In the fiscal year beginning October 2008 (the 2009 fiscal year), federal government spending exploded from 20.8 percent of GDP to 25.2 percent of GDP.  This was due to a confluence of factors including a decline in GDP due to the recession, an increase in automatic expenditures such as unemployment insurance, the $750 billion Toxic… Read more

At the recent World Economic Forum in Davos, Goldman Sachs Chief Operating Officer (COO) Gary Cohn suggested that many investors and banks might not be prepared for what he called a “significant repricing” in bond markets.  What he means by “significant repricing” is that bond yields may spike higher and bond prices fall dramatically.  His… Read more

Gracie University is the online division of the Gracie Academy.  The Gracie Academy based in Torrance, California is the U.S. home of the Gracie style of Brazilian Ju-Jitsu.  Gracie University is run by the two eldest grandsons of Helio Gracie, the founder of the Gracie style.  The Gracie name is very well known in martial… Read more

Last month JP Morgan released the report of a task force set up to explore the huge trading losses suffered last year in its CIO group.  The facts, in brief, appear to be as follows: CIO stands for Chief Investment Officer, and the original purpose of the CIO group was to manage JPM’s liquid asset… Read more

Fourth quarter United States GDP contracted by about $5 billion dollars, which is 0.1 percent negative growth annualized. This is after 3.1 percent growth in the third quarter which was the strongest quarter in 2013. The largest drivers of the fourth quarter decline were a contraction in government spending of 6.6 percent and a change… Read more

In early 2007, before the financial crisis hit, author Naseem Taleb published his best-selling book “The Black Swan” in which he argued that extreme events occur more frequently than most of us are trained to expect.  We are trained to think in terms of the “normal” distribution, or bell-shaped curve, in which events more than… Read more

Morningstar has published a research report that purports to show that a properly constructed financial plan can generate a meaningful increase in lifetime retirement spending.  The value added from a plan is referred to as “gamma” following in the line of Greek letters being used to assess investment returns.  The first Greek letter “alpha” is… Read more

This is a comment on the national November Employment Situation report released last Friday, and I use numbers from the report to calculate when the United States might reach the Federal Reserve unemployment rate goal of 6.5 percent. The unemployment rate fell from 7.9 percent in October to 7.7 percent in November which might appear… Read more

A central concept in Modern Macroeconomic theory is that capital stock will be accumulated through the process of saving for the future. A new country, starting with a low capital level, will accumulate capital for some number of years or decades until reaching an equilibrium level of capital stock. Progressive taxes on capital income imply… Read more

Actor, economist, humorist Ben Stein has written an innovative book1 on financial planning.  Instead of telling you what you should do to improve your financial position, Ben tells you 49 things you can do to impair your financial position – to reduce wealth, reduce income, and increase the chance of destitution.  Many of these things… Read more