Tuesday, July 31, 2007

Seeing Family from Japan

In the great state of Ohio this past weekend, I managed to visit some family of mine that hail from Japan. My cousins that were born there are pretty good at math and like electronic music. They also happen to have light brown hair, blue eyes and speak fluent English with no accent. My Air Force brat cousins and my favorite uncle were here stateside to buy a new home and visit colleges. I had not seen them for 3 years, and it is amazing how much time flies through the physical features of teenagers. My aunt did not look like she had aged at all, but my uncle looked a little more like my grandfather than I think even he wanted to admit.

It was great to catch up and for me to tell them of family stories from days of yore. When my aunt and uncle had retired to bed, I could impart on them bits of knowledge I learned while in college. I told them to study hard, but to remember to take a little time to enjoy life while at school. I tried to give them pointers on how to avoid the worst in relationships, the worst in spotting bad friends, and the best times to call home to keep mom and dad happy. I still have to work on that last one. My wife was there to back me up and offer bits of advice herself. As we said, "don't make the same fricking mistakes we and everyone we knew did". My cousins offered great insight into the weird happenings in Japanese culture like the men and women wearing the same clothes and styling their hair to look more and more androgynous or the Japanese version of Goth kids. I still don't understand that.


My uncle has bought a home right as he is retiring from the Air Force. He and his wife have their US jobs lined up in Ohio, and they are very excited to come back to the US. He bought it now to establish residency in case his kids go to a public school in Ohio and can take advantage of the resident tuition rates. Ohio State tuition rates for Ohio residents is about 15K with room and board. My alma mater is 46K with room and board; I hate you Cornell. His family has always lived on base housing. My aunt sacrificed a lot, while my uncle put his life on the line in Iraq, Bosnia, Kosovo, Afganistan, Iraq again, and even in Tsunami relief. I mentioned to him that he might have wanted to wait for a while to buy a house. From his hints and choice words, I got the strong impression that he has a tiny mortgage if he has one at all. I'm happy for him. I'm also happy he's only 2 hours away. He hasn't lived closer than a 20 hr drive from me for the last 20 years. I'm forever in his debt for what he has done for our country and for being a great uncle. I can't wait for his first Thanksgiving hosting.

Tuesday, July 24, 2007

The US Dollar

Ok so this chart should let you know how bad the drop has been for the US Dollar over the last few years. I have said that a weaker dollar can be a good thing for our exporting industries and possible investment in production in the US due to relative cheap labor. Moving this far down this quickly does not sit well though.

The goal of the FED is not to have a strong currency but to have a strong economy. Inflation = bad. Pretty much everyone agress to that. Other countries and regions have made moves to increase interest rates in the face of inflation. The FED is probably forced to raise interest rates the next time around, as the US dollar loses more ground and inflation still has not been tamed. As the FED has met this year and held rates steady, I have not been happy. I see inflation as a big danger as it is taxation without legislation. Raise rates, take some of the punch bowl away, and let the Phoenix that is the business cycle die and be reborn.

The downside to raising rates is that it would cause more trouble in the housing market. Jack asses who got ARMs, yes you are a jack ass for doing so and I will explain why later, would have their adjustable rates inch up in response. It would cause more folks to fall behind, stop paying the lenders, and investors on Wall St. would lose out as well. Look, foreclosure is a sad process and usually has some sad story behind it: illness, divorce, job loss, etc. If you ar foreclosed on now because you took a 2/28 ARM for that low teaser rate payment not thinking about the adjustment, I have little sympathy for you. You are an idiot for taking an ARM anyway as the mortgage rates on fixed mortgages were at historic lows at that time. In an adjustable mortgage, rates go up or down. When the current rates are at historic lows, there is generally speaking, only one way for rates to go: up. People who claim that "the mortgage man told me rates could go down" while they had a 4-5% fixed rate staring at them in the face as an option but chose that teasrer 1.25% are bold faced lying. Where was your rate going to go, -3%? If you factor in inflation, that teaser rate of 1.25% probably was like negative 3% to being with.

I'm going to go out on a limb since I do not make many predictions as I think they are generally dumb. The future by definition is undefined. I will state that if 2nd quarter GDP comes in at a solid number and inflation continues rolling along slightly above the 1-2% comfort range, the FED will raise rates. If the USDX drops below 75, the FED will raise rates. I see the FED funs rate at 5.75% by the end of 2007.

Sunday, July 22, 2007

Two Concerts - The Honda Civic Tour & the Indianapolis Symphony

In a little over two months, I have attended two very different concerts. The first was for the Honda Civic Tour featuring alternative music for cool, hip people... and mostly 14 year old girls. The second was the Indianapolis Symphony performing famous love tunes outdoors on the prairie. Both had a good vibe, but I have to admit I liked the symphony much better.


I think I already posted about this but there was some weird stuff at the Honda Civic show. First off, it's an 'alternative, pop punk' themed show with a corporate sponsor. Read that again. Punk/Alternative shows should not have corporate sponsors. The opening acts were ok, and the group +44 was there. Who is +44? They are 2 of the 3 guys from Blink 182. They added two other guitarists. Yup, they've fallen off from being punk-ish to being pop-punk to being the opening act for Fall Out Boy and hoping someone will buy their stuff without the brand recognition fo Blink 182 to rely on for sales. How the mighty TRL bands have fallen.


Fall Out Boy performed a good show. I give them credit. Their lead singer has all of the talent in the band. Sadly, he's chubby and ugly. I swear I typed this before here, so I am sorry if I am repeating myself. They did a cover of "Beat It" and an Akon song to make fun of Akon for his troubles. They performed our favorite songs, and once those were over, we busted a move out of there. There were lots of teenagers dressed like hookers there. Chris Hansen of "Dateline: To Catch a Predator" should have been there. I recall seeing young men who were old enough to buy their beers, allowing underage girls sips here and there to be 'cool'. Just not a good vibe there. Even weirder was my wife and I realizing we are older now. Whent he band was going to play their ballad, they asked the kids to put their cell phones in the air. Older folks used lighters, but my wife and I just stood there in amazement that this was the new thing. We missed that update. It was an interesting night, but I want to buy 21+ audience tickets next time I go to a concert.


The symphony I thought would be lame. Surprisingly, it was very good. The sound quality was excellent for outdoors, the symphony was near perfect, and the weather was beautiful. It was an amazing night to be outside and listening to classical music. The symphony does this every Friday and Saturday night during the summer. We will be back next summer. We will bring food and drinks though, as we saw many people will picnics set up. There were also some annoying 30-45 year olds who were drinking quite a bit, talking non-stop, and being dipsticks. I can tell I am getting older as I did not even yell at them to shut up or throw a shoe at them. Some of them passed out after the intermission, so the second half was more enjoyable than the first.


