Enjoy that extra hour of sleep? Put it to good use with our Sunday morning reads:
• Why Does America Need a ‘Deal’ to Not Blow Itself Up? (Esquire)
• 60-40 Is Dead. Long Live 60-40 (Institutional Investor)
• When the Superrich Die, Here’s What’s in Their Wallets (Real Time Economics)
• Ben Bernanke, Student of the Great Depression, Repeated a Mistake of the Great Depression (Slate) see also The Financial Crisis: Lessons for the Next One (CBPP)
• How to be a Good Client (A Wealth of Common Sense)
• ‘Fire Paul Ryan’? Rebel PACs Hit Republicans, and It Pays (NYT) but see As Bush Slips, So Does His Party (Bloomberg View)
• The Congressional GOP is destroying itself: Why its reliance on extremists is slowly poisoning it to death (Salon)
• Rap is capitalist (Noahpinion)
• WTF? Herpes affects two-thirds of people under 50, WHO says (The Guardian)
• Daniel Craig interview: ‘My advice to the next James Bond? Don’t be shit!’ (Time Out)
Be sure to check out our Masters in Business interview this weekend with Mario Gabelli of GAMCO.
London’s Real Estate Market is the Most Nuts
Source: FT Alphaville
Shooting on WSSU campus leaves 1 dead, 1 injured
http://www.journalnow.com/news/local/shooting-on-wssu-campus-leaves-dead-injured/article_bfe3bfe0-8090-11e5-8313-d3af20a430e8.html
You Republican Presidential debaters should blame CNBC for these shootings.
Jeb Bush Reflects on Debate Performance: ‘I Gotta Get Better’
http://abcnews.go.com/Politics/jeb-bush-reflects-debate-performance-iowa-gotta/story?id=34877090
I think I can, I think I can, The little engine that could.
The defining statement about modern America. If you’re this stupid, this clueless, as long as you have a Rolodex and you’re willing to cut taxes for the wealthy, you’re in the running for president.
Jeb Bush Vows to Fight Through Campaign’s ‘Bumpy Time’
http://www.nbcnews.com/meet-the-press/jeb-bush-vows-fight-through-campaigns-bumpy-time-n455136
It’s bumpy time. Bump, bump, bump, Like a little rabbit hoppin’ along to it’s hole and where are the carrots Elmer Fudd? Time to end bumpy time and hop, skip and jump to the White house for the Easter Egg hunt.
Can John Ellis Bush “get on” with the low information slugs in the GOP fever swamp?
Seems Cruz figured it out, only moderators who respect the denizens of the GOP fever swamp should be trusted not to ask questions devoid of fact and reason.
As to fever swamp the last “team” who got enough denizen of hatred and fear going in the same direction long enough to take over was Hitler’s.
I think we are all being way too hard on Jeb Bush. He has only been learning how to run for President for 20 years now.
Markets react to fiscal realities and, as we have learned the past few decades, when fiscal policies are based on fantasies then investing gets tricky; come to think of it so does running a country.
The GOP Circus: Truth-Defying Feats
…some years ago. A National Review writer named Kevin Williamson wrote a worried dispatch in 2010 called “Goodbye, Supply Side.” …
I found this conservative’s daring foray into the reality-based community exhilarating. (How did it manage to slip by the National Review editors?) Three years after he wrote it, I tracked him down and asked what happened next: what ripple effects had come from his patient proof that Republican economic dogma was based on a fantasy?
“None,” he replied. Williamson then reflected upon further questioning that, well, some: certain Republican politicians admit privately that he is correct, but “it’s hard to get them to acknowledge it in public because it’s become such a piece of dogma.”
Fast forward to Wednesday’s “Your Money, Your Vote” Republican debate. …
“Don’t tell me what you value, show me your budget, and I’ll tell you what you value.” –Joe Biden
The on-air ‘groping’ that got Mexico talking
http://www.bbc.com/news/blogs-trending-34679077
Mexico’s infamous groping was staged.
