By Simon Grey, on December 27th, 2012
There are probably diminishing returns to this investment strategy, but aping the rich is not a bad idea, at least in this case:
Investors worried that inflation and financial market turmoil will wipe out the value of their cash have poured money into gold over the past decade. Prices have gained almost 500 percent since 2001 compared to a 12 percent increase in MSCI’s world equity index.
Sales of gold bars and coins were worth almost $77 billion in 2011, up from just $3.5 billion in 2002, according to data from the World Gold Council.
“The rich are buying standard bars or have deposits of phsyical gold. People that have less money are buying up to 100 grams,” said Michael Mesaric, CEO of Valcambi “But for many people a pure investment product is no longer enough. They want to be able to do something with the precious metal.”
If people who make their money in stocks don’t think that stocks are going to be very profitable for much longer, then one of two things is the case: either we’re about to see a very impressive opportunity for making money in the stock market because all the experts are collectively wrong, or it’s time to buy gold. I’ll let the reader decide which scenario is more likely.
By Simon Grey, on November 1st, 2012
Maybe parents might want to consider the effects of pushing their children to get a college education:
Cyndee Marcoux already was stretched thin, thanks to the $80,000 in student loans she racked up after getting divorced and going back to school a decade ago. Her breaking point came in 2010, when her daughter defaulted on student-loan payments of her own.
That’s because Ms. Marcoux, a 53-year-old library administrator in Seekonk, Mass., co-signed for about $55,000 of her daughter’s loans. When the daughter was unable to keep making payments, Ms. Marcoux was on the hook—a burden that forced her to reshuffle her entire life. To scrape up the extra $550 a month she owed, she sold her house, then took a second job registering emergency-room patients on the weekend overnight shift. “You work your whole life and never pay a bill late,” says Ms. Marcoux. “You don’t ever think your kid isn’t going to pay.”
As certain internet writers have noted, this outcome wasn’t exactly unpredictable. When supply of college-educated labor outpaces demand, due in large part to federal subsidy and state propaganda, it should come as no surprise that the average income of college-educated individuals decline. And since demand for college has outstripped supply (though it should be noted that supply is radically increasing right now, almost like a bubble), two things began to happen at once: wages for college-educated workers declined while the cost of college education went up. The outcome? Lots of college grads are stuck with a lot of debt and no way to pay for it.
Making matters worse, the federal government—in conjunction with the major banks who lend out college loans, service the debt, and even act a collections agencies in the event of default—has conspired to basically make the recipients of student loans into debt slaves by preventing students loans from being discharged in bankruptcy. Furthermore, the federal government strongly encourages parents to co-sign for their children’s college loans by requiring their financial information when filling FAFSA.*
All this has started to bite a good number of parents in the rear. Deservedly so, I might add. Hopefully this will help other parents to wake up and start to actually consider whether a) their child should really go on to college and b) whether they will legally bind themselves to pay for their child’s worthless majors.
* Note: while this is only technically required to determine students’ grant status, it is assumed that parents are going to pay for their children’s education (hence the parents’ expected contribution) portion of the FAFSA calculation. Parents implicitly agree, since they are often expected and encouraged to sign for their children’s loans. Thus, the rarely-challenged assumption is that parents are good for their children’s education costs.
By Simon Grey, on April 10th, 2012
Sixty percent of women in the United States who are 65 or older do not have enough income to cover basic expenses without help, even if they are married, according to the report.
That is compared to 41 percent of men in that age group.
The report compares income, not including food stamps or help with utility bills, to very basic monthly expenses for housing, food, transportation and health care. For a single person, this Elder Economic Security Standard Index, developed by Wider Opportunities for Women, estimates an annual income of $19,000 to $28,000, depending on whether they own their homes outright, rent or pay a mortgage. For married couples, the necessary income to cover basic expenses ranges from $29,500 to $39,000.
More than half the nation’s elderly do not make enough. But women, who typically outlive men, are more vulnerable. Nearly half of white women, 61 percent of Asian women and three-quarters of black and Hispanic women have incomes that fall below the Elder Index levels. Men 65 or older report incomes that are almost 75 percent higher than women’s.
There are two trends that promise a miserable future for women.
First, the sexual revolution, which has enabled female promiscuity on a scale heretofore unseen, has done serious damage to marriage, and will continue to do so as men realize that informal LTRs are preferable to legal marriages. This means that women are less likely to have husbands in the future, ad will be less assured of having access to a man’s wealth. This will be problematic for women since it is already difficult for them to make ends meet without spousal or government help.
Second, the current federal spending trend is unsustainable. Quite simply all the benefits that today’s retirees take for granted, plus all the other benefits that politicians continue to promise them in their various bids for election, will simply not exist in the future. People cannot have everything, which is one way of saying that resources are finite. At the current rate of consumption, they will eventually be squandered, and no one will have anything. This means that women will be even worse off because the government will not be able to provide for them anymore, particularly if environmentalists of the left wing manage to impose their plans for destroying the economy for Gaia.
