Not Everything is Fake

A teacher and her daughter in need(?)

I thought that this was a scam immediately after reading it on Nextdoor.

I need your help. I am a [name of school withheld] teacher and a single mom leaving an unhealthy relationship. I have no family in the area, both of my parents are drug addicts with mental health problems, and I’m all I’ve got.

I came to Belmont with my now-ex from across the country 6 years ago, and I can’t afford to live here on my own. I need help affording the move to Richmond, VA. I’m so close to my goal. It won’t cover all of the costs, but it sure will put a dent in them. My daughter and I would be grateful for any help you can provide. Thank you so much!

The post ended with a link to a GoFundMe account.

Apparently, the message is not fake because there are real people who know this teacher and who have been on Nextdoor for years, according to their postings. A couple examples of their responses:

Ms. --- We fondly remember you teaching our kid, and we are so sorry to hear about this situation. Donating to help, and wishing you all the best. Please let us know if we can help in any other way.

Done! You were wonderful teaching my son last year in hybrid kindergarten (Nathan F) and I’m so sorry you are going through all this. Good luck with the move!!

Wait a minute.... you are moving? But I still have another son to go through [name of school], I was hoping he would be in your class at some point... 😕

The teacher answered each message and she herself has been on Nextdoor for 19 months.

It's still possible that this is a scam: she could have set up fake "parents" over the years, or she could be lying about the reasons for getting out of town. Furthermore, what's she got going in Richmond, VA, because it's certainly not family. But these possibilities are unlikely, since such long-term con skills would seek a bigger payoff.

As of this writing, the GoFundMe account has raised $11,660, overachieving its target of $10,000.

As for me.....“I do believe; help me overcome my unbelief!” --Mark 9:24

Don't Tell Me Your Feelings

(WSJ illustration)

Writer Caitlin Macy laments the current tendency to reveal emotions about "everything that comes your way": [bold added]

in the last decade a giant lovefest has taken over our day-to-day interactions so thoroughly that to abstain from appending heart emojis to everything that comes your way leaves you feeling sidelined and defensively out of tune. Remember “Mean Girls”—the movie, yes, but also the phenomenon? Nowadays the average teenage selfie post is met with reactions that run the gamut from “Luuuuuv!” to “Beauty!” to heart emojis to “Worship!”

...Now [college] applications all insist that you “tell us about your passion.” As with teenage Instagram posts, the pressure to be passionate encourages the applicant to flaunt and exaggerate, to make grandiose claims—to remain, in other words, a hyperbolic adolescent rather than taking a step toward becoming an adult capable of seeing one’s own life in a broader context.

Companies, too, as we are continually reminded, are passionate—about client service, retirement portfolios, lawn care. Never mind that what’s actually wanted is competence. And when you think about it, a corporation bragging about its passion for the service it’s providing suggests unstable—maybe even unhinged—leadership: Passion by its very nature is short-lived. It flames, and then, presumably, the fire in the loins for supply-chain optimization goes out.

Passion is over-admired as inspiration; it "flames," then goes out, and little is actually accomplished. When a person is truly passionate about something, she would be more successful channeling those feelings into a course of action, then using that passion to keep her going through the inevitable low points.

Go ahead and indiscriminately "like" or "heart" everything you see on social media if you must. Just remember that things which are given away are not highly valued.

Attack on Councilman "Tied to His Ethnicity"

Millbrae City Councilman Anders Fung and his family were physically attacked over the weekend: [bold added]

Sutro Baths

A Millbrae City Council member enjoying a Saturday afternoon walk with his family near San Francisco’s Cliff House said he suffered a head gash and neck injury when assailants flung a concrete block down at him.

“We went out to Lands End for a little family hiking; it’s a beautiful place,” Anders Fung said in an interview Sunday evening. “Then this big concrete block landed on my head and I instantly fell to the ground.”

The attack occurred as Fung and his wife and two children were heading down a steep trail to the ruins of Sutro Baths at Lands End. The injuries included a two-inch gash on the top of his head.

