WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Apple puts one in the stink

And the muppets get a Goldman Shower.

Sell everything!!!

This from the guy who told you Bear Stearns was fine just days before it imploded.

Confidential to Janet Y.

Mark Spitznagel, The Dao of Capital:
The spread of fire-suppression mentality can be linked to the establishment of forest management in the United States, such that by the early 1900s forests became viewed as resources that needed to be protected – in other words, burning was no longer allowed. The danger of this approach became tragically apparent in Yellowstone, which was recognized by the late 1980s as being overdue for fire; yet smaller blazes were not allowed to burn because of what were perceived to be risks that were too high given the dry conditions. And so smaller fires were put out, but in the end could not be controlled and converged into the largest conflagration in the history of Yellowstone. Not only did the fire wipe out more than 30 times the acreage of any previously recorded fire, it also destroyed summer and winter grazing grounds for elk and bison herds, further altering the ecosystem. Because of fire suppression, the trees had no opportunity or reason to ever replace each other, and the forest thus grew feeble and prone to destruction… In 1995, the Federal Wildland Fire Management policy recognized wildfire as a crucial natural process and called for it to be reintroduced into the ecosystem… Central bankers, too, could learn a thing or two from their forestry brethren.

National Institutes of Health studying Greenspan's Body Count

Look who's reading about Alan Greenspan victim Michael Marin.

What I saw at the San Diego Ted Cruz rally

Outside the convention hall, there were a handful of protesters.  Some of them apparently Trumpkins.

... others garden variety leftists.

The crowd was huge.  Tickets were free but obtained by RSVP on Eventbrite.  The initial lot had sold out almost immediately, so a larger space was reserved but their still ended up being a wait list.  This is the line for ticket holders.

Speaking to people in line, many seemed to be curious and open to Cruz but by no means hardcore partisans.

It looked like everyone on the wait list was able to get in, though the room was close to capacity at about 2000 people.

After a few local GOPers gave speeches, Cruz came on.  Good speech, emphasized his campaign message of Jobs, Freedom, Security.  Nods to Reagan coalition, blue collar, young people.  Thankfully light on the religious stuff.  Then talked about the primary: Trump's sore loser whining in Colorado, Cruz's recent string of victories, Nate Silver predicting 61% chance Cruz wins nomination, California likely to be deciding factor.

The crowd grew more enthusiastic as the speech went on.  At one point, some protesters made a ruckus out in the foyer, but inside it was impossible to hear what they were saying. I'm not sure whether they were Berners or Trumpkins or Purple People Beaters, but the crowd drowned them out with a loud chant of "Ted Cruz!  Ted Cruz!"

I think this guy is your nominee, probably with Carly Fiorina as his running mate.  As for beating Hillary, the media, and the Free Sh!# Army, that's a bigger challenge.

Social Security is a massive redistribution scheme -- and why gamblers, hookers, illegal aliens, and other under-the-table workers should report some income

You may have heard that Social Security pays an awful return on the money you put in. That's true -- except for the poor. Very low-income workers get a massive return on the money they pay in.

Here's how it works:
For an individual who first becomes eligible for old-age insurance benefits or disability insurance benefits in 2016, [...] his/her [benefit] will be the sum of:
(a) 90 percent of the first $856 of his/her average indexed monthly earnings, plus
(b) 32 percent of his/her average indexed monthly earnings over $856 and through $5,157, plus
(c) 15 percent of his/her average indexed monthly earnings over $5,157.
See how that works? A huge return on the first $856 per month you report, much less on the next $4,301, and almost nothing on everything above that. So if you're paying the maximum Social Security tax on income of $118,500, you're getting almost no credit for almost half the money you're paying in.

Take for example someone who earns the $856 monthly for 35 years (ignoring indexing and inflation for the sake of simplicity; it doesn't change the principle). With a combined Social Security tax rate of 12.4%, he and his employer would have paid in $44,580 over his career. Now assume he retires at 66 and lives 15 years more. He'll get 90% of that $856 monthly, or $9245 per year, for a total of $138,672 over 15 years -- far more than he paid in!

Now take someone who earns the maximum taxable $118,500 for 45 years. He and his employer would have paid in $661,230. But his monthly benefit would be just $2854 (the actual maximum benefit is currently $2639 due to differences in wage inflation and cost of living). That would be $34,253 per year or $513,796 if he lived 15 years in retirement -- a negative return on the money he paid in.

