PARALLEL UNIVERSE: Post Office Floats Idea of Offering Financial Services; Banks Hate Idea

• By David M. Kinchen 

If you can remember when you could open a savings account at your local post office, you’re on Social Security. Yes, the postal savings plan was dropped in 1967 and I’m guessing the culprit that killed this convenient idea  was the bank and S&L lobby.

NPR reported on Friday, Feb. 7, 2014 that the post office — you know, those guys who never are late delivering our monthly electricity, cable TV and other bills — could rack up billions by offering money services:

http://www.npr.org/2014/02/07/272652648/post-office-could-rack-up-billions-by-offering-money-services

The NPR story cited a white paper from the inspector general USPS on the concept:

https://www.uspsoig.gov/sites/default/files/document-library-files/2014/rarc-wp-14-007.pdf

Postal banklike services are common in many countries around the world and work as efficiently as the U.S. postal savings plan did for decades, the NPR story noted.

Many people didn’t trust banks in the Depression era before deposit insurance was offered in the Glass-Steagall financial regulation bill in 1933 (yes, that’s the same bill that was repealed in 1999 during the Clinton Administration; FDIC, which insures bank deposits was retained from G-S, which was replaced with Gramm-Leach-Bliley).

Back in the day, post offices didn’t offer very high interest rates on savings — about the same as banks offer today — but the system worked well, especially in small towns which were underserved by other financial institutions.

The NPR story noted that “More than a quarter of all Americans, some 68 million, are now underserved by banks — ‘underbanked,’ as the white paper from the Inspector General of the U.S. Postal Service calls them. They live in places where there are no bank branches, or just one. Many have to rely on check cashing outlets and payday loans, which often charge exorbitant fees.”

The NPR story continues: “Betsy Cavendish, president of Appleseed Network, says being able to go to the post office for simple financial transactions would be ‘win-win’. Many people are spending $2,500 a year or so in extra fees.”

“They have a lack of options for small-dollar loans and too few savings vehicles. Meanwhile, the Postal Service is in every zip code in the country and could potentially offer needed financial services,” she says.

Bottom line:  think we should provide more banking services; if you shop at Walmart, you’ll notice that most of the stores  have a bank inside the store; the same goes for my local H.E.B. supermarket, a big Texas chain based in San Antonio.

Banks should have nothing to fear from a postal savings system because the services offered would be limited to simple banklike tasks like cashing checks and providing savings accounts. I doubt that any postal savings plan would offer mortgages or other loans. That would be a bridge too far for banks!

BOOK REVIEW: ‘Red 1-2-3’: Edge-of-Seat Thriller About a Novelist Planning Deaths of 3 Women to Revive His Career

• Reviewed by David M. Kinchen 

 

 

• What do you do if you’re a mid-list crime novelist who’s 64 years old and hasn’t had a best-seller in years? If you’re the unnamed writer protagonist in John Katzenbach’s “Red 1-2-3” (Mysterious Press, 378 pages, $26.00. also available in a Kindle edition) you embark on a serial killing spree that will at the same time restart your career and make you as famous as Lizzie Borden or Billy the Kid or John Dillinger.

Known only as “Big Bad Wolf” — we never learn his real name —  the writer sends letters to three women:  Dr. Karen Jayson — “Red One” — 51, an internist, single, with a secret avocation; Sarah Locksley, “Red Two”, 33, a former school teacher, a widow after her husband and young daughter were killed in a traffic accident; and Jordan Ellis, “Red Three”, 17, a senior at a private prep school, a loner, except for  playing on the basketball team.

 

Here’s what Katzenbach writes:

The opening lines were delivered without salutation or introduction: “One bright, fine day Little Red Riding Hood decided to take a basket of delicious goodies to her beloved grandmother, who lived on the far side of the deep, dark woods . . .” You undoubtedly first heard the story years ago when you were small children. But you were probably told the sanitized version: the grandmother hides in her closet and Little Red Riding Hood is saved from becoming the Big Bad Wolf ’s next meal by the brave woodsman with his sharp axe. In that retelling everything ends happily ever after. In the original, there is a far different and much darker outcome. It would be wise for you to keep that in mind over the next few weeks. You do not know me, but I know you. There are three of you. I have decided to call you:

Red One.

