MONEY: Financial planning with old memes

Sunday, October 21, 2012

http://www.businessinsider.com/the-coming-retiree-crisis-2012-10

Take Action Now To Prepare For The Great Retiree Crisis

Jeff Voudrie, See It Market | Oct. 10, 2012, 8:30 AM

***** begin quote *****

The financial planning community has largely relied on assumptions regarding equity, debt and inflation percentages that have been experienced over the last 30 years.

There are 3 problems with these assumptions:

Equity returns the last 30 years have been extraordinarily high as a result of the longest and greatest Bull market in the history of U.S. stock markets. Accordingly, many financial plans used projections that assumed equity returns of 8-10% a year.

Debt returns over the same period are equally skewed. Remember the double-digit interest rates of the 1980’s? In 1989, as a young broker, I was selling 30-year TVA bonds yielding 10%! Financial plans the last 5-10 years have used interest rate assumptions around 5-6% a year.

The scenarios that led to the historic markets the last 30 years are very unlikely to EVER be repeated in today’s retiree’s lifetime. And those who are taking distributions based on these outdated assumptions may soon run out of money.

For instance, let’s assume that someone retired 5 years ago at age 60 with a $500,000 investment portfolio. Based on financial plans popular at that time, the retiree is taking $2500 a month in distributions—money they need to maintain their current standard of living. Since the plan anticipated the ability to average a 7% return on a portfolio with close to 50% in equities, the retiree expects to be able to take those distributions and never run out of money.

Adjusting those assumptions based on what many believe resembles more reasonable assumptions going forward requires decreasing the rate of return assumption for a similar-risk portfolio to around 4% and increasing the inflation assumption from 1-2% a year to 3-4% a year (which may still be too conservative). Suddenly, the portfolio that should last forever is now projected to be exhausted in only 16.8 years! That means that the entire nest egg and what it earns cannot sustain the current withdrawal rate. Since the retiree started the withdrawals five years ago, now they are down to 11.8 years—running out of money around age 76!

***** end quote *****

Clearly, the political class has screwed up the American economy.

Pity the poor, the elderly, the middle class, those on fixed income.

Inflation is grossly understated by the “official” stats.

Are we headed to be like Europe or pre-WW2 Germany?

Clearly, everyone needs to update their financial plans.

I’ve recommended to my turkeys that they adjust their “money reserve requirements”.

Everyone better plan to work for a longer time.

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MONEY: Tax hikes coming!

Saturday, October 20, 2012

http://www.financial-planning.com/news/How-Advisors-Can-Use-2012-Tax-Breaks-Before-They-Disappear-2681313-1.html?ET=financialplanning:e11881:34803a:&st=email

Dear Team:

I don’t see much news I can use?

  • Possibly pre-pay medical premiums (e.g., Maybe 7200$ x and y premiums; see if I can prepay z premiums?).
  • ROTH conversion rarely makes any sense (i.e., pay taxes now to maybe save them later)?
  • Take cap gains in taxable accounts (i.e., doesn’t fit with the Edelman style of investing).

Did I miss anything?

fjohn

*****

This is a recent email sent out. Recognize that if the Congress critters do nothing, which is their MO, we get slammed with a gigantic tax hikes in 1/1/13.

Don’t think there is much to do, but revolt.

–30–

f

 

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MONEY: The falling dollar hurts real people; an ebb tide lowers all boats

Friday, October 19, 2012

http://www.mybudget360.com/us-standard-of-living-falling-us-dollar-impact-us-dollar-benefits/

Standard of living, meet falling US dollar – how a falling US dollar benefits banks at the expense of working Americans.

*** begin quote ***

There is certainly a cost to a falling US dollar. Many Americans are living the consequences of this multi-decade long trend. The Federal Reserve has only added fuel to this trend but many families are now realizing that there does come a cost to unrelenting debt based solutions to fiscal problems. Shopping at the local grocery store I’ve noticed that some items have doubled in the last few years. Fueling up is also more expensive. The issue with living on a low dollar policy is that eventually, you end up in a low wage capitalist system. The easy money slowly inflates away especially on global items. We are seeing this in the US in various arenas especially with higher education. The end result is that the standard of living for the vast majority of Americans has fallen dramatically in the last few decades.

