Archives for April 2021

TSP’s skyrocketing million dollar accounts

The number of active and retired feds with $1 million or more in their Thrift Savings Plan accounts has jumped to a record 84,808 as of March 31 of this year. That’s up from 27,212 TSP millionaires in March 2020.

The vast majority of TSP millionaires got there by investing steadily in the C, S and I funds — even when the markets tanked, like they did during the 2018-2019 Great Recession and the big downturn last March. The C fund tracks the S&P 500 index, the S fund is invested in the rest of the U.S. market and the I-fund is in international stocks. The TSP also has the F fund invested in bonds, and the G-fund in special U.S. treasury securities. There are also a series of self-adjusting L (lifecycle) funds that get more conservative as the account holder approaches his or her retirement date.

Early in the life of the TSP, all millionaires were elected or appointed officials who brought their outside retirements with them when they joined government. Now the vast majority of TSP millionaires did it by smart, long-term investing. The largest account balance the end of March 2021 was $9,318,238. In March 2020 it was $6.3 million.

Despite, and in some cases because of the COVID-19 pandemic the stock funds available to federal/postal/military investors have been moving steadily upward, going from 55,183 to 75,420 from September 2020 to December 31 of that year.

Equally impressive are the number of investors who have passed or are closing in on accounts worth $500,000-to-749,000 (203,444) of March, 2021, compared with 149,093 the same time a year earlier.

The charts below show where things stand now compared to where it was a year ago in March.

Many federal investors — too many in the opinion of many financial planners — stay in the “safe” G and F funds. While the G fund never has a loss, it often trails all the other in returns by a large margin. But many people still flee to it when the market dips, like they did in March of last year. Many who switched from stocks to treasuries during the Great Recession are still waiting for the “right” time to get back into the market.

So where are you compared to others in the giant federal 401k plan? Here’s a look at all TSP accounts as of March 31, 2021 compared with the same period last year.

Courtesy of the Federal Retirement Thrift Investment Board.

Nearly Useless Factoid

By Alazar Moges

Former Wisconsin Senator Gaylord Nelson created Earth Day in the spring of 1970 in hopes of forcing the agenda of environmentalism to the national stage. He was successful as some 20 million Americans demonstrated around the country and Congress later that year authorized the creation of the Environmental Protection Agency.

Source: EPA

Leaders of Russia and China tighten their grips, grow closer

MOSCOW (AP) — They’re not leaders for life — not technically, at least. But in political reality, the powerful tenures of China’s Xi Jinping and, as of this week, Russia’s Vladimir Putin are looking as if they will extend much deeper into the 21st century — even as the two superpowers whose destinies they steer gather more clout with each passing year.

What’s more, as they consolidate political control at home, sometimes with harsh measures, they’re working together more substantively than ever in a growing challenge to the West and the world’s other superpower, the United States, which elects its leader every four years.

This week, Putin signed a law allowing him to potentially hold onto power until 2036. The 68-year-old Russian president, who has been in power for more than two decades — longer than any other Kremlin leader since Soviet dictator Josef Stalin — pushed through a constitutional vote last year allowing him to run again in 2024 when his current six-year term ends. He has overseen a systematic crackdown on dissent.

In China, Xi, who came to power in 2012, has imposed even tighter controls on the already repressive political scene, emerging as one of his nation’s most powerful leaders in the seven decades of Communist Party rule that began with Mao Zedong’s often-brutal regime. Under Xi, the government has rounded up, imprisoned or silenced intellectuals, legal activists and other voices, cracked down on Hong Kong’s opposition and used security forces to suppress calls for minority rights in Xinjiang, Tibet and Inner Mongolia.

Xi has sidelined rivals, locked up critics and tightened the party’s control over information. An ongoing crackdown against corruption has won popular support while also keeping potential competitors in line.