During the performance, it was nice just to shut my eyes and concentrate on the music. With the warm night's air, it felt really special. I was a skeptic at first, but won over by how good the atmosphere and music was that night. I'd like to hear a symphony in asetting more conducive to music. While the sound techs did an amazing job to make it sound so good without any odd effects from the open air "on the prairie" setting, I can only imagine a performance in a concert hall. The Mrs. and I will have to go one evening this fall or winter.

Friday, July 20, 2007

Mike Vick Can Die of Herpes and Go to Hell

I wanted to be over the top. Mike Vick can burn in hell. First off, you have herpes. Herpes is not bad in iteself, but you have herpes. I just wanted to let more people know that. I am not being funny, as I often joke about herpes, but this man has herpes. He tested for it under the name Ron Mexico. Douche.Secondly, he ran a dogfighting ring. This man was the number 1 pick in the NFL draft, signed the biggest contract in the history of the NFL, and has endorsement deals with Coke & other huge names in consumer products. He is the 27 year old, hip face of the NFL. (Now that Reggie Bush & Vince Young are around, not anymore). He threw this all away to run a dogfighting ring and cross state lines. Vick and his cohorts electrocuted, drowned, shot, and beat dogs to death. They killed dogs for losing, for not having a fighting spirit, and from what I heard on the radio this horrifying detail... they would grab dogs they saw in neighborhoods and use them for practice for their pit bulls. Sorry little Timmy or Tyrone, your dog ran away. Nope, it was used for practice by some sick ass thug wannabes.Thirdly, you are a multimillion dollar athlete. You have been paid an enormous amount of money to play a kid's game. Why on Earth are you trying to be hardcore and thuggish by running the "Bad Newz Kennels". That is not a joke; they named it "Bad Newz Kennels". This is like an SNL skit written by me. Stop trying so hard to be a thug, when you are a pampered star athlete. This goes out to all of the athletes not truly from the hood. You are 27 and with 2+ years in jail, you're peak will pass by unrealized.If you read the Smoking Gun's copy of the indictment, Vick looks fucked. The government has 4 witnesses against him and are leaning on his 3 co-conspirators. The Feds want Vick. In an interesting twist, a law put into place by Bobby Kennedy when he was AG to bring down the Mob might be used against Vick. Because of the crossing of state lines, the Feds can go after him for things he may not have organized directly but was the "Godfather" figure for execution of actions.You might be thinking he will find a way out of this because he is a sports figure and rich. No way. This region has thrown athletes in jail for failure to pay child support and has a speedy trial feature. This will go to court quick. This will result in jail time. Plan your fantasy football drafts accordingly, and think about the Falcons trading Vick's back up instead of holding him for one more year. The remaining question is: will the prison guys rape him or not because he has herpes? Does herpes scare prisoners off?May the hounds chase after him in his sleep every single evening.

Wednesday, July 18, 2007

Chevrolet Volt: An American Company's Car I Might Buy

Have you heard of the Chevrolet Volt? Seriously, this car might make me buy an American brand car. It's probably made in Mexico, but I could support 'our country' by buying it. The website explains how this is a purely electric car, that uses an engine as a back up. Not a hybrid, a pure electric car with a charge that can handle 40 miles. This is an awesome idea, and Chevy should be pimping it out non-stop.

So it is a concept car, but one that just needs a strong battery. The internal combustion engine is for use only when the charge runs out, which charges the battery back up, and you can take long road trips in this car. For long trips, the MPG can reach 150 mpg. Sign me up. Plug it in each night, and you are golden for the next day. Let's get this on the assembly line as soon as possible so we can stop importing so much oil and giving terroists and whack jobs money.

Look at the car as well, as this is key for sales. It looks cool. It does not look like a tailless sperm like the Prius. It's kind of snazzy. Nice job Chevy. This will be a huge seller if they can get it to market before Toyota gets their electric to market (pure speculation on Toyota). I don't want to go to extremes, but with a decent marketing campaign, this could be the car that saves the company. If they make it reliable for 100K miles at least and get good consumer reports reviews, this could be a huge moneymaker.

Expensive oil is not going away and with the fear of peak oil, we need to look for alternatives. Oil should be used in plastics manufacturing and chemistry, not to power a cubicle warrior like me to work. If we could move every American car to zero gas useage for day to day and 150 mpg for long distance driving, we could prolong oil's place in our industrial history. We would also deny terrorists and tyrants there greatest fundraiser. Energy independence is crucial to national security. I can see no better way to say "Fuck off" to terrorists and 3rd world thugs than to say "we're just going to cut back a bit on our imports of your stuff, in fact, our friendly neighbors tot he North and South of us can hook us up with what we need". Peace.

Sunday, July 15, 2007

The Middle East Through History

This is an awesome map with a built in timeline history lesson. The Middle East has been a hotbed for tranferring power and fighting for millenia. One thing that really stands out from this map, is that the Mongols and Romands had some awesome empires. Many people know about the Romans, but few know how powerful the Mongols were. Barry Strauss is a history professor at Cornell who specializes in ancient warfare and military history. He's brilliant, and wrote an op-ed in the daily newspaper at Cornell right after Sept 11th about how the USA would have to fight in Afganistan to win. The US pretty much followed his playbook and toppled the Taliban.

From time to time, he would discuss the Mongols. Strauss would mention the Mongols and how they were the best horse riding force ever. The Mongols also are responsible for some of Iran's problems as much of the wonderful irrigation systems dating back to the Persian Empire were destroyed when Khan and his men rode through Iran. The Mongols raped, murdered and burned their way across Eurasia. The only thing that spared Western Europe from being backward for centuries and not progressing as rapidly as it did was that the Khan died. To choose a proper new Khan, the Mongols all had to go back home to settle on his heir. Thankfully, they forgot about conquering Europe.

Thursday, July 12, 2007

Foreign Investing Once More

As a little kid, I was the guy that people called "Alex P. Keaton" and was a dipstick who read the Money section of the USA Today. I used to love opening up the Money section and pouring over the stock listings. I would look for the companies my parents worked for, the companies with presence in my homestate, and try to find the biggest movers on the NYSE. I remember when stocks were listed in fractions instead of decimals. So much fun for a little dork.

