investing · Personal Finance

We Can’t Take Rate Cuts Back

Josh Brown said something on CNBC today that I’ve believed for a long time under the Trump Economy: it’s now impossible to walk-back rate cuts.

We all remember the debacle of December 2018, when the Federal Reserve raised rates by a quarter point, from 2.25 percent to 2.5 percent. The result was a devastating market drop of 20 percent.

After the last seven days of Coronavirus fear and loathing, the Fed made an emergency rate CUT to stave off concerns, and the Dow fell by almost 3 percent. I guess it wasn’t enough, but just imagine if they had attempted to RAISE rates.

Much as Religious Investor thinking may help quench queasy market appetites by feeding the “There’s no limit!” mentality of millennial dreamers, fueled by the likes of Tesla and Virgin Galactic, at a certain point the ties which bind may horribly snap.

In that moment, will rates be cut or raised? Will it even begin to matter?

Culturalism · investing · Personal Finance

How China Got Away With Murder

We have already established that China is untrustworthy and corrupt. But the story gets a lot worse, and it goes back years.

In 1874, the Treaty of Bern was signed, establishing the Universal Postal Union, which served to set international carrier rates for mail and shipping. Because China was considered a “developing country,” then, and explicable still is today, it got a sweetheart deal on shipping to the United States. Although less of a problem intially, the growth of China’s exports resulted in a system where the USPS was paying between $300-500 million annually subsidizing foreign imports.

The bizarre impact of the old policy meant that a New Jersey-based company like Mighty Mugs had to spend $6.30 to deliver a single mug, while a counterfeit version could be sent from China for only $1.40. According to Mighty Mugs owner Jayme Smaldone, it gets worse with heavier packages:

“We pay up to $17.61 to mail a four-pound package, but a shipper in China pays $3.67.”

It should come as no surprise that Chinese knockoff sellers can easily undercut American products by offering significantly lower prices.

Thankfully, things are changing. Under a new agreement that goes into effect in July 2020, the United States will be permitted to self-declare shipping rates, hopefully leveling the playing field for struggling small businesses within its borders. As Pete Navarro said:

“China is certainly going to pay more for the privilege of shipping to our market.”

And it only look over 100 years.

Culturalism · Personal Finance

Money Doesn’t Equal Dignity

“You need money to have human dignity.”

Nowadays we have a lot of public discussion revolving this concept. People claim increasing the minimum wage, expanding healthcare, or offering free education serves to avoid the negative outcome. And that sex workers and porn artistry are “last resorts” for women struggling in a moribund, patriarchal world.

But oddly enough, having more means nothing if your personal code is bankrupt. Take Steven Spielberg. He’s a world famous influencer with a fantastic career, and more money than most could imagine. Yet reality is a cruel mistress.

His adopted daughter, Mikaela, recently came out about her pornography career, which she describes in the following terms:

“I’m doing this, not out of an urge to hurt anybody or be spiteful about it, I’m doing this because I want to honor my body (emphasis added) in a way that’s lucrative.”

Remember, this is the child of a mega-rich Hollywood power couple (who are apparently supportive of her choice). She likely had access to expansive educational, healthcare, and career-oriented resources throughout her life. Even if we want to ascribe the cause to various forms of abuse she experienced growing up, the specific avenue of pornography was certainly not a “last resort” for her in terms of a career, which she admits to pursuing.

So Bernie and Lizbeth can continue waving their hands, but having more means nothing if you possess no dignity.

investing · Personal Finance


I have a general rule for life in the United States: anything which saves you money is eventually removed.

A few of you may know about the passage and signing of the SECURE Act in December 2019. This drama-free legislation made some interesting reforms to retirement plan rules, allowing Americans to make certain penalty-free (but not tax-exempt) withdrawals for qualifying reasons, and also lengthened the timeline under which required minimum distributions (RMDs) must be taken by retirees.

That all sounds good, but there is something else to the story. A separate shift in distribution laws could leave you seriously screwed down the road where taxes are concerned.

Under previous rules, people who inherited an IRA from their parents had the liberty of “stretching” RMDs over the course of their own lifetimes, thus reducing the taxes paid on that money and building inter-generational wealth. Not anymore.

