Master Financial Education
Financial Planning Daily Commentary 2016
The  most intensive and extensive on the Web
E. F. Moody


I have asked EF Moody to provide a brief example of what he has actually found on behalf of a client who engaged his services to review the insurance contracts which funded the client's estate plan. You will be amazed. In my 30 years in the business, I have never seen an authoritative, objective, prudent expert speak so clearly on the use of insurance. What Errold can do is unique in the industry.

Steven Winks

Secretary of State John Kerry - In America,  "you have a right to be (as) stupid (as) you want to be."
(But too many Americans are abusing the privilege)

"our economics are based on an unjustified faith in rational expectations, market efficiencies and the techniques of modern finance"

 Paul Volcker

You must not believe everything you think

Stephan Thomas Vitas

You are entitled to your own opinion. You are not entitled to your own facts.

Kevin Kind

Words  are chosen in order to influence us as manipulable objects, not to inform us as autonomous subjects.

Stephen Colbert

language intentionally designed to influence rather than inform is now ubiquitous in the business of sports and politics and markets
 Why? Because it works.

Ben Hunt

Hatred is too strong an emotion to waste on someone you don't even like

Dr. Who

Be careful who you call your friends. I'd rather have four quarters than one hundred pennies.

 Al Capone

Investing is not easy. Anyone thinking that it is, is stupid

Charlie Munger

There is no sense in being precise when you do not know what you are talking about

        John von Neumann

“ . . . there is always a well-known solution to every human problem — neat, plausible, and wrong.”

 Henry Louis “H. L.” Mencken

“As skill improves, performance becomes more consistent, and therefore luck becomes more important.”
Michael Mauboussin

'The Federal Reserve is a giant weapon that has no ammunition left'

Former Dallas Federal Reserve President Richard Fisher

The reason the professors teach nonsense is that if they didn’t, what would they teach the rest of the semester?

Teaching people formulas that don’t really work in real life is a disaster for the world.”

Charlie Munger

“The expected rarely occurs and never in the expected manner.”

– Vernon A. Walters

Nations rise and fall with the quality of their leaders, and their leaders succeed and fail based upon who they are at their core – what they believe, how they think, and what they do. Nothing shapes a leader or a society like their education or lack thereof. Let me be clear: when I refer to an education, I’m not referencing earning a degree, I’m talking about developing a rich intellect – they are not always one and the same.

Mike Myatt

 "If you see fraud and don't shout fraud, you are a fraud"

Nassim Taleb

“We really can’t forecast all that well, and yet we pretend that we can, but we really can’t.”

Alan Greenspan

Arrogance diminishes wisdom

Fail with honor rather than succeed by fraud

Obi Wan Kenobi

. I do not base my forecasts on mathematical models or some finely honed methodology, but on my sense of where the economic world stands today and where I think it might likely be in the near future.

Actually, I’m going to spend the first few pages demonstrating that the mathematical models used to forecast GDP and all sorts of interesting economic events are basically nonsense.

John Mauldin

The essence of investment management entails the management of risk, not the management of returns.

Benjamin Graham

“For the foreseeable future any risks from tracker funds are far outweighed by their ability to offer cheap, diversified funds to retail investors. The real problem is not the rise of Vanguard and the other tracker funds; it is the rotten deal that retail investors have received from the fund-management industry for far too long.”
The Economist

“If you are not confused about the economy, you don’t understand it very well.”

Charlie Munger

The least competent are the most certain of their skills

Dunning-Kruger effect

"In equity markets, high-frequency traders (HFTs) ... account for a larger share of transactions. "Indeed, trading in the U.S. nowadays is concentrated at the beginning and the last hour of the trading day, when HFTs are most active; for the rest of the day, markets are illiquid, with few transactions."


The key to success is the ability to fake sincerity.

Many humorists

“I think the reason why we got into such idiocy in investment management is best illustrated by a story that I tell about the guy who sold fishing tackle. I asked him, “My God, they’re purple and green. Do fish really take these lures?” And he said, “Mister, I don’t sell to fish.”

Charlie Munger

It’s difficult to put in the hard work of reading a great work of literature, when we spend our time writing in 140 characters. 

Mark Myatt

…the current culture of education has displaced parents as the primary instructors of children in favor of professionals who try their best to recreate the home environment at school; has the federal government rather than the community determining the structure of equal educational opportunity; has deserted the idea that memorization trains the brain; has fostered a loss of literacy by replacing the study of original writings with abridged textbooks; and has created a populace unable to engage in reasonable discourse. We have rejected the historically successful model of rigorous, classical education in favor of entertainment and job training.”
Leigh Bortins

“You cannot manage returns but you can manage risk 

Peter L. Bernstein

There is an important methodological point here — distrust conclusions reached primarily on the basis of model results. Models are estimated or parameterized on the basis of historical data. They can be expected to go wrong whenever the world changes in important ways.
Larry Summers

“What you think is much less important than how you think.”
Philip Tetlock

“Doubt is not a pleasant condition, but certainty is absurd.”


Make everything as simple as possible, but not simpler


“We observe the world how it is today and make these very simple projections and turn them into a terrible scenario. “This approach fails to take into account that the world is changing.”

World Bank’s Social Protection and Labor Global Practice.

The most glaring problem with current risk tolerance questionnaires is its failure to add any perspective and context to what the risk score means.

Brian Leitner

Markets are supposed to be be based on informed consumers making rational choices. Instead, the point of marketing is to create uninformed consumers who will make irrational choices often against their best interests 

Noam Chomsky

Facts do not cease to exist because they are ignored.
Aldous Huxley

A lie can travel halfway around the world while the truth is getting its boots on.

Mark Twainn

A wise man can learn more from a foolish  question that a fool can learn from a wise answer

Bruce Lee

In the absence of regulation, someone will always be willing to exploit our irrational tendencies, leading to a “phishing equilibrium” in which individuals are harmed.

Phishing for Phools; George Akerlof and Robert Shiller

“Essentially, all models are wrong, but some are useful.”

 George E.P. Box

A Single Death is a Tragedy; a Million Deaths is a Statistic


There are decades where nothing happens; and there are weeks where decades happen.


