US Credit Card Balances, OpenAI Drama, Binance CZ Guilty Plea, RIP Goldman Sachs, Desert Island Tourism

Another TBB post featuring the most eclectic links around the web such as US credit card balances, the ridiculous OpenAI drama, the Binance CZ guilty plea, RIP Goldman Sachs, desert island tourism, the latest on the SBF trial, retirement withdrawal rates, how things are always different in the stock market, the state of the warming planet, a crazy guy got elected in Argentina, smuggling turtles, always amazing photography, Taj Mahal visit, crazy car museum, great geography based game, the latest on the crazy wold of frequent flyer miles and bank points that have been making our travel so grand in the past three decades and more!

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This blog publishes every Friday. If not Friday, it will be Monday. This is a one man labor of love operation, enjoy it white it lasts. I may also post in other days besides Friday/Monday, no promises. We are back to normal around here, appreciate you all and always thanks for the few clicks of support to keep this baby rolling…

 

 

PERSONAL FINANCE

I agree with most of Dave Ramsey’s advice on cash flow related items. But when it comes to investing this guy is dangerous. And he will never admit he is wrong so stay clear please. He is known to project 12% annual investment returns. Which imply that you can easily withdraw 8% from your investment portfolio in retirement. This is the type of advice that can ruin people so beware. And he does not like it when others take him to task and deliver a beating: How Safe is an 8% Withdrawal Rate?  Anything above 5% may not work for you. The 4% rule is still a great measuring stick to start out with and…adjust from there. Again, we are all different and there is no right number as with most things dealing with personal finance.

You need to focus on what you do best and stick with your plan, assuming you have one. There are always going to be Cassandras out there screaming, with the help of the media, that the sky is falling and that it IS different this time. And we financial planners get this question a lot: What if This Time is Different For the Stock Market? It takes a special temperament to be fully invested. Some people don’t have the stomach for it. A lot of people think they do and then they encounter their first bear market and their true risk tolerance comes out. You need to be mentally okay with seeing your portfolio go down, 10% is…pffft, ok? And anything is possible short term!

It sounds intelligent to say this time is different for the stock market but every time is different. Each market and economic cycle is unique. If there were a playbook for this stuff investing would be a whole lot easier.

Since 1928 the U.S. stock market has averaged a 10% correction in roughly two-thirds of all years, a bear market once every 4 years and a crash of 40% or worse once every 13 years.

The average peak-to-trough drawdown in a given year going back to 1928 has been a little more than 16%. In 6 out of the past 10 years alone, the S&P 500 has experienced a double-digit correction.

Corrections in the stock market are completely normal. It’s the cost of doing business. Future corrections will always feel different because markets and investors are constantly changing and evolving. That doesn’t mean you abandon risk assets because they make you feel uncomfortable.

You’re never going to survive in the stock market if you treat every downturn like it’s the end of the world.

The absolute best thing you can do for your personal finances is to eliminate ALL credit card debt. Now. Do not be among these people contributing to this sad statistic: US credit card balances see largest yearly leap on record.

Visualizing America’s $1 Trillion Credit Card Debt.

 

 

AI

The firing of Sam Altman by the board of OpenAI and the following roller coaster leading to his return was one of the most flippant events recently. If you too are wondering wtf is going on, well, join the crowd. If you want to understand it, this is a good article: The interested normie’s guide to OpenAI drama. Who is Sam Altman? What is OpenAI? And what does this have to do with Joseph Gordon-Levitt’s wife?? It all comes back to, please sit down, money.

 

SAM BANKMAN-FRIED SBF FTX TRIAL

Hopefully this is the last time I have a separate section about this guy. We all need to move on and I hope he survives in prison and makes something out of his life.

We learned so much in the trial. But still, we have a LOT to learn! The stones left unturned in the Sam Bankman-Fried trial.

Molly White followed up with this oped at the New York Times: Sam Bankman-Fried and the People Who Gave Up Their Money for Nothing.

The collapse of the FTX exchange revealed the massive duplicity underlying many crypto exchanges, but its implosion should not be attributed to that alone. It, like so many companies in the cryptocurrency industry, had propped itself up on an imaginary foundation of tokens it had invented, and that foundation was bound to fail eventually. When the next company in its position falls, the only surprise should be that people expected any other outcome.

