rise 80% since 2003, while their employees now pay 89% more for health care. On top of that, today more than one-third of workers are enrolled in health plans that come with at least a $1,000 deductible, meaning they are out a thousand bucks before their insurance even kicks in
8/25: Are emerging market yields better???
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8/25: Money going out
8/25: Rates up 8/23: Aging in Place: A Real Choice By Helen Hunter, ACSW, CMSW
As people age, they may be faced with making the decision as to whether to move out of their existing home where they have raised family. Too often, these homes are not conducive to the physical challenges that elders may face in their advancing years. A recent study of aging baby boomers shows an overwhelming propensity to remain in their current homes after retirement. As a result, many home builder and housing associations throughout the country are organizing educational activities to highlight programs and support services, such as healthcare, chore services and transportation, which will enable elders to age comfortably in place. Consumers who plan to age in place should take proactive steps to modify their homes while they are still financially and physically able. The National Association of Home Builders recommends the following modifications:
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There should be at least one bedroom and one bathroom on the first floor. First floor living is a high priority for older adults. Having a full bath and a master bedroom on the main floor makes it easier for those who have trouble climbing stairs. There should be conveniently located and easy to use controls and handles. Raised electrical outlets, electrical switches positioned slightly lower, and thermostats with large, easy to read numbers are perfect for older people. Installing lever handles makes it easier for people with arthritis to open doors. There should be no-step entrances. Having at least one entry without steps creates easier access for everyone, regardless of ability. It may be appropriate to install a wheelchair ramp in at least one entrance as well. There should be extra maneuvering space throughout the home. Wider doors and hallways can make a home more accessible. There should be drawers instead of shelves in the lower kitchen cabinets, which would accommodate a person in a wheelchair. In addition, shelves under the kitchen sink and stovetop can be converted from storage space to knee space for those who prefer to clean and cook while seated. Changing knobs on the kitchen cabinets to D-shaped pulls that are a contrasting color to the cabinet doors make it much easier for the older person to grasp. Changes to the sink area can include changing the faucet to the singlehandle lever type and installing an extra-long hose for the faucet sprayer. This would allow the older person to fill large pots that are sitting on the stove. Bathrooms should be equipped with safety features. One of the most important rooms in the house to design correctly in order to allow homeowners to age in place is the bathroom. Grab bars, a bath chair and a raised toilet seat can provide stability for the older person and prevent falls. Falls in the bathroom or on the stairs are the second leading cause of accidents for elders, just behind automobile accidents. It would be prudent to invest in enlarging at least one bathroom in the home. A larger bathroom makes maneuvering easier for people with walkers, crutches and wheelchairs. For those who have to handle daily climbing of stairs, it is very important to have proper lighting on stairways. Eyesight changes as people age. Most of the older homes dont have adequate lighting on stairways. Therefore, installing lights with adjustable controls, or dimmers, can help prevent glare and ensure proper lighting. Task lighting is also preferred for cooking, reading and shaving, while softer light is appropriate for night trips to the bathroom. There are some elders who will choose to move to a new home when they retire, many of which will have a number of the above features in place. Many others, however, will not have the ability to make such a move, for a number of reasons. By planning ahead, and making some home modification changes now, elders can choose to remain in their home, comfortable in their surroundings, aging in place, maintaining their independence and dignity. 8/23: No interest: 63% of Americans don't know how rising interest rates will affect their retirement portfolios their 401(k)s, IRAs, et al. and 24% say they feel completely in the dark about what rising interest rates mean. 8/23: Know what this is??
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8/23: Central bank
emergency reserves drop by $81bn
Central banks in the developing world have lost $81bn of emergency reserves through capital outflows and currency market interventions since early May, even before the recent renewal of turmoil in emerging markets. 8/23:Yields must go up- hence bond funds will go down,
8/23: It's still negative
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8/22
: the drug crimes may be obvious, but look how the rest of crimes have risen. Reason number one. Search Moynihan below (Feburary) 8/22: Run is over
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8/22: 401k Some 46 percent said they don't feel they know what their best investment options are, and 34 percent feel a great deal of stress over correctly allocating their 401(k) dollars. 1. "I think that's the key part of this survey, the allocation part," said Aron Gottesman, professor of finance at Pace University. "I think most Americans don't know how to allocate or distribute their assets inside the 401(k)," he said. "Should they go into stocks or bonds, or both? And how much should it be? They're confused." EFM- well, how can you pick when you have no idea of the risk of the allocation????????? YOu ave to be able to determine the riisk of loss
Hypocritic Oath. First, admit no wrong.

8/20: The Parts Are More Than the Whole: Separating Goods and Services to Predict Core Inflation 8/20: Level????? Level 1 assets are easy to assess. They include United States Treasury securities and listed stocks. Level 2 is a bit trickier and includes mortgage-backed securities. Level 3 securities trade infrequently and dont have readily observable values, allowing bankers the most leeway in their valuations 8/19: Generation skipping estate restoration irrevocable life insurance trust 8/19:
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8/19: Mauldin=
The rise in the stock market this past year has not been because of fundamentals. Earnings in the
nonfinancial sector have been flat. Mark Gongloff writes on the HuffPost site: Bloomberg figures that bank earnings rose 27% in the second quarter, which was the only thing keeping the S&P 500 from reporting a net drop in profits for the quarter. With the banks, S&P 500 profits were up 3.3% in the quarter, Bloomberg estimates. Without them, S&P 500 profits would have been down 1.2%. Lousy profits have not kept the S&P 500 from gaining nearly 19 percent so far this year. But even that performance trails the financial sector, which is up 26 percent this year. The banks topped the broader market last year, too, doubling the broader market's gain. And banks have managed all this despite never-ending scandals, onerous regulations and the scorn of an angry nation. The Wall Street Journal suggests that non-financial companies might have finally reached the limit of how much profit they can squeeze out of a dour economy by laying off workers and cutting costs. Banks, on the other hand, have the useful ability to skim rent from even the lamest economy. They're proving it now and finding profits in innovative ways, like moving aluminum around in warehouses to create a sense of scarcity and drive up prices." This lack of profits is showing up in the economy. Nominal GDP growth over the past year was the slowest ever recorded outside of a recession
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:The world has become exceedingly complex: standard, backward-looking correlation analysis simply doesn't cut it anymore. 1. Herding in financial markets: Bridging the gap between theory and evidence Date: 2013-07 By: Christopher Boortz Simon Jurkatis Stephanie Kremer Dieter Nautz URL: http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2013-036&r=fmk
Due to data limitations and the absence of testable, model-based predictions, theory and evidence on herd behavior are only loosely connected. T close this gap in the herding literature. From a theoretical perspective, we use numerical simulations of a herd model to derive new, theory-based herding intensity. From an empirical perspective, we employ high-frequency, investor-specic trading data to test the theory-implied impact of info stress on herding. Conrming model predictions, our results show that herding intensity increases with information risk. In contrast, herding measu nancial crisis period cannot be explained by the herd model. This suggests that the correlation of trades observed during the crisis is mainly due to investors to new public information and should not be misinterpreted as herd behavior .
style="font-size: 10pt; font-family: "Verdana","sans-serif";">The National Oceanic and Atmospheric Administration recently released its "State o report, which states that "worldwide, 2012 was among the 10 warmest years on record." Although the NOAA report noted that in 2012, "the Arc with "sea ice reaching record lows," it also stated that the Antarctica sea ice "reached a record high of 7.51 million square miles." NOAA also rep lower-stratospheric temperature, about six to ten miles above the Earth's surface, for 2012 was record or near-record cold, depending on the data concentrations of greenhouse gases, including carbon dioxide, continued to build.
Really degrading
8/18:What it costs to raise a kid: $241,080 Child-rearing costs in the U.S. have soared, according to the latest government data, and that doesn't even include college bills Children will cost you roughly one-quarter of a million dollars before they turn age 18. If you send them to college, you could spend twice as mu
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report by the U.S. Department of Agriculture. Offspring are also far more costly, even on an inflation-adjusted basis, than they used to be, the age children in the baby boom generation cost their parents 23 percent less to raise than kids do today. That amounts to a total of $195,690 in inflatio today's average of $241,080. 1. The biggest factor behind the rising cost of child-rearing is out-of-pocket health payments and child care expenses, which have both more than partly attributes the spiraling cost of child care to the fact that there are far more two-income families in 2013 than there were in 1960. That mea reporting day-care expenses.
A real man's steak knife
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Plumber table
8/18: Analysis: Inherited annuities can be exchanged tax-free An Internal Revenue Service ruling gives inherited-annuity owners the right to do a tax-free exchange under Section 1035 of the Internal Revenu Bloink and William Byrnes. The ruling allows those with inherited annuities to switch to another annuity that better meets their investment needs of inherited annuities still apply, 8/15: 1. The Skin In The Game Heuristic for Protection Against Tail Events Date: 2013-08 By: Nassim N. Taleb Constantine Sandis URL: http://d.repec.org/n?u=RePEc:arx:papers:1308.0958&r=cbe
Standard economic theory makes an allowance for the agency problem, but not the compounding of moral hazard in the presence of info particularly in what concerns high-impact events in fat tailed domains. But the ancients did; so did many aspects of moral philosophy.
global and morally mandatory heuristic that anyone involved in an action which can po harm for others, even probabilistically, should be required to be exposed to some dam context. While perhaps not sufficient, the heuristic is certainly necessary hence mandatory. It is supposed to counter risk hiding in th
various philosophical approaches to ethics and moral luck.
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Smoking can be dangerous to your health Stupidity is worse 8/15: 1. Carry a big stick, or no stick at all An experimental analysis of trust and capacity of punishment Date: 2013-08 By: Vicente Calabuig (ERICES, Universidad de Valencia) Enrique Fatas (University of East Anglia) Gonzalo Olcina (ERICES, Universidad de Valencia) Ismael Rodriguez-Lara (ERICES, Universidad de Valencia) URL: http://d.repec.org/n?u=RePEc:dbe:wpaper:0413&r=cbe
We investigate the effect of punishment in a trust game with endowment heterogeneity in which the investor may punish the allocator at indicate that the effect of the punishment crucially depends on the investors capacity of punishment, that is measured in our experiment allocators payoffs that the investor can destroy. We find that punishment fosters trust when the capacity of punishment is high (i.e., whe relatively low). Otherwise, punishment fails to promote trusting behavior, crowding out intrinsic motivation to trust. Trustworthiness is hi than without punishment, except if investors have a high capacity of punishment 8/15: Find your college scholarship now!
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Which is real ???? 8/15: Long term care:
According to the 2012 MetLife Market Survey, the national average monthly cost for private room nursing home care was $248 per day, or abou room in an assisted living facility worked out to about half that amount.
After multiplying those numbers by many months (or years), even the most financially-secure clients will be understandably alarmed. But you ca mitigate their panic.
Start by noting that not every person will need to live in an assisted living facility or nursing home, and those who do might have a stay that is me years.
Indeed, a study recently cited by the National Health Policy Forum estimated that although one-fifth of Americans who turned 65 in 2005 would of care, more than one-third would need none at all.
The same study said that only 6 percent of those who were 65 in 2005 would incur more than $100,000 in out-of-pocket long-term care expenses would pay a total of between $25,000 and $100,000. In other words, 82 percent of Americans who turned 65 in 2005 will pay less than $25,000 their lifetimes for long-term care costs.
8/15: Eurozone- The eurozone has emerged from the longest recession in its history with heavyweights France and Germany leading the way, rais recovery in the currency bloc is getting stronger. The 17-member area grew 0.3 per cent during the second quarter on a seasonally-adjusted basis, Eurostat, the European Unions statistics office, figure beat analysts forecasts of 0.2 per cent, and heralds a long-awaited return to growth for the first time since the latter part of 2011. 8/14: Coming to a theater near you in September!!! A fight over the government's budget, leading to a possible government shutdown. A fight over the debt ceiling. The beginning of Fed tapering (the reduction of large-scale asset purchases, known as Quantitative Easing) A nomination for a Fed Chair to replace Ben Bernanke.
8/14: VIX:
The Vix, known as Wall Streets fear gauge, moves lower when investors are more relaxed and touched its lowest level since March at 11.84 on M closed at a new record.
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However, such low levels for the index have often been a precursor to reversals. Some analysts have started to ask whether investors are becomi the outlook for stock prices noting that the Vix jumped 7 per cent on Tuesday as stocks fell. The options market is essentially saying that the rally in stocks is accurate and complete with low volatility suggesting there is not much more
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My new digs
my yacht
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vacation home 8/13: State-by-State Guide to Taxes on Retirees 8/13:20 Cities That May Face Bankruptcy After Detroit 8/13: Bayesian filter A Bayesian filter is a program that uses Bayesi... (WhatIs.com) Suppliers boost corporate spam tools E-mail security provider MX Logic and antispam ... (ComputerWeekly.com)
1. Bayes' Theorem is a means of quantifying uncertainty. Based on probability theory, the theorem defines a rule for refining an hypothesis by evidence and background information, and leads to a number representing the degree of probability that the hypothesis is true. To demonst Bayes' Theorem, suppose that we have a covered basket that contains three balls, each of which may be green or red. In a blind test, we re ball. We return the ball to the basket and try again, again pulling out a red ball. Once more, we return the ball to the basket and pull a ball o hypothesis that all the balls are all, in fact, red. Bayes' Theorem can be used to calculate the probability (p) that all the balls are red (an eve (symbolized as "|") that all the selections have been red (an event labeled as "B"): p(A|B) = p{A + B}/p{B}
Of all the possible combinations (RRR, RRG, RGG, GGG), the chance that all the balls are red is 1/4; in 1/8 of all possible outcomes, all the balls selections are red. Bayes' Theorem calculates the probability that all the balls in the basket are red, given that all the selections have been red as expressed as numbers between 0. and 1., with "1." indicating 100% probability and "0." indicating zero probability).
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8/11: Pets
I think our society needs a huge "Wake-up" call. As a shelter manager, I am going to share a little insight with you all...a view from the inside if you will.
First off, all of you people who have ever surrendered a pet to a shelter or humane society should be made to work in the "back" of an animal shelter for just on life drain from a few sad, lost, confused eyes, you would stop flagging the ads on Craigslist and help these animals find homes. That puppy you just bought will shelter when it's not a cute little puppy anymore. Just so you know there's a 90% chance that dog will never walk out of the shelter it's dumped at? Purebred o dogs that are "owner surrenders" or "strays", that come into a shelter are purebred dogs.
The most common excuses: "We are moving and we can't take our dog (or cat)." Really? Where are you moving too that doesn't allow pets? Or they say, "The thought it would". How big did you think a German Shepherd would get? "We don't have time for her". Really? I work a 10-12 hour day and still have time for m our yard". How about making her a part of your family? They always tell me, "We just don't want to have to stress about finding a place for her. We know she'll dog".
Odds are your pet won't get adopted & how stressful do you think being in a shelter is? Well, let me tell you, your pet has 72 hours to find a new family from th Sometimes a little longer if the shelter isn't full and your dog manages to stay completely healthy. If it sniffles, it dies. Your pet will be confined to a small run/ke barking or crying animals. It will have to relieve itself where it eats and sleeps. It will be depressed and it will cry constantly for the family that abandoned it. If y enough volunteers in that day to take him/her for a walk. If I don't, your pet won't get any attention besides having a bowl of food slid under the kennel door and its pen with a high-powered hose.
If your dog is big, black or any of the "Bully" breeds (pit bull, rottie, mastiff, etc) it was pretty much dead when you walked it through the front door. Those dogs doesn't matter how 'sweet' or 'well behaved' they are.
If your dog doesn't get adopted within its 72 hours and the shelter is full in most cases, it will be destroyed. If the shelter isn't full and your dog is good enough, breed it may get a stay of execution, but not for long. Most dogs get very kennel protective after about a week, and are destroyed for showing aggression. Eve turn in this environment. If your pet makes it over all of those hurdles, chances are it will get kennel cough or an upper respiratory infection and will be destroye paid a fee to euthanize each animal, and making money is better than spending money to take this animal to the vet. Here's a little euthanasia 101 for those of you that have never witnessed a perfectly healthy, scared animal being "put-down".
First, your pet will be taken from its kennel on a leash. They always look like they think they are going for a walk happy, wagging their tails. Until they get to "Th freaks out and puts on the brakes when we get to the door. It must smell like death or they can feel the sad souls that are left in there, it's strange, but it happe When it all ends, your pet's corpse will be stacked like firewood in a large freezer in the back with all of the other animals that were killed, waiting to be picked
What happens next? Cremated? Taken to the dump? Rendered into pet food? Or used for the schools to dissect and experiment on? You'll never know and it p your mind. It was just an animal and you can always buy another one, right? I hope that those of you who still have a beating heart and have read this are bawling your eyes out and can't get the pictures out of your head, I deal with this I hate my job, I hate that it exists & I hate that it will always be there unless you people make some changes and start educating the public. Do research, do your homework, and know exactly what you are getting into before getting a pet. These shelters and humane societies exist because people just do not care about animals anymore. Animals were not intended to be disposable but somehow days.
Animal shelters are an easy way out when you get tired of your dog (or cat), and breeders are the ones blamed for this. Animal shelters and rescue organizatio by keeping this misconception going.
Between 9 and 11 MILLION animals die every year in shelters (Humane Society of the United States estimates 3-4 million) and only you - as a pet owner can s changed one persons mind about taking their dog to a shelter, a humane society, or buying a dog without researching. For those of you that care--- please repo Craiglist in another city/state. Let's see if we can get this all around the US and have an impact. EFM Just adopted two older cats. They are my family now
8/11: Mother nature is pissed 2012 in the top ten of the hottest years on record (and hottest year on record for the United States and Argentina). The report notes the continuin over both land and ocean, with rising trends starting as far back as the mid-19th century, a rise in humidity levels over the past 40 years (consiste as air temperatures rise), and record or near-record level rises in sea level and ocean heat content. It also noted declines in the climate as well, sp and extent of the world's glaciers, with record or near-record lows in the temperature of the lower stratosphere (the layer of the atmosphere direc weather happens), and record or near-record lows in the amount of sea ice observed, the depth and extent of the Greenland Ice Sheet, and the am
"Human activities are changing Earths climate. At the global level, atmospheric concentrations of carbon dioxide and other heat-trapping greenh sharply since the Industrial Revolution. Fossil fuel burning dominates this increase. Human-caused increases in greenhouse gases are responsible global average surface warming of roughly 0.8C (1.5F) over the past 140 years. Because natural processes cannot quickly remove some of thes
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dioxide) from the atmosphere, our past, present, and future emissions will influence the climate system for millennia." 8/9: Time
diversification (not for novices) Planners invoke the doctrine of time diversification, that the risk of stocks diminishes with the length of the planning horizon. Academic researchers have been skeptical of this conventional wisdom. While a compelling case can be made that stocks outperform bonds over long periods, it does not follow that the proportion of wealth held in risky assets should fall with age. In fact, the canonical models o portfolio choice predict that the portfolio decision should generally be independent of age. Although there are recognized exceptions to this irrelevance proposition, none of them seem to justify the large portfolio adjustments advocated by financial planners. Explaining when and why financial planners may be right about time diversification is a problem that has exercised th ingenuity of financial economists for decades. The academic literature over the last decade (which we survey below) has developed models of life-cycle portfolio behavior, and so has provided insights into tim diversification. This has helped to bridge the gap between theory and practice. Our point is that the apparent gap was illusory to begin with; academics and practitioners were talkin past each other because they were using different notions of time diversification. We show that time-series diversification can occur even in the canonical model. Time-series diversification is an attribute of forecast horizon rather than planning horizon: I may optimally plan to invest less in risky assets five years hence even if I have an infinite planning horizon, provided t expected returns are mean-reverting. As Jagannathan and Kocherlakota (1996) put it, it is not the length of the planning horizon that matters for portfolio decisions, but how frequently the investor is allowed to adjust his portfolio. A rational investor would surely take expected changes in his wealth and expected returns into consideration in planning his lifetime portfolio strategy. However, academic researchersin refuting time diversificationoften seem to have crosssec diversification in mind. One academic paper of which we are aware that uses a timeseries notion of time diversification is the empirical paper by Levy and Spector (1996). Following Samuelsons example, Levy and Spector adopt CRRA utility. Using historical data from 1926 to 1990 they calculate optimal portfolios for (1) the entire sample period, and (2) shorter su They discover that although equities dominate bonds over the entire period, the optimal portfolio holds a smaller proportion of equity over shorter horizons. We will show that this can easily be explained as time-series diversification resulting from changes in the expected rate of return, changes which will differ depending upon the length of the forecast horizon.
8/8: REtirement Toolkit (DOL) In March, the Employee Benefit Research Institute published the results of its 2013 Retirement Confidence Survey. Among other findings, they r of surveyed workers lacked confidence that they had enough money for a comfortable retirement. While 43 percent estimated they would need t of their income to retire in financial security, less than half had calculated the amount needed to retire comfortably. 8/7:
%ustralia cuts rates to record low
The Reserve Bank of Australia has cut its official rate to a record low and said it was willing to ease policy further to supp
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countrys resource investment boom comes to an end.
8/7:
Normal Distribution
The first histogram is a sample from a normal distribution. The normal distribution is a symmetric distribution with well-behaved tails. This is indicated by the skewness of 0.03. The kurtosis of 2.96 is near the expected value of 3. The histogram verifies the symmetry. The second histogram is a sample from a double exponential distribution. The double exponential is a symmetric distribution. Compared to the normal, it has a stronger peak, more rapid decay, and heavier tails. That is, we would expect a skewness near zero and a kurtosis higher than 3. The skewness is 0.06 and the kurtosis is 5.9. The third histogram is a sample from a Cauchy distribution. For better visual comparison with the other data sets, we restricted the histogram of the Cauchy distribution to values between -10 and 10. The full data set for the Cauchy data in fact has a minimum of approximately -29,000 and a maximum of approximately 89,000. The Cauchy distribution is a symmetric distribution with heavy tails and a single peak at the center of the distribution. Since it is symmetric, we would expect a skewness near zero. Due to the heavier tails, we might expect the kurtosis to be larger than for a normal distribution. In fact the skewness is 69.99 and the kurtosis is 6,693. These extremely high values can be explained by the heavy tails. Just as the mean and standard deviation can be distorted by extreme values in the tails, so too can the skewness and kurtosis measures.
Double Exponential Distribution
Cauchy Distribution
Weibull Distribution
The fourth histogram is a sample from a Weibull distribution with shape parameter 1.5. The Weibull distribution is a skewed distribution with the amount of skewness depending on the value of the shape parameter. The degree of decay as we move away from the center also depends on the value of the shape parameter. For this data set, the skewness is 1.08 and the kurtosis is 4.46, which indicates moderate skewness and kurtosis. Many classical statistical tests and intervals depend on
Dealing
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with Skewness and Kurtosis
normality assumptions. Significant skewness and kurtosis clearly indicate that data are not normal. If a data set exhibits significant skewness or kurtosis (as indicated by a histogram or the numerical measures), what can we do about it?
8/7: HIGHER MOMENTS AND BAYESIAN MODELS A prerequisite to the use of the Markowitz framework is either that the relevant distribution of asset returns be normally distributed or that utility is only a function of the first two moments. But it is well known that many financial returns are not normally distributed. Studying a single asset at a time, empirical evidence suggests that asset returns typically have heavier tails than implied by the normal assumption and are often not symmetric, see Kon (1984), Mills (1995), Markowitz and Usmen (1996), Peiro (1999) and Premaratne and Bera (2002). Also, we argue that the relevant probability model is the posterior predictive distribution, which in general is not normal, not even under an assumed normal sampling model. The approach proposed in our paper is somewhat related to Shadwick and Keating (2002) and Cascon, Keating and Shadwick (2003) who argue that point estimates of mean and variance of an assumed sampling distribution are insufficient summaries of the available information of future returns. Instead they advocate the use of a summary function, which they call Omega, that represents all the relevant information contained within the observed data. This Omega function suggests a decision rule where investors select a portfolio that maximizes Omega for each possible level of average return. Given an average return level, this approach provides a complicated, non-linear utility function which can accommodate higher order moments. While we believe that we have made progress on important issues in portfolio selection, there are at least three limitations to our approach. First, our information is restricted to past returns. That is, investors make decisions based on past returns and do not use other conditioning information such as economic variables that tell us about the state of the economy. Second, our exercise is an in-sample portfolio selection. We have not applied our method to out-of sample portfolio allocation. Finally, the portfolio choice problem we examine is a static one. There is a growing literature that considers the more challenging dynamic asset allocation problem that allows for portfolio weights to change with investment horizon, labor income and other economic variables.
8/7:
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8/7: Jobs- The 162,000 jobs the economy added in July were a disappointment. The quality of the jobs was even worse. 1. A disproportionate number of the added jobs were part-time or low-paying or both. Part-time work accounted for more than 65 percent of the positions employers added in July. Low-paying retailers, restaurants and bars supplied gain The pension fund for retired Chicago teachers stands at risk of collapse. The city's four funds for other retired city workers are short by $19.5 bil funds is in peril of running out of money in less than a decade. And starting in 2015, the city will be required by the state to make far larger contr which could leave it hundreds of millions of dollars in the red as much as it would cost to pay 4,300 police officers to patrol the streets for a y
Chicagos plans were funded at 36 percent by the end of 2012, city documents say. Federal regulators would step in if a corporate pension fund s have no authority over public pensions. 1. Chicago's troubles, experts say, were years in the making. They are the result of city contributions under a state-authorized formula that failed enough money, two economic downturns in the 2000s that led to heavy investment losses, and an impasse in the State Capitol despite urgent call own pension system. Illinois, which has the most underfunded state pension system in the nation, controls Chicago's benefit and funding levels. 8/7: The Dangers of Ignoring Cataract Symptoms
Delaying Treatment of Advanced Forms of the Common Eye Disease Can Increase Risk of Permanent Blindness and Injury.
In support of Cataract Awareness Month in August, the American Academy of Ophthalmology is urging seniors and their caregivers to be aware ignoring the symptoms of cataracts, a leading cause of visual impairment that will affect more than half of all Americans by the time they are 80 Delaying diagnosis and treatment of age-related cataracts can increase seniors' risk of permanent blindness and can lead to both physical and psy damage.
Cataracts are caused by the clouding of the lens of the eye and are most common among older adults as the condition develops as the eye ages. M cope with cataracts accepting vision loss as an inevitable part of the aging process rather than seeking medical treatment. Due to the incapaci blurred vision, leaving cataracts undiagnosed and untreated can lead to physical danger such as injuries from falls or running into unseen objects psychological harm like depression and social isolation. In addition, the longer advanced forms of cataracts are left untreated, the more difficult successfully repair the damage caused to the eye.
Adults age 65 and older should have regular eye exams to monitor for the development of cataracts, in addition to other common eye conditions such as age-related macular degeneration (AMD) and glaucoma. People with diabetes, a family history of cataracts, and those who smoke tobac increased risk of developing cataracts. Common symptoms such as dull, blurry vision, colors appearing less vibrant, and halos around lights may noticeable as cataracts develop. This cataract simulator demonstrates how vision is affected by cataracts.
Cataracts are nearly always treatable with surgery, but it may not be necessary until performing daily activities becomes difficult. If daily life isn change in a person's eyeglass prescription may be all that is necessary until visual impairment becomes more severe. If completing everyday task cataract surgery should be discussed with an ophthalmologist a medical doctor specializing in the diagnosis, medical and surgical treatment of conditions.
"Seniors who find themselves giving up normal tasks like reading, exercising or driving due to cataract symptoms should know that they do no no in silence," said Rebecca Taylor, M.D., spokesperson for the American Academy of Ophthalmology. "Cataract surgery can help these individuals sight and their independence. It is one of the most common and safest procedures performed in medicine, so seniors should not resist seeking hel treatment can vastly improve your quality of life."
For people without regular access to eye care or for whom cost is a concern, EyeCare America, a public service program of the Foundation of th Academy of Ophthalmology, offers eye exams and care at no out-of-pocket cost to qualifying seniors age 65 and older through its corps of nearl ophthalmologists across the U.S. To learn more about EyeCare America or to find out if you or a loved one qualifies for the program, visit www.eyecareamerica.org. EyeCare America is co-sponsored by the Knights Templar Eye Foundation, Inc., with additional support from Alcon a About the American Academy of Ophthalmology
The American Academy of Ophthalmology, headquartered in San Francisco, is the world's largest association of eye physicians and surgeons with more than 32,000 members worldwide. Eye health care is provided by the three "O's" ophthalmologists, optometrists, and opticians. It is t ophthalmologist, or Eye M.D., who has the education and training to treat it all: eye diseases, infections and injuries, and perform eye surgery. Fo information, visit www.aao.org. The Academy's EyeSmart program educates the public about the importance of eye health and empowers them healthy vision. EyeSmart provides the most trusted and medically accurate information about eye diseases, conditions and injuries. OjosSanos language version of the program. Visit www.geteyesmart.org or www.ojossanos.org to learn more. About EyeCare America
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Established in 1985, EyeCare America, a public service program of the Foundation of the American Academy of Ophthalmology, is committed t preservation of sight, accomplishing its mission through public service and education. EyeCare America provides year-round eye care services to underserved seniors and those at increased risk for eye disease. More than 90 percent of the care made available is provided at no out-of-pocket patients. More information can be found at: www.eyecareamerica.org. Source: eyecareamerica.com
8/6:
Fees
How much are high fees costing you? Unless you run the numbers you will never know. Go to: http://www.401Kfees.com/how-much-are-high-fees-costing-you The calculator at this site will also provide you: 1.
How much you would have to save extra each year just end up with the same amount you would have if you had decided not to invest in the hig chose the lower fee plan. Go with the low fee plan. And this calculator also provides you with the amount annually you would have to contribute to your retirement plan to overcome the negative plan. Again go with the low fee plan. Some comparison examples [You can make your own chart using the calculator above...] ROR @ 7%............7%......................7%.....................7%.....................7%.................7%..............7% HiFees @3%..........2.5%...................2.0%.................1.5%...................1.0.................0.5%..........0.2% LoFees @.5%.........0.5%...................0.5%.................0.5%...................0.5%.............0.5%...........0.2% Initial Inv @ $25K..$25K...................$25K.................$25K..................$25K..............$25K..........$25K Yrly +up @ $0........$ 0.....................$ 0....................$ 0.....................$ 0.................$ 0...............$ 0 Start @ age @ 30.. 30 ...................... 30 .................... 30 ................... 30 ............... 30 ................30 Stop or Ret @ 65 .. 65....................... 65 .................... 65 ................... 65 ............... 65 ............... 65 Total yrs Inv = 35... 35 ...................... 35 .................... 35 .................... 35 ............... 35 ................ 35 Hi Fees Cost U $127,904...............$109,871...............$88,655.............$63,710............$34,404 U would accumulate With low fees $226,556...............$226,556 .............$226,556 ..............$226,556 ...........$226,556
2.
With high fees U would accumulate MUCH, MUCH LESS = $98,652....................$116,683 .............$137,900 ..............$162,845............$192,152 Another example: ROR @ 7%..............7%...........7%..........7%............7%.................7%..............7% HiFees @3%...........2.5%........2.0%........1.5%.........1.0%.................0.5%........0.2%
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LoFees @.5%..........0.5%........0.5%........0.5%..........0.5%.............0.5%..........0.2% Initial Inv @ $25K...$25K........$25K........$25K.........$25K..............$25K..........$25K Yrly +up @ $6K.......$ 6K........$ 6K.......$ 6K...........$ 6K...............$ 6K...........$ 6K Start @ age @ 30... 30 .. ....... 30 ............ 30 ........... 30 ............... 30 ............30 Stop or Ret @ 65 ... 65........... 65 ........... 65 ............ 65 ............... 65 ........... 65 Total yrs Inv = 35.... 35 ........... 35 ............35 ............ 35 ................ 35 ............ 35 Hi Fees Cost U $430,198 ...............$365,101..$290.042...$206,410...$110,003 And U would accummulate With low fees $970,764...............$970,764 ...$970,764 ..$970,764 ..$970,764 But With high fees U would accumulate LESS = $540,565...........$605,663 .....$679,822 ...$764,353...$860,760
Hi fees means you must save per month extra to end up with the same amount you would have accumulated if you had invested in the lower fee plan $487............................$374.....................$268.....................$172.................$83 Per Year you must save/invest more = $5,844.......................$4,488.................$3,216..................$2,064................$ 996 Which means your annual contribution to your retirement plan now must be: $11,840.....................$10,479.................$9,221...................$8,058..............$6,987
Money is not the most important thing in the world. Love is. Fortunately, I love money. ~~ Jackie Mason
8/5: Is this real????? John Mauldin
Lets take the S&P 500 as an example. It returned roughly 42% from September 1, 2011, through August 1, 2013, as the VIX Index since the global financial crisis. Over that time frame, real earnings declined slightly (down about 2% through Q1 2013 earnings s trailing 12-month price-to-earnings (P/E) ratio jumped 44%, from 13.5x to 19.5x. That means the majority of the recent gains in US driven by multiple expansion in spite of negative real earnings growth. This is a clear sign that sentiment, rather than fundament markets higher.
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As you can see in Figure 6, compared to the more common trailing 12-month P/E ratio in
Figure 5, the Shiller P/E metric essentially smooths out the series and helps us avoid false signals by dividing the markets curren inflation-adjusted earnings of the past ten years. Historically, this range has peaked and given way to major market declines at aro 26x excluding the dot-com bubble), and it has bottomed in the mid-single digits. Not only does todays Shiller P/E of 24x suggest market, but the rapid multiple expansion of the last two years in the absence of earnings growth suggests that this market is also John Hussman helps us keep current valuations in historical perspective:
The Shiller P/E is now 24.4, about the same level as August 1929, higher than December 1972, higher than August 1987, b the level of 43 that was reached in March 2000 (a level that has been followed by more than 13 years of market returns with percent of the return on Treasury bills and even then only by revisiting significantly overvalued levels today). The Shiller P moderately below the level of 27 at the October 2007 market peak. Its worth noting that the 2000-2001 recession is already calculation. Moreover, looking closely at the data, the implied profit margin embedded in todays Shiller P/E is 6.3%, compa average of only about 5.3%. At normal profit margins, the current Shiller P/E would be 29.
While it may be impossible to accurately predict when this policy-driven market will break, history suggests it would be very reason bear to eventually bottom at a P/E multiple between 5x and 10x, opening up one of the rare wealth-creation opportunities to deplo prices. Some of these technical details are rather dry, but I hope you'll focus on the main idea: We are not talking about the pote 20% to 30% drawdown in the S&P 500. If history is any indication, we are talking about the potential for a 50%+ peak-to-tro ten-year average annual returns as bad as -4.4%, according to the chart above from Cliff Asness at AQR. Such a result would fa similar deleveraging periods such as the United States experienced in the 1930s and Japan has experienced since 1989. There is too much equity risk can be unproductive and even destructive in this kind of economic environment.
I believe that Japan has begun a long-term process of continually devaluing its currency. For reasons I have written about at lengt think the yen could go to 200 to the dollar in the next five years. I dont see a precipitous move, simply a steady erosion as Japan inflation and export its deflation.
While the yen at its current valuation is not a particular problem for the rest of the world, when it hits 120 we will start to see raised speeches from the countries most affected. At 140 we could start to see serious reactions. 8/5: Bathing a Loved One by Ryan Mackey
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When a loved one loses the ability to bathe and maintain themselves, proper hygiene becomes especially important. Depending on the frailty of t of involvement can range from offering minimal assistance to doing all tasks from washing to even toweling off. While every situation differs, the recommendations that should help both you and the person feel as comfortable as possible, and allow for the bathing process to be as normal as p
Be calm when approaching the person about a bath, so you do not anger them and make them feel awkward in any way. If they oppose yo try later on when/or if they are relaxed. Bear in mind the persons traditional bathing habits and try to adapt these routines, so they feel as relaxed as possible. Make the experience as easy as you can, by remaining composed, using a properly lighted bathroom.
Do not argue with the person over when they bathe, rather walk them through the process and explain to them how easy you have made it.
Recommend they take a bath and not a shower if they are able to get into a tub. Using a tub is less taxing on the caregiver and is much safe Properly prepare the soaps, sponges, and towels needed ahead of time so the bath progresses quickly. If possible use a tub with a hand-held shower attachment that can help when washing the person. If the person is self-conscious about being without clothes, wrap a towel around them when in the bath to provide a feeling of privacy. Use liquid soaps instead of bar soaps for convenience circumstances. 8/5: GDP VS GDI
you get somewhat different numbers when you look at gross domestic income instead of gross domestic product. 1. IN theory, G.D.I. and G.D.P. should be equal. One measures gross income, the other gross production, and as a matter of basic accounting they dont, not in real time, because they are collected from different sources using different deadlines and definitions. G.D.P., for example, depends h while G.D.I. relies on data from paychecks, which are often issued well after sales are made, said J. Steven Landefeld, director of the bureau. G the bureaus children, he said. Were proud of both, and we know theyre different. Early G.D.I. numbers have provided a better indicator of cyclical changes in the economy of the onset and the end of the last recession, in par readings of G.D.P., according to research by Jeremy J. Nalewaik, a Fed economist. What are the G.D.I. numbers telling us now? It depends on how you look at them. The Economic Cycle Research Institute, an independent forec economy fell into another recession sometime in the middle of 2012 and it is still in a recession now, according to Lakshman Achuthan, the ins officer. He relied in part on G.D.I. data. But the vast majority of mainstream economists reject this interpretation, and Mr. Landefeld said G.D.I. exaggerate economic trends. The G.D.P. and G.D.I. numbers available right now indicate that the economy is growing, but Mr. Achuthan said that the historical revisions mad reminder that these numbers are all a moving target, and that they will change. Mr. Carson of AllianceBernstein is far more sanguine, saying the economy appears to be growing modestly. But he agrees that the data isnt allow Weve gotten so many new numbers, he said. They help a bit. Now the past has become a little less foggy, but as for the present, theres still p around. 8/5: GDP:
Gross domestic product numbers released on Wednesday also suggested that the economy was still ailing. In the second quarter of 2013, the Bure said, the growth rate of G.D.P. was 1.7 percent, on a seasonally adjusted, annualized basis. Thats just a preliminary number, subject to extensive quarter, the bureau now says G.D.P. grew at a 1.1 percent rate after a series of reductions from its initial estimate of 2.5 percent.
But how weak is the economy? The numbers dont appear to fit a coherent pattern. Even with the downward revisions in the labor figures, the cu is greater than would typically be expected from a weak economy. The lackluster G.D.P. picture is hard to reconcile with the decline in the unem seeing, said Joseph G. Carson, director of global economic research at AllianceBernstein. During similar tepid growth environments in the past, sometimes even increased rather than declined, he said 8/5: 401k Fees:
Its been about a year since the U.S. Department of Labor 1. (DOL) required employers to tell their workers how much their 401(k)-type plans w
only 14% who noticed the new fee information 7% of all plan participants said they made changes to their plan as a result of seeing the dis kxinvisible" style="overflow: hidden;" data-id="11847" data-alias="Legolas Media" height="0" scrolling="no" width="0">
But only 32% of those who took action moved money out of expensive fund choices. The majority of employees did nothing.< class="kxtag kxin
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"This isn't right, this isn't even wrong." Wolfgang Pauli (1900-1958), upon reading a young physicist's paper
8/5 : Shopping for the Right In-home Help By Eileen Beal, MA
When Mom and Dad are struggling to keep up with the chores, activities or medications that help them maintain their independence and health, their situation (and your concerns) could be as simple as bringing in someone to provide in-home care for a couple of hours a day.
But not before you and they have had a frank discussion about the kind of help, support and services they need and will accept. You want th are a part of the decision-making process, that their wishes and wants are honored and respected, says Mary Ellen Mel Roberts, LCSW, a cer coordinator at Oklahoma City-based Elder Care Solutions. Start by asking your loved ones (and yourself) the following questions: What days and times, and in what situations, might you need help? How much money is available to pay for outside resources, and will your insurance including Medicare or Medicaid cover any costs? Home care vs. home health aide
Home care aides provide assistance with housekeeping and chores (meal preparation, shopping, errands, etc); socialization and companionship; a provide some personal care (bathing and grooming). In some areas, they are called personal care assistants.
Home health aides increasingly certified nursing assistants (CNAs) and/or state tested nursing assistants (STNA) provide medically-related ca pressure and glucose levels, dress dry wounds, empty colostomy bags, etc.); assist with therapeutic treatments prescribed by a physician; supervi administration; etc.
The clients needs and the aides skill-level determine what the aides [hourly] fee will be. The more skills the aide has, the higher the cost, sa Adams, RN, the Director of the Cleveland, Ohio-based Western Reserve Area Agency on Agings Community Services and Support Program. Write a job description
Using the information youve gathered from discussing and assessing your loved ones needs, write a detailed job description. Care expectation client to client, so having everything in writing means everyone knows, and meets, expectations, says Lucy Andrews, the nurse/CEO at Santa R California-based At Your Service Home Care. A detailed job description doesnt just clarify expectations; it should also influence whether to hire on your own or through an agency.
With an agency, the aide has been trained, screened and checked for everything from DUIs to TB and bonded. And they are supervised. T Adams, includes surprise home visits.
But there are other benefits, too. Clients have back-up if the scheduled caregiver cant be there. And an agency handles all the paperwork: re forms, payroll, taxes, workers compensation, insurance, says Andrews. And, adds Roberts, if you arent happy with the person, all you do is call the agency and say, This isnt working.
Hiring on your own means asking people you trust for word-of-mouth referrals and/or posting help wanted ads. Increasingly, you can do that at the PHI Nationals Matching Services Project http://phinational.org/policy/resources/phi-matching-services-project). And youll also be doing th interviewing, supervision, scheduling and paperwork. But, theres an upside, too. Its usually easier to partner with the person wholl be comin will usually be paying less, too, says Adams. Do a thorough interview
If you decide to go through an agency, use the questions at the Eldercare Locator (http://www.eldercare.gov) to screen and vet the agency. Then following questions to interview the candidates they suggest and/or you find on your own:
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Can you provide me with your full name, address, phone number, current photo ID and Social Security number so that I can run a backgro credit check? (If youre interviewing an agency candidate, request contact information only.) Can you (your agency) provide me with copies of current documentation related to personal insurance, bonding, workers compensation, a health status (TB test, immunizations, etc.)? Can you (your agency) provide me with current documentation related to specific services (dementia care, CPR, etc.) you are trained/cert Can you (your agency) provide me with references related to past clients and employers. How long have you been providing care? Why did you leave your last position? What are your expectations if I hire you? What hours and days will you be available? What hourly rate do you expect, and how do you expect to be paid? How do you like to get feed-back and suggestions? What do you like and dislike about home care?
You should also ask situation-specific questions, such as: Since my mother is Jewish, can you prepare kosher foods? Since my father doesnt spe whats your competency in (fill in the blank)? Since we get a lot of snow here, how reliable is your car? (Note: All the thorough interview in interviewees and two books cited in the source resource list: How to Care for Aging Parents (pps. 155-161) and The Caregiver Helpbook (pps
In addition, download the United Hospital Funds Home Care: A Family Caregivers Guide and A Family Caregivers Planner for Care at Ho full of tips and strategies for running a good interview, and for addressing the challenges that could come with employing an in-home caregiver.
8/4: Discounts
This list may be useful for you and your family and friends too. Dunkin Donuts gives free coffee to people over 55 . If you're paying for a cup every day, you might want to start getting it for FREE. YOU must ASK for your discount ! No Ask...No Discount. RESTAURANTS: Applebee's: 15% off with Golden Apple Card (60+) Arby's: 10% off ( 55 +) Ben & Jerry's: 10% off (60+) Bennigan's: discount varies by location (60+) Bob's Big Boy: discount varies by location (60+) Boston Market: 10% off (65+) Burger King: 10% off (60+) Chick-Fil-A: 10% off or free small drink or coffee ( 55+) Chili's: 10% off ( 55+) CiCi's Pizza: 10% off (60+) Denny's: 10% off, 20% off for AARP members ( 55 +) Dunkin' Donuts: 10% off or free coffee ( 55+) Einstein's Bagels: 10% off baker's dozen of bagels (60+) Fuddrucker's: 10% off any senior platter ( 55+) Gatti's Pizza: 10% off (60+) Golden Corral: 10% off (60+) Hardee's: $0.33 beverages everyday (65+) IHOP: 10% off ( 55+) Jack in the Box: up to 20% off ( 55+) KFC: free small drink with any meal ( 55+) Krispy Kreme: 10% off ( 50+) Long John Silver's: various discounts at locations ( 55+) McDonald's: discounts on coffee everyday ( 55+) Mrs. Fields: 10% off at participating locations (60+) Shoney's: 10% off Sonic: 10% off or free beverage (60+) Steak 'n Shake: 10% off every Monday & Tuesday ( 50+) Subway: 10% off (60+) Sweet Tomatoes: 10% off (62+) Taco Bell : 5% off; free beverages for seniors (65+)
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TCBY: 10% off ( 55+) Tea Room Cafe: 10% off ( 50+) Village Inn: 10% off (60+) Waffle House: 10% off every Monday (60+) Wendy's: 10% off ( 55 +) Whataburger: 10% off (62+) White Castle: 10% off (62+) This is for me ... if I ever see one again. RETAIL & APPAREL: Banana Republic: 30% off ( 50 +) Bealls: 20% off first Tuesday of each month ( 50 +) Belk's: 15% off first Tuesday of every month ( 55 +) Big Lots: 30% off Bon-Ton Department Stores: 15% off on senior discount days ( 55 +) C.J. Banks: 10% off every Wednesday (50+) Clarks : 10% off (62+) Dress Barn: 20% off ( 55+) Goodwill: 10% off one day a week (date varies by location) Hallmark: 10% off one day a week (date varies by location) Kmart: 40% off (Wednesdays only) ( 50+) Kohl's: 15% off (60+)Modell's Sporting Goods: 30% off Rite Aid: 10% off on Tuesdays & 10% off prescriptions Ross Stores: 10% off every Tuesday ( 55+) The Salvation Army Thrift Stores: up to 50% off ( 55+) Stein Mart: 20% off red dot/clearance items first Monday of every month (55+) GROCERY : Albertson's: 10% off first Wednesday of each month ( 55 +) American Discount Stores: 10% off every Monday ( 50 +) Compare Foods Supermarket: 10% off every Wednesday (60+) DeCicco Family Markets: 5% off every Wednesday (60+) Food Lion: 60% off every Monday (60+) Fry's Supermarket: free Fry's VIP Club Membership & 10% off every Monday (55+) Great Valu Food Store: 5% off every Tuesday (60+) Gristedes Supermarket: 10% off every Tuesday (60+) Harris Teeter: 5% off every Tuesday (60+) Hy-Vee: 5% off one day a week (date varies by location) Kroger: 10% off (date varies by location) Morton Williams Supermarket: 5% off every Tuesday (60+) The Plant Shed: 10% off every Tuesday ( 50 +) Publix: 15% off every Wednesday ( 55 +) Rogers Marketplace: 5% off every Thursday (60+) Uncle Guiseppe's Marketplace: 15% off (62+) TRAVEL: Airlines: Alaska Airlines: 50% off (65+) American Airlines: various discounts for 50% off non-peak periods (Tuesdays - Thursdays) (62+)and up (call before booking for discount) Continental Airlines: no initiation fee for Continental Presidents Club & special fares for select destinations Southwest Airlines: various discounts for ages 65 and up (call before booking for discount) United Airlines: various discounts for ages 65 and up (call before booking for discount) U.S. Airways: various discounts for ages 65 and up (call before booking for discount) Rail: Amtrak: 15% off (62+) Bus: Greyhound: 15% off (62+) Trailways Transportation System: various discounts for ages 50+ Car Rental: Alamo Car Rental: up to 25% off for AARP members Avis: up to 25% off for AARP members
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Budget Rental Cars: 40% off; up to 50% off for AARP members ( 50+) Dollar Rent-A-Car: 10% off ( 50+) Enterprise Rent-A-Car: 5% off for AARP members Hertz: up to 25% off for AARP members National Rent-A-Car: up to 30% off for AARP members Overnight Accommodations: Holiday Inn: 20-40% off depending on location (62+) Best Western: 40% off (55+) Cambria Suites: 20%-30% off (60+) Waldorf Astoria - NYC $5,000 off nightly rate for Presidential Suite (55+) Clarion Motels: 20%-30% off (60+) Comfort Inn: 20%-30% off (60+) Comfort Suites: 20%-30% off (60+) Econo Lodge: 40% off (60+) Hampton Inns & Suites: 40% off when booked 72 hours in advance Hyatt Hotels: 25%-50% off (62+) InterContinental Hotels Group: various discounts at all hotels (65+) Mainstay Suites: 10% off with Mature Traveler's Discount (50+); 20%-30% off (60+) Marriott Hotels: 25% off (62+) Motel 6: Stay Free Sunday nights (60+) Myrtle Beach Resort: 30% off ( 55 +) Quality Inn: 40%-50% off (60+) Rodeway Inn: 20%-30% off (60+) Sleep Inn: 40% off (60+) ACTIVITIES & ENTERTAINMENT: AMC Theaters: up to 30% off ( 55 +) Bally Total Fitness: $100 off memberships (62+) Busch Gardens Tampa, FL: $13 off one-day tickets ( 50 +) Carmike Cinemas: 35% off (65+) Cinemark/Century Theaters: up to 35% off Massage Envy - NYC 20% off all "Happy Endings" (62 +) U.S. National Parks: $10 lifetime pass; 50% off additional services including camping (62+) Regal Cinemas: 50% off Ripley's Believe it or Not: @ off one-day ticket (55+) SeaWorld, Orlando , FL : $3 off one-day tickets ( 50 +) CELL PHONE DISCOUNTS: AT&T: Special Senior Nation 200 Plan $19.99/month (65+) Jitterbug: $10/month cell phone service ( 50 +) Verizon Wireless: Verizon Nationwide 65 Plus Plan $29.99/month (65+). MISCELLANEOUS: Great Clips: $8 off hair cuts (60+) Supercuts: $8 off haircuts (60+) NOW, go out there and claim your discounts--and remember-YOU must ASK for your discount ---- no ask, no discount. 8/4: 20 Charts That Show The Economy Has Dramatically Improved View these
8/4: Poor A whopping 4 of 5 Americans will have dealt with poverty at some point by the year 2030, dealing with joblessness or living off of public program Thirty-five to 55-year-old Americans have the highest risk of falling into poverty, arguably the worst time in anyone's lives to fall on hard times.R poverty rate are becoming more blurred, as an increasing number of whites have joined the ranks of the poor today (40%). 1. "More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation's de number of poor blacks," The U.S. as a whole scores even worse when it comes to child poverty rates, ranking second-to-last of 35 countries analyzed. Government spend declined the past three years, removing kids from programs aimed to help them.
girls feeding elephant Just too funny
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8/4: U.S. GDP 1. expanded 1.7% in Q2. Spending increased 1.8%, compared with 2.3% in Q1. Investment increased 4.6%, compared with -4.6% in Q1. Exports increased 5.4%, compared with -1.3% in Q1. Imports increased 9.5%, compared with an increase of 0.6% in Q1. Government spending and investment fell -1.5%, compared with -8.4% in Q1
8/1: 1. List of suggestions for behavioural elements in the macroeconomic model Date: 2013-07 By: Ardjan Gazheli Mikls Antal Jeroen van den Bergh URL: http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:7:d:0:i:24&r=cbe
Traditional economic theory describes economic agents as being perfectly rational. According to this approach, agents posses all necessa the ability to process this information to make the best decision for maximizing their profit. However, in the real world this assumption do of reasons. First, economic agents are not in possession of all the information relevant to making decisions and furthermore, information not have all the computational abilities needed to arrive at optimal decisions. Third, they are boundedly rational and have a number of ot which influence their choices. Here we provide a list with the most important behavioural biases of different stakeholders involved in a su This will allow us to improve macroeconomic models and associated analyses of transition policies.
7/31: Vision Loss Tips By Ryan Mackey
Up to 30 percent of seniors today face partial vision loss at the hands of macular degeneration. The retina gradually declines with age in macular the vision used to read and look into another persons face. The macula, which is the center of the retina, deteriorates to a point that sight is restr
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retina only. Here are some helpful tips to alleviate the problems a loved one may face if they are in a hospital or a nursing home.
Tell a loved one to be up front about their vision loss with any aides and hospital staff that may take for granted their ability to see food, people, a
Make sure staff at the hospital or nursing home makes a special note about a loved ones reduced vision levels, and does not merely describe thei glaucoma.
Be understanding of the persons capacity to see and do certain tasks. If there is something they struggle with such as writing their signature or re sure the doctors know ahead of time.
Make sure any visitors or staff members introduce themselves to your loved one when they enter the room instead of simply walking in the room been recognized.
Ensure that the lighting in the loved ones room is sufficient enough for them to see as best as possible. The stronger the light, the better chance t clearly and make out certain images.
Have the staff at the hospital or nursing facility make known the meals they bring in and arrange the meal so the senior can adjust to an eating po
Other vision conscious items such as large number playing cards, books on tape, and large button phones can assist the senior in making the adjus smoothly.
When a loved one has undergone prostate surgery, incontinence may result as a complication. The prostate gland is an organ surrounding the ma passageway for urine to exit the body. After any destruction to the gland, either through treatment for cancer, or a removal due to the prostates enlargement, there is a chance for incontinence.
Incontinence itself is not a disease, but a symptom or side effect of another condition which underlies it. In both men and women, the spinal c bladder sensation and control, as to the muscles surrounding the pelvis. Many conditions can be treated, but until full treatment is implemented a incontinence must be dealt with.
Addressing the matter with your loved one will help ease their stress and yours. As an unwanted condition that is embarrassing to the loved one, caregivers to have control options available. Some may come in medication form prescribed by the doctor. Others are medical supplies that ca counter, or via insurance if covered. TYPES OF INCONTINENCE
Incontinence can occur at nighttime in individuals of any age. Known as enuresis or bedwetting, it is attributed to children. This psychologica loved one from dealing with the situation. As a caregiver, you may be inclined to call them accidents. Although they may occur less frequentl incontinence, take the better safe than sorry approach on a nightly basis.
Environmental incontinence occurs in households that have too many obstacles between the individual and the bathroom. In one bathroom hom may be occupying the facilities when the urge appears. This type of incontinence can also occur on trips of any length. Total incontinence may occur when there is damage to the bladder or urethra, and is constant. This is the most taxing upon caregivers and loved intervention.
Both reflex and functional incontinence can occur in patients who have dementia, stroke or other sensory awareness dysfunctions. As with total interventions that are more advanced, or combined with medication and fluid control, can help. DIFFERENT PERSPECTIVES
Womens menstrual cycles predispose them to tolerating pads for extended periods of time. Men may be resistant to wearing pads to absorb leak recovering from surgery (or other issues that affect bladder control). Current state of the art design in pads make for an easier transition period a treated.
Depending on your loved ones level of cooperation, bladder pads can be an option. Adhesive strips keep pads in place, and absorb small leaks, s incontinence. There are deodorant characteristics, allowing the pad to be used for several hours, but they have saturation points requiring change loved one will need to tell you they require a change, or you will need to work out a spot check schedule.
Larger absorbent pads are meant for individuals who have higher levels of urine leakage. They are undergarment liners that come with their ow buttons, or with adhesive strips that lock on to underwear. In most cases, any stick on protectors are best used with brief underwear rather tha provide a better, more secure fit. Some higher quality liners have moisture indicators that change color depending on the saturation level. Individuals who experience moderate incontinence may need disposable briefs. Even in light flow incontinence, briefs may be a choice for night
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both caregiver and loved one to have a sounder and drier sleep during the night.
Some products will also have leg cuffs or elastic legging to help keep the leaks contained better. This is especially true if they are being worn at s trips to the bathroom may be hampered by other guests. Food and drink intake may also be increased when out with others. Protective briefs of for overnight visits, too. USE WHAT WORKS
Discuss medication options with the doctor in addition to products that will help decrease bathroom anxiety. While limiting fluids can be done that your loved one receive a consistent level of nourishment and hydration. Encourage regular eating and drinking patterns, but watch for produ stimulators, such as caffeine. Caffeine opens the kidneys, and can also be dehydrating in some instances, requiring more fluid intake. Its sometimes a battle to get your loved one to utilize adjuncts for intimate needs. Maintaining an open communication is important, as is compa fear of losing control. When choosing a product to help keep your loved one comfortable, consider all aspects. You may need to start with a ligh something with more coverage. When possible, a mutual decision is the goal that scores points all around. 7/30: How annuity payouts are different Estimated Quotes for a Single Life Annuity Male 69 Deposit $100,000 Estimated Monthly Income Annual Payout Rate*
Income Payment Options and Definitions
Single Life Income with No Payments to Beneficiaries ("SL") You receive this income for your lifetime, which means, you can never outlive this income. After you die there are no payments made to beneficiaries.To receive your FREE 9-page report with detailed quotes $640 about this annuity, click the box(es) to the right and fill in the information at the bottom of this page. Single Life Income with Up to 5 Years Paid to Beneficiaries ("5CC") You receive this income for your lifetime, which means, you can never outlive this income, even after the specified period has ended. If you should die during the first 5 years your beneficiaries will continue to receive this income until the end of the 5th policy year.To receive your FREE 9-page report with detailed quotes about this annuity, click the box(es) to the right and fill in the information at the bottom of this page. Single Life Income with Up to 10 Years Paid to Beneficiaries ("10CC") You receive this income for your lifetime, which means, you can never outlive this income, even after the specified period has ended. If you should die during the first 10 years your beneficiaries will continue to receive this income until the end of the 10th policy year.To receive your FREE 9-page report with detailed quotes about this annuity, click the box(es) to the right and fill in the information at the bottom of this page. Single Life Income with Up to 15 Years Paid to Beneficiaries ("15CC") You receive this income for your lifetime, which means, you can never outlive this income, even after the specified period has ended. If you should die during the first 15 years your beneficiaries will continue to receive this income until the end of the 15th policy year.To receive your FREE 9-page report with detailed quotes about this annuity, click the box(es) to the right and fill in the information at the bottom of this page. Single Life Income with Up to 20 Years Paid to Beneficiaries ("20CC") You receive this income for your lifetime, which means, you can never outlive this income, even after the specified period has ended. If you
7.68%
Click this box and complete the form below to receive your free quotation report about this annuity.
$630
7.56%
$599
7.19%
$561
6.73%
$517
6.20%
Click this box and complete the form below to receive your free
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should die during the first 20 years your beneficiaries will continue to receive this income until the end of the 20th policy year.To receive your FREE 9-page report with detailed quotes about this annuity, click the box(es) to the right and fill in the information at the bottom of this page. Single Life Income with Installment Refund Paid to Beneficiaries ("IR") You receive this income for your lifetime, which means, you can never outlive this income. If you should die before receiving an amount equal to the premium, your beneficiaries will continue to receive this income in installments until the total amount paid to you and your beneficiaries $561 equals the premium. Payments stop only upon your death after the total premium has been paid back to you and your beneficiaries.To receive your FREE 9-page report with detailed quotes about this annuity, click the box(es) to the right and fill in the information at the bottom of this page.
quotation report about this annuity.
6.73%
7/30: Stocks too high???? Stock prices are now at very high levels compared with average corporate earnings for the preceding decade, or compared with the replacement cost of corporate assetstwo indicators that many economists note have in the past been very good predictors of stock-market returns. When shares have been this expensive on such measures in the past, they have usually turned out to be a poor investment. investors today who hold a typical conservative portfolio of 40% stocks and 60% bonds cannot safely rely on withdrawing 4% a year and still making their portfolio last 30 years. They believe such investors run a 50% chance of running out of money before they die. much of the boom in the market has been fueled by the Fed's easy-money policy. 7/29: Poverty Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream. As nonwhites approach a numerical majority in the U.S., one question is how public programs to lift the disadvantaged should be best focused on the affirmative action that historically has tried to eliminate the racial barriers seen as the major impediment to economic equality, or simply on improving socioeconomic status for all, regardless of race. 1. Hardship is particularly growing among whites, based on several measures. Pessimism among that racial group about their families' economic futures has climbed to the highest point since at least 1987. In the most recent AP-GfK poll, 63 percent of whites called the economy "poor." While racial and ethnic minorities are more likely to live in poverty, race disparities in the poverty rate have narrowed substantially since the 1970s, census data show. Economic insecurity among whites also is more pervasive than is shown in the government's poverty data, engulfing more than 76 percent of white adults by the time they turn 60, according to a new economic gauge being published next year by the Oxford University Press. 1. The gauge defines "economic insecurity" as a year or more of periodic joblessness, reliance on government aid such as food stamps or income below 150 percent of the poverty line. Measured across all races, the risk of economic insecurity rises to 79 percent. Marriage rates are in decline across all races, and the number of white mother-headed households living in poverty has risen to the level of black ones. Nationwide, the count of America's poor remains stuck at a record number: 46.2 million, or 15 percent of the population, due in part to lingering high unemployment following the recession. While poverty rates for blacks and Hispanics are nearly three times higher, by absolute numbers the predominant face of the poor is white. 1. More than 19 million whites fall below the poverty line of $23,021 for a family of four, accounting for more than 41 percent of the nation's destitute, nearly double the number of poor blacks. In 2011 that snapshot showed 12.6 percent of adults in their prime working-age years of 25-60 lived in poverty. But measured in terms of a person's lifetime risk, a much higher number 4 in 10 adults falls into poverty for at least a year of their lives. 1. The risks of poverty also have been increasing in recent decades, particularly among people ages 35-55, coinciding with widening income inequality. For instance, people ages 35-45 had a 17 percent risk of encountering poverty during the 1969-1989 time period; that risk increased to 23 percent during the 1989-2009 period. For those ages 45-55, the risk of poverty jumped from 11.8 percent to 17.7 percent. Higher recent rates of unemployment mean the lifetime risk of experiencing economic insecurity now runs even higher: 79 percent, or 4 in 5 adults, by the time they turn 60. By race, nonwhites still have a higher risk of being economically insecure, at 90 percent. But compared with the official poverty rate, some of the biggest jumps under the newer measure are among whites, with more than 76 percent enduring periods of joblessness, life on welfare or near-poverty. By 2030, based on the current trend of widening income inequality, close to 85 percent of all working-age adults in the U.S. will experience bouts of economic insecurity. "Poverty is no longer an issue of 'them', it's an issue of 'us'," says Mark Rank, a professor at Washington University in St. Louis who
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calculated the numbers. "Only when poverty is thought of as a mainstream event, rather than a fringe experience that just affects blacks and Hispanics, can we really begin to build broader support for programs that lift people in need." For the first time since 1975, the number of white single-mother households living in poverty with children surpassed or equaled black ones in the past decade, spurred by job losses and faster rates of out-of-wedlock births among whites. White single-mother families in poverty stood at nearly 1.5 million in 2011, comparable to the number for blacks. Hispanic single-mother families in poverty trailed at 1.2 million. 1. Since 2000, the poverty rate among working-class whites has grown faster than among working-class nonwhites, rising 3 percentage points to 11 percent as the recession took a bigger toll among lower-wage workers. Still, poverty among working-class nonwhites remains higher, at 23 percent. The share of children living in high-poverty neighborhoods those with poverty rates of 30 percent or more has increased to 1 in 10, putting them at higher risk of teenage pregnancy or dropping out of school. Non-Hispanic whites accounted for 17 percent of the child population in such neighborhoods, compared with 13 percent in 2000, even though the overall proportion of white children in the U.S. has been declining. The share of black children in high-poverty neighborhoods dropped from 43 percent to 37 percent, while the share of Latino children went from 38 percent to 39 percent. Race disparities in health and education have narrowed generally since the 1960s. While residential segregation remains high, a typical black person now lives in a nonmajority black neighborhood for the first time. Previous studies have shown that wealth is a greater predictor of standardized test scores than race; the test-score gap between rich and low-income students is now nearly double the gap between blacks and whites. 7/29: Inflation rate 1910 - 2010
7/28: Egypt- Truly thought that once Mubarek was gone and a democratic vote was taken that the country could be a precursor to change in the area and certainly for women's rights. If Egypt cannot get through this mess, the area will destabilize into complete factional fighting. 7/28: Yardeni noted, nearly all of the 3.6 million drop in unemployment from the peak at 15.4 million during October 2009 through June of this year can be explained by the drop in the participation rate from 65.0% to 63.5%. The same can be said for the drop in the unemployment rate from its most recent cyclical peak. Currently at 7.6%, it would be at 9.7% if the participation rate were 65%.
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I dont know why anyone even expects the overall Japanese economy to grow, when its population is shrinking. We should look at GDP per capita, not GDP, in Japan.
Paul Volcker 7/28: I've got gas- The Arctic's rapid warming could cost the global economy more than $60 trillion if melting permafrost releases huge quantities of methane, a potent greenhouse gas, a new study finds. The cost nearly mirrors the $70 trillion size of the world economy in 2012. 1. Permanently frozen ground, called permafrost, beneath the Arctic's East Siberian Sea could belch out 50 billion tons of methane at any time The global costs of climate change would come from sea level rise, extreme weather events, crop damage and resulting poorer health, the researchers said. Most of the financial damage is predicted to hit hardest in developing countries in Africa, Asia and South America. "Roughly 80 percent of the extra impacts will occur in developing countries. Developing countries are more vulnerable to climate change
7.28: Americans fear another financial crisis I believe they are right with at least $100,000 in investible assets, 83% fear another financial crisis and 62% are scared of investing in the stock market. That is more than the 58% who fear death and the 57% who fear public speaking. The only common fear that evokes similar distress is skydiving (81%).
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7/28: 1. The Value of Risk Reduction: New Tools for an Old Problem Date: 2013-06 By: David Crainich (CNRS-LEM and IESEG School of Management) Louis Eeckhoudt (IESEG School of Management (LEM-CNRS) and and CORE (Universit Catholique de Louvain)) James K. Hammitt (Harvard University (Center for Risk Analysis), Cambridge - Toulouse School of Economics (LERNA-INRA)) URL: http://d.repec.org/n?u=RePEc:ies:wpaper:e201313&r=rmg The relationship between willingness to pay (WTP) to reduce the probability of an adverse event and the degree of risk aversion is ambiguous. The ambiguity arises because paying for protection worsens the outcome in the event the adverse event occurs, which influences the expected marginal utility of wealth. Using concepts of prudence (equivalently, downside risk aversion), we characterize the marginal WTP to reduce the probability of the adverse event as the product of WTP in the case of risk neutrality and an adjustment factor. For the univariate case (e.g., risk of financial loss), the adjustment factor depends on risk aversion and prudence with respect to wealth. For the bivariate case (e.g., risk of death or illness), the adjustment factor depends on risk aversion and cross-prudence in wealth.
7/28: 7/28: GDP- The main reason is that GDP fails to capture the economic wellbeing of most citizens and that is a very big shortcoming indeed in the present circumstances. Real incomes are being squeezed. Households are still carrying a lot of debt. There is a growing number of working poor and no reason to expect significant improvement in any of these areas over the next year or two. A few numbers help to tell the story. Median incomes in real terms declined sharply in the two years to 2011-12, and on some measures are back to the levels of 2001-02. The Institute for Fiscal Studies thinks the picture stabilised in 2012-13 but says there are good reasons to expect further falls in living standards over the next couple of years. Benefits and tax credits are being cut. And real incomes are continuing to fall: total pay including bonuses rose at just 1.7 per cent in the 12 months to May way below the pace of inflation, as has been the case for most of the past five years. It is true that overall employment numbers have held up well, but this strength has come at a price. The explanation is that people have traded wage rises for jobs, meaning that lots of them are very hard-up indeed. According to the IFS, the majority of working-age adults and children considered to be in poverty now live in families containing at least one worker hence growing concern about the working poor.
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7/25: Interesting: Unlike 2008 when China deployed a gargantuan stimulus package to fend off the global financial crisis, it is instead using a series of targeted reforms to reduce the power of the government and give companies more space to operate. The State Council, Chinas cabinet, said late on Wednesday it hoped to arouse the energy of the market. It announced a three-pronged approach. First, it has temporarily scrapped all value-added and operating taxes on businesses with monthly sales of less than Rmb20,000 ($3,250). It said the tax cuts, which go into effect at the start of August, would help more than 6m enterprises which employ tens of millions of people Second, the government pledged to simplify approval procedures and reduce administrative costs for exporting companies. Among the various moves, it said it would temporarily cancel inspection fees for commodities exports and streamline customs inspections of manufactured goods. Third, it said it would create more financing channels to ensure that the country can fulfil its ambitious railway development plans. More private investors will be encouraged to participate and new bond products will be issued.
7/24: NUA The break for net unrealized appreciation on lump-sum distributions from a qualified plan has allowed clients to trade ordinary income tax rates for long-term capital gains rates on a portion of their retirement savings, if they qualify under the lump-sum distribution provisions and have a triggering event: turning 591/2 years old, disability (only for the self-employed), separation from service (not for the self-employed) and death. 1. But the big tax package signed into law at the beginning of the year made changes to both ordinary income tax and long-term capital gains rates. In addition, a new 3.8% health care surtax on net investment income took effect at the start of 2013. Because this strategy is pegged to the disparity between tax rates for long-term capital gains and ordinary income, advisors must reevaluate the benefits of these transactions. To use the net unrealized appreciation tax break, clients must have the appreciated securities (usually stock) of their employer inside a qualified plan. After the triggering event, the client must take a lump-sum distribution, emptying all like plans in one calendar year and moving the securities to a taxable account. If done properly, ordinary income tax is owed in the year of the transaction on the original cost of the shares, and then long-term capital gains are owed on the remaining appreciation when those shares are sold later on. 1. The appreciation is taxed at long-term capital gains rates regardless of when the stock is sold. This is true even if the client dies and a beneficiary does the selling; the net unrealized appreciation does not receive a step-up in basis at death. 7/24: Stress
If youre trying to make an important decision while the baby is crying, the boss is shouting on the phone and the cat has chosen this moment to think outside the box, you might want to take a breather and wait. A new review shows that acute stress affects the way the brain considers the pros and cons, causing it to focus on pleasure and ignore the possible negative consequences of a decision. The research has implications for everything from obesity and addictions to finance, suggesting that stress may modify the way people make choices in predictable ways.
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Stress affects how people learn, says Mara Mather, a psychology professor at the University of Southern California and the lead author of the review.
People learn better about positive than negative outcomes under stress.
This research also implies that programs that fight addiction by using punishment are unlikely to succeed. In fact, research suggests that treatments that use small rewards like merchandise or movie vouchers for clean urine samples work better than punitive treatments and that they actually save money. But programs that use positive reinforcement have traditionally been controversial because they are seen as rewarding addicts, a concept with which many critics disagree. Men vs womenresearchers studied people playing a computer game in which they had to inflate balloons on screen. Bigger balloons earned more points, but each additional pump of air also raised the risk of popping the balloon and destroying its value entirely. Men who had been stressed by the cold-water task tended to take more risk in this game going for the extra pump while women responded in the opposite way. That meant that the men ultimately earned more. What we found is that under stress, males are more likely to make risky choices and their decision strategies change so that they make their choices faster, says Mather, whereas females under stress become more conservative and actually make their choices slower in this risky decision-making context.
Read more: http://healthland.time.com/2012/03/05/decision-making-under-stress-the-brain-remembers-rewards-forgets-punishments /#ixzz2Ztz6UnBP
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7/24: LTC insurance The lifetime probability of becoming disabled in at least two activities of daily living or being cognitively impaired is 68% for people age 65 and older1 The median annual rate for a private nursing home room is $230 per day which is $83,950 per year.2 The cost for a single 65 year old to purchase a $240 maximum daily benefit with 3 year benefit period LTC policy at standard health rate is $4,867 per year.3 Only 10% of the elderly have a private long-term care insurance plan.4 An estimated 58.4 million people are unpaid caregivers to an adult family member or friend age 50 or older.5 For the family caregiver forced to give up work to care for a family member or friend, the cost in lost wages and benefits is estimated to be $160 per day which is $58,425 per year in 2013 (assuming a 3% annual increase that is $215 per day which is $78,519 per year in 2023).6 7/23: 1. The Role of Emotions on Risk Aversion: A prospect theory experiment Date: 2013-03 By: Campos-Vazquez, Raymundo M. Cuilty, Emilio URL: http://d.repec.org/n?u=RePEc:pra:mprapa:48280&r=cbe This study measures risk and loss aversion using Prospect Theory and the impact of emotions on those parameters. Our controlled experiment at two universities in Mexico City, using uncompensated students as research subjects, found results similar to those obtained by Tanaka et al. (2010). In order to study the role of emotions, we provided subjects with randomly varied information on rising deaths due to drug violence in Mexico and also on youth unemployment. In agreement with previous studies, we find that risk aversion on the gains domain decreases with age and income. We also find that loss aversion decreases with income and is less for students in public universities. With regard to emotions, risk aversion increases with sadness and loss aversion is negatively influenced by anger. On the loss domain, anger dominates sadness. On average, anger reduces loss aversion by half.
1. Myopic Loss Aversion under Ambiguity and Gender Effects Date: 2013-07 By: Iigo Iturbe-Ormaetxe Kortajarene (Universidad de Alicante) Giovanni Ponti (Universidad de Alicante) Josefa Toms (Universidad de Alicante) URL: http://d.repec.org/n?u=RePEc:ivi:wpasad:2013-05&r=cbe Experimental evidence suggests that the frequency with which individuals get feedback information on their investments has an effect on risk-taking behavior. In particular, when they are given information sufficiently often, they take fewer risks compared with a situation in which they are informed less frequently. In this paper we find that this result still holds when subjects do not know the probabilities of the lotteries they are betting upon. We also detect significant gender effects, in that the frequency with which information is disclosed mostly affects mens betting behavior, rather than womens, and that men are much more risk-seeking after experiencing a loss.
1. Consistency and Aggregation in Individual Choice Under Uncertainty Date: 2013-01-18 By: Jeff Birchby (Rutgers University) Gary Gigliotti (Rutgers University) Barry Sopher (Rutgers University) URL: http://d.repec.org/n?u=RePEc:rut:rutres:201301&r=cbe It is common in studies of individual choice behavior to report averages of the behavior under consideration. In the social sciences the mean is, indeed, often the quantity of interest, but at times focusing on the mean can be misleading. For example, it is well known in labor economics that failure to account for individual differences may lead to incorrect inference about the nature of hazard functions for unemployment duration. If all workers have constant hazard functions independent of duration, simple aggregation will nonetheless lead to the inference that the hazard function is state-dependent, with the hazard of leaving unemployment declining with duration of unemployment. Similarly, a recent study in psychology has shown that the learning curve, a monotonically increasing function of response to a stimuli, is better understood as an average representation of individual
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response functions that are, in fact, more step-function-like. As such, the learning curve as commonly understood is a misleading representation of the behavior of any one individual. These observations motivate us to consider the question of possible aggregation bias in the realm of choice under uncertainty. In particular, Cumulative Prospect Theory posits a weighting function through which probabilities are transformed into decision weights. An inverted S-shaped weighting function is commonly taken to be the appropriate weighting function, based on quite a number of experimental studies. This particular version of the weighting function implies, in simple two outcome lotteries, that an individual will tend to overweight small (near 0) probabilities and to underweight large (near 1) probabilities. A natural question to ask, suggested by both the hazard function and the learning curve examples, is whether this weighting function is not, similarly, an artifact of aggregation. Of course, no one believes that every individuals behavior can be accounted for by a single weighting function. Studies have shown that there can be considerable variation in estimated weighting functions across individuals. But no one, to our knowledge, has systematically addresses the question of whether, in fact, one can meaningfully use a single weighting function, even as a rhetorical device, to accurately discuss individual choice behavior. If most individuals indeed do have an inverted S-shaped weighting function, then this representation of choice behavior is not misleading, provided it is clear that one is discussing the behavior of most, not all, individuals. We focus on the reliability of estimated weighting functions. We study the problem of determining the parameters of the cumulative prospect theory function. Using responses to paired sets of choice questions, it is possible to derive estimates for a two-parameter version of the Cumulative Prospect Theory choice function (using a po wer function for the value function and Prelecs one parameter version of the weighting function). By analyzing multiple such pairs of choice questions, we are able to also investigate the consistency of these estimates. Our main finding is that there is, in general, considerable variation at the individual level in the choice parameters implied by the responses to the different pairs of choice questions. The modal choice pattern observed is one consistent with expected value maximization, and there is considerably less variation (again, at the individual level) in the parameters implied by those who appear to be maximizing expected value on one pair of choice questions than for those who never choose in this way. But these individuals account for only about one-fifth to one-sixth of subjects. For the rest of the subjects, it is rare that any two pairs of estimates are the same, and often the implied parameters
1. Superstition in the Housing Market Date: 2013-07 By: Fortin, Nicole M. (University of British Columbia, Vancouver) Hill, Andrew J. (University of British Columbia, Vancouver) Huang, Jeff (University of British Columbia, Vancouver) URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7484&r=cbe We provide the first solid evidence that Chinese superstitious beliefs can have significant effects on house prices in a North American market with a large immigrant population. Using real estate data on close to 117,000 house sales, we find that houses with address number ending in four are sold at a 2.2% discount and those ending in eight are sold at a 2.5% premium in comparison to houses with other addresses. These price effects are found either in neighborhoods with a higher than average percentage of Chinese residents, consistent with cultural preferences, or in repeated transactions, consistent with speculative behavior. 7/23:
Golden Years or Financial Fears? Decision Making After Attendance at Retirement Seminars
"This study examines the participants in 85 [retirement planning] seminars conducted by five companies in 2008 and 2009 to determine how much learning takes place and whether employees adjust retirement plans. Using surveys conducted before and after the seminars, we find that financial literacy and knowledge of retirement program parameters are significantly higher after the seminar. Employees with the largest increases in knowledge were most likely to change their planned retirement age and planned age of claiming Social Security benefits." (National Bureau of Economic Research)
Dodd-Frank, Where Are You?

