I have warned for years that public pensions are overestimating their future returns, and therefore are a giant source of debt for future taxpayers who will be forced to pick up the deficit. At the end of the fiscal year in June, median public pensions had missed their expected returns by 1.1 percentage points. Bloomberg's Martin Z. Braun reports: U.S. public pensions posted their weakest performance in three years, falling a percentage point short of their investment targets, and the prospect of rock-bottom interest rates and a trade-war induced recession could put a greater strain on … [Read more...]
This Money Market Fund is Paying 47 Times More than its Competition
Fidelity investments may be sparking a war among money market funds by offering a 1.91% yield on money in new brokerage and retirement accounts. That's 47 times higher than Fidelity competitor, TD Ameritrade, 10 times higher than Charles Schwab and 27 times higher the E*Trade. Vicky Ge Huang reports on Fidelity's move at AdvisorHub, writing: “I am not surprised to hear that Fidelity is offering better interest rates,” said Greg O’Gara, senior wealth management analyst at Aite Group. “They continue to try to reach out to their client base and prospects by offering superior product alternatives … [Read more...]
Luxury Buyers Race to Beat New NYC Taxes
As though New Yorkers weren't taxed enough already, New York City has imposed a new set of transfer taxes on properties selling for $2 million or more. Buyers raced to close their real estate deals to beat the taxes which could be up to 3.15% on deals. The number of luxury deals closed in June was record-breaking. Over $4.8 billion worth of property changed hands. The WSJ's Josh Barbanel reports: As the deadline to beat the tax increase neared, the buying frenzy only intensified. Of the 673 June transactions of at least $2 million, 351 closed in the final seven days. That week alone accounted … [Read more...]
Are Munis a Shelter from the Storm? Not so Fast
The Wall Street Journal reports that Americans in high tax states like New York and California are jumping into municipal bonds to shelter their investments from taxation. Maybe these are residents who can flee from the high tax states they call home, as so many others have. Now that the federal government has stopped subsidizing these states' high taxation, residents are feeling the full burden of their states' big-spending ways. The Journal reports: Investors in high-tax states like New York and California are piling into municipal bonds this year, fueled in part by the 2017 tax overhaul … [Read more...]
Can You Guess Where Financial Firms Are Going When they Flee the Northeast’s High Taxes?
If you answered Palm Beach County in Florida, you're right. When tax reform capped state and local tax deduction from federal returns, financial firms and their employees were exposed to the naked truth about the high state taxation in the Northeast. With governments in New York, Massachusetts, and Connecticut drowning in obligations, taxes aren't coming down soon. That's why so many financial firms and employees are voting with their feet and heading for low tax Florida instead. Many wealthy retirees have already made this sound financial choice, and it's no surprise to see profit-making … [Read more...]
This Small State is Beating its Neighbors in a Debt Race. That’s Not Saying Much.
Despite being surrounded by the two states ranked by Moody's as having the worst debt service to state revenue ratios in the country, Rhode Island managed to come in 18th highest. Connecticut was worst, and Massachusetts just behind in second place. Is there a lot of work to be done in Rhode Island? Absolutely, but in New England, 18th worst is cause for celebration where debt is concerned. Rhod Island certainly has its weak points. Woonsocket is much deeper in debt than the State's Public Finance Management Board recommends. The Newport Daily News reports: “At the state level, the debt of … [Read more...]
Can You Put the American Dream on Your Credit Card?
According to reporting from The Wall Street Journal, Americans are increasingly turning to debt to finance what many consider typical parts of the middle-class American lifestyle; cars, college, houses, and healthcare. AnnaMaria Andriotis, Ken Brown and Shane Shifflett report: Consumer debt, not counting mortgages, has climbed to $4 trillion—higher than it has ever been even after adjusting for inflation. Mortgage debt slid after the financial crisis a decade ago but is rebounding. Student debt totaled about $1.5 trillion last year, exceeding all other forms of consumer debt except … [Read more...]
How Well do You Really Know Someone?
Jason Zweig and Andrea Fuller report for The Wall Street Journal that there are deficiencies in one of the most popular tools for finding help with investments online. They write: Many people seeking a financial adviser begin their search at LetsMakeAPlan.org, a directory operated by the Certified Financial Planner Board of Standards Inc. The Board, which controls the CFP label coveted by financial planners, boasts of its high standards and has touted its directory of professionals as a place where people can find a screened, skilled and trustworthy financial planner. What they won’t … [Read more...]
Your Retirement Life: NewportFILM Outdoors
To kick off the Newport Folk Festival weekend, Newport FILM in partnership with Newport Folk Presents, showed Echo in the Canyon outdoors at St. Michael’s Country Day School. Becky and I walked there from our house and as you can see in my quick video we weren’t alone. It was a beautiful night. From NewportFILM: Echo In The Canyon celebrates the explosion of popular music that came out of LA’s Lauren Canyon in the mid-60’s as folk went electric and The Byrds, The Beach Boys, Buffalo Springfield, and The Mamas and the Papas gave birth to the California Sound. It was a moment (1965 to … [Read more...]
Is Your Credit Card One of the 100 Million Just Breached? Would You Even Know?
A hacker recently stole information on 100 million credit card customers from one of the biggest card companies in the world. According to The Wall Street Journal, the hacker was able to access information like "names, addresses, ZIP Codes, phone numbers, email addresses, dates of birth and self-reported income, the bank said. Consumer data including credit scores, credit limits, balances, payment history and some transaction data are also part of the breach. Also exposed were about 140,000 Social Security numbers and 80,000 linked bank account numbers." The victims were customers of … [Read more...]