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Showing posts from 2020

Employment up, market rallies: the takeaway

Employment stunningly rose by 2.5 million in May and the jobless rate declined to 13.3%, according to data Friday from the Labor Department that was far better than economists had been expecting and indicated that an economic turnaround could be close at hand.

Economists surveyed by Dow Jones had been expecting payrolls to drop by 8.33 million and the unemployment rate to rise to 19.5% from April’s 14.7%. If Wall Street expectations had been accurate, it would have been the worst figure since the Great Depression.
As of 9:00 AM June 5, the DJIA is up about 700 points, and the S&P 500 is up 60+, or 2.5%.
Stocks rally because investors focus on the future... And the latest airline data suggests a slow (but steady) return to normalcy. COVID-19 still has no tangible solution. Trade tensions with China are bubbling. Civil unrest is breaking out nationwide. But the Nasdaq 100 just hit a record high and the S&P 500 is down only 8% from its February peak — all because investors are focus…

CARES Act provides protections to VA loan holders

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act, Public Law 116-136. The CARES Act protects borrowers with Federally-backed mortgage loans who are experiencing financial hardship due to the COVID-19 national emergency.

The CARES Act provides multiple protections on your VA-guaranteed loan if you experience financial hardship directly or indirectly caused by the COVID-19 emergency, regardless of your loan’s default status. These protections include:A defined forbearance period of up to 180 days, with the possibility for extending it for another 180 daysA foreclosure and eviction moratorium for 60 days starting March 18, 2020Instructions on how mortgage servicers are to report to the credit agencies. For example, borrowers who have requested the COVID-19 Forbearance option are not considered to be delinquent for purposes of credit reporting. A forbearance is a defined time period of one month or longer during which your mortgage ser…

5G. Was it worth it?

In January 2019 I proposed the following basket of stocks related to 5G as a possible portfolio. 

The initial total investment was $75,000. The value is currently $102,526, for a profit of $27,524.  If dividends are included, the profit is $30,037, for a total return of 40 percent (annualized to 30 percent annually). 
While some of these stocks are near or at 3-year highs, it might be worth investigating the following stocks in a smaller basket: ADI, DLR, GLW, QCOM, T, VIAV, XLNX. These companies also pay dividends, so a play on that alone would be worth an annual yield of 2.9%. 
Do your due diligence. Happy investing.

Number One Indicator of People Who Retired with Dignity

Spoiler alert: Savings rate.

Honest Advice About Getting Rich

Emotional Benefits of Strong Money Management

Originally published by Schwab, Inc. -- Even in the best of times, money concerns can cause a lot of stress. But according to a recent survey by the National Foundation for Financial Education, nearly 9 in 10 Americans say that COVID-19 is making money a primary cause of anxiety. Add to that the need to juggle working from home, child care, home schooling and health concerns and people are being stretched to the limit.

Understandably, people are worried about their financial future. Equally understandably, they often don't feel like they have the energy to deal with it. But as overwhelming as it can seem, there are strategies to help you cope and stay calm. As I wrote recently, you may have to think differently to get through these times, but there are ways to do it. And it starts with awareness.
Be aware of what you can control First realize that no matter how uncertain you may feel, there are some financial things you can still control. That in itself will help ease your stress. …

Dan Crenshaw on Socialism and the role of government

Dan Crenshaw, R-TX, speaks to Arizona State University students on socialism, taxation, gratitude, the role of government and other subjects of interest. Liberty is ordered freedom. Well worth the 51 minutes of your time.

A surge in day trading: Are people gambling their stimulus checks?

From Barron's: Boredom seems to be driving a surge in day-trading, Randall Forsyth reports. The one-time stimulus checks have often been used to bet on stocks. Sports gamblers without sports are now betting on companies without customers. According to TD Ameritrade, page visits to its “education center” spiked 280% in April compared to last year. These retail traders could be an extra source of liquidity -- and volatility -- during the normally quiet summer months.

A full-blown retail mania has taken hold in buying and selling small lots of stocks and options, says Jim Bianco, head of the eponymous Bianco Research, who over the years has been in front of the big trends in markets, in part because he watches things that conventional indicators don’t pick up.
From Bloomberg: Forget buy-and hold. Stuck at home and dreaming of a killing, bored retail traders are branching out into all manner of Wall Street exotica.

Darting in and out of stock options, dabbling in complicated exchange-tr…

The economics of California vs. Texas

Why are millions of people leaving California and moving to other states? What do those states have that California doesn’t? PragerU’s first mini-documentary explores the root causes of this mass exodus from the Golden State. “Fleeing California,” featuring PragerU’s own Will Witt, sheds light on one of the most significant but underreported stories of our time.

