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12-16-2014, 06:11 PM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 5,991
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Quote:
Originally Posted by Senator
We are definitely not looking at WW3, unless Putin attacks the USA in some sort. Even if the entire EU is overtaken by Russia, it is not worth risking one American life. They have enough people in those countries to fight their own wars.
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Yes, well, unfortunately we happen to be a member of this obscure organization called NATO and they were foolish enough to make a pact that if you attack a member, you attack the whole family. Lots of little former Russian goodies are now members of this club now.
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12-16-2014, 06:44 PM
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#22
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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WW3 would be one of the portfolio failure modes described in The Retirement Calculator From Hell, Part III, where William J Bernstein describes the external risks that make any estimate of long-term financial success greater than about 80% meaningless.
Quote:
Let’s examine a small sampling of possible political, economic, and military failure modes:
- The mildest scenario is that of catastrophic inflation, as experienced in Germany and Hungary in the 1920s or, more recently, in much of the developing world.
- Political failures are slightly worse, since these threaten the basic human motivation to work and produce. The state, for whatever reason, can decide to confiscate your assets or, worse, society’s means of production. Anyone who judges this unlikely should turn on CNN during any G-8 or WTO conference.
- Local military action. Probably the lowest-probability item on this list, but something to think about on other continents.
- The Big One: Some deranged prime minister or colonel in central Russia, Pyongyang, or South Asia could let loose the four horsemen upon the planet.
So, think about what a 97% 40-year success rate means: the absence of all of the above for approximately the next 1,200 years. (A 97% success rate means a 3% failure rate; those 40 years divided by 0.03 is 1,200 years.) Ignore for a minute the uncertainties of the less-developed world and think only about the winners: Germany—in this century alone, three episodes of military and/or economic disaster, the first two associated with mass starvation. Japan—wartime devastation even worse than Germany’s. England—near brushes with disaster in 1812-1814 and in both world wars. And even the United States—repeated banking failures, civil war, and the near-bankruptcy of the Treasury in the 19th century. The near collapse of the capitalist economy in the 1930s. And oh yes, I almost forgot—the entire globe barely missed mass incineration in October 1962.
History’s best-case scenario was the Roman Empire, which survived more or less intact for about seven centuries (if you ignore the odd sackings of the capital after 200 A.D.).
A wildly optimistic historian might give us another few centuries of economic, political, and military continuity. Back-of-the-envelope, that’s about an 80% survival rate over the next 40 years. Thus, any estimate of long-term financial success greater than about 80% is meaningless.
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12-16-2014, 07:23 PM
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#23
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,194
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Quote:
Originally Posted by samclem
I'm worried about what Russia will do. These very low oil prices have put Putin in a bad spot. He's no doubt feeling domestic pressure, and will be tempted to do something to rouse the public behind the Motherland and forget about their inflation, commodity shortages, and falling standard of living. He'll have internal scapegoats, but will need external ones, too. A geopolitical/military flare-up of some kind is exactly what the doctor ordered, and by the time it's on TV in Moscow, it won't matter who really started it because they'll say whatever needs to be said, and the public will believe it (because they want to).
Those dancing in glee because Putin is in a pickle are ignoring history.
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You would be wrong in him feeling domestic pressure... his approval rating is over 80%..... so far the drop in the ruble has not filtered down to the person on the street.... now, the big businesses are feeling the pinch, but not the masses yet...
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12-16-2014, 07:29 PM
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#24
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,194
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Quote:
Originally Posted by Senator
We are definitely not looking at WW3, unless Putin attacks the USA in some sort. Even if the entire EU is overtaken by Russia, it is not worth risking one American life. They have enough people in those countries to fight their own wars.
My personal thought is this. If a war starts anywhere, and we are not ready to use nuclear weapons from the get-go, it's not bad enough to get in.
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But we have that pesky NATO treaty saying we will protect all of those countries if attacked.... most likely to start in the Balkins...
Opps... see that Fermion beat me to it....
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12-16-2014, 07:46 PM
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#25
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gone traveling
Join Date: Sep 2013
Posts: 1,248
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Quote:
Originally Posted by Texas Proud
You would be wrong in him feeling domestic pressure... his approval rating is over 80%..... so far the drop in the ruble has not filtered down to the person on the street.... now, the big businesses are feeling the pinch, but not the masses yet...