Great spirits have always encountered violent opposition from mediocre minds 

Albert Einstein


World Clock by

Sorry for the downtime

Site was hacked

Still having problems

I want to kill something


Bounded rationality: psychology, economics and the financial crisis

Classical mathematical algorithms often fail to identify in time when the international financial crises occur although, as the classical theory of choice would suggest, the economic agents are rational and the markets are or should be efficient and behave also rationally. This contribution does not pretend to give a complete answer to these questions, but it will highlight some well-known limits of the classical theory of rational choice. In particular, the present paper will focus on the concept of bounded rationality. The work also makes some references to behavioral economics and to the literature of behavioral finance which has given important contributions in explaining the behavior and the anomalies of financial markets. Finally, following the approach of Simon, the paper proposes ananalytical model to describe the behaviour of agents which are rationally bounded, risk averse and loss averse, emphasizing ther elationship between psychology and economics which helps to explain the crisis in financial markets.

Economics and the ‘perfect’ rationality.
Economics in its classical conception is seen as a normative theory:how we should act. In its
neo-positivist approach of systemic-formal nature, economics takes the form of nomologic -
deductive propositions, which are obtained by reasoning, starting from unproven axioms. With
these axioms we deduce the propositions of the theory, which requires the use of logic and
mathematics. Thus economics presents itself as a rational science in the sense that its propositions
are obtained by means of logic, in a way which is similar to rational mechanics. In economics,
moreover, rationality is interpreted in terms of consistency not of substance. We have therefore a
syntactic and non-semantic notion of rationality. The agents are rational if they have a coherent
criterion of choice. The consistency of the choices implies that the agents are represented by a
system of preference. Economics describes the choice as a rational process driven by a single
cognitive process that includes the principles of the ‘theory of rational choice’ and it orders the
decisions on the basis of their subjective expected utility.
In this view the “homo oeconomicus” appears perfectly rational and has a complete knowledge,
while his economic choices, guided by rationality, are self contained in the economic sphere
without affecting other aspects of the individual such as the emotions or being influenced by the

According to von Neumann and Morgenstern, individuals generally move in the reality following
predetermined patterns of behavior, at the base of which there is the assumption that they always
prefer to have a greater wealth than less. The theory studies the preferences underlying consumer
behavior under risk, i.e. when the subject is asked to make a decision without knowing with
certainty which ex ante state of the world will happen, but he knows the probability distribution,
that is, it is known to him a list of possible events, each of which he  associates a probability of
occurrence. This theory assumes that each individual has stable and consistent preferences, and that
he makes decisions based on the principle of maximization of subjective expected utility. So given a
set of options and beliefs expressed in probabilistic terms, it is assumed that the individual
maximizes the expected value of a utility function u (.). The individual uses probability estimates
and utility values as elements of calculation to maximize his expected utility function. Thus he
evaluates the relevant probabilities and utilities on the basis of his personal opinion but also using
all relevant information available.

EFM- You have some serious problems with the theory. Decisions are made by people based on the misconception of their own competence. If you read the cognitive section in my book AND the section on illiteracy and aliteracy, you will find that the average person does not read at all and, in any case,  don't read anything hard.As a result, you have a great void of both knowledge and competence since they do NOT grasp principle of maximization of subjective expected utility. They do not understand probabilsitic returns and therefore cannot validate same.  The theory can say that individual investor estimates and weights the material presented. But  they can only do so in that limited existence.

“Theories that
incorporate constraints on the information-processing capacities of the actor may be called theories
of bounded rationality” (Simon, 1972, p.162). Simon argues that most people are only partly
rational while are emotional/irrational in the remaining part of their actions. He maintains that,
although the classical theory with its assumptions of rationality is a powerful and useful tool, it fails
to include some of the central problems of conflict and dynamics which economics has become
more and more concerned with (Simon, 1959, p.255). Simon identifies a variety of ways to assume
limits of rationality such as risk and uncertainty, incomplete information about alternatives,
complexity (1972, pp.163-164). Furthermore, he asserts that an individual who wants to behave
rationally must consider not only the objective environment, but also the subjective environment
(cognitive limitations), thus you need to know something about the perceptual and cognitive process
of this rational individual."

Another way to look at bounded rationality is that, because individuals lack the ability and
resources to arrive at the optimal solution, they instead apply the irrationality only after having
greatly simplified the choices available. Actually, individuals face uncertainty about the future and
costs in acquiring information in the present. These two factors limit the extent to which agents can
make a fully rational decision. Thus, Simon claims, agents have only bounded rationality and are
forced to make decisions not by 'maximization', but rather by satisficing , i.e. setting an aspiration
level which, if achieved, they will be happy enough with, and if they don't, try to change either their
aspiration level or their decision. Satisficing is the hypothesis that allows to the conception of
diverse decision procedures and which permits rationality to operate in an open, not predetermined, space (Barros, 2010). Real-world decisions are made using fast heuristics, 'rules of thumb', that
satisfice rather than maximize utility over the long run. Thus agents employ the use of heuristics to
make decisions rather than a strict rigid rule of optimization. The agents do this because of the
complexity of the situation, and their inability to process and compute the expected utility of every
alternative action.

For Simon “as economics becomes more and more involved in the study of uncertainty, more and
more concerned with the complex actuality of business-decision making,the shift in program will
become inevitable. Wider and wider areas of economics will replace theover-simplified
assumptions of the situationally constrained omniscient decision-makerwith a realistic (and
psychological) characterization of the limits on Man’srationality, and the consequences of those
limits for his economic behavior” (Simon, 1976, pp.147-148).
Simon, however, does not reject the neoclassical theory tout. The
adoption of heuristics by individuals is necessary to solve theproblems of everyday life, but in the
financial sector it can lead to biases which have proved very expensive.

