Monday, April 30, 2012

Are We Really Interested in "Taking Care of Our Own"?

A significant number of American voters seem to believe that the unemployed don’t really want jobs because they would prefer to live off unemployment insurance, food stamps or other social benefits.

Many of these same voters are also drawn to a particular austerity strategy: cutting taxes for higher-income individuals and cutting unemployment insurance and other social benefits for low wage earners and the unemployed.  This strategy makes perfect sense if you believe that most people who are struggling to pay their bills aren’t trying hard enough.

But, the social safety net is not a hammock that unemployed workers can luxuriate in.   A New York Times/CBS News poll conducted last fall found two-thirds of those receiving benefits said the amounts received were not enough to pay for basics like housing and food.  Contrary to the apparent belief of some American voters, the unemployed aren't getting rich off unemployment insurance and food stamps.

The argument that most people who are unemployed and struggling to pay their bills aren’t trying hard enough appeals for various reasons.   It absolves believers of any responsibility for other people’s hardships.   It lends credence to the assertion that the labor market would work just fine if it weren’t jammed up by a social safety net.   And this argument does contain a partial truth: some people probably do shirk their responsibility.   They do let access to unemployment benefits, food stamps or disability insurance reduce their job search efforts.   But the number who fall into this category is minuscule compared to those who really want to work and can’t find a job.

The unemployed want jobs badly enough.  But some Americans don’t seem sensitive to the problem and don't seem to care much about helping the unemployed in the process of getting back to work.

Bruce Springsteen’s recent album, “Wrecking Ball” includes the song “We Take Care of Our Own.”  The problem is, it’s not clear that some American voters really believe that philosophy.

"Where are the hearts that run over with mercy…”

“Where’s the work that’ll set my hands, my soul free…”

Sunday, April 29, 2012

A Picture is Worth a Thousand Words

One reason manufacturing jobs will not be coming back to where they were ---

Thursday, April 12, 2012

Carried Interest Revisited

A little biased, but mostly accurate ---

Listen to the Market Pundits or Flip a Coin?

So, you want to follow the advice of your favorite market pundit?  After all, they make the really big bucks and have all that experience, not to mention those big research staffs to analyze every real-time market move along with every fiscal/monetary policy decision in ascertaining the timing and direction of future equity and bond market movements.

You might want to flip a coin instead.  Over time, the probability of  your coin-flip decision being correct would be 50%, better than most of the market pundits touted as such by the financial media.

Here's a table, prepared from analyses by CXO Advisory Group, that shows the accuracy rate of the market predictions of 18 investment advisors who are touted by the major financial media outlets (CNBC, Fox Business News, Bloomberg TV, etc.) and the financial press as market experts.

Pundit scores

(You can get into the "weeds" of these scores and see more ratings at the CXO guru website ---

Next time you hear or read about a market forecast (timing or direction) by one of the investment pundits, consider their opinion as only one of the inputs into your financial decision-making.  Maybe even consider it as a contrarian input.

In a future post, I want to highlight how mutual fund managers perform compared to market indices.  Here's a clue --- the vast majority of mutual funds do not perform as well as their benchmark indices.  Moreover, those mutual funds that do perform better in one year don't usually (or can't) replicate that better performance over time.  Buying a benchmark ETF (e.g., SPY or IVV to replicate the S&P 500 index) may be your better investment alternative over time.

Wednesday, April 4, 2012

Does the Market Have You Stressed?

If the market has you stressed out (or even if it doesn't), relax in one of these hoodies --- artwork by my son Brandon (you can find him on FB @
and his artwork @!/profile.php?id=568836417&sk=photos).

The hoodies and other products containing Brandon's artwork can be found @

untitled Hoody         poet Hoody