Yeske Buie Weekend Digest 4/24/2009
The weather is beautiful and it feels like Spring may have finally arrived (not to mention the economic “green shoots” that Fed Chairman Ben Bernanke has reported seeing!). Hope you enjoy our latest offering. And have a great weekend!
What it means to Live Big®
The list continues to grow! Here’s the latest entry: “Get an almost free vacation through a home exchange”
Speaking of which, check out www.HomeExchange.com.
And speaking of our Japanese connections, Dave is also a director (hon.) of the Japan Academic Society for Financial Planning
And speaking of what it means to Live Big, that was the title of Elissa’s keynote speech, delivered on Thursday at the Rachel Carson Middle School career day event. As you might have expected, the presentation was a big hit with both students and teachers.
Webinar Archive Available
Judging by the responses received so far, our “Perfect Storm webinar last week was a great success. We’ve now made it available on our website for download or viewing. There are three versions to choose from:
– Windows Media Version this recording can be streamed or downloaded to your computer.
Don’t hesitate to contact us if you have trouble accessing any version.
Just a reminder that we’ve posted an article on our website (“Guarding Against Identity Theft“) on how to protect yourself from identity theft.
How to Get Help
And don’t forget that our updated client page (https://clients.yebu.com/) offers a full list of who does what and who you should contact for help with various issues. Contact numbers and email links are available from that page as well.
What we will miss about the prophets® of doom
by David Marsh, Financial Times
For two years now, we have collectively gorged on tales of tears and deeds of downfall. If the bulls really are back and the economic and financial misery is about to end, here are 16 reasons why we will miss the gloomy times.
1. Role-play will be a lot less pleasurable. We have split the world into two pantomimic parts: the evil (the bankers) and the good (everyone else). In future, sorting out villains and victims will require more imagination.
2. The crisis has favored inexpensive, socially constructive pastimes such as bird-watching, book-reading and communal needlework. More aggressive activities will soon be on the rise again.
3. The prophets of doom have had a field day. Yet we feel strangely comfortable with the Cassandras. We have enjoyed being told that the light at the end of the tunnel signals an approaching train. Now we will have to get re-acquainted with the optimists – a much more dangerous and unsettling bunch of people.
4. During the recession we profited from empty planes, hotels, restaurants and buses. When recovery comes we will have excess demand again. The good life, when it returns, will be a lot more crowded.
Here are a few of the more interesting items that appeared over the past week.
Irrational Banks or Irrational Incentives?
In an interesting interview with Nobel laureate Daniel Kahneman, we learn about the dysfunctional assumptions that led policymakers, including Alan Greenspan, to overlook the dangerous behavior of banks in recent years. Greenspan, we are told, made the mistake of assuming that banks were rational when, in fact, their managers had been given short-term incentives that were at odds with the long-term interests of the bank. He also quotes a colleague from Princeton who said “there were exactly five people who foresaw this crisis, and this does not include (Fed Chairman) Ben Bernanke.” Not to mention that fact that many who foresaw the crisis were among those who predicted 10 out of the last three.
Bonds for the Long Run?
Financial analyst Ross Arnott claims in a recent study that bonds have not only beaten stocks over the past 40 years, but that they’re probably a better bet going forward. Robert Huebscher of Advisor Perspectives strikes back with his own analysis. Huebscher demonstrates that not only was the dominance of bonds over the past 40 years an anomoly, but the prospects for bonds going forward aren’t anywhere near as rosy as stocks.
A Crisis of Ethic Proportions
John Bogle, founder of Vanguard Funds, delivers a point-perfect screed against the bankers and fund managers who have maximized their interests at the expense of their customers. He calls for the establishment of a “fiduciary society.”
Quote of the Day
“Ten out of three is a pretty good record, relatively. But I conclude from the fact that only five people predicted the current crisis that it was impossible to predict it. In hindsight, it all seems obvious: Everyone seemed to be blind, only these five appeared to be smart. But there were a lot of smart people who looked at the situation and knew all the facts, and they did not predict the crisis.”
Nobel laureate Daniel Kahneman