The Stingy News Weekly (03/17/2013)
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The search for balance
"Even low-fee tax-optimized balanced portfolios face difficulties today because the yield on Canadian bonds is very low. To get a real return of 5 per cent on an equally mixed stock and bond portfolio you'd need to see stocks gain more than 9 per cent a year, which seems unlikely at this point. Because most people wind up in reasonably balanced portfolios, it's more critical than ever to avoid high fees. Unless, of course, they're keen on the Freedom 75 plan."
Retirement is cheaper than you think
"The Statistics Canada Survey of Household Spending for 2010 found senior couples on average spent a combined $53,100 a year (including money paid to income tax). From looking at that figure as well as talking to seniors and their advisers, I estimate that a retirement lifestyle that you might call middle class or a bit better costs about $40,000 to $70,000 per couple (also including income tax payments)."
Would the real Peter and Paul please stand up?
"But we must also understand that exchange is only possible to the extent that people trust each other: when eating in a restaurant we trust the chef not to put things in our food; when hiring a builder we trust him to build a wall which won.t fall down; when we book a fl ight we entrust our lives and the lives of our families to complete strangers. Trust is social bonding and societies without it are stalked by social unrest, upheaval or even war. Distrust is a brake on prosperity, because distrust is a brake on exchange."
Trust & growth
"Trust is core to all economic activity. You only want to act if you think you will not be cheated. Poor societies are often characterized by a lack of trust, which hampers exchange, and hampers credit as well. To the degree that you doubt that you will be rewarded for the fruits of your labor, you will face frictional costs in doing business, and you might reduce your business in areas that don.t seem to be worth the risk."
Unfair, short-sighted and self-defeating
"The logic behind both of these reform initiatives is that bank deposits have two, contradictory properties. They are both sticky, because they are insured; and they are flighty, because they can be pulled instantly. So deposits are a good source of funding provided they never run. The Cyprus bail-out makes this confidence trick harder to pull off."
Levy on bank deposits
"They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple"
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