Apologies for errors on site recently. Am working on it.

Errold. F. Moody Jr.

click above for bio


Financial and Economic Daily Commentary 2019

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
  ain 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

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



Your premium is also credited with a minimum guaranteed interest rate, meaning your cash value is guaranteed to grow each month. And if your clients were to tire of the product, they have the option to request for a full return of your single premium – providing an increased level of flexibility that most clients are looking for.

Help your clients utilize an existing asset – whether that be money set aside in CDs, savings accounts, or other liquid funds – as the funding.

  • Your client’s premiums will never increase
  • The amount of death/ long-term care benefits are guaranteed
  • Their money earns interest with a minimum guaranteed interest rate
  • They will never outlive their plan benefits when you select the optional Lifetime Benefit feature
  • LTCi benefits are received income-tax free
  • Interest accumulation is tax-deferred
  • Life Insurance benefit, if unused for LTCi purposes, is payable on a tax-free basis
  • One policy can cover an individual or joint insureds – including spouses, partners, siblings, and even parents/ siblings
  • Funding sources can include: CDs, money market accounts, cash, life insurance cash value, annuities, and qualified assets
  • Typically designed as a single premium, but clients can pay premiums for 1 to 20 years, or even lifetime payments on a guaranteed level basis

“Recession” conjures up specters of 2007-2009, the most severe business downturn since the 1930s in which the S&P 500 Index plunged 57 percent from its peak to its trough. The Fed raised its target rate from 1 percent in June 2004 to 5.25 percent in June 2006, but the main event was the financial crisis spawned by the collapse in the vastly-inflated subprime mortgage market.

Similarly, the central bank increased its policy rate from 4.75 percent in June 1999 to 6.5 percent in May 2000.  Still, the mild 2001 recession that followed was principally driven by the collapse in the late 1990s dot-com bubble that pushed the tech-laden Nasdaq Composite Index down by a whopping 78 percent. (EFM- Mild?? The losses totaled 49%)

The 1973-1975 recession, the second deepest since the 1930s, resulted from the collapse in the early 1970s inflation hedge buying of excess inventories. That deflated the S&P 500 by 48.2 percent. The federal funds rate hike from 9 percent in February 1974 to 13 percent in July of that year was a minor contributor.

The remaining eight post-World War II recessions were not the result of major financial or economic excesses, but just the normal late economic cycle business and investor overconfidence. The average drop in the S&P 500 was 21.2 percent.

EFM- I thought last year that there would only be 3 increases in interest rates for 2018. There were four. With less confidence I felt there would only be two increases in 2019. The FED now says none. I also felt that a  recession was possible in late 2019. Schilling feels that the upcoming recession will drop stock prices to around 20% since there is no major upheavals embedded in the economy- tech in 2000, the real estate in 2008. But if the U.S. coughs- the world catches cold. From Brexit, China, Russia, North Korea, Venezuela, Iraq, Trump- I think this could break  normalcy and cause a greater drop. 

The spread, or yield curve, between the three-month and 10-year Treasury notes just broke the longest streak ever of being above 10 basis points, or 0.1 percentage points. The two maturities were last below that level in September 2007, a run of 3,009 trading days, according to Bespoke Investment Group. In Thursday afternoon trading, the spread was just 5 basis points, or as close to inversion as just before the financial crisis.

EFM- there is an excellent graph showing how the curve has looked most recently

3/24: Midwest flooding

Floodwaters have devastated farmers and rural towns in the Midwest, forcing difficult questions for many people about whether they will stay loyal to a home they love. With climate change making extreme weather events more common, many Americans now see an unforgiving Mother Nature that threatens their way of life with growing frequency.

But the increased flooding and severe weather is also emboldening some Midwesterners to become louder advocates for the help they need from politicians to protect their communities and livelihoods.

EFM- here is the problem. THERE IS NOT ENOUGH MONEY TO CORRECT THIS SITUATION. If the land is not lost right now, it will be a very short time coming. So what happens when New Orleans goes under? Does the government pay those in Houston that have lost their homes? Puerto Rico is still devastated. Is California going to lose farm land? Will the Sacramento area go under when the levies break? Yes. Can the levies be fixed now? Not really- there isn't enough money.



3/22: Brexit is delayed two months. Not sure it will make much difference.

Exceptional detail- not meant for the consumer. Actually, it will be difficult for all agents. But it will give you an idea just how manipulative an illustration can be (and are).

The specter of major flooding on the Mississippi River upstream from New Orleans is a more perilous situation now than in years past, some researchers believe. That's partly because the river floor has risen significantly higher over the years as sediment has collected in the river bottom,

The situation is so serious that Xu believes a "mega flood" could overpower a giant flood control structure north of New Orleans and send the Mississippi River rushing down another path entirely and creating a new route to the Gulf of Mexico. That would allow the Gulf to push saltwater upstream into the river, ruining the drinking water supply for metropolitan New Orleans,

EFM- considering bomb cyclones et al, this may be a serious outlier- but one that must be rationally considered. Unfortunately, there is not enough money to protect from Mother Earth who is obviously pissed as to what we have done to her property.

3/21: Just another reason why South America is just too volatile to invest in.

Former Brazil president arrested on corruption charges

Michel Temer, who immediately preceded current President Jair Bolsonaro, was taken into custody in Sao Paulo.