His steady consolidation of power led to the removal of term limits on the Chinese presidency in 2018, demolishing a convention the party had established to prevent a repeat of the abuse produced by Mao’s one-person rule. Xi further telegraphed his intention to remain in power by breaking from tradition and not indicating a preferred successor. One who appeared eager to take on the role, Sun Zhengcai, was brought down in 2017 and sentenced to life in prison on corruption charges.

And in Russia, Putin’s most outspoken critic, Alexei Navalny, was arrested in January upon his return from Germany, where he spent five months recovering from a nerve-agent poisoning that he blames on the Kremlin — an accusation Russian authorities have denied. In February, Navalny was sentenced to 2½ years in prison.

In defying the West, Putin and Xi both have tapped nationalist feelings. Russia’s 2014 annexation of Ukraine’s Crimea propelled Putin’s approval ratings to nearly 90% before they slackened amid economic woes and unpopular pensions reform.

But the impact of Putin’s and Xi’s enduring retention of power hardly ends at their respective nations’ borders. It ripples outward into the geopolitical balance of power in countless ways.

As Moscow’s relations with the West sank to post-Cold War lows amid accusations of election meddling and hacking attacks, Putin has increasingly sought to strengthen ties with China. And while China so far has avoided a showdown with the West like Russia’s, it is coming under growing pressure from Washington and its allies over Beijing’s human rights record in Xinjiang, Hong Kong and the South China Sea.

U.S. President Joe Biden has taken an increasingly tough line with both leaders, recently describing Putin as a “killer” and having his top national security aides excoriate China for a litany of issues. Such approaches suggest that Moscow and Beijing will have incentives to build an even stronger alliance.

Like their nations, the two leaders themselves have fostered a closer relationship, too.

Putin and Xi have developed strong personal ties to bolster a “strategic partnership” between the two former Communist rivals as they vie with the West for influence. And even though Moscow and Beijing in the past rejected the possibility of forging a military alliance, Putin said last fall that such a prospect can’t be ruled out entirely.

While both Putin and Xi each appear to be firmly entrenched, numerous challenges persist. The pandemic, for one, posed a major challenge for both rulers, and they took a similarly cautious approach when it struck.

Putin responded last spring by introducing a sweeping six-week lockdown that severely hurt the already weak Russian economy. His approval rating plummeted to a historic low of 59%. Later, the government eased restrictions and steered clear from new lockdowns, helping reduce economic damage and shore up Putin’s ratings.

Xi remained out of the public eye in the first uncertain weeks, possibly fearing that any misstep could have given rivals a chance to topple him. In the end, China controlled the pandemic better than many other places, enhancing Xi’s position as leader.

Xi must also figure out how to satisfy ambitious young politicians who may see their careers being stymied by his lengthy tenure. And he has to demonstrate that his extended rule will not lead to the excesses of the Mao years, especially the disastrous and deeply traumatic 1966-76 Cultural Revolution.

“Xi has to manage an essential paradox. He venerates Mao and is building the same cult of personality and centrality of the party,” said Daniel Blumenthal, director of Asian Studies at the American Enterprise Institute. “But he knows his people fear and loathe Maoism so he has to also pretend he is not Mao. For now, he is an unchallenged strong leader, dealing with cracks and fissures in the party and society through Maoist-style campaigns and purges.”

Putin faces even more daunting challenges. Russia’s economy is a fraction of China’s, and its overwhelming reliance on exports of oil and gas and other raw materials makes it vulnerable to market fluctuations. Western economic and financial sanctions have cut Moscow’s access to Western technologies and capital markets, slowing down the economy and impeding modernization efforts. Stagnant living standards and falling incomes have fueled growing discontent.

Russia’s increasingly close ties with China are part of its strategy to offset Western sanctions. Chinese companies provided substitutes for missing Western technologies, helped with major infrastructure projects like energy supplies to Crimea and channeled cash flows to ease the burden from sanctions on Kremlin-connected tycoons.