The SECURE Act upends this tradition by placing a 10-year distribution requirement on such inheritance IRAs. So if your parent dies and hands over an account with $500,000, you would need to withdraw something like $50,000 annually to spread it out over that period, or take the lump sum. In either case, taxes will be high.

Perhaps the rule won’t be so horrible for folks who inherit at the age of eighteen, but for others it is bad news. Imagine pulling in a six-figure salary at age 45 and having to stack $50,000 on top of that. Your taxes will giggle with delight.

A broader issue relates to how America prevents people from building wealth if they are not extremely rich. Under current tax laws you can even be penalized for making too much while also maxing out a Roth IRA, and few lucrative deductions are available for middle class people. The SECURE Act is just a garnish on that system.

investing · Personal Finance · Uncategorized

Expense Ratios Simplified

What the heck is THAT?

We’re talking about the elusive “Expense Ratio,” which governs some of the charges passed on to the investment fund participants by money managers. In most cases, this figure will be something like 0.04-0.99 percent, numbers that successfully flummox the mathematically disinclined. They don’t look expensive, and in fact they really don’t seem like much at all.

But the truth is in the fee lines. If you go by the first glance, it is easy to end up paying hundreds if not thousands of dollars worth of expensive charges that eat away at the base return.

Consider the following S&P 500 options for a second, and keep in mind that the returns are a few months old:

American Funds AMCAP Fund

5-year return:  8.94%

Gross and Net Operating Expenses: 0.36%, or $3.60 per $1000

Vanguard Institutional Index Fund

5-year return: 9.63%

Gross and Net Operating Expenses: 0.04%, or $0.35 per $1000

Those numbers make a BIG difference, and we’re not even including the other administrative fees. Plugging them into a calculator we get:

A difference of over $26,000 over thirty years, all while the participant thought he was “saving” money.

Now let’s look at a bond fund for comparison:

Ivy High Income Fund

5-year return: 3.91%

Gross and Net Operating Expenses: 0.57%, or $5.70 per $1000

What’s really sad is that the bond fund has a much lower return, and yet charges higher fees, eating away at growth for the saver or retiree. Expense ratios DO matter, even if they seem like legalese at first glance. Choose the low-cost fund whenever possible

Culturalism · Personal Finance

The Masks of China

As some of you already know, Xi Jingping was photographed at the Beijing Coronavirus hospital wearing the transmission prevention mask which has become iconic during the crisis. This is while reports suggest he has failed to visit Wuhan, where the outbreak originated.

From what we can see now, there are a few possible takeaways:

1. The virus threat is not serious, and Xi simply has to put up the image of containment, in a (non-malicious) propaganda act.

2. A massive calamity is being covered up in China, but we still need take the Thomas Friedman approach, because their government is honest.

3. It’s the Russians.


Personal Finance

How To Stay Warm Sleeping In Your Car

Is there a way to car camp in the cold comfortably?

This is a pretty common question among van dwellers who aren’t somewhere in the Deep South. That’s because most of us can sleep in humid regions without too much trouble, especially considering the aid of a cooling mattress or some battery-powered fans.

On the flip side, cold weather car camping always becomes an issue. Part of the problem is that heaters draw so much power, making battery-operated versions quite rare.

Sure, one can try to install an inverter or keep the heat on all night, but that way lies the risk of Carbon Monoxide. Propane heaters are not much better, especially if you intend to sleep in a smaller vehicle.

So where does that leave us? As it turns out, with a couple of decent options.

1. Use a Proper Sleeping Bag

Ditch the Coleman easy rip zippers and choose something durable. I’ve found the WolfTraders -30 model to be quite satisfactory, even if it is a bit expensive. Remember, minimalism doesn’t mean Cheapito thinking, particularly when it comes to holding in the heat.   

2. Bundle Up

You probably heard as a kid that the body loses heat at its ends. Make sure to wear a fresh pair of warm socks, some gloves, and a thick hat or balaclava while resting. The head is especially crucial, because it is usually more exposed, and you don’t want to be covered by the bag completely, or breathing will create moisture and possible sickness.