"Two young men in hoodies" (Facebook)

At first the councilman thought it was an accident, but other smaller objects followed. His wife saw what Fung in a Facebook post described as two “young men in hoodies.”

“When my family confronted the perpetrators demanding them to stop, one of them gave my family an obscene hand gesture,” Fung wrote.

They then ran off. Fung said he had no doubt the assault was racially-motivated.

After the family recounted details of the assault to U.S. Park Police Fung was taken by San Francisco fire fighters to the emergency room of California Pacific Medical Center. In addition the head injury, which doctors closed with a half-dozen metal stitches, Fung wrote that his injuries included “a cervical disc herniation around my neck.”

The Chronicle didn't print the above photo which was posted to Anders Fung's Facebook page, nor did it publish additional details of the suspects' appearance or speech patterns, which could easily be obtained from interviewing the Fung family.

Maybe the reasons are innocuous, or maybe the suspects don't fit the narrative of those who commit hate crimes.

Interest Rates and Housing Prices

The unit is on the 2nd floor.

In yesterday's post I noted:

We are already seeing early signs of a recession with layoffs in tech and a cooling housing market (mortgage interest rates have risen above 5%).

Saturday's mail included a flyer for a new listing in a nearby development.

A two-bedroom, two-bath condo has been offered at $829,000 (pictures right) when one year ago similar units had sold for over $1 million.

But could a mortgage-rate change by itself explain a $200,000 drop in price? Yes.

The table below compares the monthly payment on a $1.02 million property versus one that costs $800,000. Both are financed with an 80% 30-year loan, the former at 3% and the latter at 5%.

The 20% down payment is $44,000 ($204,000-$160,000) less on the lower-priced example, but the focus of this exercise is the monthly payment.

(Of course, in real life a $44,000 down payment difference can be a huge factor.)

There's less than a $5 difference in the mortgage payments, confirming the effect that interest rates have on the size of mortgage loans and ultimately real estate prices.

The drop in house prices will be felt immediately after existing "loan-lock" commitments expire, and the ripple effects through construction, labor and the building materials supply chain should manifest before year end.

The coming slowdown in real estate is obvious, while the ultimate recessionary effect on the economy is unclear. Let's hope that the battle against inflation succeeds, else the cost will not have been worthwhile.

Note: below is a chart from the St. Louis Fed. It shows that mortgage rates have risen from 3.0% to 5.2% during the past year.

They Learned Nothing from the Experience

Now that's a hockey-stick (WSJ graph)

The 1970's-type inflation that we've been predicting for over a year is here with a vengeance.

U.S. Inflation Hit 8.6% in May: Energy, groceries, shelter costs drive fastest rise in consumer-price index since December 1981

U.S. consumer inflation reached an 8.6% annual rate in May, its highest level in more than four decades as surging energy and food prices pushed prices higher...

May’s increase was driven in part by sharp rises in the prices for energy, which rose 34.6% from a year earlier, and groceries, which jumped 11.9% on the year, the biggest increase since 1979. But inflation pressures were distinctly broad-based in May, said Sarah House, senior economist at Wells Fargo Securities.

“Inflationary pressures were seen nearly everywhere,” she said.

Prices for used cars and trucks—a key engine of the past year’s inflation surge—rose 1.8% in May from April, reversing three months of declines. Shelter costs, an indicator of broad inflation pressures, accelerated on a monthly basis in May and were up 5.5% compared with a year ago.

Airline fares rose 12.6% on the month, the third straight double-digit rise.

The younger folk who have never lived through high inflation may be forgiven for not seeing the warning signs, but the gerontocrats who run the country have no excuses.

But wait--it could get worse. We are already seeing early signs of a recession with layoffs in tech and a cooling housing market (mortgage interest rates have risen above 5%). The dreaded stagnation + inflation = stagflation is possibly looming. It will require skilled economic leadership to engineer a "soft landing," i.e., reduce inflation without cratering the economy.

