Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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Interest Rates, Investment Income, and Inflation

Mr. Alan Greenspan

When there is inflation, the value of money goes down, so you might expect interest rates -- the rental cost of money -- to go down, too. However, people anticipate higher prices, so lenders build a premium into the interest rate structure to compensate for the value of the money to be lower when it is repaid. That raises interest rates, and the Federal Reserve will generally raise them even higher to put a stop to inflation. So, buying and selling bonds is a zero-sum game, far riskier than it sounds. Consequently, there is a flight toward common stock, thus raising its price. Meanwhile, inflation usually hurts business, tending to lower the stock prices. As a consequence of all these moving parts, long-term investors are urged to buy at a "fair" price and never sell, no matter what. Even that strategy fails for any given stock because somehow corporations seldom thrive for more than seventy-five years. So, the advice is to diversify into a basket of stocks, and the cheapest way to get that basket is to buy an index fund. In a sense, you can forget about the stock market and let someone else manage the index, for about 7 "basis points", that is, seven-hundredths of a percent. All of this explains the choice suggested for Health Savings Accounts of buying total market index funds. Limiting the universe to American stocks is based on a political hunch that it reduces the chances of harmful Congressional protectionism. Having said that, a Health Savings Account must raise cash from time to time, and to guard against forced selling in a down market, some average amount of U.S. Treasury bonds will have to be maintained. Ideally, the number of Treasuries would be small for young people, and grow as they get older, and therefore more likely to get sick. Pregnancy is the one universal cost risk for younger people, and they know better than anyone what the chances of that would be in their own case.

This approach is greatly strengthened by reference to the modern theory of a "natural" interest rate, to which the whole system has a tendency to revert, if only we knew what the natural rate is. It is not entirely constant, but over time it seems to be something like 2%. If we knew for certain what it was, we could set a goal for perpetuities like the Health Savings Account to be "2% plus inflation". Since inflation is targeted by the Federal Reserve as 2%, that would amount to an investment goal of 4%. If you can buy an American total market index fund consistently gaining at 4.007 % per year, you should buy and hold. If it rains less than that, it is either run by incompetents, or it is a bargain which will eventually revert to 4.007% and pay a bonus. If, on the other hand, it gains more than that, there exists a risk it will revert to the mean. That it is being run by a genius is sales hype to be ignored. We suggest buying into it in twenty yearly installments, which should balance out the ups and downs, so then you can forget about even this issue.

But don't count the same issue twice. In order to assure a 2% real return, it is necessary to obtain 4% in the real world of 2% inflation, and the compounded income of 4% accounts for both in equal measure. A compound income of 6%, however, is two-thirds inflation / one third "real", so artificially raising interest rates to control inflation can progressively overstate the requirement, and hence overdo the deflationary intent. Conversely, when the Federal Reserve fails to raise interest rates as Mr. Greenspan did, the result can be an inflationary bubble. The central flaw in adjusting prevailing rates to current natural rates is that we do not know precisely what the natural rate is. To go a step further for immediate purposes, we are also uncertain how much deviation there is between medical inflation and general inflation. As a result, the best we can expect is to make as much income on the deposits as we safely can, and continuously monitor whether the premium contributions to Health Savings Accounts might need to be adjusted. And the safest way to do that is to have two insurance systems side-by-side, one of them a pay-as-you-go conventional policy for basic needs during the working years, and a second one whose entire purpose is to over-fund the heavy expenses at the end of life and the retirement years, permitting any surpluses to be spent for non-medical purposes. With luck, the beneficiary might retain a choice between increased premiums, and increased (or decreased) benefits.

If these calculations are even approximately close, the financial savings would be several percents of GDP, a windfall so large that mid-course adjustments could be tolerated.

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Bank Street

Hit play and then click on a building to learn more.