And of course we have this guy smh: Michael Lewis Is Still Defending Sam Bankman-Fried.

But Lewis was impressed (at least initially). “He is not conventionally dishonest,” Lewis said on his podcast the day that Bankman-Fried took the stand without the presence of the jury — sort of a trial run for what would happen when jurors were in the courtroom. “What he does is evade questions he doesn’t want to answer.”

It’s hard to imagine that a veteran journalist like Lewis has never encountered a subject in the high-powered world of finance who was skilled at the art of deflection — that is, avoiding answering tough questions.

“He does it very ably,” said Lewis. “It’s a little spellbinding.” Lewis went on to say he was impressed by Bankman-Fried’s “fiber” and found his testimony as “riveting as theater.”

Shocking #notreally…

 

CRYPTO SCAMS

It is amazing to me how many of these crypto guys end up with felony convictions and yet, the crypto crowd keeps finding ways to cheer each other up smh…

Binance’s Zhao pleads guilty, steps down to settle US illicit finance probe

So this guy may not even serve any time in jail and gets to keep his billions. Actually, he proved to be much smarter than his “buddy” Sam.

Meanwhile, the price of bitcoin does not appear to be impacted for whatever reason. This article “Binance Guilty Plea Shows What Crypto’s Really About” attempts to explain this weird phenomenon. Comes down to four possible reasons: Digital art, digital gold, gambling and crime. The digital art is tiny, it is not digital gold, there will always be gambling and of course crime (which is going to be less now that the regulators will be looking over Binance for several years). So, you know, be careful out there.

 

GEOPOLITICS

We are falling behind here: The State of the Planet in 10 Numbers. A snapshot of the warming world, from sea level rise to fossil fuel subsidies. There has been some progress but nowhere near enough.

Hopefully by the time this blog post is published or soon thereafter, some of the Israeli hostages are released. And expect the war to continue with Hamas and Netanyahu in charge. Excuse me but, why is Mr. Security Netanyahu still in charge after the biggest day of carnage in his watch? Anyway, let’s switch to Argentina…

You know, governance matters. Argentina continues its long streak of horrendous governance. And now they elected a hell of a guy, I guess everyone is looking for a savior smh. Argentina’s Economic Turmoil Is Getting Worse. These Charts Explain Why. President-elect Javier Milei faces runaway inflation, empty coffers after decades of economic mismanagement.  Anyway, this guys is a piece of work, I just don’t have that feeling he is going to be the savior so good luck to all Argentinians! Wild-Haired Former Rocker Promised to Remake Argentina if Elected President. Ok, some facts about this guy, hang on:

 

 

ODDZ & ENDZ

Oh Goldman Sachs, the smart guys with the CEO David Solomon who likes to DJ lol. RIP Goldman Sachs. When I started out at Goldman, it was the most feared firm on Wall Street. Those days are gone for good. Indeed.

Solomon is not unwilling to admit error. “Look, I don’t know that we’ve gotten everything exactly right,” he says. “We definitely haven’t.” But he wants it known that he does not recognize himself in what’s been written about him. He’s been called, among other things, a “jerk,” and a “prick,” and a “dick.” Solomon’s defenders frequently use the word “tough” to explain why he isn’t well-liked. “He’s not a teddy bear,” concedes someone close to him. Still, Solomon’s predecessors, Blankfein and Hank Paulson, weren’t exactly known for being soft and fuzzy. What’s different about Solomon is that his toughness is unleavened by Blankfein’s humor, or by Paulson’s knack for being simultaneously ferocious and oddly endearing. Solomon has a habit of beginning an answer by questioning your premise, or by quibbling with something you said.

I had no idea turtle smuggling was a thing, another fantastic Texas Monthly story: The Great Cajun Turtle Heist. Alligator snapping turtle populations in Texas were dwindling. One family of smugglers had been poaching them from the state for years. 

I have not seen these amazing photos from the Vietnam War. The Marines and Tet: The Battle That Changed the Vietnam War.

More amazing photos: 25 Winning Photos From The 35th AAP Magazine Photography Awards.

 

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