3/21: Another Alzheimer's failure

US pharmaceuticals company Biogen and its Japanese partner Eisai have announced they will cease clinical trials for a  Alzheimer’s disease treatment,

EFM- I am not aware of any drug that has truly helped these patients

3/20: US debt

The U.S. national debt has crossed $22 trillion — the highest ever. In the first four months of the 2019 fiscal year (October 2018-January 2019), the federal budget deficit ballooned to $310 billion, up 77% from the same time last year, as revenues fell 2% to $1.1 trillion and spending rose 9% to $1.4 trillion,

In calendar 2018, the budget deficit grew to $873 billion, 28% over that of 2017. The culprit was lower tax revenues after the passage of the 2017 Tax Cuts and Jobs Act. That picture will worsen, the nonpartisan Congressional Budget Office (CBO) warned, projecting that the U.S. would add another $12.2 trillion in debt over the next decade to reach levels not seen since World War II in the 1940s.

big banks have not shrunk in size since the financial crisis of 2008, and shows that the banks have also remained complex, despite a drive to reduce instability risks by simplifying the financial system.

“Simplification of bank complexity was one of the policy priorities of the post-crisis period,” the paper said. “Regulatory frameworks continue to focus on limiting the risk of failure by improving risk absorption capabilities and on improving resolution mechanisms for dealing with these BHCs in the event of failure. Some forms of BHC complexity significantly declined, even while the largest of the large remain highly complex on organizational, business, and geographic dimensions,” it said.

EFM- So will there be another run on the bank with the next recession??

3/20: Sit stand, then fall down

lower yourself to the floor, crisscross style, without bracing yourself with your hands, knees, arms, or sides of your legs. If you can stand back up, again without the aid of those body parts, you’ve scored a perfect 10 (five points for sitting, five points for standing). You lose a point every time you support yourself with a forbidden joint or appendage.

The researchers tested 2,002 adults 51 to 80 years old, and then followed them until a participant died or until the study concluded, which was a median of 6.3 years. In that time, 159 people died — only two of whom had scored a perfect 10. Those who had the lowest score of zero to three points had a risk of death that was five to six times higher than those who scored eight to 10 points.

“It is well known that aerobic fitness is strongly related to survival, but our study also shows that maintaining high levels of body flexibility, muscle strength, power-to-body weight ratio and co-ordination are not only good for performing daily activities, but have a favorable influence on life expectancy,”

The current target allocation is 30.5% domestic large-cap equities, 28% fixed income, 11% international equities, 10% real estate, 7% infrastructure, 5% emerging markets equities, 4.5% domestic midcap equities and 4% domestic small-cap equities.

This is not aht different from Sept 2018-
As of Sept. 30, the actual allocation was 30.9% domestic large-cap equities, 27.8% fixed income, 11.9% international equities, 10.4% real estate, 6.4% infrastructure, 4.6% domestic midcap equities, 4.3% emerging markets equities, 3.3% domestic small-cap equities and 0.4% cash.


In 2017, Americans spent $3.5 trillion on health care — a level nearly equal to the economic output of Germany, and twice as much as other wealthy countries spend per person, on average. Not only is this a problem for the people seeking care; it’s also a problem for the companies they work for. Currently, about half of Americans are insured through an employer, and in recent years companies have borne the financial brunt of rising costs. Frustrated, many employers have shifted the burden to workers, with average annual deductibles rising by more than 50% since 2013.

Warren Buffett has even gone so far as to argue that health care costs hamper economic competitiveness more than taxes do.

The fundamental economics of the global life insurance industry are broken, with distribution consuming an increasing share of the industry’s total economic value, particularly compared with customers’ declining share. After decades of limited innovation, traditional distribution is on the cusp of meaningful change—especially in the agency channel—which will unlock benefits for all stakeholders.

Of course, transformational change is not so easy to accomplish. Agents have historically been resistant to change, significant amounts of technology and innovation are required, and some carriers still struggle to separate the performance of new business from that of the in-force book.

In today’s newsletter, we will take a quick look at some of the critical figures and data in the energy markets this week. 

We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.

Investor Alert: Make sure you don't miss out on Tomorrow's new and improved Oil & Gas Insider, where we tackle the implications of China's global energy investment strategy. Sign up today for your free trial.

-    U.S. natural gas production
soared to a new all-time high in 2018, rising by a massive 10 billion cubic feet per day (Bcf/d), an 11 percent increase from the year before. 

-    The increase was the largest ever recorded in a single year. 

-    Natural gas exports jumped to 9.9 Bcf/d, up 14 percent from the year before. That figure includes both pipeline and LNG exports. LNG exports rose by 53 percent to 3 Bcf/d.

China’s second-highest official after President Xi Jinping, said at his annual news conference that the answer lay in cutting corporate taxes and deregulation, and not a return to the strategy during previous downturns of printing money and ramping up government spending. However, recently released economic data has suggested that the government is indeed turning to monetary expansion and heavy infrastructure investments in an effort to stabilize growth.

We used to believed that “traditional” autocratic governments were devoid of grand theories about society and, for the most part, left their people alone. Unlike communist governments, they had no universalist pretensions, no anti-liberal “ideology” to export. Though hostile to democracy at home, they did not care what happened beyond their borders. They might even evolve into democracies themselves, unlike the “totalitarian” communist states. We even got used to regarding them as “friends,” as strategic allies against the great radical challenges of the day: communism during the Cold War, Islamist extremism today.

Today, authoritarianism has emerged as the greatest challenge facing the liberal democratic world — a profound ideological, as well as strategic, challenge. Or, more accurately, it has reemerged, for authoritarianism has always posed the most potent and enduring challenge to liberalism, since the birth of the liberal idea itself. Authoritarianism has now returned as a geopolitical force, with strong nations such as China and Russia championing anti-liberalism as an alternative to a teetering liberal hegemony. It has returned as an ideological force, offering the age-old critique of liberalism, and just at the moment when the liberal world is suffering its greatest crisis of confidence since the 1930s. It has returned armed with new and hitherto unimaginable tools of social control and disruption that are shoring up authoritarian rule at home, spreading it abroad and reaching into the very heart of liberal societies to undermine them from within.

