Memories of remodeling

 
I've enjoyed the Facebook photos of Keith Fernandes, a friend of our children, spending his vacation remodeling his bathroom. The work clothes and the exhausted look brought back the memories of our first home in Champaign, IL. Sometimes I say "we" remodeled it, however I don't saw, hammer, plumb or sweat because I watched my mother do that and swore I'd never do it. Bob did it all. One night (1962) there was a trip to the ER because something fell on his head. Then there was a truck borrowed from a construction site to haul away debris thrown out a 2nd floor window and the ex-con he hired to help with the heavy wall board and studs. Bob made the mistake of paying him in cash the first day and he didn't come back the second day. This was all done to make it into a working duplex. We lived downstairs and rented the upstairs. It is the only way to make money buying a house--rent it to someone else. When we bought a second house in a nicer area of town we rented out both units and that paid the mortgages on both houses. Years later after we'd sold it on land contract and moved to Columbus, a bank error was found and we were returned some money.

The economy

All the numbers look good according to the pro-Biden reports. Except when corrected for inflation they are all underwater, from retail to manufacturing to investment capital to jobs. They still can't get the workers to return--it was too easy working in pajamas, or less. As the election cometh, so come the lies.

I haven't shopped Target for years. It went all out trans during the Obama administration around 2012 where all this started, beginning with making the Target restrooms unsafe for girls and women. Then Target began devoting a whole month to the rainbow, for 2% of the population, hacking a rainbow sent by God after the flood which they stole from Christians and Jews. Now they've got swimsuits in the women's department with a "tuck" feature for men, so men can frolic in the women's locker rooms and real women will be at risk of assault. What ever happened to all those brave ladies of "Me Too?" Never believe a man who says he's a woman. And if the woman has just discovered she was raped 20 years ago, don't believe her either. Especially if the perp is a politician or movie star or rock celebrity.

Check your investments for DIE

I've suggested that if you have a pension or private investments, you take a look at the Annual Reports to see what the DIE (diversity inclusion equity) statements are. Comcast makes this extremely difficult to find. The annual report was a filing statement, so I went back to the proxy and found it in the 2021 summary. Comcast has way overcompensated for diversity, with 44% people of color among employees. (Can't tell if those are management or line.) 30% are women on the board, 30% POC. I don't mind if they load up with women as long as they are qualified and didn't get degrees in dance and library science. By 2021 women should be able to tell if they are token or a relative. And does it really make a difference if super rich people who control huge swaths of stock are female or black? Is that really diversity? I abstained on almost all votes, except I voted against the "independent" Me Too investigation, just because in today's climate, no man or woman, gay or straight, in management can get a fair investigation, especially if the investigators comb through their social media posts of 8 years ago or find out about consensual affairs.

 
Comcast's language is a bit more trendy, using BIPOC instead of just POC. That's even more virtue signaling. Like I'm sure the board is loaded with "indigenous people." Donating $100 million for social justice, including "Lift Zones" and BIPOC small businesses affected by COVID. Comcast is another company that's made out like gang busters with the Covid pandemic. $100 million is probably small potatoes. And that revolving door with government? In 2020 124 out of 144 Comcast Corp lobbyists in 2020 have previously held government jobs. Way up from 2019. Yes, it was a very good year for Telecommunication companies.

Hillary and Nancy’s talking points

Hillary Clinton (still making the rounds of the sympathetic talk shows), Nancy Pelosi and all the rest of the Democrats trying to save Obama's legacy continue to repeat erroneously that Trump is just continuing Obama's successes. That's wrong. The recession ended in June 2009 about 5 months after Obama took office. He had nothing to do with it. However, because of imposing more regulations, and taking our tax money to float his ARRA for his supporters, he did slow down the recovery, which toddled along for 7 years before gaining momentum. He did have us in war his whole 8 years, more than GW Bush.

People like me and Bill Gates--people who had investments--saw the recovery quickly because of the stock market. I'm not part of the 1%, but they did terrific under Obama. That didn't help the black teen or the former coal miner working at McDonald's or the retail clerk out of work because the consumer confidence didn't recover.

The Trump recovery is reaching down and pulling up the people who had given up, the people Obama gave up on and who were told things would never be any better than the slow gear on the old rattling truck; the people receiving the "dole" who thought they might never work again.

People are saving, investing and starting new businesses. They are hopeful under Trump--even those who don't like him. Obama never preached recovery, or pride, or happiness or joy.  Sharing public bathrooms with the opposite sex, allowing foreigners assistance for college that Americans can’t get, pushing abortions—how is that hope? Hope for Obama was a campaign slogan and nothing else.