“Beijing helped Moscow, at least to some extent, to withstand U.S. and EU pressure,” Alexander Gabuev, the top China expert with the Carnegie Moscow Center wrote in a recent analysis. “This assistance also allowed Moscow to become more assertive elsewhere in the world, from being present in the Middle East and Africa to supporting the Venezuelan regime and interfering in U.S. elections.”

Military cooperation remains a high-stakes frontier. As U.S. pressure grew, Russia has moved to expand military ties with China. Their armed forces have held a series of joint drills, and Putin has noted that Russia has provided China with cutting-edge military technologies.

But a full-on alliance — putting the joint military might of Xi’s and Putin’s grips on their nations? Something like that seems less abstract when the increasingly tight relationship between the two long-term leaders is taken into consideration.

“We don’t need it,” Putin said in October. “But theoretically, it’s quite possible to imagine it.”

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Ken Moritsugu, the Greater China news director for The Associated Press, reported from Beijing.

Jordan king doubles down on sedition claims against brother

BEIRUT (AP) — Jordan’s King Abdullah II addressed the unprecedented public rift within the royal family for the first time Wednesday, portraying it as an attempted sedition involving his half-brother that had been “nipped in the bud,” but caused him anger, pain and shock.

The monarch appeared to be doubling down on the allegations against Prince Hamzah, a former crown prince, while at the same time trying to reassure Jordanians that the nation was returning to business as usual. But even if the current crisis is eventually defused, major challenges loom for the Western-allied monarchy as it confronts growing internal dissent.

Wednesday’s statement, presented by a newsreader on Jordan TV, dealt with the internal crisis that erupted over the weekend when Hamzah was confined to his home and accused of being part of a plot to destabilize the kingdom.

Hamzah has denied the allegations, saying he was simply calling out long-running corruption and mismanagement in the kingdom.

The king said Wednesday that he was hurt by the recent events.

“The challenge over the past few days was not the most difficult or dangerous to the stability of our nation, but to me, it was the most painful,” he said. “Sedition came from within and without our one house, and nothing compares to my shock, pain, and anger as a brother and as the head of the Hashemite family, and as a leader of this proud people.”

Abdullah also suggested that there was continued control over Hamzah’s movements. The prince, who has not been seen or heard from in days, was “with his family at his palace, under my care,” the statement said.

There was no sign that authorities have released up to 18 other detainees, including members of one of the powerful tribes on which the monarchy has historically relied.

Authorities have imposed a sweeping gag order on any coverage of the royal dispute in a sign of how sensitive they are to how it is perceived. The gag order and the king’s willingness to sanction his own brother also reaffirmed what Jordanians understand as their “red line” — an absolute ban on criticizing the monarch or the royal family.

Bessma Momani, a professor of international relations at Ontario’s Waterloo University, said the crisis strengthened Hamzah’s popularity, making critics of the government and new followers rally behind him.

She said the king’s doubling-down on vague plot allegations could also create problems in the future. Prosecuting those detained, including members of a powerful tribe, could stir protests. If they are let go, more questions could arise about whether there was ever a plot.

Even before the palace drama, Jordan was grappling with an economic crisis exacerbated by the coronavirus pandemic, with one in four people out of work. Longstanding complaints about corruption and misrule have fueled scattered protests in recent months.

At the same time, the region’s strategic landscape is shifting as powerful Gulf states pursue closer ties with Israel, potentially undermining Jordan’s role in the Middle East peace process.

The White House, in a statement issued Wednesday, said President Joe Biden had spoken with Abdullah to express strong U.S. support for Jordan and underscore the importance of the king’s leadership to the United States, the region and the peace process.

Asked by reporters if he was concerned about the situation in Jordan, Biden said: “No, I’m not. I just called to tell him that he has a friend in America. Stay strong.”

The crisis in the royal family erupted Saturday when Jordan’s military chief of staff visited Hamzah and warned him to stop attending meetings with critics of the government. Things quickly escalated, with Hamzah accusing the security establishment of threatening him and ordering the general to leave his home.

