igor67

If you have to wait a month or two for all the paper work and send someone else money first that is not really liquid. While it isn't as crazy as how quick in the last housing run-up people were to not pay attention to how much money they spent on realty fees while rapidly turning over houses, paying closing costs again just 2 years into a loan eats into that appreciation. And the amount of closing costs does different rather noticeably based on location. They are definitely higher in MN than WI for example. To say nothing of the dangers of increasing ones own personal leverage especially if you are thinking you 'need' the liquidity your payments are going to go up, assuming you can invest that added liquid income to make-up the difference... Well that works great when your incorporated and can walk away when the bankruptcy happens. For a house of course there are other risks like the danger of ending upside down when you want or need to change jobs and move.

My experience would suggest the answer can't possibly be that simple, but perhaps an easy place to start on the regulatory side is preventing anyone/thing from betting more shares than what actually exist.

I'm not sure how long the price needs to stay inflated to cost the hedge fund folks their money, but at some point the price will come down and some fraction of these retail investors are going to lose some serious money as well.

Normal inflation would account for most of that price shift, without resorting to a formula car prices in the Depression were 1-2000 dollars and my grandfather purchased his house for $1000, in a small town of no particular economic value that sold for $40K years ago. That gives a range of 20-40 times an increase due to inflation. Those are crude comparisons of course, but inflation clearly explains most of that price change. I can sort of see where some of those historical details support a notion of something lost, I do not know the precise amount of gold back currency my grandfather had in 1933, but I do know that because of the WPA he had a job and was able to keep making the payments on that house and turn that into a solid blue collar life, so I'd have a hard time claiming he came out behind. Somewhat more generally I think it is worth asking in general how far back in time one is willing to hold onto that type of grievance. I said generally because there are other types of calls for settling old disputes that I don't think we (collective) do ourselves any favors in demanding direct compensation for. In this case my grandfather has been dead for 29+ years, which means a pretty good portion of this board wasn't even alive to have any kind of connection to that. So while understanding the history is always super relevant, any policy needs to be firmly grounded in the needs of the present and future.

Gold has a few other uses, but it's real world value is it's incredibly high electrical conductivity and great resistance to corrosion. So I find it very unfortunate that this rare substance is mostly wasted on a medium for trade because our ancestors thought it looked pretty and gave it value based purely on the power of belief, especially since we have found other items to use purely as convenient methods of trade.

While I am not a Bitcoin fan (or gold) for somewhat distinct reasons I would be far more worried about a return to the gold standard for general economic reasons, not investing reasons. If you are talking about just creating a permanently fixed asset for trade that is a very different discussion, it is basically the same as investing in something like ultra rare cars.

That also means if you are say a ditch digger paid in Bitcoin you would need to be paid less wage in the future than you are now. Which maybe in theory sound workable, but what happens when someone invents something like say a vaccine that most people desperately want, but actually costs very little to produce? Since we'd have to pay some amount of Bitcoin for this new thing, everyone else has less Bitcoin to spend and the car dealer has to immediately lower his price to compensate (or sell fewer cars), but the cost of car was already set by the higher prices he paid for wages and materials! You need the amount of currency to be changeable since people generate so many less than tangible products and are also both resources (more labor) and costs (more food and cars). Hyper inflation and deflation are both signs that whatever currency you are using is completely out of touch with with people need for survival and prosperity.

Thank you I was unaware of that particular detail. That does leave me wondering why you would want to make it so as we have more people (about 2 billion more by 2050) you would guarantee there to be exactly the same amount of money available as that just makes everyone poorer (on average)

I'm sorry nate but I don't follow your reasoning at all. Bitcoin is practically the embodiment of innovation making something that never existed before and turning it into a commodity. You literally just run computers to mine more. Whereas gold is completely limited, at best you can create more wealth by digging more out of the ground but it is still highly limited.