"Many investment advisers have yet to feel any direct impact from the Dodd-Frank financial reform law three years after it was introduced.... As of July 15, the deadlines have passed for 279 of 398 required Dodd-Frank rules ... Regulators have missed the deadlines for 172 of those rules, while 107 have been finalized." (Investment News; free registration required)
7/23: EU banks still pose systemic threat Eurozone banks must shed at least 2.7tn in assets by 2016 for their balance sheets to be sustainable, according to an analysis by Royal Bank of Scotland.
7/23: Yep The market is currently cheering continuing monetary accommodation while at the same time looking for a more robust economic recovery and far higher earnings. The problem is that while investors can have one or the other, they cant have both. A stronger economy means an imminent reduction of QE that the market doesnt like, while a weaker economy that results in an extension of QE leads to corporate earnings far lower than current forecasts. We therefore think that the current market strength is irrational in the same way as the dot-com boom of the late 1990s and the subprime mortgage boom of 2005-2007, both of which were ignored by investors for lengthy periods
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7/22: One in 10 people will be obese by 2015. And, nearly one in three of the worldwide population is expected to be overweight, 7/22: chinese banks": Taking another major step for financial reform, Chinas central bank is loosening its tight grip on bank lending, suggesting the recently installed government is serious about liberalizing the countrys banking sector. 1. Until now, Chinese banks were restricted from lending money to businesses at anything less than 70 per cent of the rate desired by the Peoples Bank of China. As of Saturday, this restriction will be scrapped, making it likely that the banks will lower their rates as they compete with each other for new loans. 7/22: Seven Symptoms of Forecasting Illness By Steve Player and Steve Morlidge, The underlying problem with delusions of accuracy is that they fail to acknowledge or take into account normal variations in the marketplace; this failure prevents a company from managing risks and capitalizing on opportunities with flexibility and adaptability. 7/22: Nothing like a celebrity endoresement
Raymond Lucia Sr., a syndicated radio personality and financial advice author, was ordered to pay $50,000 for giving investors misleading information about his Buckets of Money wealth-management strategy.
Lucia's career received a huge lift thanks to his relationship with uber-celebrity Ben Stein, the self-proclaimed lawyer, economist, actor, screenwriter and financial commentator, who helped promote Lucia's seminar business and increased his media visibility. In 2001, The American Spectator quoted Stein as saying "his advice -- lots of liquidity and very wide diversification -- is so sensible it has saved me from suicide many a night."
7/22: English "Mediaid: Campaigners are calling for the government to concede that its new capped system for care home fees falls short of covering all costs for elderly individuals entering into care. Radical reforms, to be introduced from 2016, will see a new 72,000 cap introduced on what adults are expected to contribute toward their care bills in their lifetime. The reforms, first announced in February, will also see additional financial help for people with less than 118,000 in assets, and from 2015, a scheme to prevent anyone having to sell their home during their lifetime to pay for care costs. Under the governments proposals, detailed in a consultation document launched on Thursday, local authorities will step in to pay care costs once the 72,000 cap has been exhausted. ($109,000) Currently only individuals with assets of less than 23,250 in England will get help from the state with care fees. Up to 40,000 individuals a year sell their homes to pay care home fees, which can range between 25,000-35,000 a year. These reforms bring reassurance to millions of people by ending the existing unfair system so no one need face unlimited care costs or the prospect of selling their home in their lifetime, said Norman Lamb, minister for care and support. No one wants to face an unknown future. This overhaul of the way care is paid for gives people the certainty and peace of mind we all deserve. The consultation outlines details for the new deferred payment scheme to be offered by local authorities in England from April 2015. It also sets out proposals for a range of financial products, to help people prepare for later life care. But campaigners said it was crucial that the public understood that only eligible costs set by the local authority would count toward the 72,000 cap, meaning the amount individuals actually spend could be much higher. 7/22: Bernanke- Bernanke, while giving a seemingly token nod to what he called improving economic conditions, stated that the economy still faces significant risks. He said it was too early to tell if the economy had weathered the full impact of tighter fiscal policy or that the debate concerning other fiscal policy issues, such as the debt ceiling, will evolve in a way that could hamper the recovery. He added that with the recovery still proceeding at only a moderate pace, the economy remains vulnerable to unanticipated shocks, including the possibility that global economic growth may be slower than currently anticipated. I do not know exactly when (obviously) we are going to meet another bad recession- but you cannot have good times when gdp is 1.8% Subsequently, below par reports on retail sales, inventories and exports led most economists to reduce second quarter GDP growth to about 1% or even less. 7/21" How big are we?? 7/21 Wedlock- 73 percent of all black kids are born out of wedlock. Growing up, these kids drop out, use drugs, are unemployed, commit
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crimes and are incarcerated at many times the rate of Asians and whites or Hispanics, who are taking the jobs that used to go to young black Americans. Read Moynihan 2/13 7/11: China slowing Chinese exports and imports both fell in June, underlining the economys weakness and raising the prospect of a deeper slowdown in the months ahead. Exports fell 3.1 per cent from a year earlier, compared with a 1 per cent increase in May, and far below the 10.4 per cent average increase for the first half of 2013. Imports slipped 0.7 per cent from a year earlier, an indication of sluggish domestic demand. Imports were down from a 0.3 per cent decline in May and also far below the 6.7 per cent average increase in the first half. That left China with a $27.1bn trade surplus in June. For the first half, Chinas overall surplus was 58.5 per cent larger than a year earlier. That normally would have provided a boost for the economy, but the numbers were exaggerated by grossly inflated export invoicing earlier in the year, a trick to sneak capital into the country that the government has now cracked down on. China will report its second-quarter gross domestic product data on Monday. Growth is widely expected to have slowed to about 7.5 per cent, its second consecutive quarterly slowdown. The government set a growth target of 7.5 per cent for 2013. With a series of economic indicators, from construction to bank lending, all pointing lower, China is at risk of slipping below its annual growth target for the first time since the Asian financial crisis 15 years ago. 7/11: Workers Prefer Face-to-Face Training 1. July 9, 2013 (PLANSPONSOR.com) - One-third (33%) of workers polled identified in-house, instructor-led workshops as the type of professional training they value most. Tuition reimbursement for off-site seminars ranked second, with 22% of the response, surpassing online courses (18%) and reference books (16%), according to a survey from OfficeTeam. Companies appear attuned to workers' desires for in-person training: More than two-thirds (67%) of human resources (HR) managers polled said their organizations offer this type of instruction. Many firms also provide books or other reference materials (64%) and online courses (62%). However, only 35% of executives indicated they subsidize classes taken by employees outside of work. In addition, 12% said they do not offer any of these training options to staff. 7/11: U.S. Air Quality Summary | 7/10: Housing: a report issued Monday by Lender Processing Services. LPS found that, although delinquent mortgages declined 15% this year, they are still running at 6.08% of all outstanding mortgages about 1.5 times the rate from 1995 to 2005. LPS also found that new problem loans are entering the system at a rate of 0.73%. While thats an improvement from the darkest days of the mortgage crisis, its still above the 0.55% rate seen between 2000 and 2004. Moreover, LPS also found that existing borrowers are still struggling. Though the number has declined by half since last year, more than 7.3 million mortgage holders have loans that exceed the value of their homes thats more than 14% of all existing home loans 7/10: Dont Let Depression Get You Down
By Michael Plontz
Caregiving can sometimes be a depressing venture. Not only does it usually involve someone we love deteriorating before our eyes, our own lives become completely rearranged. Believe it or not, the fact that the holidays are right around the corner can make even those not in a caregiving situation depressed. Imagine what that does to a caregiver. Depression can range from feeling a little blue to obsessing about death and suicide. It is not just a single disorder, but a group of psychiatric illnesses. This group of illnesses may affect your body and mind, and your mood and behavior. Although it is a serious condition, it is very treatable. Two symptoms to watch out for, and that doctors watch out for, are a loss of pleasure in daily activities and continuous feelings of hopelessness and sadness. Women have a 50% greater chance of being diagnosed with depression and some types of depression may run in families. The three most common types of depression are major depression, dysthymia, and bipolar disorder. Major depression may have many symptoms that affect a persons ability to carry out necessary everyday activities such as eating, working and sleeping. Other once-pleasurable activities seem insurmountable. A person can usually go on from day to day, but may have a disabling episode
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one or two times in his or her life. Dysthymia is long term or chronic depressive symptoms. These symptoms may not be disabling, but usually prevent the person from felling good and functioning well. Major depressive episodes may be experienced by people with dysthymia. Bipolar disorder, sometimes called manic-depression, is often a chronic condition. It causes the afflicted to experience cycles of depression, mania, lethargy, and exuberant happiness. These mood changes are normally rapid and dramatic. More detailed symptoms of dysthymia and major depression include the following: Memory, concentration, and decision-making problems Feeling irritable and restless Appetite changes-eating more or less Insomnia Feeling hopeless and pessimistic Feeling anxious, empty or sad Feeling tired or less energetic Thinking of death and suicide or even attempting suicide Losing the ability to enjoy activities that used to be enjoyed (e.g. sex) Physical symptoms that dont improved with treatment In addition to the above episodes of depression, those people afflicted with bipolar disorder may experience the following manic symptoms as well: An obvious increase in energy Social behavior that may be deemed inappropriate A marked increase in talking Impossibly huge ideas Severe insomnia Happiness not befitting the occasion Thoughts that race or are disconnected An increase in sexual desire Anyone who believes they are depressed should seek the help of a professional. With a combination of psychotherapy and medication, 80% of those who are depressed can be helped. Medications include a variety of mood stabilizers, anti-anxiety drugs or antidepressants that have helped many people. The newer drugs have fewer side effects too. Psychotherapy involves talking to a therapist to resolve problems. Behavioral therapy involves discussing a persons actions and how they can get more satisfactory and rewarding results from them. A patient also learns about his or her behavior patterns and how to unlearn the ones that are self-defeating. A severe form of therapy is electroconvulsive therapy (ECT). This is used only when a person cant take the medication or their depression is so severe that it is life threatening. If you see any of these signs in yourself or your loved one, seek help soon. Depression is something that can become worse over time if not treated. Life is meant to be enjoyed, in spite of all its hardships. Dont let depression get you down. 7/10: Slowing population grwoth rate but still too many people
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7/9: find cheapest gas in your area. 7/9: The Myth of Time Diversification: Analysis, Application, and Incorrect New Account Forms Read this
7/9: 7/8: Our infastructure is in terrible shape" According to the American Society of Civil Engineers, the nation has a backlog of some $3.6 trillion in overdue infrastructure maintenance. 7/8:
&lderly care poses proble" for 'ndia

About 100m Indians are aged over 60 years old, the worlds second-largest senior population after China, posing a new challenge for the country
7/8: Eateries, Bars Show Big Appetite for Hiring- Definitely a good sign Restaurants and bars account for nearly one of every 10 American jobs. The latest gains have been especially strong, with June seeing the fastest year-over-year growth in restaurant jobs in nearly 18 years. 7/7: Looks a little better but I want to see September.
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7/7: I really thought Egypt had a chance, Now I have no idea and the mess could destabilize the area even worse- if that is possible. Do you note how Syria has been shuffled to the back burner?? 7/7: From an article: "It has taken years for me to really understand what went wrong at Wealth Management LLC. It has been difficult to come to grips with the fact that this series of events was not the result of evil people doing evil things. And after much time, exploration, introspection and study, Ive learned that what happened at Wealth Management LLC is not all that different than what
is happening at financial planning firms across the country. What happened was profoundly simple, yet incredibly damaging. What happened was that we simply had no idea what the real impact of our advice was. 1 At Wealth Management LLC, we didnt really know what we were doing and we didnt understand how our advice would impact clients lives.2 Sure, tons of internal research was performed. The financial planning staff was well-trained and followed practice standards and offered advice based on conventional professional wisdom3. The investment team seemed (I say
seemed because I did not work in this department, but observed from the outside) to be constantly performing due diligence work, was continuously researching new ideas and testing theories. But we didnt understand how the tools and strategies we were
suggesting would impact our clients.4"

these were two humans, not so different than you or I, who made a poor decision or two. These were two humans who are flawed as each of us is. And much more frightening to me, these were two humans who I believe truly and deeply wanted to help their
clients5.
The reality of what happened at Wealth Management LLC that caused clients tremendous harm is far scarier than people choosing to do evil. Every element of what we did at the practice from financial planning advice to investment management services to client service to compliance revolved around doing what was in the best interest of the client. Everyone from CEO to receptionist was encouraged to respectfully call out any other staff member when something felt as if it might be straying away from the fiduciary culture.
Professional staff was engaged in all sorts of training and educational pursuit to continue building the firm competency and to continue increasing the value and benefit of the work we delivered to clients6. Financial planning
staff was exploring life planning and legacy planning, learning about advanced estate planning law and techniques, and so on and so forth. Investment team staff members were pursuing the CFA, CAIA and other designations, constantly learning about new theories and investment vehicles and expanding their knowledge. Clients who had invested in various private investment pools7 with Wealth Management LLC had their lives crushed. No recovery. No major bull market to make up lost ground. This was true lost wealth, and tons of it. There were long-retired wealthy people who had to find any kind of work possible or move in with children to make ends meet. There were spouses who had never worked and had to get their first jobs in their 60s. As news broke on the disaster of the private investment pools, I dont think anyone at the firm quite knew how bad the damage was going to be to clients lives. Over several months, losses in their portfolios moved from small write-downs to indeterminately large losses. While you were watching markets knowing the pain, we sat in the dark, uncertain if a client now had 95 percent of their previous wealth or 5 percent. How could it go so wrong? Clients werent crushed because of the undisclosed compensation Putman and Fevola received, although this
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seems to be the prevailing opinion. Clients were crushed because the investment pools simply did not work as the investment team expected, which was exacerbated by the extreme liquidity crisis in 2008. Clients were crushed because Wealth Management LLC did what so many other planning firms do: offered strategies and advice based on internal research and opinion, and tried to do something to differentiate themselves in a competitive market. Clients were crushed because, instead of trying to help clients make good financial
decisions based on the overall impact of those decisions8, Wealth Management LLC provided advice based on
theoretical economic benefit9 to clients.

Financial planning lives in a competitive environment. Practices must compete with one another, with accounting firms, with wirehouses and insurance companies. Often the differentiation relies on specific strategies that are touted as superior to standard practice. It might be an investment strategy (as was the case at Wealth Management LLC) or tax strategy or any number of other strategies. The strategy or idea may be grounded
in solid thought and be theoretically very compelling, but not something that has been publicly vetted and tested10.
there seems to be a strong dislike for academics in the financial planning profession. Ive seen this both in person and in online communities and discussions. Comments such as, They dont understand what its like to work with real people, or Its easy to preach from their ivory towers, often accompany discussions about academic research. Undoubtedly, working with people and helping them make financial decisions in real life IS different than researching financial decisionmaking, strategies and ideas, but that does not invalidate the academic work! Yet, it seems many practitioners would
prefer to simply ignore research that comes out of academia instead of trying to incorporate that learning into their daily practices11.
At Wealth Management LLC, this disdain existed, but very quietly. Instead of understanding and accepting research on safe-withdrawal rates, the firm looked for strategies that would theoretically allow for a higher withdrawal rate. It was never stated outright, but implied in much of our work. Experience is a critical element in creating a great financial planner. It takes years of working with clients and learning how to reach people to truly become a financial planning professional. Yet this same experience can lead planners to take suboptimal positions. This experience can blind us to change. Experience can lead us to believe all people we encounter in the future will behave like people
weve encountered in the past. This ends up leading financial planners to make well-intentioned recommendations that may ultimately fail12. And this desire to help leads financial planners to constantly look for new solutions and ideas to replace those that have failed in the past13. At Wealth Management LLC, the investment strategies that ultimately destroyed clients financial lives were
born out of the desire to prevent clients from being harmed and allow them to live a life filled with more financial wealth. These strategies were researched and implemented well, and I believe truly came from a need by those involved to help people. Add these four factors up, and an environment for harm has been created even while maintaining a fiduciary standard. These lead to a
financial planning firm creating private investment pools designed to pay a steady income stream using a variety of
alternative and sometimes bizarre investments, instead of considering

old-fashioned time-tested investment vehicles14.
At Wealth Management LLC, our focus was almost entirely on the economic impact (making clients money) of the advice we offered instead of on the overall life impact. Both the financial planning team and the investment team could put together spreadsheets and documents that would blow clients away15 and help clients make decisions understanding theoretical economic impact. But we had no idea how the decision would impact the clients lives overall. We
didnt understand how these things would play out in the real world. We had no idea what the real impact of our advice was16.
every decision we help a person make impacts many parts of their lives. Sure, theres some theoretical economic impact, but theres also behavioral impact and emotional impact and physical impact and social impact17. For example, carrying debt has been tied to an increased incidence of depression. But do any planners raise this with clients when making debt payoff decisions? How can we not help our clients understand this dynamic? Worse yet, depression has been shown to increase poor financial decision-
making. So through a vicious cycle, the non-financial impact ends up having more financial impact18.
When you recommend a client stay invested in a strong down market (a position with
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plenty of research suggesting it is advisable), do you know how this impacts your clients emotional and physical well-being? What if taking this position increases the likelihood of that client making other poor decisions19?
The harm caused clients at Wealth Management LLC is incredible. We didnt know what the real impact of our advice was going to be. Not only were the private investment pools based on theoretical research with poorly understood
risks20, but we didnt know how that type of investing would impact clients emotionally or physically. We
didnt know what
the real impact of our advice was21

1. the failure of knowing what their advice would generate is the key element that I have addressed for years. As you know, brokers have no idea of the fundamentals of investing. CFPs are little better with one semester on money. True that CFAs have a nuch greater exposure to theory, but Paul
Volcker noted that - our economics are based on an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance. I also took two years of the CFA
material. Heavy theory- but the applied concepts in real life had limited use. In all the instruction I had done, it has been Peter Bernstein, Benoit Mandelbrot who put investments into a valid perspective. Add Taleb, Kahneman and others mentioned in my book and you get closer to realism. But none of these is required reading for planners. 2.This is essentially 1 over again. The did NOT know what they were doing and therefore the implications would be horrendous if the risk was not properly identified. Risk is not taught. Or is disguised as standard deviation. 3. Maybe it was because I had taught so many different financial courses that I became aware that conventional theory was highly suspect. But even a novice should have been aware of the fallacy of the Dotcom which blew away rational investing and the inability/impossibility to have bubbles. \ 4. Once again I point to Volcker- an unjustified faith. 5. I have noted that there has been a focus on "helping the client" et al during the last few years. But I simply have a difficulty with merely words offered by those with a high school diploma and a few courses. Same with a degree in astronomy and a few courses. What does one expect??? Being nice, concerned and helpful is a given- though apparently not offered that often. It was the "professional" image they wished to convert. But it was necessary to offer services beyond investing advice- simply because such advice was so bad when the clients needed real life knowledge to offset bad times. 6. Professional staff is not a broker nor RIA nor CFP. Get a least a degree in planning. As for the investment criteria, review Volcker comments and the recommended books. 7. What is an investment pool supposed to do versus a good allocation? Once you look at these you see illiquidity along with investments and hedging that few have clue to 8. When I hear, "the market always comes back" I cringe. Statistically, some credit is due. But recognize that such numbers are based on a very, very short U.S. economic history. And certainly very little consistency over those limited periods. 9. The theoretical benefits follows most of all commentary here. The industry is mired in old homilies that became dogma since it was easy to use. And you could do tons of computer spreadsheets and make peoples eyes glaze over. 10. Again, reference to theory without testing in the real world. 11. It IS necessary to learn the history and theory of past attempts to define risk and return. It is only from there that you can move forward. Without this, you are just guessing. The problem has been that academics had taken untested theory and made it dogma. Standard deviation is the big key to failure. Not too many have yet moved away to the real world of Risk of Loss. Actually, most advisors don't have a clue to how to do it or the limitations to its use. 12. I have continually referred to regression to a mean as yet another crutch for those that do not want to have to think. The statistical process is limited and the changes in our economics, society, technology make such regression as more luck than anything else. 13: As for financial planners looking to new methods/analyses to replace those that have not worked- fine and dandy. But not with a high school education or a degree in soap. Further, without the grounding of Bernstein, Mandelbrot, Volcker, Taleb, Roubini et al, it is a waste of time. 14. The alternative investments are not that well understood since they are designed to do all sorts of things no matter what. But remember that random correlation was to do the same thing- except it didn't when everything went wrong. So if 'all' the correlations moved to 1.0, why should not the alternative stuff (absent going short) Also note- that will be repeated continuously- they are all addressing an "investment". Why? Sometimes NO investment is worthwhile. Not even bonds (2008). Cash in CDs is a great alternative 15. Spread sheets, spreadsheets, and more spreadsheets. Computers can dump out all sorts of numbers that won't work in real life. Impressive, though. 16: And here again the truth comes out. They did not know how this mess would work in the real world.
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17. I have tried to make the point that losses have a severe emotional drag on investors. Or simply having the wife look at her male who is the 'king of the house' lose his shirt. The Dotcom is a fine example. What are retirees going to do when losses reach 50%. (the point being that the adviser HAD to counsel investors what he was going to do and when if the economy tanked.) 18. The element of depression has been quite apparent with the losses of jobs, homes, money, esteem and more. Where were the advisers warning the public of the bubble in the 90s (mostly it was Greenspan. But his warning quickly fell apart). 19: Buy and hold. buy and hold, buy and hold. I am not willing to sit in front of an avalanche. I want to be elsewhere when it snows heavy. That is what the inverted yield curve did= it was the weather forecaster for months ahead. Think of this. You put $50,000 in the Dotcom. It grows to $100,000 by 2000. You lose 60% (minimum) because you used tech stock. You have $40,000 left. In 2008, you had grown back to $100,000 and then have a 50% loss. You are back to $50,000. Feel better now. 20. risk is when you do the computations for the Risk of Loss. Then it takes some effort to= without ego- address the local, state, national and international economics. It's very hard. Few do it. That's why there was a Dotcom and a real estate mess. 21 they did not know of their lack of what would happen since most are mired in the past: 22.
7/7: Few Get Paid Advice, and Even Fewer Take It (PDF)
"Just 23 percent of workers (and 28 percent of retirees) report they have obtained investment advice regarding their household financial situation from a professional financial advisor who was paid through fees or commissions ... Of these workers, only a quarter (27 percent) followed all of the advice, but more disregarded some of it and followed most (41 percent) or some (27 percent) of it. Retirees were more likely to report following all of the advice (46 percent)."
7/7: Parkinson's Disease with Dementia Spe ial Challenges
By Sandra Fuson, Staff Writer

In the U.S. today there are more than one million people with Parkinsons Disease (PD). Approximately 50,000 new cases are diagnosed annually. PD is a progressive movement disorder that affects the central nervous system. Its causes are unknown, and while physicians can manage some symptoms of the disease, there is no known cure. Primarily individuals over the age of 60 are most at risk for developing PD, although cases as young as 30 years old have been diagnosed (juvenile PD). For some patients, however, hallucinations and severe uncontrollable muscle difficulties make them especially vulnerable for dementia as PD progresses. Dementia has been defined as cognitive impairments that are sufficient to interfere with activities of daily living. Dementia worsens over time, with cognitive processing declining each year faster than that of the general population. Most people think of Alzheimers disease when dementia is mentioned, although there are many types of dementia with various causes. Estimates are that 20 30 percent of the patients with PD will develop dementia, generally after age 70. If it is going to develop, there is generally a 10 to 15 year lag from the time that motor difficulties appear with PD. If symptoms of dementia appear earlier, experts suggest that the cause could be something other than PD. Signs of Dementia: Before discussing possible causes of dementia, it would be helpful to explore what signs or symptoms the PD patient may experience. Dementia will first be noticed at home, not in the doctors office, even if you dont have a name to put with it. Since caregivers are with their loved ones more often than doctors, it is helpful to bring any changes in behavior to the doctors attention. Some of the most common signs of dementia in PD include: Memory recall and processing Impaired thinking, often at a much slower rate Apathy or lack of motivation Moodiness Confusion and disorientation Easily distracted
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Keep a diary of signs as they develop and schedule an appointment with your physician to discuss them. It would also be helpful to note how often symptoms appear and even the circumstances when they were first noticed. Giving your doctor enough information to make a determination is the first step in making the correct diagnosis. Remember that if someone is going to develop dementia, there is generally a lag of at least 10 to 15 years. If dementia develops earlier, it is important to take note of the symptoms and discuss them with your physician. Correctly diagnosing the cause will make treatment and adjustments much easier. Some signs that the dementia is caused by something other than Parkinsons disease include: anxiety, restlessness, and even delusions (irrational thought processes). Speech or language difficulties are also a signal that the dementia is not caused by Parkinsons. Finally, depression can mimic the signs of dementia in Parkinsons patients. Depression is a common companion to PD, and having your loved one fully evaluated can aid in their recovery from these troublesome symptoms if depression is the underlying cause. Medications to treat depression can bring relief and can even improve memory and mood. Lewy Bodies and their Role in Dementia: In patients who develop dementia, Lewy bodies are usually present. Lewy bodies are protein deposits on the nerve cells. Scientists havent determined yet if the Lewy bodies play a role in killing the cells or if the cells, in the process of dying, are more susceptible to developing the protein deposits. Perhaps even the Lewy bodies develop as a method to repair the cell, and instead play a role in developing dementia. Dopamine is the neurotransmitter involved in regulating movement. In Parkinsons patients, the ability to regulate the amount of dopamine is damaged. For this reason, medications such as Levodopa, try to increase the amount of dopamine in the brain, thus helping the movement issues with Parkinsons. Lewy bodies generally damage not just dopamine, but other neurotransmitters as well. By impairing movement and thought processes, the person with Parkinsons demonstrates the symptoms of dementia: unable to process new information, blankly staring off into space, unable to recall specific incidences, and inability to make sound judgments. There are other symptoms as well, depending on the area of the brain that is damaged. Medication-induced Dementia: In some patients, the type of medication that they are taking can induce the symptoms of dementia. Regardless of the cause, your doctor needs to be involved as soon as symptoms are noted in the patient. By adjusting medications, your physician may be able to detect whether or not Lewy bodies are to blame or if the medication is actually causing the problem. Dementia is not a normal process of PD; and in the cases of medication inducing the dementia, it can be reversed. Vascular Dementia: Although not common in Parkinsons, it is possible to have vascular dementia. Vascular dementia generally develops when there are small, unnoticed strokes. By determining if vascular dementia is indeed present, doctors can sometimes halt the advancement by treating the underlying causes. Further tests will be needed to find out if these strokes have occurred and what the underlying cause of the stroke was. By stabilizing the patients vascular health, you can greatly improve chances of improving vascular dementia. Changes in Daily Living: Finding out that your loved one had Parkinsons was difficult enough. Adjusting to dementia can significantly add to stress. Remember not only to consider the person with Parkinsons and how their life is affected, but it is especially important to reduce caregiver stress during this adjustment. In order to make a successful transition, youll need to make changes to daily routines. This requires not only cooperation from the patient, but the caregiver as well. Avoid open-ended questions such as What would you like to eat? Since thought processing is affected, the patient may feel frustrated when they are unable to name something specific that they like to eat. Offer choices: Would you like chicken or pork chops? Give a limited number of choices so the person can name what they want without too many options. Establish schedules and stick to them. Lists of activities may help. For example, next to the bed may be a list that reads: Wake up Put on slippers Put on robe By breaking down the daily routine into small, manageable steps, you can avoid frustration from the patient and the caregiver perspective. Both people know what to expect and in what order you need to do the steps. Remember that as the dementia worsens over time, you may need to develop lists with more specific steps. For example, the first list
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may have said, Brush your teeth. The new list may read: Open toothpaste Get toothbrush Put toothpaste on toothbrush Brush teeth Rinse If you think your loved one may not be able to remember which medications they need to take, how much they need to take, etc., you may have to lock away medications and dispense doses as needed. This may be an adjustment to the person who was accustomed to independence in taking their medication. Explain the reasons why you need to control medications and that you want the person to be safe. Over time you can make this transition as well. Keep living environments simple, free of clutter. Clutter in the home can resemble the clutter that the person feels in their thought processes. By keeping the environment free to extraneous objects, you can help decision-making processes go much smoother. Remember too that Parkinsons will gradually worsen over time, making smooth movements almost impossible. Keeping the home area safe and fall-free will help with this as well Other ideas that you may want to consider: Keep travel plans simple. As much as possible, continue established routines if you need to travel. Keep dangerous objects, such as knives, out of reach and out of sight. Other objects you may want to put away include ladders, step stools, small appliances that require supervision when in use, and anything else in your home environment that you think would be a danger to your loved one. Use mental exercises to keep memory as sharp as possible. These include puzzles, card games, reading, listening to music, and even keeping a diary. Continue a good exercise routine. This not only keeps the movement portion of PD under control, but it can aid in cognitive processing as well. Keep dressing as simple as possible. Buttons and snaps can be a challenge. Slip-on clothing and even Velcro work well. Get a wrist or pendant ID for your loved one to wear. The Alzheimers Association can provide one. Financial Obligations: Develop a plan for finances and how your loved ones assets will be used before the dementia develops too much. Scientists have demonstrated that each year the person with dementia loses mental processing at more than twice the rate of a person without dementia. Youll want to put these arrangements in place as soon as possible. Youll want to consider: Preparing a will and keeping it in a safe place. Consulting a financial planner to decide how assets need to be used, dissolved, or otherwise distributed. Deciding about long-term care options. Deciding how bills will be paid on an ongoing basis especially important if the person with Parkinsons is not married, is widowed or lives alone (although they may not be able to continue living alone for long). By making these decisions in advance, youll save much stress later as the disease develops further. Many people with Parkinsons will not develop dementia. For those patients who do, it is important to learn your medical options and make adjustments to the home environment. Some of these adjustments can transition over time, while others need to be made more quickly. Even with dementia, the person will have good days and days that thought processes are not as sharp. By keeping the lines of communication open with your doctor, the disease can be managed as effectively as possible, despite its debilitating effects on daily living. 7/4SPECIAL NEEDS PLANNING - As this article points out, "More than 5% of school-age children are diagnosed with a disability...caring for these children can be overwhelming and require a lifetime of planning, financial and otherwise." :
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7/4: 1. Reading to Young Children: A Head-Start in Life? Date: 2013 By: Kalb, G. Ours, J.C. van (Tilburg University, Center for Economic Research) URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:2013029&r=cbe Abstract: This paper investigates the importance of parents reading to their young children. Using Australian data we find that parental reading to children at age 4 to 5 has positive and significant effects on reading skills and cognitive skills of these children at least up to age 10 or 11. Our findings are robust to a wide range of sensitivity analyses. 7/4: 1. Does the better than- average effect show that people are Overconfident?: two experiments. Date: 2013 By: Jean-Pierre Benoit Juan Dubra URL: http://d.repec.org/n?u=RePEc:mnt:wpaper:1301&r=cbe We conduct two experiments of the claim that people are overconfident, using new tests of overplacement that are based on a formal Bayesian model. Our two experiments, on easy quizzes, find overplacement. More precisely, we find apparently overconfident data that cannot be accounted for by a rational population of expected utility maximizers with a good understanding of the nature of the quizzes they took. The finding is of particular interest because Benoit and Dubra (2011) have shown that the vast majority of the existing findings on the better-than-average efect are actually consistent with Bayesian updating. 7/4: 7/3: Part of a reply you may find useful............. First, I agree that one must read Mandelbrots The (Mis)Behavior of Markets. I have seen some of his other work but the math is far, far beyond me. But his book was an outstanding commentary of a market and its advisors who are out to lunch. To this I add Peter Bernstein- who, along with Mandelbrot- are, in my mind, two different, yet complementary, geniuses that made me think every day of what I need to do/redo. The main books from Bernstein are Capital Ideas, Capital Ideas Evolving; Against the Gods- The Remarkable Story of Risk (in that order) I also add Daniel Kahneman and Thinking Fast, Thinking Slow. I have read Taleb but I tend to reflect more on Mandelbrot. I could never understand how there could be so many differences in the opinions/calculations of valuations when, assuming even the strong form of an efficient market, everybody can get a different price/assumption/computation et al. None of that followed a rational experience. I admit that mathematical computations are fine when there is a finite number of things that can happen- simplistically flipping a coin. But when there was a large number of intertwining elements- certainly with volatility of hundreds of factors (if not more)- it is impossible to determine what will really happen. Admittedly many results may fall into a bell shaped curve of sorts- but the outlying curves reflect the real risk of investing. Now you add in the clearly emotional area of humans (who are not that bright anyway (they do not read)) and there is no telling what the results might be. That said, and getting to the point about risk, we have the situation of the Dotcom and 2000. There were NO valuations worth their salt since there was no income from the stocks to discount. It was only the discount of a HUGE valuation projected in the future. (After all, stocks were running at a 20% rate and tech stock even higher. Everyone knew that it would continue like this- ask FNN). As such, there were few that recognized what basic economics told everyone who had a clue. The inverted yield curve was a 100% indicator of an upcoming recession (a little latitude taken). In 2000 it was apparent to anyone. It does not say when it will happen (12/14 months average), not how long it will last nor how bad it will be. But losses averaged about 40%+ in equities and with the obvious risk overall, why did not advisors- or at least heavy hitters- recognize what was almost a guarantee and, if not get out, at least temper the exposure. I have always stated that the bulk of so called financial advisors were suspect. The fundamentals of investing have never been taught to a broker. And the bulk of Registered Investment Advisers have simply used that dismal/useless real life education/knowledge of the series 7 licensing material to become fiduciaries with the total regard to do the best for a client. (Impossible) For those extolling various designations, they are effectively one semester training on money.
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What about the others? A couple did see what was going on but essentially we had an entire community of economists/advisors (the FED??) that said nothing. You do not need a mathematical genius/Taleb et al to construct anything. What am I missing? Is it just the abject failure of the human/pure arrogance (even those at the highest level) to catch on? 2000 was NOT a black swan. It was obvious meltdown preceded by a pure statistic. . Now we come to 2008. Actually there was an inverted curve about mid 2006- See www.econbrowser.com/archives/2006/08/the_yield_curve_1.html? What am I missing again? A 100% indicator can admittedly fail but what happened to all the esteemed member of the FED, economists, advisors (though I have already dismissed them) et al in evaluating that plus all the other factors. Sure it took longer for the losses to hit hard but that generally comes from the FED and others trying to make things better before it falls flat. It is true that the ultimate losses might fit a Black Swan in terms of its severity, but in no way was the recession anything more than what should have been anticipated. At this point, mid 2013, one must also address the scenarios of risk. I admit that my position regarding the market climate starting late 2011 was wrong. The market has done extremely well to date. That said, I do not view allocations in terms of pure anticipated returns. I do not see the stock market as the investment du jour- in other words it can fail miserably. I approach any allocations/investments in terms of how much risk is taken for every dollar of expected return. Due to the approaching sequester and many other issues, I did not see an economic environment very appealing to the risk oriented investor. (Admittedly since risk is really not statistically shown to consumers, it is fairly well a given that they have any idea of what they are doing. Additionally, when viewing the numerous articles on financial literacy, there is no chance of critical understanding of the numerous factors towards investing.) It is my opinion that the resulting returns in 2012 and current were/are due to the FED buying billions of Treasuries a month in order to stimulate the economy with low rates. The risk of investing did drop- but it was due to severe extenuating circumstances and an input by the FED to halt a secondary recession. All that said, it is kicking the can and potentially making things worse later on. That is not a given, admittedly, but once one puts the overall local, state, national and international economies into perspective, a reality check is warranted. As for local economics, one can look to city and county unfunded pension plans and the enormous deficits. Some cities have declared bankruptcy. Many others will have to. Equities are NOT going to return historical rates no matter what certain advisers state. Bond returns are currently dismal and will not approach historical levels for perhaps a decade or better. So there goes whatever returns were projected. States are in the same crisis. Sure one can look at California doing better. But once one researches the enormous cuts to its previous budgets, you can make things look respectable. Just remember that some very good programs were devastated by said cuts- most notably for education. The poor are doing worse and the middle class is in the doldrums as well. Nationally the U.S. looks better. However, GDP was supposed to be horrid in late 2011 and 2012. If you are under 2%, nothing looks favorable long term. (This just in- A decline in consumer spending and business investment caused the Department of Commerce to revise GDP growth down to a 1.8% annual rate in the first quarter from the previously estimated 2.4%.) Statistics from 2012 till recently show a 2%+ GDP, that unemployment has gone down, housing prices have not only improved, but some prices are escalating similar to the boom. Consumer sentiment improved. But the GDP was bolstered by the FED. It is somewhat illusory due to the decision to keep rates low, but they had to do something. Home prices do bother me. Not that some increase was not expected in certain areas, but the boom areas (San Francisco for example) cannot sustain increases without another tumble. Why does this happen? Perception of the prices going higher even overnight. A bubble. Unemployment is not 8%. It is at least double that with those that have simply left the job market altogether, etc. Consumer sentiment is better, but I have limited my position on this statistic since, werent they happy in the dotcom?. Werent they happy when home prices inflated so much- including theirs? It is true that when they feel good, they spend more money and that is what keeps the economy moving. I just dont think they are that bright overall. The consumer statistic is, in large part, illusory. They are buying stocks now at valuations above historic measures. Company profits cannot exceed a true GDP unless they can sell stuff at a growing rate in a subpar economy. Who can do that? Apple?? Maybe but it is facing considerable pressure now. What else? Cars? Nope. Homes? Certainly not when interest rates are rising. Now we get to the international arena where the whole pie is starting to disintegrate. From Roubini- "Japan, struggling against two decades of stagnation and deflation, had to resort to Abenomics to avoid a quintuple-dip recession. In the United Kingdom, the debate since last summer has focused on the prospect of a triple-dip recession. Most of the eurozone remains mired in a severe recession now spreading from the periphery to parts of the core. Even in the United States, economic performance has remained mediocre, with growth hovering around 1.5% for the last few quarters. (See July 2013 GDP comment above) And now the darlings of the world economy, emerging markets, have proved unable to reverse their own slowdowns. According to the IMF, Chinas annual GDP growth has slowed to 8%, from 10% in 2010; over the same period, Indias growth rate slowed from 11.2% to 5.7%. Russia, Brazil, and South Africa are growing at around 3%, and other emerging markets are slowing as well."
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This is not to say there is an imminent collapse of the U.S. next week. It does say that a lot of grandiose comments about the surge of manufacturing et al over the last year was due to the FED as well as some perceived positive growth of the world. But Greece is probably going to have to leave the EURO and that will send a message to everyone that the bailouts proposed were just a sham to begin with. With that impact, what has happened in Italy, Portugal, Spain et al and cause more upheaval. The U.S. has 17 trillion of debt which is over $132,000 per taxpayer. No matter the political party, no one wants to truly tackle Medicaid, Medicare and Social Security budgets. The sequester came and went with little consumer backlash. Maybe they figured it was fait compli given the failure of the politicians before. Maybe since the impact was not going to be felt until the measures took hold months later- as they have been most recently. So where are we now. Possibly in a cusp that will allow some more growth. But probably not for long. If the world really does slow down a LOT- which it might- you are going to see another recession. Maybe not as bad as 2008, but close.
7/1: Annuities" John Hancock, has left the annuity business altogether, other firms have cut back on selling annuities; and some have offered to buy out guarantees in exchange for adding a lump sum to the clients account value, Hartford Financial Services Group Inc. /quotes/zigman/180454/quotes/nls/hig HIG -0.99% , for instance, is now requiring owners of certain of its guarantees to move at least 40% of their money into bond fundsand lose their guarantee if they fail to transfer the money out of stock funds Some firms, given the current conditions, will likely curtail sales of variable annuities by lowering benefits, put the kibosh on what are called 1035 exchanges, eliminate aggressive investment options available to contract owners, or maybe do some or all of the above experts said consumers will need to evaluate the cost/benefit of variable annuities, especially those that include guaranteed living-benefit riders, more closely. A few years ago, a buyer could allocate 80% or 85% to equity subaccounts, including aggressive growth accounts, said John Olsen, president at Olsen Financial Group. Now, the maximum equity allocation is much less and aggressive subaccounts may not be available with these riders. And the rider cost is greater. According to Olsen, theres a reason why issuers are offering buy outs for contract owners with such living benefits. They underpriced those benefits, he said. That doesnt mean that they were incompetent; its mostly that they had very little historical evidence of the risks and performance of these riders on which to base rates. 7/1: Marriage?????? Between 1950 and 2011 the US marriage rate fell "a stunning 66 percent," 7/1: Medicare The unfunded liability in Medicare, the trustees tell us, is $34 trillion over the next 75 years.
Looking indefinitely into the future, the unfunded liability is $43 trillionalmost three times the size of today's economy. Based on more plausible assumptions, such as those reflected in the "alternative" scenario for Medicare produced by the Congressional Budget Office in June 2012, the long-term shortfall is more than $100 trillion.
Take one source of optimism that the trustees are compelled to transmit in their latest report.
Its predicted expenditures are based on the assumption built into the law that next Jan. 1 [2014] there will be a 25% decrease in the fees that Medicare pays doctors. That means that every doctor in America who participates in Medicare will take a 25% pay cut. The reason has nothing to do with ObamaCare.
In the Balanced Budget Act of 1997, Congress declared that Medicare physician fees could grow no faster than the economy as a whole. Since then, though, Congress has postponed the cuts on 14 occasions, not allowing them to take place. Why assume things will be different now?
A second problem, however, does stem from ObamaCare.
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In order to pay for the expansion of health insurance for the young, the new health law calls for steep cuts in the growth of health-care spending on the elderly. Whereas Medicare spending per person in real terms has been increasing at about the rate of growth of real GDP per person plus two percentage points, the ObamaCare law calls for a spending growth rate of GDP plus 0.04%. Assuming this slower growth rate will materialize, over the next decade it produces about $716 billion in savings.
By 2030, [in just 17 years] for instance, doctors treating Medicare patients would be paid 40% of private health-insurance fees. The Medicare reimbursement to hospitals for inpatient treatment would fall to 60% of the private-insurance level.
From a financial point of view, senior patients will become less desirable than welfare recipients.
Medicare's Office of the Actuary is predicting that one in seven hospitals will completely leave the Medicare system by 2020 because of these pay cuts. 6/30: Who do you trust
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U.S. Marketing 5/30: Add this to the pile bond yields today are well below and stock market valuations are well above their historical average. Importantly, there are no historical periods in the United States where comparable low bond yields and high equity valuations have occurred simultaneously. It is only in the last few years that we've simultaneously seen 10-year government bond yields fall below 2.5% while the cyclically-adjusted price earnings ratio is also above 20.
Priceless 6/30:
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Third of student loan borrowers never earned degree

One out of every five adults 20 years of age or older owe money on student loans The exact figures for American adults: 19.6 percent have student loans and 57 percent are concerned about repayment. A third of the debtors are not college graduates, and 9 percent of them possess only a high school degree. The high school graduates may have incurred debt by pursuing nondegree training or helping to pay for a child's education. Some 25 percent attended college but did not graduate. 30 percent of college grads must pay back student loans, and 28 percent of those who earned advanced degrees had to borrow. Amazingly, the percentage of Americans stressed about college debt is nearly identical across age groups except for individuals age 60 or older. The percentage of Americans with college debt is 57 percent, but that drops to 41 percent for those who are at least 60. Only 4 percent of these older Americans have college debt. Hispanics and African Americans are about twice as likely to carry student-loan debt: 34 percent of blacks and 28 percent of Hispanics have it, compared with 16 percent of whites and 19 percent Asians. Which gender worries more about college debt? Women are no more likely to incur college debt than men, but they are 8 percent more prone to worry about it. Because they are more likely to pay the family bills, women may be more aware of how these loans impact their household finances.
6/30: Not exactly inspiring