And he was just smart enough to allow fracking because that saved his lunch, economically speaking. He never said America was the best, the greatest, because. . . he was honest and didn't believe it. I had to grit my teeth in November 2016 because Trump wasn't my choice, but I'm so glad he proved me wrong. And proved Obama wrong.

https://www.forbes.com/sites/christopherhelman/2013/02/12/president-obama-gets-it-fracking-is-awesome/#7325032d425d

When the state university invests

I don't know exactly how venture capital works, but when I read that Ohio State University is involved in the Rev1 Ventures which is a few miles from here on Kinnear Rd. that it's my tax money going to work to produce millions for investors and to do good for people. How can I know? OSU only gets money to invest or give away from the federal government or the state government--my taxes. From that it takes about 60% to run the university and passes the rest along. So how do I get a return on my investment? At some point, it trickles down, I suppose, with money for jobs, infrastructure, employees thriving, etc. And how does OSU complete this mission to invest and grow businesses while at the same time maintaining such an anti-market, anti-capitalist, anti-America atmosphere on campus, infusing its students with that attitude, including STEM?

https://www.bizjournals.com/columbus/news/2019/12/17/rev1-ventures-launches-15m-biotech-investment-fund.html

https://ceo.osu.edu/new-ventures

https://www.development.ohio.gov/files/otf/TVSF_CY2016_FINAL_7_27.pdf

https://development.ohio.gov/files/otf/2019_TVSF_RFP_Phase2.pdf

https://www.rev1ventures.com/

David Shuttleworth’s 20th anniversary party

We attended Dave’s business anniversary event http://www.sco-advisors.com/ last night in a sweet little 19th century restored cottage,  and the food was outstanding both in taste and presentation, so of course, I asked. . . http://party-panache.com/ Mini butter-puffs stuffed with turkey salad, toasted pecans and dried cranberries. . . Nutted Olives, Large queen olives surrounded with cream cheese, rolled in toasted pecans, served halved. . . Asparagus spears wrapped with prosciutto and boursin. . . Balsamic Rosemary Roast Beef Served with red onion confit and horseradish cream on baguette slices. . . Large chilled shrimp, served with seafood cocktail sauce . . . Assorted fresh fruit on skewers with dips . . . delicious finger desserts, especially dark chocolate brownies. . . .and many more delights. Needless to say, I didn’t fix dinner.

I’m working on lowering my cholesterol, but this event, plus a wonderful Easter box sent by our California sister Debbie, (with wonderful pretzels covered with icing) has certainly made it difficult.

Make your New Year's Resolution about your finances

I know there are some who think Medicare is "free" healthcare, and believe all Americans should have it rather than the ragged, poorly thought out and sketchy Obamacare (these unnamed would be Democrats/Progressives) or private insurance. But it's not free. First, all my working years I paid into it (I'm not eligible for Social Security, although I did pay into it in a number of non-state jobs, so there's a special deduction for state employees). Second, I get a "Medicare reimbursement" with my monthly pension, which is then taxed. My "free" health insurance costs over 13% of a very small pension.  If I were single, or even if I hadn't invested 15% of my income in addition to my pension deduction every month I worked, I would be in desperate circumstances. Many women my age had a shorter work career, at a lower salary range due to career choices, and will be single longer than men. So make your New Year's resolution to put more into retirement. You'll need it for your health insurance, which by then will be single payer government owned, and horribly expensive.

According to the work of Harvard University's Malcolm Sparrow, fraud could account for as much as 20 percent of total federal health care spending, which would be considerably higher than what the government's figures indicate.

 

http://www.forbes.com/sites/merrillmatthews/2012/05/31/medicare-and-medicaid-fraud-is-costing-taxpayers 

 

 http://www.cato.org/publications/congressional-testimony/waste-fraud-abuse-government-health-care

Do good by doing well

I received a notice today that my investment advisor had purchased 10,000  bond shares in a company I'd never heard of so I researched it. (Another purchase notice was stock in Ford, but that company I understand.) Even after reading what it does (semiconductor equipment and yield management system) I didn't understand.  What I did understand is that one of the founders (Tencor) was a Czech immigrant who left a Communist country and became successful in the United States. After poking around the internet I found a physics post doctoral fellowship named for him (died in the 90s), employees volunteering at Habitat for Humanity, grant for superior papers by young STEM students, and a foundation to support the children of his employees in college.  The company KLA-Tencor is involved in a number of “good works.”  Doing good while doing well.  It’s the capitalist way.