Based on their performance so far, how would you bet, dear reader?

It's Everywhere

50 years ago I became friends with a group of evangelical Christians. They were nice people, law-abiding, hard-working, but they had one bee in their bonnet that I had difficulty accepting: they saw the devil in everything.

Thank goodness we're more enlightened today. We now know that systemic racism, not fictional Satan, is everywhere. For example, take a simple package of tea.

White tea, without evidence, is declared to be "more beneficial" than green tea. And note that black tea hasn't even entered the discussion.

On the front of the package "white" has the larger font.

White dominance is easy to see once you look for it.

Chronicle Editorial Board: Spinning for Progressives

The Chronicle is feeling what he's feeling.

We're used to reading editorials where writers cherry-pick facts, misrepresent the positions of opponents, and warn of apocalypse if their advice isn't followed.

But at least major newspapers don't make up facts that are foundational to an argument, or so we thought until we read the Chronicle's take on Chesa Boudin's recall (yesterday's post below). [bold added]

Editorial: No, California didn’t just send a message on crime — only voter apathy

Voter turnout was barely at 26% in San Francisco the morning after the election. It was even worse across most of the state. Sure, ballots will continue trickling in for days. But the story will stay the same.

Voters weren’t “desperate for change,” as one Los Angeles Times website headline put it. They couldn’t be bothered...

But it was apathy and resignation, not overt anger or a definitive vision, that ruled the day in San Francisco and across California in Tuesday’s election.

But is the Chronicle correct about voter apathy being high?

In an election-analysis article, the same newspaper says that the turnout to recall Chesa Boudin was higher than in 2019, when he was elected.

Unlike Tuesday’s election, which ended up being largely about a single candidate, the 2019 election asked voters to cast their ballots for the mayor, D.A., city attorney, public defender, sheriff and several other races in the year before a presidential election...the Department of Elections is now anticipating turnout among registered voters to hit 46% — higher than the 42% rate seen in the 2019 election, and a lot higher than the 36% rate for the February school board recall.

As of this writing 123,926 votes have been counted, and 74,335 (59.98%) of them were to oust Chesa Boudin.

When all the mail-in votes are finally tabulated, the total is expected to be above 200,000.

The same chart for 2019 shows that Chesa Boudin was elected because he received 68,575 votes (35.71%) out of 192,053, the leader out of four candidates through "ranked choice" voting.

With only 57% of the 2022 ballots counted, there are already more "no" votes against Chesa Boudin than voted for him in 2019.

Sounds like the San Francisco electorate is getting less apathetic, but we're not professional interpreters of facts like the Chronicle editorial board.

Two-and-One-Half Years Was Enough

Chesa waved at cars. The voters waved back. (Chron)

When Chesa Boudin was elected to the office of San Francisco District Attorney 2½ years ago, we half-jokingly asked if San Francisco was headed in the same direction as Caracas.

Since then his Progressive policies have failed so miserably in the eyes of San Francisco voters that they weren't willing to wait until November, 2023 but removed him from office in yesterday's recall election.

San Francisco voters overwhelmingly voted to remove District Attorney Chesa Boudin from office on Tuesday, favoring a recall effort that argued his progressive reforms were too lenient and made the city less safe.

Boudin trailed by about 20 percentage points Tuesday evening, according to the latest figures from city elections officials. Around 60% of San Franciscans who cast ballots voted to recall him...

Boudin was part of a wave of progressive prosecutors who took power in American cities, channelling the energy of the Black Lives Matter movement.

Boudin eliminated cash bail, which favors wealthier defendants; helped divert more defendants to treatment instead of trials; and pursued criminal prosecutions against nine police officers.

As expected, the Boudin campaign blamed Republicans. Even the San Francisco Chronicle was incredulous:

Boudin blamed the recall on conservative forces, pointing to the fundraising against him, but only 7% of voters register as Republican in San Francisco. Rather, he split Democrats in a city where many residents are frustrated with chronic problems, including high rates of burglary and drug overdoses.

