ENRON COLUSION: (WSJ) "Nearly 100 Merrill Lynch & Co. executives invested more than $16 million of their own money in a controversial partnership that the securities firm was selling for Enron Corp. Though each executive invested less than $1 million, the people said, their involvement highlights the role played by senior Wall Street officials in helping to create some of the partnerships that Enron used to pad its earnings and hide debt from investors -- and that eventually resulted in huge losses that led to the energy-trading company's downfall. This partnership was particularly controversial because it allowed some Enron officials to make far more money working part time on the partnerships than they did working full time for Enron." And, "Merrill's involvement as underwriter for Enron and its executives' investments raises serious conflict-of-interest questions."

My problem is that these partnerships may be held as entirely legal as the congressional investigation goes forward. It may show that the partners and managers were greedy- but entirely within their rights to do this. The “Economist” noted, “As revelations in the Enron affair continue to tumble out, employees and investors are furious at the way senior executives seem to have behaved and at how auditors, analysts, banks, rating agencies and regulators turned a blind eye to what was going on."

The accounting debacle will ultimately require some changes, but unless the tax laws change, the ability of a corporation to make up separate partnerships to hide income and negate taxes will still run amuck. Frankly, I think after all the hew and cry, some adjustments will be made. But the attorneys and accountants will simply find new ways to create the shelters and bypass integrity, honesty and more. This will go on till the next company blows up. Too much lobbyist money. It might be that the only entity that really gets slammed is Arthur Anderson. And of course all the employees lost much of their retirement. Further, many of these partners may actually keep much of the fortunes they made (stole).

MARKETING: (NY Times, AARP) The 50-plus age group is the fastest growing segment of the population.

• Seniors control 48 percent of all discretionary spending; 43 percent of new cars are bought by seniors.

• The net worth of seniors is five times that of other Americans; people over 50 had a total net worth of $20 trillion in 1998, up from $7.6 trillion 15 years earlier. But numerous studies show that they have limited knowledge how to actually plan for an extended lifetime (how many years will you life, actuarially, after age 65?). If you don’t know, you are one of the those that may end up in financial difficulties

I'm trying to imagine you with a personality.

401(K) DISASTER: A bill that would allow workers to receive more investment advice about 401ks and help avoid these type of economic disasters, "The Retirement Security Advice Act", would allow life insurance and other financial service companies that provide retirement plans to also provide investment advice. Currently those companies are forbidden from offering advice. Under the bill the financial companies would be required to fully disclose its financial interest when advising on investment vehicles. Supporters say workers need all the advice they can get to prevent Enron type situations.

The problem is that the advice will never be taught or offered. A life insurance company agent/executive/small furry animal has never been taught anything about diversification. Neither has a financial broker/service company or just about anyone else. Oh, there will be restrictions that will become law- but they will be based on something far removed from knowledge. You have to know the fundamentals of investing before you can do anything- certainly doing instruction. I suppose there are some classes that focus on this- but no licensing classes nor no continuing education instruction.

And here is just what I mean about lack of knowledge by even the most “sophisticated” people. Tom Brokaw had a comment that his elderly mother had bought 200 shares of Enron some time ago for a little over $8,000. She sold it recently for $80. He obviously was making the point that Enron lied, how it took money from little old ladies, etc. etc. Sorry, but the point was entirely missed. What is some old lady doing buying individual stock anyway? She did not have a clue to what she was doing. Where was Tommy boy in advising his dear mother that the purchase of single securities for someone her age was clearly inappropriate? And he didn’t do anything cause he doesn’t have a clue.

Now, if you think you are so good at picking individual securities, then you shorted K Mart late last year

I got kicked out of ballet class because I pulled a groin muscle. It wasn't mine.

