My Review of "The Fix"

4 out of 5 stars.

The book, by Jonathan Tepperman, excellently looks into the world situation, as many describe as hopeless, but sees many examples of extraordinary success in tackling big problems and presents them as ways which might also be used elsewhere. The common denominator of the successes is using pragmatism, not looking for perfection, but moving positively.

First, he sees the Terrible Ten problems being income inequality, immigration, corruption, Islamic extremism, civil war, the resource curse, energy, the middle income trap, gridlock I, and gridlock II.

As for possible improvements, I will cover these.....

Brazil's poverty.

Rather than lots of social programs, Lula introduced Bolsa Familia, just giving poor families cash  with certain rules, like having the kids attend school so that future generations will have greater chances for success in addition to making the parents better consumers. And being cheaper for the government. Basically combining left wing goals with right wing, Milton Friedman  economics......pragmatism.

 Canada's need for more people, but white resistance, even from existing minorities.

So, rather than an incremental approach to immigration, mass immigration with strict vetting for those most likely to help the economy, resulting in a true multicultural nation. And with strong government support for multiculturalism, it made the nation more Canadian, not less.

Mexican gridlock.

Since the winning party had no majority, it created a plan to have all three major parties participate.

America's shale revolution

It really could only happen in the US because of such things like its bankruptcy laws which encourage risk taking, RE laws which sometimes allow residential land owners also mineral rights thus encouraging investment returns for average people, Wall Street lending/investment, environmental costs effectively managed, lesser population density than Europe, etc.

Other topics include Rwanda's overcoming its genocidal past, Indonesia overcoming terrorism, Singapore overcoming corruption and lack of natural resources and Botswana overcoming conflicts over new diamond riches.

Sure, it takes special situations, like good leaders or just good luck, but all counties or governments could gain insights from the book, hence I recommend it.

My Review of "California Comeback"

California Comeback

4 out of 5 stars.....

The author, Narda Zacchino, is well-qualified to analyze what is happening in California, both by growing up and having a long, distinguished journalism career in California.

And I, having lived in California since 1973, think she has done a fine job in concluding that this is not just a comeback, but as her subtitle states, a model for the nation.

The book starts with the California Dream beginning with the 1849 Gold Rush and the hope for anyone striking instant wealth, but just story-like until 1963 when CA overtook NY as the most populous state, signaling the Eastern elite better take notice. Governor Pat Brown, inspired by FDR's New Deal, basically had brought about a CA New Deal,

Then CA turns Right, the Reagan Revolution, all leading up to the 2008 crash, where CA was ridiculed.

Enter Jerry Brown, Pat's son, as governor in 2011. Having been governor from 1975 to 1983, plus having served in many positions like Secretary of State, Attorney General and Oakland mayor. Always socially liberal and fiscally conservative, plus with such experience, pragmatic, he set CA on a remarkable path, just passing France as the world's 6th largest economy and distancing itself from the previously heralded Texas model.

The book covers many more details and history, such that I do recommend the book.

Negative Interest Rates

Negative interest rates spreading around the world are a result of globalization and technology, a unique combination in history, resulting in powerful deflationary effects.

But, rather than the deflationary effects being all bad, not only are many good because of increased productivity, but even many of the bad like reduced income in nations or localities with inefficient economies, can improve efficiencies by investing in things like education, healthcare, technology and infrastructure.

This is a unique time in history in that because of low or negative interest rates, such investments are a no brainer for wise economies.

As for misappropriation of capital, that is possible whatever interest rates are. The US housing bubble behind the 2008 crash was mostly due too poor lending standards and lax regulation on complex new securities and derivatives. Now, Denmark is mitigating a housing bubble by restricting foreign money into Danish housing and other restrictions/regulations.

The resultant large income inequality is an opportunity to redistribute some of the wealth for investments mentioned above, including increasing minimum wages or earned income tax credits. This even helps the wealthy long term.

The Economy

The US Economy

The US economy is doing fine. Financial crashes take longer to recover from, than cyclical recessions. The faster 1980's recovery was not preceded by a financial crash.

We have had the longest consecutive months of job growth in history, with both unemployment and underemployment about 1/2 than before the recovery began. And inflation is contained, while energy costs and borrowing costs are at bargain levels. And wages are starting to increase. We have the world's best economy.

As for presidential candidates blaming trade deals for less well-paying jobs, they are wrong. We are in the middle of the latest industrial revolution, brought on by globalization and technology. It's called progress.

