Errold. F. Moody Jr.

click above for bio

Financial and Economic Daily Commentary 2018

Knowledge makes obsolete the inequities that ignorance and prejudice justify


USA Today- "This is a high-powered personal bookmark list that spans the spectrum of the truly useful."

FORBES- "You'll find some great information."

BUSINESS WEEK: "For an Expert, Click here"  

From an adviser: It is a daily read for me. Clearly biased towards the client.
Great perspectives and links to thought provoking material. Greatly appreciated

Investor/Investing Risk of Loss: Identify, Manage and Limit Investment
Risk of Loss on Mutual Funds and ETFs

Four Phase Process that will change the investment dichotomy for 75% of Middle and Lower Income investors overall and up to 90% for 401k Investors 

Losses limited to about 12% for recessions

Patent Pending

Morality, Sexism, Ethics, Corrupt Equilibrium

Critical reference to the limited fiduciary capabilities in the planning industry (and more) and why they may/will remain as such given sophomoric DOL rules and flaccid organizational enforcement. Specific commentary to sexism and ethical and moral lapses of society impacting women. Not the standard drivel

Analysis for investors and advisers. The economic changes from the Great Recession caused major adjustments in investing. One of the major issues is the flip flop of the correlations in bond funds versus equities  coupled with a truly lower return and an increased overall risk. It will take a lot more effort to provide adequate return for those in need and the discussion will address pros and cons particularly for retirement purpose Emphasis on risk, Click for full article. 

“It’s not the Fed’s job to stop people from losing money.”

A Detailed Timeline of the 2008 Financial Crisis


Revolutionary Method for Asset Allocation- Increase Returns, Reduce Risk

September 2018


October 2018

Have you sold your Equities yet???

December 2018

1/17: Death by.............

The deadliest animal in the world is the Asian cobra, causing nearly 50,000 fatalities a year. That's followed by the puff adder snake, the ocellated carpet viper, the kissing bug, the assassin bug, the freshwater snail and the tsetse fly, all of which have more than 10,000 fatal encounters with humans a year.

1/17: Booming global debt

The latest figures come from the Institute of International Finance (IIF), an industry research and advocacy group. It reports that in September, worldwide debt totaled $244 trillion, or almost a record 318 percent of world gross domestic product. That figure covers all government, household and nonfinancial business borrowing. (World GDP means total global output.)

Government debt has tripled from $20 trillion in 2000 to $65 trillion in 2018, rising as a share of GDP from 55 percent to 87 percent. Household debt has increased over the same years, from $17 trillion to $46 trillion (from 44 percent to 60 percent of GDP). Finally, nonfinancial corporate debt rose from $24 trillion to $73 trillion (71 percent of GDP to 92 percent).

If economic growth slows, then servicing outstanding debts becomes harder. “The risk is not [an economic] blowout but a slow slog — slower growth,” Gibbs says. “As debt service gets bigger, it takes away from what you can do with more borrowing. It diverts from more productive uses.”

Another risk is that over-indebted businesses in emerging-market countries trigger some sort of financial crisis. Loan losses force some banks to close or stop lending. The circumstances are particular to individual countries or industries, but if too many local crises occur, the global economy could lose steam.

“rollover risk” — the possibility that borrowers won’t be able to renew existing loans. That prospect seems particularly strong among emerging-market borrowers. According to the data from the IIF, emerging-market borrowers face $2 trillion of maturing debt in 2019, with about a quarter of those loans made in dollars (most of the rest are in local currency). To avoid default, borrowers must somehow raise those dollars, either from a new loan or from other sources.

1/16: Lower-Wage Workers Pay More Than Higher-Wage Workers for Employer-Provided Medical Care Benefits

"In March 2018, private industry workers earning an average wage in the lowest 10 percent paid an average of $151.78 per month for medical care plans for single coverage. That was $25 more than the average monthly contributions of private industry workers with an average wage in the highest 10 percent ($126.82)."

EFM- doesn't make sense. But then again, making sense is not mandatory with finances, politics, the economy..............

                                                                WOW, I WONDER WHAT THE LOSING TEAM GOT

1/16: This will destabilize world economics

Theresa May's Brexit deal crushed in parliamentary vote as country barrels toward deadline without a plan to leave the European Union

It's not clear whether any alternative plan has enough support, and the E.U. has said it won't budge in the concessions it has already given her.

1/16: The shutdown's economic impact may be double previous estimates. It could push the U.S. into a contraction.



How Global Warming Changes International Relations

In “Climate Leviathan: A Political Theory of Our Planetary Future,” two theorists look at possible political outcomes for our warming planet and argue that a more forceful international order is emerging.

EFM- I don't think it will stop the onslaught of warming oceans, terrible weather, huge losses of agricultural land and the addition of about 2 billion more people by 2050.

1/16: oil

Chart of the Week

•    Iraq’s oil production topped 4.6 million barrels per day (mb/d) in late 2018, roughly double production levels from a decade earlier.