By Skye Doherty, Steve Bernard and Caroline Nevitt
Published: October 10 2008 19:22 | Last updated: November 24 2008 16:42

Click here for the FT Page

Store of Value

Think for a moment how huge stores of sand -- silicon -- changed from almost worthless to immensely valuable when someone got the idea to borrow a considerable amount to transform it into silicon computer chips. It wasn't his money which did it, it was borrowed. It wasn't even his sand, and it quickly became worthless again when someone else put it to more desirable use. According to our standards, the inventor became a billionaire for making this contribution to society, and when he died other people got to spend money they never earned. (Actually, it was many innovators cooperating.) That's our system, and anybody else is free to try to imitate it. Its main justification is that millions of other people got jobs or even wealthy because he risked bankruptcy and they didn't.

The same simple process gave us general prosperity when lots of people did it; many succeeded and some failed. Some succeeded, but made atom bombs; some succeeded and made addicting opiates. Some watched the general process and surmised, in a century we can realistically expect the rest of the six or seven billion on Earth to become involved in a race to eliminate poverty worldwide before others blow us all up. Because, although we have achieved a lot quickly, some will still live and die in poverty, because we didn't achieve it soon enough. Give us some of it, or we will blow you up. Must we give it all?

There are other ways to summarize the economic world, and they could easily triumph. The pirates may enslave the producers, for whatever purpose they have not explained. The have-nots may outvote the haves, causing us to choose falsely between sympathy and democracy. The people who inherited warlike genes may enslave the people who inherited innovative genes, particularly if the non-innovators also inherited genes to persuade with false arguments. Or the innovators may have inherited the Crusader mentality of Convert or Die. But praise of greed may lead to the triumph of greed, and we may agree to a false premise. A false premise that we must choose between becoming the enemy and defeating the enemy, using logic when we need to use self-interest. As the athletic aristocrat George Washington reminded us: Only if you are strong, will other people leave you alone.

New Jersey Abbott Districts

{Privateers}
The Abbott District

Three decades ago, before a lot of New Jersey voters were even born, the so-called Mt. Laurel decision ordered the state to distribute money to woefully underperforming school districts to give the kids a fair chance in life. But now, thirty years later, the money routinely goes to ten or twelve school districts, and the other five hundred are suffering from high taxes. The voters in the five hundred districts are angry and want some of their tax money to stay at home. But by any fair appraisal, the schools in the Abbott Districts are still deplorable, and a great many children are growing up without an educational chance in modern life. Both sides have a legitimate point, and neither will budge.

But now there arises an entirely different way of looking at the mess. Maybe money isn't the point, but education is the point. The purpose of the Abbott District money was not to give money fairly or unfairly. The purpose of the money was to educate children, so at least they wouldn't grow up to a life of poverty and crime. In a sense, it doesn't much matter how unfairly the money is distributed, just so the kids get an education. Do they?

Frankly, it doesn't look as though they do. After thirty years, it is not hard-hearted to say the burden of proof is on those who say the money did some good. The very least that everyone ought to agree on is to perform a library search for other ideas, like charter schools, and report to a Legislative committee, followed by taking testimony from places with experience with other ideas. Because the real issue is not, how long we go on spending this money. It is, or ought to be, how long must the kids wait before something better is given a chance?

These are not easy issues. Our forebears didn't do such a wonderful job with assimilating the American Indians, but surely we can do better than that. With this horrible example before us, we cannot really expect the problem to solve itself. Nor is it a purely local problem; plenty of big cities have the same issue in a slightly different form. How are charter schools doing, for example? I have every confidence that if the local Camden County community, or even the whole State of New Jersey, could show some important progress -- money would come pouring in to help a winning project. But to keep on with the same old ideas is going to get you the same old results.

Terse Verse: Home Plate Topic: Dinning

Home Plate

Child hood
Tastes good
Mom cooked
Dad looked
Each meal
Stays real
Stays part
Ones heart

When wed
Food fed
His growl
Claims foul
Hew threat
Safe bet
Ends shout
Eat out

January 2014 investment musings

  1. 2013 worked out as predicted: interest rates went up and stocks went up. I sold all my bonds and bond funds, went a little short the 30-year (TBF) and went a lot of long equities (VB being the best of a good lot; SCHD and VTI being the somewhat-laggard others) and that worked.

