Straight Talk from Al Jacobs

INTEREST IS RISING

 

Though it’s been rumored interest on savings accounts will remain in the cellar indefinitely, it appears certain select banks are offering more attractive rates than we’ve seen for many years. The increases are not dramatic, by any means, and the terms being tied to the higher rates are fraught with conditions, but the signs are unmistakable: At long last firms are willing to compete – at least to a limited extent – for depositors’ money.

 

The particular newspaper ad I spotted, with the heading “GREAT CD RATES,” was placed by HAB Bank, with local offices in Artesia California. With a minimum deposit of $1,500, a depositor can obtain an annual percentage rate (APR) of 2.48% for a 24-month CD or 2.68% for one of 36 months. You might note, HAB is not a California bank. It’s headquartered in New York and is listed as the 38th largest bank in the state of New York as well as the 521st largest in the nation. So, as you see, this is no major banking institution competing for funds … but perhaps it’s a straw in the wind. Why my attention was specifically drawn to this ad is because, in following these CD offerings as I’ve been doing, this is the highest APR I’ve yet seen, with the previous high about three months ago being 2.25%. I’m anxious to see where we go from here.

 

There was a time, not many years ago, when money could be deposited with a bank at a rate of five percent per annum, or perhaps a bit greater. Thanks to the federal government’s FDIC guarantee, it was thoroughly safe, so that many a retiree came to rely upon this as the bonus they needed to augment their Social Security and pension payments, together with any other dribs and drabs which kept them financially afloat. During the past ten years or so we Americans have been deprived of this option. It’s been tough slogging for many oldsters and I’m convinced that if the major banks have their way nothing will change.

 

With that said, let me offer a prediction. With the recent relaxation of the Dodd Frank 2010 legislation, together with the desire by the many remaining community banks to resume full banking capability, there’ll be a demand for depositors’ funds once again. And with this demand will come a willingness to offer a fair interest rate to those depositors … and although reluctantly, by the major banks as well. Within a reasonable period we’ll quite likely see the five percent interest rate return.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

 

 

Straight Talk from Al Jacobs

 

VIEWS OF THE HOMELESS

 

As perceived by California Lieutenant Governor Gavin Newsom, candidate for governor, there’s a “lack of leadership” in addressing homelessness at the state level. He vows he’s prepared to “get deeply involved at a granular level where most governors haven’t in the past.”  He added that “I want to be held accountable on this issue, and I want to be disruptive of the status quo. I’m willing to take risks. I’m not here to be loved. What’s going on is unacceptable, and it is inhumane.” As part of a broad strategy he took as San Francisco Mayor, he pledges to end chronic homelessness by developing housing and family reunification programs for those living outside the longest.

 

Through the eyes of State Senate Pro Tem Kevin de León, candidate for the U.S. Senate, California must adopt a philosophy for treating homelessness he refers to as “housing first” – a recovery-oriented approach to end homelessness centering on quickly moving people experiencing homelessness into independent and permanent housing and then providing additional supports and services as needed. His support for a homeless housing program originated in January 2016 when he proposed a $2-billion bond to finance new and rehabilitated housing for mentally ill people living on the streets. As he said, “It makes no sense to provide social services, only for them to go live behind an alley or in a cardboard box.”

 

As seen by Los Angeles Mayor Eric Garcetti, presidential hopeful: A “shelter crisis exists today,” he claims, “for the estimated 25,237 unsheltered homeless who call the city home.” He claims the city will ease or eliminate restriction on homeless shelters, allowing them to be quickly built on land owned or leased by the city. The mayor also announced the inclusion of $20 million in his proposed 2018-19 budget to help fund new shelter facilities. As Garcetti said, “This is the right thing to do. It’s the moral thing to do.”

 

As viewed by Jon Johannessen, a local resident who must live in the beleaguered community of Venice, California: “Boo [to them all] for failing to understand. There is no ‘homeless’ problem. Instead there are mentally ill people listlessly wandering the streets in rags. There are drug-addled screamers raging at life day and night. There are ‘street people’ who accept money and services from our government but have no intention of ever working. This cannot be solved with temporary shelters.”