•    Iraq is the second largest oil producer in OPEC, and holds the world’s fifth-largest oil reserves,
according to the EIA

•    About 90 percent of Iraq’s oil production comes from the massive oil fields in the south near Basra and the Persian Gulf. The remaining 10 percent comes from the oil fields in the north, some of which are in disputed territory, but most of which are run by the semi-autonomous region of Kurdistan. 


Survey finds different financial stressors among generations

The biggest cause of financial stress for baby boomers and Generation X is sufficient retirement savings, compared with paying the bills for millennials, according to the Employee Benefit Research Institute/Greenwald & Associates Health and Workplace Benefits Survey. Most employees said benefits, including health, retirement and some voluntary benefits, contribute to their financial security.


Fed study: Faster wage growth unlikely

Unemployment rates are the lowest since the 1960s, but that doesn't mean wages will increase at a faster pace, finds a study by the Federal Reserve Bank of San Francisco. Average hourly earnings for US workers increased 3.2% in 2018 and are expected to grow at a gradual pace.

1/16: Life Review

If you find yourself in a hole, stop digging"

The quote is from Will Rogers, a simple talking philosopher, who just asked us to look honestly at ourselves, look around and appreciate what we see.

In preparing for a community course on interacting with a dependent loved one to keep them stimulated and positive, I was struck by the many technical supports available and the real lack of hands-on relationship builders for caregivers and the person they love.

One of the last stages that most of us may be lucky to go through is Life Review. It’s not just for those few seconds as we look up at the light from above that we skip through the high and low points of our lives with harps plinking “Just a Closer Walk With Thee.” To look at our lives—the should have, would have, could have or still have to do—gives a person purpose, a sense of self worth and a calmness. Without ordering our lives, our hopes and our regrets, we may forget what we’ve done and who we are, and turn to emptiness and despair.

As we get older, we often have extra time to philosophize about our lives, unless we have to deal with a major change like an acute medical crisis or a chronic medical problem of our own or a loved one. Then all we think of is our condition or the condition of our loved one and we miss out on really appreciating where our lives have led us.

So what can we do to accomplish a Life Review?

Ask questions. Every day and record the answers. Have a binder where you can add pages as you go along.

Start with the basics like: Your name. Were you named for someone in your family? What town were you born in? What hospital? Was there a midwife? Your parents—what were their names? Where were they born? How did your parents meet? How many brothers do you have? Sisters? Who were you closest to and why? What things scared you when you were a child?

What was your favorite meal? Who was your favorite movie star? If you were going on vacation tomorrow, where would you go? What subject in school did you love, or hate? How old were you when you learned to drive? How did you feel the day you graduated from high school, married?

Family can make this a wonderful project to remind Dad or Grandma about things they had forgotten and didn’t think anyone really cared about—their life.

1/16: Trump is losing Syria

                                              Putin seems to be playing him like a fiddle

EFM-I am not saying that everything is wrong with Trump. But I have known pathological liars and you don't want to have anything to do with them if possible.

1/15: Long-Term Care Insurers Paid A Record $10.3 Billion In 2018 Claims

Benefits were paid on more than 303,000 policies and passed the $10 billion mark for the first time. According to a trade association, in 2017, total claims amounted to $9.2 billion paid to about 295,000 individuals.

1/15: WHAT????? Trump is exploring leaving NATO. One of the most boneheaded comments one can imagine. (Though wait a few moments)


GMO has released to the public its 7‐Year Asset Class Real Return Forecasts. As of December 31, 2018
they are

-2.5% U.S. Large
1.3% U.S. Small
2.0% Intl Large
2.8% Intl Small
4.7% Emerging
8.2% Emerging Value

-0.7% U.S. Bonds
-2.6% Intl Hedged
2.7% Emerging debt
-0.1% U.S. Inflation Linked Bonds
0.6% U.S. Cash

EFM- I do see bond returns around that low after inflation (that is what the real return means). I think U.S. equities should be better and emerging not so much.


Antarctic ice loss sextupled since 1970s, study finds. If pace continues, small islands, low-lying areas face major flooding threat.

The Antarctic went from contributing an average of 40 billion tons of melting ice to the ocean each year in the decade beginning in 1979 to contributing 252 billion tons each year in the decade beginning in 2009,. That rate of loss could result in more significant sea level rise around the globe in coming decades, threatening coastal communities.


1.   Dishonesty, Social Information, and Sorting




The dishonesty literature investigates how people behave when they are provided certain types of information. However, this approach predominantly ignores the fact that people -to some extent- can choose which information they want to be exposed to. By conducting a laboratory experiment, we study individuals’ decisions to choose which social information they would like to observe and the effect of this sorting on their engagement in unethical conduct. We find evidence that sorting exacerbates the prevalence of dishonesty, which is mainly driven by the ones who chose maximum information. Our results demonstrate that sorting is an important factor determining dishonest behavior and that previously observed levels of prevalence of dishonesty in the literature can be an underestimate of actual level of dishonest behavior in real-world situations.


