Two important institutional changes since the late 1960s also have affected the composition of financial asset holdings of households. One is the growing prevalence of pension funds. Since 1960, the share of financial assets that pension funds comprise grew from a little under 7% to 27%. This growth has been due in part to the introduction of 401k, 403b, and Keogh accounts that have allowed households to make tax deductible contributions to retirement plans with significant control over the disposition of those investments. In addition, many large employers have switched from defined-benefit to defined-contribution retirement plans, again allowing households to decide how much of their retirement funds to invest in the stock market. These changes began to accelerate in the 1970s. Prior to these changes, many businesses either adopted “pay-as-you-go” pension plans with no significant contributions to the stock market, or restricted their investments to ultra-safe assets, such as government securities.
Obviously nobody knows for sure. That is what makes investing interesting and sometimes downright scary. But we need to parse through the data available and find where our convictions lie. This article is meant to give readers all the ammunition they need to discern a position for themselves but we will also provide our assessment at the end. It is fine to disagree. We need investors on both sides of the argument. That is what makes up a marketplace in the first place.
I rate Clancy's Classic, early stories five stars. Hunt for Red October and Cardinal of the Kremlin are the best, Clear and Present Danger and Without Remorse are also good tales with good characters, well written. This book shows the weaker side of a formula followed for too long. The Ryan character is now fully emersed in a fantasy world and characters that were filled out in earlier books are now hollow shadows. And, the gratuitous sex and Jack Ryan's increasing use of foul language don't ring true compared to Clancy's earlier stories. I wonder if, at the time of this book, Clancy started using uncredited "collaborators" to boost his writing output? This story still provides some entertaining reading, but it is far less compelling than the earlier work that made Tom Clancy the highest standard in spy/techno adventures.
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It is isn’t egotism and lack of self-motivation that causes us to trade more. Panic and greed also play a part. It is a natural human emotion to want to invest more when markets are going well, or sell when markets are down or at least to stop contributing. Studies that shown that if you tell somebody that they have a 95% chance of making money, they are more likely to invest than if you tell them they have a 5% chance of losing money.
RATE AND REVIEW this podcast on iTunes!U.S. GDP Growth Reported at 4.1%Today we finally got the highly anticipated first look at U.S. economic growth, or really GDP growth, because the GDP is not that great a barometer of the economy. Nonetheless, thats the one that everybody uses to measure it, and that's the one that we're going to talk about ...…
However, as we explained last December, this is a low-ball estimate which "understates the potential losses" as it "does not include high-yield bonds, fixed-rate mortgages, and fixed-income derivatives", which would suggest that the real number is likely more than double the estimated when taking into account all duration products. As a reminder, Goldman calculated the entire duration universe at $40 trillion as of the summer of 2016, resulting in $2.4 trillion in losses for a 1% move. By now the number is far, far greater.
Yet, Karen is only one of the brilliant minds that you’ll get exposed to and have the chance to meet at the SIC. It’s going to be an intellectually thrilling event, and I hope you can be there with me to experience it firsthand. To learn more about attending the SIC 2018, and about the other speakers who will be there, I encourage you to click here.
There are many people who don't agree with these bears. PIMCO analyst Joachim Fels, for one, finds a recession to be unlikely over the next 12 months, Barron's reports. However, he adds that a global recession within the next five years has a 70% probability, based on history. Barron's also notes that the forecasting prowess of Jim Rogers and Marc Faber is questionable. They have been wrongly bearish for years, and those who followed their advice in the recent past would have missed out on the bull market. Additionally, Barron's notes that Nobel Prize winning economist Robert Shiller of Yale University, whose models indicate an overpriced market, nonetheless believes that stocks may climb yet higher. (For more, see also: Stocks Could Rise 50%, Says Yale's Shiller.)
Historically, municipal debt predates corporate debt by several centuries—the early Renaissance Italian city-states borrowed money from major banking families. Borrowing by American cities dates to the nineteenth century, and records of U.S. municipal bonds indicate use around the early 1800s. Officially the first recorded municipal bond was a general obligation bond issued by the City of New York for a canal in 1812. During the 1840s, many U.S. cities were in debt, and by 1843 cities had roughly $25 million in outstanding debt. In the ensuing decades, rapid urban development demonstrated a correspondingly explosive growth in municipal debt. The debt was used to finance both urban improvements and a growing system of free public education.