Women will have three options to avoid this mess. They can either take their future financial security into their own hands by getting degrees and jobs (and real jobs, wherein one actually contributes to the economy and doesn’t merely engage in busy work), they can marry beta providers (trololol), or they can become part of an alpha harem (and here alpha refers to a man who can command resources to provide for multiple women). My guess is that women will go down first path until the bottom falls out of the economy and demand for superfluous workers declines, and then they will go down the third path, which will incidentally lead to the decline of civilization.
By Christopher Briem, on February 28th, 2012
Sometimes it is worth looking back at old posts. Actually a reader reminded me recently that there still are ‘deals’ being shopped to consumers for locking in long term natural gas prices. Reminds me that a year and a half ago I posted this letter I received myself.
Was it a good deal? Even then Elwin pointed out the problems with interpretng the offer. It seems the offer was just for the commodity price of the gas, not the total price consumers pay. If someone had taken this deal, they clearly would have lost out vs. the option of not taking it. But what about going forward? There are current version of these deals being offered are you can check out the current version of the natural gas shopping guide put out by the state. It seems to still be the case that for all the vaunted deregulation of natural gas supplies in Pennsylvania, some of us only have one alternative offer and even that comes at a price that is above prices we get by default these days. That and I am pretty sure the current natgas price has not yet fully adjusted for the recent drops in natural gas prices. The bottom line is that the only ‘offer’ I have is to pay a higher price than what I currently get with the added benefit that the higher price will be ’locked in’ for a year. You would think with all this gas literally erupting all around us there might be a few more suppliers willing to offer gas to consumers at more competitive rates? A curious system of ‘competition’ all around.
And on that state shopping guide page.. it seems that none of the archive links seem to be working??
 Join the forum discussion on this post - (2) Posts
By B.P.T., on February 22nd, 2012
Thanks for the article from Laura Ryan
I worked in the garden all day yesterday. I was trying to clean out all of the winter nastiness because I heard that we were having an early spring. I raked and hauled off leaves, pulled vines, tended the soil, and picked up an trash that had made its way to the garden. I worked really hard. I worked so hard that my back was killing me at night. I ended up taking two ibuprofen and turning on direct tv new haven and relaxing the rest of the evening. I spent most of the next day doing the same too. You can imagine my disappointment when a big snow storm rolled through on Sunday. I was so upset! I thought that the snow was over. I had spent all day working hard getting the garden cleaned up and ready. Now, I am going to have to do it all over again, but this time I am going to make sure and take some ibuprofen before I get out there!
Join the forum discussion on this post - (2) Posts
By B.P.T., on January 23rd, 2012
Thanks to Darwin Barton
There’s something to be said for raising your kids on a daily basis and that’s what I’m working on doing. A few years back my husband and I made the tough decision for me to quit my job and it’s been really nice, actually, since we’re able to have me watch the kids all day while he works. I love him to death but I wish he made a bit more money only because our life has changed dramatically in the last few years. We’ve not cut back on certain things like home alarm systems and the organic produce we like to buy but others like trash pickup and things like that had to go to make room for our new lifestyle. I don’t feel bad about it though because it means I get to be with the kids and do what I like to do which just makes me feel good about how I’m living my life. I know the kids appreciate being able to have their mom around!
Join the forum discussion on this post - (2) Posts
By B.P.T., on January 20th, 2012
With all of the volatility and uncertainty in the market, investing with options can be a good strategy to limit risk or speculate on a theory without putting down too much capital. Trading with options can be risky and requires a good understanding of the underlying security and why options change in price, so many retail investors end up ignoring them completely. However, despite that potential risk and education required, there are many instances where an average investor can use options to protect or enhance their portfolio. The CBOE has a great introduction to options trading if you would like more information.
Once you know enough about options to begin trading, you need to find a place to trade them. Many well known stock brokerages also offer the ability to trade options, but before you go with your existing stock broker, you should review the offerings from all options brokers to make sure you are getting the best deal and the best support for options trading possible.
Because options trading can be very complicated, many brokers offer advanced options trading software tools to help investors place these trades correctly. If a broker doesn’t offer this and forces you to place all legs of a trade manually, it probably isn’t the best place to trade options. Another factor to consider is which software platforms are supported by the broker. Many brokers now offer the ability to trade and review your portfolio from your mobile phone or tablet, so if that is something that interests you, be sure to pick a broker with those features. Also, you need to evaluate the amount of support you need when trading, and the type of support you prefer. Many brokers offer customer service 24 hours a day via phone, email, or chat, while others only respond during business hours or are only available using certain methods of communication. Last but not least, you need to consider the costs of trading at each brokerage. The pricing structure can vary widely, and some are better suited for frequent traders, while others are more attractive to people that keep positions in place for a longer period of time, so you need to evaluate your personal strategy and choose accordingly.
