Mar 29, 2022

Trying to contextualize inflation data

I'll assume this is legit thing to do but idk. If I compound $1 starting in 1914 at [2%, 3%, 4%, CPI-U] This is what it'd look like. Any conclusions? Not really although it looks like: a) the damage of the late 70s was more or less permanent, b) we are inflicting some damage again, and c) hyper inflation would be literally off the chart and unimaginable. 

Mar 28, 2022

Swag on Annuity Discount Rate

This is a back of the cocktail check of implied annuity discount rates.  Not sure I'm doing this right. If I trust immediateannuities.com ("IA")(not sure how those are priced? market products available to IA? CANNEX? idk) and AAcalc.com (guess based on a number of inputs including the current yield curve which gives a price close to the former) and if for my model I use SOA annuitant conditional survival probabilities for 65yo male and a 5% load and assume a simple immediate annuity and if I solve for the average simple discount that matches my (discrete) model to the basic IA price, the discount looks like it is around 3.6%.  I can't remember the last time I did this, maybe a couple years ago and it was under 3%.  I have not looked at the yield curve but if I did I'm not sure how an insurer or AAcalc uses it because the current 30 year is still just a little over 2.5.  Anyone know how observable rates work in pricing annuities? 

Mar 23, 2022

On an Inflection Point

Somewhere around 2008 I got myself trapped into Florida by way of a deft but radically unprincipled and bad faith maneuver by my ex. Don’t worry, I have forgiven her both the infidelity and the move-fraud (I am holding out on forgiveness for the mess she created in my kids’ heads but then again that is for them to forgive, not me). I could have perhaps bailed on the whole move-enterprise at the time but I mean really, I had a moral commitment to my kids and I was the trailing spouse at that time so it was hard to object. Plus she told me at the time that we were: a) going to move back in 2 years (we kept our house in MN for that reason) and b) that we would work on our marriage while in FL. 

However, in the event, I was told somewhere around the week before we got on the plane – after the moving trucks had left, after the kids were enrolled in new schools – that there was a problem: “uh, can we talk for a second? I need to tell you that I rented a second house…those boxes with the red stickers are going to my house, green to yours.” Geezus. No Exit. I get the Sartre Nausea thing now maybe though he was talking about something else. Got the divorce petition a few weeks after we moved. Nausea indeed. 

I asked an attorney about this problem and he just said “short of having a tug of war with the kids arms on the jetway, there’s not much to do now. Go or stay. You can’t slap a restraining order on her.” So, I went. I later called this my “elevator problem.” One can get on an elevator 10 million times but the 10M+1st time, when it gets stuck between floors, you start to sweat. It is a trap.