Unless one thinks Trump is another Eisenhower. Ike also believed in Infrastructure spending and military preparedness. The Truman-Eisenhower bull market lasted from 1947 all the way to 1957, when the DJI fell 20%. But where Ike was very popular, Trump is much less so. Where Ike was cautious and trusted his advisors. Trump is the opposite. And unlike Trump, Eisenhower never courted bankruptcy.
A little more than thirty years ago Tom Clancy was a Maryland insurance broker with a passion for naval history. Years before, he had been an English major at Baltimore’s Loyola College and had always dreamed of writing a novel. His first effort, The Hunt for Red October—the first of the phenomenally successful Jack Ryan novels—sold briskly as a result of rave reviews, then catapulted onto the New York Times bestseller list after President Reagan pronounced it “the perfect yarn.” From that day forward, Clancy established himself as an undisputed master at blending exceptional realism and authenticity, intricate plotting, and razor-sharp suspense. He passed away in October 2013.
There has never been a more fiscally clueless team at the top than the Donald and his dimwitted Treasury secretary, Simple Steve Mnuchin. After reading the latter's recent claim that financing Uncle Sam's impending trillion dollar deficits will be a breeze, we now understand how he sat on the Board of Sears for 10-years and never noticed that the company was going bankrupt.
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A municipal bond, commonly known as a Muni Bond, is a bond issued by a local government or territory, or one of their agencies. It is generally used to finance public projects such as roads, schools, airports and seaports, and infrastructure-related repairs. The term municipal bond is commonly used in the United States, which has the largest market of such trade-able securities in the world. As of 2011, the municipal bond market was valued at $3.7 trillion. Potential issuers of municipal bonds include states, cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly owned airports and seaports, and other governmental entities (or group of governments) at or below the state level having more than a de minimis amount of one of the three sovereign powers: the power of taxation, the power of eminent domain or the police power.
Jim: Well, Jay Powell has one commanding credential. And that credential is the absence of a PhD in economics on his resume. I say this because we have been under the thumb of the Doctors of Economics who have been conducting a policy of academic improv. They have set rates according to models which have been all too fallible. They lack of historical knowledge and, indeed, they lack the humility that comes from having been in markets and having been knocked around by Mr. Market (who you know is a very tough hombre).
RATE AND REVIEW this podcast on Facebook.https://www.facebook.com/PeterSchiff/reviews/Look Carefully at the Price IndexThe GDP number came out yesterday; 3/5% did slightly beat the consensus of 3.3%, but remember, for a while the Atlanta Fed was looking for a print in the 4's. But the New York Fed was at 2.2%, so the print was much higher than ...…
I don't believe Clancy actually wrote this book. It isn't like his prior Ryan books. It's over 1000 pages, and if you deleted all the "f" words, it probably would have been 100 pages shorter. Not having references to sex and whores/prostitutes could have cut another 100 pages. He could have been just fine not adding useless filler to demonstrate his knowledge of history. I had a hard time even getting interested in it and almost gave up about 10 chapters into it. It finally did pick up and I stayed the course, despite multiple typo errors and repeated statements in different parts of the book. Evidently, even the editors couldn't get through it all. Very disappointing. I ordered two more of the books in the series at the same time and really hope they are much better (written by Greany). Of the 13 books that I have read of the Ryan/Ryan JR/Clark series of books, this is the first one I've given a negative rating on, as I normally love his books.
I don’t wish to get too deep into the weeds here, but to explain this, you have to look to the money multiplier. The money multiplier is the amount of money that banks generate with each dollar of reserves. Due to the over-indebtedness of the economy—or more precisely, the lack of “savings”—the multiplier has plunged from 12.1 in 1985, to 3.6 today.
