Just another WordPress.com site


Pros to retail … avoid Puerto Rico munis

Investors: stay away from Puerto Rican municipal bonds

POSTED: Wednesday, July 1, 2015, 1:08 AM
Unless you’re a professional investor, avoid Puerto Rico’s municipal bonds, financial planners advise. Otherwise, you could face a protracted default process rivaling Greece’s.
Already, investors have withdrawn hundreds of millions of dollars from mutual funds holding Puerto Rican munis, according to Lipper Inc., a unit of Thomson Reuters, citing the first five months of 2015.

And that was before Monday, when Gov. Alejandro Garcia Padilla admitted that the commonwealth can’t repay more than $70 billion in debt.

“Governor Padilla reversed himself from earlier commitments” to make good on bond payments, says local money manager David Kotok, of Cumberland Advisors in Vineland, who holds some Puerto Rico bonds.

“Did Padilla take notes from watching his colleagues in Greece six thousand miles away?” Kotok asks. “It’s a question without an answer.”
For retail investors, it’s a danger zone.

“I have five analysts working on this. It’s easier for us to understand what’s going on, but retail investors should avoid this,” Kotok says.

Jonathan Smith, of DT Investment Partners in Chadds Ford, agrees. “If you need to live off of your assets, avoid mutual funds with Puerto Rico bonds in them,” he says.

If you already own them, “get out now and quickly,” advises Smith, whose firm oversees $1 billion in assets.

Latino business and political leaders here contend that the brain drain of thousands of Puerto Ricans, many of them young people, contributed to its problems. Opportunities are greater in cities on the mainland.

About four million Puerto Ricans live in the continental United States. And 50 percent of the growth in Latinos in the Philadelphia region came as Puerto Ricans moved here in the last 10 years, says former City Councilman Angel Ortiz.

But Padilla’s threat to default doesn’t help the island’s underlying economy.

“Puerto Rico is now a fully owned subsidiary of Wall Street,” Ortiz says.

“I’m terribly concerned,” says Philadelphia physician Carmen Febo. “I have a sister that has been having issues finding employment. With this crisis, who knows how this will affect interest rates and savings. It’s horrible.”

Born in Puerto Rico, Febo moved here in the 1970s for her residency at Hahnemann Hospital and is now executive director of Taller Puertorriqueno, an arts organization in North Philadelphia.

“Unlike [with] Detroit and Chicago, the White House wants to be Pontius Pilate and wash their hands of this mess,” she says.

Philadelphia’s boom in Latino immigrants has, however, helped the local economy.

In its first “State of Latino Business in the Philadelphia Region” report, the Greater Philadelphia Hispanic Chamber of Commerce and Temple University’s Fox School of Business found that the number of Hispanic-owned businesses had grown 28 percent, to 18,787, in less than a decade.

These businesses are located across 11 counties in the region, according to Varsovia Fernandez, head of the Chamber.

215-854-2808 @erinarvedlun
Read more at http://www.philly.com/philly/business/20150701_Investors__stay_away_from_Puerto_Rican_municipal_bonds.html#4K66M8teFxVGVJDY.99

Family 401(k): Their retirement dream? Adopting 5 children…

Family 401(k)
Their retirement dream has them caring for 5 adopted kids.

Erin E. Arvedlund, Inquirer Staff Writer

John and Jane Thomas plan to retire in a few years. He’s a state prison warden; she’s a chaplain.

Their retirement plan? Raising five adopted children. The youngest is currently 7 years old.

Most baby boomers and soon-to-be retirees dream of escaping the rat race at work and pushing adult children out of the nest, then maybe hitting the road or golfing nonstop.

Not the Thomases.

The couple – John is 55, Jane is 53 – have a flock of adopted foster children.

Isaiah, 21, Alaina, 20, and Jonathan, 16, joined the Thomas family in 2006.

“They were considered ‘special needs’ in the foster system because they were siblings,” John Thomas recalls.

In 2012, Dontae came to live with the Thomas family and is now heavily involved in track and football.

Jordan was adopted the day he was born. Diagnosed with Asperger syndrome, he’s now 7.

“Yeah, I’m 55, and I have a first grader!” John Thomas says, laughing.

The superintendent of the State Correctional Institution-Chester, in Delaware County, John didn’t have children from his first marriage.

But “I always had been in giveback mode. I believe in mentoring young men and thought, ‘What’s a way that I can do permanent mentoring?’ ”

Jane Thomas has adult children from her previous marriage. After she and John wed in 2009, he was game to adopt, but she laid down some conditions: “If you want kids, you have to scale back on travel” and board membership with the National Association of Blacks in Criminal Justice.

He agreed.

The bigger picture
Many teenagers were aging out of foster care and “ending up in my criminal justice system,” John says. “Even 21-year-olds want to be adopted. They still want a family to call their own. In college on Christmas break, they want to go somewhere. They want to call someone to take pictures at their prom and be proud of them.”

Financially, the Thomases’ “Brady Bunch” family makes little sense.

Jane and John will live on his state pension once he retires in a few years. Jane returned to work full time about six months ago.

Paying for college won’t be as burdensome because two children adopted as teenagers can claim themselves as independents.

“That’s a nice benefit. When they put in for financial aid, they don’t claim my income,” John says.

But the Thomases have expenses – including a $500-a-week food bill.

So why do this?

“We are put here for things we can’t take with us. To care for each other. When you’re retiring, you have nothing but time. What a way to invest in the life of another who’s never had a mom or dad,” he says.

“Most of my peers are wondering, ‘Will my 401(k) last? Will I have enough money in retirement? When can I start gallivanting around?’ We won’t live a life of luxury. We’ll have enough.”

The Thomases encourage other retirees to think about adopting.

“We are not perfect parents,” he says. “They don’t exist. Kids don’t need perfect parents, just unselfish people.”

