So Baby Boomer: Life Tips

Blogging Boomer Carnival #261

Baby Boomers continue to personally evolve; setting new trends along their wake.  This carnival, the 261 of the BBC series, is just a small piece of the microcosm series that was developed to record the boomer generation's evolution. 

Come to the fair and observe interesting segments of trend-setting happenings that seek life's meaning through passionate living.   Be sure to visit the Blogging Boomer Carnival #261 hosted this week by Nancy Mehegan at Vaboomer.com

Pick up the FREE "Books for Boomers" ebook while at the carnival.

Position yourself to Conquer the Crash

To this day, I wonder why Robert Prechter's book Conquer the Crash has not been more widely recognized. It described in advance much of what happened in the 2008 financial crisis.

Published in 2002, the book provided detailed descriptions of then-future economic scenarios. They were detailed vs. general. Prechter was specific in a way that would prove right or wrong; there was no gray.

This is from the book:

There are five major conditions in place at many banks that pose a danger: (1) low liquidity levels, (2) dangerous exposure to leveraged derivatives, (3) the optimistic safety ratings of banks' debt investments, (4) the inflated values of the property that borrowers have put up as collateral on loans and (5) the substantial size of the mortgages that their clients hold compared both to those property values and to the clients' potential inability to pay under adverse circumstances. All of these conditions compound the risk to the banking system of deflation and depression.

Conquer the Crash, second edition, (p. 179)

That's just one excerpt about one topic in a 456-page text. Perhaps you see why I believe the book deserves more credit. Yet even that one paragraph from the book turned out to be a virtual mirror of what came to pass. And much of what he predicted is unfolding today: the JPMorgan trading fiasco, massive withdrawals at Greek banks, downgrades of Italian and Spanish banks and much more. Those are just a few headlines.

The broader point is that Conquer the Crash prepared its readers. Around the time the book's second edition published in 2009, the Chicago Sun-Times remarked

And the credit implosion is still not over. Please take a look at the chart:

In the Conquer the Crash quote in the first part of this article, you'll notice the last three words are "deflation and depression."

The world has yet to completely pass through these economic valleys.

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It's not too late to prepare yourself for what's ahead Elliott Wave International is offering a special free report with 8 lessons from Conquer the Crash to help you prepare for your financial future. In this 42-page report, you'll get valuable lessons on what to do with your pension plan, what to do if you run a business, how to handle calling in loans and paying off debt, a list of imperative do's and don'ts, plus much more. Get Your FREE 8-Lesson Conquer the Crash Report Now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Position Yourself for the Rest of "Conquer the Crash". EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

 Robert R. Prechter Jr.: Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression

 

The Fifth Year Blogging Boomer Carnival

A blog carnival is a special kind of blog community.

There are many kinds of blogs, and they contain articles on several different topics.  Blog carnivals typically collect links pointing to blog articles on a particular topic.  A blog carnival is like a special interest magazine.  It has a title, a topic that flows through its postings, editors, contributors, and an focused audience. Editions of the carnival typically come out on a regular basis, like every Monday.

The Blogging Boomers Carnival is a collection of like-minded blogs cooperating to expose their best stories of interest to the Baby Boomer Generation.  To our knowledge, the Blogging Boomers Carnival is the only oldest, now in its fifth year and best boomer-centric carnival. 

Please come to the Blogging Boomer Carnival #260 that celebrates our fifth year of existence---hosted by the Midlife Crisis Queen, Laura Lee!

While there, pick up your free Books for Boomers ebook.

 John Agno: Books for Boomers: Reviews & Coaching Tips

How big banks can gamble with their investment portfolio.

By Guest Author George Papadopoulos, CPA/PFS, CFP

Large investment banks and brokerage firms are in the news again, with word that J.P. Morgan Chase suffered a $2 billion loss while trading for its own investment portfolio. 

If you're inclined to be amused by such things, word had apparently leaked out weeks before the losses were spotted that a mysterious individual dubbed "The London Whale"--who we now know is Bruno Michel Iksil--was taking strangely large positions in credit default swaps linked to corporate bonds.  Other traders reported the unusual market activities to the Wall Street Journal, and four days after the article was published, on April 14, J.P. Morgan executives stepped in and stopped the trading activity. 

The story prompted some to speculate that the firm's crack risk management department stayed diligently on top of the firm's speculative trading activities by carefully reading the newspaper. 