For the past few weeks, I’ve been intensely focused on what I believe to be a double cross in COMEX gold futures by JPMorgan of other trading entities, particularly other commercial participants. I would define the double cross as JPMorgan positioning itself so flawlessly so as to be nearly perfect in its execution, including the avoidance of any widespread knowledge of what has occurred. After all, a double cross always includes the element of surprise and this one promises to be a doozy. Read More
Debt, my man, debt. In the rush to FIRE economy how could anything be better than DEBT? Particularly if you get the debtors to re-contract for that debt, and more, every so many months, resetting the terms of their interest payback to the beginning of the curve each time? As Ron said, this was all Monopoly money…that people agreed to pretend was real. The problem with speculation is that once you have more than a few people dancing atop the Milk the Suckers ponzi pyramid, it ceases to be a pyramid shape….
At first he was called Hotfoot Teddy, but he was later renamed Smokey, after the icon. New Mexico Department of Game and Fish Ranger Ray Bell heard about the cub and took him to Santa Fe, where he, his wife Ruth, and their children Don and Judy cared for the little bear with the help of local veterinarian Dr Edwin J. Smith. The story was picked up by the national news services and Smokey became a celebrity. Many people wrote and called asking about the cub's recovery. The state game warden wrote to the chief of the Forest Service, offering to present the cub to the agency as long as the cub would be dedicated to a conservation and wildfire prevention publicity program. According to the New York Times obituary for Homer C. Pickens, then assistant director of the New Mexico Department of Game and Fish, he kept the cub on his property for a while, as Pickens would be flying with the bear to D.C. Soon after, Smokey was flown in a Piper PA-12 Super Cruiser airplane to the National Zoo in Washington, D.C. A special room was prepared for him at the St. Louis zoo for an overnight fuel stop during the trip, and when he arrived at the National Zoo, several hundred spectators, including members of the Boy Scouts, Girl Scouts, photographers, and media, were there to welcome him.
Between tax legislation and cryptocurrencies, there’s been little interest in much else. As for tax cuts, it’s an inopportune juncture in the cycle for aggressive fiscal stimulus. And for major corporate tax reduction more specifically, with boom-time earnings and the loosest Credit conditions imaginable, it’s Epic Stimulus Overload. History will look back at this week - ebullient Republicans sharing the podium and cryptocurrency/blockchain trading madness - and ponder how things got so crazy. Read More
Eleven GOP members of Congress led by Rep. Ron DeSantis (R-FL) have written a letter to Attorney General Jeff Sessions, Attorney John Huber, and FBI Director Christopher Wray - asking them to investigate former FBI Director James Comey, Hillary Clinton and others - including FBI lovebirds Peter Strzok and Lisa Page, for a laundry list of potential crimes surrounding the 2016 U.S. presidential election.
The living symbol of Smokey Bear was a five-pound, three month old American black bear cub who was found in the spring of 1950 after the Capitan Gap fire, a wildfire that burned in the Capitan Mountains of New Mexico. Smokey had climbed a tree to escape the blaze, but his paws and hind legs had been burned. Local crews who had come from New Mexico and Texas to fight the blaze removed the cub from the tree.
Robert J. Shiller, a 2013 Nobel laureate in economics, is Professor of Economics at Yale University and the co-creator of the Case-Shiller Index of US house prices. He is the author of Irrational Exuberance, the third edition of which was published in January 2015, and, most recently, Phishing for Phools: The Economics of Manipulation and Deception, co-authored with George Akerlof.
Per the latest COT report (note: this references the August 21st COT Report), the hedge fund (Managed Money) net short position in Comex paper gold was 90,000 contracts – by far a record short position for the hedge fund trader category. Conversely, the bank net long position (Swap Dealers) in Comex paper gold was close to an all-time high. It’s not quite as high it was in December 2015.
Listen to him say….”THESE ARE THE FACTS.” This video is very entertaining and very informative. It shows you how much of a shyster these real estate agents can be. He says “there’s a whole bunch of us (realtors) out there who know real estate – it’s what we do for a living. We’re licensed and WE HAVE TO TELL YOU THE TRUTH, BY LAW. Boy, what a shyster.
The $3 trillion that Vanguard has invested in index funds might indicate stability as, according to Vanguard, the best way to invest is to invest in index funds. But such a statement isn’t true at all. The positive performance Vanguard’s index funds have achieved in the last 35 years, which is now the main factor in attracting new funds, is just a result of many factors that has lead the S&P 500 to grow 23 times since 1980.
