Leeds on Finance

Plosser’s Speech (and no, I’m not back!)

Good Morning,

Long time, no talk to.  While I’m not about to resume blogging, I had written some notes about Philadelphia Fed President Charles Plosser’s recent speech…and I thought that it would be easy to share them.  I thought this was a significant speech because it describes the argument that is being made to potentially raise interest rates sooner.  My guess is that President Plosser and Dallas Fed President Fisher are both raising concerns in the FOMC meetings (Pres. Plosser actually dissented at the last meeting).  On to my notes…

Philadelphia Fed Pres., Charles Plosser, presented his argument as to why the FOMC should raise rates sooner, rather than later. Specifically, he does not like the FOMC’s forward guidance that says, “that it likely will be appropriate to keep its target federal funds rate near zero for a considerable time after the asset purchase program ends.” He gave the following arguments:

1. We are more than five years into a recovery. While it has been sluggish and uneven, the progress is undeniable.
2. The first-quarter slowdown was weather related. The second quarter showed a strong recovery in most of the categories that had been affected by the weather in the prior quarter.
3. The Philadelphia Fed’s Manufacturing Business Outlook Survey increased for the third consecutive month and had its strongest reading since March 2011. This is a reliable indicator of national manufacturing trends. Expectations are strong and there is continued expansion in manufacturing employment.
4. The year-to-date monthly average job growth has been 215,000 jobs this year compared with 194,000 jobs last year. You have to look at the long-term trend (not just the weak reading for the past month).
5. The economy has created 1.7 million jobs since the start of the year, nearly 10% more than the same period in 2013, 20% more than in 2012, and 30% more than in 2011.
6. The unemployment rate was 6.1% in August, down more than a full percentage point from a year ago (and down from the peak of 10% several years ago). This means that the unemployment rate continues to fall faster than many policymakers had been forecasting. The Summary of Economic Projections submitted in December 2013 predicted that the unemployment rate would be somewhere between 6.3% to 6.6% at the end of 2014 and by the end of 2015, it would be in the 5.8% to 6.1% range. We are a year ahead of where we thought we would be.
7. Long-term unemployment has dropped by approximately 1.3 million people from a year ago. The duration of unemployment spells has declined. Job openings have returned to pre-recession levels and the rate at which employees voluntarily leave their jobs (the quit rate) has risen.
8. Inflation appears to be tracking upward. The year-over-year CPI was 2% in July, the fourth month at or above that level. The year-over-year PCE inflation index was 1.2% in December. In July 2014, it was 1.6%. Again, back in December 2013, the prediction was 1.4% to 1.6% for 2014.
9. The FOMC statement that it will not raise interest rates for some time fails to reflect the significant progress toward our goals. It also limits the committee’s flexibility to take action going forward.
10. Taylor-type rules indicate that interest rates should already be above zero or should be lifting off in the very near future. (The Taylor rule states that the nominal Fed funds rate should reflect a real Fed funds rate [often thought to be around 2%, near the real growth rate], plus an additional amount to reflect inflation that is above target inflation, plus another amount to reflect output that is above potential output.)
11. Raising rates sooner, rather than later, reduces the chance that inflation will accelerate and, in so doing, require policy to become fairly aggressive with perhaps unsettling consequences.
12. The idea that we cannot raise rates because the labor market has not completely healed is risky because we do not know how to confidently determine whether the labor market is fully healed or when we have reached full employment.
13. If monetary policy waits until it is certain that the labor market has fully recovered before beginning to raise rates, policy will be far behind the curve.   Then, the FOMC may be forced to raise rates very quickly to prevent an increase in inflation. This may create unnecessary volatility and a rapid tightening of financial conditions.
14. In sum, we are no longer in a financial crisis, the labor market is not in the same dire straights it was five years ago, and inflation is increasing.

Have a great weekend.

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Market Update — July 1, 2013

Good morning.  Here are some of the numbers that I found most interesting from a few articles that I read this week.