Dishonesty; social norms; selection; laboratory experiments


Economists: Odds of US recession highest in 6 years

A partial shutdown of the US government and trade tensions with China have brought the risk of a US recession to the highest level in more than six years, analysts and economists surveyed by Bloomberg say. The median chance of a recession in the next 12 months is 25%, up from 20% in December, the survey finds.

EFM- I think the risk is much higher


1/14: Housing and the shutdown

“The housing industry was already facing market challenges before any government closure,” Lawrence Yun, Chief Economist with the National Association of Realtors said in a press release sent with the 2019 Government Shutdown Report. “The shutdown is causing tangible harm to potential buyers, the real estate market and economic growth.” 

A survey of more than 2,200 Realtors found that 11 percent have current clients who are impacted by the shutdown, and 11 percent have potential clients who have been impacted by the shutdown. The most common impact reported is simply putting off the decision to buy a home, the report notes. 


1/14: Rebalancing

• This paper investigates the strategy of rebalancing the retirement portfolio during the withdrawal phase.The goal is to provide the largest number of equal (real) withdrawals from a given retirement portfolio.

• The study investigates six different allocations of stock and five different harvesting rules, only one of which rebalances the portfolio annually.The methods are tested using five different withdrawals rates (3–7 percent).The results look at shortfalls over 30 years, as well as shorter periods.

• The study uses two analysis methods: bootstrap and historical inflation adjusted rates of return in their true temporal order. Both methods find that rebalancing provides no significant protection on portfolio longevity, and this holds for all withdrawal periods. In fact, in some cases, rebalancing increases the number of shortfalls.

• Withdrawing bonds first, over stocks, performs the best of all the methods, though the resulting stock-heavy portfolio may make some investors uneasy. This method also is most apt to leave a larger remaining balance at the end of 30 years, while rebalancing leaves the smallest amount.

• Withdrawing stocks first leaves more shortfalls than withdrawing low first or high first.

• Confirming previous research, the larger the proportion of stocks to bonds, the longer the portfolio lasts; the higher the withdrawal rate, the more shortfalls.

• The results suggest that the use of lifecycle funds or a life-cycle strategy that decreases stock proportions as one grows older needs empirical justification.

EFM- So is this 'true'? No. Rebalancing with stocks over 30 years must include 4 or so recessions where the stocks fall 50%. But then think about a stock portfolio with losses not greater than about 12% to 15%. Sound better?


1/14: Long term care goes high tech

In the U.S., where health-care spending equals 17.2% of GDP, people over 65 will outnumber those under 18 by 2035,

At the Sawayaka-en nursing home outside Tokyo, whose residents average 86 years old, 48 rooms have been equipped with four devices that monitor the occupants and stream data to the nurses’ station using software designed by Z-Works. Under the bed, a palm-sized Doppler radar sensor, developed with Sharp, monitors heartbeat and breathing. Other devices track whether people are at risk of falling out of bed or are taking too long to get back from the toilet

Stroke patients wearing virtual-reality goggles catch balls or move objects that appear to pop up in front of them.

a close up of a building

                          Shake your head to see the animal. Really!

1/14: Can you make sense of this????

There is confusion over President Trump’s plans to wind down U.S. involvement in the conflict: Last month, officials said the president intended to pull out American troops within 30 days, but more recently, the national security adviser, John R. Bolton, said the pullout was conditional and American forces could remain in Syria for months or even years.

And despite those plans, Secretary of State Mike Pompeo said in a speech in Cairo on Thursday that the U.S. would pursue a more activist policy in the Middle East.

EFM- There is nil continuity coming from the administration. Think the world's countries are confused?? Sure are and it makes for anxiety and strive. This makes us look weak and that we cannot be trusted.

1/13: Jellyfish are killing the oceans

experts to warn a toxic combination of warming oceans, overfishing and pollution is causing jellyfish populations to surge with damaging ecological and commercial consequences.  “Every industry that has got people, aquaculture or equipment like power plants or ships where jellyfish are in the water are suffering financial damage,”

linked to jellyfish were likely to run to billions of dollars and warned the increasing prevalence of blooms was an indicator that the global ecosystem was out of balance. Warming waters and overfishing were a “dream come true” for jellyfish and bad news for their predators, as they were able to adapt better to changes and outbreed competitors,

Predictions of a coming “jellyfish apocalypse” date back more than a decade and have been amplified by high profile events, such as when the USS Ronald Reagan was evacuated in 2006 in Brisbane when jellyfish got sucked into condensers used to cool its engines. China is now testing jellyfish shredders — nets with clusters of steel blades that chop up the creatures — to protect its aircraft carriers.  Global fisheries are at risk. Last year, large stocks of salmon at fish farms off Ireland’s west coast were destroyed by stinging jellyfish while scientists blame an invasive species of cone jellyfish for the collapse of the Black Sea fishery in the early 2000s. The creatures likely arrived in the ballast water of a ship.  Power stations, which suck in seawater to cool reactors, are also being affected by the gelatinous creatures with nuclear and coal generators in the US, Sweden, Japan, Israel and Scotland forced to suspend operations over the past decade after swarms of jellyfish clogged equipment.  “In Japan earthquakes are the number one threat to the electricity grid but jellyfish are the second,

1/13: Divorce

Statistically, approximately 50% of all first marriages end in divorce. The odds of second marriages succeeding are lower, and the odds of third marriages making it are lower still. In other words, there is an inverse relationship between the number of marriages a person has and their odds of success.