EFM- Look for the inverted yield curve. And


Gideon v. Wainwright (1963) Supreme Court decision  granted poor criminal defendants the right to have a lawyer represent them in court in state criminal cases even if they could not afford one

do poor defendants actually receive equal justice? While the courts have mandated representation for all, the dictate for equality before the law remains a lofty ideal, not a reality.

EFM- The more money you have, the better the attorney, the better you will be received in court. And the better the resolution.

"Pollution is disproportionately caused by whites, but disproportionately inhaled by black and Hispanic minorities," the study said.

Poor air quality remains the largest environmental health risk in the United States, the study warns. In fact, with 100,000 deaths per year, more Americans die from air pollution than car crashes and murders combined.

“Even though minorities are contributing less to the overall problem of air pollution, they are affected by it more,” said study co-author Jason Hill, an engineering professor at the University of Minnesota, who is white. “Is it fair (that) I create more pollution and somebody else is disproportionately affected by it?” 

Hill said that while the air in the U.S. has gotten cleaner in the past decade, pollution inequity has remained stubbornly high.

"What is especially surprising is just how large pollution inequity is and has been for well over a decade,"

Nearly half of Americans surveyed (48 percent) mistakenly believe all financial advisors are required by law to always act in their clients’ best interest, according to new data from leading digital wealth manager Personal Capital. In its 2019 Financial Trust Report, released today, Personal Capital also revealed that 65 percent of investors who work with a financial advisor incorrectly believe that financial advisors only make recommendations that are in a client’s best interest, an increase from 46 percent in 2017.

nearly one in three Americans surveyed (30 percent) think a financial advisor is likely to take advantage of a consumer, almost all (97 percent) trust that their own financial advisor will act in their best interests.

Underscoring the lack of awareness around advisors’ legal obligations to their clients, nearly one in five investors surveyed (18 percent) were unable to identify if their advisor is a broker/dealer or a fiduciary. The 26 percent who indicated their advisors are broker/dealers should reconsider whether they are receiving unbiased financial advice.

When investing their money, the survey found Americans are most likely to trust a Registered Investment Advisor (28 percent), followed by a big bank/brokerage firm (21 percent), a local advisory company (14 percent) and an online platform or mobile application that offers financial advice (8 percent) with their money, though one in three Americans wouldn’t trust any of the listed options.

The model also factored in 79 "drivers" of health, such as smoking, body mass index (obesity) , clean water and good sanitation conditions, along with other variables, such as fertility measurements, income and education. Then, the researchers plugged in numbers to predict three separate scenarios: a "most-likely" forecast, a "better-health" scenario and a "worse-health" scenario.

The "most-likely" scenario, the top eight causes of early death in 2040 are expected to be ischemic heart disease, stroke, lower-respiratory infections, chronic obstructive pulmonary disease (a lung disease that blocks airflow), chronic kidney disease, Alzheimer's disease, diabetes and road injuries.

In this scenario, the life expectancy in the U.S. is projected to be 79.8 years in 2040, up only 1.1 years from the 2016 estimate, the researchers found. Other parts of world would see greater improvements, however; for example, life expectancy in Syria is predicted to rise from 68.2 years in 2016 to 78.6 years in 2040, and in Equatorial Guinea it's predicted to rise from 65.6 years in 2016 to 75.9 years in 2040.

Life expectancy is also projected to exceed 85 for both men and women in Japan, Singapore and Spain and to top 80 in 59 other countries, including China.

On the one hand, accelerating technology provides a great opportunity to push toward the "better" scenario, while an absence of policy action could thrust the world into the "worse" scenario.

Under the "better-health" scenario, men could gain an additional 7.8 years, on average, in life expectancy by 2040 and women could gain 7.2 years, on average. What's more, life expectancies in 158 countries would increase by at least five years, and 46 of those countries would see increases of at least 10 years, according to the report..

Under the "worse-health" scenario, on the other hand, life expectancy is projected to go down in nearly half of the countries examined, the report found. Perhaps most striking, the authors wrote, is that deaths from HIV/AIDS could increase by 120 percent in this scenario.

The key health drivers that can lead to early death are high blood pressure, high body-mass index, high blood sugar, and tobacco and alcohol use,

3/17: Life expectancy in England

"We're positioning ourselves for the back half of the year for a weaker consumer,"

the “2017/2018 Willis Towers Watson Global Benefits Attitude Survey,” which showed a clear relationship between employees' financial worries and their work performance, engagement levels, and record of absences. Specifically, the survey revealed that employees who were struggling financially lost 41% more work time to absence than peers without financial worries, had lower engagement levels than their peers without financial worries (51% vs. 29%), and were less productive than their peers without financial worries (32% vs. 5%).

of this analysis showed that 24% of the employees had high stress levels, 33% were experiencing medium stress levels, and 43% had low stress levels. Additional analysis indicated that middle-aged employees (aged 35-54) were far more likely to be in the high and medium financial stress groups than their younger (aged 18-34) and older (aged 55+) counterparts.

employers are increasingly taking a holistic view of employee well-being, and are developing strategies that both engage and appeal to their employees. For example, they noted, 55% of respondents in 2018 said they provide access to telemedicine, up sharply from just 24% of respondents surveyed in 2016; and another 14% anticipate adopting telemedicine by 2020.

The survey also found that significant shares of employers are improving their health care benefits, with 22% of respondents indicating that they offer employees three medical insurance plans, and 13% reporting that they offer four or more options. The survey also found that the share of respondents who said they made health savings accounts (HSAs) available to employees rose to 24% in 2018, up two points from 2017.

The findings also showed that having more family responsibilities was associated with higher stress levels. For example, researchers noted, 69% of the high-stress group, but just 42% of the low-stress group, had children; and more than a quarter of the high-stress group, but only 10% of the low-stress group, were single household heads.