Markets and Economy

Strong first half of the year.  The Dow Jones Industrial Average ended the first six months of the year up 14%.  The Dow was up over 15% through May and dropped 1.4% in June.

Higher yields.  The ten-year UST yield rose to 2.485% (from 1.63% in early May).  The last time that yields rose so much (as they did in the second quarter) was 2010 Q4.

Higher mortgage rates.  Rates on fixed mortgages surged this week to their highest levels since July 2011.  The rate jumped from 3.93% to 4.46% — the most since April 1987.  The rate on the 15-year mortgage increased from 3.04% to 3.50%.

Moving out of munis.  Investors took almost $10 billion out of municipal bond funds in the past month.

Low inflation.  Overall inflation was 1% in May from a year earlier. Core inflation rose 1.1% from a year earlier. That matched the previous month’s reading and equaled the smallest rise in underlying prices on record.

Underemployed young people.  In 2001 the underemployment rate (for 22 – 27 year olds) fell to as low at 35%, but last year it rose to 44%.

Banking

More IPOs.  Global equity issuance is up 36% (vs. the same period last year) to $381bn.

Fewer deals.  The value of deals announced globally fell 9.7% in the first half, to $870bn.

Thank goodness the bankers will be able to eat.  Investment banking fees have risen 9% to $36bn this year from the same period in 2012.  Of the global fee pool, 59% was generated in the Americas.

Oil

The oil is flowing.  The U.S. pumped 6.5 million barrels a day of oil last year, according to the Energy Information Administration, the most since the mid-1990s.  In April, we pumped 7.4 million barrels per day.  This was the best month in more than two decades.

But gas prices didn’t drop.  The price of a gallon of regular gasoline averaged $3.62 in 2012, the highest on record.

Fracking!  The fracking boom has boosted U.S. production by roughly 2 million barrels per day over the past five years.  While this is a large increase for the U.S., it represents just over 2% of worldwide oil consumption.

Gold

Gold hit three-years lows.  It has dropped 13% since the start of June and is down approximately 30% since the start of the year.   The 23% drop in Q2 was the largest quarterly decline since the start of modern gold trading.

Most commodities are down.  The Dow Jones Commodity index is down 9.9% this year.  But, lean-hog prices are up 19%.

I wish I hadn’t taken on that debt!  In the past 10 years, the 55 gold and silver companies analyzed by BMO Capital Markets have increased their net debt from less than $2 billion to a record of $21 billion.  In other words, firms have increased leverage and now prices have dropped.

Cost of mining an ounce of gold.  The cost of mining an ounce of gold rose to $775 in 2012 from $280 in 2005 (according to BMO).

Education

More degrees, but falling in the rankings.  From 2000 to 2011, the percentage of Americans (age 25 – 34) holding a degree (from either a community college or four-year institution) increased from 38% to 43%.  But, we fell from 4^th place to 11^th place (when ranked against other countries).

We need a one-semester degree.  More than 70 percent of Americans enter a four-year college (ranking us 7^th).  But, less than two-thirds (of those that enter) end up graduating. If you include community colleges, the graduation rate drops to 53 percent. Of the 23 OECD countries being studied, only Hungary does worse.

Is it worth it?  According to the O.E.C.D., a college degree is worth $365,000 for the average American man after subtracting all its direct and indirect costs over a lifetime. For women, it’s worth $185,000.  (I haven’t read this report.  One thing I always wonder about is whether these studies compare jobs that require degrees with jobs that don’t.  If so, the numbers are misleading because many people with degrees end up working in jobs that don’t require degrees.)

The real salary jump comes from four-year degrees.  According to the O.E.C.D., a typical graduate from a four-year college earns 84 percent more than a high school graduate. A graduate from a community college makes 16 percent more.

Wealth gap in education.  The college graduation rate of high-income Americans born in the 1980s was 20 percentage points higher than in the 1960s. Among low-income Americans, it advanced only 4 percent.

