Tag Archives: current-events

Iron Cage of Bureaucracy

28 Apr

German philosopher Max Weber coined the term “Iron Cage” in the early 1900’s to describe an instance where bureaucracy grows too large an unwieldy.  Where the unchecked nature of the system stops serving the people it was created to serve and now only serves the interests of those within the bureaucracy.

Is that California today?

The news that Toyota is pulling up 5,000 jobs and sending them to Texas isn’t be good. The fact is, large or small, California, with intense, over-reaching regulations and law and very high taxes, is a difficult place for businesses to succeed these days.

In the annual Chief Executive magazine “Best States / Worst States” ranking that surveys CEOs for their opinions, Texas has been holding on to the No. 1 spot for a while; California seems permanently relegated to No. 50.

Why? Why do we continue to vote for such inefficient fools? There is no question the majority of fault can be laid upon the feet of the Democratic party in California.  The idea that laws and regulations can save us all form ourselves is showing quite a few holes.

But if the Dems are so bad, how is it the GOP can’t find a way to point that out constructively and make a case to be elected? probably because the GOP is worried more about their God (instead of the planet their God created), my bedroom and their extreme stances on such things that have little to do with our day to day that they actually make the Democrat morons look…good. Ugh.

Can we just push the power button and ‘power cycle’ this state? How can we restart us?

I hit upon an analogy the other day coaching my kids in lacrosse.  We do sprints at the end of each practice. No one likes sprints.  But if you play basketball, lacrosse, football, soccer – you know you need to do sprint work to be in shape.

What always happens is one or two boys aren’t giving their all.  The result, they all get to run more.  That makes the boys who were lazy the target of the boys who gave their all. It creates divisions.  So, we encourage them all to work as a team.  And with 15 boys, we can get our result.

But with the 40 State senators and 80 Assembly members, we have 100 not sprinting and only 20 who really are working their hardest.

What does a coach end up having to do when he has so many on his team not giving their all? Not pulling the rope in the same direction? He has to cut those players and remake his team. The only other solution is to walk away from coaching the team.

Toyota walked away this week.  What company is next before we Californian’s figure out that we need a new start?

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Happy Friday Book Lovers!

11 Apr

Do you love to read? Who doesn’t, right?  Well, head on over to the Santa Rosa Vet’s Building today or this weekend for the “Spring Book Faire” and support the Friends of Santa Rosa Library!

 

http://www.santarosachamber.com/events/2014/04/11/community-events/spring-book-faire/

Can the Damaged Brain Repair Itself?

3 Mar

People with Alzheimer’s, former NFL players, returning veterans from war may find this video very hopeful.

All of us, I believe, will find this information very intriguing.  After all, is there anything more important for our lives than the brain?

Siddharthan Chandran does a very nice job of making a complicated topic quite understandable. If you’re interested in how your brain works or how it might even work better, take 15 minutes to check out this video. Truly inspiring science.

What will your home be worth in 2014?

9 Jan

Many of clients have asked lately what I think about the coming year and where markets will go.

Obviously, due to my position, this question comes up quite a lot.  But recently, the market in question isn’t only the stock market but also the real estate market.

This article from the Fiscal Times is an interesting outlook on the 2014 real estate market in America.  The author makes interesting points, most concerning to me is the tight lending market.

For five years now, our Federal Reserve has been printing money in order to stabilize our economy.  One of the main reasons for doing this ‘quantitative easing’ (QE) has been to provide banks with liquidity in order that they may make loans. The theory being, banks make loans to businesses and individuals. The loaned money then gets spent in the economy and drives the consumer economy to recovery.

The only problem is, as this article points out, loans aren’t being made.  It is another example of our Government’s left hand not speaking to its right hand.  While the Fed and ostensibly the Obama administration want liquidity in the economy (QEs 1,2 & 3) Congress is busy dreaming up all sorts of ways to scare the hell out of banks that want to lend with misguided regulations.

So, what you have is a bunch of deer in the headlights known as lenders.  If lending standards could simply come back to pre-2000 underwriting, it would significantly increase lending, pumping up bank profits, economic activity and along with it, home prices and the stock market too.

I guess I’m just being too practical again.

In general, I think the residential al estate market in Northern California should continue to recover in 2014 but perhaps not at the same pace we saw last year.  Tight lending and interest rate increases aside, the simple equation of supply and demand still benefit the Bay Area home owner over the buyer at this time.  There is an increasing demand for homes and a limited supply for sale. That scenario will likely drive home prices higher in 2014.

If you’ve got questions about your own property, we can make time to sit down with you and go over your situation. Just give us a call.

Finally – A Large Corporation Takes a Stand for People over Profit

12 Dec

We don’t often see major companies making moral stands these days.  Yes, there are the Costcos, Patagonias and B Corporations of the world.