The relationship between financial stress and time lost to absence was measured by employees' use of sick days, unpaid leave, and non-pregnancy-related disability leave. The results indicated that for every one absence day taken by the employees with low stress levels, the employees with high stress levels took 1.75 absence days, and the employees with medium stress levels took 1.37 absence days.

employers are looking for ways to reduce medical expenses by, for example, offering preventive care benefits such as flu shots, tobacco cessation programs, health risk assessments, and biometric screenings. Moreover, the share of respondents who indicated that they offer disease management programs designed to help employees with chronic conditions better control their health outcomes increased to 38% in 2018, up nine points from 2017; and another 17% said they plan to start offering these programs by 2020.

The survey also found that the share of employers who rated their health benefits as competitive within their industry or region increased in 2018 to 74%, up from 71% in 2017; but that employees' satisfaction levels with their health options did not change. Researchers speculated that the expense of family health coverage might explain this pattern, as a much smaller percentage of respondents said they believe their family health coverage is affordable (53%) than said they think their individual coverage is affordable (81%).

Researchers observed that as employers are recognizing that financial stressors can negatively affect productivity in organizations, they are increasingly providing financial well-being programs that prepare employees to make better saving and spending decisions. In 2018, 62% of respondents reported offering employees access to financial advisors, and 47% indicated they provide financial literacy education. In addition, 43% of 2018 respondents reported that they are taking steps to measure employee retirement readiness, compared to just 33% in 2016.

46% of the employers surveyed in 2018 said they provide tuition assistance, up from 42% in 2017. Moreover, 82% of respondents said they offer their employees the opportunity to connect with the charitable causes they champion through volunteering.

3/17: Nuclear threat North Korea is considering dropping nuclear talks with the US and restarting missile launches and nuclear tests just weeks after Donald Trump walked out of denuclearisation talks with Kim Jong Un.

EFM- This divorce could get messy with worsening rhetoric about Little Rocket Man.

The number of reports of financial fraud against older adults has quadrupled since 2013, with 63,500 filed reports describing more than $1.7 billion in actual losses or attempted thefts in 2017,

The average loss in 2017 was $34,200, although 7% of victims lost more than $100,000 each.
  • One-third of those who lost money were aged 80 or more years, losing an average of $39,200.
  • 52% of the reports involved money transfers, with an average loss of $32,800.
  • 44% of the reports involved checking or savings accounts, the type of financial product with the highest average monetary loss: $48,300.
  • Losses were greater when the older adult knew the suspect, averaging $50,000 compared with $17,000 when the victim did not know the alleged perpetrator.
  • In more than two-thirds of cases, financial institutions do not appear to be reporting elder financial exploitation to law enforcement or adult protective services, according to the report. “This is a missed opportunity to increase investigation and prosecution, and to make it more likely that victims will receive appropriate services,” the authors wrote.

Elephant Queen

Queen Tusker
She is truly impressive

women of all ages suffer depression at rates two to four times higher than men. But a study in the journal Maturitas finds that many women shed their depression as they move from their mid-40s into their 60s.

The drop in negative moods ushered in a drop in the prevalence of depression: 23 percent of the 60-year-olds in the study were depressed but only 15 percent of the 70-year-olds.

3/14: Healthcare increases

Nationwide, health expenditures are projected to grow by 5.5 percent annually from 2018 to 2027, more than twice the rate of inflation, according to a new study by the Centers for Medicare and Medicaid Services. But unionized auto workers enjoy some of the most generous medical coverage plans in the country and have been spared premium increases.

The UAW sees that as a hard-won benefit that helps make up for concessions to automakers in other areas. But automakers view these gold-plated worker plans as a growing burden that puts them at a disadvantage against rivals with non-unionized factories.

3/14: Drug overdose

Overdoses from synthetic opioids, such as fentanyl, which is 50 times more powerful than heroin, claimed 67,000 lives between 2013 and 2017.

U.S. consumer prices rose for the first time in four months in February, but the pace of the increase was modest, resulting in the smallest annual gain in nearly 2-1/2 years.

The Consumer Price Index increased 0.2 percent, lifted by gains in the costs of food, gasoline and rents. The CPI had been unchanged for three straight months.

The Fed, which has a 2 percent inflation target, tracks a different measure, the core personal consumption expenditures (PCE) price index, for monetary policy.

The core PCE price index increased 1.9 percent on a year-on-year basis in December after a similar gain in November.

Fed Chairman Jerome Powell on Sunday reiterated the central bank’s wait-and-see approach to further monetary policy tightening this year. Powell said the Fed did “not feel any hurry” to change the level of interest rates again.

Factors, advisors believe, will impact their businesses over the next 10 years.

EFM- It says NEXT decade. Covering two decades, the list might start with climate change, artificial intelligence, changing workplace dynamics and the medical advancement. By 2040 you should see lifespans dropping.

Flood insurance premiums could rise and property values fall in the most deluge-prone areas under a plan the Trump administration intends to roll out in coming weeks to change the way risk is calculated under the National Flood Insurance Program.

Use private-sector data to calculate flood threat for each home

Instead of simply focusing on whether a home is inside or outside of the 100-year flood plain, the Federal Emergency Management Agency plans to use private-sector data to calculate the real flood threat for each home and set costs based on that data, according to people familiar with the effort and a briefing document obtained by Bloomberg.

3/13: In today’s newsletter, we will take a quick look at some of the critical figures and data in the energy markets this week. 

We will then look at some of the key market movers early this week before providing you with the latest analysis of the top news events taking place in the global energy complex over the past few days. We hope you enjoy.