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

 

Straight Talk from Al Jacobs

 

ADVICE TO INVESTORS

 

For those of you who’ve been paying attention, the securities market has experienced considerable volatility these past several weeks. The three major stock indices – DJIA, NASDAQ & S&P 500 – have all incurred notable one-day increases and declines. And as is conventional, within hours of the close of the market each day, financial commentators and analysts began to offer their interpretations and recommendations. If there’s a single piece of advice which is repeated over and over, it’s that investors should be cautious.

 

Ah, yes … cautious. I’ve been listening to economic advisors repeat that catechism for more years than I can remember. That an investor must be cautious, regardless of market fluctuations, is obvious. Actually I can’t think of many endeavors in which we participate wherein the exercise of caution is not advisable. Nonetheless, the implication seems to be that, barring some bizarre circumstance, caution is not worth mentioning.

 

But along with the standard exhortation, there’s one matter the pundits will not address. You’ll receive no explanation on how to exercise caution, nor suggestions as to actions you might take in an uncertain market, as if a market were ever certain.  Hmm … but let me renege a bit. You’ll receive a bit more than just a suggestion. You’ll be given a recommendation that the way to exercise caution will be to subscribe to an advisory service. And as you might expect, the particular service recommended will invariably be the one offered by the individual who is at that moment is advocating you be cautious. So to solve the problem you need merely click the hyperlink, provide your credit card number, and your uncertainties will be alleviated.

 

And in view of all this, do I have any suggestions to offer? More specifically, what helpful advice can I provide when the market becomes volatile to ensure you’ll not become a victim of a rapidly declining portfolio of securities? Why isn’t it obvious what my recommendation will be? I will, of course, naturally stress that whatever may be the uncertainties you experience or the circumstances you face, that above all you should be cautious.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Do you need investment advice? You’re in luck.  www.roadwaytoprosperity.com  

Are school costs eating you up? It needn’t be. www.roadwaytoprosperity.com  

Straight Talk from Al Jacobs

 

STUDENT DEBT IS A WASTE

 

A recent headline is ominous: “Student Loan Debt Now Mammoth.” A majority of undergrads are taking on debt to attend college, some of it massive. Examples of students’ financial misfortunes are described, but it’s the article’s final sentence that leaves me confused: “The big question now is what, if anything, we can do about it.”

 

I’m not certain who we are. Am I, a self-financed graduate, one of we? Are parents who paid for their children’s schooling part of we? More specifically, why should the collective we do anything about it when a college education is for the direct benefit of a specific recipient? This is a problem for the student and family to resolve, not we.

 

Now that I’ve disavowed all personal responsibility for educating millions of people I don’t know, I’ll explain how each student can earn a diploma without going into hock. I subscribe to the principle of college-on-the-cheap. The first two years of post-secondary education, the freshman and sophomore years, are pursued at a local community college. The next two years, as a junior and senior, are earned at a state university. Tuition charges vary with each state, but legal residents generally enjoy low preferential rates. The annual tuition for a full academic load at the California State University system is currently in the range of $6,600 plus about $800 in various fees.

 

I’m convinced that two years at a local community college followed by the junior and senior years at a reasonably priced state university is the way to go. This is because scholastic benefit depends more upon the student’s efforts than anything else. I’ll share my personal bias with you. Unless you or your parents have more money than you know what to do with, attendance at an acclaimed university represents an unwarranted expense. The time will come when your textbooks have been sold, your course notes burned, the names of your instructors forgotten, and your framed diploma relegated to a wall at which you rarely glance. At that point your education is what’s left in your head. That’s what really counts.

As a final thought, I disagree with those critics who contend that a degree from an institution without an exalted reputation will forever stigmatize its holder. To you, I pose this question: Do you actually know from what schools your dentist, attorney, accountant, and physician received their bachelors’ degrees?

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

If you’re a bit short on money, take a look at how to change that. www.roadwaytoprosperity.com  

Straight Talk from Al Jacobs

 

FINANCIAL ERRORS TO AVOID

 

As many of us are aware, for persons pursuing the American dream for financial success, things don’t always work as smoothly as they might. A recent article titled Top 10 Most Common Financial Mistakes include as reasons living on borrowed money, spending too much on your house and not having a plan. Although these may be factors, they’re merely peripheral to financial success.  This leads me to my version of what goes wrong for most persons. I’m convinced two fundamental bad habits are what cause most people to spend a lifetime merely scraping by.