But here is a story I found inspirational.  I’m no big fan of Coca Coal and am certainly upset with their role in this country’s growing obesity issues.  However, this story demonstrates they can see and act on what is right.  Kudos to you Coke.

blood sugar

Never Forget

11 Sep

Never Forget. That was one of the many phrases burned into American minds 12 years ago, today.  Never forget the fallen first responders.  Never forget the sacrifice they made.  Never forget their families. Never forget what happened to the city of New York, the Pentagon, the people in those planes and buildings. Never forget.

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Today, facebook will  be full of profile picture changes.  Today, politicians will remember this day.  News stations will talk about it. But what I hope is really talked about is what has happened to America since then.

One of the over arching themes of our response to the terror attacks was that we couldn’t let the terrorists win.  Today, Al Quaida causes havoc around the world. Bin Laden is dead. But his evil work goes on.  Today, Americans are surveilled by secret agencies of their government without warrant or reason. Today, our Congress allocates more money to wars in the middle east than to our roads and schools.

Twelve years later, we stand on the brink of yet another war, our standing in the world as “the Good Guys” is weak, our economy is weak, our government is weak and our debts are huge.  So, have we won yet?

Today is a day of remembrance. Of course we must remember all those who died on 9-11.  We must never let die the memory of those who have since lost their lives or been maimed in our subsequent wars.

And most of all, we must start to remember that America was founded on principals of freedom, a system of government that was elected by the people, for the people. It is a system of checks and balances that is being eroded in the name of security. Most of all America has been known as a people that worked hard, did good and cared about the world. How did we allow one evil little man and his small band of extremists threaten our way of being?

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No matter your race, gender, political conviction or educational level, we must demand that our government stop being directed by lobbies of defense, Wall Street, insurance, oil, agriculture, unions and others and start doing what is right for our country and the world.  Stop yelling at each other and start yelling at our elected officials and this process can begin.  The sacrifices of those we lost twelve years ago won’t go down as the end of America as we once knew it but the start of an even better of America.

 

What You Need to Know About Health Care Reform

6 Sep

In the next couple of months, you will be hearing a lot about health insurance.  Most aspects of the Affordable Care Act become effective in 2014 but whether they will impact you depends on your unique circumstances.  All too often, many consumers receive advice from individuals or companies with biased points of view or who may simply be unaware of the facts.

 

Debunking some common myths

The Patient Protection and Affordable Care Act is intended to expand access, remove certain limits, and protect customers, but this complex legislation has left consumers confused as to how it may affect them. Below, we debunk some common misunderstandings so that you can better understand the upcoming changes under the new legislation.

 

Myth: The new law cuts Medicare’s primary benefits.

Fact: The legislation adds benefits, such as annual wellness exams and preventive screenings, incorporated at no cost into Medicare Part B.

 

  • As federal subsidies are reduced for Medicare Advantage plans, insurers may look to cut expenses by scaling back on extra services, such as dental coverage, vision care, or gym memberships.
  • Other insurers may increase premiums or co-pays.
  • One change that may occur in the future is that higher-income Medicare subscribers may pay higher premiums. Premiums for Parts B and D are based on income; however, according to the new legislation, income levels will not be readjusted until 2020.
    • Currently, the income level starts at $85,000 for a single person and $170,000 for married couples. If you are close to these income levels in retirement, you might want to consider diversifying a portion of your retirement income portfolio by converting to a Roth IRA because tax-free withdrawals from a Roth IRA are not added to the Medicare premium income level calculation.

 

Myth: Medicare will be replaced with a national medical program.

Fact: Health care reform is not a national medical program or universal health care, but those who do not currently have health care insurance should find it easier to get and keep coverage. Ultimately, the intention of reform is to give consumers the opportunity to choose their plans and plan providers.

 

  • Starting in 2014, it is intended that state- and federal-established insurance exchanges will provide consumers and small businesses an avenue for comparing the benefits and costs of a range of private insurance health plans. Insurance purchased through the exchanges cannot be denied due to preexisting conditions and is guaranteed renewable.
  • Open enrollment for insurance purchased under the Health Insurance Exchange (HIE) marketplace begins on October 1, 2013, for coverage starting on January 1, 2014.

 

Myth: Americans are required to buy health insurance.

Fact: Technically, this is not true, but by 2014 almost all U.S. citizens and legal residents (with certain exceptions) must either have health insurance coverage or be prepared to pay a tax penalty.

