This has been quite the week. Here are your pre-NFP morning train reads:
• Fees matter more than asset allocation (FT) see also Why You Owe Your Freedom to Jack Bogle (Total Return)
• Number of ultra-rich swells to almost 173,000 (The Guardian)
• Shilling: Look Out Below, Copper’s Falling (BV)
• Fed’s Williams: Ready to Consider Rate Rises Starting This Summer (Real Time Economics) see also Six Charts That Tell the Story of the Unfathomably Bleak Economy the Fed Faced in 2009 (Real Time Economics)
• Apple Found Its Newest Billboards On The Internet (BuzzFeed)
John Cleese explains Dunning-Kruger (a link from Bruce Bartlett {https://twitter.com/brucebartlett} a Republican with a functioning brain.)
https://www.youtube.com/watch?v=wvVPdyYeaQU
The Whitewater saga continues…
Give us all your emails!
US strategy in Iraq must (democratically; US supposedly gave them “freedom” with Baghdad running the place) rely on the most numerous faction. Two thirds the population of Iraq is Shi’a. That Shi’a are closer to Iran than ISIS’ Iraqi Sunnis (former Baathists, etc) is a bothersome irrelevance.
US strategy remains unified Iraq, to keep a unified Iraq would either: Saddam state imposed by Sunnis/ISIS or a Shi’a state.
Otherwise, if you despair of both Sunnis/ISIS and Shi’a break up Iraq.
CO2 Levels for February Eclipsed Prehistoric Highs (Scientific American)
“by century’s end enough CO2 will have been spewed from burning long-buried stores of fossilized sunshine to raise concentrations to 550 ppm or more, enough to raise average annual temperatures by as much as 6 degrees C in the same span. That may be more climate change than human civilization can handle, along with many of the other animals and plants living on Earth, already stressed by other human encroachments.”
This is great news – 85 more years to Drill, Baby Drill !
http://teapartyatperrysburg.blogspot.com/2014/12/its-time-to-give-sarah-palin-her-due.html
“Sarah Palin was never an editor of the Harvard Law Review but unlike the president she knows bullshit when she hears it. She doesn’t put her faith in lithium ion batteries or solar panels. She believes in the ingenuity of Americans, the ability to find a fix for about any technical problem.”
Scientific American… is neither Scientific or American.
– Rudy Guliani
Uh….I think his actual quote is “I am not a scientific American.”
Apple put into Dow…
http://www.reuters.com/article/2015/03/02/us-nasdaq-apple-dow-insight-idUSKBN0LY1PS20150302
Notice how the American-loving keepers of the well-regarded, much-followed, highly-relevant, mathematically-sound and important index, the Down Jones industrial Average only added APPL run by a known supporter of gay marriage AFTER the liberal Warren Buffet took control of RINO Rupert Murdoch’s company?
http://money.cnn.com/2015/02/17/investing/buffett-fox-stake/
Warren Buffet, Rupert Murdoch, and Tim Cook don’t love America.
– Rudy Guliani
Well, I hope Warren doesn’t fire all the ditzy blonds on FOX. They might talk out their asses most of the time, but at least they’re fun to look at.
Actually, that was rude and I apologize. It was stated in haste while at McD’s for coffee. Fox News was spewing out the rhetoric on Obama Care, which I know isn’t perfect, and some old rednecks were there going along with it. I had to point out to them that they had a lot of nerve considering they are recipients of the biggest social programs we have. SS, MediCare, not to mention depreciation on every head of cattle they own, and a tax write off for all the fuel they pump into their gas guzzling 4×4 quad cab dually work pickup that is also depreciated but used for personal travel 90% of the time. But we won’t tell the IRS. It’s the same old story. I got mine and the hell with you.
You clearly missed how imperative it is that the government’s hands be kept off of Social Security and Medicare. Our freedom must be protected!
Fees matter more than asset allocation….
Wealth Front says the same thing. Look at the graph half way down the page. Although they call it index funds return vs mutual funds.
https://www.wealthfront.com
For a $10,000 investment the return for index funds over mutuals fund is $93,687.
For asset allocation the return over 20 years produces is $22,306.
Although the info given in the Wealth Front link isn’t completely clear, the message is the same, fees matter a lot, a whole lot.
It is interesting how much Wealthfront focuses on tax management in their upfront market materials. That means a primary marketing target is well-heeled investors who are investing outside of retirement accounts. That is right in Merrill Lynch’s etc. wheelhouse.