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Just give it a time. Cost of everything is quickly rising.
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12-16-2014, 07:46 PM
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#26
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
Originally Posted by Texas Proud
You would be wrong in him feeling domestic pressure... his approval rating is over 80%..... so far the drop in the ruble has not filtered down to the person on the street.... now, the big businesses are feeling the pinch, but not the masses yet...
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But his oligarch pals are "domestic pressure" too.
I wonder if today's Russian populace is really going to be as docile and patient as their long-suffering Soviet forebears. And even they finally got fed up with corruption and an obviously broken system.
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12-16-2014, 07:50 PM
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#27
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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The American fracking industry did this. They should have been Time's people of the year.
Thank you, frackers!
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12-16-2014, 07:51 PM
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#28
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by M Paquette
WW3 would be one of the portfolio failure modes described in The Retirement Calculator From Hell, Part III, where William J Bernstein describes the external risks that make any estimate of long-term financial success greater than about 80% meaningless.
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With man-made calamities like what we have seen in the past, who needs asteroids?
And Bernstein pointed out that 97% success rate for a 40-year retirement means no major upheavals for 1200 years. So, why people keep bothering with 100% FIRECalc runs?
Party on, people! You don't have as much control of your future as you think. You certainly influence its course, but the outcome is never 100% certain as you hope for and plan. Party on!
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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12-16-2014, 07:54 PM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2007
Posts: 7,746
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Maybe there will be new "elections" and the oligarchy will find a new "candidate" to win.
In other news, I bought five figures of international value fund just a day too early. Catching falling knives can leave the occasional gash in your hands.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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12-16-2014, 07:56 PM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 37,931
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Quote:
Originally Posted by Car-Guy
I heard Stuart Varney say today on his show that the current oil glut and drop in crude prices (and the Collapse of the Ruble) was due in large part to "fracking". I'm not sure how true that is but I thought it was an interesting comment.
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That's a bit convoluted. The oil price drop is due to speculators dumping oil since Saudi Arabia said they wouldn't cut production. Some have speculated that Saudi Arabia did this to shut down the US fracking industry, although why they wouldn't have taken up such a step a year or two ago is a big question in my mind. It's just as likely they did it to hurt Russia directly, IMO. Only they know what their strategy is.
__________________
Retired since summer 1999.
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12-16-2014, 08:05 PM
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#31
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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Quote:
Originally Posted by audreyh1
That's a bit convoluted. The oil price drop is due to speculators dumping oil since Saudi Arabia said they wouldn't cut production. Some have speculated that Saudi Arabia did this to shut down the US fracking industry, although why they wouldn't have taken up such a step a year or two ago is a big question in my mind. It's just as likely they did it to hurt Russia directly, IMO. Only they know what their strategy is.
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That's totally convoluted. The Saudis didn't do it before because the price of oil wasn't dropping. Duh.
Of course speculators are dumping oil (Dumping rubles is the same thing. It's all Russia produces.). What else are they going to do with it?
There's too much for the demand due to the frackers' production increasing & Saudis not cutting production. While they're hurting the frackers, the Saudis also hurting themselves & most importantly, hurting Russia even more. No love lost there with their cozy relationships with Iran & Syria.
As I said above, praise to the American frackers!! We should give them a tax credit for their production.
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12-16-2014, 08:14 PM
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#32
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,593
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Quote:
Originally Posted by Car-Guy
I heard Stuart Varney say today on his show that the current oil glut and drop in crude prices (and the Collapse of the Ruble) was due in large part to "fracking". I'm not sure how true that is but I thought it was an interesting comment.
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This made me laugh! Stuart Varney showing he knows nothing about the oil industry.
We have been fraccing wells in the U.S. since the 1940's....how else do you think oil drillers break up the oil-rich rock formations to get the oil and gas out?
__________________
*********Go Astros!*********
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12-16-2014, 08:18 PM
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#33
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,593
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Quote:
Originally Posted by gerntz
That's totally convoluted. The Saudis didn't do it before because the price of oil wasn't dropping. Duh.
Of course speculators are dumping oil (Dumping rubles is the same thing. It's all Russia produces.). What else are they going to do with it?