The financial crisis has raised many questions and created new problems for economic theory. It is
not all certain that the mathematical algorithms devised by the classical theory can predict in time
when the international financial crises occur, but, as this paper tried to argue, we can enrich our
knowledge of the complex reality of financial markets through the fertile contribution of Simon and
of behavioral economists.
Firstly, the present contribution has tried to argue that psychology and economics provide wide ranging
and relevant evidence that bounded rationality is important, so the notion as formulated by
Herbert Simon represents a reference point for understanding economic behavior and economic
processes. The work also underlined the relation between bounded rationality and procedural
rationality which is the form of psychological rationality that constitutes the basic concept of
Simon’s behavioral theory. Moreover, the work examined the criticism to the classical theory of
rational choice and to expected utility coming from behavioral economics. The analysis regarding
the behavioral economics has highlighted failures of classical theory of rational choice, but also
anomalies and biases in the behavior of the economic agents in financial markets, although the
critical part of the behavioral theory seems more convincing than the positive and proactive part of
the same theory, leaving a significant degree of indeterminacy in defining solutions. In the last
section, this work also suggested an analytical model to describe the bounded  rationality of the
agents following Simon and that also takes into account loss aversion (Bernatzi, Thaler, 1995;
Kahneman, Knetsch and Thaler, 1990) and a strong aversion to risk to demonstrate that the
behavior of investors, influenced by psychological factors, leads to crisis and to losses at the global

“ heuristic principles reduce the  complex tasks of assessing probabilities and predicting values to simpler judgmental operations”
Kahneman and Tversky

9/25: Obama drew a line in the and that could not be crossed. But Syria apparently used a couple of Chlorine bombs and Russia and Syria have been dropping a lot of conventional bombs. The cumulative deaths are now over
300,000.Assad looks like he will stay in power. Looks like another war we lost.
9/25: Life Insurance options A and B

9/25 U.S.  dying

Global death rates fell by more than a third from 2000 to 2015. The United States, however, is one of the few countries in the world that have gone against the grain, new data show. Its maternal mortality rate has risen despite improvements in health care and an overwhelming global trend in the other direction.

There were 28 maternal deaths — defined as deaths due to complications from pregnancy or childbirth — per 100,000 births in the United States in 2013, up from 23 in 2005, the institute found. The rate in 2013, the most recent year for which the institute had detailed data for the United States, was more than triple Canada’s. The institute is projecting that the American rate dipped in the last two years to 25 by 2015.

Increases were extremely rare among rich countries. In all, 24 countries had one from 2000 to 2015, including South Sudan and the Democratic Republic of Congo, though their rates were much higher. America’s increase put it above a number of poorer countries whose rates had declined with the global trend, including Iran, Vietnam, Russia and Romania.


Give Me a Lift

By Valeri Thelen, Staff Writer


The toilet seat should not be overlooked as a way to help a loved one stay independent as long as possible. It also can be a location of great concern for those prone to falling or for caregivers who must help transfer their loved ones in order for them to use the toilet.

It may not be the household item that catches a person’s eye or thoughts while looking for hazards, but toilet seats have options available today that many caregivers are unaware of. From extra padding to extra height, these specialized seats make it easier for elderly loved ones to get on and off the toilet. The industry, however, is bringing innovation one step forward with power-lift toilet seats.

On the market

There are two main types of power-lift seats on the market. The first is a spring-powered option. It is already in an upright position when a loved one approaches it, not like the usual toilet seat. It hinges on the front and meets a person’s rear while they are standing. When a loved begins to sit back, the spring and hydraulic piston slowly lowers them to a seated position.  

With this option, the device takes about 80 percent of the weight off the person using it. When a loved one is finished, he or she stands up independently, with the weight again being minimized by the hydraulics in the system.

The second option is completely motorized, assuming 100 percent of a person’s weight. This is a great option for someone who needs full assistance. It installs on the toilet and includes a hand controller for raising and lowering the seat. The controls help the seat meet a loved one in their standing position; then, with a small lean back, lowers them directly onto the toilet. When the person is finished, the controller again is available to lift a loved one to a complete standing position. For larger people, a dual-motor option can be bought for additional support.

A power-lift toilet seat is available in either a free-standing or wall-mounted product. The free-standing seats are able to be used bedside, which some people may prefer for flexibility. The good news, if you are considering a purchase, is that if a physical deems this kind of support medically necessary, many insurance companies will help cover the cost. A caregiver can do some easy research to find out their loved ones’ benefits.

Why bother?

Time in a bathroom is typically a very personal thing. Many loved ones may feel embarrassment needing assistance, especially if they still are very mentally aware and simply experiencing the standard bending/reaching issues that often come with age. With more progressive needs, an aide still must assist the person in getting on and off a toilet.

From another point of view, a power-lift toilet seat is an ideal option for someone in recovery from a surgery or illness. It helps people return home and stay home longer.  From knee issues to back concerns, a long list can be made of times when a power-lift seat is beneficial. Toileting is one thing that no person can ignore, and a little help can go a long way for someone who just needs a boost.

Safety is of utmost importance to all those involved in caregiving. All power-lift toilet seats come with weight recommendations, but most are between 250 to 500 pounds. There are also bariatric versions available. The power-lift toilet seats help caregivers and loved ones alike, by promoting independence and dignity, while preventing injuries.

Falls are a big safety risk for people with uneven gait, or wobbly knees. Elderly people are especially at risk, as any caregiver will attest. A power-lift toilet seat tremendously minimizes that danger.

While these products were designed originally for hospitals and other care facilities, they are now available for the consumer. Caregivers are thankful for fewer falls and trips to the emergency room, and loved ones are grateful for regaining a sense of self-worth and respect.

9/22: Worked for me

Cycling headcases New research into bike helmet use around the world shows that wearing a helmet can reduce the chance of fatal head injury by 65 per cent. Data from 40 separate surveys of 64,000 cyclists also showed that the more serious the injury, the greater the protection helmets provided.


9/22: Dealing with Caregiver Guilt

By Malika Brown, MSW, LSW


Caregivers often carry around undeserved guilt, believing that they aren’t doing enough for their loved ones. This guilt can make the caregiving role even more stressful than it already is. One might ask why a caregiver feels guilty when they’re doing such a courageous job. Here are some reasons:

  • Resentment for personal time lost – It’s normal to feel like you’re missing something when so much of your time is taken up taking care of someone else. The caregiver thinks that they shouldn’t feel this way.

  • Unresolved issues – Many times, there are issues stemming from childhood or arguments in the past that hinder the caregiving process. Many caregivers feel guilty about this.

  • Comparing yourself to others – Some caregivers will look at another caregiver and think that they could never accomplish what that other person did.

  • Knowing placement is inevitable – There can be tremendous guilt involved when a caregiver has to place their loved one in assisted living or a nursing home.

  • Dealing with your own issues – You may be dealing with personal or health problems yourself, which takes away from your caretaking responsibilities.

Ways to Cope with Caregiver Guilt

  • Acknowledge the guilt – It’s normal to feel guilt from time to time. Once it’s recognized, we are better able to deal with it.

  • Look at the bigger picture – Although you may be stressed with a particular situation now, it will not last forever. Look at the sacrifices you make for your loved one and realize that you are doing a great job.