China is a mess. The Shanghai Stock Exchange Index is down 14% this year, and down by more than a third over the last three years. It trades lower today than it did in early 2009, when the global economy was nearing collapse. Manufacturing, long China's engine of growth, is nowcontracting. Imports are down. Economists around the world are cutting their forecasts of the country's economic growth. China's banking system is straining, too. Interest rates tied to interbank lending surged to more than 20% last week as a credit crunch emerges after years of binging on debt.
According to Census Bureau data, working-age Chinese (those age 15 to 64) currently make up 74% of the country's total population. By 2030, that figure will drop to 68%, and all the way down to 60% by 2050. America's working-age population is set to decline, too, but not nearly as much -- from 66% today 61% by 2050. China's population is so large that this rapid decline in its working-age population adds up to literally hundreds of millions of people:
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6/27- Not exactly inspiring
6/26: An omen??????? >Paragon pulls fixed-rate mortgages First example of UK lender being hit by the rising cost of borrowing money on the markets 6/25: A history of one year rates
Title: 1-Year Treasury Constant Maturity Rate Series ID: WGS1YR Source: Board of Governors of the Federal Reserve System Release: H.15 Selected Interest Rates Seasonal Adjustment: Not Seasonally Adjusted Frequency: Weekly, Ending Friday Units: Percent Date Range: 1962-01-05 to 2013-06-21 Last Updated: 2013-06-24 2:47 PM CDT Notes: Averages of business days. For further information regarding treasury constant maturity data, please refer to http://www.federalreserve.gov/releases/h15/current/h15.pdf and http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/yieldmethod.aspx.
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DATE VALUE 1962-01-05 1962-01-12 1962-01-19 1962-01-26 1962-02-02 1962-02-09 1962-02-16 1962-02-23 1962-03-02 1962-03-09 1962-03-16 1962-03-23 1962-03-30 1962-04-06 1962-04-13 1962-04-20 1962-04-27 1962-05-04 1962-05-11 1962-05-18 1962-05-25 1962-06-01 1962-06-08 1962-06-15 1962-06-22 1962-06-29 1962-07-06 1962-07-13 1962-07-20 1962-07-27 1962-08-03 1962-08-10 1962-08-17 1962-08-24 1962-08-31 1962-09-07 1962-09-14 1962-09-21 1962-09-28 1962-10-05 1962-10-12 1962-10-19 1962-10-26 1962-11-02 1962-11-09 1962-11-16 1962-11-23 1962-11-30 1962-12-07 1962-12-14 1962-12-21 1962-12-28 1963-01-04 1963-01-11 1963-01-18 1963-01-25 1963-02-01 1963-02-08 1963-02-15 1963-02-22 1963-03-01 1963-03-08 1963-03-15 1963-03-22 1963-03-29 1963-04-05 1963-04-12 1963-04-19 1963-04-26 1963-05-03 1963-05-10 1963-05-17 1963-05-24 1963-05-31 1963-06-07 1963-06-14 1963-06-21 1963-06-28 1963-07-05 1963-07-12
3.24 3.32 3.29 3.26 3.29 3.29 3.31 3.29 3.20 3.15 3.10 2.99 2.96 2.91 2.97 3.00 3.06 3.06 3.01 3.04 3.03 2.98 2.96 2.97 3.04 3.16 3.22 3.27 3.33 3.32 3.30 3.28 3.21 3.15 3.11 3.13 3.06 3.04 3.03 2.98 2.99 2.96 2.98 2.98 2.98 2.99 3.01 3.03 3.02 2.99 3.00 3.01 3.04 3.03 3.01 3.06 3.05 3.00 3.00 3.01 3.03 2.99 3.00 3.05 3.10 3.08 3.10 3.14 3.13 3.11 3.09 3.09 3.12 3.19 3.23 3.18 3.19 3.19 3.29 3.50
163 of 397
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Daily Commentary
1963-07-19 1963-07-26 1963-08-02 1963-08-09 1963-08-16 1963-08-23 1963-08-30 1963-09-06 1963-09-13 1963-09-20 1963-09-27 1963-10-04 1963-10-11 1963-10-18 1963-10-25 1963-11-01 1963-11-08 1963-11-15 1963-11-22 1963-11-29 1963-12-06 1963-12-13 1963-12-20 1963-12-27 1964-01-03 1964-01-10 1964-01-17 1964-01-24 1964-01-31 1964-02-07 1964-02-14 1964-02-21 1964-02-28 1964-03-06 1964-03-13 1964-03-20 1964-03-27 1964-04-03 1964-04-10 1964-04-17 1964-04-24 1964-05-01 1964-05-08 1964-05-15 1964-05-22 1964-05-29 1964-06-05 1964-06-12 1964-06-19 1964-06-26 1964-07-03 1964-07-10 1964-07-17 1964-07-24 1964-07-31 1964-08-07 1964-08-14 1964-08-21 1964-08-28 1964-09-04 1964-09-11 1964-09-18 1964-09-25 1964-10-02 1964-10-09 1964-10-16 1964-10-23 1964-10-30 1964-11-06 1964-11-13 1964-11-20 1964-11-27 1964-12-04 1964-12-11 1964-12-18 1964-12-25 1965-01-01 1965-01-08 1965-01-15 1965-01-22 1965-01-29 1965-02-05
3.55 3.51 3.49 3.50 3.53 3.55 3.58 3.58 3.57 3.58 3.56 3.59 3.61 3.64 3.69 3.68 3.75 3.77 3.73 3.73 3.78 3.80 3.83 3.84 3.84 3.81 3.79 3.77 3.78 3.74 3.75 3.78 3.86 3.91 3.90 3.90 3.94 3.95 3.93 3.93 3.89 3.85 3.86 3.82 3.84 3.84 3.84 3.85 3.85 3.82 3.79 3.75 3.67 3.71 3.70 3.70 3.74 3.75 3.77 3.83 3.86 3.85 3.82 3.84 3.86 3.87 3.87 3.87 3.86 3.85 3.86 4.03 4.07 4.03 3.99 4.01 4.01 3.94 3.94 3.94 3.94 3.98
164 of 397
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Daily Commentary
1965-02-12 1965-02-19 1965-02-26 1965-03-05 1965-03-12 1965-03-19 1965-03-26 1965-04-02 1965-04-09 1965-04-16 1965-04-23 1965-04-30 1965-05-07 1965-05-14 1965-05-21 1965-05-28 1965-06-04 1965-06-11 1965-06-18 1965-06-25 1965-07-02 1965-07-09 1965-07-16 1965-07-23 1965-07-30 1965-08-06 1965-08-13 1965-08-20 1965-08-27 1965-09-03 1965-09-10 1965-09-17 1965-09-24 1965-10-01 1965-10-08 1965-10-15 1965-10-22 1965-10-29 1965-11-05 1965-11-12 1965-11-19 1965-11-26 1965-12-03 1965-12-10 1965-12-17 1965-12-24 1965-12-31 1966-01-07 1966-01-14 1966-01-21 1966-01-28 1966-02-04 1966-02-11 1966-02-18 1966-02-25 1966-03-04 1966-03-11 1966-03-18 1966-03-25 1966-04-01 1966-04-08 1966-04-15 1966-04-22 1966-04-29 1966-05-06 1966-05-13 1966-05-20 1966-05-27 1966-06-03 1966-06-10 1966-06-17 1966-06-24 1966-07-01 1966-07-08 1966-07-15 1966-07-22 1966-07-29 1966-08-05 1966-08-12 1966-08-19 1966-08-26 1966-09-02
4.02 4.04 4.08 4.10 4.08 4.04 4.04 4.04 4.04 4.03 4.04 4.04 4.03 4.02 4.03 4.04 4.03 4.03 4.00 3.94 3.96 3.98 3.98 3.98 4.00 4.03 4.05 4.07 4.10 4.14 4.15 4.17 4.22 4.35 4.29 4.26 4.29 4.32 4.37 4.38 4.36 4.39 4.41 4.61 4.73 4.81 4.91 4.90 4.87 4.86 4.87 4.88 4.92 4.97 4.99 5.01 5.01 5.00 4.92 4.91 4.87 4.91 4.90 4.91 4.93 4.89 4.90 5.00 5.03 5.03 4.99 4.87 4.96 5.07 5.20 5.22 5.21 5.23 5.33 5.59 5.79 5.89
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Daily Commentary
1966-09-09 1966-09-16 1966-09-23 1966-09-30 1966-10-07 1966-10-14 1966-10-21 1966-10-28 1966-11-04 1966-11-11 1966-11-18 1966-11-25 1966-12-02 1966-12-09 1966-12-16 1966-12-23 1966-12-30 1967-01-06 1967-01-13 1967-01-20 1967-01-27 1967-02-03 1967-02-10 1967-02-17 1967-02-24 1967-03-03 1967-03-10 1967-03-17 1967-03-24 1967-03-31 1967-04-07 1967-04-14 1967-04-21 1967-04-28 1967-05-05 1967-05-12 1967-05-19 1967-05-26 1967-06-02 1967-06-09 1967-06-16 1967-06-23 1967-06-30 1967-07-07 1967-07-14 1967-07-21 1967-07-28 1967-08-04 1967-08-11 1967-08-18 1967-08-25 1967-09-01 1967-09-08 1967-09-15 1967-09-22 1967-09-29 1967-10-06 1967-10-13 1967-10-20 1967-10-27 1967-11-03 1967-11-10 1967-11-17 1967-11-24 1967-12-01 1967-12-08 1967-12-15 1967-12-22 1967-12-29 1968-01-05 1968-01-12 1968-01-19 1968-01-26 1968-02-02 1968-02-09 1968-02-16 1968-02-23 1968-03-01 1968-03-08 1968-03-15 1968-03-22 1968-03-29
5.80 5.91 5.88 5.68 5.62 5.60 5.58 5.54 5.54 5.61 5.59 5.49 5.45 5.44 5.20 5.04 5.01 4.93 4.77 4.69 4.69 4.61 4.63 4.76 4.83 4.69 4.56 4.30 4.20 4.15 4.11 4.09 4.11 4.11 4.13 4.14 4.15 4.18 4.19 4.23 4.45 4.55 4.79 5.00 4.94 4.98 5.10 5.09 5.13 5.10 5.14 5.18 5.17 5.21 5.27 5.31 5.30 5.33 5.41 5.42 5.49 5.63 5.61 5.64 5.64 5.71 5.70 5.70 5.74 5.63 5.46 5.35 5.37 5.35 5.43 5.40 5.41 5.44 5.47 5.63 5.66 5.60
166 of 397
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Daily Commentary
1968-04-05 1968-04-12 1968-04-19 1968-04-26 1968-05-03 1968-05-10 1968-05-17 1968-05-24 1968-05-31 1968-06-07 1968-06-14 1968-06-21 1968-06-28 1968-07-05 1968-07-12 1968-07-19 1968-07-26 1968-08-02 1968-08-09 1968-08-16 1968-08-23 1968-08-30 1968-09-06 1968-09-13 1968-09-20 1968-09-27 1968-10-04 1968-10-11 1968-10-18 1968-10-25 1968-11-01 1968-11-08 1968-11-15 1968-11-22 1968-11-29 1968-12-06 1968-12-13 1968-12-20 1968-12-27 1969-01-03 1969-01-10 1969-01-17 1969-01-24 1969-01-31 1969-02-07 1969-02-14 1969-02-21 1969-02-28 1969-03-07 1969-03-14 1969-03-21 1969-03-28 1969-04-04 1969-04-11 1969-04-18 1969-04-25 1969-05-02 1969-05-09 1969-05-16 1969-05-23 1969-05-30 1969-06-06 1969-06-13 1969-06-20 1969-06-27 1969-07-04 1969-07-11 1969-07-18 1969-07-25 1969-08-01 1969-08-08 1969-08-15 1969-08-22 1969-08-29 1969-09-05 1969-09-12 1969-09-19 1969-09-26 1969-10-03 1969-10-10 1969-10-17 1969-10-24
5.50 5.54 5.72 5.91 6.01 6.05 6.13 6.32 6.15 6.04 6.04 5.94 5.92 5.84 5.70 5.69 5.50 5.42 5.38 5.48 5.47 5.44 5.43 5.50 5.43 5.42 5.46 5.57 5.57 5.59 5.66 5.72 5.75 5.77 5.76 5.96 6.02 6.24 6.51 6.44 6.49 6.29 6.22 6.32 6.41 6.39 6.41 6.43 6.44 6.34 6.31 6.27 6.25 6.25 6.25 6.28 6.29 6.34 6.42 6.42 6.58 6.79 7.09 6.91 7.26 7.69 7.68 7.53 7.53 7.58 7.48 7.58 7.45 7.63 7.74 7.80 7.81 7.83 7.97 7.82 7.60 7.39
167 of 397
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Daily Commentary
1969-10-31 1969-11-07 1969-11-14 1969-11-21 1969-11-28 1969-12-05 1969-12-12 1969-12-19 1969-12-26 1970-01-02 1970-01-09 1970-01-16 1970-01-23 1970-01-30 1970-02-06 1970-02-13 1970-02-20 1970-02-27 1970-03-06 1970-03-13 1970-03-20 1970-03-27 1970-04-03 1970-04-10 1970-04-17 1970-04-24 1970-05-01 1970-05-08 1970-05-15 1970-05-22 1970-05-29 1970-06-05 1970-06-12 1970-06-19 1970-06-26 1970-07-03 1970-07-10 1970-07-17 1970-07-24 1970-07-31 1970-08-07 1970-08-14 1970-08-21 1970-08-28 1970-09-04 1970-09-11 1970-09-18 1970-09-25 1970-10-02 1970-10-09 1970-10-16 1970-10-23 1970-10-30 1970-11-06 1970-11-13 1970-11-20 1970-11-27 1970-12-04 1970-12-11 1970-12-18 1970-12-25 1971-01-01 1971-01-08 1971-01-15 1971-01-22 1971-01-29 1971-02-05 1971-02-12 1971-02-19 1971-02-26 1971-03-05 1971-03-12 1971-03-19 1971-03-26 1971-04-02 1971-04-09 1971-04-16 1971-04-23 1971-04-30 1971-05-07 1971-05-14 1971-05-21
7.54 7.68 7.80 8.01 8.04 8.02 8.16 8.17 8.21 8.34 8.18 8.00 8.04 8.15 7.94 7.72 7.43 7.21 7.05 6.98 7.03 6.79 6.86 6.81 6.87 7.18 7.65 7.72 7.78 7.72 7.78 7.57 7.58 7.60 7.50 7.36 7.23 7.06 7.02 7.03 7.07 7.17 7.02 6.71 6.83 6.86 6.78 6.55 6.60 6.52 6.43 6.39 6.30 6.11 5.87 5.26 5.00 5.04 5.09 4.94 4.95 4.96 4.98 4.68 4.35 4.26 4.17 3.96 3.71 3.68 3.72 3.58 3.60 3.71 3.95 4.07 4.26 4.31 4.65 4.86 4.96 5.20
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Daily Commentary
1971-05-28 1971-06-04 1971-06-11 1971-06-18 1971-06-25 1971-07-02 1971-07-09 1971-07-16 1971-07-23 1971-07-30 1971-08-06 1971-08-13 1971-08-20 1971-08-27 1971-09-03 1971-09-10 1971-09-17 1971-09-24 1971-10-01 1971-10-08 1971-10-15 1971-10-22 1971-10-29 1971-11-05 1971-11-12 1971-11-19 1971-11-26 1971-12-03 1971-12-10 1971-12-17 1971-12-24 1971-12-31 1972-01-07 1972-01-14 1972-01-21 1972-01-28 1972-02-04 1972-02-11 1972-02-18 1972-02-25 1972-03-03 1972-03-10 1972-03-17 1972-03-24 1972-03-31 1972-04-07 1972-04-14 1972-04-21 1972-04-28 1972-05-05 1972-05-12 1972-05-19 1972-05-26 1972-06-02 1972-06-09 1972-06-16 1972-06-23 1972-06-30 1972-07-07 1972-07-14 1972-07-21 1972-07-28 1972-08-04 1972-08-11 1972-08-18 1972-08-25 1972-09-01 1972-09-08 1972-09-15 1972-09-22 1972-09-29 1972-10-06 1972-10-13 1972-10-20 1972-10-27 1972-11-03 1972-11-10 1972-11-17 1972-11-24 1972-12-01 1972-12-08 1972-12-15
5.12 5.05 5.40 5.81 5.86 6.18 6.06 5.83 6.03 6.20 6.21 6.22 5.51 5.47 5.34 5.39 5.47 5.44 5.33 5.12 4.90 4.85 4.66 4.57 4.69 4.60 4.76 4.72 4.67 4.64 4.61 4.45 4.41 4.14 4.22 4.33 4.40 4.27 4.16 4.26 4.28 4.35 4.80 4.84 5.02 5.17 5.12 4.93 4.64 4.60 4.66 4.69 4.61 4.69 4.85 4.86 4.96 5.11 5.08 5.04 4.91 4.87 4.82 4.83 4.84 5.09 5.39 5.46 5.51 5.54 5.60 5.60 5.53 5.53 5.44 5.38 5.27 5.20 5.25 5.35 5.44 5.48
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Daily Commentary
1972-12-22 1972-12-29 1973-01-05 1973-01-12 1973-01-19 1973-01-26 1973-02-02 1973-02-09 1973-02-16 1973-02-23 1973-03-02 1973-03-09 1973-03-16 1973-03-23 1973-03-30 1973-04-06 1973-04-13 1973-04-20 1973-04-27 1973-05-04 1973-05-11 1973-05-18 1973-05-25 1973-06-01 1973-06-08 1973-06-15 1973-06-22 1973-06-29 1973-07-06 1973-07-13 1973-07-20 1973-07-27 1973-08-03 1973-08-10 1973-08-17 1973-08-24 1973-08-31 1973-09-07 1973-09-14 1973-09-21 1973-09-28 1973-10-05 1973-10-12 1973-10-19 1973-10-26 1973-11-02 1973-11-09 1973-11-16 1973-11-23 1973-11-30 1973-12-07 1973-12-14 1973-12-21 1973-12-28 1974-01-04 1974-01-11 1974-01-18 1974-01-25 1974-02-01 1974-02-08 1974-02-15 1974-02-22 1974-03-01 1974-03-08 1974-03-15 1974-03-22 1974-03-29 1974-04-05 1974-04-12 1974-04-19 1974-04-26 1974-05-03 1974-05-10 1974-05-17 1974-05-24 1974-05-31 1974-06-07 1974-06-14 1974-06-21 1974-06-28 1974-07-05 1974-07-12
5.57 5.64 5.70 5.78 5.89 6.03 6.15 6.16 6.04 6.20 6.43 6.64 6.90 7.03 7.00 7.01 6.82 6.76 6.79 6.83 6.77 6.78 7.03 7.16 7.22 7.20 7.29 7.53 8.05 8.12 8.41 8.72 8.90 9.18 8.89 8.66 8.50 8.39 8.59 8.40 7.87 7.67 7.43 7.38 7.21 7.26 7.73 7.89 7.48 7.26 7.45 7.25 7.08 7.32 7.32 7.39 7.49 7.54 7.23 6.80 6.81 6.85 7.11 7.30 7.43 8.06 8.35 8.47 8.58 8.58 8.71 9.00 9.19 8.76 8.46 8.54 8.63 8.63 8.60 8.82 9.04 9.00
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Daily Commentary
1974-07-19 1974-07-26 1974-08-02 1974-08-09 1974-08-16 1974-08-23 1974-08-30 1974-09-06 1974-09-13 1974-09-20 1974-09-27 1974-10-04 1974-10-11 1974-10-18 1974-10-25 1974-11-01 1974-11-08 1974-11-15 1974-11-22 1974-11-29 1974-12-06 1974-12-13 1974-12-20 1974-12-27 1975-01-03 1975-01-10 1975-01-17 1975-01-24 1975-01-31 1975-02-07 1975-02-14 1975-02-21 1975-02-28 1975-03-07 1975-03-14 1975-03-21 1975-03-28 1975-04-04 1975-04-11 1975-04-18 1975-04-25 1975-05-02 1975-05-09 1975-05-16 1975-05-23 1975-05-30 1975-06-06 1975-06-13 1975-06-20 1975-06-27 1975-07-04 1975-07-11 1975-07-18 1975-07-25 1975-08-01 1975-08-08 1975-08-15 1975-08-22 1975-08-29 1975-09-05 1975-09-12 1975-09-19 1975-09-26 1975-10-03 1975-10-10 1975-10-17 1975-10-24 1975-10-31 1975-11-07 1975-11-14 1975-11-21 1975-11-28 1975-12-05 1975-12-12 1975-12-19 1975-12-26 1976-01-02 1976-01-09 1976-01-16 1976-01-23 1976-01-30 1976-02-06
8.61 8.49 9.03 9.08 9.09 9.53 9.83 9.59 9.09 8.68 8.41 8.31 7.97 8.09 7.89 8.00 7.80 7.59 7.55 7.63 7.55 7.24 7.10 7.33 7.29 7.01 7.02 6.70 6.44 5.93 6.07 5.86 6.08 6.06 6.00 6.09 6.24 6.65 6.97 6.83 7.02 6.89 6.61 6.30 6.21 6.26 6.20 5.89 6.20 6.74 6.92 6.96 6.97 7.30 7.38 7.63 7.73 7.80 7.71 7.62 7.70 7.88 7.75 7.70 7.25 7.00 6.73 6.44 6.30 6.38 6.58 6.68 6.75 6.88 6.65 6.32 6.18 5.96 5.77 5.74 5.68 5.82
171 of 397
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Daily Commentary
1976-02-13 1976-02-20 1976-02-27 1976-03-05 1976-03-12 1976-03-19 1976-03-26 1976-04-02 1976-04-09 1976-04-16 1976-04-23 1976-04-30 1976-05-07 1976-05-14 1976-05-21 1976-05-28 1976-06-04 1976-06-11 1976-06-18 1976-06-25 1976-07-02 1976-07-09 1976-07-16 1976-07-23 1976-07-30 1976-08-06 1976-08-13 1976-08-20 1976-08-27 1976-09-03 1976-09-10 1976-09-17 1976-09-24 1976-10-01 1976-10-08 1976-10-15 1976-10-22 1976-10-29 1976-11-05 1976-11-12 1976-11-19 1976-11-26 1976-12-03 1976-12-10 1976-12-17 1976-12-24 1976-12-31 1977-01-07 1977-01-14 1977-01-21 1977-01-28 1977-02-04 1977-02-11 1977-02-18 1977-02-25 1977-03-04 1977-03-11 1977-03-18 1977-03-25 1977-04-01 1977-04-08 1977-04-15 1977-04-22 1977-04-29 1977-05-06 1977-05-13 1977-05-20 1977-05-27 1977-06-03 1977-06-10 1977-06-17 1977-06-24 1977-07-01 1977-07-08 1977-07-15 1977-07-22 1977-07-29 1977-08-05 1977-08-12 1977-08-19 1977-08-26 1977-09-02
5.82 5.96 6.02 6.39 6.23 6.23 6.06 6.12 5.96 5.75 5.84 6.02 6.09 6.29 6.54 6.69 6.69 6.52 6.48 6.45 6.46 6.28 6.12 6.21 6.11 6.10 6.02 6.00 5.93 5.91 5.89 5.87 5.76 5.80 5.63 5.38 5.41 5.50 5.45 5.51 5.33 5.05 4.92 4.93 4.91 4.86 4.87 5.02 5.22 5.38 5.50 5.57 5.40 5.37 5.54 5.55 5.52 5.49 5.49 5.45 5.43 5.39 5.41 5.54 5.67 5.87 5.93 5.91 5.86 5.83 5.80 5.79 5.72 5.81 5.88 5.99 6.08 6.24 6.34 6.48 6.42 6.35
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Daily Commentary
1977-09-09 1977-09-16 1977-09-23 1977-09-30 1977-10-07 1977-10-14 1977-10-21 1977-10-28 1977-11-04 1977-11-11 1977-11-18 1977-11-25 1977-12-02 1977-12-09 1977-12-16 1977-12-23 1977-12-30 1978-01-06 1978-01-13 1978-01-20 1978-01-27 1978-02-03 1978-02-10 1978-02-17 1978-02-24 1978-03-03 1978-03-10 1978-03-17 1978-03-24 1978-03-31 1978-04-07 1978-04-14 1978-04-21 1978-04-28 1978-05-05 1978-05-12 1978-05-19 1978-05-26 1978-06-02 1978-06-09 1978-06-16 1978-06-23 1978-06-30 1978-07-07 1978-07-14 1978-07-21 1978-07-28 1978-08-04 1978-08-11 1978-08-18 1978-08-25 1978-09-01 1978-09-08 1978-09-15 1978-09-22 1978-09-29 1978-10-06 1978-10-13 1978-10-20 1978-10-27 1978-11-03 1978-11-10 1978-11-17 1978-11-24 1978-12-01 1978-12-08 1978-12-15 1978-12-22 1978-12-29 1979-01-05 1979-01-12 1979-01-19 1979-01-26 1979-02-02 1979-02-09 1979-02-16 1979-02-23 1979-03-02 1979-03-09 1979-03-16 1979-03-23 1979-03-30
6.41 6.57 6.55 6.63 6.79 7.05 7.07 6.96 7.05 6.99 6.92 6.91 6.91 6.94 6.94 6.97 7.01 7.03 7.43 7.34 7.30 7.28 7.31 7.38 7.38 7.34 7.29 7.28 7.25 7.39 7.43 7.40 7.42 7.57 7.68 7.78 7.86 7.93 7.92 7.89 8.03 8.22 8.32 8.34 8.42 8.42 8.39 8.23 8.13 8.38 8.40 8.47 8.46 8.56 8.72 8.81 8.88 8.93 9.17 9.24 9.95 10.16 9.89 9.92 10.11 10.14 10.12 10.49 10.54 10.51 10.51 10.50 10.31 10.13 10.19 10.19 10.33 10.36 10.30 10.31 10.22 10.11
173 of 397
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Daily Commentary
1979-04-06 1979-04-13 1979-04-20 1979-04-27 1979-05-04 1979-05-11 1979-05-18 1979-05-25 1979-06-01 1979-06-08 1979-06-15 1979-06-22 1979-06-29 1979-07-06 1979-07-13 1979-07-20 1979-07-27 1979-08-03 1979-08-10 1979-08-17 1979-08-24 1979-08-31 1979-09-07 1979-09-14 1979-09-21 1979-09-28 1979-10-05 1979-10-12 1979-10-19 1979-10-26 1979-11-02 1979-11-09 1979-11-16 1979-11-23 1979-11-30 1979-12-07 1979-12-14 1979-12-21 1979-12-28 1980-01-04 1980-01-11 1980-01-18 1980-01-25 1980-02-01 1980-02-08 1980-02-15 1980-02-22 1980-02-29 1980-03-07 1980-03-14 1980-03-21 1980-03-28 1980-04-04 1980-04-11 1980-04-18 1980-04-25 1980-05-02 1980-05-09 1980-05-16 1980-05-23 1980-05-30 1980-06-06 1980-06-13 1980-06-20 1980-06-27 1980-07-04 1980-07-11 1980-07-18 1980-07-25 1980-08-01 1980-08-08 1980-08-15 1980-08-22 1980-08-29 1980-09-05 1980-09-12 1980-09-19 1980-09-26 1980-10-03 1980-10-10 1980-10-17 1980-10-24
10.09 10.24 10.04 10.12 10.30 10.27 10.09 9.95 9.88 9.74 9.48 9.61 9.39 9.44 9.53 9.70 9.82 9.72 9.72 9.95 10.14 10.28 10.75 10.91 10.89 10.81 11.02 12.50 12.68 13.31 12.91 12.94 12.31 12.45 11.76 11.93 12.28 11.91 11.84 12.02 11.90 11.92 12.11 12.36 12.80 13.22 14.71 15.24 15.77 15.68 15.58 16.25 15.74 14.68 13.21 11.86 10.94 9.77 9.44 9.02 8.68 8.56 7.89 7.87 8.23 8.51 8.54 8.57 8.58 9.13 9.35 9.71 10.79 11.28 10.74 11.12 11.65 12.07 12.28 11.99 11.98 12.56
174 of 397
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Daily Commentary
1980-10-31 1980-11-07 1980-11-14 1980-11-21 1980-11-28 1980-12-05 1980-12-12 1980-12-19 1980-12-26 1981-01-02 1981-01-09 1981-01-16 1981-01-23 1981-01-30 1981-02-06 1981-02-13 1981-02-20 1981-02-27 1981-03-06 1981-03-13 1981-03-20 1981-03-27 1981-04-03 1981-04-10 1981-04-17 1981-04-24 1981-05-01 1981-05-08 1981-05-15 1981-05-22 1981-05-29 1981-06-05 1981-06-12 1981-06-19 1981-06-26 1981-07-03 1981-07-10 1981-07-17 1981-07-24 1981-07-31 1981-08-07 1981-08-14 1981-08-21 1981-08-28 1981-09-04 1981-09-11 1981-09-18 1981-09-25 1981-10-02 1981-10-09 1981-10-16 1981-10-23 1981-10-30 1981-11-06 1981-11-13 1981-11-20 1981-11-27 1981-12-04 1981-12-11 1981-12-18 1981-12-25 1982-01-01 1982-01-08 1982-01-15 1982-01-22 1982-01-29 1982-02-05 1982-02-12 1982-02-19 1982-02-26 1982-03-05 1982-03-12 1982-03-19 1982-03-26 1982-04-02 1982-04-09 1982-04-16 1982-04-23 1982-04-30 1982-05-07 1982-05-14 1982-05-21
13.51 13.97 13.61 14.20 14.81 15.18 15.52 15.44 13.82 13.86 13.68 13.91 14.52 14.24 14.41 14.92 14.50 14.50 14.69 13.92 12.96 13.51 13.20 13.98 14.27 14.70 15.11 16.36 16.63 16.44 15.44 15.22 14.73 14.67 14.86 14.94 15.27 15.34 16.36 16.13 16.56 16.45 16.74 17.07 17.15 16.93 16.13 16.05 16.52 15.53 15.14 15.34 15.02 13.83 12.51 11.88 11.70 12.00 12.32 12.79 13.56 13.68 13.80 14.39 14.72 14.37 14.85 15.11 15.03 14.08 13.71 13.73 14.08 14.01 14.32 14.20 14.07 13.86 13.75 13.71 13.49 13.18
175 of 397
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Daily Commentary
1982-05-28 1982-06-04 1982-06-11 1982-06-18 1982-06-25 1982-07-02 1982-07-09 1982-07-16 1982-07-23 1982-07-30 1982-08-06 1982-08-13 1982-08-20 1982-08-27 1982-09-03 1982-09-10 1982-09-17 1982-09-24 1982-10-01 1982-10-08 1982-10-15 1982-10-22 1982-10-29 1982-11-05 1982-11-12 1982-11-19 1982-11-26 1982-12-03 1982-12-10 1982-12-17 1982-12-24 1982-12-31 1983-01-07 1983-01-14 1983-01-21 1983-01-28 1983-02-04 1983-02-11 1983-02-18 1983-02-25 1983-03-04 1983-03-11 1983-03-18 1983-03-25 1983-04-01 1983-04-08 1983-04-15 1983-04-22 1983-04-29 1983-05-06 1983-05-13 1983-05-20 1983-05-27 1983-06-03 1983-06-10 1983-06-17 1983-06-24 1983-07-01 1983-07-08 1983-07-15 1983-07-22 1983-07-29 1983-08-05 1983-08-12 1983-08-19 1983-08-26 1983-09-02 1983-09-09 1983-09-16 1983-09-23 1983-09-30 1983-10-07 1983-10-14 1983-10-21 1983-10-28 1983-11-04 1983-11-11 1983-11-18 1983-11-25 1983-12-02 1983-12-09 1983-12-16
13.00 13.46 13.59 14.22 14.62 14.41 13.98 13.46 12.50 12.73 12.32 12.23 10.63 10.63 11.12 11.05 11.10 10.67 10.34 10.05 8.82 8.89 9.26 9.03 9.19 9.23 9.07 9.26 9.06 8.83 8.80 8.75 8.62 8.41 8.56 8.83 8.98 9.06 8.98 8.67 8.59 8.93 9.05 9.28 9.34 9.17 8.94 8.98 8.83 8.64 8.70 8.93 9.23 9.43 9.64 9.54 9.82 9.78 10.12 10.27 10.18 10.31 10.63 10.77 10.43 10.27 10.57 10.38 10.21 10.01 9.89 9.77 9.92 9.69 9.86 9.92 9.95 9.92 9.90 10.01 10.10 10.15
176 of 397
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Daily Commentary
1983-12-23 1983-12-30 1984-01-06 1984-01-13 1984-01-20 1984-01-27 1984-02-03 1984-02-10 1984-02-17 1984-02-24 1984-03-02 1984-03-09 1984-03-16 1984-03-23 1984-03-30 1984-04-06 1984-04-13 1984-04-20 1984-04-27 1984-05-04 1984-05-11 1984-05-18 1984-05-25 1984-06-01 1984-06-08 1984-06-15 1984-06-22 1984-06-29 1984-07-06 1984-07-13 1984-07-20 1984-07-27 1984-08-03 1984-08-10 1984-08-17 1984-08-24 1984-08-31 1984-09-07 1984-09-14 1984-09-21 1984-09-28 1984-10-05 1984-10-12 1984-10-19 1984-10-26 1984-11-02 1984-11-09 1984-11-16 1984-11-23 1984-11-30 1984-12-07 1984-12-14 1984-12-21 1984-12-28 1985-01-04 1985-01-11 1985-01-18 1985-01-25 1985-02-01 1985-02-08 1985-02-15 1985-02-22 1985-03-01 1985-03-08 1985-03-15 1985-03-22 1985-03-29 1985-04-05 1985-04-12 1985-04-19 1985-04-26 1985-05-03 1985-05-10 1985-05-17 1985-05-24 1985-05-31 1985-06-07 1985-06-14 1985-06-21 1985-06-28 1985-07-05 1985-07-12
10.13 10.09 10.02 9.91 9.86 9.87 9.81 9.94 10.05 10.21 10.24 10.33 10.53 10.85 10.79 10.91 10.76 10.94 10.98 11.19 11.52 11.68 11.84 12.10 11.92 12.02 12.15 12.28 12.17 12.10 12.03 11.90 11.84 11.80 11.73 11.80 11.97 11.95 11.61 11.41 11.42 11.39 11.16 10.93 10.46 10.31 9.98 9.99 9.64 9.55 9.63 9.49 9.09 9.10 9.19 9.04 9.05 8.90 9.03 9.18 9.19 9.30 9.61 9.89 9.91 9.97 9.68 9.54 9.32 8.95 8.89 8.92 8.73 8.52 8.22 8.09 7.80 7.85 7.66 7.91 7.66 7.73
177 of 397
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Daily Commentary
1985-07-19 1985-07-26 1985-08-02 1985-08-09 1985-08-16 1985-08-23 1985-08-30 1985-09-06 1985-09-13 1985-09-20 1985-09-27 1985-10-04 1985-10-11 1985-10-18 1985-10-25 1985-11-01 1985-11-08 1985-11-15 1985-11-22 1985-11-29 1985-12-06 1985-12-13 1985-12-20 1985-12-27 1986-01-03 1986-01-10 1986-01-17 1986-01-24 1986-01-31 1986-02-07 1986-02-14 1986-02-21 1986-02-28 1986-03-07 1986-03-14 1986-03-21 1986-03-28 1986-04-04 1986-04-11 1986-04-18 1986-04-25 1986-05-02 1986-05-09 1986-05-16 1986-05-23 1986-05-30 1986-06-06 1986-06-13 1986-06-20 1986-06-27 1986-07-04 1986-07-11 1986-07-18 1986-07-25 1986-08-01 1986-08-08 1986-08-15 1986-08-22 1986-08-29 1986-09-05 1986-09-12 1986-09-19 1986-09-26 1986-10-03 1986-10-10 1986-10-17 1986-10-24 1986-10-31 1986-11-07 1986-11-14 1986-11-21 1986-11-28 1986-12-05 1986-12-12 1986-12-19 1986-12-26 1987-01-02 1987-01-09 1987-01-16 1987-01-23 1987-01-30 1987-02-06
7.82 8.03 8.14 8.15 8.07 7.95 7.97 8.04 8.20 8.11 7.88 7.96 8.06 8.01 8.03 7.97 7.91 7.89 7.85 7.87 7.90 7.65 7.57 7.59 7.63 7.74 7.86 7.73 7.62 7.63 7.69 7.62 7.52 7.22 7.03 7.01 6.89 6.67 6.41 6.21 6.46 6.56 6.49 6.65 6.74 6.79 7.00 6.85 6.61 6.54 6.36 6.29 6.18 6.25 6.27 6.16 6.01 5.85 5.67 5.66 5.79 5.81 5.80 5.79 5.57 5.73 5.82 5.74 5.76 5.89 5.79 5.77 5.78 5.83 5.90 5.92 5.97 5.80 5.76 5.69 5.82 5.92
178 of 397
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Daily Commentary
1987-02-13 1987-02-20 1987-02-27 1987-03-06 1987-03-13 1987-03-20 1987-03-27 1987-04-03 1987-04-10 1987-04-17 1987-04-24 1987-05-01 1987-05-08 1987-05-15 1987-05-22 1987-05-29 1987-06-05 1987-06-12 1987-06-19 1987-06-26 1987-07-03 1987-07-10 1987-07-17 1987-07-24 1987-07-31 1987-08-07 1987-08-14 1987-08-21 1987-08-28 1987-09-04 1987-09-11 1987-09-18 1987-09-25 1987-10-02 1987-10-09 1987-10-16 1987-10-23 1987-10-30 1987-11-06 1987-11-13 1987-11-20 1987-11-27 1987-12-04 1987-12-11 1987-12-18 1987-12-25 1988-01-01 1988-01-08 1988-01-15 1988-01-22 1988-01-29 1988-02-05 1988-02-12 1988-02-19 1988-02-26 1988-03-04 1988-03-11 1988-03-18 1988-03-25 1988-04-01 1988-04-08 1988-04-15 1988-04-22 1988-04-29 1988-05-06 1988-05-13 1988-05-20 1988-05-27 1988-06-03 1988-06-10 1988-06-17 1988-06-24 1988-07-01 1988-07-08 1988-07-15 1988-07-22 1988-07-29 1988-08-05 1988-08-12 1988-08-19 1988-08-26 1988-09-02
6.05 5.98 5.90 5.94 6.06 5.99 6.07 6.18 6.26 6.60 6.67 6.76 6.88 7.03 7.20 6.95 6.91 6.80 6.73 6.77 6.71 6.61 6.53 6.71 6.88 6.96 6.93 7.01 7.16 7.41 7.72 7.65 7.70 7.88 8.10 8.33 7.22 6.73 6.87 6.96 7.01 7.02 7.02 7.24 7.23 7.19 7.15 7.15 7.12 6.90 6.77 6.65 6.59 6.70 6.63 6.63 6.72 6.63 6.77 6.78 7.01 6.92 7.03 7.07 7.23 7.33 7.40 7.58 7.59 7.46 7.40 7.53 7.52 7.62 7.79 7.79 7.85 7.89 8.17 8.27 8.28 8.24
179 of 397
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Daily Commentary
1988-09-09 1988-09-16 1988-09-23 1988-09-30 1988-10-07 1988-10-14 1988-10-21 1988-10-28 1988-11-04 1988-11-11 1988-11-18 1988-11-25 1988-12-02 1988-12-09 1988-12-16 1988-12-23 1988-12-30 1989-01-06 1989-01-13 1989-01-20 1989-01-27 1989-02-03 1989-02-10 1989-02-17 1989-02-24 1989-03-03 1989-03-10 1989-03-17 1989-03-24 1989-03-31 1989-04-07 1989-04-14 1989-04-21 1989-04-28 1989-05-05 1989-05-12 1989-05-19 1989-05-26 1989-06-02 1989-06-09 1989-06-16 1989-06-23 1989-06-30 1989-07-07 1989-07-14 1989-07-21 1989-07-28 1989-08-04 1989-08-11 1989-08-18 1989-08-25 1989-09-01 1989-09-08 1989-09-15 1989-09-22 1989-09-29 1989-10-06 1989-10-13 1989-10-20 1989-10-27 1989-11-03 1989-11-10 1989-11-17 1989-11-24 1989-12-01 1989-12-08 1989-12-15 1989-12-22 1989-12-29 1990-01-05 1990-01-12 1990-01-19 1990-01-26 1990-02-02 1990-02-09 1990-02-16 1990-02-23 1990-03-02 1990-03-09 1990-03-16 1990-03-23 1990-03-30
8.09 8.01 8.07 8.18 8.13 8.07 8.12 8.13 8.10 8.35 8.55 8.71 8.75 8.89 9.10 9.00 9.07 9.17 9.11 8.96 8.97 9.05 9.15 9.27 9.41 9.40 9.39 9.56 9.78 9.71 9.47 9.48 9.28 9.22 9.16 9.05 8.89 8.86 8.80 8.40 8.45 8.53 8.28 7.97 7.85 7.96 7.86 7.73 8.12 8.30 8.36 8.32 8.27 8.07 8.18 8.38 8.35 8.00 7.85 7.81 7.89 7.87 7.71 7.64 7.73 7.73 7.73 7.66 7.80 7.82 7.78 7.97 8.01 8.09 8.13 8.05 8.19 8.14 8.34 8.42 8.35 8.34
180 of 397
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Daily Commentary
1990-04-06 1990-04-13 1990-04-20 1990-04-27 1990-05-04 1990-05-11 1990-05-18 1990-05-25 1990-06-01 1990-06-08 1990-06-15 1990-06-22 1990-06-29 1990-07-06 1990-07-13 1990-07-20 1990-07-27 1990-08-03 1990-08-10 1990-08-17 1990-08-24 1990-08-31 1990-09-07 1990-09-14 1990-09-21 1990-09-28 1990-10-05 1990-10-12 1990-10-19 1990-10-26 1990-11-02 1990-11-09 1990-11-16 1990-11-23 1990-11-30 1990-12-07 1990-12-14 1990-12-21 1990-12-28 1991-01-04 1991-01-11 1991-01-18 1991-01-25 1991-02-01 1991-02-08 1991-02-15 1991-02-22 1991-03-01 1991-03-08 1991-03-15 1991-03-22 1991-03-29 1991-04-05 1991-04-12 1991-04-19 1991-04-26 1991-05-03 1991-05-10 1991-05-17 1991-05-24 1991-05-31 1991-06-07 1991-06-14 1991-06-21 1991-06-28 1991-07-05 1991-07-12 1991-07-19 1991-07-26 1991-08-02 1991-08-09 1991-08-16 1991-08-23 1991-08-30 1991-09-06 1991-09-13 1991-09-20 1991-09-27 1991-10-04 1991-10-11 1991-10-18 1991-10-25
8.29 8.29 8.41 8.57 8.56 8.36 8.24 8.22 8.18 8.08 8.05 8.14 8.13 8.06 8.09 7.87 7.85 7.67 7.70 7.73 7.93 7.85 7.74 7.75 7.77 7.79 7.58 7.62 7.58 7.50 7.41 7.35 7.30 7.29 7.30 7.24 7.08 6.96 6.95 6.78 6.71 6.62 6.58 6.51 6.23 6.20 6.30 6.40 6.48 6.32 6.41 6.34 6.26 6.22 6.26 6.25 6.11 6.13 6.13 6.15 6.13 6.30 6.40 6.37 6.36 6.40 6.30 6.32 6.29 6.18 5.88 5.72 5.62 5.74 5.70 5.58 5.56 5.50 5.40 5.36 5.33 5.39
181 of 397
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Daily Commentary
1991-11-01 1991-11-08 1991-11-15 1991-11-22 1991-11-29 1991-12-06 1991-12-13 1991-12-20 1991-12-27 1992-01-03 1992-01-10 1992-01-17 1992-01-24 1992-01-31 1992-02-07 1992-02-14 1992-02-21 1992-02-28 1992-03-06 1992-03-13 1992-03-20 1992-03-27 1992-04-03 1992-04-10 1992-04-17 1992-04-24 1992-05-01 1992-05-08 1992-05-15 1992-05-22 1992-05-29 1992-06-05 1992-06-12 1992-06-19 1992-06-26 1992-07-03 1992-07-10 1992-07-17 1992-07-24 1992-07-31 1992-08-07 1992-08-14 1992-08-21 1992-08-28 1992-09-04 1992-09-11 1992-09-18 1992-09-25 1992-10-02 1992-10-09 1992-10-16 1992-10-23 1992-10-30 1992-11-06 1992-11-13 1992-11-20 1992-11-27 1992-12-04 1992-12-11 1992-12-18 1992-12-25 1993-01-01 1993-01-08 1993-01-15 1993-01-22 1993-01-29 1993-02-05 1993-02-12 1993-02-19 1993-02-26 1993-03-05 1993-03-12 1993-03-19 1993-03-26 1993-04-02 1993-04-09 1993-04-16 1993-04-23 1993-04-30 1993-05-07 1993-05-14 1993-05-21
5.15 5.00 4.96 4.82 4.74 4.61 4.44 4.35 4.17 4.14 4.06 4.17 4.14 4.23 4.19 4.19 4.37 4.41 4.55 4.64 4.73 4.64 4.50 4.25 4.14 4.32 4.34 4.25 4.12 4.12 4.27 4.27 4.18 4.12 4.14 3.96 3.64 3.53 3.53 3.57 3.54 3.43 3.40 3.52 3.39 3.17 3.15 3.16 3.02 3.09 3.26 3.48 3.50 3.58 3.64 3.73 3.76 3.82 3.72 3.76 3.64 3.62 3.60 3.50 3.47 3.41 3.41 3.45 3.36 3.31 3.30 3.39 3.36 3.30 3.32 3.31 3.21 3.18 3.25 3.23 3.27 3.40
182 of 397
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Daily Commentary
1993-05-28 1993-06-04 1993-06-11 1993-06-18 1993-06-25 1993-07-02 1993-07-09 1993-07-16 1993-07-23 1993-07-30 1993-08-06 1993-08-13 1993-08-20 1993-08-27 1993-09-03 1993-09-10 1993-09-17 1993-09-24 1993-10-01 1993-10-08 1993-10-15 1993-10-22 1993-10-29 1993-11-05 1993-11-12 1993-11-19 1993-11-26 1993-12-03 1993-12-10 1993-12-17 1993-12-24 1993-12-31 1994-01-07 1994-01-14 1994-01-21 1994-01-28 1994-02-04 1994-02-11 1994-02-18 1994-02-25 1994-03-04 1994-03-11 1994-03-18 1994-03-25 1994-04-01 1994-04-08 1994-04-15 1994-04-22 1994-04-29 1994-05-06 1994-05-13 1994-05-20 1994-05-27 1994-06-03 1994-06-10 1994-06-17 1994-06-24 1994-07-01 1994-07-08 1994-07-15 1994-07-22 1994-07-29 1994-08-05 1994-08-12 1994-08-19 1994-08-26 1994-09-02 1994-09-09 1994-09-16 1994-09-23 1994-09-30 1994-10-07 1994-10-14 1994-10-21 1994-10-28 1994-11-04 1994-11-11 1994-11-18 1994-11-25 1994-12-02 1994-12-09 1994-12-16
3.55 3.58 3.61 3.49 3.53 3.42 3.42 3.41 3.53 3.57 3.55 3.48 3.41 3.37 3.34 3.32 3.38 3.39 3.35 3.35 3.36 3.40 3.46 3.56 3.55 3.58 3.61 3.62 3.60 3.61 3.60 3.61 3.63 3.52 3.51 3.51 3.66 3.85 3.88 4.01 4.16 4.28 4.31 4.36 4.46 4.71 4.70 4.90 4.99 5.23 5.49 5.23 5.29 5.31 5.16 5.18 5.30 5.47 5.49 5.49 5.41 5.51 5.41 5.60 5.63 5.61 5.56 5.62 5.72 5.85 5.92 6.07 6.04 6.10 6.22 6.28 6.42 6.58 6.63 6.89 7.10 7.20
183 of 397
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Daily Commentary
1994-12-23 1994-12-30 1995-01-06 1995-01-13 1995-01-20 1995-01-27 1995-02-03 1995-02-10 1995-02-17 1995-02-24 1995-03-03 1995-03-10 1995-03-17 1995-03-24 1995-03-31 1995-04-07 1995-04-14 1995-04-21 1995-04-28 1995-05-05 1995-05-12 1995-05-19 1995-05-26 1995-06-02 1995-06-09 1995-06-16 1995-06-23 1995-06-30 1995-07-07 1995-07-14 1995-07-21 1995-07-28 1995-08-04 1995-08-11 1995-08-18 1995-08-25 1995-09-01 1995-09-08 1995-09-15 1995-09-22 1995-09-29 1995-10-06 1995-10-13 1995-10-20 1995-10-27 1995-11-03 1995-11-10 1995-11-17 1995-11-24 1995-12-01 1995-12-08 1995-12-15 1995-12-22 1995-12-29 1996-01-05 1996-01-12 1996-01-19 1996-01-26 1996-02-02 1996-02-09 1996-02-16 1996-02-23 1996-03-01 1996-03-08 1996-03-15 1996-03-22 1996-03-29 1996-04-05 1996-04-12 1996-04-19 1996-04-26 1996-05-03 1996-05-10 1996-05-17 1996-05-24 1996-05-31 1996-06-07 1996-06-14 1996-06-21 1996-06-28 1996-07-05 1996-07-12
7.12 7.21 7.24 7.12 7.02 6.95 6.88 6.79 6.70 6.54 6.47 6.54 6.39 6.37 6.38 6.38 6.28 6.17 6.24 6.16 6.00 5.98 5.92 5.71 5.69 5.66 5.59 5.65 5.53 5.47 5.64 5.72 5.68 5.71 5.86 5.81 5.66 5.63 5.59 5.57 5.69 5.61 5.60 5.59 5.58 5.48 5.45 5.43 5.44 5.39 5.35 5.35 5.30 5.21 5.18 5.17 5.03 5.05 4.93 4.85 4.81 5.04 5.14 5.15 5.41 5.44 5.42 5.48 5.62 5.51 5.52 5.63 5.67 5.59 5.59 5.70 5.78 5.86 5.82 5.79 5.82 5.90
184 of 397
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Daily Commentary
1996-07-19 1996-07-26 1996-08-02 1996-08-09 1996-08-16 1996-08-23 1996-08-30 1996-09-06 1996-09-13 1996-09-20 1996-09-27 1996-10-04 1996-10-11 1996-10-18 1996-10-25 1996-11-01 1996-11-08 1996-11-15 1996-11-22 1996-11-29 1996-12-06 1996-12-13 1996-12-20 1996-12-27 1997-01-03 1997-01-10 1997-01-17 1997-01-24 1997-01-31 1997-02-07 1997-02-14 1997-02-21 1997-02-28 1997-03-07 1997-03-14 1997-03-21 1997-03-28 1997-04-04 1997-04-11 1997-04-18 1997-04-25 1997-05-02 1997-05-09 1997-05-16 1997-05-23 1997-05-30 1997-06-06 1997-06-13 1997-06-20 1997-06-27 1997-07-04 1997-07-11 1997-07-18 1997-07-25 1997-08-01 1997-08-08 1997-08-15 1997-08-22 1997-08-29 1997-09-05 1997-09-12 1997-09-19 1997-09-26 1997-10-03 1997-10-10 1997-10-17 1997-10-24 1997-10-31 1997-11-07 1997-11-14 1997-11-21 1997-11-28 1997-12-05 1997-12-12 1997-12-19 1997-12-26 1998-01-02 1998-01-09 1998-01-16 1998-01-23 1998-01-30 1998-02-06
5.80 5.85 5.80 5.60 5.62 5.64 5.81 5.95 5.88 5.82 5.72 5.61 5.57 5.55 5.56 5.48 5.44 5.41 5.42 5.41 5.42 5.46 5.51 5.50 5.55 5.61 5.61 5.61 5.62 5.53 5.49 5.47 5.60 5.70 5.72 5.81 5.94 5.99 5.99 5.98 6.01 5.93 5.90 5.86 5.85 5.86 5.76 5.72 5.65 5.65 5.63 5.54 5.56 5.54 5.48 5.55 5.59 5.54 5.59 5.58 5.59 5.48 5.47 5.45 5.45 5.52 5.53 5.35 5.44 5.44 5.46 5.50 5.54 5.53 5.49 5.55 5.52 5.25 5.18 5.22 5.28 5.26
185 of 397
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Daily Commentary
1998-02-13 1998-02-20 1998-02-27 1998-03-06 1998-03-13 1998-03-20 1998-03-27 1998-04-03 1998-04-10 1998-04-17 1998-04-24 1998-05-01 1998-05-08 1998-05-15 1998-05-22 1998-05-29 1998-06-05 1998-06-12 1998-06-19 1998-06-26 1998-07-03 1998-07-10 1998-07-17 1998-07-24 1998-07-31 1998-08-07 1998-08-14 1998-08-21 1998-08-28 1998-09-04 1998-09-11 1998-09-18 1998-09-25 1998-10-02 1998-10-09 1998-10-16 1998-10-23 1998-10-30 1998-11-06 1998-11-13 1998-11-20 1998-11-27 1998-12-04 1998-12-11 1998-12-18 1998-12-25 1999-01-01 1999-01-08 1999-01-15 1999-01-22 1999-01-29 1999-02-05 1999-02-12 1999-02-19 1999-02-26 1999-03-05 1999-03-12 1999-03-19 1999-03-26 1999-04-02 1999-04-09 1999-04-16 1999-04-23 1999-04-30 1999-05-07 1999-05-14 1999-05-21 1999-05-28 1999-06-04 1999-06-11 1999-06-18 1999-06-25 1999-07-02 1999-07-09 1999-07-16 1999-07-23 1999-07-30 1999-08-06 1999-08-13 1999-08-20 1999-08-27 1999-09-03
5.28 5.28 5.42 5.43 5.37 5.36 5.39 5.36 5.30 5.39 5.40 5.45 5.43 5.46 5.45 5.43 5.42 5.42 5.40 5.41 5.38 5.34 5.36 5.36 5.37 5.31 5.23 5.24 5.10 4.91 4.76 4.76 4.61 4.41 4.18 4.14 4.01 4.10 4.46 4.52 4.54 4.59 4.46 4.49 4.47 4.63 4.59 4.55 4.51 4.49 4.51 4.61 4.67 4.71 4.82 4.89 4.77 4.74 4.75 4.72 4.66 4.67 4.70 4.73 4.78 4.79 4.89 4.93 5.08 5.12 5.03 5.14 5.11 5.06 5.01 4.98 5.07 5.13 5.23 5.20 5.19 5.29
186 of 397
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1999-09-10 1999-09-17 1999-09-24 1999-10-01 1999-10-08 1999-10-15 1999-10-22 1999-10-29 1999-11-05 1999-11-12 1999-11-19 1999-11-26 1999-12-03 1999-12-10 1999-12-17 1999-12-24 1999-12-31 2000-01-07 2000-01-14 2000-01-21 2000-01-28 2000-02-04 2000-02-11 2000-02-18 2000-02-25 2000-03-03 2000-03-10 2000-03-17 2000-03-24 2000-03-31 2000-04-07 2000-04-14 2000-04-21 2000-04-28 2000-05-05 2000-05-12 2000-05-19 2000-05-26 2000-06-02 2000-06-09 2000-06-16 2000-06-23 2000-06-30 2000-07-07 2000-07-14 2000-07-21 2000-07-28 2000-08-04 2000-08-11 2000-08-18 2000-08-25 2000-09-01 2000-09-08 2000-09-15 2000-09-22 2000-09-29 2000-10-06 2000-10-13 2000-10-20 2000-10-27 2000-11-03 2000-11-10 2000-11-17 2000-11-24 2000-12-01 2000-12-08 2000-12-15 2000-12-22 2000-12-29 2001-01-05 2001-01-12 2001-01-19 2001-01-26 2001-02-02 2001-02-09 2001-02-16 2001-02-23 2001-03-02 2001-03-09 2001-03-16 2001-03-23 2001-03-30
5.28 5.26 5.23 5.24 5.34 5.42 5.47 5.51 5.45 5.50 5.56 5.65 5.73 5.69 5.85 5.97 5.95 6.03 6.12 6.13 6.17 6.24 6.20 6.23 6.22 6.18 6.18 6.20 6.24 6.30 6.17 6.14 6.09 6.19 6.24 6.38 6.40 6.28 6.30 6.23 6.14 6.15 6.13 6.08 6.09 6.11 6.06 6.09 6.17 6.21 6.20 6.23 6.20 6.14 6.09 6.08 6.06 5.98 5.94 6.01 6.11 6.14 6.09 6.09 6.00 5.78 5.73 5.44 5.34 4.89 4.79 4.85 4.83 4.66 4.72 4.80 4.69 4.47 4.47 4.31 4.17 4.19
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2001-04-06 2001-04-13 2001-04-20 2001-04-27 2001-05-04 2001-05-11 2001-05-18 2001-05-25 2001-06-01 2001-06-08 2001-06-15 2001-06-22 2001-06-29 2001-07-06 2001-07-13 2001-07-20 2001-07-27 2001-08-03 2001-08-10 2001-08-17 2001-08-24 2001-08-31 2001-09-07 2001-09-14 2001-09-21 2001-09-28 2001-10-05 2001-10-12 2001-10-19 2001-10-26 2001-11-02 2001-11-09 2001-11-16 2001-11-23 2001-11-30 2001-12-07 2001-12-14 2001-12-21 2001-12-28 2002-01-04 2002-01-11 2002-01-18 2002-01-25 2002-02-01 2002-02-08 2002-02-15 2002-02-22 2002-03-01 2002-03-08 2002-03-15 2002-03-22 2002-03-29 2002-04-05 2002-04-12 2002-04-19 2002-04-26 2002-05-03 2002-05-10 2002-05-17 2002-05-24 2002-05-31 2002-06-07 2002-06-14 2002-06-21 2002-06-28 2002-07-05 2002-07-12 2002-07-19 2002-07-26 2002-08-02 2002-08-09 2002-08-16 2002-08-23 2002-08-30 2002-09-06 2002-09-13 2002-09-20 2002-09-27 2002-10-04 2002-10-11 2002-10-18 2002-10-25
4.00 4.07 4.04 3.82 3.90 3.76 3.76 3.78 3.70 3.64 3.59 3.46 3.60 3.70 3.62 3.60 3.59 3.56 3.50 3.44 3.45 3.44 3.43 2.95 2.60 2.49 2.40 2.39 2.37 2.31 2.11 1.99 2.24 2.35 2.23 2.21 2.17 2.23 2.28 2.24 2.13 2.03 2.18 2.25 2.19 2.24 2.24 2.28 2.41 2.58 2.66 2.70 2.64 2.53 2.42 2.36 2.33 2.31 2.40 2.38 2.35 2.32 2.24 2.13 2.10 2.06 2.00 1.97 1.88 1.82 1.67 1.76 1.81 1.80 1.70 1.78 1.73 1.68 1.55 1.59 1.77 1.79
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2002-11-01 2002-11-08 2002-11-15 2002-11-22 2002-11-29 2002-12-06 2002-12-13 2002-12-20 2002-12-27 2003-01-03 2003-01-10 2003-01-17 2003-01-24 2003-01-31 2003-02-07 2003-02-14 2003-02-21 2003-02-28 2003-03-07 2003-03-14 2003-03-21 2003-03-28 2003-04-04 2003-04-11 2003-04-18 2003-04-25 2003-05-02 2003-05-09 2003-05-16 2003-05-23 2003-05-30 2003-06-06 2003-06-13 2003-06-20 2003-06-27 2003-07-04 2003-07-11 2003-07-18 2003-07-25 2003-08-01 2003-08-08 2003-08-15 2003-08-22 2003-08-29 2003-09-05 2003-09-12 2003-09-19 2003-09-26 2003-10-03 2003-10-10 2003-10-17 2003-10-24 2003-10-31 2003-11-07 2003-11-14 2003-11-21 2003-11-28 2003-12-05 2003-12-12 2003-12-19 2003-12-26 2004-01-02 2004-01-09 2004-01-16 2004-01-23 2004-01-30 2004-02-06 2004-02-13 2004-02-20 2004-02-27 2004-03-05 2004-03-12 2004-03-19 2004-03-26 2004-04-02 2004-04-09 2004-04-16 2004-04-23 2004-04-30 2004-05-07 2004-05-14 2004-05-21
1.51 1.46 1.46 1.51 1.55 1.53 1.47 1.43 1.41 1.38 1.41 1.38 1.32 1.32 1.32 1.30 1.30 1.27 1.22 1.16 1.32 1.27 1.19 1.25 1.33 1.31 1.25 1.23 1.20 1.13 1.13 1.08 0.97 0.95 1.02 1.07 1.08 1.10 1.13 1.22 1.26 1.29 1.33 1.35 1.33 1.22 1.21 1.22 1.17 1.20 1.29 1.30 1.30 1.35 1.36 1.30 1.35 1.37 1.31 1.27 1.28 1.29 1.29 1.19 1.20 1.25 1.28 1.24 1.23 1.22 1.23 1.16 1.18 1.17 1.23 1.32 1.41 1.50 1.55 1.63 1.83 1.83
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2004-05-28 2004-06-04 2004-06-11 2004-06-18 2004-06-25 2004-07-02 2004-07-09 2004-07-16 2004-07-23 2004-07-30 2004-08-06 2004-08-13 2004-08-20 2004-08-27 2004-09-03 2004-09-10 2004-09-17 2004-09-24 2004-10-01 2004-10-08 2004-10-15 2004-10-22 2004-10-29 2004-11-05 2004-11-12 2004-11-19 2004-11-26 2004-12-03 2004-12-10 2004-12-17 2004-12-24 2004-12-31 2005-01-07 2005-01-14 2005-01-21 2005-01-28 2005-02-04 2005-02-11 2005-02-18 2005-02-25 2005-03-04 2005-03-11 2005-03-18 2005-03-25 2005-04-01 2005-04-08 2005-04-15 2005-04-22 2005-04-29 2005-05-06 2005-05-13 2005-05-20 2005-05-27 2005-06-03 2005-06-10 2005-06-17 2005-06-24 2005-07-01 2005-07-08 2005-07-15 2005-07-22 2005-07-29 2005-08-05 2005-08-12 2005-08-19 2005-08-26 2005-09-02 2005-09-09 2005-09-16 2005-09-23 2005-09-30 2005-10-07 2005-10-14 2005-10-21 2005-10-28 2005-11-04 2005-11-11 2005-11-18 2005-11-25 2005-12-02 2005-12-09 2005-12-16
1.82 1.92 2.07 2.22 2.16 2.14 2.04 2.07 2.12 2.16 2.07 1.99 1.98 2.03 2.03 2.10 2.09 2.14 2.20 2.24 2.18 2.22 2.27 2.35 2.47 2.53 2.60 2.62 2.60 2.66 2.71 2.77 2.82 2.85 2.87 2.89 2.95 2.96 3.05 3.13 3.20 3.24 3.31 3.38 3.38 3.33 3.32 3.28 3.33 3.33 3.35 3.32 3.32 3.28 3.30 3.39 3.40 3.46 3.52 3.59 3.68 3.77 3.84 3.90 3.89 3.88 3.77 3.76 3.82 3.88 3.97 4.08 4.14 4.19 4.26 4.32 4.35 4.36 4.30 4.34 4.35 4.34
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2005-12-23 2005-12-30 2006-01-06 2006-01-13 2006-01-20 2006-01-27 2006-02-03 2006-02-10 2006-02-17 2006-02-24 2006-03-03 2006-03-10 2006-03-17 2006-03-24 2006-03-31 2006-04-07 2006-04-14 2006-04-21 2006-04-28 2006-05-05 2006-05-12 2006-05-19 2006-05-26 2006-06-02 2006-06-09 2006-06-16 2006-06-23 2006-06-30 2006-07-07 2006-07-14 2006-07-21 2006-07-28 2006-08-04 2006-08-11 2006-08-18 2006-08-25 2006-09-01 2006-09-08 2006-09-15 2006-09-22 2006-09-29 2006-10-06 2006-10-13 2006-10-20 2006-10-27 2006-11-03 2006-11-10 2006-11-17 2006-11-24 2006-12-01 2006-12-08 2006-12-15 2006-12-22 2006-12-29 2007-01-05 2007-01-12 2007-01-19 2007-01-26 2007-02-02 2007-02-09 2007-02-16 2007-02-23 2007-03-02 2007-03-09 2007-03-16 2007-03-23 2007-03-30 2007-04-06 2007-04-13 2007-04-20 2007-04-27 2007-05-04 2007-05-11 2007-05-18 2007-05-25 2007-06-01 2007-06-08 2007-06-15 2007-06-22 2007-06-29 2007-07-06 2007-07-13
4.37 4.36 4.37 4.41 4.43 4.50 4.60 4.67 4.70 4.72 4.74 4.77 4.76 4.77 4.82 4.85 4.91 4.90 4.94 4.98 5.01 4.98 4.99 5.03 5.04 5.13 5.24 5.27 5.27 5.24 5.22 5.17 5.10 5.09 5.10 5.07 5.03 5.02 5.02 4.97 4.90 4.90 5.03 5.05 5.07 5.00 5.03 5.03 5.01 4.95 4.90 4.95 4.96 4.99 4.98 5.03 5.08 5.10 5.10 5.07 5.07 5.05 4.96 4.92 4.93 4.93 4.90 4.94 4.97 4.93 4.90 4.90 4.89 4.86 4.95 4.96 4.98 4.98 4.95 4.94 4.99 5.00
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2007-07-20 2007-07-27 2007-08-03 2007-08-10 2007-08-17 2007-08-24 2007-08-31 2007-09-07 2007-09-14 2007-09-21 2007-09-28 2007-10-05 2007-10-12 2007-10-19 2007-10-26 2007-11-02 2007-11-09 2007-11-16 2007-11-23 2007-11-30 2007-12-07 2007-12-14 2007-12-21 2007-12-28 2008-01-04 2008-01-11 2008-01-18 2008-01-25 2008-02-01 2008-02-08 2008-02-15 2008-02-22 2008-02-29 2008-03-07 2008-03-14 2008-03-21 2008-03-28 2008-04-04 2008-04-11 2008-04-18 2008-04-25 2008-05-02 2008-05-09 2008-05-16 2008-05-23 2008-05-30 2008-06-06 2008-06-13 2008-06-20 2008-06-27 2008-07-04 2008-07-11 2008-07-18 2008-07-25 2008-08-01 2008-08-08 2008-08-15 2008-08-22 2008-08-29 2008-09-05 2008-09-12 2008-09-19 2008-09-26 2008-10-03 2008-10-10 2008-10-17 2008-10-24 2008-10-31 2008-11-07 2008-11-14 2008-11-21 2008-11-28 2008-12-05 2008-12-12 2008-12-19 2008-12-26 2009-01-02 2009-01-09 2009-01-16 2009-01-23 2009-01-30 2009-02-06
4.99 4.91 4.83 4.78 4.44 4.16 4.30 4.27 4.15 4.11 4.05 4.12 4.24 4.14 3.97 3.93 3.72 3.58 3.30 3.25 3.17 3.20 3.28 3.42 3.18 3.04 2.83 2.31 2.23 2.08 2.04 2.10 1.98 1.66 1.52 1.35 1.60 1.63 1.63 1.67 1.88 1.93 1.94 2.07 2.09 2.19 2.14 2.51 2.57 2.46 2.35 2.25 2.21 2.33 2.30 2.23 2.18 2.12 2.17 2.08 2.05 1.69 1.95 1.59 1.24 1.25 1.66 1.44 1.24 1.12 0.96 0.93 0.69 0.50 0.45 0.40 0.37 0.44 0.43 0.43 0.49 0.54
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2009-02-13 2009-02-20 2009-02-27 2009-03-06 2009-03-13 2009-03-20 2009-03-27 2009-04-03 2009-04-10 2009-04-17 2009-04-24 2009-05-01 2009-05-08 2009-05-15 2009-05-22 2009-05-29 2009-06-05 2009-06-12 2009-06-19 2009-06-26 2009-07-03 2009-07-10 2009-07-17 2009-07-24 2009-07-31 2009-08-07 2009-08-14 2009-08-21 2009-08-28 2009-09-04 2009-09-11 2009-09-18 2009-09-25 2009-10-02 2009-10-09 2009-10-16 2009-10-23 2009-10-30 2009-11-06 2009-11-13 2009-11-20 2009-11-27 2009-12-04 2009-12-11 2009-12-18 2009-12-25 2010-01-01 2010-01-08 2010-01-15 2010-01-22 2010-01-29 2010-02-05 2010-02-12 2010-02-19 2010-02-26 2010-03-05 2010-03-12 2010-03-19 2010-03-26 2010-04-02 2010-04-09 2010-04-16 2010-04-23 2010-04-30 2010-05-07 2010-05-14 2010-05-21 2010-05-28 2010-06-04 2010-06-11 2010-06-18 2010-06-25 2010-07-02 2010-07-09 2010-07-16 2010-07-23 2010-07-30 2010-08-06 2010-08-13 2010-08-20 2010-08-27 2010-09-03
0.60 0.64 0.72 0.68 0.70 0.64 0.59 0.58 0.60 0.55 0.52 0.50 0.53 0.52 0.47 0.49 0.50 0.56 0.51 0.48 0.53 0.46 0.48 0.47 0.49 0.49 0.47 0.44 0.45 0.42 0.40 0.40 0.41 0.39 0.36 0.36 0.39 0.39 0.36 0.33 0.29 0.27 0.29 0.32 0.37 0.41 0.47 0.41 0.35 0.31 0.31 0.33 0.35 0.36 0.34 0.34 0.39 0.41 0.42 0.43 0.47 0.44 0.44 0.43 0.39 0.38 0.35 0.36 0.36 0.33 0.30 0.29 0.31 0.31 0.28 0.27 0.30 0.27 0.25 0.25 0.26 0.25
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2010-09-10 2010-09-17 2010-09-24 2010-10-01 2010-10-08 2010-10-15 2010-10-22 2010-10-29 2010-11-05 2010-11-12 2010-11-19 2010-11-26 2010-12-03 2010-12-10 2010-12-17 2010-12-24 2010-12-31 2011-01-07 2011-01-14 2011-01-21 2011-01-28 2011-02-04 2011-02-11 2011-02-18 2011-02-25 2011-03-04 2011-03-11 2011-03-18 2011-03-25 2011-04-01 2011-04-08 2011-04-15 2011-04-22 2011-04-29 2011-05-06 2011-05-13 2011-05-20 2011-05-27 2011-06-03 2011-06-10 2011-06-17 2011-06-24 2011-07-01 2011-07-08 2011-07-15 2011-07-22 2011-07-29 2011-08-05 2011-08-12 2011-08-19 2011-08-26 2011-09-02 2011-09-09 2011-09-16 2011-09-23 2011-09-30 2011-10-07 2011-10-14 2011-10-21 2011-10-28 2011-11-04 2011-11-11 2011-11-18 2011-11-25 2011-12-02 2011-12-09 2011-12-16 2011-12-23 2011-12-30 2012-01-06 2012-01-13 2012-01-20 2012-01-27 2012-02-03 2012-02-10 2012-02-17 2012-02-24 2012-03-02 2012-03-09 2012-03-16 2012-03-23 2012-03-30
0.26 0.26 0.25 0.26 0.24 0.22 0.22 0.23 0.22 0.24 0.27 0.27 0.28 0.29 0.30 0.30 0.30 0.29 0.27 0.27 0.26 0.28 0.30 0.29 0.27 0.26 0.25 0.23 0.26 0.30 0.27 0.24 0.24 0.22 0.20 0.18 0.19 0.19 0.18 0.18 0.18 0.17 0.19 0.19 0.16 0.18 0.21 0.16 0.11 0.11 0.10 0.10 0.12 0.10 0.10 0.11 0.11 0.11 0.12 0.12 0.12 0.10 0.11 0.12 0.13 0.11 0.11 0.12 0.12 0.12 0.11 0.11 0.12 0.13 0.15 0.17 0.17 0.18 0.18 0.20 0.20 0.18
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2012-04-06 2012-04-13 2012-04-20 2012-04-27 2012-05-04 2012-05-11 2012-05-18 2012-05-25 2012-06-01 2012-06-08 2012-06-15 2012-06-22 2012-06-29 2012-07-06 2012-07-13 2012-07-20 2012-07-27 2012-08-03 2012-08-10 2012-08-17 2012-08-24 2012-08-31 2012-09-07 2012-09-14 2012-09-21 2012-09-28 2012-10-05 2012-10-12 2012-10-19 2012-10-26 2012-11-02 2012-11-09 2012-11-16 2012-11-23 2012-11-30 2012-12-07 2012-12-14 2012-12-21 2012-12-28 2013-01-04 2013-01-11 2013-01-18 2013-01-25 2013-02-01 2013-02-08 2013-02-15 2013-02-22 2013-03-01 2013-03-08 2013-03-15 2013-03-22 2013-03-29 2013-04-05 2013-04-12 2013-04-19 2013-04-26 2013-05-03 2013-05-10 2013-05-17 2013-05-24 2013-05-31 2013-06-07 2013-06-14 2013-06-21
0.19 0.18 0.18 0.18 0.19 0.18 0.20 0.21 0.19 0.18 0.18 0.19 0.21 0.20 0.20 0.18 0.17 0.17 0.18 0.19 0.19 0.17 0.17 0.18 0.18 0.17 0.17 0.18 0.18 0.19 0.18 0.19 0.17 0.17 0.18 0.18 0.15 0.15 0.16 0.15 0.14 0.14 0.15 0.15 0.15 0.15 0.17 0.17 0.15 0.15 0.15 0.14 0.13 0.12 0.12 0.12 0.11 0.11 0.12 0.12 0.14 0.14 0.14 0.13
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Men know this is what God intended
6/25: Demerging Read this!!!! A GROWTH slowdown in the so-called BRICS nations Brazil, Russia, India, China and South Africa could be impeding the expansion of the global economy. Thats serious enough, and indeed we are seeing unrest in Brazil over stagnant living standards. Yet a graver problem may be lurking behind the headlines namely, that sustained, meteoric growth in emerging economies may no longer be possible. The disconcerting truth is that the great age of industrialization may be behind us. Evidence for this view is coming from at least four directions: THE RISE OF AUTOMATION First, machines can perform more and more functions in manufacturing, and sometimes even in services. That makes it harder to compete via low wages GLOBAL SUPPLY SOURCES Supply chains are now scattered across many countries WIDER ECONOMIC GAPS AGING POPULATION 6/24: Drinking women: In the nine years between 1998 and 2007, the number of women arrested for drunken driving rose 30%, while male arrests dropped more than 7%. Between 1999 and 2008, the number of young women who showed up in emergency rooms for being dangerously intoxicated rose by 52%. The rate for young men, though higher, rose just 9%. Gallup pollsters have repeatedly found that the more educated and well off a woman is, the more likely she is to imbibe. White women are
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more likely to drink than women of other racial backgrounds, but in the past few decades the percentage of women who classify themselves as regular drinkers has risen across the board. An analysis of the drinking habits of 85,000 Americans in 2002 found that 47% of white women reported being regular drinkers, up from 37% in 1992. The percentage of black women who said they drank regularly rose from 21% to 30%, and the percentage of Hispanic women who said the same grew from 24% to 32%. (American Indian and Asian-American women were not included in the study.) 6/23: DOW effects in returns and in volatility of stock markets during quiet and turbulent times Date: 2013-02-28 Dumitriu, Ramona By: Stefanescu, Razvan URL: http://d.repec.org/n?u=RePEc:pra:mprapa:47218&r=fmk The persistence in time of the calendar anomalies is one of the most disputed subjects from the financial literature. Quite often, the passing from quiet to turbulent periods of time provokes radical changes in the investors behaviors which affect the stock markets seasonality. In this paper we investigate the presence of the day of the week effects in returns and volatility for 32 indexes from advanced and emerging markets. We analyze this seasonality for two periods of time: a relative quiet period, from January 2000 to December 2006, and a more turbulent period, from January 2007 to September 2012. A GJR-GARCH model allows us to identify, for the two periods, various forms of day of the week effects in returns and volatility. However, only for few indexes we find the stability in time of the daily seasonality. For many of the advanced markets indexes, the day of the week effects in returns identified for the quiet p eriod disappeared during the turbulent period. A less radical decline occurred for the day of the week effects in volatility. In the case of indexes from the emerging markets, the persistence in time of the daily seasonality in returns was more consistent in comparison with advanced markets indexes. Regarding the volatility of emerging markets, we find that 1. during the turbulent period many day of the week effects in volatility disappeared, while new others appeared. Keywords: Calendar Anomalies, GJR - GARCH, Volatility, Day of the Week Effects, Stock Markets JEL: C58 2. Bond returns and market expectations Date: 2013-05 Carlo Altavilla By: Raffaella Giacomini (Institute for Fiscal Studies and UCL) Riccardo Costantini URL: http://d.repec.org/n?u=RePEc:ifs:cemmap:20/13&r=fmk A well-documented empirical result is that market expectations extracted from futures contracts on the federal funds rate are among the best predictors for the future course of monetary policy. We show how this information can be exploited to produce accurate forecasts of bond excess returns and to construct profitable investment strategies in bond markets. We use a tilting method for incorporating market expectations into forecasts from a standard term-structure model and then derive the implied forecasts for bond excess returns. We find that the method delivers substantial improvements in out-of-sample accuracy relative to a number of benchmarks. The accuracy improvements are both statistically and economically significant and robust across a number of maturities and forecast horizons. The method would have allowed an investor to obtain positive cumulative excess returns from simple "riding the yield curve" investment s trategies over the past ten years, and in this respect it would have outperformed its competitors even after accounting for a risk-return tradeoff. Keywords: Yield curve modelling, futures, market timing, exponential tilting, Kullback-Leibler 3. What drives option prices ? Date: 2012-06 By: Frdric Abergel (FiQuant - Chaire de finance quantitative - Ecole Centrale Paris, MAS - Mathmatiques Appliques aux Systmes - EA 4037 - Ecole Centrale Paris) Riadh Zaatour (FiQuant - Chaire de finance quantitative - Ecole Centrale Paris, MAS - Mathmatiques Appliques aux Systmes - EA 4037 - Ecole Centrale Paris)
http://d.repec.org/n?u=RePEc:hal:journl:hal-00687675&r=fmk URL: We rely on high frequency data to explore the joint dynamics of underlying and option markets. In particular, high frequency data make observable the realized variance process of the underlying, so its effects on option price dynamics are tested. Empirical results are confronted with the predictions of stochastic volatility models. The study reveals that while the modeling of stochastic volatility gives more robust models, the market does not process information on the realized variance to update option prices. Keywords: options, microstructure, smile, stochastic volatility
6/23: structured investment vehicle. The SIV is a not-so-distant cousin of the special purpose entity, or SPE, which was the main weapon of destruction in the Enron scandal. The corporate scam du jour in those days was mass accounting fraud, in which a company would create an ostensibly independent corporate
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structure that would actually be controlled by its own executives, who would then move their company's liabilities off their own books and onto the remote-controlled SPE, hiding the firm's losses. The SIV is a similar concept. They first started showing up in the late Eighties after banks discovered a loophole in international banking standards that allowed them to create SPE-like repositories full of assets like mortgage-backed securities and keep them off their own books These behemoths operated on the same basic concept as an ordinary bank, which borrows short-term cash from depositors and then lends money long-term in the form of things like mortgages, business loans, etc. The SIV did the same thing, borrowing short-term from investors and then investing long-term on things like student loans, car loans, subprime mortgages. Like banks, a SIV made money on the spread between its short-term debt and long-term investments. If a SIV borrowed on the commercial paper market at 3 percent but earned 6.5 percent on subprime mortgages, that was an easy 3.5 percent profit. The big difference is a bank has regulatory capital requirements. A SIV doesn't, and being technically independent, its potential liabilities don't show up on the books of the megabank that created it. So the SIV structure allowed investment banks to create and take advantage of, without risk, billions of dollars of things like subprime loans, which became the centerpiece of the new trendy corporate scam creating and then selling masses of risky mortgage-backed securities as AAA investments to institutional suckers.
we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash The Financial Crisis Inquiry Commission published a case study in 2011 of Moody's in particular and discovered that between 2000 and 2007, the agency gave nearly 45,000 mortgage-backed securities AAA ratings. One year Moody's doled out AAA ratings to 30 mortgage-backed securities every day, 83 percent of which were ultimately downgraded. "This crisis could not have happened without the rating agencies
6/23:
Russia is not a place to do business
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The country could grow at 5% to 6% a year but in all rankings of business regulation, investment risk and corruption, it trails
6/23:
(iolence flares as )" *ra+ilians protest
6/23: Behavioral Law and Economics: Empirical Methods Date: 2013-01 By: URL: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn) http://d.repec.org/n?u=RePEc:mpg:wpaper:2013_01&r=cbe
Originally, behavioral law and economics was an exercise in exploring the implications of key findings from behavioral economics (and psychology) for the analysis and reform of legal institutions. Yet as the new discipline matures, it increasingly replaces foreign evidence by fresh evidence, directly targeted to the legal research question. This chapter surveys the key methods: field evidence, survey data, vignette and lab experiment, discusses their pros and cons, illustrates them with key publications, and concludes with methodological paths for fu-ture development. It quantifies statements with descriptive statistics about the 77 behavioral papers that have been published in the Journal of Empirical Legal Studies since its foundation until the end of 2012. 6/20: Emotional state and Market Behavior Date: 2013 By: Breaban, A. Noussair, C.N. (Tilburg University, Center for Economic Research)
URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:2013031&r=cbe Abstract: We consider the relationship between the emotional state of traders and market prices. We create asset markets with the structure first studied by Smith, Suchanek and Williams (1988), which is known to generate price bubbles and crashes. We analyze participants' facial expressions with facereading software before and while the market is operating. We find that greater positive emotion in facial expressions before the market opens predicts higher prices and larger bubbles. Greater fear predicts lower prices and smaller bubbles. Those traders who remain the most neutral during periods of market volatility achieve the highest earnings. Loss aversion in decision making is correlated with fear, not with other emotions. 6/20: Strategic Self-Ignorance Date: 2013-05-28 Thunstrm, Linda (Department of Economics and Finance, University of Wyoming) Nordstrm, Jonas (Department of Economics, Lund University) By: Shogren, Jason F. (Department of Economics and Finance, University of Wyoming) Ehmke, Mariah (Department of Agricultural and Applied Economics, University of Wyoming) van 't Veld, Klaas (Department of Economics and Finance, University of Wyoming) URL: http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_017&r=cbe We examine strategic self-ignorancethe use of ignorance as an excuse to over-indulge in pleasurable activities that may be harmful to ones future self. Our model shows that guilt aversion provides a behavioral rationale for present-biased agents to avoid information about negative future impacts of such activities. We then confront our model with data from an experiment using prepared, restaurant-style mealsa good that is transparent in immediate pleasure (taste) but non-transparent in future harm (calories). Our results support the notion that strategic self-ignorance matters: nearly three of five subjects (58 percent) chose to ignore free information on calorie content, leading at-risk subjects to consume significantly more calories. We also find evidence consistent with our model on the determinants of strategic self-ignorance. 6/19: Disease- More than a third of adults and nearly a fifth of children in the US are now officially considered to have a disease: obesity. Obesity rates have "doubled among adults in the last 20 years and tripled among children in a single generation," As things stand now, primary care physicians tend to look at obesity as a behavior problem.This will force primary care physicians to address it, even if we don't have a cure for it. - Dr. Rexford Ahima,
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University of Pennsylvania 6/18: On the Risk Return Relationship. Date: 2012-05 By: URL: Jianxin Wang (UTS Business School, the University of Technology Sydney) Minxian Yang (School of Economics, the University of New South Wales) http://d.repec.org/n?u=RePEc:swe:wpaper:2012-31&r=rmg
While the risk return trade-off theory suggests a positive relationship between the expected return and the conditional volatility, the volatility feedback theory implies a channel that allows the conditional volatility to negatively affect the expected return. We examine the effects of the risk return trade-off and the volatility feedback in a model where both the return and its volatility are influenced by news arrivals. Our empirical analysis shows that the two effects have approximately the same size with opposite signs for the daily excess returns of seven major developed markets. For the same data set, we also find that a linear relationship between the expected return and the conditional standard deviation is preferable to polynomial-type nonlinear specifications. 6/17: Euthanasia-Made-Easy Read this!!!!!!!!!!!!!!!!! Belgium adopted euthanasia in 2002, a year after neighboring Holland, with the goal of helping incurably ill patients escape "unbearable physical or mental suffering." It has become widely accepted; in 2011, the last year for which numbers are available, 1,133 Belgians had euthanasia requests approved, up about five fold from the first full year after the law was passed. Euthanasia accounts for about 1% of all deaths in Belgium. Another bill would let patients with early Alzheimer's sign a declaration asking to have their life ended when a doctor concludes they're no longer interacting with the outside world, even if they seem vigorous and happy at the time. Now, patients must be lucid to request euthanasia, which is generally carried out soon after. "It's a deep worldview if you accept that life isn't necessarily a good and death isn't necessarily a bad.,. "A lot of people in the world aren't happy, and if death is one more option we lay out for them the world will look like a very different place." 6/17: Chrysler will freeze its pension plan for about 8,000 U.S. salaried workers and shift them to a defined contribution plan. 6/17: Not good retirement For Retirees, a Million-Dollar Illusion. The column showed that in this environment of ultralow interest rates, a retired couple could easily exhaust a $1 million bond portfolio, even with relatively modest withdrawals. Most households only wish they had that kind of money. As I wrote on the Bucks blog in an initial response to readers, the column focused on $1 million because of its symbolic power, not because it represents the savings of a typical American family. In fact, the median financial net worth of American households of all ages, excluding homes and cars, is $10,890, as estimated by Edward N. Wolff, an economics professor at New York University. For households headed by those in the 55-to-64 age bracket, its $61,300. A large majority of Americans are in far worse straits than the millionaire households.
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As Jack VanDerhei, research director of the nonprofit, nonpartisan Employee Benefit Research Institute, puts it, very large numbers of people are at risk of running out of money in retirement. In a recent study, the institute found that roughly 44 percent of households in the baby boom and Gen X generations those born from 1948 to 1975 were likely to run short of cash in their retirement years. And forthcoming research from the institute finds that low bond yields are worsening the situation. These low rates are unlikely to continue indefinitely; global markets last week were in disarray over speculation that the Federal Reserve might take action that could lead to higher rates. But if current low yields did persist indefinitely, Mr. VanDerhei has found, 56.7 percent of boomer and Gen X households would find themselves at risk of running through all their assets in their lifetimes. Many people sense that theyre heading toward danger. In an October survey by Pew Research, 38 percent of adults said they were not too or not at all confident that they would have enough income and assets for retirement, up from 25 percent in late February and March of 2009. Strikingly, more than half of those in their late 30s were in the not-confident categories, compared with only about one-third of those in their early 60s.
Junior, all you need to do is invest just $100 per month. By the time youre old enough to wear diapers again, youll have a million dollars.
6/17: A Rice Gets a Price PremiumA7 A big winner in a congressional farm bill may be producers of sticky rice, the kind used in sushi and other Asian dishesand grown by a congressman who helped push for the provision 6/17:
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6/16: ETFs- annual share turnover rates (including both individual and institutional transactions) in 2012 were 2,517% for SPDRs, 761% for iShares, and 250% for Vanguard. (Among traditional mutual funds, the turnover rate for investors was about 32% last year; for my nickel, disgracefully excessive!) Each day, the SPDR S&P 500 alone is the most widely traded stock in the world. Its shares were turned over at a 4,688% rate in 2012nearly 5,000 percent!
6/15" Our children- The report imagines a hypothetical class of 100 high school graduates. Of those, it estimates that: 71 have experienced physical assault, 28 have been victimized sexually (10 report that they have been the victims of dating violence in the past year, and 10 report they have been raped), 32 have experienced some form of child maltreatment, 27 were in a physical fight, and 16 carried a weapon in the past year. 64 have had sexual intercourse, 48 are sexually active, 27 used a condom and 12 were on birth control pills the last time they had sex; 21 percent had a sexually transmitted infection in the past year; three or four of the young women have been or are pregnant, and one has had an abortion. 39 have been bullied, physically or emotionally 16 in the past year; 29 felt sad and hopeless continually for at least two weeks during the past year; 14 thought seriously about attempting suicide, and six went through with the attempt. 34 are overweight, and 22 are living in poverty (10 in deep poverty).
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I could not have said it better
Just wait for the four wheel drives!!! 6/16:
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6/16: Hard landing????

China a 30% probability of GDP growth falling below 7% in the third or fourth quarter, dragging second half GDP to hard landing territory, generally in the vicinity of 6%. To make matters worse, China is sticking by its guns to not stimulate the economy anymore than it already does through fixed asset investments. Beijing leaders recently signaled that monetary and fiscal policy loosening is unlikely in the short term. Liquidity will remain tight in June and July.
Nouriel Roubini : Greece becomes first developed Nation to be cut to Emerging Market status by MSCI
6/16: 1. Behavioral Law and Economics: Empirical Methods Date: 2013-01 By: Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn) URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2013_01&r=cbe Originally, behavioral law and economics was an exercise in exploring the implications of key findings from behavioral economics (and psychology) for the analysis and reform of legal institutions. Yet as the new discipline matures, it increasingly replaces foreign evidence by fresh evidence, directly targeted to the legal research question. This chapter surveys the key methods: field evidence, survey data, vignette and lab experiment, discusses their pros and cons, illustrates them with key publications, and concludes with methodological paths for fu-ture development. It quantifies statements with descriptive statistics about the 77 behavioral papers that have been published in the Journal of Empirical Legal Studies since its foundation until the end of 2012.
6/16: Home pricesone in four U.S. homeowners with a mortgage still has negative equity: the mortgage exceeds the value of the home, according to new data from Zillow. These 13 million U.S. homeowners will need more price appreciation before they can feel that the housing-market downturn of the previous
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decade is truly over.
My computer is slow
6/13: Africa's Worst Drought Tied to West's Pollution Extremely illuminating
6/13: This is an idea of what is available to read. I have no clue to what they are talking about and am not going to learn
1. Risk Measure Estimation On Fiegarch Processes Date: 2013-05 By: Taiane S. Prass S\'ilvia R. C. Lopes URL: http://d.repec.org/n?u=RePEc:arx:papers:1305.5238&r=rmg We consider the Fractionally Integrated Exponential Generalized Autoregressive Conditional Heteroskedasticity process, denoted by FIEGARCH(p,d,q), introduced by Bollerslev and Mikkelsen (1996). We present a simulated study regarding the estimation of the risk measure $VaR_p$ on FIEGARCH processes. We consider the distribution function of the portfolio log-returns (univariate case) and the multivariate distribution function of the risk-factor changes (multivariate case). We also compare the performance of the risk measures $VaR_p$, $ES_p$ and MaxLoss for a portfolio composed by stocks of four Brazilian companies.
Jacob, age 92, and Rebecca, age 89, living in the Villages, Florida, are all excited about their decision to get married. They go for a stroll to discuss the wedding, and on the way they pass a
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drugstore. Jacob suggests they go in. Jacob addresses the man behind the counter: "Are you the owner?" The pharmacist answers, "Yes." Jacob: "We're about to get married. Do you sell heart medication?" Pharmacist: "Of course, we do." Jacob: "How about medicine for circulation?" Pharmacist: "All kinds." Jacob: "Medicine for rheumatism?" Pharmacist: "Definitely." Jacob: "How about suppositories?" Pharmacist: "You bet!" Jacob: "Medicine for memory problems, arthritis and Alzheimer's?" Pharmacist: "Yes, a large variety. The Works." Jacob: "What about vitamins, sleeping pills, Geritol, antidotes for Parkinson's disease?" Pharmacist: "Absolutely." Jacob: "Everything for heartburn and indigestion?" Pharmacist: "We sure do." Jacob: "You sell wheelchairs and walkers and canes?" Pharmacist: "All speeds and sizes." Jacob: "Adult diapers?" Pharmacist: "Sure."
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Jacob: "We'd like to use this store as our Bridal Registry."
6/13: So how are you doing???
How are finances faring now, all these years into the recovery? Theyve barely recovered, at least judging by a recent report from the Federal Reserve Bank of St. Louis. It finds that adjusted for inflation, average net worththe value of what households own minus their debtsis still far below its pre-recession peak. Through the end of 2012, families had recouped less than half of what they lost, as shown by the teal line below.
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6/13: MIB Life Index Reports U.S. Life Insurance Activity off -1.9% in May 1. Braintree, MA. (June 10, 2013) U.S. application activity for individually underwritten life insurance declined -1.9% in May, year-over-year, all ages combined, according to the MIB Life Index. Year-end 2012 gains (+1.2%) continue to erode in the first five months of 2013 with March 2013 gains as the only exception. Notably, Mays declines are more restrained than previous monthly losses as summer approaches. For 2013, application activity is off -2.0% year-to-date as compared to the same five-month period last year. The five-year, year-to-date trend line for the Index as of May shows stability in application activity overall, with the May 2013 composite Index value of 83.04 comparing favorably against the five-year retrospective average of 83.22. Mays application activity was -5.1% less than that of April, consistent with previous time periods. The most notable age demographic trend has been the compression of the monthly year-over-year percent changes in application activity by age group. Mays age group results continued the trend with ages 0-44 off -2.2%, ages 45-59 off -3.4%, and ages 60+ up +1.6% year-over-year. Year-to-date, ages 0-44 are off -1.9%, ages 45-59 are off -3.5%, and ages 60+ remain flat at -0.0%, compared to the same five months last year. The 60+ age group is still growing, albeit at a lessened pace and it remains the only demographic with steady and progressive growth since the inception of the MIB Life Index in 2000. Additional 2013 Life Index metrics are available with registration from www.mibsolutions.com/loginLI (register at www.mibsolutions.com/regLI) along with the MIB Life Index Annual Reports. MIB CEO Lee Oliphant talks with A.M. Best on the 2012 year-in-review available from www.mibgroup.com. U.S. Monthly Percent Change (year-over-year) U.S. Monthly Percent Change By Age (year-over-year) May 2013 - 1.9% April 2013 - 4.7% March 2013 +4.2% YTD 2013 - 2.0% Age 0 - 44 45 - 59 60+ May '13 Apr. '13 Mar. '13 - 2.2% - 5.6% + 5.2% - 3.4% - 5.4% + 1.5% + 1.6% - 0.5% + 5.6%
U.S. Monthly Percent Change (year-over-year) May 2013 - 5.1%
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6/12: Power laws- Power laws apply, in nature or society, where there is extreme inequality or unevenness: where a high peak (corresponding to a handful of huge cities, or frequently used words, or very rich people) is followed by a low long tail (corresponding to a multitude of small towns, or rare words, or wage slaves). In such cases, the notion of average is meaningless. 6/12" Cough Falls in CO2 emissions by the United States and Europe were offset by China, lifting worldwide emissions by 1.4 percent to 31.6 billion tonnes, the International Energy Agency (IEA) said on Monday. 1. Scientists have said that the rise in global average temperature needs to be limited to less than 2 degrees Celsius this century to prevent climate effects such as crop failure and melting glaciers, but that would require emissions to be kept to about 44 billion tonnes of CO2 equivalent by 2020. The IEA said that the world is on a path to an average temperature rise of between 3.6 and 5.3 degrees Celsius. China's CO2 emissions rose by 300 million tonnes last year, but the 3.8 percent gain was one of the lowest it has achieved in a decade, reflecting the nation's efforts to adopt renewable sources and improve energy efficiency. Japan's emissions, meanwhile, rose by 70 million tonnes, or 5.8 percent, as efforts to improve energy efficiency failed to offset increasing use of fossil fuels after the Fukushima nuclear accident in 2011, the IEA said. In the United States, a switch from coal to gas in power generation helped to reduce emissions by 200 million tonnes, or 3.8 percent, bringing them back to the level of the mid-1990s. Even though the use of coal increased in some European countries because of low prices, emissions in Europe declined by 50 million tonnes, or 1.4 percent, because of the economic slowdown, growth in renewables and emissions caps on industrial and power companies. 6/11: Face the technology facts:
Here I am calling my Mommy 6/12: Nigel Taylor on Insurance Licensing The CFP Board, further, should have prosecuted all their NAPFA fee only planners that broke and break the law in the 34 States that need
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insurance licensure to offer advice in the business of insurance,instead of picking on fee-only planners who actually have a license as a separate and distinct part of their business model. The CFP Board are dumb and dumber on this issue and always will be. This is stupidity in the extreme on their part. There is NO chance of confusion for those with half a pea brain and proper disclosure. They are living in glass houses throwing stones! 1. Finally, if the CFP Board can't wrap their head around the concept, they should completely exclude insurance advice as a financial planning element because it requires State licensure, something their designation does not and cannot circumvent and never will. Their CFP(R) Certificants have no right to offer insurance advice for a fee in most States requiring a license. However many do so with impunity and break the law on a regular basis when not licensed. It's disgusting and reprehensible behavior. I sincerely hope Mr. Goldfarb has realized the errors of his ways and will support the separation of an RIA Fee-only Firm from an insurance practice in the future. One has NOTHING to do with the other and the CFP Board needs to take their head out of their nether regions and start hiring people for their board of governors who DISAGREE with them for a change, instead of continuing with this self-serving, oligarchic approach to governance and cronyism that now exists. Everything is not rosy, said the director of the American Association for Long Term Care Insurance. When insurers stop selling or exit the business, many of them hire these third-party administrators to adjudicate claims and that is where interpretations dont seem to be as liberal.
DEDUCTIBLES In the long-term care world, deductibles work a bit differently than typical insurance policies. The policies have waiting periods, or elimination periods, and they are typically measured in days: 30, 60, 90 or 100 days. So if your policy covers $150 a day for in-home care, and you have a 60-day waiting period, you will typically owe the first $9,000 60 times $150 a day before the policy kicks in. But the way the waiting periods are counted is critical, too. If a person is getting home care a few days a week, and the company only counts those days of care toward the waiting period, the total time needed to satisfy the waiting period will be much longer than 60 days, Ms. Burns said. So it isnt just the $9,000, but the total time that has to be satisfied. With certain older policies, meanwhile, the insured person must also spend three days in the hospital before the policy will pay any benefits. Some of these older policies have requirements that most states dont allow today, Ms. Burns said. But these requirements must still be met in these older policies. ELIGIBILITY To become eligible for benefits, patients must be expected to need substantial assistance for at least 90 days, either because they are suffering from a form of dementia, for instance, or because they cant perform two basic daily activities from a list of six, including items like bathing, getting dressed and eating. (This applies to certain policies written after 1997.) What we are finding today is that when people are getting assessed, they fire on 8 or 10 cylinders on some days and they will trick people, said Brian I. Gordon, president of MAGA, a long-term care insurance agency in Riverwoods, Ill. They want to become Superman the day the assessor comes out. And then the insurer may deny the claims. Glenn R. Kantor, a lawyer in California whose firm focuses on insurance claims, said he represented a woman, blind from severe macular degeneration who was receiving benefits for home care. But when the representative from the insurer asked her if she could bathe by herself, the woman told the company she could as long as her aide led her into the shower and gave her soap and a washcloth. Shortly thereafter, the insurer cut off her payments. Then, they sent her to collections to get the money back, Mr. Kantor said, because the caregiver was not within arms length but left the bathroom to go into the next room while the woman bathed. The insurance company settled, but the terms were confidential LICENSED CAREGIVERS Depending on where a patient lives and the type of policy, a licensed caregiver for home care services will probably have to be hired (though some policies, known as cash plans, will let you spend the money with fewer restrictions and pay a grandchild or a neighbor for care, for instance). If they are not licensed, those types of people may not be covered under most long-term care policies today,
But thats not the case everywhere. In California, for instance, the state insurance law prohibits insurers from imposing this requirement, Mr. Kantor said. So we are seeing a number of people have their claim denied by the carrier saying your caregiver isnt licensed. ASSISTED LIVING Many of the policies that benefit people today were written before assisted-living facilities came into vogue, experts said. So some families will find out that only a skilled nursing facility is covered. Then you have the daughter wandering around the state with the contract trying to find a place that meets the policys requirements, Ms. Burns added. Mr. Gordon said that many carriers could still pay for assisted-living facilities as long as they met certain conditions, including being licensed by the state, providing care by a licensed doctor and 24-hour nursing services, among other items. Ultimately, however, it may or may not be covered after the claim is submitted, he added. Even once you think you have found the right type of facility, be sure to read the fine print. Some policies will require that a facility have a nurse on duty 24 hours a day. But some of them will have a nurse there for 12 hours and on call for 12 hours, Mr. Gordon said. And if
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thats the case, the coverage may be denied. Mr. Slome, of the trade organization, said that many insurers did not anticipate the new types of facilities. And while he has heard insurance claims directors say that they dont officially provide coverage, they will. The squeaky gear gets the grease, he added. ALTERNATE PLAN OF CARE Some policies have provisions for what they call alternate plans of care, which experts said implied a certain degree of flexibility. People read those and say, Look, it says they will do this, said Ms. Burns. In reality, they will consider something different, but the insurer makes the ultimate decision. Continental Casualty Company, a subsidiary of the CNA Financial Corporation, sold policies with a similar provision, which could potentially allow the insured to receive benefits for care, say, in the home instead of a nursing home, Mr. Kantor said. But since the CNA unit stopped selling the policies in 2003, he said they were making a habit of no longer honoring those provisions. The insurance company is insistent that they have the right not to approve the plan, said Mr. Kantor, who is representing a woman with Alzheimers disease whose request for an alternate plan was not even considered. But it was not sold that way. A spokeswoman for CNA declined to comment on the specific case, but said an alternate plan of care may be mutually agreed upon between CNA and the claimant. However, the alternate plan of care benefit was never intended to confer a general right to home health care that the optional rider provides. DOCUMENTATION For Ms. Havlish, the Pennsylvania woman who handled her fathers claims, documentation was one of the most frustrating parts of the process. Every time the agency billed the insurance company, it would get sent back as not paid because they did not chart properly, she said, referring to documentation kept by caregivers. And some insurers have been known to deny claims on that basis. Harvey Rosenfield, a lawyer and founder of Consumer Watchdog, recently represented Dr. William Hall, a man who filed suit against Senior Health Insurance Company of Pennsylvania (formerly known as Conseco Senior Health Insurance Company) for failing to pay long-term care benefits for eight months. The insurer required an inordinate amount of forms and documents that were not referred to in or required by the policy, according to the lawsuit complaint. The two parties ultimately reached a settlement last month. With all of the hurdles, trying to get a claim paid can be like an Olympic event, Mr. Rosenfield said. The bottom line is that practices vary widely from company to company and state to state. And whether you can trust the company depends on regulation in that state and most states have limited regulation. 6/11: Hospice Care: Length of stay
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Age
Who pays
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6/10: Bonds: The probabilities are remarkably grim for retirees who insist on holding only bonds in the belief that they are safe, says Seth J. Masters, the chief investment officer of Bernstein Global Wealth Management. Because we live in this world we tend to think of it as normal, but from the standpoint of financial market history, its not normal at all, Mr. Masters said. And thats very clear when you look at fixed-income returns. in 1991, only 11 percent of workers expected to retire after age 65, while this year, 36 percent said they would retire after 65 and 7 percent said they didnt plan to retire at all. 6/9: Withdrawal Resources: Common Symptoms and Treatment Alcohol, Heroin, Excess fishing 6/9: 1. Semi-bounded Rationality: A model for decision making Date: 2013-05 By: Tshilidzi Marwala URL: http://d.repec.org/n?u=RePEc:arx:papers:1305.6037&r=cbe In this paper the theory of semi-bounded rationality is proposed as an extension of the theory of bounded rationality. In particular, it is proposed that a decision making process involves two components and these are the correlation machine, which estimates missing values, and the causal machine, which relates the cause to the effect. Rational decision making involves using information which is almost always imperfect and incomplete as well as some intelligent machine which if it is a human being is inconsistent to make decisions. In the theory of bounded rationality this decision is made irrespective of the fact that the information to be used is incomplete and imperfect and the human brain is inconsistent and thus this decision that is to be made is taken within the bounds of these limitations. In the theory of semi-bounded rationality, signal processing is used to filter noise and outliers in the information and the c orrelation machine is applied to complete the missing information and artificial intelligence is used to make more consistent decisions. 2. Reading to Young Children: A Head-Start in Life? Date: 2013
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By: Kalb, G. Ours, J.C. van (Tilburg University, Center for Economic Research) URL: http://d.repec.org/n?u=RePEc:dgr:kubcen:2013029&r=cbe Abstract: This paper investigates the importance of parents reading to their young children. Using Australian data we find that parental reading to children at age 4 to 5 has positive and significant effects on reading skills and cognitive skills of these children at least up to age 10 or 11. Our findings are robust to a wide range of sensitivity analyses. 6/9: 1. The effect of anticipated and experienced regret and pride on investors' future selling decisions Date: 2012 By: Lee, Carmen Krussl, Roman Paas, Leo URL: http://d.repec.org/n?u=RePEc:zbw:cfswop:201217&r=cbe This paper investigates the effect of anticipated/experienced regret and pride on individual investors' decisions to hold or sell a winning or losing investment, in the form of the disposition effect. As expected the results suggest that in the loss domain, low anticipated regret predicts a greater probability of selling a losing investment. While in the gain domain, high anticipated pride indicates a greater probability of selling a winning investment. The effects of high experienced regret/pride on the selling probability are found as well. An unexpected finding is that regret (pride) seems to be not only relevant for the loss (gain) domain, but also for the gain (loss) domain. In addition, this paper presents evidence of interconnectedness between anticipated and experienced emotions. The authors discuss the implications of these findings and possible avenues for further research. -6/9: 1. Individual Expectations, Limited Rationality and Aggregate Outcomes Date: 2012-02-17 By: Te Bao (University of Amsterdam) Cars Hommes (University of Amsterdam) Joep Sonnemans (University of Amsterdam) Jan Tuinstra (University of Amsterdam) URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:2012016&r=cbe Recent studies suggest that the type of strategic environment or expectation feedback can have a large impact on whether the market can learn the rational fundamental price. We present an experiment where the fundamental price experiences large unexpected shocks. Markets with negative expectation feedback (strategic substitutes) quickly converge to the new fundamental, while markets with positive expectation feedback (strategic complements) do not converge, but show under-reaction in the short run and over-reaction in the long run. A simple evolutionary selection model of individual learning explains these differences in aggregate outcomes. 6/9: 1. Up close it feels dangerous: 'anxiety' in the face of risk Date: 2013 By: Thomas M. Eisenbach Martin C. Schmalz URL: http://d.repec.org/n?u=RePEc:fip:fednsr:610&r=rmg Motivated by individuals' emotional response to risk at different time horizons, we model an 'anxious' agent--one who is more risk averse with respect to imminent risks than distant risks. Such preferences describe well-documented features of 1) individual behavior, 2) equilibrium prices, and 3) institutions. In particular, we derive implications for financial markets, such as overtrading and price anomalies around announcement dates, as well as a downward-sloping term structure of risk premia, which are found empirically. Since such preferences can lead to dynamic inconsistencies with respect to risk trade-offs, we show that costly delegation of investment decisions is a strategy used to cope with 'anxiety.' 6/9: 1. Market Frictions, Investor Sophistication and Persistence in Mutual Fund Performance
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Date: 2012-05 By: Ariadna Dumitrescu (Group for Research in Economics and Finance (GREF), ESADE Business School) Javier Gil-Bazo (Universitat Pompeu Fabra and Barcelona Graduate School of Economics) URL: http://d.repec.org/n?u=RePEc:esd:wpaper:2013-1&r=fmk If there are diseconomies of scale in asset management, any predictability in mutual fund performance will be arbitraged away by rational investors seeking funds with the highest expected performance (Berk and Green, 2004). In contrast, the performance of US equity mutual funds persists through time. In this paper, we investigate whether market frictions can reconcile the assumptions of investor rationality and diseconomies of scale with the empirical evidence. More specifically, we extend the model of Berk and Green (2004) to account for financial constraints and heterogeneity in investors' reservation returns reflecting the idea that less financially sophisticated investors face higher search costs. In our model, both negative and positive expected fund performance are possible in equilibrium. Moreover, expected fund performance increases with expected managerial ability, which can explain the evidence on performance pe rsistence. The model also implies that performance persistence increases with fund visibility, as fund visibility increases the proportion of unsophisticated investors in the fund. Consistently with this prediction, we report empirical evidence for the US equity fund market that diferences in performance are significantly less persistent among hard-to-find funds than otherwise similar funds.
The slums of Kibera Just plain sad 6/9: 1. Disposition Effect and Loss Aversion: An Analysis Based on a Simulated Experimental Stock Market Date: 2013-04 By: Kohsaka Youki (Center for Finance Research, Waseda University) Grzegorz Mardyla (Faculty of Economics, Kinki University) Shinji Takenaka (Japan Center for Economic Research) Yoshiro Tsutsui (Graduate School of Economics, Osaka University) URL: http://d.repec.org/n?u=RePEc:osk:wpaper:1302r&r=cbe We experimentally investigate the existence of the disposition effect and loss aversion as its potential cause. Our approach includes three key characteristics: (i) An environment closely mimicking actual stock markets; (ii) Individual-specific reference prices; (iii) A direct test of loss aversion as a cause of the disposition effect. We find strong support for the existence of the disposition effect as an independent hypothesis. This is an improvement over previous studies, which tested this hypothesis only jointly with others. Our
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results also strongly point to loss aversion, of the type postulated by prospect theory, being a source of the disposition effect. 6/9: 1. Risk Aversion Relates to Cognitive Ability: Fact or Fiction? Date: 2013-04-17 By: Andersson, Ola (Research Institute of Industrial Economics (IFN)) Tyran, Jean-Robert (University of Vienna) Wengstrm, Erik (University of Copenhagen) Holm, Hkan J. (Lund University) URL: http://d.repec.org/n?u=RePEc:hhs:iuiwop:0964&r=cbe Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Structural estimation allowing for heterogeneity of noise yields no significant relation between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making, rather than to risk preferences. 6/9: 1. To what extent are financial crises comparable and thus predictable? Date: 2012-10-16 By: Diamondopoulos, John URL: http://d.repec.org/n?u=RePEc:pra:mprapa:45668&r=rmg This paper critically examines the quantitative approach to financial crises from two perspectives. First, the assumption of comparability of financial crises is analyzed. The key question here is: how comparable are crises? An important consideration here is the context social and political. Second, if financial crises are comparable to a certain extent, then we should be able to make predictions. Thus, the second key question is: how predictable are crises? The results have implications for the development of a theory of financial crises and government policies on crisis management. 6/9: 1. As Easy as Pie: How Retirement Savers use Prescribed Investment Disclosures Date: 2013-03-01 By: Hazel Bateman (School of Risk and Actuarial Studies, University of New South Wales) Isabella Dobrescu (CEPAR and School of Economics, University of New South Wales) Ben R. Newell (School of Psychology, University of New South Wales) Andreas Ortmann (School of Economics, University of New South Wales) Susan Thorp (Finance Discipline Group, UTS Business School, University of Technology, Sydney) URL: http://d.repec.org/n?u=RePEc:uts:rpaper:326&r=cbe : We report the results of two laboratory experiments that study how university student and staff participants chose retirement savings investment options using ?user-friendly? information prescribed by regulators. We demonstrate that choices of more than 20% of participants cannot be predicted using any of the prescribed information items but that 30% of participants used all, or almost all, items, frequently in unexpected ways. A pie-chart showing asset allocation had the largest marginal impact on investment choices. Participants preferred options with more segmented pies (lower concentration) and with equally sized segments (lower deviation froma 1/n allocation). This choice behavior is consistent with the application of a simple diversification heuristic. Participants cannot choose more than one investment but are guided by the extent to which a pre-mixed investment option appears evenly balanced across asset classes . This novel application of a 1/n strategy is distinct from existing findings of na?ve diversification in ?mix-it-yourself? conditions where participants spread resources evenly across funds or categories. The results highlight that information contained in prescribed investment disclosures may not be used in the manner intended by the regulator. The results also pose interesting methodological questions about the way ?user-friendly? information prescribed by regulators is validated before being legislated. 6/9: 1. The Alpha of a Survey of the Literature in Economic and Financial Literacy
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Date: 2013-03 By: William T. Alpert (University of Connecticut) Oskar R. Harmon (University of Connecticut) URL: http://d.repec.org/n?u=RePEc:uct:uconnp:2013-06&r=cbe There is a century long history of economic and financial education laced with implications for both political civic education. It has been argued by some economists that since economics is based on rational self-interested agents we dont need to teach economics at the undergraduate level all. This paper offers a brief review of the literature from the K- college results of economic and financial education extending the survey to the more recent attempts at public financial and economic education. In the review we try to highlight both the results and types of approaches. We then identify some of the areas in which the relatively new areas of behavioral and experimental economics are relevant to economic and financial literacy efforts. We speculate on how these findings may effect economic and financial literacy efforts in the future. JEL Classification: A20, A21, A22, A29 6/9: 1. Responsibility effects in decision making under risk Date: 2012 By: Pahlke, Julius Strasser, Sebastian Vieider, Ferdinand M. URL: http://d.repec.org/n?u=RePEc:zbw:wzbrad:spii2012402&r=cbe We explore situations in which a decision-maker bears responsibility for somebody else's outcomes as well as for her own. For gains we confirm the intuition that being responsible for somebody else's payoffs increases risk aversion, while in the loss domain we find increased risk seeking. In a second experiment we replicate the finding of increased risk aversion for large probabilities of a gain, while for small probability gains we find an increase of risk seeking under conditions of responsibility. This discredits hypotheses of a cautious shift under responsibility, and indicates an accentuation of the fourfold pattern of risk attitudes usually found for individual choices. -6/9: 1. 'I'll do it by myself as I knew it all along': On the failure of hindsight-biased principals to delegate optimally Date: 2013 By: Danz, David Hber, Frank Kbler, Dorothea Mechtenberg, Lydia Schmid, Julia URL: http://d.repec.org/n?u=RePEc:zbw:wzbmbh:spii2013203&r=cbe With the help of a simple model, we show that the hindsight bias can lead to inefficient delegation decisions. This prediction is tested experimentally. In an online experiment that was conducted during the FIFA World Cup 2010 participants were asked to predict a number of outcomes of the ongoing World Cup and had to recall their assessments after the outcomes had been realized. This served as a measure of the hindsight bias for each participant. The participants also had to make choices in a delegation game. Our data confirm that hindsight-biased subjects more frequently fail to delegate optimally than subjects whom we have classified as not hindsight biased. -6/9: EconomistsMark Perry, a professor of finance and business economics estimates that more than half of economic forecasts are based on intuition. Over time, economists have started to realize that people are unpredictable, he says, and thats forced them to diverge from what more formal models might predict. Others say using a little guesswork may not necessarily be a bad thing, arguing that mathematical models are often rendered useless in the real world, especially when dealing with events like the terrorist attacks on Sept. 11, 2001 and other unanticipated disasters. These models assume consistency and predictability when actual behavior is hard to predict, says John Kay, one of Britains leading economists. Relying on consistency is not very sensible strategy. Any professional economist or researcher has to use a certain amount of judgment and creativity either to detect relationships that havent been noticed by others or to sort through the many influences that are affecting the economy, says Simonson of the National Association for Business Economics. No period in time can be replicated based solely on a mathematical model. Thats why people say economic
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forecasters exist to make weather forecasters look good, My two cents- the inverted yield curve in 2000 was a 100% indicator of a recession. The inverted yield curve in 2006 (Plus more) was a 100% indicator of a recession. Does not say when, how bad, nor how long. Nobody really knew it that bad but that is not my issue. A recession sucks. The risk was known We have a huge amount of risk right now that is being abated by the FEd pumping in vasts amount of money. The GDP shows 2.4%- not bad. But, again, that is being manipulated. Probably closer to 0.5%. (No more inverted yield curve- rates are next to zero anyway). Real unemployment is about 23% as defined by the DOL. The article notes- Economists look at past events to figure out whats coming next..." But only a fool would say the future is rosy. Bogle says that there will be a 50% loss in the market TWICE in this next decade. I stated in my book that there was an 85% chance of one recession and a 50% chance of two. Have a nice day 6/9: Discouraged workers- Discouraged workers those who are not actively seeking employment are not included that estimate; adding them pushes the rate closer to 23%.
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The civilian labor force rose by 420,000 to 155.7 million in May; however, the labor force participation rate was little changed at 63.4 percent. Over the year, the labor force participation rate has declined by 0.4 percentage point. The employment-population ratio was unchanged in May at 58.6 percent and has shown little movement, on net, over the past year. (See table A-1.) In May, the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was unchanged at 7.9 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.) In May, 2.2 million persons were marginally attached to the labor force, down from 2.4 million a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.) Among the marginally attached, there were 780,000 discouraged workers in May, little changed from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force in May had not searched for work for reasons such as school attendance or family responsibilities.
6/9: Actually it is an F In a 2009 study, Lusardi, along with Peter Tufano, a finance professor the Harvard Business School, found that only one-third of the population understands how credit cards (and compound interest) work. Whats more, nearly half of all adults grade themselves with a C, D or F for personal finance knowledge, according to a 2013 survey by the National Foundation for Credit Counseling 6/9: Find out about all
U.S. Senators
113th Congress
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There are 100 members of the United States Senate 2 from each of the 50 states. Currently, 55 senators caucus with the Democrats and 45 senators caucus with the Republicans. And there are about 2,000 lobbyists (I am just guessing- could be more) 6/9: Numbers Unemployment Insurance Initial Claims: 346,000 as of June 1, 2013 Unemployment Rate: 7.6% in May 2013 Consumer Price Index: -0.4% in April 2013 Payroll Employment: +175,000(p) in May 2013 Average Hourly Earnings: +$0.01(p) in May 2013 Producer Price Index: -0.7%(p) in April 2013 (p) preliminary; (c) corrected
Like my getup?? The gas mask costs extra (Actually the head of Turkey) 6/9: Launch- this jeep One of the stupidest ideas ever on a car that will lead to several deaths
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"Look!!! I see water" (People unclear on sailing) 6/6: Financial texts I have read hundreds of texts. Anyone truly discussing professional financial literacy has to have read: Peter Bernsteion; Capital Ideas; Capital Idea Evolving; Against the Gods- The Remarkable Story of Risk Benoit Mandelbrot; The (Mis)Behavior of Markets Daniel Kahneman; Thinking Fast, Thinking Slow Investments by Bodie Kane and Marcus
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i 6/6:
In Medicaid Planning, Dont Surrender Life InsuranceTrade It for LTC Instead