On average, we’re average.  (Maybe we’re not ready for college?)  In 2009, American 15-year-olds ranked 17th in reading tests — among 65 nations. They ranked 27th in math and 23rd in science.

Higher cost of education (us teachers have to keep up with the bankers).  The tuition for 2011-12 at four-year public colleges rose an average of 15.6%, while the increase at four-year private nonprofit colleges was 10.2 percent.

Who charges the most?  Columbia University had the highest tuition among all private nonprofit colleges in 2011-12—just over $45,000—followed by Sarah Lawrence College, Vassar College, George Washington University, Trinity College, and Carnegie Mellon University, where tuition and fees all exceeded $44,000.

Tuition charges are somewhat misleading.  Net-price increases (increase in tuition less the increase in scholarship and grants) were 5.1 percent at public colleges and 8.5 percent at private nonprofit institutions.

CEO Compensation

CEO compensation.  The top 200 chief executives at public companies with at least $1 billion in revenue received a median 2012 pay package of $15.1 million.  This was a 16% increase from 2011.

Compensation is mostly stocks and options.  Median cash compensation was $5.3 million last year, while stock and option grants came in at $9 million.

CEOs own a lot of stock!  The median value of stock holdings of these C.E.O.’s was $51 million.

Golden parachutes.  More than 60% of Fortune 500 companies had golden parachutes in place by 1990. Today, about 82% of the CEOs of Standard & Poor’s 500 companies are entitled to some type of cash payment if they are replaced upon a change in control.

Have a great week.

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Market Update — June 24, 2013

A few interesting numbers I read this weekend:

1. A bad week.  The S&P 500 fell 2.1%.  The MSCI emerging markets index fell 4.7%, its biggest weekly drop since May 2012 (credit the Fed, questions about China’s economy and financial system, problems in Brazil).  Gold fell to a nearly three-year low before recovering slightly on Friday.
2. Stocks that are seen as “bond alternatives” have done the worst.  In the past month, the S&P 500 has dropped 4.6%.  The S&P index of consistent dividend-paying stocks has fallen 5.9% in the same period. The utility sector is down 8.4%. The FTSE index of U.S. mortgage REITs has fallen 13%.
3. When will the Fed funds rate rise?  Recent FOMC projections show that only four Fed officials see short-term interest rates rising before 2015, while the remaining 15 saw rates remaining near zero until 2015 or 2016.
4. Huge potential losses.  The BIS said in that a rise in bond yields of 3 percentage points across the maturity spectrum would inflict losses on U.S. bond investors – excluding the Federal Reserve – of more than $1 trillion.
5. Yields can increase quickly.  In 1994, yields in many advanced economies rose by about 2 percentage points in the course of a year.
6. Get my money out of there!  Based on the funds that report weekly, investors took $2.2 billion out of muni mutual and exchange-traded funds during this past week.  This is the largest outflow since December 2012.  Muni funds have seen outflows for four straight weeks.
7. Are financial incentives strong enough?  Once new health insurance exchanges are up and running in October, companies with 50 or more full-time employees can either provide affordable care to all full-time employees, or pay a penalty. But that penalty is only $2,000 a person, excluding the first 30 employees. An employer’s contribution to family health coverage averages $11,429 a year.
8. Don’t shake my hand!  A recent study says that only 5 percent of people wash their hands well enough to kill germs that cause infections and illnesses.  The study found that 33 percent of people did not use soap and 10 percent did not wash their hands at all.
9. Women are drinking more.  In the nine years between 1998 and 2007, the number of women arrested for drunken driving rose 30%, while male arrests dropped more than 7%. Between 1999 and 2008, the number of young women who showed up in emergency rooms for being dangerously intoxicated rose by 52%. The rate for young men, though higher, rose just 9%.

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Summer Reading

I’m writing to give you some summer reading…because you don’t have enough to do.  First, three friends of mine run an investment firm (Goshawk Global Investments, L.L.C.).  They have written a couple of pieces about investing and I thought that you might find them interesting.  I’ve combined both articles into one pdf and here is the link.

