A tempting target…

Back in April, Senators Jeff Merkley of Oregon and Maggie Hassan of New asked the GAO to launch a study on “risks that fossil fuel stocks currently present” to those invested in the federal government’s Thrift Savings Plan (TSP). The distinguished senators then go on to imply that the TSP should create funds that “incorporate climate change risk” as part of the 401-k style program’s offerings.

Part of the allure of the TSP is its remarkably small fee structure – it’s very cheap in comparison to many other funds. Fees are low, in part, because TSP is simple. It’s got five basic index funds and five “lifecycle funds” that automatically reallocate participant’s money based on target dates. It’s got an elegant simplicity that’s historically effective at creating wealth for its participants over their long careers.

Look, I accept that climate change is a real thing. I also don’t have any particular love of the energy sector – many leaders in the area are losing value. That’s my real issue with them, though. If we’re going to drop energy companies from a portfolio, do it because they’re not making us money – not because some holier-than-thou senator wants to score a few political points.

Congress never saw a big pot of money sitting around that it didn’t want to stick its whole hand into. With $500 billion in assets under management I can understand why the TSP is an awfully tempting target. That said, the very last thing I want to see is a good thing turned on its ear by driving TSP to respond to whatever political views happen to hold sway at any given moment. Treating retirement funds as just another political football is almost a guaranteed way to manage to take another slug of cash out of my pocket.

There are already fund options out there for just about any special interest that wants to play in the market – whether your “thing” is gender diversity, sustainable energy, human rights, or a laundry list of other causes. TSP should remain a broad-based set of fund options targeted at replicating the market overall and building wealth over time for the wide swath of federal employees. Catering to the few individuals who can’t seem to be satisfied with that just doesn’t make senses… unless of course you’re more interested in enforcing ideological purity than in making good financial decisions. Surely no member in the United States Senate could ever be accused of that.

The “right” causes…

While the smoke was still rising from Notre Dame, social media lit up with posts decrying the ultra-wealthy who were anteing up sums measured in hundreds of millions of dollars for the rebuilding of the cathedral for not giving to the “right” causes. I lost track of the number of posts that said something to the effect of “Don’t give to Notre Dame because water in Flint or because the church is rich (which is a half truth at best because the wealth of the Roman church tends to be in items they can’t sell off or borrow against like St Peters or the Vatican museum) or because Puerto Rico.

It’s utter nonsense, of course. If you bothered to know anything about how cathedrals across Europe were originally financed a thousand years ago, you’d pretty quickly find that the local nobility and ultra-wealthy of the day gave lavishly to the cause. These symphonies in stone wouldn’t exist if it weren’t for the funds that flowed in from those elite sources. 

Ultimately, these posts illustrate one of my unreconciled problems with the left – the simple fact that I don’t need their help and certainly not their permission when deciding how to allocated the money I put in the time to earn. It’s like the they just can’t resist telling me how they know better where and for what to spend my money than I do. I guess being a holier than thou do gooder is easy as long as someone else foots the bill. 

As for me, everyone can piss right off with that nonsense. Every time one of these lunatics tries to jam their hand a little further into my pocket, you can expect me to resist with all available energy. I’m no billionaire, but I’m proud of knowing that some small portion of my donation will go to restore or preserve such an important part of western civilization… But the hand wringing bleeding hearts should feel free to send their own check to the charity cause of their choice. I promise I won’t say a word about it, no matter how pretentious and attention seeking a cause they’ve selected.

Just different…

I’m old enough to have caught the tail end of what could be called “local retail.” When I was a kid even our small town of a few hundred had what in generations past would have been called a dry good store. My home town wasn’t big enough to justify its own hardware store, but the next town of any size in either direction along the George’s Creek valley had one – Pritchard’s in Frostburg anchored the central stretch of Main Street, Ternent’s in Coney sat (where it still does business) at the center of town on Jackson Street. Ames provided a primitive “big box” style of retail while G.C. Murphy represented the last bastion of traditional American department stores. Murphy’s, though, was “in town” and usually involved a special trip. You didn’t end up there to pick something up on a whim.

There was a proper 1980’s mall, of course, decorated in shades of beige with it’s glass dome and sunken fountain centerpiece. It was anchored by JC Penny, The Bon Ton / Eyerly’s, K-mart, and Sears.

I’m taking this stroll down memory lane because of all these stores – many of them one-time giants of American retail, only a handful remain. Ternent’s lives still, I suspect as much due to the loyalty of the surrounding community (and inconvenience of making the 30 minute one-way drive to the next closest hardware store) as anything else. JC Penny creaks along providing the area with “something that isn’t Walmart. Now Sears has filed for bankruptcy protection. Its lone store back home isn’t on the closure list this time, but I don’t think anyone really expects it will last forever or even that it will last long. It’s only a matter of time before Sears too becomes part of consumer history.

Protected here by my walls of books and largely tucked away from people to the extent I can manage, it’s easy to dismiss just how much the world has changed in the last 30 or 40 years. A guy I use to work for was fond of saying that on average “it’s not better or worse, it’s just different.” It’s a nice sound bite and maybe it’s even true. But I can tell you without a moment’s shame that the older I get the less interest I have in “different” overall. Slowly, the words “different” and “worse” feel like they’re becoming synonymous.

I know intellectually that bankruptcy delivers creative destruction to the marketplace, but I’d consider it an awfully big favor if we could somehow avoid sweeping away all vestiges of the world that was.

The long view…

I start most mornings with a quick review of the news – usually a scan of BBC, CNN, Fox, Washington Post, New York Times, and London Times. The one thing they all have in common this morning is that they’re screaming the arrival of a new economic collapse. The reader comment sections are even worse. Fear in the market is an ugly, ugly thing.

