Full Text of Final GOP Tax Bill

 It is the intent of the GOP Congressional leadership to vote on this bill as soon as possible to preempt any informed debate or public review or discussion.  The vote will purposefully be prior to any CBO fiscal analysis, despite an at least $1.4 trillion deficit impact, or any Joint Conference on Taxation analysis as normally required.  The Tax Bill is a huge economic blunder which will cut spending on infrastructure, education, make health insurance more expensive, do nothing to boost wages, and put a bullseye on Medicare and Social Security.

Here is a link to a post by a tax attorney/law professor providing a links to the full 1097 page bill and  a 570 page explanation.

The economic "benefits" are based on historically inaccurate assumptions of trickle down economics and false arguments to justify huge benefits to the very wealthy as opposed to little or no benefits (in some case even more taxes paid in future years)  for the the middle class or poor.  This bill will economically cripple the Affordable Care Act and increase American citizens without health care by 10-13 million.  It is direct attack on higher education and public education.

When the patently erroneously revenue assumptions prove systemically lacking, you may expect these GOP Congressional leaders to propose massive cuts in Social Security and Medicare to make up for their purposefully misrepresentation of the tax bill's revenue.

It pays to be a big money political donor.

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See How GOP Tax Plan Will Impact Your Taxes

Here is an interactive page where you can click on your state and then click your tax bracket and see if you benefit or actually pay more in future years.  You may be surprised what happens in 2019 and how different it will be by 2027.  People in lower tax brackets are going to see how they will pay for the benefits thrown at the the highest tax brackets.

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Daily Research Links for Week #388 (August 14 - 21, 2017)

Here is the link (which is a private page) to The Pursuit of Financial Happiness(TM) Daily Research Links for Week #388.  I am now working on Week #399.  The Week #388 is a Pdf which is ten pages long with active links for you to follow.  You may want to bookmark the above Daily Research link and visit as you have time.  These links are available on a current Daily basis by e-mail (just those days links) to subscribers to The Pursuit of Financial Happiness(TM) Daily Research Links.  To request a subscription, contact me at mjscpa@sbcglobal.net.

These links contain differing viewpoints which are worth reading and, therefore, do not connote my approval or disapproval.  They are articles, audio, video, Pdf documents, studies, etc. on macroeconomic and financial issues of value in understanding what is going on in various countries, the world, and the markets.

You might also want to check out the home page of my professional website www.mjscpaplan.com.

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Daily Research Links for Week #387 (August 7-13, 2017)

The Pursuit of Financial Happiness(TM) Daily Research Links for Week #387 are 12 pages long and can be found here.  I am presently working on Week #397.  The Daily Research Links contain a variety of viewpoints worth reading and digesting; it should not be assumed I agree or support any particular viewpoint, particularly when I am presently a variety of viewpoints on an issue or subject.

These Research Links are in the original language, may contain audio, video, long studies, etc on macroeconomic and financial issues   These help me understand what is going on in the world, in different countries, market sectors, companies, and economies.

These Daily Research Links can be sent by e-mail world-wide on a current daily basis if one wishes to subscribe by contacting me at mjscpa@sbcglobal.net.

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Daily Research Links for Week #386 (July 31 - August 6, 2017)

 Here is the link to The Pursuit of Financial Happiness(TM) Daily Research links sent daily to subscribers world wide for Week #385.  It is 13 pages long.  I am now working on Week #395.

As I have indicated, the links do not reflect my agreement but only that they are worth considering.  The links may be audio, video, pdf documents, long studies,as well as news and other articles, and are always in the original language (not translated). 

This is research I do on a daily basis as a fiduciary fee only registered investment advisor.  No matter where you live in this world, if you wish to subscribe to The Pursuit of Financial Happiness(TM) Daily Research Links you may contact me at mjscpa@sbcglobal.net.

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Data Breach: Lock or Freeze Credit

If you have had your credit information stolen or exposed to a data breach, such as Equifax, you need to monitor your credit and bank accounts.

The data breach at Equifax apparently compromised personal information in one of its credit monitoring programs (where consumers can "safely" have their credit monitored for unauthorized use) which included birth dates and social security numbers.  While they are now offering a free (and new) lifetime credit lock program where you control who has access to your credit information, I would be reluctant to trust them again.  Their initial response to the data breach was tardy and the initial data breach customer service website they set up looked like a phishing website.

If you have recently received notification that a debit or credit card is being replaced as the result of a data breach, you would be wise to assume it is probably Equifax related.

Immediately monitor your credit card and/or bank accounts twice daily.  You can use Credit Karma to monitor Transunion and Equifax and Credit Sesame to monitor Experian; both are free.  I would avoid any credit monitoring service which charges a fee.

For the most part, a credit lock program are designed to be continuing fee services and are marketed by credit reporting services, while a credit freeze involves an initial fee and a fee for each temporary lifting (should be $10 --- if you are over 65 years old, an active duty military, or a victim of identity theft it should be free).  The Illinois Attorney General provides information, including form letters for each credit reporting service, on what the fees should be for different individuals and I would expect other state attorney generals to also provide this information.  You should also be able to get non-state specific information from the Consumer's Union.

On the whole, you would probably be better off with doing a security (credit) freeze then getting netted by what is normally a more expensive credit lock marketed program.  Do the credit (security) freeze.

Update 10/3/17:

It may cost victims of Equifax data breach $4.1 billion to freeze credit.