*** end quote ***

The seems to be a basic stupidity in human beings as to the devastating impacts of “inflation” (i.e., counterfeiting by a central bank).

As an injineer, we can’t have a “standard” that varies. 

As a football fan, imagine if a yard was redefined each football season as 2% less. 35.28 inches. Easier to make a first down. Records would be meaningless. And, eventually, in 30 years, they’d play on a one inch field.

Absurd.

So why is it different for money?

In my lifetime, the “dollar”, whatever that is, has lost 99% of it’s value. Gasoline that was 30¢ per gallon was $3.75 last night. Has gasoline become more expensive? Those evil oil companies. No!!! Based on the price of silver, gas is actually ~30% cheaper. 

<<Those three silver dimes in 1960 bought a gallon of gas. Today those three dimes are worth about $6 (conservatively) to $10.50 (speculation). So either 28% cheaper or 65% depending upon your value of those dimes.>>

Why can’t “We, The Sheeple” see it?

And, in the general inflation (i.e., loss of value of the money), wages don’t go up. Those on fixed income are so screwed. And, the poor get poorer. Savings are a joke.

Also even the stock market gets “hurt”. Sure the stock prices go up, but never as much as the inflation rate. We’ve seen this in the Carter disaster. Then, stocks went up in the single digit %s, but the inflation was 25 or 30%. Hence the real value went down.

How does a tin foil hat view the world? Always price things in silver or gold. Makes it obvious.

A new men’s outfit in Rome was two ounces of gold. Today, you can buy a nice outfit for 3500$! Clothing has gotten “cheaper”.

A new car in the 60’s was 6 ounces of gold. (I know a bought a Chevy Nova brand new for 1200$). Today, 10,500$ won’t get you a new car. Cars have become more “expensive”. Gas we’ve already said has gotten “cheaper”.

What do you buy that’s changed?

Gooferment!!!

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MONEY: PT is less than AU?

Thursday, October 18, 2012

KITCO Metals quotes

 

 

Take a look at the price of platinum versus gold.

What does this signal?

Price manipulation in the commodities markets in advance of the election?

Wonder when we’ll hear about the derivative contracts that are used to move the market.

Argh!

—30—

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GOVEROTRAGEOUS: Fifth Amendment violation by “permits

Thursday, October 18, 2012

http://www.wnd.com/2012/10/landowner-stands-ground-against-government-shake-down/?cat_orig=politics

WND EXCLUSIVE
Landowner stands ground against government ‘shake-down’
Supremes agree to decide how much regulators can require
Published: 13 October 2012
by Bob Unru

*** begin quote ***

“But regulators saw a chance to pounce and make all kinds of costly, unrelated, outrageous demands,” he said. “Without any justification, the government demanded money, labor and resources as the price for allowing the Koontzes to use their own land.

“This was a flat-out shakedown, a form of extortion,” he said.

Family members had tried for years to develop the land, but the local St. Johns River Water Management District would not issue the necessary permits, “because Koontz would not agree to costly and unjustified conditions that the district imposed.”

“Specifically, the district demanded that Koontz dedicate his money and labor to make improvements to 50 acres of district-owned property located miles away from the proposed project,” the legal team explained.

“In other words, what we have here is a classic case of an unconstitutional shakedown. The U.S. Supreme Supreme Court has ruled that the government violates property rights – it commits a ‘taking‘ in violation of the Fifth Amendment – if it tries to use the permitting process to extract conditions that aren’t related to the impact of the proposed development.”