Crenshaw on why America is divided over reopening

Americans are deeply divided over the reopening of the country, and like most everything else these days, it’s political. In an op-ed for The Wall Street Journal, Rep. Dan Crenshaw (R-TX) breaks down why. “Liberals emphasize the dangers of an open society, shaming those who want to go back to work. Conservatives argue the opposite. Red states are steadily reopening, while most blue states lag,” he writes. “House Democrats believe it isn’t safe for lawmakers to go back to work, while the Republican-controlled Senate is back in session.” One explanation advanced is that liberals will do, say, and desire the opposite of whatever President Trump believes, he says. There’s also the geographic breakdown—the urban vs. rural divide, although this is not as black and white as it seems. And finally, the economic devastation of the shutdown may be felt less by the left-leaning and college-educated who are more likely to be able to work from home, while less educated, working-class Americans hav…

Dan Crenshaw on Socialism, Congress, and the Miracle of America
Dan Crenshaw represents a congressional district covering north Houston, Tx.

New more excuses: Zero-based budgeting made easy

Nearly every article I've either read or written about personal finance always stresses the importance of budgeting. Budgets and emergency funds are the two primary keys to guaranteeing financial peace of mind.

Now you no longer have any excuses. EveryDollar is an app (desktop or mobile) that you can easily use to budget, if you don't want to use envelopes, notebooks or spreadsheets. It uses zero-based budgeting.

Just do it. Here's a short tutorial.

How white liberals really view black voters

1. The young white people thought that voter ID is racist, that minorities do not have easy access to IDs, access to services and the internet, or don't have the knowledge to take advantage of the internet.

2. Blacks thought these white people were ignorant, racist or stupid (or all three). All had IDs, were willing to show them when they vote, knew how to get services, and had internet access.

Go figure.

To mask or not to mask

I'm not talking about the "unmasking" of Gen. Flynn, whatever that means. (It has to do with intelligence gathering methods.)

Here, let's look at the issue of wearing a mask, any mask, for the purpose of "protection" against the Covid-19 virus.

First, when I did a general Google search for face masks, the top 20 articles were either CDC, FDA, or other common agencies with articles on how to wear a mask, or where to buy one.

I was more interested if face masks where worth the bother, based on empirical data. So I did a search on Google Scholar for some scientific papers, and the conclusion was: They (most cloth masks) are not very effective, are not worn or used properly, instill a false sense of security, but are better than nothing. So I choose not to wear one unless I'm forced to, and then I may fight back. Hear that, Costco? I'm not coming to your store.

But -- if you choose to wear a mask, please do so. But do it correctly.

Covid-19: What is the …

Is it OK to reopen?

To those calling it selfish and reckless to open:

You want a shutdown but expect your garbage to be picked up. You expect stores to be open with food and supplies. You expect farmers, packers and pickers to generate the supplies. You expect truck drivers to deliver them.

You expect Amazon to ship your packages while you sit at home. You expect the driver to leave it on your doorstep.

You expect your phone, cable and internet to work, and power to stay on. You expect your mail to show up, rain or shine.

You expect doctors and nurses to be available, although many have been furloughed.

The entire premise of shelter in place is based on the the idea that "others" must risk their health so you can protect yours. There is nothing virtuous about ordering your Amazon packages and making trip after trip to the store while claiming we need to stay shut down. And the new thing now is mask shaming, and roaming "deputies" spying on their fellow citizens to "encourage"…

The 'Heros' Act: Democrats new stimulus much more than stimulus

The House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act – the HEROES Act for short -- a $3 trillion follow-on relief package to the $2.2 trillion package signed into law in March.

The bill passed the House on a vote of 208 to 199. Lawmakers had less than three days to consider the 1,800 pages of legislation.

The math of House Speaker Nancy Pelosi’s latest bailout legislation, misleadingly called the Heroes Act, is mind-boggling.

There has already been roughly $3 trillion in coronavirus response spending approved. The Heroes Act contains another $3 trillion, for a total of $6 trillion. This $6 trillion is more than $18,000 for every person in the United States. Or more than $72,000 for a family of four.

Only a fraction of this is to pay for direct COVID-19 related health-care expenses. The bulk of it is to prop up the economy in one way or another.
For example, the act provides more than a trillion-dollar bailout for state and local governme…

Don't make these mistakes

00:01:20 - Mistake #1: Not investing at all 00:04:05 - Mistake #2: Not having an emergency fund 00:07:18 - Mistake #3: Waiting too long to get in 00:09:46 - Mistake #4: Investing too much money at once 00:11:05 - Mistake #5: Not investing enough to cover future financial needs 00:14:25 - Mistake #6: Not considering taxes 00:16:55 - Mistake #7: Not being honest with yourself about how hands-on you want to be

What the unemployment report shows -- the real impact

While most major news -- and financial -- outlets are reporting the basic unemployment rate of 14.7%, a more encompassing measure that includes those not looking for work as well as those holding part-time jobs for economic reasons also hit an all-time high of 22.8%. That reading may be a more accurate picture of the current jobs situation as millions of workers are being paid to stay home and thus not willing or able to look for new jobs. Its previous worst level was 17.2% in April 2010.

The jump in the “real” unemployment rate reflected a plunge in the labor participation rate to 60.7%, its lowest level since 1973.

In all, the rolls of the unemployed surged to 23.1 million, a jump of 15.9 million over March as governments across the country placed stringent restrictions on what businesses could be open. Multiple states are beginning to relax those rules, but about 60% of the economy remains under stay-at-home orders.