 

First and foremost in fleecing the average citizen is the credit card. I’ll describe how they should be used. When the bill arrives in the mail, check it for accuracy, write a check for the full amount and mail it in the envelope provided before any interest can be charged. This has been my habit since I acquired my card years ago. There’s another way many people choose. Presume the balance owing is $350.00. You’ll be given the option to make a minimum payment of $25.00. Many persons take this route so to stretch out their finances – and perhaps stretch out is the correct term, as I visualize an old pirate movie where the prisoner is stretched out on a rack. If you go this method, you’ll be charged interest on the unpaid balance at rates in the 25% range.

 

For the second misfortune, the motor vehicle constitutes the average American’s single most important fixation. Far more than transportation, it’s for many the embodiment of beauty, price, status and individuality. There’s no single product more forcefully promoted or representing such a substantial portion of disposable income than one’s vehicle, and the potential for financial dilemma is all too real.

 

I’ll dispense the following advice: Don’t buy anything you can’t pay for in cash. If a new vehicle isn’t within your budget, search for a serviceable used one. If the old one still runs dependably, don’t make the change.  And regardless of how you select your wheels, avoid several bad choices. Don’t lease a vehicle; if you must borrow, search for the lowest possible interest rate; and keep whatever you buy as long as it’s serviceable.

 

A final thought: These are the two reasons why many Americans remain mired in debt, but they’re easily correctible. Merely a bit of self discipline and an ability to ignore the social pressures imposed by the promoters of these scams are required.

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

 

Are your local schools operating well? Maybe they’re better than you think. See why. www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

EDUCATION AT A STANDSTILL

 

The 2018 report on California’s educational rankings has just been released. Following the headline declaring: “California’s test scores nearly stagnant,” the byline states: “Disparities between disadvantaged students and their peers could persist for decades.” It appears this concern by the Department of Education over achievement gap between the various ethnic and economic groups of students takes precedence over their actual academic performance.

 

In case you’d care to know how California’s students are actually performing at their studies, the report spells it out. The state’s student population meeting satisfactory English language standards is just under 50 percent. As for math, some 39 percent managed to make the grade. This is disconcerting, perhaps, but what appears to particularly dismay the educational establishment is when they view the performance records of select groups. The proportion of Hispanic students meeting minimum performance level in English is 39 percent; for math it’s 26.6. Even more disillusioning is Afro-American achievement, with English at 32 percent and mathematics a dismal 19.7.

 

I’ll summarize on a positive note. Education in the United States is not as grim as reported. The focus on inequality distorts the picture. By definition, a school is failing if it’s in the bottom 5% of schools across the state based on combined English language arts and math scores. By mathematical necessity, five percent of the schools in every state must be designated as failing, and this is so regardless of the quality of teaching, the condition of the campus or a positive attitude of the students. If a school falls into this category because a large portion of the student body is not proficient in English, or perhaps not inherently scholastic by nature, or that many must work to help support their family, it will remain a failing school. But despite the stigma assigned to a failing school, there’s no reason why highly-motivated pupils cannot do well in such a setting. Provided no actual hostility to education exists, a reasonably bright and attentive student can master the required subjects and maintain a high academic standing in class. The fact a school is designated as failing need not rub off on those who attend.

 

A final though: If the media would concentrate on the ninety-five percent of schools which are not failing, we’d discover there are many fine institutions, a huge pool of dedicated instructors and a nation brimming with educated youngsters.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Don’t look for the homeless problem to be solved.  See why:      www.roadwaytoprosperity.com  

Straight Talk from Al Jacobs

THE IDIOCY OF OUR HOMELESSNESS EFFORTS

 

According to the annual report of the U.S. Department of Housing and Urban Development, on any given night about 134,000 Californians are without shelter. Whether they’re bedding down on a street corner bench, curling up alongside a dumpster, or provided with a cot in a shelter, they’ll awaken the following morning to spend another day roaming the streets.

 

And what’s being done by the establishment to ameliorate the problem? Committees are formed to study the matter; survey crews are hired to count the homeless; bond issues are passed to throw money here and there; and elected officials issue proclamations castigating one another. An analysis by the National Low Income Housing Coalition reveals our state has only 22 affordable and available rental homes for every 100 very low-income households. Simply stated, California is short more than a million rentable units needed for its impoverished citizens.

 

So what’s being considered? The Terner Center for Housing Innovation at UC Berkeley reports that a 100-unit affordable housing project can be built for $42.5 million. On this basis, our rental unit shortage is resolvable for $425 billion. With three months still to go in office, perhaps Governor Jerry Brown can push this through the legislature.