Red Two.

Red Three.

I know each of you is lost in the woods.

And just like the little girl in the fairy tale, you have been selected to die.

                                     * * *

BBW — I’m going to call him that for the remainder of the review — has an unwitting accomplice in his wife, Mrs. BBW, who’s an administrative assistant to the dean of the school Jordan Ellis attends. She’s also familiar with residents of the western Massachusetts area where all the Reds live and where BBW and Mrs. BBW live.

At first we’re led to believe that the only thing the three women have in common is their red hair. As the narrative progresses, we quickly realize that each of the three has skills that come to the fore as they decide to act against BBW. But — before they can plot against the plotter — they have to meet each other. This occurs after BBW sends each woman a YouTube video that shows he knows where they can be found.

That’s his first mistake: He doesn’t understand that with a computer — and all three Reds are computer literate — the women can ultimately contact each other, something BBW doesn’t want. He wants them alone, lost in the woods, vulnerable.

Once they discover each other, Karen, Sarah and Jordan display their resourcefulness to ferret out clues left by BBW. Since so much of the book is a spoiler, I won’t go into the details. Katzenbach has written a first-rate thriller that will appeal to devotees of the genre.

 

John Katzenbach

 

About the Author

John Katzenbach has written twelve previous novels and one work of non-fiction. Three of his novels have been made into feature films: In the Heat of the Summer (adapted for the screen as The Mean Season), Hart’s War starring Bruce Willis, and Just Cause starring Sean Connery. His other books include The New York Times bestseller The Traveler; Day of Reckoning and The Shadow Man. Katzenbach was a criminal courts reporter for The Miami Herald and Miami News and a featured writer for the Herald’s Tropic magazine. His most recent novel was the critically acclaimed What Comes Next. He lives in western Massachusetts. His website: www.johnkatzenbach.com

BOOK REVIEW: ‘The Deepest Secret’: Powerful Novel Probes the Secrets We Hide from Our Neighbors

• Reviewed by David M. Kinchen 

 “All happy families are alike; each unhappy family is unhappy in its own way. — Leo Tolstoy, “Anna Karenina”

I was going to resist using this famous line from one of Tolstoy’s masterpieces because it has all the attributes of a cliche´, but I decided it’s appropriate in any discussion of Carla Buckley’s enthralling family in peril thriller “The Deepest Secret” (448 pages, Bantam Books, an imprint of Random House, $26.00, also available in a Kindle edition, and an audio book from Random House).

 

The families living in the novel’s suburban Columbus, Ohio cul-de-sac all have challenges and problems, but Eve and David Lattimore’s are among the most complicated.

They have a rebellious 16-year-old daughter, Melissa — something many families can identify with — but their biggest challenge is their 14-year-old son, Tyler, who suffers from the rare disease xeroderma pigmentosum (XP) where exposure to ultraviolet light — artificial and sunlight alike — causes permanent damage. The average life expectancy of people born with XP is 20 years.

As if this isn’t enough, David is based in his company’s Washington, DC office during the week, commuting to Columbus on weekends. Eve is essentially a single mom, like her best friend Charlotte, a divorced woman raising Amy, one of Tyler’s best friends.

Tyler is like any other 14-year old, eager to explore his world, but his XP means a life of  heavy curtains and deadlocked doors protect him during the day. He can only leave the house  at night. For Eve, only constant vigilance stands between an increasingly restless teenage son and the dangers of the outside world.

There are so many events in this page-turner of a thriller that constitute spoilers, but I can state that Amy, younger than Tyler,  is a central figure in the tragedy that envelopes the cul-de-sac.