Investor Alert: Make sure you don't miss out on Thursday's new and improved Oil & Gas Insider, where we tackle the bearish implications of bullish news in the oil markets. Sign up today for your free trial.


-    The U.S. saw electricity consumption rise to an all-time high in 2018 at 4,178 million megawatthours, according to the
EIA. That was a 4 percent increase from the year before.

-    The previous peak was in 2007, so it took until last year to bring consumption levels back to the pre-recession peak.

-    Weather is a key factor. The higher levels in 2018 are largely due to a hot summer and cold winter.

3/12: May fails to get a Brexit vote.
This is an absolute mess just before the formal exit is to take place. With no agreement so far- well I actually cannot imagine the international ramifications.     nmiaes:Ma May

When considering a fund's volatility, an investor may find it difficult to decide which fund will provide the optimal risk-reward combination. Many websites provide various volatility measures for mutual funds free of charge; however, it can be hard to know not only what the figures mean but also how to analyze them. Furthermore, the relationship between these figures is not always obvious. Read on to learn about the four most common volatility measures and how they are applied in the type of risk analysis based on modern portfolio theory.

Optimal Portfolio Theory and Mutual Funds

One examination of the relationship between portfolio returns and risk is the efficient frontier, a curve that is a part of the modern portfolio theory. The curve forms from a graph plotting return and risk indicated by volatility, which is represented by standard deviation. According to the modern portfolio theory, funds lying on the curve are yielding the maximum return possible given the amount of volatility.

Curve demonstrating the maximum expected return given the risk for a given investment.

As standard deviation increases, so does the return. In the above chart, once expected returns of a portfolio reach a certain level, an investor must take on a large amount of volatility for a small increase in return. Obviously portfolios with a risk/return relationship plotted far below the curve are not optimal since the investor is taking on a large amount of instability for a small return. To determine if the proposed fund has an optimal return for the amount of volatility acquired, an investor needs to do an analysis of the fund's standard deviation.

Modern portfolio theory and volatility are not the only means investors use to analyze the risk caused by many different factors in the market. And things like risk tolerance and investment strategy affect how an investor views his or her exposure to risk. Here are four other measures. (For related reading, see: What Is Your Risk Tolerance?

1. Standard Deviation

As with many statistical measures, the calculation for standard deviation can be intimidating, but because the number is extremely useful for those who know how to use it, there are many free mutual fund screening services that provide the standard deviations of funds.

The standard deviation essentially reports a fund's volatility, which indicates the tendency of the returns to rise or fall drastically in a short period of time. A volatile security is also considered higher risk because its performance may change quickly in either direction at any moment. The standard deviation of a fund measures this risk by measuring the degree to which the fund fluctuates in relation to its mean return.now

A fund with a consistent four-year return of 3%, for example, would have a mean, or average, of 3%. The standard deviation for this fund would then be zero because the fund's return in any given year does not differ from its four-year mean of 3%. On the other hand, a fund that in each of the last four years returned -5%, 17%, 2% and 30% would have a mean return of 11%. This fund would also exhibit a high standard deviation because each year the return of the fund differs from the mean return. This fund is therefore riskier because it fluctuates widely between negative and positive returns within a short period. (For related reading, see: 4 Things That Make a Stock a Risky Bet.)

Remember, because volatility is only one indicator of the risk affecting a security, a stable past performance of a fund is not necessarily a guarantee of future stability. Since unforeseen market factors can influence volatility, a fund with a standard deviation close or equal to zero this year may behave differently the following year.

To determine how well a fund is maximizing the return received for its volatility, you can compare the fund to another with a similar investment strategy and similar returns. The fund with the lower standard deviation would be more optimal because it is maximizing the return received for the amount of risk acquired. Consider the following graph:

Graph showing the efficiency of two S&P 500 funds, with fund A being the optimal risk to return ratio.

With the S&P 500 Fund B, the investor would be acquiring a larger amount of volatility risk than necessary to achieve the same returns as Fund A. Fund A would provide the investor with the optimal risk/return relationship. (For more, see: The Uses And Limits Of Volatility.)

2. Beta

the amount of seafood that humans could sustainably harvest from a wide range of species shrank by 4.1 percent from 1930 to 2010, a casualty of human-caused climate change.

“That 4 percent decline sounds small, but it’s 1.4 million metric tons of fish from 1930 to 2010,”

Scientists have warned that global warming will put pressure on the world’s food supplies in coming decades. But the new findings — which separate the effects of warming waters from other factors, like overfishing — suggest that climate change is already having a serious impact on seafood.

3/10:  China lowers growth target China has lowered its target for economic growth in 2019 from 6.5 per cent to between 6 and 6.5 per cent, blaming in a rare admission the impact of the trade war with the US. Asia-Pacific equities dipped into negative territory on Tuesday morning on the news.


Value of Risky Lifestyle Choices" Fee Download
CEPR Discussion Paper No. DP13537

CHLOE MICHEL, University of Zurich, Students
Email: chlomich@gmail.com
University of Mannheim
Stony Brooke University

Using data from the Panel Study of Income Dynamics on breast cancer diagnosis and lifestyle choices, we estimate how being diagnosed influences smoking, drinking, and exercising habits for more than 9,000 women over the period 1999 to 2011. These data allow us to learn more about the trade-offs women are willing to make between participating in unhealthy (but enjoyable) habits and increasing one's life expectancy. Our parameter estimates indicate that the impact of diagnosis has a different effect on smoking, drinking, and exercising behavior, and the impact also depends upon the recency of the diagnosis. We find that recently diagnosed women exercise and smoke less but do not change their drinking habits relative to healthy women. These changes are not always consistent with public information on cancer risk factors, but are rationalized after considering that lifestyle choices increase the utility of living. For a woman diagnosed with breast cancer, our results indicate that a woman will smoke only if the value placed on smoking is greater than 6% of the total utility from being alive. We find the threshold is lower for drinking where drinking has a positive impact on the value of life if the value placed on drinking is greater than 3% of the total utility from being alive. Finally, a woman with breast cancer will find it valuable to engage in exercise even when it brings disutility of 3% of the value of living. Using conventional estimates for the value of a year of life, we find that these choices  imply that, per year, women value smoking at about $49,000 for smokers, drinking at about $29,500 for drinkers, and exercising at about $28,200 for exercisers.

