Thursday, May 21, 2015

Down with Immigration Reform!

May 5, 2015
CNBC: The billion-dollar unicorn trend is about to go global

Immigrants are hard workers by definition.

I had no idea that hard worker was the definition of immigrant, but it all makes sense now!

Although I was born in Washington State and have lived here all my life, it turns out that I was an immigrant for quite a few years. I then stopped being an immigrant and became a lazy bum. I have no desire to be reformed! I have no desire to work hard again! I like my new easy-going laid-back lifestyle! So down with immigration reform I say!

And whatever you do, don't even think of getting me started on the billion-dollar unicorn trend! You have no idea how close I am to going off on a mythical creature and Candy Mountain rant!

By Definition?

By definition, by definition means that the statement that is being made is a rewording or direct consequence of a definition of the thing being discussed.

However, in practice,
the phrase by definition is carelessly used to make sloppy connections between ideas, while conveying the impression that this connection is an inherent requirement of the rules of logic and language.

If there is one thing I know with absolute certainty, it is that CNBC would never carelessly make sloppy connections between ideas! That's just crazy talk!

I heckle therefore I am, by definition. Hahaha! ;)

Wednesday, May 20, 2015

Quote of the Day

May 20, 2015
Here's how much money you should save based on your income

...the holiday shopping season, where savings go to die.

Have no fear. The savings are then reborn in the gated communities and penthouse suites of our billionaire overlords, like hundreds of millions of pheonixes rising from the ashes! These savings then clog the banking system and drive interest rates ever lower.

So we've got that going for us, which is nice, lol. Sigh.

Darwin Club

May 20, 2015
New 1,080-calorie burger comes topped with hot dogs, chips

Carl’s Jr. began selling a 1,080-calorie burger Wednesday that it hopes appeals to Americans’ patriotic spirit, along with their appetites.

The first rule of Darwin Club is: You do not talk about Darwin Club.

I'm Really Pushing My Luck!! (Musical Tribute)

May 20, 2015
The Onion: Toyota Recalls 1993 Camry Due To Fact That Owners Really Should Have Bought Something New By Now

While Toyota is reportedly confining its recall to the 1993 Camry, it also issued a warning to owners of 1994 to 1998 models alerting them to the fact that they were really starting to push it.

Hahaha! I'm starting to think that they can pry the 1996 Toyota Camry XLE V6 from my cold dead fingers. That's 19 years and I don't even have 100k miles on it yet!

Can you imagine what this service-based consumer economy would be doing if more people were as frugal as me? I may have bought a nice car, but I did it with expectations that it would be with me for a very, very long time. So far, so good. Based on how well it is holding up, it may be a close race between its remaining life expectancy and my own. No joke.

It's apparently not just long-term bonds that I buy with intent to hold to maturity. Come to think of it, I've also only bought one house in my life. Still living in it. One and done. Continually buying and selling houses isn't cheap, not that the heavily biased National Association of Realtors would like me to point this fact out. Commissions dry up if everyone buys and holds. Go figure.

This economy demands trading and churning, for if it slows, so too GDP growth. Therefore, for the love of all that's holy, please keep up with the Joneses so I don't have to do it. That means buying a new car every time you buy a new house. Never be satisfied with what you have! Keep constantly on the move! Use your day trading profits to extract all that new prosperity! Or not. Your call. Life in the fast lane is not without its risks.

Volatility Does Not Equal Risk!

Why Volatility does not Equal Risk - Warren Buffett

Volatility does not measure risk. Past volatility is not a measure of risk. It's nice math, but it's wrong.

May 20, 2015
Are Long Maturity Bonds Worth the Risk?

So the losses in the BC Aggregate were roughly 70% lower, on average, with around half the volatility. But the returns were nearly 90% of the long-term treasury performance numbers. So to earn slightly better performance numbers, an investor would have had to deal with much higher volatility and much larger losses in long bonds.

As a holder of long-term inflation protected treasuries with intent to hold to maturity, I could give a rat's @$$ about volatility. I care only about risk. I have no desire to own the BC Aggregate filled with an assortment of low yielding medium-term treasury and corporate bonds. Need I point out that interest rate risk is not the only risk here?

1. There are no guarantees that corporate bonds will return the principal to you. Corporations cannot print money. They own no monetary printing presses.

2. Investing in an assortment of medium term bonds does not guarantee that one's nest egg can keep up with inflation over the long-term, especially with the yield curve so steep.

3. What if long-term interest rates don't rise from here and, as long-term savers, we are permanently stuck at the short end of the curve? You know, like the last half decade. Then what? Better have an eatin' cat food over the long-term backup plan. Sigh.

I am a retiree. I cannot afford to take many risks. I have no job to fall back on if I lose money in this economy's casino. Volatility does not keep me up at night. Risk does. They are not the same thing.

I don't lock in these low rates over the long-term out of greed. I lock them in because I know there is the potential for them to get worse. As they say, a bird in the hand is worth two in the bush. They also say not to count one's chickens before they hatch. Sitting in shorter-term investments to meet longer-term needs is chicken s%^t. That's right. I'm suggesting that the plan is filled with manure. Of course, manure can make things grow. It's just not something I am willing to count on.

This is not investment advice.


I see that the BC Aggregate Index does not hold municipal bonds. I guess it is not as aggregate as the name implies. It does, however, hold mortgage-backed bonds. This should come in handy for those eager to embrace housing bust risks again, in the name of safety. And as an added bonus, the index used to be called the Lehman Aggregate Bond Index, for those still sentimental over the pillar of risk free strength that fine institution once was, lol. Sigh.

Tuesday, May 19, 2015

The Ownership Society's Hull Breach

The following chart shows annual owner-built one-family unit housing starts.

Click to enlarge.

Surely we can fill the hole with some more freshly printed money. Or better still, how about an interest rate hike or two? You know, for old times' sake.

Trickled down sea water in the economy's bilge tanks, baby. That's what I'm talking about.

Source Data:
St. Louis Fed: Custom Chart

Monday, May 18, 2015

Job Creation Math

May 18, 2015
This is the largest private real estate project in U.S. history

Here’s how it works: Foreign individuals invest between $500,000 and $1 million in a project that will create at least 10 jobs per investor.

The kind of optimist who feels that $500k can generally create 10 sustainable jobs is probably also the kind of optimist who thinks that the Fed's $4 trillion balance sheet created 80 million sustainable jobs.

$500k / 10 jobs = $50k per job
$4t / 80m jobs = $50k per job

Good luck on that theory.

Saturday, May 16, 2015

Our President Trusts Treasuries More than Stocks

May 15, 2015
The Obamas Are Still Rich, But Hold a Big Mortgage

The president’s largest investment in 2014 was between $1 million and $5 million in U.S. treasury notes. He also holds investments in U.S. treasury bills and has consumer accounts at Vanguard, Northern Trust, and JPMorgan Chase & Co., among others.

It would seem that once you've been fully briefed on the many problems our country faces, it becomes harder to buy in on the rosy economic future theory.

You know, it's the theory that says stocks should rise 10% or more each year. Always have, always will.

It's also the theory that says when interest rates are this low, the vast majority of one's nest egg must be kept in high risk assets. There is simply no other alternative.

One wonders how much more bearish this permabear would be if he was fully briefed by those in power. Perhaps ignorance is bliss. In any event, my personal investments seem very presidential, so I've got that going for me, which is nice, lol. Sigh.