The World’s Wealthiest Family Gets $4 Million Richer Every Hour FYI: The 25 wealthiest dynasties on the planet control $
1.4 trillion.
The numbers are mind-boggling: $70,000 per minute, $4 million per hour, $
100 million per day.
That’s how quickly the fortune of the Waltons, the clan behind Walmart Inc., has been growing since last year’s Bloomberg ranking of the world’s richest families.
At that rate, their wealth would’ve expanded about $23,000 since you began reading this. A new Walmart associate in the U.S. would’ve made about 6 cents in that time, on the way to an $
11 hourly minimum.
Even in this era of extreme wealth and brutal inequality, the contrast is jarring. The heirs of Sam Walton, Walmart’s notoriously frugal founder, are amassing wealth on a near-unprecedented scale — and they’re hardly alone.
The Walton fortune has swelled by $39 billion, to $
19
1 billion, since topping the June 20
18 ranking of the world’s richest families.
Regards,
Ted
https://www.bloomberg.com/features/richest-families-in-the-world/
Cliff Asnes: Bonds Are Frickin' Expensive FYI: First, a disclaimer. We are not suddenly pro-market timing. We have always either advocated against it, or, at the most, argued for sinning a little (meaning don’t do much of it or only do it at true extremes – and even then don’t do that much of it!). Still, whether you’re going to do anything about it or not,
1please just view this as a posting. When something as important as the U.S. bond yield hits historical extremes, it’s worth at least a discussion, though certainly not an automatic huge short. There are also some other interesting things to examine along the way about the long-term relationships between real bond yields, real T-bill yields, the slope of the yield curve, and economic conditions.
Regards,
Ted
https://www.aqr.com/Insights/Perspectives/Bonds-Are-Frickin-Expensive
Hasenstab Loses $1.8bn In Single Day As Big Bet Blows Up: (FEMGX) - (TPINX)
PIMCO income A expense ratio Hrm. Maybe I mis-read things at the time, which was entirely possible then.
Memories fade. Sometimes we remember what we want to remember.
My own memory says that PIMCO funds were generally expensive, though I believe that there was a period of time when they actually got cheap. I think at one time Bill Gross said something about making fees more reasonable. But that's my fuzzy memory, and it's harder to find records of such pronouncements than it is to dig up old filings:
PIMIX current expenses (
July 31, 2019 summary prospectus):
Management Fees: 0.50%
12b-
1 Fees: N/A
Other Expenses: 0.55% (all of which is interest expense, per footnote)
Fee Waiver: N/A
Total ER: 1.05%PIMIX expenses
10 years ago (
July 31, 2009 prospectus):
Management Fees: 0.45%
12b-
1 Fees: N/A
Other Expenses: 0.6
1% ("reflect interest expense", per footnote)
Expense Reduction (0.05%)
Total ER: 1.01%
PIMCO income A expense ratio Memories fade. Sometimes we remember what we want to remember.
My own memory says that PIMCO funds were generally expensive, though I believe that there was a period of time when they actually got cheap. I think at one time Bill Gross said something about making fees more reasonable. But that's my fuzzy memory, and it's harder to find records of such pronouncements than it is to dig up old filings:
PIMIX current expenses (
July 31, 2019 summary prospectus):
Management Fees: 0.50%
12b-
1 Fees: N/A
Other Expenses: 0.55% (all of which is interest expense, per footnote)
Fee Waiver: N/A
Total ER: 1.05%PIMIX expenses
10 years ago (
July 31, 2009 prospectus):
Management Fees: 0.45%
12b-
1 Fees: N/A
Other Expenses: 0.6
1% ("reflect interest expense", per footnote)
Expense Reduction (0.05%)
Total ER: 1.01%
The bond market is screaming It takes Krugman 529 words to say that none of us understands wtf is going on with interest rates?
Edit: Kinda busy today. Some chopped up observations ... I don’t think Krugman’s wrong. He just tosses out a number of possibilities - already widely understood.
What I suspect may be the unmentioned elephant in the room is (broadly defined) global demographics. Many nations are experiencing declines in working age populations and increases in the elderly. And, the elderly are living longer. A lot of the change relates to the devastation / loss of life stemming from WWII. Babies born shortly after the war ended are now 70-75 years old.
That demographic shift puts enormous pressure on income producing instruments because the elderly have shorter anticipated time horizons over which to invest and lower risk tolerance in general. Bonds, including those held via various insurance products, become an investment of choice for a growing sector of the populations in the more advanced (wealthier) global economies. This drives rates downward.
