The First Week of November Ends

The first week of November ends tomorrow. It wasn't a full week. November 1st landed on a Monday. So if you observe Sunday as the first day of the week, maybe it's not really a full first week. But it's still the first week. 

In our neck of the woods, the week brought real fall weather. For the first time this year the heat kicked in at night. That's how we know it was chilly. Oh, and getting out on some glorious fall days sent the message too, especially if you hit pavement early: "It's chilly." In fact this morning, I'd thought I heard: "It's cold out here, Dude."

By Friday night, I'd taken in a good dose of fall to make up for those unusually warm days that held fall back this year. Sure, next week we warm up from daytime low 50s to low 60s. But that's not particularly warm. And it'll get chilly at night. Such thoughts mixed with the usual how'd the markets fare this week. Not that it's a particularly interesting question, but it is necessary to ask since I'm in a business that intersects with financial markets on a regular basis. So how markets fared impacts, in some fashion, my business - naturally. They fared pretty well. Stocks, bonds, precious metals all nudged up. Stocks continued hitting all-time highs, even in the face of the Fed announcing a tapering of their monthly bond buying. Last time they announced that, it generated some new financial phraseology: taper tantrum. Stocks dropped like rock. This time? They yawned and kept trudging higher. Go figure.

Of course, markets do not a life make. If you're not working in some financial market capacity, maybe you didn't notice - or care about - what happened during this first week of November. In any case, so much for markets. On to the next thing.

In case you missed it, we posted a cartoon during the week:

Catchy, isn't it? It spurred a cascade of thoughts about just how screwed most of us are. 

Now, to clear the air, this isn't put forth in a complaining or murmuring tone. Personally, I started seeing when and how that big fat screw began to penetrate our lives actually quite a few years ago. And while the initial shock took some time to settle down, once things became clearer, I simply tried to fashion ways to deal with the inevitable process of being subjected to actions and policies that screwed and continue to screw us. There's just nothing gained by getting all worked up, gritting our teeth, screaming at the TV, or any of the myriad behavioral responses that this what lies behind this cartoon can gin up. 

(Besides - and really this is more important - if we understand that all that happens to us is caused or permitted by God, you don't come to terms with the bad stuff by complaining to God. He's causing or permitting bad stuff to help us become less attached to the world. He wants us to draw closer to Him. The goal is to help us - by hook or by crook - get to Heaven. And the road to Paradise isn't always smooth.)

So I'm thinking of maybe commenting on this in the coming weeks. Yeah, why not? Okay, so here's maybe the most obvious, and possibly biggest item on the Screw List: Interest rates.

My professional work helps people prepare for their so-called "retirement" years. And once they've reached the point where their income goes away (or goes down a lot), and they have to rely on other sources to get the money they need to live a decent life, they expect our firm to provide clear and effective guidance on how they should allocate whatever funds they have at their disposal. It's commonly known as "Retirement Planning."

To understand how Retirement Planning has been impacted, it's best to look at how things were done before the Fed suppressed interest rates beginning around 2008. We'll keep this short and simple, and maybe expand on it in the future. For now, though, just know this: Before 2008, it was possible for many people - even ordinary people, not just the well-to-do - to fund a portion of their retirement with what are known as "risk-free" government issued Treasury securities. You could build what's called a "Ladder" of these. And with interest rates in the historically normal range, you'd get a decent income from them without the volatility and anxiety that comes for many of us with investing in the stock market.

Since 2008, that's been impossible and it's a big deal. Retirees who rely on their savings and investments to live have been forced to invest in more risky assets like stocks to generate returns that will allow their stash to last for the rest of their lives. It's a dilemma. 

But it's more than a dilemma. The low interest rates are kept low by Fed policy, in cahoots with the Federal government. The matter is hardly even brought up anymore. It's almost like it's a natural state of affairs. It's not. It's being imposed on us.

There's a lot more to discuss here, but for now, just know that those low interest rates are a big item on the Screw List.