Tug of War and Happy Mother's Day

What a week in world events with fear running rampant. The tug of war that was subject of last week's newsletter was in full force this past week, and it seemed like a war and the side with good news let go of the rope. The first section is from Vanguard giving a weekly recap. Next is a section on the events in Greece. Finally, a section on Mother's Day.

Vanguard

The U.S. stock market's historic plunge toward the end of the week, which wiped out gains for the year, overshadowed positive news about the economy. Job growth surged in April as businesses gained more confidence and hired more people in a variety of sectors. Firms invested more in their businesses, ramped up production, and restocked depleted inventories. The manufacturing sector has played a key role in this recovery; it's added more than 100,000 jobs since December. Economists said continued improvement in employment in all sectors will be critical for a sustained recovery. For the week ended May 7, the S&P 500 Index fell 6.4% to about 1,111 (for a year-to-date total return of about 0.3%). The yield of the 10-year U.S. Treasury note fell 24 basis points to 3.45% (for a year-to-date decrease of 40 basis points).

Greece

This week the debt level of Greece and bailout by the IMF was the top story that trumped all other news. It is like the mouse that roared. The economy of Greece comprises only 2% of the European Union which means that it is a very small fraction of the world's economy, it is in the noise. The IMF bailout is on the magnitude of $130 billion, about 1 month on US debt last year. So if Greece's economy is so small, then what is all the fuss? The answer is the concern that this is the tip of the iceberg in Europe.

It is good to learn from the Greece debt situation because our country is going down the same road. We are truly trying as a government to be like Europe, not a good road. So what we learn from this situation is that governments that go broke pay higher interest rates, have to go on an austerity plan that includes reducing government pension payments, and higher taxes. Sooner or later when a country ignores being fiscally responsible the end result is not pretty.

What this means that in the future, years from now, as our debt balloons and we have to go on an austerity plan to balance the budget public benefits will be reduced, like: pensions, Social Security, and Medicare. It is good to understand that we need to be prepared to retirement beyond counting on Social Security and Medicare benefits.

The question is the stock market correction mean that we have a repeat of 2008 or is this a buying opportunity? My perspective is that this situation is nothing in comparison to what we have alrealy gone through and given the improving economy this represents a buying opportunity. The good news on the USA and global economy keeps getting better which means that the future looks better than today.

Mothers Day Trivia: Believe It or Not Records

Mothers Day Trivia: Oldest Mother
On April 9, 2003, Satyabhama Mahapatra, a 65-year-old retired schoolteacher in India, became the world's oldest mother when she gave birth to a baby boy. Satyabhama and her husband had been married 50 years, but this is their first child. The baby was conceived through artificial insemination using eggs from the woman's 26-year-old niece, Veenarani Mahapatra, and the sperm of Veenarani's husband.

Mothers Day Trivia: Most Surviving Children
Bobbie McCaughey is the mother who holds the record for the most surviving children from a single birth. She gave birth to the first set of surviving septuplets - four boys and three girls -on November 19, 1997, at the University Hospital, Iowa, US. Conceived by in vitro fertilization, the babies were delivered after 31 weeks by cesarean in the space of 16 minutes. The babies are named Kenneth, Nathaniel, Brandon, Joel, Kelsey, Natalie and Alexis.

Mothers Day Trivia: Shortest Interval Between Two Children
Jayne Bleackley is the mother who holds the record for the shortest interval between two children born in separate confinements. She gave birth to Joseph Robert on September 3, 1999, and Annie Jessica Joyce on March 30, 2000. The babies were born 208 days apart.

Mothers Day Trivia: Longest Interval Between Two Children
Elizabeth Ann Buttle is the mother who holds the record for the longest interval between the birth of two children. She gave birth to Belinda on May 19,1956 and Joseph on November 20, 1997. The babies were born 41 years 185 days apart. The mother was 60 years old when her son Joseph was born.

Mothers Day Trivia: Highest Recorded Number of Children
The highest officially recorded number of children born to one mother is 69, to the first wife of Feodor Vassilyev (1707-1782) of Shuya, Russia. Between 1725 and 1765, in a total of 27 confinements, she gave birth to 16 pairs of twins, seven sets of triplets, and four sets of quadruplets. 67 of them survived infancy.