Second, I gave a presentation ten days ago in Galveston about the Fed.  It was a long presentation (approximately two hours).  I know what you’re thinking…wow, Sandy talking about the Fed for two hours.  Who wouldn’t want to listen to that?  It reminds me of when I recently visited a friend at a law firm that I worked at (25 years ago).  He asked if I ever thought of returning to the law firm.  I told him that I would definitely be interested if I was diagnosed with a terminal illness…because every day at the firm felt like a month.

Anyway, here’s a link to my slide deck.  The purpose of the presentation was to summarize all of the issues that the Fed is thinking about.  I hope that you’ll find that it’s a really good summary of what’s going on in the economy.  You’ll see that it’s divided into sections:

1. Primer on the Fed

2. Growth

3. Fiscal Policy

4. Employment

5. Inflation

6. Monetary Policy

7. How to Follow the Fed

The slide deck includes my slides as well as many slides that were used by Fed Presidents and Governors in their speeches.  It summarizes many of their views on issues such as fiscal policy, the job market and inflation.

In order to put this presentation together, I spent a lot of time reading all of the Fed speeches (and other material).  I have to tell you that I’m surprised about the fact that we’re talking about tapering QE3.  In my opinion, many of the FOMC members are much more scared of deflation rather than inflation.  I would imagine that this has to be a very heated debate right now.  Some of the reasons that the potential tapering surprises me include:

1. The latest PCE price index (the Fed’s preferred measure of inflation) showed a .74% inflation rate.  The core rate (excluding food and energy) was around 1.05%.

2. The Dallas Fed uses a “trimmed mean” (where they exclude outliers on both sides) and it had its first negative reading ever.

3. The Fed has relied on the fact that our inflation expectations are “anchored” at 2% — but we have to wonder how much longer it will take before these expectations become “unanchored”.

4. NY Fed President Dudley recently spoke about lessons from Japan.  One of the (many) mistakes Japan made was to have a lot of “starts and stops” to their policies – where they thought that they had fixed things and then found out that they hadn’t.  Does the Fed want to stop QE and then re-start it?

Don’t get me wrong when you read this.  There are loads of potential problems from extremely accommodative monetary policy.   In fact, here’s a link to a blog that I wrote about this issue.  With that said, the Fed often fights the fire that is right in front of them – and that fire is deflation.

I’m sure that many of you think it sounds crazy to hear me say that the Fed wants inflation.  In my opinion, there is no question that the Fed wants some inflation (2%) and has great fear of deflation.  Ask Japan how difficult it is to end deflation.  I even wonder if the Fed wants some inflation (that is higher than 2%) in order to make it easier for the government to pay back our massive debt.

With all that said, President Fisher made a very strong argument as to why the Fed should stop buying mortgage-backed securities.  You should see this on Slide 129.  As usual, he makes perfect sense and I would agree with cutting back on the MBS.

Finally, there’s a slide in the deck that is “black” because it was a link to a youtube video that President Fisher used in one of his presentations.  Here’s the link (I found this amusing).

I hope you enjoy this slide deck.  Most importantly, I hope that it’s a good summary of the economy and helps to keep you up to date.  I’ll be interested to hear the FOMC statement today.

Have a great week.

If you enjoy this blog, please forward it to others who may be interested.

If you want to receive my occasional emails, here’s how:

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IMPORTANT: if you don’t receive the email in step 3 or you don’t click on the link, you won’t be on the list.  Sometimes, people who use corporate emails get blocked (it’s probably 50% of the time).  So if you don’t get the email, you know you need to use a personal email.

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It Won’t Hurt That Much!

Bond prices dropped sharply on Tuesday (meaning interest rates increased), so I decided to write a quick note about an interesting Vanguard article that I read last week.  The Vanguard piece is actually a few years old and titled, “Risk of Loss: Should Investors Shift From Bonds Because of the Prospect of Rising Rates?”  Here’s the link.

