Frugal News
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| The elements of investing |
| 08/29/10 4:30 PM EST | Books |
| "The Elements of Investing.written by former Vanguard board members Charles Ellis and Burton G. Malkiel.distills investing into five fundamental principles: save, index, diversify, avoid blunders, and keep it simple. Simply visit the publisher's website and download your copy today." |
| More Books: The original captain of industry |
| Into thin error |
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| The Fed can create money, not confidence |
| 08/25/10 5:04 PM EST | Government |
| "The key word here is "uncertainty." The Obama administration and Congress have dumped a huge load of highly dubious new legislation on Americans, much of it unread even by the legislators who voted for it. ObamaCare is an attempted federal takeover of a vast and complex industry. No one really knows how much chaos the financial sector "reform" act will generate. Hyperactive zealots in federal bureaucracies such as the Environmental Protection Agency have been unleashed to do silly things like attempt to reduce the planet's supply of carbon dioxide." |
| More Government: War between the sexes |
| Complex adaptive systems |
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| The lost half decade |
| 08/25/10 4:47 PM EST | Real Estate |
| "While it has been a 'lost decade' for equities, housing isn't too far behind. The sector is now in the midst of a lost half decade and counting. Following up on yesterday's downright awful release of existing home sales, today's new home sales report for July came in at a seasonally adjusted annualized rate of just 276K, which is a record low dating back to 1963. Since peaking in July 2005, new home sales have now declined by more than 80% in five years." |
| More Real Estate: Credit score is the tyrant |
| Vancouver's bubble trouble |
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| War between the sexes |
| 08/25/10 3:53 PM EST | Government |
| "On average, 65-year old men today will receive only 43.6% of the net benefits that women receive, and young men today can expect a net tax burden over their lifetimes that will be 3.4 times greater than for women." |
| More Government: Complex adaptive systems |
| Battle looms over public pensions |
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| Complex adaptive systems |
| 08/25/10 3:41 PM EST | Government |
| "As long as the Chinese keep giving us money and inflation remains low, I see nothing forcing US policy to change. This is not sustainable, however, and when the US turns into a Greece-like situation, it will be a very bad decade. When you try to micromanage a complex system, the most important virtue is humility." |
| More Government: Battle looms over public pensions |
| Huge government benefit |
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| Battle looms over public pensions |
| 08/23/10 3:59 PM EST | Government |
| "There's a class war coming to the world of government pensions. The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide. The have-nots are taxpayers who don't have generous pensions. Their 401(k)s or individual retirement accounts have taken a real beating in recent years and are not guaranteed. And soon, many of those people will be paying higher taxes or getting fewer state services as their states put more money aside to cover those pension checks." |
| More Government: Huge government benefit |
| U.S. is bankrupt |
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| Huge government benefit |
| 08/23/10 3:58 PM EST | Government |
| "Not participating in Social Security is a huge benefit. The implicit return on 'premiums' paid by you and your employer is typically below zero. In other words, if you took your social security taxes and stuffed them in a mattress, you would get a better return." |
| More Government: U.S. is bankrupt |
| Why I'm not hiring |
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| But still expensive |
| 08/22/10 7:28 PM EST | Funds |
| "A few years ago, a research paper by three academics claimed that Canadian mutual funds levied higher average fees than funds in seventeen other countries. Since average Canadian fund fees are high, the media jumped all over this research - despite being incomplete. Reading through many versions of the paper, it became clear that the core data and underlying assumptions were questionable." |
| More Funds: Stewardship common sense |
| Reward for punishment |
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| Soak the very, very rich |
| 08/12/10 11:09 AM EST | Taxes |
| "In a society that's becoming more stratified, a sensible tax system should draw more distinctions, not fewer. The U.S. is now a place where the rich and the ultra-rich really inhabit different worlds. (A couple of years ago, Barron's declared, 'Yes, it takes more than $10 million to be seen as rich these days.') They should probably inhabit different tax brackets, too." |
| More Taxes: Fun tax facts |
| Special interest |
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| U.S. is bankrupt |
| 08/12/10 11:02 AM EST | Government |
| "Let's get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills. What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy." |
| More Government: Why I'm not hiring |
| This ain't your granpa's debt |
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| Why I'm not hiring |
| 08/09/10 9:15 AM EST | Government |
| "A life in business is filled with uncertainties, but I can be quite sure that every time I hire someone my obligations to the government go up. From where I sit, the government's message is unmistakable: Creating a new job carries a punishing price." |