 

I have a better way to fix the problem. The federal government’s Section 8 rent subsidy program, which supplements low-income tenants’ payments in the competitive rental market, averages out at about $600 monthly per family in modestly priced areas. In this way, the government’s cost to house the million families works out to $7.2 billion annually. With market rents available, the prospective landlords will build and pay for each apartment – and not at the $425,000 envisioned by UC Berkeley, but on the cheap. And if the poor can’t live in high priced areas, it’s likely all for the better.

 

A final thought: I don’t believe there’s any possibility the homeless crisis will be approached in a thoughtful manner by our elected officials. There’s a reason for this: I’m convinced most of those persons who run for and get elected to public office specialize in only one thing: it’s running for and getting elected to public office. Actually viewing and approaching real life problems in some sensible fashion is beyond their abilities. And as we citizens vote the way we do, we deserve what we get.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

 

Are the banks your buddies? See why not. ? www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

PAYDAY FOR THE BANKS

 

The headline couldn’t be ignored: “Payday loans get a major rival.” The announcement: The nation’s fifth-largest commercial bank, U.S, Bank, headquartered in Minneapolis, Minnesota, will enter the payday loan business, letting customers borrow sums of $100 to $1,000 for periods of three months. The cost of these loans will be, in addition to processing fees charged, $12 for every $100 borrowed – equivalent to an annual interest rate of 71 percent.

 

Although major banks made short term loans in the past, a 2013 prohibition by then-Controller of the Currency Thomas Curry barred them from this practice on the basis they trapped many low-income earners into a cycle of high cost debt they were unable to repay. Apparently the Trump administration wants banks back into this line of work, which led the current Controller, Joseph Otting, to rescind the rule this past May. It appears other banks, including scandal-ridden Wells Fargo, will likely follow suit.

 

The truly insidious aspect of the payday-type loan is not the rare one-time use by a borrower temporarily short of money for an important purpose, but rather the repeated use by the same persons whose lives are perpetually on the edge of financial insolvency. According to a study by the Pew Charitable Trusts, most payday borrowers fall into one or more of the five following categories: those with lower education, apartment renters, African Americans, those earning below $40,000 annually and persons divorced or separated. It’s further revealed most such borrowers use payday loans to cover ordinary living expenses over the course of months, not unexpected emergencies over the course of weeks.

 

As for the practicalities of these loans, they’re clearly predatory by design. As there are no periodic payments, the lender is invariably compelled to roll the loan over at the end of the period upon payment of another fee. Accordingly, these loans normally result in interest rates exceeding 100 percent. It’s not hard to understand why these cash-strapped payday customers are left with fewer resources than before the loan.

 

A final thought: The payday loan does no favor to the borrower. Persons with few assets and meager earning abilities are generally better off never borrowing at any time for any reason. The last thing they need is to pay interest to anyone for anything.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

If the money isn’t rolling in as you want, why not? www.roadwaytoprosperity.com  

Straight Talk from Al Jacobs

 

 

AS THE ECONOMY SOARS

 

The headline in my local newspaper is favorable – at least a part of it is: “Economy soars …” Unfortunately the rest of it is less than encouraging: “… but 40% of U.S. hardly getting by.” The author, David Lazarus, a business and consumer columnist for the Los Angeles Times wastes no time describing the problem: “By virtually any yardstick the U.S. economy is doing great, with corporate profits at record highs … [yet] a report out this week finds almost half of Americans are having trouble paying for basic needs such as food and housing.”

 

Why are corporations doing so well? It’s because they’re automating their facilities, getting rid of wage-collecting employees, and moving their operations to places with fewer regulations and less oversight. And why are Americans having trouble meeting their living expenses? For exactly the same reasons. Thus, Amazon is doing nicely as an Online company, as it plans to employ Prime Air as its delivery system to get packages to customers in 30 minutes or less using unmanned aerial vehicles. Meanwhile, Sears and J.C. Penney close stores as they dismiss employees. At the same time, Uber and Lyft soon hope to transport fares nationwide with self-driving vehicles while taxis with drivers struggle to compete. Perhaps this helps explain why a recent CNBC poll reports more than half of Americans have seen no change in their paychecks over the past several years.