There's too much for the demand due to the frackers' production increasing & Saudis not cutting production. While they're hurting the frackers, the Saudis also hurting themselves & most importantly, hurting Russia even more. No love lost there with their cozy relationships with Iran & Syria.
As I said above, praise to the American frackers!! We should give them a tax credit for their production.
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DEF: frackers = oil producing companies...AKA...all oil companies that explore, lease acreage and drill wells looking for oil. This would include Exxon Mobil, Anadarko, Conoco Phillips, Marathon, EOG Resources, Chevron, etc, etc...
Blaming "The Frackers" sounds like a reality TV show or similar.
__________________
*********Go Astros!*********
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12-16-2014, 08:22 PM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 37,931
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Quote:
Originally Posted by gerntz
That's totally convoluted. The Saudis didn't do it before because the price of oil wasn't dropping. Duh.
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So the Saudis waited until the price of oil started dropping a little before they made it drop a whole lot further by refusing to cut production?
__________________
Retired since summer 1999.
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12-16-2014, 08:26 PM
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#35
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 7,107
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Recent years "fracked" oil production is piddling compared to other traditional extraction practices.
__________________
Duck bjorn.
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12-16-2014, 08:34 PM
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#36
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,593
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Quote:
Originally Posted by Brat
Recent years "fracked" oil production is piddling compared to other traditional extraction practices.
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Yes, what's being done now is very controlled and precise, kind of like taking out an enemy tank with a laser guided bomb instead of like the old days when you would try to blow up the whole town and hope to get the tank.
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*********Go Astros!*********
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12-16-2014, 09:05 PM
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#37
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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Quote:
Originally Posted by NW-Bound
With man-made calamities like what we have seen in the past, who needs asteroids?
And Bernstein pointed out that 97% success rate for a 40-year retirement means no major upheavals for 1200 years. So, why people keep bothering with 100% FIRECalc runs?
Party on, people! You don't have as much control of your future as you think. You certainly influence its course, but the outcome is never 100% certain as you hope for and plan. Party on!
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I would beg of some one who is not mathophobic as I am to explain to me why the calculation of a 97% success rate for a 40 year retirement means no mayor upheval for 1,200 years and how what happens over 1200 years affects my measly remaining few decades (at best) on this earth. Oh, by the way 40/.03 =1333.33
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12-16-2014, 09:36 PM
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#38
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 5,991
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Quote:
Originally Posted by ejman
I would beg of some one who is not mathophobic as I am to explain to me why the calculation of a 97% success rate for a 40 year retirement means no mayor upheval for 1,200 years and how what happens over 1200 years affects my measly remaining few decades (at best) on this earth. Oh, by the way 40/.03 =1333.33
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If you have a major upheaval every 40 years then you have a 100% chance of failure in your 40 year retirement plan. In order to only have a 3% chance of failure (assuming everything else was perfect in your investments and SWR) you would need a major upheaval to only happen an average of once every 1200 years.
Reminds me for some reason of the guy who carries a bomb with him when he flies because what are the odds of two people having a bomb on an airplane.
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12-16-2014, 09:58 PM
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#39
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 2,525
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Got it. Anybody contemplating a 40 year retirement is doomed to 100% failure. Whew! its a good thing I'm 65 so at best I got a maximum of 35 years - just under the wire!
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12-16-2014, 11:03 PM
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#40
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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No, not 100% failure over 40 years. But it is impossible to say that it will be 0. In the history of the US since 1776 till 2014, there have been big events like the American Revolution itself, the Civil War, the two World Wars, the Great Depression, etc... Quite a few big events in 238 years. So, how can we say that there's 0% chance of anything big happening in the next 40 years, that won't affect us in a bad way?
I again will say that I am more worried about something happens to me personally, the main thing being health deterioration. Something bad already happened to me while I least expected it, and I recovered but have "nice" surgical scars to show for it. Many Most of us will not be posting here in 40 years. Anybody cares to make a guess how many will be left? Definitely not 97%. I am not sure of the age composition of posters here, but I think much less than 50%, maybe even 25% 10%, will be left standing, er breathing, as quite a few will be alive but bedridden.
And Bernstein was just rounding off 1333 years to a nice number of 1200. When we talk about probability and randomness, a rough order of magnitude is sufficient to make a point.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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