  • Accept that you’re human and have flaws – All of us make mistakes from time to time. Some of us may be good at the physical aspects of caregiving, while others may be better able to handle the emotional toll. Recognize your strengths and don’t focus on the negative.

  • Make time for yourself – This is easier said than done, but it’s a must! Even if it’s just an hour or two a week, go out and have coffee with a friend, catch a movie, attend a caregiver support group, or just curl up and read a book. Taking time out helps you put your situation in better perspective.

  • Know that you are making the best decision for you and your loved one at that time – This can be hard to accept, especially if you’ve made a promise to a loved on in the past that you can no longer keep. A change in a situation may force you to break that promise, but realize that the promise was made under different circumstances. You are making the best decision with new circumstances.

  • Deal with unresolved issues or accept them for what they are – Many times, we may be taking care of someone who we resent, for many reasons. You can choose to try and resolve those feelings from the past to allow you to care for that person fairly. You can also choose to allow someone else to care for that person because you know you cannot rightfully do so. Either way, this is something you need to consider if your past with that person is an issue for you. Talk to a professional if necessary to make the best decision for both you and your loved one.

Reach out for support from family and friends; seek caregiver support groups or professional help to work through your feelings of guilt. Know that you are not alone in your caregiving journey and the help is available. Most of all, remember that you are doing the best that you can!

9/22: Yep- these situations can be covered by life insurance

1.    Has a history of DRUG use.


2.    Recently been charged with a DUI.


3.Needs coverage effective immediately - within 24 hours.


4.    Client does not want to secure Life coverage (can be done confidentially, without the Insured Person’s knowledge)

-Must have a valid contract in place, and certain criteria met, for this type of coverage


5.    Afraid of needles and does not want to have Medical Exam


6.    Assignment in a foreign country and they are not able to secure a policy.


7.    Travel to War Zones causing the Traditional carrier to decline the application.


8.    Has health issues and is willing to accept coverage with an exclusion (i.e. cancer).


9.    Limits as high as $100,000,000 with no medical exams just a 1 page application.


10.  Coverage for a short period of time

9/21: Fat

9/21:DC Plan Participants Lack Flexible Distribution Options

According to research by global analytics firm Cerulli Associates, 92% of recordkeepers describe offering participants a one-time, lump-sum distribution paid in cash upon retirement or separation as the most frequently offered method of distribution. Only 23% indicated offering one-time lump sums converted to guaranteed monthly or quarterly payments.

The firm also found that nearly one-third of defined contribution (DC) plan recordkeepers indicate that none of their DC plan clients have adopted a guaranteed in-plan retirement income option. Conversely, only 8% of DC plan recordkeepers report that 16% or greater of their DC plan clients have adopted a guaranteed in-plan retirement income option, Cerulli research found. Moreover, Cerulli found that less than half of surveyed recordkeepers let their participants take ad-hoc withdrawals as needed
9/21: Tips for Managing Incontinence
with Frontotemporal Dementia

By Geri Hall, PhD, ARNP, GCNS-BC, FAAN


Always make sure the doctor does an evaluation to rule out infections, tumors, etc. for both urinary or bowel incontinence.

If the patient is still early in the disease, there are two frontotemporal dementia-specific issues:

Many people with this condition have bowel and bladder accidents when over stimulated, such as at a shopping center.  I would use this as an indicator of how much stimulus the individual can manage and try to avoid crowds, loud places, etc. 
Try to get him/her to wear a protective garment.  Many refuse the bulkier garments.  A one-size pull-up brief might be more comfortable.  You are not going to ask permission, but say, “If you are coming with me, put these on.”

Make sure he/she is taken to the toilet (or insist they go) 20 minutes after the first meal.  There is a normal reflex that makes us want to have a BM then, so you can try for an evacuation.

Avoid all caffeine as it irritates the bladder.

Do not leave him or her outside to wait for you as anxiety will build.

Increase general fluid intake during the day to enhance the urge to urinate.
Plan “pit stops” every two hours while out.

People with this condition have abulia (failure to initiate) and do not recognize they need to find a toilet when the urge presents.  I had one client who would wake each morning and then have a BM in bed.  It upset his wife as she thought he was doing it to be rude to her. He was continent the rest of the day.   All she had to do was wake him at 6 am and tell him to go to the bathroom and he evacuated normally.  So, prompting and directing should become a way of life after noting what the patient’s usual schedule is.

In later dementia, the person may have  incontinence that may not respond to prompting. This is usually managed by continuing to try to prompt, but using the incontinence products even doubled when necessary. Pad the bed with lawn and leaf bags under the sheets and make a draw sheet to minimize the amount of late night changing.

Provide adequate fiber using two large oatmeal raisin cookies each afternoon with a glass of liquid.

Incontinence briefs need to be changed two or three times per day even if not soiled because of the risk of urinary infections.

To help the individual adapt to the briefs, take the underpants out of the dresser drawer and replace with pull-up briefs.  After a while, they will “get it.”
Finally, if there are “accidents” on a rug, use a pet disinfectant. Standard cleaners do not kill the fecal bacteria. 

9/21: Middle income and poor not doing well

9/20: What's the final impact US? Not sure how deep this will hurt our exports.

The threat to EM growth Demand for emerging market exports has hit a new post-crisis low, with US imports from China dropping sharply in July in the latest sign that the engine of growth for the world’s developing economies is sputtering. (FT)

9/20: These were sent to me. Use at your own discretion

How Much Will My Lifestyle Cost?


How Much House Can I Afford? | Home Affordability Calculator


Five Basics You Should Definitely Know About the Stock Market


Home Equity Calculator


Dictionary of Banking Terms and Phrases


Home Improvement Calculators | Estimate How Much Material You Need


Teaching Financial Literacy to Teens: Budgeting


Student Loan Repayment Estimator

  1. Contractionary Volatility or Volatile Contractions?




Stefano Giglio (University of Chicago) ; Ian Dew-Becker (Northwestern University) ; David Berger (Northwestern University)

Innovations in realized volatility are associated with recessions, while shocks to volatility expectations are not.


9/19: Larry Summers

For nearly a decade, since the mid 2008 FOMC meetings where many believed that the worst had past, the Fed been too serene about the economic outlook and a return to past regularities.  When the Fed predicted last December that it would raise rates four times in 2016, market participants saw a disconnect from reality.  It has been that way for a long time.  Figure 1 shows the Fed’s forecasts of its future monetary policies since they began releasing them.  The Fed has always believed that rate increases and normalization were around the corner but never been able to deliver.  Figure 2 looks at the current situation showing the “dots” reflecting Fed forecasts and the market’s prediction of future interest rates.  The divergence between the market and even the dovish end of Fed forecasts is clear.