There are plenty of high-paying jobs available, plus, part of this new industrial revolution is an Enterpreneurial Age. Other than professional jobs (doctors, lawyers, even blue collar ones like electricians, etc), starting/investing in businesses is now easier and more lucrative than ever.

Plus, government sponsored infrastructure jobs, with interest rates at historically low interest rates, are an easy way to good jobs and affordable higher education.

As for the "disappearing middle class," that is just misreading economic history. 1950-1970 was an aberration, the result of post ww2 industrial world hegemony.

1970-mid 1980s was both a readjustment of our industry brought on by Japan beating us with manufacturing. Plus, inflation brought on mostly by the 1973 Arab oil embargo.

1990-present started the new Renaissance, the end of the Cold War, globalization and the digital revolution, together meant a growing world prosperity, but our middle class struggling because of foreign competition. Meanwhile, higher wage people in the US grew from about 14% in 1971 to 21%, resulting in record income inequality.

But, with rising wages, ACA, and improving education (Common Core, expanding community colleges, and online learning including MOOCs, and election of the right president, it is reasonable that a new US middle class will emerge.

My Review of "Age of Discovery"

5 out of 5 stars.....

A must read! The authors, Ian Goldin and Chris Kutarna, brilliantly describe in detail how we are in a new Renaissance, starting in 1990, much like the original one of 1450-1550, initially centered around Florence and Venice, Italy.

A Renaissance, because it affects things worldwide, even seeing parallels with Gutenberg and Zuckerberg, both the printing press and digitization freeing speech. And Columbus discovering the new world with the falling of the Berlin Wall, spreading culture.

This is the most prosperous time in history (% above poverty), literate (estimated more alive today with college degrees than all before 1980), longest average life expectancy, most peaceful (% dying from war), due mostly from spreading of democracy and trade, etc.

And with both come great income inequality and great resistance from established thoughts, seeing parallels between Copernicus' heliocentric proof and today's scientists' proof of climate change. And back then, the Inquisition, now al Qaeda and ISIS, also here in the US, religion based resistance to same sex marriage, transgender civil rights and Planned Parenthood.

So, with all these advancements, come massive job losses and other distresses. The book even uses the Renaissance's Michelangelo's sculpture of David as both an example and metaphor for the advanced skills of a Renaissance versus the dullard brutish Golliath, culminating in our choices now, which will we choose.

The book goes into how there has been a paradigm shift from cause and effect to quantum superposition. Also, nanotechnology and its future are mentioned. Complexity is covered, how it advanced finance, yet also brought new risks.

Etc,etc.

I strongly recommend the book.

My Review of "5 Easy Theses"

What differentiates this from just being a very good book to what I think is an excellent one, is the background of the author, James M. Stone. Not only does he have an excellent financial academic start, but then in high level government positions, to starting and managing a decent size financial (insurance) company. So, a well diversified background to write about the  challenges America must face, all depending heavily on understanding finance.

He sees 5 main areas to tackle. Following each are some items covered.

 1.  Fiscal Balance

 Fix Social Security (adjust for life expectancy), Medicare (too generous) and Government pensions (defined contribution and matches for new enrollees), eliminate home mortgage interest tax deduction, eliminate corporation debt interest tax deduction.

 2.  Inequality

Both income and wealth distribution need to be addressed, in tax law especially looking at tax dodging by the wealthy and corporations via trusts, etc, also favoring long term investing and reducing speculating. The author also favors an annual tax on unrealized capital gains and also repealing the "step-up" cost basis for inherited assets.

3. Education

More money into poor areas, more use of charter schools and more vocational education - better tracking of kids, also a national service program, increased early childhood education, longer school hours.

4. Healthcare

Lots of changes here - drug negotiating and other things plus a single negotiator, tackle end of life care, single payer and regulator, reduce excessive testing, reduce overuse of specialist doctors, salary more doctors, more use of specialized nurses and physician assistants.

5. Financial Reform

Break up big banks - basically incentivize them to break up, less bank leverage, more disclosure, less use of derivatives, hedge funds regulated like mutual funds, reduce finanialization of our economy - it reduces productivity.

I recommend the book.

My Review of "Sleeping Giant"

5 out of 5 stars...despite her bias, she nails it.

Just like the far Right wrongfully demonizes the word, liberal (liberals are not against business, just want government to regulate it and provide a safety net of social programs), the far Left, epitomized by the author, demonizes the word, neoliberal (originally a balance between free market capitalism and regulation).