https://www.youtube.com/watch?v=XCLf7ylBQr4

https://www.youtube.com/watch?v=w5cHeZN_t7I

https://www.youtube.com/watch?v=lomLzuLVkgQ

https://www.youtube.com/watch?v=nRc4akRPpnA

Investing in Whirlpool

In going through my e-mail this morning I noticed we had purchased 35 shares of Whirlpool (investment advisor) for $5,124.89 at $146.4254 a share (I may own more, but don’t have that information at hand). Whirlpool is the number one major appliance manufacturer in the world, with approximately $20 billion in annual sales, 100,000 employees and 70 manufacturing and technology research centers throughout the world in 2014.  So I took a look at what had been going on and see that Whirlpool had slumped to its 52-week low Friday after it reported weaker-than-expected quarterly revenue, but beat earnings expectations in its latest quarter, thanks to cost cuts and acquisitions that drove European and Asian sales. So I guess to professionals, that’s the time to buy—don’t buy high?

I like the idea of investing in something I know, use, can see, and touch, even though I’m not the one who placed the order. The headquarters are in the mid-west—Benton Harbor, Michigan.  In the past year we remodeled our kitchen and replaced the appliances.  I now have a Whirlpool microwave and refrigerator/freezer, a GE double oven and a Kitchen Aid dishwasher.  I suppose it would be better to have all the same company to get a color match, but in all cases since these were replacements, we had to go with what would fit. The double oven replacement was a nightmare—don’t ever spec one unless you absolutely need it. I wasn’t happy that the new microwave sticks out so much further than the old one which was flush with the cabinets, but after looking at other models, magazine ads, and other homes (my daughter’s), I see they are all that way.

Also, Kitchen Aid is owned by Whirlpool which owns 13 brands, including: Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht, and Gladiator. With the housing market rebounding,  sales to new housing installers should rebound in the coming years after a slow down in 2008. If the construction trucks in our condo complex are any indication, remodeling is booming also.

http://investors.whirlpoolcorp.com/

http://www.wikinvest.com/stock/Whirlpool_%28WHR%29

The race-based wealth gap

What happens with employees investing in 401(k)s? The investment behavior of  9,600 Alcoa workers was examined between 2003 and 2010 for racial differences.  Outcome:  Blacks and Hispanics invested differently than whites.

• Black and Hispanic employees were less likely to participate in the plans at all
• minority contributors to the plans chose safer, low-returning assets like money market accounts than riskier fare like stock or bond funds
• minority employees were more likely to make early withdrawals from their accounts, or take loans out against them
• black salaried employees were less likely to participate in the plans than Hispanic or White salaried employees

Yet, at the end of the article, despite showing investing behavior was different,  the author still concluded “it’s important to keep in mind that racial inequality can manifest itself in many different ways, including some with the potential to perpetuate the disparity in our retirement years.”

http://qz.com/343369/racial-disparities-can-be-found-even-in-our-401k-accounts/

Do you shop at Whole Foods?

"In 1978, 25 year old college dropout John Mackey and 21 year old Rene Lawson Hardy, borrowed $45,000 from family and friends to open the doors of a small natural foods store called SaferWay in Austin, Texas (the name being a spoof of Safeway, which operated stores under their own name in Austin at that time). When the couple got booted out of their apartment for storing food products there, they decided to simply live at the store. Since it was zoned commercial, there was no shower stall. Instead, they bathed in the Hobart dishwasher, which had an attached water hose." . . fast forward through various mergers and acquisitions, and you have Whole Foods, where I know many of you shop. I bought 50 shares this week. That's how ordinary people like me can be part of the big vision of those more ambitious and talented in the U.S. Let's not lose that through a greedy government that punishes small start ups. There's a brand new Whole Foods in my community--I'll have to stop in and check out my investment. http://www.wholefoodsmarket.com/company-info/whole-foods-market-history

Not affected yet—but just wait for all the tax increases to satisfy Obama’s desire for power

“Some TurboTax customers are mad at Intuit, maker of the popular tax-prep software, because they've finished their returns but are unable to file. Their anger is misplaced. They should blame the Internal Revenue Service, along with the 111th Congress and President Obama for enacting and signing the tax increase with which TurboTax can't yet comply. (They could also blame George W. Bush if they're in a jocose frame of mind.)

At issue is ObamaCare's new 3.8% "net investment income tax." It took effect Jan. 1, 2013, so that taxpayers are encountering it just now as they prepare their returns for last year. In effect, it applies the Medicare payroll tax to interest, dividends and capital gains.