Invest in some thermal shirts and long underwear. They’re not terribly expensive, but do the job well.

3. Utilize Hand Warmers

A large pack of these little guys will run 14-20 bucks, but provide excellent comfort. One or two in the bag or in a hoodie pocket can make a lot of difference. Just avoid sticking them in that place.

4. Hot Water Bottles

This is one few people will readily think of, despite the ease and affordability. Purchase one or two of these fellows with the fabric case and boil water at work with an electric kettle or somewhere with a free outlet and place them at the bottom of your bag. They will prevent that chill that builds up around the feet, especially if that end is near a car door or trunk.

5. Get a Remote Starter

Although pricey (usually around $300.00) this feature can be a major boon in chilly weather. Once you get out of the bag upon waking, the change in temperature can be uncomfortable and cause sickness. Instead, keep the button close by and tap it so the car heats up before exiting. This also works as a precedent to going to sleep so the car is not freezing when you get in.

To be cautious, purchase a battery-operated carbon monoxide detector and keep it in the car as a safeguard.

investing · Personal Finance

The Religious Investor

Just how HIGH can it go?”

You’ve probably heard something along those lines in market-based articles. After all, greed and overconfidence are the virtues of constantly churning stock wheels.  It should never stop.

Over the last few years, we have witnessed a rather new phenomenon: the Religious Investor. In this case, it is a person who has no regard for reality or the underlying principles of value. Any outcome, regardless of nature, is an affirmation of their stock’s worth, and skepticism? We simply won’t have it!

The Religious Investor operates much like the Chant Warrior where psychological tropes are concerned. Anything Bad is Good, and anything Good is good. Low polling? That’s because the polls are wrong! Not getting positive attention? Only because of media bias! There is zero possibility of an alternative, because that contradicts the religious narrative.

You probably recognize by now that my target here is Tesla. To be clear, it applies to shareholders in other stocks as well, like Buttondown notes:

One January 29th, 2020, they released a fresh earnings report showcasing the following:

Q4 Non-GAAP EPS of $2.14 beats by $0.38

GAAP EPS of $0.58 misses by $0.26.

Revenue estimate was $7.05 billion, actual was $7.38 billion, beating by $330 million

In reaction, the stock rose from around $570 to $644, roughly 11 percent. This despite relatively poor results in the second half of the year, and a weak track record

Look at how Tesla bulls respond to skepticism:

Comparatively, Apple released the following results not long ago:

Q1 GAAP EPS of $4.99 beats by $0.45.

Revenue of $91.82B (+8.9% Y/Y) beats by $3.41 billion.

Apple’s uptick? About 2 percent. And even in that case, after a long run of success, calling for a sell gets you shredded by the true believers.

So should we all go to cash, or stop being haters and buy?

Culturalism · Personal Finance

How To Win At Economic Dating

If you’re more than a young whippersnapper, you probably remember the video I made on Prince Harry’s decision to wed Meghan Markle. It got about 60,000 views, and made a lot of folks angry.

Why? Because I called his decision an “impending disaster.” This was wholly unacceptable, for anyone detracting from his life choices was necessarily a hater in the eyes of my critics.

As it turns out, I was 100 percent correct. Harry the heroic helicopter pilot has been relegated to the status of a dutiful servant beneath his hard-charging and clever wife. Yes, I meant clever. The mistake of the outrage crowd is to assume a negative attitude towards Meghan, which was never the case. We should rather look to her as a model.

Stop and figure things for a second. At the time of their wedding, Markle was pushing forty and recently divorced. Her acting career had been moderately successful, but nothing to ensure long-term dominance in the entertainment industry. She stood to end up like a more ethical Lori Loughlin: famous, but hardly a star.

Nevertheless, she managed to wife up a younger prince with access to copious wealth, AND had a son with him. That’s pure talent.

The press frenzy over the royal couple’s “Megxit” chapter of stepping back from duties to live in Canada remains baseless controversy, as it’s all part of the plan. With legal and blood ties to the royal family, plus a newly-minted trademark brand, she has become financially invincible. Even Camilla Parker Bowels could never dream up such a fantasy.

How’s that for happily ever after?