9/19: LTC

9/19: Sat it isn't so
A messy situation that undoubtedly is similar to most other pensions.

governments nationwide do not know the true condition of the pension funds they are responsible for. That exposes millions of people, including retired public workers, local taxpayers and municipal bond buyers — who are often retirees themselves — to risks they have no way of knowing about.two competing ways of valuing a pension fund are often called the actuarial approach (which is geared toward helping employers plan stable annual budgets, as opposed to measuring assets and liabilities), and the market approach, which reflects more hard-nosed math.

The market value of a pension reflects the full cost today of providing a steady, guaranteed income for life — and it’s large. Alarmingly large, in fact. This is one reason most states and cities don’t let the market numbers see the light of day.

But in recent years, even the more modest actuarial numbers have been growing, as populations age and many public workers retire. In California, some struggling local governments now doubt they can really afford their pension plans,

The problem reaches far beyond pensions, and into the $3.7 trillion municipal bond market. The reason is that municipal bond ratings take into account the strength (or weakness) of government pension plans. If those numbers have been consistently wrong, as dissidents argued, then actuaries were helping mislead the investors buying municipal bonds.

Arguably, the flawed standards worsened the problem with each passing year: Actuarial values determine the annual contributions that states and local governments make to their pension plans, so if the target numbers are too low, the contributions will always be too small. Shortfalls will be compounding, invisibly.

Much of the debate surrounded the routine practice of translating future pension payments into today’s dollars, which is called discounting

EFM the discount number can vary a LOT and that has always made me think about what might be objective.

  1. Decision Making with Risky, Rival Outcomes: Theory and Evidence




David B. Johnson (Department of Economics, Finance, and Marketing, University of Central Missouri) ; Matthew D. Webb (Department of Economics, Carleton University)

Little is known about how individuals make decisions when they must choose several options from a set of options when the outcomes are risky and the payoffs are rival. When researchers model these decisions, they assume people maximize their expected utility. We design an experiment in which subjects face either rival or independent payoffs. While theory predicts different behavior, subjects behave nearly identically under these payoff schemes. This suggests individuals are not maximizing expected utility. Additional treatments demonstrate that this behavior is likely driven by a heuristic used to simplify a complex math problem, rather than a preference for lotteries with the highest independent expected utilities. Our results suggest that using expected utility as peoples' objective function in these types of environments will lead to biased predictions.


decision making, risk, rival, online experiment


C90 D01 D81


9/18" Over the 40 days through Wednesday, the S&P 500‘s highest and lowest closes have been just 1.75 percent apart. It’s the first time that has ever happened in the history of S&P data

“A lack of volatility in the market is usually accompanied by positive returns,” he said. “One of the periods that was closest to this narrow [in terms of the market range] was in the mid-1960s; the market did very well in the ’60s, and that was a good period of calm.”

EFM- The volatility is very low right now and is not showing the global risks. But that is what an advisor needs to recognize in researching an allocation as though the volatility was 'normal'. But with the world pushing down interest rates BELOW zero, it is difficult to know if the current conditions of ultra low rates is the new normal and all the past signals are no longer trustworthy.

9/18: If you get Netflix, watch Extremis and see how you want to die. It's only 24 minutes out of your life.



"The Evolution of Physician Practice Styles: Evidence from Cardiologist Migration" Free Download
NBER Working Paper No. w22478

DAVID MOLITOR, University of Illinois at Urbana-Champaign

Physician treatment choices for observably similar patients vary dramatically across regions. This paper exploits cardiologist migration to disentangle the role of physician-specific factors such as preferences and learned behavior versus environment-level factors such as hospital capacity and productivity spillovers on physician behavior. Physicians who start in the same region and subsequently move to dissimilar regions practice similarly before the move, but each percentage point change in practice environment results in an immediate 2/3 percentage point change in physician behavior, with no further changes over time. This suggests environment factors are twice as important as physician-specific factors for explaining regional disparities.

Distrust conclusions reached primarily on the basis of model results. Models are estimated or parameterized on the basis of historical data. They can be expected to go wrong whenever the world changes in important ways.

Larry Summers

9/18: Black boxes

BlackRock Inc. urged regulators to increase scrutiny of robo-advisers as customers flock to automated services, lured by low fees and ease of use.

Regulators should ensure digital advisers understand their customers before offering such services and provide clear disclosure on the algorithms used to recommend securities, the New York-based company said in a report released today. They should also analyze fee disclosures and how the firms protect client data and prevent cyber breaches, BlackRock said.

“If you as an individual signed up for digital advice and tried three different products, you will get three different answers,” BlackRock Vice Chairman Barbara Novick said in an interview Friday. “There are no standards or rules of the road on these things, so you either need disclosure that establishes what are the rules or advice on best practices, but these should be up for discussion.”

EFM- I have already done my part.Click on


on my home page or on Lnkedin

9/18: We're already paying billions to protect the world so what is another trillion for England.

Britain’s armed forces cannot defend the UK against a serious military attack and have lost much of their ability to fight conventional wars, the recently retired head of the country’s Joint Forces Command has warned.

General Sir Richard Barrons has said a series of “profoundly difficult” strategic challenges are being sidestepped as Whitehall focuses on “skinning” budgets and delivering costly but increasingly redundant big-ticket military projects.

His 10-page, private memorandum is the most forthright criticism of defence policy from the UK’s senior military leadership to have emerged publicly in years and will raise grave concerns in Nato.

9/18: Love that 11%

9/18: Larry Summers

Private sector GDP growth for the last year has averaged 1.3 percent, a level that has since the 1960s always presaged recession. Total work hours have over the last six months grown at nearly their slowest rate since early 2010. And both market and survey measures of inflation expectations continue to decline

I believe that countering the next recession is the major monetary policy challenge before the Fed. I have argued repeatedly that (i) it is more than 50 percent likely that we will have a recession in the next 3 years (ii) countering recessions requires 4 to 5 percentage points of monetary easing (iii) we are very unlikely to have anything like that much room for easing when the next recession comes.