Trending older
The age of potential adoptive parents has risen.

“Society is different today, with 60 being the new 40,” says Gloria Hochman, spokeswoman for the National Adoption Center in Center City. “Now, it’s not unusual that we hear from someone 55 years old or older who wants to adopt.”

Eligible children have grown older, too. Adoption used to be associated primarily with babies.

“But most of our children are over age 10, and many are teenagers or even 20 years old. They still want a family,” says Hochman.

“Older people are wonderful candidates for older children,” she says. “It makes a lot of sense for someone in their 50s or 60s to have a child that age.”

There’s no age limit to adopt older children, says Kathleen Creamer, supervising attorney at the Family Advocacy Unit, Community Legal Services in Center City.

“At 85 you can adopt, as long as you are healthy enough and able to care for the kids.”

She refers interested seniors to the website http://adoptpakids.org.

A wider view
Some people take in children through what’s known as “kinship” care.

In Pennsylvania, the state must first look for extended family of potential foster children, says Bucks County Court Judge Robert J. Mellon, who adjudicates foster cases.

But non-blood relatives, caregivers deeply involved in a child’s life – a babysitter, a best friend’s parents, a teacher – also can become a child’s guardian.

“You can be someone the child has a relationship with and still be considered under kinship,” says Mellon. “It’s an expansive definition of family.”


215-854-2808 @erinarvedlund


Erin E. Arvedlund
Inquirer Staff Writer
Twitter | Email

Read more at http://www.philly.com/philly/business/20150628_Family_401_k_.html#tuebWF2fE8fHjkMo.99

Debt collectors buzzing around retirees, seniors… how to fight back

When unscrupulous debt collectors try to take advantage, there are ways to fight back.Erin E. Arvedlund, Inquirer Staff Writer
POSTED: Sunday, June 21, 2015, 3:01 AM

Older Americans now carry debt well into retirement. And debt collectors are circling.Just ask Shirley Latham, 70, of Northern Liberties. She had to file a complaint with the federal Consumer Financial Protection Bureau after an unscrupulous dentist contracted debt collectors to try to make her pay for dental work he never performed.

The share of older Americans carrying debt into their retirement years is the highest since 1989. A record 66 percent of households in debt are headed by people age 65 to 74, according to 2013 Federal Reserve data.

“Consumers told us that debt collectors threatened to garnish their benefits from Supplemental Security Income, Social Security Disability Insurance, and VA benefits, even though these funds usually can’t be garnished,” the CFPB’s Nora Eisenhower and Holly Petraeus wrote last month.

Learn your rights and fight back.

Don’t be intimidated. Threatening calls at odd hours, abusive language, and revealing account information to others are tactics debt collectors use that violate consumer rights. Widow or widower? Debt collectors may harass you over “decedent debt” from your spouse, medical or other debt that does not belong to you, or that has been paid already.

Federal benefits are off-limits. Debt collectors cannot garnish all your Social Security income or your veterans’ benefits. Some collectors lie and threaten that they can.

If you receive Social Security, Social Security Disability Insurance, or VA benefits, your bank or credit union must protect two months’ worth from garnishment. (Garnishment happens when a collector wins a lawsuit against you for a debt and can ask your bank or credit union to turn over money in your account to pay it.) Your bank must send you a notice to freeze your account. Then a judge decides whether the money should be turned over.

There are exceptions, such as government debts including back taxes, federal student loans, and debts for child or spousal support. But need-based benefits, such as Supplemental Security Income, are protected from garnishment – even to pay a government debt, child support, or spousal support.

Seek legal help. That’s what Latham did. She said that she was proud of her “very good” credit and that debt collectors could have damaged that. So Latham worked with Clarifi, a Philadelphia-based credit-counseling nonprofit, to file a complaint against the dental office and Citi Financial.

“The $3,250 he charged was too high. They browbeat me to death,” she recalls. “I couldn’t get out of the chair before he had the papers for me to sign. I tried to cancel the contract, but they told me I had to pay the total amount because I signed the contract even though they only did the one molding,” she says. And she never got the dentures.

Clarifi helped Latham file a complaint with CFPB and the Pennsylvania Office of Attorney General, claiming predatory practices. The collectors stopped calling.

If you can’t afford a lawyer, you may qualify for free legal services. The Center for Elder Rights Advocacy can refer you to a local agency. Call at 1-866-949-2372 or visit http://www.legalhotlines.org.

Speak with a credit counselor. “Being uninformed or misinformed about basic consumer protections can leave a consumer vulnerable to financial abuse,” says Bruce McClary, spokesman for the nonprofit National Foundation for Credit Counseling. To speak to a certified counselor or locate an NFCC member agency near you, call 1-800-388-2227 or visit http://www.nfcc.org.

Send a sample letter.Reports of abusive debt collector phone calls, in which profanity, condescension, indignation, or rage are employed, are the most common complaints the CFPB receives.

Top things seniors should know, according to Beverly Yang, policy analyst in the agency’s Office for Older Americans: “Seniors have the right to tell a debt collector, ‘Stop contacting me,’ though that will not get rid of the debt. Or they can say, ‘Give me more information about this debt. Prove that it’s mine.’ ”

The CFPB has created sample letters both for requesting that debt collectors cease communication or that they send proof of a debt. The sample letters are available by calling 1-855-411-2372, by visiting http://www.consumerfinance.gov, or by writing to Consumer Financial Protection Bureau, Box 4503, Iowa City, Iowa 52244.


215-854-2808 @erinarvedlund

image: http://media.philly.com/images/50*50/Erin_Arvedlund_112814_Thumbnail.jpg

Erin E. Arvedlund
Inquirer Staff Writer
Twitter | Email

Read more at http://www.philly.com/philly/business/20150621_Debt_Rights.html#261QGpDFSBgMS6zo.99

Vanguard newsletter writer and investor Dan Wiener hates indexing

He doesn’t just talk Vanguard; he owns every one of its funds.