Clearly, it pays to report that first $856 per month of income to get a big payback on Social Security.  Cash workers, stay-at-home spouses, middle-aged immigrants, and anyone else expecting to live into retirement age should find a way to report some income.  The magic number is 35 years x $10,272 in today's dollars, or around $360,000 in lifetime income.  As a side benefit, there's also the "Earned Income Tax Credit" handout you may qualify for.

The rest of you?  Sorry about those payroll taxes.  We gotta spread the wealth around.

Obama regime erects new Berlin Wall to keep companies from fleeing world's most oppressive taxation

The Treasury Department imposed tough new curbs on corporate inversions Monday, shocking Wall Street and throwing into doubt the $150 billion merger between Pfizer Inc. and Allergan PLC, which was on track to be the biggest deal of its kind.

The Treasury move, which was more aggressive than anticipated, sent Allergan’s shares tumbling 19% in after-hours trading and could stall a trend in corporate deal-making that has seen companies searching for ways to escape the U.S. tax net. Pfizer shares edged 0.9% higher.

The new rules, the government’s third wave of administrative action against inversions, will make it harder for companies to move their tax addresses out of the U.S. and then shift profits to low-tax countries using a maneuver known as earnings stripping.
The U.S. has among the highest corporate tax rates in the world, in addition to being alone among developed countries in taxing the overseas earnings of foreign subsidiaries.

Message to global business leaders: don't start a company in the U.S., because even if you don't mind the high taxes at first, someday you might, and you won't ever be allowed to leave.

Dave Ramsey just makes stuff up about gold

Radio gold-basher Dave Ramsey on his 3/24/16 show (hour 2, 30 mins in):
When you look at the track record, say, over 50 years, if you put money in gold 50 years ago, or you put money in a growth stock mutual fund 50 years ago, or you bought a house 50 years ago with the exact same amount of money, so we took $100,000 and we put it in there, and you visit 50 years later, you know, you would find that gold has about a 2% rate of return over that 50 years... It's done horribly!
The truth?  Not even close.  Gold was $35 in 1966, and is $1216 now.  That's a 7.35% annual return compounded over 50 years.  And it's 8.2% annually over the 45 years since Nixon took the dollar off the gold standard in 1971.  That's not quite as high as stock returns, but it's a hell of a diversifier due to its low correlation with stocks, and certainly deserves at least a few percentage points in any asset allocation.

Pro Tip: use mutual funds for dollar-cost averaging, then flip into ETFs to cut taxes and expenses

Exchange-traded funds (ETFs) are the greatest thing since sliced bread. They allow individual investors to build diversified portfolios at near-zero cost. You can get all the asset classes you need using only a handful of ETFs.

Here's a 4-ETF portfolio you could start with, choosing various weights depending on your risk tolerance.

VTI - Total US stock market
BND - Total US bond market
VEA - Foreign stocks
VWO - Emerging market stocks

Your total cost on that portfolio would be less than 0.1% per year.

If you want to get fancy, you could throw in a few other asset classes like REITs (VNQ and VNQI), munis (MUB, CMF, NYF), and high-yield bonds (HYG). There are even ETFs for the precious metals (SGOL, SIVR, PPLT, PALL...), though most goldbugs prefer, with good reason, to hold physical metal.

So what's the downside to ETFs for individual investors?  It's that you generally can't set up automatic dollar-cost averaging as you can with mutual funds.  I like to dollar-cost average into volatile, uncorrelated asset classes as a long-term savings strategy, putting $100 or so into a number of funds monthly.  Online trading platforms such as Vanguard, Fidelity, Schwab, and E-Trade can accommodate this easily.  But none that I'm aware of can do automatic periodic investing of fixed dollar amounts into ETFs.

For example, I want to dollar-cost average into mid-cap stocks.  The SCHM ETF is extremely cheap at 0.07% per year, but there's no way to set up automatic periodic investing in it.  So I'll dollar-cost average into the Dreyfus Mid-cap Index Fund (PESPX), which has much higher expense ratio of 0.50%, but allows automatic investing. Then I'll sell it all every year or so and swap into the SCHM ETF, so I'm only paying the higher expense ratio on my recent investments, and allowing the bulk of my mid-cap money to grow in the lower fee SCHM ETF.

Besides the higher expenses, there's another good reason to prefer ETFs over index funds: index funds may pay out capital gain distributions which are taxable to the current holders, even if the current holders did not own the shares long enough to participate in the appreciation. PESPX, for example, has paid out sizeable capital gains the last few years.  Switching from mutual funds to ETFs can help you avoid these unexpected tax bills.

Father of the Year

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