Some of the recall team’s most vocal advocates were Democrats, who said they believed in Boudin’s overarching goals but said his leadership had created an office in disarray and a system that let offenders off without meaningful consequences.

Since the rest of us in the Bay Area had to accept Chesa Boudin's 2019 election, we tried to make the best of it by satisfying our curiosity about "anti-carceral" policies. Would devoting more funds to mental health, substance abuse, and homelessness reduce crime?

Each side tried to show statistics in their favor, but the public perception was that there was an explosion in lawlessness across the board.

As for your humble blogger, the 18-year-old Toyota Camry has become less reliable. I'm looking forward not having to drive it whenever we go into the City.

As I Perused the Voter Information Guide

Going through the CA Voter Information Guide, I came across this gem (right) of a statement from a gubernatorial candidate who I never heard of.

Should I reward such juvenile expression with a click to her website? Yes.

Mariana Dawson has an interesting grab bag of policies, both left (rent freeze, student loan relief, nuclear-free California) and right (reinstate death penalty, pro gun rights, anti-Critical Race Theory).

In a May 27th announcement she announced that she's no longer a candidate:

I'm officially ending my campaign for the 2022 Governor's race, and refocusing on running next year in a recall election.

We're exiting this race because my main signature gatherer went rogue and demanded I support the Republican party.

I refused.

“F all politicians” includes their political parties, whether it’s the Democratic Party or Republican Party. I want no part of their political civil war.

Elsewhere on her website she says she's not a millionaire, and she's not taking donations. You may have observed that she's expecting a recall election next year, at which point she'll run for governor!

Well, first impressions can be wrong. She's far from the worst candidate we've ever seen.

Note: this is an example of why I don't do early voting. Late-breaking developments, such as a candidate's withdrawal, could change one's decision. I'll head down to the Recreation Center and cast my ballot this afternoon.

They're Not Stupid

Two people sleeping at Kuhio Beach, Waikiki

The Honolulu Star-Advertiser runs an evergreen headline (right):

East Honolulu’s percentage of unsheltered homelessness in 2022 has grown to 24%, or 575 of the 2,355 unsheltered homeless people recorded during the March 10 Point-in-Time count, a gain of 6 percentage points from the 2020 count and a 10-percentage-point rise from the 2019 count.

The article covers the usual subjects/solutions of building shelters, buying unused land, increasing rental assistance, and lamenting the high cost of housing.

But the interesting part of the story to your humble Honolulu-born blogger is that the homeless population is migrating from the residential and industrial sections to East Honolulu, which includes Waikiki.

And why not? if you are going to be homeless, you may as well live in a tent on the nice white-sand beaches that tourists pay $thousands to see; there's a better chance that a few will slip you a few dollars on Kalakaua Avenue than on North King Street. Some homeless may be mentally ill, but they're not stupid.

Related: economist Scott Sumner uses similar logic in explaining why the homeless prefer to live in high-cost California: "homeless people in Arkansas are already homeless, so [by moving to LA] they benefit from all of the positive factors that make LA a desirable place to live, without the drawback of paying high prices for an apartment."

Churches and States

Patriarch Kirill (WSJ)

Three years ago the Ukrainian Orthodox church split off from the Russian Orthodox church. "Putin bitterly resented" the separation, which may have been a factor in his decision to annex portions of Ukraine. [Note: in Ukraine "almost two-thirds of Orthodox churches are still formally aligned with the Russian Orthodox Church."]

After it began, Patriarch Kirill of the Russian Orthodox church has supported the invasion to such an extent that it threatens a division in the wider Eastern Orthodox church:

In sermons broadcast on dedicated Orthodox TV channels and YouTube, the 75-year-old patriarch, who has led the church since 2009, has portrayed the war as a holy struggle against the West to preserve what he calls the russky mir—Russian world—uniting East Slavic lands including Ukraine under Moscow’s spiritual and political fold. The concept, which the patriarch has espoused with particular fervor since 2012, is an undercurrent to much of Mr. Putin’s rhetoric...