The market has been consistently wrong for most of the last decade on the ease with which interest rates could be raised by the Fed. And estimates of the neutral rate have been far lower for far longer than anyone would have predicted a decade ago. All of this suggests the need for substantial humility about what the Fed’s capacities will be the next time the economy encounters difficult times.

Reifschneider assumes inh is base case that the Fed funds rate reaches 3 percent before the next recession and treats as an extreme case the possibility that rates will reach only 2 percent before the next recession. As Jared Bernstein points out, market expectations are much more pessimistic than this.

According to the OIS market (basically long term fed fund futures), fed funds are expected even in the long run to rise only to 1.5 percent. This may be a bit misleading because the expected fed funds rate in 2020 of 1 percent includes some probability that it is zero because of a recession. Even so markets, which have been much more right than the Fed so far, are clearly signaling the likelihood that rates will be under 2 percent when the next recession comes.

EFM- I think the odds of another recession in the next three years is 80%.

9/18: I don't think they can stabilize the EU while Assad holds onto Syria, Iran is getting harder to control and that little schmuck in North Korea builds  nuclear bombs, Britain leaves the EU and Germany weakens.

European Union leaders on Friday gave themselves six months to come up with a plan to revitalize confidence and unity in the face of festering divisions bared by the United Kingdom's decision to leave the EU.

They vowed to strengthen cooperation on security, reduce illegal migration and improve prosperity for the alliance's disaffected citizens..

The alliance is facing unprecedented division over how to absorb more than 1 million migrants from the Middle East, Africa and Asia who have traveled to Europe to escape war and poverty back home. Germany has welcomed most of them but other EU members, such as Hungary, don't want to accept any.

There are also widening fissures over how to boost economic growth and trade, concerns that populist political parties are eroding trust in mainstream ones, and squabbles over whether forming an EU army is the best way to secure the region's borders from the threat of terrorism

9/18:  Help for Low-Income Seniors

The HUD grant program is welcome news for aging Americans and their caregivers. As seniors age, more specialized care needs to come to the forefront, and paying for private assisted living is prohibitively expensive for many families. Furthermore, navigating the Medicaid process to pay for assisted living can be difficult and onerous, notes an article on

Now, however, 11 facilities in 9 states have be established in order to help seniors stay in place — with much-needed assisted living services such as personal care, safety systems, transportation, elevators, meals and housekeeping. Help with daily living activities like these is key for many seniors who wish to remain independent.

One of the awardees is Delta Volunteers of America Elderly Housing Inc. in Colorado, which has converted 22 of its apartments into assisted living units. Not only will the conversion help more seniors stay out of costly nursing care, according to U.S. Sen. Michael Bennet, D-Colo., these units will also “help reduce health care costs by providing access to health care services in the home rather than in a hospital,”

9/18:  PSCA's Mobile Knowledge Center

The Plan Sponsor Council of America (PSCA) has launched a mobile application called the PSCA Knowledge Center. The app will serve as a one-stop shop where plan sponsors can access information and resources related to qualified and non-qualified retirement plans via several channels including articles, podcasts, and the council’s own surveys

9/18: Income for the poor not doing very well


"The Effects of the Early Retirement Age on Retirement Decisions" Fee Download
NBER Working Paper No. w22561

DAY MANOLI, University of Texas at Austin
Vienna University of Economics and Business, Austrian Institute of Economic Research (WIFO), Institute for the Study of Labor (IZA), CESifo (Center for Economic Studies and Ifo Institute)

We present quasi-experimental evidence on the effects of increasing the Early Retirement Age (ERA) on older workers' retirement decisions. The analysis is based on social security reforms in Austria in 2000 and 2004, and administrative data allows us to distinguish between pension claims and job exits. Using a Regression Kink Design, we estimate that, within a birth cohort, a 1.0-year increase in the ERA leads to a 0.4-year increase in the average job exiting age and a 0.5-year increase in the average pension claiming age. When the ERA increases, many older workers remain in their jobs longer.

9/18: It's the economy stupid!

Last week, 26 percent of people surveyed in Gallup’s poll of Americans’ confidence in the economy rated current economic conditions as excellent or good, while 30 percent labeled them poor. Thirty-seven percent of those surveyed said their economic outlook was “getting better” compared with 57 percent who said it was “getting worse.”

EFM_ I wish both parties would just hone in on what is wrong. Between her emails and his taxes...................................

9/18: Deutsche Bank asked to pay $14bn in US probe

Deutsche Bank shares fell sharply in extended trading on Thursday as the lender scrambled to play down the chances of it paying $14bn to settle allegations of mis-selling mortgage securities, after receiving an initial claim for that figure from the US Department of Justice.
EFM- I remember when they first came out. Going to be the best thing since sliced bread/ But I already knew that any new investment has to be tested for a year or two.

9/16: Index

Over a one-year period, 84.62% of large-cap managers underperformed the benchmark, and 91.91% lagged over the five-year investment horizon

9/16: Bad robo

9/16: LOW volatility and very deceptive

9/16: 2016 Lifetime Income Survey (PDF)
"58 percent of American adults feel confident they can successfully turn their retirement savings into income after they stop working. Only 35 percent of survey respondents are concerned about running out of money in retirement, despite the fact that Americans are living longer. Today, a couple at age 65 has a 73 percent chance of one of them living to to age 90."

9/16: A Fiduciary Blueprint: The Restatement of Trusts, the Prudent Investor Rule, and the DOL's New Fiduciary Rule
"In adapting their practices to the DOL's new fiduciary rule, financial advisers need to focus on the fact that fiduciary liability is generally based on a fiduciary's imprudent conduct in developing their investment recommendations, not the actual performance of the actual investments and strategies. It is reasonable to assume that the courts will continue to rely on the Restatement of Trusts and the Prudent Investor Rule in interpreting imprudent conduct under the DOL's new fiduciary rule."
The Prudent Investment Adviser Rules

EFM- I am completing commentary on the prudent man rule- totally out of date

9/16: Interest rates unchanged

Bank of England The central bank is likely to leave rates at a record low of 0.25 per cent, but the focus will be on its assessment of the economy in the wake of the Brexit vote — new data showed the UK labour market has so far been unruffled by the referendum result. (FT)

And we may do the same.


Older Adults and Alcohol

A national 2008 survey found that about 40 percent of adults ages 65 and older drink alcohol. Older adults can experience a variety of problems from drinking alcohol, especially those who:

• Take certain medications
• Have health problems
• Drink heavily

There are special considerations facing older adults who drink, including:

Increased Sensitivity to Alcohol
Aging can lower the body’s tolerance for alcohol. Older adults generally experience the effects of alcohol more quickly than when they were younger. This puts older adults at higher risks for falls, car crashes, and other unintentional injuries that may result from drinking.