| More Government: This ain't your granpa's debt |
| The technocracy boom |
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| Tim's 2010 Conference |
| 08/02/10 11:28 AM EST | Value Investing |
| "Glacier, Indigo, EGI Financial, Sun-Rype Products and Arlington, which is a little bit of a special situation. But all of these companies, I think, are really through any restructuring. They're somewhere in various stages of cash generation or discovery, and whether or not we sell them or not, depends an awful lot on the price they're trading at." |
| More Value Investing: Mr. Market refuses |
| Sticking to what works |
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| The muni-bond debt bomb |
| 07/26/10 2:55 PM EST | Bonds |
| "Like homeowners before the housing bubble burst, states and cities have gorged on debt, extended repayment times, and used devious means to avoid limits on borrowing - all in order to finance risky projects and kick fiscal problems down the road. Though the country's economic troubles have helped expose some of these unwise practices, the downturn has brought not reform but yet more abuse. Even as Tea Party protesters and taxpayer groups revolt against excessive government spending and taxes, they are paying too little attention to the gigantic state and local debt bomb. If it can't be defused, we're all at risk." |
| More Bonds: Bond default |
| The bond return puzzle |
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| This ain't your granpa's debt |
| 07/26/10 10:23 AM EST | Government |
| "The deficits of the next few decades are scheduled to balloon because of budget decisions -- Medicare and Social Security and tax levels -- that are decades in the making. The political process created this time bomb and the political process will have to defuse it." |
| More Government: The technocracy boom |
| Washington takes aim at Apple |
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| Credit score is the tyrant |
| 07/25/10 8:41 AM EST | Real Estate |
| "A FICO score, he patiently explained, is merely a tool that lenders use to help manage their risk; criticizing it is akin to criticizing 'a saw because the construction job turned out badly.' With big banks making thousands of credit decisions every day, they couldn't possible do it without some standardized benchmark; a credit score provided that benchmark. Over the years, he added, the algorithm had gotten very good at predicting the odds of a borrower defaulting. In fact, FICO scores are not the best predictor. The amount of equity a person has in his home, his debt-to-income ratio, his job stability and his cash reserves are all better predictors than credit scores, according to Dave Zitting, the chief executive of Primary Residential Mortgage, a leading mortgage lender. And yet, he said, 'The credit score has become the line in the sand for the banks.'" |
| More Real Estate: Vancouver's bubble trouble |
| The homeownership gap |
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| The technocracy boom |
| 07/22/10 10:09 PM EST | Government |
| "When historians look back on the period between 2001 and 2011, they will be amazed that a nation that professed to hate bureaucracy produced so much of it." |
| More Government: Washington takes aim at Apple |
| Government for sale |
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| It's Greek to me |
| 07/22/10 10:01 PM EST | World |
| Markets are safer when fear balances greed, and when worry about losing money balances worry about missing opportunity. We don't like it when fear rears its head and stocks drop, but certainly that creates a healthier environment in which to be a holder, and one which should offer better buying opportunities." |
| More World: Down with doom |
| The Andy Grove essay |
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| Bond default |
| 07/21/10 8:38 PM EST | Bonds |
| "When Arkansas defaulted on its bonds in 1933, the politicians and investors talked about the same things we would talk about today. The state blamed underwriters for allowing it to sell too many bonds. Investors compared the willingness to repay debt with the ability to pay, and weighed the advantages of bonds backed by a pledge of taxing powers to those secured by specific revenue. Unlike today, nobody thought the federal government should come to the rescue." |
| More Bonds: The bond return puzzle |
| Obama pays more than Buffett |
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| Stewardship common sense |
| 07/16/10 6:01 PM EST | Funds |
| "In the course of our research we've uncovered a fund company - one that received a good culture grade and had no regulatory deductions - that purchased shares in a related company in one of its funds. Since the firm has followed all of the rules, technically, it's not considered a regulatory issue. Accordingly, the trade was not reviewed by the IRC. But when we discovered all of the facts, we have zero doubt that a conflict of interest existed, whether or not the law defines it as such." |
| More Funds: Reward for punishment |
| Keys to success |
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| Washington takes aim at Apple |
| 07/15/10 3:12 PM EST | Government |
| "If you want to produce something in America, you'd better play the game. Contribute to politicians' campaigns, hire their friends, go hat in hand to a congressional hearing, and apologize for your success." |
| More Government: Government for sale |
| What fresh hell is this? |
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