Rita Rudner

GROWTH IN WORLD’S ELDERLY POPULATION UNPRECEDENTED (United States Census Bureau) The world's population age 65 and older is growing by an unprecedented 800,000 people a month, according to a report issued December 13 by the U.S. Census Bureau and the National Institute on Aging. The report, "An Aging World: 2001," predicts that this phenomenon of global aging will continue well into the 21st century, with the numbers and proportions of older people continuing to rise in both developed and developing worlds. The pace of population aging, the report found, varies widely among countries. Generally, developing countries are aging faster than more developed ones. Demographers estimated that more than three-quarters of the world's net gain of older people from 1999 to 2000 occurred in still-developing countries. The ratio of older people to total population differs widely among countries, too. The United States was 32nd on a list ranking countries with high proportions of people age 65 and older. Italy replaced Sweden as the world's oldest country in 2000, with 18 percent of Italians having attained age 65.

(LA Times) About 10% of the world's population is now over age 60. That will double by 2050 (where I will be conveniently dead). Japan and Italy now have median ages above 40. Nations where the 60+ population is expected to be about 40% by 2050 are Germany, Spain, Switzerland Greece, Sweden, Bulgaria, Slovenia, the Czech Republic and Armenia. The U.S has lots of young immigrants and we will reach only about 27% of age 60+ by 2050.

Of those over age 80, 2/3 are women. By 2050, there will be 3.2 million people aver age 100.

Today there are 9 people of working age- defined as age 15- 65- for every older person. This ration will shrink to 1 in 4 by 2050.

EXPECTED: ("Closing the Gap: A National Blueprint to Improve the Health of Persons with Mental Retardation") The U.S. health care system has "failed to respond to changes in the lives of people with mental retardation," and these individuals continue to receive inferior health care. people with mental retardation "feel excluded from public campaigns to promote wellness" and face "exceptional challenges in staying healthy." Although a growing number of mentally retarded people no longer live in mental institutions, the report says "neither the education and training of health professionals nor other elements of the nation's health system have been updated to reflect their progress"

If you read the statistics from police for many years, the bulk of the homeless are mentally ill. Many were forced out years ago when the government said that the mentally ill should not be “incarcerated”.

MEDICARE: Out-of-pocket costs for Medicare+Choice beneficiaries increased almost 50% from 1999 to 2001, while average monthly premiums rose and prescription drug coverage declined during the same period. Out-of-pocket prescription drug costs for those in poor health increased 56% from 1999 to 2001, while drug costs for those in good health increased 47%. The average monthly premiums for Medicare+Choice beneficiaries increased from $14.43 in 2000 to $22.94 in 2001, while the percentage of beneficiaries with prescription drug coverage decreased from 78% to 70% over the same period

ASSISTED SUICIDE: (British Medical Journal 2001)Doctors in the Netherlands are allowed to kill patients with "suffering of a medical nature" if they request euthanasia. The law in most other countries declares this illegal. So the Dutch have extended the edges of doctoring. A court in the Netherlands has now decided, however, that doctors cannot accede to requests for euthanasia from patients with "existential suffering" often associated with aging, resulting from loneliness, emptiness, and fear of further decline. The court accepted that the physician’s patient, former senator Edward Brongersma, had endured such suffering. He was obsessed with his physical decline and hopeless existence. He had spoken with his physician on up to nine occasions of his wish to die. But the appellate court accepted that the problems faced were not medical ones and that general practitioners had no expert experience in these questions. It believed that the senator’s physician had promised too soon to fulfill his wish to die, rather than seeking other solutions for his sense of life’s pointlessness.

In that same context, you can look at the statistics for Oregon- the only state where assisted suicide is allowed (though there is a federal position to stop it). There were just a few that requested drugs- mostly end stage renal decease- and fewer still that used them. I have always felt that if you are at the end of life with no hope of improvement and there is pain, it could be viable. But there is also hospice care which does everything to provide comfort in the last days of life.

PROACTIVE IDEALISM: (Craig Cox, Managing Editor of Business Ethics) "The new proactive ethical movement arises from the recognition that in the world at large and business in particular, idealism has become the most practical policy to assure long-term viability and growth. Pragmatic idealism means 'doing the right thing' at every available opportunity."

So why did ENRON (and many others yet to come) go wrong? Per Tom Rusk, MD, An ethical culture in no way assures an organization's success; however, organizations that ignore ethical standards, or wink at ethical lapses, do so at their peril. "Long-term profitability is practically synonymous with an ethical culture of success., "Many of the most serious and chronic problems of American business have to do with the pursuit of short-term profits above all else."