Now that I am older and actually have some money, I enjoy investing on my own. My 401K is always stocked to the max of what I can put in, and I like to check up on it monthly. My 401k rollovers can be checked anytime I desire. Thank you Internet. One thing that I have started to take advantage of concerning my money, and that I have written about before, is foreign investing. The benefits of foreign investing are diversification away from the risks in the US markets. Does this mean you buy the weirdest of stocks out of foreign countries? No. Does this mean you just buy a big, broad index foreign stock portfolio? Maybe. It means that you look for opportunities to hve your portfolio outperform the US market, to hedge against shocks that might be peculiar to the US, and to add exposure to different types of economies (natural resource, industrial, or service based).

There are a lot fo vehicles for this type of investing, and I currently use mutual funds for my foreign exposure. I have a core holding of a broad, foreign index mutual fund, some other smaller actively managed mutual funds in my current 401k, and very soon, I will be adding single country ETFs and an actively managed mutual fund to the mix (DODFX). I am keen on investing in foreign holdings because I feel that the US dollar is going to get weaker. This has major ramifications concerning investments, and earnings from foreign companies, can boost a domestic based portfolio. Likewise, multinational corporations that do business worldwide are a good buy since their foreign earnings will become more dollars.

Why does a falling dollar matter in your investments? Look at today's rally. Gains that you made today, if turned into actual dollars in your pocket, would be worth less than they were vs. the rest of the world's currencies (except those that peg to the dollar & the sh*tty Yen). Let's look at the US dollar index since mid-2005 and the S&P 500 index since 2005. The S&P has gained around 30%, but inflation has eaten into that "officially" around 5%. With the dollar's 5% value depreciation since mid-2005, an investor of the S&P has had maybe 1/3 of his or her gain for the period eaten away. I am one of those S&P 500 investors, damn you dollar!

A few of the ETFs that I am going to purchase for a long term buy and hold are EWY (South Korea), EWC (Canada), and EWA (Australia). I wanted to purchase EWA a year or so ago when it was in the high teens, but I had to pay for a honeymoon. Damn you best tropical trip ever! EWA and EWC are both more natural resource oriented, and if we are at the beginning of a decades long commodity bull market, yippee. South Korea is a destination because I trust it's banking sector much more than I do Japan's or China's. China and India are extremely juiced to the point of bubble trouble, and I like what South Korea is doing. They have invested in a ton of automation, and are trying to be at the forefront of robotics & other cutting edge technology. A few positives for South Korea are: democratic government, good trade relations with China/Japan/US, huge currency reserves yet it has let it's currency appreciate vs. the dollar freely, and a huge IT infrastructure with an eye on robotics. These ETFs are trading rather high right now in value, but my vision, Asian influenced, is long term. Why plan for just the next quarter, when you can plan for the next quarter century?

Tuesday, July 10, 2007

A Weaker Dollar Could Help our Economy

Before you throw tomatoes at me, hear me out. A weaker US dollar, not a completely deflated US Dollar could help America out with our wealth distribution and investment for manufacturing, which might help save the middle class from becoming razor thin. A little Econ 301, but with floating exchange rates goods and services cross borders and trade balances tip one way or the other. Eventually, a currency with a trade surplus is suppose to appreciate, making their goods & services not as competitive as the other nation's goods & services, and suddenly the second nation will be the one running trade surpluses. This is how it is suppose to work. This is not how it works in today's world because certain Asian countries manipulate the currency exchange markets so that their currencies stay the same as the dollar, keeping their labor cheap so companies will invest there and keep the people happy they get $1 a day. This is being called Bretton Woods 2 by some sharp economists. This kills our manufacturing sector, as companies will invest their capital where the labor is most cost efficient. Capital owners win (which includes you at home mutual fund owners), and labor loses. A weak dollar will make investing in the American labor force cost efficient, and spur growth.

You're reading this and ticked off. You're like "screw off douchebag". Yes, a devaluing of the dollar would hurt prices of goods we import. A major crash of the dollar would fuck everyone over, even the other countries around the world that hold our currency as reserves. Not to mention that even if the world dislikes America, in most polls, the world still wants America to lead the good side with resolving most problems. Think the Europeans can handle Iran (not so far), think anyone trusts the Chinese (no way), and who has the arsenal to lend a hand when countries need help? America. I do not see a currency crash ahead, but I think an adjustment of the dollar by a decent amount is coming. This would hurt our consumer culture a bit, but it would help things be srestored to natural balances.

With that dollar adjustment, foreign & domestic capital owners will have slightly more motivation to invest in manfuacturing in the USA. Labor in the USA will become cheap. Thyssenkrupp is a multinational corporation that recognizes the power and efficiency of American labor. TK is investing 3-4 billion dollars in a steel manufacturing plant in Alabama. More investments like this will happen when the dollar is allowed to float vs. those Asian nations. Paul Krugman wrote in 2001 "It's a good bet that the era of the strong dollar will soon come to an end. That will be no tragedy; but it will be a problem if a falling dollar distracts the Federal Reserve from its duty, which is to ensure not a strong dollar but a strong economy." This study is funded by the steel industry, but shows that manufacturing in the US is a good investment that the strong dollar hurts. Now I know a weak dollar will hurt the consumer, but if it can bring steady non-Walmart jobs to the nation, it will do some good.

There are people who say we do not "make" anything anymore. I agree that the amount of stuff we make has decreased; it is easily demonstrated by statistics. We still 'make' some things. Take a look at trade data. While our trade balance has grown to scary levels, we have also increased our exports in a major way. Take a look at the trade data for imports/exports, and you will notice a trend. Canada, Mexico, Nigeria, Saudi Arabia and Venezuela are all in the top 10 for imbalances. Our trade balance is a result of cheap Asian goods that we cannot get enough of and oil. Wouldn't you know it? Those 5 countries listed above are the biggest oil exporters to the USA. If you study the goods we import vs. the goods we export, you'd find out that we export labor intensive goods. Our specialty is in skilled labor. A cheaper dollar will make oil more expensive for us and probably force us to cut back on consumption. A cheaper dollar would also make our labor cheaper to the world, and our goods cheaper to foreign markets. Foreign capital will look at old existing structures and put machinery in them ad employ the average Joe Americans on the cheap. An exampe would be America tool & die firms. Their bids would suddenly be cheaper on a global scale vs. foreign tool & die firms. Win. If American investors can turn old warehouses and shoe manufacturing plants into condos and retail distribution centers, foreign capital can make even better use of them. It's a win-win (pay no attention to expensive price tags on gadgets from Asia).