That said, the author, in this book, Sleeping Giant, Tamara Draut, I think correctly sees that the Great Recession recovery can only fully recover if it helps the new working class succeed, thus attacking the significant problem, income inequality, and addressing climate change and rebuilding our infrastructure as ways to quickly create high-paying jobs.

Plus, I think the book correctly identifies today's lowest paid working class jobs like fast food, other retail, and caregiver jobs as not unskilled, and thus deserving up to $15/hr + benefits, and sharing jobs having more worker protection. And unions do have a role here.

The book also I think, correctly sees the political split in the US as to how to tackle the hardships faced by the working and erstwhile middle classes.

Ever since the success of the 60's civil rights laws,  non-college-educated White men began to feel competition from Black men, followed by competition from more women in the workforce pursuant to the feminist movement, then competition from immigration and the browning of America, culminating with the War on Terror and the Islamophobia which followed.

On the other side, college-educated White men including an overwhelmingly college-educated media sees this diversity being the beneficial evolving history of America.

All told, the author sees this new working class as her Sleeping Giant in powering this economy forward. And already, the Work for $15 and the Black Lives Matter movements seem to have begun raising minimum wages around the country.

I strongly recommend this book, for its timeliness and perceptiveness.

My Review of "The Gray Rhino"

3 out of 5 stars......

Gray rhino, like a black swan, is a metaphor, a black swan event being a totally unexpected tragic event, like the chance of seeing a black swan. Whereas, behind nearly every unexpected event are early warning signs. A gray rhino is a warning which could cause tragedy (if disturbed, could charge and kill). but if seen and not disturbed, but with proper reactions, can not be harmed or cause harm.

The author, Michele Wucker, here, looks at ways to spot "gray rhinos" and either avoid or minimize the effects of them, the key being to use long term planning and not just short term. Thus, in case some emergency hits, the reaction is not out of emotion, but reason.

"Gray rhino" examples like Enron and the recent Greek debt crisis are explored. Plus, current ones like climate change, large national debts, income inequality and worldwide slow economic growth rates are identified.

Important is to deal with the risk soon, not to ignore. Also, avoid groupthink. As for muddling/kicking the can, sometimes good and sometimes bad. And, humans are wired with an optimism bias, a priming bias (listening more to "experts" and an availability bias (influenced more by recent events). Plus, predictors are most often wrong when either extremely over or under confident. Whereas, predictions do tend to be better when extensively studied before making a prediction.

The term, "agnotology" is mentioned, being the existence of a culture of ignorance, slit is best consider a diversity of opinions, including those from women.

The book contains lots of ways to evaluate situations, so many that although I do recommend the book, some may find it confusing.

Portfolio "Update"

I just added some CAT (Caterpillar). It is a Dividend Aristocrat, yielding 5% when I bought.

The portfolio, in order of biggest holding to least

WBA (Walgreen Boots Alliance)
PEP (Pepsi)
PG (Procter & Gamble)
MAT (Mattel)

GPC (Genuine Parts)
HAS (Hasbro)
MMM (3M)
KO (Coca Cola)

T (AT&T)
ADP (Automatic Data Processing)
KMB (Kimberly Clark)

K (Kellogg)
VZ (Verizon)
SYY (Sysco)

CVX (Chevron)

HPQ (Hewlett Packard, Inc)
DPS (Dr. Pepper, Snapple)
CDK (CDK Global)

IBM (International Business Machines)

CAT (Caterpillar)
HYH (Halyard Health)

6% GNMA (Government National Mortgage Association) Bonds

Stocks make up abt 25% of my assets.  Other assets are CDs, a home mortgage and about 2% precious metals..

My Review of "High-Level Investing for Dummies"

5 out of 5 stars....

High-Level Investing for Dummies, by Paul Mladjenovic, was just released in January, 2016 and the author wrote it in mid 2015, just when the current economy began hitting its headwinds. So, perfect timing to present his information and he does offer thoughts of how one might use some of his strategies to navigate this turbulence.

This book is not only excellent for experienced investors, but great timing and excellent as a reference, by providing links for additional information. Plus, he also recommends related books, magazines, brokers, etc. And, he presents names and strategies of great investors, past and present.

He identifies himself as a dividend growth investor, also liking ETFs and options, both in conservative and speculative ways. So, all bases are covered. Plus, no matter how experienced the reader is, the book is a great refresher, well appendix-ed and a great table of contents, for easy skipping around.

The author frequently reminds the reader, "the more you learn, the more you earn"

I heartily recommend this book