Outside of Russia, the patriarch’s loyalty to Mr. Putin has aggravated splits in the broader Eastern Orthodox community of some 220 million faithful. In the face of criticism, he has doubled down. Returning to the Armed Forces Cathedral on May 8, he gave another sermon dismissing as nonsense the accusations that his speeches are militaristic and calling on Russians to “consolidate all our forces, spiritual and material, so that no one dares encroach upon the holy borders of our fatherland.”

European Union officials said this month that the bloc is considering sanctions on Patriarch Kirill, including a potential asset freeze and travel ban, for his role as a leading advocate of the Russian invasion of Ukraine.

The war has revived rumors that the Russian Patriarch was a KGB agent:

Born Vladimir Gundyaev, Patriarch Kirill is widely believed by many church historians to be a former agent of the KGB, where the president himself served...

Patriarch Kirill was born in Leningrad, now St. Petersburg, in 1946. After he graduated from the Leningrad seminary in 1970, he rose in the church’s ranks and joined the foreign-relations department, a position that allowed him to take frequent trips abroad at a time when fellow Soviet citizens were banned from doing so.

Evidence from Soviet-era files that emerged publicly in the 1990s suggests that Patriarch Kirill was a KGB agent with the code name “Mikhailov.” While he isn’t named directly, several documents refer to a “Mikhailov” who represented the Russian Orthodox Church at the Switzerland-based World Council of Churches, traveled to international church conferences and provided information to KGB handlers. That lines up with the biography of Patriarch Kirill, who was just 24 when he became the church’s representative to the WCC in 1971.

“There’s absolutely no doubt that Kirill was an agent of the KGB,” said Felix Corley, a U.K.-based author who has researched KGB links to church leaders. By the late Soviet era, it was typical for senior leaders of the Orthodox Church and other faiths to work with the secret police, though the degree of collaboration varied, Mr. Corley said.

The separation of Church and State in America is a constant irritant to political activists of all stripes. Church leaders run the gamut of politics, from opposition to the use of American troops to abortion, from preaching against economic inequality to transgender philosophy, from supporting freedom of speech to decarbonizing the atmosphere.

The separation of Church from State can be frustrating, but Russia has shown what can happen if the separation did not exist.

The Ride is Bumpy, so What?

I'll take "Things People do in Texas that I Can't Imagine Them Doing in California," Alex.

----Guadalupe River, New Braunfels, TX via Vacation Secrets on Facebook

By the way, Californians, Texas has a drought, too.

Coping with Inflation

(WSJ illustration)

The WSJ publishes 15 Ways Consumers Can Deal With—and Even Benefit From—Rising Inflation. Below are my comments in italics:

What’s your inflation rate?

In the CPI-U [consumer-price index for all urban consumers], motor fuel represents approximately 5% of assumed total household spending and is up 44% from April 2021 to April 2022. Used cars and trucks represent approximately 4% of the total and are up 22.7% over the same period. So if you can hold off on buying a new car, for instance, you can feel less of a sting from those big increases.

My personal inflation rate is lower than the average because the largest expenditures (mortgage and car payments) are fixed. Variable components have a discretionary element, e.g., chicken can be substituted for beef, and we can dine out two days a week instead of three. So we're lucky--we certainly feel the inflation, but the non-inflatable part of our budget is high, and we are willing to substitute lower-priced items in most cases.

Be aware of shrinkflation

Product companies will slowly “shrink” the contents of the packages and goods you buy while charging you the same price. This means a price hike for you. The package of strawberries now has five fewer strawberries. The bag of chips has more air and less chips than usual. The roll of toilet paper went from 264 sheets to 244 sheets...

One way to deal with shrinkflation is to try to stick with generic store brands because those tend to be the last to shrink...It also helps to only buy fruits and vegetables that are in season.

