Jack McHugh

Comments:

• Another critique of calls to increase immigration is accusations they primarily come from elites frustrated they can't find servants. ~~~~~~~~~ As someone on the brink of retirement, I don't need or really want to work, but can imagine a wee-bit of part-time if the people and job were fun. Doesn't seem too implausible...

  Post: Late Shift

  Link to comment from December 10, 2022

• These are not your father's utilities these days. They are heavily politicized, and far down the road of replacing a grid that was the wonder of the world with one that is unreliable and far more costly.

  Post: Worst Year Ever

  Link to comment from November 9, 2022

• Why is practically everyone so certain that interest rates will stop rising and go back down in the coming two-three years? They might do that - I know nothing - but could easily keep rising higher and longer than anyone expects. Among other factors, rising national debt levels that approach annual GDP are not encouraging. On the threshold of retirement, I'm just glad to have taken advantage of 2021 to shift asset allocation to 45/55 stocks/2-year bonds. It's come down further the old fashioned way, and I'm just letting that ride. I make no assumptions either way. Maybe rates will plunge and stocks roar again before my check-out date, but it could also pass that we're entering a replay of the 1970s-early '80s.

  Post: Worst Year Ever

  Link to comment from November 9, 2022

• "Goldman expects CPI to be under 3% through 2023..." Or not - and then what? No one is talking about this but they should: What a $1 Trillion Deficit Means to the U.S. Economy (manhattan-institute.org). Excerpts: '...CBO data shows that government debt—39% of GDP in 2008—has already doubled, to 78%. The debt-to-GDP ratio is projected to reach 105% within a decade, and 194% after three decades.   '...The federal government currently pays an average interest rate of 2.3% on its debt...far below the previous average rates of 10.5% (1980s), 6.9% (1990s), and 4.8%(2000s).CBO assumes that interest rates paid on the debt will remain historically low—rising to 3.4% over the next decade and 4.2% over 30 years. What if interest rates rise higher?   '...A 1% interest-rate increase would add nearly as much government debt—$11 trillion—as the 2017 tax cuts, extended over 30 years.   '...The debt-to-GDP ratio is projected to reach 194% of GDP in 30 years under current policy. If interest rates wereto rise to 6.9%—the average rate paid by the federal government on its debt in the 1990s—the U.S. debt-to-GDP ratio would move closer to 250%.   '...A recent analysis...shows that each percentage-point increase in federal debt as a share of GDP raises the interest rate on the 10-year bond by four basis points—even if other economic factors are currently pushing rates back down.   '...It is highly unlikely that offsetting factors holding interest rates down...could counter the debt-to-GDP ratio effect...'

  Post: Almost Done

  Link to comment from October 19, 2022

• Has me thinking about a "Three Levels of Wealth" model someone wrote about in the last couple years, maybe here. Level 2 is: "You no longer have to look at the prices on the menu." (Level 1 is no debt; I forget if that includes mortgage but think it does. Level 3 is you don't have to look at the prices on luxury international travel.)

  Post: Unhappy Meals

  Link to comment from October 12, 2022

• Done accumulating and with plans to retire at the end of 2022, I was thinking about this possibility all through 2021. And thinking about the "lost decade" and more suffered by the retirees of 2000. Which (thankfully) made me aggressive about taking profits/rebalancing several times in 2021. By last fall, with a substantially larger pile of 2-year treasuries and correspondingly smaller pile of stock index funds, I found myself thinking, "I don't want to own any fewer stock shares going forward." And realizing, the asset ratio that looked so shockingly conservative at that point will appear a lot less so if stocks are down 40% someday... Or 25%. Sure enough... I was lucky, maybe a little bit good, and have no regrets - but it's still not fun.

  Post: Failure Is an Option

  Link to comment from October 8, 2022

• ETA, I forgot to give the context for those recent moves: I retire at the end of 2022.

  Post: Price Protection

  Link to comment from September 29, 2022

• Conclusion first: Stocks may indeed be the best inflation hedge in the long-run, but for me and some others here, that may be "Keynesian" long-run: "In the long run we are all dead.” ~~~~~~~~~~~ My sense is, you can run but can't hide from high inflation/negative real interest rates. I think a lot about the retirees of 2001, who had to wait a long, long time before liquidating equities with a gain not a loss. For these reasons, I'm treating my entire bond portfolio (100% 2-year treasuries) as THE distribution "bucket" for as long as stocks remain underwater. With yields improving, ongoing hits from inflation (hopefully) won't be so bad. Family history suggests my bonds would carry me pretty close to the end, and even if stocks remain in a deep hole then, they'll still provide "enough." With all this in mind, I was lucky/smart in 2021 by taking profits on stocks the whole way up, boosting my asset allocation for the first time (and just in time) to more bonds than stocks (55/45 bonds/stocks).

  Post: Price Protection

  Link to comment from September 28, 2022

• "My only quibble is with the ever-present use of the term “full retirement age.” Indeed. FRA should be considered opening day of the "Social Security Bonus Rewards Round," when the benefits of waiting start to really add up!

  Post: Ten Reasons to Claim

  Link to comment from September 18, 2022

• Unless you can afford to do it with no meaningful hit to your lifestyle/spending as you wait. (I know - you're referring to those who can't afford to do that.)

  Post: Beginning Badly

  Link to comment from September 17, 2022