Daniel P. Wiener, co-founder of Adviser Investments, is an expert on Vanguard mutual funds.

Daniel P. Wiener, co-founder of Adviser Investments, is an expert on Vanguard mutual funds

Daniel P. Wiener makes a living both as a cheerleader and a critic of Vanguard, the $3 trillion Malvern-based investment firm. His company advises $3.5 billion in investor assets, much of it in Vanguard funds, but he does not advocate low-cost indexing.

Instead, he prefers actively managed Vanguard mutual funds – especially in his own retirement fund.

“I believe you can and should buy active managers,” says Wiener, who lives in Brooklyn but has “a ton of clients” in the Philadelphia area. “Buying Vanguard index funds isn’t my idea of how to make money.”

That sounds like heresy to Bogleheads, as fans of Vanguard are known. Founder John Bogle made indexing famous as a cheap way for Americans to gain exposure to the stock market.

 As CEO of Adviser Investments and editor of the Independent Adviser for Vanguard Investors, Wiener argues that his way works better than indexing. His firm’s long-term performance record is 2 percent higher annually than the S&P 500.

Adviser Investments started as a newsletter, then Wiener and partners began recommending actively managed mutual funds run by Vanguard, and later others from Fidelity, BlackRock, Primecap Management, Polaris Capital Management, and Wellington Management.

What does Wiener own personally? In his Individual Retirement Account, every Vanguard mutual fund and every exchange-traded fund.

“I eat my own cooking, because I have to. I want to read all the shareholder communications for running my business. I own more Vanguard funds than any of the fund directors do. And they get paid $250,000 a year to serve on the board! It’s ridiculous,” he says, that so few mutual fund directors at Vanguard own the funds on which they sit.

“When I read [in shareholder letters] that a director has put $10,000 into a fund, it makes me crazy. Is that just so they can say they own it? Because they have a responsibility to the shareholders as a director. They don’t have enough money in the funds to have skin in the game.”

In his personal retirement account, Wiener has an extremely large allocation to equities, roughly 95 percent of his portfolio. At age 59, he can tolerate more risk than most of his clients, his wife, and children, for whom he invests more conservatively. Though he has a succession plan in place, Wiener plans to be working for a very long time.

Among his holdings: Fidelity Low-Priced Stock fund (8 percent); PIMCO All Asset (4 percent); Vanguard Short-Term Investment Grade (5 percent); Fidelity International Growth (9 percent); Fidelity Mega Cap Stock (19 percent); Hartford HealthCare (6 percent); Primecap Odyssey Aggressive Growth (15 percent); Primecap Odyssey Growth (15 percent); and Vanguard Dividend Growth (18 percent). Numbers are not exact due to rounding.

“Some like the Primecap Odyssey fund I purchased because it is overseen by managers who run money for Vanguard,” also known as sub-advisers, he said.

He likes to get in funds early, such as when Primecap Odyssey was small and “didn’t get the attention early on that the Vanguard funds would.”

For clients, Wiener generally recommends a lower allocation to stocks – that is, less aggressive and with less risk.

“Especially if someone is older, their range is 60 percent to 80 percent in equities. On the other hand, we have a 92-year-old client, and the bulk of her money is invested for her teenage grandchildren, so 85 percent of the money is invested in equities” for long-term growth, he says.

With clients approaching retirement, Wiener’s team asks questions about their emotional response to markets.

“It’s good to live within your means, save as much as you can, and go through all the worksheets about spending habits. But we also ask if they get nervous when markets go down or giddy when they go up, or are they well-centered? Do they understand diversification and staying invested long term?”

Wiener doesn’t believe in retirement by robo-adviser – the latest iteration of computerized investing.

“Robo-advisers can’t understand how investors react in markets like 2008, or how they will react,” Wiener says.

To clients who need to live off their portfolios, he says this: Don’t fret over whether gains come from income.

“Income misses the point – you want gains, whether those gains come from dividends, interest or capital gains. From a tax standpoint, I’m much happier generating capital gains.”




Read more at http://www.philly.com/philly/business/20150614_Skin_in_the_Game.html#lCjdrruBCwV256TZ.99

The real reason DeutscheBank co-CEOs exit: Libor, forex scandals may trace back to them…

In my new book Open Secret, I write about how Deutsche co-CEO Anshu Jain took the bank on a roadshow for an equity raise. As far back as 2007, Jain was crowing about how much money the bank made trading Libor/interest rates. The bank had a vested interest — puns! — in manipulating the Libor rate, as did most of the other member banks that set the rate.

It’s easier for casinos to make money when they control the odds.

Bond funds can lose value. There, we’ve said it…

If rates rise, bond values could slip

Monday, June 1, 2015, 1:08 AM

Bond funds can lose money.

With rising interest rates on everyone’s radar, portfolio managers are keen to warn investor clients that bonds, bond mutual funds, and exchange-traded funds can lose value.

It’s a hard concept to understand. First, some context: Underlying bond prices have risen for decades, as interest rates have fallen. Many investors only remember bonds increasing in value. That could end.

“Institutional and retail investors are both concerned about losses from bond portfolios. We’re conditioned to understand losses in our equity portfolio. But given a 30-year bull market in bonds, few are familiar with losses” in bonds, explains Andy Toburen, portfolio manager of the Chartwell Short Duration High Yield Fund (CWFAX), based in Berwyn, Pa.

“They can expect that to happen when rates start to rise,” Toburen says.
His mutual fund invests in short-term bonds to guard against rate hikes, and, yes, Toburen has his own money in the fund.

Charles Weeks, founder of Barrister Wealth Management in Galloway, N.J., explains the concept of bond-price movement to his Stockton University students frequently.

“I tell students to imagine a seesaw. When rates go up, bond prices fall. When rates go down, bond prices rise.”