Perhaps there's brainwashing involved, but about half the time I don't find generics to be as good or effective as branded products, so that suggestion doesn't work for me.

Instead, my problem is kind of the opposite but is an opportunity to save money: don't buy more than you're going to use before it spoils. I buy too-large packages of perishable items, for example, two loaves of bread for $7.50 instead of one for $5, then have to throw out the second because of mold. Switching to smaller-size packages raises the per-item cost, of course, but the overall expense is lower.

Delay Social Security

Every year that Social Security benefits are delayed past full retirement age, the amount of the eventual benefit increases by 8%.

Thus, an individual with a full-retirement-age benefit at 67 years of $1,000 a month could increase their benefit to as much as $1,240 by delaying to age 70—an increase of as much as 24%. And the annual CPI increase is based on this higher amount.

My health is good but not great, and there's a good chance I will make it to 90. However, there are many personal friends, relatives, and acquaintances my age for whom stuff happened, so I claimed full benefits at 66 rather than defer until 70. Deferral is a good plan if you're in good health and are financially comfortable.

Buy the car you’re leasing

New-vehicle prices rose 13.6% since March 2021, while prices for used cars/trucks were up a whopping 34.7%. If you have a vehicle lease expiring soon, you possess a valuable way to avoid those higher prices.

That’s because your vehicle’s lease-end price was set when your lease began, prior to the current inflation...

Even if you really want to get rid of it, buy it anyway. It’s now a (lightly) used vehicle whose market value has jumped about 35% in the past year. So sell it yourself, and pocket the profit on the difference before buying something else. If you simply return it to the dealer, they will do the same thing and, of course, share none of the profit with you.

We bought out our leased car three months ago. It was the right thing to do, kind of like going to the dentist.

Seek a higher return on happiness

Take a moment and think about what you’re spending money on and why. And then stop spending money on the unnecessary things that don’t bring you joy. After all, if you stop spending money on something, by definition, you are no longer impacted by inflation in that area...

take just a week (a month is even better) and commit to deliberately reflecting on every single expenditure made during that period—from the auto-payment on that streaming service to filling up your gas tank—transformational things can happen...thinking about that one expenditure allows you to rethink where you are going—literally and figuratively.

COVID-19 caused a lot of people to reflect on their lives before inflation struck. What one needs vs. what one wants is an age-old question, but it's still relevant. I want the latest iPhone but the almost-four-year-old iPhone XS Max satisfies all my needs (except for status and techno-lust), so resist temptation!

Ask for a raise

The salary increases one normally gets are likely to be below the rate of inflation, so it is important to ask for higher raises...Given the state of the labor market—this time in favor of workers—summon up courage and go ask for the raise. You need it.

I only expressed unhappiness to management about my pay a couple of times in my career. Each time I was fully prepared with comps, a list of extra things I did, and even a worst-case scenario if the discussion went south and I had to leave the company. Even if the worst-case scenario is improbable, it's good to go through in your mind (see "happiness" above) and enter negotiations with the confidence that walking away from a job isn't so bad.

Time your expected purchases

Consumers are often advised to have cash and other liquidity available for unexpected expenses, such as house or car repairs or even medical bills. But there is another use for that cash on hand: making expected purchases on sale and ahead of time. While this only works for nonperishables, there is real value to be reaped by buying goods when the price is right and in quantities that make sense.

...households tend to hold inventories of consumer goods worth about $1,100 on average. By shopping strategically and optimally managing their inventories, households can potentially earn returns well above 20% on their “household working capital.” The key is not to stockpile too much at full cost and buy only when the price is right.

Stockpile supplies when prices are low. Clothing, however, carries the risk that tastes change: you may not like the swimsuit you bought on sale last winter.

Don’t add explicit inflation protection

While there’s nothing wrong with maintaining a long-term allocation to Treasury inflation-protected securities (TIPS) for diversification, tactically adding them as a hedge may not have the intended effect. TIPS performance is driven by unexpected changes in inflation expectations. So while inflation is high today, the likelihood of inflation expectations surprising to the upside going forward seems low now that the Federal Reserve is actively tightening monetary policy.