Authorities placed the former crown prince under a form of house arrest and detained up to 18 people, including former senior officials. On Sunday, the government said Hamzah and others were involved in a “malicious plot” against the kingdom’s security with foreign support.

Abdullah and Hamzah are both sons of King Hussein, who ruled Jordan for nearly a half-century before his death in 1999. Abdullah had appointed Hamzah as crown prince upon his succession but stripped him of the title in 2004.

The government imposed the gag order on coverage of the dispute after an audio recording of the meeting between Hamzah and the chief of staff, Gen. Yousef Huneiti, raised questions about its allegations of a foreign conspiracy. Neither mentioned any such plot in the recording, which was recorded surreptitiously and circulated online.

Family members of those who were arrested in connection with the alleged plot, meanwhile, said they’ve had no communication with authorities or the detainees.

Those arrested include Yasser al-Majali, Hamzah’s chief of staff, and Samir al-Majali, both prominent members of the Majali tribe.

“We don’t know where he is,” said Yasser al-Majali’s brother, Abdullah. He said they have been unable to reach any officials and have not been informed of any charges.

“If there is anything against them, take them to court for a fair trial,” he said. “We don’t want any trouble. We care about stability and we want our people to be released.”

The Majali tribe issued an angry statement immediately after the arrests, calling it a “black day” in which the tribe’s dignity had been insulted.

The tribe denied the men had plotted against Jordan and warned against involving them in “any internal or family dispute.” On Wednesday, video surfaced of the tribesmen holding a small rally demanding the release of their relatives and chanting: “Where is Hamzah?”

Jordan has a large Palestinian population, including more than 2 million refugees from past wars with Israel and their descendants. The monarchy has granted most of them full citizenship but has historically viewed them with suspicion. Its main base of support is powerful tribes from east of the Jordan River, who dominate the security forces.

For decades, the monarchy has cultivated close ties with the U.S. and other Western nations, which it has used to press for the creation of a Palestinian state including the West Bank and east Jerusalem, which Israel captured from Jordan in the 1967 war.

That strategy has hit a wall in recent years as the peace process has ground to a halt. Israel and Jordan made peace in 1994 and maintain close security ties, but relations have soured amid a series of recent diplomatic spats.

At the same time, Gulf countries have been cultivating closer ties with Israel over their shared antipathy toward Iran, relations made public last year when the United Arab Emirates agreed to normalize relations with Israel in a U.S.-brokered deal. Saudi Arabia has at times appeared to be weighing a similar move.

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Krauss reported from Jerusalem.

Startup cards stay open to credit builders

While major credit card issuers tightened lending standards and slashed credit limits amid COVID-19, some financial technology startups took a different tack.

In 2020, young companies like Grow Credit, TomoCredit and Chime launched or expanded credit cards that are available to those with less-than-ideal credit — because they don’t run a credit check at all. Instead of relying on the traditional FICO credit scoring model , these “fintech” products can evaluate alternative factors like bank accounts and money management to determine eligibility.

What’s more, these cards don’t feature annual fees or even APRs. It’s literally not possible to carry a balance on them.

Here’s how this new breed of credit cards differs from traditional cards and why they’re easier to get, even in tough times.

HOW STARTUPS CAN EVALUATE APPLICANTS DIFFERENTLY

Traditional credit card issuers typically conduct a hard inquiry on your credit report to evaluate your creditworthiness. Hence, even before the pandemic, card options were slim for those with no credit or poor credit (FICO scores of 629 or lower).

But some new products on the market aren’t as concerned with your credit report as they are with other facets of your financial life.

Grow Credit, for example, offers the Grow Credit Mastercard, issued by Sutton Bank . The company has proprietary technology that evaluates income, according to Joe Bayen, CEO and founder of Grow Credit. Applicants must provide access to their bank account information.

