Social life and health

Health isn't just predicted by how many resources people have, but by how they relate to other people. Feeling isolated make you sick. The social world remodels your body. Your relationships with the people around you profoundly influence whether you perceive the world as a safe, comfortable place, or as one that is threatening and uncertain. As long as your brain thinks that everything is fine, your body is going to be running a program of long-term investment, general maintenance, and rebuilding. If your brain perceives that you are in an uncertain or threatening environment then it's going to activate stress responses in the rest of the body that trigger changes in gene expression. When we feel threatened our fight or flight response will be activated.

A naturally shy, introverted child may hang back on the playground, get picked on for doing so, and become even more likely to withdraw. These variations in individual temperament are relatively small difference to start off with, but they can propagate into big differences over time by shaping the pattern of social choices you make. Consistently choosing one way over the other solidifies your outlook on whether other people are generally good and trustworthy, or unfriendly and threatening. If your worldview leans toward the later, you are more likely to build a more autonomous, independent life for yourself. That in turn propagates this perception that the world is a distant place, that there is no one else you can turn to. That world view seem to be correlated with long term increases in health risk.

The lonely people's immune systems tended to over express an array of inflammation genes, which control immediate tissue repair processes but also drive the wear and tear we know as aging.

Year 2050

US Census Bureau is anticipating that there will be 1 million centenarians kicking around by 2050.

2050 - 1967 = 83

Will I be around?

Q: "What's the best thing about being over 100 years old?"
A: "No peer pressure"

Older people are less likely to hold a grudge, more likely to forgive. Being slow to anger, can be very useful skill for mediating interpersonal conflicts. They can help different members of a group see the bigger picture.

Combine wisdom and perspective with youth and vigor.

My readings in the past year

A long bright future by Laura L. Carstensen

Power: Why Some People Have It and Others Don't by Jeffrey Pfeffer

Highly Effective Networking: Meet the Right People and Get a Great Job by Orville Pierson

This Time Is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart and Kenneth Rogoff

A Financial History of Western Europe (Economic History) by Charles P. Kindleberger

Moody's: "The level of uncertainty about the outlook for the euro area... is no longer compatible with a stable rating outlook."

Germany: "Even if Germany were to receive a worse rating, it would still be the country with the best rating in Europe, because all the other countries would have to be downgraded."

Moody's: "A Greek exit would set off a chain of financial sector shocks... policymakers could only contain at a very high cost."

Germany: "If Germany gives additional billions in aid without anything changing in these countries, things will move in the wrong direction."

Moody's: "Over the transitional period...additional pressure on the strongest nations' balance sheets will increase pressure on their credit rating."

Germany: "The risk mentioned by them are not new, although the analysis places particular emphasis on short-term risks while longer term stability prospects go unmentioned."

Fertilize ocean with iron to reduce carbon

http://www.reuters.com/article/2012/07/20/us-climate-oceans-idUSBRE86J1E920120720

Evidence is increasingly clear that the U.S. economy is slowing.

The dollar declined against the euro and the yield on 10-year U.S. government bonds dropped to an all-time low as the data stoked worries the economy was floundering and could need more help from the Federal Reserve. U.S. stock prices were lower.

The International Monetary Fund slashed its forecast for global economic growth on Monday and urged European policymakers to take bolder action to stem their crisis. It also warned that China's economy risks a hard landing.

Job creation in the United States has slowed dramatically in the last few months as employers worry about a sagging global economy hurt by Europe's snowballing debt crisis. Bernanke's peers at central banks in China, the euro zone and Britain have cut interest rates this summer to prop up their economies.

The U.S. factory sector also has shown signs of contraction due to the global slowdown, although on Monday a survey showed New York state manufacturers perked up in July. Still, new orders shrank at the state's factories.

The retail data is worrisome because it suggests consumer spending, which drives about two-thirds of the economy, is also sagging.

A poll showed on Monday that American companies are scaling back plans to hire workers with a rising share of firms saying the European debt crisis is taking a bite out of their sales.