  2. My option-selling experiment taught me not to engage in option selling. Nothing bad happened but (1) it kept me from being fully invested in equity (2) in May when rates went up sharply, I end up owning some things I didn't really want. The choice it's left me with is to hold too much cash or to chase a rising market. It was educational and fun, but I won't do it again.

  3. My investigations into income-producing securities have made me think I don't want income-producing securities, at least for the time being. If I keep 5-years' of cash or so, I will be able to pay my bills and whether any downturn without selling; also, cash provides diversification from equities without owning bonds. Income means income taxes and capital gains are still the most tax-advantaged way to earn. VB is currently providing this.

  4. SCHD (and its big brother VIG) are supposed to be a compromise, owning the rock-solid dividend payers ... a form of "fundamental indexing"; these went up less than VB (~20% vs ~30%), paid only slightly-more in dividends and their history makes me skeptical of the proposition that they hurt less in downturns.

  5. I continue to ponder annuities (who doesn't want a pension?). With the current rate environment, neither purchased nor bond-ladder annuities are attractive. NY Life fixed immediate annuities have a 1.6% IRR; a 30-year US Treasury bond ladder has a 3.65% IRR, but that's up from 2.81% in November 2012, so I remain hopeful. The theory is that (1) the economy is improving (2) because of number 1, the Fed is starting to taper (3) because of both 1 and 2, interest rates are going up and will continue to go up, and equities will also go up. This worked last year and I'm thinking it will continue to work as long as we don't have any dreadful exogenous shocks.

    When/if the 30-year yields 5.5% (up from 3.75% today), the bond-ladder annuity will have a 5.20% IRR, which is beginning to look acceptable. Simultaneously, if we do actually get there then the economy will have had a multi-year bull run and maybe it'll be time to sell stocks anyway. So: 30-year = 5.5% => sell stocks, buy bond ladder for fixed income. If all works as planned, this is likely to happen in 2015 at the very earliest. Tax consequences are an unresolved concern.

  6. I continue to worry about knowing how to identify the next downturn. In 2000, I absolutely knew what to do but I didn't do it. In 2007 I noticed the anomaly in the E-mini futures markets but didn't connect it to the impending disaster. What will be the next signal? Will I recognize it? Will I act on it? We're very far into the bull market that began in 2009 and that is worrisome.

Keynes vs. Milton Friedman: Not Much Difference

FEDERAL RESERVE, BOND MARKETS, AND THE ECONOMY--How to control them.

INFLATION BUST

MARKETS and ECONOMIES

INFLATION BUST

=====================================================================================================

Ratio of Stocks to Bonds

Monetarism {Friedman}===========[periods of relative stability}================Keynseanism {Phillips Curve}==========================

===================================================================================================

Stocks drop

=====================================================================================================

Sell bonds stagflation

Discourage hiring.

Sell bonds, buy stocks

Buy stocks Make hiring expensive.

============================={Crash}=====================Sell stocks, bonds when you can===>

Buy and sell lots of them. =============

Here's the Prediction for 2015

Stuart A. Hoffman, chief economist of PNC bank:

National Debt: 10 Trillion when Obama took office, 18 Trillion in 2015, of which 6 Trillion is owed to ourselves (Medicare trust funds, etc). GDP 18 trillion.

2015 will be a recovery year in America, a puzzle in the rest of the world. The US has comparatively small trade, should not affect the rest of world, much. House prices, wages, employment should improve, some short-term interest rates will be announced by FED as symbolic.

But after 2016, the future is less promising: education, medical care, especially ominous. Oil is what saved us. But it's bad for Canada and Mexico. The Swiss pegged their currency to Euro, which they did not join. When Euro promised bond-buying (QE3), the Swiss exporters rebelled, forcing an end to peg, so Swiss franc soared. Too small to affect the world, Switzerland might still have an effect influencing Germany to follow the same pattern, possibly followed by England.