I thought this headline on ENRON hit the nail on the head: “Some of the lawmakers and regulators investigating some of the causes behind the Enron- Arthur Andersen scandal may need to look no further than a mirror.”

Although ENRON went "too far" with its use of partnerships and greed, I can assure you that many companies are doing exactly the same thing. Offshore filings to lower or completely eliminate taxes is a mainstay of tax planning. Bush has been unwilling to shut these things down and the IRS has lost numerous cases lately on the legitimacy os such partnerships/tax shelters. The lobbyists pump a lot of money to politicians who turn a blind eye to the breaches of fiduciary duty that the officers and directors are supposed to have. Supposedly nothing new here- just that it went so far as to destroy many lives.

Then you have this- corporations loaning money to executives at absurd "rates". The NY TImes notes, One is for $2 million, to be repaid over five years with no interest. Two others, one for $5 million and one for $10 million, will be forgiven if the borrowers keep their current jobs for a few years." More than 25 percent of large companies give their executives loans. About 15 percent of large companies give their executives loans to buy stock or to exercise options, up from about 10 percent in 1996. Because of the way such loans are structures, investors may never know in time (if at all) what is truly going on with any the company. Hence, further validation that the effort in buying individuals securities is effectively a high risk game- particularly if you do not know the numbers to diversification. And hardly anyone does.

LTC MEDICAID: A recent BDO Seidman study shows that nursing homes in Washington lose an average of $11.96 every day on every Medicaid-funded resident, creating an annual shortfall of more than $61 million.

HEPATITIS C: One of the important facts to understand about Hep C is that it is most often discovered by coincidence. This virus will not cause symptoms for 20 to 30 years after initial infection. Unfortunately, the symptoms that do show up are very serious, and include both cirrhosis and cancer of the liver. This virus is frequently contracted through previous blood transfusions, tatoos and contaminated needles. Of course, today the blood supply is free from Hep C, but with the long period before symptoms develop, new cases resulting from transfusions continue to be diagnosed. Roughly 20% of the population will eliminate the virus without any intervention. The remaining 80% result in persisting infection without medical treatment. Over 50% of those with the persistent infection can be treated successfully with a combination of ribavirin and interferon. This treatment is usually given for a year for maximum possible effectiveness.

PRODUCTIVITY: (USA Today) NY TimeS) productivity — the amount of output per hour of work - increased at an annual rate of 3.5% in the October-December quarter, a big improvement over the 1.1% growth rate in the previous quarter.

How is that possible? Businesses responded to slumping sales by sharply cutting back on their payrolls. That caused the total number of hours worked to drop at a faster pace than output, thus creating a rise in productivity.

Normally it goes down in a recession. During the last 30 years, the average annual growth rate of productivity in all quarters was 1.7 percent. In quarters that included periods of recessions, as identified by the National Bureau of Economic Research, productivity shrank at an average annual rate of 0.35 percent. Yet in the three quarters since the most recent recession began in March 2001, productivity has clocked annual growth rates of 2.1 percent, 1.1 percent and 3.5 percent.

RETIREMENT?: (NY Times) While their parents stopped working at 65, the children are finding that they must stay on the job until their late 60's or early 70's if they want to live as well in retirement. Forty percent of the people who have saved for their retirement and are now 67 are still on the job. That's compared to only 20 percent of the 67-year- olds with company-financed pension plans.

The employer-financed pensions, combined with Social Security, produced a retirement income at age 65 equal to nearly 60 percent of a typical worker's preretirement pay.

Part of the reason is this- Life expectancy for 65- year-old Americans is 84 years, up one year since the 1970's. To collect 60 percent of preretirement income through age 84, people will have to continue working, and saving, to age 69.5. "You lose 4.5 years of leisure but you gain a year of life expectancy, so the net loss is 3.5 years of leisure." That's the reason I focus so heavily on the actuarial lifetime with about 5 years extra depending on health. Then you have to add in for long term care costs, etc. And medical bills will keep piling up until the U.S. has a national plan. Even if it finally does, only the most indigent will get it for free so figure that medical care will still be quite costly for anyone now age 50 forward. (Frankly, I think it will always be this way).

