Friday, December 20, 2013

Winners and losers

Today’s winning mutual funds are tomorrow’s has-beens—don’t time market
Only 7% of the 692 domestic mutual funds that ranked in the top quartile of returns in September 2011 managed to continue to rank in the top quartile through September 2013, according to the S&P report. Only 21.24% managed to stay in the top quartile over two straight years. Over five years, the odds drop considerably, even if the standards are lowered to just staying in the top half of all funds in a respective category. Only 6.47% of the 1,421 domestic mutual funds that ranked in the top half of performers in September 2009 stayed in the top half for the next five years without slipping. Smart investors use index funds since they beat 86% of all funds over time.

Congress cuts military pensions—but not their own pensions
Saying thank you to our military? Military retirees are outraged that Congress voted a budget deal that trims military pensions, calling the move "an egregious breach of faith." The  deal cuts pension cost of living raises by 1% for military retirees who aren't disabled and not yet 62 years old. Cost of living hikes are automatic raises intended to keep up with inflation.
What is left after cuts to food stamps and unemployment comp? Congress’s pay?

Wealthy cut holiday spending—economy falters
Survey predicts a sharp, 9.4 percent drop in holiday spending this year. Behind this drop is a sharp falloff in spending by the wealthy. Those with incomes above $100,000 plan to lay out $300 less than they did last year, undoing two years of strong gains. Already have everything they want.

Corporations are not spending on new plants/equipment—CEOs clean up
Corporate share-buyback authorizations this year through March totaled an estimated $208 billion, according to research firm Birinyi Associates. That marked the strongest first quarter since Birinyi began recording buyback data in 1985.
The first quarter was the fourth-largest in dollar terms, trailing the second-, third- and fourth quarters of 2007. At the current pace, 2013 would see $833 billion of authorizations versus $477 billion in 2012 and second only to 2007’s $863 billion of buyback activity.

Prius is best value car
Best overall value among all models out there, Consumer Reports magazine says look no farther than the Toyota Prius, the popular hybrid car. And at the other end of the spectrum, if you want to squander all your dollars, you can't do a better job of flushing them away than by buying the Nissan Armada, a giant SUV, says CR as part of its annual Best New-Car Value analysis. For Prius, it's a second straight win on the CR best-value list, having unseated the Honda Fit from the title it held for four straight years. The magazine lauds it as having the right combination of performance, reliability and low estimated five-year ownership costs at 47 cents per mile. Armada costs $1.20/mi.
Toyota Avalon Hybrid Limited scored highest among large cars and Lexus ES 300h was top luxury car. Save more with a top pick USED vehicle:
Hyundai is most fuel efficient. 
Honda is top safety pick

To claim or NOT to claim insurance—that is the question
Drivers pay an average of 38% more for car insurance after making a single claim, according to a new report. The hike is steepest in Massachusetts, where just one claim leads to an average premium increase of 67%. California (+62%) and New Jersey (+59%) are not far behind. Maryland has the lowest post-claim increase (+20%), followed by Alabama (+22%) and Michigan (+23%). A second claim puts an even deeper dent in Americans' wallets: a driver with two claims pays nearly twice as much for car insurance as a claim-free driver (+86%). Time to ask for discounts with a new company:

Voter fraud issue is GOP fraud—study says no fraud
Out of the 197 million votes cast for federal candidates between 2002 and 2005, only 40 voters were indicted for voter fraud, according to a Department of Justice study outlined during a 2006 Congressional hearing. Only 26 of those cases, or about .00000013 percent of the votes cast, resulted in convictions or guilty pleas. But the push for voter ID laws is not all about preventing fraud, said Pennsylvania state Rep. Daryl Metcalfe, who sponsored his state's voter ID law. Cost of routing out 26 from 200 million is estimated at over $200 million in all states. This includes buying a birth certificate, going to MV, paying fee and state bureaus making and enforcing new laws/regs about voter ID.
Paying military retirees full benefits would be cheaper (see above).

ObamaCare charges smokers more, but …
Except in CA, NY NJ and MA, you will be charged more for your policy. This surcharge may make premiums greater than your subsidy. There is little that can be done to verify non-smoker status on the applications. Once you have coverage, you can’t lose it. I am guessing poor smokers won’t worry about collections after they get sick. 
Health plans are voluntarily extending the deadline for consumers to pay their first month's premium. Consumers who select their plans by Dec. 23 and pay their premiums by Jan.10 will be able to have coverage effective Jan. 1.

ObamaCare will reduce costs eventually
Executives in the health care delivery system said: “overall, the expected average operating cost reduction was 11.7 percent. Fifty-four percent said the savings could be achieved by reducing the number of hospitalizations, 49 percent said savings could be achieved reducing the number of readmissions, and 39 percent said savings would be achieved by reducing the number of emergency room visits.”  It is easy to be pessimistic “yet hospital leaders appear to be very optimistic about the future of the system."

Junk insurance plans being uncovered—mixed blessing
Some states allow companies to sell plans that don’t cover serious costly illness. Consumers buy plans because they are cheap. They don’t realize the ‘junk’ until they have to use the plans. By then it is too late. Bankruptcy often follows losing all savings.

ObamaCare forces Congresspeople to pay more for insurance—taste own medicine
Rep. Jim Matheson, D-Utah, saw his monthly premiums rise from $434 to $795. Like all members of Congress, Matheson had previously selected his insurance from plans offered through the Federal Employees Health Benefits Program, which still covers everyone from park rangers in Zion National Park to the chef in the White House. With such a large federal workforce, the program has a huge risk pool and that meant lower-than-average costs for top-quality insurance. But when Congress passed the Affordable Care Act in 2010, Republicans fought for and won a provision requiring lawmakers and most of their staffers to get their insurance through an exchange, set up to help the uninsured and those who buy insurance on the private marketplace. Now they have to pay more. Young staffers may pay less.

Small business owners save using the web
The Insureon Small Business Institute study shows that the market for the nation's smallest businesses saw overall price increases of 2%, slightly lower than the increases reported for the overall small business insurance market. "The online market for small business insurance is strong and healthy," said Ted Devine, CEO of insureon. "More business owners are comfortable purchasing coverage online, and these [SCIOP Index] numbers show that going online to make that purchase is a smart decision from a financial standpoint for owners of the nation's smallest businesses."

SCAMS           “Deficits don’t matter” Republican Godfather, Dick Cheney, 2002
Bush wars increased the debt by $4-6 trillion to $16 trillion. 1985 debt $3 T, same as 1945.

Why regulation is necessary!
Merrill Lynch settles SEC charges to the tune of $132 million over misleading investors about three structured debt products. The hedge fund, Magnetar Capital, hedged its stock positions by shorting against the collateralized debt obligations known as Octans I CDO Ltd. and Norma CDO I Ltd., that Merrill Lynch was selling to its clients, according to the SEC. When your broker offers the next Octans I, ask the SEC if OK.

States sold our highways to investors—investors have no risk and all cash? We lose!
States have agreed to pay investors fixed amounts instead of the tolls. If no traffic, states must still pay. FL taxpayers pay extra $13 m according to some. IN, IL, NY, NJ giving private investors the road projects since taxes can’t be raised. Traffic falls—bankruptcy.

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