Saving my money-market account

I work for the Archdiocese of Oklahoma City as director of music at Epiphany Catholic Church.  Through my employment, I have a retirement plan, a 403-b (like a 401-k, only for non-profit organizations).

The investment choices are stock and bond mutual funds, or a money-market account.  Metropolitan Life runs the show.  My retirement money is in the money-market account, but as I have noted previously, it is not a very sound money-market fund.  It’s funds are invested in:

  • Large (and therefore uninsured) deposits in banks,
  • Commercial paper (like Lehmans)
  • Bank acceptances (effectively, these are post-dated checks)

So in mid-September I wrote the business office, suggesting that employees be allowed to take their money out of this plan and deposit it in CDs at a locally owned bank or credit union.  Three weeks later, no reply.

So I sent another email, and noted that it seemed to me that the financial advice the Archbishop was getting was as toxic and useless as the psychological advice he received a few years ago stating that a certain priest with a predilection for teen-age boys was “cured” and no longer a danger to young people. 

Unfortunately, that psycho-babble wasn’t worth much, and he “re-offended”, thereby gravely harming two young men, and also causing great public scandal and a judgment of about $10 million, which the Archdiocese paid.

I think employees everywhere should demand reforms in the 401-k/403-b system.  Every plan should be required by law to include an account at a locally owned bank or credit union as one of its investment options. 

Alas, that would be a structural support for the Main Street economy, and would take money away from the parasitical Wall Street economy, so it will take strong pressure from voters for Congress to force such changes on the retirement system.

Here’s a final curious note.  I went to the Metropolitan Life retirement system website today, and curiously the documents describing the investment options in the Archdiocese’s plan aren’t available.  How conveeeeeeeeeeeeeeeeenient.

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On liberation from the tyranny of cell phones.

I am enjoying my second day without cell phone service.  Someone said to me — “I can’t believe you cancelled your cell phone service, Bob”.  The answer to that is — “If I had known it would be so relaxing, I would have ditched the cell months ago.” 

Some time in the middle of the afternoon today, I realized that one of the facts of life with a cell phone in your pocket is that you are always on duty.  You never have a moment away.  Even if you turn it off, it’s there in your pocket, subliminally reproaching you for willingly separating yourself from instant access.

Well, with 8 web sites, a half dozen or so emails, and a landline at home and at the office, I think I am plenty accessible. 

The guy at the cell phone company was practically incredulous that I would cut off my cell phone service entirely.

He kept dangling treats, “Jump, Doggie, Jump, that’s a good boy, renew your contract for 2 years, add more minutes, think about what you’re doing, here’s your treat — a cheap plastic phone made by slave labor in a country far away that cost us about 5 dollars.  See, you can pay us even more money and download RINGTONES AND WALLPAPER FOR THE DISPLAY.”  Ooooh.  Aaaaah. Ooooh. Aaaaah.

I wasn’t impressed though. Yeah, I had the overture to the Marriage of Figaro for my ring-tone, but if I want to listen to opera, there are better ways than sitting around and hopng that people call me. Alas for him, ka-ching did not go the cash register — but my household cash register sounded like a slot machine hitting the jackpot reporting the large raise I gave myself over the next few years by ridding myself entirely of one more monthly bill.


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Toking on a small white pebble, desperate to get high.

On Wall Street today, the market zig-zagged like a drunk on a binge.  It reminded me of people I have known who have sadly gone down the tubes with various kinds of drug addiction.  I remember showing up at one person’s house, and he was on the floor, feeling around, peering at little rocks, to try to find one more little cocaine rock to smoke.  He couldn’t believe he was actually out of drug, surely he must have dropped some on the floor, so went his muddled thinking. I left right away as he tried to get high off what was certainly a small white pebble.

The government keeps shooting up the junkie marketplace, and sure enough, things swoop up for a bit, all the junkies feel fine, but alas, it does not last, and ever more quickly, the financial meth high goes away.

Some time soon we will get to the financial meth equivalent of toking on a small white pebble in a desperate attempt to get high.  I feel very sorry for the many people who got sucked into the parasitical Wall Street scam.  I hope this event is enough to teach entire generations some prudence and financial wisdom.


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My last trip to a casino.

This happened more than ten years ago, when I was living in Kansas City, Missouri.

KCMO comes equipped with “riverboat casinos”, which are actually “pier casinos”, but that doesn’t sound as romantic as “riverboat”.  One day I decided to go there with a friend. 

I am not much of a gambler, so I went to the slot machines.  I put three quarters in a machine, and bingo, I won FIVE HUNDRED DOLLARS.  My friend, bless his heart, said, “Bob, we should leave now!”  I said, “No, I’m going to win some more!”  So I kept feeding that one armed bandit, high on adrenaline, and ended up not only losing all of the $500 I had won, but also hitting the ATM for another fifty bucks!

I should have walked out of that casino right after winning that money.  But I didn’t.  So I lost and lost but I kept plugging away because I just knew I would eventually hit another jackpot.