If I were fifteen years closer to retirement seeing the Dow bleed off 600 points in one trading session might ratchet up my pucker factor a bit. In my experience, though, it pays to remember that in financial markets time is generally your friend. Markets go up. Markets go down. But over the long term the trend has always clawed its way higher.

With six hundred points down I’m looking around the house wondering what I can sell to put my hands on cold hard cash. If I had a big pile of it just sitting around not doing anything, I’d be buying this dip with both hands… because in 20 years no one is going to even remember what a “Brexit” was. It’s one of those times where it really pays to take the long view.

Something something chickens hatching…

Long, long ago someone told me something about chickens hatching and getting the count wrong. While out and about surveying the fine interstate system here in my home state this morning, I had plenty of opportunity to run a few basic calculations – mostly involving the cost of fuel, my own average miles per gallon, and my best guess about what next year’s pay tables might look like.

If for some reason yet to be determined my daily commute were to more than double in distance the corresponding increase in salary I might expect due to this unforeseen circumstance wouldn’t quite cover the additional cost of fuel expended in traveling to and from. It certainly wouldn’t cover the cost of acquiring and maintaining a secondary, more fuel efficient commuter car. Even if it did, I’d then have to dig into my pocket to hire a dog walker due to the presumed two hour increase in the duration of the commute.

Now these chickens I’m looking at aren’t even eggs yet, but my natural tendency with life is to play all sorts of interesting “what if” scenarios out in my head. Barring a change in one of the inputs, I don’t see a clear path to balance the equation. That bit is troublesome to say the least. Of course it’s all speculation and conjecture at the moment so we’ll just proceed on assuming there will be eggs or chickens available at some point in the future. That fact too remains to be seen.

The Quickening…

The problem with having bought a house at the height of the real estate boom in 2007 while also being responsible enough to keep up with all the necessary payments is that you’re metric shit loads of cash underwater on the mortgage and no self-respecting bank wants to refinance a loan for a mortgagee who’s not teetering on the brink of foreclosure or bankruptcy. In other words, you have to be the proud owner of a “troubled asset” to qualify for many of the refinance options available. Alternately for a standard refinance through most conventional avenues, you’ve got to owe less than 80% of the value of the property. Without delving too deeply into my finances, I’ll go ahead quickenand say I owe way, way more than 80% of the home’s current market value. Because I played by the rules of the game, didn’t skip payments, and avoided becoming a general deadbeat, my options had mostly winnowed down to one: Sit down, shut up, and take it like a man.

While sitting at home on a snowy weekday, I saw a commercial for Quicken’s brand of mortgages. I don’t remember what I was trying to avoid doing, but whatever it was made spending time on the phone with another bank that was probably going to tell me no seem like a good idea by comparison. Surprisingly, a couple of phone calls, a few emails, and a dozen uploaded documents later, I’d locked in a rate and was preliminary approval on a refinance that decreased the life of the loan and lowered by interest rate (and monthly payment) significantly.

The whole process went from first contact to closing in just a hair over 30 days. That’s not bad for something any number of the large national lenders told me simply couldn’t be done. I’m not getting a dime for shilling for Quicken Loans based in this post. I’m doing it because I had a first class experience with them and realize that some of you might just be in the same boat I was. If that’s you, it’s well worth your time to give them a call and see if they can work some financial black magic for you too.

Gone secesh…

I hesitate to say the idea of Western Maryland seceding from the rest of the state has started to gain traction, but it has recently garnered some interest from at least one of the local Baltimore newscasts. I’m a contrarian by nature and generally tend to come reverse2down on the side of rebels, troublemakers, and malcontents, but on the issue of a free and independent Western Maryland, I’m not sure the concept is fully baked.

The idea of a small, less obtrusive government sounds delightful (and in line with my own general beliefs about the just and proper role of the state), but there are issues no one is discussing. They’re the issues of how such a new state would raise revenue and on what its economy would be based. Maryland writ large has tax money flowing from the defense industry and federal government, the Port of Baltimore, financial services, and yes, agriculture, aquaculture, and a host of other large and small businesses. I have to ask what are the equivalent economic drivers to make Western Maryland viable as an independent state? Tourism, agriculture, and scenic beauty aren’t going to get the job done by themselves. Ask Allegany County how well the “tourism gambit” has worked out for them over the last 30 years.

The state has an obligation to provide a host of public services – police, education, infrastructure, protection of natural resources, to name a handful. Until those who seek to cleave off the western five counties of the state present a clear plan for how they will govern rather than simply offer the complaint that “Annapolis doesn’t listen to us,” I can’t even consider the idea, let alone endorse it.

But despite my misgivings about this plan, it comes down to this: Even when the fortunes of work and responsibilities led me far afield, I’ve always considered myself a Marylander, a loyal son of the Old Line State. I’ve risen and slept my entire life under the quartered banner of Calvert and Crossland. I’ve been duly awed by the majesty of the old Wye Oak and rightly impressed by the tenacity of the St. Mary’s settlers who carved their colony out of Maryland’s primeval wilderness on the lower shores of the Chesapeake. Anyone who wants to throw that legacy over the side will need to make an awfully compelling argument for why 382 years of history should be turned on its ear.

To my brethren in Western Maryland, all I can say is we hear your cry on the Eastern Shore. They hear it in southern Maryland too. Annapolis no more listens to us than it does to you… but I can’t quite bring myself around to thinking the best we can do is slice off the three corners of the state and leave them to their own devices. Would it not better serve us all to unite the three rural sections of this state against the middle rather than continuing to let the middle play us off one against the other?

As for me, I’d rather go down fighting under the cross bottony than have the colors of any other state, old or new, raised above my head.