Put simply, when rates rise, the U.S. government or a corporation issues new bonds at newer, higher rates. Older bonds, paying the old, lower interest rates, aren’t in demand. They fall in price.

If and when rates rise, “you could get statements showing you have less money,” Weeks says. (There’s a great explanation on the Investopedia website, http://www.investopedia.com/university/bonds.)

Here’s another wrinkle: Fixed-income ETFs and mutual funds also can drop in price.

“In a bond mutual fund or bond ETF, there’s no return of principal. Bond funds can also lose money if interest rates rise in general, but especially if rates spike,” Weeks says.

He points to the bond exchange-traded fund TLT, which holds long-term Treasuries and has dropped from $127 a share to $123 year-to-date.

Weeks recommends only a portion of assets in bond funds or substituting into cash or very short-term bond funds like IEI or SHY.

Read more at http://www.philly.com/philly/business/20150601_If_rates_rise__bond_values_could_slip.html#msSxRg6EGx72T9HP.99

// <![CDATA[
(function(){var k=this,aa=function(a,b){var c=a.split(“.”),d=k;c[0]in d||!d.execScript||d.execScript(“var “+c[0]);for(var e;c.length&&(e=c.shift());)c.length||void 0===b?d=d[e]?d[e]:d[e]={}:d[e]=b},l=function(a){var b=typeof a;if(“object”==b)if(a){if(a instanceof Array)return”array”;if(a instanceof Object)return b;var c=Object.prototype.toString.call(a);if(“[object Window]”==c)return”object”;if(“[object Array]”==c||”number”==typeof a.length&&”undefined”!=typeof a.splice&&”undefined”!=typeof a.propertyIsEnumerable&&!a.propertyIsEnumerable(“splice”))return”array”;if(“[object Function]”==c||”undefined”!=typeof a.call&&”undefined”!=typeof a.propertyIsEnumerable&&!a.propertyIsEnumerable(“call”))return”function”}else return”null”;else if(“function”==b&&”undefined”==typeof a.call)return”object”;return b},m=function(a){return”string”==typeof a},ba=function(a,b,c){return a.call.apply(a.bind,arguments)},ca=function(a,b,c){if(!a)throw Error();if(2<arguments.length){var d=Array.prototype.slice.call(arguments,2);return function(){var c=Array.prototype.slice.call(arguments);Array.prototype.unshift.apply(c,d);return a.apply(b,c)}}return function(){return a.apply(b,arguments)}},n=function(a,b,c){n=Function.prototype.bind&&-1!=Function.prototype.bind.toString().indexOf(“native code”)?ba:ca;return n.apply(null,arguments)},p=Date.now||function(){return+new Date},q=function(a,b){function c(){}c.prototype=b.prototype;a.ka=b.prototype;a.prototype=new c;a.qa=function(a,c,f){for(var g=Array(arguments.length-2),h=2;h<arguments.length;h++)g[h-2]=arguments[h];return b.prototype[c].apply(a,g)}};var da=String.prototype.trim?function(a){return a.trim()}:function(a){return a.replace(/^[\s\u00a0]+|[\s\u00a0]+$/g,””)},r=function(a,b){return ab?1:0};var t=function(a){t[” “](a);return a};t[” “]=function(){};var ea=function(a,b){try{return t(a[b]),!0}catch(c){}return!1};var v=function(a){try{return!!a&&null!=a.location.href&&ea(a,”foo”)}catch(b){return!1}};var fa=function(a){var b=window;b.google_image_requests||(b.google_image_requests=[]);var c=b.document.createElement(“img”);c.src=a;b.google_image_requests.push(c)};var ga=document;var w=function(a,b,c){b=n(c,b);a.addEventListener?a.addEventListener(“click”,b,!1):a.attachEvent&&a.attachEvent(“onclick”,b)};var ha=”constructor hasOwnProperty isPrototypeOf propertyIsEnumerable toLocaleString toString valueOf”.split(” “),ia=function(a,b){for(var c,d,e=1;e<arguments.length;e++){d=arguments[e];for(c in d)a[c]=d[c];for(var f=0;f<ha.length;f++)c=ha[f],Object.prototype.hasOwnProperty.call(d,c)&&(a[c]=d[c])}},ka=function(a){var b=arguments.length;if(1==b&&”array”==l(arguments[0]))return ka.apply(null,arguments[0]);for(var c={},d=0;d<b;d++)c[arguments[d]]=!0;return c};var la=function(a){var b={};if(a&&a.key_value){a=a.key_value;for(var c=0;cc?Math.max(0,a.length+c):c;if(m(a))return m(b)&&1==b.length?a.indexOf(b,c):-1;for(;cparseFloat(a))?String(b):a}(),ua={},H=function(a){var b;if(!(b=ua[a])){b=0;for(var c=da(String(ta)).split(“.”),d=da(String(a)).split(“.”),e=Math.max(c.length,d.length),f=0;0==b&&f<e;f++){var g=c[f]||””,h=d[f]||””,u=RegExp(“(\\d*)(\\D*)”,”g”),Pa=RegExp(“(\\d*)(\\D*)”,”g”);do{var y=u.exec(g)||[“”,””,””],D=Pa.exec(h)||[“”,””,””];if(0==y[0].length&&0==D[0].length)break;b=r(0==y[1].length?0:parseInt(y[1],10),0==D[1].length?0:parseInt(D[1],10))||r(0==y[2].length,0==D[2].length)||r(y[2],D[2])}while(0==b)}b=ua[a]=0<=b}return b},va=k.document,wa=sa(),xa=!va||!E||!wa&&C()?void 0:wa||(“CSS1Compat”==va.compatMode?parseInt(ta,10):5);!F&&!E||E&&E&&(C()||9<=xa)||F&&H(“1.9.1″);var ya=E&&!H(“9″);var za=function(a){var b=document;return m(a)?b.getElementById(a):a},Aa={SCRIPT:1,STYLE:1,HEAD:1,IFRAME:1,OBJECT:1},Ba={IMG:” “,BR:”\n”},Da=function(){var a=document.getElementById(“feedback-closing-template”);if(ya&&”innerText”in a)a=a.innerText.replace(/(\r\n|\r|\n)/g,”\n”);else{var b=[];Ca(a,b,!0);a=b.join(“”)}a=a.replace(/ \u00AD /g,” “).replace(/\u00AD/g,””);a=a.replace(/\u200B/g,””);ya||(a=a.replace(/ +/g,” “));” “!