The time to get out of this market was a year ago.  But like Bob in the casino, people think they are supposed to “buy and hold”.  That’s the advice they hear all the time.  That advice is given by people with a vested interest in keeping people in the market.  It is not necessarily advice that is good for any individual situation.

If I had walked out after losing half my money, I would have been ahead.  If I had walked out after losing three-fourths of my money, I would have been ahead.

Some people may think the thing to do is ride this market all the way down to the bottom.  But if in fact we are on the verge of a Kondratieff winter, it will be a long time before the market recovers.  When a house is on fire, that’s the time to save what you can quickly and run.

I have not been tempted to return to a casino since my little mis-adventure a decade ago, so I guess, overall, I am way ahead of the game, even if I did lose $500 at the time. If there is a silver lining in the present situation, it will be found in people recovering a healthy skepticism of the parasitical Wall Street economy.  If people want true financial security, now is the time to invest in the local Main Street economy.

Greed is not good.  Greed is one of the seven deadly sins, and is objectively evil.  No long term good comes from rejoicing in greed. We cannot pursue a good end by objectively evil means. Governments which structurally encourage greed lay the foundations for their own collapse.

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The many faces of the 401-k scam.

This is a collection of some miscellaneous thoughts that have been running through my brain regarding 401-ks.

+ It’s a mistake to base our independent retirement programs on 401-ks. (Or 403-bs, for those of us who work for non-profit organizations.)

+ A 401-k is NOT a savings plan, it is a speculation plan.  

+ 401-ks structurally encourage risky behavior with your retirement funds.

+ 401-k investments are typically “morally neutral”, that is, they aren’t invested in funds that have had any kind of moral screening regarding their investments. I work for the Archdiocese of Oklahoma City, our 403-b retirement plan offers a variety of stock and bond mutual funds, plus 1 money market account, and that’s it. For all we know, money in those funds may be invested in making bombs and funding abortion drug research. No one can say “the Archdiocese of Oklahoma does not invest in abortion” because the retirement mutual funds of the Archdiocese are not morally screened.

+ The bait on the 401-k/403-b is that the money isn’t taxed now, it is taxed at retirement.  “Presumably” one’s income tax rate will be less at retirement, but this is not a guarantee.  And many people have 401-ks who are in the minimum tax brackets anyway. With the way things are going, the idea that tax rates will be lower 20 years in the future is speculative to the extreme.

+ 401-ks encourage people to save less, because they expect to make speculative gains.  In reality, most people should save more.  That would require most of us to “spend less”.

+ 401-ks are based on the idea that over time, the market always goes up.  Folks neglect to point out that the history of humanity stretches hundreds of thousands of years into the past, and the US stock market has a very short history compared to that.  Where — today — in an investment made in the stock market of ancient Rome?  Noting increases over long periods of time says nothing about what happens to any individual person sucked up into the scam.  A person could retire and the very next day lose everything in a stock market crash. 

+ 401-ks starve local economies of real wealth, and shift that wealth to parasitical financial markets that produce no real wealth, no actual goods and services.

+ Employers often don’t listen to their employees when making decisions about retirement plans. The Archdiocese of Oklahoma City personnel people don’t even reply to my notes suggesting that employees be allowed to put their money in a simple bank account in a credit union.  Their attitude is that they know better how to handle my money than I do.  However, by their decision — not mine — my retirement money is invested in post-dated checks, large uninsured deposits in large banks that may be on the verge of failure, and other similarly risky ventures.   The financial advice that the Archbishop of Oklahoma is getting is as toxic as the psychological advice he received about a particular pedophilic priest’s being “cured” and thus eligible to return to ministry.  Oops.

Going forward, we are going to need better programs than this.  We are going to need community — real community — to make it into the future.  We will have to build new structures to replace the ones collapsing around us, and the time to start that was yesterday.

American leaders of business, economics, academia, and religion are busy betraying ordinary people, abandoning the weak to the devouring wolves, and generally doing what aristocrats do — take care of themselves and those like them, at the expense of everybody else.

They are as clueless as the French aristocracy in 1789, or the Russian aristocracy in 1917.

We will all pay the price of their greed, and our willing participation in their bloodthirsty games of violence and gluttony.

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And you thought “party on, dudes” was just a phrase.

Not at AIG it isn’t.  It’s apparently a way of life.

The ink is barely dry on the mega-billion dollars bail-out welfare checks, and the brass at AIG are partying as though it was “business as usual.  Said event included $23,000 in “spa services” like facials and pedicures.  Woo hoo, nice work if you can get it, especially at the taxpayer’s expense.

The $700 billion bailout for the parasitical Wall Street economy will end up paying for a lot of Dom Perignon, you betcha. 

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Another dose of financial methamphetamine

As I noted in my post of Sept. 26th, Wall Street and the political aristocracy are hooked on financial meth.  This morning, another heavy dose of meth was delivered, since they are having problems getting and keeping high these days.  World-wide, central banks cut their interest rates.