Increased Health Problems
Certain health problems are common in older adults. Heavy drinking can make these problems worse, including:

• Diabetes
• High blood pressure
• Congestive heart failure
• Liver problems
• Osteoporosis
• Memory problems
• Mood disorders

Bad Interactions with Medications
Many prescription and over-the-counter medications, as well as herbal remedies can be dangerous or even deadly when mixed with alcohol. Medications that can interact badly with alcohol include:

• Aspirin
• Acetaminophen
• Cold and allergy medicine
• Cough syrup
• Sleeping pills
• Pain medication
• Anxiety or depression medicine

Drinking Guidelines for Older Adults
Adults over age 65 who are healthy and do not take medications should not have more than:

• 3 drinks on a given day
• 7 drinks in a week

Drinking more than these amounts puts people at risk of serious alcohol problems.

If you have a health problem or take certain medications, you may need to drink less or not at all.


Why Seniors Don’t Eat: It’s Complicated.

More than half of older adults who visit emergency departments are either malnourished or at risk for malnutrition, but not because of lack of access to health care, critical illness or dementia. Despite clear signs of malnutrition or risk of malnutrition, more than three-quarters had never previously been diagnosed with malnutrition, according to the results of a study published online in Annals of Emergency Medicine (“Malnutrition Among Cognitively Intact, Non-Critically Ill Older Adults in the Emergency Department”).

“We were surprised by the levels of malnutrition or risk of it among cognitively intact seniors visiting the ER, and even more surprised that most malnourished patients had never been told they were malnourished,” said lead study author Timothy Platts-Mills, MD, of the University of North Carolina Department of Emergency Medicine in Chapel Hill, N.C. “Depression and dental problems appear to be important contributors, as is difficulty buying groceries. Given that seniors visit ERs more than 20 million times a year in the U.S., emergency physicians have an opportunity to screen and intervene in ways that may be very helpful without being very costly.”

Of patients age 65 and older, 16 percent were malnourished and 60 percent were either malnourished or at risk for malnutrition. Of the malnourished patients, 77 percent denied have been previously diagnosed with malnutrition. Malnutrition was highest among patients with symptoms of depression (52 percent), those residing in assisted living (50 percent), those with difficulty eating (38 percent) and those reporting difficulty buying groceries (33 percent). Difficulty eating was mostly attributed to denture problems, dental pain or difficulty swallowing.

In this study, nearly all (95 percent) of patients had a primary care physician, nearly all (94 percent) lived in a private residence and nearly all (96 percent) had some type of health insurance. More than one-third (35 percent) had a college education.

Malnutrition is defined as lacking “adequate calories, protein or other nutrients needed for tissue maintenance and repair.”

“For patients who report difficulty buying groceries, Supplemental Nutrition Program, Meals on Wheels, Congregate Meals Programs or community-based food charities can be helpful, although other factors may also need to be addressed,” said Dr. Platts-Mills. “The growing role of the emergency department as community health resource makes it an essential place for identifying and addressing unmet needs of older adults. Implementation of oral nutritional supplementation is inexpensive and may reduce overall costs by accelerating recovery from illness and reducing readmissions.”


IRS: DB participants can split between annuities and lump-sum payments

By Nick Thornton

New IRS rule aims to provide pension plan participants with more flexibility when given the option of a lump sum or an annuity


"Tomorrow’s Inheritance: The Frontiers of Estate Planning Formalism" Free Download
Boston College Law Review, Vol. 58, Forthcoming
UC Davis Legal Studies Research Paper No. 503

DAVID HORTON, University of California, Davis - School of Law

The rules that govern the creation of an estate plan are in flux. Courts once demanded strict adherence to the Wills Act, which requires testators to express their wishes in a signed and witnessed writing. Yet this legacy of hyper-vigilance is waning. The Uniform Probate Code, the Restatement (Third) of Property, and ten states have adopted the harmless error rule, which excuses botched attempts to make a will under certain circumstances. Meanwhile, trusts have eclipsed wills as the dominant method of posthumous wealth transmission. Supposedly, this movement has further diminished formalism’s domain. Because trusts are immune from the Wills Act, they do not necessarily have to be written or signed, and they never need to be attested. This Article explores three budding topics that threaten to further complicate this area. First, there are anecdotal accounts of decedents trying to make electronic wills. In both strict compliance and harmless error jurisdictions, e-wills raise thorny issues about the meaning of “signed” and “writing” in the Wills Act, and when, if ever, courts should be able to overlook violations of the statute. Second, despite the received wisdom that trusts are less formal than wills, a rising number of settlors are failing to observe the arcane principles that govern the transfer of property into a trust. Third, most state legislatures have adopted or are currently considering statutes that give fiduciaries access to the contents of a decedent’s email, text messaging, and social media accounts. However, the precise steps necessary to convey these cutting-edge forms of property after death remain unclear.

The Article tries to help courts and policymakers regulate these matters by offering a fresh perspective on the purpose of mechanical, bright-line principles in the realm of estate planning. As conventionally framed, this debate revolves around what the Article calls the “intent paradigm”: the idea that execution doctrines should be gauged primarily by whether they facilitate or frustrate the wishes of individual decedents. Conversely, the Article explores a different virtue of formalism: its ability to prevent decedents from imposing spillover costs. The Article demonstrates how some unyielding principles limit the burden on courts, survivors, trustees, the trustee’s creditors, purchasers of trust property, and other third parties. It then explains how recognizing this anti-externality function can pay dividends in wills law, trust law, and emerging niches such as the inheritability of digital assets.


Will take additional time for gully correct.


8/16: Bigger is not better in mass extinction

The researchers conducted the work through a statistical analysis of a 2,497 different marine animal groups at one taxonomic level higher than the level of species — called “genera.” And they found that increases in an organism’s body size were strongly linked to an increased risk of extinction in the present period — but that this was not the case in the Earth’s distant past

Barnosky was the co-author of a study published last year that found an “exceptionally rapid loss of biodiversity over the last few centuries, indicating that a sixth mass extinction is already under way.”

EFM_ pity we cannot choose certain people to go extinct now. I have a rather large list.