 

What can be done? Many economists call for a higher minimum wage, a progressive tax system that spreads the nation’s wealth more equitably, and a social safety net to subsidize all those persons who cannot otherwise fend for themselves … though they don’t explain how to enforce this without a full socialization of the economy, in which government dictates how each company shall operate its business down to the most minute detail – all the while preventing sources of capital from fleeing the country.

 

A final comment: Although the economy may be agreeable for a select portion of Americans, it’s far from favorable for the majority of our citizens. The current National Unemployment Rate of 3.9 percent sounds impressive, but the method devised by the Labor Department is contrived – intentionally so. In reality it’s well into the double digits and growing. Where we’re heading economically is uncertain, but I foresee untold misery in the future. I fear that what’s in store for our nation will not be pretty.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

FUNDING THE COMMUNITY COLLEGE

 

UC Berkeley Professor David Kirp’s article “Can community colleges deliver on diplomas?” is statistically well documented. As a senior scholar at the Learning Policy Institute, he appears to be intimately familiar with how the state’s 114 community colleges receive their funding. In the past, enrollment dictated the dollars which flowed, but starting this year, nearly half will be dependent upon “whether the institution improves student outcome and how well it serves poor students.” Translated, this means a larger portion of students must attend full-time, receive associate arts degrees and transfer to 4-year institutions, so to qualify for needs-based federal financial aid.

 

I fully understand why the colleges require an infusion of cash. The state of California is awash in unfunded financial obligations as it continues to spend with abandon. I question, however, whether the typical community college student will be well served by this emphasis on an associate arts degree. I recall, a number of years ago, enrolling in several courses – poetry, short stories and creative writing. I had a particular purpose and the courses served me well. To have been coerced into a more extensive course of study to meet some preordained definition of student improvement would have been senseless. A gateway to a four-year course of study is not the only reason the community college exists. Its purpose for many students is to provide specific instruction as each needs for any variety of reasons.

 

Professor Kirp then mentions that because of a test given to each new student, 80% are consigned to remedial math, with many then “dropping out before they get a crack at classes that lead to a degree.” In addition, as he points out, students must be enrolled in college-credit classes. He adds “Many students are clueless about what courses they need to graduate … fewer than half will pass the math course. Discouraged by the lack of progress, they leave.”

 

I’m convinced these new rules being instituted – quite clearly for the purpose of meeting federal requirements for ever more money – is transforming the community college into an institution which no longer meets the needs of many Californians seeking supplemental schooling.  It’s painfully obvious that in the world of the professional educator, dollars allocated to an instructional process invariably take precedence over any educational purpose.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Interest is something to receive, not to pay. www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

ADVICE TO YOU LENDERS

 

With not much profit to be gained from bank savings accounts or stock dividends, many persons are looking for other places to put their spare investment cash. One possibility is the lending of money. Irrespective of Polonius’ advice to his son, “Neither a borrower nor a lender be,” from Act 1 of Shakespeare’s Hamlet, sensible lending can be a viable road to prosperity…though sensible is the operative word.

 

I received a call from a close friend this morning asking whether I’d care to join him in a proposed housing project here in Southern California. It involves financing the purchase of acreage on which homes will be built. Security for the loan would be a first deed of trust (similar to a mortgage) on the land. As houses are completed and sold, portions of the land loan will be systematically paid off. The attractive aspect of the offer is the loan’s interest rate: 12 percent per annum.

 

Although I’m actively involved in trust deed lending – and presently at only 7½ percent – I reluctantly turned this offer down. Let me explain why. My investment will be as a minority-interest outsider with no say in any aspect of the project. If I fail to receive scheduled installment payments, I’ll have no recourse other than file a lawsuit. If the land drops in value or the houses are not built and sold as planned, I’m not sure what I’d do. If the loan goes into default and I eventually end up as part owner of vacant land with a group of strangers, what then?

 

My current lending operation is quite different. I loan on non-owner-occupied residences and small apartments. All loans are held by my corporation. I evaluate every one before approving it, service each loan personally and take appropriate actions as required. If a borrower defaults, I know exactly what to do. Should a trust deed sale (similar to a foreclosure, but non-judicial) be required, I handle it as the Trustee of record. In deference to Murphy’s Law, there are as few uncertainties as possible.