I couldn't agree more


"Brave Boys and Play-it-Safe Girls: Gender Differences in Willingness to Guess in a Large Scale Natural Field Experiment" Fee Download
CEPR Discussion Paper No. DP13541

NAGORE IRIBERRI, Universidad del País Vasco (UPV/EHU)
Email: nagore.iriberri@gmail.com
Autonomous University of Barcelona

We study gender differences in willingness to guess using approximately 10,000 multiple-choice math tests, where for half of the questions, both wrong answers and omitted questions are scored 0, and for the other half, wrong answers are scored 0 but omitted questions are scored +1. Using a within-participant regression analysis, we find that female participants leave significantly more omitted questions than males when there is a reward for omitted questions. This gender difference, which is stronger among high ability and older participants, hurts female performance as measured by the final score and position in the ranking. In a subsequent survey, female participants showed lower levels of confidence and higher risk aversion, which may explain this differential behavior. When both are considered, risk aversion is the main factor explaining the gender differential in the willingness to guess. A scoring rule that is gender neutral must use non-differential scoring between wrong answers and omitted questions.


"Work of the Past, Work of the Future" Fee Download
NBER Working Paper No. w25588

DAVID H. AUTOR, Massachusetts Institute of Technology (MIT) - Department of Economics, National Bureau of Economic Research (NBER), IZA Institute of Labor Economics
Email: dautor@mit.edu

Labor markets in U.S. cities today are vastly more educated and skill-intensive than they were five decades ago. Yet, urban non-college workers perform substantially less skilled work than decades earlier. This deskilling reflects the joint effects of automation and international trade, which have eliminated the bulk of non-college production, administrative support, and clerical jobs, yielding a disproportionate polarization of urban labor markets. The unwinding of the urban non-college occupational skill gradient has, I argue, abetted a secular fall in real non-college wages by: (1) shunting non-college workers out of specialized middle-skill occupations into low-wage occupations that require only generic skills; (2) diminishing the set of non-college workers that hold middle-skill jobs in high-wage cities; and (3) attenuating, to a startling degree, the steep urban wage premium for non-college workers that prevailed in earlier decades. Changes in the nature of work—many of which are technological in origin—have been more disruptive and less beneficial for non-college than college workers.

3/7: Trade deficit

The Commerce Department said Wednesday that — despite more than two years of President Trump’s “America First” policies — the United States last year posted a $891.2 billion merchandise trade deficit, the largest in the nation’s 243-year history.

United States bought far more in foreign goods than it sold to customers in Africa, Asia, Europe and North America. The shortfall topped the 2006 record of $838.3 billion, set as the housing bubble was peaking, and marked the third consecutive year of rising deficits.

3/6:People in states where marijuana is legal are eating more cookies and ice cream

Specifically, chip sales increased 5.3%, while cookie sales climbed 4.1% and ice cream purchases increased 3.1% in the aftermath of legalization,

EFM: AND now we get more obesity in those states

3/6: This is a BIG deal.

Beijing promised to prop up its economy and protect foreign companies' technology secrets in a bid to cool trade tensions with the US.

EFM- Trump should get kudos for this. And I now think a reasonable trade deal is in the making- though many articles suggest otherwise.

3/6: Brain fog

Research shows that cognitive performance declines during winter and early spring.

Dr. Jicha followed three groups of older adults, giving the first two groups assignments of daily reading or origami-making. The third group wasn’t given specific instructions but told to maintain their normal routine. After just four weeks, the first two groups showed significant cognitive improvement.

“Both reading and origami boosted healthy brain waves and nerve cell synaptic interconnection,”

3/6: Not bad


Don't wait to lock in these rates!

5 year annuity

  Issue through age 90

Up to 5% Penalty Free Withdrawals
Full Value at Death

3/6: Will $14.5 billion plug GE's long-term care insurance hole? Some experts say 'No'
Alwyn Scott / Reuters

General Electric Co is setting aside one of the largest amounts ever to cover potential losses on policies that provide long-term care in nursing facilities and patients’ homes. But insurance experts are concerned that may not be enough.

GE shocked investors last year when it took a $6.2 billion after-tax charge and said it planned to set aside $15 billion over seven years to cover claims on some 300,000 long-term care policies written more than a decade ago, when actuaries did not yet know how costly the claims would become.

The costs, which far exceeded GE’s estimates, sent its shares tumbling, spurred an investor lawsuit and prompted the U.S. Securities and Exchange Commission to investigate.

Last week, GE provided new details about its insurance and scheduled a “teach in” for Thursday to give more information.

GE’s new reserves amount to about $55,000 per policy, in line with those of other long-term care insurers, according to an analysis for Reuters by Audit Analytics, an independent research company based in Massachusetts.

For comparison, Humana Inc has set aside $77,282 per policy, while Unum Group has set aside $10,614, Audit Analytics said.

3/5: China and Fentanyl

American law enforcement officials complain that China’s police are not crime fighters but rather protectors of the Communist Party

EFM: Must be part of the trade deal or no go.

3/5: 10 minute video from CFA institute

Financial Market History - Charles (Charley) D. Ellis

3/5: Black home ownership

In 2004, the pinnacle of homeownership in the United States, nearly half of all African American families owned a home, according to census data.