But the lesson that was lost, amid the calls for new regulation and pronouncements that banks were too big to fail and too reliant on bailouts, is that once again a large brokerage firm was making huge bets and also advising customers on their investments.  When a large institution trades into and out of the markets for its own profit, it sets up the most basic conflict of interest in its dealings with the investors who are receiving the advice of its brokers.  If the firm made the mistake of investing in a dog stock that isn't likely to go up in value, or if the research department determines that a certain company whose stock the firm owns is about to report unfavorable news or deteriorating financials, then the brokers are told that what the company wants to unload is a wonderful "investment opportunity" for their customers.   

Some resist acting on these blatant attacks on their customers, but--as evidenced by the actual volume of trading for the brokerage community's own accounts--many do not.  It's a little like the real estate broker who spots a nice piece of property selling at a terrific bargain.  Is he more likely to call his customers, or find a way to buy the property for himself? 

Fortunately, registered investment advisors with the Securities and Exchange Commission--unlike brokerage firms--are strictly prohibited from these kinds of conflicts, and we embrace that position.  It genuinely would not occur to most financial planning professionals to bet against clients or try to sell you something that we wanted to get rid of in our own portfolio, not because the regulators might find out, but because it is visibly the wrong way to serve the public and the community. 

When the 2008 meltdown swept through the financial world, former Federal Reserve Chairman Paul Volker proposed that brokerage firms and lending institutions be banned from trading in their own accounts, and the so-called "Volker Rule" bounced around Congress for a full year. 

Industry lobbyists finally convinced our elected representatives that it was a very bad idea to force brokers to stop speculating in exotic securities and simply give good investment advice to their customers, or to require banks to lend their money to businesses and consumers instead of making wild bets with it.  What we didn't realize then, what J.P. Morgan's London Whale may have taught us, is that the consumer protections proposed in the Volker Rule might also be a great way to keep these large organizations solvent.

Blogging Boomer Carnival #259

Come to the carnival where approximately a dozen participating blogs focus on Baby Boomer issues from health to midlife crisis to finance and travel. 

As the boomer generation's 60s become the new 40s, this week's boomer-centric articles document newsworthy happenings in their lives.  Be sure to visit SoBabyBoomer's tent at the Accidental Locavore by Anne Maxfield.

"Women and Time" is free May 14 only for working women who want better work/life integration: http://www.amazon.com/dp/B006OEFXYO/

What Every Working Mom Wants for Mother's Day

A women and workplace survey from More magazine shows that 43% of women surveyed say they are less ambitious now than they were a decade ago. And only a quarter of the 500 women ages 35 to 60 say they're working toward their next promotion....

And forget the corner office: 3 out of 4 women in the survey--73%--say they would not apply for their boss' job. Almost 2 of 5--38%--report they don't want to put up with the stress, office politics and responsibility that often go hand in hand with such positions.

A new survey reveals that working mothers care more about having flexible hours than any other benefit an employer can offer. Working mothers biggest challenge is: Work/Life Balance.

Give the Mother’s Day Gift...that every working mom needs to reclaim her time and life.

On Mother’s Day (May 13th) and May 14th only, you can download to the working-mother-in-your-life's computer, eReader, tablet or smartphone for FREE the new ebook “Women and Time” that delivers exclusive self-coaching tips to help working mothers achieve better work/life integration. Women and Time is also available in a paperback edition at Amazon.com for only $9.99.

 John G. Agno: Women and Time

Blogging Boomer Carnival #258

Baby Boomers continue to personally evolve; setting new trends along their wake.  This New Year Carnival, the 258th of the BBC series, is just a small piece of the microcosm series that was developed to record the boomer generation's evolution.  Come to the fair and observe interesting segments of trend-setting happenings that seek life's meaning through passionate living:

This week's carnival is hosted by Sightings at 60

Free at the carnival:  Books for Boomers: Reviews & Coaching Tips

The Manic-Depressive Stock Market: What to Make of It

The psychology of the market may be teetering on the edge

The stock market: one week it acts like Dr. Jekyll, the next week it's Mr. Hyde.

That shift can even occur in the course of a single session.

These dramatic fluctuations appear to be impulsive; and we know that impulse does not flow from cold reason. Even so, the Efficient Market Hypothesis would have us believe that investors are constantly applying reason and logic to reach some objective market pricing, via the latest news or measure of stock market valuation.

The February 2010 Elliott Wave Theorist provides insight:

The Efficient Market Hypothesis (EMH) and its variants in academic financial modeling...rely at least implicitly but usually quite explicitly upon the bedrock ideas of exogenous cause and rational reaction. Stunningly, as far as I can determine, no evidence supports these premises...