I think everybody has been assuming they are targeting millenial start-up investors, but they can do a fair amount of savings in 401ks and Roth IRAs where tax management is a non-issue other than just saving the money in the first place. The focus on tax management means they are going after individuals who are saving more than $20k or so per year.
Silicon Valley mints 23 new billionaires to become best place to get rich
State of California now has 131 people worth 10 figures, more than any country beside China and the US
03 Mar 2015
If you want to become super-rich, move to Silicon Valley.
It may sound like obvious advice, but the latest Forbes rich list, has just named it home to the greatest number of billionaires on the planet after China and the US.
The tech hub has minted 23 new billionaires in the last year alone, fuelled by the recent success of companies such as taxi-ordering app Uber and Airbnb, the holiday home rental website, all founded in northern California.
Last year the tech industry also spawned the world’s youngest billionaire – 24-year-old Evan Spiegel, the CEO and co-founder of mobile messaging company Snapchat, who has a net worth of $1.5 billion (£1 billion). Snapchat’s other co-founder, 25-year-old Bobby Murphy, had the same net worth.
…
http://www.telegraph.co.uk/news/worldnews/northamerica/usa/11446029/Silicon-Valley-mints-23-new-billionaires-to-become-best-place-to-get-rich.html
I don’t want to become super-rich. Just multi-millionaire next door rich. Provided we can tame health care, that should be plenty.
Netanyahu’s answer is war against Iran
http://m.ft.com/cms/s/0/c78a7cd0-c1bd-11e4-bd24-00144feab7de.html
Settlements in Tehran!
And, btw, US, you fight it and you finance it. Thereby ensuring that your kids can”t go to college, your oldsters can’t retire and your people can’t have universal health care. Niiice.
so we think we can retire, using a defined contribution plan. and while we have over all saved a lot (24 trillion), most of it is in IRA (7.3 t). while the defined contribution plans (401k,403(b), 457(b),etc) have a total of 6.6 trillion). and the majority have less than 200,000 in them, some have s lot less. but there are some who have a million or millions. but they arent a majority. and lots of boomers will be working past 65, cause they have no other choice. with pensions slated to follow the dodo bird into oblivion, the 1960-1990s version of retirement is pretty done. we will go back to the old version, where you work till you either died, or were so physically unable too. and you ended living with your children, cause you had no choice,
guess some have got their wish to bring back the old days
just not do sure that the rest of us wanted it
Interesting stats from a recent Fidelity study http://www.usatoday.com/story/money/2015/03/05/investors-millionaires-in-the-making/24385157/
36% of workers have saved less than 41k for retirement and 60% have saved less than $25k. Probably most of these workers have no defined benefits plan outside of SS as well.
Typically, people with at least $250k in retirement savings make $125k/year while people with $2.5M or more in retirement savings and are still working make $200k/yr.
BTW – I would much prefer to raise the limits for IRA contributions so that middle-class earners can save more and get back the difference in taxes by clawing back the excess savings of a Mitt Romney type of IRA. Some sort of maximum amount like Obama proposes makes sense as these programs were always designed for middle-class and lower-upper class savings in the first place. it is surprising how much of the total assets sits in these mega-IRAs so even a fairly large cap in the $5-10M range would claw back a fair amount of tax-sheltered money. Why should a middle-class family be limited in their contributions if a millionaire can game the price of an asset contributed to his IRA?
because
freedom?
American Democracy is doomed?
http://www.vox.com/2015/3/2/8120063/american-democracy-doomed
The failures of Bush compared Obama’s successes make the whole point moot. The mass of voters see progress and “legal hardball” is why we write laws spelling things out. It’s always been legal hardball, with people going over the line since Washington Crossed the Delaware.
Obama’s done a great job. The right can’t except that.Bush was a disaster, the right can’t accept that either. But sixteen years is making the center move the Democrats way.
Almost no one ever mentions Bogle’s bigger creation (I think eventually someone would have taken indexing where it needed to go – Wells Fargo – just make the institutional version available to the public, DFA, Arnott, someone else). What is the shortcoming with everyone I just listed? They all still have the conflict of interest between the fund management company and the fund shareholders. Bogle cut that thing like Alexander and the Gordian Knot. A simple thank you would be nice. And no more Bloomberg columns with uncomplimentary pictures.
Whenever I see the UHNW charts I think “Who did this guys have to screw/what did he have to do to have this obscene level of wealth. Yes, it’s obscene when my countrymen can’t have health care, their retirement is under threat, their kids can’t go to college, the wealthy can sway elections, and employees of the firms the UHNW’s own pay so little that special HR programs are required to guide them through the complexities filing for food stamps.