I am primarily a value investor. For me, the algorithms serve as a way to monitor whether my view about valuations is becoming accepted by other market participants. As I have mentioned, I believed earlier this year that we were in the late stage of a cyclical bull market. The markets are finally agreeing and turning the late-cycle bull into an early cycle bear.
In addition, during World War II, the Empire of Japan considered wildfires as a possible weapon. During the spring of 1942, Japanese submarines surfaced near the coast of Santa Barbara, California, and fired shells that exploded on an oil field, very close to the Los Padres National Forest. U.S. planners hoped that if Americans knew how wildfires would harm the war effort, they would work with the Forest Service to eliminate the threat. The Japanese military renewed their wildfire strategy late in the war: from November 1944 to April 1945, launching some 9,000 fire balloons into the jet stream, with an estimated 11% reaching the U.S. In the end the balloon bombs caused a total of six fatalities: five school children and their teacher, Elsie Mitchell, who were killed by one of the bombs near Bly, Oregon, on May 5, 1945. A memorial was erected at what today is called the Mitchell Recreation Area.
"We expect both a deterioration in earnings quality and a peak in organic growth in 2018," Mike Wilson, Morgan Stanley's chief US equity strategist, wrote in a client note. "The bear market in valuations has already begun and supports our overall view that the next cyclical bear market in US equities may have already begun, but is being masked by an index price level that has fallen only 12% thanks to the adrenaline shot to EPS from tax."
There are always cycles. The current cycle started at the bottom of the Great Recession and will last “until central banks put on the brakes,” said Ray Dalio, founder of Bridgewater Associates, in an interview with Bloomberg. “We’re in a perfect situation, inflation is not a problem, growth is good, but we have to keep in mind the part of the cycle we’re in.”
It depends on whether they need short-term cash at their disposal. For millennials just getting going on their 401ks, it's probably a good time to boost contributions or shift the mix of funds in retirement accounts to be more aggressive (younger investors should usually be fairly aggressive anyway, since they have decades to recover from short-term bear markets).
The haunting Gary Jules version of the Tears for Fears’ Mad World speaks to me in these tumultuous mad times. It must speak to many others, as the music video has been viewed over 132 million times. The melancholy video is shot from the top of an urban school building in a decaying decrepit bleak neighborhood with school children creating various figures on the concrete pavement below. The camera pans slowly to Gary Jules singing on the rooftop and captures the concrete jungle of non-descript architecture, identical office towers, gray cookie cutter apartment complexes, and a world devoid of joy and vibrancy. Read More
"The first thing to do is check the current risk of the portfolio," Alexander G. Koury of Values Quest Inc. told TheStreet in July. "This will help the investor determine what would be the worst-case scenario if the market were to move into a bear market. That means an investor will know how much they're willing to lose of their portfolio, and they can determine whether or not that is comfortable for them."
Two weeks after we reported that GE had found itself locked out of the commercial paper market following downgrades that made it ineligible for most money market investors, the pain has continued, and yesterday General Electric lost just over $5bn in market capitalization. While far less than the $49bn wiped out from AAPL the same day, it was arguably the bigger headline grabber.
JOIN PETER at the New Orleans Investment Conferencehttps://neworleansconference.com/conference-schedule/Ominous OctoberToday was the end of the month of September; it's also the end of the third quarter we are now beginning the final quarter of the year. When we come back to trading next week, we will be in the month of October, and as I mentio ...…
Once upon a time, there was a little-known energy company called Enron. In its 16-year life, it went from being dubbed America’s most innovative company by Fortune Magazine to being the poster child of American corporate deceit. Using a classic recipe for book-cooking, Enron ended up in bankruptcy with jail time for those involved. Its shareholders lost $74 billionin the four years leading up to its bankruptcy in 2001.
Bear markets are inevitable, and you have to be willing to endure them in exchange for the opportunity to get life-changing wealth from your investments during the stock market's upward moves. Fortunately, there are ways to prepare for bear markets that can make it easier to get through them when they hit. You can even boost your overall returns if you're willing to use some smart investment strategies that others may be too fearful to use.