So, what accounts for the seemingly unstoppable gains in equities? That’s more complicated. But I suspect a few factors: (1) the loss of defined benefit retirement plans has driven many inexperienced investors into the equity markets leading to more exaggerated boom & bust cycles; (2) money has been driven into equities the low and lower interest rates, (3) global productivity has increased due to the technology revolution. (4) To some extent, the advent of “instant feedback” brought about by the web has prompted more risk taking by market participants than when we relied mainly on time-lagged print sources for news and information. (Think of the “casino effect” on human behavior.)
PIMCO income A expense ratio I owned PIMIX years ago and the ER was something like .60 or .70. For them to be charging 1.XX ERs on classes including their institutional, for that reason alone I wouldn't touch it with a barge pole. Wonder if they've gotten too comfortable in their ways? *shrug*
I agree with Ted (yes, it can happen!) that the bloated AUM does not warrant such a high ER unless they're just being greedy. It's practically doubled in 10 years if memory serves. But really, given PIMCO's many black boxes and offsetting swaps and other moving parts, how can one effectively manage a bond fund that big forever? I know complexity breeds expense, but this is bit much imo.
Two Steaming Piles Of 403B.S.
Unbelievable. But yet totally believable, given Wall Street.[1]
I opted for the 403(b) over the pension system at my state uni system precisely to afford me flexibility in investments. If I made (or lost) money, I wanted to be the one doing it, not some faceless state pension board with who knows what level of investing competence. Thankfully we have about 25 or so uber-low-cost funds/annuities/TDFs in our basic account package- but if things changed for the worse, I'd move everything out of that account and into the 403b's brokerage window to invest in what I find attractive.
[1] Reading the article I'm reminded of this quote from Steve Carrell's character in 'The Big Short'
"The banks have given us 25% interest rates on credit cards. They have screwed us on student loans that we can never get out from under. Then this guy walks into my office and says those same banks got greedy, they lost track of the market, and I can profit off of their stupidity? F--k, yeah, I want him to be right!"
For Charles: IOFIX An experienced trader can always tell the frauds and Pretenders from the real deals. The Pretenders have this need to always prove their brilliance by never being wrong and never admitting mistakes. One way to do this is always post your winning trades after the fact but never ever mention your losers.
But I digress. Speaking of making mistakes, I just made one of my biggest blunders in many, many a moon. My affinity for IOFIX is well documented above in this thread. Can’t think of a better bond fund technically and even more so fundamentally - the ever shrinking legacy rmbs market. Best of all it is not a groupthink fund. IOFIX is also a pattern trader’s dream and for reasons I won’t go into here. Also look at its performance in August 2017 and 2018. I was fully expecting a day like today this August. Mentioned it to a poster here in one of our many messages. I was locked and loaded with 89% in IOFIX. Yet last week went from 89% to 55%. Dumb me! That cost me five figures in additional profits today. As for being petty and complaining about an otherwise great day, real traders are also never satisfied and always striving for perfection. Trading was my profession and how I built my nest egg and old mindsets are hard to break.
The bond market is screaming The following commentary by Paul Krugman is from
a current column in the New York Times. It has not been abridged.
An old line about war says that amateurs talk about tactics, but professionals study logistics. A similar line about the economy would be that amateurs talk about stocks, but professionals study the bond market. And lately the bond market is telling a tale of profound pessimism.
Why does the bond market reflect economic expectations? If investors expect a boom, they also expect the Fed to try to rein in the boom by raising short-term interest rates (which it more or less directly controls), to head off potential inflation. The prospect of higher short-term rates then leads to higher long-term rates, because nobody wants to lock money in at a low yield if returns are going up. Conversely, if investors expect a slump, they expect the Fed to cut rates, and pile into long-term bonds to lock in returns while they can.
So the slump in long-term yields since last fall, from a peak of 3.2 percent to just 1.63 percent this morning, says that investors have grown drastically less sanguine about the economy. Long-term rates are now notably lower than short-term rates — and this kind of “yield curve inversion” has in the past consistently been the precursor to recession.
Bond investors could, of course, be wrong — there are some people out there claiming that we’re in a bond bubble. And so far the real economy, as measured by G.D.P., job growth, and all that, is still chugging along. But as I said, there’s clearly a wave of pessimism sweeping the market. What’s it about?