Viewed from the other end of 2015, was he right?

Dubious Wisdom: Adding Incentives to Health Savings Accounts on Behalf of Other Linked Accounts

Government programs tend to have a "one size fits all" quality, growing in part from the Constitutional requirement for equal justice under the law. Most of them make no mention of what to do with left-over funds, usually implying they return excesses to the pool for recycling. Supposedly that reduces the cost for everyone else. Sometimes, of course, it raises employee salaries, buys battleships, or is otherwise spent for things we didn't specify. A much better default rule would be to return unspecified excesses to the original contributor, as an incentive to keep his spending lean and mean. But that's someone else's Crusade; we just urge it to be examined each time the matter arises.

The cookie-cutter similarity is exaggerated by the way legislation is created. Each Congressman represents nearly a million constituents, far too many to be running for re-election every two years with scant time left to legislate. The laws are consequently too general, are revisited too infrequently, and leave too much to the Judicial branch and the administrative agencies to settle. Congress increasingly resembles a Board of Directors, rather than the source of legislation, ultimately lacking the power to control the President by picking him. For this reason, we hear the British parliamentary system praised since the Prime Minister is chosen by the ruling party. My own feeling is Congressmen are not able to devote enough time to the job of legislating mainly because they spend so much time in the telephone call center, soliciting election funds within the hearing of their leadership. The deluge of business is ultimately the balance point of leverage in the system. Let's examine some issues which are not urgent, but eventually must be settled by these harried law-makers.

We have stumbled onto the clear linkage between paying for healthcare, and subsequently being forced to pay for the resulting extended retirement, which is an unexpected but inevitable consequence of improving health care. Although the cost of healthcare has been a national concern, extended longevity proves to be potentially even more expensive, expressed as a lump sum at age 65. That's because a completed retirement fund becomes a constantly shrinking asset once you retire, whereas Medicare is only spent when you get sick. Furthermore, retirement will soon last a third of a lifetime (or more), so it is awkward to suggest a defined price for it. Everyone, even someone who is quite rich, is afraid to spend retirement funds for fear of running out of money during a particularly expensive terminal episode, like some of the cancer treatments now making an appearance. Homogeneous nations like the Scandinavians seem willing to carry equal retirement to a national level, for approximately the same reason socialism is more popular there. A homogeneous people are more willing to trust each other to "re-insure" the whole population in unpredictable circumstances. But our society seems headed in the opposite direction of diversity. These are not parallel goals.

Socialism is mainly unpopular in America if carried beyond issues of mere subsistence, because of its tendency to reduce work incentives. So it's a circular argument usually growing out of famines and genocides. For example, raising the retirement age might ease financial strains, but instead many people just want to quit work at age fifty, while others see no reason to retire at all. Unfortunately, workaholics resent the suggestion their extra income should support others who prefer to quit work. The difficulty is magnified by first supporting thirty million people who are plainly unable to work, plus at least an equal number who hate the kind of work they do. The outcome is a diverse nation seemingly resistant to government protections which guarantee more than bare survival, in constant contention with a subpopulation which yearns for education during the first third of their lives, and another subpopulation which yearns for expensive leisure during the last third of their lives.

If that's a fair analysis, there will always be a divergence in luxury for retirements, and therefore a constant propaganda war between fairness to the poor and fairness to their more visibly successful competitors. The term "Social Darwinism" captures that flavor. At least for a long time to come, the amount available for individual pensions at retirement age will be a scorecard for a successful life. Both public boasting and envious criticism should, therefore, be discouraged, but the lifelong incentive to be frugal cannot be ignored. If we can manage this paradox, the incentive can be used as a silent reminder that what you frittered away as a youth, might have been used to improve your retirement. At the very least, the public might be reminded government debt lowers long-term interest rates, intentionally lowered in order to stimulate short-term growth of the economy. But to paraphrase John Keynes, "In the long run, we are all retired." Eventually, we must all live on what we saved, and debts we agreed to must be repaid. What we now seem to have, are incentives to retire early, and incentives for the government to inflate away the cost by suppressing interest rates.