Gold, meanwhile, has been an awful inflation hedge since gold futures began trading in 1975, in part because they tend to rise in anticipation of inflation (rightly or wrongly) rather than with inflation.

Even with the recent period of higher inflation, average inflation is less than 3% over the past five-year and 10-year periods. So rather than adding an explicit inflation hedge, you are better off reviewing the underlying assumptions of your financial plan to focus your attention on items that are within your control.

Plus, most investors already own the best asset to combat inflation: stocks. A big reason stocks beat inflation over time is that corporate earnings and dividends tend to grow faster than inflation.

I followed my own advice from one year ago, and it holds up: If we are going to reprise the 1970's, shift some investments into real estate, gold, art, or more stable foreign currencies that can keep up with dollar inflation. (I would recommend cryptocurrencies, but I don't understand them well enough.) Get out of bonds and low-growth dividend paying stocks. If you have variable-rate loans, convert them to long-term fixed-rate debt.

Control your lifestyle creep

spending inertia is very common and, oftentimes, there are some expenses that can be cut out with minimal impact. A good place to start this budgeting process is to simply pull all of one’s bank account, credit-card and debit-card statements and look for any recurring expenses for subscriptions or services that may no longer be needed.

COVID's silver lining: we bundled our shopping expeditions, doctor's visits, etc. to minimize car trips before gas spiked, cut back on recreational travel, and cooked more often. We're spending less in total than we did before COVID but I draw the line on subscriptions; we're keeping them all.

Account for shadow inflation

Do you remember when your restaurants gave you free bread and butter? When soda refills were free? Or when your hotel room was automatically cleaned, and you could count on fresh turned-down sheets before bedtime? With the cost of goods rising rapidly, along with the current labor shortage, many of the services we have grown accustomed to are no longer included without an extra fee...

Since it is likely right now that the cost of goods and services will continue to rise, build a buffer into your budget for spending on meals and other services that are affected by this cost increase.

The message seems to be that freebies are a vanishing species, hence inflation is worse than we thought, and we should "build a buffer." Very helpful! (sarc)

Buy inflation-indexed stocks

Investors should purchase stocks from established companies—such as supermarkets—whose revenues are indexed to the inflation rate. Inflation is a basket, and the best thing correlated with the change in the price of the basket is exactly the basket. Food is sold in supermarkets and, therefore, the inflation rate of food is highly correlated with the revenues of those companies. Because those companies have small margins, their earnings also are correlated with the inflation rate. Hence, buying a claim on the revenues or the earnings has to be correlated with the inflation rate.

My own preference is for real estate stocks or the hard asset itself. Though risky, real estate returns, especially with leverage, exceed inflation.

Update your résumé

I encourage individuals to update their résumés. Given the tight job market, there’s an opportunity for many employees to find new positions that will pay them more—and a higher salary is obviously a benefit in an inflationary environment. But workers may be able to find a job that is more personally satisfying as well.

The retirement nest egg is big enough so that I don't have to go back to work...yet. If inflation continues for a couple more years, then the résumé will have to be dusted off.

Watch for falling prices

One strategy for dealing with inflation is accelerating certain purchases. This might seem counterintuitive given the impact of inflation on the economy. However, in certain scenarios it is possible to selectively capitalize on the current environment. Many consumers will need to cut spending on discretionary items, so a lack of demand may cause the prices of various nonessential goods to decrease. This can present a unique buying opportunity.

If you planned to pursue new hobbies in retirement, for instance, and are fortunate enough to have ample cash flow, it’s possible to make the most of this inflationary environment by accelerating the purchase of select recreational items as their prices fall. The key is to identify where you have some financial flexibility and make the most of what is otherwise a very challenging situation.

Prices fall with products that no one else wants (duh!). Time to fill your space with hardcover books and CD's.