AP: Hundreds of officers lose licenses over sex misconduct
By MATT SEDENSKY and NOMAAN MERCHANT
Nov. 1, 2015
12 photos
OKLAHOMA CITY (AP) — Flashing lights pierced the black of night, and the big white letters made clear it was the police. The woman pulled over was a daycare worker in her 50s headed home after playing dominoes with friends. She felt she had nothing to hide, so when the Oklahoma City officer accused her of erratic driving, she did as directed.
She would later tell a judge she was splayed outside the patrol car for a pat-down, made to lift her shirt to prove she wasn’t hiding anything, then to pull down her pants when the officer still wasn’t convinced. He shined his flashlight between her legs, she said, then ordered her to sit in the squad car and face him as he towered above. His gun in sight, she said she pleaded “No, sir” as he unzipped his fly and exposed himself with a hurried directive.
“Come on,” the woman, identified in police reports as J.L., said she was told before she began giving him oral sex. “I don’t have all night.”
The accusations are undoubtedly jolting, and yet they reflect a betrayal of the badge that has been repeated time and again across the country.
…
http://bigstory.ap.org/article/fd1d4d05e561462a85abe50e7eaed4ec/ap-hundreds-officers-lose-licenses-over-sex-misconduct
One of the predicted consequences of global warming is that farming areas will move north (while present growing areas will grow hotter and change to desert. Over time, farm production in North America will move north out of the mainland USA and further into Canada/Alaska. Here is a story that appears to support this change.
=============
NPR
Rising Temperatures Kick-Start Subarctic Farming In Alaska
November 01, 2015 7:51 AM ET
We’ve heard a lot about the negative effects of climate change in the arctic and subarctic. But some Alaskans, like farmer Tim Meyers, are seeing warming temperatures as an opportunity.
Now that potato harvest is underway at his Bethel farm, Meyers uses a giant potato washer, like a washing machine for root vegetables, to clean California white potatoes.
They’re some of the only commercially-produced vegetables in this southwestern Alaska region, about the size of Oregon.
Meyers says the warming summers are a big part of his success.
“I hate to say that but I guess I’m taking advantage of the fact that it is getting warmer,” he says.
…
http://www.npr.org/2015/11/01/453337333/rising-temperatures-kick-start-sub-arctic-farming-in-alaska
Re: 60/40
Who uses Vanguard Balanced Index anymore? It sounds big at $25B, but their Target Date 2025 is already at $30B, and that is just one of the many TD and LifeStrategy funds that Vanguard runs. I think the article’s focus on adding hedged equity strategies etc. as the next step from a simple S&P500/US bond fund is a classic Wall Street canard to sell something complex with significant fees to replace something simple that can be augmented easily with little extra cost. The simplest solution of funds like the Vanguard TD and LS funds get you half-way there very simply and with virtually no fees, but there is no money to made there for salesmen.
So the standard 60/40 S&P500/US bonds fund is effectively dead. The Vanguard funds are some of the simplest alternatives and they have a solid blend of US & Intl stocks along with US & Intl bonds. These index-based funds don’t have a value tilt since they are cap weighted and they don’t have real assets either. They also have a relatively small weighting towards emerging markets as well since the international component is cap-weighted. However, if somebody wants to tweak their portfolios a bit, they can use one of the TD or Lifestrategy funds as the core and add 5-10% each of REIT, EM, LV and/or SV index funds and a pretty complex multi-factor portfolio emerges with a very simple structure for rebalancing and very low costs. My guess is that this would have higher returns and lower volatility over a decade or more than 90% of the offerings out there with virtually no effort or costs.
China and Demographics: Lessons for the Washington Post
The end of China’s one child policy is producing an outpouring of nonsense about demographics. Nowhere is the confusion greater than in the opinion pages of the Washington Post, …
The Post again told readers today that China faces a terrible demographic problem because of its one-child policy.