ASBESTOS THERE, MOLD HERE:"Asbestos, the product once known as a ``magic mineral'' because of its heat-proof qualities, is set to become an increasing curse for Europeans who worked with it and a multi-billion dollar problem for the insurance industry. Concerns are growing that a United States-style explosion in asbestos-related claims could hit European firms that manufactured and installed asbestos products, and well as insurers who covered the health of those firms' employees."

But do you know what is apt to be the next biggest curse for property insurers in the U.S. (outside of terrorism) MOLD. Recent articles note that it’s liability is soon to pass that of asbestos.

401(k) The Profit Sharing/401(k) Council of America says of companies with company stock in their 401(k) plans, including matches and employee purchases, the amount of company stock breaks down approximately this way:

35 percent of the employees have less than 10 percent company stock in their plans.

Ski vacations are a great way to visit some nicely appointed and professionally staffed emergency rooms

John Wagner

INSURERS AND 9/11: (BEST) The immediate financial impact on life insurers of Sept. 11 was manageable, with worst-case scenario payouts anticipated at under $6 billion. Best anticipates that these combined forces will have longer-term implications for insurers' investment portfolios, mental health and disability claims and life reinsurance, particularly catastrophic life reinsurance, group life reinsurance and workers' compensation carve-out coverages. Other findings:

1. A 5% growth in net premium and 15% decline in pretax statutory operating earnings in 2001, as compared to 11% and 10% respectively in 2000.

2. Extreme volatility in the equity markets and low interest rates are causing customers to shift from variable to fixed products.

3. The need to define limits on terrorism coverage going forward is critical. While a more immediate issue for property/casualty insurers, the implications of bioterrorism and other threats make it a concern for life/health insurers as well.

4. There are some indications that more people are seeking out life insurance, turning the old "life insurance is sold not bought" adage on its head.

And more: The unprecedented events of Sept. 11 have forever changed the way the insurance industry defines risk. Both property and liability lines have been exposed to catastrophic risks that cannot be priced using traditional actuarial methods." Some trends:

1. Underwriters must now think in terms of target potential and consider the huge clash potential, in addition to traditional loss exposures.

3. Expect to see a renewed flight to quality that will benefit financially strong insurers and reinsurers.

4. The changing risk environment has introduced even greater volatility that will keep the property/casualty and financial services industries from combining.

THE RICH GET RICHER: (NY Time) The number of Americans with million-dollar incomes more than doubled from 1995 through 1999 but the percentage of their income that went to federal income taxes, however, fell by 11 percent.

For those with million-dollar incomes, the share of their income that went to taxes fell to 27.9 percent in 1999, from 31.4 percent in 1995.

For those Americans who did not make a million dollars, the portion of their income going to taxes edged up in those years, to 12.8 percent from 12.5 percent.

Those making a million dollars or more, just one of every 625 taxpayers in 1999, more than doubled their slice of the nation's income to 11.2 percent that year, from 5.4 percent in 1995. These high-income taxpayers also captured a quarter of the nation's total personal income growth from 1995 through 1999.

The incomes of taxpayers making less than $1 million also rose, though not as sharply. The income of everyone making less than a million dollars averaged $41,000 in 1999, up from $33,500 in 1995, a 22 percent increase, the data, using adjusted gross incomes, showed.

The tax return data show that the number of taxpayers reporting incomes of less than $25,000 declined slightly, while those reporting incomes at higher levels increased.

I can see your point, but I still think you're full of crap

LTC: While the average stay in a nursing home is 2.6 years, most of those people didn't become disabled and need care only from the first day they entered the nursing home. Many of them required care prior to entering the nursing home, sometimes receiving care for months or years at home before their health condition or personal situation made it necessary to seek care in a facility.