Invest in alternative energy

Investors may want to consider alternative-energy stocks as an inflation hedge...But the war in Ukraine has further underscored the importance of sourcing alternative energy...While traditional energy may outperform over the near-term, the drive toward clean energy seems unlikely to reverse and may present a better long-term opportunity for socially responsible investors and the planet.

Even if you don't buy alternative energy stocks, get out of fossil fuel companies like Chevron and Exxon-Mobil. Their shares have doubled in the past year, so take the profits. The long-term prognosis is bad.

Better insulate your home

One of the best investments for a return on your dollar is to better insulate your home. This is particularly important given the current higher costs of fuel. Often, you can get a free energy assessment from your power company, with a to-do list for lowering your energy costs.

The upgrade will eventually pay for itself—sometimes in as little as three to five years—and you will have lower heating and cooling bills that will outlast this inflationary period. If it takes five years in saved electrical and fuel bills to recoup the expense, you likely just got a lifetime 20% return on your insulation investment. And as the costs of fuel and electricity go up, so does your percentage saved.

Insulating the house has been recommended for decades, and we haven't done it because we're highly allergic to the dust that project will create. Besides, it's cheaper to wear a sweater during the winter and go to the air-conditioned mall, library, or theater during the summer.

A few final words of advice, applicable to non-inflationary times, too:

1) Temper your lifestyle to be less than your income (easy to say, but pride and pleasure are powerful obstacles);

2) Pay off your credit card balances every month;

3) Do all you can to make your marriage work.

Relevant Article

Deadlines are not friendly to headline writers. Current events can impart unintended meaning and emotions to an unlucky choice of words.

The Yale Alumni Magazine (YAM) cover story is a cheery one.

The women's ice hockey team made it to the NCAA Final Four ("Frozen Four"), where the Bulldogs lost to the eventual champion, Ohio State, 2-1.

Speaking of current events, YAM also has a relevant article on research into the effect of trauma on children's brains.

Children who have endured chronic stress, such as living in a violent neighborhood or within an unstable home life, tend to have thick branches near the brain’s alarm system (the amygdala) and weaker ones near its off switches (the hippocampus and prefrontal cortex). The alarm system blares and there’s nothing to stop it...

(Wiley Online Library)

For children who have endured severe trauma, one option is Trauma-Focused Cognitive Behavioral Therapy (TF-CBT). Dylan Gee is involved in a study designed to assess TF-CBT. Previous studies have shown that it works very well for about half to two-thirds of those who go through it, but less well for others. Her goal is to figure out which children are most likely to benefit from TF-CBT and what might improve the process for those who don’t.

Gee is assessing volunteers, aged 10 to 17, before and after therapy. The theory is that the reason many children show fewer symptoms of trauma after TF-CBT is because the therapy strengthened their regulatory centers. In other words, the children have better control over their brain’s alarm center than they had before.

Children exposed to traumatic events, especially those involving extreme violence, will, of course, need therapy ("TF-CBT").

The Yale study indicates that physical intervention in the development of children's brains at the cellular level is also necessary to right the ship.

Although we are years, if not decades, away from devising the methodology, at least we know the direction in which we're headed.

Back to Work

Elon Musk via email has ordered Tesla employees back to the office. Asked for confirmation, he responded with the tweet shown at the bottom, "They should pretend to work somewhere else."

="ltr">They should pretend to work somewhere else

— Elon Musk (@elonmusk) June 1, 2022

Comments:

1) I hope that vaccinated workers who have COVID co-morbidities (or who live with someone who has) can be accommodated by maintaining physical distance, allowing them to mask, and ventilating their workspace.

2) If (1) is true, then there's little justification for workers complaining; showing up for work on time was the minimum requirement pre-COVID.

3) Elon is implying not very subtly that remote workers "pretend" to work.

4) One of the criteria for being classified an employee, according to tax law, is that the employer dictates the working hours and location of the job. If recalcitrant office-goers otherwise like working for Tesla, perhaps they can work out a deal to be classified as self-employed contractors.