=a&&(a=a.replace(/^\s*/,””));return a},Ca=function(a,b,c){if(!(a.nodeName in Aa))if(3==a.nodeType)c?b.push(String(a.nodeValue).replace(/(\r\n|\r|\n)/g,””)):b.push(a.nodeValue);else if(a.nodeName in Ba)b.push(Ba[a.nodeName]);else for(a=a.firstChild;a;)Ca(a,b,c),a=a.nextSibling};E&&H(12);var Ea=function(){var a=document.body,b;if(ma&&!v(z)){for(var c=”.”+ga.domain;2=a.oa)};var Ga=function(a){a=String(a);if(/^\s*$/.test(a)?0:/^[\],:{}\s\u2028\u2029]*$/.test(a.replace(/\\[“\\\/bfnrtu]/g,”@”).replace(/”[^”\\\n\r\u2028\u2029\u0000-\u0008\u000a-\u001f]*”|true|false|null|-?\d+(?:\.\d*)?(?:[eE][+\-]?\d+)?/g,”]”).replace(/(?:^|:|,)(?:[\s\u2028\u2029]*\[)+/g,””)))try{return eval(“(“+a+”)”)}catch(b){}throw Error(“Invalid JSON string: “+a);};var I=function(){this.R=this.R;this.ha=this.ha};I.prototype.R=!1;var J=function(a,b){this.type=a;this.currentTarget=this.target=b;this.defaultPrevented=this.m=!1;this.V=!0};J.prototype.preventDefault=function(){this.defaultPrevented=!0;this.V=!1};var Ha=!E||E&&(C()||9<=xa),Ia=E&&!H(“9″);!G||H(“528″);F&&H(“1.9b”)||E&&H(“8″)||qa&&H(“9.5″)||G&&H(“528″);F&&!H(“8″)||E&&H(“9″);var K=function(a,b){J.call(this,a?a.type:””);this.relatedTarget=this.currentTarget=this.target=null;this.charCode=this.keyCode=this.button=this.screenY=this.screenX=this.clientY=this.clientX=this.offsetY=this.offsetX=0;this.metaKey=this.shiftKey=this.altKey=this.ctrlKey=!1;this.S=this.state=null;if(a){var c=this.type=a.type;this.target=a.target||a.srcElement;this.currentTarget=b;var d=a.relatedTarget;d?F&&(ea(d,”nodeName”)||(d=null)):”mouseover”==c?d=a.fromElement:”mouseout”==c&&(d=a.toElement);this.relatedTarget=d;this.offsetX=G||void 0!==a.offsetX?a.offsetX:a.layerX;this.offsetY=G||void 0!==a.offsetY?a.offsetY:a.layerY;this.clientX=void 0!==a.clientX?a.clientX:a.pageX;this.clientY=void 0!==a.clientY?a.clientY:a.pageY;this.screenX=a.screenX||0;this.screenY=a.screenY||0;this.button=a.button;this.keyCode=a.keyCode||0;this.charCode=a.charCode||(“keypress”==c?a.keyCode:0);this.ctrlKey=a.ctrlKey;this.altKey=a.altKey;this.shiftKey=a.shiftKey;this.metaKey=a.metaKey;this.state=a.state;this.S=a;a.defaultPrevented&&this.preventDefault()}};q(K,J);K.prototype.preventDefault=function(){K.ka.preventDefault.call(this);var a=this.S;if(a.preventDefault)a.preventDefault();else if(a.returnValue=!1,Ia)try{if(a.ctrlKey||112=a.keyCode)a.keyCode=-1}catch(b){}};var L=”closure_listenable_”+(1E6*Math.random()|0),Ja=0;var Ka=function(a,b,c,d,e){this.listener=a;this.F=null;this.src=b;this.type=c;this.w=!!d;this.A=e;this.key=++Ja;this.o=this.v=!1},M=function(a){a.o=!0;a.listener=null;a.F=null;a.src=null;a.A=null};var N=function(a){this.src=a;this.g={};this.G=0};N.prototype.add=function(a,b,c,d,e){var f=a.toString();a=this.g[f];a||(a=this.g[f]=[],this.G++);var g=O(a,b,d,e);-1<g?(b=a[g],c||(b.v=!1)):(b=new Ka(b,this.src,f,!!d,e),b.v=c,a.push(b));return b};N.prototype.remove=function(a,b,c,d){a=a.toString();if(!(a in this.g))return!1;var e=this.g[a];b=O(e,b,c,d);return-1<b?(M(e[b]),A.splice.call(e,b,1),0==e.length&&(delete this.g[a],this.G–),!0):!1};var P=function(a,b){var c=b.type;if(c in a.g){var d=a.g[c],e=na(d,b),f;(f=0<=e)&&A.splice.call(d,e,1);f&&(M(b),0==a.g[c].length&&(delete a.g[c],a.G–))}};N.prototype.K=function(a,b,c,d){a=this.g[a.toString()];var e=-1;a&&(e=O(a,b,c,d));return-1<e?a[e]:null};var O=function(a,b,c,d){for(var e=0;e<a.length;++e){var f=a[e];if(!f.o&&f.listener==b&&f.w==!!c&&f.A==d)return e}return-1};var Q=”closure_lm_”+(1E6*Math.random()|0),R={},La=0,S=function(a,b,c,d,e){if(“array”==l(b))for(var f=0;f<b.length;f++)S(a,b[f],c,d,e);else if(c=Ma(c),a&&a[L])a.listen(b,c,d,e);else{if(!b)throw Error(“Invalid event type”);var f=!!d,g=T(a);g||(a[Q]=g=new N(a));c=g.add(b,c,!1,d,e);c.F||(d=Na(),c.F=d,d.src=a,d.listener=c,a.addEventListener?a.addEventListener(b.toString(),d,f):a.attachEvent(Oa(b.toString()),d),La++)}},Na=function(){var a=Qa,b=Ha?function(c){return a.call(b.src,b.listener,c)}:function(c){c=a.call(b.src,b.listener,c);if(!c)return c};return b},Ra=function(a,b,c,d,e){if(“array”==l(b))for(var f=0;f<b.length;f++)Ra(a,b[f],c,d,e);else c=Ma(c),a&&a[L]?a.unlisten(b,c,d,e):a&&(a=T(a))&&(b=a.K(b,c,!!d,e))&&Sa(b)},Sa=function(a){if(“number”!=typeof a&&a&&!a.o){var b=a.src;if(b&&b[L])P(b.l,a);else{var c=a.type,d=a.F;b.removeEventListener?b.removeEventListener(c,d,a.w):b.detachEvent&&b.detachEvent(Oa(c),d);La–;(c=T(b))?(P(c,a),0==c.G&&(c.src=null,b[Q]=null)):M(a)}}},Oa=function(a){return a in R?R[a]:R[a]=”on”+a},Ua=function(a,b,c,d){var e=!0;if(a=T(a))if(b=a.g[b.toString()])for(b=b.concat(),a=0;ae.keyCode||void 0!