These Funny Signs You Can't Un-See1/13: Heating up the ocean

oceans are heating up 40 percent faster on average than a United Nations panel estimated five years ago. The researchers also concluded that ocean temperatures have broken records for several straight years.

“2018 is going to be the warmest year on record for the Earth’s oceans,”

As the planet has warmed, the oceans have provided a critical buffer. They have slowed the effects of climate change by absorbing 93 percent of the heat trapped by the greenhouse gases humans pump into the atmosphere

“If the ocean wasn’t absorbing as much heat, the surface of the land would heat up much faster than it is right now,”  “In fact, the ocean is saving us from massive warming right now.”

the surging water temperatures are already killing off marine ecosystems, raising sea levels and making hurricanes more destructive.

“The actual ability of the warm oceans to produce food is much lower, so that means they’re going to be more quickly approaching food insecurity,”

The effects of the warming on marine life could also have broad repercussions, Dr. Pinsky said. “As the ocean heats up, it’s driving fish into new places, and we’re already seeing that that’s driving conflict between countries,” he said. “It’s spilling over far beyond just fish, it’s turned into trade wars. It’s turned into diplomatic disputes. It’s led to a breakdown in international relations in some cases.”

“We are warming the planet but the ocean is not warming evenly, so different places warm more than others,” Dr. Zanna said. “And so the first consequence will be that sea level will be different in different places depending on the warming.”

1/13:President Trump  demanded billions of dollars in Congressional funding for a wall, which would be "indirectly paid for" via a trade deal with Mexico. An extended shutdown can affect the economy in a number of ways - from delaying business permits and visas to reducing service hours at innumerable agencies. Withheld or forgone pay from millions of federal employees can also hit consumer spending, which makes up about 70% of U.S. economic activity.

EFM: This will reduce GDP. Maybe not too much right now but in another week it will get serious.

1/13: Global reconstruction of historical ocean heat storage and transport

Formal research report

1/13: Popcorn for cattle:

I was herding some cattle into a corral. You usually throw some hay in front of them to entice them into the enclosure. But one wouldn't budge. I had some popped popcorn in my car and decided to try that.  I have rarely seen any animal instantly gorge themselves on something like that (except me). The other cows were the same. So if you need an extra incentive to move thousands of pounds of animals with an IQ of rope, try it.


U.S.-China trade talks were extended for an unscheduled third day, fueling optimism that the world's largest economies can avoid an all-out confrontation. Progress was seen on issues including purchases of U.S. farm and energy commodities, as well as increased access to China's markets, but the two sides are still ways apart on Chinese structural reforms that would stop alleged theft and forced U.S. technology transfer.

EFM- the theft has got to stop. If the U.S> does not get guarantees, the trade talks will end without a proper resolution



1/13: From          Monitor your child’s identity:

Identity theft is a disturbing crime regardless of your age. The idea that your personal information is now in the hands of people with bad intentions can leave you feeling quite vulnerable. Now imagine the panic of discovering that your minor child’s personal information has been stolen and is being used fraudulently. Children’s identities are attractive for identity thieves for many reasons including that their credit reports are blank slates and that the theft may not be detected for some time.For warning signs of child identity theft and steps to undo the damage, check out: Six Warning Signs That Your Child’s Identity Has Been Stolen.

1/13: This really pisses me off. Puerto Rico is far from perfect with its ineptness, but the people still need a lot of help. 

Trump’s plans to take money from Puerto Rico to build the wall 

1/13: Health Care

In 2000 the United States spent considerably more on health care than any other country, whether measured per capita or as a percentage of GDP. At the same time, most measures of aggregate utilization such as physician visits per capita and hospital days per capita were below the OECD median. Since spending is a product of both the goods and services used and their prices, this implies that much higher prices are paid in the United States than in other countries. But U.S. policymakers need to reflect on what Americans are getting for their greater health spending. They could conclude: It’s the prices, stupid. Read the full research paper: It’s The Prices, Stupid: Why The United States Is So Different From Other Countries.

A Health Insurance Roadmap Solution and Clarification:

As covered in the last edition of the GET READY! Newsletter, There is more that Americans agree on with Health Insurance, then they disagree on.Americans want access to Affordable Health Insurance, choice in their Health Insurance & Health Care and no penalty for pre-existing conditions.