The Commerce Department said sales of motor vehicles and parts dropped 0.6 percent last month. Receipts at electronics and appliance stores declined 0.8 percent.

Sales at gasoline stations dropped 1.8 percent, reflecting a decline in gasoline prices.

Excluding autos, retail sales fell 0.4 percent last month. A so-called core measure of retail sales, which excludes autos, gasoline and building materials, dropped 0.1 percent.

Lateral Move

Once you are proficient in a skill you tend to use it again and again. You become less inclined to learn new skills, use new concepts and try new tools, because you know the ones that worked. You are like a hammer seeking nails. But to be successful long term you need to keep and eye on the new skills and tools. When the problem is a screw, a hammer is not going to be effective.

Lateral move increases job satisfaction. You learn new skills, have different perspectives, build new relationships, and add variety into your reseme.

800 years of financial crisis

Financial crises are common and similar.

Debt and default go hand in hand.

Currency debasement and depreciation are common ways adopted by sovereign to reduce debt.

This time is different - yeah, right.

Some working skills

• Consult: fist seek to understand, then to be understood
• Negotiate: is the relationship long term (colaborative) or short term (competitive)? Can you find win-win solution?
• Strenthen relationship: what is the thing your counterparty value? Can you provide them? What is the thing you value? Can you clearly communicate them?

Policy choices

What are the policy choices you have when faced with recession?

1. Lower exchange rate to improve exports
2. Lower interest rate to spur home and car buying
3. Public investment in infrastructure, education, and public health
4. Encourage domestic and foreign investment by reducing restrictions, red tape, welfare and taxes. Streamline regulation to reduce cost of doing business.

# 1 and 4 are supply side measures. They aim to increase production. # 2 and 3 are demand side initiatives. They work by stimulating demand.

Conservatives usually want to use supply side measures. Liberals usually want to use demand side policies.

Why compromise and unity is important for growth

Political infighting can pull down economic growth. This is true everywhere in the world.

In 2011 in the US we see the national debt ceiling brinkmanship in Congress pull down consumer confidence and business hiring. In Europe the dispute between German and southern countries - Spain and Italy - can pull the entire euro zone into recession. The same force slowed down the economic development in Africa, India, and many other places in the world.

Strike and labor dispute is another example.

To foster growth and prosperity it is important to resolve political differences.

Communicate with yourself

Some notes from reading:

• Heed your mind and your life will follow
• Make time for quiet reflection and listen to your heart
• Face your fears
• Be open - Don't be afraid to make changes in your life
• Stand up for what you believe
  
  
  
  

BIBOR manipulation

LIBOR rate is used to price adjustable rate mortgages, car loans, and coporate prime rates.

Traders and executives at Barclay manipulated the rate to profit from trading position.

Barclay paid $450M to settle the charge.

What's shocking is CNBC's Rick's comment: "Central bank is manipulating rates. There is nothink wrong Barcaly trying to do the same thing."

Well, Central Banks manipulate interest rates to foster price stability and economic growth. They do it for the benefit of the society. Barclay did it to profit themselves. There is a difference here.

I found it troubling that financial commentators are justifying illegal behavior. It points to an environment that people lost their sense of right and wrong, and the only goal is to profit, even at the cost of society.

How to invest in current environment?

Bond yield is artificially low due to central bank buying and holding of $2 trillion plus Treasury and agency securities. Bond pricing is at historically high valuation.

Stock - S&P PE at 14 is at historical average and isn't cheap. Given a deleveraging outlook I expect slow economic growth. I think blue chip consumer brands are going to do well, especially those with emerging market exposure. High leveraging companies are benefiting from low rate environment but may face challenges to grow.

Real Estate - the best time in a decade to buy.

Retirement Cost

median annual expenditures in 2009 (in 2010 dollars) for a household with at least one person age 65 to 74 totaled:

• Home: $14,471
• Food: $3,896
• Health: $3,504
• Transportation: $3,887
• Clothing: $830
• Entertainment: $2,417
• Other: $1,185