After considering all of the criteria listed above, I decided that MyTrack is the best online options broker for me. It has a good education section, software that is specifically made for options trading, competitive pricing, and good support. Hopefully you’ll be able to find a broker that is just as good for you.
By Simon Grey, on January 18th, 2012
Now, with the property worth roughly $60,000 less than the balance of their mortgage, Martin, 68, has been giving serious thought to just walking away, a process lenders call “strategic default.”
“Guilt and morality are one side, and objective financial analysis are on the other side,” Martin said. “They’re coming to two opposite conclusions. I wonder how many other people are struggling with the same question.” [Emphasis added.]
Actually, there is nothing at all immoral about walking away from an underwater mortgage. Yes, people (particularly Christians) are generally morally bound to pay their debts. But here’s the thing: If you default, your debts will be paid.
In a general mortgage agreement, the borrower agrees to borrow a certain amount of money at a specified price (called interest) from a lender. Since houses tend to be expensive, lenders don’t generally give out unsecured loans; in fact, lenders generally demand some type of security—also known as collateral—to secure the loan. In general, a mortgage is secured by the property being purchased with the mortgage.
This means that if a borrower misses a specified number of payments (known as default), the lender has the right to confiscate the property pledged as security as compensation for the loan. Stated another way, if you default on your loan, your lender will confiscate your pledged property. In essence, by confiscating your property, your debt is considered paid in full by the lender. You therefore owe the lender nothing, for the lender has stated, per the terms of the contract, that ownership of property offered as security will suffice as repayment in lieu of currency.
That the lender may take a loss on the loan is the concern solely of the lender. The lender has a moral responsibility to do due diligence on each loan, in order to maximize profit. If a lender fails to anticipate a declining housing market, that is his own problem. If a lender fails to anticipate high inflation, that is also his own problem. The borrower is not responsible for ensuring the lender’s profits, the lender is. If the lender is a fool, it is not the borrower’s job to save the lender from his foolishness.
As such, it is not inherently immoral to walk away from an underwater loan. If the lender contractually accepts the property used as security as sufficient for repayment, then there is no problem with using that property to repay the loan. The only question the borrower has to ask himself is which payment method is cheaper—cash or property—and act accordingly.
Note: obviously, this is a general moral guideline, not specific legal advice. Treat it as such. If you are considering a strategic default, consult with an attorney first.
By Simon Grey, on January 6th, 2012
What about the “losers”? Bite your tongue. When you call lower-income people “losers,” you’re falsely assuming that we’re all racing for the same finish line: material success. But to a large extent, lower-income people are just racing for other finish lines. Leftist outrage over income inequality is therefore deeply misguided. To a large extent, incomes differ because priorities differ. And if the poor don’t consider their lack of riches a big deal, why should anyone else?
As I wrote before, most poor people are where they are because of the choices they’ve made in their life. In fact, it is fair to say that, all things being equal, they don’t want to be rich. They would rather have whatever they have instead of wealth.
Note that this isn’t some deep psychological analysis, but rather a tautology: by their fruits ye shall know them. You can tell that most poor people want to be poor (or, more accurately, have what they have instead of wealth) by the mere virtue of the fact that they are poor. At this point in time, the markers of poverty are fairly well-known, and so only the astonishingly ignorant do not know what is needed to avoid poverty.
Thus, most poor people know that their past actions would likely lead to poverty, yet they made them anyway. Since they knowingly made those decisions, they are no more deserving of anyone’s pity than child who sticks his finger on a hot stove after being told not to do so.
Join the forum discussion on this post - (2) Posts
By B.P.T., on December 19th, 2011
Thanks to Darwin Barton
Having a house is great. I love having a garage to park in, I love having separate room for my office and my husband’s “man cave.” I really love having a fenced in backyard for our dog and cat. I don’t love worrying about burglary, or fire, or flood. Life was most definitely a lot easier before I had any of these responsibilities. It’s funny that I so completely ignored my parents when they cautioned me to enjoy my “responsibility free” life when I was younger. I’m sure I’ll pass the same advice on to my future children, and I’m sure they will ignore it, just as I did. The one thing that saves my sanity is having a adt. This service allows me to worry at least a little less. I know my house is being monitored even in the event that I’m away when disaster strikes. While it obviously can’t prevent a fire, the service can ensure that the proper authorities are contacted when necessary. This is definitely another piece of advice I’ll pass on to my children—sign up for an alarm monitoring service!
Join the forum discussion on this post - (1) Posts
|
|
Most Popular Posts