To see why this is not true, we will …contrast a country with moderate productivity growth and no demographic change with a country rapid productivity growth and a rapid aging of its population. …
NB: The Washington Post is the official mouth organ of the Very Serious People so it needs to be understood that this macroeconomic ‘confusion’ about China is simply another editorial manifestation of the core argument for even more cuts in the social safety net of the United States. What’s that you say, you didn’t know the latest budget agreement included another cut in Social Security? Boehner may have been the front man but there’s not much chance incoming House Speaker Ryan would have approved any deal that didn’t give him a scalp.
I believe demographics are very important for long-term economic trends. However, the USA, Canada, and a handful of other countries have a huge advantage because these countries have been formed by assimilating immigrants from all over the globe for centuries now. “Old World” societies like China, Japan, and many European countries don’t have that option because their self is defined by their past.
As a result, we have the capacity for adjusting our demographics, almost in real-time, by simply modifying immigration quotas. Very few other countries can do that without creating enormous social disruption.
Certainly. Over the long run national demographics are important in assessing the probability of GDP growth rate and nations successful in assimilating immigrants are more likely to do better in that regard. However the same could be said of nations with stronger productivity growth because It does not take as many workers to reach the same output.
Therefore focusing on the worker to retiree ratio as the WaPo editorial board and similar VSP’s tend to do is misleading at best: That ratio does not tell you enough and it certainly does not tell you whether a nation can or cannot afford a safety net for its citizens over the long term.
RW wrote “What’s that you say, you didn’t know the latest budget agreement included another cut in Social Security?”
==========
I call BS! What they did was close an unfair loophole, which is exactly what Congress should be doing more of.
How about taking on the mortgage deduction next Congress?
Labeling file-and-suspend as somehow unfair is one of those ‘common sense’ opinions or value judgements that is not supported by fact (in this case actuarial rather than macroeconomic): it does not disadvantage those who contribute to SS nor those who are receiving benefits but did not file-and-suspend (whether they could or not); it does offer flexibility and some advantage to those who do, single-earner couples in particular; see http://crr.bc.edu/wp-content/uploads/2009/05/IB_9-11.pdf
The only SS beneficiaries penalized by the loss of claim-and-suspend are those couples who might have received a bit more income while in the gap before full retirement age. That loss is “unfair” if you like but, regardless, the only real BS going on is the claim that benefits were not in fact cut.
PS: agreed the mortgage deduction should go or at least be reduced to some threshold below jumbo.
There is a more detailed discussion of this in a Slate article. An excerpt:
“File and suspend was the Social Security equivalent of having your cake and eating it too: No longer did you need to decide between either taking earlier but lesser benefits or waiting for the maximum payoff at a later age.
Boston University economics professor Laurence Kotlikoff, one of the leading champions of file and suspend, estimates that the loophole allows Social Security recipients to collect up to an extra $50,000. Kotlikoff himself has all but built up an empire devoted to teaching people how to use the regs to maximize their Social Security benefits, offering online software and co-writing a bestselling book, Get What’s Yours.”
http://www.slate.com/articles/double_x/doublex/2015/10/budget_deal_closed_social_security_loophole_known_as_file_and_suspend.html
IMO, we would be better served as a society if we stopped trying to nuance every law and regulation looking for the loopholes and instead strove to adhere to the spirit of our laws.
Great Sunday to watch commercials on Fox all day.
Especially galling us the half dozen before the boring kickoff, the boring kickoff, then the half dozen after the boring kickoff
Cullen Roche does a short defense of Ben Bernanke: http://www.pragcap.com/the-real-tragedy-of-the-crisis-was-congress-not-the-federal-reserve/
“WTF? Herpes affects two-thirds of people under 50, WHO says (The Guardian)”
Oh Barry, Barry, Barry. Such a babe in the dating woods.
https://en.wikipedia.org/wiki/Epidemiology_of_herpes_simplex. Note how the curve is headed respective to age. Last I looked, women over 50 have a 50% likelihood of having it. I don’t have time but maybe someone else can locate it (maybe a CDC link).