Back when I would go fishing growing up, I could fish, listen to Ueck on the radio and read a book. Multitasking and doing nothing all at the same time it was great.

There are any number of examples for the link between numbers of investors and risk and efficiency (which are 2 somewhat distinct things). One of the more defining monopoly behaviors is to suppress competition by buying out the competitors and just letting their idea die. The entire math behind free markets assumes infinite individuals (large numbers generally behave similar enough to infinite for this to work). What's true for supply and demand is also true for investing the wisdom of the crowd works better in the long run than any individual. So the smaller number of people you have making the decisions the more the individuals deviations from the best choice will accumulate as inefficiencies. Scientists have expressed concern about analogous behavior with grant agencies for years with them often favoring funding safer experiments and not risky ones. DARPA is rather famous for running counter to this trend. On the private side the tendency for various investment firms or management styles to favor sales departments (and the shiny immediate returns) vs. long term R&D is another one.

I certainly understand how an individual level investing makes sense, but when one looks at wealth accumulation as a pure Darwinian steel cage match the game seems rather less impressive. Let's take my current yearly pension contribution of $4200. Now let's assume for the moment that I'm a crazy active investor who researches everything and manages to get a 10% return and no fees. I've made for the year an impressive $420 dollars. On the other hand I could make more than that with a 1% raise on my actual salary. When the question comes what is the best thing to do with that extra income specifically of course the answer is to invest it (hence the individual benefit), but when you start applying that same analysis on the high side of the equation you also realize that the working class, I saved my way to 1-2 million net worth, individual is still losing ground over time to someone sitting on a few billion. This also leads to significant inefficiency over time in the usefulness of investment capital. Instead of lots of investors placing bets on which ideas are good ones it becomes more and more concentrated with fewer people making meaningful decisions on which business ideas to invest in, which to anyone familiar with the math understands leads to more missed opportunities, aka less innovation.

I'm trying something different in the new year, I'm pretty much giving up all paid services. Had been doing Sling for awhile, and its a solid value but I mostly watch network. I basically get Netflix for free via my phone, and For that extra bit of cable like indulgence I'm trying Pluto TV. Sure it means commercials again, but my TV watching has actually gone down this last year. With everybody doing their own little channel we plan to sign-up here and there for a month or two and binge things.

I would argue BTN would be a good match for something different.

Sling is completely portable. You do need to have decent internet to stream. Netflix is also completely portable and lets you stream a little better with slower connections (since it buffers unlike Sling).

Its because Christopher Heyerdahl is really quite something. He played a number of aliens on Stargate Atlantis and Sanctuary so he isn't always recognizable except for the voice. I liked his work on Van Helsing as well.

I honestly find it more than a little disturbing that the stock market is basically right back where it was

Thanks for the correction on the percentage.

I used to rant about Boomers and Social Security, complaining that all their money was parked on the shores of Vietnam. It's kind of true afterall. But I changed my mind for a few different reasons. 1) as mentioned above the drumbeat of empirical data that most people don't save enough. Second though was the realization though that most of the cost increases were driven by life span increases and demographic transition. Life span increases may continue incrementally, but the demographic transition is nearing maturity (aka the percentage of the population in different age categories is closer to stabilizing). Three no one complains when private companies fail to meet 10, 15 or 30 year projections. With my school budgeting experience I came to viscerally appreciate the importance of modest year to year corrections. Without that level of adjusting any 30 year projection for any company or government is going to end up either controlling the world because they have made so much money or be bankrupt many times over. Also remember our SSI is 13%, 6.5 from you and 6.5 from your employer. Very small changes in the program now would have a very large impact on how long there continues to be a SSI 'surplus' The surplus is actually one of the last things I realized is problematic. What would happen to the stock market if a mythical investor let's call him Warren Gates, suddenly bought 3 trillion dollars in stocks(AKA the value in the trust fund)? Of course it would over inflate prices on tons of stocks, Buffet has made a lot of comments during the last Bull market for not having enough places to park merely Billions in cash because the value isn't there. So there is reason to be concerned about over supplying the stock market with capital, when there are plenty of very useful investments like roads, bridges and public health that generate huge economic benefits.

