PLANNING FOR LIFE'S DIFFICULTIES

Planning for life is very difficult.  There is a saying, "Life is what happens as we plan other things."

There are uncertainties in how long you will live.  For example no male on either side of my family lived to 75, and here I am 86 and age.   I never dreamed of attaining in my wildest dreams!

And then there is the economy.  Yes we know the economy goes up and down, but will it be down when you need some money?  Who would have thought we would have another financial collapse like 1929; yet, we did in 20008-2009, and during my retirement at that.  Our assets dropped in half.  Fortunately I wasn't hurting for money so we came through that all right.

So how do you plan for inflation, deflation, financial collapse, runaway inflation, and possible sickness.  I never took out long-term care insurance because I never expected to live to 75, though I hoped to live to 70.  So I developed financial modules one for safe money (CDs) that couldn't be touched until desperate, one for runaway inflation (stocks and some bonds, and precious metals).

But what really gets me is our government.  We live in a land of push and shove and anything goes so what is true today may not be true tomorrow.  In the period of Reagan tax cuts and his reworking the tax code, I ended up paying more taxes because of the closing of certain "loopholes."  For just one example, you used to be able to take interest on time purchases off your income, but no longer.

Now you have to finagle taking out a home construction loan to get money for such things and deduct the interest, but I no longer have a home.  At one time, you used to be able to deduct health insurance from you income.  Then it became health costs over 5%.  Then it became health costs over 7.5% of your income (That happened just in my paying for Medicare and my backup plan.).  Now it is more than 10% of AGI (adjusted gross income).*

You should tremble when congress talks of "reforming the tax code" because you are very likely to be among those who get hurt.  For one example there is talk of drastically reducing what you can put into a 401K plan to $2,500.  At  $2,500/yr, 401K's are no longer a retirement plan.  For another there is talk of elimination deductions of state and local taxes from your Federal taxes.  Watch out!

* https://turbotax.intuit.com/tax-tips/health-care/deducting-medical-expenses-for-a-major-illness-or-injury/L5fSkrd6C
https://www.cnbc.com/2017/10/25/gop-shouldnt-raid-401k-retirement-plans-to-fund-tax-cuts-commentary.html

DOLLAR INDEX TREND CHANGES

We have undergone an extended period where the Dollar Index ($DXY) has fallen, and then risen some but not as high as the previous high, then fallen some more and risen again but not as high as the previous high.   This downward sine curve started last December, 2016, when the dollar index was above 102.  We went through five declining peaks and valleys until the bottom set at 91.32 on September 8, 2017.

The following rise went to 93.79, slightly higher (not lower) than the previous peak of 93.73, indicating that the declining trend in the dollar might be over.  The following valley only declined to 93.05, higher than the previous low of 91.32.  The dollar index closed Friday at 94.80, higher again than the previous high of 93.79 on October 6.

Click on figure to enlarge)


How high the dollar may go in this rising trend is anyone's guess, but the high of last December was substantially higher than now.  But the previous period prior to December 2016 had a horizontal trend of peaks close to 100 and troughs close to 92 in 2015.

Incidentally, in 2014 the $DXY hit a trough of 79.90 and the dollar has never gotten close to that in 2017.

At any rate, the rising dollar will have an macro economic effect, dampening U.S. export profits that doesn't sound good for multi-national companies at a time when the global economy is increasing nicely that does sound good for multi-national companies.  Will the two things balance out?

Watch this space.

NEW MALLS

We all know that brick and mortar retail stores are having a tough time because of online purchases from companies like Amazon and retail stores themselves.   Not surprisingly, the problem extends to mall operators themselves like giant GGP Inc. that owns 126 retail  malls.  but they are working on a new mall set to open in 2018.

Mr. Mathrani said the death of shopping malls has been exaggerated. GGP has leased nearly 10 million square feet so far this year, up from 9.5 million for all of 2016. But he concedes there is a wide variance between the top-rated malls and weaker properties. For instance, foot traffic rose 1.4% at GGP’s high-end A malls for the first six months of the year, but was flat at its midtier B malls.

The peak decade for  new mall construction was 1966 - 1975   The decade does not neatly fit into presidential terms as it includes the later half of the Reagan administration, the entire Bush-41 administration, and beginning of the Clinton administration.  Thus the decline has been in effect for some time but has dropped to a new minimum during the decade of 2006 - 2015 (the end of the bush-43 administration and most of the Obama administration).

(click on figure to enlarge)

GGP is also upending the standard formula. Only about 30% of the SoNo mall will contain retail chains, reflecting a shift in shopper spending away from clothing toward beauty, health and fitness and entertainment.

https://www.wsj.com/articles/big-mall-operator-bets-that-america-needs-a-new-mall-1508842802

PRESIDENTIAL DECORUM

We in America have invested our President, not only with the duties of a prime minister but with certain trappings of royalty as well.  This is why decorum in a president is important.  President Kennedy was very aware of this and played it to the hilt.  When given a cowboy hat as a gift, he held it in his hands and did not put it on, for example.

But decorum in the president is "out the window" now.  Someone like Sen. Flake* can have a 97% approval rating as a conservative and still have only 18% poll rating in Arizona largely because of his critical remarks about the lack of decorum by the president.  Flake after all voted for ALL the "health care" measures rapidly thrown together in the Senate no matter how awful.  That should be enough to endanger his reelection, but it is not the reason.

