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Author: Rayvt Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: A talking head economist says to buy stocks Date: 9/24/2013 10:48 AM
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http://www.indexuniverse.com/sections/news/19944-roubini-ove...

The steady anemic global recovery led by the United States means investors ought to overweight U.S. equities, Nouriel Roubini, the New York University economics professor known as “Dr. Doom”.

Roubini, said the United States is leading the world out of recession.

"You probably want to be underweight in bonds, and overweight in equities, mainly in the U.S.,” Roubini said.

"While the U.S. is definitely recovering, much of its allure is that it’s more attractive than other parts of the developing world, notably Europe"

“The fiscal problems in the U.S. are severe, but on a relative basis, they’re not as severe as in Japan, the eurozone and the U.K.,”
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Author: CCinOC Big funky green star, 20000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73275 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 11:04 AM
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I'll see you one economist and raise you 300.

300 Economists Warn Obama: Grave Danger Ahead
http://www.rooseveltinstitute.org/new-roosevelt/300-economis...

I don't agree with these economists' cure, but that's another topic.

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Author: Rayvt Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73276 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 11:26 AM
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Yeah, just a point of information. Personally I pay zero attention to economists, or talking heads of any kind, or Pronouncements of Learned Individuals, or newspapers, or political magazines.

For purposes of investing, that is. I read all of these for education, information, and entertainment.

Neither the climate or the stock market works by majority rules.

We learned that in the 10'th grade, where the school's most popular and respected teacher had the class vote on the value of PI.

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Author: CCinOC Big funky green star, 20000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73282 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 8:44 PM
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Personally I pay zero attention to economists, or talking heads of any kind, or Pronouncements of Learned Individuals, or newspapers, or political magazines.

Except when one of them supports your premise. Then you start a thread to disseminate their opinion.

Hokay!

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Author: Jeanwa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73283 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 8:49 PM
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I'll see you one economist and raise you 300.

300 Economists Warn Obama: Grave Danger Ahead
==============================

If the whole economy is in grave danger, doesn't that include the insurance companies? Do they have a plan for survival and continue payouts when this grave danger happens?

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Author: synchronicityII Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73285 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 9:37 PM
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If the whole economy is in grave danger, doesn't that include the insurance companies? Do they have a plan for survival and continue payouts when this grave danger happens?

They're going to start offering a new product. You may have heard of survivorship universal life, well this will be SURVIVALIST universal life! Every year your account gets credited with precious metals, canned goods, bullets, kevlar, and old gummint surplus cheese from cold war era civil defense shelters.

-synchronicity, I'd buy it just for the cheese.

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Author: PSUEngineer Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73286 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 10:14 PM
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They're going to start offering a new product. You may have heard of survivorship universal life, well this will be SURVIVALIST universal life! Every year your account gets credited with precious metals, canned goods, bullets, kevlar, and old gummint surplus cheese from cold war era civil defense shelters.

Do the credits include toilet paper?

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Author: CCinOC Big funky green star, 20000 posts Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73287 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 10:29 PM
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The Great Depression Q&A

Recently, St. Louis Fed Economist Dave Wheelock sat down to answer some questions about some parallels between the current economic recession and the Great Depression.

http://www.stlouisfed.org/great-depression/qa.html

Why do we have these periods of booms and busts?

Well, you do have shocks that are uncontrollable—when you have wars and severe weather events, for instance. You have technology shocks. Then, you do have these episodes of financial mania that seem to just arise. It’s hard to put your finger on it. Some people will describe it as myopia on the part of investors. They’ll think that prices will go one way forever. Other people will suggest monetary policy flooded the market with a lot of liquidity. That money and credit had to go someplace. Economists are generally reluctant to talk about irrational behavior, but there is a growing field of behavioral finance, which emphasizes this myopic behavior. It’s a tough question to answer, but it’s certainly intriguing.

Stablity of Life Insurance under Great Depression Strain

http://library.cqpress.com/cqresearcher/document.php?id=cqre...

