Failure to Panic

An interesting take on the tactics being employed in the debt debacle in D.C. It appears Sen Rubio was right- the deal all along was going to be a big ball of nothing. No "real cuts" in near term in exchange for largest debt ceiling increase ever and largely symbolic vote on BBA. The rating agencies will likely be unimpressed which is really the bigger issue.

The Three Pillars

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A Reasoned Approach

This is one of the better articles on the debt deal I have seen. The author is the head of PIMCO- the large bond manager so he has some credibility on these issues. The final paragraph sums up nicely.

Hearing Bad News? Ignore it

The picture atop this article tells the tale. With all of the varied possibilities for what might or might not happen this week and next, it is important to maintain perspective.

Crisis of the Old Order

Robert Samuelson has an excellent article on what is holding back our recovery. The crisis of the old order (welfare state/economic growth/global trade) is a stumbling block not just for the U.S. but most of the world. We have a higher % of people turning 65 in the next couple decades which translates into even greater concern about the sustainability of the welfare state structure.

Neon Swans

An outstanding article outlining the issue of the unknown before us and what (if anything) to do. Most of those quoted in the article advise doing nothing . Even if you wanted to react in some way no way to know if that would be helpful even in the short run.

What We Do and Don't Do

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Consumers relying on credit cards

This article briefly outlines how consumers are increasingly relying on credit cards for basic expenses such as food and fuel. This is not a good trend. Consumers on average are not paying down debt and this limits their flexibility going forward.

"Free Advice" Unraveled

Clark Howard does a great job in this article describing the fallacies surrounded so called "free advice" from brokers and others that often turns out to be costly indeed. His depiction of some of the popular financial products such as variable annuities is also good.

Debt Kills Growth

Saw this piece yesterday in NYT on the impact of debt levels on economic growth . It indeed appears that we are in the midst of a very,very slow climb and some elements of the economy will never be the same. We need clarity of vision but that is not to be found.

Whole Brain Investing

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How an Economy Grows

An outstanding piece today in WSJ with the thoughts of Professor Robert Lucas of University of Chicago on how economies grow. He talks about the European model and how the carrying cost of their debt/governmental structures has detrimentally impacted their growth rates the past 40 years or so. The U.S. is close to the tipping point towards that model at present . Reduced output (or "work effort" as Lucas puts it) is not a good result.

Housing Utility vs. Investment

The tone of this article is a bit sour but nonetheless on point for the main. Towards the end he touches what might be the real issue- the utility of housing versus housing as an investment. Despite perceptions to the contrary, residential housing has over time been a reasonable storehouse of value but not great. Perhaps the rate of inflation +/- 1% per year. Even so, the utility derived from the house accounts a good amount of psychic income.

Retirement Perspectives Differ

This is a great short article on retirement perspectives and how they differ substantially between spouses. Where to retire differs as much as when. The survey says 58% work with a financial advisor but only 1 spouse participates. We see this as well and it can become a huge issue compounding problems over time. Happy 4th America !

The Real Risks in Investing

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