{top quote}
One logical place to begin is to pay a bounty into an HRSA for subnormal spending during the previous year {bottom quote}

Therefore, if unifying the finances of medical care and retirement at any age, is an incentive to be medically frugal, why not unify the incentives for all things medical? Otherwise, the landmark moment becomes the termination of your present means of support, the termination of your present mortgage, or graduation from your present school. There is general agreement, medical costs have risen so fast because there is nothing else to spend earmarked medical money on, except frivolous medical care. As we said earlier in the book, there is the reason to suppose the success of Health Savings Accounts lies in the powerful incentive provided by retirement needs, offered as use for left-overs from healthcare. The roll-over of an HSA into an IRA provides an alternative, and the tax deduction for the health of an HSA provides a preferred, but not mandatory, outlet.

If, one by one, other funding sources for healthcare flow into an HSA, healthcare at all ages are provided with a unified incentive to be frugal. Health insurance of one form or another may resist the HSA alternative, but if we are correct, the market will force it. Because medical care seems destined to concentrate among elderly people, it seems urgent to provide this incentive to Medicare first. Of all places, Medicare is the least desirable place to be employing deficit financing, pay-as-you-go financing, or other mechanisms to make it appear to be less expensive than it is. Medicare is where serious expensive disease concentrates, and that trend continues. Because of stretched finances, one logical place to begin is to pay a bounty into an HSA for subnormal spending during the previous year. The compound-interest beauty of this approach is the younger you do it, the more it will help; and so that idea might be built into it, too.

Flexibility is also an incentive for almost any program. We have mentioned several ways to enhance Medicare's revenue and there seems no reason to limit the choices. The transition from Medicare as we know it is likely to be a long one and family circumstances may change several times during the phase-in. If the individual could contribute to the contingency fund, or to the Last Year of Life fund, make choices for increased benefits for late retirement --and flexibility for anything else anyone can suggest, the bookkeeping may become more complicated, but the attractiveness of Medicare improves.

Attention might be paid to the individual's ability to apportion the distribution of his nest-egg at the time of retirement, until the time later on when he writes his last will and testament. There will be an irresistible tendency to overestimate personal retirement needs, in order to avoid exhausting them too soon, and that should be relied upon. On the other hand, these requirements are often abruptly changed by illness, or death of a spouse. There might be several contingency funds, with different rules for invading them. These warnings are issued in full realization most people cannot see so far ahead, and most people will be a long way from achieving their own goals.

With such general ruminations in mind, it seems inadvisable to limit choices without good cause or provide for handling exceptional cases with some sort of required approval. Doing otherwise might lead to forcing some people to reject a job opportunity, or else to buy insurance they do not need. Or to encourage inflation to minimize the unfairness to a surviving spouse, to force reduction of his/her lifestyle. For the first few decades at least, constraining the choices at certain critical points should operate on a sort of common-law or Court of Equity process. As the issues gradually surface, they are slowly resolved. The country grows increasingly restless about the intervention of administrative agencies without adequate oversight by the court system, at the same time, it distrusts the courts. The problem is not so much incompetent courts, as the design of a system dumping decisions on them which might better be made by the individuals. Once more, the problem of too little congressional time surfaces. At present, the tendency to flexibility is to reduce it, and most of the public prefers otherwise.

Marriage Laws. Broken marriages, whether broken by death or design, are too common to justify immobilizing their future direction. A lawyer dominated legislature must recognize the danger of too much power in the hands of the trial bar when dealing with life-long savings of either party to a divorce, or both, or prior expenditures of the couple for health purposes. Or unanticipated contingencies which occur after the separation of a couple. It will be a long time before we have settled what is best to do about serial marriages of homosexuals, or marriages of intersex couples, or no marriages at all. The courts dealing with lifetime health and retirement funds should at least have a defined outlet for the special insights their role provides because the country will need to hear those insights.