The WSJ article notes that, ". . . the problem with planning for long-term care . . . . [is that] . . . you don't know how incapacitated a person is going to be and how long care will be needed for." A respondent noted, "That's exactly why insurance is a good idea; it provides financial protection and peace of mind against this uncertain but potentially catastrophic risk. Uncertainty about how much care you might need should not be a reason not to plan ahead and consider insurance. The appropriate question to ask yourself is, given the uncertainty, how would I pay for care and still maintain my family's qualify of life, if I needed care for an extended amount of time? While insurance may not be right for everyone, it is critical that they consider whether or not it makes sense for them and to plan in advance for how they would pay for care if they decide not to buy insurance."

But think about this- do you buy fire insurance or auto insurance with the intent to use it- or know how much you might need via statistics. You never want to use insurance. Emotional security is at least as important.

STUPID: (CBS) A retired couple held $700,000 in Enron stock. They were told to diversify but said that they had done so well they wanted to stay in. They have about $4,000 left. Sorry? O.K., I am sorry for them. By the same token, they were stupid. You got $700,000 in one investment and you don't even go to the library to determine what is practical? You don't take the advice of a (supposed) professional?

Harsh? Sure. But if you were born in Ethiopia, you'd already be dead by now. That's harsh. America gives the opportunity to learn and think. It's called reading. Try it some time.

For those that were still employed at Enron, (NY Times, WSJ) employees had 62 percent of their 401(k) holdings invested in the company's stock.

Labor Secretary Elaine Chao said a task force had considered, but quickly rejected, the idea of imposing caps on the amount of employer-company stock that workers can hold -- an idea that has been incorporated into several recent bills due to Enron. "We need to remember: It's [the workers'] money. "They earned it, they sacrificed to save it; and they should have the right to decide how to invest it."

What a moron. Does that also allow a father to operate on his son because he has the "right" to make such decision? Ludicrous. Or ingest drugs. Sure, we know it happens. We also know what the end result universally is. It's the same with investor's- they don't have a clue to the fundamentals. And if they make the wrong mistake by being stupid or gullible, should they suffer consequences because the government is out to lunch Should the ER's simply get a walk?

Actually it's simple. Just teach the EE's what diversification is by the numbers. For those that still want to accept risk, they MUST sign a release form (perhaps with spousal consent) acknowledging the extended exposure and releasing the company from any subsequent claims if the stock folds. Easy.

All that said, there has been a total breach of the fiduciary duty owed to consumers. And its starts right at the government. No entity- the SEC, NASD, etc.- has ever required the fundamentals of investing be taught or presented to anyone.

The greatest weakness of most humans is their hesitancy to tell others how much they love them while they're still alive.

O. A. Battista

GOING UP AND UP AND UP: ("The Budget and Economic Outlook: Fiscal Years 2003-2012," Congressional Budget Office (31 Jan 2002) Medicare spending will grow at an annual rate of 7.2 percent through 2012, with automatic annual updates to provider payments representing much of the increases, the Congressional Budget Office said in a 10-year budget outlook released on January 31. Given a 7.2 percent annual growth rate, total Medicare spending in 2012 is projected to reach $498 billion. Counting the Social Security surplus, meant to support future retirees, the federal government will accumulate a $2.5 trillion surplus overall from 2003 to 2012. Without the Social Security reserves, the picture changes to a cumulative $242 billion deficit.

Over the next decade, Medicaid spending is projected to grow more rapidly than spending for other means-tested programs. Higher prices, greater consumption of services, and, to a lesser extent, higher enrollment will continue putting upward pressure on Medicaid costs--pushing outlays from $143 billion in 2002 to $323 billion in 2012--an average annual increase of 8.5 percent. Spending for acute care services, which includes payments to managed care plans and payments for prescription drugs, accounts for more than half of all Medicaid outlays and is the most rapidly growing component of the program. Acute care spending is anticipated to grow from $76 billion in 2002 to $188 billion in 2012. Spending for long-term care, which accounts for about one third of all Medicaid spending, is also expected to grow rapidly, climbing from $42 billion in 2002 to $98 billion in 2012, as states expand eligibility for home- and community-based services in response to legal challenges under the Americans with Disabilities Act.