By Robert Bloink, Esq., LL.M., William H. Byrnes, Esq. Your clients who are nearing retirement age might often wonder why they bother maintaining the life insurance policies they have funded for years. With children grown, the need to provide for beneficiaries in the event of an untimely death has already been eliminated. Further, these policies are considered assets that can have a significant impact when determining Medicaid eligibility. Despite this, recent proposals in several states can give older clients a reason to maintain their policies and provide peace of mind in Medicaid planning. Under these proposals, ownership of a life insurance policy can actually help clients in long-term care planning as more state Medicaid offices embrace the use of life settlements in conjunction with Medicaid coverage. The Proposals Many clients will eventually need to rely upon Medicaid coverage for long-term care services in a nursing home because Medicare and private health insurance cover only limited long-term care, and traditional long-term care insurance has become prohibitively expensive for many in recent years. Since Medicaid coverage does not kick in until the client spends down assets to below the system-mandated threshold, many would end up surrendering their life insurance policies in order to meet these asset requirements. To avoid this result, several states have proposed legislation that would use a type of life settlement technique to convert the value of the life insurance contract into a stream of income that must be used to fund long-term care. Florida, for example, would require that the proceeds of the life settlement be held in an irrevocable state or federally insured account with a schedule of payments to provide for long-term care. Further, Floridas proposed rule would permit a death benefit equal to the lesser of $5,000, or 5% of the account value, which would be paid to the clients beneficiaries or estate. Upon the clients death, if the account schedule called for further long-term care payments, those
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amounts would be added to the death benefit. Kentuckys proposal contains similar provisions but also would require that the face value of the life insurance policy exceed $10,000 before the client could enter into a life settlement with the state. How to Advise Even for clients who have been paying into a life insurance policies for years, depending on the type of policy, the surrender value can be significantly less than the eventual death benefit. The life settlement rule in Texas anticipates that clients will be able to realize approximately ten times more than the surrender value by entering into a life settlement with the state to provide long-term care services. For clients who no longer see the traditional need for life insurance because their children are financially independent, the ability to convert life insurance into long-term care insurance later in life can provide a powerful incentive for maintaining those policies. Because the proposed rules would require that any amounts remaining in the clients account with the state be refunded as a death benefit, the client would not lose the funds if they are not eventually needed to cover the cost of long-term care. Conclusion Not all clients will need to resort to a life settlement in lieu of surrendering a life insurance policy to qualify for Medicaids long-term care coverage. However, those clients who are considering surrendering policies because of a perceived lack of need should be advised of the possibility that those policies could eventually be converted into a form of long-term care insurance without jeopardizing Medicaid eligibility.
Lincoln Inaugeration Let's vote him in again. Even dead, he would be better than almost anyone else.
6/2: Storms:
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Facing A Storm Surviving The Storm Peace of Mind Leaving Your Loved One Home Alone Hurricane Preparedness for Caregivers Caregiver Emergency Plan Disaster Preparedness for Elder Loved Ones Medication Management in Disaster Planning Safety Begins at Home Before Its Too Late: Planning for an Emergency Older Adults Not Prepared to Ensure Food Safety Caregiving in the Aftermath of a Storm
More Resources www.ready.gov/seniors www.cdc.gov/Features/tornadosafety/index.html www.cdc.gov/Features/afteraflood/index.html www.cdc.gov/features/hurricanepreparedness/index.html www.phe.gov/ASPRBlog/Lists/Posts/Post.aspx?ID=54 www.redcross.org/prepare/location/home-family/seniors 6/2: !USING P"ICES "ISE - he !"#$%ase-!hiller house-price inde& of '( big metropolitan areas rose a seasonally ad)usted *.*% in March from +ebruary, the largest monthly gain since April '((,, and was up *(.-% from a year earlier. .&isting-home sales have been higher than year-earlier levels for '' straight months. /ew-house construction plunged far below normal levels in the deep housing bust, as pent-up demand for single-family dwellings built up amid record-low mortgage rates, foreclosure-plagued mar0ets and wea0 labor conditions. 1uilders in some mar0ets report being able almost to name their price on newly constructed houses.
!USING# J!$S AND !"DE"S IMP"!%E - /ew- and e&isting-home sales improved in April. 2ome resales rose to their highest point since /ovember '((-, and the median home sales price rose **% from a year ago to 3*-',4((, almost a five-year high. /ew home sales rose '.5% in April, and the median price for a home rose *5% from a year ago. +irst-time )obless benefit applications fell by '5,((( to a seasonally ad)usted 556,((( for the wee0 ended *4 May. 7rders for 8.!. durable goods increased more than e&pected in April, pointing to a potential rebound in manufacturing in the second half of '(*5. ,$'9 8nemployment9 :ashington publishes the headline unemployment figure and buries away the more accurate "8-,." he 8-, figure includes part-time wor0ers who would rather be employed full-time, people who are so discouraged that they are not sure )obs e&ist for them any longer and people who simply have not loo0ed for a )ob in a while for various reasons. ;n April, the U&'
unem(loyment rate )as *+.,- u( .rom t/e *+.0- in Marc/. '123 PENSI!N "E4U"NS - owers :atson reports that the median return for 8.!. companies< defined-benefit retirement plans
was '.=6% in '(**, while 5e.ine5&contri6ution (lans )as &7.22-. hat was the largest margin in more than *5 years by which defined-benefit retirement plans outstripped the performance of defined-contribution plans. ,$'9 8!"9ING M!MS - America<s wor0ing mothers are now the primary breadwinners in 6(% of households with children...a milestone in the changing face of modern families, up from )ust **% in *-,(. he findings by the #ew >esearch %enter, released today, highlight the growing influence of "breadwinner moms" who 0eep their families afloat financially. :hile most are headed by single mothers, a growing number are families with married mothers who bring in more income than their husbands. he Associated #ress has more details here. EIG 4 LA"GES4 S4A4E - hat would be the !tate of ?isability with a population of **,(((,(((, all drawing federal disability.
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MEDICAID C!UN4": - According to an annual report to %ongress, a record =',,((,((( were enrolled in Medicaid for at least one month in fiscal '(*', up from =*,=((,((( in fiscal '(**. #articipants now outnumber the populations of +rance and the 8@.
,$'9 ;7*<k= $ALANCES - +idelity ;nvestments reports the average 6(*A0B balance hit a record high of 34(,-(( during the first quarter, a =5% )ump from the first quarter of '((-. .mployees age 55 and older who have been with the same employer for at least *( years had average first-quarter account balances of 3'55,(((, compared with 3*5(,=(( four years earlier. wo-thirds of the past year<s increase is attributed to stoc0 mar0et gains, while employee and employer contributions made up a third of the increase
6/2:
Military Retiree checklist: What survivors should know

Shift Colors periodically provides a checklist for retirees and their family members. This checklist is designed to provide retirees and their loved ones with some help in preparing for the future. The checklist is not all-inclusive and should be used with other estate planning tools. 1. Create a military file. __ Retirement orders __ DD 214 __ Separation papers __ Medical records 2. Create a military retired pay file. __ Claim number of any pending VA claims __ Address of the VA office being used __ List of current deductions from benefits __ Name, relationship and address of beneficiary of unpaid retired pay at the time of death __ Address and phone number for DFAS: Defense Finance and Accounting Service U S Military Retirement Pay Post Office Box 7130 London, KY 40742 7130 (800) 321-1080 option #3 (for deceased members) 3. Create an annuities file, to include: __ Information about the Survivor Benefit Plan (SBP) (Additional information regarding SBP annuity claims can be obtained from the DFAS-Cleveland Center office at
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1-800-321-1080.) __ Reserve Component Survivor Benefit Plan (RCSBP) __ Retired Servicemans Family Protection Plan (RSFPP) __ Civil Service annuity 4. Create a personal document file. __ Marriage Records __ Divorce decree __ Adoptions and naturalization papers 5. Create an income tax file. __ Copies of state and federal income tax returns 6. Create a property tax file. __ Copies of tax bills __ Deeds and any other related information. 7. Create an insurance policy file. __ Life Insurance __ Property, accident, liability insurance __ Hospitalization/Medical Insurance 8. Maintain a listing of banking and credit information, in a secure location. __ Bank account numbers __ Location of all deposit boxes __ Savings bond information __ Stocks, bonds and any securities owned __ Credit card account numbers and mailing addresses 9. Maintain a membership listing of all associations and organizations. __ Organization names and phone numbers __ Membership fee information 10. Maintain a list of all friends and business associates. __ Include names, addresses and phone numbers 11. Hold discussions with your next of kin about your wishes for burial and funeral services. At a minimum the discussion should include cemetery location and type of burial (ground, cremation or burial at sea). This knowledge may assist your next of kin to carry out all of your desires.
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12. You could also pre-arrange your funeral services via your local funeral home. Many states will allow you to prepay for services. 13. Investigate the decisions that you and your family have agreed upon. Many states have specific laws and guidelines regulating cremation and burials at sea. Some states require a letter of authority signed by the deceased in order to authorize a cremation. Know the laws in your specific area and how they may affect your decisions. Information regarding Burials at Sea can be obtained by phoning Navy Mortuary Affairs at (866) 787-0081. 14. Once your decisions have been made and you are comfortable with them, have a will drawn up outlining specifics. 15. Ensure that your will and all other sensitive documents are maintained in a secure location known by your loved ones. Organizations to be notified in the event of a retiree death: 1. Defense Finance and Accounting Service, London, KY (800) 321-1080 2. Social Security Administration (for death benefits) (800) 772-1213 3. Department of Veterans Affairs (if applicable) (800) 827-1000 4. Office of Personnel Management (OPM) (724) 794-8690 5. Any fraternal group that you have membership with: e.g., MOAA, FRA, NCOA, VFW, AL, TREA 6. Any previous employers that provide pension or benefits.
6/2:
&, agrees to end decades of o#erfishing

Deal to end overfishing could see stocks soar by 15m tonnes by 2020 and end practice of discarding millions of tonnes of unwanted fish
Bipolar Disorder: Preventing Manic Episodes By Jennifer Bradley, Staff Writer
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For a caregiver of someone with bipolar disorder, having fun may be the furthest thing from their mind when dealing with a manic or depressive episode, medication trials and errors, and just frustration with the entire situation. A loved one living with bipolar disorder still wants to feel included and normal, however. With some basic knowledge, ways to handle surprises, and a sense of love and hope, this feat can be accomplished successfully. Prepare ahead Its not necessary for everyone in a large group setting to necessarily know about and understand a persons bipolar condition. A select few close friends and family will benefit from having a bunch of tricks up their sleeve, so to speak, for ways to avoid fun turning into failure. Empathy is a big one. Its knowing what a loved one is feeling and really, truly caring for their challenges. A caregiver wont get far without it. After that, what are the loved ones triggers? Large crowds? Loud noise? Dont take them to those types of places. Just dont. It may seem like they could get out for a while. If it sets their emotional reactions on high, a calm atmosphere will be much more enjoyable in the end. Constant communication with how a loved one feels about activities is important for a caregiver. Do they like going to dinner? Or taking a walk? What are the types of events/outings they enjoy and feel they can manage successfully? This attitude also gives them control, something that many people with bipolar disorder struggle with maintaining in many areas of life. Sometimes having a planned-ahead, structured schedule is a good idea. Loved ones living with bipolar disorder do best with knowing whats to come and are able to mentally prep themselves for any new or scary experiences. They also have a finer memory of past experiences than the average person. If they didnt like something before, chances are they will remember it and resist trying it again. Caregivers take on a lot of burden, and this is just one more place. They may lose their choice of fun activities, but also gain a more full and satisfying relationship with a loved one. Dont fight fire with fire The first rule of preventing an outburst is simply not being the flame that starts one. The four big communication no-nos, according to Bipolar Disorder for Dummies, Second Edition, are criticism, blame, judgment and demand. The guide says to keep them out of interactions with a loved one who is bipolar. Honing these skills is essential, and how a caregiver (or anyone for that matter) says something makes a world of difference in the outcome of an event or gathering. While some people tend to yell when they are upset, and if a caregiver is one of those people, it is imperative to find another way of expression. Yelling at a person with bipolar disorder puts them on the defensive and increases
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aggression, and possibly hitting the trigger point of stress. Fighting fire with water is much better. Here are some examples of phrases that may be taken the wrong way by someone with bipolar disorder, but not affect someone else. Who said life was fair? Chill! Its all in your head. Snap out of it. Shouldnt you be better by now? Stop acting crazy. And things to say: What would you like to do? This episode wont last forever. Well get through this together. What can I do to help you have fun? I wouldnt change anything about you. Caregivers willing to jump on the rollercoaster of bipolar disorders certainly will find loops and dark tunnels along the way. Its a guarantee. Taking the big dip over the hill can be a blessing, in knowing someone who needs love and compassion is being given it. The loved one with a bipolar disorder is looking to their caregiver to be a friend who enjoys life with them.
6/2: Five Simple Steps to Create a Safer Environment for Seniors By Brett Brenner
Electricity is such a common part of our everyday lives. Many wake up each morning to the sound of an alarm clock and then proceed to turn on lights around the house before using a whole host of other electrical appliances throughout the day. Its our norm. Yet in spite of the safety, comfort and entertainment electricity provides, electrical accidents are a leading cause of home fires every year. According to the National Fire Protection Association (NFPA), adults over 65 have the highest risk of death from fire, and the risk only increases with age. For those 75 and over, the risk is 2.8 times higher than the general population. Whats more, many older adults have remained in the same home for an extended period of time, and electrical fires are more common in older homes with aging electrical systems. In honor of National Electrical Safety Month in May and on behalf of the Electrical Safety Foundation International (ESFI), I encourage caregivers to familiarize themselves with some basic tips to help maximize the safety of the seniors in their care while minimizing the risks associated with electricity. 1. Verify that the homes electrical system is in compliance with the most up to date electrical codes. Contact a licensed electrician to conduct a quick home electrical safety inspection. The electrician should determine the following: Circuit breaker panel board is properly labeled. When the power goes out in a specific section of the home, labels serve as a quick way to know which breaker to flip to restore power.
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Circuit breaker has a detection system designed to prevent fires. This is commonly known as an arc-fault circuit interrupter (AFCI) and can detect a circuit breakdown and disconnect the power before a fire erupts. Wall outlets should also include detection devices such as a ground fault circuit interrupter (GFCI), which can detect an imbalance or leakage of electrical currents that can cause lethal shock. Let the electrician know if youre noticing any of the following: frequently blown fuses or tripped circuit breakers; a tingling feeling or slight shock when you touch an appliance; outlets and/or switches that are warm or make crackling, sizzling or buzzing noises; or flickering or dimming lights. 2. Make sure the home is properly lit. Install night lights near stairways, walkways and other areas to ensure they are illuminated to avoid tripping hazards. Lamps should be easily accessible in seating areas and in bedrooms and touch-lamps are especially useful to seniors. Make sure light bulbs are the appropriate wattages for night lights and lamps, and consider using fluorescent bulbs as they consume less energy. 3. Set calendar reminders to routinely check the performance of detection devices. Press the test buttons on GFCIs, AFCIs and smoke detectors. You should replace smoke detectors that are more than 10 years old and replace batteries at least once a year. 4. Ensure that outlets and power cords are properly loaded. No more than two appliances should occupy a single outlet as overloaded outlets can easily overheat and start a fire. Also, check electrical cords for signs of damage and never run cords under rugs or carpets or pinch them under furniture, doors or windows. 5. Only use electric products that are certified by Underwriters Laboratories (UL). The UL mark indicates that the product has been tested and approved for safety. Be cautious of counterfeit electrical products, which are often sold at deep-discount stores. They may have erroneous UL labels. Look for spelling errors on the product packaging as a red flag that the product may be counterfeit. For more information and tools to keep seniors safe, visit the resources for older adults section on the ESFI Web site. I invite you to encourage seniors to take a few moments to watch short videos on best safety practices also available on the ESFI Web site
5/31: GDP for first quarter was 2.4%. Not bad= but I think inflated by activities of FED 5/31: Do you kinow the answer to what to do with an unneeded policy. I bet 85% will terminate the policy and take the cash value. WRONG!!!!!!!!!!!!!!!!!!!!!!!! Millions upon millions of dollars will be lost Now that American Taxpayer Relief Act of 2012 (ATRA) makes higher exemptions and lower rates permanent, many of these clients who p rchased life ins rance to finance estate taxes no longer expect an estate tax lia!ility and are serio sly ree"al ating their life ins rance programs# $ith a permanent increase in the ele"ated estate tax exemption co pled with exemption porta!ility, expect to see an o"erall decrease in the se of life ins rance for estate li% idity p rposes and an increase in the se of lower death !enefit&higher cash "al e life ins rance that can !e !orrowed from on a tax'free !asis#
5/30: Question: Neven AdamUnfollow Follow Neven Adam
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Is there a need for Macro-level risk analytics and/or consulting from a macroeconomic, geopolitical and international market perspective in the investment management / risk management industries?
Answer- That is exactly where the risk comes from if one already has a diversified portfolio (easier said than done nowadays). One takes all inputs as you mentioned and puts them into a "brain hopper" to weigh how great the risk is on a national and international scale regarding something that 'may go wrong'. It is not an attempt at timing the market- it IS an attempt to judge the overall risks to investing (in particular) irrespective of current returns. In 2000, the inverted yield curve helped solidify an upcoming recession. It did so in late 2006 as well. Currently the input for risks is enormous- which the market, at least till recently- paid little heed. But it is not just looking at the FED. North Korea, the sequester, and on and on. Pundits can say that such effort to alter the risk of a portfolio in regards to risk overall is folly and best to buy and hold. The market/investors and certainly retirees lost 44% in 2000. the losses sustained in 2008 were 57% top to bottom (and that is just the basic market). The market returns from late 2011 have been dramatic. The investing risks have been extremely high as viewed by any rational investor (of which there seems to be few). It is the macro analysis that may help in increasing returns at certain times but it is unquestionably the need to keep losses to a minimum. 5/30:
Ariz. Twins Suffer Strokes at 26, Only Months Apart

For those younger than 45, the stroke risk has jumped 14 to 20 percent. Risk factors caused by obesity and smoking were
once only seen in the elderly.

5/30:
&, eases hard line on austerity

France, Spain and the Netherlands to be given a waiver on the annual 3% deficit limit on condition national governments embark on labour market reforms
US housing lift could crimp Fed buying
Prices surged 10.9% in March from a year earlier driven by record-low mortgage interest rates, an improving jobs market and low inventory levels
5/29: alzheimers{ Gary Barg: Dr. Wischik, what is the current state of the science of determining the cause and possible treatment for Alzheimers disease? Claude Wischik: For the last twenty years or so the field has focused almost exclusively on the amyloid hypothesis. (Ed. note: The amyloid theory describes how an increase in secreted beta-amyloid peptides leads to the formation of plaques eventually resulting in the death of brain cells.) I think that view has been severely dented by repeated trial failures. The main alternative is the theory that weve backed since the mid-80s. And that is the tau theory. This builds on Dr.Alzheimers original discovery. Dr. Alzheimer discovered a lesion in the brain called the tangle, which are abnormal fibers forming inside nerve cells. These nerve cells are the ones critical for all communication from one part of the brain to the other. We found that the amount of aggregated tau protein going into these tangles is really driving how demented people are. Gary Barg: Is there a single target potentially identifiable for treatment of the disease? Or is it inherently more complicated? Claude Wischik: I think tau plays an important role, but probably tau is also not the whole story. Its just that tau is a better story than the amyloid. If I can put it in simple terms: as nerve cells age, their garbage disposal machinery becomes less and less efficient at handling bits of junk that form during the normal wear and tear of the cells. Once that process is initiated, it acts as a seed on which the tau aggregation can begin. And once tau aggregation begins, it just goes on and on, sucking more and more of the normal tau protein into these toxic aggregates. And whats worse is that this process spreads from one nerve cell to the next. I do sincerely believe that a tau based treatment will provide a way forward in the near term. Not just that, it may well be the only story thats going to break in the next seven years for a potential successful treatment.
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Gary Barg: Can you discuss the value of considering clinical trials for Alzheimers caregivers? Claude Wischik: Caregivers have to weigh a very simple odds calculation. Theyve got to do this risk analysis. One, its a dead certainty that if I have the disease, its going to progress and at some point, Im going to end up, or the person I care for is going to end up, in a nursing home. On the other hand, you have the possibility, but by no means the certainty, that a certain experimental treatment will delay or stop or protect from that outcome. Its a very simple risk calculation to say youre much better off trying an approach that may give hope versus the dead certainty of just staying where you are. So for the caregiver and the patient, its in their own selfish best interests that they participate in clinical trials. Then theres the more altruistic thing which is that their participation in the trials will hasten the day when treatments can actually help. From a patient caregiver point of view, the odds are very simplecertainty versus the possibility of a way out. Gary Barg: Theres actually a third track and that is what I would call selfishly altruistic, meaning that I can help my descendants, future generations of my family, by hastening a possible cure or therapy. Claude Wischik: Yes, I agree with that. You know, from the early days when I used to collect brain tissue in Cambridge, I felt very embarrassed at having to ask relatives about consenting for the collection to study the disease. But I was overwhelmed by the essential altruism and generosity of people. I thought that maybe 30 percent or 40 percent would say Yes.& It turned out that more than 95 percent of people, when approached, said Yes. So theres a deep sense of community and commonality of purpose that we all somehow benefit. I think there is that, and its not very far below the surface. Gary Barg: Our readers experience firsthand the real life limitations of the current treatments for Alzheimers disease. Do you have any prediction about the time horizon for the development of a truly effective treatment for Alzheimers? Claude Wischik: If our Phase III confirms our Phase II, then we should have that data in 2015. And that means that a drug could be on the market by 2016. So thats the timetable that were working to at the moment. Were pretty confident that the result will be positive because we did a very big Phase II study on 321 subjects. And there we found that, at the optimum treatment dose, we achieved a 90 percent reduction in the rate of progression. So were pretty hopeful about our chances in Phase III. So the good side of all of this is that there are a lot of people out there who are working hard to try and bring about help to patients and loved ones and the caregivers and so on. A lot of people have dedicated their lives to this. Lets hope some of that produces some benefit. Gary Barg: If you only had one most important piece of advice to impart to a family caregiver dealing with Alzheimers, what would that be? Claude Wischik: Thats really easy. If you really think this is Alzheimers, run, dont walk. Go to a clinic. Find a trial and get the patient enrolled, particularly in the early stages. Dont hang about. Dont pretend this is going to go away by itself. Thats often the big barrier people dont want to face it. They dont want to face the word. They think, OK, my memorys bad, but I havent got Alzheimers. The trouble is, they just let it pass another year. Itll be OK. We can manage somehow. That it cant be. If its really bad enough that you suspect it and generally the families know then find a trial. At least theres some hope. But if you do nothing, then theres no hope 5/29: Arthritis Tips By Ryan Mackey
Few diagnoses can create such a transition from the routine in life, as does arthritis. Activities such as sports, traveling, and driving are often too painful to continue, and realizing the physical limitations can be disappointing. Being a caregiver in times such as this can be a stressful situation, but here are some tips that may allow the caregiver to alleviate a loved ones emotional and physical pain associated with arthritis. Become as educated as possible with the conditions of arthritis and be knowledgeable on any new treatment options available. Because arthritis usually affects the hands first, writing may be more difficult for them, but finding the right balance of comfort may only require a small triangle cushion found in many office supply stores. Pill reminders can reduce the stress of taking pain medication throughout the day. Do not let the loved one sit idle and resting for long periods of time, as they may become stiff and in pain if they begin moving. Instead, make sure they move around at least a little bit each hour to create blood flow and movement in the legs and arms. Just because a loved one may not be able to do the activities they enjoyed doing in years past, involving them in your life and your families may provide that rewarding feeling of participation again.
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An exercise routine can focus on painful areas and reduce discomfort through better fitness. Arrange cupboards and furniture with their reduced flexibility and movement in mind. Use safety rails in the bathroom and along stairways so the loved one can maintain their balance and still be provided with reassuring support. If possible, anytime large items are used, it may be easier to condense the item such as soap or soda into a smaller, lighter bottle that they can lift easier. In the kitchen, use lightweight dishware and cups with handles when they are eating. Do not be afraid to attend arthritis support groups that can help caregivers adjust emotionally and better understand the condition.
5/29: Hurry= According to Morgan Stanley, 84% of all stock trades are by high-frequency computers (Posted on April 26, 2012). We are all taught to Buy and Hold, yet the average stock is held for just 22 seconds in today's computer driven market. Financial institutions take billions of dollars in profits by trading millions of shares moving only by pennies.
5/28: 1. Reconciling behavioural and neoclassical economics Date: 2013-05-02 By: Guilhem Lecouteux (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X) URL: http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00819763&r=cbe The representation of the individual in economics as a rational homo oeconomicus had been seriously questioned by the development of behavioural economics. Some authors nevertheless argue that economists do not need to produce complex models of human behaviour, since such investigation does not fall within the scope of economic analysis. We show that the mere definition of the scope of economic analysis is quite ambiguous, between on the one hand a conception of economics as a science of individual choice and on the other hand as a science of social institutions: this duality finds its origins during the marginalist revolution with Jevons, Menger and Walras, whose theories seem to be in conflict concerning the scope of economic analysis and the definition of the "economic man". Economists then produced two distinct models of this economic man, one as the simplification of a real individual, and the other as a representati ve agent. The figure of the homo oeconomicus developed later by Pareto homogenized these two traditions, leading to the indeterminacy of the scope of economic analysis and in fine to the development of behavioural economics. Since behavioural and neoclassical economics are the continuation of these two distinct traditions, we stress that they should be considered as complementary rather than substitute approaches to economic analysis. 5/28: 1. Norms Make Preferences Social
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Date: 2013-05 By: Erik O. Kimbrough (Simon Fraser Unviersity) Alexander Vostroknutov (SMaastricht University) URL: http://d.repec.org/n?u=RePEc:sfu:sfudps:dp13-01&r=cbe We develop a unifying explanation for prosocial behavior. We argue that people care not about others payoffs per se, but whether their own behavior accords with social norms. Individuals who are sensitive to norms will adhere to them so long as they observe others doing the same. A model formalizing this generates both prosociality (without relying on explicit distributional preferences) and well-known context effects (for which distributional preferences cannot account). A simple experiment allows us to measure individual-level normsensitivity and to show that norm-sensitivity explains heterogeneity in prosociality in public goods, dictator, ultimatum, and trust games.
5/28: Massive change that will continue
5/26: Pension or Settlement Income StreamsWhat You Need to Know Before Buying or Selling Them Do you receive a monthly pension from a former employer? Are you getting regular distributions from a settlement following a personal injury lawsuit? If so, you may be targeted by salespeople offering you a lump sum today to buy the rights to some or all of the payments you would otherwise receive in the future. Retired government employees and retired members of the military are among those being approached with such offers. Typically the lump sum offered will be less payments you would otherwise receive
sometimes much lessthan the total of the periodic
5/26: China downgrade: Chinas sovereign credit rating has been cut by a major international agency for the first time since 1999 with Fitch raising concerns on Tuesday that the countrys rising debt problems will require a government bailout. Fitch downgraded Chinas long-term local currency rating from AA- to A+, citing a number of underlying structural weaknesses in the Chinese economy, including low average incomes, lagging standards of governance, and a rapid expansion of credit.
5/26: Nothing has changedFrom a post in 2001 (not me) - Fee-Only Planners that have chosen not to follow CA L&D regulations: I understand their position to ignore this rule..............But currently, the CDI's position is clear: you are not following CA state regulations and should be subject to prosecution. It
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is unethical for you to choose what regulations you are not following without adequate disclosure. Anything less is hypocrisy. Do two wrongs make a right? NAPFA, CFP and FPA Boards: Your lack of backbone on this is issue is even more hypocritical. Perhaps as part of Practice Standards, Planners should have to disclose what regulations they chose not to follow. ........... if one was to do the research on this issue, I do not know how anyone can come away with another feeling. < img alt="" border="0" width="1" height="1" src="http://stats.ft.com/si/track.gif?WT.js=No"/> 5/26: The Rise of Developing Nations in 10 ChartsThe cost of doing ! siness in the ( aranteed )ni"ersal *ife (()*) markets has risen as the interest rates ha"e fallen# +n 200, the ()* market had increases p to -0., 2010 increases p to 20., 2011 p to -0., 2012 p to 1/. and 0 st these co ple months in 2011 the ()* marketplace has experienced o"er 100. increases in costs# There are some ins rance companies that ha"e taken m ltiple increases (on same prod ct or thro gh discontin ing and iss ing new prod cts)or ha"e had to exit the ()* market completely# +n addition, these press res apply not 0 st to ()* ! t to all prod cts#
5/26:
+ew 1oomers %atch 8p on 6(*A0B !aving 7nly a small minority of baby boomers ta0e advantage of the ;>!C higher 6(*A0B Dcatch-upE contributions available to wor0ers when they reach age 5(.
5/26:
-he day ,. had si/ hours gas left

Britain came within six hours of running out of natural gas in March, according to a senior energy official, highlighting the risk of supply shortages amid declining domestic production and a growing reliance on imports
http://link.ft.com/r/LVA6WW/4VINQ6/62X9T/MSIP3S/LSVD4P/PJ/h?a1=2013& a2=5&a3=23
5/26 : 5/23: 1. The role of psychological and physiological factors in decision making under risk and in a dilemma Date: 2013-04-18 By: Jonas Fooken Markus Schaffner URL: http://d.repec.org/n?u=RePEc:qut:qubewp:wp010&r=cbe
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We study the difference in the result of two different risk elicitation methods by linking estimates of risk attitudes to gender, age, personality traits, a decision in a dilemma situation, and physiological states measured by heart rate variability (HRV). Our results indicate that differences between the methods are reflected in a different effect of gender and personality traits. Furthermore, HRV is linked to risk-taking in the experiment for one of the methods, suggesting that emotionally more stressed individuals display more risk aversion. However, we cannot determine if these are significantly related to the difference on the results of the two methods. Finally, we find that risk attitudes are not predictive of the ability to decide in a dilemma, but personality traits are. There is also no apparent relationship between the physiological state during the dilemma situation and the ability to make a decision.
Dedication 5/23: 1. Variation in risk seeking behavior following large losses: A natural experiment Date: 2013-03-14 By: Lionel Page David A. Savage Benno Torgler URL: http://d.repec.org/n?u=RePEc:qut:qubewp:wp007&r=cbe This study explores people's risk attitudes after having suffered large real-world losses following a natural disaster. Using the margins of the 2011 Australian floods (Brisbane) as a natural experimental setting, we find that homeowners who were victims of the floods and face large losses in property values are 50% more likely to opt for a risky gamble { a scratch card giving a small chance of a large gain ($500,000) { than for a sure amount of comparable value ($10). This finding is consistent with prospect theory predictions of the adoption of a risk-seeking attitude after a loss. 5/23: 1. As Easy as Pie: How Retirement Savers use Prescribed Investment Disclosures Date: 2013-03-01 By: Hazel Bateman (School of Risk and Actuarial Studies, University of New South Wales) Isabella Dobrescu (CEPAR and School of Economics, University of New South Wales) Ben R. Newell (School of Psychology, University of New South Wales) Andreas Ortmann (School of Economics, University of New South Wales) Susan Thorp (Finance Discipline Group, UTS Business School, University of Technology, Sydney) URL: http://d.repec.org/n?u=RePEc:uts:rpaper:326&r=cbe
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: We report the results of two laboratory experiments that study how university student and staff participants chose retirement savings investment options using ?user-friendly? information prescribed by regulators. We demonstrate that choices of more than 20% of participants cannot be predicted using any of the prescribed information items but that 30% of participants used all, or almost all, items, frequently in unexpected ways. A pie-chart showing asset allocation had the largest marginal impact on investment choices. Participants preferred options with more segmented pies (lower concentration) and with equally sized segments (lower deviation froma 1/n allocation). This choice behavior is consistent with the application of a simple diversification heuristic. Participants cannot choose more than one investment but are guided by the extent to which a pre-mixed investment option appears evenly balanced across asset classes . This novel application of a 1/n strategy is distinct from existing findings of na?ve diversification in ?mix-it-yourself? conditions where participants spread resources evenly across funds or categories. The results highlight that information contained in prescribed investment disclosures may not be used in the manner intended by the regulator. The results also pose interesting methodological questions about the way ?user-friendly? information prescribed by regulators is validated before being legislated.
5/22: 1. Behavioral Learning Equilibria Date: 2013-01-14 By: Cars Hommes (University of Amsterdam) Mei Zhu (Shanghai University of Finance and Economics) URL: http://d.repec.org/n?u=RePEc:dgr:uvatin:2013014&r=cbe We propose behavioral learning equilibria as a plausible explanation of coordination of individual expectations and aggregate phenomena such as excess volatility in stock prices and high persistence in inflation. Boundedly rational agents use a simple univariate linear forecasting rule and correctly forecast the unconditional sample mean and first-order sample autocorrelation. In the long run, agents learn the best univariate linear forecasting rule, without fully recognizing the structure of the economy. The simplicity of behavioral learning equilibria makes coordination of individual expectations on such an aggregate outcome more likely. In a first application, an asset pricing model with AR(1) dividends, a unique behavioral learning equilibrium exists characterized by high persistence and excess volatility, and it is stable under learning. In a second application, the New Keynesian Phillips curve, multiple equilibria c o-exist, learning exhibits path dep endence and inflation may switch between low and high persistence regimes. 5/22: 1. Disposition Effect and Loss Aversion: An Analysis Based on a Simulated Experimental Stock Market Date: 2013-04 By: Kohsaka Youki (Center for Finance Research, Waseda University) Grzegorz Mardyla (Faculty of Economics, Kinki University) Shinji Takenaka (Japan Center for Economic Research) Yoshiro Tsutsui (Graduate School of Economics, Osaka University) URL: http://d.repec.org/n?u=RePEc:osk:wpaper:1302r&r=cbe We experimentally investigate the existence of the disposition effect and loss aversion as its potential cause. Our approach includes three key characteristics: (i) An environment closely mimicking actual stock markets; (ii) Individual-specific reference prices; (iii) A direct test of loss aversion as a cause of the disposition effect. We find strong support for the existence of the disposition effect as an independent hypothesis. This is an improvement over previous studies, which tested this hypothesis only jointly with others. Our results also strongly point to loss aversion, of the type postulated by prospect theory, being a source of the disposition effect.
5/20:
,. wor0er insecurity at !-year high

Britains employees are feeling more insecure and under pressure at work than at any time in the past 20 years, a large-scale study of the workforce has found.
http://link.ft.com/r/BLH300/MJ813W/HYFTA/5V8OT0/FDG8BS/QR/h?a1=2013& a2=5&a3=19
5/20: 5/20: CFP Education: the reality is that the current state of CFP continuing education is far from ideal. In recent years, the CFP Board has increased its scrutiny when reviewing presentation materials submitted for consideration, but arguably the net result has simply been to frustrate a lot of
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well-intentioned educators and conference organizers, while actually punishing few wrongdoers. After all, while the CFP Board may reject a presentation for questionable or overtly product- or sales-centric material on a presenters slides, there's nothing to stop a speaker from presenting with a "clean" slide deck and just using the microphone to sell directly from the podium. In fact, savvy product sponsors have long since figured out that as long as the slides are simple and apparently objective, there are few repercussions if any to delivering a thinly veiled sales pitchedsometimes, hardly veiled at all in the middle of a presentation. At worst, the event organizers simply don't invite the company or speaker back again, which is of little concern since there are dozens and hundreds of either CE events to abuse. This problematic state of affairs was echoed clearly during the comment period in response to the CFP Board's proposal to increase the number of required CFP CE credits from 30 every two years up to 40; the organization received a record-breaking 1,100 comments in response to the proposal, of which 85% opposed the increase. The dominating theme of the negative feedback was clear when perusing the public comments themselves: certificants saw little value in an increase in the continuing education requirements when the current state of CE was already of such low quality. That suggests that if the CFP Board wants to lift the number of required CFP CE hoursarguably necessary if financial planning will ultimately be recognized as a profession, as the CE requirements for planners are woefully behind other professionals like CPAsit first needs to clean up the
quality of the education itself.

EFM- The CFP is one semester on money. Continuing education can never be that significant since the agents don't have much of a background. But consumers do not care. They just LOVE marketing 5/19: The Guide to Intimacy after Cancer
I have gained weight 5/19: Future Retirees at Risk of Downward Mobility, Pew Finds
"The report estimates that, at the median, Americans born between 1966 and 1975 -- so-called Gen-Xers -- will be able to replace just half their pre-retirement income once they stop working, well below the minimum 70 percent replacement rates recommended by most financial planners. Late baby boomers -- which the report defines as those born between 1956 and 1965 -- will be able to replace 60 percent of their working incomes in retirement, the report estimates. Both replacement rates are below what financial experts say is necessary for a secure retirement."
5/19: More e>amination o. a5?isers is (riority# SEC@s 8/ite says

Mary Fo :hite, head of the !ecurities and .&change %ommission, told the 2ouse +inancial !ervices %ommittee that the agency<s top priority is increasing e&amination of financial advisers. "!ignificant additional coverage is essential if investors are to be appropriately protected," she said. he !.% doesn<t have an opinion on whether that should be accomplished through more funding
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for the agency or creation of a self-regulatory organiGation,
Why bother??? They do not know very much. That is the problem
5/19: Consumer Fact Sheet: The Basics of Investing

"The Insured Retirement Institute (IRI) and the National Retirement Planning Coalition (NRPC) released a new fact sheet focused on the basics of investing as part of their six-month national retirement planning campaign.... According to research by IRI, only about 17 percent of Boomers believe that they are extremely or very knowledgeable about making financial investments. Even more alarming, more than 40 percent of Boomers say that they are not very or not at all knowledgeable about investing
5/19: Seventh Circuit Moves Closer to Eliminating Stock Drop Liability in ESOPs
"The Seventh Circuit rejected the Sixth Circuit's standard, preferred by the named plaintiff and the Secretary of Labor, which states that the Moench presumption is overcome when a plaintiff can show that a reasonable fiduciary would have come to a different investment decision. For the Seventh Circuit, this sets the bar too low, in light of the conflicting position in which ESOP fiduciaries find themselves."
5/19: House Bill Seen Slowing DOL's Fiduciary Push

"[A] congressional panel will consider legislation that would, among other things, require the SEC and DOL to coordinate their separate efforts on a fiduciary-duty regulation.... The House bill would require the SEC to coordinate its fiduciary-duty work with other federal agencies before proposing a rule, according to two financial industry lobbyists. This provision could have the effect of slowing the DOL's fiduciary work to the SEC's pace."
5/19: Personality Type Theories and Investing

"Individuals are different in the way they process information, vary in the way they behave when faced with a financial decision, and have different risk preferences, so it is essential that advisors interact with each client effectively. This often means that you must change the way you speak to different types of clients even though your advice may be similar across your client base."
5/19":
12P downgrades *er0shire 3athaway

Rating agency says it maintained its AA+ insurance financial strength rating on Berkshires core subsidiaries, but that the outlook on all ratings was negative
http://link.ft.com/r/S4XZQQ/OFOU18/5VWQL/IIWWCA/RP5MGZ/UP/h?a1=2013& a2=5&a3=17
5/19:
*ritain is hurtling to the e/it fro" &urope

The UK prime ministers strategy to deal with pressure for a departure is being torn to shreds by sceptics who have learnt from past mistakes
http://link.ft.com/r/19JYUU/JQHRTK/JE3B7/PFQQ5D/PN7Z0L/9A/h?a1=2013& a2=5&a3=17
5/19 The Callan Periodic Table of Investment Returns
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5/17:
So exactly what is it saying?? It is not a good omen 5/16: Peter Bernstein Peter Bernstein liked to say, markets have memory banks. What investors expect is shaped by what they experience.
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Bernstein was fond of pointing out that in 1958, when the yield on stocks fell below bond yields for the first time, Wall Streets wise men predicted that it couldnt possibly last. There was nothing else in their memory banks to draw on. For decades centuries, in fact stocks had always yielded more than bonds. So the reversal had to be temporary, they argued. But it wasnt: Bonds went on to out-yield stocks for another half-century, to Bernsteins bemusement. By the same token, many investors individuals and professionals alike in the late 1990s had never experienced a protracted bear market in stocks. It was easy for them to imagine the future as an endless stream of double-digit gains. Never having seen even conservative stocks lose much money, they were eager buy Internet stocks at any price.
5/16: Risk and age Joachim Klement, chief investment officer at Wellershoff & Partners in Zurich, has argued that your attitude toward financial risk is shaped largely by the market returns you experience between the ages of 18 and 25, which he calls the formative years for investors.
The younger you are, the fewer experiences you have had time to deposit in your memory bank. So you will pay more attention to whatever has happened lately and, naturally, expect the future to resemble the recent past the only history you have lived through. Research by Stefan Nagel, an economist at Stanford University, suggests that someone who is 30 years old places nearly twice the subjective weight on recent data as does someone who is 50 and nearly three times as much as someone who is 70.
5/16: .94% of Pension Plans Underfunded: Wilshire 5/16:
%"erican in#estors should thin0 local

Data increasingly refute the popular belief that they offer the best growth earnings predictions are too optimistic, writes Richard Bernstein
http://link.ft.com/r/OZMCDD/B4R2UO/08ZKN/5V81YM/T1WCNT/N9/h?a1=2013& a2=5&a3=14
That'll hurt
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5/13: Welf Mrgn- Borzi had particular criticism for the variety of credentials that financial advisors use, poking in particular at the term wealth manager. For the consumer, this is very, very, very confusing.
5/13:
DOW JONES INDUSTRIAL AVERAGE Dec. 31, 1964: 874.12 Dec. 31, 1981: 875.00
Now let's talk about reversion to the mean 5/13: Buffet- every time the risk-free rate moves by one basis point--by 0.01%--the value of every investment in the country changes. People can see this
easily in the case of bonds, whose value is normally affected only by interest rates. In the case of equities or real estate or farms or whatever, other very important variables are almost always at work, and that means the effect of interest rate changes is usually obscured. Nonetheless, the effect--like the invisible pull of gravity- is constantly there
Let's say you put $1 million into the 14% 30-year U.S. bond issued Nov. 16, 1981, and reinvested the coupons. That is, every time you got an interest payment, you used it to buy more of that same bond. At the end of 1998, with long-term governments by then selling at 5%, you would have had $8,181,219 and would have earned an annual return of more than 13%. That 13% annual return is better than stocks have done in a great many 17-year periods in history--in most 17-year periods, in fact. It was a helluva result, and from none other than a stodgy bond. The power of interest rates had the effect of pushing up equities as well, though other things that we will get to pushed additionally. And so here's what equities did in that same 17 years: If you'd invested $1 million in the Dow on Nov. 16, 1981, and reinvested all dividends, you'd have had $19,720,112 on Dec. 31, 1998. And your annual return would have been 19%. The increase in equity values since 1981 beats anything you can find in history.
(Or is this the reversion to the mean)

. Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like--anything like--they've performed in the past 17. If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate--repeat, aggregate--would earn in a world of constant interest rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%
EFM- It will be worse than that in possibly short order. Rates must rise. And GDP will fall under 2%.
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You cannot have 15%+ return with GDP that low. And the GDP has risen due to the FED pumping in billions of dollars. This is not pessimism- just real life 5/12: See below first Generally not bad overall but my issue is who is going to make the stewards?? To say that x or y should be done in no way provides the knowledge base to do it. That has always been my sticking point with CFP standards, NAPFA illegality and on and on. Nice words but misses reality. Note that nothing really addresses IF ANY life insurance be used at all. I have always said if you need insurance, just buy insurance. Term, no lapse (caveats apply). If you add cash, now the dance begins to figure out what will work and why. Note in particular the variable life has effectively no commentary. That is because the risk of loss inside a policy can bury a policy in short order- as many policyholders found out in 2000 and 2008. Risk of loss and causation is really the focus. The main problem is that indexed life is not even mentioned. Doubt that the individuals at West Point may have enough experience with them. You are now also dealing with the Risk of loss and causation as addressed above. In short- Just not sure the ideals will work in the real world when agents hardly know very much at all. Do the stewards??? (Not without previous commentary on variable life- certainly with the significant (and in my mind, unsubstantiated) returns of the market right now. Actually, the real effort needed in the business is for annuities (absolutely for indexed products). Really hard to figure out but the industry can get away with it since there is no "central place" to get the info. I can do an analysis- mainly if an annuity was valid given the circumstances and how it might work- but no one would pay for that effort. Life insurance can be figured out for the bulk of Americans. But you need a planning process to determine the applicability of real life product application- funds, annuities, life insurance. Considering the fact that the fundamentals of investing have never been taught to a broker; the knowledge of life insurance to agents is terrible; and the planning process for most designations et al is essentially a smokescreen to get assets under management, we have a situation bordering on failure. The Standards are OK but I don't see much for the consumer since it is annuities that need attention. It will be interesting if 'fiduciary' is truly mandated (most of it is just words right now) because it will cause a firestorm of protest from the industry- as it already has.
From: Stephen Winks [mailto:s.winks@srconsultant.com] Sent: Thursday, May 09, 2013 11:41 AM To: 'Errold Moody' Subject: Insurance Agent Standard: Is Stewardship even possible in the insurance business model? http://www.veralytic.com/SharedFiles/Download.aspx?pageid=94&mid=165&fileid= Errold, What do you think? You might be the only person who can make a professional assessment. 5/12: West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 1 May 7, 2013 Executive Summary The first draft of the Best Practices Standard for Life Insurance Stewards (Standard) was prepared by a task force consisting of Barry Flagg, Joe Maczuga and Don Tone, and later augmented by Vince Micciche. The first draft was subsequently reviewed and edited at West Point April 24 25, 2013 by the following industry thought leaders: Paul Auslander John Gilliam Vince Micciche Mike Brohawn Josh Husbands Mike Pepe Mark Chamberlain Andy Kalinowski Julie Schneider Rita Cheng Brett Lotspeich Jacqueline Steinberg Barry Flagg Joe Maczuga Don Trone Mathew Geherin Jim McGuire The edited draft, which will now be referred to as the West Point Draft, will be administered by an Advisory Board overseen by the Leadership Center for Investment Stewards, a Swissbased, not-for-profit professional society. As soon as practical, the Leadership Center will publish the West Point Draft and provide the public web-based access to the Standard and the ability to comment on the proposed language.
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The Standard is based on a universal decision-making framework which consists of six Steps and seventeen Dimensions (Dimensions define the details of a Step). A similar framework has been used to develop a: Global wealth management standard for wealth holders; Fiduciary standard for advisors, trustees and investment committee members; Governance standard for directors; and Project management standard for staff. Step 1 - Define Dimension 1.1: Define roles and responsibilities of decision-makers The Life Insurance Steward: a. Defines the roles and responsibilities of each decision-maker and service provider (party); including: West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 2 Policy owner Insured Life Insurance Steward Related Financial Stewards Attorney Accountant Payor/funding party b. Confirms that each party demonstrates an awareness of their role and responsibilities c. Requires a statement from any party who may have a potential conflict-of-interest, and how this conflict will be managed. (Consistent with Dimensions 5.2 and 6.3) Step 2 Analyze Dimension 2.1: State goals and objectives (objectives) The Life Insurance Steward defines the clients goals and objectives, in terms of: a. What the life insurance is for: Asset Protection Business Continuation Family Protection/Income Replacement Estate Planning Investment planning Retirement Planning/Funding b. Core values, personal and business relationships and/or philanthropic objectives Dimension 2.2: Brief decision-makers on objectives, standards, policies, and regulations The Life Insurance Steward: a. Defines the decision-making framework for all persons serving in a fiduciary capacity (such as the trustee of a life insurance trust) b. Confers with the client's tax advisor that the life insurance strategy (strategy) is tax compliant c. Confers with the clients legal counsel to confirm the appropriateness of the legal structure d. Confirms that the client is eligible to obtain appropriate insurance products e. Confirms that each party has the capacity to comply with this Standard f. Confirms that any party lacking expertise has prudently delegated West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 3 Step 3 Strategize Dimension 3.1: Identify sources and levels of Risk Considering the client's goals and objectives (consistent with Dimension 2.1), the Life Insurance Steward: a. Defines the clients sources of risk, and capacity of each, in terms of: Loss of income Longevity Disability, long-term health care issues (see also Health Care Planning Standard) Investment risks Business non-continuation Changes in tax code and/or estate planning regulations Family governance issues; family disruption; bad actors in the family Liquidity needs
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b. Confers with parties on the client's sources and levels of risk Dimension 3.2: Identify Assets The Life Insurance Steward defines the clients assets (all assets in summary form, not just those tied to insurance planning), in terms of: a. Liquid assets b. Illiquid assets c. Business assets d. Anticipated future assets e. Human capital/earning capacity Dimension 3.3: Identify Time Horizons The Life Insurance Steward defines the time horizon associated with each stated life insurance goal and objective, taking into consideration such factors as: a. Definitive short-, intermediate- and long-term time lines or events b. Contingent short-, intermediate- and long-term time lines or events c. Duration of coverage West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 4 Dimension 3.4: Identify Expected Outcomes (performance) The Life Insurance Steward identifies performance objectives for life insurance policies, and for assets invested in insurance policies, in terms of: a. Absolute returns and outcomes/contractually guaranteed b. Relative returns and outcomes/non-guaranteed assumptions c. Stability of the product's pricing d. Funding objectives e. Contingency outcomes f. Underwriting parameters Step 4 Formalize Dimension 4.1 Define the strategy that is consistent with RATE The Life Insurance Steward defines the strategy which is consistent with the clients risk capacity, assets, time horizon and performance expectations, as applicable, taking into consideration: a. Non-insurance strategies, including the diversification of carriers b. Self-insurance strategies c. Use of existing policy(s) d. New insurance strategies In the case of 4.1.c. and 4.1.d. above, the Life Insurance Steward should consider: e. Policy style and functionality with regard to an understanding of: Premium dependence Cash value dependence Risk assumed by each party Responsibilities assumed by each party Dimension 4.2: Ensure the strategy is consistent with implementation and monitoring constraints The Life Insurance Steward ensures that the life insurance strategy: a. Is not constrained by the Steward's: Compensation model Distribution structure, or agency relationships Use of proprietary product West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 5 b. Is not constrained by: Prevailing industry marketing practices [To illustrate, from the Society of Actuaries Final Report of the Task Force for Research on Life Insurance Sales Illustrations: Illustrations should not be used for comparative policy performance proposes because doing so is fundamentally inappropriate.] Insufficient underwriting offers c. Is consistent with prevailing industry best practices when such practices are not in conflict with this standard [To illustrate, FINRA Rule 2210 states: It is inappropriate to compare a life insurance policy with another product based on hypothetical performance because such comparisons can be misleading and are strictly prohibited.]
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Dimension 4.3: Formalize the strategy in detail and communicate The Life Insurance Steward prepares a written Life Insurance Strategy Statement (LISS), which at a minimum, identifies: a. Policy owner (client) b. Insured c. The legal structure of the policy owner if other than an individual. d. The roles and responsibilities of each party e. As it relates to the life insurance product(s), the client's risks, assets, time horizons, and expected outcomes (consistent with Dimensions 3.1 - 3.4) f. The due diligence criteria for the selection of the life insurance product(s) (consistent with Dimension 5.1) g. The monitoring criteria for the life insurance strategy (consistent with Dimension 6.1) h. The process for controlling and accounting for fees and expenses associated with the life insurance strategy (consistent with Dimension 6.2) i. Real or potential conflicts of interests (consistent with Dimension 6.3) j. Rate class of the insured Step 5 - Implement Dimension 5.1: Define the process for selecting key personnel to implement the strategy The Life Insurance Steward develops a due diligence process for selecting product(s) which includes, as a minimum: a. The type of life insurance company b. Its distribution channel c. Its financial strength and claims-paying ability rating d. Its retention limits West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 6 e. Its underwriting capabilities f. Its reputation for client service, clarity in client communication, and integrity g. Contractual provisions that allow for maximum control and flexibility and liquidity h. Transparency of fees and expenses; including: Cost of Insurance Charges Fixed Administration Charges Premium Loads Cash-Value-Based Wrap Fees (e.g. VUL, M&Es) Surrender/Early Termination Charges Fund Management Fees (FMEs) i. Performance of invested assets underlying policy cash values, including: Availability of investment options Tenure of portfolio management team Style or peer group consistency Assets under management Performance relative to peer group Risk-adjusted performance relative to peer group Fund fees and expenses Contractual provisions j. Competitiveness of product pricing and performance within its peer group k. Liquidity Dimension 5.2: Define the process for selecting tools, methodologies, and budgets to implement the strategy The Life Insurance Steward defines a process for: a. The selection of the appropriate product(s): Term Universal Variable Whole Life Single, Joint b. Ensuring the sustainability/ continuation of the policy, considering, as a minimum: Lapse Risk Liquidity Risk Default Risk Systemic Risk (the risk that a financial crisis could impair the ability of an otherwise adequately capitalized insurer to pay a death claim)
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c. Reducing expenses through the blending of strategies (conversion of existing policies) d. Pricing consideration of the secondary market. West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 7 Dimension 5.3: Ensure that service agreements and contracts do not contain provisions that conflict with objectives a. The Life Insurance Steward ensures that service agreements and contracts do not contain provisions that conflict with the goals and objectives of the client b. Contracts reflect representations made by product provider(s). Step 6 - Monitor [Editorial note: As used in this Standard, the frequency of periodic is dependent on type of product(s) utilized with the clients strategy.] 6.1: Prepare periodic reports that compare performance with objectives The Life Insurance Steward defines a process to periodically monitor the life insurance strategy which includes, as a minimum: a. Changes to the client's sources and levels of risk capacity, assets, time horizons, or performance expectations b. Changes to the insureds health c. Financial stability and rating of the product provider d. Funding adequacy (over-funded/underfunded) of the insurance strategy; taking into consideration: Increasing/decreasing the planned premium Increasing/decreasing policy benefits Rebalancing the asset allocation of the underlying investment strategy (cash value products) Changing policy contracts Changing coverage duration e. The review of product costs and expenses relative to the original proposal(s) and representative benchmark averages f. Changes in tax and/or estate planning laws g. Changes in beneficiary designations h. Alternatives for a policy once a risk has been reduced or eliminated. Dimension 6.2: Prepare periodic reports that analyze costs, or ROI, with performance and objectives The Life Insurance Steward: a. Periodically analyzes fees and expenses associated with the life insurance strategy, including: West Point Draft - Best Practices Standard for Life Insurance Stewards Copyright 2013. Leadership Center for Investment Stewards Page 8 Fees paid to third party administrators, trustees, and insurance consultants; Brokerage costs, and use of soft dollars; and Fees and expenses of service providers. b. Analyzes the impact fees and expenses have on the product, seeking to minimize cost and maximize capital efficiencies. Dimension 6.3: Conduct periodic examinations for conflicts-of-interest and self-dealing, and breaches of a code of conduct The Life Insurance Steward: a. Conducts periodic reviews of all parties to ensure that there are no new conflicts (consistent with Dimension 5.2) which may conflict with the clients strategy b. Defines (or refers to) an ethics code or standards statement, and ensures that all parties periodically acknowledge the same c. Remains objective and promotes a policy of full disclosure i. Advises the client when conflicts arise and how such conflicts will be managed Dimension 6.4: Prepare periodic qualitative reviews or performance reviews of decisionmakers The Life Insurance Steward: a. Conducts periodic qualitative reviews of all service providers to determine whether there are personnel or organizational changes which may impact the quality of services being provided to the client; and b. Takes into consideration any legal or regulatory charges brought against a service provider. 5/12: Buy and Hold??????????? In 1965 the Dow hit 1,000, Seventeen years later it was at 764. If clients were taking distributions during that period they would never
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have recovered. 5/12: I've got gas: Worldwide levels of the chief greenhouse gas that causes global warming have hit a milestone, reaching an amount never before encountered by humans, federal scientists said Friday. Carbon dioxide was measured at 400 parts per million at the oldest monitoring station which is in Hawaii sets the global benchmark. The
last time the worldwide carbon level was probably that high was about 2 million years ago,
Other scientists say it may have been 10 million years ago that Earth last encountered this much carbon dioxide in the atmosphere. Actualy it was 8,345,120.45 years ago on a Tuesday at 3:04 pm. I was there.
On average the amount is growing by about 2 parts per million per year. That's 100 times faster than at the end of the Ice Age. Back then, it took 7,000 years for carbon dioxide to reach 80 parts per million, Tans said. Because of the burning of fossil fuels, such as oil and coal, carbon dioxide levels have gone up by that amount in just 55 years.
5/8:
%ustralia cuts rates to record low

The Reserve Bank of Australia has cut its benchmark cash rate to a record low, in a renewed attempt to boost activity outside of the resources sector and soften the impact of a strong domestic currency on trade-exposed industries. In a move that surprised economists, the RBA opted to reduce its cash rate by 25 basis points to 2.75 per cent, highlighting the persistent strength of the Australian dollar over the past 18 months and subdued demand for credit as the reasons for its move. The Board has previously noted that the inflation outlook would afford scope to ease further, should that be necessary to support demand, RBA governor Glenn Stevens said in his post-meeting statement.
http://link.ft.com/r/FG6LAA/52IICX/7AKSH/ORE64T/OFZFNW/LE/h?a1=2013& a2=5&a3=7
5/7: 1. Bond return predictability in expansions and recessions Date: 2013-04-25 By: Tom Engsted (Aarhus University and CREATES) Stig V. Mller (Aarhus University and CREATES) Magnus Sander (Aarhus University and CREATES) URL: http://d.repec.org/n?u=RePEc:aah:create:2013-13&r=fmk We document that over the period 1953-2011 US bond returns are predictable in expansionary periods but unpredictable during recessions. This result holds in both in-sample and out-of-sample analyses and using both univariate regressions and combination forecasting techniques. A simulation study shows that our tests have power to reject unpredictability in both expansions and recessions. To judge the economic significance of the results we compute utility gains for a meanvariance investor who takes the predictability patterns into account and show that utility gains are positive in expansions but negative in recessions. The results are also consistent with tests showing that the expectations hypothesis of the term structure holds in recessions but not in expansions. However, the results for bonds are in sharp contrast to results for stocks showing that stock returns are predictable in recessions but not in expansions. Thus , our results indicate that there is not a common predictive pattern of stock and bond returns associated with the state of the economy.
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5/6:
&, econo"ies to breach deficit li"its

Brussels has signalled its willingness to relax austerity across the eurozone as EU forecasts showed the blocs recession was becoming longer and deeper
http://link.ft.com/r/P75VYY/1OXALG/SP8AI/PFQG8O/JQOKDP/N9/h?a1=2013& a2=5&a3=3
5/6: Create Self-Care By Learning How To Think Like A Soldier By Joan Fay
During the ten years that I cared for my partner as she navigated the world of terminal lung cancer, I was often told by well-meaning people to take care of myself. After all, if I didnt take care of myself, how would I have the energy to take care of anyone else? They dispensed advice like Pez candy, rattling off ways I could make life easier on myself: eat healthy meals, take long walks, meditate, take a bath or go shopping. They had no idea how impractical their suggestions were. Exercising and eating healthy, let alone meditating or relaxing in a bath, were not even on my radar, especially during the last six months of Vicks life. Anxiety, exhaustion and stress ruled my days. I was educated as a counselor and understood that I needed to shore up my reserves in order to be there for my partner, but I found myself unable to practice any of the self-care techniques I had been taught. Depleted, I knew I had to find a way to increase my energy and keep my mind alertif not for my own sake, then for Vicks. I wondered who else works the way caregivers do, under such mentally and emotionally taxing conditions? While watching an episode of the Nightly News, the answer came Soldiers in battle must survive life-threatening encounters and keep their wits about them. How do they do it? And, if it was possible for them, could it also be possible for me? A few clicks of the mouse, and I had the answers and the strategies I needed. Combat soldiers dont take the time to eat healthy meals while dodging sniper bullets, nor do they wake early during a mission and meditate to reduce stress. Instead, according to a presentation created by Walter Reed Army Institute of Research, titled Battlemind Training, Preparing for War: What Soldiers Should Know and Do, soldiers are taught They learn how to meet challenges head on, how to utilize the support of others and how to develop inner strength to combat their greatest fears. I could not alter the course of my partners illness, anymore than a combat soldier can change the attitudes of those he is fighting against. But I could adopt a few of the mental tricks soldiers learn for dealing with the overwhelming tasks I faced. Taking my cue from the soldier training, I assessed my situation by creating a list of tasks for which I was responsible. This list included monitoring and dispensing numerous medications, planning and cooking meals, feeding our animals, cleaning the house and maintaining the yard, managing my full-time career and my emotions while making my partner comfortable and safe during her daily seizure episodes and declining oxygen levels. No wonder I was exhausted! Yet, there was no retreat. I had to face the challenges in front of me; and as I thought it over, I realized it was my choice how I dealt with these many challenges. I could react to each new medical symptom with complaint and drama, or I could meet the challenges head on, as the soldiers are taught to do, and take care of what needed to be taken care of in the moment. This realization stopped my internal whining and allowed a well of strength to rise up from somewhere deep inside, reducing the amount of anxiety I carried. Taking a good look at what I had to do and what I wanted to do did not stop what was happening to Vick, but it did stop some of my anxiety about all the issues we were facing. The assessment also showed me how insane it was to do all of these items on my own. I knew I needed help and needed it fast. So, when people asked me if there was anything they could do, my answer became Yes! I would rattle off the tasks that I needed done, and let the person decide which one suited him or her best. This new declaration resulted in delegating my credit card and grocery shopping to my mother, house cleaning to my sister-in-law, and yard maintenance to our neighbors. I also gave up the need to be a hostess to the numerous people who came to sit with Vick. Utilizing the support of others in this way helped me to fend off some of the exhaustion I had been enduring. Reducing the level of internal complaining and the number of tasks on my never-ending to-do list allowed me more energy. However, nothing helped as much as the attempt I made to adopt the third tenet of soldier training trust. Soldiers are taught to trust their military training as a way to help them move through fear and build inner strength. Even before Vicks health declined to the point of needing hospice care, I was enveloped in fear. As odd as it sounds, I wasnt afraid of Vicks inevitable death as much as I was of not being able to ease her suffering. I didnt trust myself, or my emotional strength, to deal with such outcomes, so I over-compensated
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by trying to anticipate her every need. I constantly asked her how she was feeling and if she needed water, pain medication, food, or blankets. A part of me believed that I could eliminate her suffering, and thus my own, simply by making her comfortable. Not surprisingly, my attempts resulted in her feeling suffocated and controlled. Family and friends often underestimate the emotional toil that caregiving places on the individual. When a terminal illness is involved, the emotional issues can feel like a continuous crisis. I knew intellectually that my thoughts were the cause of my increased anxiety and sleepless nights, but it wasnt until I began meeting the challenges head-on and began using the support of others that I also began to trust myself and Vick. I made a decision to be less vigilant and to allow Vick to ask for what she needed. Then, I began checking in with myself, asking what I needed in any given moment, and trusting the answer. Sometimes my check-in said that I needed to sit quietly with Vick and read. Other times, it told me I needed to take a walk or write an email to a trusted friend and discuss my fears. This small action of checking-in with myself and honoring the response had the greatest impact on my level of fear and feelings of stress. The more I practiced this little ritual, the more I began to trust myself to survive the diseases equivalent of mortar fire. As I look back on those last six months, changing my perception and learning to think more like a soldier not only helped me improve self-care, it also gave me cherished moments with Vick that I dont think I would have had otherwise.
5/5: 401(k) Matches Being Eliminated

"The number of companies providing matching money for employees' 401(k) plans is shrinking as business owners try to save money ... 5 percent of employers who provided matches dropped the match in 2010 and another 2 percent dropped it in 2011.... A total of 42 percent of the companies with active 401(k) plans in 2011 did not provide money to match employees' savings[.]" 5/5: Frontline Producer Explains Controversial 401(k) Documentary (Part 4 of 4) "That so many believed 'The Retirement Gamble' didn't feature the importance of savings suggested the show's producers might have been unfamiliar with a 2012 Wharton Study that concluded savings were more important than asset allocation when it comes to retirement success.... Is it possible, rather than assume personal accountability for his plan's failings, Smith has instead chosen to blame Wall Street? ... As of result of Smith's public admission regarding his personal 401k difficulty, the [Plan Sponsor Council of America (PSCA)] offered him free membership. When FiduciaryNews.com asked Smith if he'd take the PSCA up on their offer, he said, 'No, I don't think so.' Again, is it the failure to take responsibility that prompts this response, or the bitterness and lack of trust after having been a victim?" 5/5: A5?isers
(re(are .or ;7*<k= )ork a/ea5 o. D!L (ro(osal
As they wait to hear how the 8.!. Habor ?epartment will define fiduciary rules for 6(*A0B management, registered investment advisers and bro0er-dealers are busy preparing to go after what they see as a growing business. !ome companies are creating special training and certification programs for advisers focusing on the retirement-plan mar0et. 5$59
%d#isor 4onfidence Plunges

WealthManagement.coms Advisor Confidence Index reveals advisors believe the market is due for a near-term pullback amid an economic recovery that remains fragile.
*.
Everyone has a unique smell, except for identical twins, who smell the same.
Not showing exceptional grwoth at all. 5/5: Compared to what???
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Compared with the weak and declining performance of economic data in most advanced economies, the US still stands out as a relative bright spot. But even in the worlds largest economy, indicators of real activity and confidence remain well below their normal levels for a recovery < img alt="" border="0" width="1" height="1" src="http://stats.ft.com/si/track.gif?WT.js=No"/>
5/2: Wealth" The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institutes analysis of Federal Reserve data. By 2010, whites were about six times as wealthy. The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families. All in all, Hispanic families lost 44 percent of their wealth between 2007 and 2010, the Urban Institute estimates, and black families lost 31 percent. White families, by comparison, lost 11 percent of their wealth.
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5/2: PBS 401(k) April 23, 2013 The Retirement Gamble A Breath of Fresh Air- and a Complete Smoke Screen This will not endear me to those extolling the value of the PBS special on 401(k) fees. I am not indicating that the fees are not relevant- of course they are. But the video is indicative of the almost complete failure of consumers, the incompetency and corruption of the industry and regulators, and a piece of (essentially) fluff by PBS that did not address the true risks of investing. The piece leaves the impression that the real evil in 401k plans are the fees. No, they are not. It is the continuing level of incompetence by the regulators and other officials in getting adequate knowledge and capability to the advisors so that the advisors can educate the consumers on the risks of investing. Not just some sophomoric commentary on returns by a software package that compares what happened from 1929 or 1940 or 1969 et al that will be THE guide for the foreseeable future. I mean real life identification of what the products can do, what the risk of loss potentially could be and what to do when another economic impasse occurs. Lets first review some of the PBS players. The two industry retiree specialists interviewed (Prudential and JP Morgan) were so far out to lunch it was ludicrous. No idea of how the difference in fees worked over time; trying to differentiate fiduciary versus suitability. These two are paid hundreds of thousands of dollars in salaries (commissions???) and have the ethical and moral content of a gnat. Teresa Ghilarducci, author of Why the 401(k) is a Failed Experiment has some good criticisms of the 401k plans. But she notes this in her article, ...Talk to Chuck was a campaign that referred to a world in which you could actually have a partner and a trusted adviser for your financial products, just like you had a trusted teacher that helped you through your education or through your career. This is where this gets moronic- but is something the industry has the industry has imbedded into the best of the researchers- that of inherent competency. Since the issue comes up repeatedly in all industry and organizational rhetoric, lets first explore the knowledge base of a broker versus a fiduciary (RIA). Obviously there must be a major difference between the capability of the two since the fiduciary is required to only do the best for the client. Right?? Why??? First, the fundamentals of investing have never been taught to a broker. I taught many, many financial courses to a very diverse group of students- those for securities, real estate and insurance licenses; continuing education courses for same and including CPAs, attorneys et al. (As of this writing, I have the only two courses approved for Continuing Education of the California Bar (or any other state) for attorneys on the subjects of investments and insurance and annuities.) There is no instruction on correlation, standard deviation (if taught at all, it is universally wrong), diversification, risk etc. Never has been, is nothing now, and in view of the current regulatory focus, there will be nothing in the future. I have written (fought) with FINRA, SEC, NASAA, Mary Shapiro and more for almost 20 years to step up licensing education and that for arbitrators, etc. It has universally been that the industry would never allow it since it would reduce sales (true then and now). At
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an absolute minimum (addressed below) is that every investor know their potential Risk of Loss. But that is NOT possible since no broker has to know how money works. Nor do RIAs. (If you do not know how to use a personal financial calculator in the investment, insurance and annuities business, you cannot be a fiduciary. You cannot be a professional. You can be a fry cook at Dennys- just dont deal with financial products.) That is a real problem with Roper, Ghilarducci, Smith and PBS and on and on- they actually believe that a fiduciary has some mandatory knowledge of products and applications. No there isnt and never has been. Registered Investment Advisers have generally taken the inefficient Series 7 knowledge and used it to validate becoming an RIA. Generally, the focus competency is towards a designation- CFP or similar. And a CFP is what? Effectively one semester on money. Not a semester in investments, a semester on insurance et al. Just one semester on money. What about strictly fee planners? Say NAPFA. What about them? Many RIAs call themselves financial whatevers and journalists fall all over themselves extolling their virtues- just as the fee planners do themselves. Touting some moral high ground without competency in no way validates what happened in 2000 and 2008. It is mandatory to understand risk causation- and that involves local, national and international economics. But the insight to such material is not going to happen with one semester of effort. Note the comment about teachers above. Look, a teacher at least has a degree (generally) in teaching. (The traditional educational route to teaching at the elementary, kindergarten, middle or secondary school level is to earn a bachelor's degree from an approved teacher education program.) So what do our fiduciaries have? A Registered Investment Advisor is merely a registration with the SEC or state. It addresses ONLY investments. It is not retirement planning, insurance knowledge or much of anything else. There are many, many planners with a degree in planning. Use one with at least 10 years of experience and that has a life insurance license (the only way to stay current on life insurance and annuities.) This is not a panacea for success. However having at least 8 semesters of learning beats just one. Consumer Federation of Americas Roper- people claiming to offer advice are really salespeople with no such best interest obligation..... EFM- True. But it is also true that fee planners are also selling themselves. It is still marketing. And how does one have the best interest without mandatory knowledge? It is a scandal that this situation has been allowed to develop a scandal that can be laid directly at the feet of securities regulators who allowed brokers to rebrand themselves as advisers without regulating them accordingly. EFM-Partly true- It is not the regulation initially. It is that the SEC and every state regulatory agency is allowing a series 7's worth of knowledge to pass as something valuable. In doing so, the agents feel- and the lack of regulatory oversight and effort engenders- that they can pass themselves off as having the right to offer highly detailed reviews of products and situations where they do not have a clue. One thing that struck me as I was watching, however, is how ineffectively we appear to be enforcing the fiduciary duty where it does exist. We spend, and the show spends, a lot of time on the issue of fiduciary duty for advice to individuals, but the show also highlights how poor the investment offerings often are within retirement plans. But management of retirement plans is supposed to come with a clear fiduciary obligation. Why isnt it resulting in better plan options? EFM- What did you expect? You do not have a valid knowledge base. Never have had. And it will not become available until the requisite competency exists. Not going to happen. A fine example was this. I sent my book, Financial Planning, Fiduciary Standards under Dodd Frank to Labor Secretary Hilda Solis. Couple months later two staff attorneys called, said it was a breath of fresh air, yada, yada. But after a few more minutes of cursory talk, I asked what are you going to do about increasing education to the industry. They merely replied that if fiduciary was implemented, they would just wait for the law suits to happen and that would send a message to the industry. Well, there was a couple more years of my life wasted. Sent one to Borzi as well- never heard a word. I admit that the industry does not like what I wrote. Probably worse is that I doubt that any of the regulatory entities that received the book read it- or if they did try- were incapable of understanding it. Roper got one. Did not hear a word. One reason is that she- as well as most journalists- are closet acceptors/violators of fiduciary rules anyway. The issue- find a fee planner in California who is legal? I dare you. From a post in 2001 (not me) - Fee-Only Planners that have chosen not to follow CA L&D regulations: I understand their position to ignore this rule..............But currently, the CDI's position is clear: you are not following CA state regulations and should be subject to prosecution. It is unethical for you to chose what regulations you are not following without adequate disclosure. Anything less is hypocrisy. Do two wrongs make a right? NAPFA, CFP and FPA Boards: Your lack of backbone on this is issue is even more hypocritical. Perhaps as part of Practice Standards, Planners should have to disclose what regulations they chose not to follow.
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........... if one was to do the research on this issue, I do not know how anyone can come away with another feeling. Twelve years later with every valid journalist and financial magazine aware of said violations and nary a one cared. Its not just California. It covers about 35 states. Probably most can say they were unaware. Just like the PBS heavy hitters. The not knowing is called strategic ignorance. You can validate anything you want by moral egoism/situational ethics. It is very easy to rationalize being illegal, stupid et al. As long as it is OK for you, then it must be OK. Lastly we have the consumers. The PBS teacher noted that she was now on a path that might help her for retirement- she understood the risks she was taking. No she didnt. She couldnt. There is effectively NOTHING offered anywhere that defines what risk actually is- meaning conservative, moderate, aggressive, etc. If anything was needed for consumers, this is step one. Risk is how much you can lose. Not that you CAN lose but how MUCH you can lose. Every single 401k employee in the United States should have this number for the portfolios they are using. Will they get it? No. None of the brokers masquerading as advisors has any specific ability with a financial calculator. RIAs are the same. CFPs, CPAs, ChFCs, CFAs do but it is limited. Excluding CFAs and CPAs not acting directly as 401k advisors, and you still have no designations with a clue to how to address the real potential risk of loss. The full description is too detailed here- do some homework at my site (need to know how to use a power function). But the essence is that one can do a few keystrokes on a personal financial calculator (there are no calculators on the web to do this) and determine (hypothetically) how much money might be left in a portfolio after a hiccup in the economy/market (they are not the same). For example: If, after 10 years a major bad economy/market should occur, it may show that the portfolio would only have 60% of total assets left. Not 60% of any gain. 60% of the total holdings. A different portfolio allocation might show 40% left. And so on. Maybe having 80% left might be considered a conservative portfolio overall (there are NO set guidelines anyplace so the words themselves have no meaning- or mean something different for each person.) 60% left is moderate 40% left is aggressive and so on. This is mandatory for every investor worldwide (not just 401k accounts)- otherwise no one truly understands what risks they are actually taking. Almost every unique portfolio allocation can be compared to another. And another. And another. And no matter who does the calculation, they are all using pretty standard statistical inputs (i.e. standard deviation) from the likes of Morningstar. No more guessing, no more lies, no more confusion. (Yes there are caveats but are not addressed here.) So there you have almost the first key element to 401k investing. That a fund may be cheaper than another is valid- but it is the allocation of the various cheap funds that determines what the financial exposure is to the employee. Simple, useful, effective. So, will this work by itself over time in reducing extensive losses? Probably not unless by luck. The effort describes the potential magnitude of the LOSS but NOT the risks that can CAUSE the loss (causation). And here is where the PBS special did a dirty disservice to its viewers. John Bogle made clear statements that with the fees in line, the only thing that investors needed to do was buy and hold a basket of index funds through thick and thin, ups and downs. WRONG. (Admittedly he usually suggests a move to bonds as one gets older. OK- tell me what bond funds are viable now?) It is how much money you will have available when you retire. The losses of 2000 and 2008 have devastated retirements that will never recover. Such economic upheavals were known before the recessions hit via the inverted yield curve. The inverted curve has been a 100% correct indicator of an upcoming recession. It does not say when it will happen (average about 13 months), how long it will last nor how bad it will be. Recessionary losses (500 index) average 40%+. Losses in 2000 were 44%; losses sustained in 2008 were 57% top to bottom. So why did not advisors notify 401k employees of the potential hazard? Is that not a duty of a fiduciary? Or is to stand around and watch Rome burn??
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I estimated that there was an 85% chance of a recession in this decade and a 50% chance of two recessions. Bogle recently stated that he anticipated two 50% losses in the stock market in the next decade. That, I believe, is not a good investment. Try to tell that to younger investors- you put money into this account/portfolio/allocation I recommend but be aware there is a pretty good chance that you are going to lose 50% of all monies invested twice every decade. And when it happens, I am just going to tell you to sit there. I dont think so bunky. Of course the naysayers would say that is market timing with the potential to get out at the top and in at the bottom. No, it is risk melioration. All investing, I submit, starts with how much risk is being taken for every dollar anticipated. Admittedly the 1990s buried any thought of risk since everything went up. I disagreed when teaching and told students what would they do when the market did/might change similar to 1973/1974. Of course that was heresy. But at least I tried. But while real life sunk into some, advisors are not doing the homework to do better. At best is the use of all types of products that supposedly will hinder/control/stop another market loss. I disagree in that correlations will still go to one. Further, many of these new hedging products are untested. In essence, more investors are scared of the market- and rightfully so if the advisors are not doing the reading necessary to be professionals. So to all that either liked or dislike the PBS special, so what? It is the losses to be sustained on a woefully financially literate public (see research by Lusardi). The next recession will further destroy retirement planning because the consumer will now just hunker down further. Considering the added incapability of Washington with a budget, saving or investment, I dont really blame them It is possible to teach risk to 410k participants. You dont need a millions charts and futuristic returns like the Congressional Budget Office that shows no recessions for a decade. It is possible to address the causation but the depth of the analysis is beyond consumers. The problem is that it is unquestionably beyond the supposed fiduciary that has a series 7 or just one semester on money. NOTHING IN ALL THE WORLD IS MORE DANGEROUS THAN SINCERE IGNORANCE AND CONSCIENTIOUS STUPIDITY Martin Luther King Jr. Is there a product that can produce a return at an acceptable risk even in view of the market drops precipitously? Yes- it is called an indexed annuity. Are they available? Yes. Should you use one. Not a chance. The industry has layered them with fees and contractual elements that are so bizarre and confusing that it is impossible to figure out whos on first. Yet, properly developed, they could be used by most corporations, governmental agencies et al as the defacto investment- perhaps controlling them similar to a defined benefit pension. Not perfect- but what we are doing now sucks. Of course the mere thought of this is major heresy to the industry since it would kill sales of stocks and mutual funds by the billions. And I have no idea who would take on the effort to produce a low fee product. However it would solve a majority of the retirement issues looking forward. And it would allow workers to get on with their lives- albeit still with financial illiteracy. But they were screwed anyway and at least this gives them a chance. The focus on fees, ipso facto, was a waste of PBS film. 5/2: Risk= Lusardi Risk preferences A factor that affects how individuals make financial decisions is their attitude toward risk. This is an important determinant of portfolio choice and the type of assets into which people choose to invest their private and retirement wealth. The data show a strong aversion to risk among Americans, with 26 percent of respondents stating they are unwilling to take any risk at all (rating 1 on a 10-point scale), and a total of 45 percent exhibiting low risk tolerance (rating 1 to 3). * The
three things pregnant women dream most of during their first trimester are frogs, worms and potted plants. Scientists have no idea why this is so, but attribute it to the growing imbalance of hormones in the body during pregnancy.
5/1: Gaming the system?? Banks??? Oh reallY??
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Fed weighs tighter cap on ban0 le#erage