How does this help the famous middle class? First off, it does not force everyone who wants to earn 'decent money' to have to get a 4 year degree. Seriously, a class of workers can have 2 year technical degrees or extended technical degrees and work in these manufacturing jobs. The cost for these schools is much cheaper than your average diploma mill. This factor might even slow down the rising cost of 4 year degree schools, as the return of getting a 4 year degree vs. a tech degree or no degree shrinks. If a person knew they could make $35-40K a year with a 2 year tech degree for 30 years, would they take it? With 2 years and maybe 10 grand in loans vs. 4 years and 25 grand in loans, the average American would.

Another positive factor of this devaluing of the dollar would be that as this middle class would grow, which is needed for an economy and nation to be strong. I'm going to go out on an historical limb and mention the idea that the Spanish Inquisition, which removed the Jewish citizenry from Spain and lasted a few hundred years, destroyed a middle and merchant class and contributed to SPain's downfall from world power. There needs to be social mobility and a decent spread of wealth. Yes, I do believe that Gini Coefficients do matter. From my econ 314 Intermediate Macro class, I recall learning how after the Korean War, South Korea had been decimated. With US aid and an interesting way of partitioning land, a lot of the surviving society re-started as mid-level farmers. With an increase in savings and an investment in the dducation of the nation, Korea became a major exporter. It's not that everyone received the same amount of land and were kept the same. The wealth started as distributed relatively well, and the starting gun went off. If wealth in this nation can be spread a little bit better and more people can go to further education for greater wealth and social equity, the United States will be stronger for it.

Believe me, a devaluation of the dollar would cause a shock, and the press would scream bloody murder. We'd also move from the nation that has the capital to invest in other nations to a nation of labor used by foreign capital. In some ways, we could blame the FED and the powers in control of our monetary system. In other ways, we can look in the mirror and blame ourselves for a low savings rate, a consumer culture out of whack with reality, and a me-first attitude. Rather than assign blame, we could just do something about it and move on with life. Life would suck for a while with a weaker dollar, and we would have to be a little humble for a while (while still kicking the sh*t out of Al Qaeda). With a rebalancing of dollars/euros/yen/yuan, the American strengths of innovation and a strong education network could shine.

----End note: If the US Dollar Index breaks 80, we will be in virgin territory for currency trading. Investors could rush in there for a cheap buy, as there are few 'stable' places like the US. For all the talk of the Euro, there is still only a monetary policy uniting those nations. Not much else. The Islamification of Europe does not help. A better bet: If global uncertainty continues, precious metals are the best bet.
Disclaimer: I invest in both foreign stocks and precious metals.

Monday, July 09, 2007

Army Of Darkness - Bruce Campbell sticks out his giant jaw and delivers a ton of one liners in this classic. It's a perfect Sunday Afternoon, nothing on tv, cable station classic, which blends action and comedy with a little wink wink-nudge nudge to the campy ccinema traditions of old. Sam Raimi directed this cult classic and its predecessors, Evil Dead and Evil Dead 2: Dead by Dawn. Watch those two flicks first. Evil Dead is a pure horror film, and really unsettling if you watch it at night in someone's basement. Creepy. Evil Dead 2 is brilliant in that Raimi might have pulled a great trick on his entire cast and only Campbell was in the know. Watch it closely. It appears that Raimi told Campbell to play the movie as a comedy, but told the other actors to play it as a drama. Evil Dead 2 throws the action to Army of Darkness, and the comedy gets kicked up about 10 notches.

The picture to the right is of the famous "boomstick" line. This scene might be the highlight of the entire movie. I do not want to sell any of the other segments short, but the sequence of Ash being forced to march to the castle as he narrates his story allt he way to the boomstick line is hard to match in the comedy-action hall of movies. The amount of one liners in this movie that are quotable is extremely high. There are so many that my wife and I even exchange lines, "Shop smart, shop S-mart" or "you ain't leading bit two things: jack and shit... and jack just left town". I do not want to gush over this movie anymore, but I recommend that y'all watch it for a good laugh.


"Sure I could have stayed in the past, could have even been king... but in my own way, I am king. Hail to the King baby"

Sunday, July 08, 2007

Saving Social Security

Social Security is the 'third rail' of politics, and few changes have been put in place besides increasing the amount of the tax on incomes to fund it. This neat little article talks about its original intent and how it morphed. Seriously, the only changes to the system besides mega-changes like disability benefits, Medicare and prescription drug benefits has been the rate of SS tax. This article talks about its original intent in greater detail, and it a paper more than just a small newspaper article. This wonderful program was intended to replace some of the lost income in retirement for a limited time frame. The life expectancy of Americans was barely beyond 65 in 1937, now American males live to an average of 72. Not everyone knows this program will face a shortfall, and start to pay only 70% of what it should be paying in 2042. Social Security will not pay 0; it will just pay less. Remember that in 2017 it starts to run down the big stored up reserve of cash. Still, no one seems to want to do anything about it. Let me rephrase that, George W. Bush wanted to try to mix it up, but was blocked by the Democrats in Congress. Any changes would have been good. Instead of the issue becoming a debate on some form of change, it was dropped altogether. Way to fight Dubya!

Social Security was a great idea to help lift so many of the elderly and disabled out of poverty, and in its original form of a 2% payroll tax, not a big drain on pocketbooks. Take a look at historical rates. People don't realize that over time this tax has been bumping higher and higher. No one bitches about this one. Nobody bitches either about the cap on the income that is taxable for SS. This cap makes the tax regressive by nature. Fan-fucking-tastic! How come no one suggests a removal of the cap but a reduction in the total tax rate to be tax neutral but make the SS payroll taxes 'fair'? That could be issue number 1 just to make it fair. For those of you that point to Europe and drool over their government programs, those countries and Japan are facing a baby shortage crisis. They do not have enough workers coming on board to properly fund their pograms. At least we have a healthy birth rate and legal immigration. We have a solvency issue due to that big Baby Boomer generation. You can talk about privatization, but that isn't going to do much since it would have to be slowly implemented and may not be a gain at all for someone. When you get right down to it, there are only so many things that can be done to keep SS solvent. It's better to do this now than later, and I wish one '08 prez candidate would mention this.