While there were several notable failures of insurance companies during the Depression, the only relatively large life company in difficulty was the $150,000,000 Illinois Life of Chicago, whose failure was followed by indictment of several of its officers on charges of conspiracy and embezzlement of funds of the company to support hotel properties in which they were interested. Most life insurance companies were so strong financially that they were not obliged to seek loans from the Reconstruction Finance Corporation. At the same time, they were indirectly aided by RFC loans to the railroads. Although the insurance companies held railroad bonds in large amounts, they were mostly high-grade, first-lien obligations. An estimate of the amount of defaulted bonds held by life insurance companies placed the proportion at less than 2 per cent of the bond portfolio, or less than 1 per cent of total assets.

Historical Evolution of Life Insurance // The Great Depression Pressures Life Insurers

http://www.naic.org/documents/cipr_130404_white_paper_state_...

State regulation (put in place after the Armstrong Investigations) still prohibited insurers from investing in the stock market. As such, the stock market crash did not have the same devastating impact on life insurers as it did other institutions. Only 20 out of 350 insurers (5.7 percent) went into receivership during the Great Depression. Of those that failed, virtually all of the policyholder claims were still honored from solvent reinsurers. This compares to more than 4,000 bank failures out of approximately 25,733 state and national banks (15.5 percent) at the height of the Great Depression in 1933. In stark contrast to insurers, bank failures resulted in losses to depositors of about $1.3 billion from 1929 to 1933. However, the life insurance industry did not escape unscathed. Life insurers were primarily invested in conservative long-term bonds, real estate, and mortgage loans. As the Great Depression wore on, mortgage defaults and low interest rates hurt both asset valuations and investment earnings. Low interest rates also hurt insurers’ ability to support crediting rates on annuity policies priced before the economic fallout. Compounding this problem was insurers’ use of overly optimistic mortality tables. At the same time, policyholders could no longer afford their policies or they cashed them in for needed liquidity. The result was lapsed policies and high surrenders that drained cash flows. Higher mortality losses and rising disability claims further increased cash outflows. Accounting for the changes in the economic environment, insurers shifted their investments toward government securities, commercial real estate mortgages and public utility bonds. Despite the challenges of the time, it is important to note life insurers provided a substantial amount of liquidity at a time when such sources were very limited.

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Author: synchronicityII Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73288 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 10:50 PM
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Do the credits include toilet paper?

http://www.civildefensemuseum.com/cdmuseum2/supply/san/skiv1...

-synchronicity

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Author: spinning Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73290 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/24/2013 11:52 PM
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State regulation (put in place after the Armstrong Investigations) still prohibited insurers from investing in the stock market. As such, the stock market crash did not have the same devastating impact on life insurers as it did other institutions.

Is this still true? If not, it would make insurance companies riskier.

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Author: Rayvt Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73293 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/25/2013 10:09 AM
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Every year your account gets credited with precious metals, canned goods, bullets, kevlar, ....

...and an updated map showing the location of all Mormon residences in your zipcode. ;-)

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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73312 of 76237
Subject: Re: A talking head economist says to buy stocks Date: 9/25/2013 7:54 PM
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State regulation (put in place after the Armstrong Investigations) still prohibited insurers from investing in the stock market. As such, the stock market crash did not have the same devastating impact on life insurers as it did other institutions. Only 20 out of 350 insurers (5.7 percent) went into receivership during the Great Depression. Of those that failed, virtually all of the policyholder claims were still honored from solvent reinsurers. This compares to more than 4,000 bank failures out of approximately 25,733 state and national banks (15.5 percent) at the height of the Great Depression in 1933. In stark contrast to insurers, bank failures resulted in losses to depositors of about $1.3 billion from 1929 to 1933.

This has changed. Not only do insurance companies invest in the stock market now, they guarantee their variable annuity and IUL policyholders 'returns' based on stock market performance.

Therefore, holding up the performance of insurance companies during the Depression as a reason to believe that insurance companies (and the IULs they issued) will be able to withstand a future stock market meltdown that other financial institutions will not be able to withstand is fundamentally flawed reasoning.

AJ

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