When tragedy strikes, it becomes clear that this family is not the only one on the quiet cul-de-sac that is more complicated than it appears. And as Eve is forced to shield her family from harm, there are some crises she cannot control—and some secrets that not even love can conceal.

The cul-de-sac’s secrets are revealed, proving that seemingly happy families all have secrets they strive mightily to conceal from their friends and neighbors.

“The Deepest Secret” is a  story about hope and forgiveness, about the terrifying ways our lives can spin out of control and the unexpected sacrifices that may save us. Women are the obvious target audience –logical since women outnumber men as book buyers — but male readers should also experience Buckley’s insights in this gripping thriller.

Carla Buckley

Brian Killian photo

 

About the author

Carla Buckley is the author of “The Deepest Secret”, “Invisible”, and “The Things That Keep Us Here”, which was nominated for a Thriller Award as a best first novel and the Ohioana Book Award for fiction. She is a graduate of Oberlin College and the Wharton School of Business, and lives in Chapel Hill, North Carolina, with her husband and three children. She is currently at work on her next novel, “The Good Goodbye”.

Her website: www.carlabuckley.com

BOOK REVIEW: ‘The Safe Investor’: Veteran Investor Tim McCarthy Outlines in Detail What Every Investor Should Do, How to Do It, and What Not to Do

• Reviewed by David M. Kinchen 

When a publicist asks me if I want to review a book about investing, MEGO–My Eyes Glaze Over. I usually resist the impulse, but Anna Sacca has never steered me wrong so I agreed to read and review Timothy F. McCarthy’s “The Safe Investor: How to Make Your Money Grow in a Volatile Global Economy” (Palgrave MacMillan, 320 pages, notes, index, $30.00, also available in a Kindle edition).

 

When I told a good friend and former newspaper colleague — who shall remain anonymous but whom I consider to be an outstanding investor — about the book he emailed me:

Dave: Here’s a good link about active vs passive investing.

http://www.bankrate.com/finance/financial-literacy/long-term-investing-strategies-1.aspx

I’m an active investor, meaning I actively manage my accounts; I watch

them daily, buying and selling individual stocks. for me, with time to

watch my investments and do the research required, it works. most of

the time. plus, I like it. and I get to learn about new industries,

trends, etc.

 

And, if you are an active investor, you can bail out of the market

when things get really bad, like in 2007-8. I sold all of my stocks

and moved to all cash before the big downtown. passively investments

generally won’t do that. most mutual funds are basically buy and hold

for the longterm. that’s just not me.

* * *

McCarthy addresses people like my friend, saying that it’s a workable strategy if you have the knowledge — and the time.

For the rest of us,  he goes into great detail about how to invest, how to get information, how to pick an investment advisor — and much, much more, including how to avoid fraudsters like Bernie Madoff. At the end of each chapter, he summarizes in bullet points the lessons that should be learned in the chapter. This made it easy for me to glean the information necessary to follow a “safe investor” plan.

If you watch any TV, log on to the web or read a print newspaper,  you’ll quickly discover that Investing information  is everywhere; there are blogs, newspapers, magazines, and cable TV shows all dedicated to helping individuals invest in smarter and more successful ways.

Yet despite all the efforts to educate the public on investing, McCarthy writes that most people still feel uncomfortable with how they should actually invest their money.

Recent predictions about slowing economic growth, historically low interest rates, and volatile markets have investors scratching their heads about what to do with their money. And more than ever, people are scared about whether they can grow their money enough to last through their lifetime.

Timothy McCarthy  has spent the last 30 years in the US and overseas providing investment solutions to individuals and their advisors. His book is crammed full of real-life anecdotes and examples of what to do — and, even more important, what not to do when it comes to investing money that you can’t afford to lose.

I was particularly impressed with McCarthy’s “Three Pockets” theory of investing, so I’m reproducing the information below, taken from the book:

 

The Safe Investor teaches investors how to organize their savings into three “pockets”. This makes it easier for them to budget their savings and investments into three categories: savings, investing, and trading. First, sit down with your financial advisor to discuss about a savings plan. Relevant information include your take home pay, monthly expenses, and a breakdown of what you spend on every month.  Once you are ready to commit to putting aside some money periodically (usually monthly), then you are ready to put this money into the three pockets.