1. Remove cap for payroll taxes - This would extend the life of the program maybe 7 years. Not a long term fix, but when Bush floated his privatization idea out there, the Grey Panthers mentioned this first. Why had they not mentioned it earlier the old bastards? This is a short term fix, but this should be done to make the tax a 'fair tax' on all citizens.
2. Increase the age of retirement benefit eligiblity - This has to be done as life expectancy has increased for all Americans since the SS plan was instituted in 1937. Men born in that year might live to 63 and women 68, which means a man might have collected a check if he drew early. We need to look at the lif expectancy tables and say "In 1937, we expected people to retire at age X and die at age Y. Today those ages are X+6 and Y+8". Make the age increase graded for year of birth. This seems 'fair' if it just relies on year of birth.
3. Raise the payroll tax - I hate tax increases. I really do. The government has done it before, and if they combined a payroll tax increase with a slight bump in the total payroll tax, it could add a significant amount of time to the life expectancy of SS. The last bump in the payroll tax came at the end of the Reagan Era, when a gradual bump of 1% occurred. Any bump combined with removing the cap could extend the life of SS for 20+ years. An increase to the payroll tax to 14.2% would extend the life of SS for 75 years, and an increase to 15.9% would extend it for about as long as we could expect America to stick around (see here for my rip off of their data.
4. Means testing for benefits - People get pissed off about this. If I had been paying into the system for years and found out I would get squat, I would be ticked too, oh wait, that is me. I'm 27 and won't see a dime from SS by the time I retire. With the Baby Boomers about to retire, could means testing be implemented fast enough? Is it fair? What about my money I put in out of my checks? Here's the truth: SS does not take your money and put it in a safety deposit box with your name on it for later use. It never has been that way. Your money has been taken from you and given to people who never paid into it, paid into it for a few years, or paid into it at the lower payroll tax rates. If it's a child, it will not pay into the system for years. People need to disconnect the idea of calling that SS money their money. SS is a massive redistribution program (or Ponzi Scheme), and means testing is just a more extreme way of exemplifying that.

To appeal to the millions of poor or middle class Americans out there, maybe start phasing out benefits if your mean/median annual income exceeded $70,000 in 2007 dollars with a benefit minimum by $150,000 mean/median income in 2007 dollars. This would be absolutely atrocious for the upper class, as they would be paying payroll taxes for a lifetime and not see a dime. I do not think it would get their support, and well, they fund our political class. This would also place the onus on the individual to save for retirement. Personal responsiblity would come into play because you would have it built into your mind from day one of your work history that SS might be reduced or not there at all for you. This could encourage a flood of IRA/401K savings. This option should be considered a last resort, as it is the ugliest of the options available, and with current tax rates on the upper class, could cause some of them to leave our country, taking their financial and intellectual capital with them.

One thing that I want to consider is life expecctancy projections. I assume Baby Boomers will be in good health come retirement age, but a small factor I would consider is the level of recreational drug/alcohol use and abuse in their younger years. What kind of heart damage has cocaine inflicted on their circulatory systems? Cocaine's explosive '70s and '80s users might find themselves in rough shape. It will probably be evened out by their healthy eating and working out, wait a minute, obesity rates are up for people now. Scratch that.

If I were given the power to control SS and modify it to fit the nation, which I would love, I would combine 3 elements with the fourth as a nuclear option for Baby Boomers and beyond if projections fall short to the model in the first 10 years. I would hate to have to slash someone's SS check in half or reduce it to a minimum benefit if forced to go to idea 4. An ultimate dream would be to remove the payroll tax altogether and tell the people to fend fror themselves in old age or during disability, but we saw how that worked before SS. Did not go so well. In place of abandoning the plan, I would own up to it's need in society and make some moves. I would remove the payroll tax cap first. This is an additional 7 years right off the bat. Starting in 2008, I would raise the payroll tax to 13.3%, to 14.2% in 2011, to 15.1% in 2014 and finally 16% in 2017. If the other features were enacted, we might not need to raise tax rates this much over 10 years. This would most likely set into place a recession if done all at once, so I favor phasing it into place. The people would be thanking me in 35 years when they are getting 100% of expected benefits if it meant slower GDP growth (and a recession somewhere in the middle) for 5 years. I hate doing this but would be for the "good of all". I would make an adjustment to the eligible age for benefits for citizens above the age of 35+/-, who are not already in the twilight phase of work (under age 50). I actually think the retirement age has been adjusted for these workers already, but I would tweak the younger ones a bit more. I would want to wait for life expectancy projections and medical breakthroughs before adjusting it for people under 35 just yet.

This would be a hard change to swallow. This would mess with our consumption for a decade as payroll taxes are put into place. This would tick a lot of people off, but running the show is not about having everyone like you. We, as a nation, would have to sacrifice. I am sure our men and women in the armed forces understand sacrificing for the good of all, but I think average Americans have just forgotten this concept (it's been fading away for 35 years now). The question to ask is would you rather do what is wrong or not face something so that you are liked by everyone, or do what is right and have people hate you? I'd rather do what is right. There are a ton of problems in the nation, a fair amount in the USA, and probably a few behind the doors of every American home. I think if we start with one big problem that threatens us all we can tackle the smaller ones. I recall a phrase meant to mean something was easier to fix than a person thought or to wonder why something cannot be done "if they can put a man on the moon...". I would love for a day when people could say "if they could save Social Security...".
Odysseus
I have lost the ability to title blog posts. I am trying to figure out how to get that ability back.

When studying at the liberal arts college at Cornell University, I decided to take a Greek culture course and the following year a Greek history course. Many of the storylines or story arcs of characters in dramas from today can be traced back to the plays and epic stories of ancient Greece. A recurring theme that we owe to the Greeks is the 'hidden destiny' theme (think Star Wars). Bits of the political, economic and cultural have trickled down to us, and I am not so naive as to think it was all positive. The Greeks had slaves, treated women poorly, exploited others amongst other negatives. In my eyes, there seems to be something both ancient yet forward thinking. A character that I feel exemplifies this is my favorite character of ancient Greek literature, Odysseus.

Odysseus is a nuanced character that is both honorable & just while also being devious with impure motives. When I think of modern day anti-heroes, Odysseus comes to mind as the father of that tribe of characters. I have a strong feeling, in a fictional world, Odysseus-Batman-the Punisher-Wolverine would be drinking buddies. When faced with losing the hand of Helen, Odysseus is the one who devised the oath to Menelaus to hopefully prevent anyone from trying to take Helen (backfired as Paris had not been at the suitor pageant). He also came up with this idea and received the hand of Penelope in marriage as a result. In the things that he did for the good of all, there always seemed to be a bonus for him.