9/16: The Academic Failure to Understand Rebalancing

9/15: Doctor burnout

9/15:The Sorry State Of Risk Tolerance Questionnaires For Financial Advisors

9/15: Just terrible

"Cat and Mouse: A Dynamic Analysis of Predatory Payday Lending" Free Download
USC Law Legal Studies Paper No. 16-27
USC CLASS Research Paper No. CLASS16-25

DARIA ROITHMAYR, USC Gould School of Law
University of Southern California
Emory University

Legal actors and the regulators who pursue them often engage in a co-evolutionary game of cat and mouse, as each innovates to out-compete the other. Predatory payday lenders are a prime example of this co-evolutionary arms race. Lenders have discovered increasingly creative ways to escape state regulation, like partnering with Indian tribes to claim immunity from state jurisdiction. In turn, regulators continually adapt their regulation to retarget the latest innovation. A regulator trying to keep pace with legal actors faces a tradeoff: adapting more frequently reduces the prohibited behavior, but increases wasteful innovation for both regulator and lenders, as each innovates in response to the other. In this paper, we draw from dynamic mathematical models of drug resistance to map this process and to advise regulators on how to optimize their regulatory approach. We construct a simple mathematical model using coupled differential equations to describe the arms race of innovation between regulatory strategy and the strategy of the regulated, in the context of payday lending. We conduct numerical approximations, to analyze the evolutionary pathways of regulator and lender strategy over time, and to map the tradeoff between the benefit from reducing predatory lending and the harm from having to return again and again to the drawing board to generate new regulation. We show that, contrary to intuition, a regulator should delay responding to an innovative payday lender strategy: we calculate an optimal response time that balances the need to respond slowly in order to minimize triggering repeated innovation, and the need to respond quickly to minimize the number of predatory payday lenders. We also show that a regulator that is unable to adapt quickly should weaken the strength of its innovation, in order to minimize further innovation by predatory lenders.

9/15: Health care stocks plunge as Australia restricts long-term care fees     Interesting

9/15 Experience and Satisfaction Levels of Long Term Care Insurance Customers:A Study of Long Term Care Insurance Claimants
Great stuff. Necessary for retirement advisors

Currently there are more than seven million people with long term care (LTC) insurance, and more than a
quarter million are receiving benefits. As claims grow, a key question emerges: What is the actual
experience of insureds as they seek benefits under their policies? In this study we survey a cross-sectional
sample of claimants in 2015 and 2016 to ascertain their experience with the claim filing process, their
views about their coverage, the influence they believe it has on their use of services, the quality of the care
they are receiving, and their overall level of satisfaction with their policy. In addition, we uncover the
relationship between policy characteristics and people’s level of satisfaction. Finally, we analyze the
coverage that claimants have in order to provide a coverage profile for in-force policyholders. Where
possible, we compare findings in this study with those from a 2005 Department of Health and Human
Services (DHHS) study that looked at individuals who were beginning to receive benefits.
Eleven major LTC insurance companies participated in the study by providing a random sample of
claimants for the research team to interview. A telephonic survey was conducted, consisting of 34
questions and taking roughly 15 minutes; 1,291 surveys were completed (a 37 percent response rate).
The sample was comprised of individuals receiving home care (45 percent), in assisted living (31 percent),
in nursing homes (17 percent), and in other settings (about 7 percent). On average, individuals had been
receiving benefits for two years, and the average value of total claims paid at the time the insurance
companies pulled their data was $118,986 per person. The average totalpayment to individuals in a
nursing home totaled $134,731, for those in assisted living $95,589, and for those receiving paid home
care services $76,784.

Claimant Characteristics
The average age of 2015
2016 claimants (who have been receiving benefits for some time) is 84
years; for 2005 claimants (who were beginning to receive benefits), it
was 79.
Most claimants are female (70 percent), are not currently married (63 percent), and own their own
home (55 percent). They have multiple limitations in activities of daily living (ADLs)
an average of
3.7 limitations
as well as multiple limitations
in instrumental activities of daily living (IADLs).
Some claimants transition between care sites. In total, 23 percent of claimants had previously been
in a different care setting, with those in nursing homes most likely (36 percent) to have done so an
those receiving home care the least likely (10 percent).


"How Rigged are Stock Markets?: Evidence from Microsecond Timestamps" Fee Download
NBER Working Paper No. w22551

ROBERT P. BARTLETT, University of California, Berkeley - School of Law, University of California, Berkeley - Berkeley Center for Law, Business and the Economy
University of California, Berkeley, National Bureau of Economic Research (NBER)

We use new timestamp data from the two Securities Information Processors (SIPs) to examine SIP reporting latencies for quote and trade reports. Reporting latencies average 1.13 milliseconds for quotes and 22.84 milliseconds for trades. Despite these latencies, liquidity-taking orders gain on average $0.0002 per share when priced at the SIP-reported national best bid or offer (NBBO) rather than the NBBO calculated using exchanges’ direct data feeds. Trading surrounding SIP-priced trades shows little evidence that fast traders initiate these liquidity-taking orders to pick-off stale quotes. These findings contradict claims that fast traders systematically exploit traders who transact at the SIP NBBO.


"Born with a Silver Spoon? Danish Evidence on Wealth Inequality in Childhood" Fee Download
NBER Working Paper No. w22549

SIMON HALPHEN BOSERUP, University of Copenhagen
Columbia University - Graduate School of Arts and Sciences - Department of Economics, Columbia University - School of International & Public Affairs (SIPA), National Bureau of Economic Research (NBER)
University of Copenhagen - Department of Economics, CESifo (Center for Economic Studies and Ifo Institute)

We study wealth inequality in childhood using Danish wealth records from three decades. While teenagers have some earnings, we estimate that transfers account for at least 50 percent of wealth at age 18, and much more so for the rich children. Inheritance from grandparents does not appear quantitatively important, but we do find evidence that children receive inter vivos transfers. While wealth holdings are small in childhood, they have strong predictive power for future wealth in adulthood. Asset holdings at age 18 are more informative than parental wealth in predicting wealth of children many years later when they are in their 40s. Hence, childhood wealth reveals significant heterogeneity in the intergenerational transmission of wealth, which is not simply captured by parental wealth alone. We investigate why this is the case and rule out that childhood wealth in itself can accumulate enough to explain later wealth inequality. Our evidence indicates that childhood wealth is a proxy for a broad set of circumstances related to intergenerational transmission and future wealth accumulation, including savings/investment behavior and additional transfers.