Federal Reserve officials are weighing a stricter cap on bank leverage, a move that would respond to increasing demands to constrain the riskiness of large lenders. According to people familiar with the matter, Fed officials have discussed increasing the amount of equity capital banks are required to hold, setting the bar higher than the 3 per cent of assets level agreed internationally. The move is being considered amid growing scepticism about the Basel III capital accords, which impose higher capital requirements on banks around the world but allow them to vary the amount depending on the riskiness of individual assets. Officials are concerned that some banks are gaming the system.
http://link.ft.com/r/9ULF66/YGM1IU/AMIF8/8Z04U2/873BAY/ID/h?a1=2013&a2=4&a3=30
5/1:
,1 ho"e ownership rate at near )5-year low

The share of the countrys population that owned their homes fell to 65 per cent in the first quarter, as property prices post gains
http://link.ft.com/r/IOCBMM/3CKGGR/FKJ1V/R3SLSE/A5U8D1/6C/h?a1=2013& a2=4&a3=30
5/1: Global slowdown???
4hina "anufacturing growth slows

Growth in Chinas manufacturing sector slowed in April, providing further evidence of weakness in the worlds second-largest economy. Chinas official purchasing managers' index dropped to 50.6 in April from 50.9 in March, indicating a slowdown in manufacturing activity that appeared to be driven mostly by a slump in new export orders.
http://link.ft.com/r/YIQXNN/1OWB8M/QNBVD/YBUOLD/ULWQO2/28/h?a1=2013& a2=4&a3=30
4/30: Shame- The 2011 Somali famine killed an estimated 260,000 people, half of them age 5 and under, according to a new report to be published this week that more than doubles previous death toll estimates1. The aid community believes that tens of thousands of people died needlessly because the international community was slow to respond to early signs of approaching hunger in East Africa in late 2010 and early 2011.
4/29:
Generation jobless
The number of young people out of work globally is nearly as big as the population of the United States
the number of young people without a job has risen by 30% since 2007. The International Labour Organisation reports that 75m young people globally are looking for a job. World Bank surveys suggest that 262m young people in emerging markets are economically inactive. Depending on how you measure them, the number of young people without a job is nearly as large as the population of America (311m). 1. 4/28: Earnings: the median wage of the average American maleemployed or nothas declined by $13,000 since 1969. Most of that drop is because of plummeting earnings among those with a high school diploma or less, something thats highly dependent on your parents. Evan Soltas examined the General Social Survey data and concluded that if your father didnt graduate high school, you are eight times more likely not to graduate high school yourselfa 22.2 percent chance, as compared to a 2.9 percent chance among kids whose fathers did graduate. 4/28: US economy grows 2.5% in first quarter
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The US economy grew at an annualised rate of 2.5 per cent in the first quarter of 2013 as disappointing figures were hit by another slide in federal defence spending. Defence knocked 0.6 percentage points off the total, following a similar decline in the fourth quarter of last year, suggesting that cuts to the military under sequestration are biting deep. Final sales of domestic product a measure that gives one of the best indications of underlying demand in the economy because it knocks out inventories rose by a fairly weak 1.5 per cent. The figures suggest that the squeeze on government spending may be having bigger than expected effects on the US economy, keeping it trapped in a pattern of steady but mediocre growth, despite a pick-up in the housing market. http://link.ft.com/r/9ULF66/4VDUAC/HYFTA/PFQRHF/SU54EW/ID/h?a1=2013&a2=4&a3=26
Dogs should not try to climb trees : 4/28 Diabetes: Treating Hypoglycemia
Hypoglycemia (low blood sugar or insulin shock) occurs when blood sugar level drops too low. If a person with diabetes takes too much insulin, exercises too much or eats too little food, hypoglycemia can develop. It can happen at any time, and with surprising suddenness. If not treated promptly, it can result in a loss of consciousness. Symptoms: Irritability Pale, moist skin Sweating Dizziness Rapid pulse
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Extreme hunger Shallow breathing Weakness Faintness Inability to concentrate Blurred vision Loss of coordination and mental confusion Headache Fatigue If you or your loved one experience any of these symptoms, you should immediately stop what you're doing and treat the condition fast. Treatment: Step 1: Your Body Needs sugar-And Fast Any fast-acting sugar will remedy the situation, juice, glucose tables, candy, even honey or syrup. Once you've taken some sugar, you should rest for five or ten minutes to let your body absorb the sugar. If you don't feel better by then, repeat the treatment. Important: If you still don't recover after this, call your physician immediately. Step 2: After an Insulin Reaction When the symptoms have subsided, it is essential to eat some more slowly digested food to prevent the high insulin level in the blood from causing another reaction. Milk, a peanut butter or meat sandwich, perhaps a piece of bread or fruit should be taken.
This information was provided by the Juvenile Diabetes Foundation International for more information call 1 800 JDF CURE 4/28: John Bogle Predicts Two 50% Declines in the Market Over Next 10 Years
4/28:Teresa Ghilarducci: Why the 401(k) is a Failed Experiment experts have actually analyzed the choices that people make. So one disturbing fact is that if people have 15 choices, they feel the most prudent thing to do would be to diversify their contributions it makes actually a lot of sense and they just put 1/15 of their contributions into all their funds. Or theyll ask their co-worker, So, buddy, what did you put your money in? Or they just may be in a good mood to put their money toward things that sound like growth, or they may be in a mood to put things in that more sound like value. 1. Theres really no guidance that employers provide, and that makes sense, because if employers provided guidance, theyd be on the hook if they provided the wrong guidance. So workers are really left on their own to choose among the Chinese menu, and because theres no regulation, theres often not a distinction about whether or not theyre even investing in a stock or a bond. And theres nothing on that Chinese menu that reveals the price of that product.
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Many middle-class workers are consuming a product that was once only a product that very rich people bought, and that was a personal adviser. The big difference is that the rich people would hire a financial adviser that had just a very high fee and knew a lot about taxes and estate planning. Now middle-class workers are getting a product where the adviser is really just a broker or a salesman, so it looks like the kind of product that rich people have, but its a very different product. 1. So when you hire a guy, or you have a financial broker, that guy is most often attached to a big financial company. Many people are getting their financial advice from an American Express adviser. Theyre getting their advice from somebody who they find in a small room at their local bank, who are selling products for their individual retirement account. Or theyre talking to a financial adviser thats connected to Charles Schwab or Fidelity or another mutual fund aggregator. And this guy works for that financial company, just like the person who sold you a car works for the dealer or for the auto industry. Now that guy and often its a gal does have some professional standards they have to meet. They have to pass a couple of licenses, and they have to know something about you not very much about you, but they want to know if youre a high-risk investor or you want a secure amount of money, and they probe you a little bit. Theres always the standard questions. Do you want to preserve your capital, or do you want to make as much as possible? And based on those questions, they have some rough standards about what kinds of products to put you in. But after that, everything they tell you is really not regulated.. EFM- the licenses do not require a knowledge of teh fundamentals of investing. There is absoultey nothing to determine the statistical risk exposure of an asset allocation And in any case, that needs further review. For example, many 'conservative' portfolios have bond funds. They are doing terrible. Supposedly they can help insulate a protfolio during high risk. B ut the risk for them is whenver the FED raises rates. I think the correlations for both stocks and bonds will hover around 1.0 and that means major losses. 4/28: (California Broker)
The Financial Industry Is Not Meeting Womens Needs

Sixty-two percent of women are interested in financial planning, retirement planning, and investing compared to only 35% in 2006. However, 70% of all women say financial information is hard to understand, up significantly from the 44% in 2006, according to a survey by Allianz Life Only 38% of women surveyed work with financial professionals. Thirty-eight percent of those who have a financial professional say their financial professional is not very responsive, and 40% say the professional doesnt seem to be interested in their personal situation. However, most women who see a financial professional say that the professional helps them earn better returns on their money and become more self-sufficient. More than 90% of women say they need to get much more involved in financial planning. Fifty seven percent say there are equally responsible for major investment decisions and retirement planning in their household. Women also say its important to feel engaged and to learn in a non-intimidating environment with other women. Despite a desire to connect, the Internet is the most popular source for financial information (54%), with financial professionals coming in at 39%. The top subject that women want to learn most about is attaining a retirement lifestyle. Women are also asking for simple-to-understand financial information over the Internet. For more information, visit www.allianzlife.com.
Americans Prefer Long-Term Financial Planning

Get-rich-quick strategies dont appeal to the large majority of Americans, according to a study by Northwestern Mutual. Three quarters of Americans say that long-term planning is more important than short-term performance. One-third say that their approach to future financial goals can be best described as slow and steady wins the race. Greg Oberland, Northwestern Mutual executive vice president said, On one hand, were seeing strong evidence that people are saving more. On the other, we know that half of all Americans have no long-term plan in place, and nearly a quarter are taking on more risk than they would prefer because they feel the need to play catch-up. People aged 55+ list the following as the best financial decisions they ever made: 40% Saved early. 40% Paid off a mortgage. 29% Bought real estate at a good price. 27% Invested heavily in my 401k. 22% Made sure their family would be protected. People aged 25 to 54 say the following would be the best decisions they could make in the coming years: 53% Start to save early
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52% Make sure the family is protected. 25% Rely heavily on the 401k. 20% Buy real estate at a good price.
4/25:
Im leaving my job. What should I do with my 401(k)? As high as the fees can be on funds inside a 401(k), they can be worse for Individual Retirement Accounts. Dont assume you will be getting the best advice from those offering advice via your companys plan administrator. A recent Government Accountability Office study discovered that all-too-many advice givers for the plans pushed exiting employees into their own proprietary financial products, instead of counseling them to either leave the money in place or roll it over to their new employers retirement plan.
4/25: PBS Frontline on 401ks You really missed a truly major problem: Re "Only 15 percent of advisers are fiduciaries advisers who by law must operate with your best interests in mind." Just who do you think these advisors are? You rail against brokers and commissions (generally justified) but then opt over to the use of 'advisors' who have no more valid knowledge than a broker- which is effectively nothing. Since I have taught securities licensing courses- the fundamentals of investing have never been taught to a broker. One wanting to charge a fee simply takes that 'knowledge' base (series 7 course) to apply as a registered investment advisor. Using a twit that charges a fee is still using a twit. Admittedly, the index funds are normally the best use of funds simply for the cost. But where were these great advisors for 2000 and 2008? Just telling everyone to stay pat, the market will come back. Probably true but one does not know how long it will take. Many retirees could be dead by then. One can say that the consumer is not very bright in taking out so much money as the market dove. "Sadly, a recent AARP study reported that 70 percent of mutual fund savers were not even aware that they were paying any fees at all" reflects a citizenry dumber than a post. But was not the 401k advisor/educator/fiduciary also charged with the hard work- if not the ability- to recognize not only fees but allocation risk and economic risk. If not, then we are back to a bunch of twits charging a fee for incompetency. As to allocation and economic risk- every 401k employee should have a statistical number identifying their OWN loss exposure if a hiccup occurs in the economy/market (though they are not the same). Is it done? No- not a one. Why? You have to know how to use a financial calculator and the power function. (Neither brokers nor advisors are required to have mandatory education with a financial calculator. Anyway, those that do use one essentially have no idea what the power function is anyway, Feel better now??) But in just few minutes the employee can see that if a recession occurs, they might only have 60% of their portfolio left. Can they handle a 40% loss?? Others might only have 40% left. Can they handle a 60% loss?? (2000 loss was 44% and 2008 was 57% top to bottom) Here is part of the problem overall however- the 401k educators are clueless to economic risk and the Congressional Budget Office shows no recession in this decade AND a return to a real 4% GDP. So you have stupid regulators effectively telling today's employees that the world will be OK once again. We WILL have a recession this decade- maybe even two. So then what? Charging low fees will be useless if a stock index fund loses another 50% in value- and I submit it will. The continued marketing of "trusted financial advisers" is a cop out to the necessary real world product application in very, very tough times. Useful education to the masses is possible and fees are one part. The Risk of Loss is of far greater urgency and unless it is tackled, you can kiss away a much greater retirement ability once the next economic debacle occurs. It should be soon considering the "quality of our politicians". Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013
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Strutt your stuff!!!!
4/25: 1. Risk Aversion Relates to Cognitive Ability: Fact or Fiction? Date: 2013-04-12 By: Andersson, Ola (Research Institute of Industrial Economics (IFN)) Tyran, Jean-Robert (Department of Economics, University of Vienna) Wengstrm, Erik (Department of Economics, Lund University) Holm, Hkan J. (Department of Economics, Lund University) URL: http://d.repec.org/n?u=RePEc:hhs:lunewp:2013_009&r=cbe Recent experimental studies suggest that risk aversion is negatively related to cognitive ability. In this paper we report evidence that this relation might be spurious. We recruit a large subject pool drawn from the general Danish population for our experiment. By presenting subjects with choice tasks that vary the bias induced by random choices, we are able to generate both negative and positive correlations between risk aversion and cognitive ability. Structural estimation allowing for heterogeneity of noise yields no significant relation between risk aversion and cognitive ability. Our results suggest that cognitive ability is related to random decision making, rather than to risk preferences. 4/25: 1. Honest on Mondays: Honesty and the Temporal Distance between Decisions and Payoffs Date: 2013-03
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By: Ruffle, Bradley (Ben Gurion University) Tobol, Yossi (Jerusalem College of Technology (JTC)) URL: http://d.repec.org/n?u=RePEc:iza:izadps:dp7312&r=cbe
distancing the decision task from the payment of the reward increases honest behavior. Each of 427 Israeli soldiers fulfilling their mandatory military service rolled a six-sided die
in private and reported the outcome to the unit's cadet coordinator. For every point reported, the soldier received an additional half-hour early release from the army base on Thursday afternoon. Soldiers who participated on Sunday (the first work day of the week) are significantly more honest than those who participated later in the week. We derive practical implications for eliciting honesty. *A 4/25:
We show that temporally
human head remains conscious for about 15 to 20 seconds after it has been decapitated.
More hard-up *ritons turn to food ban0s

The number of people in Britain receiving emergency food rations has more than doubled in the past year, data showed on Wednesday, as inflation eroded incomes and government spending cuts pushed hundreds of thousands into crisis
http://link.ft.com/r/P75VYY/YGM4Y3/C4Q3O/R39Q00/WHK72E/JY/h?a1=2013& a2=4&a3=23
4/24: Americas Federal Reserve is still printing money to buy bonds and has made it clear that it will not raise short-term rates at least until unemployment, now close to 8%, falls to 6.5%. At the Bank of Japan Haruhiko Kuroda, the new governor appointed by the stimulus-minded prime minister, Shinzo Abe, this week announced a new phase of monetary easing to hit an inflation target of 2%: bond purchases will be stepped up to double the countrys monetary base. The Bank of Englands mandate has been tweaked to allow rates to stay lower longer. Even the European Central Bank (ECB) may be inching towards greater boldness. The message from the rich worlds central banks is clear: the era of ultra-loose monetary policy is here to stay. 4/24: The Pension Benefit Guaranty Corporation today released an update of Finding a Lost Pension, a guide for people who think they have a pension, but who cannot find their pension plan or former employer to begin receiving their benefits. 4/23: Fall Prevention The lack of exercise is a critical issue. Humans do not like to exercise. Mostly old ones. 4/22: Government Spending Per Household Exceeds Median Household Income In fiscal 2010, according to numbers published by the Census Bureau and the Office of Management and Budget (OMB), net spending by all levels of government in the United States was $5,942,988,401,000. That equaled $50,074 for each one of the 118,682,000 households in the country. In that same year, according to the Census Bureau, the median household income was $49,445. That means total net government spending per household ($50,074) exceeded median household income (49,445) by $629... As recently as 2000, the relationship between government spending and household income was dramatically different. Data from the
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Census Bureau and the OMB show that in that year net spending by all levels of government was 3,239,913,876,000. That equaled $29,941 for each of the nations then 108,209,000 households. In 2000, the median household income was $41,990...
4/22: Closing the GDP gap
4/22
An Imaginary Recession Go back and look at the chart just above. Notice the shaded gray areas. Those are recessions. Now notice that there is not one decade without a recession, and most have two. Obama, the Senate, and the House all assume that we have vanquished the recession virus and will not experience that economic malady again in our near future. Can I get any of my readers to make a wager with me that the US will somehow get through the rest of this decade without a recession?
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4/21: CBO- Congressional Budget Office and a big fat joke
Read the fine print- we are lucky to get 2% GDP this year and they are projecting 4% for the next three years and averaging 3.7% from 2015 to 2018.
Are you kidding me??????????? Last year we were at a real inflation-adjusted growth rate of 1.7%.
4/21:
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Required Minimum Distribution Calculator

Use this calculator to determine your Required Minimum Distribution (RMD) from a traditional 401(k) or IRA. In general, you must begin withdrawing money by April 1 of the year following the year that you turn 70. In general, your age and account value determine the amount you must withdraw. Note that taxes may be due on distributions from a traditional IRA or 401(k). Do not include balances from a Roth IRA or 401(k). Note: Users whose primary beneficiary is a spouse more than 10 years younger must use the Joint Life Expectancy Table in IRS Publication 590, which will generally produce lower required distributions.
An engineer, a chemist, and an economist are stranded on a deserted island. They are starving, when miraculously they find a box filled with canned food. What to do? They consider the problem, bringing their collective lifetimes of study and discipline to the task. Being the practical, straightforward sort, the engineer suggests that they simply find a rock and hit the cans until they break open. No, no! cry the chemist and economist, we would spill too much food and the birds would get it! After a bit of thought, the chemist recommends that they start a fire and heat the cans. The pressure in the cans will force them open and the food will conveniently already be heated. But the engineer and economist object, pointing out correctly that the cans would likely explode and splatter the food all over the beach. The economist, after carefully studying the cans and reading the labels, starts scrawling a series of equations in the sand, which eventually cover the entire beach. After much pondering, he excitedly announces, Ive got it! Ive got it! as he points to the final equation. They ask him to explain, with their visions of finally getting a meal causing them to regard the economist with a new sense of respect. The economist clears his throat and begins, First, assume a can opener They then ate the economist. 4/21: Superbug= MRSA, kills more Americans each year than HIV/AIDS, emphysema, Parkinsons disease, and homicide combined only two new antibiotics have been FDA-approved since 2009, the IDSA reports, along with hundreds of drugs for other conditions. The average cost of bringing a new drug to market is $1.3 billion, 1. Forbes reports, and it can range up to $11 billion. It costs the same amount of money to develop a new drug that patients will take for the rest of their lives as it does to develop an antibiotic that patients might take for several days, Gram-Negative Bacteriathe Most Dangerous Superbugs 1. Gram-negative bacteria (so named because they dont turn purple during a lab test called the Gram stain test, while Gram-positive bacteria do) trigger a wide range of infections, including food poisoning, cholera, pneumonia, and STDs, according to the National Institutes of Health. Among the Gram-negative bacteria that have developed antibiotic resistance are: E. Coli, the leading cause of urinary tract infections (UTIs). There are reports of E. Coli infections in 37 states that are resistant to more than 15 types of antibiotics, including carbapems, which the CDC calls the last line of defense when all other treatments fail. Up to 50 percent of these infections are fatal. Klebsiella pneumonia, which causes many types of healthcare-associated infections, including pneumonia, UTIs, and bloodstream infections. The most deadly form is called CRKP (carbapenem-resistant Klebsiella pneumonia) and is resistant to almost all antibiotics. Neisseria gonorrhoeae, which causes the sexually transmitted disease gonorrhea, the second most commonly reported infectious disease in the US. Cases of difficult-to-treat super gonorrhea have been reported in the US and the CDC says its only a matter of time before there will be no treatment at all, meaning that the STD could actually be fatal, the Atlantic reports.
4/21: Literacy???? Japanese students advantage in terms of higher economic literacy largely arises because of their greater knowledge of the terminology and definitions used in personal finance, and much less from better comprehension or greater ability to apply their personal finance knowledge. While it isnt clear to what extent financial literacy is obtained through formal schooling already, the governments and education providers in New Zealand and the United States could potentially learn much from Japan, in terms of how young people engage with
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personal financial terms, and how they interpret their meaning. However, in order to meet the benchmark standard, all three countries should work harder on developing appropriate curriculum to support young peoples personal financial literacy, particularly in the areas of comprehension and application. 4/21: The Caregivers' Role in Rehabilitation By Sean Kenny
The ever expanding role of caregivers has grown by leaps and bounds in the last few years. Primary caregivers have always been extensions of their medical facility based counterparts, whether they are doctors, physiologists, nutritionists, or psychologists. The field of rehabilitative medicine is no different. There is a growing need for rehabilitative and therapeutic practice beyond the traditional medical setting. Even many health clubs are now providing several rehabilitative services once found only in the clinical setting. Caregivers are also in a unique situation to help administer rehabilitative prescriptions for their loved ones as part of the care team. Effective rehabilitation requires effective communication. Poor communication results in lost time in the rehabilitation process. By maintaining open lines of communication, problems can be minimized and eliminated more readily. Caregivers can insure there is an open and regular dialogue with the other health care professionals involved in their loved one's care. Along with the task of maintaining lines of communication, the caregiver's role may take the form of implementing some actual program exercises. Some of these exercises may include actively moving an injured limb through a range of motion, assisting in flexibility exercises or even applying manual resistance in strengthening activities. Occasionally testing and recording the progress of the activities are also common assignments given to caregivers. Many caregivers also find themselves in the role of motivator for their loved ones, helping them adhere to their therapy and program. Simply being present can help provide the accountability to keep patients progressing. For legal reasons, decisions in programming must be left to the medical professionals in charge of the case. But the caregiver is called upon to question decisions if they don't seem to make sense. Effective caregivers need to make sure their concerns and their loved one's concerns are understood and addressed. It is equally important to understand the strategy of the rehabilitative process and not deviate from the medically designed plan. Please make sure you are comfortable in this assistance role and feel confident you received ample training and supervision for any active role you may play in actual program assistance. Documentation of activities is frequently another caregiver responsibility. Report writing, exercise logs, updates, contracts, etc. are all valuable tools for recording and evaluating a program's progression. Make sure all reports are in a legible, orderly format for other health care personnel. Written documentation also proves invaluable should legal matters arise. Above all, caregivers must be sensitive to the individual needs of their loved one during the rehabilitative process. Patience and understanding are especially vital in rehabilitative relationships. Caregivers need to be familiar with their loved one's condition, medical terminology and treatment procedures. This will aid in communication and interactions with medical personnel. The more positive the environment and interactions, the more positive the outcomes. Rehabilitation Terminology To help insure effective communication throughout the rehabilitation process, here are some commonly used terms to describe certain conditions and exercises. This list is supplemental and in no way extensive. - See more at: http://www.caregiver.com/articles/caregiver/rehab_role.htm#sthash.AcgoUrg4.dpufActive-assisted exercise: Exercise in which the patient is helped through a ROM (see below) which they are unable to do by themselves. Active exercise: Exercise in which the movement is done entirely by the patient. Closed-chain exercise: Any exercise in which the exercising body segment is attached to a fixed surface such as a floor, requiring the entire limb to bear the resistance. An example would be squats for the legs. Coordination: The working together of various muscles in the execution of movement. Cross-transfer: A neurological phenomenon in which training the "healthy" limb provides strength increased in the immobilized limb. DAPRE: A program often used in rehabilitation. The abbreviation stands for "daily adjustable progressive resistance exercise".
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Flexibility: ROM possible in a joint or series of joints. Limited ROM exercise: Exercise in which the ROM is limited due to an injury or the bio-mechanics of the injury. Non-weight bearing exercise: An exercise in which the body weight is not borne by the lower extremities. Open-chain exercise: An exercise in which the end of the exercising body segment is not fixed to the end of a floor, wall, etc. and is freely movable. Leg extensions are an example of an open-chain exercise for the legs. Passive exercise: An exercise in which the patient is taken through a ROM by a therapist, caregiver or machine. Reconditioning: The restoration of pre-injury or pre-deconditioning levels of physical fitness through a program of prescriptive therapeutic exercise. ROM: An abbreviation for range of motion. This is the measurement of the range that a limb moves through space around its joint. Rehabilitation Strategies Regardless of why your loved one needs a rehabilitation program, the goal of the therapy is to help restore levels of fitness to the pre-injury state or better. In cases of chronic illness or disability, programs focus on improving the quality of life and comfort. To achieve this, many techniques can be employed depending on the therapeutic goals and objectives. Before programming begins however, testing of functional capacity is normally done to establish baselines and future progression. The areas tested can be muscular strength, power, endurance, flexibility and range of motion. Some of the devices used include: calipers, isokinetic instruments, goniometers and dynamometers. After testing, therapeutic exercise programming and selections begin. The basic program structure allows for a warm-up prior to activity, the reconditioning exercises, then concluding with a cool-down period. - See more at: http://caregiver.com/articles/caregiver /rehab_role2.htm#sthash.o0HtWAEb.dpuf Most rehabilitation programs are geared towards progression. In regards to resistance training and strength improvement, one of the most commonly used programs is the Daily Adjustable Progressive Resistance Exercise (DAPRE) system. This is a four set exercise program (the first two sets are progressive warm-ups) that take in to consideration the daily variations of a patient's strength levels. Resistance can be applied through weights, machines, latex bands, or manually by the caregiver or therapist. Another common exercise prescription for strength improvement is isometric exercises. An isometric contraction is when the muscle is neither shortened or lengthened, merely contracted and tensed. Tension is generated, and energy is released in the form of heat, not mechanical work. Pushing against an immovable object such as a wall is an example of isometric exercise. These are especially valuable to a patient who needs to exercise an immobilized limb or when joint motion is hindered by inflammation. Instead of using repetitions to measure work, "seconds of contraction" are the units in isometric programming. Flexibility drills, active-assisted exercise and limited ROM exercises are also frequently employed by the therapist and introduced to the caregiver. Muscle Function Below is an example of a few of the major muscle groups that are targeted by rehabilitation programs. You can see how conditioning each area can improve one's quality of life. The person in this example is wheelchair bound (paraplegic).
Muscles Strengthened Functional Benefits Shoulders, deltoids (anterior, Self-care, loading/unloading wheelchair, posterior), trapezius. lifting objects, wheelchair sports. Biceps Transfer activities such as repositioning legs. Rotar Cuff (supraspinatus, Transfers, pressure relief, counteract subscapularis, infraspinatus, tight internal rotors from wheelchair teres m.). propulsion. Triceps Transfers, wheelchair propulsion. Chest (pectoralis major). Wheelchair propulsion, driving and braking. Back (latissimus dorsi, rhomboids, posterior deltoid) Pressure relief, transfers, pulling activities.
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- See more at: http://caregiver.com/articles/caregiver/rehab_role3.htm#sthash.040Cup6w.dpuf 4/18: Ultra low rates: THE low-rate world was not meant to last. In 2008-09, when central banks slashed short-term rates close to zero and started buying bonds to push down longer-term rates, everyone assumed these extraordinary measures would soon be unwound as economies recovered. 1. But the extraordinary has become the norm. Americas Federal Reserve is still printing money to buy bonds and has made it clear that it will not raise short-term rates at least until unemployment, now close to 8%, falls to 6.5%. At the Bank of Japan Haruhiko Kuroda, the new governor appointed by the stimulus-minded prime minister, Shinzo Abe, this week announced a new phase of monetary easing to hit an inflation target of 2%: bond purchases will be stepped up to double the countrys monetary base. The Bank of Englands mandate has been tweaked to allow rates to stay lower longer. Even the European Central Bank (ECB) may be inching towards greater boldness. The message from the rich worlds central banks is clear: the era of ultra-loose monetary policy is here to stay. 4/18: Bogeheads on risk You are all dancing around risk. It is this, it is that- yet not a one of you simply indicates that any portfolio can be statistically identified to potential losses if the economy/market (they are not the same) take a hit. You take any valid allocation and divide up the SD into the appropriate increments. Divide this by the square root of the number of years the allocation will be held. for example, a 30% SD held for 9 years gives a SD of 10%. Doesn't mean much to risk since it "suggests" that SD/risk goes down. Bunk To find the amount you would have left at the end of 9 years, you take 1- the 9 year Sd to the 9th power. If it says 43% left- can you therefore accept a 57% loss. Or 60% left- can you accept a 40% loss. that is how it is done. (The are no industry standards for conservative, aggressive, moderate so they are useless terms) Remember that 2000 was a 44% loss and 2008 was a 57% loss top to bottom (that is just a pure S&P fund). That is a Risk of Loss and ends the sophomoric rhetoric. As to rebalancing- it does not, can not reference risk. If you did not know the correlations going in (and you didn't) then you assuredly are clueless to the correlations at the time of rebalancing except by luck (I am excluding individual situations- deaths, etc) As to risk overall and the potential impact- it is the economic risk. The 2000 recession was preordained by knowing certain economic measures. They are not taught to brokers, CFPS, small furry animals or much else. Same with 2006 and the forthcoming recession. Doesn't say when it will start (average is a year plus), how long it will last not how bad it will be. (Average recession was 40%+ loss) Cannot use certain factors anymore due to extremely low interest rates. But you have the sequester, rising rates at some point, Europe sucks, Japan still kind of sits there, China is slowing(?), etc. Should see a major correction by mid year. Can I be wrong about returns? Sure. But I will not be wrong about risk. and risk of loss is what I start with since the consumers are clueless to risk overall and there is NO form or client questionnaire that specifically identifies what losses one might expect. There is a duty to inform consumers Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013 4/18: 1. Personal Financial Literacy Among High School Students in New Zealand, Japan and the United States Date: 2013-03-25 By: Michael P. Cameron (University of Waikato) Richard Calderwood (University of Waikato) Ashleigh Cox (University of Waikato)
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Steven Lim (University of Waikato) Michio Yamaoka (Waseda University) URL: http://d.repec.org/n?u=RePEc:wai:econwp:13/04&r=cbe Personal financial literacy is becoming increasingly important in the modern world, especially for young people. In this paper we compare financial literacy of high school students in Hamilton, New Zealand, with samples from Japan and the United States. We compare not only overall financial literacy, but also literacy across five dimensions (or themes) of financial literacy, and across three cognitive levels. We find that financial literacy is poor overall in all three countries, but is substantially worse in New Zealand and the United States than in Japan. The performance is similar across themes and cognitive levels for U.S. and New Zealand students, but Japanese students perform better mostly in terms of their greater knowledge of terminology and definitions, rather than better comprehension and ability to apply their knowledge. This suggests that all three countries should work harder to develop the financial li teracy of their high school students. Being financially literate provides the best chance of making effective financial decisions and minimising the likelihood of being misled and facing financial problems (Marcolin and Abraham 2006). Such literacy has been noted as a core consumer skill (Atkinson and Messy 2012) and is particularly important in difficult times, when people are more vulnerable to getting themselves into monetary troubles (Borodich et al. 2010). Not only does poor financial literacy impact adversely on personal financial affairs, but it has been cited as one of the aggravating factors associated with the global financial crisis (see, for example, Gerardi et al. 2010). 4/18: 4/18: Housing"The days of historically high levels of housing affordability are numbered," said Zillow Chief Economist Stan Humphries. "Current affordability is almost entirely dependent on low interest rates, and there's no doubt that rates will begin to rise in the next few years." Rates will rise because the Federal Reserve will inevitably have to get out of the business of buying agency mortgage-backed securities, which currently drives down rates. This won't happen immediately, but it will in the next two to three years. That will directly affect home buying demand, because without dramatic income growth, potential first-time buyers will see monthly payments as too big of a chunk to pay. Meanwhile potential move-up buyers will not want to let go of their fixed low rates, and that will be a disincentive to move.
4/18: the Australian Securities and Investments Commission (ASIC) announced it would delay its work on financial planner education (at least while the Future of Financial Advice reforms were being implemented), the TPB released an 1. exposure draft outlining its own requirements for planners who provide advice with tax implications, including in areas such as superannuation. If financial planners wish to keep providing advice with tax implications after 1 July, they will have to be registered with the TPB and comply with the set requirements as part of the Tax Agent Services Act (TASA). According to the draft, advisers would have to have successfully completed a TPB-approved course in Australian tax law and engaged in the equivalent of two years of full-time relevant experience in the preceding five years. The two-year period is reduced to 18 months if a planner holds a TPB-approved tertiary degree relevant to tax advice, and to 12 months if they are a voting member of an 'adviser tax association.
4/17: Treasuries back on investors buy lists
The message from bond yields and lower commodity prices is one of slower growth and potentially deflationary forces are again looming over the economy
http://link.ft.com/r/BLH300/NRBKOZ/VL0M9/XH35RM/A5PA3M/OS/h?a1=2013&a2=4&a3=15 4/17: the term financial literacy. 1. Literacy suggest some sort of deficit, and that turns people off particularly when youre dealing with an issue like money, says Brimble. Money is a very sensitive issue because it attaches to peoples self esteem and social standing or at least their perception of it, he says. In the UK and parts of Europe they use the term financial capability, which refers to the ability to use the information one has to make sound financial decisions,
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4/17:
,. pension deficits set to rise by 6)!!bn

Shortfalls increase despite rise in share and bonds markets because low interest rates reduce amount by which liabilities can be discounted
http://link.ft.com/r/19JYUU/EKFCEQ/08ZKN/YBPM97/XBKP2R/RF/h?a1=2013& a2=4&a3=15
EFM- we are just as bad if not worse A low-interest-rate environment is wreaking havoc with corporate defined benefit plans, according to a new study from Wilshire Consulting. Wilshire, based in Santa Monica, Calif., found that 94% of pension plans are underfunded. "The $282.3 billion funding shortfall at the beginning of the year expanded to a $342.5 billion deficit," Russ Walker, vice president, Wilshire Associates, said in a statement. Defined benefit pension assets for S&P 500 Index companies increased by $113 billion, from $1.11 trillion to $1.22 trillion, while liabilities increased $174 billion, from $1.39 trillion to $1.56 trillion. The median corporate funded ratio is 76.9%, which represents a modest decline from 77.7% last year. The defined benefit plans in Wilshire's study yielded a median 11.8% rate of return for 2012. This performance combines with the 3.6% median plan return for 2011, the 11.9% median plan return for 2010 and the 16% median plan return for 2009 to mark four consecutive years of gains for these plans after the global market dislocation events of 2007 and 2008. 4/17: How financially capable are Americans? If people are ill-equipped to make financial decisions, there can be consequences for the individuals themselves and for the economy as a whole. A new survey fielded in the summer of 2009 provides timely insights on this important topic. Financial capability is measured in terms of how well people make ends meet, plan ahead, choose and manage financial products, and possess the skills and knowledge to make financial decisions. The findings from this survey paint a troubling picture of the state of financial capability in the United States. The majority of Americans do not plan for predictable events such as retirement or childrens college education. Most importantly, people do not make provisions for unexpected events and emergencies, leaving themselves and the economy exposed to shocks.
4/17: Housing- perhaps housing, as a credit-driven sector, is inherently bubbly. Karl Smith has 1. made this point. Rising home values can make both lending and borrowing more attractive, encouraging more people to buy first homes or sell old ones and buy new ones. In housing, in other words, rising prices can increase demand, at least for a while. The same dynamic occurs on the way down; falling prices make people reluctant to enter the market and cause lenders to tighten credit standards, reducing overall demand. Meanwhile, supply responds on a lag. Construction may ramp up during the boom, but it also collapses during the bust, during which time population continues to grow. Eventually, supply tightens enough to raise rents and prices, touching off another boom. Unless, that is, credit standards are prevented from tightening and loosening in a pro-cyclical manner, or unless supply can be made to respond quickly and substantially enough to dampen the price spiral.
4/17: States Ranked Most and Least Likely to Engage in Five Key Measures of Financial Capability
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4/17: there go the coastlines worldwide The summer ice melt in parts of Antarctica is at its highest level in 1,000 years, Australian and British researchers reported on Monday, adding new evidence of the impact of global warming on sensitive Antarctic glaciers and ice shelves. Researchers from the Australian National University and the British Antarctic Survey found data taken from an ice core also shows the summer ice melt has been 10 times more intense over the past 50 years compared with 600 years ago.
If Wolverine was a cat
4/17" Liar, liar
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Building on earlier experiments, they got 312 pairs of students to participate in a game of sending and receiving money in which dishonesty was more profitable than honesty. Who would prove the more honest? Of the 85 men who took part, 55 percent lied to secure a higher payoff. Of the 71 women who took part, only 38 percent lied. This is statistically significant. There was no gender difference in trust. It is important to emphasize that, in this game, everyone was anonymous -- no one knew anything about the other participant. This suggests that decisions about whether to lie derived only from a choice about whether falsifying the truth might lead to a windfall. In more personal circumstances, results may differ because other issues are involved, such as maintaining a reputation, appearing selfless or not wanting to hurt some else's feelings.
4/16: The global economy is stuck in a rut, unable to sustain a decent recovery and susceptible to a sudden stall, according to the latest Brookings Institution-Financial Times tracking index of recovery. Despite strong financial markets and confidence returning to business and consumers in emerging economies, overall indicators of
growth have hardly budged since mid-2011, since when repeated tentative upswings have always been snuffed out by weak data and renewed stress in the eurozone. EFM- the U.S. will have a tough time with more unemployment caused by the sequester. It is being noted right now.
4/16: Australia: In the face of the industrys preoccupation with the implementation of the Future of Financial Advice (FOFA) reforms on 1 July, efforts by the regulator to raise the bar on financial planner education appear to have taken a back seat. 1. The Australian Securities and Investments Commission (ASIC) closed submissions for Consultation Paper (CP) 153: Licensing: Training and assessment framework for financial advisers on 1 June 2011, and since then the silence has been deafening. CP153 proposed three main initiatives to raise the bar on financial planner education: a national adviser certification exam; a 12-month supervision period for new advisers; and a knowledge update review to be taken within a new advisers first two years and every three years thereafter. 4/15: Portfolio Optimization Theory Versus Practice - In the Journal of Financial Planning, Roy Ballentine takes an interesting look at the theory of portfolio optimization versus its practice, highlighting gaps between what modern portfolio theory suggests should be done and how the real world works, and how to reconcile the two with a better portfolio construction process going forward. The starting challenge is that the theory assumes the characteristics of asset classes are well defined and stable, although in reality we often disagree about what even constitutes an asset class, and the compositions seem to shift over time (for instance, are hedge funds even an asset class, or what constitutes "emerging markets" and at what point is China no longer one?); there's also not always agreement about what index or benchmark effectively represents an asset class. Classic modern portfolio theory also assumes that expected return and risk parameters are all that matter, but not taxes, liquidity, cash flow, and other real-world concerns that planners routinely take into account. In addition, it's difficult to determine appropriate investment expectations, especially since optimization tools are highly sensitive to inputs; in turn, this means investors may not even prefer the "most efficient" portfolios, if they were produced with an unconstrained optimization process that may be overly reliant or sensitive to a few key assumptions. The list of criticisms goes on and on, and at the end Ballentine suggests an alternative approach that is less reliant on the science of MPT, and instead wraps portfolios deeper around client needs and goals. For instance: adapt the portfolio to whatever risks the client is concerned about (which may or may not be standard deviation); what kinds of worst-case risks would the client have witnessed historically and can they afford those risks; what is the broad investment outlook for major asset classes, and which ones still belong in the portfolio; what alternative, unexpected scenarios could occur, and how does the portfolio fare if it is "stress tested" through that; and what other issues will/could/should drive investment selection for a particular client, from taxes to liquidity to other concerns? The ultimate point to all of this: clients and advisors may be relying too much on the mathematics and science of optimization techniques, and not enough to the art - in the form of experience, judgment, skill, and even luck - of how to best apply it. EFM- RE "For instance: adapt the portfolio to whatever risks the client is concerned about (which may or may not be
standard deviation)" I really do not understand the stupidity of such statements. Does anyone remotely believe that a consumer knows their risk= conservative, moderate aggressive et al? Cannot since there are no guidelines to the loss expected when things go bad. That's because the brokers do not know because the industry has never set standards. And the idea of putting in "which may or may not be standard deviation" is just plain wrong. It is the risk of loss. Readers already know how that is done- if not do some homework here. As to the actual probability of losing monies- it is based on national and international economics. Both 2000 and 2008 could/should have been mitigated by around 80%. 401k providers/instructors did not have the competencybut why that might be a surprise with only a series 7 knowledge base................ This is how it is done. Does that make it perfect? Not in my mind because I am constantly examining the conclusions I have made. Right now I am still focused on market returns that seem so far beyond reality that they do not make
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sense. They should have a major correction. Will I be right? Six months will tell. The essence is this however. Even if I am wrong about returns. I am right about risk. And risk of loss and economic risk is where the investment process begins.
4/15: Retirement: Confidence in financial preparations for retirement dropped to 37 percent this year from 44 percent in 2011, the first year IRI did a Retirement Confidence survey. The press conference highlighted the study, which also showed 61 percent of Baby Boomers do not see their financial situation improving in the next five years. 4/14: How I would love to get 7.5% In June of 2012, Calpers lowered the expected rate of return on its portfolio to 7.5% from 7.75%. Mr. Milligan suggested 7.25%. Calpers had last dropped the rate in 2004, from 8.25%. But even the 7.5% return is fiction. Wall Street would laugh if the matter weren't so serious. And the trouble is not just in California. Public-pension funds in Illinois use an average of 8.18% expected returns. According to the actuarial firm Millman, the 100 top U.S. public companies with defined benefit pension assets of $1.3 trillion have an average expected rate of return of 7.5%. Three of them are over 9%. (Since 2000, these assets have returned 5.6%.) Who wouldn't want 7.5%-8% returns these days? Ten-year U.S. Treasury bonds are paying 1.74%. There is almost zero probability that Calpers will earn 7.5% on its $255 billion anytime soon. The right number is probably 3% 4/14: 1. Self-Image and Strategic Ignorance in Moral Dilemmas Date: 2013-03-15 By: Grossman, Zachary van der Weele, Jol URL: http://d.repec.org/n?u=RePEc:cdl:ucsbec:qt0bp6z29t&r=cbe Avoiding information about adverse welfare consequences of self-interested decisions, or strategic ignorance, is an important source of corruption, anti-social behavior and even atrocities. We model an agent who cares about self-image and has the opportunity to learn the social benefits of a personally costly action. The trade-off between self-image concerns and material payoffs can lead the agent to use ignorance as an excuse, even if it is deliberately chosen. Two experiments, modeled after Dana, Weber, and Kuang (2007), show that a) many people will reveal relevant information about others' payoffs after making an ethical decision, but not before, and b) some people are willing to pay for ignorance. These results corroborate the idea that Bayesian self-signaling drives people to avoid inconvenient facts in moral decisions.
4/14: 1. Analyst Forecast Revisions and Overconfidence Date: 2013 By: Jean-Sbastien Michel J. Ari Pandes URL: http://d.repec.org/n?u=RePEc:lvl:lacicr:1305&r=cbe We find evidence that supports the notion that analysts who provide extreme forecast revisions are overconfident, especially in assessing the earnings prospects of high information uncertainty firms. We further examine whether analyst overconfidence is associated with stock market performance, and find that a portfolio of extreme forecast revisions underperforms a portfolio of modest forecast revisions in high information uncertainty firms, but not in low information uncertainty firms. Finally, we find that experienced analysts are more overconfident than inexperienced analysts, particularly for high information uncertainty firms, suggesting that analysts do not reduce their overconfidence bias by learning from experience. 4/14: 1. Personality Traits and Economic Preparation for Retirement Date: 2012-09
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By: Michael D. Hurd (RAND) Angela Lee Duckworth (University of Pennsylvania) Susann Rohwedder (RAND) David R. Weir (Survey Research Center, University of Michigan) URL: http://d.repec.org/n?u=RePEc:mrr:papers:wp279&r=cbe This paper assesses the effects of personality traits on economic preparation for retirement, wealth accumulation, and consumption, among persons 66 to 69 years of age. Among the five chief personality traits of neuroticism, extroversion, agreeableness, conscientiousness, and openness, we focus most on conscientiousness. We find levels of adequate economic preparation for retirement ranging from 29 percent to 90 percent and that conscientiousness positively affects the proportion of persons adequately prepared for retirement, while neuroticism negatively affects it. Both consumption and wealth increase with conscientiousness but wealth increases faster, indicating that more conscientious persons save more out of retirement resources. 4/14: Personality Traits and Economic Preparation for Retirement Big five- The Big Five taxonomy of personality traits, encompassing neuroticism, extroversion, agreeableness, conscientiousness, and openness, is now widely accepted as describing the organization of personality at the broadest level of abstraction. 4/14:
Record in#est"ent planned for 7orth 1ea

Record levels of investment will flow into the North Sea this year as 14 new oilfields come into production, triggering a historic rise in oil and gas output after more than a decade of decline
http://link.ft.com/r/19JYUU/SU0D3O/PFHCK/SPS0CA/WHXN47/XL/h?a1=2013& a2=4&a3=12
4/14: A planner sent me a very derogatory email calling me every name in the book since I had professionally commented on a blog he did. He is a CFP and a memeber of NAPFA. He did a fluffy piece going to professionals showing a standard deviation chart and that it was not necessarily risk. He also noted that consumers are afraid of losing money. What is the point to such drivel? To suggest that SD is not necessarily the best descroption of risk without addressing the implications is a waste of time. Tell the reader, 'why'? To suggest that consumers don't like risk without addressing the statistical risk of loss................... He said he did not want to get too technical. But the real reason is he did not know why SD cannot be used as risk and he had no clue to how to calculate the statistical risk of loss. SD is not risk since SD goes down over time. Risk goes UP over time. Risk of loss is how much you could lose if there was a hiccup in the economy. Risk overall is what the national and international economics are doing to the world. (Sometimes you can include 'local'- say for indivudal real estate). Right now, the risk is high- the sequester will increase unemployment and slow down the economy to well below 2% GDP. However, few are paying too much attention to the impact and the market is going up based on ..........marketing. Can it continue this way? Sure, look at the DOTCOM. Made no sense but momentum investing allows stupid valuations. But our national economics is going to take a hit. I think sooner than later. The U.S. cannot live on the huge deficits we have built. 4/14: 1. How to Improve Economic Understanding? Testing Classroom Experiments in High Schools Date: 2013-02-15 By: Gerald Eisenkopf (Department of Economics, University of Konstanz, Germany) Pascal Sulser (Department of Economics, University of Konstanz, Germany) URL: http://d.repec.org/n?u=RePEc:knz:dpteco:1304&r=cbe We present results from a field experiment at Swiss high schools in which we compare the effectiveness of a classroom experiment against conventional economics teaching. We randomly assigned classes into different teaching environments or a control group. Our results suggest that both teaching methods improve economic understanding considerably in contrast to classes without prior training. We do not observe a significant overall effect of the classroom experiment, but more able students benefit from the experiment while others lose out. Furthermore there is no robust impact of economic training on social preferences, measured as both individual behavior in incentivized decisions or political opinions.
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4/14: GAO researchers said they were told by industry experts that: Participants think that they have received investment advice from their service providers that is solely in the participants best interest, even though they may not actually be receiving such advice. Service providers use their Web sites and call centers, including making outbound calls to plan participants, as a means of marketing their firms retail IRA products and steering participants into them. When taking a distribution, participants may be steered first into a providers IRA product, and if they opt out or decline that rollover option, they are then directed to a portal sponsored by the same provider where participants can access other companies IRA platforms, for which the service provider receives some compensation if a participant chooses a companys IRA through that portal. In addition to marketing their products, service providers may offer their call center representatives financial or other incentives for asset retention when separating plan participants leave their assets in the plan or roll over into an IRA at the firm.
4/11:
8%pplication fraud9 on the rise

Mortgage application fraud rose for the sixth successive year to a record high of 38 in every 10,000 applications, up 9 per cent from 2011, according to a report
http://link.ft.com/r/EB8122/HIPU6N/7AKSH/4CBAL1/1OEJEL/4O/h?a1=2013& a2=4&a3=9
4/11: PayinA a Bine# 6ut Not A5mittinA Guilt

he !.%<s practice of allowing firms to pay huge fines to settle civil cases without ac0nowledging wrongdoing doesn<t sit well with those who want companies to own up to their misdeeds.
A#osted on April (', '(*5B
http9$$0nlg.net$Ibsa2J
4/10: No Mas- 57 percent of American workers currently have less than $25,000 in total savings and investments (excluding the value of their homes) put aside for retirement. In 2008, that number was 49 percent. As a result, almost 50 percent of the nations workers are either not too confident or not at all confident that they will have sufficient resources to cover the bills in their retirementwhile many who are feeling a bit better about the future may just be kidding themselves." "Soon, millions of Americans will more fully understand the dreadful price to be paid for having backed the wrong horse as the country is left to deal with a serious senior crisis brought on by two generations of employers unwilling to properly compensate workers for their contributions and public policies that rewarded this greed."
4/9: Returns- According to Longboard Asset Management, from 1983 to 2007, 40% of stocks were unprofitable, 19% lost at least threequarters of their value, 64% underperformed the market, and 25% were responsible for all the market's gains. 4/9: Financial Literacy: There is a problem with this well-intentioned effort to teach youngsters personal finance: Educators havent found an approach that clearly works. 1. I wish it werent true, but it is, said Lauren Willis, a professor at Loyola Law School in Los Angeles who has published several papers on the subject. Math matters, but these financial education programs do not. Repeated research has shown that classroom
personal finance instruction does not translate into financial literacy or wiser financial decisions. Students dont remember what they learn, and the lessons become outdated too quickly. ..................In 2000, Mandell started asking students he surveyed whether they had taken a semester course related to personal finance, to see if those who had were answering more questions correctly than their peers. The results were dismal. 1. There was zero difference, Mandell said. We did this for five separate national studies of high school seniors, and we found no difference. Among college students, those whod taken a high school class did no better than those who had not. Even college classes in personal finance, business and economics failed to
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register a statistical benefit. Instead, what predicted smart financial decisions was analytical skills and problem-solving ability. Engineering and science majors performed the best.
Educators have not found an effective way to teach financial literacy in the classroom, but they have learned a few things. Games and competition help. So do basic skills on how to find information, and so do parents.
Like anything, if its not reinforced at home, it goes out the window,
4/9:
Millionaires: Take $80 Million In U.S. Jobless Aid

The U.S. government paid almost $80 million in unemployment benefits during the worst of the economic downturn to households that made more than $1 million, including a record $29.9 million in 2010, 4/9:
401(k) Equity Exposure Down from 2006, Up from 2008

NAPA Net Staff
At the end of 2012, 401(k) participants had allocated 36% of plan assets to diversified equities, 21% to money market funds and 13% to company stocks, according to a new study by Spectrem Group. Current equity exposure is 10% below 2006 levels, when investors allocated 40% of 401(k) assets to diversified stocks, 19% to company stocks and 16% to money market funds.
4/8: Retirement A Boston College economist, Alicia H. Munnell, and her colleagues have estimated that more than half of Americans are saving too little to support an adequate lifestyle if they plan to retire at 65. Why is the situation so serious? One reason is that traditional pension plans in which employees have almost no decisions to make are being supplanted by defined-contribution plans like 401(k)s. In these plans, employees have to decide for themselves how much to save and how to invest their money. For many people, being asked to solve their own retirement savings problems is like being asked to build their own cars. 4/8: Of course, all they grow up there is ice
Canada Sheds Jobs in MarchA2

The Canadian economy posted its biggest one-month job loss in more than four years last month, and the unemployment rate rose to a four-month high
4/7: Household Saftey checklist GREAT!!!!!!
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Aye, maties 4/7: Up Close It Feels Dangerous: 'Anxiety' in the Face of Risk April 2013 Number 610 JEL classification: D01, D03, D81, G02, G11, G12 Authors: Thomas M. Eisenbach and Martin C. Schmalz Motivated by individuals' emotional response to risk at different time horizons, we model an 'anxious' agent--one who is more risk averse with respect to imminent risks than distant risks. Such preferences describe well-documented features of 1) individual behavior, 2) equilibrium prices, and 3) institutions. In particular, we derive implications for financial markets, such as overtrading and price anomalies around announcement dates, as well as a downward-sloping term structure of risk premia, which are found empirically. Since such preferences can lead to dynamic inconsistencies with respect to risk trade-offs, we show that costly delegation of investment decisions is a strategy used to cope with 'anxiety.' 4/7: Literacy survey- 40 percent of adults have a budget and closely track their spending. In other words, 60 percent don't use a budget. Only 32 percent of those polled spend less on living expenses now than they did last year a steady decline since 2009's 59 percent level. At the same time, 27 percent said they now spend more than they did a year ago. About 71 percent pay all bills on time and have no debts in collection a 7 percent improvement from 2012. Similarly, the percentage of adults who do not pay all bills on time has decreased, from 33 percent in 2012 to 26 percent in 2013. 37 percent carry credit card debt from month to month a 7 percent decrease since the question was first asked in 2009. Insufficient savings tops the list of financial worries, with 43 percent most worried that they don't have enough emergency savings, and 38 percent worried they'll retire with inadequate savings. In fact, a whopping 31 percent say they currently save nothing for retirement. When asked where they learned the most about personal finance, the largest number (33 percent) said from their parents; yet 78 percent
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agree that they could benefit from advice and answers to everyday financial questions from a professional. 4/7: Maybe we are coming back to earth now
,1 adds just 55:!!! jobs in March

The US economy added just 88,000 new jobs in March, a reading sharply lower than economists expectations that is bound to raise concerns the labour market is entering a soft patch amid federal budget cuts. According to data released on Friday by the labor department, the US unemployment rate ticked down to 7.6 per cent as the size of the US labour force showed a stiff decline. Government employment fell by 7,000, offering evidence that austerity at the federal level was setting in gradually. But jobs in the private sector were much harder to come by than in February, with manufacturing losing 3,000 jobs, construction gaining 18,000 and retail losing 24,000.
http://link.ft.com/r/R5WAEE/PN815D/IINHZ/TUJP1B/XBKXVI/CM/h?a1=2013& a2=4&a3=5
4/7: $700 Million in Katrina Relief Missing more than 24,000 homeowners who received grants of up to $30,000 to elevate their homes either misspent or pocketed the money.
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4/4: Alzheimers- 35.6 million people worldwide have Alzheimers disease. Unless a cure is found, ADI projects this number will increase
to 115 million people by the year 2050. In 2013 alone, were talking about payments to the tune of $203 billion, and by 2050 that number is expected to skyrocket to $1.2 trillion
4/4: Another simplistic comment about standard deviation.and my reply Standard deviation is NOT risk and cannot be used in that focus. Standard deviation goes DOWN over time. It is the risk of loss that determines what might happen to an asset allocation is a bad economic scenario occurs. It goes up over time. You take 1- minus the SD for the time selected to the power of the years for the entire allocation. That is simply how it is done. The number gives a "statistic" of how much will be left that can be used against other allocations. The risk of losing monies in the market place is reflected by, generally, outside economic facts. In 2000 and 2008, the inverted yield curve (a 100% indicator of an upcoming recession) foretold losses of an average of 40+%. Standard deviation had nothing to do with the loss or any projection- it merely indicates how bad it might be for the client. In comparing the numbers, a client can see that one portfolio might leave 75% of value after 10 years while another would leave 45% everything being equal. The advisor can simply ask which one they could handle. That the advisor does not understand the economics of risk is the problem. Buy and hold with cheap index funds might be better but I submit that the losses in 2000 and 2008 shows the fallacy of advisor knowledge and competence.
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Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013 4/4: From
Attorney CEO PolicyLogix Life Insurance Portfolio Management Patented & Objective Fiduciary Life Insurance Review
"Have always enjoyed reading your commentaries over the years, you know your stuff"
4/3: Absolutely fascinating
Where did the allies get their fuel for all of their military vehicles to fight WWII in Europe?
4/2: 1. Reaching for Yield in the Bond Market Date: 2013-03 By: Bo Becker Victoria Ivashina URL: http://d.repec.org/n?u=RePEc:nbr:nberwo:18909&r=fmk Reaching-for-yieldinvestors propensity to buy riskier assets in order to achieve higher yieldsis believed to be an important factor contributing to the credit cycle. This paper presents a detailed study of this phenomenon in the corporate bond market. We show that insurance companies, the largest institutional holders of corporate bonds, reach for yield in choosing their investments. Consistent with lower rated bonds bearing higher capital requirement, insurance firms prefer to hold higher rated bonds. However, conditional on credit ratings, insurance portfolios are systematically biased toward higher yield, higher CDS bonds. Reachingfor-yield exists both in the primary and the secondary market, and is robust to a series of bond and issuer controls, including bond liquidity and duration, and issuer fixed effects. This behavior is related to the business cycle, being most pronounced during economic expansions. It is also more pronounced for firms with poor corporate governance and for which regulatory capital requirement is more binding. A comparison of the ex-post performance of bonds acquired by insurance companies shows no outperformance, but higher systematic risk and volatility.
4/2: I understand the basics of the Tribble case. but RE: "In construing whether a plans reliance on an experts advice is reasonably justified, the courts have stated various requirements, such as independent, impartial, unbiased, objective, and thorough. As an attorney, I can state that in far too many cases plans and plan sponsors blindly rely on whatever information and advice the service providers provide." EFM- the court notably excludes the requirements of knowledge. The fundamentals of investing have never been taught to a broker, Diversification, standard deviation, correlation et al are not nor ever have been touched upon in the 7. Yes there might be a description of "diversification" akin to "not putting all your eggs in one basket" but since the number of eggs specified is not included, the definition is useless. Standard deviation is NOT risk. Correlations are not correlated. Certainly fees are a consideration but the incompetent use of index funds does not relieve one of the fiduciary duty. Then we have RE: "The Court goes on to properly point out that ERISAs duty to investigate requires fiduciaries to review the data a consultant gathers, to assess its significance and to supplement it where necessary. (page 49). My experience has been that plan sponsors are totally unaware that plans and plan sponsors have a fiduciary duty to conduct an independent and thorough investigation of each investment option being considered by a plan, and that such independent investigation is at the very heart of [ERISA's] prudent person standard. EFM- The court might make a valid statement to investigate but it has little meaning in the real world. A fiduciary in this case is who? an attorney? That is good for a chuckle since I have never yet one- even an arbitrator- who knew what diversification was. You are not going to get anyone in human resources. The company CEO- another good chuckle. The average American has a score of F on financial literacy quizzes (see Annamaria Lusardi) so you are not starting from any substance. A
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fiduciary as defined by the prudent man rule generally does not exist because they are untrained, unknowledgeable and incompetent in knowing what to do. That is clearly evident by 2000 and 2008. I have indicated in a recent book that the prudent man rule and the ERISA oversight needs complete revamping. But the courts are overseen by those who do not know the fundamentals of investing and how they should be applied. The issue of fees is perfectly relevant but losing your shirt with index funds is not a blessing.
4/1: Tiny- The global pool of government bonds with triple A status from the three main rating agencies, the bedrock of the financial -system, has shrunk more than 60 per cent since the financial crisis triggered a wave of downgrades across the advanced economies. The expulsion of the US, the UK and France from the nine-As club has led to the contraction in the stock of -government bonds deemed the safest by Fitch, Moodys and Standard & Poors, from almost $11tn at the start of 2007 to just $4tn now, < img alt="" border="0" width="1" height="1" src="http://stats.ft.com/si/track.gif?WT.js=No"/> 4/1: To Senior counsel fo Fi360 I am familiar with fi360 but wish to add some commentary that is not meant to be confrontational but for added insight to the prudent process. RE: The Practices provide the foundation and framework for a disciplined investment process and generally represent the minimum process prescribed by US law and legal precedent.. ... It is my position that the minimum process has been the bane of the industry. The fundamentals of investing have never been taught to a broker or to a supervisor. Diversification, correlation, standard deviation are generally not identified at all- or, if so, the commentary is wrong. Standard deviation is almost universally taught as risk ipso fact- yet that is wrong and always has been. Correlations are not correlated. RIAs tout their fiduciary responsibility yet the bulk of fee offerings are based on their series 7 knowledge- the very same dismal competency noted above. Yet it is adequate for the SEC. Not even close You can have a prudent practice I suppose- but not with those who are incompetent to begin with. Even the designations are woefully lacking- if otherwise, we would have not seen the devastation of 2000 and 2008. Insurance is a minefield of exponentially increasingly difficult products that 99% of the agents are clueless to their underpinnings. In short, the industry needs a wholesale rampup of education before the prudent process can properly serve the public. All I have seen so far is the effort to force one to be a fiduciary- certainly not a bad idea. But if the agents are incapable of the needed knowledge, what truly is being served? If I am off base, feel free to comment. But after close to 40 years to educate agents, I find that few partake of the offerings since it is so much easier to just pretend to be trustworthy.
4/1: Russia gears up for shale boom Russia is gearing up for an oil boom on the same scale as the US, as the techniques that sparked the shale revolution are applied to Siberias deposits of unconventional oil, according to one of the countrys top oil executives 4/1: This was sent to the Executive editor of Kiplingers Manny I am not looking for press- but I am looking to address the failure of an industry that does not have the ability to deal competently with consumers. The fundamentals of investing have never been taught to a broker. The RIAs tout their fiduciary responsibility but they almost universally used the series 7 license to indicate their knowledge base. This license does not cover asset allocation, correlation, standard deviation, risk of loss and on and on. Even when such is offered, it is old and trite. Standard deviation is still presented as risk- but that has been a lie for decades. Correlations are not correlated- therefore rebalancing is fraught with error because the agents are clueless to its moving underpinnings.
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Diversification is not taught as part of securities licensing. Sure the text mentions "not putting all your eggs in one basket". So what? How many eggs must that be?? Insurance is a minefield of exponentially increasing difficult products on which the agents rarely know what they are talking about. CFPs, NAPFA tout fiduciary but have actively told its membership to .keep dong the thing (illegally) but just keep quiet about it. Susan Johns told NAPFA members that "we hope California will not enforce their laws since other states might do so as well". It is truly a shame that the public have been lulled (marketing of course) into the acceptance of third rate service that is incompetent. It is for that and associated issues that so much money was lost in 2000 and 2008. The profession needs a revamping but it is not simply going to come from the term "fiduciary".
4/1: Florida asset protection and more Florida Homestead The purpose of homestead asset protection planning is to promote the stability and welfare of the state by securing a home for the homeowner. Article X Section 4 of the Florida Constitution provides the exemption from creditors. I am amazed when I find out Florida Residents havent filed for their homestead exemption. If you dont file, the asset is not protected. A basic rule for asset protection planning if you own a home and are a Florida resident is to file a homestead exemption. Currently the Florida and Texas constitutions are the only ones that allow such protection. Tenants by the Entireties This is property jointly owned by husband and wife, which offers some asset protection because an asset titled Tenants by the Entireties cant be seized to satisfy a debt of only one spouse. But if both spouses are on a debt and are sued with a judgment, the asset could be seized. In such situations, there are other strategies for asset protection. Retirement Accounts Florida Statute 222.21 allows extensive asset protection for retirement accounts. Cash or other property inside a retirement account or payable from a retirement account to the owner, plan participant or beneficiary is exempt from creditors, so assets and distributions from retirement accounts are generally creditor proof. Because retirement accounts are ordinary income assets, they cant be challenged in court through probate. Retirement accounts are generally not subject to probate unless a beneficiary is not named. Missing a beneficiary designation can cause the proceeds of the retirement account to go through probate, creating creditor and dispute risk. Annuities Much like retirement accounts, there is broad asset protection with annuities under Florida Statute 222.14. Specifically, cash values of annuities are protected from creditors as well as distributions from annuity contracts. If the contract is issued to a resident of Florida, it cannot be attached, garnished from creditors or lawsuits. Distributions to beneficiaries upon death of the owner or annuitant cant be garnished either. Similar to retirement accounts, annuities are ordinary income assets, and as such are not disputable or subject to probate. Life Insurance Florida Statute 222.13 and 222.14 protects cash surrender values and death benefit proceeds from creditors. Similar to annuities, the value of an insurance policy or death benefit proceeds paid to a beneficiary cannot be attached or garnished by creditors or lawsuits. Spendthrift Trusts Spendthrift trusts are established and funded by one individual for the benefit of someone else. Although generally creditor proof, there are several exceptions, depending on the type of creditor, so they must be used with caution. As with any asset protection planning, knowing your individual circumstances and protection needs is critical when there are loopholes such as these exceptions. Discretionary Trusts This trust is perhaps one of the most powerful trusts from an asset protection standpoint because distributions to beneficiaries are at the trustees discretion, meaning the beneficiary has no control in determining distributions from the trust. The beneficiaries are not permitted to demand distributions, which can protect the beneficiary from the most powerful of creditors the IRS. The most powerful reason this benefit may be attained is that the beneficiary holds no property interest that may be attached as an asset. Limited Partnerships Limited partners are usually silent investors and have no liability within the company. Although they have liability with their outside investment, creditors cant attach assets of a limited partner with creditors within the partnership. As such Limited Partners are usually just investors in the partnership. Advanced planning may be conducted utilizing Limited Liability Partnerships or Limited Liability Limited Partnerships, extending creditor protection to the General Partner. There are many possibilities to consider for the limited partner and general partner for asset protection planning. Corporations Shareholder owners of a corporation are generally subject to only the debts of the corporation to the amount of the shareholders capital contribution pursuant to Florida Statute 607. This is generally the case, but there are many scenarios where the Corporate Structure can be pierced and the shareholder, if he or she is an officer, director or employee of the corporation, can be held personally liable outside of the corporate structure for misconduct or torts, namely fraud or other improper conduct. When the corporate veil is broken, assets owned outside the corporation become attachable, eliminating limited liability behind the corporate veil. Limited Liability Companies An LLC insulates members there are no shareholders in an LLC from the liabilities and obligations
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of the LLC. The members do not have personal liability for the debts or obligations of the LLC, though each members liability is limited to his or her capital investment. It is difficult for personal creditors to pierce the LLC because the assets of an LLC cannot be attached by personal creditors of the members of the LLC. Specifically, a creditors only remedy is to file a charging order against the members interest. Charging orders expire after a year, and creditors have to file a new charging order. Generally, if the member or LLC does not distribute assets or income outside the LLC veil, they cannot be garnished and are creditor proof. Many times creditors stop filing charging orders as they are time consuming and expensive.
3/31:
7orth .orea says it has entered a 8state of war9 with 1outh .orea
North Korea has rounded off a week of bellicose rhetoric by warning that it has entered a state of war with South Korea, causing a further deterioration of relations on the Korean peninsula.
http://link.ft.com/r/XYEWFF/B49LRO/PFHCK/U1JVZ4/LS0SF2/OS/h?a1=2013& a2=3&a3=30
3/31: My email to Annamaria Lusardi Annamaria I have followed a lot of your research on basic literacy and have quoted you on my site as well as your works in my last two books: Financial Planning Fiduciary Standards under Dodd Franks and The Failure of Securities Arbitration. Your insight to basic literacy is never addressed in any training to brokers or planners- certainly not to insurance agents- and the securities suitability rule effectively says that if someone has a pulse, then a product will be "acceptable". The problem is that even if the literacy rate you reference goes up to even an "A', the public are so far out to lunch with the products that they will continue to get screwed by the industry. Even if a fiduciary level in the business is required. That's because most Registered Investment Advisors have merely taken a series 7 knowledge to indicate their "competence". The fundamentals of investing have never been taught to a broker- nor even to an RIA. They make up stuff that they will do the best for a client- but they cannot without much further training. The fundamentals of investing are not in the series 7 or even that for supervisors- the series 24. I have spent most of my adult life to try to make a difference for consumers only to be thwarted at any level by the industry. As far as the SEC, FINRA, NASAA, CFP Board, NAPFA, FPA, State insurance departments et al- they have a dismal record of regulating anyone. At some time, I would like to discuss this with you and see if there are any avenues I might have missed.
3/31: A survey of 1,030 American men and women (60% have less than $250,000 in investable assets; 27% have no investable assets; and 13% have more than $250,000 in investable assets) revealed the following: . 80% of American investors do not believe the federal government is doing enough to protect consumers from being taken advantage of by financial advisors 84% of American investors agree that financial advisors should be regulated by the federal government to protect investors and build confidence in financial services These results should serve as another wake-up call for the SEC, Congress and the [Obama] administration to protect American investors who continue to be vulnerable to fraud and abuse while key Dodd-Frank investor-protection reforms are mired in rulemakings or need follow-up congressional action 3/31: Life insurance- were in the midst of an uncertain tax environment, with low interest rates and a volatile stock market. And weve found that most financial professionals have probably reviewed their clients existing investment portfolios, retirement plans, and mortgages, but not their life insurance policies. . With more than $3 Trillion in neglected life insurance assets (over $1 Trillion residing in trusts), both the frequency and the monetarydamage awards of the resulting breach of fiduciary duty cases are on the rise. 20% of policies have lapsed or are near lapse = $200 billion With no intervention, 25% of TOLI policies have a high probability of never paying a death benefit 79% of trust-owned policies are orphaned; no insurance professional monitoring them
3/31: Australia March 25 2013
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Author page On 20 March 2013, key pieces of legislation amending financial services law were introduced into Parliament. NEED TO KNOW Amendments to the Corporations Act 2001 restrict
the use of the expressions financial planner and financial adviser (including words of similar importance).
3/31: Financial Relief for Family Caregivers : Knowing How to Find it Every month, millions of people worry about how they will pay their rent or mortgage, utilities, phone bill, the food bill, car payment, and insurance, along with any other unexpected expenditures that might come their way. Almost everyone lives paycheck-to-paycheck, and when the extra responsibility of being a family caregiver for a loved one is added to an already costly equation, youve got a situation that stretches way beyond anyones financial imagination or reality. Its taken several years for the financial plight of the family caregiver to be recognized, probably because it was always assumed that health insurance and other coverage would pay for any of the medical expenses and other needs of a loved one, which is certainly far from being true. With over 54 million caregivers in the United States (and counting), their collective voices are echoing louder and louder with the cries of financial anguish and despair. The situation has reached a crisis level, with many family caregivers having to choose between paying the mortgage or paying for their loved ones life-sustaining medicines, unable to afford both. Family caregivers also run the risk of losing jobs and benefits because of their dedication to a loved one who may be terminally ill, physically challenged, aging, or all three at the same time. Although our government is beginning to recognize the financial crisis among family caregivers with the creation of the National Family Caregiver Support Program and the Older Americans Act, we still havent gotten past the beginning stages in providing financial assistance for all family caregivers on a national level. Financial help for caregivers still seems to be primarily up to each individual state and/or community, with monetary decisions based upon what can be afforded in the way of caregiver assistance at that particular time. On a national level, the enactment of the Older Americans Act Amendments of 2000 established and funded the National Family Caregiver Support Program (NFCSP). The program was created to help relieve the financial hardships from the continual care by family caregivers (of any age) who act as unpaid caregivers for loved ones 60 or older. Last year, the program received a congressional appropriation of $155.2 million (fiscal year 2003), with the funds allocated to states through a congressionally mandated formula based on a proportionate share of the 70+ population. The NFCSP was developed by the Administration on Aging (AoA) of the U.S. Department of Health and Human Services, and was modeled after successful programs in states such as California, New Jersey, Wisconsin and Pennsylvania. Most family caregivers who receive assistance from this program have been providing major care for quite a while, and have received little to no financial support. One of the major improvements brought about from this program is the quickness with which a family caregiver can be placed within its system. In years past, most family caregivers were placed on a very long waiting list for traditional funding. The fact that a loved one had a caregiver was something that actually worked against them, making the care recipient a lower priority for services, because they were being compared to people who did not have a caregiver. With the NFCSP, it is a requirement to have a caregiver in order to receive services through this program, and family caregivers who are providing 24-hour care are considered to be the highest priority. While the NFCSP tries to find families who are economically or socially needy, having a low income is not an eligibility requirement for receiving available services. Theres also a program that helps grandparents 60 or over who are serving as the primary caregivers for grandchildren or other related children under 18 or who may have mental or physical challenges, and who live in the grandparents home. Best of all, there is no charge for any of the services provided to family caregivers of older persons or grandchildren. Through the program, all states who are working in partnership with local area agencies on aging, as well as with faith- and community-service providers, are to offer five direct services that best meet the range of caregivers needs, including: information to caregivers about available services assistance to caregivers in gaining access to supportive services individual counseling, help in organizing support groups, and caregiver training to assist caregivers in making decisions and solving problems relating to their roles respite care for family caregivers through the use of companions, homemakers, home health aides, adult day care, and in-facility care. supplemental services, on a limited basis, to help with the care provided by caregivers, which may include medical supplies such as disposable undergarments or nutritional items The National Family Caregiver Support Program is available throughout the United States, with some variation in priority for services and types of services offered in different areas. Family caregivers can contact the NFCSP through their local area agency on aging (AAA) or by contacting the Administration on Aging directly at 202-619-0724. Also available throughout the country is the Temporary Assistance to Needy Families (TANF) program, developed to help provide financial assistance, referred to as a grant, for low-income families who have children under 18 living at home; this includes grandparents who are the sole caregivers of grandchildren. The money comes from the federal government, but the states run the program. The states must follow
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some basic federal rules for TANF, including two rules that could apply to grandparents who are raising grandchildren: adults cannot receive TANF benefits for more than five years (a lifetime limit); and adults who receive TANF benefits must get a job when the state says that they are ready. Depending on what is needed, the grandparents can be "on the grant" if the money received is for their own support. One of the main eligibility requirements for grandparents who are placed on the grant is that they must have a job or do some form of community service within two years of receiving the TANF grant. Be aware that some states may give a shorter window of time in which to obtain employment or perform a community service. Some states dont require the grandparent to have employment or to do community services if the grandchild is younger than 12 months or if childcare for a grandchild under 6 years old can not be found. Grandparents can also apply for a "child-only" grant for just the grandchilds support alone. Most states allow grandparents to switch to a child-only grant, but some states have special rules about making such a change. With a child-only grant there are no work requirements and grandchildren will probably receive benefits for more than 5 years. Some questions family caregivers and grandparents should ask regarding TANF include: Is my family eligible? Am I, or should I be, "on the grant?" Is a "child-only" grant better for my family? How do I apply? Do the time limits and work requirements apply to my family? Can I get a waiver? Is there a separate state program for grandparent-headed families that does not have time limits and work requirements? If so, how does it work?
Remember that the rules affecting grandparents and their grandchildren vary from state to state, so its best to contact the department of social or human services in your county or state to find out the right information. Some states may have stricter rules than the basic federal ones, for example, they may have a lifetime limit of less than five years for benefits. For more information on the TANF program and other available services, contact AARP Grandparent Information Center (GIC) at: AARP Grandparent Information Center, 601 E Street NW, Washington, DC 20049; phone: 202/434-2296; fax: 202/434-6466. Or email the GIC at gic@aarp.org. Their URL is: www.aarp.org/grandparents. Some of the other programs on a national level also include: Social Security Disability When a disabled individual has had Social Security deductions made from their paycheck and has worked in the preceding five (5) year period, they may qualify for disability benefits from the Social Security Administration. If the Social Security Administration awards disability benefits, the recipient receives monthly cash benefits based on the amount of money they paid into Social Security. The payments continue as long as the disability persists. After two (2) years of receiving disability benefits, the individual also becomes eligible for Medicare coverage. If the disability continues until the recipient reaches retirement age, the Social Security Administration converts the monthly disability check to a Social Security Retirement check. In some cases, a disabled individual age 50 or older, who is the widow/widower or ex-spouse of a deceased worker may also qualify for Social Security benefits. For information about Social Security Disability, Supplemental Security Income or Medicare, call the U. S. Social Security Administration toll-free at 800-772-1213. The Social Security web site is http://www.ssa.gov. Supplemental Security Income (SSI) Supplemental Security Income is a benefit which can be given to an individual whose monthly income and assets are below amounts that change annually. In addition to these financial eligibility criteria, the applicant must meet age requirements (65 or older) or must be able to establish a disability according to Social Security Disability guidelines. SSI pays cash benefits and entitles the individual to automatic Medicaid assistance. Use the Social Security contact information listed above for SSI information. Medicare Medicare provides assistance for hospitalization and doctors' costs if the individual has paid into the Social Security fund and either has been receiving Social Security Disability benefits for two (2) years or has reached age 65. There are limitations of Medicare coverage. For example, Medicare, in contrast to Medicaid, does not pay for prescriptions (however, this may soon change). In some instances, it is possible to qualify for both Medicaid and Medicare. For information regarding Medicare, call 800-333-7586 or visit the Medicare web site at www.medicare.gov. The Social Security contact information listed above may also be of use. Veterans Benefits The U.S. Department of Veterans Affairs (VA) administers Non-Service Connected Pensions. The non-service connected pension is for wartime veterans who are considered permanently and totally disabled and meet the VA's income and asset limitations. This pension could be used to offset the cost of medical or nursing care for the veteran. Contact the VA Office at 800-827-1000. Social Security offers extra help with Medicare Prescription Drug Plan Costs. Im certain there is a care giver who is taking care of someone that could use help on paying for their Medicare Prescription drug costs. Over 1 million people have been identified as eligible for this benefit but apparently they are not aware of this fact.
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http://www.ssa.gov/prescriptionhelp/ American Kidney Fund Provides financial assistance to people with kidney cancer or other kidney diseases. As well as help locate appropriate doctors and medical services. Contact them at 6110 Executive Boulevard, Suite 1010, Rockville, MD 20852, 800-638-8299 or 301-881-3052, email: helpline@akfinc.org, and at their web site, http://www.akfinc.org. Candlelighters Childhood Cancer Foundation (CCCF) Provides advocacy, bereavement, counseling, financial assistance, insurance information, and referral. CCCF maintains a list of organizations to which eligible families may apply for financial aid. Contact them at: 3910 Warner Street, Kensington, MD 20895, 800-366-2223 or 301-962-3520, email to info@candlelighters.org, and the web address is http://www.candlelighters.org. Cure for Lymphoma Foundation Provides grants to any person with lymphoma experiencing financial difficulty. To be eligible you must be an U.S. citizen. Grants are limited to the cost incurred for childcare, travel/transportation and related expenses to treatment or transplant, medical aids and devices (wheelchair, ramps, hospital bed, walker), education and support meeting or camps, cosmetic aids (wigs, eyelashes, scarf's) and hygienic products. Contact information: 215 Lexington Avenue, New York, NY 10016, 212-213-9595 or 800-CFL-6848, email: infocfl@cfl.org, and the web address, http://www.cfl.org. The National Children's Cancer Society Provides financial assistance to any child diagnosed with cancer on or before his/her 18th birthday. Assistance for medical care may include, bone marrow transplant, donor harvest, supplies, respite care, donor harvest, pharmaceuticals, home health care. Assistance for ancillary cost may include transportation, childcare, household expenses, meals, lodging, and insurance premiums. Assistance is not available for insurance co-pays and deductibles. Contact them at 800-5-FAMILY or 314-241-1600 and email at PFS@children-cancer.com. Cancer Care, Inc. Provides limited financial assistance nationally for pancreatic cancer, colorectal cancer, women with breast, ovarian, and cervical cancer. Local financial assistance includes help for people with all cancers in New York, New Jersey, Connecticut and San Diego, California. Financial help is for transportation, radiation, chemotherapy, pain medications, home care, child care, and some screening and biopsies. Please be aware that CancerCare grants are not for basic living expenses such as rent, mortgages, utility payments and food. Contact information: 275 Seventh Avenue, New York, NY 10001, 800-813-4673 or 800-813-HOPE, email at info@cancercare.org, and the web address is http://www.cancercare.org. Betaseron Foundation Provides financial assistance for Multiple Sclerosis medications. Contact them at 800-948-5777. Leukemia Research Foundation Offers financial assistance, transportation to treatment centers, and blood transfusions. Contact them at 800-955-4LSA or their web address at www.leukemia.org. American Organ Transplant Association (AOTA) Provides financial assistance to transplant recipients and their families, including airfare and bus tickets, advice on fundraising and establishing trust funds. Contact information: PO Box 277, Missouri City , TX 77459, 713-261-2682, and web address www.classkids.org/library/resouc/fundraising.htm. Campaign for Home Energy Assistance (LIHEAP) Designed to assist eligible, low-income households in meeting the heating or cooling portion of their residential energy needs. LIHEAP dollars are distributed by local community action agencies, usually at the county level. The Salvation Army processes applications in many states. To find the phone number of your community action agency, call your state's energy assistance director. A listing can be found at www.neada.org/members/states.htm, or contact the program directly at 202-783-5594 or 202-783-5588. You may also contact them through email at info@liheap.org or at their web address, www.liheap.com. Chai Lifeline Provides financial assistance, housing, weekend retreats for the entire family living with a child with cancer or catastrophic illness, weekend retreats for bereaved families, holiday trips, insurance information as well as support to Jewish children who suffer from cancer and other life threatening illnesses. Contact information: 151 West 30th Street, New York, NY 10001, 212-465-1300 or 877-CHAI-LIFE, email at tcabcat@chailifeline.org, and their web address is www.chailifeline.org. National Children's Cancer Society (NCCS) Provides financial and fundraising assistance, including costs related to medical treatment, such as travel and lodging. Contact them at: 1015 Locust, Suite 600, St. Louis, MO 63101, 800-532-6459, email at pfs@children/cancer.com, and the web address is www.childrencancer.com. National Association for Terminally Ill Provides assistance to individuals with terminal diseases in obtaining financial aid.
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Contact information: PO Box 368, Shelbyville, KY 40066-0368, or toll-free at 888-847-0390. First Hand Foundation Provides financial assistance to children under 20 years of age worldwide. Patient doesnt have to be a citizen. The request must be clinically relevant to the health of the child. There must be no other existing financial net to cover the requested expenses. The foundation does not provide funding for debt reduction or experimental treatments and medications. Contact them at 2800 Rockcreek Parkway, Kansas City, Missouri 64117, 816-201-1569 or 816-201-7569, email at firsthandfoundation@cerner.com, and the web address is www.firsthandfoundation.org. Kelly Anne Dolan Memorial Fund Provides financial assistance for the uninsured needs of families caring for terminally, critically, and chronically ill children. The fund has assisted with everything from rent to electric bills to burial expenses. Families in need of assistance should contact their social worker, case manager, visiting nurse, nurse practitioner or doctor at the medical establishment where their child is treated in order to have a healthcare professional address a letter to the foundation for help. The following are the states in which funds are available: PA, NJ, NY, DE, MD, VA and Washington D.C. Contact information: 602 S. Bethlehem Pike Bldg "D, Box 556, Ambler, PA 19002, 215-643-0763, email address is pdolan@kadmf.org, and the web address is www.kadmf.org. Aside from financial services available on a national level, some states also have their own financial assistance programs for family caregivers. General Assistance is a program funded on the state level and is designed to provide cash assistance to low-income people who do not qualify for federally funded programs. Here are some other programs where caregivers may find financial relief, state-by-state: select a state 3/31: Young more likely to switch banks Less than a third of customers aged 18 to 24 believe their bank is fair and transparent and less than a quarter think their bank is ethical
3/31:
Hong- erm %are /eeds !nea0 8p 7n 8s %oncerns about caring for an aging parent are not )ust financial. creates physical challenges. his video e&plores the issues. heyCre deeply emotional, and the act of providing care even
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2umans are stupid
3/26: Breast Cancer Guide by Dr. Kathleen Ruddy for Answers.com http://breastcancer.answers.com/ 3/26: United States Savings Bond Resources 3/26: 1. Predictability of stock market activity using Google search queries Date: 2013-03 By: Sofa B. Ramos Helena Veiga Pedro Latoeiro URL: http://d.repec.org/n?u=RePEc:cte:wsrepe:ws130605&r=fmk This paper analyzes whether web search queries predict stock market activity in a sample of the largest European stocks. We provide evidence that i) an increase in web searches for stocks on Google engine is followed by a temporary increase in volatility and volume and a drop in cumulative returns. ii) An increase for web search queries for the market index leads to a decrease in the returns of the index as well as of the stock index futures and an increase in implied volatility. iii) Attention interacts with behavioral biases. The predictability of web searches for return and liquidity is enhanced when firm prices and market prices hit a 52-week high and diminished when the market hits a 52-week low. iv) Investors tend to process more market information than firm specific information in investment decisions, confirming limited attention theory.
3/24: More crap= A new United Nations study has found that more people around the world have access to a cellphone than to a working toilet. Well, that makes sense. There is more crap spilled out with words than anything that else the human body could do. 3/24:
Participating Whole Life Versus Non-Participating Whole Life