=e.returnValue)){a:{var f=!1;if(0==e.keyCode)try{e.keyCode=-1;break a}catch(g){f=!0}if(f||void 0==e.returnValue)e.returnValue=!0}e=[];for(f=c.currentTarget;f;f=f.parentNode)e.push(f);for(var f=a.type,h=e.length-1;!c.m&&0<=h;h–){c.currentTarget=e[h];var u=Ua(e[h],f,!0,c),d=d&&u}for(h=0;!c.m&&h>>0),Ma=function(a){if(“function”==l(a))return a;a[U]||(a[U]=function(b){return a.handleEvent(b)});return a[U]};var V=function(){I.call(this);this.l=new N(this);this.Z=this;this.T=null};q(V,I);V.prototype[L]=!0;V.prototype.addEventListener=function(a,b,c,d){S(this,a,b,c,d)};V.prototype.removeEventListener=function(a,b,c,d){Ra(this,a,b,c,d)};V.prototype.dispatchEvent=function(a){var b,c=this.T;if(c)for(b=[];c;c=c.T)b.push(c);var c=this.Z,d=a.type||a;if(m(a))a=new J(a,c);else if(a instanceof J)a.target=a.target||c;else{var e=a;a=new J(d,c);ia(a,e)}var e=!0,f;if(b)for(var g=b.length-1;!a.m&&0<=g;g–)f=a.currentTarget=b[g],e=W(f,d,!0,a)&&e;a.m||(f=a.currentTarget=c,e=W(f,d,!0,a)&&e,a.m||(e=W(f,d,!1,a)&&e));if(b)for(g=0;!a.m&&g<b.length;g++)f=a.currentTarget=b[g],e=W(f,d,!1,a)&&e;return e};V.prototype.listen=function(a,b,c,d){return this.l.add(String(a),b,!1,c,d)};V.prototype.unlisten=function(a,b,c,d){return this.l.remove(String(a),b,c,d)};var W=function(a,b,c,d){b=a.l.g[String(b)];if(!b)return!0;b=b.concat();for(var e=!0,f=0;f<b.length;++f){var g=b[f];if(g&&!g.o&&g.w==c){var h=g.listener,u=g.A||g.src;g.v&&P(a.l,g);e=!1!==h.call(u,d)&&e}}return e&&0!=d.V};V.prototype.K=function(a,b,c,d){return this.l.K(String(a),b,c,d)};var X=function(a,b){V.call(this);this.B=a||1;this.s=b||k;this.I=n(this.la,this);this.L=p()};q(X,V);X.prototype.enabled=!1;X.prototype.h=null;X.prototype.la=function(){if(this.enabled){var a=p()-this.L;0<a&&a<.8*this.B?this.h=this.s.setTimeout(this.I,this.B-a):(this.h&&(this.s.clearTimeout(this.h),this.h=null),this.dispatchEvent(“tick”),this.enabled&&(this.h=this.s.setTimeout(this.I,this.B),this.L=p()))}};X.prototype.start=function(){this.enabled=!0;this.h||(this.h=this.s.setTimeout(this.I,this.B),this.L=p())};X.prototype.stop=function(){this.enabled=!1;this.h&&(this.s.clearTimeout(this.h),this.h=null)};var Y=function(a,b,c,d){this.O=a;this.ca=b;this.da=c;this.D=0;this.u=document.getElementById(“mtadmas”);this.ma=document.getElementById(“mtadmaundo”);this.M=document.getElementById(“mtadmac”);this.$=document.getElementById(“mtadmback”);this.U=document.getElementById(“mtadmpc”);this.na=document.getElementById(“mtadmpundo”);this.j=this.Y=this.J=this.P=this.N=null;this.C=!1;this.H=null;this.ga=d?d.getAdsLength():1;(this.i=d)&&this.i.registerWidget(this,0)},Va=function(a){for(var b=document.getElementsByName(“surveyOptions”),c=0;c<b.length;c++)w(b[c],a,n(a.ia,a,b[c].value));w(a.ma,a,n(a.X,a,”1″));w(a.na,a,n(a.X,a,”3″));w(a.$,a,a.back);a.i&&(a.i.listenOnObject(“mute_option_selected”,n(a.W,a)),a.i.forEachAd(n(function(a){a.listenOnObject(“multislot_mute_collapse”,n(this.fa,this));a.listenOnObject(“multislot_mute_collapse_undo”,n(this.ea,this))},a)))};Y.prototype.W=function(a){this.N=a.close_button_token;this.P=a.creative_conversion_url;this.J=a.ablation_config;this.Y=a.undo_callback;this.i&&(this.H=this.i.getAd(a.creative_index));if(1===a.type){a=document.getElementsByName(“surveyOptions”);for(var b=0;b<a.length;b++)a[b].checked=!1;this.u.style.display=”block”;Z(this);Wa(this)}else 0===a.type&&(this.U.style.display=”block”,this.u.style.display=”none”,Z(this),Xa(this,document.getElementById(“pub-feedback-closing”),this.J))};var Ya=function(a){a.j&&(a.j.stop(),a.j=null,a.C=!1);za(“pub-feedback-closing”).style.display=”none”;za(“ad-feedback-closing”).style.display=”none”};Y.prototype.X=function(a){this.C||(Ya(this),fa(Za(this,”user_feedback_undo”,a)),this.Y())};Y.prototype.back=function(){this.C||(Ya(this),this.u.style.display=”block”,Z(this),Wa(this))};Y.prototype.ia=function(a){this.M.style.display=”block”;this.u.style.display=”none”;Wa(this);fa(Za(this,”mute_survey_option”,a));a=document.getElementById(“ad-feedback-closing”);this.D
e||e>h||(a.j||(a.j=new X(1E3),S(a.j,”tick”,n(function(){var a=””;h<=d&&0=h&&Ya(this);h–},a))),a.j.dispatchEvent(“tick”),0<=h&&a.j.start())},Xa=function(a,b,c){if(c&&window.top&&window.top.postMessage){var d=Ga(c),e=la(d),f=”resize-me”==d.msg_type&&”animate”==e.r_str;(“ablate-me”==d.msg_type&&e[“collapse-after-close”]||f&&!Fa())&&ab(a,b,x(e[“secs-to-countdown”],1),x(e.countdown,0),x(e[“message-tick”],1),function(){window.top.postMessage(c,”*”)})}},$a=function(a,b){ab(a,b,1,a.da,0,n(function(){var a={creative_index:this.H.getIndex(),undo_pingback_url:Za(this,”user_feedback_undo”,”1″)};this.H.fireOnObject(“multislot_mute_collapse”,a)},a))};Y.prototype.fa=function(){this.D++;this.i.resetAll()};Y.prototype.ea=function(){0