Below is a diagram of the three pockets: as seen on page 102 of The Safe Investor

The Savings Pocket has two objectives for. First is to not lose any principal. Second is to be liquid in case of any emergencies. Trade offs for the savings pocket is that cash sitting here will not have a real return.

The Investing Pocket is for true investments. This pocket is used to successfully minimize risks in a diversified portfolio. You and your financial advisor can decide which funds to invest in, while the book The Safe Investor, will expand on possible investments and recommended allocations. You will want to invest with a long term time horizon in order to capture compounding returns and further minimize risks of cyclical stock market activities. Meanwhile, the periodic deposits into this pocket will act as a buffer in order to lower the average price of your investments in case of a possible market bubble and crash.

The Trading Pocket is a psychological release valve. An investor that is constantly watching what the market does is also aware of popular trends and hot ipo issues going around. Rather than risk the majority of an investor’s capital, the Safe Investor can save and invest, and have a third account that is proportionately smaller in order to make these sorts of bets. This will keep any investor looking to make 15%+ returns satisfied.

Lessons of The Three Pockets:

• Savings Pocket is your “rainy day” pocket or for emergencies. This is short term money used for short term expenses.
• Investing Pocket grows more than your savings pocket but less risky than your trading pocket. The key thing is to diversify across a variety of asset classes, and across many country types and geographies. Use time in order to trickle in your investments.
• Trading Pocket helps to alleviate your brain’s response to either panic when the market goes down, or become greedy when the market goes up. With this account, you can go ahead and make concentrated bets on stocks.

Source: Information taken from The Safe Investor by Timothy F. McCarthy, published by Palgrave Macmillan, 2014.

* * *

McCarthy believes that  understanding  how to create  a  truly globally  diverse portfolio while applying the magic of time will help all investors navigate risky markets. He writes that U.S. investors often neglect foreign investments out of fear and ignorance.

McCarthy  also explores the fundamentals of picking and evaluating financial advisors for those who want to understand the principles of investing but not actually do the work themselves.

McCarthy  helps guide the reader along a straightforward  path to investment  success by telling engaging and actual stories to illustrate each of his seven lessons of successful investing. “The Safe Investor” will help even those readers with little interest or aptitude for finance to be comfortable in knowing what to do to manage their life investment plan and how to manage their own advisors.

To show the kind of humor McCarthy uses, take a look at his “Trickle In, Trickle Out” anecdote on Pages 106-7:

“Some people will know at least the ‘trickle in’ part of the formula by its traditional name, ‘Dollar Cost Averaging.’ I used to use that phrase until an evening meeting years ago  when a well-dressed woman in her mid-60s said, ‘Please  forgive me for being so upfront, but none of my friends understood what in God’s name you mean by this ‘dollar cost averaging’ thing….After showing them on a sheet of paper how just putting in a little in every year really decreases your risk over time, one gentleman exclaimed, ‘Oh, you just tinkle in a little money at a time!” His wife interrupted and said, ‘George, I think you mean trickle, not tinkle. It’s a bit more genteel.’

With anecdotes like this, and with the puppy his mother promised him at the age of three — an anecdote that really broke me up! — I found “The Safe Investor” to be an exception to my “MEGO” rule.

 About the Author

Timothy F. McCarthy has the unique experience of heading up three of Asia’s largest financial services firms, Nikko Asset Management  Co., Goodmorning  Securities, and Jardine  Fleming  UT. He has also served as President  and COO of The Charles Schwab Corporation and President of the Fidelity Investment Advisor Group. McCarthy earned his MBA degree at Harvard University in 1978.

His website, which contains information related to the book, a glossary of financial terms, financial planning tools, country evaluations and much more content, is www.timmccarthy.com

Publisher’s website: www.palgrave.com