Similarities of Participating Whole Life Insurance and Non-Participating Whole Life Insurance: Insurance for your whole life Guarantee of a minimum cash value
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Growth that is included in the insurance policy Guaranteed death benefit, cash value, fixed and annual premiums, and accessible cash values Differences Between Participating Whole Life Insurance and Non-Participating Whole Life Insurance: A participating whole life insurance plan is a policy that combines an insurance policy with a low-maintenance investment plan offering you the benefits of both a whole life insurance policy, providing guaranteed, tax-free, death benefits plus regular investment dividends paid out to you A non-participating whole life insurance plan has no cash value and doesnt pay dividends to the policy holder Advantages of Participating Whole Life Insurance: Participating whole life insurance combines lifetime insurance protection with a tax-advantaged investment component Guaranteed premium, death benefit and cash surrender values It can be used during your lifetime to pay for education, business opportunities, to purchase a home, supplement your retirement income, to pay for long-term care or home care. It can be used upon your death to pay final expenses and debts, ensure that your family is left with the resources to live life comfortably, leave a legacy to a charity, pay taxes owing on your estate.. Advantages of Non-Participating Whole Life Insurance: Premiums are usually lower than for participating whole life The value of the plans are fully guaranteed The issue is that participating/universal life includes the focus on cash. Generally a bad decision for middle America. If you need insurance, just buy pure insurance- term or no lapse. 3/24: Buy and Hold- "If you had bought the Nasdaq in 1999, you'd be down 40%," 3/24: :hite-1lac0 :ealth Kap /early riples
7ver the past '5 years, the gap in wealth between blac0 and white American households has nearly tripled, from 345,((( to 3'5,,5((.
3/24: '((4-(-9 ;nvestors >eally ?id !ell How RE: "Repeated loud warnings by financial advisers fail to reverse the human tendency to panic when the market plunges and to rush in after its gone up." Where were the warnings of the impending recession??? With an inverted yield curve, a drop to 44% average should have been a key to reduce risk well before the debacle. That the consumer acts irrationally is a problem. That the industry is not well trained at all is the real issue. The fundamentals of investing have never been taught to a broker. Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013
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Well. there goes the neighborhood- though the one in the middle is kind of cute 3/24: March is Brain Injury Awareness Month Traumatic Brain Injuries can Result from Senior Falls
Traumatic brain injuries due to falls caused nearly 8,000 deaths and 56,000 hospitalizations in 2005 among Americans 65 and older, according to a new report from the Centers for Disease Control and Prevention released in the June issue of the Journal of Safety Research. Traumatic brain injuries, or TBIs, are caused by a bump or blow to the head; however, they may be missed or misdiagnosed among older adults. TBI often results in long-term cognitive, emotional, and/or functional impairments. In 2005, TBIs accounted for 50 percent of unintentional fall deaths and eight percent of nonfatal fall-related hospitalizations among older adults. Falls are not an inevitable consequence of aging, but they do occur more often among older adults because risk factors for falls are usually associated with health and aging conditions. Some of these conditions include mobility problems due to muscle weakness or poor balance, loss of sensation in feet, chronic health conditions, vision changes or loss, medication side effects or drug interactions, and home and environmental hazards such as clutter or poor lighting. Most people think older adults may only break their hip when they fall, but our research shows that traumatic brain injuries can also be a serious consequence, said Dr. Ileana Arias, director of CDCs National Center for Injury Prevention and Control. These injuries can cause long-term problems and affect how someone thinks or functions. They can also impact a persons emotional well-being. Each year, one in three older Americans (65 and older) falls, and 30 percent of falls cause injuries requiring medical treatment. In 2005, nearly 16,000 older adults died from falls, 1.8 million older adults were treated in emergency departments, and 433,000 of these patients were hospitalized. Falls are the leading cause of injury deaths and nonfatal injuries for those 65 and over. This study analyzed 2005 data from the National Center for Health Statistics National Vital Statistics System and the Agency for Healthcare Research and Qualitys Nationwide Inpatient Sample. Key findings are: Death rates for fall-related TBIs were higher among men than women (26.9 per 100,000 and 17.8 per 100,000, respectively). Rates for fall-related TBI hospitalizations were similar among men and women (146.3 per 100,000 and 158.3 per 100,000, respectively). Death and hospitalization rates for fall-related TBIs generally increased with age. Additional findings: The majority of men and women hospitalized with a fall-related TBI spent two to six days in the hospital (54.9 percent of men; 61.5 percent of women).
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The median total charges for these hospitalizations were $19,191 for men and $16,006 for women. Arias also points out that as more baby boomers reach retirement age, these types of injuries will increase demands on the health care system unless action is taken to prevent the injuries. CDC has developed tips and suggestions for older adults, their caregivers, health care providers, and communities to help prevent falls, Arias said. For older adults, their children, caregivers, and health care providers, CDC recently developed the Help Seniors Live Better, Longer: Prevent Brain Injury initiative. Developed in collaboration with 26 organizations, it features easy-to-use English- and Spanish-language materials in a concise question-and-answer format to help prevent, recognize, and respond to TBI. For more information and materials, visit www.cdc.gov/TraumaticBrainInjury/seniors.html. CDC has also created resources for practitioners and community-based organizations. Preventing Falls: What Works. A CDC Compendium of Effective Community-based Interventions from Around the World and Preventing Falls: How to Develop Community Based Fall Prevention Programs for Older Adults can be downloaded or ordered at http://wwwdev.cdc.gov /HomeandRecreationalSafety/Falls/preventfalls.htm. To access this article, please link to www.cdc.gov/injury. For information about the Journal of Safety Research, please link to www.sciencedirect.com/science/journal/00224375. The study citation is doi:10.1016/j.jsr.2008.05.001.
3/24:
Caregiving for a Parent or Elderly Person By Patricia St. Clair
Throughout our lives we are usually identified by our roles as son, daughter, brother, sister or parent. As our parents age, however, roles often reverse or take on new meanings. Because today's baby-boomers increasingly find themselves assuming the role of "caregiver," they begin to feel the necessity to become proactive in the care of one or both parents. Issues surface that have remained buried. Parents often find themselves battling their adult children for authority in decision-making. Adults with elderly parents need to educate themselves, not only with written information but also with personal knowledge of their parents' habits and problems. Timing is everything, and that old adage certainly applies to assisting a parent make the transition from independent to needy or problematic. Open communication with elderly parents is the optimum situation but one that is not an option in many families. Short of this, adults with elderly parents need to realize that they will always be the "child" in the eyes of their parents. Baby boomers not only respect authority but are much more health-conscious than those over 65 who feel surprise at their still-existence on earth. Elderly parents may never openly admit a problem or ask for help, but the educated, alert offspring can easily pick up subtle clues. Visiting parents presents an opportunity to notice changes in habits. Slowness in dressing, eating and walking are obvious changes. A prolonged delay in opening mail or driving a familiar route should be considered a cry for help. A brief review of the medicine cabinet can also provide offspring with important medical knowledge as to what medicine is being prescribed, not necessarily taken, by their parent. This is by far one of the most common problems children face when dealing with parents who are just beginning to fail. While a parent may give up the fight in going to a physician, and while the same parent may follow through in getting a prescription filled, it is quite common for the untouched bottle to remain in a medicine cabinet or nightstand drawer. Breaking down and taking the medicine would be admitting to themselves that a problem exists, and this is simply not an option to many elders. Therefore, adult children should be keenly aware of the types of medicines prescribed and familiarize themselves with the medical problems to which the medicines are correlated.
Rather than involve the court system or attorneys as elders begin to fail, adults need to reach out to siblings, relatives, church friends and volunteer services. Many siblings today live hundreds of miles apart, and in many cases also lived far distances from their parents. Family members, all of them, need to become proactive in the management of their parents' healthcare. The familiarization with prescribed medicine is the first important step, and if the elder refuses to discuss their medical problems, offspring should establish a relationship with their parents' physician. The medical community often welcomes this show of caring; however, others dissuade the intrusion. Family members should never withdraw when the first door slams in their face, but should persist until finding a method to establish some sort of common ground with their parents' healthcare provider. The alert, knowledgeable offspring will also be more prepared to deal with deeper issues as the patient's condition worsens. Nursing homes and home healthcare, in combination with finances can become a full-time concern. Parents are often reluctant to discuss both their medical condition and financial situation with adult children, but when health deteriorates to the degree that outside help
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is necessary, it is vital for the primary caregiver to be aware of both. Most importantly, children should be aware of their parents' insurance and exactly what it covers. Financial awareness is crucial here, for few elders are totally covered by any insurance plan. When nursing homes appear to be the only alternative to independent living, children often begin to question the feasibility of having a parent move in with them. Ironically, government aide is available to eldercare housing facilities but not to adults who care give to parents within their homes. The financial burden to children is often the deciding factor in the decision made regarding the elder's future home. Again, the more knowledgeable the offspring is regarding insurance and costs of facilities (including transportation, medicine and meals) vs. cost of moving a parent into the child's home, the easier a reasonable decision can be made. On a personal note, my mother passed away in April 1999, after a yearlong illness. Before she lost the capacity to communicate, she struggled to clarify all legal matters to me, her only child. Utmost on her mind were specifications regarding stocks, bonds and bank accounts. This one act on her part enabled me to be proactive not just in her medical needs but her overall financial needs as well. Every family is different, as are the needs for every caregiver. However, money seems to be one of the more basic concerns for all parties involved. Regardless of whether Mom is to be placed in a Nursing Home or move in with offspring hundreds of miles away, money often becomes the deciding factor upon which life-altering decisions are made. Insurance companies need to be contacted to find out what coverages policies provide. Financial information is crucial in assisting adult offspring in making decisions regarding the parent's healthcare. A second controversial issue between elders and their offspring is independence, or the lack thereof. Mom has driven to the grocery, drug store and all points in between all of her adult life, only to be told now that she no longer possesses the ability or good judgment to drive. In the best of circumstances this is stressful, but to those whose parents have truly lost the ability to make wise decisions behind the wheel of a car, it can be devastating. Now the subject of transportation becomes a major issue. Who is to take off work to transport Mom (or Dad) to the doctor? Chances are, Mom or Dad will disagree with their limitations, thus setting the stage for further confrontations. Battles never "solve" confrontations; they merely deepen the resentment already felt among all parties involved. The loss of driving ability, the relocation of a parent, and the need for questions involving financial matters all are underlying courses of the biggest fear an elder has. This is the fear of losing independence. Although offspring caregivers must deal with numerous situations as they arise, the elder fears losing their "rights" more than the sum of all the other parts. There's a juggling of guilt vs. need for the elder. It is a battle that is never quite won. We as caregivers need to be fully aware of that battle raging inside the elder while we cope with the daily tasks of caregiving. Any adult child with the potential of caregiving should make it a priority to watch for signs in aging family members for the onset of illness or failure. Awareness can provide a caregiver with the advantage he/she needs to plan, take necessary steps, consult with health care professionals and be prepared for what may lay ahead. Refusing to face the inevitable cripples the caregiver, and ultimately the elder, as the caregiver has chosen to remain ignorant of choices that can and should be made. Thousands of articles, hundreds of books and numerous movies have been based on the subject of caring for the elderly. What has not been emphasized to the full extent is the subject of what the elder experiences as his or her world collapses, health deteriorates and independence disappears. Those of us who are adult children and are or have cared for an elder have no doubt witnessed firsthand the effects that the loss of independence have had on our loved ones. We take for granted so many of life's "little things. Last minute additions for dinner only require a short drive to the corner market. The batteries for the TV's remote control have gone out and we have to manually get up to change channels. The phone rings and you remember the cordless phone is still on the charger instead of perched by your easy chair, which makes you have to disengage yourself from the cushions if you want to talk to the caller. These examples are common in our daily lives and are easily rectified, although most of us would classify them as impositions. Now realize what an elder who is barely mobile or perhaps already bedridden would go through in similar circumstances. In the first place, she wouldn't be fixing dinner and would only hope that a loved one would be preparing it for her. To her, that would be the imposition, having to cause further work for someone she loved. Secondly, if her remote's batteries ran out, chances are she would have to wait until a loved one remedied the problem or merely shut the television off. There again, to the elder the imposition would be in having to rely on her caregiver for help instead of being able to handle it herself. And the phone ringing? Elders who are farther in their journey down the final path of life rarely want to talk on a phone, much less struggle to reach for it or find it amid their sheets or blankets. We all want to believe our parents will live forever. We often don't see them as men or women. They are simply Mom and Dad. When we are faced with role reversals and find ourselves making the decisions and often saying "no" to the people who always made the rules for us, it effects all of us in different ways. There are no rules for this game, and no "rights" or "wrongs. There are merely guidelines from which we can take advise from those who have dealt with these issues before us and hope we do all within our power to make our elder's last years, months, and days on earth peaceful, comfortable and loving. We must go with our inner feelings much of the time as to what would be right or wrong for our loved one, and as our elder sees how difficult the attempts are on our part, he or she often is willing to compromise on situations that could have caused major rifts within the family. The issues with which we must deal are numerous and diversified, but the more open those involved can be with each other and the better communication they can achieve, the more successful they will be in working toward the end in harmony and peace.
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3/19: PBGC's Risk-based Policy Keeps Almost $1 Billion in Pension Obligations from Healthy Companies
FOR IMMEDIATE RELEASE March 18, 2013 WASHINGTON The Pension Benefit Guaranty Corporation said today that shifting its enforcement policy away from companies unlikely to default on their pensions benefited about 50 businesses by almost $1 billion since the start of a pilot program announced in November. The new approach screens out financially sound companies and small plans with less than 100 people, which excludes 92 percent of businesses that sponsor plans from the agency's enforcement efforts. 3/19: Rebalancing is intended to keep risk constant. It cannot do that unless one knows the correlation of the initial portfolio and then the correlations at the time of the rebalance. Unless that is known (and rarely is it) then the risk can go up by an unacceptable amount. Correlations have bounced around all over the place and there is little consistency. See graphs on equities and bonds over the last 10 years. BIG surprise As Lo and Taleb have noted- anything based on correlation is charlatanism. So the way to do rebalancing is by the risk of loss via standard deviation- which is never done. Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013 3/19:
&, set to widen bonus cla"pdown

If agreed, the Ucits overhaul will be a shock to the fund management sector, which until now has largely enjoyed free rein to set managers pay
http://link.ft.com/r/UXDMSS/1OMS0H/U1O7Q/HY7W11/87ROMT/E4/h?a1=2013& a2=3&a3=17
Soon for America???? 3/19: Financial Advisor Input Sought On Fraud Against Elderly You are not going to make any headways without almost completely altering the landscape of advisors overall. One needs to first address the literacy of the general public overall. I suggest you look at Financial Planning Fiduciary Standards under Dodd Frank and The Failure of Securities Arbitration. They both review literacy and aliteracy of American consumers- which is pretty much known a abysmal. But then there is financial literacy- effectively an F grade throughout life. Quantitative studies conducted from 2006 to the present on the financial literacy of U.S. retail investors conclude overwhelmingly that American investors lack essential knowledge of the most rudimentary financial concepts: inflation, bond prices, interest rates, mortgages, and risk. Consequently, it is not surprising that investors do not understand advanced financial concepts such as differences between stocks and bonds, the role of the stock market, and the value of portfolio diversification. In addition, investors often do not appreciate the impact of mutual-fund fees on long-term returns, nor are they aware of the existence of index funds, which minimize such fees.. My point being that even if they did have even a C grade, the questions asked by researchers does not relate to the real life application of products. Once you get to the elderly- say above age 65- there is a loss of competence in financial matters of about 2% per year. That does NOT address senile dementia/Alzheimers. Beyond that from certain studies is that their perception of competence goes up by the same 2% per year. Since I have been around in the business for about 40 years, I certainly have seen the elderly nod in agreement when sophisticated
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material is presented to them. Actually, lets face it- the understanding of an index annuity is so far beyond their competence it is laughable. B ut that is not called financial fraud except in the most adverse of scenarios. So why is that not called elderly abuse if they are clueless to the ramifications of their actions?
And since the advisors/brokers have never been taught the fundamentals of investing, is that not a glaring irresponsibility by the industry and regulators? Sure is Insurance and annuities are a basket of mindnumbing exponentially increasing products that the agents are rarely trained on. If you had an unlicensed physician giving advice, everyone would be up in arms. Here we have licensed- but grossly incompetent agents- selling stuff promoted by marketing. Elderly abuse is far greater than evidenced by researchers since they do not know what should be done. But as a result, billions of improper products are sold the most unsuspecting of consumers. That is also elderly abuse that no one really puts into focus. A step up to fiduciary standards will not make much difference since the knowledge base of Advisors would have to be stepped up 10 fold. Too costly and far too much time to institute. It may be possible to reduce some areas of financial fraud, but what is going on today is considered legal and there is too much money being made for proper changes. Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013)
3/18: IDEAL AM!UN4 !B LIBE INSU"ANCE - A study by Kuardian Hife reveals young Americans A'(s and 5(sB say 3* million in life insurance would "ma0e all their dependents< troubles go away." 2owever, they carry an average face amount of 35-(,(((. he study also found the '*-to-5( age group to be the least informed about life insurance.
+1*03 APPEAL !B 4E"M LIBE - According to an article in +inancial Advisor, term life insurance can meet the needs of a wide range of younger and middle-aged consumers loo0ing to replace income, ta0e care of debt or pay education costs in case of premature death. he product, which costs a fraction of whole life, offers rates that are 5(% lower than they were two decades ago, partly because of medical improvements, greater longevity and improved underwriting standards, plus various policy riders are available to address terminal illness, disability and accidental death. 5$*49 !eniors- seniors lost $2.9 billion to financial exploitation in 2010 and the problem is growing. From 2008 to 2010 there was a 12 percent increase in the amount of money scammed from seniors, according to Skip Humphrey of the Office for Older Americans in the federal Consumer Financial Protection Bureau. 5$*499AK./%J9 !ecurities and .&change %ommission. A% ;7/9 >equest for data and other information. !8MMA>J9 he !ecurities and .&change %ommission is requesting data and other information, in particular quantitative data and economic analysis, relating to the benefits and costs that could result from various alternative approaches regarding the standards of conduct and other obligations of bro0er-dealers and investment advisers. 5$*49 $"!AD AND P!SI4I%E G"!84 - Laried data from different parts of the 8.!. economy continued to paint a positive picture of broad-based growth. he 8.!. +ederal >eserve<s 1eige 1oo0 reported "modest" or "moderate" growth in all but two of the +ed<s *' districts. A 8.!. ?epartment of %ommerce report on business spending indicates that orders for nondefense capital goods e&cluding aircraft, a pro&y for business investments, rose =.'% in Fanuary. 8.!. auto sales increased 5.=% in +ebruary, a continuation of a steady rise since '((-<s deep slowdown. 8.!. home prices rose -.=% in Fanuary from a year ago. 5$*49 L!NG&4E"M&CA"E EDUCA4I!N - A 2arris ;nteractive study reveals that long-term-care discussions with a financial adviser are relatively rare and =5% of age 5(M adults do not own long-term-care insurance. Ah, but then the term "financial adviser" is a fraud.
Social Security Disability Insurance Program: Funds Run Out in Three Years (PDF)
3/17: Text of CBO Testimony on the
"In the past four decades, the number of workers with disabilities who receive benefits from the [Social Security Disability Insurance ('DI')] program has increased nearly sixfold, rising from 1.5 million in 1970 to 8.8 million in January 2013.... Since 2009, the program has paid out more each year in benefits than it received in dedicated revenues..... In 2023, CBO projects, the program's spending will be 0.82 percent of GDP, and dedicated tax revenues will be 0.66 percent of GDP. CBO projects that the DI trust fund will be exhausted in 2016, nearly 20 years before the projected exhaustion of [the] trust fund for the Social Security retirement program." (
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Just before I have had my morning coffee 3/17: 1. OVERCONFIDENCE, OMENS AND EMOTIONS: RESULTS FROM A FIELD EXPERIMENT Date: 2013-02 By: Maria De Paola Francesca Gioia Vincenzo Scoppa (Dipartimento di Scienze Economiche, Statistiche e Finanziarie, Universit della Calabria) URL: http://d.repec.org/n?u=RePEc:clb:wpaper:201303&r=cbe We analyze how overconfidence is affected by superstitious beliefs and emotions induced by positive and negative stimuli in a field experiment involving about 700 Italian students who were randomly assigned to numbered seats in their written examination sessions. According to widespread superstitions, some numbers are considered lucky, while others are considered unlucky. At the end of the examination, we asked students the grade they expected to get. We find that students tend to be systematically overconfident and that their overconfidence is positively affected by being assigned to a lucky number. Interestingly, males and females react differently: on the one hand, females tend to expect lower grades when assigned to unlucky numbers, while they are not affected by being assigned to lucky numbers. On the other hand, males are not affected by being assigned to unlucky numbers but expect higher grades when assigned to luc ky numbers. 1. Examination behavior Gender differences in preferences? Date: 2013-01-10 By: Nekby, Lena (Department of Economics, Stockholm University) Skogman Thoursie, Peter (IFAU - Institute for Evaluation of Labour Market and Education Policy) Vahtrik, Lars (Department of Economics, Stockholm University) URL: http://d.repec.org/n?u=RePEc:hhs:ifauwp:2013_001&r=cbe A unique examination strategy in first year microeconomics courses is used to test for gender differences in preferences in examination behavior. Students have the possibility of attaining a seminar bonus on the final exam for near-perfect seminar attendance and are given two voluntary initial quizzes during the semester. At the final exam, the scores received on initial quizzes can either be accepted as is, or students can attempt to improve their marks by answering similar quiz questions on the exam. Results suggest that female students are more likely to take initial quizzes and receive a seminar bonus but are less likely to re-take quiz-questions on the final exam. These results suggest higher risk aversion among female students relative to male students, behavioral differences with tangible implications in terms of final grades on the course. 1. The effect of earned vs. house money on price bubble formation in experimental asset markets
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Date: 2013-02 By: Brice Corgnet Roberto Hernn Praveen Kujal David Porter URL: http://d.repec.org/n?u=RePEc:cte:werepe:we1304&r=cbe Can house money explain asset market bubbles? We test this hypothesis in an asset experiment with a certain dividend cash and shares is given to subjects initial portfolios are constructed using subject that bubbles still occur; however trading volumes are significantly abated and the dispersion of earnings is significantly lower when subjects earn their starting endowments. We investigate the role of cognitive ability in accounting for the differences in earnings distribution across treatments by using the Cognitive Reflection Test (CRT). We find that high CRT subjects earned more money on average than the initial value of their portfolio while low CRT subjects earned less. Subjects with low CRT scores were net purchasers (sellers) of shares when the price was above (below) fundamental value while the opposite was true for subjects with high CRT scores. 1. Disposition Effect and Loss Aversion: An Analysis Based on a Simulated Experimental Stock Market Date: 2013-02 By: Kohsaka Youki (Center for Finance Research, Waseda University) Grzegorz Mardyla (Faculty of Economics, Kinki University) Shinji Takenaka (Japan Center for Economic Research) Yoshiro Tsutsui (Graduate School of Economics, Osaka University) URL: http://d.repec.org/n?u=RePEc:osk:wpaper:1302&r=cbe We experimentally investigate the existence of and possible origin of the disposition effect. Our approach has three distinct characteristics: Firstly, we created an experimental environment that closely mimics a real stock market and were thus able to obtain and analyze trading behavior data that accurately depicts actual individual investor trading behavior. Secondly, based on a questionnaire survey we conducted during the experiment, we were able to pinpoint each individual participantfs reference point. This, in effect, allowed us to verify an independent hypothesis of the existence of the disposition effect. such an approach differs from the extant literature, where only a joint hypothesis has been examined so far. Thirdly, we measured individual loss aversion coefficients and directly tested whether loss aversion is a cause of the disposition effect. Our results indicate both the existence of the disposition effect as well as prospect theoryfs loss aversion being one of its sources.
3/17: Drinking yourself to death is not a right Even a law-abiding drunk drowning his sorrows at home imposes health costs on others. Alcoholism triggers crime and violence, writes John Gapper
Here I am teaching correlation 3/17: 1. Understanding Financial Crises: Causes, Consequences, and Policy Responses
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Date: 2013-02 By: Stijn Claessens M. Ayhan Kose Luc Laeven Fabin Valencia URL: http://d.repec.org/n?u=RePEc:een:camaaa:2013-05&r=fmk The global financial crisis of 2007-09 has led to an intensive research program analyzing a wide range of issues related to financial crises. This paper presents a summary of a forthcoming book, Financial Crises: Causes, Consequences, and Policy Responses, that includes 19 contributions examining these issues and distilling policy lessons. The book covers a wide range of crises, including banking, balance-of-payments, and sovereign debt crises. It reviews the typical patterns prior to crises, considers lessons on their antecedents, and analyzes their evolution and aftermath. It also provides valuable policy lessons on how to prevent, contain and manage financial crises. Keywords: Global financial crisis, sudden stops, debt crises, banking crises, currency crises, defaults, restructuring, welfare cost, asset price busts, credit busts, prediction of crises JEL: E32 2. The Inefficient Markets Hypothesis: Why Financial Markets Do Not Work Well in the Real World Date: 2013-02-26 By: Roger E.A. Farmer (UCLA Economics) Carine Nourry (Aix-Marseille University (Aix-Marseille School of Economics), CNRS-GREQAM, EHESS & Institut Universitaire de France) Alain Venditti (Aix-Marseille University (Aix-Marseille School of Economics), CNRS-GREQAM, EHESS & EDHEC) URL: http://d.repec.org/n?u=RePEc:aim:wpaimx:1311&r=fmk Existing literature continues to be unable to offer a convincing explanation for the volatility of the stochastic discount factor in real world data. Our work provides such an explanation. We do not rely on frictions, market incompleteness or transactions costs of any kind. Instead, we modify a simple stochastic representative agent model by allowing for birth and death and by allowing for heterogeneity in agents discount factors. We show that these two minor and realistic changes to the timeless Arrow-Debreu paradigm are sufficient to invalidate the implication that competitive financial markets efficiently allocate risk. Our work demonstrates that financial markets, by their very nature, cannot be Pareto efficient, except by chance. Although
individuals in our model are rational;
markets are not.
Note that the individuals in the MODEL are rational- that is also not real world. Maybe the irrationality of both means the inefficiency is squared. No matter, efficiency does not exist. 3/17:
;ong-ter" battle to dri#e out short-ter" ris0

Risk metrics should be based on the cash flows of assets, not on their market prices, and the use of derivatives
should be limited
http://link.ft.com/r/4RNQTT/UL0AK9/5VWQL/JE5VI2/PNVAKW/D5/h?a1=2013& a2=3&a3=14
3/17: Are Americans Stressed, Anxious Over Retirement Investing? According to a new Franklin Templeton Investments survey, 73% of respondents reported they find thinking about retirement saving and investing causes them stress and anxiety 3/14:
%hronic and %ritical %are riders. hey are quite different from a true long-term-care product li0e MoneyKuard, and that difference can be devastating for the insured. .&ample9 #itta case, and made reference to a potential hole in these contracts. Nuite simply, we can now remove the word "potential", as the hole is quite real. +urther, that hole is based on the presence of one word in the rider language. he word is "permanently", and the unfortunate truth is that most policy owners Aand agentsOB have no idea how e&posed they truly are by this one word. ;f you recall the facts of the #itta case, the long-term-care event was finite in nature. he individual in question was in)ured in a car accident, and the need for care was based on her recovery from her in)uries. 1y its very nature, this was a temporary situation.
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1y now, most of you see the problem. ;f Mr. #itta<s mother was an insured e&pecting coverage for this event under the chronic and critical illness accelerated death benefit provisions of most policies she was in for a rude awa0ening. 1ased on the temporary nature of the need for care, most chronic and critical care riders would pay e&actly Gero dollars. +urther, even if we throw that aside and assume she would be eligible for coverage, there is the issue of how much she would have been able to accelerate. A cursory read of the glossy propaganda that accompanies most sales would tal0 about a percentage of the face amount. !ome are as high as '5%. he reality, however, is much different. ;t turns out that the ma)ority of these riders have a mortality component associated with the benefit calculation. :hile the mechanism varies, the bottom line is that the ma& percentage is only part of the equation, and a discount factor based on mortality is also applied. he result is that the actual percentage of the face amount an insured can access via a claim can be reduced by as much as 5(%. his means the ma&imum a policy owner can access may be as low as *'.5%. :hile this is still better than nothing, it is a far cry from the e&pectation. ;f this is not discovered until claim time, ma0e sure your ."7 is paid up and your lawyer is on speed dial. !o how to deal with all of thisP ;s my point that all of the %hronic and %ritical %are riders should be avoidedP Absolutely not. hey serve a purpose in a sound ris0 management strategy. 2owever, they are far from a complete solution, and the purchaser needs to understand both that there are events that will be e&cluded, and there is significant variability in the calculation of benefits. ;f the prospective buyer is uncomfortable with the large gaps in coverage, it<s time to thin0 about a more robust solution. !omething li0e MoneyKuard perhapsP
3/14: 3/13: Never trust a stateThe Securities and Exchange Commission on Monday charged the state of bond investors about the states approach to funding its pension obligations.
Illinois with securities fraud for misleading municipal
An SEC investigation revealed that Illinois failed to inform investors about the impact of problems with its pension funding schedule as the state offered and sold more than $2.2 billion worth of municipal bonds from 2005 to early 2009.
3/13: Interest rates and growth: low real interest rates have historically been associated with low, not high, equity returns. Mohamed El-Erian, the chief executive of PIMCO, a fund-management group, said recently that: For the rally in equity markets to continue, the current phase of assisted growth, as anaemic as the outcome is, needs to give way to genuine growth. 3/13: More growth-
the cyclically-adjusted price-earnings ratio (which averages profits over ten years), is at 22.9, around 39% above its long-term average, according to Robert Shiller of Yale University. An alternative measure, the Q ratio, which compares shares to the replacement cost of net assets, shows the American market as 50% overvalued, according to Smithers & Co, a
The best long-term measure of value, consultancy. The dividend yield on the market is 2.6%, compared with the historical average of 4.1% (although share buy-backs partly compensate for this shortfall). Valuation does not often drive the market in the short term. During the dotcom bubble investors were happy to buy shares on stratospheric multiples: the cyclically-adjusted p/e reached 44 in late 1999. But the aftermath of that bubble illustrated an old rule. When investors buy assets at above-average valuations, they will suffer below-average future returns.
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Given the current combination of low bond yields and high equity valuations, Antti Ilmanen of AQR, a fund-management group, calculates that the prospective return from a balanced American portfolio is the lowest it has been for a century. That is not good news for American corporate-pension funds, which still have a $479 billion deficit even after the latest rally,
3/12: Market- this rally in the Dow has been accompanied by the weakest GDP growth of all the bull markets since the second world war. 3/12: Stock Market Confidence Indices - United States
3/12: Stock-drop cases reinforce need for due diligence Bad decision by U.S. Supreme Court The Moench presumption 2. In Moench, the Third Circuit adopted a presumption of compliance with ERISA when a fiduciary invests in the employer's stock. In its rulings against the Citigroup and McGraw-Hill plaintiffs, the Second Circuit joined with several other U.S. Court of Appeals circuits in adopting the Moench presumption. "The Moench presumption is a standard of judicial review that, in essence, gives the fiduciaries the benefit of the doubt when determining whether or not it's prudent to leave company stock as an option in their plan," said Mr. Paranczak. "The standard basically says that only in the most egregious, dire circumstances would a plan sponsor or fiduciary need to take extra caution by either putting limitations on stock trading or hiring an outside fiduciary to review the prudence. The presumption of reasonableness in the vast majority of cases is that the ERISA plan sponsor fiduciary knows best about the company stock, and they're not required to overreact to market conditions." Courts applying the Moench presumption recognize that employer stock is a "presumptively prudent" investment. To defeat the presumption, plaintiffs must show that the fiduciaries were aware of dire financial circumstances threatening the company's viability and creating the danger that company stock would become worthless. WRONG: The fiduciary needs to recognize the risk of the potential loss for a non diversified portfolio/allocation. And stupid attorneys applying non real world arguments. 3/11: LTC- only 10% of Boomers have discussed the topic with their children and only 6% with their parents. Less than half (45%) have discussed it with their spouses and only 23% with their financial advisors. More than one-third (35%) said they find it difficult to discuss long-term care, with 33% noting that it is depressing. Though its difficult to start these conversations about seemingly somber topics, families and advisors need to put the difficult conversation in perspective by thinking about the future and how a conversation now can make a situation easier down the road, John Carter, president of distribution and sales for Nationwide Financial, said in a statement. Many Boomers are burying their heads in the sand, with 23% not planning at all for long-term-care expenses. Others are planning to cover the costs with their 401(k) or retirement savings (22%) or their personal savings (21%). Many (64%) are under the mistaken belief that state laws cannot force children to pay their parents unpaid nursing home bills. Currently 29 states have laws that could make a patients children responsible for unpaid long-term-care bills, according to Nationwide Financial.
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Most Boomers (78%) do not expect their children to support them in retirement, which is likely to mean smaller inheritances for their children. About half of the Boomers surveyed (48%) agreed that paying for long-term costs will take away from the money intended for their children as an inheritance, and 43% would rather use these funds to cover long-term care costs than pass money to their heirs
MY RUBBER DUCKY IS BIGGER THAN YOUR RUBBER DUCKY (Actually it was a little rubber ducky that was part of the deficit reduction programs overseen by Congressional Quacks. Gotta a little bit bigger donja think?????) 3/11: No more commissions- On January 1, all licensed financial advisors in the U.K. were required to adopt a fee-for-service model. And in July, the same will go for advisors in Australia. That means selling a product and getting a commission on the sale is verboten. Aite Group calls it the most significant change taking place in the global financial advice industry this year, as highlighted in a recent report from the Boston-based research firm entitled Top 10 Trends in Wealth Management, 2013. 3/11: Guide about the dangers of alcoholism. 3/10: Pics from WWII- You must open the section on the Holocaust. The most vivid and horrifying of any I have seen. .
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3/5:
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3/4: "!$$ING "E4I"EMEN4 B!" C!LLEGE - !allie Mae, the nation<s largest student loan provider, has issued a report, "2ow
America !aves for %ollege," that indicates an alarming number of parents have or are planning to raid their retirement funds to pay a child<s college costs. As the report points out, this isn<t a good idea. ;n addition to drawing down retirement savings, withdrawals from retirement plans can result in ta&able income that then results in reduced financial aid eligibility the following year. 5$69 C* $ILLI!N PE" M!N4 - A recently released independent study estimates that the !.% delay in promulgating a fiduciary standard is costing investors about 3* billion a month in retirement savings. More information is available here. 5$69 !LDE" B!L9S AND DE$4 - /ew reports from AA># and the .mployee 1enefit >esearch ;nstitute A.1>;B paint a blea0 retirement picture, particularly in regard to debt. "Middle-income Americans age 5( and older carry more credit card debt, on average, than younger people...a reversal of the trend from '((4." %lic0 for a copy of In the Red: Older Americans and Credit Card Debt. 5$69 PE4 SNAP - :hile the !upplemental /utrition Assistance #rogram A!/A#B is a federal program administered by the states, #et +ood !tamps is a /ew Jor0-based nonprofit that helps pet owners who can<t afford to support their animal friends. " he #et +ood !tamps program...has been created to fill the void in the 8nited !tates +ood !tamp program which e&cludes the purchase of pet food and pet supplies. ;n these rough economic times, many pet owners are forced to abandon their beloved pet to the A!#%A, /orth !hore Animal Heague or other animal shelters due to the inability to pay for their basic food supply and care." 5$69 +ederal 1udget in #ictures
Federal spending and debt are out of control, and if America does not change course, the future will be dramatically worse. Now more than ever, it is crucial that Americans understand what our nations spending, taxes, and debt mean for them and their families. The Heritage Foundations Federal Budget in Pictures offers a unique tool to learn about the federal budget in a clear and compelling way. These pictures reveal the urgent need to rein in spending. The federal budget is on an unsustainable course,
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3/: $IG $AN9S C0D $ILLI!N SU$SID: - :hat if the billions of dollars they allegedly earn for their shareholders were almost
entirely a gift from 8.!. ta&payersP .conomists have tried to pin down e&actly how much the subsidy is in big ban0s< borrowing costs and some put the number at about (.4 percentage points. he discount applies to all their liabilities, including bonds and customer deposits. Multiplied by the total liabilities of the *( largest 8.!. ban0s by assets, (.4% amounts to a ta&payer subsidy of 345 billion a year. o put the figure in perspective, it<s tantamount to the government giving the ban0s about 5 cents of every ta& dollar collected. !ee complete article at bloomberg.com.
3/4" 1. Liquidity Shocks and Stock Market Reactions Date: 2013-02 By: Turan G. Bali (McDonough School of Business, Georgetown University) Lin Peng (Zicklin School of Business, Baruch College) Yannan Shen (Zicklin School of Business, Baruch College) Yi Tang (Schools of Business, Fordham University) URL: http://d.repec.org/n?u=RePEc:koc:wpaper:1304&r=fmk This paper investigates how the stock market reacts to firm level liquidity shocks. We find that negative and persistent liquidity shocks not only lead to lower contemporaneous returns, but also predict negative returns for up to six months in the future. Long-short portfolios sorted on past liquidity shocks generate a raw and risk-adjusted return of more than 1% per month. This economically and statistically significant relation is robust across alternative measures of liquidity shocks, different sample periods, and after controlling for various risk factors and firm characteristics. Furthermore, the documented effect is stronger for small stocks, stocks with low analyst coverage and institutional holdings, and for less liquid stocks. Our evidence suggests that the stock market underreacts to firm level liquidity shocks, and that this underreaction can be driven by investor inattention as well as illiquidity. 3/4" 1. Dynamic Conditional Beta is Alive and Well in the Cross-Section of Daily Stock Returns
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Date: 2013-02 By: Turan G. Bali (McDonough School of Business, Georgetown University) Robert F. Engle (New York University Stern School of Business) Yi Tang (Schools of Business, Fordham University) URL: http://d.repec.org/n?u=RePEc:koc:wpaper:1305&r=fmk This paper investigates the significance of dynamic conditional beta in predicting the cross-sectional variation in expected stock returns. The results indicate that the time-varying conditional beta is alive and well in the cross-section of daily stock returns. Portfolio-level analyses and firm-level cross-sectional regressions indicate a positive and significant relation between dynamic conditional beta and future returns on individual stocks. An investment strategy that goes long stocks in the highest conditional beta decile and shorts stocks in the lowest conditional beta decile produces average returns and alphas of 8% per annum. These results are robust to controls for size, book-tomarket, momentum, short-term reversal, liquidity, co-skewness, idiosyncratic volatility, and preference for lottery-like assets. 3/4" 1. Risk, Uncertainty, and Expected Returns Date: 2013-02 By: Turan G. Bali (McDonough School of Business, Georgetown University) Hao Zhou (Division of Research and Statistics, Federal Reserve Board) URL: http://d.repec.org/n?u=RePEc:koc:wpaper:1306&r=fmk A conditional asset pricing model with risk and uncertainty implies that the time-varying exposures of equity portfolios to the market and uncertainty factors carry positive risk premiums. The empirical results from the size, book-to-market, and industry portfolios as well as individual stocks indicate that the conditional covariances of equity portfolios (individual stocks) with market and uncertainty predict the time-series and cross-sectional variation in stock returns. We find that equity portfolios that are highly correlated with economic uncertainty proxied by the variance risk premium (VRP) carry a significant, annualized 6 to 8 percent premium relative to portfolios that are minimally correlated with VRP. 3/4: 1. Black swans, dragon kings, and Bayesian risk management Date: 2013 By: Haas, Armin Onischka, Mathias Fucik, Markus URL: http://d.repec.org/n?u=RePEc:zbw:ifwedp:201311&r=rmg In the past decades, risk management in the financial community has been dominated by data-intensive statistical methods which rely on short historical time series to estimate future risk. Many observers consider this approach as a contributor to the current financial crisis, as a long period of low volatility gave rise to an illusion of control from the perspectives of both regulators and the regulated. The crucial question is whether there is an alternative. There are voices which claim that there is no reliable way to detect bubbles, and that crashes can be modeled as exogenous black swans. Others claim that dragon kings, or crashes which result from endogenous dynamics, can be understood and therefore be predicted, at least in principle. The authors suggest that the concept of Bayesian risk management may efficiently mobilize the knowledge, comprehension, and experience of experts in order to understand what happens i n financial markets. --
3/3: FDIC Electronic Deposit Insurance Estimator 3/3: Nassim Taleb : I do not think the bad news would be the recession , the bad news is continuing to commit the same mistake , too much debt, the tumor at the center of the system that has not been removed it is when someone makes money and gets a bonus and when they lose money we pay the price , tax payers future generations , the core of the problem is that asymmetry in pay off , socializing the losses and privatizing the gain and the generator of that inequity is still there , what has happen since the crisis , these people got us here and they are raping the benefits as an industry they have not suffered , you have people in the street unemployed people , you have the federal reserve doing everything to finance these bonuses , I am outraged ....the first time we bailed out the bank was in 1982 - 83 during the Reagan years and they said OK this should never happen again but the fact that bailed out the banks then and in 87 again and keep repeating it gave the banks the feeling that they could hijack society to extract that bonus system that is extremely sneaky , since they know that if they are making mistakes someone else will pay for it but if they make the money they get the benefits , in 2008 when they bailed out the banks once again they should've set the ground to remove that problem they did not , the banks today have hijacked the government , it is like inverse of
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hat the french did they socialized the banks in 1981 while here it is the banks who took over the government , it is not like the banks should be taking more risk or less risk , the banks should be something others than machines to generate themselves bonuses , the banks should be something more like utility , we are bailing them out because they are a utility otherwise we will let them die like other business like the car industry , we should remove that problem that has not been addressed , today the banks are vastly more centralized than they were before the crisis they are much more powerful than they were before they have incredibly snaky lobbying in Washington and it looks like every monetary policy w have had in the United States for about ten years were there to accommodate them and today more than ever , so we have not solved the problems that got us here...we have wasted three years doing nothing but transferring money to the pockets of the bankers .... 3/3: Bob Veres notes- the AICPA PFS credential will merge with the CFP mark so that the profession can rally around a unified credential. The only true professionals will be those with a four-year degree plus the additional credential, and they will belong to an association that only allows credentialed professionals to join - making it much easier for consumers to recognize who is pretending to be a professional while pursuing a sales agenda. EFM- the degree is NOT in financial planning. If one has an astronomy degree and one semester in training as a CFP, where is the vaunted expertiese?????????????? There are those with degrees in planning. though far from a panacea, the choice should be obvious. 3/3: US growth revised up to 0.1% in fourth quarter Growth in the US was revised up from an annualised fall of 0.1 per cent to a rise of 0.1 per cent in the fourth quarter of 2012, but the increase was much smaller than analysts had expected. The initial report of a fall in output for the final three months of the year had caused alarm about a US economic slowdown, but it was distorted by special factors, and economists expected an upward revision to about 0.5 per cent. However, the new estimate was dragged down by the same big falls in business inventories and federal defence spending both temporary factors that do not reflect underlying demand from American business and consumers suggesting that moderate growth will continue. EFM- I am not so optimistic 3/3: Incomplete article. RE: quantifying (an) asset can range from tough-to-do to nearly impossible. Agreed, very tough. But as Peter Bernstein noted, one cannot determine returns but one can determine risk. A competent advisor (of which there are very, very few) knew that a recession was pretty much preordained in 2000 as well as late 2006. Though not an absolute guarantee, the inverted yield curve has been a 100% indicator of a recession about 12 to 14 months hence. Losses average 40%+. When the economy starts to go into the toilet, you dollar cost averaging down. Equity losses should not have exceeded about 15%- 20% max. Gage that against the 57% S&P loss top to bottom. If the portfolio consisted of individual stocks- shame. (How many stocks must you have in a portfolio in order to insulate it due to unsystematic risk? If you or your advisor does not know that, no amount of stress testing is valid.) the overall losses to the overall economy and retirees in particular is that risk of loss is not taught to 401k participants nor just about anyone else. Why? Well, what can anyone expect ion that brokers have never been taught the fundamentals of investing. I doubt it will happen even assuming a fiduciary standard is formally used. Sure one must address job, divorce, etc but the asset allocation for just about all participants must be addressed with its own risk in a down economy. Does not appear that was done here at all. Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013) 3/3:
-elepathic rats pro#ide first step towards creation of <brain-net<

Rats have collaborated telepathically to solve problems across continents in the first use of neurotechnology to transmit thoughts directly between animals brains. Miguel Nicolelis, a pioneer of research into brain-computer interfaces at Duke University in North Carolina, worked on
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the experiments with scientists at the Safra International Institute for Neuroscience of Natal in his native Brazil. Their results were published on Thursday in the journal Scientific Reports. Prof Nicolelis called the experiments an initial step towards the creation of a biological computer or brain-net linking multiple brains. We cannot even predict what kinds of emergent properties would appear when animals begin interacting as part of a brain-net. (I can)
http://link.ft.com/r/G8OTZZ/IENHUQ/62X9T/ZG3O27/RP2QWH/28/h?a1=2013& a2=2&a3=28
So, if we can tie enough rats together, they will have more brain power than the politicians and can end up ruling the world just for cheese rather than ego and power. Case solved 2/28: 2013 tax guide
FISCAL CLIFF Absolute morons

Might very well cause a recession
2/27: When Congress first adopted the sequester, in August 2011, the intention was to spur a deal to reduce the deficit. Hence the big and indiscriminate cuts it threatened if no deal were reached, of $1.1 trillion over the next decade, including $85 billion this year, to be divided equally between the military and civilian portions of the budget. The biggest items in the budgetSocial Security (the federal pension scheme), Medicaid (government-funded health care for the poor) and, for the most part, Medicare (the federal health-care scheme for the old)are exempted, as are military pay and services for veterans. So the remaining elements of the defence budget must shrink by a whopping 8% this year, and non-military programmes by about 5%. 2/26: Directory for 113th Congress 2/26: Drink up: On any given day in the United States, 18 percent of men and 11 percent of women drink more alcohol than federal guidelines recommend, according to a study that also found that 8 percent of men and 3 percent of women are full-fledged "heavy drinkers."
2/26: That is just terrible:
Roubini Forecasting 1.6% GDP Growth in the U.S. this year

2/25: Euro Zone Is Forecast to Sink FurtherA7 EU economists predicted the economy will shrink for the second straight year in 2013 and the third year in the last five.
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2/24: China jobs freeze as Apple cuts orders Foxconn, the worlds largest contract electronics manufacturer, has imposed a recruitment freeze across most of its factories in China as it slows production of Apples iPhone 5. The suspension in hiring by Chinas largest private-sector employer and the biggest assembler of Apple products, is the first such countrywide move since the 2009 downturn, prompted by the financial crisis. It underscores the weakening demand for some Apple products, which has put pressure on the US companys battered share price. Currently, none of the plants in mainland China have hiring plans 2/24 1. Roubini : The Mother of All Bubbles Has Begun Nouriel Roubini : The risk of the end game from QE is not going to be goods inflation, it's not going to be a rout in the bond market, Roubini says. The risk is like during the 2003-06 [cycle] - we're exiting very slowly and we got an asset bubble.We could create an asset bubble worse than the previous one which could lead to another financial crisis not this year, not next year but two or three years down the line if we keep on doing these policies, he says. You're building the financial leverage thats going to lead you to [another] bubble and eventual crash. - in yahoo finance < style="left: 0px; top: 0px; width: 1px; height: 1px; position: absolute; z-index: 100000;" id="_atssh570" title="AddThis utility frame" src="//ct5.addthis.com/static/r07/sh114.html#iit=1361674674531& tmr=load%3D1361674673193%26core%3D1361674673275%26main%3D1361674674525%26ifr%3D1361674674532&cb=0&cdn=5& chr=utf-8&kw=&ab=-&dh=nourielroubini.blogspot.com&dr=&du=http%3A%2F %2Fnourielroubini.blogspot.com%2F2013%2F02%2Froubini-mother-of-all-bubbles-has-begun.html&dt=Roubini%20%3A %20The%20Mother%20of%20All%20Bubbles%20Has%20Begun%20%7C%20Nouriel%20Roubini%20Blog&dbg=0& md=0&cap=tc%3D0%26ab%3D0&inst=1&irt=1&jsl=32&prod=undefined&lng=en-us&ogt=&pc=men&pub=xa-4bb2d31930f34a21& ssl=0&sid=512981b102bba606&srpl=0.00001&srd=0&srf=0.02&srp=0.2&srl=1&srx=1&ver=250&xck=0&xtr=0&og=&rev=119426& ct=1&xld=1&xd=1" name="_atssh570" height="1" width="1"> 2/24: A government at the mercy of events The decision by Moodys to cut the rating of the UK government from AAA to Aa1 is neither surprising, nor informative nor, in itself, damaging. But it is humiliating for the coalition government. It indicates that its programme of fiscal austerity is failing, on its own terms. Since cutting the deficit and retaining the AAA-rating were its overriding policy objectives, this has to be politically damaging. Alas, without a strong economic recovery, the position is likely to get worse. The government has put itself at the mercy of events.
: 2/24: UK loses AAA- The United Kingdom lost its triple A credit rating after being downgraded by Moody's Investors' Service late on Friday, in the latest blow to the government's fiscal consolidation programme as it tries to address the nation's rising debt burden.
Moody's lowered the UK rating by one notch to Aa1 citing the the deterioration in the government's balance sheet and continued weakness in its growth outlook,
2/24: 50-State Chart of Small Claims Court Dollar Limits 2/24: Home prices: The US has plenty of land, so outside big cities the main cost of a house is construction, and the main cost of construction is labour. That means that in the long run, house prices should track rising wages but not run ahead of them. House prices have gone up a little bit since 1890 in real terms, says Mr Shiller. With prices about right relative to history, there is no reason to expect big moves up and down over the next decade or two.
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Another requirement absorbing unwanted houses built during the boom also seems to be met. Although the US housing crash evokes an image of endless stretches of unwanted houses in a desert, over-construction was only a small part of the US housing bubble from 2003 to 2006. In fact, new building never matched its 1970s peak. I think the excess was in terms of home price appreciation and the excess was in terms of home ownership, says Michelle Meyer, a housing economist at Bank of America Merrill Lynch in New York. 2./24: Most Older Americans Avoid Dipping Into Savings But 1 in 5 Outspend Income by 50% or More (PDF)
"About 60 percent of elderly American households spend less than their incomes, but in 2009 more than 14 percent of older households spent considerably more than their income, according to a new report ... Singles, households with no pensions, African-Americans and Hispanics have larger shares of households with deficits. Health care and home related expenses are the biggest drivers of income deficit." (EBRI)
2/24: Fed Meeting Showed Growing Unease Over QE Policy Several Federal Reserve policymakers were concerned last month about the risks of the Fed's efforts to boost the U.S. economy by keeping borrowing costs low for the foreseeable future. 1. Minutes of the Fed's Jan. 29-30 policy meeting released Wednesday showed that some officials worried about the Fed's monthly purchases of $85 billion in Treasurys and mortgage bonds. They expressed concern that the continued purchases could eventually escalate inflation, unsettle financial markets or cause the Fed to absorb losses once it begins selling its investment holdings. 2/24: 1. Roubini : For the U.S., we have kicked the cliff down the road Nouriel Roubini : For the U.S., we have kicked the cliff down the road. we have the debt ceiling issue. We have a sequester issue. We have a continued resolution issue. I think they're going to kick the can further down the road. There's not going to be a grand bargain on spending cuts and revenue increases. They will decide to cut spending by $40 billion and then push the problem another three months. And then every three months they are gong to disagree and have another commission. Until there is market pressure, and there is no market pressure in the U.S., they will kick the can down the road. 2/21: Isle of Man Tax Haven
The island will give information about bank accounts to the Treasury, and offenders will receive immunity from prosecution if they come forward
2/21: Deficit The deficit reduction mavericks are back. Alan Simpson and Erskine Bowles failed to get Washington to accept their original deficit reduction plan at the end of 2010; but this bipartisan duo is rolling out a revamped plan and more tough talk aimed at both Congress and the President. "They haven't done any of the tough stuff, any of the important stuff, they haven't reformed the tax code...they haven't done anything to slow the rate of health care to the rate of growth of the economy, they haven't made Social Security sustainably solvent. There's about $2.4 trillion more of hard work we've gotta do," former Clinton White House Chief of Staff Erskine Bowles tells Politics Confidential. In their new plan, Simpson and Bowles call for a variety of measures that would shrink the nation's deficit, ranging from decreasing discretionary spending to reforming government programs to make them more sustainable. Simpson gets particularly passionate when talking about reforming programs utilized by the country's growing aging population, such as Medicare and Social Security, describing our current path as "madness."
"10,000 [Americans] a day are turning 65," . "This is madness. And life expectancy is 78.1, and in 5 years will be 80. Who is kidding who? This will eat a hole through America." Outside of the Zombie Apocalypse coming from Canada, this is as bad as it can get. (I knew those Canadians were up to something. )
2/21 Expertise in asset allocation can take several forms. Some advisors will develop their own methods in-house while others will turn to outside providers. For the latter group, the challenge will be selecting the best models and applying them to specific clients. Either way, asset allocation will undergo a major change in the coming years. A great deal of work already has been done on long-term accumulation planning, Phillips said. Now interest is shifting to finding the best ways to get an income stream from a portfolio. That might be for clients who are spending down their portfolios in retirement or for others who just want more investment income. The most comprehensive form of asset allocation will include distribution planning, and advisors who master this art are likely to see their revenues keep growing. 2/21: RE to: As regards must a government protect citizens? If not, just eliminate laws and see what happens. Absolute chaos.
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As regards knowledge of financial products for the consumer: Read any research on consumer financial literacy and the grade is F. Take it further into the real world of product application and the consumers are so far removed from reality it is scary. Any elderly actually require witnesses to validate a purchase of almost any financial product. As regards a suitability standard, there never has been one. There are words, but no set standards. The fundamentals of investing have never been taught to a broker. Actually the same can be said about RIAs since the bulk have simply used the Series 7 as their intro to fee practice. So what is a fiduciary? Same set of knowledge? I think not. Must be far far greater. Where does it come from. Pretty much nowhere. Certainly not through using prepackaged software. And not through CFP training. Even a Masters. Old homilies and false theories. As to the fiduciary standard, if imposed by DOL/EBSA on retirement plan accounts and IRAs, result in the inability of consumers to access financial and investment advice? Your point is that there actually can be (acceptable) advice by those with a series 7 or similar. Nice try. As to, Will the same be true if the SEC also imposes fiduciary standard on broker-dealers providing personalized investment advice? And where comes that expertise via a B/D firm? I think not. What about organizations violating fiduciary duty. Question is, does a fiduciary have to be legal? Great for a class discussion since there has never been a CFP, NAPFA or Garret member who has been legal in CA (and most other states) to offer comprehensive fee services. The Past NAPFA stated that we hope that California does not enforce their laws since other states might do so as well. CFP directors told members to keep violating the law but just keep quiet about it. Yes, a fiduciary standard is necessary. But based on past history and current practices, the consumer will probably stayed screwed. Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013)
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Real Life 2/20: Reply to San Franciso Chronicle on finding a Financial Planner Sorry but this is useless. First, there are no retail stockbrokers or registered representatives left in the U.S. For at least 15 years, they have been called financial advisors, planners, etc. in order to support a perception of competency. A fraud. Brokers have never been taught the fundamentals of investing. It's not in the Series 7 nor in continuing education. While RIAs/investment advisers have a fiduciary duty to consumers, the bulk used the series 7 to substantiate competency. Nope There is no real life application to products in any licensing. None have been taught the risk of loss, standard deviation- even diversification. Investment advisors and financial planners have universally used generic software programs to impress consumers with pretty charts and old statistics into giving them money so that they can reach some high AUM- Assets under Management- that supposedly says they must be good. And how did that work in 2000 and 2008? Buy and hold may be fine if nothing goes wrong- but with inept and unknowledgeable advisors- you have the same impact as the politicians with money. Losses and huge debt. As for the CFP- I actually had Wikipedia recently remove some CFP tripe because it clearly suggests that one use a semi-qualified planner. The CFP is one semester on money- not one semester on investing, a semester on insurance etc. There are PLENTY of planners who have a degree in planning- that is where you start. Anything less than a degree is foolish. And while it tends to be preferable to pay a fee, there are no CFPS in California (nor NAPFA et al) who are fully licensed and legal to offer comprehensive fee services. There is a huge difference in sophomoric commentary about planning versus real world. The continuing focus by journalists and rags, no matter the source, is banal advice that will lead to a poor future. We are not in Kansas anymore, Toto. Errold F. Moody Jr. PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser EFMoody.com Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013)
I have been trying to bulk up 2/20:

E8ill "eAulations to "e5uce I"A Bees 8orkFG
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. Munnell# Ant/ony 8e66# an5 Brancis M. %itaAliano
he briefs 0ey findings are9 ?ue to 6(*A0B rollovers, ;>As have become the biggest form of retirement savings. 1ut ;>As tend to have higher fees, partly because commissions Q such as *'b-* fees Q encourage bro0er-dealers to sell more
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e&pensive mutual funds. *'b-* fees would have been eliminated under a '(*( ?epartment of Habor reform proposal. his study finds that eliminating *'b-* fees would produce only modest benefits and, despite industry concerns, would create little harm. 1older reforms merit consideration, such as 0eeping savings in 6(*A0Bs, e&tending 6(*A0B protections to rollover ;>As, and limiting fees in both accounts. his brief is available here.
2/20: A lower rate economy Mr. Grantham writes that the Fed-engineered low interest rate period has given us a sneak preview of what a permanently lower-rate regime might look like. According to Mr. Grantham, the artificially low T-Bill rates will first work their way slowly up the curve. Next, high-yield stocks the most obviously competitive type of equities begin to be bid up ahead of the rest of the market [as has happened, he notes]. The low rate competition then filter into securities that are historically sought after for their higher yields, including higher-grade real estate, where the cap rates slowly fall; and, unfortunately, also forestry and farmland, mainly of the larger and more standard varieties that appeal to institutions, which show declines in their required yields, i.e., their prices rise. The longer the rates stay below true market rates, the higher asset prices become, which leads corporate assets to sell way over replacement cost, Grantham writes. Then, if the heart of capitalism is still beating at all, a long period of over-investment begins and returns are bid down and everything moves into balance, often helped along if asset prices get too high, as in 2000 and 2007, by a good healthy market crunch. in a late December 1999 column, dot-com insanity had become a dangerous virus consuming Americas 95 2/20: things change: million investors ... Wall Street was red hot ... stocks roared ... the top 19 funds of 1999 had totally irrational returns from 179% to 323% ... investors laughed at 30% index-fund returns ... expected 100% plus returns to continue indefinitely ... early retirement was all the buzz. 1. Paradigm shift: Great American Dream triggers death of optimism Something profound and historic happened during the New Millennium transition
Forbes: Famed contrarian money manager David Dreman remarked that the average analyst forecast was wrong by 40% between 1982 and 1990 and didnt get any better in the 90s, in fact, they got worse. The average analyst consensus forecast was off 48.7%. In fact, the inaccuracy of these forecasts shows how dangerous it is to buy or hold stocks on the basis of what analysts predict.
Wall Street Journal: To the sophisticated investor, it is no longer news that analysts recommendations may lack objectivity, but what isnt as widely known: The pressure that negative analysts feel is often from their own clients, institutional investors. One analyst who did issue a sell signal and wound up in the doghouse said, You make a lot of friends when you say buy a stock, but not when you put out a sell.
BusinessWeek: Wall Street research reports are more sales documents than disinterested analyses. Most professional investors understand this and treat research accordingly, but Main Street investors never get it, till its too late.
Forbes: Economist Gary Shilling warned that Wall Street analysts, often appearing on TV business shows, have spurred you to buy stocks for years, and correctly so in this long bull market. But what will their advice be worth if we head into a full-blown bear market? Less than zero; theyre paid to be bulls 24 hours a day, 365 days a year.
Newsweek: How much research do Wall Street analysts actually do? You should not take Wall Street research too seriously. ... Remember to laugh the next time someone tells you that the stock market is a rational place and that big-money investors know what theyre doing. in a late December 1999 column, dot-com insanity had become a dangerous virus consuming Americas 95 million investors ... Wall Street was red hot ... stocks roared ... the top 19 funds of 1999 had totally irrational returns from 179% to 323% ... investors laughed at 30% index-fund returns ... expected 100% plus returns to continue indefinitely ... early retirement was all the buzz.
2/20: Current annuity rates
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2/20: DE$4&BUELED C!NSUMP4I!N - Anyone familiar with rehab programs 0nows that the first step toward fi&ing a problem is
admitting that there is one. >ight now, one of the biggest threats facing American investors, even bigger than our fiscal uncertainty and sluggish economy, is a combination of "debt-fueled consumption" and unrealistic e&pectations. " he developed economies of the world are addicted to debt-financed consumption, and this is very dangerous," says the manager of #;M%7. As he sees it, even the way we measure growth AK?#B is flawed. 2e li0ens it to some sort of twisted household logic. ";magine a family that measures its success by how much it spends. hey buy a house they can<t afford, a car they can<t afford. ;t feels marvelous. ;t feels li0e prosperity, and yet we 0now it<s not prosperity. :e 0now it<s a false prosperity R an illusion of prosperity." '$'(9 SMALL $USINESS $ENEBI4S - H;M>A reports 6=% of small businesses A'--- employeesB in the 8nited !tates offer benefits to their employees. hat is the lowest level in two decades. " he recession has had an impact on smaller employers< ability to offer benefits, particularly those with fewer than ten employees. he wea0 economy caused a lot of small firms to close, while the new firms cropping up to replace them are less li0ely to offer benefits. Many small businesses are also hesitant to add new benefits until the economy improves." '$'(" 8!"9ING B!" 4 E :AN9EE D!LLA" - he 8.! dollar is shrin0ing as a percentage of the world<s currency supply, raising concerns that the greenbac0 is about to see its long run as the world<s premier denomination come to an end. According to the ;nternational Monetary +und, when compared to its peers, the dollar has drifted to a *5-year low, indicating that more countries are willing to use other currencies to do business. he American currency, however, still reigns supreme -- it constitutes 35.=' trillion, or ,'%, of the 3, trillion in allocated foreign e&change holdings by the world<s central ban0s. "Kenerally spea0ing, it is not believed by the vast ma)ority that the American dollar will be overthrown. 1ut it will be, and this defroc0ing may occur in as short a period as five to *( years." '$'(9 ; am getting fat again- Failure to take account of modern science in assessing calories could lead to errors of up to 30% in figures on food labels and websites
2/19: Retirement sucksThe retirement landscape is shifting dramatically, making the outlook for retiring Baby Boomers and Generation Xers far less sanguine than for current retirees. 53 percent of households are at risk of not having enough to maintain their living standards in retirement. Explicitly including health care in the Index further drives up the share of households at risk. Saving more and working longer may substantially improve the outlook.
2/19: Bailout= this sucks (NY Times) Late last Wednesday, the New York Fed said in a court filing that in July it had released Bank of America from all legal claims arising from losses in some mortgage-backed securities the Fed received when the government bailed out the American International Group in 2008. One surprise in the filing, which was part of a case brought by A.I.G., was that the New York Fed let Bank of America off the hook even as A.I.G. was seeking to recover $7 billion in losses on those very mortgage securities. What did the New York Fed get from Bank of America in this settlement? Some $43 million, it seems, from a small dispute the New York Fed had with the bank on two of the mortgage securities. At the same time, and for no compensation, it released Bank of America from all other legal claims. Senator Sherrod Brown, Democrat of Ohio, who serves on the Banking Committee, said the New York Feds behavior in this case underscores that the more we learn about these bailouts, gifts and advantages that Wall Street gets, the clearer it becomes that one set of rules applies to the largest megabanks and another set of rules to the smaller financial institutions and the rest of the country.
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Walker F. Todd, a former official at the Federal Reserve Bank of Cleveland, warned: As a public entity, the Federal Reserve needs to take its custody of public funds seriously enough to ask for more than merely nominal compensation when it is giving up things of value to a bank holding company. If the central bank starts releasing binding legal claims for nominal compensation, it looks like just one more element of the secret or back-door bailout of the banking system.2/18: Neither way worksFewer investors across all age groups are using traditional advisors as their primary provider of financial guidance,s. The decline is most pronounced among Americans younger than 50. In 2005, 22% of households headed by individuals in their 20s used advisors as their primary advice provider. By 2011, only 7% did. The use of advisors also fell among investors in their 30s and 40s, falling from 20% and 27%, respectively, to 9% and 16%.Investors in older age groups also reported using traditional advisors less, particularly seniors over the age of 70. In 2005, 53% of the over-70 set relied primarily on their advisors for financial advice. By 2011, the percentage fell to 40%. 2/19: 13 years ago, Investors Business Daily really had predicted the Dow 49,200 for 2013. Other optimistic gurus had a vision for America projecting way out to 2047. Yes, these pundits and economists kept a long-term perspective and saw Americas future headed into a prosperous new century and beyond.
15,000 by 2005: Deutsche Bank economist Ed Yardeni, quoted in Barrons.
18,500 by 2006: Prudentials chief technician, Ralph Acampora, quoted in Fortune.
41,000 by 2008: Harry Dent, author of The Roaring 2000s: Building The Wealth And Lifestyle You Desire In The Greatest Boom In History. Wired magazine quoted 41,000 as a peak with the market not bottoming till 2022. Dent has since published The Great Crash Ahead and The Great Depression Ahead.
21,200 by 2010: Sheldon Jacobs, publisher of the popular No-Load Fund Investor newsletter hedged his optimistic bet in small type: But it wont be smooth sailing. There will be three major bear markets before then. But long-run, it was optimistic.
30,000 by 2010: In an interview, Barrons noted that back in 1989 Frank Jennings, manager of Oppenheimer Global Growth & Income Fund, had successfully predicted the Dow at 10,000 within 10 years. His new Dow 30,000 assumed an exponential gain of 11% a year. Later in 2000, Jennings optimism was reinforced with the publication of Dow 36,000: The New Strategy for Profiting from the Coming Rise in the Stock Market, by James Glassman and Kevin Hassett. 2/18: Americas Most (and Least) Literate Cities 2/18: Sterling- Hedge funds and investment managers are dumping sterling as disappointing economic growth in the UK, the threat of a downgrade of its debt and an upcoming change of guard at the Bank of England have fuelled concerns about a drop in the countrys asset values 2/17: Algorithms: The models at the heart of modern finance are often said to be mathematically complex and impossible to understand. But this belies the fact about how they work. It is the world that is mind-bogglingly complex. The models are dramatic simplifications, designed to give some small quantitative purchase on problems that would otherwise be intractable. To achieve these simplifications, model builders make assumptions about how the world works assumptions that rarely
hold exactly and often fail spectacularly.

the models were a source of information, tools that could provide some quantitative insight, but no more. A model such as Black-Scholes can tell you how much an option should be worth if the period from now to the options expiration is filled with normal trading days and not what will happen if markets go haywire. This sort of best-case-scenario information can be crucial to decision-making, but it is never the whole story. The trouble with models arises not because they can sometimes fail but because they are often built in ways that force us to trust them implicitly. Most investment companies use computerised risk management systems to limit the risk traders can take. These systems are built into the infrastructure of a firms operations and both traders and managers rely on them. But they are as sensitive to assumptions as any other model and just as liable to fail. Indeed, a failure in these systems was what initially masked the London Whale trades from JPMorgan executives, allowing losses to spiral out of control. Even the language of traders, who often speak in a code of Greek letters such as delta and gamma, rests on acknowledged assumptions about
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the likelihood of market crashes. And it is here that the real danger lies. We should fear models only insofar as we are able to forget that we are using them at all. That is when it is easiest to lose sight of where the simplifications end and the real world begins. EFM- This is clear from previous books by Mandlebrot and Bernstein. It is also the reason that an advisor is supposed to view overall risk. Admittedly that is not easy, takes a lot of time to 'master' and, no matter, is not perfect within itself. That said, it is designed to substantially reduce large losses since the overall risk can be addressed. As Peter Bernstein noted, you cannot determine returns but you can determine risk. So why are advisers lacking in such aspects. Take a look at the basic licensing education- series 7 for example. Risk is not an issue exacept in the most esoteric terms. The fundamentals of investing have never been taught to a broker. 2/14: Children- Moynihan
, a longestablished motivation among mortals. In this pattern, a growth in deviancy makes possible a transfer of resources, including prestige, tothose who control the deviant population. This control would be jeopardized if any serious effort were made to reduce the deviancy in question. This leads to assorted strategies for re-defining the behavior in question as not all that deviant, really. In the years from 1963 to 1965, the Policy Planning Staff of the U.S. Department of Labor picked up the first tremors of what Samuel H. Preston, in the 1984 Presidential Address to the Population Association of America, would call "the earthquake that shuddered through the American family in the past twenty years." The New York Times recently provided a succinct accounting of Preston's point: Thirty years ago, 1 in every 40 white children was born to an unmarried mother; today it is 1 in 5, according to Federal data. Among blacks, 2 of 3 children are born to an unmarried mother; 30 years ago the figure was 1 in 5. In 1991, Paul Offner and I published longitudinal data showing that, of children born in the years 1967-69, some 22.1 percent were dependent on welfare - that is to say, Aid to Families with Dependent Children - before reaching age 18. This broke down as 15.7 percent for white children, 72.3 percent for black children. Projections for children born in 1980 gave rates of 22.2 percent and 82.9 percent respectively. A year later, a New York Times series on welfare and poverty called this a "startling finding ... symptom of vast social calamity." And yet there is little evidence that these facts are regarded as a calamity in municipal government. To the contrary, there is general acceptance of the situation as normal. Political candidates raise the
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subject, often to the point of dwelling on it, But while there is a good deal of demand for symbolic change, there is none of the marshaling of resources that is associated with significant social action. Nor is there any lack of evidence that there is a serious social problem here. Richard T. Gill writes of "an accumulation of data showing that intact biological parent families offer children very large advantages compared to any other family or non-family structure one can imagine." Correspondingly, the disadvantages associated with single-parent families spill over into other areas of social policy that now attract great public concern. Leroy L. Schwartz, M.D., and Mark W. Stanton argue that the, real quest regarding a government-run health system such as that of Canada or Germany is whether it would work "in a country that has social problems that countries like Canada and Germany don't share to the same extent." Health problems reflect ways of living. The way of life associated with "such social pathologies as the breakdown of the family structure" lead to medical pathologies. Schwartz and Stanton conclude: "The United States is paying dearly for its social and behavioral problems," for they have now become medical problems as well.
To cite another example, there is at present no more vexing problem of social policy in the United States than that posed by education. A generation of ever-more ambitious statutes and reforms have produced weak responses at best and a fair amount of what could more simply be called dishonesty. ("Everyone knows that Head Start works." By the year 2000, American students will "be first in the world in science and mathematics.") None of this should surprise us. The 1966 report Equality of Educational Opportunity by James S. Coleman and his associates established that the family background of students played a much stronger role in student achievement relative to variations in the ten (and still standard) measures of school quality.
In a 1992 study entitled America's Smallest School: The Family, Paul Barton came up with the elegant and persuasive concept of the parentpupil ratio as a measure of school quality. Barton, who was on the policy
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planning staff in the Department of Labor in 1965, noted the great increase in the proportion of children living in single-parent families since then. He further noted that the proportion "varies widely among the states" and is related to "variation in achievement" among them. The correlation between the percentage of eighth graders living in twoparent families and average mathematics proficiency is a solid .74. North Dakota, highest on the math test, is second highest on the family compositions scale - that is, it is second in the percentage of kids coming from two-parent homes. The District of Columbia, lowest on the family scale, is second lowest in the test score.
A few months before Barton's study appeared, I published an article showing that the correlation between eighth-grade math scores and distance of state capitals from the Canadian border was .522, a respectable showing. By contrast, the correlation with per pupil expenditure was a derisory .203. I offered the policy proposal that states wishing to improve their schools should move closer to Canada. This would be difficult, of course, but so would it be to change the parent-pupil ratio. Indeed, the 1990 Census found that for the District of Columbia, apart from Ward 3 west of Rock Creek Park, the percentage of children living in single-parent families in the seven remaining wards ranged from a low of 63.6 percent to a high of 75.7. This being a One-time measurement, over time the proportions become asymptotic. And this in the nation's capital. No demand for change comes from that community - or as near to no demand as makes no matter. For there is good money to be made out of bad schools. This is a statement that will no doubt please many a hard heart, and displease many genuinely concerned to bring about change. To the latter, a group in which I would like to include myself, I would only say that we are obliged to ask why things do not change.
For a period there was some speculation that, if family structure got bad enough, this mode of deviancy would have less punishing effects on children. In 1991 Deborah A. Dawson of the National Institutes of Health, examined the thesis that "the psychological effects of divorce
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and single parenthood on children were strongly influenced by a sense of shame in being 'different' from the norm." If this were so, the effect should have fallen off in the 1980s, when being from a single-parent home became much more common. It did not. "The problems associated with task overload among single parents are more constant in nature," Dawson wrote, adding that since the adverse effects had not diminished, they were "not based on stigmatization but rather on inherent problems in alternative family structures" - alternative here meaning other than two-parent families. We should take note of such candor. Writing in the Journal of Marriage and the Family in 1989, Sara McLanahan and Karen Booth noted: "Whereas a decade ago the prevailing view was that single motherhood had no harmful effects on children, recent research is less optimistic." The year 1990 saw more of this lesson. In a paper prepared for the Progressive Policy Institute, Elaine Ciulla Kamarck and William A. Galston wrote that "if the economic effects of family breakdown are clear, the psychological effects are just now coming into focus." They cite Karl Zinsmeister: There is a mountain of scientific evidence showing that when families disintegrate children often end up with intellectual, physical, and emotional scars that persist for life.... We talk about the drug crisis, the education crisis, and the problems of teen pregnancy and juvenile crime. But all these ills trace back predominantly to one source: broken families. As for juvenile crime, they cite Douglas Smith and C. Roger Jarjoura: "Neighborhoods with larger percentages of youth (those aged 12 to 20) and areas with higher percentages of single-parent households also have higher rates of violent crime." They add: "The relationship is so strong that controlling for family configuration erases the relationship between race and crime and between low income and crime. This conclusion shows up time and time again in the literature; poverty is far from the sole determinant of crime." But the large point is avoided. In a 1992 essay The Expert's Story of Marriage," Barbara Dafoe Whitehead examined "the story of marriage as it is conveyed in today's high school and college textbooks." Nothing amiss in this tale. It goes like this:
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The life course is full of exciting options. The lifestyle options available to individuals seeking a fulfilling personal relationship include living a heterosexual, homosexual, or bisexual single lifestyle; living in a commune; having a group marriage; beings single parent; or living together. Marriage is yet another lifestyle choice. However, before choosing marriage, individuals should weigh its costs and benefits against other lifestyle options and should consider what they want to get out of their intimate relationships. Even within marriage, different people want different things. For example, some people marry for companionship, some marry in order to have children, some marry for emotional and financial security. Though marriage can offer a rewarding path to personal growth, it is important to remember that it cannot provide a secure or permanent status. Many people will make the decision between marriage and singlehood many times throughout their life. Divorce represents part of the normal family life cycle. It should not be viewed as either deviant or tragic, as it has been in the past. Rather, it establishes a process for "uncoupling" and thereby serves as the foundation for individual renewal and "new beginnings." History commences to be rewritten. In 1992, the Select Committee on Children, Youth, and Families of the U.S. House of Representatives held a hearing on "Investing in Families: A Historical Perspective." A fact sheet prepared by committee staff began: "INVESTING IN FAMILIES: A HISTORICAL PERSPECTIVE" FACT SHEET HISTORICAL SHIFTS IN FAMILY COMPOSITION CHALLENGING CONVENTIONAL WISDOM While in modern times the percentage of children living with one parent has increased, more children lived with just one parent in Colonial America. The fact sheet proceeded to list program on program for which federal funds were allegedly reduced in the l980s. We then come to a summary. Between 1970 and 1991, the value of AFDC [Aid to Families with Dependent Children] benefits decreased by 41%. In spite of proven success of Head Start, only 28% of eligible children are being served. As of 1990, more than $18 billion in child support went uncollected. At the same time, the poverty rate among single-parent with children under 18 was 44%. Between 1980 and 1990, the rate of growth in the total Federal budget was four times greater than the rate of growth in children's programs.
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In other words, benefits paid to mothers and children have gone down steadily, as indeed they have done. But no proposal is made to restore benefits to an earlier level, or even to maintain their value, as is the case with other "indexed" Social Security programs. Instead we go directly to the subject of education spending.
Nothing new. In 1969, President Nixon proposed a guaranteed income, the Family Assistance Plan. This was described as an "income strategy" as against a "services strategy." It may or may not have been a good idea, but it was a clear one, and the resistance of service providers to it was equally clear. In the end it was defeated, to the huzzahs of the advocates of "welfare rights." What is going on here is simply that a large increase in what once was seen as deviancy has provided opportunity to a wide spectrum of interest groups that benefit from re-defining the problem as essentially normal and doing little to reduce it.
2/14: I don't blame them Affluent Americans Downbeat on Economy

Two thirds of high-net-worth households with $5 million or more in investable assets believe that the country is worse off now than it was in 2007. read more
2/14:
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2/14: Like it or not, the fiduciary standard is coming
My reply RE: "I personally feel that the SEC and FINRA are ill-equipped to provide the necessary level of enforcement required if all financial advisors are fiduciaries. Given the rampant cases of investor fraud across the country, I see no end in sight, with nominal punishments for bad behavior." It is not just them. It includes effectively every State Insurance Department as well as the planning organizations of the CFP, NAPFA, FPA, et al. NAPFA past president said years ago- "we hope California does not enforce their laws because other states might do so as well". CFP directors told members to keep violating the law but just keep quiet about it". It's called situational ethics- if it is OK for you, your business, your organization, etc, then the rules can be- and are- bent to allow mass hypocrisy.
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RE:"Perhaps if we better educate the average investor by providing sound and unbiased financial education, we can better equip investors to be able to identify potential investment fraud and empower them to select the type of advisor that is appropriate for their specific needs. In my opinion, there needs to be a cultural shift in the country rather than a legislative movement to clean up the industry." I agree with what you say but the current illiteracy and ALITERACY of the American consumer will not be changed for at least 20 years even with massive interdiction in the schools starting now. And what we do have is the Stock Market Game that 'teaches' children that they should buy and sell stocks and funds as quickly as possible in three weeks to beat other students in their classes and earn bragging rights. We do need a shift but with the industry money still controlling political purse strings, I am not holding my breath. Errold F Moody Jr PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser Author: Financial Planning Fiduciary Standards under Dodd Frank (2012) The Failure of Securities Arbitrations (2013)
2/13: Deviancy: Patrick Moynihan 1993 "proffers the thesis that, over the past generation, , the amount of deviant behavior in American society has increased beyond the levels the community can "afford to recognize" and that, accordingly, we have been re-defining deviancy so as to exempt much conduct previously stigmatized, and also quietly raising the "normal" level in categories where behavior is now abnormal by any earlier standard. 2/13 Moynihan again on the mentally ill. It shows a main reason why gun control is not the real answer. We, as a society, decided long ago that the release of the mntalllyill to their own devices was the 'best' move- at least financially. Early in 1955 Averell Harriman, then the new governor of New York, met with his new commissioner of mental hygiene, Dr. Paul Hoch, who described the development, at one of the state mental hospitals, of a tranquilizer derived from rauwolfia. The medication had been clinically tested and appeared to be an effective treatment for many severely psychotic patients, thus increasing the percentage of patients discharged. Dr. Hoch recommended that it used systemwide; Harriman found the money. That same year Congress created a Joint Commission on Mental Health and Illness whose mission was to formulate "comprehensive and realistic recommendations" in this area, which was then a matter of considerable public concern. Year after year, the population of mental institutions grew. Year after year, new facilities had to be built. Never mind the complexities: population growth and such like matters. There was a general unease. Durkheim's constant continued to be exceeded. (In Spanning the Century: The Life I
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of W. Averell Harriman, Rudy Abramson writes: "New York's mental hospitals in 1955 were overflowing warehouses, and new patients were being admitted faster than space could be found for them. When he was inaugurated, 94,000 New Yorkers were confined to state hospitals. Admissions were running at more than 2,500 a year and rising, making the Department of Mental Hygiene the fastest-growing, most-expensive, most-hopeless department of state government.")
The discovery of tranquilizers was adventitious. Physicians were seeking cures for disorders that were just beginning to be understood. Even a limited success made it possible to believe that the incidence of this particular range of disorders, which had seemingly required persons to be confined against their will or even awareness, could be greatly reduced. The Congressional Commission submitted its report in 1961; it proposed a nationwide program of deinstitutionalization.
Late in 1961, President Kennedy appointed an interagency committee to prepare legislative recommendations based upon the report. I represented Secretary of Labor Arthur J. Goldberg on this committee and drafted its final submission. This included the recommendation of the National Institute of Mental Health that 2,000 community mental health centers (one per 100,000 of population) be built by 1980. A buoyant Presidential Message to Congress followed early in 1963. "If we apply our medical knowledge and social insights fully," President Kennedy pronounced, "all but a small portion of the mentally ill can eventually achieve a wholesome and a constructive social adjustment." A "concerted national attack on mental disorders [was] 110W possible and practical." The President signed the Community Mental Health Centers Construction Act on October 31, 1963, his last public bill-signing ceremony. He gave me a pen.
The mental hospitals emptied out. At the time Governor Harriman met with Dr. Hoch in 1955, there were 93,314 adult residents of mental
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institutions maintained by New York State. As of August 1992, there were 11,363. This occurred across the nation. however, the number of community mental health centers never came near the goal of the 2,000 proposed community centers. Only some 482 received federal construction funds between 1963 and 1980. The next year, 1981, the program was folded into the Alcohol and Other Drug Abuse block grant and disappeared from view. Even when centers were built, the results were hardly as hoped for. David F. Musto of Yale writes that the planners had bet on improving national mental health "by improving the quality of general community life through expert knowledge, not merely by more effective treatment of the already ill." There was no such knowledge.
However, worse luck, the belief that there was such knowledge took hold within sectors of the profession that saw institutionalization as an unacceptable mode of social control. These activists subscribed to a re-defining mode of their own. Mental patients were said to have been "labeled," and were not to be drugged. Musto says of the battles that followed that they were "so intense and dramatic precisely because both sides shared the fantasy of an omnipotent and omniscient mental health technology which could thoroughly reform society; the prize seemed eminently worth fighting for."
But even as the federal government turned to other matters, the Mental institutions continued to release inmates. Professor Fred Siegel of Cooper Union observes: "In the great wave of moral deregulation that began in the mid-1960s, the poor and the insane were freed from the fetters of in middle-class u mores." They might henseforth sleep in doorways as often as they chose. The problem of the homeless appeared, charac-
teristically defined as persons who lacked "affordable housing."

