10 Tuesday AM Reads

My two-fer-Tuesday morning train reads:

• The Surprise About Weak U.S. Profits Is How Strong They Are (Bloombergbut see Warren Buffett and Jeremy Grantham have been warning us about this moment for years (Business Insider)
• 60/40 Return Expectations (A Wealth of Common Sensesee also Goldman’s O’Neill Comes Up Short on active investing (ETF.com)
• Charley Ellis Foresees a 401(k) Crisis (Morningstar)
• Who Owns Stocks? It’s Not Just the Rich (Real Time Economics)
• Apple Executives Mark Anniversary of Steve Jobs’s Death With Personal Tributes (Re/Code)

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What's been said:

Discussions found on the web:
  1. VennData commented on Oct 6

    “I’ve volunteered to go to prison with the government many times. What I won’t do is I won’t serve as a deterrent to people trying to do the right thing in difficult situations,” Snowden said in the interview in Moscow,


    Shut up. Leave Russia. And do the time for your horrific CRIMES, Criminal.

    Snowden you are a criminal and a traitor.

    • Winchupuata commented on Oct 6

      You certainly have the right to have that opinion about him but in mine he’s a hero.

    • Crocodile Chuck commented on Oct 6

      He’s a bigger patriot than you or me, VD.

      You’re just too thick to realise it.

      Having re-read BR’s rules for posting, I’ll leave it there.

    • just-sayin commented on Oct 7

      Hey Venn
      You’re sounding a lot like one o dem ole Republicans you love.

      Think about this….usually a traitor is motivated by personal gain or
      due to some warped ideology.
      Snowden definitely was not motivated by either of these.
      From what I have seen he just wanted to wake up Americans
      to what their government was up to.

      What should he have done instead…sit in the corner and suck his thumb?

    • rd commented on Oct 6

      The Putin and Assad solution to the hospital problem is simple: you either deny it ever occurred; or just say that somebody stored explosives there and blew itself up. That way you don’t have to pay attention to the event at all.

    • just-sayin commented on Oct 7

      Did you check out the comments on that gun article?
      Pretty obvious why America has a gun problem listening
      to the gun-toting heroes there….

  2. rd commented on Oct 6

    Re: Charley Ellis 401k crisis

    I think the real solution to the 401k problem is to set up a default 401k, similar to a 529, at the state or federal level. Any employer could use it as long as the employee put in at least 6% of pay and the employer immediately matched 3% with instant vesting with no minimum waiting periods or investment amounts. The contributions would be sent in with FICA taxes. The investment would be a diversified target date fund with an ER of less than 0.5% (preferably less than 0.3% – financial firms could bid at 5 year intervals to manage it). High school students scooping ice cream could be enrolled in it as well as many mom and pop small businesses.

    A strong Social Security plan at current levels, which is essentially a government-guaranteed annuity, with a 9% savings plan invested in the markets would likely suffice for most people since the savings would be starting at an early age.

    However, it would have to move the financial sector away from its current looting mentality where the primary goal is to plunder 1%-3% annually from savers while mystifying them with complex mumbo-jumbo sales jargon. Given the current war being waged in Washington over the fiduciary requirement, I can’t see that helping savers and society is high on the agenda of these firms.

    BTW – the longest I have worked for any firm has been 13 years. Defined benefit plans would have been disastrous for me. However, I have been amassing a fair chunk of change in defined contribution plans over the years so that retirement should be comfortable without having to work until 70.

    • Winchupuata commented on Oct 7

      Amazing how something like this is allowed and leeches like these guys are getting filthy rich. It does pay off to be scum.

    • VennData commented on Oct 6

      Did I say Correct? I guess it depends on your POV

  3. rd commented on Oct 6

    Does anybody actually invest in a 6040 portfolio? I would expect that a 40/20/40 or 30/30/40 portfolio would be much more common as most portfolios now, and certainly most “all-in-one” funds now have a healthy dose of international stocks (some have international bonds as well).

    • intlacct commented on Oct 6

      yes, essentially. Paper assets 50%: 60/30/10. Real assets 50%. Most dependable performer? Human capital!

    • intlacct commented on Oct 6

      No funds for them unless we find another place to cut.

  4. winstongator commented on Oct 6

    re: Warren Buffett and Jeremy Grantham have been warning us about this moment for years

    They are really stating the obvious – the economy is bad during recessions. However their statement highlights their error: “In every period except one, a 0.6% decline in margins in 12 months coincided with a recession.” Coincidence is not a cause or even a leading indicator. If you look at most of the time periods, the dip in margins doesn’t happen until a recession has already started.

    Really useful information is in the ‘these three signs show a recession is imminent!’ posts.

  5. RW commented on Oct 6

    What the TPP likely ain’t and likely ain.

    That Massive TPP
    It is amazing how the elite media can be dragged along by their noses into accepting that the Trans-Pacific Partnership (TPP) can have a big impact on trade and growth. …The reality is that the vast majority of the trade between the countries in the TPP is already covered by trade agreements as can be seen. [pie chart]

    This doesn’t mean that the TPP can’t have an impact. It will lock in a regulatory structure, the exact parameters of which are yet to be seen. …We also know it will mean paying more for drugs and other patent and copyright protected material …[and] …the Obama administration gave up an opportunity to include currency rules. This means that trade deficit is likely to persist long into the future.

    NB: The relationship between an expensive (AKA “strong”) dollar, increased trade deficit and increased unemployment rate is grossly under- and mis-reported in the financial press. Generally speaking the average working American pays dearly for cheaper foreign goods and less expensive vacations abroad (when they take them which is rarely).

    • rd commented on Oct 6

      They ain’t seen nothin’ yet. Just wait until the hedge funds figure out that there can be real money made here.

  6. Jojo commented on Oct 6

    ZIRP takes on a whole new meaning
    Oct 6 2015, 03:07 ET | By: Yoel Minkoff, SA News Editor

    Officially joining the 0% bond club, the U.S. Treasury sold a new government security on Monday containing a three-month maturity and a yield of zero for the first time on record.

    In essence, buyers gave a free short-term loan to the government in exchange for a highly liquid debt instrument for their portfolio.

    The result adds to the diminishing expectations – stoked by Friday’s disappointing jobs report – that the Fed will keep interest rates at basement levels throughout 2015.


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