My suggestion, based upon last year’s A Health Insurance Roadmap, is going with the simplest solution, which is a Medicare for All based plan. The issue with this statement is that Medicare for All has many different meanings. My solution does not involve single payer or complete universal health insurance as those are fiscally sustainable. It does include doing away with all group health insurance plans, period. Everyone, between the ages of 18 and 65 goes into the same health insurance pool. This accomplishes the goal of spreading the risk between healthy and unhealthy people and allows people to have portability of their health insurance and not have to switch medical providers and medications, if they leave an employer.

Medicare Part A is extended to cover all U.S. Citizens.To some degree, this already is in place as the Emergency Medical Treatment & Labor Act (EMTALA) ensures public access to emergency services regardless of ability to pay. Section 1867 of the Social Security Act imposes specific obligations on Medicare-participating hospitals that offer emergency services to provide a medical screening examination (MSE) when a request is made for examination or treatment for an emergency medical condition (EMC), including active labor, regardless of an individual's ability to pay. Hospitals are then required to provide stabilizing treatment for patients with EMCs.

The traditional Medicare Parts B & D (plus MediGap Supplements) are mostly only available through insurance companies under Medicare Advantage Plans. Medicare Parts B & D are only offered by the Federal Government in parts of the U.S. where is there are no participating insurance company (or only one company, so consumers have a choice). Medicare Advantage is growing quickly and now accounts for one third of all new Medicare enrollees. Except for emergency room visits, health insurance basically still works the same. All new enrollees, including those turning 65 would only go into Medicare Advantage programs. Medicare Advantage programs do have issues that would need to be addressed.

The remaining question is funding and employer premiums. Medicare Taxes continue and the income cap is removed, that helps stabilize Medicare (this is only a start). Employers would then be able to fund Health Care Spending Accounts that employees use to pay health insurance premiums (HSA’s allow employees to use pre-tax dollars to pay health care costs). Yes, this is a simplistic, incomplete solution, however, it is a solid start that maintains the private health insurance marketplace while not greatly increasing the burden on the federal government.

States and cities are moving ahead with their own plans as at least 10 states are exploring whether to allow residents to pay premiums to “buy in” to Medicaid, the federal health care program for the poor. See: Medicaid ‘Buy-In’ Could Be a New Health Care Option for the Uninsured. Single payer is on the table as new Governor Gavin Newsom is already moving California toward single-payer. And New York City Mayor De Blasio Unveils Health Care Plan for Undocumented and Low-Income New Yorkers.

The reality is that single payer health insurance is not sustainable in the U.S. economy. It’s time for a bipartisan plan that allows everyone to purchase coverage while being fiscally sustainable. And as mentioned in the first item in this newsletter, it’s all about managing expenses and it’s nice to see that Senator Alexander recognizes this as the elephant in the room.

Lastly, the health insurance sector remain stable heading into 2019, according to new analysis by S&P Global Ratings."A combination of still-favorable business conditions, financial factors, and diminished near-term legislative uncertainty balances our concerns relating to merger and acquisition activity, elevated policy risk, and re-emergent legal overhang," said S&P analyst Joseph Marinucci. Here’s how: A robust job market bolstering employer-sponsored plans, Baby Boomers transitioning to Medicare Advantage, and ACA exchanges attracting new payers are good signs for health plans in the coming year.



Oil is officially back in a bull market as confidence grows over both the strength of the global economy and the willingness of OPEC+ to adhere to its production cut agreement.

Top 97 Funny Minions quotes and sayings 32

1/11: Reply to Intelligent Fiduciary

Errold F Moody Jr

Fiduciary irresponsibility


I note in your Intelligent Fiduciary the issue of fees and TDFs. I will exclude the issue of fees since lawsuits, commentary et al have covered most of the concerns- yet leave the major problem to 401k participants are a couple of areas I will lightly address.


One main one which I have covered previously in my own articles are the Target Date Funds for retirees. You probably agree with this that the mere statement- used by a lot of journalists- is that TDFs are the greatest thing since sliced bread and you can use them for the rest of your life. Your comment, “Do we know our funds’ glide path? This is the way the asset allocation changes as participants age, and it can differ from fund to fund, making some more conservative and some riskier than others,” addresses a fact but not the solution. That said, I don’t think there is a solution. There are so many glide paths that one might need several TDFs for 401k selections because the inherent risks are rarely covered properly. In particular, participants would need to be aware of the implications to their unique retirement requirements. Point being  that right now larger equity positions may very well get hammered with a economy that can really go south. Many ‘experts’ (using the term loosely) suggest a recession in the near term. (As of 1/11, Trump’s antics will destabilize the international arena, the closing of government will drop our GDP, the trade war with China is not going to be resolved amicably no matter the press, Trump is marrying Kim Jong Il (Isn’t love wonderful?), the wall will be paper mache…..). So should the TDF stay with equities? Or should they revert to bonds? Problem is that standard bond funds will get hammered doing so. Vanguard’s bond fund has done .28% for one year- which means a loss with inflation. Equities (S&P 500) are down about 12% from highs a few months ago but recently it was about 16.67%. What does that mean for the 401k participants who need higher returns to fund their retirement- that means total yield that exceeds a standard bond fund (maybe below 0- almost certainly when inflation is factored in). So how much will they need? It will vary all over the place depending on an individual’s budget and then a Present Value for needs. Each employee will differ so the basic education will need to cover that? Seems doubtful. And the idea that anyone says that any set investment allocation (mostly referencing TDFS) will work for 30/35 years is a moron. I figure I might be OK with what I do for 5 years, an 80% to 90% correct interpretation to stock/bonds for 10 years and that is about it. Our world is in such a state of flux that the economic arena after 10 years maybe something no one has ever seen. It IS necessary to provide some criteria to consumers for retirement, but it must be a range of numbers.