 

A final comment: There are many firms which make real estate loans available to the investing public. Some are good – some not so good. With a bit of inquiry and analysis, you can figure out which are inherently sound and which to stay away from. When you locate one or more you like, you may choose this as an investment route. Though it may not qualify as nirvana, it beats Chase Bank’s 0.01percent savings rate.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Is Alzheimer’s curable? See the latest. www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

DEMENTIA IN THE CROSSHAIRS

 

A recent Online article suggests researchers have come upon the first two potentially effective Alzheimer’s medications ever developed, named Anavex 2-73 and BAN2401. As a result, dementia specialists met in Chicago to discuss the findings, which breathes life into the possibility that whatever factors drive or contribute to the disease can be effectively targeted and eventually pinpointed, in hopes of ridding mankind of this pernicious scourge. However, the possibility a single drug, or even a series of them, may not be the answer was expressed by James A. Hendrix, director of global science initiatives at the Alzheimer’s Association, who said “Maybe one-size-fits-all is not the best approach.” This acknowledges a growing likelihood the ailment may be many different diseases.

 

It has long been my belief Alzheimer’s disease – which at an earlier time was known as dementia or senility – is a mental aberration resulting from any variety of malfunctions that plague the human body. It’s long been recognized professional prize fighters can develop these symptoms, apparently the result of repeated blows to the head. It’s also known certain chemicals can be the source. As one example, children overexposed to the element lead will develop cognitive impairment. There’s a third circumstance which I believe to be, far and away, the most common cause of mental deterioration in persons as they age. This is what may be best described as long-term diminution of oxygen to the brain.

 

Let me offer a theory for consideration. It’s well known cerebral hypoxia –impairment of brain function – can result from acute oxygen deprivation. Is it therefore not possible long-term oxygen reduction may slowly result in those symptoms identified with Alzheimer’s? As we age, we’re less physically active, so there’s less oxygen flowing to the brain through the carotid arteries. The result: garden variety senility.

 

I’ll now pose a question: Why is mild oxygen deprivation not aggressively researched as a likely cause of Alzheimer’s? I‘ll offer an answer: There’ll be neither research grants nor pharmaceutical stipends for such a quest. In short, there’s not much profit to be reaped by simply encouraging oldsters to vigorously walk four miles at a clip or visit the local YMCA for a daily swim. And God forbid that Alzheimer’s should actually be cured, and the research profits ended. Thus it will continue to be business as usual.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

 

Welcome to 1957. www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

WELCOME TO 1957

In jest, I recently suggested to a friend that I’m living comfortably in 1957. When questioned what I meant, I confessed to having lost all toleration for what the 21st Century has become and decided to relegate my life to a more lucid era. Specifically, I’ve embraced skepticism – which by definition decrees “Ninety-five percent of everything is nonsense” – and now choose to confine my activities, as much as practicable, to the other five percent. How is this possible? Let me explain it to you.

I’ve disconnected my television, so President Trump’s proclamation 21 million illegals are to be deported, Governor Jerry Brown’s assurance his proposed Bullet Train will soon be carrying passengers, or Elon Musk’s announcement Tesla will make a profit this year, will not be flashed onto my TV screen. Although I still subscribe to two newspapers, I systematically avoid viewing any articles relating to celebrities in the process of castigating one another, multimillionaires apologizing for their sexual misbehavior, elected officials accused of uttering defamatory statements as teenagers and lawsuit settlements awarding millions of dollars to men who claim to have been denied entry to women’s restrooms.

Things are now looking up, for the calendar on my wall dates back to a time when popular music on the radio normally included a melody, where comedy actually consisted of more than a continuous flow of profanity, and athletic events were devoid of constant reminders the United States practices rampant discrimination. For this reason, I revel in the knowledge a thoroughly likeable Dwight Eisenhower is our chief executive, students can attend universities without incurring loans they’ll eventually be making monthly payments on from their Social Security benefits, and you’re able to purchase a new home in a desirable location at a price no greater than four times your annual gross income.

  You’re now justified in asking me when, if ever, I’ll be returning to the 21st Century. It’s a fair question, and I’ll tell you. I’ll be back when our government begins to enact and enforce rules and regulations which truly make sense; when some sort of societal rationality replaces the hysteria which is now perennial; and finally, when the tax paying citizen is once again treated as more than merely a pocket to be picked. In short, I’ll return when I’m once again confident my presence is welcome.