Osteopornosis: A degenerate disease

ETHICS: "The lone whistle-blower is often set up against a powerful corporate or government entity with more resources and power. "From the get-go, you have the likelihood of retaliation." People committed to bringing out the truth need to steel themselves, as well as their families, for difficult times. "The Enron scandal has increased pressure on companies to create programs that encourage employees to expose wrongdoing without fear of retribution. Would-be whistle-blowers have some cause for hope." We shall see. I think it will be a passing fancy.

MEDICAID COVERAGE: (California HealthCare Foundation's Medi-Cal Policy Institute (MCPI) Nearly half of California's primary care physicians (45 percent) and specialists (43 percent) say they do not have any Medi-Cal patients in their practices.

*In 1998, 55% of primary care physicians and 57% of specialist surveyed said they treated Medi-Cal beneficiaries. According to the surveys, the percentages of doctor participation in Medi-Cal did not change significantly from 1996 to 1998.

*On average, Medi-Cal beneficiaries accounted for 11% of primary care physicians' patients and 7% of specialists' patients. Among physicians surveyed in 1998, half said that less than 5% of their patients were enrolled in Medi-Cal.

*Medi-Cal participation among specialists ranged from 41% for orthopedic surgeons to 67% for obstetricians-gynecologists.

*The ratio of primary care physicians to Medi-Cal beneficiaries in 1998 was 38 per 100,000, "well below" the Health Resources Services Administration's recommended workforce standards.

*Spanish-speaking physicians and those from "underrepresented minority groups" were more likely to accept Medi-Cal beneficiaries. Also, international medical graduates or physicians not board certified were more likely to treat Medi-Cal patients (Bindman et al., "Physician Participation in Medi-Cal, 1996-1998," CHCF Medi-Cal Policy Institute, February 2002). Dr. Andrew Bindman, lead author of the study, said of the last finding, "These attributes may enhance the cultural competence of physicians available to Medi-Cal patients. On the other hand, international medical graduates and physicians who are not board certified are also more likely to participate in the Medi-Cal program, which raises questions about whether Medi-Cal patients have access to the same quality of physicians as privately insured patients" (CHCF release, 2/11). The report also analyzed physician perception of the Medi-Cal program and found that most had "negative opinions" about the program. Among those who accept Medi-Cal patients, 94% said reimbursement rates were inadequate, and 87% said the paperwork required of the program makes it "burdensome" to participate. Also, the study found that 76% of all primary care physicians and 82% of specialists surveyed said Medi-Cal beneficiaries have more complex health problems than other patients and a majority require additional time for "explanations and education."

OBESITY IS NOW A WORLDWIDE PROBLEM. There are 800 million worldwide that are undernourished. But there are now 300 million that are obese and the problem is escalating dramatically. Obesity is the “same” as being 20 years older.

COMMON DETERMINANTS OF BOND AND STOCK MARKET LIQUIDITY: The Impact of Financial Crises, Monetary Policy, and Mutual Fund Flows l (Tarun Chordia, Asani Sarkar, and Avanidhar Subrahmanyam) The authors study common determinants of daily bid-ask spreads and trading volume for the bond and stock markets over the 1991-98 period. They find that spread changes in one market are affected by lagged spread and volume changes in both markets. Further, spread and volume changes are predictable to a considerable degree using lagged market returns, lagged interest rates, lagged spreads, and lagged volume. During financial crises, stock and bond spreads and volume are more volatile and become more highly correlated; moreover, money supply positively affects financial market liquidity, albeit with a two-week lag. During normal times, increases in mutual fund flows enhance stock market liquidity and trading volume, but during financial crises, U.S. government bond funds see higher inflows, resulting in increased bond market liquidity.

GREEDY AND STUPID (US News): A former school teacher bilked over 200 "investors" out of 15 million (including some pro football players) by offering a 300% Yes, that's a three with TWO zero's) in just 7 days. She is now serving a 12 year jail term. But the 200 investors should be put in a home for the unbelievably stupid.