*** end quote ***

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“But regulators saw a chance to pounce and make all kinds of costly, unrelated, outrageous demands,” he said. “Without any justification, the government demanded money, labor and resources as the price for allowing the Koontzes to use their own land.
“This was a flat-out shakedown, a form of extortion,” he said.
Family members had tried for years to develop the land, but the local St. Johns River Water Management District would not issue the necessary permits, “because Koontz would not agree to costly and unjustified conditions that the district imposed.”
“Specifically, the district demanded that Koontz dedicate his money and labor to make improvements to 50 acres of district-owned property located miles away from the proposed project,” the legal team explained.
“In other words, what we have here is a classic case of an unconstitutional shakedown. The U.S. Supreme Supreme Court has ruled that the government violates property rights – it commits a ‘taking ‘ in violation of the Fifth Amendment – if it tries to use the permitting process to extract conditions that aren’t related to the impact of the proposed development.”

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POLITICAL: Media Bias a la Candy Crowley

Wednesday, October 17, 2012

http://newsbusters.org/blogs/noel-sheppard/2012/10/16/joe-trippi-crowleys-interruption-libya-looked-ref-just-threw-flag#ixzz29WUs0xt6

Joe Trippi: Crowley ‘Correcting’ Romney on Libya Looked Like ‘The Ref Just Threw the Flag’

By Noel Sheppard | October 16, 2012 | 23:20

*** begin quote ***

Conceivably the biggest moment in Tuesday’s presidential debate was when moderator Candy Crowley injected herself into the discussion siding with Barack Obama on remarks he claimed he made in the Rose Garden following the attack on our consulate in Benghazi, Libya.

*** end quote ***

Against my better judgment, I watch the second debate because the Yankees were hopeless.

As all the “conservative” pundits predicted, Ms. Crowley couldn’t help but pile in on her “team’s side”.

I thought that wasn’t permitted by the rules of engagement?

And, what’s more she was WRONG!

Liberal bias!

Took the UN Ambassador on the TV circuit with a misleading at best story. Took the White House a week to walk it back and only after that DoI guy told to the truth to Congress. (You could almost hear the conversation right out of that Jack Ryan movie. “I ain’t going to jail. I’m the guy who always goes to jail.”) And BHO44 didn’t concede it until he was on the View.

Argh!

I can make some small allowance that perhaps it MIGHT be in the nation’s strategic interest to keep stuff quiet.

(For example, if I was Prez, I would not have illed Bin Laden. He’d be in an undisclosed location with some nasty folks asking tough questions. And, even when presented with the downed helicopter, I’d lie to the TV and say ‘wasn’t us’. Stragteically. I also threaten anyone who did toe the party like with an assignment to be Presidential liaison with the Base Commander in Sitka Alaska. And, call the commander and have him in a cube at the end of the longest runway counting seagulls for his daily report.)

But in this case, I think this was al about CYA for the BHO44 reelection and nothing else.

Can “We, The Sheeple” see through the media bias and recognized a failed foreign policy?

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MONEY: Commodities tell us that the politicians are lying. (What’s news there?)

Wednesday, October 17, 2012

http://www4.thedailybell.com/28133/Peter-Schiff-Riding-Into-the-Sunset-or-a-Brick-Wall

Riding Into the Sunset or a Brick Wall?
Tuesday, October 09, 2012 – by Peter Schiff

*** begin quote ***

If everyone starts to carry rolls of cash everywhere, it’s not a big leap to carry coins. A silver coin the size of a dime is currently worth about $3.50. Two could buy you lunch.

*** end quote ***

As someone, who remembers 29 cent per gallon gas — with a glass, trading stamps, and a guy to wipe the window, it’s not a far stretch to imagine a country using gold and silver coins as money.

Paper should be bank warehouse receipts. No fractional reserve banking should be permitted.

We shouldn’t let the elite effete political class define money. Money should be a weight of something. The free market will assign it a value.

In the debate Ron Paul gave a classic line about “in the Sixties, three silver dimes would buy a gallon of gas and those same three silver dimes would buy more gas now”. Still true. Even in California.

Now if you are reading this, just ask yourself: “What’s changed?”

Three silver dimes = gallon of gas in 1960’s = more than a gallon of gas in 2012.

Yet, gas is now over $3 per gallon. 5 in California.

What’s changed?

Could it be that the value of the dollar has changed? Not the value of silver or gasoline?