At the moment, the US markets are up a bit, but elsewhere (Europe, Asia), the news isn’t so good.

This action of course made everyone who has actual money in the bank a bit poorer.  As the fed lowers its interest rate, banks and money market fund managers follow suit.  This penalizes savers, and rewards speculators.  Once again, we take from the Main Street ants and give to the Wall Street grasshoppers. This constant finagling of the interest rates is one of the structural supports for Wall Street.  The government actively discourages people from keeping their money in the bank (the prudent choice), and gives financial incentives for putting it in the stock market (the speculative gamble).

So it comes to pass that the rich get richer, and everybody else gets poorer.

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Getting ready for poverty.

It looks like we are approaching “punctuated equilibrium” — a time when events and changes move rapidly — the “old” crumbles and a new way of doing things settles into place.

Only one thing seems certain about the present financial mess.  We will come out of this punctuated equilibrium much poorer than we were when we went in.

For decades, we’ve been in the business of subsidizing the Wall Street grasshoppers and penalizing the Main Street ants (if you need a reminder of the details of Aesop’s fable, read it here). 

The parasitical Wall Street economy has been sucking the life-blood of Main Street for a long time, with the regular assistance of the US Congress and the various presidential administrations.

But now comes the piper presenting his bill and demanding payment.  As a Kondratieff winter looms, the Wall Street grasshoppers are wailing for a rescue, and the government is obliging by taking all that it can from the Main Street ants and giving it to Wall Street grasshoppers to keep their cozy party well stocked with the finest wines and the best drugs.

The political mantra of the hour is “this economy is fundamentally sound.”

Well, no it isn’t. If it was, we wouldn’t be seeing panic in the financial markets.  Our economy is characterized by serious misallocation of resources driven by insane and irrational economic policies and a corrupt and decadant political aristocracy.

Here in Oklahoma, we’re building a half billion dollar bridge to nowhere, the I-40 Crosstown Freeway Relocation Project.  Instead of investing in an improved public transportation system that will meet the challenges of peak oil, we decided to spend $120 million to become a “Big League City” and steal the Sonics from Seattle.  Like, party on, dudes.

I suppose when the next gas crunch comes upon us, somehow our NBA team — the “Thunder” — will magickally produce oil to fill our cars since we won’t have a bus system to take us anywhere.

I guess it won’t matter, because we are a Big League City.  We even have a nice Potemkin Village downtown.

Like Mugabe in Harare, we will drive the poor away from our glittering new downtown area.  He crudely used soldiers and earth moving machinery. We will be much more civilized, we will use a due process eminent domain riot that will be completely legal, just like we did 20 years ago when the OKC Chamber of Commerce teamed up with the City Council and ODOT to ethnically cleanse the historic Deep Deuce area next to downtown.  They had to drive out the black folk so that white people could use the land for development.

They also needed some of that land to build a freeway between Edmond and downtown. This freeway was necessary since many white people were leaving OKC because of the integration of the schools and were moving to mostly-white Edmond so their kids wouldn’t have to go to school with “those kind of people”.

The present financial crisis is what you get when you elect pretty boys to local, state, and federal office based on their ability to manipulate people’s fears and greeds for their own private gains.  When this is over, we will all wish we had made much better political and financial decisions. But we didn’t, and so we have made a bed in which we must lay, uncomfortable as it may be.

As the Bible says, “Sow not in furrows of injustice, lest you reap a seven-fold harvest.”

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Blood in the streets

How ungrateful of the markets.

Here comes Congress and the Federal Reserve, who for all practical intents and purposes are dumping cash from helicopters all over Wall Street, and yet the market continues its stubborn way downward.

Which just goes to show that nobody at the White House, the Congress, the Treasury, or the Federal Reserve really knows what is going on and what should be done.  Their standard response (throw money) doesn’t seem to be working. 

I suspect part of the reason is that our money is increasingly worthless.  But the major reason is that market irrationalities will only be tolerated so long by the marketplaces.  Sooner or later economic reality erupts to the future.  And that reality is the dismal news that the United States is effectively bankrupt.  We are a nation of grasshoppers, and the Kondratieff winter is on its way. 

Ash heap of history, here we come.

What am I doing?  I am taking my own advice.  Cell phones?  Cancelled on Wednesday. Credit cards?  All cut into shreds.  Food storage? Filling out the gaps in my present plan. Extra/back-up income?  Working on a part-time business making and selling bulgar wheat. Banking at a credit union? Been there for years.

My advice to everyone is to “go and do likewise”.  The ash heap of history is not going to be a fun experience. Congress has betrayed Main Street.  We need to work together at the grassroots to save ourselves and our local economies.

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OOPS! Congress votes, market drops

Something seems to be wrong with this picture.

Congress just voted to cave to the Wall Street blackmail.

But almost immediately after the vote — the market, which had been generally up all day — began to fall.

One thing to remember about this.  If those folks in Congress and Wall Street were smart, we wouldn’t be in the present mess.  Since it is the same people designing the rescue, who designed the crisis, low expectations are in order all around.

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