2/13:
,1 -reasury triggers fall in yen

Sudden movements highlight volatile forex atmosphere ahead of a summit of G20 finance ministers amid fears of a new
round of currency wars

http://link.ft.com/r/0QSDPP/SUGP95/5VWQL/WTJ8TO/1OK8LS/28/h?a1=2013& a2=2&a3=11
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2/12: Student Loan Network 2/12: Pension raiding many families treat these retirement accounts as sources of ready cash for current needs and discretionary spending rather than as sources of income in retirement. About 6 percent of young adults ages 25 to 44 reported cashing in some of their pension money. And at age 59when early withdrawal penalties are removedabout 15 percent withdrew from their accounts, a proportion about equal to the rate of withdrawal for those ages 65 and 66. 1. Withdrawals jumped in 2003, after the 9/11 stock market crash, briefly stabilized and then jumped again from 2007 to 2009. "If you leave people to their own devices, it's tempting for them to use this money before they retire," Stafford said. "Our data show that they're withdrawing money for reasons ranging from out-of-pocket medical expenses to home repairs of more than $10,000 like a new roof, to discretionary expenses like remodeling their kitchens and installing granite countertops. Anecdotal evidence suggests that some families are using these accounts to obtain tax advantages, or to shelter assets from student loan applications." By far the most common reason for withdrawals appears to be mortgage loan distress, according to Stafford. Those who are behind on their mortgages, or are afraid they are going to fall behind, are raiding their retirement accounts to stay above water. "That's the problem with defined contribution pensions," Stafford said. "With defined benefit plans, people cannot get their hands on the money before they retire. Now as GM, Ford and many state and local governments are offering 'conversions' of defined benefit pensions, offering lump sums to retirees in place of monthly pension checks, this problem is going to get bigger. 2/12: Home Repair Projects
Home Improvement Outdoor Projects 2/12: the dollar
the dollar is winning the race to the bottom. In the last 12 years, gold is up from $255 per ounce to the mid-$1600s. Silver is up from $4.50 to $32 per ounce. Oil is up from under $30 a barrel to over $90 per barrel and the euro has grown from under $0.90 to almost $1.35, a 50% gain since 2001. The dollar has been falling for almost 50 years, but it hasnt fallen in each of those years. The dollar basically declined from 1965 to 1978, then strengthened from 1979 to 1985, then fell until 1995, gained strength until 2001, and has fallen for the last 12 years. The dollars chronic weakness since 2001 has helped U.S. exports grow faster than the overall economy. According to John Lonski, Moodys chief capital market economist, U.S. exports are up an average 5.3% a year since mid-2002. In the previous seven years (1995 to 2002), when the dollar was strong and America was growing faster than in recent years, export growth was only 4% per year. In the late 1990s, exports totaled less than 10% of GDP, but today, our exports represent a record-high 14% of GDP, leading to a rebirth of American manufacturing.
2/12: Find the Data Better than google for certain info 2/11: A Modern History of Fiscal Prudence and Profligacy We draw on a newly collected historical dataset of fiscal variables for a large panel of countries to our knowledge, the most comprehensive database currently availableto gauge the degree of fiscal prudence or profligacy for each country over the past several decades. Specifically, our dataset consists of fiscal revenues, primary expenditures, the interest bill (and thus both the primary and the overall fiscal deficit), the government debt, and gross domestic product, for 55 countries for up to two hundred years. For the first time, a large cross country historical data set covers both fiscal stocks and flows. Using Bohns (1998) approach and other tests for fiscal sustainability, we document how the degree of prudence or profligacy varies significantly over time within individual countries. We find that such variation is driven in part by unexpected changes in potential economic growth and sovereign borrowing costs. 2/11: 1. Manipulating Reliance on Intuition Reduces Risk and Ambiguity Aversion
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Date: 2013 By: Jeffrey V. Butler (EIEF) Luigi Guiso (EIEF) Tullio Jappelli (University of Naples "Federico II" and CSEF) URL: http://d.repec.org/n?u=RePEc:eie:wpaper:1301&r=cbe Prior research suggests that those who rely on intuition rather than effortful reasoning when making decisions are less averse to risk and ambiguity. The evidence is largely correlational, however, leaving open the question of the direction of causality. In this paper, we present experimental evidence of causation running from reliance on intuition to risk and ambiguity preferences. We directly manipulate participants predilection to rely on intuition and find that enhancing reliance on intuition lowers the probability of being ambiguity averse by 30 percentage points and increases risk tolerance by about 30 percent in the experimental subpopulation where we would a priori expect the manipulation to be successful (males). 2/11: 1. A psychological perspective of financial panic Date: 2012 By: Anat Bracha Elke U. Weber URL: http://d.repec.org/n?u=RePEc:fip:fedbpp:12-7&r=cbe In spite of large number of financial crises, often depicted as episodes of financial panic, the notion of panic in financial markets is not very well understood. Many have argued that in order to understand financial crises, and in particular panic events, we need to go beyond classic economic arguments. This paper is an effort in that direction, in which we attempt to give a psychological account of panic and of panic in financial markets in particular, by discussing uncertainty, the desire for predictability and control, the illusion of control, and confidence. We suggest how one might incorporate these psychological insights into existing economic models. 2/11: 1. Peer Effects in Risk Taking Date: 2012-12 By: Lahno, Amrei M. Serra-Garcia, Marta URL: http://d.repec.org/n?u=RePEc:lmu:muenec:14309&r=cbe This paper examines the effect of peers on individual risk taking. In the absence of informational motives, we investigate why social utility concerns may drive peer effects. We test for two main channels: utility from payoff differences and from conforming to the peer. We show experimentally that social utility generates substantial peer effects in risk taking. These are mainly explained by utility from payoff differences, in line with outcomebased social preferences. Contrary to standard assumptions, we show that estimated social preference parameters change significantly when peers make active choices, compared to when lotteries are randomly assigned to them. 2/11: 1. Effect of uncertainty about others rationality in experimental asset markets Date: 2012-11-19 By: Eizo Akiyama (Faculty of Engineering, Information and Systems. University of Tsukuba) Nobuyuki Hanaki (Ryuchiro Ishikawa) URL: http://d.repec.org/n?u=RePEc:aim:wpaimx:1234&r=cbe We investigate the extent to which price deviations from fundamental values in an experimental asset market are due to the uncertainty of subjects regarding others rationality. We do so by comparing the price forecasts submitted by subjects in two market environments: (a) all six traders are human subjects (6H), and (b) one human subject interacts with five profit-maximizing computer traders who assume all the traders are also maximizing profit (1H5C). The subjects are told explicitly about the behavioral assumption of the computer traders (in both 6H and 1H5C) as well as which environment they are in. Results from our experiments show that there is no significant difference between the distributions of the initial deviations of the forecast prices from the fundamental values in the two markets. However, as subjects learn by observing the realized prices, the magnitude of deviations becomes significantly smaller in 1H5 C than in 6H markets. We also conduct additional experiments where subjects who have
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experienced the 1H5C market interact with five inexperienced subjects. The price forecasts initially submitted by the experienced subjects follow the fundamental value despite the fact that the subjects are explicitly told that the five other traders in the market are inexperienced subjects. These findings do not support the hypothesis that uncertainty about others rationality plays a major role in causing substantial deviation of forecast prices from the fundamental values in these asset market experiments. 2/11: 1. A Nudge Isnt Always Enough Date: 2012-12 By: Erin Todd Bronchetti Thomas S. Dee David B. Huffman Ellen Magenheim URL: http://d.repec.org/n?u=RePEc:crr:issbrf:ib2012-21&r=cbe Over the past decade, researchers have focused attention on a new approach for encouraging Americans to adopt beneficial behaviors. This approach relies on making the desired behavior occur automatically unless an individual chooses to opt out. A prominent example is automatic enrollment in 401(k plans, in which employees are signed up for the plan at a default contribution rate if they do not take any action. This policy has proven to be a potent way to boost participation rates. While such default design strategies can improve some saving decisions, researchers have begun exploring their potential limitations. For example, one recent study found that setting a very high default contribution rate for a workplace saving plan caused many workers to choose a different rate. This brief is based on a new study that also tests the limits to default design through an experiment to encourage low-income individuals to save about 10 percent of their tax refund. The discussion is organized as follows. The first section describes the behavioral theory behind default design. The second section explains how defaults were used to nudge some low-income tax-filers to buy U.S. Savings Bonds with a portion of their tax refund. The third section discusses the results: the tax filers who were nudged to invest in the bonds were no more likely than other low-income filers to participate, apparently because they already had plans to spend their refunds. The final section concludes that policies that rely on default design may not work when they clash sharply with individuals intentions.
2/11: Retirement Expectations May Be Too Ambitious 1. February 5, 2013 (PLANSPONSOR.com) Ameriprise Financials Retirement Check-In survey found many Americans may be financially ill-prepared for their dream retirement. On average, the survey found, those nearing retirement (ages 50 to 70) aim to close a $250,000 gap before they can retire comfortably, and 68% percent plan to work after they officially retire. Still, the majority (78%) expect to be extremely happy after they leave the work force. Nearly nine in 10 (88%) respondents said they feel comfortable navigating all of the resources available about retirement preparation. Seventy percent said they feel in control of their financial future, and 72% said their dream retirement includes really nice vacations. However, more than one-third (38%) admitted they may not have an accurate understanding of what costs they will face in the future because that have not yet estimated their annual expenses in retirement. Less than half of respondents (46%) are extremely or very confident they will be able to afford essential expenseshousing, utilities and medical costsin retirement. Just 38% feel confident in their ability to afford extras such as traveling and pursuing hobbies. Respondents said they expect to need close to $1 million for a comfortable retirement (on average, $934,000), but their current investable assets, including employer-sponsored plans, are less than $700,000. One in five (22%) report they have less than $250,000 total saved for retirement. 2/11:
Choosing Well: Long Term Care Facilities By Hilary Gibson, Caregiver.com

One of the hardest things a caregiver will ever have to do is to know when its time for their loved one to go into a long-term care facility. Often, caregivers will go long past the point of when they should have incorporated help from the outside. Sometimes, its their own fear of failing as a caregiver and the fear of letting someone down that stands between themselves, their loved ones, and an improved quality of life for both. Identifying some of the following may help make the decision process a little easier, and define certain things a little more clearly for you. A long-term care facility may be needed if: your relatives condition keeps getting worse and is becoming too much for you to handle on your own; no matter how hard you try to give care to your loved one, its just not enough; you feel as if you are the only one around who is having to care for someone who is ill or elderly; youre not receiving any type of respite, and it doesnt look like anything can be arranged for you to get much-needed time away or rest; relationships with other family members are breaking down because of the time you must dedicate to caring for one person; your caregiving
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responsibilities are beginning to greatly interfere with your work and personal life; you have feelings of guilt when it comes to taking care of yourself; your coping skills are beginning to include self-destructive behavior, such as eating too much or too little, increased drug use or alcohol use, or losing emotional control too often; you rarely experience any moments of happiness, but have too many real moments of exhaustion, anger, and resentment; you hold your feelings in, never allowing them to be shared with a friend or with a professional. As a caregiver, you may very well have experienced many, if not all of these things from time-to-time, or you may now be starting to experience these things constantly. In order to conquer your fears of placing a loved one into a long-term care facility, you need to understand more about some of the facilities nearest to you. For example, in Miami-Dade County, there exists an innovative concept to the traditional nursing home or a long-term care facility. The Hebrew Homes Health Network provides seven different state-of-the-art residences located throughout different neighborhoods in Miami. People are given the individualized care that they need by a professionally trained staff which concentrates on the specific medical, social, and dietary needs of the residents. Also, the cleanliness of a facility is one of the more crucial areas of importance and concern to the caregiver and to the health and well-being of a resident, and this is why all seven facilities of the Hebrew Homes Health Network take cleanliness very seriously. What makes these residences so innovative is that they strongly encourage continued involvement of family members and friends of those residing in one of the homes. Compassionate, caring staff members work closely with family members, and are always available to meet with them, even when its not regular business hours. There are also Family Night activities held monthly, as well as holiday celebrations that include all family and friends of the residents. William Zubkoff, PhD., M.P.H. and president of Hebrew Homes Health Network states, We are dedicated to our mission to provide the highest quality and most compassionate long-term and rehabilitative care and service, meeting the needs of our residents, our families and our employees with compassion, dignity and love. We will continuously strive, as a team, to improve our network by developing the most effective systems to provide cutting-edge elder care services. As a caregiver, you may wonder how to go about finding whats available to your loved one in and around the area in which they live, and how to decide upon what type of facility will be best for them. A few people you may want to ask are: your family physician; hospital discharge planners; social workers; home healthcare nurses; friends and/or neighbors who have been through similar experiences; your religious leader; geriatric screening programs through a local hospital or community center; and finally, government agencies such as the federal Area Agencies on Aging, or local social services or family services groups. If there is a professional familiar with your loved ones condition, ask them about what kind of facility would be best in matching and meeting particular needs. These people may be able to help you base a decision upon specific medical considerations and information, such as conditions like Alzheimers or Parkinsons, mental health and awareness of the person, and their physical and mobility factors. When deciding on a few places to check out, first call them and ask if there is a waiting list for the facility, what the cost might be, and what types of insurance or supplements, if any, are accepted. The answers you receive from these phone calls should help you narrow down your list of possible places. When youve selected a few places, make sure you ask even more questions to help you better assess the quality of each facility. Also, listen to your gut feelings when you begin each tour, and it may be helpful to bring along a friend or other family member in order to get some other forms of input regarding each facility. Some general questions to ask each place can include: Location - is the facility conveniently located to where you live? Will it be easy for you to get to in order to visit? Is public transportation available nearby? Appearance/Atmosphere - are the kitchen, day rooms and bedrooms clean? Is there good natural and artificial lighting? How is the temperature? Are there any unpleasant odors? Does the facility meet your standards of cleanliness? Is the facility wheelchair and walker friendly? Are there handrails to help with walking? Menus - is the menu varied and nutritious? Will the facility accommodate special dietary needs? Is food available throughout the day? Are people allowed to snack? Are mealtimes flexible and varied? How is the food? Visit facilities at mealtime. Does the food look appetizing? Do residents appear to be enjoying their meals? Is there adequate assistance and supervision for those residents who need it? Ask if you can sample the food. What do you think of it? Bathrooms - are they private? Are they clean? Are they easy to find? Are they close to where your loved one will be? Do they have grab bars and other safety devices installed? Alzheimers-friendly if your loved one has Alzheimers, is the staff specially trained to care for someone with this condition or other forms of dementia? Is there a separate unit for Alzheimers residents? Are Alzheimer residents able to wander safely indoors and outside? Resident-to-staff ratio - What is the resident-to-staff ratio? How many residents have Alzheimers disease? Does the staff provide enough care throughout the disease process, no matter what the disease and/or condition? Interaction - do all staff interact with residents on a regular basis, and in a friendly and personable manner? Activities are there meaningful activities for groups and individuals? Are there therapeutic activities, like music, pet, or plant therapy? Are there opportunities for your loved one to socialize? Are the routines flexible and offer variety?
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Visiting when are you allowed to visit? Can you have privacy with the resident when visiting? Can you take the resident on outings, such as to a park, a restaurant, or to a family function? Behavior Management - how are different types of behaviors handled? Are restraints used? (Physical restraints like straps, chemical restraints like sedatives, or restraints to the environment, like a locked door.) Dont be afraid to ask what portion of the residents has to be medicated or have to have physical restraints; also, try noticing these things yourself. Safety - are there smoke detectors? Are there slip-proof mats in the baths, grab rails, bed rails, etc.? Medical Care - can you continue to use members of your loved ones healthcare team? Is there a doctor always available or on call in case of emergencies? How often does a doctor visit? Can you meet the doctor? Philosophy of Care - does the facility focus on the needs of the individual resident? Can flexibility in routines be accommodated? Are there regular care planning meetings regarding your loved one? Will these meetings include you and other family members as well? Individualized Care - is consideration given to individual cultural, religious or spiritual needs? Are other languages spoken? Is the facility home-like? Atmosphere - what is the atmosphere like? Are residents up and about? Are they socializing with one another? Is the staff actively engaged with residents? Does staff treat residents with respect? Outdoor Areas - is there a nice spacious outdoor area for residents? Is there a covered outdoor area in case of rain? Another great way to obtain information is to speak directly to the residents. Ask them how they like living there, and let them know that you are considering the facility for a family member. Larger facilities may offer an opportunity for you to speak with residents in a more private setting, enabling you to get more candid answers and information. You may find residents at smaller facilities to be a little less comfortable speaking about their experiences, since they have less privacy; if this is the case, dont push the issue. After youve had the official tour, you may want to walk around the facility by yourself, unaccompanied. Just remember not to enter any of the residents rooms or areas without receiving permission first. When making your final decision, take into consideration not only the services your loved one will need right now, but what they may need in the way of care further down the line. Make sure the facility you decide upon has services that you may also need in the future. Before making your decision, carefully review the entire admissions packet, especially the section that covers fees and services with a complete schedule. Will Medicare be accepted? Will Medicare be willing to cover the chosen facility? Will Medicaid be accepted if personal funds run out? Even after doing all your homework and visiting several facilities, you may not find exactly what youre looking for; however, keep your options open and flexible. You can help promote quality-of-care for your loved one by staying actively connected to them as much as possible, no matter what type of facility is decided upon. 2/10: Life Settlements- Average age, standard LE, inexpensive policy: 77-year-old male with standard health LE underwriting of 12 years combined with an ultra-low premium of 2.4 percent on a Lincoln $1 million UL policy. High offer: $140,000. Elder insured, short LE, expensive policy: 91-year-old, impaired male with a 3-year LE and an expensive premium of 13 percent on a $500,000 John Hancock UL policy. High offer: $115,000. Young insured, impaired, average premium expense: 72-year-old male with a 10.5 year LE and a 3.1 percent premium to carry a $2 million AXA UL policy. High offer: $230,000. Older insured, standard or slight impairment, average premium expense: 84-year-old female with a 6.5 year LE and a 4 percent premium to carry a $5.1 million Lincoln UL policy. High offer: $1.9 million. < 2/10: Wow <>China trade growth hints at strong 2013
Chinese exports and imports rose strongly in January, pointing towards solid growth both in China and abroad at the start of 2013. Exports increased 25 per cent from a year earlier, the fastest pace since April 2011 and up from 14.1 per cent in December. Imports increased 28.8 per cent, more than four-times Decembers 6 per cent rise. 2/10: Fall Off Fiscal Cliff Inevitable The U.S. will inevitably fall off the fiscal cliff on March 1, forcing $1.2 trillion in federal cuts and potentially lowering 2013 GDP by up to 0.75%, said former MFS Investment Management Chairman Robert Pozen. Pozen, speaking at an Investment Management Consultants Association (IMCA) conference in New York City today, told an audience of advisors that Democrats and Republicans are too politically dug in to repeat the budget compromise that avoided a plunge off the cliff in January. "On March 1, we are going to fall of the cliff," said Pozen, a senior lecturer at Harvard Business School and a fellow of the Brookings Institution. "That's what happens when Congress does nothing, and doing nothing is the sure bet here." 2/10: Very interesting ">EU leaders seal long-term budget deal EU leaders agreed a seven-year budget after a bargaining session in Brussels lasting more than 24 hours. Herman Van Rompuy, European Council president and chair of the negotiations, tweeted: "Deal done! #euco has agreed on #MFF for the rest of
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the decade." No further details were available but it is thought that fiscal hawks, including the UK and Germany, have prevailed over those member states seeking more robust spending. 2/8: Variable annuity: a variable annuity may make sense e.g. doctors who are concerned about malpractice suits. Three-quarters of US states protect variable annuity assets from creditors regular IRAs do not benefit from ERISA protection and may be more vulnerable to creditors. 2/8: Equity rates
Starting real rates Lowest 5% Next 15% Next 15% Next 15% Next 15% Next 15% Next 15% Highest 5%
Real equity return over next 5 years -1.2% 3% 3.6% 3.9% 4.9% 7.3% 9.3% 11.3%
the slope is perfect. Low real rates are associated with low future returns on equities; high real rates are associated with high future returns
2/8: It's just money............ style="font-size: 13.5pt; font-family: "Georgia","serif"; color: rgb(0, 1, 1); text-decoration: none;">Record of trader talk to haunt RBS
Filings portray casual banter over rate-fixing on banks desks as it admits manipulating Libor rate and agrees to pay 390m fine
Japanese banks accused of Tibor fixing

Former trader says lenders colluded to manipulate benchmark, forcing higher rates on millions of borrowers while thwarting efforts to ease credit flow
2/8: Europe- Europes economy remains sick. Euro-area GDP is forecast to shrink again this year by 0.2%, after a contraction of 0.4% in 2012. 2/8: Fischer Black- certain economic quantities are so hard to estimate that I call them unobservables. One unobservable, he pointed out, is expected return, the amount by which people expect to profit when buying a security. So much of finance, from Markowitz on, deals with this quantity unquestioningly. Yet, wrote Fischer, Our estimates of expected return are so poor they are almost laughable. 2/8: Deficit: The Congressional Budget Office analysis said the government will run a $845 billion deficit this year, a modest improvement compared to last year's $1.1 trillion shortfall but still enough red ink to require the government to borrow 24 cents of every dollar it spends. 1. The agency projected that the economy will grow just 1.4 percent this year if $85 billion in across-the-board spending cuts take effect as scheduled March 1. Unemployment would average 8 percent
2/8: We can kiss this society goodbye >Rate-fixing scandal shakes three continents
Lurid emails, cited in the settlement, lay bare a culture
where RBS employees would readily alter rates in
exchange for steak dinners

Vancouver, which until last year had Canadas strongest growth in house prices, is now its weakest region. The number of homes sold in the greater Vancouver area dropped by 23 per cent last year. Its a bit of a stalemate at the moment, says Jordan Macnab. Buyers are waiting for it to crash, and sellers dont want to give it up. The lack of buyers is sobering evidence that Canadas housing boom, which began in 2000 and bounced back to life after the financial crisis of 2008-09, is now over.
I thought they all had igloos or something. 2/7: RE: "Nine out of ten employees want their company to provide financial education. This key benefit can help to reduce the anxiety
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many have around personal finances making them happier employees." Sounds very nice- except it cannot work in the real world. 401k education was- and still is- based on a old homilies and bad theories that led, in large part- to the 44% losses in 2000 and 57% in 2008. The fundamentals of investing have never been taught to a broker. Insurance is a minefield of exponentially increasing products that the consumers rarely can comprehend and the agents are little better. But since the 401 educators are lacking in the real life application of product, what can one expect to have happened. Financial education starts with risk- current and projected risk- and how an employee needs to recognize what can happen if the economy goes wrong again. And it will. Is the industry prepared to step in and guide? It cannot guide since what little they do know is pretty useless and their insight to anything further is mired in confusion and ineptness. Paul Volcker noted- our economics are based on an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance. Financial literacy in the U.S. is an F- but those reserach questions have nothing to do with the real world of investing. I do not see a way out Errold Moody PhD MSFP MBA LLB BSCE Life and Disability Insurance Analyst Registered Investment Adviser 510 459 7797 Financial Planning Fiduciary Standards .under Dodd Frank The Failure of Securities Arbitrations 2/7: CFP: the global number of CFP professionals grew by more than 8,000 last year (for an annual growth rate of 5.7 percent), from 139,818 at year-end 2011 to 147,822 at year-end 2012. 2/7: We should trust our banks The Royal Bank of Scotland will pay $610m (390m) to settle US and UK investigations that it manipulated a key benchmark lending rate, with one of the banks Asian subsidiaries pleading guilty to US criminal charges of rate-rigging. RBS, which is 82 per cent-owned by UK taxpayers, acknowledged that employees including over 21 traders and one manager -- had tried to rig the London Interbank Offered Rate, or Libor, in documents published on Wednesday as part of the banks settlement with the US Department of Justice and Commodity Futures Trading Commission, and the UK Financial Services Authority. maybe not 2/6: face="Arial">Matters of the Heart Reclaiming Intimacy After a Heart Attack By Mary Damiano One of the biggest issues caregivers face when their loved one is recovering from a heart attack is resuming intimacy. One reason for this is the myth that sexual activity can bring on another attack. While there are casesthe most famous perhaps, is ex-Vice President Nelson Rockefeller having a heart attack and dying while in the act with his mistresscardiologists agree that sexual activity for people who have had heart attacks is no more strenuous than climbing two flights of stairs. But many caregivers and their loved ones recovering from heart attacks dont know this because they dont ask their doctors, and doctors often dont take the initiative to bring it up. When Robin Baxley, 47, had her heart attack in April 2001, her main concern was with getting better. I had a hematoma, which you get after surgery, so I wasnt myself for a month, she says. The Miramar, Florida resident spent a week in the hospital and says that initially, sex was not a priority. That was the last thing on my mind, she recalls. Shyness prevented Baxley from asking her doctor specifics about resuming intimate relations with her husband. I really took it upon myself, she says. I did not ask the doctor because I felt funny asking him. According to the Journal of the American Medical Association, a 1996 study conducted by James E. Muller, M.D. of Deaconess Hospital and Harvard Medical School, found that there was minimal risk associated with having sex after a heart attack. Researchers conducting the study interviewed a national sample of 858 heart attack patients who were sexually active in the year before their heart attacks. The researchers discovered that while there is an increased risk of having a heart attack during the two hours following sexual activity, that risk is about the same for everyone, whether or not there is a history of cardiac disease.
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The researchers cited previous data indicating that the risk of heart attack in a healthy person is about one in a million, and the risk of heart attack in a person with a history of cardiac disease is about two in a million. The study also found that the risk of heart attack caused by sexual activity rises to about two in a million for a healthy person and 20 in a million for a person with a history of cardiac disease. Researchers also report that regular exercise can reduce, and possibly eliminate the slight increased risk of a heart attack associated with sexual activity. In an editorial published with the study results, Robert F. Debusk, M.D., Stanford University School of Medicine, Palo Alto, California, wrote about the study as well as physicians reluctance to talk sex with their patients. "The prospects for a rapid and complete recovery from acute MI [heart attack] and avoidance of future cardiac events have never been better. However, despite these favorable prospects, physicians and patients are too often burdened by the misconception that sexual activity after acute MI is dangerous." Baxley says that her doctor never addressed the subject of sex directly, but once her doctor said it was safe to resume normal activities, she figured that meant all activities. Still, there was some trepidation. I went to him for another follow-up. He wanted me to exercise at a gym, and he said I could resume my normal activities, and without asking him that question, I just took it upon myself, she says. I was still a little afraid, but since he said I could resume my regular activities, I went ahead and everything was fine. Like many caregivers, Baxley says her husband, Jesse, had his own concerns. He was a little concerned. He kept asking me if everything was all right, if I felt all right to go ahead. In my mind, if the doctor said I could exercise and do all my activities, that would not hurt. Then I felt better about it. I felt more secure about it. Debusk also wrote that his desire for doctors to be more open with their patients as the result of Mullers research. It is hoped that the valuable study by Muller et al will also embolden physicians to overcome their reticence to discuss this vital aspect of human functioning with their patients. After all, patients are interested not only in the years in their lives, but also in the liveliness of their years. Nearly a year later, the Baxleys enjoy the kind of relationship they had before the heart attack. Tips For Intimacy After a Heart Attack Dont have sex if youre upset or angry. Stress makes the heart beat faster, and having sex at that time will only burden the heart further. Dont take medication right before sexual relations unless your doctor has advised. Some people think this will help prevent a heart attack, but taking medication in a way other than the doctor prescribes is not advised. Talk to your doctor. People recovering from heart attacks often allow their sense of modesty to keep them from discussing this subject with their physicians. Wait several hours after a full meal to allow for digestion.. According to the American Heart Association, fears about sexual performance, coupled with general depression can reduce sexual interest. Caregivers should be aware that their loved ones may feel depressed during their recovery period. This is normal, and in 85 percent of the cases, the depression goes away within three months. Try not to let this cycle magnify any previous sexual problems between partners. Dont rush things. Choose a time when you and your partner are relaxed and can put the stress of the day behind you. Choose a setting free from interruptions and distractions Sexual activity is usually no more strenuous than climbing two flights of stairs
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2/6:
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2/5: Europe?? A strong wave of investments has flowed into Europe over the last couple of months, offering some observers hope that its a precursor of a sustained economic recovery and an end to the long-standing euro crisis. On the surface, it appears to be good news, particularly given that the eurozone recently slipped back into recession. But despite the injection of more than $135 billion in private investment towards the end of 2012, the latest economic indicators offer more cause for pessimism than optimism.
The split between what financial markets and the economic fundamentals are telegraphing about the future is confusing many observers. On the financial side, equity and bond markets, buttressed by the moves of the European Central Bank (ECB) in the fall to support government debt markets, have seen two very positive developments. One development is falling government bond interest rates, which is key because that makes it easier for some of the more desperately strapped governments to finance their large debts. The second development is rising equity markets. That suggests some companies may become more optimistic and could start to hire new workers in countries that have devastating unemployment rates. As for why the stock markets are doing so well while real economies are doing so badly: I think that quantitative easing is a big part of the explanation,. [Central banks] are buying up huge amounts of debt securities globally, and at least part of the money is going into equities and driving their prices up. (Just like the U.S.) This is a huge concession and suggests that the current approach of using austerity for debt reduction may be self-defeating. In its most recent update of its World Economic Outlook, released January 23, the IMF forecast that while the world economy overall was likely to grow by about 2% this year, the euro area continues to pose a large downside risk to the global outlook, as does excessive near-term fiscal consolidation in the United States. 2/4 Contagion: Kristin Forbes says she still sees complacency over the risk that financial turmoil will spread beyond a single country, even with Europe's struggle to curb its sovereign-debt crisis. Regulators aren't doing enough to bolster preventive oversight, .
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1. "Recently you've seen some softening of some of the regulatory requirements that are being talked about and some stepping back from some of the proposals," "There's a trade-off obviously. In the middle of the crisis, having stricter capital requirements might delay a recovery, but it's critically important for the long-term stability." Officials today may be tempted to bolster bank profitability by relaxing rules such as stress-test thresholds or by expanding the categories of assets that qualify toward liquidity buffers, Forbes said in the research she presented at Jackson Hole. Such loosening may backfire and "increase a country's vulnerability to contagion." While requiring more capital may reduce the availability of credit, it also could offer nations "substantial benefits" by buffering against international panics. Tighter rules on bank reserves would reduce risks, acting on Forbes's finding that "countries with more-leveraged banking systems are significantly more vulnerable." 2/4: Bias blind spot (self bias): In order to avoid, one actively seeks out contrary data and conclusions (or you'll easily succumb to a self-confirmation bias where you only read what already confirms what you think you know);: See Freethinkers/Tolstoy above
I'm redecorating
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This is what it will be
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It comes in a kit 2/3: More on the dollarIts easy to say the dollar is declining, but compared to what? Sure, the dollar has fallen against the euro in the last six months, but the dollar is rising against the Japanese yen. Whats really happening is that the worlds major central banks are taking turns killing their own currencies in a race to the bottom for trade advantages. The winner is the nation with the weakest currency, since weak currencies help boost exports. By most measures, the dollar is winning the race to the bottom. In the last 12 years, gold is up from $255 per ounce to the mid-$1600s. Silver is up from $4.50 to $32 per ounce. Oil is up from under $30 a barrel to over $90 per barrel and the euro has grown from under $0.90 to almost $1.35, a 50% gain since 2001. The dollar has been falling for almost 50 years, but it hasnt fallen in each of those years. The dollar basically declined from 1965 to 1978, then strengthened from 1979 to 1985, then fell until 1995, gained strength until 2001, and has fallen for the last 12 years. The dollars chronic weakness since 2001 has helped U.S. exports grow faster than the overall economy.
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2/3: then look at this that came out the just now. This could be real interesting
This economy is tough to figure out.
2/3: 4% annual retirement withdrawal under attack. (Actually, should have been shot a long time ago) The results of a study suggest that this risky combination in today's market environment may mean the 4% withdrawal rate should actually be more like 3%, and that blindly following a 4% withdrawal rate path has a whopping 57% risk of failure. Granted, this assumes rates stay low, while most advisors expect them to normalize at some point, but the research notes that if rates normalize within 5 years, the risk of failure is still 18%; if it takes 10 years, the risk of failure is 32%. Frankly, I think this is a stupid approach. To try and figure out by statistics what a retiree should expect 25 years hence is laden with economic chicanery. This represents a software program that is supposed to cover a myriad of actual risks and does whaat? placate the advisor and let them sit back and do nothing???
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These are manmade art- not photoshop. Pretty impressive 1/31: Housing (Financial times) House price rises during the first three quarters of 2012 took 1.3m households out of negative equity, leaving 10.7m still mired in the trap, but a turnround in the hardest hit areas offers further hope. According to data prepared for the Financial Times by CoreLogic, markets with a higher share of negative equity houses worth less than the mortgage on them enjoyed a faster rise in prices than the rest in 2012. Of the 100 largest US housing markets, the 10 with the most homes in negative equity saw prices rise by an average of 9 per cent from November 2011 to November 2012, while the 10 with the least negative equity saw an average rise of just 4 per cent. In short, it is hard to find an exact cause for the rebound in home prices. But that isnt unusual we hardly ever know the real causes of major changes in speculative prices. Yet we do know that any short-run increase in inflation-adjusted home prices has been virtually worthless as an indicator of where home prices will be going over the next five or more years. THERE is a good deal of short-run momentum in home prices they tend to keep going in the same direction for a year or maybe more. But those prices have generally reverted to the mean fairly quickly, in inflation-corrected terms. The upswing in home prices from 1997 to 2006 up 86 percent, in real terms was an anomaly. And that upswing was almost completely reversed by 2012. We certainly cant rule out another boom. Its possible that the 20th-century pattern of real home prices, which typically hugged the historical mean, has disappeared. Perhaps people are more speculative in their thinking, after the recent roller-coaster ride, and more prepared psychologically to buy into a bubble. But I wouldnt put any money on that.
1/31: I may have this- been fighting something for 25 years. One physician thought it a possibility- but how do you prove?
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Post Polio Syndrome: Recognizing the Unrecognizable By Henk Snyman, MD Throughout the 1940s and 1950s, polio emerged as a devastating epidemic that affected thousands in the United States alone. Once the second leading cause of death behind stroke, polio stood as an incurable, viral disease that caused severe pain, breathing difficulties, paralysis, and in many cases, death. The virus crippled children and adults for years until a vaccine finally became widely available in 1955. Although polio has been eradicated in the developed nations of the world, the tides have turned over the past 25 years as polio survivors have begun to experience a range of lingering side effects that significantly affect overall quality of life. Causes of Post-Polio Syndrome The polio virus was originally characterized in three stages, including acute illness, recovery period, and stable disability. In the 1980s, when polio survivors who were diagnosed at a young age began to experience pain, progressive weakness, and fatigue, experts identified a fourth stage of the disease commonly known as post-polio syndrome (PPS). More than half of all polio survivors are now developing the deteriorating side effects of PPS. Considered a progressive neuromuscular decompensation, PPS is surfacing in thousands of Americans, negatively affecting their ability to partake in lifes simplest pleasures. A Difficult Journey Navigating through life with PPS is undoubtedly difficult, as mobility is quickly lost and it becomes challenging to live a normal, regular life. The extreme bouts of pain and weakness that accompany the condition can hinder work, familial obligations, and the ability to enjoy hobbies and activities. As a result, many PPS patients become depressed and dormant, ultimately affecting those around them. Unfortunately, there is no specific cure for post-polio syndrome, and the lack of adequate treatment most certainly leads to feelings of frustration and hopelessness among the afflicted. The lack of a cure is a result of the lack of knowledge surrounding post-polio syndrome. Because PPS demonstrates similar symptoms to other incurable chronic conditions including chronic fatigue syndrome (CFS) and fibromyalgia, physicians are often quick to misdiagnose or even dismiss PPS. Those diagnosed with PPS often remove themselves from their communities, their work, and even their families. As such, its particularly important for caregivers to educate themselves on both the physical and emotional side effects of the condition. How to Help A strong support base is critical for those living with post-polio syndrome as it is likely that among other positive effects, the chances the condition will be officially accepted by the medical community will vastly improve if caregivers acknowledge PPS and encourage their loved ones to speak out about it. Fortunately, there are an overwhelming number of PPS communities and support groups that have been established to address the growing concern of post-polio syndrome. These support groups convene regularly to discuss lifes challenges associated with PPS and ways in which individuals can move on and rebuild their lives. The creation of these PPS support groups has garnered the attention of numerous physicians, who have taken a special interest in studying the transformation of the disease and utilizing unique treatments for individuals living with PPS. Over the last few years, specialty physicians, including doctors of osteopathy, acupuncturists, chiropractors and physical therapists, have treated PPS with alternative therapies that have served to create a pathway to a more active, fulfilling life for their patients. Life is Possible Through a recent increase in awareness and attention, post-polio syndrome has started gaining traction and validation within the medical community. And with recent advances in medicine and technology, breakthrough treatments that treat the debilitating side effects of the condition arent far away. It takes a strong will to be a caregiver for an individual living with an illness. For caregivers of those with PPS, it is difficult to be the supportive backbone when all others have become skeptics and have dismissed PPS as a serious medical condition. As a result, these providers are encouraged to discuss the condition with their loved ones, and in turn, encourage them to have open communication lines with physicians, medical professionals, and fellow polio survivors. 1/31: 3% is fine but I do not believe it is sustainable. Most analysts were showing well under 2%. And that is terrible
The U.S. Bureau of Economic Analysis (BEA) has issued the following news release today: Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.1 percent in the fourth quarter of 2012 (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.
Here is the offset <">The US economy shrank at an annualised rate of 0.1 per cent in the fourth quarter of 2012 as fiscal cliff concerns weighed on business investment.
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But much of the fall was due to a big reversal in business inventories which knocked 1.3 percentage points off growth suggesting that the underlying economy remains stuck on a feeble growth path of around 1-2 per cent.
THE GREAT DOLLAR DECLINE IS ABOUT TO BEGIN We have now embarked on an episodic or secular decline in the US Dollar. This decline will persist for many years (if not decades) and will entail a remarkable decline in the value of our currency. We will experience both a large decline and a long-lasting one. The causes underlying this prospective decline are neither obscure nor difficult to understand. In a nutshell, as an economy we have established profound and rapidly growing imbalances, while at the same time we have lost a significant measure of our competitiveness. Here are the data: In 1966, federal government spending accounted for 16.5% of the economy. By 2000, it had grown to 18.8%. Today, federal spending occupies 23.8% of the US economy. We are continuing an uninterrupted march away from capitalism and towards a semi-socialist economic structure. Federal government deficits and borrowing are running out of control: Net borrowing by the federal government from the public was $1,170 billion for the 12-months ending 11/30/12, The federal government budgetary deficit as a percent of nominal GDP was an unsustainable -7.4% of GDP as of 11/30/12, and Just paying the net interest on the outstanding federal debt consumed 6% of the federal budget as of 11/30/12. Imagine what will happen when interest rates increase from their current 1% level to perhaps 3% or 4%. When interest rates rise, as they inevitably will, the portion of the federal budget consumed by just paying interest on the debt will increase many fold - squeezing out all other federal programs. But this is only the beginning. We have made promises in terms of existing entitlement programs that can never be met: Medicare and social security today consume 8.7% of our nations total GDP and As these two programs are currently structured, they will consume an impossible 12.8% of the total economy by 2086. Such a 50% proportionate increase in the cost of these two entitlement programs would rive our economy into a state of perpetual zero economic growth - resulting in massive social upheaval. Our demographic trends are working against us: Today the portion of our population consisting of productive (working) individuals, those aged 20 to 64 is 59.4%. By 2050, this percentage will have fallen to 54.1%. But worse yet, the portion of those over 65 years of age today stands at 13.6%, but is projected to rise to 20.2% by 2050. These demographic trends will reduce savings, significantly undermine productivity, and generate a massive increase in the cost of entitlement programs. All of which our economy has no capacity to absorb. Unfortunately, to date, the US has been unable to respond to these forces with increased competitiveness. In fact, our relative ability to compete on a global basis has declined: The US trade balance for goods over the 12-months ending 10/31/12 was running at a deficit of -5% of GDP and Worse yet, to pay off the foreigners who have invested in the US economy, we would have to give them 27% of our GDP (i.e., the US net international investment position stands at -27% of GDP as of 12/31/11). Finally, the US has benefited from the virtuous cycle resulting from the planets adoption of the US Dollar as the sole and exclusive global reserve currency. In essence, this has allowed us to simply print many many trillions of Dollars and just give them to foreigners in exchange for valuable goods and services. Unfortunately, this process can and always has also run in reverse. The so-called vicious cycle: During the inevitable vicious cycle, the foreign nations that hold those many trillions of US Dollars will exchange them for stable or appreciating currencies - thus serving to further compound and accelerate the Dollars decline. This vicious cycle will unfold as nations slowly and gradually over a period of a couple of decades abandon the Dollar as a the global reserve currency. As of 10/31/12 China held $1.2 trillion of US Treasuries, Japan held $1.1 trillion, and OPEC, Brazil, and the UK combined held an additional $0.7 trillion. The process of abandoning the Dollar as the exclusive reserve currency will place a profound downward pressure on Dollar exchange rates.
1/30: Financial Literacy Quiz FINRA The general pulic gets 60% pass through Further look at the questions- they are so mundane the correct answer provides no insight to the real world. Really sucks.
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1/30: Fee Only Advsiers and Life Insuance Analysis (2002) This is by Nigel Taylor The end result is a scathing rebuke of unlicensed fee planners However, this is an independent article and I do not agree with the proposed "solutions".
I WAS GOING TO ASK WHY- BUT THEN I DECIDED TO EAT IT.
* Professional investment may be likened to those newspaper competitions in which the competitors have to pick out the six prettiest faces from a hundred photographs, the price being awarded to the competitor whose choice most nearly corresponds to the average preference of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not a case of choosing those which, to the best of ones judgment, are really prettiest, nor even those which average opinion genuinely thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees
Keynes
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* "There is little correlation between sophistication of a banking system and productivity growth,''
Paul Volcker
Here are some of the worst predictions that were made about 2008. Savor them -- a crop like this doesn't come along every year.
1. "A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!" -- Richard Band, editor, Profitable Investing Letter, Mar. 27, 2008 At the time of the prediction, the Dow Jones industrial average was at 12,300. By late December it was at 8,500. 2. AIG (NYSE:AIG - News) "could have huge gains in the second quarter." -- Bijan Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008 AIG wound up losing $5 billion in that quarter and $25 billion in the next. It was taken over in September by the U.S. government, which will spend or lend $150 billion to keep it afloat. 3. "I think this is a case where Freddie Mac (NYSE:FRE - News) and Fannie Mae (NYSE:FNM - News) are fundamentally sound. They're not in danger of going under I think they are in good shape going forward." -- Barney Frank (D-Mass.), House Financial Services Committee chairman, July 14, 2008 Two months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each. 4. "The market is in the process of correcting itself." -- President George W. Bush, in a Mar. 14, 2008 speech For the rest of the year, the market kept correcting and correcting and correcting. 5. "No! No! No! Bear Stearns is not in trouble." -- Jim Cramer, CNBC commentator, Mar. 11, 2008 Five days later, JPMorgan Chase (NYSE:JPM - News) took over Bear Stearns with government help, nearly wiping out shareholders. 6. "Existing-Home Sales to Trend Up in 2008" -- Headline of a National Association of Realtors press release, Dec. 9, 2007 On Dec. 23, 2008, the group said November sales were running at an annual rate of 4.5 million -- down 11% from a year earlier -- in the worst housing slump since the Depression. 7. "I think you'll see (oil prices at) $150 a barrel by the end of the year" -- T. Boone Pickens, June 20, 2008 Oil was then around $135 a barrel. By late December it was below $40. (Actaully there was nothing wrong given the situation) 8. "I expect there will be some failures. I don't anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system." -- Ben Bernanke, Federal Reserve chairman, Feb. 28, 2008 In September, Washington Mutual became the largest financial institution in U.S. history to fail. Citigroup (NYSE:C - News) needed an even bigger rescue in November. 9. "In today's regulatory environment, it's virtually impossible to violate rules." -- Bernard
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Madoff, money manager, Oct. 20, 2007 About a year later, Madoff -- who once headed the Nasdaq Stock Market -- told investigators he had cost his investors $50 billion in an alleged Ponzi scheme. 10. A Bound Man: Why We Are Excited About Obama and Why He Can't Win, the title of a book by conservative commentator Shelby Steele, published on Dec. 4, 2007.
There is nowhere to hide right now, Roubini, an economics professor at NYUs Stern School of Business, said in an interview with Bloomberg Television. Markets have become perfectly correlated and economies are also becoming perfectly correlated. This is not your kind of traditional minor recession. * Asked in 2004 to name the most important lesson he had to unlearn, he said: "That I knew what the future held, that you can figure this thing out. I've become increasingly humble about it over time and comfortable with that. You have to understand that being wrong is part of the [investing] process." Peter Bernstein I agree with his last statement with this caveat. If you are going to be wrong, at least keep losses to a minimum. Regarding the inverted yield curve and a recession- I cannot guarantee what the market will do. But I do know that risk is going way up and feel that this must be kept in perspective. So I may opt out into cash/bonds. Might I miss some of the runup. Yes. Did I miss most of the drop. Yes. Bernstein also noted that you need to be far more aware of the consequences than the probabilities. * "My branch managers only want producers who will pick the gold from their grandmother's teeth. Now that we have the gun to your head and we are into your pockets, do as you are told, sell what we want you to sell when we want you to sell it, or we'll fire you and hire someone else. Then we will sue you for what we lent you and make damn well sure that you never see your book of business again."
-Unnamed former Vice President of Sales of a major broker-dealer Makes you feel kinda warm and fuzzy doesn't it?
* I worked as a broker for more than a decade. It is difficult to stay in the industry once you know the truth. But working in that industry and knowing the truth is better than not being around because you know the truth. If you "get out" you will be out. And that means your clients will be turned over to someone else who does not know the truth or cares about the truth. That is not good for the people who trust you. When you have enough clients and assets and are ready, you might decide to leave the brokerage industry and start a fee only advisor firm. But don't lease too early or you will fail, and that does not help you or your clients.
Rick Ferri But all the customers in the interim get screwed. Don't buy stocks from a stockbroker
* With growing empirical evidence on persistent overconfidence, much
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attention has been paid to the question of why people are overconfident and experience does not lead them to become more realistic, especially in activities like investing where results can be calculated ex post. Existing studies demonstrate that self-serving attribution bias (past successes tend to exacerbate overconfidence as people take too much credit for their successes, while past failures tend to be ignored as people blame their failures on forces beyond their control), confirmatory bias and cognitive dissonance (tendency to overweigh data confirming prior beliefs while to dismiss data contradicting prior beliefs), illusion of control, and forces related to evolution and tournaments or contests, can all contribute to generating persistent overconfidence throughout the life cycle. Gervais and Odean (2001) find that, with attribution bias at work, people may even learn to become more overconfident rather than more realistic over the life cycle. * Over confidence in the diagnosis of a patient, the outcome of a trial, or the projected interest rate could lead to inappropriate medical treatment, bad legal advice, and regrettable financial investments. It can be argued that peoples willingness to engage in military, legal, and other costly battles (risks) would be reduced if they had a more realistic assessment of their chances of success.
Griffin and Tversky
* Members must train registered persons about the characteristics, risks, and rewards of each product before they allow registered persons to sell that product to investors. Likewise, members should train registered persons about the factors that would make such products either suitable or unsuitable for certain investors.
NASD Manual (Good for a Laugh)
* My opinion is that the most likely scenario is not a blowup (of hedge funds) but rather that hedge funds as a group will gradually and continually lose their edge over other asset classes. Then they will top out- like mutual funds, real estate, etc.- and then just be a fluctuating fraction of total financial assets- part of the financial landscape"
Ed Thorp- Math professor and leader of hedge funds in the 60s.
* "NASD expects members to exercise their market expertise to recognize those situations where the materiality of difference is not in doubt and, consequently, identify that the lower yielding instrument does not represent a reasonable rate of return given the attendant risks as compared to other similarly composed products or direct investments in the underlying components of such products with similar."
"This first level suitability analysis focuses on the product and determines whether the product is suitable for any investor. The modeling required for effective due diligence should allow brokerage firms to determine the value of the equity-linked note at issue and in the secondary market by comparison to the cost of the simpler bond and option components which replicate the payoffs at maturity of the structured product." But that is the same comparison that should be done in all cases of sales or selection of products. The only thing that bothered me in the article was the lack of reference to risk. Yes, returns are the focus of just about everyone but risk comes first. For example, they make reference to using Intel stock and some Treasury instruments. They show that that allocation would have done better than the structured notes. But if you put in the mandatory risk element of using one stock, the comparison does not compute. Risk is paramount in any comparison. The use of a single stock is unacceptable. Why didn't they
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also use Enron? Worldcom? Adelphia?
* Unless you make millions of dollars on Wall Street, you probably shouldnt be speculating in currencies.
Sam Stovall, the chief investment strategist at Standard & Poors
* Faced with the cold, hard fact that they have not saved enough to live out their years comfortably, 43 percent of Americans say they will have to re-enter the work force almost as soon as they leave it. * A conventional valuation [of stocks] which is established [by] the mass psychology of a large number of ignorant individuals is liable to change violently as the result of a sudden fluctuation of opinion due to factors which do not really matter much to the prospective yield, since there will be no strong roots of conviction to hold it steady. . . resulting in unreasoning waves of optimistic and pessimistic sentiment.
John Maynard Keynes
* The probability of a (portfolio) shortfall is a flawed measure of risk because it completely ignores how large the potential shortfall might be. If it were true that stocks are less risky in the long run, then the cost of insuring against earning less than the risk-free rate of interest should decline as the length of the investment horizon increases. But the opposite is true.
Zvi Bodie
* "Nobody wants to acknowledge the reality of the brokerage industry," which is that most novice brokers receive cursory training and then spend five years working phone books in an attempt to survive * "As long as the current composition of arbitration panels consist of a mandatory industry representative and public arbitrators who maintain significant ties to industry, the process is fundamentally unfair to investors,"
NASAA president Joseph Borg
* Tinkering with mathematical formulas is simply more fun than agonizing over the minutia of benchmark construction. Unfortunately, no amount of arithmetic can bail us out if the benchmark is wrong.
Ronald J. Surz
Given the enormity of the late-90s bubble and the duration of past secular bear markets, it could be that, taking inflation into account, 15 years from now, stock prices wont be materially higher than they are today.
Robert D. Arnott
Since 2001 overall corporate profits have doubled, to more than $1 trillion. Contributors to that gain include a cumulative $440 billion increase in investment, a $375 billion expansion of budget deficits and a $140 billion decline in household savings. The only negative during the period was a $405 billion widening of the trade deficit. But several positive factors could turn into negatives over the next year or so. Consumer spending and investment in residential construction will both drop, he said, and he expects the budget deficit to narrow. Capital spending should climb and the trade deficit should shrink, but these two positives for profits will not be enough to offset the other factors.
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Douglas Cliggott
* Psychologically, I think the rich, because of their egos, think they know everything. Well, they dont, and many of them repeatedly make horrible investments because they can. The research surveyed in this paper suggests that the standard economic approach to climate change policy, with its almost exclusive emphasis on rational responses to monetary incentives, is seriously flawed.
John Gowdy
* If you look at housing at a fraction of total employment, it is about 2.5%. So let's not be fixated on housing William Poole, St Louis FED President "The SPIDER (S&P 500) ETF underperformed the S&P 500 Index by 1.2% during the past 10-years." * March 1999: Harry S. Dent, author of The Roaring 2000s "There has been a paradigm shift." (Translation: "This time it's different, a New Economy!") October 1999: James Glassman, author Dow 36,000 "What is dangerous is for Americans not to be in the market. We're going to reach a point where stocks are correctly priced, and we think that's 36,000 ... It's not a bubble. Far from it. The stock market is undervalued." (Warning, don't choke on your popcorn!) December 1999: Joseph Battipaglia, market analyst "Some fear a burst Internet bubble, but our analysis shows that Internet companies account for only 7% of the overall Nasdaq market cap but carry expected long-term growth rates twice those of other rapidly growing segments within tech." (The Internet Index lost two-thirds in the next six months.) December 1999: Larry Wachtel, Prudential "Most of these stocks are reasonably priced. There's not reason for them to correct violently in the year 2000." (Fact: The Nasdaq lost 50% in 2000.) December 1999: Ralph Acampora, Prudential Securities "I'm not saying this is a straight line up. I'm not saying you can't have pauses. I'm saying any kind of declines, buy them!" (He also predicted a 14,000 Dow by the end of 2000 and an 11-year bull.) February 2000: Larry Kudlow, CNBC commentator "This correction will run its course until the middle of the year. Then things will pick up again, because not even Greenspan can stop the Internet economy." (He's still an economist, hosting his own show.) April 2000: Myron Kandel, CNN "The bottom line is, before the end of the year, the Nasdaq and Dow will be at new record highs." (Later in September he predicted a rally to 12,000 by election day.)
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September 2000: Jim Cramer, CNBC commentator "SUNW probably has the best near-term outlook of any company I know." (Within four months Sun Microsystems went from $60 to $30, down to $10 in a year, below $3 in two years.) November 2000: Louis Rukeyser on CNN "Over the next year or two [the stock market] will be higher, and I know over the next five to 10 years it will be higher." (We crashed, fell into a recession, and in two years tech lost 70%.) December 2000: Jeffrey Applegate, Lehman strategist "The bulk of the correction is behind us, so now is the time to be offensive, not defensive." (That's a sucker's rally.) December 2000: Fed Chairman Alan Greenspan "The three- to five-year earnings projections of more than a thousand analysts, though exhibiting some signs of flattening in recent months, have generally held firm. Such expectations, should they persist, bode well for continued capital deepening and sustained growth." (And the curtain opened revealing the Wonderful Wizard of Oz.!) January 2001: Suze Orman, financial guru "In the low 60s here, I think the QQQ, they're a buy. They may go down, but if you dollar-cost average, where you put money every single month into them, I think, in the long run, it's the way to play the Nasdaq." (The QQQ fell 60% further.) March 2001: Maria Bartiromo, CNBC anchor "The individual out there is actually not throwing money at things that they do not understand, and is actually using the news and using the information out there to make smart decisions." (Yes, she's serious.) April 2001: Abby Joseph Cohen, Goldman Sachs "The time to be nervous was a year ago. The S&P then was overvalued, it's now undervalued." (Unfortunately, the markets continued down for another 18 months). August 2001: Lou Dobbs, CNN "Let me make it very clear. I'm a bull, on the market, on the economy. And let me repeat, I am a bull." (Within a year the Dow and Nasdaq lost a third more). June 2002: Larry Kudlow, CNBC "The shock therapy of decisive war will elevate the stock market by a couple thousand points." (He also predicted the Dow would hit 35,000 by 2010.) * America's productivity probably will keep growing solidly for some time to come. "A case can be made that the strong productivity growth of the post-1995 era is likely to continue for some time
Federal Reserve Chairman Ben Bernanke
* As a group, market forecasters are egregiously overconfident. In conformity
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to the dynamic model of overconfidence of Gervais and Odean (2001), successful forecasters become more overconfident. Whats more, more experienced forecasters have learned to be overconfident, and hence are more susceptible to this behavioral flaw than their less experienced peers. It is not just individuals who are affected. Markets also become more overconfident when market returns have been high.
Richard Deaves, Erik Lders, Michael Schrder
* We know that people are vulnerable to being overconfident.. So this very large array of ETF really provides people with enough rope to hang themselves.
Hersh Shefrin, a professor of behavioral finance
"The emergence of China, India, and the former communist-bloc countries implies that the greater part of the earth's population is now engaged, at least potentially, in the global economy
Ben Bernanke
* Millions of households are unable to make wise financial decisions even when adequate information is available. Low levels of financial skills provide a fertile environment for consumer-finance myths to arise and gain widespread acceptance.
William Emmons .
* In 1988, the UK government made it possible for workers to opt-out of their occupational pension scheme. By 1995, some 5 million workers had indeed opted out. Many of these workers were badly informed by financial advisers and as a result made severe errors in their pensions savings. According to Davis (2004), 500,000 individuals were persuaded by commission-driven salesmen to leave occupational funds, of which 90% received inappropriate advice (owing to high transfer costs and no employer contribution). The response has been massive fines on insurance companies and tightening of regulations on selling. This issue continues to affect confidence in personal pensions, compounded by comparable concerns over misspelling of endowment insurance policies to back mortgage loans for house purchase. * The lack of basic (consumer) financial knowledge correlates with poor financial management, including such behaviors as using payday lenders or check-cashing services, incurring late fees on credit cards, failing to maintain precautionary savings balances, passing up employer matching contributions to retirement accounts, and being chronically under-insured.
William Emmons
* A study of specific financial behaviors is likely to be more informative and reliable than a study of financial knowledge because knowledge alone does not guarantee that households will act wisely when making actual financial decisions. After all, some (much?) financial advertising is designed to confuse consumers or reinforce bad habits (for example, impulse shopping), inhibiting the translation of knowledge into action.
William Emmons
* One general conclusion one can draw is that U.S. households do not consistently demonstrate the basic skills of financial literacy.
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* a clear majority of U.S. households with credit cards do not shop around when applying for a card and end up paying finance charges on the cards they use. These facts alone might support the conclusion that credit management is poor in the average U.S. household. Another indication of poor credit management is the fact that virtually all households that are paying high rates of interest on credit-card balances simultaneously hold balances in low-yielding assets, such as checking or savings deposits or money-market mutual funds, or have housing equity against which they could borrow at a lower rate.
* Perhaps the clearest evidence of U.S. households poor credit-management skills is the more than 13 million non-business bankruptcy filings in the United States during the ten years ending Sept. 30, 2004a period of generally falling interest rates and low unemployment rates.7 A high rate of bankruptcy filings suggests that a large segment of the population lacks adequate creditmanagement skills. * In sum, U.S. households average level of basic financial literacy is moderate at best. Cash management is done reasonably well by most households, while long-term investment decision-makingincluding retirement planningis done poorly by the average household (in some cases by doing nothing at all). * The third obstacle to widespread financial literacy is the undeniable fact that the literacy bar keeps risingthat is, the typical households responsibilities for managing its financial affairs are increasing. Moreover, the tasks are becoming more and more complex. Two potentially far-reaching examples of increasing demands on consumers to make complex financial decisions are personal retirement accounts and health savings accounts. * The equity premium has thus been a source of controversy, even among experts. Welch (2000) studied the opinions of 226 financial economists who were asked to forecast the average annual equity premium over the next 30 years. Their forecasts ranged from 1% to 15%, with a mean and median of 7%. No clear consensus emerged: the cross-sectional dispersion of the forecasts was as large as the standard error of the mean historical equity premium. * Insurance is the most technical investment vehicle known to man. Derivatives dont even come close. At the same time, a person who trained me in advanced design strategies using life insurance said, You have to explain things to clients in such a way that they can then explain it to their next door neighbor and get it right. A seeming contradiction, yes, but one estate planning professionals also must resolve in working with their clients on complex strategies. In one sense, this seeming contradiction is solved by the idea of refinement. When we finally understand something well, sometimes after many years of study, we can explain the concept more simply and succinctly than when we first learned it.
John E. Mayer, president of Fiduciary Review Services
* When administrators change (401(k) offerings, they choose funds that did well in the past, but, after the change, added funds do no better than dropped funds.
Edwin J. Elton, Martin J. Gruber, and Christopher R. Blake
* For the U.S. Stock category, the rating system employed by Morningstar offers no added value in terms of predicting mutual fund returns, as there is no occasion where the rating system would outperform a random walk. Unlike the
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system that classifies all mutual funds as a single group, the system using the U.S. Stock classified funds to base a rating upon is even not able to predict underperformance. The rating system used by Morningstar for International Funds does, at best, equal the performance of a random walk. However, it not able at outperforming this random walk. "To test whether age bias is real or imagined, researcher Joanna Lahey sent out about 4,000 rsums to firms in Boston and St. Petersburg, Fla., and measured response rates from employers. The results: A younger worker is more than 40% more likely to be called for an interview than a worker 50 or older." The average period of unemployment in 2005 was 24.1 weeks for job seekers 55 and older, compared with just 17.8 weeks for those under 55 * "The single greatest fear is illness and the inability to pay for it it's three times more frightening than dying," * "For the past five years, the Fed has clearly telegraphed short-term interest rates...That uncertainly is a thing of the past. With short-term rates at or near their peak, monetary policy will depend far more on unfolding data than in recent years. Investors may change their Fed expectations more quickly, more often and more significantly in 2006 than in 2001-2005.
Jeffrey Gundlach
* "Life on Earth is at the ever-increasing risk of being wiped out by a disaster, such as sudden global warming, nuclear war, a genetically engineered virus or other dangers we have not yet thought of."
Stephen Hawking
* DCA reduces the risk of investing but DCA is a theoretically sub-optimal investment strategy when compared to jumping in to the market and investing the entire amount in one lump sum.
Constantinides
* Mitchell and Moore (1998) concluded that individuals fail to plan for retirement because they lack sufficient domain-specific knowledge, and Hershey, Brown, Jacobs-Lawson, and Jackson (2001) found that retirees report feeling they should have become more knowledgeable about savings and investments. Grable and Lytton (1997) found that investment knowledge is positively related to saving behaviors. Taken together, these findings indicate that knowledge of financial planning for retirement has a profound effect on retirement saving decisions. * The standard economic approach to climate change policy, with its almost exclusive emphasis on rational responses to monetary incentives, is seriously flawed. * "The economy continues to perform well and inflation remains a concern, so it is not surprising that the Fed raised rates today. They are likely to pause at 5.0 percent for a while, however. The impact of interest rate increases on the economy occurs with a lag, so the Fed needs to pause to gauge the strength of the economy and the risk of higher inflation. If inflation ticks up or growth is too robust, the Fed will need to tighten further. Currently, the risk of a rate cut is low -- there are few signs of economic weakness.
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Swiss Re US Chief Economist
Believers in the law of small numbers tend to overinfer the outcome of a random process after a small series of observations. They believe that small samples replicate the probability distribution properties of the population. We provide empirical evidence indicating that investors are mistakenly driven by this psychological bias when hiring or firing a fund manager after a successful (or losing) performance streak.
Baquero, Verbeek
* For todays newsletter, I am going to talk about the second most feared creditor that virtually no one considers a creditor. Who? The stock market. Who is the number one guaranteed creditor ever year? The IRS. Remember, a creditor is anyone or thing that can take your money. You might be scratching your head when thinking why the stock market is a creditor. Its simple. Looking back over the last 10 years, who was the creditor that took the most money from you? In other words, over the last 10 years, when did you lose the most money? If you had any investible dollars in 2000-2002, you lost nearly 50% of your invested assets! If we just look at 2001, lets see what probably happened to your actively traded money. If you were in growth mutual funds, you probably had returns similar to Merrill Lynch: Merrill Lynch Mid-Cap Growth Fund <36.6%> Merrill Lynch Premier Growth Fund <52.6%> Merrill Lynch Focused Twenty Fund <70.1%> Merrill Lynch Fundamental Growth Fund <19.4%> Merrill Lynch Global Growth Fund <26.3%>
Roccy M. DeFrancessco, Jr
* "The prospective increase in the budget deficit will place at risk future living standards of our country. "As a result, I think it would be very desirable to take concrete steps to lower the prospective path of the deficit." Last year's budget deficit came to $319 billion, an improvement from 2004 but still the third largest deficit ever recorded. This year, the White House is projecting the deficit to swell to $423 billion, which would set a record in dollar terms. Volcker said we will have a financial debacle soon. I said in 1999 that it would happen within 10 years. Should be interesting. * We report experiments that shed light on these theories of the demand for high-fee mutual funds. In our first experiment, we give subjects four S&P 500 index fund prospectuses and ask them to allocate $10,000 among these funds. To make choices incentive-compatible, we randomly select subjects who will receive the next years return from their hypothetical portfolio (if that return is positive).2 The selected subjects do not actually make investments in their chosen funds. Hence, subjects returns are completely unbundled from any fund services. Despite our eliminating the role of fund services, subjects continue to choose
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high-fee portfolios. * only 52% of the respondents understand correctly that holding a single company stock implies a riskier return than a stock mutual fund. Since the first two questions are key to respondent financial numeracy, it is disturbing that only slightly over half (56%) of the sample get both questions right. This is a remarkably low figure if we contemplate the complex financial calculations that these households on the verge of retirement have most likely engaged in, over their lifetimes. Also disturbing is the fact that only one-third (34%) of respondents correctly answer all three questions. the news is not positive: financial literacy levels are low among older Americans. There are large differences between Whites, Blacks, and Hispanics.9 Thus Blacks and particularly Hispanics are much less likely to correctly answer the question about interest compounding: fewer than half of the Hispanics gave a correct answer, and a sizable fraction of the remainder simply stated they did not know the answer. This is a potentially important result in view of the fact that many Hispanics do not hold even basic assets, such as checking accounts. As far as risk diversification is concerned, Hispanics and Blacks both display difficulty answering this question: only one third (37%) of the Blacks responded, and 40% of Blacks did not know the answer. This may shed light on why so many Blacks do not hold stocks. Differences in financial knowledge across education groups confirm our expectation that financial literacy is highly correlated with schooling. Most importantly, financial illiteracy is acute among those with less than a high school degree. Fewer than one-third of respondents with elementary education correctly answer the question about interest compounding, and one-third simply stated they did not know. The proportion of correct answers to the question about interest compounding increases gradually with education, while the proportion of both incorrect answers and DKs falls. The question about risk diversification reveals that only those who have a college degree display a high proportion of correct answers. Nevertheless, even here, almost one-third of those with a college degree do not know the answer or answer incorrectly to this question. Looking at the pattern of responses across sex, the results show that women are generally less financially knowledgeable than are men . For women, the proportion of correct answers is significantly lower across the three questions, in that females are approximately 10 percentage points less likely than males to answer correctly to both the question about interest compounding and inflation. Yet some findings are worth highlighting: for instance, the leading edge of the Baby-Boomers (those age 51-56 in 2004) are much less knowledgeable about inflation, perhaps a result of their limited historical exposure to inflation, or to the fact they were in their 20s in the high inflation period during the 1970s and early 1980s. Fewer than one-third of the sample respondents (31%) indicated that they actually attempted to do a retirement saving calculation; these we call the simple planners. few undertake retirement planning even among the educated.
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only 58% of those who tried to develop a plan actually did so, while another handful more or less developed a plan (9%). The high failure rate, so far as developing a plan is concerned, underscores the fact that retirement projections are difficult to do. of the subset of serious planners, only one-third (38%) was always able to stick to its plan, while half were mostly able to stick to their plans (below we call these respondents Successful Planners). In the sample as a whole, this represents a meager 19% overall rate of successful planning.Of course, households may face unexpected shocks making them deviate from plans, but the fact remains that few respondents do what the economic models suggest that they should. In other words, planning for retirement is difficult, few do it, and fewer still think they get it right. One reason people fail to plan for retirement, or do so unsuccessfully, may be because they are financially illiterate. In this case, they may fail to appreciate the role of (or may have a hard time solving problems with) compound interest, inflation, and risk. We find that retirement calculations are not an easy task: only 31% of these older people had ever tried to devise a retirement plan, and only two thirds of these succeeded. For the sample as a whole, only 19% engaged in successful retirement planning. Third, we find that financial knowledge and planning are clearly interrelated. Fourth, we evaluate the planning tools people use, and the respondents who did plan were less likely to talk to family/relatives or co-workers/friends, than they were to use formal means such as retirement calculators, retirement seminars, or financial experts. Fifth, keeping track of spending and budgeting habits appears conducive to retirement saving. From a Life and Disability Analyst: "The whole financial industry is mostly built on BS. The thing I've always admired about you is that you call 'em as you see 'em. No BS." Policy-makers are well advised to follow two principles familiar to navigators throughout the ages: First, determine your position frequently. Second, use as many guides or landmarks as possible." "By not tying policy to a small set of forecast indicators, we may sacrifice some degree of simplicity, but we are less likely to be misled when a favored variable behaves in an unusual manner,"
FED Chairman Bernanke
* Read, every day, something no one else is reading. Think, every day, something no one else is thinking. Do, every day, something no one else would be silly enough to do. It is bad for the mind to be always part of unanimity.
Christopher Morley
* it is a tough job for companies to reach workers. We as a culture have this aversion to details, and financial details confuse the hell out of most people. "I talk with quite a few employees who are plan participants at Fortune 500 companies. "They are never pulled aside for hands-on training to help with these very important choices. Companies need to do more." * Five percent of the people think. Ten percent of the people think they think. And eighty five percent of the people would rather die than think Thomas Edison
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* Experience is not a matter of having actually swum the Hellespont or danced with the dervishes or slept in a doss- house. It is a matter of sensibility and intuition, of seeing and hearing the significant things, of paying attention at the right moments, of understanding and coordinating. Experience is not what happens to a man; it is what a man does with what happens to him. * the sheer complexity of index annuities, the market conduct of distributors and making comparisons to investment products can cause some real headaches for insurance companies. * The responsibility for finding the best advisers remains with the client. Oddly, despite affluent individuals often voiced dissatisfaction with ethier advisors, many still do not invest the effort needed to find a good match. It seems ad hoc or random how some people choose and advisor. This lackadaisical approach can leave individuals at the mercy of the worst elements of the financial advisory world- mediocre firms seeking primarily to amass assets under management.
Elizabeth Harris
* female managers in upper levels of organizations, i.e. CEOs, are often associated with inferior management skills as compared to male managers. Further evidence for this form of think manager, think male-stereotyping in a financial environment can be deducted from a survey of Wang (1994), who reports that sales representatives at brokerages spend more time on advising men than women, offer a wider variety of investments to men and try harder to acquire men as customers.
Here is a BIG caveat to that. Brokers want male investors because they do NOT have to spend as much time explaining the investments or risks. That's because a man will indicate he knows what is going on when, in fact, he doesn't have a clue (male ego). An intelligent woman will ask MORE questions and demand more effort- something that a male adviser is loathe to do and may be incapable of doing anyway. So brokers opt for the easier of the two to sway their (limited) thinking.
* The Pension Benefit Guarantee Corporations finances are shaky. In 2005, it reported a $22.8 billion deficit in its pension insurance program for single employers like IBM. A retiree might get only 40 to 50 cents on each dollar of expected retirement income from a pension plan that falls under the control of the PBGC, -- and that's if the PBGC itself remains in business. "Right now its liabilities are much higher than its assets. There may be no obligation to pay anything. The idea that the defined-benefit model is somehow more secure is baloney."
Wharton insurance and risk management professor Kent Smetters
"smoothing," allows pension managers can use assumptions about the economy for three to five years in the future to stall reporting a decline in the value of pension assets or an increase in liabilities. "The rules permit a lot of rosy assumptions. "So what's happened is that the stock market took a dive in 2000 and interest rates took a dive, too. That combination meant defined-benefit plans became under-funded, but the corporations didn't have to recognize this right away. Now we're at the end of the smoothing period and the chickens are coming home to roost." the recent move away from guaranteed plans is driven by meager returns in the stock market that have left many defined-benefit plans under-funded for what they have promised to pay out. "The sharp declines in the stock market that
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happened three or four years ago really made many companies realize exactly how much financial risk they were undertaking by offering a defined-benefit plan. "Many of the recent changes have been motivated by a desire to minimize that kind of financial risk. A 401(k) plan is not without risk, but the risk is born by the employee, not the employer."
Olivia Mitchell, director of Wharton's Pension Research Council
* Over the last 25 years, life insurance has begun to evolve into something more than just protection against premature death. In the last five years, life insurance has seen more innovation than in the previous 200 years. * every six and a quarter years, on average, assets return to their fair valuation, as measured by the replacement cost of corporate assets. From that point, they rise or fall in relation to that valuation, but eventually come back again.
Jeremy Grantham
* "The declining impact of education on our adult population was the biggest surprise for us, and we just don't have a good explanation. What's disturbing is that the assessment is not designed to test your understanding of Proust, but to test your ability to read labels."
Mark S. Schneider, commissioner of education statistics
* "The average American's ignorance about money, for instance, is a constant source of amazement." He wonders: How it is "that a rational, intelligent person has no difficulty dressing down a clerk for overcharging a couple of bucks, then devolves into a jelly doughnut in the face of a broker whose dumb advice results in the loss of thousands?"
Lee Eisenberg
* "If the inflation rate continues to be persistent like this, the Federal Reserve will simply have to pursue persistent policies that will keep that inflation from increasing further." Expectations of low inflation are probably the most important condition for price stability. "In a low-inflation environment, the stability of expectations of long-run inflation is certainly one, and perhaps the single most important, element in the continued success of the low inflation policy,"
William Poole St Louis FED
"On average, world standards of living are rising in large part because of the widening embrace of competitive free markets, especially by populous and growing China and India," Since the autumn of 2001, global gross domestic product per capita has grown more than 8%. Growth in developing Asia, where many of the world's poor reside, has been considerably faster
Alan Greenspan
* You need to keep raw irrational emotion under control.