But it doesn't apply to all such income. If your modified adjusted gross income is under $200,000 (or $250,000 for a married couple), you don't pay the tax at all. Further, if your modified AGI is above the threshold but your noninvestment income is below it, the tax is applied on the difference between your total income and the threshold.”  James Taranto, WSJ

Comparing Social Security with private investment for retirement

One of the better and easy to understand explanations I've seen. Especially that 100% death tax.

Income sources for wealthy retirees

The problem with Obama's desire to raise taxes is it is a job killer and a way to punish the successful--the dream of all socialists/marxists who want the power of the purse over everyone, not just the poor. I've never been in the top quintile of income, but I have roamed around the other four. And I've had a good life. The bottom quintile was when I was a married college student in 1961 living in an apartment with no car, and a job translating Russian medical journals, warming up baby bottles and changing diapers, and using a wringer washer 3 flights down that took quarters. The fourth quintile was when we were "DINKS" double-income-no-kids after the children left home in the late 80s, early 90s when I was an Associate Professor and my husband was a partner in a small architectural firm. Now we're both retired, and probably hovering between second and third.

But there are definitely wealthy retirees. Among people in the highest quintile who are technically "retired," 43.7% of their income comes from wages, salaries and self employment. Only 18.7% of their income in that group comes from private pensions, IRAs, annuities, etc. So when Obama is successful in raising taxes by scolding Americans about being stingy and greedy, this is the group who can afford to just stop earning income. That means zip, nada zilch to your state government coffers too. Now that's a huge problem, because unlike the feds, the state governments can't just print more money. They are obligated by law to stay on budget. Raising taxes collects less money for the government--especially from rich people who either can take their business off shore, hire a smart tax lawyer or just stop earning until somebody wises up after the next election.

But it's also a big problem for the government to be taking in a lot as it did during the Bush tax cut years, because politicians, whether Democrat or Republican, just salivate when they see those numbers, so instead of paying down the debt, they just increase the government programs.

Source for figures (not opinion) "Income of the Aged Chartbook, 2008," issued by the Social Security Administration, although I can't find a picture that exactly matches those--this one is close.

Museums Get University Bailouts

Another segment of our society who thought the bubble would never burst--private art museums. In today's WSJ we find that Magnes Museum is giving away its entire collection of prized Jewish art. Judah Magnes, for whom it is named, was a former Oakland, California resident who became a renowned rabbi, lecturer, political activist, and co-founder of Israel's Hebrew University. It was started in 1960 by the Fromer family. There is an interesting timeline (leaving out the bubble and the endowment problems) can be found at the website.



"Many museums took on debt to finance these activities (expansions)—only to have the floor fall out from under their endowments in 2008 when the market crashed. Last year, the Gulf Coast Museum of Art in Largo, Fla., shut its doors and gave its 435-piece collection of contemporary Florida art to St. Petersburg College, after seeing its $8 million endowment shrivel to $500,000." You've got to have some pretty risky investments to have your endowment shrivel that much. So there's probably a lot more to be told about the investment advisors these museums are using.
The Magnes Museum in Berkeley, Calif., and the Museum of Contemporary Craft in Portland, Ore., Get University Bailouts - WSJ.com

Time Shares--I've never understood them

USAToday on Jan. 18 had an article about a well-educated, wealthy couple who were apparently not real smart about money. Their marriage was in trouble. So they accepted a free week-end at a resort, and were "suckered into" buying a time share during a week (October ) they can't possibly use! They have school age children.

$18,000 for one week
$1,150 annual fees
$90 annual club fees
$200 trade fee for a different week

She blames the beauty, excitement and charismatic salespeople. I see her dilemma (divorcing while trying to cut expenses and sell it), but we did something slightly similar in the heat of the moonlight when we bought a lake lot in Indiana we really couldn't use. However, we paid $10,000 for it and sold it a year later for $25,000.

Not if Obama keeps this up

Maybe we'll just move in with the kids. Got this in my e-mail today.

DO YOU HAVE ENOUGH TO LIVE THE RETIREMENT LIFE YOU WANT? Merrill Lynch invites Ohio State faculty and staff to attend a free retirement seminar; “Planning for Your Retirement Lifestyle,” on Wednesday (2/17) or Thursday (2/18) at the Fawcett Center.

Love or hate Glenn Beck, recently he's been lecturing on the debt our states are in due to some of their pension plans. As California goes, so goes the nation.

After being smacked around by the SOTU speech, the stock market went up a little when the government was so snowed in by this last global warming blizzard they couldn't do anything. In November 2008 everything started to nose dive because business sector knew more taxes and regulations were coming even before he took office. It accelerated the drop that began when Democrats took over Congress at the beginning of 2007.