Special Treatment of the Handicapped. Not only do handicapped people of all varieties have increased healthcare expenses, but they also have special laws dealing with their problems. These may conflict with what is generally best to do about lifetime health and retirement funds. It is unwise to freeze the rules before the exceptions become evident. Retirement is now commonly thirty years long; relationships can change. Freed of obligations to minor children, they may even change more rapidly.

Expatriate Citizens and Conflicts Between States. It is comparatively common for citizens who were foreign-born, to retire to the nation of their birth because it is cheaper to live there. They become subject to devaluations of the foreign currency and pray to agents who purport to help them, just as residents of different state jurisdictions become subject to conflicting mandates. If the host country abuses them, they present a problem for the State Department.

The list of potential conflicts with flexibility is very long, and these are only examples of it. The basic point is that a mechanism should be created to deal with long term exceptions to laws which envisioned a much shorter horizon and many fewer linkages.

Insurance Commissioner Role in Bond Prices

The Ninth Constitutional Amendment restricts federal law to a handful of topics, mainly national defense and taxes -- all other topics are to be covered by state laws. While federalists have always regarded this balance of power as an unwelcome compromise, gradually chipping away at it for two hundred years, state domination of the business of insurance has remained securely under the control of the state insurance commissioner. As John Dickinson predicted, there has been a steady tendency for the laws of the largest state to set the pattern which the others usually follow by reciprocity. In this case, dominance of state insurance laws has gradually shifted from New York to California. As a further consequence, state insurance laws have grown more liberal.

For this reason, state laws generally follow the pattern of limiting insurance portfolios to no more than 25% common stock, although there is no law or constitutional provision that they must do so. The explanation usually offered is that although stocks generally pay higher dividends, a guaranteed bond dividend comes closer to matching the liabilities of insurance that do variable stock dividends. And originally that may have been true, although gradually changes in other things may well have been responsible for maintaining such an apparently bizarre pattern of lobbying for lower dividends for yourself.

Compendia have been produced, showing blue-chip stock dividends (or index funds) have averaged 12% returns for a hundred or more years, while bond returns have averaged 5%. Life expectancy has meanwhile lengthened by nearly thirty years. While there may be legitimate arguments for gradual lowering the limit rather than abruptly doubling it, the consequences of doing something like that are huge. Furthermore, the variability of insurance products defies blanket rules as they once did not, the expansion of life expectancy is as likely in the future as it was in the past, and its unknowable likelihood can be judged as well by one profession as another. Insurance executives have gradually shifted all risk from the company to the customers, and it is time to consider how simple it would be to shift it back. Arguments and risks would also appear for the stockholders of stock index funds as stockholders absorb more of the risk, although the numbers are so large that probably no one would agree to anything but gradual shifts as proof of concept.

Yield Curve as Barometer

An inverted yield curve is considered a warning of financial storms ahead. Here is the negative spread between the 10-year Treasury and the 3-month Treasury. It looks a bit like a barometer warning of an approaching low-pressure front.

"Last Time" means 2006. At that time, the yield curve was inverted but the economy didn't seem so bad. Most of us had an inkling but no real idea of what lay ahead.

C16.......Marshall

CONTENTS: this is the main body of text

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The S&P 500 Has Been Letting Us Down

Should anyone invest in stocks? The last decade has been a painful one for dedicated equity investors. In fact, in a reversal of the "normal" risk-return arrangement, the total return on the US Treasury has been substantially better than the return on stocks.

The charts below show the returns to a buy-and-hold investor; a combination of fear-and-greed plus consistently bad advice from their advisors has led most investors to buy at the top and sell at the bottom, making their returns substantially worse.

Just to round out this gloomy picture, it should be noted that these charts show the returns with reinvested dividends; most people spend their dividends and, in any event, the government always taxes them.