But the current 5 or 10 years by the industry defies credulity. What’s the problem there? If an advisor accepts the fiduciary status, can they use a calculator?  Series 7 reps are not taught how to use a financial calculator. And RIAs do not have to have that capability. So the ability- more so the recognition- of the inputs used in the software programs used to determine risk and allocations merely becomes an exercise of rote acceptance of the computations and a simple printout of what to do. Was correlation addressed? Was Monte Carlo used? What inflation? What rate of return? What time frame?


Probably necessary to see if the basics were covered but here is a main issue. What was the consumer’s risk and how was it derived. The main criteria for investing and planning software is incapable of computing an acceptable allocation selection.

The software may show a graph pointing to conservative. So I ask you as a reader- ‘what does conservative mean.’ You probably would say that it cannot lose that much.

How about Moderate risk? Well, the simplistic comment is that it can lose more than conservative portfolio.

ETF., etc., for High risk and Speculative risk.

All software does a runaround regarding   risk  because  is no grasp of the Risk of Loss. If that is not the main focus for investing- and it is not- then the consumer questions and the subsequent (useless) consumer risk profile and the allocations therefore are suspect at best and wrong at the worst.


I have identified these areas that the DOL and ERISA rules don’t even remotely cover- mainly because the internal attorneys and outside counsel are clueless to risk. Why? Well, there is no education to Risk of Loss to attorneys. BUT THERE IS NO EDUCATION TO THE PLANNING/INVESTMENT/RETIREMENT PLANNING/LICENSING entities or to STATE OR GOVERNMENTAL REGULATORY overseers either. If one cannot define how much each category of consumer risk is apt to lose in a major economic upheaval, the foundation to allocations is wrong. I will end with this:


NEW Consumer Risk Profile:


Not an investor: No loss ever-certainly for a 10% loss basic correction ever


Conservative: Willing to assume losses up to 20%- 25%  (10% to 15% is a correction- up from 10% in the 1990s)


Moderate: Accepts losses to 45%


Aggressive: Accepts losses to 65%


Speculative: Accepts losses to 100%+ (leverage)  


If advisors for 401ks or involving ERISA rules cannot address the software inconsistencies (they are all different) then I do not know how a firm/advisor can be a fiduciary. They have to know risk of loss.

Garbage In; Garbage Out


PS (Arbitrators are not taught about risk either. Many arbitrations therefore are a farce.)  

1/9: Real Estate Funds dropped 6.16% in 2018

Real-estate-focused mutual funds and exchange-traded funds fell 6.16% on average for the year, due to a decline during the December market tumult, according to Lipper data. The S&P 500 index fell 6.24%.

there were 48 U.S. real-estate ETFs, with total assets of $66 billion, from 23 providers on three exchanges at the end of November 2018.

According to ETFGI data, the top five real-estated-focused ETFs are Vanguard Real Estate ETF (VNQ), followed by Vanguard Global ex-U.S. Real Estate ETF (VNQI), Schwab U.S. REIT ETF (SCHH), iShares Real Estate (IYR) and Real Estate Select Sector SPDR Fund (XLRE).

“Investors are using real estate in the form of ETFs to build out their portfolios, and further diversify without having to deal with any form of property management or upfront costs that other avenues of real-estate investing require,”

1/9: World Bank cuts forecast for world economic growth in 2019

the anti-poverty agency said Tuesday that it expects the world economy to grow 2.9 percent in 2019, down from the 3 percent it forecast back in June. It would be the second straight year of slowing growth: The global economy expanded 3 percent last year and 3.1 percent in 2017.

"Global growth is slowing, and the risks are rising," . "In 2017, the global economy was pretty much firing on all cylinders. In 2018, the engines started sputtering."

The bank left its forecast for the U.S. economy unchanged at 2.5 percent this year, down from 2.9 percent in 2018. It predicts 1.6 percent growth for the

19 countries that use the euro currency, down from 1.9 percent last year; and 6.2 percent growth for China, the world's second-biggest economy, versus 6.5 percent in 2018.

The bank upgraded expectations for the Japanese economy, lifting its growth forecast to 0.9 percent, up from 0.8 percent in 2018. (EFM- still a pittance)

1/9:             28 incredible 'Made in China' innovations that are changing the world

EFM- these are absolutely incredible and you must see each one. A 3D printable car. Drone 'helicopter'. First installed rail gun. Huge floating solar 'farm'. Some just blow you away!   