EMH argues that as new information enters the marketplace, investors revalue stocks accordingly. If this were true, then the stock market averages would look something like the illustration shown [below].

We know that the market does not unfold in the way illustrated above. But we do know that the market has unfolded like this:

So in 2000, did a sudden burst of logic lead investors to realize that the NASDAQ was over-valued?

No. Technology stocks had absurd price/earnings ratios long before the NASDAQ top.

The NASDAQ's abrupt switch from Hyde to Jekyll stemmed from investors' collective unconscious. Consider the gazelle that runs in panic because others are: it does not pause to rationally survey the landscape. It explodes in a burst of speed that reaches 90 km/hr within seconds.

Decades ago, multimillionaire stock market operator Bernard Baruch said

...the stock market is people. It is people trying to read the future. And it is this intensely human quality that makes the stock market so dramatic an arena, in which men and women pit their conflicting judgments, their hopes and fears, strengths and weaknesses, greeds and ideals.

This psychology of the marketplace unfolds in waves. That is what we study.

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Want to learn what REALLY drives the markets? The FREE 50-page Independent Investor eBook will challenge conventional notions about investing and explain market behaviors that most people consider "inexplicable." You'll learn how extreme market psychology affects the markets, with some eye-opening charts that provide shocking evidence of the real forces at play in the markets. We promise to show you a whole new way of thinking about investing. Download the FREE 50-Page Independent Investor eBook Now >>

This article was syndicated by Elliott Wave International and was originally published under the headline The Manic-Depressive Stock Market: What to Make of It. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Boomers' Encore Entrepreneurial Wave

The Center for Productive Longevity (CPL), which serves as the bridge between people 55 and older and the opportunities that enable them to continue in productive activities, recently announced the results of the first in a series of four meetings, “Spotlight on Entrepreneurship Opportunities for Baby Boomers.”

Their first event was held at the Kauffman Foundation in Kansas City, MO, a focal point for entrepreneurship in America, and attracted almost 100 participants to engage in interactive discussion and dialogue about entrepreneurship. Sponsors of the event included the Kauffman Foundation, AARP, the National Association for Community College Entrepreneurship (NACCE) and CPL.

Written evaluations from the event indicated that almost all participants have a strong desire to start a new business; 97 percent stated they are more likely to create a new business as a result of attending the daylong meeting. 

According to the Kauffman Foundation, from 1996 to 2011 the number of Baby Boomers starting a business increased by nearly seven percent, the largest increase among all age groups.  For people 20-44, the number of people starting a new business actually fell about five percent during that same time period.

“There is a wide range of individual, economic and societal benefits for the Baby Boomers to start new businesses,” says William Zinke, 85, founder and president of CPL.  “People are living longer, yet often retiring earlier, and recent AARP studies confirm that 80 percent of Baby Boomers indicate their intent to continue working after leaving regular career jobs.”

The next “Spotlight on Entrepreneurship Opportunities for Baby Boomers” meetings are scheduled to be held at Babson College in Wellesley, MA on September 14, Northwestern University/Kellogg School of Business in Chicago on October 11, and the University of Denver on November 15.

To register, visit: http://www.ctrpl.org/entrepreneurship-meeting/overview.  Follow the Center for Productive Longevity on Facebook at www.facebook.com/CTRPL.

In 2011, the oldest of the 77 million Baby Boomers began turning age 65---the traditional retirement age.  Now 10,000 boomers reach the age of 65 everyday.

For years, the surge of nearly 80 million Baby Boomers into the second half of life has been described as a great gray wave, moving inexorably forward, building in size and momentum with every passing day.

The necessity today is to encourage people to continue to work in ways that truly use their talents to support the economy as well as themselves.  It is essential that those who have a strong need and desire to work in this new way have every chance to realize that objective and every opportunity to use their accumulated human and social capital in areas where it matters most....demonstrating the potential of an encore career.

"People aren't ready for retirement at fifty-two or fifty-three years old (IBM's average retirement age)," says Stan Litow, president of the IBM International Foundation and a former deputy superintendent of New York City schools.  "People want to use the opportunity of a second career to do something that is meaningful."

To be sure, there are still not enough encore career opportunities for all the people who will want them.  But thousands of aging boomers are not waiting for a job posting to tackle tough social challenges.  By identifying and implementing an innovative solution to a problem, they are also creating their own career opportunities.

 John Agno: Boomer Retirement Life Tips ($2.99)

 John Agno: Books for Boomers: Reviews & Coaching Tips (Free)

 Marc Freedman: Encore: Finding Work that Matters in the Second Half of Life ($8.55)