The record figure, fueled by the housing boom of the early 2000s, was still one-third less than housing rates for whites.

the real estate fortunes for African Americans have reversed course. Despite a strengthening economy, including record low unemployment and higher wages for black workers, homeownership levels for that group have dropped incrementally almost every year since 2004.

It fell to 43 percent in 2017, virtually erasing all of the gains made since the passage of the Fair Housing Act in 1968, landmark legislation outlawing housing discrimination.

Nationally, 63.9 percent of Americans owned a home in 2017, the Harvard report shows. The white homeownership rate reached 72.9 percent, up from 72.2 percent a year earlier. The Hispanic homeownership rate reached 46.2 percent, up from 45.5 percent in 2016.

Researchers at the Urban Institute found large disparities between the homeownership rates of black families and white families in all 100 of the cities with the largest black populations, pushing the housing gap between the two groups to its highest in more than 50 years.

All home buyers face these hurdles,- “So grappling with student debt and affordability issues generates a much greater barrier to homeownership.”

3/5: LTC
Seventy percent of working caregivers report work-related difficulties due to their dual roles, according to the National Alliance for Caregiving. That’s more than six million people who say it’s hard—and stressful—to be an employee and a caregiver to a family member at the same time.


"Fertility Cost, Intergenerational Labor Division, and Female Employment" Free Download
CESifo Working Paper No. 7293

BEATA SMARZYNSKA JAVORCIK, University of Oxford - Department of Economics
Email: beata.javorcik@economics.ox.ac.uk
Norges Bank, Research Department, CESifo (Center for Economic Studies and Ifo Institute)
Email: jin.cao@norges-bank.no

China has set to increase the minimum retirement age, to ease the pressure from pension expenditure and the falling labor supply caused by the aging population. However, policy debates have so far neglected the crucial fact that families in China largely rely on retired grandparents for childcare. Using novel and high-quality survey data, we demonstrate that intra-family downward labor transfer towards childcare significantly increases young females’ labor force participation rate and their labor income, and such effects do not exist for males. Furthermore, we show that the positive effects from grandparental childcare are higher for better-educated, urban females with younger children. This paper thus reveals a large, hidden cost in the new retirement policy — the reduced feasibility of grandparental support, due to postponed retirements, may crowd out productive labor of young females, — and rationalizes a series of social protection policies to accompany the phase-in of the new retirement scheme.

And the gentle breezes  blow,  
70 miles per hour at 52 below!  
Oh, how I love Minnesota 
When the snow's up to your butt;  
You take a breath of winter air  
And your nose is frozen shut.  
Yes, the weather here is  wonderful,  
You may think I'm a fool.  
I could never leave Minnesota ,  
Cause I'm frozen to the stool.

3/4: Another 'guide' to recession

3/4: There are 9.4 million people living in subsidized housing that is funded at least partly by the Department of Housing and Urban Development (HUD). The median household income of these families is $12,906 (one-fifth of the national median household income of $61,372),

Eligibility is based on three factors: annual gross income, whether an applicant qualifies as elderly, a person with a disability, or as a family and U.S. citizenship or eligible immigration status. 

There are three major forms of federally subsidized housing assistance: public housing, privately owned subsidized housing, and the housing choice voucher program (often called Section 8).

A national look at subsidized housing

HUD residents and milestones over time
HUD contributions over time

State HUD housing occupancy
Female HUD population

3/4: FACTS: (alberto savoia)

I like hard facts. The harder, the better. I like them even when they go against my desires and preferences. I like them because they are grounded in reality, and that grounding gives me a solid foundation—a bedrock I can build upon. Facing and accepting hard facts may feel uncomfortable at first, but that initial distress is nothing compared to the problems and pain that await those who choose to ignore them.

The hard facts we will explore share three dimensions of hardness:

  1. They are hard to take. They may be difficult to accept, at least at first.
  2. They are based on hard, objective data, not on tenuous hopes, wobbly beliefs, or volatile opinions.
  3. They are hard in the sense of being solid, unyielding, and permanent. They are unlikely to change—at least in your lifetime.

The last two characteristics of hard facts, objectivity and permanence, make them universal and timeless, so you better get used to them.

“If we are going to prevent the planet from warming up another couple of degrees,

we are going to have to go to geoengineering. The price of continued inaction could be

“many more surprises in the greenhouse” known as Earth.

Wallace Broeker

3/3: Recession looming? Probably not

I had indicated not that long ago that a recession could start this year. Much depended on what happened- and will happen-  to Trump (doesn't look pretty), the North Korea lovefest (they have had a spat but I don't think it is total breakup), the immigration issue at Mexico and the WALL (Trump will NOT get $5 billion+), Syria (we lost since they are still using chemicals to kill), how hard Putin is laughing at the U.S. (very hard considering he got the Ukraine on a platter; Assad will be Russia's puppet), whether China and the U.S. will sign a trade agreement (Probably); the U.S.GDP (slower but not bad), Brexit (I don't have a clue but it doesn't appear England and the EURO even have a viable agreement yet for April), Venezuela is a mess, Netanyahu has been invited for fraud and bribery, catauhu ..... Now we add in commentary from the Financial Times- Signs of trouble in China and the US are accompanied by an ever-extending period of weakness in the eurozone, an economy which was slower than the other two to get going after the global financial crisis and has performed in an adequate but not spectacular way since. Germany may well record a technical recession — two quarters of contracting GDP — in the second half of last year."JPMorgan is preparing for a broad economic slowdown. It's even willing to give up market share in key businesses like mortgage, auto, and commercial-bank lending to protect itself against a recession."Where we've lost share it's been intentional," . "It's been in order to preserve returns or, to a lesser extent, because we walked away from business that was outside of our risk appetite."