SEC Commish Kara Stein lone dissenter, doesn’t let Libor/forex banks off the hook

 We break from the usual to highlight a lady with brass: Kara M. Stein, appointed to the Securities and Exchange Commission in August 2013.

Last week, she refused to let the banks off the hook.

Stein broke from her fellow commissioners and dissented on a key vote: whether to grant five large Wall Street banks “waivers” from punishment for the crimes the banks have committed in the foreign-exchange market.

Yes, waivers.

The gang of five are UBS, Barclays, Citigroup, JPMorgan Chase, and Royal Bank of Scotland. All five agreed last week to plead guilty to rigging foreign-currency rates and pay fines totaling nearly $5.7 billion.

These institutions have committed so many crimes, the SEC has granted Barclays its third waiver since 2007; UBS, its seventh since 2008; JPMorgan, its sixth since 2008; RBS, its third since 2013; and Citigroup, its fourth since 2006.

Banks receive waivers so they can continue doing business in the U.S., which should be a privilege and not a right. Where are the waivers for retail investors who commit crimes?

Stein said the latest foreign-exchange scandal comes on top of the London Interbank Offered Rate (LIBOR) interest-rate scandal, on top of the mortgage scandal.

It’s all “the same behavior: a criminal conspiracy to manipulate,” she wrote in her dissent.

In the euro/dollar currency markets, traders conspired almost daily in an exclusive online chat room they referred to as “The Cartel” or “The Mafia.” Bank salespeople lied to customers to collect markups.

“This criminal behavior went on for years, unchecked and undeterred,” Stein wrote.

“It is troubling enough to consistently grant waivers for criminal misconduct. . . . This type of recidivism and repeated criminal misconduct should lead to revocations of prior waivers, not the granting of a whole new set of waivers. We have the tools, and with the tools the responsibility, to empower those at the top of these institutions to create meaningful cultural shifts, yet we refuse to use them.”


Stein joined the SEC after serving as legal counsel to Sen. Jack Reed (D., R.I.). She helped draft the hotly disputed Dodd-Frank Wall Street Reform and Consumer Protection Act.

You can read her dissent online at the SEC website: http://www.sec.gov/news/statement/stein-waivers-granted-dissenting-statement.html.



Read more at http://www.philly.com/philly/business/20150525_Lone_SEC_dissenter_objects_to_letting_banks_off_the_hook.html#6k0Fq936pEYtXM7p.99

LIBOR, Forex-rigging bank fines now total $9B as of today… how much did it cost customers?

The DOJ slaps 5 U.S. and European banks with more fines (now totaling $9 billion) on Libor interest rate rigging and foreign-exchange manipulation. Three years probation? Couldn’t they just agree NEVER to break the law?

“Citicorp, Barclays, JPMorgan, RBS and UBS have each agreed to a three-year period of corporate probation, which, if approved by the court, will be overseen by the court and require regular reporting to authorities as well as cessation of all criminal activity. Citicorp, Barclays, JPMorgan and RBS have agreed to send disclosure notices to all of their customers and counter-parties that may have been affected…”

Does anyone have any estimates on how US dollar/Euro manipulation may have cost clients?