The premise of their article was that whether or not the bond market is experiencing a “bubble”, you should stay the course.  While this may not be a surprising argument from a mutual fund family, I thought that they made some interesting points (that I’ll describe below).  (I tend to be a fan of Vanguard, so you can take my comments, as always, with a grain of salt.)

I’ll preface this summary with a key thought.  Several well-known investors have recently commented that it’s unlikely that anyone will look back ten years from now and say, “I wish I had put all my money in ten-year Treasuries yielding 2%.”  I agree – and this summary isn’t an argument to throw money into bonds.  Rather, I thought that Vanguard made an interesting argument that even if we’re in a bond bubble, the ramifications will be very different than when a stock bubble bursts.

Finally, realize that this Vanguard article was written when the Barclay’s Aggregate Bond Index was yielding 2.90%.  Last week, the index was yielding closer to 1.90%.

Here are some of their ideas:

1. Huge increases in bond yields are very uncommon.  (Another way of saying this is that huge drops in bond prices are very uncommon.  Prices and yields move inversely).  Imagine that the yield on the bond index moved from 2.9% to 6.9%.  This would be a tremendous move.  This type of move has only happened (within a year) twice before (1980 and 1981).  On a relative basis, a 140% increase in rates has never happened (in one year) in the U.S.  (Of course, you would have to believe that there’s a greater possibility of a 140% move when rates are low.)

2. If we did have a 400 basis point increase in rates (from 2.9% to 6.9%), losses would be significant.  The one-year price decline (~13.5%) would be the worst year ever.  The previous worst 12-month return was -9.2% (March 31, 1980).

3. After that one bad year, you’d (hopefully) be earning higher returns again (if rates didn’t keep rising).  After you suffered through that 13.5% loss, you would earn 6.9% per year going forward.  By the end of year three (one year of losses and two years of gains), you’d be close to even.  In other words, your losses would be offset by higher yields in the future.  See Vanguard’s slide below.

4. You shouldn’t lose sight of the reason that you hold bonds – to diversify your portfolio.

5. A bond “bear market” is different than a bear market in stocks.  With stocks, we think of a bear market as one in which prices drop 20%.  We’ve never had that kind of drop in the bond market index.  With bond markets, we tend to think of a bear market as one in which returns are negative.

6.  The worst bond losses can’t be compared to the worst stock losses.  The worst 12-month drop in bonds was 9.2%.  This pales in comparison to losing 67.6% in stocks (for the year ending June 1932).

7. Calendar year losses in bonds have been relatively rare and small.  We’ve never had huge losses in bonds when viewing them on a “calendar year” basis.  The worst calendar year drop for bonds was 2.9% (1994).  That was followed by an 18.5% gain in 1995.  To put that 2.9% loss in perspective (for bonds in 1994), realize that stocks lost 2.9% (or more) on 27 different trading days in 2008!

8. Inflation would make losses worse.  All of the returns that are mentioned above are in nominal terms.  If you have losses plus inflation, your real returns are (obviously) worse.

9. Reasons for bond losses.  Higher interest rates are normally caused by either inflation, government budget problems or some systemic shock.

10. Bond losses could cause other problems.  Vanguard didn’t address the problems that could be caused by bond losses (such as the hit to bank capital due to losses in their bond portfolio or the increased cost of interest on government debt).

Talk to you sometime in the future…

Have a great week.

If you enjoy this blog, please forward it to others who may be interested.

If you want to receive my occasional emails, here’s how:

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IMPORTANT: if you don’t receive the email in step 3 or you don’t click on the link, you won’t be on the list.  Sometimes, people who use corporate emails get blocked (it’s probably 50% of the time).  So if you don’t get the email, you know you need to use a personal email.

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Reinhart and Rogoff Revisited

Has it been long enough that you miss me?  I didn’t think so.

First, I received so many emails when I said that I was going to stop my weekly writing – I wasn’t able to respond to any of them.  But, I read them all and I really appreciate all of your comments.