What’s the yardstick?

This makes the case that gasoline is actually CHEAPER now.

Argh!

And, the politicians tell us there is no inflation!

No wonder the oil sheiks are screaming like stuck pigs. They are getting robbed like the rest of us.

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POLITICAL: SO the “debates” are scripted?

Tuesday, October 16, 2012

http://thepage.time.com/2012/10/14/moderator-role-under-scrutiny-before-the-debate/

Moderator Role Under Scrutiny — Before the Debate
By Mark Halperin | October 14, 2012

*** begin quote ***

In an unusual departure from the normal hostility that exists between the Obama and Romney campaigns, both parties wholeheartedly agreed with the Commission that they wished to avoid a repeat of what occurred four years ago. In 2008, NBC News’ Tom Brokaw moderated the town hall session between Obama and Republican nominee John McCain, and the two campaigns and the organizers felt that Brokaw redirected the topics too severely from the audience queries and asked too many of his own questions, limiting the number of citizens who got a chance at the microphone. Appearing on NBC News “Meet the Press” on Sunday, Brokaw said, “[I]t’s tricky for the moderator. I said that Candy Crowley ought to get combat gear after I went through that four years ago.” Brokaw told TIME, “I am satisfied citizens in the hall and online got a fair hearing.” Brokaw also said that while there was some press criticism of the job he did, he heard no complaints directly from the campaigns and a Commission official praised the debate to him as “good television.”

*** end quote ***

George Orwell must be rolling over.

Talk about propaganda.

Very carefully agreed as to what the people will see.

Argh!

Wake up, Sheeple. 

Lambs to the slaughter!

Another “reality” show.

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INTERESTING: Big deal!

Tuesday, October 16, 2012

amazon.com

Dear Kindle Customer,

We have good news. You are entitled to a credit for some of your past e-book purchases as a result of legal settlements between several major e-book publishers and the Attorneys General of most U.S. states and territories, including yours. You do not need to do anything to receive this credit. We will contact you when the credit is applied to your Amazon.com account if the Court approves the settlements in February 2013.

Hachette, Harper Collins, and Simon & Schuster have settled an antitrust lawsuit about e-book prices. Under the proposed settlements, the publishers will provide funds for a credit that will be applied directly to your Amazon.com account. If the Court approves the settlements, the account credit will appear automatically and can be used to purchase Kindle books or print books. While we will not know the amount of your credit until the Court approves the settlements, the Attorneys General estimate that it will range from $0.30 to $1.32 for every eligible Kindle book that you purchased between April 2010 and May 2012. Alternatively, you may request a check in the amount of your credit by following the instructions included in the formal notice of the settlements, set forth below. You can learn more about the settlements here:
http://www.amazon.com/help/agencyebooksettlements

In addition to the account credit, the settlements impose limitations on the publishers’ ability to set e-book prices. We think these settlements are a big win for customers and look forward to lowering prices on more Kindle books in the future.

Thank you for being a Kindle customer.

The Amazon Kindle Team

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

(c) 2012 Amazon.com, Inc. or its affiliates. All rights reserved.
Amazon.com, 410 Terry Avenue N., Seattle, WA 98109-5210.

Reference: 26267370

Please note that this message was sent to the following e-mail address: reinkefj

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

Benefits from an Attorney General E-books Settlement Fund

Para una notificación en Español, llamar o visitar nuestro website.

Records indicate that you are eligible for a payment from Settlements reached by the State Attorneys General with E-book publishers Hachette, HarperCollins, and Simon & Schuster. The Settlements resolve an antitrust lawsuit about the price of electronic books (“E-books”). Amazon.com has not been sued in this case. It is providing this notice as a service to its customers.

What the Settlements Provide

The Settlements create a $69 million fund for payments to consumers who purchased qualifying E-books from April 1, 2010 through May 21, 2012. If the Court approves the Settlements, eligible consumers like you will receive automatic credits to your E-reader accounts. The credit can be used on any purchases of E-books or print books. The amount of your payment has been determined based on the qualifying E-book purchases identified by Amazon.com in your E-reader account.