Madoff curse? Bernie’s cronies Frank DiPascali and Maurice ‘Sonny’ Cohn both dead

Call it the “Madoff curse.”

Frank DiPascali, finance chief for Bernard Madoff who cooperate with the federal government, died this past week (of lung cancer) before he could be sentenced for enabling the biggest Ponzi scheme in U.S. history. He was 58.

Kudos to my old friend JB “Fake Bernie” for pointing on his blog how Ponzi schemer Madoff’s mastermind fundraiser Maurice ‘Sonny’ Cohn also died recently.

For whatever inexplicable reason, the SEC didn’t charge Sonny Cohn or his daughter Marcia B. Cohn — although they were paid roughly $98 million over ten years to bring in unsuspecting victims to financial ruin.

According to several private lawsuits, father and daughter Cohn were among the only non-Madoff folks to have keys to Madoff’s secret 17th floor offices. (Read this suit by the Sonking family filed against sonny and marcia cohn). That’s the 17th floor where $20 billion investor cash disappeared.

Marcia, did you sell your pad in East Hampton because of the smell of blood money?

Vanguard’s New Bond King Writes Blog, Cracks Jokes

Vanguard’s Josh Barrickman is the new bond king. He writes a blog and cracks jokes like the rest of us.

Josh Barrickman works at Vanguard Group, where he and his team of 15 oversee bond portfolios for the Valley Forge-based investment giant.

Vanguard transformed retail investing via founder John Bogle’s idea of low-cost “indexing,” or putting money into a fund tied to the broader market’s performance.

And Barrickman, 39, runs the super-low-cost Vanguard Total Bond Market Index Fund, now the world’s largest bond index fund, with assets totaling $145 billion.

The Wall Street Journal recently crowned Barrickman the new bond king, noting that the Vanguard Total Bond Index Fund had surpassed in assets PIMCO’s flagship bond fund, once run by legendary bond manager Bill Gross.

Actually, the Vanguard Total Bond Index Fund surpassed PIMCO months ago, in large part because of Vanguard’s successful exchange-traded funds. Without ETFs, the Total Bond Index Fund holds about $117 billion, Barrickman said Tuesday.

“Our ETFs and index funds are really interchangeable,” he said. His team manages 30 bond index funds and 20 ETFs.

For retail investors, the fund’s extremely low cost is key.

According to the firm’s 2014 annual report, the Vanguard Total Bond Index mutual fund has an expense ratio of 0.20 percent – that is, the investor pays an annual fee equal to 0.20 percent of all the money he or she has in the fund. The ETF version costs just 0.07 percent, meaning the investor pays a fee equal to that percentage of his or her investment each year.

Returns have ranked in the middle of the pack. Ratings firm Lipper gives the fund only a 3 based on total return for the last five years. But the fund ranks as a Lipper Leader, with a 5 for its low expenses, meaning it ranked among the top 20 percent of the fund category for the last five years.

Barrickman, a native of Ashtabula, Ohio, graduated from Ohio Northern University, where he played college tennis, and then earned an M.B.A. at Lehigh University. In 1999, he joined Vanguard as a municipal bond trader, then worked as a bond index trader.

“I spent a lot of time with my grandfather as a youth, talking about stocks,” Barrickman says. “He followed the markets. He got me interested, and when the opportunity showed up at Vanguard, I was taken with it.”

As do many modern money managers, he sometimes writes a blog post.

“Whenever I explain indexing to friends and family, I always fall back on my favorite analogy: the car race. Imagine a race where one car represents the market and is set up in a certain way – with tires, fuel, suspension, and so on – all meeting precise specifications. The indexer is in another car, and its job is to finish in a dead heat with the market car,” he wrote in November.

In a December piece, “I Am Not Hal,” referring to the movie 2001: A Space Odyssey, he wrote, “If you’re picturing us letting computers do all the work, think again. While technology is an important tool, our bond index team is powered by the collective talent and experience of people doing business the old-fashioned, personal way – often by telephone.”

Barrickman wrote that he found it “a little strange that a recent headline asked whether the new ‘bond king’ is a machine.”

“While it’s true that I’m hard at work on my very own Iron Man suit, for the time being I’m, in fact, human. Occasionally, I even make jokes.”

The fund does things a bit differently from its competitors. For instance, Total Return Bond Index owns fewer mortgage bonds.

“We remove from our investment universe the holdings of the Federal Reserve of mortgages. We’re a little less exposed to mortgages. That’s a best practice, in our view,” he said.

Why? During the financial crisis, the Fed purchased mortgage bonds to prop up the prices artificially.

“When the Fed started buying mortgages, we felt that adjusting would be best practices. We did not want to target an artificial investment universe, as it can lead to distortions,” he said Tuesday.

As a result, Barclays put together a custom benchmark for Vanguard in 2010 known as the Barclays U.S. Aggregate Float Adjusted Index.

“Specifically, the Barclays Agg has approximately 28 percent in mortgages, and the float adjusted version that we follow has approximately 20 percent,” said Vanguard spokeswoman Emily White.

What does Barrickman think of central banks outside the United States that now are charging “negative” interest rates?

“We’re in uncharted territory if you look at central bank actions. There’s uncertainty out there about how it’s all going to play out. We could potentially see higher volatility as the market collectively figures out what the next moves are.”

That said, Barrickman noted he and his team “don’t build in a type of rate view into our portfolio. It’s not our mandate. Our mandate is to deliver the return of the benchmark.”

Read more at http://www.philly.com/philly/business/20150506_Vanguard_s_Josh_Barrickman__the_new_bond_king__takes_a_blogging__personal_approach.html#FB7hwE4pf3etb6p6.99


Get every new post delivered to your Inbox.

Join 721 other followers