True, Flack, like me, finds our President scary on foreign policy.  He is sympathetic to illegal workers, and opposed to the WALL.  The latter is enough for Trump lovers to hate Flake by itself.

But the problem with our President goes beyond him.  Proposals being put forth by Republicans in the Senate and House are depressing.  The House narrowly passed the "budget" bill that blasts open the deficit by an estimated $1.5 trillion.  To pay for this deficit, Republicans will try to take away various benefits people are getting from Medicaid and Medicare.  Can we afford health care for the people in America?

Our big hope is for Trump to screw up  the tax reform.  I would be OK with a 10% cut in the corporate tax rate from 36% to 26% and see if it pays for itself.  I'm also OK with a tax rate of 10% on foreign earnings returned to America for companies that legally agree not to buy back stock for at least five years.  Buying back stock in most cases is just a waste of money by companies that don't know what to do with their excess earnings.  It is hardly certain that companies will either increase the number of employees or increase their wages as neither of these happened in the 2004 tax Holiday.

* http://www.cnn.com/2017/10/25/politics/flake-speech-trump-gop/index.html
http://www.washingtonexaminer.com/michael-barone-jeff-flake-is-the-senator-from-the-wrong-state/article/2638593

ABORTION REFUSED FOR 17 YR-OLD IMMIGRANT GIRL

Just a week ago, I wrote about Lights Going Out In America.*  Now I have become aware of a case of an immigrant from Mexico, a 17 yr-old girl, is being refused an abortion by herr custodian - the American government.**  The article cited is by The Economist and is very good.  I urge you to read it in entirely.  It is not long.

The young girl is not asking the U.S. government to pay for her abortion, drive her to the facility, etc, but she is still being refused to have it, even though a Court Of Appeals has said she should be allowed to have it.  The government may take it to the Supreme court.  They want to stall until the girl is 20 wks pregnant so she cannot have an abortion because of Texas Law.  She is currently 16 wks pregnant.

But an additional feature of the article mentions other cases where someone agrees that someone else should not have their rights.  When we now talk about religious freedom, we need to ask, "Freedom For Whom?"  It is usually a freedom to discriminate against someone else, supposedly because of  religious beliefs.

Also mentioned is the Hobby Lobby and Little Sisters Of The Poor cases where an employer refuses to even let the government pay for what the organizations say are abortifactients. and the Christian baker who refused to bake a wedding cake for a Gay couple,

The article ends with:
Federal agencies are not bearers of religious-liberty interests. By the same token, the Department of Defence cannot suddenly decide to pull out of wars it deems unjust. Nor can the Social Security Administration close up shop because its personnel adopt the Amish belief that insurance is an insult to God. The rule of law governs in America: an arm of the federal government cannot go rogue in the hopes of avoiding “complicity” in lawful endeavours.** 

Nice words but yes, the lights ARE going out in America.

I got word this morning (October 26) from NARAL, that the 17 yr old girl was able to get an abortion after all.

* http://stopcontinentaldrift.blogspot.com/2017/10/lights-going-out-in-america.html
** https://www.economist.com/blogs/democracyinamerica/2017/10/testing-limits

MELANIA TRUMP ON BULLYING

First Lady Melania Trump has taken a tour to schools in which she is trying to combat bullying. * Some news-people make fun of her as she is married to the biggest Bully anyone has ever heard of.  I wish they wouldn't do that.  After all, you can be sure that she has been bullied by her husband, maybe daily.**  I only hope they do have some good times together.  Shes seems to have made an adjustment to the situation, perhaps for the sake of her child.  Perhaps she hopes that her husband hears her efforts and will modify his nature some, especially toward her.

I think she is the perfect example of my saying: "Marry a rich spouse and be miserable in comfort."***

I tell myself that I shouldn't feel sorry for her, but I do.****

* http://www.independent.co.uk/news/world/americas/melania-trump-anti-bullying-campaign-husband-donald-treatment-us-president-first-lady-a8017236.html
**https://www.vanityfair.com/news/2017/04/donald-melania-trump-marriage
*** http://stopcontinentaldrift.blogspot.com/2017/06/best-sayings-of-everett-estes-ford.html
**** http://stopcontinentaldrift.blogspot.com/2016/11/im-also-beginning-to-feel-sorry-for.html

SOLAR ENERGY- OCTOBER 2017

The Solar industry continues to perform well, though it may be flat next year for some reason:

It’s an abrupt turn after a good year for the industry. The Guggenheim Solar exchange-traded fund (TAN) is up 31% since Jan. 1, compared with the Nasdaq Composite’s 21% rise. Those returns reflected the strong demand enjoyed by the solar industry, as developers and installers raced to get ahead of the threatened U.S. tariff and reductions planned by China in 2018 for domestic solar projects. June-quarter shipments of modules rose 68% year over year at JinkoSolar, while shipments rose 89% at JA Solar. And the ITC’s move toward tariffs may spur continued stockpiling of orders by these companies’ customers in the year’s remaining months.

http://www.barrons.com/articles/will-new-tariffs-dim-the-solar-power-boom-1506746992