Most of the money that has flowed into bad investments with bad timing was not that of the ultimate investors, those who need the cash flow the investments are supposed to generate; rather it was money professionally managed on the investors' behalf, in pension funds, endowments, mutual funds and the like.

It is not so much the stock market that has let investors down, but those who were entrusted with the fiduciary duty to protect the investors' interests. These people get paid no matter what they do and they are insulated from any form of punishment for their bad behavior.

Investors ... individuals, families, colleges, foundations ... all need to take back control of their investments. I can hear it now, something to the effect that this will expose the most vulnerable to thieves and scoundrels and, anyway, investors do not have the education to manage their own investments. But could they really do worse than they have at the hands of those who are supposed to be looking out for their interests now?

Reflecting on the undeniable fact that investors have been ill-served by their advisors is one perspective.

Another is to suggest that perhaps the era of the American economy reigning supreme has ended ... it is certainly the case that we look more and more like Japan post-1989 every day. Perhaps our era began after WWII, 1950, say, and ended just before the real froth got onto to the dot-com bubble, 1998, say.

Perhaps it's inevitable: empires rise and then are supplanted by others ... it's just the natural progression of things.

Or perhaps it's reversible? More/better regulation might be suggested by one group. Less government intrusion would be the cry of another of the warring political camps.

Or maybe it's just cyclical ... look at the middle part of the charts: in 1964 America began a huge expansion of its government spending - war on poverty, etc. - and began a very expensive war: Vietnam. These events dragged the economy down through the 1970s but then we got free of them both and leaped forward.

We are once again seeing huge growth in government spending and we are engaged in two expensive wars. Is it possible that we will suffer for a decade more, go through a Volker-esque catharsis and then leap forward again?

Everyone's got an axe to grind. So best to look after your own knitting and not turn your affairs over to anyone else. Que Sera Sera ... best to be sailing your own boat: chart your course and cancel your subscription to cable news.

 

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14 Blogs

Interest Rates, Investment Income, and Inflation
With inflation, interest rates go up. But when rates go up, it doesn't always mean inflation. There's a new theory of interest rates, which helps explain this, but only partially.

Link to Banking Panic of 2007-20??
.

Bank Street
Interactive feature: Follow the fortunes of some of the world's largest banks as they navigate the global financial crisis from the Financial Times.

Store of Value
Gold used to be the store of value, and now we increasingly think of stocks and bonds as the sole store of value. But that's just a current manner of speaking because everyone knows we have much larger stores of value locked up in real estate, fine art, and a host of other stores of value. To say nothing of inaccessible deposits of raw materials. The aggregate amount of wealth tied up in unexploited sources is simply unimaginable. The problem is to link it in ways that don't cost too much to exploit.

New Jersey Abbott Districts
There's a big uproar about the state giving money to thirteen school districts, but not to the other five hundred. That may be the wrong way to look at the Abbott districts. The question really is: Have the schools improved, after thirty years of this?

Terse Verse: Home Plate Topic: Dinning
New blog 2015-03-05 21:11:53 description

January 2014 investment musings
2013 was a good year for equity investors, a bad year for bond investors; what happened and what lies ahead?

Keynes vs. Milton Friedman: Not Much Difference
New blog 2019-02-04 22:30:53 description

Here's the Prediction for 2015
New blog 2015-12-10 17:33:56 description

Dubious Wisdom: Adding Incentives to Health Savings Accounts on Behalf of Other Linked Accounts
.

Insurance Commissioner Role in Bond Prices
Some quirks in the American Constitution explain how the State Insurance Commissioner can alter bond prices.

Yield Curve as Barometer
Is a financial Hurricane Dorian coming?

C16.......Marshall
DESCRIPTION: this is where you put a small summary blurb which appears in the little boxes.

The S&P 500 Has Been Letting Us Down
Should anyone invest in stocks? The last decade has been a painful one for dedicated equity investors.