However, it’s not clear if the April numbers fully accounted for t…

Beyond Covid-19: Important Issues to Consider

Jordan Peterson warns against government power:

Adam Schiff should resign:

New York Post: Adam Schiff lied about the Trump investigation, and the media let him
Just so you know: Adam Schiff, as a representative in the U.S. House, represents West Hollywood, Burbank, parts of Pasadena, Glendale, the Verdugo Hills communities of Sunland and Tujunga, as well as parts of central Los Angeles including Hollywood, the Hollywood Hills, Echo Park, Silver Lake, and Los Feliz.

Why you should return to work, even if unemployment pays more

The Motley Fool -- At issue is the $600 weekly supplement to state unemployment checks, enacted by the CARES Act. In many states, that extra $600 doubles or even triples unemployment payouts. Consider Alabama, which previously had a maximum weekly unemployment benefit of $275. The additional $600 increases that maximum to $875, which would be an income increase to anyone who was formerly making less than $45,000 a year. Even in Massachusetts, where benefits are the highest in the country, the extra $600 equates to a "raise" of 73%.

A big unemployment benefit versus a smaller paycheck? That's not an easy choice to make in normal times, when there isn't a contagious virus lurking outside your home. Certainly, remaining unemployed does satisfy some immediate needs. On the simplest level, you don't have to go outside and you can still pay your bills. But there are longer-term benefits -- for you, your employer, and the economy -- associated with making the tough choi…

I slept and dreamed...

I slept and dreamed that life was beauty.
I woke and found that life was duty. 

Has the market hit bottom?

Seven Rules of Money

Below are seven rules of money. I have collected videos for you to watch to learn the concepts. You may not like all of them. But watch them. And find your own. There is a lot of information out there. Most of it is OK; some of it not. This will help you achieve financial security or independence. First: You define what financial security means to you. Set your goals in writing. An Introduction to Goal Setting (49 minutes).  For lazy or attention deficit people: A Shorter Introduction (6 minutes).

Dave Ramsey ruined our life!
Pay yourself firstAlways have/use a budget. Is budgeting really that hard?20/30/50 method: 50% needs, 30% wants, 20 percent savings. How to manage your money with the 50/30/20 RuleAutomate your savings and investments. How do I automate my finances? Saving alone will never make you richCompound interest. In only two minutes. From investing guru Warren Buffett.Importance of investing. Should we invest our savings?How to invest: Investing BasicsHow does the stock m…

Leaving the Left

What's Better? A Roth or Traditional IRA?

Both traditional and Roth IRAs can be effective retirement savings tools, but eligibility limitations mean one or both may not be right for you. Here’s a guide to help you choose.

What’s the difference between a traditional and Roth IRA?

A traditional IRA is an individual retirement account that allows you to make contributions on a pre-tax basis (if your income is below a certain level) and pay no taxes until you withdraw the money. This makes a traditional IRA an attractive option for investors who expect to be in a lower tax bracket during retirement than they are now.

On the other hand, Roth IRA contributions are made with after-tax dollars. The benefit of a Roth IRA is that you can withdraw your contributions and earnings tax-free after age 59½, if you’ve had the account for at least five years, or you meet certain other conditions.² In addition, your after-tax contributions to the Roth account can be withdrawn at any time, tax- and penalty-free. However, if you make an early with…

Big Tech Censors Dissent Over Coronavirus Lockdowns

Massive Job Losses Continue, But Pace Slows

Initial claims for unemployment insurance totaled 4.43 million for the week ending April 18, marking the fifth consecutive week of massive, record-shattering layoffs, and dwarfing the previous high of 695,000 in October 1982. However, on a positive note, the latest tally is the third week of declines in the number of initial claims since the 6.87 million claims during the week of March 27.

During the Great Recession in 2008-09, total job losses were 8.8 million over 25 months versus the current 5-week total of 26.5 million initial claims. The unprecedented flood in claims is the leading edge of a tsunami of negative economic statistics that reflect the impact of the COVID-19 outbreak and the drastic policy reactions implemented to contain the spread.

Sales of new single-family homes tumbled 15.4 percent in March to a 627,000 seasonally adjusted annual rate. Sales are now down 9.5 percent from a year ago. Sales fell in all four regions tallied: sales plunged 41.5 percent in the Northeast…

Oil: Troubles are Just Beginning, But Won't Last Forever

Wall Street tumbled for a second straight day on Tuesday as a collapse in U.S. oil prices and glum forecasts by companies worsened fears of a deep economic downturn.

All 11 S&P 500 sector indexes fell 1.6% or more, with energy sliding for the seventh time in eight sessions a day after the WTI contract crashed below zero as oil traders ran out of storage for May deliveries.

With the collapse spilling into June futures contracts, equity investors became wary of the extent of the economic damage from sweeping lockdown measures that have halted business activity and sparked millions of layoffs.

The May Crude Oil Contract took a destructive hit April 20 as the contract traded into negative territory. Crude Oil plunged to all-time lows surpassing levels not seen since 1983. A variety of factors contributed to the heavy selling pressure and the lack of demand remains a major concern. The Light Sweet Crude Oil May 2020, (CLK20) contract traded well below the $0 price point, dropping as lo…