In another scam, an advisor went after many football players by displaying his mansion, expensive cars, etc. He lied to them, inflated the value of the real estate, took undisclosed commissions and diverted monies. So why did they go with him in the first place? The SEC says they were unsophisticated investors who "lapped up his good- guy act". But he also conned his pastor, fellow parishioners, retirees and the disabled. . The SEC noted that his advisory services were unregistered.

If you do not read, don't like to read, don't have time to read, hire someone that does. Too much money continues to be lost by people who are lazy, stupid and/or arrogant. You do not trust people with your money- certainly based on esoteric issues. What should you do? Read Who Can You Trust .

RETIREMENT (WSJ) After two years of watching their portfolios shrink, nearly one in five investors is considering postponing retirement, by four years on average. A survey released Wednesday by MetLife Inc.'s Mature Market Institute found that 33% of the 924 adults between the ages of 38 and 55 that it surveyed are less confident about their financial strategy as a result of the recession and September's terrorist attacks.

The UBS survey found that 26% of the investors it questioned in their 50s are considering a later retirement date, along with 21% of those who are 60 or older. And nearly 40% of those in their 60s also expect to live less comfortably in retirement than they had expected before the recession.

The latest study also shows that 19% of investors have made changes in their portfolios in the wake of the recession, with 38% of them withdrawing money from the financial markets, and 71% shifting to less-risky investments.

I personally feel that the entire issues rolls areound the comment, “less confident about their financial strategy.” Unless you have the ability with a financial calculator, read material from the FED and have a good grasp of statistical market history and volatility, you cannot develop a decent retirement strategy. If that is not done, people easily get caught up in the euphoria of the times, watch some 30 year old pretty boy “analyst” on CNBC telling them the U.S. structural economy h10as changed forever, valuations mean nothing and so on. Even Charles Schwab, Peter Lynch, Louis Rukeyser, et al, are part of the problem since they suggest that “you too can successfully buy stocks.” Well, have you read anything most recently that any of them shorted Enron and made millions? What about shorting Kmart? If analyzing a company’s financial statement and interpreting the footnotes in a financial statement was so easy, why did everyone miss the “obvious”. Further, how many of these companies would you need to review in order to have a viable portfolio. About 50- 70. Can you do that bunky? I don’t think so.

So what are the choices? Generally low cost index- or index like- funds that have low turnover. But the real the trick in the proper selection is to gauge the national and international economies given current conditions and select those that fit within your risk profile and your needs. Additionally, you may need to adjust these because you are aware of past history- the “fine” example being 1973/74. I submit that no one could lose 45% of their assets and sleep at night- or that their spouses would let them. You have to do your homework. If you are not willing to read or don’t have the time to do so, hire someone that does.

Reintarnation: Coming back to life as a hillbilly.

SCOTT FREE: The past CA Insurance Commissioner, Chuck Quackenbush, was forced to resign due to a number of "improprieties" including taking money from an account to pay his wife's failed political bills. He moves to Hawaii. And guess what? The State says they are now unable to prosecute, so this guy goes scott free. He indicated he was going to write a book Bite me. No wonder insurance gets such a (deservedly) bad name. Since it is incapable of going after the people at the top, it's ineffectiveness is also shown at the bottom.

Years ago I approached the CA Department of Insurance in an attempt to weed out the fraudulent practices I found running rampant in this state as well as others. Through perseverance, I was able to get the Department to issue a letter of condemnation against the various planning organizations. Did it work? Nope. The organizations knew the Department was understaffed and the wholesale unethical activity continues.

And here is a way that Lay protected himself anyway. He and his wife are guaranteed about $400,000 a year in income starting in 2007. Unlike the Lays' other assets, which are threatened by lawsuits, Texas state law puts annuities out of reach of creditors and plaintiffs' lawyers. That’s also true of other states and worth looking into as a protection from creditors. OJ Simpson was able to shelter his pension plan from the civil suit.

ASSISTED SUICIDE: It is allowed by law in Oregon since 1997. So has there been wholesale slaughter and misuse of the law? In 2001, 44 people had received prescriptions for lethal drugs. But only 21 took their lives. The median age was 68. Thirteen- 62%- were women. About 50% had end stage cancer.