Some of my favorite moments of Odysseus in literature are his discovery of Achilles, his handling of the Sirens, and his attempt to shirk his oath to Menelaus. Odysseus' discovery of Achilles was crucial in the war against the Trojans and is an example of his craftiness. The Greeks were told they needed Achilles to win, but Achilles was on an island of all women. They could not locate him as he hid amongst the young girls. Odysseus put out some swords and shields. Legend has it, when Achilles reached out his arm to grab a sword, Odysseus grabbed his wrist, which exposed hairy arms, and brought him along to fight in the war. Odysseus played to the prophecy of Achilles, the great future warrior, and was rewarded.

When the Sirens were an obstacle, Odysseus had been warned by others that their songs would shipwreck any crew. The songs enchant a crew, leading them to crash their ships on the rocks and drown. Odysseus also heard that the songs of the sirens were so beautiful that they caused this enchantment, and wanted to hear them. Here he devises a scheme to get through the peril but satisfy his needs as well. Odyseeus has his crew seal their ears with wax, tie him up to the mast without wax in his ears, and forbids them to untie him until they are out of reach fo the Sirens' call. In this manner, Odyseeus' desires are fulfilled by the songs of the Sirens reaching his ears, but his crew is spared their lives. Yes he does seem to be a genius for his move to seal the ears of the crew, but he is a selfish man for even risking their lives or his life by not sealing his own in order to listen to the song.

The last exmaple of his cleverness that makes me smile is his attempt to avoid serving Menelaus in his 1000 ships campaign to get Helen back. Odysseus fakes insanity with weird actions in his fields because he does not want to go. He fears the prophecy that his journey home, if he does survive the war, will be an arduous one. To prove his sanity, a Greek puts Odysseus' infant son in front of his plow. Odysseus has the choice of killing his son and keeping the Greeks fooled or sparing his son and sacrificing himself for the war. He chooses to spare his son, and is rewarded 20 years later to see him grown strong both physically and mentally. Odysseus' attempt to stay with his family and not honor the oath to Menelaus shows that while he is a crafty character, he does honor and love his family; even a child with whom he has shared so little.

If you consider the hall of heroic characters that have graced the pages and screens throughout Western Civilization, many have been your brawn over brains type. Odyseeus is a bit different. While he is strong, shoots arrows straight & true, and can cut through the bodies of enemies, there is another quality about him that allows him to take such a lasting role in the Greek literary tradition. The Greek word is "metis", which Wikipedia tells me is cunning intelligence. What I recall, from chats with my professor, is that there is no mystery in the reason for Athena to be the goddess of "crafts" and "cunning intelligence". This is part of the reason she loved Odysseus so much. He is crafty. He is clever. He lives in a world of grey, recognizes it, and operates in it. He is human.

Friday, July 06, 2007

It's been a couple of months, but I remembered that I had not typed about my family friend Angel who died in Iraq. My dad contacted me when I was at work when he found out. It shook me. I had closer friends who served and had survived intact with only mental or emotional scars. One even joked "I have to do these stupid post-trauma sessions". Angel did not have that burden as he paid the ultimate sacrifice. My first words to my dad were that I hoped Angel had not married his girlfriend prior to leaving, but he did. A young war widow, and there have been countless young war widows through the ages. My next thoughts were to his mom who had done so much to protect him.

Angel was a good soccer player, a good guy, a loving son & brother, and a guy who gave back to the community. He had benefitted from local rec programs, and he gave back by volunteering in the youth leagues. He joined the Marines to earn money to finish school. He had some credits, but the financial burden was getting too high. His mom was so proud he was going to college as she had sacrificed a lot for him and his sister. When I found out the Marines, I thought "oh sh*t, why couldn't he have signed up with the Air Force or duty on a submarine in the Navy". He was there 2 months, that's all.

My favorite Angel memories were when he and his sister would say my sister and I were 'tv kids', we looked like the white people they put on tv shows. I'd tease him back about being the only Hispanic boy in Maine. Teachers would say he should have been shaving at age 11. His mom would interject that she had a mustache at age 11, too. Angel and his family would quiz me on my Spanish, and I remember how when I got back from taking college Spanish courses they said, "it must be working, you can keep up with us now". Whenever he did the sign of the cross, he'd grab his cross after and kiss it. Those are moments I will not forget.

Angel's mother lost her oldest son years ago in an accident, and to have to bury two sons is a pain I hope to never know. My heart goes out to you Ana, and I hope you can find some peace. I know from his mom that it was an IED that took him. I know there are still parts of him there. Just like those parts, there are bits of sound, smells, images of him in my memory that will never leave. I just hope that your soul, like the souls of so many young men that have gone off to war to not return home alive, is at peace.

Ramblings on Obesity

So every American knows that obesity is a problem in the United States. Now I do not mean big boned kind of fat where the people are going to be built stocky or have an apple body shape. I am talking obese. We practically glorify eating with hot dog, pie, lobster eating contests like the Romans with their vomitoriums. Obesity rates are rising very fast in this nation, more data here, and obesity is defined as having a BMI over 30. Now this is a setting where BMI is over 30, but you do not look like weightlifter, more like Mr. Softee. Being overweight used to be a sign of wealth, and some cultures valued being overweight (Caribbean cultures come to mind from an anthro class I once took).This is a problem that really does threaten the nation (other countries are seeing rising obesity rates as well). There have to be some solutions to this problem.

There have been studies, papers, essays, tv specials, documentaries, and other bits of media explaining our obesity problem. Here is my list of reasons for this rising problem (I do not care if I am politically incorrect):
1. Lower levels of physical activity
2. Higher calorie intake
3. Higher sugar and simple carb intake
4. Higher fat intake
5. Increase in general laziness
6. Increase in consumption of processed foods
7. Fewer home cooked meals because both parents work
8. Humans once required 6000+ calories a day to surive. It is now around 1500; our bodies are having difficulty adjusting.
9. Indifference to weight because science and medicine will find a cure
10. The survival rate of humankind is extremely high; survival of the fittest not happening right now

To use an analogy, I see the obesity problem like a clogged artery: it is straining us now little by little, but down the road, we're going to be fucked. I would not be surprised if we get a boost in foreign born surgeons in the US over the next 25 years to grapple with the boost in obesity related surgeries. The clogged artery that is obesity is going to fuck us up as a society as soon as the baby boomers start to reach prime 'heart disease' age. Odd since the boomers were the first to take up jogging and weightlifting, they'd somehow drop that for cream filled donuts. Add that to the baby boomer hypocrisy pile.