 

  • Premiums for low- and middle-income individuals who buy insurance through the new exchanges will be subsidized based on their household income. Medicaid will remain the primary health care program for the poor.
  • The amount of the insurance subsidy will vary according to income, family size, and plan type.
    • Families with incomes up to 400 percent of the federal poverty level who purchase coverage through an HIE will be eligible for a reduction in premium.
    • Families with incomes less than 250 percent of the federal poverty level will qualify for lower deductibles and co-pays.
    • People will not be required to buy health insurance if the least expensive plan available costs more than 8 percent of their income.

 

Myth: Small employers are required to subsidize their employees’ health insurance.

Fact: This is not the case, although small business owners are encouraged to provide access to affordable coverage.

 

  • Many businesses with fewer than 50 full-time employees qualify for tax credits based on their contributions to employees’ health insurance. The smaller the business and the lower the average wage, the higher the potential tax credit. In 2014, the tax credit will increase.
  • Companies with 50 or more employees will be subject to fines for not offering affordable insurance that covers minimal essential health care. (On July 1, 2013, the Obama administration announced that it was giving employers another year to comply with the new rules.) The legislation considers health insurance affordable if 60 percent of health care expenses are paid by the plan and an employee pays no more than 9.5 percent of household income toward the family’s coverage.
  • If your employer provides you with access to health insurance, very little may change. Employer-provided health insurance plans in effect prior to March 23, 2010, are grandfathered under the new law, and some new consumer protections apply to these plans. For example:
    • Starting in 2014, these plans cannot have any annual or lifetime limit on benefits nor exclude children due to preexisting conditions.
    • Insured individuals cannot lose coverage due to illness or medical conditions, and dependent coverage covers adult children up to age 26 (unless the child has coverage available through his or her own employer).
    • In addition, making a claim for a seriously ill employee cannot increase premiums for the employer’s group.

 

Myth: All taxpayers will feel the tax bite from health care reform.

Fact: The brunt of the taxes associated with reform will impact the highest income taxpayers. Workers with annual adjusted gross income (AGI) of $200,000 ($250,000 if married) will see their payroll tax increase 0.90 percent and may see some investment income taxed an additional 3.8 percent. Some taxpayers will also pay the cost of the new health care reform through the revised threshold for claiming medical expense deductions.

 

  • Starting in 2013, only qualified expenses that exceed 10 percent of AGI are eligible for deduction, up from the previous 7.5-percent threshold.
  • In 2018, a new 40-percent tax will take effect for insurers that offer “Cadillac” health insurance plans. For the purposes of the health care bill, Cadillac health care plans are defined as those with premiums of at least $10,200 for single coverage and $27,500 for family plans.
    • Although this new tax will be imposed on the insurance companies, the costs will likely be passed along to the insured. Commentators predict that high-deductible plans will become more popular in order to keep certain insurance plans from being categorized as Cadillac options.
    • Deductible contributions to health savings accounts (HSAs) may become more popular as a way to bring down taxpayers’ AGI. (Deductible contributions to HSAs are only available to taxpayers who maintain a high-deductible health insurance plan.)
    • Tax-exempt bonds, tax-deferred annuities, cash-value life insurance, charitable remainder trusts and Roth conversions may become more attractive to investors in the highest tax brackets to help lower taxable income.

 

All in all, the health care reform law is intended to expand access, remove certain limits, and protect consumers. Feel free to contact us if you would like to discuss your current health care plans or how the new legislation may affect your financial situation.

 

Presented by Matthew J. Everson, CFP®, AIF®

MJ Everson financial | Intelligent Financial Guidance

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer. Municipal bonds are federally tax-free but may be subject to state and local taxes, and interest income may be subject to federal alternative minimum tax (AMT). The purchase of bonds is subject to availability and market conditions. There is an inverse relationship between the price of bonds and the yield: when price goes up, yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity. Some bonds have call features that may affect income. Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. Guarantees are based on the claims-paying ability of the issuer. Withdrawals made prior to age 59½ are subject to a 10-percent IRS penalty tax, and surrender charges may apply. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. The investment returns and principal value of the available subaccount portfolios will fluctuate so that the value of an investor’s unit, when redeemed, may be worth more or less than the original value. Optional features available may involve additional fees. Cash-value life insurance is a type of life insurance policy that both accumulates value during the policyholder’s lifetime and pays out upon the policyholder’s death. The interest and earnings on the policy are typically not taxable, and while some accrue a cash value that can be borrowed against, certain types may not allow you to withdraw from your cash value at all. Whole life, variable life and universal life are all types of cash-value life insurance.

 

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To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

One Simple, One Complex, Both Worthwhile

4 Sep

It is rare that I take a political stance on my blog. But I’m finding it quite interesting that a Congress that is historically uncooperative, completely at logger heads on things as simple as the color of the sky, can find rapid agreement on granting the White House power to drop bombs on people we do not care about.