One answer is that last fall many investors were looking at a couple of quarters of high growth, and thinking that this might be the start of an extended boom. Serious economists warned that this growth was a temporary lift — a “sugar high” — driven by the shift from fiscal austerity to what-me-worry deficit finance. But at least some people bought into the Trumpist line that tax cuts were going to produce an enduring rise in the growth rate.
Since then, however, it has become clear that the tax-cut boost was indeed a one-time thing. In particular, there has been no sign of the promised surge in business investment.
At the same time, Trump’s trade war may be starting to take a toll. In particular, the uncertainty may be deterring business spending. Whether new tariffs would hurt or help your business, it now makes sense to hold off on plans to expand, until you see what he actually does.
Finally, economic troubles in the rest of the world — several major European economies are quite possibly in recession — are filtering back to the U.S.
Now, most economists aren’t predicting a recession here, for good reason. The truth is that nobody is very good at calling turning points in the economy, and calling a recession before it’s really obvious in the data is much more likely to get you declared a Chicken Little than hailed as a prophet. (Believe me, I know all about it.) But the bond market, which doesn’t worry about such things, is looking remarkably grim.
I leave the possible political implications as an exercise for all of you.
Chuck Jaffe: How Could $1,000 A Month Change Your Life? John:
If you mean a time where the Treasury (and other sovereign Govts) are unable to service their debts, at least more than for a day or 5, well my crystal ball tells me something else will occur. (see next paragraph) --- Though if you are truly concerned, then the thing to buy is gold bullion. Not ETFs, not mining stocks, nothing with a 3rd party custodian. Just gold, which you self-custody somewhere in your personal residence. The "worst" you can expect from bullion, is that it will retain its purchasing power over time. The "best" is that it soars in value when conventional asset markets become dislocated for some indeterminate period of time.
Look, the whole world is awash in debt, not just the USA. So there will be a global solution, involving most major currency sovereigns. The CBs already have a playbook to address it, once we approach the financial "cliff". I don't know what's in the playbook, but I suspect ONE of the plays will be for each sovereign Treasury to issue new private-placement debt (PPD) to their respective central bank. The terms of the PPD would be: a) no maturity (i.e. perpetual), and b) 0.0% coupon. So "free money". The proceeds received from the CB to the Treasury could be used to pay off existing public bondholders as those debts fall due. --- So definitionally, there would be no "default". Moving to PPD financing has enormous implications. But the key is, there need not be any "default".
When will Us bankrupt or default on their bonds
I worry about my nephews nieces children living in a poor economic system in 20+yrs
I wonder what potus congress doing about fed deficits beside kicking can down road after 2020
Think it will be very difficult to pass laws /convince US citizens /tax workers (voters small business owners) >40s% in taxations and rich folks ~ 70% to pay (for all free Healthcare and green deals and 1k monthly each millennials)
I would vote for yang if he gives me one k monthly and a free Corvette
As rono would say - time buy more (physical) gold?!? -
PIMCO income A expense ratio The half percent drop on 8/12 is probably attributable to the fund's bet on Argentine bonds.
M*: ETF Or Traditional Index Fund: Which Is More Tax-Efficient? Text & Video Presentation
Vanguard Put Gun Stocks In A Gun-Free Fund After Index Error FYI: Vanguard Group Inc.’s biggest sustainable exchange-traded fund bought shares of gun maker Sturm Ruger & Co. Inc. and held them for more than a month, mimicking an error in the benchmark it tracks.
Vanguard US ESG Stock ETF says it tracks an index that doesn’t include weapons manufacturers, along with other companies that socially responsible investors prefer to avoid. Though the Sturm Ruger buy was temporary and small — 2
19 shares worth about $9,000 — it raises questions about the rapid growth of socially responsible investing in general and index strategies in particular.
Regards,
Ted
https://www.inquirer.com/business/vanguard-esg-fund-gun-stocks-index-error-20190812.html
Two Steaming Piles Of 403B.S. FYI: (This is a follow-up article.)
Teachers in Pennsylvania and Texas are waking up screaming from a midsummer night’s 403(b) nightmare.
Traditionally, large insurers enjoy blasting teacher’s retirement accounts with high fees and unnecessary products. Two states are willing accomplices to mass financial exploitation.
Pennsylvania and Texas passed some of the most blatant anti-consumer 403(b) legislation in modern history.
Deciding it was a crime against humanity having a single low-cost vendor servicing teachers retirement accounts, Pennsylvania took action.
Regards,
Ted
https://tonyisola.com/2019/08/two-steaming-piles-of-403b-s/