Worst recession since. . . Carter

But they don't say it that way, do they? Sometimes you hear, twenty-six years, or even "the 1930s." FDR is never blamed for the Great Depression even though it dragged out another 10 years after he took office. Presidents Obama and Reagan both inherited a recession. Reagan's was much worse because he also got inflation in the deal.

"At the end of World War II, from 1945 to 1946, there was a very sharp drop in U.S. output (12.1 percent) as the war economy began its transition to a civilian economy. The deepest and longest-lasting recession the United States has experienced since then began in 1980, when Jimmy Carter was president (the gross domestic product dropped 9.6 percent in the second quarter of that year) and did not end until fourth-quarter 1982, almost two years into the Reagan presidency. There were positive quarters during this almost three-year period, resulting in what is known as a double-dip recession, but GDP did not return to the 1979 level until well into 2003. Unemployment peaked at 10.6 percent in the fall of 1982.

As can be seen in the accompanying chart, both President Reagan and President Obama inherited an economy suffering from a year of no growth, along with rising unemployment. (The numbers are almost identical.) But Mr. Reagan faced a far direr situation in that inflation was in the double digits and the prime interest rate was at 20 percent. In contrast, Mr. Obama inherited an economy in which inflation was falling (in fact, inflation has been close to zero for this year) and interest rates were very low.

A situation in which the number of jobs available is falling is bad enough, but if inflation is also destroying purchasing power, the misery is compounded. In the 1960s, economist Arthur M. Okun created the Misery Index by adding the unemployment rate to the inflation rate. In the 1976 presidential race, Jimmy Carter frequently attacked President Ford for allowing the Misery Index to reach 13.57, even though it was lower when Mr. Ford left office than what he had inherited from the Nixon years. Ironically, four years later, when President Carter was running against Ronald Reagan, the Misery Index reached a record high of 21.98. Mr. Carter had no defense and lost the election. The Misery Index dropped by more than 10 points during the Reagan presidency, the single largest improvement during any president's tenure in the last half-century." Richard W. Rahn, Cato Institute

However, if you are the one unemployed, it's 100% not 10%, and if your retirement funds have been decimated, a 10,000 Dow will take a lot of years to make up what you've lost. And whether or not you voted for the current president, in your heart you know that raising taxes is not the way to grow the economy because it's never worked before. And if you know that, and still support him, then you really don't care that people are suffering.

Only Americans can save the economy

Stop waiting for the President to do something. Stop applying for phony "shovel ready" stimulus money (as of yesterday less than 14% had been spent by federal agencies).

1. Go out and buy something from a local business today. Skip the internet.
2. If you are in business, put an advertisement in a local newspaper or magazine or TV channel.
3. Take the kids to the zoo or go to a movie and then out for ice cream.
4. To to the lumber yard or hardware store and buy that item to do the home repair you've been promising.
5. Leave bigger tips--bus boys pay rent too, you know.
6. Buy school supplies for a low income family at the neighborhood five and dime dollar or drug store.
7. Have a party--invite the neighbors.
8. Put $5 more in the collection plate next Sunday.
9. Buy stock in an American company whose products you know and trust.
10. And if you live in a state like Ohio that is proposing more gambling to bring in jobs, consider the fall out, the outside interests, and cost of social problems before you vote.

A home is not a financial investment

This is one of the myths our government, regardless of party, has told us. That's how we got Fannie Mae, FHA, VA loans, etc. That's why the government, not the banks, gave us the subprime mess.

A home you purchase with a mortgage can be an investment in many things--your family, your neighborhood, shared values with the community, an idea, etc., but if you want a building as a financial investment, buy one and rent it. Then it's an investment.

We own two homes (until last year we owned three because we held the mortgage on our son's home). Right now, both our primary residence (a condo) and our summer cottage (on leased land) are undergoing repairs for water damage. One indication of how desperate the economy is: the Lakeside contractor we hired was 1) able to get here within weeks of calling him, and 2) when he found roof damage, he was able to get a sub here within hours. Normally, (i.e. during the Bush boom years) we could wait months, or even have a no-show.

At our condo, the guy we hired to stain the deck is also a general "handy-man" and he found that our hose connection in the rear under the deck was leaking inside the house when we watered the flowers! Well, that could certainly account for the mold on the books!

So with home values declining, our upkeep is on the incline. But your primary home really always required upkeep--but you have to live somewhere, right? A summer home, however, (or winter if you go south) is just a step above a boat, which is a hole in the lake into which you throw money.