Second, here’s a link to a pdf file that contains the resumes of three of my MBA students.  They all were members of The MBA Investment Fund, a $17 million investment fund that I oversee with Keith Brown.  They are all willing to move anywhere for the right opportunity in asset management (sell side or buy side).  Don’t hesitate to email them or me if you’re interested.

Now, on to an issue that a lot of people have written to me about…Reinhart and Rogoff’s paper and their mistakes.  Here’s a quick summary of the situation and my thoughts about it.

Summary:

Reinhart and Rogoff (“RR”) are two Harvard professors who have written extensively about our current situation (high debt ratios, financial crises, etc.).  Probably their most influential paper was “Growth in a Time of Debt.”  The paper’s primary finding was that when debt-to-GDP exceeded 90%, the median country experienced a slowdown in growth of 1% and the average was a 4% slowdown.  (In other words, the middle country experienced slower growth, but there were some real disasters that really dragged the average down.)

Remember, a 1% slowdown in growth might not sound like much, but it’s huge!  Imagine that you take the U.S. growth rate from 3% down to 2%.  As a simple example, if we have 2% productivity growth, that means that we don’t need any more employees.  (In other words, our current workers produce 2% more and that’s how much we grew.)  In reality, our productivity is lower than 2%, but our growth isn’t that much higher than productivity.  So, it takes a long time to return to full employment.

A month ago, a doctoral student (and some faculty) at UMass – Amherst wrote a paper arguing that the RR paper contained errors and, as a result, had some incorrect conclusions.  The new paper is titled, “Does High Public Debt Consistently Stifle Economic Growth?  A Critique of Reinhart and Rogoff”.  The authors are Thomas Herndon, Michael Ash and Robert Pollin.

The new paper argues (among other things) that:

1. There was a spreadsheet error in the RR paper;

2.  RR selectively excluded some data (countries with high debt and growth that didn’t slow much); and

3. The weighting system that RR used was not justified.

As a result of these issues, the new paper argues that the average growth rate does not drop nearly as much as RR had said and that there is little discernable difference in growth at a 90% debt-to-GDP ratio.

Many people now argue that the RR paper was the basis of the austerity movement and that the paper has now been disproved.  Reinhart and Rogoff have admitted that there was a spreadsheet error but argue that their main finding was based on the median country (not the average country) and that their findings still hold.  Let me tell you my thoughts…

My Thoughts On This Issue

1.  The idea that there is one magical debt-to-GDP ratio (e.g., 90%) that will cause a country’s growth to slow is far too simplistic.  I think most of us knew this.  Certainly, in my policy class, I always spoke about this and I spoke about this in presentations I’ve given.

All countries are different and the amount of debt (relative to GDP) that they can handle differs.  Does a country issue the debt in its own currency or in a foreign currency?  How much of the debt is held by its own citizens as opposed to foreigners (who may flee)?  Is the country’s currency a reserve currency?  Does the country have growth opportunities?  These are just a few examples of other factors that also matter.

Relying on one single factor (like debt-to-GDP) is like saying that the home team will always win in a sporting event.  The home-field advantage is one factor (and it’s very important), but other issues are also important.

2. I’m always going to be wary of an empirical study that would have significantly different results if a few data points weren’t included.  (The new paper argues that RR left out some data points from New Zealand, Australia and Canada.)  Rather than relying on empirical findings (and arguing about whether New Zealand’s data should be included in these calculations), you should really be thinking about intuition.  Here’s my intuition:

If debt-to-GDP = 100%, that means debt is the same as GDP.  If interest rates return to their 30-year average (prior to the Fed’s zero interest rate policy), that would put rates around 5.7%.  That would mean our interest would equal 5.7% of GDP each year. Our tax revenue has averaged 18% of GDP for the past 60+ years.  So, if interest is eating up approximately 1/3 of our tax revenue, we’re not in a sustainable position.

