$1 trillion gap for states . . . ouch

States face a $1 trillion gap between assets in public pension plans and their obligations to retirees, a Feb. 18 study by the Washington-based Pew Center on the States said. Illinois borrowed $3.5 billion in January to finance its pension contribution, which led Moody’s and S&P to cut their ratings to the second-lowest of any state.

Uh oh for banks!

In a report published this month, Moody's Investors Service Inc. said that private mortgage insurers had rejected 20% to 25% of claims in recent quarters, compared with a long-term average of about 7%.

What this means is that loans that lenders have on their books which have defaulted and have not been written down because the lenders feels secure in the value because they have purchased mortgage insurance from an insurer like MGIC are really not properly valued. If the rejections are upheld, the lenders are going to have to write down more loans.

the state of the world of investing today

"a cynic knows the price of everything and the value of nothing" anonymous

I was a member of a fraternity at USC

Wall Street Bonuses??? Watch the 60 Minutes interview with Michael Lewis

click here

Investing Advice from a real pro

"The world is a lot different now. Nobody with any brains buys an asset based on what it's done. All intelligent investors buy for the future." Bill Fleckenstein

Never plan to be on time

Always plan to be early. Late folks tend to have an aversion to waiting. They try to time their arrivals to the minute. If the drive to work takes 20 minutes and it’s 22 minutes before 9:00, the late person, rather than leaving the house, will continue reading the paper or cleaning the breakfast dishes until exactly 8:40. Of course, this kind of split-second time management rarely works.

The end of ignorance is coming

During a recent interview with Charlie Rose, Intel CEO Paul Otellini had some amazing comments on the future of computing. He also said that within 5 years everything is going to be on every device; you'll be able to access it all from your car, your phone, your personal computer, your TV. To which Rose asked, "What's going to become obsolete?" Otellini responded, "Ignorance."

The problem with Greece, Germany and California

It's all about fertility and we have a developing problem too. The United States has a fertility rate of around 2.1, or just over two kids per couple (our politicians have done a really good job of mortgaging our kids future for them).

Greece has a fertility rate of about 1.3: 10 grandparents have six kids have four grandkids - i.e., the family tree is upside down. Demographers call 1.3 "lowest-low" fertility - the point from which no society has ever recovered. And compared to Spain and Italy, Greece has the least worst fertility rate in Mediterranean Europe.

read the whole story here

What were the real losses at Madoff??

By the end of his multi-decade fraudulent run, the final account statements (November 30 2008) issued to all his “clients” totaled the sum of $73.1 billion dollars. The people conned by Madoff believed they were worth a collective $65 billion dollars more than their accounts were worth. The initial amount of cash put up was $20 billion dollars, beginning in the early 1960s and continuously from there forward.

The bankruptcy court in this case has made the basic determination that the losses were ONLY the cash that was initially given to Madoff & Co. The extra $45 billion was a fictitious part of Madoff’s fraud. Therefore, it represents funds that were not actual investment losses, and are not covered by SIPIC insurance. So there . . .

The largest Tsunami ever . . .

Where was the largest tsunami in history recorded?

a. India

b. Philippines

c. Chile

d. Japan

In 1971 a wall of water 278 feet (84.7 meters) high surged past Ishigaki Island, Japan. It moved a 750-block of coral 1.5 miles (2.4 kilometers) closer to shore but did little other damage.