Charlie Munger * What about people who want to pick stocks?
You're back to basic Ben Graham, with a few modifications. You really have to
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know a lot about business. You have to know a lot about competitive advantage. You have to know a lot about the maintainability of competitive advantage. You have to have a mind that quantifies things in terms of value. And you have to be able to compare those values with other values available in the stock market. So you're talking about a pretty complex body of knowledge.
Charlie Munger Personally, I think it is VERY hard- and it seems to have gotten harder the more I "knew." Certainly as the Internet has changed how information is sent instantaneously to all.
* What do you think of the efficient market theory, which holds that at any one time all knowledge by everyone about a stock is reflected in the price? I think it is roughly right that the market is efficient, which makes it very hard to beat merely by being an intelligent investor. But I don't think it's totally efficient at all. And the difference between being totally efficient and somewhat efficient leaves an enormous opportunity for people like us to get these unusual records. It's efficient enough, so it's hard to have a great investment record. But it's by no means impossible. Nor is it something that only a very few people can do. The top three or four percent of the investment management world will do fine.
Charlie Munger If you have read enough of my material over the years, you will see similar comments. I do believe the market is efficient- but you never know when that might be. For example, was the market efficient during the dot.com? No. but given enough time, it will even out. The idea is to utilize the (IN)efficiency to your benefit. That's why you don't just buy and hold. You have to stay vigilant in the interim of inefficiency.
* Do you think the stock market will return its long-term annualized 10% in the next decade? A good figure for rational expectation would be no higher than 6%. I think it's unreasonable to assume that the world is going to try to arrange itself so that the inactive, asset-owning class is going to get a much higher share of the GDP than it normally gets. When you start thinking that way, you get into these modest figures. The reason the return has been so good in the past is that the price-earnings ratio went way up. Ibbotson finds 10% average returns back to 1926, and Jeremy Siegel has found roughly the same back to 1802. Jeremy Siegel's numbers are total balderdash. When you go back that long ago, you've got a different bunch of companies. You've got a bunch of railroads. It's a different world. I think it's like extrapolating human development by looking at the evolution of life from the worm on up. He's a nut case. There wasn't enough common stock investment for the ordinary person in 1880 to put in your eye.
Me- Funny stuff. Charlies comments reflect the absurdity of historical numbers since you had to find out when they started. You can make up almost any numbers- just pick the starting point. The focus is on today and the economics toward the future. Doesn't mean you will be right. But if you read the think, you got a shot at a realistic returns commensurate with RISK (the key element in investing)
* What do you see for bonds? The bond market has fewer opportunities now. The short-term rates are the same as the long-term rates, and the premium interest rate you get for taking
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risk is lower than it ought to be, given the risk. By definition, that's a world in which bond investment is much tougher to do with great advantage.
Me- I keep referencing the flat yield curve. You CANNOT maintain a flat yield curve. You CANNOT!!!!!! And when the rates do rise, it might be a good time to use a fixed annuity with a lock in rate.
* Our budget position will substantially worsen in the coming years unless major deficit-reducing actions are taken," "The fundamental fiscal issue is the need to make difficult choices among budget priorities, and this need is becoming ever more pressing in light of the unprecedented number of individuals approaching retirement age," As long as health-care costs continue to grow faster than the economy as a whole, "they will exert budget pressures that seem increasingly likely to make current fiscal policy unsustainable," Government estimates that entitlement spending, which currently accounts for 8% of gross domestic product, will consume 13% by 2030. "I fear that we may have already committed more physical resources to the baby-boom generation in its retirement years than our economy has the capacity to deliver," "deficits that cumulate to ever-increasing net external debt, with its attendant rise in servicing costs, cannot persist indefinitely." "if, however, the pernicious drift toward fiscal instability in the United States and elsewhere is not arrested and is compounded by a protectionist reversal of globalization, the adjustment process could be quite painful for the world economy."
Alan Greenspan
* It is painfully clear how misleading (conditional) correlation can be. Low (high) correlations do not necessarily imply low (high) dependence. * Economists have finally realized that orthodox economic models are too unrealistic and dogmatic.
Dr. Brian J. Jacobsen Assistant Professor Business Economics
The problem will become much worse. "To call upon taxpayers most of whom don't have defined-benefit pensions to pay for the benefits of those who do would be fundamentally unfair."
PBGC executive director
There are variable annuities, which are subject to NASD regulation, fixed annuities, which are subject to state insurance commissioners regulation, and equity-indexed annuities which are subject to utterly ambiguous regulation because it isnt entirely clear to anyone whether theyre insurance products or securities. Yet all these products look pretty much the same to investors. EIAs are particularly complex. They are often marketed as risk-free, which they most certainly are not. And they are marketed disproportionately to elderly people, often without suitability analyses having been made. And sales commissions are as high as 10%. But we cant touch all equity-indexed annuities sales, because they arent registered as securities and are often sold by non-broker-dealers. I think what we need to do here is invite the state insurance regulators to work with us on
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harmonizing and clarifying the rules for fixed and equity-indexed annuities sales. Weve had some preliminary discussions with some of them toward that end, but we have a long way to go.
NASD
* There is no meaningful statistical relationship, as measured by correlation coefficients, between stocks and oil prices over periods of time like days, weeks, months, quarters, or years. Correlation coefficients near one or negative one could indicate a meaningful relationship, while those near zero show randomness. The daily correlation between stock and oil prices in the third quarter was -0.2 and just 0.1 so far this year, demonstrating the cognitive error.
Ken Fisher
* "People fall back on anything they can lay their hands on verbally to keep away from the danger of knowing, and of being known."
Harold Pinter, Nobel Prize in literature.
* "People spend more time choosing a TV than choosing their 401(k) investments,"
Jeffrey Miller
There are two dangers that arise when people are ill-informed. One is that they won't realize what they've done. So when times are bad, they'll be very disappointed. If you just take somebody's current investments and project return without any notion of risk, you give them a wildly distorted view of what their future might hold. It may be the best point estimate if you've done it carefully, but they have no notion of how good it can get or how bad it can get. So when and if it gets bad, they're not only likely to be desperately disappointed if they're already retired, they're also likely to do the wrong thing if they haven't retired. In classrooms for decades, we've presented investments as a risk/return tradeoff. Now, people are being presented investments as a return/return trade-off. There ought to be a law against that. Instead, we can help people understand the range of outcomes associated with different investments and help them find combinations of investments that are optimal.
Bill Sharpe
* Rising Interest Rates are more likely than not to hinder stock market and valuation performance, perhaps significantly, in the years ahead
Joseph Ellis
* A sizable minority of eligible workers - 30 percent - do not participate in company plans. That fact, combined with meager savings rates of those who do participate, poor allocation choices and misguided corporate policy decisions are evidence that 401(k)'s are not operating on all cylinders.
NY Times
* The Fed's failure to curb bubbles, while aggressively easing policy when they burst, is partly to blame for America's imbalances, which could give the next Fed chairman a lot of grief.
Economist
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* The jump in energy prices will undoubtedly be a drag from now on.
Alan Greenspan
Treasury secretary, John Snow, is worried that a meltdown of corporate pension funds could become the next Savings & Loan crisis, a reference to the scandals among thrift banks at the end of the 1980s that ended in a $200 billion government bail-out. In a rising rate environment, there is little margin for error. If something goes awryanother terrorist attack, or weaker earnings, or an inverted yield curvethe stock market is much more likely to take it on the chin.
Alan Greenspan
"Given the size of America's imbalances- the current account deficit, the overvalued housing market, the overextended consumer, a major (economic) upset is possible. There is a 75% chance of a crisis in the next few years."
Paul Volcker
* Individual investors generally do not live in worlds of averages. They are impacted by the reality that correlations differ greatly from one phase of the market to another. That is because they frequently have liquidity needs that are independent of whether or not financial markets are doing well. In fact, most investors do not really have an investment time horizon. They often have several horizons that are driven by different goals for spending different amounts of money in different time frames. Individual investors also make irrational decision that are driven by emotional factors, leading to untimely portfolio withdrawals. Financial advisors cannot ignore these facts
Fowler and Rattiner
* First, as Markowitz himself pointed out, it is not certain that using the bell shaped curve is the best way to measure stock market risk; it is easy but not necessarily right. Second to build efficient portfolios, you need good forecasts of earnings, share prices, and volatility for thousands of stock. Otherwise garbage in, garbage out. Finally, for each stock, you must laboriously calculate its covariance with, or how it fluctuates against, every other stock. For a thirty stock portfolio, about the minimum needed to make the numbers work well, that means 495 different calculations of mean variance and covariance. For the entire NY Stock Exchange, 3.9 million calculations. And because prices change, the exercise needs constant repetition.
Benoit Mandelbrot
* "If you live each day as if it was your last, someday you'll most certainly be right." So I asked myself, if today were the last day of my life, would I want to do what I am about to do today? And whenever the answer has been no for too many days in a row, I know I need to change something. Remembering that I'll be dead soon is the most important tool I have ever encountered to help me make the big choices in life. Because almost everythingall external expectations, all pride, all fear of embarrassment or failure- these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no
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reason not to follow your heart. Steve Jobs commencement speech * Individuals fare best by constructing equity oriented broadly diversified portfolios without the active management component
David Swensen
* Timing decisions involve the large questions of asset class valuation, forcing short term asset allocators to develop views on an impossibly broad range of factors.
David Swensen
* "There are 141 topics in the CFP investment education module, and not one of them addresses how to find the best portfolio for your future dollar goals."
Dick Purcell
Consumers were more willing to spend money based on an apparent increase in wealth, rather than increases in their earnings, when part of that wealth was based on gains from stocks or real estate that could readily disappear Folks tend to view periods of low rates (which we have had fore a long time) as structural and permanent. That leads to unwise investments which compounds the hurt when the value of the assets suffer a decline.
Alan Greenspan
The coming decade of big deficits will reduce national saving by 2-3% of GDP. As a result, American households will accumulate fewer assets, yielding $1,500-3,000 less income a year.
The Economist
* Human beings simply aren't hard-wired to be good investors.

David Swensen, chief investment officer of the Yale endowment
Correlation is a mathematical measure of the tendency of one investment to move in relation with another. The correlation coefficient is a mathematically derived number that measures this tendency toward co-movement. If two investments move in the same direction at the same time, they have positive correlation. If they move in opposite directions at the same time, they have negative correlation. If the movement of one investment is independent of the movement of the other, they are non-correlated.
Rick Ferri
* "Prices of almost all publicly traded stocks are now too high in relation to probable long-term earnings per share, especially in the U.S.A.," He advises investors to keep no more than half of their portfolio in stocks. "Bond prices also continue to be too high, "especially the prices of lower-quality bonds."
John Templeton
* "The NASD arbitration process and purported SEC oversight thereof constitutes a sham upon the investing public,"
Les Greenberg
* "Very few hedge funds will be able to cover their very high operating costs.
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Because many hedge funds work with borrowed money, it is quite possible that many will become bankrupt within the next year or two and the liquidation of those bankrupt funds will depress share prices."
John Templeton
News events accounted for a surprisingly small amount of the stock market's movements.
David M. Cutler and Lawrence H. Summers of Harvard and James M. Poterba of the Massachusetts Institute of Technology
* Individual willingness to bear risk is not normally observable; this is one reason why researchers have typically assumed that individuals have identical risk preferences and so explained the observed differences in behavior and wealth by assuming some form of market friction or imperfection that affects individuals differentially. We find unequivocal evidence that risk preferences differ considerably across individuals and that these differences have substantial explanatory power as regards individual decisions.
Luigi Guiso and Monica Paiella
* Three decades from now, we will be surrounded by a young world that will surely have the wherewithal to buy our assets and ship us the goods we need. Why will Chinese and Indonesian investors want to buy our assets when their own economies will be growing so fast? The U.S. is viewed as the center or innovation and the crucible of invention. We are world leaders in higher education and most areas of research. More leading firms begin in the U.S. than anywhere else. And our country still has more brand names that the world trusts than any other country. * investors should brace themselves for a sustained period of modest, if not mediocre, gains in both the stock and bond markets, with total returns in the mid-single digits.
Bill Gross
* "There's a reality in the marketplace; it moves up and down. If you're saying buy and hold, you're essentially denying that reality."
Pete Kendall, co-editor of the Elliott Wave Financial Forecast
Alicia Munnell concurred that peoples choices too often fail to serve them well. She offered the example of males opting for a single-life payout from their defined-benefit pension plans, leaving their surviving wives with no income. Munnell noted that 401(k) plans often require employees to make many decisionswhether to join, how much to contribute, how to invest, when to rebalance, whether to roll over when changing jobs, how to use the money in retirementleading some to make serious mistakes. Automatic enrollment solves one of these problems, but only partially, because the automatic contribution rates are usually lower than those selected by other participants. Moreover, employees tend not to change the default contribution and investment options. She noted that experimental evidence suggests that offering too many choices can bring cognitive overload, confusing people and leading to poor choices. If people are making mistakes, it could simply be that our procedure for presenting information and eliciting responses needs to be improved. Cases of medium difficulty arise with regard toactivities that will improve our
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welfare, but only after we are forced to become familiar with their benefits. Examples include reading great literature or exercise programs. The brain does not make the right choices initially because it does not have the right model of how it, itself, will change in response to these choices. In these cases, we cannot expect to achieve consistency in responses before, during, and after implementing the action. By engaging in the activity, we are changing the brains ability to experience welfare. Cases of the greatest difficulty arise when people are happy the way they are and do not want to change. In the case of psychopaths, for instance, treatment might actually reduce their welfare by enabling them to feel guilt, so that their actions no longer provide the former satisfaction. * Benign paternalism meets the criteria for good behavioral policy because it encourages desirable behavior without preventing consumers from in and choosing for themselves.
Benjamin and Laibson
* busy, inattentive people gather information only occasionally.

Ball, Mankiw, and Reis
* Psychology provides a drastically different picture of human behavior from that which prevails in economics. Preferences can be malleable, context dependent, and inconsistent even though decision makers are thoughtful, serious, and engaged.
Eldar Shafir, Professor of Psychology and Public Affairs, Princeton University
* The market is in the early stages of a once-in-a-generation - or rarer - bear phase that will carry it to a mere fraction of its current worth in coming decades.
Pete Kendall, co-editor of the Elliott Wave Financial Forecast
* The standard models of human behavior in economics, which assume that people are well-informed economic agents striving to maximize a set of consistent preferences, frequently produce patently faulty predictions. Although individuals perceive themselves to be unitary creatures, that impression is likely illusory. While the evolved subsystems that make up the human brain do communicate, in many contexts one system or the other tends to dominate. In some circumstances, for instance, emotions and drives can control our thinking, radically changing our preferences, our taste for risk, the degree of empathy we feelin effect, profoundly altering our rationality and our perception of utility. Somewhat ironically, moreover, it is the unconscious behaviors that are (relatively) predictable. It is consciousness or cognition that introduces the element of unpredictability in human behavior. All told, given the structure of our brain, it is unlikely that humans will behave as if they are consistently maximizing any single utility function. Rather, their utility function will seem to vary with their circumstances.
Federal Reserve Board of Boston
* First, as Markowitz points out, it is not certain that using a bell shaped curve is the best way to measure stock market risk; it is easy, but not necessarily right. Second to build efficient portfolios you need good forecasts of earnings, share prices and volatility of thousands of stocks. Otherwise, garbage in, garbage out. Finally, for each stock, you must laboriously calculate its covariance with, or how it fluctuates against, every other stock. For a thirty
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stock portfolio, about the minimum number needed to make the numbers work well, that means 495 calculations of mean, variance and covariance. For the entire NY Stock Exchange, 3.9 million calculations. And, because prices change, the exercise needs constant repetition.
Benoit Mandelbrot
* The market is very risky- far more risky than if you blithely assume that prices meander around a polite Gaussian average
Benoit Mandelbrot
* If you are going to use probability to model a financial market, they you had better use the right kind of probability. Real markets are wild. Their price fluctuates can be hair raising- far greater and moe damaging than the mild variations of orthodox finance. That means that individual stocks and currencies are riskier than normally assumed. It means that stock portfolios are being put together incorrectly; far from managing risk, they may be magnifying it. It means that some trading strategies are misguided and options mis-priced. Anywhere the bell shaped curve assumptions enters the financial calculations, an error can come out. Benoit Mandelbrot * In a rational world, we would have a progressive consumption tax that would penalize high levels of spending instead of earning and saving. As it stands now, the system encourages gigantic homes and commensurately large mortgages, because mortgage interest is tax deductible.
DANIEL AKST
* The fund industry paints itself as the salvation of Mom and Pop, then drowns them in brochures for growth funds, technology funds, health care funds, overseas health technology growth funds, and other absurd permutations. These are nothing more than an invitation to commit the same mistakes by sector that small investors have always made by chasing the latest hot individual stock. The S.E.C., if it were really doing its job, would inform the public that it is wasting its money. But the agency considers itself the protector of the active small investor, so it cant very well tell him that his activity is the single biggest menace to his investment returns. Dont get us wrong, speculators and active fund managers are highly useful people. They do the research and risk taking to make sure prices are right that is, reflect the latest wisdom about what companies are worth. They make the world safe for indexers: smart investors who stick their money in cheap, broad fundsand let Wall Street support them rather than the other way around."
Holman Jenkins Jr
* The income gap between the rich and the rest of the U.S. population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself.
Alan Greenspan
Most investors, both institutional and individual, will find that the best way to own common stocks (shares) is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) of the great majority of investment professionals.
Warren Buffet
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Behavioral economics provides a needed intellectual foundation for Keynesian economics and stabilization policy. * in-group favoritism found with two groups tends to disappear when there are three. * The lack of a unified theory in psychology and the low probability that one will come along any time soon make it impossible for economics to truly incorporate psychology into its basic paradigm.
Dan Ariely
In a complete reversal, modern psychology shows that affect is actually highly regular and that it is cognition that introduces unpredictability into behavior. Unconscious behaviors generally occur in fully predictable patterns unless consciousness overrides them. As a result, humans are less predictable than rats.
George Loewenstein
Starting points strongly influence peoples decisions, evidence that peoples values depend on their circumstances.
Thaler
Most of the standard financial models assume- incorrectly- that one day's price is independent of the last; it takes a random walk. But with economic quantities- production, inflation, unemployment- some form of dependence is the rule and economists crank the numbers through cookbook tests to measure how strong it is and over how many time periods it extends.
Benoit Mandelbrot
The framing of alternatives also affects decisions. For example, when people (including doctors) who are considering a risky medical procedure are told that 90 percent survive five years, they are far more likely to accept the procedure than when they are told that 10 percent do not survive five years. Because framing affects peoples behavior, providing more information cannot remedy matters, unless the information is presented in a fully neutral fashion. In some cases, additional information only increases peoples anxiety and confusion, thereby reducing their welfare. * If people are making mistakes, it could simply be that our procedure for presenting information and eliciting responses needs to be improved. * There is no benefit gained by purchasing investments that have a consistently high positive correlation with other investments.
Rick Ferri
"The odds of financial ruin in a free, global market economy have been grossly underestimated." Many of the underpinnings of modern finance turn out to be faulty. Mandelbrot notes specifically Markets are turbulent Markets are very, very risky, more risky than the standard theories imagine Market timing matters greatly. Big gains and losses concentrate into small packages of time
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Prices often leap, not glide. That adds to risk. In markets, time is flexible, that is, volatility speeds up market time Markets in all place and ages work alike Markets are inherently uncertain and bubbles are inevitable Markets are deceptive- that is patterns are wrongly seen patterns are wrongly seen in random motions Forecasting prices may be perilous, but you can estimate the odds of future volatility In financial markets, "value" has limited value Modern portfolio theory assumes that market prices vary mildly, independently, and smoothly from one moment to the next. "If those assumptions are wrong, everything falls apart." The wild swings of real markets mean you have to build in a wider margin of safety than conventional theory holds"
Benoit Mandelbrot
"Orthodox economists often model (stock plans and risk) as long series of random events spread out over time. While they can be of varying importance and size, their assumed distribution follows the bell curve so that no single event is preeminent. What sense is this. The terrorist attack on the World Trade Center was, far and away, the most important even in the years for financial stability and, consequently, for financial markets. It forced the closure of the NY Stock Exchange for an unprecedented five days and when trading reopened, caused a 7.5% fall, It was one titanic event, not the sum of many small ones. Big news causes big market actions. And that action concentrates in small slices of time." "From 1986 to 2003, the dollar traced a long bumpy decent against the Japanese Yen. But nearly half that decline occurred on just 10 out of those 4,695 trading says. Put another way, 46% of the damage to dollar investors happened on 0.21% of the days. Similar statistics apply in other markets. In the 1980's, fully 40% of the positive returns from the S&P 500's index came during just 10 days- about 0.5% if the time. What is an investor to do. Brokers often advise their clients to buy and hold. Focus on the average annual increases in stock prices, they say. Do not try to time the market seeking the golden moment to buy and sell. But this is wishful thinking. What matters is the particular, not the average." "As a further example, consider the drop of the market on October 19, 1987 of 29.2%. The probability of that happening, based on the standard reckoning of financial theorists was 10 to the 50th power- a number so small it has no meaning." MARKETS ARE VERY, VERY RISKY- MORE RISKY THAN STANDARD THEORIES IMAGINE Benoit Mandelbrot * Portfolio composition skills of individual investors have not improved over time.
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GOETZMANN, KUMAR
* "The odds of financial ruin in a free, global market economy have been grossly underestimated."
Benoit Mandelbrot
* Return forecasts are guesses in an uncertain and tempestuous world where the past cannot be relied upon as a guide to future returns. Return distributions are not stable normal or non-stable normal, they are simply unstable or haphazard, requiring an on going evaluation of the state of the world, speculation on what lies before us and flexibility. It is better to make educated guesses about the future, evaluate alternative scenarios, and admit that we don't know, rather than to presume that there is a predestined long-term rate of return and that risk can be managed in terms of short-term portfolio volatility based on historical distribution of asset class returns and covariances.
Peter Bernstein
* Investors who are overconfident about the accuracy of their private information or in their ability to interpret their private information (e.g., Odean (1999) may intentionally choose to hold focused and underdiversified portfolios. Furthermore, investors may prefer to invest in stocks they are familiar with (e.g., stocks in their vicinity, i.e., local stocks, employer stock, etc.) and this preference for the familiar (e.g., Grinblatt and Keloharju (2001), Huberman (2001), Zhu (2002)) may induce under-diversification.
Goetzman, Kumar
* The looming retirement of 78 million baby boomers will put a huge strain on the Depression-era retirement program and aggravate the country's already bloated budget deficits. "Unless the trend is reversed, at some point these deficits would cause the economy to stagnate or worse. Unless growth in the Social Security and Medicare is restrained, these programs will require more and more government resources. Spending on these programs will rise from about 8% of the total economy currently to about 13% by 2030
Alan Greenspan
The random walk model assumes that successive returns are independent, identically distributed, and normally distributed. The policy portfolio makes sense in a world where asset class returns looking forward are the same at all points in time. If asset class return expectations are subject to change then the idea of sticking with an asset allocation solution does not make economic sense. If the random walk model does not fit reality, then the policy portfolio does not fit reality either. The idea that successive returns are drawn from a return generating process with a stable mean and standard deviation is among the most extreme and absurd assumptions in all of economics.
Bill Jahnke
* The problem with BHB is that an analysis of variation of quarterly returns tells us nothing about the how return accumulates over time. The performance attribution framework developed by BHB is not valid for the determination of what matters to investors, which is the funding of long-term financial objectives: it overstates the relative importance of investment policy, understates the consequences for engaging in market timing, ignores the role cost plays in investment performance, and fails to account for the financial implications of actively adjusting the long-term asset class policy allocation.
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Markowitz (1952) warned against the pitfalls of using aggregations of securities in portfolio selection. Markowitz saw the investment problem as a dynamic one with an ever-changing set of expected returns, variances and covariances and a changing set of optimal investment solutions. He specifically warned against using historical returns as the basis for estimating expected returns, variances, and covariances. Sharpe (1964) proposed a capital asset pricing model where the risk premiums per unit of systematic risk are not fixed, and the mean-variance efficient market portfolio is continuously being reconstituted along with changing investment prospects.
Bill Jahnke
* Because investment management involves as much art as science, qualitative considerations play an extremely important role in portfolio decisions. The definition of an asset class is quite subjective, requiring precise distinctions where none exist. Returns and correlations are difficult to forecast. Historical data provide a guide, but must be modified to recognize structural changes and compensate for anomalous periods. Finally, quantitative measures have difficulty incorporating factors such as market liquidity or the influence of significant, low-probability events.
Yale Endowment
* One of the key insights of asset pricing theory is also one of the simplest: only systematic risk should be priced.
Torben G. Andersen, Tim Bollersleve, Francis X. Diebold and Jin Wu
* Avoid the noise of the market. Stop watching CNBC, except as entertainment. Dont read Money magazine, unless youre using it to tell you where to go on vacation or what insurance to buy or what car to buy. But dont listen to their investment advice, because its highly likely to be dangerous to your healthat least financial health.
Larry Swedroe
* I feel pretty optimistic about the economy both in terms of real growth and employment gains and also in terms of inflation (Early 2005) . What I mean by that is that my confidence is building that the economy seems like it's on course for growth slightly above trend ... not the kind of stellar growth that we've previously seen sometimes coming out of recessions. But growth that's above trend and that will erode the slack that I think still exists in labor markets, gradually moving us back to full employment.. ...
President FED Board of SF
* Popular financial advice suggests that households should strive to replace between 65 and 85 percent of pre-retirement income in retirement, but there appears to be little scientific basis for this estimate.
Barbara A. Butrica, Joshua H. Goldwyn, and Richard W. Johnson
* "Although I do not think a significant pickup in inflation is imminent, I continue to be struck by talk of price increases that my business contacts say they are planning as the economy expands. The argument that excess slack in the economy would curb prices might be flawed, and he worried that businesses are running out of the ability to use new technologies that made them more efficient. "There probably is a limit to how long businesses can leverage productivity
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gains to hold prices down,"

Atlanta Fed Bank President Jack Guynn
* If you take your average advisor, he or she knows that the long-term history of stocks has averaged about 10%, which is true. In his bones, he will believe a return in any given year of 0% percent to 20% is more likely than a return above or below those levels. The history of Western markets, however, is exactly contrary to that. Returns are higher or negative 70% of years in America. They are between 0% and 20% only in the remaining 30% of the calendar years since 1926. In overseas Western developed markets, returns of zero to 20% happen in only 25% to 40% of years. Returns greater than that or negative happen 60% to 75% of years. Overwhelmingly, markets are more volatile than people think.
Ken Fisher
People make fairly arbitrary decisions when allocating money in their 401(k) accounts. When offered a choice between a stock fund and a bond fund, many people chose a 50-50 split. Yet when a second stock fund was added, many investors put a third into each fund and increased their stock holdings rather than opting to keep a total of 50 percent in stocks.
Shlomo Benartzi and Richard H. Thaler
Most people would rather have someone else make their investment decisions, and from an economic perspective, that might make the most sense. "If you have a medical problem, rather than spending seven years to learn to be a doctor, you might as well just pay a doctor," he said. "If you need to figure out a portfolio allocation, then, rather then delegating it, now we're going to force you to spend all the time and learn how to do it? It doesn't seem to be a very efficient use of people's time."
Shlomo Benartzi and Richard H. Thaler
* We know that, in general, people tend to extrapolate too much from the past." "They invest a lot of their retirement funds in company stocks because they did well in the past." That can be a lousy strategy, since stocks that have been popular among investors, giving them high market values relative to their assets, tend to pay lower returns than stocks for which the reverse holds true.
Shlomo Benartzi
Do you think the investing public has gotten smarter (in regards to stock picking)? A: I think my answer would be no. The day-trader phenomenon would not have developed out of a population that was thoughtful about how the stock market works. And I don't think that many individual investors have learned that the more you press, the more problems you're going to get into. They have not learned that, and maybe they never will. A lot of investors feel it isn't hard, they just don't know how. After 50 years I still haven't got it all clear. And that's okay, because I understand that I haven't got it figured out. In a hundred years, I won't have it all figured out.
Peter Bernstein
"Understanding that we do not know the future is such a simple statement, but it's so important." "............anything can happen. There really is such a thing as
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a "paradigm shift," when people's view of the future can change very dramatically and very suddenly. That means that there's never a time when you can be sure that today's market is going to be a replay of a familiar past." * "..........in 2003 you urged big investors to abandon fixed asset allocations in favor of strategies like market timing. Why all the flip-flopping? I make no excuses or apologies for changing my mind. The world around me changes, for one thing, but also I am continuously learning. I have never finished my education and probably never will.
Peter Bernstein
* The great Michigan economist Paul MacCracken, at the blackest moment of 1974, told me never to believe in apocalyptic scenarios. But on balance, the advantages of the optimistic developments are waning while the power of the pessimistic developments is growing. We cannot reverse the balance without sacrifices and fear and pain that can last many years. The structures we grew up with are crumbling before our eyes, and nothing new is there to take their place. By structures I mean the global environment as well as global political and economic relationships. The most hopeful thing I do see is the emergence of Asia as a young economic power. Although they will be competitors to the U.S., the [emerging Asian countries] lend a dynamic character to the world economy that the old powers can no longer generate. Like the U.S. in the 19th century, they are the dynamo that can drive things forward. Higher living standards in those countries is also a strong positive for the world. But they have no interest in the environment, and corruption is endemic, so they are no angels.
Peter Bernstein
* Is market timing [short-term trading back and forth among asset classes] really a good idea? For institutional investors, the policy portfolio [a rigid allocation like 60% stocks, 40% bonds] had become a way of passing the buck and avoiding decisions. The problem was that institutions had settled on a [mostly stock] asset allocation because in the long run, they concluded, that's the only place to be. And I think the long run ain't what it used to be. Stocks don't have to do well in the future because they did well in the past. In fact, the opposite may be more likely. As you know, I have my doubts about the certainty so many investors feel about the long-run attractions of investing in stocks. We do not know what is going to happen over the long run, never have, never will, and when [in 1999] the institutional funds were relaxed about [holding] equities, it was a moment when equities were far away from anything resembling real value. Ben Graham said to invest with a margin of error, so you don't get killed when you are wrong. They invested with a margin so small or nonexistent that meant they had to be right or they would get killed -- and they were. Individuals can't ignore the asset-allocation question. You want to have some structure as to where you want to be. And rebalancing is a wonderful form of market timing for individuals, almost judgment-free.
Peter Bernstein
* Cognitive Dissonance is the mental conflict that people experience when they are presented with evidence that their beliefs or assumptions are wrong. People
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have an incredible degree of self denial. They will effectively jump through mental hoops in order to reduce or avoid mental inconsistencies James Montier * Individuals who exhibit over confidence are said to not be well calibrated James Montier * Humans simply aren't capable of carrying out the dynamic optimization problems required by the tenets of classic finance theory. In stead they use rules of thumbs Heuristics) to deal with the deluge of information. James Monteir * The lack of a unified theory in psychology and the low probability that one will come along any time soon make it impossible for economics to truly incorporate psychology into its basic paradigm. * The old ways don't work in this age of lightening fast change, high volatility, global hypercompetition, declining prices and compressed margins. New threats and opportunities arise faster and more often. The next assault on your ability to make money can come from almost anywhere. You have to study your extended industry, which includes all the players who influenced the industry's's behaviors and economics. Increasingly they can upend your old assumptions.
Larry Bossidy and Ram Charan, authors of Confronting Reality "The problem with sensitivity analysis as it is applied in practice is that there
are no rules as to the extent to which a change in the value of a variable is tested for its impact on the projected result. For example, a 10% increase in labour costs may be very likely to occur while a 10% increase in sales revenue may be very unlikely. The sensitivity test applied uniformly on a number of project variables does not take into account how realistic or unrealistic the projected change in the value of a tested variable is.
Savvakis C. Savvides
* Political leaders will have no choice but to raise taxes if they do not cut back on trillions of dollars in unfunded commitments - most of them associated with Medicare
Stuart Butler, senior fellow, Heritage Foundation
* There has been universal acceptance that illustrations have credibility. The primary value of a policy illustration is in the first year only. Each year after the first becomes more and more hypothetical and without basis.
Joseph W. Maczuga
* Wisdom is the product of knowledge and experience, but it is more than the accumulation of information. It is the coordination of this information and its deliberate use to improve well-being. In a social context, wisdom allows the individual to listen to others, to evaluate what they say, and then offer them good (sage) advice. * News understanding (and misunderstanding) is driven more by impressions and images than information. In depth television reporting is brief and ephemeral and rarely is retained in the minds of the audience.
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Danny Schechter
* "The major mistake that people make is that they are not very good at dealing with a lot of uncertainty. So, rather than a rational assessment of data and probabilities, they like stories and they make decisions based more on mental images rather than a sober assessment of their portfolio and how [a particular] stock fits into it."
James Scott
* Finance theory is quite clear that if you make investment decisions based on what you read in newspapers and see on TV, you will sometimes be right and lucky, more often wrong and unlucky, and overall do worse than if you had made no decisions at all.
Ken Fisher
* Most advisors believe that if they get an adequate education, whatever that means, they are up to the task of making decisions, given a modicum of training in getting a designation or degree such as a CIMA, MBA, CFA, or CFP. Finance theory, however, says getting a designation or degree is insufficient.
Ken Fisher
The most recent Fama-French data show that IPOs have become even more like lottery tickets; it has never been easier, by concentrating on just a few issues, to become fabulously wealthy. And it has never been easier, by regularly throwing money at them, to become poor.
William Bernstein
A standard phrase investment advisors use is large-cap value. That category is actually nonexistent. It is an oxymoron. And, if you believe it exists, youre a regular moron. The way the market actually works, there is a size continuum from biggest to smallest, and if you take stocks a quarter as big as the average stocks market capitalization, they would act more like the tiniest stocks than the stocks bigger than the markets average capitalization. When you look at value, only a very few stocks are bigger than the markets average capitalization, and they essentially are all energy-dependent such that you cannot build a diversified portfolio out of them. All value portfolios, unless synthetically created, have market caps smaller than the markets average capitalization, unless they have zero industry diversification and very little single stock diversification. The impact is that what people call large-cap value is just a bet on less smallness than small cap-value. All value is a bet on a certain amount of smallness; the question is how much. So if you look at times when small-cap value is going great, big value is acting more like small-cap value than like large-growth and vice versa. When small-cap value is doing badly, whats called big-value is again acting more like small-value than big growth.
Ken Fisher
* The most erroneous stories are those we think we know best - and therefore never scrutinize or question.
Stephen Jay Gould
The foolishness of buy and hold: The capital market pricing mechanism is a different world. It is the world our brains dont want to think in, a world dominated by supply and demand shifts, for instance, which we dont think
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about. I seriously doubt that many of your readers have ever tried to build supply and demand schedules for any security and have no idea how they vary from the ones they were taught about in basic microeconomics. People pay attention to these proxies and not supply and demand directly. Forecasting supply and demand shifts five to ten years from now is beyond treacherous. If you remember your basic microeconomics, supply and demand shifts are all about the psychology and functions behind eagerness. How eager will people be for equities in a decade? And how eager will entities and bankers be to create them? If you think you can answer that with any precision, you are a fool. It is way beyond the current state of capital markets science.
Ken Fisher
Equity Risk Premium and backtesting: People making assumptions about the ERP are just trying to make 10-year predictions on the market. What Arnott, Ibbotson, and others are saying is whether they believe returns will be average, above average, below average, and they are usually talking about the next 10 years or so. With almost all academic calculations of the ERP, if you take their formulas and backtest them, you are likely to find their forecast for stock returns were vastly lower than the markets actual returns. For example, Cliff Asness is one of the most widely cited ERP calculators. We put ourselves back in the early 1980s, took his formula, and applied the numbers to the economy then. It called for a negative equity risk premium for most of the last 20 yearsnot just a lower ERP, but a negative ERP in what turned out to be a very huge bull market. If the formula could be wrong for that long, what makes it right now? But making long-term capital markets forecasts based on whats known about the markets and economy would seem to be a pretty sensible, if not scientific, approach. No one could begin in the 1980s or early 1990s to see either good things that were not expected, like the fall of the Soviet Union, or the tremendous optimism that would come in the late 90s over things like the Internet. When you think about major events in history, few people could see them 10 years out. But the other issue is that it is actually the latter years in a 10-year period that matter most. History shows that. When you look at spreads of bonds versus stocks, or stocks versus cash, during rolling decades of calendar years since 1926, the highest spread is 18% in favor of stocks and the lowest is negative 4% or 5% depending whether you use cash or bonds to look at the spread. Those are huge swings. And it is the back-end optimism or pessimism in the 10-year periods that determines the returns, not the front-end of those periods. Ten years from now, will people again be wildly optimistic? I dont know. But not only do I not know, no one else does either. And using an ERP that says equities should return 5% or 6% or 7% or 12% annually is simply a statement of not appreciating how wildly volatile equities are. Markets are far more volatile than investors think they are. The reality is we cannot tell how people will feel five or ten years from now. And because they tend toward extremes, they could be extremely optimistic or pessimistic, and we know the spread of stocks versus bonds or cash is positive 18 versus negative 4 or 5. If you think you can predict how people will feel five to ten years from now, you are what a behaviorist calls overconfident at the extreme. Three years ago, if you would have asked advisors a question about the equity risk premium, some would have had a low number and others a high number. Ironically, after a big bear market, most academic calculations brought their numbers down for the expected returns on stocks. And most people three years ago could not see three years into the future, and those who could may have been lucky. Thats three years ago, not ten. A 10-year forecast is much tougher. We believe it is wiser to take it one year at a time. Lets worry about here and now and not worry about
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2013 because there is not a lot we can do about 2013.

Ken Fisher
* "The major mistake that people make is that they are not very good at dealing with a lot of uncertainty. So rather than a rational assessment of data and probabilities, they like stories and they make decisions based more on these mental images rather than a sober assessment of their portfolio and how (a particular) stock fits into it."
Jim Scott
Ninety-nine percent of failures come from people who have the habit of making excuses.
George Washington Carver
*Small cap effect: (Ken Fisher) The small-cap twits do a different stupid thing, by the way. They see the long-term excess return on small cap and miss that it comes from three two-year periods of 1933-34, 1943-44, and 1976-77, all emerging similarly from big bear markets. When you take away those three similar periods out of that long history, then big-caps do better. If removing three two-year periods ruins your long term trend, then you dont have robust statistics and that completely undermines the statistical underpinning to the so called small-cap effect. Economists, like most other humans, tend to forecast by extrapolating existing trends. That's fine when things tend to keep moving in the same direction. But when there is a shift, look out * Embedded in capitalism is the capital market pricing mechanism. At its core and guts is that if you give it enough time, capitalism arbitrages all raw variances in capital costs by category to zero by adjustments in supply and demand for securities. The tech investor and energy investor have a hard time fathoming that the 20-year return on those two categories is identical. Similarly, the 30-year return on the markets of all major Western nations is almost identical. Its the same thing with growth and value stocks, and big- and small-caps. If you dont believe in the near-total power of the capital markets pricing mechanism to accomplish its goal, you dont really believe in capitalism and will end up the same place Mr. Bin Laden will end up. In the long term, all major equity categories effectively perform nearly identically. Their differences are small and serendipitous. But people dont think that way. The small-cap twits do a different stupid thing, by the way. They see the long-term excess return on small cap and miss that it comes from three two-year periods of 1933-34, 1943-44, and 1976-77, all emerging similarly from big bear markets. When you take away those three similar periods out of that long history, then big-caps do better. If removing three two-year periods ruins your long term trend, then you dont have robust statistics and that completely undermines the statistical underpinning to the so called small-cap effect. The function of capitalism is to arbitrage differences in categories to zero. If you know that, then you know that categories are not important. The real issue is: What categories do well and badly next?
Ken Fisher
* "If we have promised more than our economy has the ability to deliver, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels"
Alan Greenspan on Social Security and Medicare
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"The major mistake that people make is that they are not very good at dealing with a lot of uncertainty. So rather than a rational assessment of data and probabilities, they like stories and they make decisions based more on these mental images rather than a sober assessment of their portfolio and how [a particular] stock fits into it."
Jim Scott
Kahneman and Tversky examined systematic errors in the casual statistical judgments of statistically sophisticated researchers (Tversky & Kahneman, 1971). Remarkably, the intuitive judgments of these experts did not conform to statistical principles with which they were thoroughly familiar. In particular, their intuitive statistical inferences and their estimates of statistical power showed a striking lack of sensitivity to the effects of sample size. We were impressed by the persistence of discrepancies between statistical intuition and statistical knowledge, which we observed both in ourselves and in our colleagues. We were also impressed by the fact that significant research decisions are routinely guided by the flawed intuitions of people who know better.
Dan Kahneman
* "People who drive change are the subjects of great scrutiny."

Carleton Fiorina
Risk: Well, it certainly doesnt mean standard deviation. People mainly think of risk in terms of downside risk. They are concerned about the maximum they can lose. So thats what risk means. In contrast, the professional view defines risk in terms of variance, and doesnt discriminate gains from losses. There is a great deal miscommunication and misunderstanding because of these very different views of risk. Beta does not do it for most people, who are more concerned with the possibility of loss
Daniel Kahneman
People cheat. Why? Because they are motivated to hit the goal, and when they come very close to meeting it but dont, it is very tempting to fudge the numbers. In addition, individuals can easily justify their decision to cheat by telling themselves that they deserve to meet the goal, and also deserve the reward that comes with doing so. And how often does this happens? Within the business community, I think its epidemic.
Schweitzer
* "It isn't what the book costs; it's what it will cost if you don't read it."
Jim Rohn
Nobody, other than the tiniest percentage of investors in the world, really gets standard deviation. Lets pretend that the standard deviation of the market is 20. What does that say? What it says is that if our return expectation for the time period ahead was 10%, wed be pretty confident (but not completely) that our return would be between 30% and negative 10%. Nobody feels that way though. Everybody feels overconfident. Advisors may have studied standard deviation in statistics class, but they didnt get it in their bones. They typically think returns cluster around the long-term average rather than fluctuate wildly around it. But we know that average returns are not normal. Normal returns are extreme and volatile and always have been. If you take your average
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advisor, he or she knows that the long-term history of stocks has averaged about 10%, which is true. In his bones, he will believe a return in any given year of 0% percent to 20% is more likely than a return above or below those levels. The history of Western markets, however, is exactly contrary to that. Returns are higher or negative 70% of years in America. They are between 0% and 20% only in the remaining 30% of the calendar years since 1926. In overseas Western developed markets, returns of zero to 20% happen in only 25% to 40% of years. Returns greater than that or negative happen 60% to 75% of years. Overwhelmingly, markets are more volatile than people think.
Ken Fisher
Most studies show that 80% or 90% of money managers think that they are above the average. They are in a business in which every participant thinks he or she is better than average, and able to beat the market even if no one else can. The people who self-select into that occupation are bound to exaggerate their skill. This is almost a statistical regularity. It has to be that way. If they didnt think they were above average, they would be doing something else where they think they would have a competitive advantage. So I dont think that overconfidence is fixable, it is always going to be there. But its also true that many financial professionals have a lot of confidence in their ability to do things that they simply cannot do. They are confident about individual decisions, and about particular opinions and general forecasts about what the market will do, even when there is no foundation for that confidence.
Daniel Kahneman
Individuals who have goals and fail to meet them are more likely to act unethically than people who are simply trying to do their best, without the motivation of a specific goal. People rely on a limited number of heuristic (essentially rules of thumbs) principles which reduce the complex tasks of assessing probabilities and predicting values to simpler judgmental operations. In general, these heuristics are quite useful, but sometimes they lead to severe and systematic errors.
Daniel Kahneman
The inevitable consequence is that most readers of (financial) journals don't read the original articles. They may scan the abstract, but it's the rarest of beasts who reads an article from beginning to end, critically appraising it as he or she goes. Indeed, most planners are incapable of critically appraising an article. They have never been trained to do so. Instead, they must accept the judgment of the editorial team and its peer reviewers--until one of the rare beasts writes in and points out that a study is scientifically nonsensical. The best academic research we know of indicates that 97 percent of the long-term return of any portfolio is determined by its asset allocation, the selection of what types of assets make it up. Only about 3 percent is determined by the choice of specific investments. Ironically, investors typically focus 97 percent of their attention on trying to identify the best stock, the best fund, the best guru or the best newsletter a quest that determines about 3 percent of their performance while they spend almost no time on asset allocation which makes 97 percent of the difference. The smartest investors concentrate on what makes a difference: asset allocation. Our advice: Follow their example. Work on getting your asset
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allocation right and keeping your costs as low as possible.

Richard Buck
"I am not dismissing the risk of an unwelcome further increase in inflation," But, most of the fundamental trends in productivity and the evidence that factories and the labor markets are still capable of tapping plenty of unused capacity and talent favored an outlook for low inflation. "I think the risk is manageable."
Alfred Broaddus, president of the Federal Reserve Bank of Richmond
* "The test of character is not persistence when you expect a light at the end of the tunnel. The true test is performance and persistence when you see no light coming."
James A. Ray
*With the Standard & Poor's 500-stock index trading at 21.1 times trailing 12-month earnings, compared with its average of 15.6 since 1935, Mr. Brown said stocks were likely to produce only modest gains over the medium to long term. "When you look out five, six, seven, eight years, you're looking at highish single-digit returns, not returns in the high teens,"
Alan Brown, chief investment officer of State Street Global Advisors
* "The key to good investment results is to avoid the big loss,"

Arieh Coll, manager of the Eaton Vance Growth fund.
* Perfect knowledge of past performance in general only guarantees a portfolio designed for past conditions Eric Haas * Cognitive Irrationality: Kajem, and Tversky contended that people frequently form estimate by starting with a given, easily available reference value- which could be arbitrary- and adjusting from that value. An estimate therefore would be anchored to that value. Think of an auto salesman starting negotiations at the manufacturers suggested listing price) * Losses: People are generally reluctant to accept a sure loss and therefore are willing to make unsound bets in the hopes of breaking even. The companies that have thrown good money after bad are legion. * Research in the decision-making literature suggests that rather than processing more information when decisions become more complex, consumers tend to reduce the amount of effort they expend in order to make their decision or choice
Julie Agnew and Lisa Szykman
* If some one sees "High School Graduate" on a resume, how are they to know if they got "passed along" or if they are a mensa type? High school diplomas have degraded to certificates of attendance.
Fortress @ Slashdot
Cognitive dissonance. The theory states that humans have a powerful motive to maintain cognitive consistency, a state of mind in which ones beliefs, attitudes, and behavior are all compatible with each other (Abelson et al., 1968). Cognitive dissonance theory predicts that under certain circumstances, people
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change their attitudes so as to be consonant with their actual or past behavior. When attitudes toward a behavior state that the behavior should be different than the behavior already enacted, a person might likewise suffer from cognitive dissonance and consequently alter his attitudes in such a way that they will coincide with behavior.
A. Nir
The keys to success and happiness in an environment of rapid economic change are life-long learning and ethical behavior. "I do not deny that many appear to have succeeded in a material way by cutting corners and by manipulating associates. But material success is possible in this world and far more satisfying when it comes without exploiting others"
Alan Greenspan
Randomness: One can study randomness, at three levels: mathematical, empirical, and behavioral. The first is the narrowly defined mathematics of randomness, which is no longer the interesting problem because we've pretty much reached small returns in what we can develop in that branch. The second one is the dynamics of the real world, the dynamics of history, what we can and cannot model, how we can get into the guts of the mechanics of historical events, whether quantitative models can help us and how they can hurt us. And the third is our human ability to understand uncertainty. We are endowed with a native scorn of the abstract; we ignore what we do not see, even if our logic recommends otherwise. We tend to overestimate causal relationships. When we meet someone who by playing Russian roulette became extremely influential, wealthy, and powerful, we still act toward that person as if he gained that status just by skills, even when you know there's been a lot of luck. Why? Because our behavior toward that person is going to be entirely determined by shallow heuristics and very superficial matters related to his appearance. There are two technical problems in randomness what I call the soft problem and the hard problem. The soft problem in randomness is what practitioners hate me for, but academics have a no-brainer solution for it it's just hard to implement. It's what we call in some circles the observation bias, or the related data mining problem. When you look at anything say the stock market you see the survivors, the winners; you don 't see the losers because you don't observe the cemetery and you will be likely to misattribute the causes that led to the winning.
Nassim Taleb
* "Much of what happens in history comes from 'Black Swan dynamics', very large, sudden, and totally unpredictable 'outliers', while much of what we usually talk about is almost pure noise. Our track record in predicting those events is dismal; yet by some mechanism called the hindsight bias we think that we understand them. We have a bad habit of finding 'laws' in history (by fitting stories to events and detecting false patterns); we are drivers looking through the rear view mirror while convinced we are looking ahead." "Why are we so bad at understanding this type of uncertainty? It is now the scientific consensus that our risk-avoidance mechanism is not mediated by the cognitive modules of our brain, but rather by the emotional ones. This may have made us fit for the Pleistocene era. Our risk machinery is designed to run away from tigers; it is not designed for the information-laden modern world."
Nassim Taleb
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* How to become a millionaire There is a silly book called A Millionaire Next Door, and one of the authors wrote an even sillier book called The Millionaire's Mind. They interviewed a bunch of millionaires to figure out how these people got rich. Visibly they came up with bunch of traits. You need a little bit of intelligence, a lot of hard work, and a lot of risk-taking. And they derived that, hey, taking risk is good for you if you want to become a millionaire. What these people forgot to do is to go take a look at the less visible cemetery in other words, bankrupt people, failures, people who went out of business and look at their traits. They would have discovered that some of the same traits are shared by these people, like hard work and risk taking. This tells me that the unique trait that the millionaires had in common was mostly luck. This bias makes us miscompute the odds and wrongly ascribe skills. If you funded 1,000,000 unemployed people endowed with no more than the ability to say "buy" or "sell", odds are that you will break-even in the aggregate, minus transaction costs, but a few will hit the jackpot, simply because the base cohort is very large. It will be almost impossible not to have small Warren Buffets by luck alone. After the fact they will be very visible and will derive precise and well-sounding explanations about why they made it. It is difficult to argue with them; "nothing succeeds like success". All these retrospective explanations are pervasive, but there are scientific methods to correct for the bias. This has not filtered through to the business world or the news media; researchers have evidence that professional fund managers are just no better than random and cost money to society (the total revenues from these transaction costs is in the hundreds of billion of dollars) but the public will remain convinced that "some" of these investors have skills.
Nassim Taleb
* Much of the research into humans' risk-avoidance machinery shows that it is antiquated and unfit for the modern world; it is made to counter repeatable attacks and learn from specifics.
Nassim Taleb * Long Term Capital- Everything reposes on probabilities being stationary, i.e.
not changing after your observe them, assuming what you observed was true. They were all convinced of measuring risks as someone would measure the temperature. It led to series of fiascos, including the blowup of a fund called Long-term Capital Management, co-founded by two Nobel economists. Yet it has not been discredited they still say "we have nothing better" and teach it in Business Schools. This is what I call the problem of gambling with the wrong dice. Here you have someone who is extremely sophisticated at computing the probabilities on the dice, but guess what? They have no clue what dice they are using and no mental courage to say "I don't know". Social scientists have suffered from physics envy, since physics has been very successful at creating mathematical models with huge predictive value. In financial economics, particularly in a field called risk management, the predictive value of the models is no different from astrology. Indeed it resembles astrology (without the elegance). They give you an ex-post ad-hoc explanation. After seeing the reactions to the Long-Term Capital Fiasco I became puzzled with the reactions of regulators, central bankers and the financial establishment. They did not seem to learn the real lesson from the event.
Nassim Taleb
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* Behavorial activity: The puzzling question is why is it that we humans don't realize that we don't know anything about the significant brand of randomness? Why don't we realize that we are not that capable of predicting? Why don't we notice the bias that causes us not to realize that we're not learning from our experiences? Why do we still keep going as if we understand them? A lot of insight that comes from behavioral and cognitive psychology which shows that we don't have good introspective ability to see and understand what makes us tick. This has implications on why we don't know what makes us happy affective forecasting why we don't quite understand how we make our choices, and why we don't learn from our own experiences. We think we're better at forecasting than we actually are. We are not made for type-2 randomness. How can we humans take into account the role of uncertainty in our lives without moralizing? As Steve Pinker aptly said, our mind is made for fitness, not for truth but fitness for a different probabilistic structure. Which tricks work? Here is one: avoid the media. We are not rational enough to be exposed to the press. It is a very dangerous thing, because the probabilistic mapping we get from watching television is entirely different from the actual risks that we exposed to. If you watch a building burning on television, it's going to change your attitude toward that risk regardless of its real actuarial value, no matter your intellectual sophistication. How can we live in a society in the twenty-first, twenty-second, or twenty-third century, while at the same time we have intuitions made for probably a hundred million years ago? How can we accept as a society that we are largely animals in our behavior, and that our understanding of matters is not of any large consequence in the way we act? Trivially, we can see it in the behavior of people. Many smokers know that what they're doing is dangerous, yet they continue doing it because visibly their cognition is of no big impact on their behavior. There is another bias: they believe that the probabilities that apply to others do not apply to them. Most people who want to look like Greek gods and a lot of people want to look like Greek gods know exactly what to do: buy a hundred dollar membership at some gym and show up three times a week. Most people know exactly what the solutions are to the problem, including the problems of randomness. It is not sufficient. We need to protect ourselves from the modern environment in a far more effectual methods than we have today. Think of the risk of diabetes, which is emerging largely as a maladaptation to the world in which we live. But we have far more acute a problem in our risk-bearing. We scorn what we don't see. We take a lot of risks, but because we're comfortable we don't see them. We have no protocol of behavior, and this is far more dangerous than these physical diseases. The probabilistic blindness we have is an equivalent mental illness, far more severe than diabetes and obesity.
Nassim Taleb
* Risk bearing: (Nassim Taleb) We have vital research in risk-bearing. The availability heuristic tells you that your perception of a risk is going to be proportional to how salient the event comes to your mind. It can come in two ways, either because it compressed a vivid image, or because it's going to elicit an emotional reaction in you. The latter is called the affect heuristic, recent developed as the "risk as feeling" theory. We observe it in trading all the time. Basically you only worry about what you know, and typically once you know
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about something the damage is done. There are two types of people, people worthy of respect who try to resist explaining things, and people who cannot resist explaining things. So we have a left column and a right column. In the left column, that of the people who take their knowledge too seriously, you first have historians: "This was caused by that. Why? Because two events coincided. The president came and suddenly we had prosperity, and hence, maybe having a tall president is something good for the economy." You can always find explanations. The second one is a journalist. On the day when Saddam was caught, the bond market went up in the morning, and it went down in the afternoon. So here we had two headlines "Bond Market Up on Saddam News," and in the afternoon, "Bond Market Down on Saddam News" and then they had in both cases very convincing explanations of the moves. Basically if you can explain one thing and its opposite using the same data you don't have an explanation. It takes a lot of courage to keep silent. One aspect of this left-column bias is well-known by empirical psychologists called the Belief in the Law of Small Numbers how we tend to overestimate how much data we have to reach a conclusion. It might have been an optimal strategy in some simpler environment. You don't need to make sure that this is a tiger before your run for your life. If you see something that vaguely resembles a tiger, you run; it's far more efficient to overestimate the odds.
Nassim Taleb
* Negligence in any specific case needs to be compared with the normal rate of negligence for all possible events at the time of the tragedy including those events that did not take place but could have.
Nassim Taleb
* "I hope and anticipate that trust and integrity again will be amply rewarded in the marketplace as they were in earlier generations. There is no better antidote for the business and financial transgressions of recent years"
Alan Greenspan
Something that psychologists certainly know and economists never look at is that people don't learn from their own past mistakes. Economics assumes we learn, and because we are able to learn, we can correct. Cognitive psychologists have done a number of studies that show that people don't learn from the past. Because we are not able to learn from the past, we may look at a specific past mistakes and decide if we were only more careful, we could have prevented it. But we don't. We will still get into mania almost the same way the next time and the time after.
Lifson and Geist, The Psychology of Investing
* "You need only reflect that one of the best ways to get yourself a reputation as a dangerous citizen these days is to go about repeating the very phrases which our founding fathers used in the struggle for independence."
Charles A. Beard * Variable ratio reinforcement schedule. Basically, people (and rats) will persist
in doing something, even with little or no return, if they are given the tiniest bit of hope of a coming reward.
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* "If you rely only on the facts and other ostensibly rational information to understand the market, you're an incomplete investor."
Richard Geist * A periodic reading of the Financial Times and the Wall Street Journal does not suggest an underlying mathematical order in the return generating process; rather it suggests that investing offers an ever changing set of risky bets with variable rewards for risk taking. Bill Jahnke
* Most investors would be considerably better off by purchasing a low expense index fund, than by trying to select an active fund manager who appears to possess a hot hand
Burton Malkeil
* The most important lesson an investor can learn is to be dispassionate when confronted by unexpected and unfavorable outcomes.
Peter Bernstein
* Many aspects of investing are fun,but your future wealth isn t a game.You should manage it in the most cold-blooded fashion. Emotion,pride,ego,dreams,and nightmares have nothing to do with the process,although some investors rely on little else.It is in this sense that volatility really matters. Many people pride themselves on being long-term investors,but acting deliberately when prices are bouncing around is not so easy. When stocks are blasting skyward,even the most steadfast can be sucked into the updraft. When they are cascading downward, keeping one s cool is almost impossible.Volatility provokes the constant dread that some investors know more than we do,making us fearful of ignoring such powerful price movements.
Peter Bernstein
* Depending on the time span over which a study is performed, the results of the study can vary dramatically. Readers should keep in mind the importance of the time frame in at least partially determining the results of this study or any other similar study.
Kenneth S. Reinker and Edward Tower
* Measuring risks, especially important long-term ones, is imprecise and difficult. Virtually none of the economic statistics reported in the media measure risk. To fully comprehend risk, we must stretch our imagination to think of all the different ways that things can go wrong, including things that have not happened in recent memory. We must protect ourselves against fallacies, such as thinking that just because a risk has not proved damaging for decades, it no longer exists. Yet another psychological barrier is a sort of ego involvement in our own success. Our tendency to take full credit for our successes discourages us from facing up to the possibility of loss or failure, because considering such prospects calls into question our self-satisfaction. Indeed, self-esteem is one of the most powerful human needs: a view of our own success relative to others provides us with a sense of meaning and well-being.
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So accepting the essential randomness of life is terribly difficult, and contradicts our deep psychological need for order and accountability. We often do not protect the things that we have - such as our opportunities to earn income and accumulate wealth - because we mistakenly believe that our own natural superiority will do that for us. Robert Shiller
And as a "reply" from Bill Jahnke who I sent the above quote to:
It follows on the view that human beings do well under the "illusion of control." There is a good correlation between good mental health and the (false) belief that we exercise a good deal of control in our lives (and if not, there is a beneficent creator who operates in our best interests). This misplaced belief in control leads to an under appreciation of the uncertainty we face in planning our financial lives. The vast majority of today's investors are sailing into the future with little appreciation of the rough and unpredictable seas that lie ahead. * The US evidence that, over the long haul, stocks have beaten inflation over all 20-year periods is based on relatively few nonoverlapping observations and is hence subject to large sampling error. * People in business tend to be fans of both capitalism and aggressiveness. If necessary, a case can even be made that ethics is about semantics, but when it crosses over the line of breaking the law, tolerance should turn to zero. Greed, dishonesty, corruption, conflicts of interest, schemes, kickbacks, shell companies, price fixing, and their kind, need to be outed and eliminated from the industry.
Insurance Newscast
* The use of asset class correlation in portfolio management has become commonplace. When designing and implementing investment portfolios, many financial advisors use a mean variance optimization model that is based on historic correlation analysis. The practice has become widely accepted as evidenced by the deluge of articles recommending various portfolios based on historic correlation data. However, investors and practitioners need to be careful not to base their investment decisions solely on these simple mathematical regressions. What is often left out of the model is that the correlation between asset classes is dynamic and can unexpectedly change by a large amount in either direction.
Rick Ferri
* The most general implication of the efficient market hypothesis is that most security analysis is logically incomplete and valueless. The logical incompleteness consists of failing to determine or even consider whether the price of the stock already reflects the substance of the analysis. A very optimistic forecast of a companys future earnings is no justification for buying the stock; it is necessary that the analysts forecast be significantly more optimistic than other forecasts. Such marked differences of opinion are the basis of abnormal gains and losses. A proper analytical report will include evidence of the existence of such a difference and support for the analysts own views.
James Lorie and Mary Hamilton
* Just because there are some investors smarter than others, that advantage
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will not show up. The market is too vast and too informationally efficient.
Financial Advisor
* A lot of investment advisors are not at all interested in doing long-term plans for people, and many believe that the only thing that matters to clients is performance. Should investment advisors get dragged into this messy business of planning? Its a lot easier to just manage someones money than help them plan. If all I have to do is pick a few funds for your portfolio, thats pretty easy. And most advisors make their money there. Planning is more difficult.
Bob Curtis
* Taxable funds spend "another 1.5 percent to 2 percent to buy and sell their stocks each year," which makes it virtually impossible for them to beat the indexes
Ted Aronson
* In my experience, interacting with my classmates (many of whom are established advisers) in the CFP program, most of them have very little ability in economic analysis or the ability to do financial planning without computer software, sad to say.
CFP candidate
The implementation of monetary policy `àt its core'' involves the process of using risk management techniques to determine the likely outcomes of a wide array of policy options. ``While change itself is certain, what form it will take next is always uncertain,'' `Èconomic understanding will always move forward, but as we move forward, we learn or relearn how much we still do not understand about the economy'' * `Ùncertainty is not just an important feature of the monetary policy environment, it is the defining characteristic''
Alan Greenspan
* "If you have a code of ethics and pooh-pooh it, you have a problem." Directors have to make tough decisions based on their ethics not what's convenient for management. "That's what real leadership is." * "Your reputation is in the hands of others. That's what a reputation is. You can't control that. The only thing you can control is your character." * "We cannot restore integrity and morality to our society until each of us, singly and individually, takes responsibility for our actions."
Harry Emerson Fosdick
"If you are being paid to act in the interest of investors and you violate that trust, you shouldn't be paid. We need to revitalize the governance of this industry so that the interest of the investor is paramount."
Eliot Spitzer
* Seven decades of US stock returns since 1926 seem hardly long enough to draw robust conclusions about the risk of ten-year equity investments.
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Philippe Jorion
* ''We don't realize how quickly we will adapt to a pleasurable event and make it the backdrop of our lives. When any event occurs to us, we make it ordinary. And through becoming ordinary, we lose our pleasure.''
Tim Wilson
* We seem unable to predict that we will adapt. When we find the pleasure derived from a thing diminishing, we move on to the next thing or event and almost certainly make another error of prediction, and then another, ad infinitum.
Wilson and Gilbert
* Long-run evidence (that stocks will provide superior returns) doesn't fit the circumstances as they are today. • Policy portfolios (i.e. fixed asset allocations that are regularly rebalanced) are obsolete. Managers will need to be more opportunistic. • More than a 50% stock allocation doesn't make sense (because the prospective equity risk premium is so small). • For now, equities are not the best place to be for the long run (ten years).
Peter Bernstein
* Major unforeseen events that can bring about a collapse in confidence or disruption to the normal function of financial markets without any warning can and do occur with some frequency
Federal Reserve of St Loss
"All the charts, computers and mathematical models in the world cannot tell us, with any certitude, what the market will do tomorrow, next month or next year. Surprise is endemic in the financial world and the risk of being surprised is not measurable. Per Maynard Keyes on the nature of certainty in the financial market, "There is not scientific basis on which to form any calculable probability whatever. We simply do not know." That's why Long Term Capital blew up. They thought they could scientifically measure their risks. They ignored the possibility of pure randomness."
Peter Bernstein
* If you roll dice, you know that the odds are one in six that the dice will come up on a particular side because you know the dice have six sides. But, in the stock market, such computations are baloney- you don't even know how many sides the "dice" have."
"Whereas people resist randomness, markets resist prophecy. The fact that something has happened in the past does not mean it will happen in the future. The fact that it has never happened, does not mean it cannot happen" Nassim Nicholas Taleb
* Acting according to your advantage...is, by definition, not following ethical principles at all
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Academy of Management Journal
* Prudence is determined not by actual portfolio results, but by the soundness of the decision-making that led to those results.
Scott Simon
* It is impermissible to find a fiduciary prudent solely because he claims the declines in the value of the stock market during 2000, 2001, and 2002 were unpredictable."
Scott Simon
* I think stocks are still very risky. Stock prices went down in line with earnings [during the bear market], so P/E [price-to-earnings] multiples didn't really fall much. Valuations remain quite high, particularly if you look at core earnings, [a measure offered by Standard & Poor's that accounts for stock options and strips out income from pension-plan investments.] Today the S&P 500 trades at something like 45 times what its core earnings were last year. That's quite high [compared to its 15.4 historical average valuation according to S&P.]
Robert Shiller
* When you have strong managers, weak directors, cooperative accountants and passive owners, don't be surprised when the looting begins * Fund investors lose a lot of money not just because of their own foolishness and greed but because we–the industry—create things likeinformation agefunds to lure in the money and advertise them like crazy.
John Bogle
* "It's just not true that you can't beat the market. Every year about one-third of the fund managers do it. Of course, each year it is a different group."
Stovall, Robert , Investment Manager
* "Prudence is determined by fiduciary conduct not portfolio performance. A fiduciary's conduct is found in its decision-making process. The fiduciary must be able to prove that it established a decision-making process that a prudent investor would follow. Any finding of fiduciary imprudence, then, hinges on "process not performance."
Scott Simon
The timing of many investment decisions is based not on educated guesses as to what the economy is going to do but on guessing what other people are going to guess the economy is going to do.
Dick LePre
* Irrationally, people feel differently about losing than they do about gaining, even if either choice produces the same outcome.
Kahneman and Tversky
* The market is still susceptible to irrational exuberance on the part of small investors.
New York University's Stern School of Business, Professors Eli Ofek and Matthew Richardson.
* "Is piety a worse sin than venality? It's a sad commentary on the entire
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industry that it is seen as a plausible argument that, given a choice between charging 0.65% and 2.65%, it is somehow justifiable to charge the higher amount because some advisors can't survive at the lower fee level; that it is somehow reasonable to suck the entire value added from the investment process out of the pocket of the person who puts up the capital in order that someone else can be paid." *[A] fundamental problem with risk measurement [is that] investors often have a hard time seeing risk when they look back at historical results. The stock or mutual fund that has had great performance will not necessarily have frightening statistical risk measures, even though it actually may have been quite risky. The reason is that the risks that could have devastated [the stock or mutual fund] simply did not [occur]. There is only one way to handle those risks: broad diversification. But as soon as you follow the broadly diversified path, you will never get the best result if& lsquo;best' is defined as winning the performance race. That race will always be won by a nondiversified strategy that concentrated money in whatever happened to be the top-performing sector at the time. The problem is that this is not something that is predictable at the start of the race - the risks that did not [occur] are not seen as risks looking back in time. Scott Simon * A trustee isn't allowed to look back in time, and with the benefit of hindsight, claim that its conduct is prudent because the trust portfolio's performance turned out to be superior.196 Section 8 of the Act mandates:Compliance with the [standard of prudence] is determined in light of the facts and circumstances existing at the time of a trustee's decision or action and not by hindsight.Commentary to Section 8 explains that[h]indsight is not the relevant standard … [i]n the language of law and economics, the standard is ex ante, not ex post … The language of Section 8 of the Act and Commentary thereto suggests that trustees adopt a view of risk that's prospective, not retrospective. A retrospective view of risk focuses on the outcomes of investment performances. Those who view risk this way, as noted, assign no risk to track records which, in retrospect, have succeeded and assign all risk to track records which, in retrospect, are seen to have failed. A prospective view of risk requires trustees to recognize consciously - before the selection of any investment strategies - the essential problem identified by Nobel Laureate Harry Markowitz:Portfolio selection involves making a decision under uncertainty.Since uncertainty implies risk,the best way of managing the problem described by Markowitz and encountered by all investors ordinarily is to diversify trust portfolios broadly.198 Thus, trustees should diversify because they don't know what's going to happen to a particular stock (or a small group of stocks, or even an asset class) in the future.
Scott Simon
* People are efficient, rational beings who tirelessly act in their own self-interest. They make financial decisions based on reason, not emotion. And naturally, most save money for that proverbial rainy day. Right? Well, no. In making financial decisions, people are regularly influenced by gut
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feelings and intuitions. They cooperate with total strangers, gamble away the family paycheck and squander their savings on investments touted by known liars.
Dr. Jonathan Cohen and Dr. Alan Sanfey
* Dr. P. Read Montague, a neuroscientist at Baylor University in Houston, is using gambling tasks to identify individual differences in willingness to take monetary risks. Bullish investors have different patterns of dopamine release compared with bearish investors, he said. And in a game of mutual trust, women's brains show a big dopamine or reward response when they are trusted by others; there is no such response in men's brains. * Dr. Montague says the brain seizes on patterns and deludes itself into thinking that short sequences predict long ones. For example, after flipping three tails in a row, many people expect the next toss to be heads. By contrast, if a stock does well two quarters in a row, they expect it to continue doing well. Such intuitions lead people to adopt a false sense of confidence and tolerate losses for longer than they should * "Under the influence of powerful emotions or drives, people often end up doing the opposite of what they think is best for themselves, even at the moment of acting,
Dr. George Loewenstein, an economist at Carnegie Mellon University in Pittsburgh.
* "Americans have remarkably poor long-term memories," "I believe when the economy comes back and the market starts to rise again, as it inevitably will, people will jump right back in. Will they be more careful investors? I kind of doubt it. Careful investing takes work." Lawrence E. Mitchell, a George Washington University law professor * ''Despite the volatility we observe in speculative markets, no one should conclude from any of my or others' research on financial markets that these markets are totally crazy. I have stressed only that the aggregate stock market in the United States in the last century has been driven primarily by psychology and fads, that it has shown massive excess volatility. But many markets for subindexes relative to the market do not show evidence of excessive volatility, and the market for individual stocks shows substantial evidence supporting the notion that prices in these markets do carry genuine information about future fundamentals. A second problem is that financial innovation sometimes encourages secret dealings, deception and even fraud. . . . But this should not be viewed as evidence against impressive progress in the field of finance.''
Robert J. Shiller
* ''While behaviorists think that it is theoretically possible to beat the market, individual investors do not have the time or training to do that on their own
Richard Thaler
* ''To the extent that the behaviorists are right, few if any could take those insights and beat the market. In other words, you ought to act as if the markets are efficient.''
Burton Malkiel
* Virtues like fortitude, courage and prudence are rarely talked of and no longer prized; excessive sentimentality has taken over from true emotion and
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clearheaded thinking; formal manners have all but disappeared; genuine ethics have taken a back seat to verbose moralizing.
Dr. Digby Anderson
* "Your ability to persist in the face of setbacks and disappointments is vital to all great achievement and it's always a result of a decision you make. It's not the external environment, it's the internal environment."
Brian Tracy
"It's still true that most individual investors don't rely heavily on analysts. The most common is from friends, acquaintances and word of mouth."
Jay R. Ritter, a professor at the University of Florida who specializes in behavioral finance.
* "Obstacles are necessary for success because in selling, as in all careers of importance, victory comes only after many struggles and countless defeats. Yet each struggle, each defeat, sharpens your skills and strengths, your courage and your endurance, your ability and your confidence and thus each obstacle is a comrade-in-arms forcing you to become better... or quit. Each rebuff is an opportunity to move forward; turn away from them, avoid them, and you throw away your future." Og Mandino * The kind of errors that people have been making and that underlied the recent stock market bubble do reflect human shortcomings, but they reflect exactly the kind of shortcomings that can infect professors', analysts' and trustees' thinking just as much as anyone else's.
Robert Shiller (I need to comment on Shiller's statement. It is true that trustee's are human. But they are held to a much higher level of fiduciary responsibility. They have to be aware of such shortcomings and adjust their thinking accordingly. If not, why would you use such a person if they were only going to follow the herd in any case?)
* I think we can say that investors have over-confidence in a complex culture of intuitive judgments about expected future price changes, and an excessive willingness to act on these judgments. This overconfidence is then a powerful force in the market, and these intuitive judgments ultimately are behind both the feedback that under-lies the bubble and the end of the feedback that signals the end of a bubble. There is a lot of evidence that such overconfidence in intuition is a powerful force in the markets.
Robert Shiller
* I think we can say that investors have over-confidence in a complex culture of intuitive judgments about expected future price changes, and an excessive willingness to act on these judgments. This overconfidence is then a powerful force in the market, and these intuitive judgments ultimately are behind both the feedback that under-lies the bubble and the end of the feedback that signals the end of a bubble. There is a lot of evidence that such overconfidence in intuition is a powerful force in the markets.
Robert Shiller
* Ultimately, people who choose asset allocations must use their subjective judgment about the probability that stock trends will continue. This is true among the experts as well as the general public. While there are formal
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statistical models to help experts, it is widely understood that these models are only as good as their specific assumptions. Assessments of trends and probabilities that underlie asset decisions are inherently subjective.
Robert Shiller
* Psychologists have documented that there is a social basis for attention, that is, people tend to pay attention to what others are paying attention to. Not surprisingly, speculative assets whose price has gone up a lot recently gather a great deal of attention. People are more likely to buy assets that have their attention just because they are thinking about them more. Assets that have not had big price increases are less likely to garner the attention.
Robert Shiller COWLES FOUNDATION DISCUSSION PAPER NO. 1303
* People fail to perceive fully that the new era theory, despite having some concrete facts as part of the story, in fact has no solidity; the concrete facts do not lead to a new-era conclusion without the insertion of some outright guesses. The error people make is in presuming that someone else has verified the conclusion carefully, when, while some have tried, in fact no one has really been able to do so. The error people make is in assuming that the currency of the new era theory is evidence that many people have completed all the missing links in the argument, rather than evidence of the bubble itself.
Robert Shiller
* Thus, theory and empirical evidence both indicate that stock market returns increase when volatility rises.
ST Louis FED
* "People treat their own cases as if they were unique, rather than part of a huge lottery. You hear this silly argument that 'The odds don't apply to me.' Why should God, or whoever runs that lottery, give you special treatment?"
Tversky
* "Where many people go wrong in trying to reach their goals is in constantly looking for the big hit, the home run, the magic answer that suddenly transforms their dreams into reality. The problem is that the big hit never comes without a great deal of little hits first. Success in most things comes not from some gigantic stroke of fate, but from simple, incremental progress."
Andrew Wood
* Investor protection is supposed to be the responsibility of three institutionsthe SEC, the stock exchanges and the courts. Yet over the past several years, the effectiveness of each has eroded.
Arthur Levitt
* If you put tomfoolery into a computer, nothing comes out of it but tomfoolery. But this tomfoolery, having passed through a very expensive machine, is somehow enobled and no-one dares criticize it.
Pierre Gallois
"In the short run, the marketplace is beset by waves of optimism and pessimism that move expectations irrationally."
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Daily Commentary
Federal Reserve Board
*Something that psychologists certainly know and economists never look at is that people don't learn from their own past mistakes. Economics assumes we learn, and because we are able to learn, we can correct. Cognitive psychologists have done a number of studies that show that people don't learn from the past. Because we are not able to learn from the past, we may look at a specific past mistakes and decide if we were only more careful, we could have prevented it. But we don't. We will still get into mania almost the same way the next time and the time after.
Lifson and Geist, The Psychology of Investing
Behavioral economists describe this dynamic -- where otherwise smart people make foolish, often conflicting, financial choices -- as a paradox of human nature. Hence, people make knee-jerk decisions about their financial needs without consulting a professional, even though they know better. This disconnect in financial behavior is likely due to one of three factors: -- Despite the sluggish economy, people remain overconfident in their abilities to manage their finances -- they tend to overestimate their own abilities, knowledge and skills.-- People have a hard time translating good intentions into effective actions. -- People have a general skepticism about others who might take an interest in their finances. Recent corporate scandals have fueled this skepticism by making people question whom to trust.
Cornell University psychologist Dr. Tom Gilovich
Married men live longer than single men, but married men are a lot more willing to die
Be ashamed to die until you have won some victory for humanity
That's All folks!
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Daily Commentary
Want to see what this site looked like in 1997?
NOTHING IN ALL THE WORLD IS MORE DANGEROUS THAN SINCERE IGNORANCE AND CONSCIENTIOUS STUPIDITY
Martin Luther King Jr.
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Financial Education Investing Retirement Research

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Daily Commentary

Master Financial Education Errold F. Moody Jr.

INSURANCE and ANNUITIES LONG TERM CARE & AGING

11/17: Prone to a bubble???

11/16: A billion here, a billion there.............................

Guaranteed for 5 Years

Yr 1 / 3.40% Yrs 2-5

11/16: Young caregivers

11/16: The splitting of the Senate (now in convenient GIF form)

11/16: Euro going nowhere

deflation in the region.

Quality Assisted Living on a Budget

Rolls-Royce plans 3D printing for jet engine parts

11/11: Here kitty, kitty, kitty,

11/10: Getting Lower Costs on Health Coverage 11/10:

11/8: Global Burden of Disease

:11/7 Buy sell agreement review

This is what I disagree with-

Date: By: URL:

2013-09-29 Cunningham, Thomas http://d.repec.org/n?u=RePEc:pra:mprapa:50292&r=cbe

Date: By: URL:

11/3: 11/3: Finance of Retirement & Pensions

11/3: Comovement of Corporate Bonds and Equities Date: 2013-07

2013 & 2014 Contributions

2013 $ 17,500 $ 5,500 2013 $ 5,500 $ 1,000

2014 $ 17,500 $ 5,500 2014 $ 5,500 $ 1,000

Roth IRA Income Limits

2013 Contribution Deadlines

More Helpful Roth Topics

Hoisington Investment Management Quarterly Review and Outlook

Fed stays course on bond buying

United States GDP Growth Rate

9/25: debt ceiling:

JPMorgan hit with $9 !" in fines o#er $whale$ trade

avoided specific criticism

9/18: Home Inspectors nationally 9/18: Unequal

9/16: pension gap (Mauldin)

9/15: Want to live long???

9/15: Life settlements

9/15: What an upswing

9/12: Though the rich are taking advantage of the opportunity

23. 12. 20.

58.4 508.7 282.7 36.0 89.2

83.1 718.9 399.3 50.8 125.3

116. 14. 36.

Dental hygienists Bicycle repairers

13.0 63.4 15.6 185.4 100.0 120.3 4.1

17.8 86.6 21.4 252.9 136.5 163.9 5.6

This disconnect has ruinous economic costs. About

Nominal versus real

9/8: 1. Window dressing in mutual funds Date: 2013

Bad hair day 9/4:

: 9/4: Date US Inflation Rate

9/3: Yea right- this makes sense

World History in 500 slides in two minutes. Fascinating

Highest 20% $903,213 72%

9/1:End-of-Life Medical Costs Vary Widely

50% of a double dip recession.

When the facts change, I change my mind. What do you do sir?

Why Did Disability Allowance Rates Rise in the Great Recession?

8/25: Are emerging market yields better???

8/25: Money going out

8/23: Central bank

emergency reserves drop by $81bn