1/8:  Americans are overconfident about retirement

Sixty four percent of workers surveyed said they’re very or somewhat confident about their financial prospects in retirement, up from 60% in 2016. Confidence was even higher among those closest to quitting time: 71% of workers aged 55 and older professed confidence they’ll have enough money to live comfortably in retirement.

EFM- that's ludicrous. The optimism is not going to be justified

“There’s an incredible amount of overconfidence out there, based on erroneous assumptions about what life will be like after retirement,” says Jack VanDerhei, EBRI’s research director. “Many people may be in for an unexpectedly rough ride when the reality of retirement sets in.”

Older workers are more likely to have done some retirement prep than younger colleagues, as you’d expect, but not nearly enough, the survey showed. Only about half of the workers 55 and up had roughed out how much they’ll need to have saved, what their costs will likely be or how much monthly income they’ll need to cover those bills. Worse, just 37% had thought about how much to tap savings for living costs in retirement and a mere 28% had forecast their estimated health care expenses.

EBRI found that 43% of workers 55 and older have less than $100,000 in savings and investments, and just 38% have $250,000 or more.

That low level of savings helps explain why the percentage of workers who are very confident about their retirement prospects (as opposed to the combined numbers for “very” and “somewhat” confident) are actually quite low. Only 17% said they were “very confident,” down from 18% a year ago.

1/8:  Retirement Confidence Survey  

The Retirement Confidence Survey (RCS) gauges the views and attitudes of working-age and retired Americans regarding retirement, their preparations for retirement, their confidence with regard to various aspects of retirement, and related issues. The RCS is the longest-running survey of its kind and is conducted annually by the Employee Benefit Research Institute (EBRI) and the independent research firm Greenwald & Associates.

The 2018 survey of 2,042 Americans ages 25 or older was conducted online January 3 through January 16, 2018. The survey includes 1,002 workers and 1,040 retirees. Data were weighted by age, sex, and education. The margin of error is ± 3.16 percentage points for all workers and ± 3.10 percentage points for all retirees.


a screenshot of a cell phone: Traffic 2

1/7: Gary Shilling Sees 66% Chance of Recession in 2019

He recommends "defensive" stock sectors, long-term Treasuries and a "heavy cash position."

EFM- If one had used my Process, you would already been in cash. But you would have lost 12% from the top of the S&P several months ago. We'll see how this all plays out

1/7: Read the Kiplinger article to understand my comment

RE: .....'his life was changed, and his future set, when he was inspired by playing a stock simulation game in high school'.
The stock market game is a sham. It is a 'game' oriented toward trading as much as possible with the intent of beating another team for bragging rights. In terms of financial literacy of the industry- there has never been a requirement to learn how to use a financial calculator. 
Further yet, very few brokers, RIAs, are ever taught diversification by the numbers. Say what? How many stocks do you have to have in a portfolio in order to insulate it from unsystematic risk? More colloquially, how many stocks do you need to be properly diversified? It has a range from 50 to 350 (depends on the underlying risk). Does anyone think that risk (or any others for that matter) are fully explained to investors........

I do not dismiss learning about bank accounts, credit ratings etc- the very basics of every day life. Absolutely mandatory. But the basic knowledge to recognize the risks of loss has rarely been addressed even to those that 'profess their knowledge of personal finances'.

Just for clarity, I have taught most all securities licenses, insurance retirement et al as well as CFP courses, etc. Risk should be the criteria necessary to invest. Ain't happening.


·        Podcast on Pain Management: A Crisis With No End in Sight

·        Perspectives from the Social Sciences: Critically Engage Public Health

·        Pain Management and Public Health -- Introduction to the Special Section

·        Pain Management and Opioid Regulation: Continuing Public Health Challenges

·        Where is the Opioid Use Epidemic in Mexico? A Cautionary Tale for Policymakers South of the U.S.-Mexico Border

Effect of Remediating Blighted Vacant Land on Shootings: A Citywide Cluster Randomized Trial



India’s railroads had 63,000 job openings. 19 million people applied.

The recruitment effort is a potent sign of the country’s employment troubles. India has one of the fastest-growing major economies in the world, but it is not generating enough jobs — let alone good jobs — for the increasingly educated young people entering the labor force.

1/6: OIL   

Bullish sentiment has returned to oil markets in 2019, with Saudi Arabia cutting production while China and the U.S. look to end the trade war.

1/6: An omen???

Chinese manufacturing had an even worse December than expected, darkening the mood for global equities. The Caixin/Markit Manufacturing PMI fell to 49.7 from 50.2 in November, dropping below the critical 50 level that separates growth from contraction. Later in the week, a market rebound took hold after China's commerce ministry announced that vice ministerial-level trade talks with the U.S. would be held on Jan. 7-8.

1/6: No more a CORE investment????