We didn't have any problems lowering the benefit growth rate along with increasing contributions to improve the fund ratio. Calling it a ponzi scheme doesn't make any sense since it does not rely on ever increasing numbers of participants. It invests in the market just like individual. The reason it became easy to sell people against the idea is the dark side of compound interest. When you build your various budget forecasts extending 5,10 or 20+ years into the future any small amount of mismatch be revenue and costs will get magnified like it is compound interest, which turns into huge numbers pretty quickly. But forecasts are not destiny in the public sector anymore than they are in the private sector. You just have to manage the projection/ budget every year. I've sat through board meetings for well over a decade, and most of those years some new board member becomes convinced healthcare expenses are going to sink everything. At the end of the day though, with competitive bids and some other things we kept the impact close enough to inflation so that we've only had to increase employee contributions $25/ per check in that span.

Workforce age is not really relevant as pensions give you credit based on years worked, so swooping in at the end doesn't get you much. As I mentioned above a shrinking pool of workers does cause problems. Pension funds have an FDIC type insurance program, but solutions aren't hard to imagine since we have more workers than we did years ago, namely instead of tying pensions to jobs you could group pensions across worker classes and make sure things are staying stable. We know 401ks don't work as policy. They benefit some individuals, but after decades of telling people to save more it's clear that ain't working. If there wasn't so much money to be made in fees investment banks wouldn't try so hard to get a hold of the pensions. Aside from the rise of the 401k coinciding with rapid Wall Street growth my coworker who lived in NYC can vouch how eager they are to get their hands on the money. So I play the game a little bit to spread and hedge against what is really just a political risk. MN most recent actuarial study had to increase funding just a bit because people are living longer, I would guess that is the biggest driver of increases in most states.

Trying to extract maximum individual benefit is a short term gain though at best. If there is some sneaky hidden inefficiency, eventually it will show up in the actuarial studies and then you have to make adjustments to payouts and/ or contributions. I'm getting close enough that the various calculators give close enough results without having to completely sweat about how sensitive they are to assumptions. Between SSI and our pensions we are on pace for our retirement income to at worst match our working income. We effectively contribute 13% of our income to pensions. Once you account for not having to make SSI or Pension contributions in retirement we come out ahead. People work hard enough by and large they all deserve that.

401Ks do substantially worse. I'm not aware of any pension that isn't invested so it is earning a return. So I mentioned 1 huge advantage above, but there are 2 others that do it yourself will never top in a systematic way (so yes lucky individuals will occasionally out perform but not most). Reason number 2 is lower fees, than an individual can get. Reason 3 is that a pension never has to adopt the more conservative approach needed when you get older to manage risk. They can always participate in the market in a similar way. There are some cautions. 1) Rapidly changing the number of workers especially downward in a pension plan is problematic, this was a big one a few decades ago for the autoworkers. 2) Apparently in some states rules made it easy for lawmakers to raid the public pension fund. To my understanding this is not possible in MN or WI 3) I don't know how often private pensions are required to do the actuarial studies to adjust as people live longer or the inevitable variations in market returns.

The amount of money that wouldn't have to go to retirement under the 401K model if people didn't have to self insure against living too long is pretty staggering. It's one of the big reasons pensions are so much more efficient/ cheaper as an investment they can just assume the actuarial average. On the teaching side, the most recent data is that wealth is the biggest environmental variable on student performance yet most people need to start their families years before they hit peak earning, so it is a pretty common phenomena. The 2008 recession doubled our free/ reduced lunch population over night, including myself back then.

On the other hand getting backed into a corner policy wise might give Modern Monetary Theory a boost and give use some tools to get things moving faster going forward.