How to Receive your Benefit

Because you are pre-qualified, you do not need to do anything to receive your credit. It will be applied to your account by Amazon.com automatically, and you will receive another email letting you know when it’s available. (If you bought E-books from more than one retailer, you may receive notices with different instructions about whether you will receive a credit or need to file a Claim Form for that retailer. You will have a separate claim for each retailer and you should follow the specific instructions from each one.)

You also have the option to receive a check instead of your credit. You can request a check by calling 1-866-621-4153, or going to the Settlement website listed below, and clicking on the Check Request Option link. Be sure to reference the Settlement ID number found at the bottom of this email. The Settlement website is: http://www.EBookAGSettlements.com

Your Other Rights

You can choose to exclude yourself from the Settlements and keep your right to sue on your own. If you exclude yourself, you can’t receive any benefits from the Settlements. If you don’t exclude yourself, you can submit objections about the Settlements.

Your written Exclusion Form or objections must be postmarked by December 12, 2012. Please visit the Settlement website for detailed information on how to submit a valid Exclusion Form or objection.

A separate lawsuit against two other publishers and Apple, Inc. continues and is set for a trial in 2013. Your rights in the separate suit are not affected by any action you take in regards to these Settlements.

The Court will hold a hearing on February 8, 2013, at 10:00 a.m. to consider whether to approve the Settlements. You or your own lawyer may ask to appear and speak at the hearing.

For more detailed information:
Call 1-866-621-4153 or visit http://www.EBookAGSettlements.com
Settlement ID Number: AMG2zmVrr6F3fT6eRm

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How much did the lawyers get? Argh! What’s wrong with this picture.

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INTERESTING: Was Jeter’s stumble caused by being tired?

Monday, October 15, 2012

I posted on FACEBOOK Sunday in the wee hours:

“Argh! It’s 0109. I “invested” hours in the <Expletive Deleted> Yankees and they lose in extra innings. I want my time back. And, Jeter looked like he broke his ankle. Not a good omen. To bad Alex didn’t have that happen to him a week ago. Sigh.”

and then later that same morning in human being hours:

“Heard this morning that “doctor” Reinke, medical training courtesy of doctor Phil’s tv program, and 14 years on the first aid squad, got my “snap” diagnosis sadly correct. Do you think too many extra inning games and travel made him “tired”? Accidents happier when you’re tired. Now we will see if this Yankee’s team has “character”? ARod has to snap out of the slump for them to win. Maybe they are all just “tired”. They are all “old” in baseball terms. Tigers may have just gotten a big “break”. We’ll see!”

(REMINDER: Remember the sources of my education: I’m just a fat old white guy injineer with: Law “degree” from watching Judge Judy; Medical “degree” from watching Doctor Phil; Building “degree” from watching “Holmes on Homes”; Investing “degree” from reading about Bernie Made-off; and creating caring human relationships from studying the movie roles of Gunny Ronald Lee Ermey!)

Upon reflection, it seemed obvious to me that he’d broke it. I thought that when I saw it in real time. He was carried off the field in pain. Having broken bones, I know what that feels like. And, I’ve seen race horses fall. You can just tell. A break just seems to happen differently.

The interesting part is what role does fatigue play in all this?

Alex’s slump, Derek’s stumble, Granderson’s near miss home runs, other players not up to par, just missing the spot.

While these guys are all athletes in fine shape. Maybe a little old. Long in the tooth. But … you have to question the schedule without proper time to rest. 

Is everyone being cheated by an arbitrary schedule?

Do they need more off days and travel days to accommodate peak performance?

I know when I’m tired, I get silly, clumsy, and (more) stupid. (Some of my late night blog post can show that!)

So did a “tired” Derek just demonstrate his humanity?

No one could ever accuse him of not playing hard. But maybe Joe needed to recognize the physical shape of his troops. Maybe he’s tired too?

We’ll never know, but ‘doctor’ Reinke thinks that’s the proximate cause — greed. By the owners, TV, players, and fans.

Comments?

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