There's more bad news for Apple, which cut its quarterly revenue forecast for the first time since 2007. Qualcomm (NASDAQ:QCOM) has taken steps to enforce a court order banning the sale of some iPhone models in Germany, a move that will likely see the models pulled from local store shelves. Apple shares have fallen by 39.1% since Oct. 3 and the tech giant now registers in fourth place in the market cap standings, behind Microsoft

A father told his 3 sons when he sent them to the university, “I feel it’s my duty to provide you with the best possible education, and you do not owe me anything for that. 

However, I want you to appreciate it.  As a token, please each put $1,000 into my coffin when I die.”

And so it happened.  His sons became a doctor, a lawyer and a financial planner, each very successful financially. 

When their father’s time had come and they saw their father in the coffin, they remembered his wish.

First, it was the doctor who put ten $100 bills onto the chest of the deceased.

Then, came the financial planner, who also put $1,000 there.

Finally, it was the heartbroken lawyer’s turn.  He dipped into his pocket, took out his checkbook,

wrote a check for $3,000, put it into his father’s coffin, and took the $2,000 cash.-

He later went on to become a member of Congress...

1/6:  5 Lessons on Dealing with a Spouse with Cancer

Life is short

While my husband David did not die from his cancer, his diagnosis did introduce the stark reality of what could happen. Statistically speaking, my 55-year-old husband had a 50-50 chance of dying from his Stage IV oral cancer. That sobering statistic put everyday annoyances in perspective. In light of that, things that might previously have ignited an argument between us became inconsequential in comparison.

Spousal relationships should come first

For most of my marriage, I failed miserably at this. I immersed myself in mothering babies and toddlers and, as the parents of eight children, we were often struggling financially. I was so busy juggling bills and babies, I had no time to work on my marriage. The turning point in our relationship came after a long day of chemotherapy and radiation, when my husband collapsed in a chair in our living room, completely and utterly exhausted. I knelt down in front of him, removed his socks and shoes, and began rubbing his feet. When I looked up, there were tears in his eyes. In 27 years of marriage, I had never touched his feet. For the first time in a long time, maybe ever, I was putting my husband first. From that point on, I made a concentrated effort to consider David’s needs before my own. Doing so prompted him to reciprocate. In the ensuing years, we enjoyed an extraordinary relationship—a true partnership in every sense of the word.

Communication is key to a good relationship

For eight of the 11 days he was in the hospital after surgical removal of the tumor on the back of his tongue, my husband was unable to speak because of a tracheotomy. He struggled to communicate by writing with a shaky hand on a dry erase board. Ironically, alone with my husband in that hospital room, away from the cacophony of a house full of children, and despite being robbed of his speaking ability, David and I learned what it was to effectively communicate. In order to understand his needs,

I had to pay attention to David’s body language, becoming sensitive to the unspoken meaning behind his hand gestures, leg movement, or his facial expressions. With the removal of his tracheotomy tube, my husband’s voice was gravely and sometimes difficult to understand. His old voice never returned, and neither did our dysfunctional communication skills. We abandoned our old patterns of blaming and misunderstanding. I can remember only two instances in the ensuing five years that we even exchanged strong words, and then we immediately apologized. Surely with counseling and dedicated hard work, we could have changed destructive patterns in our marriage long before; but without the impetus of cancer, I’m not sure we would have. Which brings us to the next point.

Good can come from something inherently bad

I hate cancer. Cancer took my mother in 2010 and my eight-year-old grandson in 2013. But the fact remains that it was the shared experience of my husband’s illness that my marriage relationship was revitalized. Many times after his cancer my husband would look over at me, reach for my hand and say, “If it was cancer that made our marriage what it is today, then I am glad for the cancer.” I will always be grateful for the “bonus years” I shared with David those five and a half years after his treatment.

Life can change in an instant

Anyone who has received a cancer diagnosis holds an indelible memory of the moment the words “You have cancer” were uttered. Their life changed in that instant. My spouse’s diagnosis made me realize just how much I loved him. Hearing those words, I made an instantaneous decision to become the best caregiver possible. As for my husband, post-cancer he cherished each and every moment of life as the gift that it is. I will never forget his response to my question the day before his 60th birthday. “Does it bother you? This birthday ending in zero?” His answer was “No. Think of the alternative.” David didn’t live to see his 61st birthday. He died unexpectedly from heart failure the day before, just a few months after he’d celebrated his five-year cancer survival.

I don’t mean to trivialize either cancer or the caregiving experience. David’s treatment was grueling. He went through a radical surgery, followed by a regimen of radiation, chemotherapy, and a clinical trial drug. He seemed to age 10 years in 10 months. As his caregiver, I did things I never imagined doing: cleaning open wounds, changing bloody dressings, and feeding my husband through a tube in his stomach. I drove David to appointments, sat with him every Wednesday during his chemotherapy treatments, and watched my sturdy, strong husband get thinner and weaker every day. But what transpired in our marriage relationship during those months still amazes me. David died knowing he was truly loved, and I was left with the memory of what it was to share a true partnership with a spouse.

1/3: Climate change and the Caravan

Over the next 20 years, 4,000,000 migrants will go to the U.S.

Short video from the Financial Times

1/3 Very important