3. The real problem (that much of the historical data misses because this problem didn’t exist in many of the past years) is that we have huge unfunded liabilities.  If they’re not changed, we will always be running a deficit.  If we’re running a deficit (and the “primary deficit” that we all discuss does not even include our interest expense!), when you add in our interest, we will have huge problems.  As our baby boomers start to retire in force, we’ll see this get worse.

4. To me, these numbers are pretty simple and pretty obvious.  But, just as simple and obvious is that we can’t just cut everyone’s Social Security and Medicare and think that it won’t affect anything.  First, we need to give people time to plan (and change the amount they save – and this will impact consumer spending).  Second, we need to recognize that this will impact retirement for millions of people.

The Social Security Administration says that among Social Security beneficiaries, 53% of married couples and 74% of unmarried persons receive 50% or more of the income from Social Security.  Among elderly Social Security beneficiaries, 23% of married couples and about 46% of unmarried persons rely on Social Security for 90% or more of their income.

5. Any of these changes will impact our growth.  Obviously, if we increase taxes (or the amount of income subject to Social Security payroll taxes), this will also impact our growth.  Add in the political issue (of cutting Social Security or raising taxes on an already-progressive program) and I’m going to have to take issue with anyone who says that Social Security is easy to solve.

6. Even this new paper, which criticizes RR, comes to a similar conclusion: that growth is impacted by debt.  This new paper shows that the average growth for countries with debt-to-GDP below 30% is 4.2% — just like RR.  With a ratio at 90% – 120%, the average growth is 2.4% (significantly higher than RR).  But, move above 120% and the average growth rate is 1.6%.  This might be more optimistic than RR, but this is still an ugly scenario.

7. I’ve read other research that came to similar finding about a slowdown in growth when the debt-to-GDP ratio exceeded 90%.  I’m curious as to whether these papers also had errors.

8. Reinhart and Rogoff had been seen as the heroes of the conservative fiscal movement.  As a fiscal conservative and social liberal, I would argue that their errors have done more harm than their research did good.  People are now (mistakenly in my view) using their errors to argue that the debt-to-GDP ratio doesn’t matter.  I believe it matters, we just don’t know when.  But, we never did know when and the biggest mistake was when people thought that there was a specific number that created a fiscal landmine.

Talk to you sometime in the future…

Have a great week.

If you enjoy this blog, please forward it to others who may be interested.

If you want to receive my occasional emails, here’s how:

1. click on this link  (or type www.leedsonfinance.com into your browser)
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IMPORTANT: if you don’t receive the email in step 3 or you don’t click on the link, you won’t be on the list.  Sometimes, people who use corporate emails get blocked (it’s probably 50% of the time).  So if you don’t get the email, you know you need to use a personal email.

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The End of an Era?

First, I want to point out a 90-second piece that I did with Kris Maxwell.  It’s about “too big to fail”.  Here’s the link.  Obviously, the creative work is all Kris – and I think it’s really impressive.

Now, on to my news.  After approximately 5.5 years of writing (first an email service and then this blog), I’m going to hang it up for a while.  Yes, I’m breaking up with you.  But, it’s nothing you did.  It’s me.  I’ve changed.

The blog has been lots of fun for me.  It’s been a place to share things that I’m reading and thinking about.  I’ve learned a lot and I’ve met so many people.  With that said, the reality is that the blog takes a lot of time. And unfortunately, there’s really not a good business model in a blog.  So, it’s hard to justify the time that I find myself devoting to the blog.  I need to turn my attention to other work.  (I recently found out that my kids haven’t been saving for college and they’re somehow expecting me to pay.)

I hope to occasionally (a few times each year) send out something I find interesting or an article that you might be interested in.  I may also start an education-type business and will send out information if I do this.  In effect, I’m hoping that we can remain friends with benefits.

Thanks for supporting the blog.

Sandy

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Market Update

First, thank you to everyone who clicked over to www.prayingforpeyton.com.  Here’s the link.  Jim and Kate were thankful for all of the interest and were especially grateful to everyone who made contributions to organizations that pursue research for childhood cancer.  Obviously, I’m also very appreciative of what you did.