Now I am 27 and have all 4 of my grandparents still breathing sweet air. Having seen them and their peers age, I can assume that it is ok to have a little extra padding going into your retirement and a healthy appetite for good food, but an extra 25 lbs is only going to lead to heart, foot, and joint problems. Not everyone is going to be built like an Olympic swimmer until the day they die, but not drinking heavily, having a healthy diet, and getting in a daily walk can do a lot to keep excess weight off. This is all it takes folks, all it fucking takes.

Liberals will say more education is needed. Hog-fucking-wash. People in the 1950s did not know what was good for them, but obesity rates were lower. Heck, people in the 50s thought smoking was good for them! What can be done to combat this issue nationwide since food and nutrition education just do not seem to be working? I say they are not working since health classes in school drill it into students to eat right and be active, and yet, childhood obesity rates are skyrocketing. Believe me, I hope my future kids are built like my wife and I. I would cry myself to sleep at night if I had an obese child. It is everywhere on women's magazines but women have higher obesity rates. Across the nation, people subject themselves to radical gastric bypass surgeries which act as a 'choker' on the stomach. This reinforces my laziness point from above; too lazy to do the little things to stay healthy.

I am trying to approach this is a Libertarian way, and not have any heavy handed government programs. People should be free to become pigs if they want. Can we make add incentives for good behavior? Can we make obesity and being overweight such a horrible social stigma that we change behavior? It worked for cigarette smoking, which might be the greatest public health initiative since the shaving/stop spitting move that limited the spread of disease back in the day. Here are some ideas (some are intended for comic relief):

1. Use the BMI to set higher rates for insurance premiums.
People on government programs would have a higher fee as well. Believe me, insurance companies would be all over this. It might be more administratively, but they would gladly demand BMI measurements at annual or bi-annual frequencies with covered people's physicals. The companies would gladly gamble that people cannot keep the pounds off. Could people crash diet for the weigh in, sure. The selection would be for people right on the obesity line who only need to lose 10 lbs or less. People would have a financial incentive to stay in better than deadly shape; people respond to money. It is the American Way.
2. Charge premiums on procedures for obese individuals.
The premium on top of 'normie' rates would have to be picked up by the obese patient. If an obese person needs knee replacement surgery, tack some extra $$ on it. Angioplasty on a 40 year old 300 lb man? Double it up! I have a feeling, this would end up reducing the costs of many procedures for healthy weight (normies) people. I also think the threat of high medical bills would scare the bejeezus out of obese people.
3. Gastric Bypass surgery treated as a purely elective surgery with no insurance coverage whatsoever.
Gastric surgery would come out of the individuals pocket from dollar one. Insurance companies now cover GB if it is medically necessary (morbid obesity counts). So everyone who is in the pool of insurance pays for your fat ass to have a surgery that will do what your willpower could not do? Hell no. With the rising cost of health care and medical insurance premiums, this is a no brainer. If the bill is put back on the consumer, they will understand the impact of the surgery. This will also reduce hospital bed, ICU and recovery unit utilization. God knows, the health care works RNs, LPNs and doctors to the bone.
4. Set up bicycle buildings with dozens of bikes set up to generators; make anyone within 10% of obese/overweight line ride them until the BMI is 10% below the Obese/Overweight line (exclude people with healthy bodyfats so pro-athletes are not on duty).
Draconian, but it could also help solve energy needs as well as health needs. If they slip to the Obese/Overweight line again on random inspection by the mailmen (multitask so to keep admin costs down), report for bike duty. Bicycling does not generate much electricity, but could add some electricty to the grid. Utility companies would pay the health orgs for the output. Obese people would not see a dime. Name these bike pools something scary like "Obesteries".
5. Send people who are measured as obese (exclude low body fat people) for 3 consecutive years to do humanitarian aid in regions known for cannibalism.
Talk about goodwill in the 3rd world.
6. Deny all health care and medication to people measured obese (above exclusion honored) for 3 consecutive years.
I know yo-yo dieting might become a problem, but the fat bastards would be doing something about it. The threat of no medical treatment would scare the shit out of the extremely large, and that would be a lot of feces. This might create a black market of procedures, medicine and treatment for the obese, but then we could fine, jail, or strip the license of the MDs, pharmacists and RNs who provide help at extremely high rates to discourage the black market help.
7. After 5 consecutive years measured at an obese level (prior exclusions honored), exile.
They can be exiled to a deserted island and fight amongst each other for the limited food. Televise it as Must Eat TV.

Wednesday, July 04, 2007

Happy 4th of July

Sparklers, Steak, Potato Salad, 'nuff said. I'd like to thank my state of Indiana for making fireworks legal for anyone to buy. I'd like to thank my wife for the excellent potato salad and for buying sparklers. I'd like to thank myself for cooking the steak perfectly. I'd like to thank the founding fathers for declaring independence from the British yoke and for setting up such a wonderful system for individual freedom.

For all my hippie friends who claim severe restrictions on freedom in this nation under George W. McChimphitl...whatever you Kos readers call him, be thankful we live in a land where you can basht he president on tv whenever you want (or for an entire show like "Lil' Bush"). In other countries, the opposition is shot. Isn't it weird you can bash the president all you want, but can't say the word "ho" without getting bleeped out?

Happy 4th of July!

Tuesday, July 03, 2007

Democratization of Credit... and some Skinemax Talk

After the shitstorm of a recession this country has in '08 (I predict a recession like the one in the early '80s), there are going to be many changes in the credit industry. Rationale might enter the banking world once more. At Cornell, one of my economics professors talked about the democratization of credit that happened in the 1980's. This affected how loans were awarded, interest rates set, and everyone's favorite, how credit cards became ubiquitous. Here's a bunch of links: read here, a bit delusional here, enjoyed this here, good read here. This breaking down of barriers made a lot of loans available to people who previously would have been denied based on race, gender, etc etc. Yes, everyone should have been given a fair shake at opportunities at credit, but like one of these articles, I think the financial industry took it one step too far. Let's open the door to everyone and drown them in offers. No way would a bank want to push a line of credit with APR wildly higher than the overnight lending rate?!?!?! No, that's just hogwash.

Read this wonderful article in the NY Times and let me know if you think people have been properly educated about credit, debt, risk, etc. This is how we have gotten into this housing mess, too much debt on too little income (add to that free money with negative real interest rates, America's obsession with size, and fraud at all levels of the real estate industry). The money quote/item is this one:

"According to Mr. Morris, Mr. McKinnon said those troubles could vanish. Equitable would arrange for someone else to buy the house — temporarily, as it was explained to him. In return, Mr. Morris would receive $20,000 in cash and someone else would make monthly payments while he and his grandfather lived there for a year."

