The Mess That Greenspan Made - Part 11

The U.S. is the world leader in prison population and a close second in prison population rate. How we got there is shown below from the animated graphic in this story at Vox.

We currently lead the world with over 2 million people incarcerated (many for drug crimes as part of the wildly unsuccessful “War on Drugs”) and our prison population rate is exceeded by just one country – the Republic of Seychelle (no, never heard of it before either).

Friday Morning Links

MUST READS
Back in Iraq, Jack – Washington’s Blog
Obama authorizes airstrikes in Iraq – AP
Markets rattled by air strike fears – BBC
Israeli Jets Strike Gaza After Rockets Shatter Truce – Bloomberg
Western food imports banned as Russia hits back over sanctions – Guardian
China’s export beats forecast, trade surplus reaches new high – China Daily
What the Latest Economic Data Say About China’s Changing Growth Model – WSJ
Goldman, JPMorgan in Senate’s crosshairs for commodities holdings – Reuters
Fed Survey Finds 4 in 10 Americans in Financial Stress in 2013 – Bloomberg
Money Doesn’t Really “Go Into” Other Financial Assets – Mises
Auto loans: once a boon for America, now a bane – Fabius Maximus
Argentina’s Griesafault – Project Syndicate

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MARKETS/INVESTING
Markets face wide array of geopolitical risks – AP
Thanks Putin! Market correction has begun – CNN/Money
Key level to keep eyes on: 1900 on S&P 500 – USA Today
The stock market: Is it worse than it was in 2000? – MarketWatch
Cash-rich spending spree is sign of a growing tech bubble – MarketWatch
Government Bonds Surge as Iraq Strike Plan Boosts Safety Demand – Bloomberg
Gold at 3-1/2 week high as U.S. decision on air strikes hurts dollar, shares – Reuters
HMRC And Eurostat Alter Historic UK Gold Trade Data – BullionStar
Gold’s Big Breakout: Could 5-Month Highs Be Next? – GoldSilverWorlds
Will mining disappear in the next decade? – Mining.com
Gold: Why Can’t It Break Out? – Barron’s

ECONOMY/WORLD/HOUSING/BANKING
A recession without a boom? – Antonia Fatas
Making Sense of Friedrich A. von Hayek – Delong, WCEG
Trade boost may not save German economy from Q2 contraction – Reuters
UK trade deficit widens in June, but construction recovers – Reuters
Germany close to recession as ECB admits recovery is weak – Telegraph
BOJ Holds Stimulus as Weaker Economy Challenges Kuroda – Bloomberg
Defying Gravity: Hong Kong Property Prices Reach New Highs – WSJ
Gasp: SF’s Housing Market is Not That Overvalued After All – Curbed
Racially Diverse Millennials Control the Housing Market – HuffPost
Two Fed Officials Stake Out Different Positions on Market Levels – WSJ
In Senate Race, Jeffrey Bell Is Running Against Janet Yellen – NY Sun

 

Retiring Early is Un-American

It wasn’t immediately clear that the usage of the word “Un-American” in the title above was appropriate, that is, until reading this definition at Wikipedia:

Un-American is a pejorative term of U.S. political discourse which is applied to people or institutions in the United States seen as deviating from what are widely perceived to be fundamental American cultural and political values

Now, there are clearly no politics involved here. Rather, it is the deviation from well established cultural values, namely, ratcheting up your lifestyle at least as fast as your income rises, that makes those who choose to spend much less than they earn during their working years a candidate for retiring early as detailed in this USA Today story.

As with most journeys, retiring early starts with a few simple steps, the most important being this: You have to calculate – there’s no getting around it, really – how much you’ll need to fund your lifestyle for as long as you (and your partner) will live. This won’t be easy because you don’t know just how long that will be.

But what you do know is this: Retiring early means calculating more years into the equation — say, 30 instead of 20. For the average American household, that could mean saving an extra $400,000 or so on top of what you might already need for a traditional retirement plan.

Once you know your “number,” there are only two other steps to commit to memory: Start saving and stop spending. Put another way: Live not just within your means, but well below, says Rick Miller, president of Sensible Financial Planning in Waltham, Mass.

Living “well below” your means really is un-American – it goes against the fundamental American cultural values of consumerism and debt.

I’ve often said that a large part of the U.S. economy is driven by people buying things they don’t need with money they don’t have and, while some may point to that as being a great post-World War II success story, it results in millions upon millions of people who might never be able to call it quits as part of the traditional work force.

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Thursday Morning Links

MUST READS
Russia bans food imports from West – BBC
How The Ukraine-Russia Crisis Might End – Forbes
EU reserves right to “action” after Russia sanctions – CNA
ECB holds rates, waits for new funding measures to kick in – Reuters
Draghi Outlook Menaced by Putin as Ukraine Crisis Bites – Bloomberg
Poor eurozone economic data  may be more than just “Putin factor” – Sober Look
Bank of England Keeps Interest Rates Steady – Fox Business News
BofA reportedly in $17B settlement over toxic loan securities – LA Times
Bank of America’s Penalty Misses the Point – Bloomberg
The 1% May Be Richer Than You Think, Research Shows – Bloomberg
The US Forest Service is running out of money to fight wildfires – Vox
How to retire early while everyone else toils at work – USA Today
Will the US inflate away its public debt? – voxeu

MARKETS/INVESTING
Markets steady as central banks take center stage – AP
This market expert sees stocks up another 70% – MarketWatch
‘Faith’ in Markets Collapses Among Professional Investors – Wolf Street
The Most-Anticipated Stock Market Crash – Dollar Collapse
Gundlach’s Bet on Rates Wins Most Cash – Bloomberg
Gundlach reveals 2020 vision for bond market – Financial Times
Treasuries Rise With Bunds on Ukraine, Uneven Recovery – Bloomberg
Gold steadies as firmer dollar offsets Russia concerns – Reuters
Long Term Picture Of US Dollar, Crude Oil And Gold – GoldSilverWorlds
Gold Rises, Traders Say, Yes, it’s a Stock-Market Correction – Barron’s
Gold: Been down so long it looks like up to me! – Mineweb
Silver Pyramid Power – SRSrocco Report

ECONOMY/WORLD/HOUSING/BANKING
Why the global recovery is so slow – Reuters
Poll: 64 Percent of Americans Still Feeling Recession – MoneyNews
Americans Give Up Passports as Asset-Disclosure Rules Start – Bloomberg
German firm cuts outlook after Russia deal nixed – AP
U.K. Recovery Splits Central Bank Alumni on Rates – Bloomberg
India Spurns WTO and That’s OK – Bloomberg
Buyers stay away from housing market in China – ECNS.com
Toronto home resales surge 10% in July – Globe & Mail
Five least — and most — affordable housing markets – MarketWatch
Lockhart: Fed on Track for Second Half 2015 Rate Boost – WSJ
Fed Hawks Squawk – Fed Watch

 
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