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Daily Research Links for Week #385 (July 24-39, 2917)

The Pursuit of Financial Happiness(TM) Daily Research Links for Week #385 are here.  They are 12 pages long.  All links are in original language and may include audio, video, or long studies.  They are macroeconomic and financial information worth reading and do not imply I agree or endorse them.  You have to be able to consider and apply critical thinking to anything you read.

I am presently working on Week #393.  If you are interested in an eamil subscription to The Pursuit of Financial Happiness(TM) Daily Research Links, no matter where you live in this World, contact me at mjscpa@sbcglobal.net.

As thepursuitoffinancialhappiness.com website is constructed it will archive all past  daily research links (after 4 weeks of existence to non-subscribers) and research topics.    We will also have podcasts again as subjects deserve the attention.


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Daily Research Links for Week #384 (July 18-24, 2017)

Here is another week of daily research links for Week #384 for The Pursuit of Financial Happiness(TM).  I am now working on Week #393.

Week #384 is only 12 pages long.   As I have indicated previously, these links are being provided to not just inform, but to allow readers to determine the value of these economic and financial research links, that I use. 

If you would like to receive them on a daily subscription basis, wherever you live in the world, let me know at mjscpa@sbcglobal.net.

We are in the process of designing thepursuitoffinancialhappiness.com website where we will archive past research topics and weekly links which are at least 4 week old.  We may also put together some past writings and form them cohesively into The Pursuit of Financial Happiness(TM)  e-books on investing, estate planning, and other relevant topics. 


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Fiscal Stimulus and Global Imbalances

 The Federal Reserve 2017 Jackson Hole Symposium had what I found to be two particularly interesting papers.  The Auerback-Gorodnichenko paper "Fiscal Stimulus and Fiscal Sustainability" which finds that fiscal stimulus in a weak economy, even in countries with high debt, can improve fiscal sustainability.  Jason Furman's remarks on the paper with many charts was very good.  For those of us who have long maintained that fiscal stimulus designed to put people to work, improve needed infrastructure, and stimulate growth in the national economy -- not wasteful political favoritism or handouts to large financial institutions and the rich and rentiers --  are necessary to effectively recover from deep economic recessions and depressions, this is a welcome paper.

Menzie Chinn's paper  "The Once and Future Global Imbalances?  Interpreting the Post-Crisis Record" which documents fiscal policy can and has had a noticeable influence on current account balances.  Chinn had additional remarks with graphs.  Maurice Obstfeld, chief economist at the IMF, also provides remarks detailing the differing economic viewpoints on global imbalances and the problems with resolving the debate.

Federal Reserve Chairman Janet Yellen's speech on financial stability was very subdued and reassuring, particularly in her defense of bank regulations, which many have taken as a subtle rebuke of the current Administration's desire to reduce and/or remove regulations on banks, despite the Great Financial Crisis of 2008.

Here are all the papers, speeches, and remarks at the Symposium.

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Do ETFs Negatively Impact Portfolios?

In a recent paper studying ETF investors using data from a large German brokerage,the authors found that ETFs do not improve portfolios with the ETF portion of a portfolio underperforming the non-ETF portion of the portfolio by -1.16% and investors using ETFs used all investment products sub-optimally.  All investors in the study had refused free financial advice and were self-directed investors.  Poor timing in buying and selling accounted for .77% of the underperformance.   When compared to a market portfolio buy and hold strategy, the majority of the underperformance was due to security selection behavior. (See tables VII and VIII in the paper.)  The study found no investor distinct group benefited from, or increased diversification with, ETF use.  When trading costs were included with gross returns, the results were worse.

The authors suggest that it would be better to invest in a buy and hold strategy with a low cost diversified market investment.

This means, in my opinion, that the self-directed investor approaching or in early retirement should look for a low Beta (1.00 or lower) and a high Sharpe Ratio (the higher the better) market investment as well as review cost and performance through the years.  An investor with a long time horizon might include Alpha (the higher the better) in the criteria.  There are several that should pop up on an ETF criteria screen for deeper analysis.  If you have a fiduciary, fee only, financial financial advisor, there might be more portfolio options in a buy and hold strategy which is allowed to slowly grow.

The study concluded: "We find that the portfolio performance of individual users relative to non-users of ETFs slightly worsens after ETF use. The loss comes mostly from buying ETFs at the “wrong” times rather than choosing the ex-ante “wrong” ETFs. Therefore, adopting a buy-and-hold strategy is more important than selecting better ETFs. The benefits from a buy-and-hold strategy are twofold. First, as our analysis reveals, a buy-and-hold strategy would prevent investors from trading ETFs at “wrong” points in time. Second, the positive effects on gross performance are amplified for net performance as trading costs in buy-and-hold strategies are naturally lower.

"Our paper thus points out that the wonderful innovation of passive ETFs, with its enormous potential to act as a low cost and liquid vehicle for diversification, may not help individual investors to enhance their portfolio performance if they actively abuse passive ETFs by buying and selling them at “wrong” times. Ironically, the low cost and high liquidity of these ETFs seem to encourage their trading, and this aggravates an individual’s temptation to engage in some sort of timing. Our finding should make regulators, consumer protection agencies, companies with 401k plans, and financial economists more cautious when recommending ETF use. From a policy perspective, therefore, promoting savings on well-diversified ETFs that simultaneously limit the potential to actively trade in them might be beneficial to individual investors." 

This is the fifth post is a series on ETFs.  The fourth post, which has links to the first three in its first paragraph, on synthetic ETFs can be found here.


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