This guy then acted surprised that the company stripped away his equity and his house is now in danger again. He'd be a fool to pass on it he thought. Uhhh, if you see a $100 bill lying on the ground, don't bother picking it up, if it were real, it would be gone by the time you saw it. My question is "how do you fall behind in payments or not make ends meet when you get $20K in cash and don't have to pay any rent/mortgage? Stories like this are trickling out of the forest, and soon enough the MSM will have to pick up on it or they will be stampeded by the fools who did not read papers they signed and the jerkwads who chased them. I've got a solution for this though that will scare the bejeezus out of anyone afraid they can't take on a debt.

Let's bring back Debtor's Prisons. I'm serious. Is Suzy Spend-a-lot going to max her 3rd credit card out if she knows she has to do time in a prison if she does not pay? Not all bankruptcies are alike, so we'd set some guidelines up like bankruptcies due to medical bills/job loss are excluded (a decent chunk of BK). Maybe mix in some soft labor cleaning up beaches, parks, public grounds, working in schools, or working sanitation. Now maybe we could allow governments: local, state, Fed to bid on the debt to get use of the person while in jail. I am libertarian and dislike the idea of public funds going to a company that made a bad loan, but if we directly turn this govt money (tax) into a project for the good of all, it is a direct use of tax money. Like a reverse user fee. I'm grasping for straws here.

Let me get to Skinemax. I was checking some new Skinemax stuff out there, and it just wasn't that great. The girls were not spectacular, production quality was awful even if it was digital, and the acting was ten notches below Shannon Tweed in Scorned. The movies also use the same 4 girls. As a youth, I remember staying up til 1am to maybe see some '80s classics on late or catch a Tweed film. The problem might be the Internet making porn so easy to access, that those companies producing cheese movies just aren't trying anymore. Shame on you soft core producers.

Monday, July 02, 2007

Long Term Emergency Kit Ramblings

Not that I am a tinfoil hat wearing nutjob, but I believe in preparing for all possibilities in this life. I have previously posted on emergency kits, and I wanted to expand on this for a little long term planning. Say avian flu hits and the high mortality rate of the flu shuts the world down for more than a few weeks (economic depression much more likely but still). There would be a run on supermarkets, and electricity might be a problem if power companies lose workers. So what are you going to do for food? The human adult needs about 60 grams of protein a day and at least 1500 calories. Well if you were a prepared individual, you might have a garden with some veggies and lots of canned food. What kind of canned food?
1. Peanut Butter - This lasts for 2 years or so, has tons of calories fat & protein, and tastes good. Survival food that tastes good is awesome!
2. Beef Jerkey - I have no clue when this goes bad as long as it is sealed. It's beef jerkey, even regular beef jerkey tastes weird.
3. Tuna - Canned tunafish can last 4-6 years. There are typically 30 grams of protein in a can of tuna, and tuna has tons of those good omegas the adverts always discuss.
4. Spam - I am dead serious. Spam got the British through World War 2, so it can work for me. A good thing about Spam: it never goes bad. As long as it is sealed, it stays preserved. Awesome!

As far as starches/carb source, I'd get a big bag of good ol' white rice and store it in the burpable tupperware containters. If you don't mind simple carbs for a while, stick to honey and sugar. Honey never goes bad, even honey found in Egyptian tombs could be used today. Canned vegetables can last months if stored in a cool dry place, and if crap hits the fan only for a few weeks but you have to take in your relatives, you'll be set with several weeks of provisions stored.

As an addendum to this list of long term food, you might want to pack some 'barter goods'. Say the housing bubble pops, our economy tanks, and a global depression kicks in. Maybe you keep your job, maybe you don't. What are a few things that every person considers a basic need in life that they would trade you for that? Well, let's step back in time to a tv social test that answered my question. When Survivor on CBS first aired, it was not as hokey and fake. The survivors were allowed 1 luxury item. A dildo brought the Bible (it's an island), another dildo brought a cd player (it's an island), and the 72 year old former Marine brought the one item that everyone was asking to use: a combination razor/toothbrush. If you find the shit has hit the fan and you're still on this planet, thank your lucky stars to be alive, and get your hands on some razors, candles, toothbrushes and soap. These items will be worth quite a bit to folks; add to that cigarettes. Look at prisons, cigarettes act as a substitute for cash. Not to leave out the ladies, think about storing up some tampons/pads; great for deep cuts in case of an emergency and they are a basic need. Think about what you enjoy as a luxury, and what you need for basic health and cleanliness.

In any survival situation, the biggest factor is mental attitude. If you have a strong will to live, there are few things that can hold you down. I'll go back to wearing my tinfoil hat now.

Sunday, July 01, 2007

Inflation and Investing

There is a ton of talk on the internet and on the news about inflation. The government reports that core inflation is around 2% annually, but if you look at how those numbers are derived, you end up scratching your head. The bundle of goods in the inflation basket do not include many things in daily living. Core inflation does not include energy, food, medical necessities, but does include electronics, which I know everyone buys every single day. At the big picture, this is called inflation ex-inflation. The idea that the government records inflation without the items that have been feeling the effects of inflation. What is nice is that even mainstream media has caught onto this song and dance, and is skeptical of the government data and beign critical of the information provided and its use in policy making.

Well, how does this affect investing? It means that for your investments just to keep up with inflation, you're going to have to have higher returns. If the stock market gains 5% and inflation is 5%, you're running in place. If your bond yield is 4% and the true inflation rate is 5%, you lost money. Bonds should play a role in everyone's portfolio, even 20 something youngsters. My retirement portfolio probably has a 15% bond allocation. I look at bond's as a way to stabilize, just a touch, my portfolio. Right now many bond funds are returning 4-5%, and if you doubt govt number on inflation, you're treading water right now. An investor could reach for yield with junk bond funds, but those funds are not returning double digit percentages in yield. The spread between junk and quality debt is extremely low by historical standards, and the risk for default this late in the economic cycle is higher than it was 3 years ago. Vanguard's index funds for taxable bonds shows a 2% spread between high yield and normies. Not a lot of reward for a lot more risk.

A rec I have is for foreign bonds of high quality, and this is only because I am a dollar bear. The dollar is due for more loss of value as our Fed refuses to raise interest rates as other banks tighten their monetary policies. Add to that our printing press approach for money creation, and I think this means foreign holdings will increase in value due to exchange rate settings. One could argue that if foreign holdings will get a boost from the exchange rate, one might as well invest in equities. Equities have a far greater opportunity to outpace inflation, and return more bang for your rapidly depreciating bucks.