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Straight Talk from Al Jacobs

 

 

WE HAVE GOOD NEWS – AND BAD NEWS

 

The federal government just released official figures on the Gross Domestic Product (GDP) for the second quarter of 2018. It rose at a favorable annual rate of 4%. In general, sustained growth stimulates jobs and contributes to lower unemployment, which in turn boosts tax revenues while generating the money to finance spending on public projects. At the same time here in Southern California, housing values continue to rise, with the median home price for June in the six-county area at an all-time high of $536,250 – up 7.3% from a year earlier. Obviously the nation’s business interests are prospering, all the while homeowners’ rising property values add to their net worth.

 

As usual, of course, the good is mixed with the bad. The GDP growth is narrowly distributed, with rank-and-file workers left behind. And as income inequality becomes more severe, the likelihood is future quarterly GDP growth cannot be sustained. As for the increasing home values, only current owners profit – the deck is stacked against those seeking to purchase. Currently in San Diego County, for example, with the median home price at $575,000, 28% of buyers can afford this price. In Orange County, with a median price of $739,000, it’s ever less favorable, with only 21% able to buy.

 

Do we have problems? We most certainly do. Corporate profits are up because their employee costs are shrinking. Many persons who desperately need work cannot find it. The job market is evolving in ways never imagined. The tasks of onetime irreplaceable employees are being filled by computers. Positions formerly paying twenty-five dollars per hour in Cleveland, Ohio, or Providence, Rhode Island, are now performed in Canton, China, at two dollars per hour.

 

What are our elected leaders doing to resolve the problem? They’re hiding behind a national unemployment rate of 4.0%. In 1994 the Labor Department redefined unemployed as “persons without jobs who have actively looked for work within the past four weeks.” If they added back in those without work for longer periods and part timers, the rate would well exceed 20% … not quite as bad as the Great Depression, but close.

 

A final thought: If you’re depending upon the government to cure the problems ailing the U.S. economy, you’ll wait a long time. Unfortunately elected officials specialize in getting elected to public office, not in solving problems after being elected.

 

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com

Is homelessness curable? Here’s a plan that might work. www.roadwaytoprosperity.com  

Straight Talk from Al Jacobs

 

A NOVEL PLAN FOR HOMELESS RELIEF

 

It’s hard to believe, but I’ve just read an article on homelessness that seems to make sense. Its title: “An experiment to house homeless: private funds.” After watching government entities pass senseless resolutions, while throwing taxpayer money around indiscriminately, here’s a program that might actually work. The plan: A private for-profit real estate group in South Los Angeles will select low cost sites on which to erect nine-unit structures built from shipping containers. Eight of the units will be 4-bedroom residences of about 1,000 sq ft each, designed to house four single homeless persons who will share a common kitchen, bath and community area. The ninth will be for a resident manager who will oversee the project with its 32 residents.

 

Although the term “shipping container” conveys a dismal image, these are essentially modular home sections built in a factory, trucked to the site and set upon pre-built foundations. Once assembled, there’s little visible difference from a traditional building constructed on-site. As to cost, modular home prices start around $50,000 for an 800-sq ft home. After permits, utility connections, site prep, foundation, engineering and survey work, its total cost is $115,000…plus land, of course. Inasmuch as the area in which these units will be erected is modest, we may expect the price of the land to be minimal, and if land can be held to no more than $50,000 per 4-bedroom unit, the completed nine-unit complex, totaling 8,800 sq ft, should not exceed $1.5 million. This works out to $46,875 per homeless individual, which seems to be a viable program…a far cry from the several hundred thousand dollar estimates I’ve seen bandied about by various governmental agencies.

 

The impression given by the article’s title, implying the homeless will be housed with private funds, must be explained. Although the structures will be so built, the actual residency costs will not. When completed, tenants will be selected through a countywide database of homeless, giving the highest priority to those chronically most in need. Monthly sums will be paid to the group from either disability checks or subsidies, with services being funded with L.A. County’s Measure H homeless sales tax or charitable donations, with an average monthly payment per recipient of $725. It’s anticipated the $278,000 potential annual gross income will, after the rather substantial expenses of overseeing such an operation, generate a modest return of about five percent annually to the group…a fair return in today’s economy.

 

Al Jacobs, a professional investor for nearly a half-

century, issues weekly financial articles in which he

shares his financial knowledge and experience.

You may view them on http://www.roadwaytoprosperity.com