All of this- and more- has not coalesced into FEAR of a downturn. FED Chairman Powell predicted solid but slower growth in 2019.  So just plug along with the investments for the time being.

3/3: It's all a conspiracy

People who believe in conspiracy theories - such as the theory that Princess Diana was murdered by the British establishment - are more likely to accept or engage in everyday criminal activity.

3/3: LTC costs

The median cost of adult day care center services is only about $70 per day, compared with a cost of about $235 per day for a semi-private room in a nursing home, and about $160 for eight hours of homemaker and home health aide services per day

  • The supply of adult day services slots is still much smaller than the supply of nursing home beds. Nursing homes have about 1.7 million certified beds.
  • The average adult day services center has 66 slots. The average nursing home has 106 certified beds.
  • The Midwest, the region with the fewest adult day services slots, has 15 nursing home beds per adult day services slot. The West, which is the region with the most adult day services slots, has just 2.5 nursing home beds per adult day services slot.

3/3: Long-Term Care Providers and Services Users in the United States: Data From the National Study of Long-Term Care Providers, 2015–2016

3/3: Humans are frogs in hot water of climate change,    (A great opening line)

people may not recognize the signs of human-caused climate change until it's too late.
"I think it is quite surprising how quickly the effect of these temperatures decline,"


3/3: How can advisors avoid getting sued in a down market?

Read the article. Note the following

RE: "Assuming the client appears to be sane, it then goes without saying that the investments should be suitable for him or her. In particular, I would pay close attention to the client’s stated risk tolerance"

EFM- Tell me what suitability means? It does NOT mean the CLIENT's stated risk tolerance since they do not have a clue to how much they could lose. For many journalists the S&P 500 is a conservative fund. For others, it is moderate. OK, what does that mean? You would be hard pressed for either to tell you that 2000 was a 49% loss and 2008 was a 57% loss. Certainly not conservative and the losses are generally beyond moderate.
But since he writes for Financial Planning magazine..................

3/3: Gender equality:

Only six countries currently give women and men equal rights, a major report from the World Bank has found: Belgium, Denmark, France, Latvia, Luxembourg and Sweden scored full marks of 100 in the bank's "Women, Business and the Law 2019" report.

3/3: Caregiving:

It’s hard to catch your breath, let alone consider your own future – but it’s important to think ahead during this time. Read our tips on how to build a support system now so that you can better plan for the years ahead.

5 Ways Caregivers Can Build a Support System

Thinking ahead about who will be there for you when you need care, what you want for yourself and where you want to live, among other things, is something to begin considering now. It means positioning yourself so that when you are older, you will have as much control of your life as possible. You don’t have to take action today, but you do need a game plan.

Caudell believes that adult children — you! — must break that cycle and be prepared. “You’re giving your kids a gift,” she says. End-of-life and housing preferences, a living will, a power of attorney? Check.

Is building a support system also on that list? Here’s what the experts suggest caregivers do:

1. Assess your friend situation.

If you want more caring and interesting (or fill in the blank) people in your life, you will have to make an effort. Get involved in community activities and join committees or a walking group. Become a mentor or volunteer. Meetups are a good way to connect with people who have common interests.

There are organizations like The Transition Network (TTN) with chapters around the country for professional women age 50+ “whose changing life situations lead them to seek new connections, resources and opportunities.” Some of its chapters offer the Caring Collaborative, an initiative made up of TTN members who are “there for each other” when help or company is needed.

Barbara Stahura is active in the Collaborative’s New York City chapter. “When you meet women in a social setting, it’s easier to pick up the phone and ask for help. “If you know people in advance you have those personal connections.” A health care consultant who left her full-time job, Stahura, 62, has no children, no siblings who are alive and a husband with a chronic illness. While she’s healthy now, she knows an accident or something else could trip her up anytime. “I now have friends I’ve met through Caring Collaborative I can count on who’ve said, ‘don’t worry, let me know if you need help.’ It’s very reassuring,” says Stahura.

2. Create the life you want for the next phase.

Think about where you want to be, not only geographically but personally in the next 10 years. If you’re considering a move, figure out if you can afford it and what you will need to do to sell your home or condo in the future. Perhaps you can begin to do the work. Also, decide if you’ll have what you need when you need it (alternative transportation, doctors, movie theaters and restaurants nearby, for instance). You might be the type who prefers to surround herself with people or not. Perhaps you want to live quietly.

3. Figure out what you don’t want.

You may feel you live too far away from your daughter or son and the grandchildren, that you will become too dependent, or that you can’t live without your community or neighborhood. If you stay in your big old house, it may need ongoing repairs or, with too many stairs, be too hard to navigate later on.

4. Know your housing options.

There are several ways to ensure you will not be isolated. One friend in her 60s plans to sell her condo and buy a house with her sister. It’ll be company, she’s decided, and by splitting expenses, they can live someplace they wouldn’t have been able to afford alone. It goes without saying that they will take care of each other as they grow older.

Some older adults are opting for cohousing. You have your own place but share communal space and some meals. There’s daily interaction with neighbors who become like extended family.

Continuing Care Retirement Communities (CCRCs or Life Plan Communities) — many with assisted living and skilled nursing — can be appealing, too. Not only are your medical needs taken care of, should you have them, but there are activities and caring residents and staff.

University-based retirement communities (UBRC) that are on or near college campuses and focus on lifelong learning are one type. There are more than 100 around the country. The Village movement is also popular. You stay in your home and, for an annual fee, join a neighborhood “village.” Members get discounted vetted service referrals (i.e. think dog walking, home repairs and transportation), and social opportunities as well.

5. Look around.

If there are enough people in your building or neighborhood who are at a similar age and stage, you might want to get to know one another and/or