If we cared, why have we let 100,000 Syrians die in the past two years and millions more get displaced from their homes?

If Congress can be so quick and co-operative on waging war, spending billions we don’t have to kill more people, why has it taken two decades to formulate an energy policy, find a fix for health care and delve into all the other challenges we are faced with as a nation?

The cynic in me makes me wonder if, just maybe, this is because the powerful lobby of Wall Street and the military industrial complex are putting heavy pressure on the White House.  After all, general Dynamics, Raytheon,  Boeing, and all the companies who invest in the stocks of those companies don’t make any money if the weaponry produced isn’t used.

below are two links. One, a serious and in-depth look at this situation by William Polk.  Mr. Polk presents a thorough summary of the why, where, and what for. Most interestingly to me, he presents the fact that we do not have the facts and we do not know for certain if it was the Syrian regime or the rebels who opened those canisters of sarin gas last week.  Interestingly, this is the reason given by our government as to why we must get involved in Syria. Yet, according to the Atlantic article, there is zero credible proof Assad’s regime used the gas.

http://www.theatlantic.com/international/archive/2013/09/your-labor-day-syria-reader-part-2-william-polk/279255/
And here is a link to a video that surprised and shocked me.  One for the content (and please be warned it is graphic) and two for who is sharing it and what he is saying. Glenn Beck is no hero of mine. And I am no fan of his. But his point in the video is relevant and worth watching.

If you agree that our country has better ways to spend tax dollars, contact Senators Barbara Boxer (202) 224-3553/ Dianne Feinstein (415) 393-0707 and Congressman Jared Huffman (415) 258-9657 and urge them to do their best to speak against being involved in Syria.

Wall Street is Whining

20 Jun

Whining not winning.

It is rare to wake up to a market opening and see all signals red.  Brings back all those warm and fuzzy feelings from November 2008!  Sorry for the sarcasm, but if I don’t laugh about this, I’ll cry.

In my world, the color red indicates the value of a stock, index or fund is down.  Green is good. Green means the value is up! No green today.  Not one single green. I must admit, this has stolen from me the joy of Christmas colors.

However, it does make for a good knot in my stomach. As I brew my morning coffee, I begin to wonder how the stomachs of my clients are doing. I shake myself and speak aloud “I cannot control the day to day of the markets. Therefore, I can’t let one day shake my confidence in my ability.”  That slightly helps.

What really helps is remembering 2008.  Or 2001. Or 2000.  Or 1998. Or 1994. Maybe even 1987,  when a family cousin who owned a seat on the Chicago Mercantile Exchange jumped out of a 30 story window during the “Black Friday” market collapse. Had he waited a few months, he’d see his suicide was a rash decision, to say the least!

Emotions cloud judgment and my emotions this morning were strong!  “Bernanke is such an asshole! These god damned Wall Street bankers!” I shouted at the mirror.  While alone in my bathroom this morning, I don’t think I am alone in this sentiment.

I began to wonder how I’ll talk to my clients.  I needed a metaphor. An easy way to help folks understand this volatility. Had companies across the globe all really lost 2% of their value overnight? Business isn’t synchronized swimming.  So, the only way to explain the sell off is emotion. Namely, fear.

Try this analogy: Years ago, I was in line at a local supermarket when I noticed the woman in front of me had a snotty brat in her shopping cart. You know the type of kid; Whiny, crying, spoiled, cringe-inducing. Partially detained by the handle of the shopping cart, his stubby, greedy fingers couldn’t quite reach the candy tantalizing him on the shelf to his right.

“Mommy!” softly at first, “I want some candy.”

“No, Joey, no sweets today, honey.” She said all syrupy as if he were an Angel, not a Devil.

“Mommy!” his tone was now angry, “I want some candy!” he said louder now.

“Not right now Joey.” Mom was still so sweet.

“MOMMY!” he screamed.  And then he actually punched her gut! He whacked his mom right in place she let him gestate for months! What a tiny little waste of DNA!

Did mom whack him back?  Did she rip him out of the cart and wallop him in the parking lot?

To my shock, she grabbed the candy bar, handed it to him and said “Here, now be quiet!”

Wall Street is the kid.  Our government, the mom. My stomach is still in knots. I only wish I could punch Bernanke and Wall Street in their stomachs! In the end though, I know we’ll get through this little tantrum soon.

 

Video

What is the reason for so much violence?

13 Jun

Are domestic violence and sexual abuse “women’s issues?”  Media and public discussion make it seem this way.  But in this video, we hear from Jackson Katz about the roots of domestic abuse and sexual violence and why they remain problems for our society.  He posits that it is because our society excuses men from the issue.  He asks why? What do you think?

A powerful video worth 15 minutes of your time.

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