The card allows you to build credit as you pay for qualifying monthly subscriptions like Netflix or Hulu. Subscription services traditionally aren’t factors in your credit reports, but Grow essentially gives cardholders an installment loan that can only be used to charge eligible subscriptions to the card. Cardholders pay off the bill in full each month and build credit along the way.

Cell phone bill payments can also be handled this way, if you’re willing to pay a monthly Grow membership fee.

“The combination of a small loan that can only be used toward a product of necessity makes our platform very resilient to recessions,” Bayen said in an email.

Or consider the Chime Credit Builder Visa Secured credit card, issued by Stride Bank , which also does not require a credit check. To get it, you’ll have to open a Chime Spending Account with an eligible direct deposit, and the balance of that attached spending account typically determines your credit limit on the card.

“The direct deposit definitely does help us understand members’ income and spending habits in a way that makes this product safer for us to offer,” says Zachary Smith, head of product at Chime.

TomoCredit offers the Tomo Card. The startup’s technology allows its issuer, Community Federal Savings Bank, to determine eligibility for the card based on multiple factors, including income and account balances. The card also earns rewards. Linking a qualifying account through a third-party service is required.

BENEFICIAL FOR CARDHOLDERS AND CARD COMPANIES ALIKE

These kinds of cards come with guardrails that can minimize risks for both the consumer and the issuer.

For one, you can’t carry a balance with these products and, as such, they don’t charge interest. The companies behind these cards make money at least in part through interchange fees, which are assessed to merchants when they accept a credit card as payment.

Since you’re required to pay on time and in full, overspending is difficult to impossible. Both you and the card company can be less worried about a potential default.

Plus, payments are reported to all three major credit bureaus: TransUnion, Equifax and Experian. (The Grow Mastercard is reported to credit bureaus as an installment loan.) These bureaus record the information used to calculate your credit scores. Good scores of 690 or higher can save you money on interest rates for a car, a home or other credit cards.

And no-fee credit cards make it easier to keep the accounts open and active, which preserves the length of your credit history, another factor in your credit scores.

For LaToya Wilson , a 46-year-old Minnesota resident, the Chime Credit Builder Visa Secured credit card allows her to rebuild credit without the risk of credit card debt and to get closer to buying a house. She got the card in 2020.

“This time I’m more cautious about what I’m doing and (where) I’m spending,” Wilson says. “I see my credit score going up every month by using it.”

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This article was provided to The Associated Press by the personal finance website NerdWallet. Melissa Lambarena is a writer at NerdWallet. Email: mlambarena@nerdwallet.com. Twitter: @lissalambarena.

Celebrity zookeeper Jack Hanna diagnosed with dementia

COLUMBUS, Ohio (AP) — Celebrity zookeeper and animal TV show host Jack Hanna has been diagnosed with dementia and will retire from public life, his family said.

In a news release Wednesday, his family added that it’s believed he now has Alzheimer’s disease that has quickly progressed in the last few months.

The 74-year-old Hanna was director of the Columbus Zoo from 1978 to 1992 and still serves as its director emeritus.

“Dad advocated for improved wildlife habitats and focused on connecting the community with animals,” the statement signed by his three daughters said. Hanna continued to be a spokesperson for the Ohio zoo until he retired in 2020.

Hanna is also well-known for his live animal demonstrations on talk shows hosted by Johnny Carson, David Letterman and James Corden, increasing the profile of the Columbus Zoo and leading to massive attendance increases over the years.

Hanna, who always wore khakis on every television appearance and in photos, hosted the popular syndicated TV show “Jack Hanna’s Animal Adventures” from 1993 to 2008. He also hosted “Jack Hanna’s Into the Wild,” which started in 2007, and “Jack Hanna’s Wild Countdown” until last year.

“While Dad’s health has deteriorated quickly, we can assure you that his great sense of humor continues to shine through,” the statement said. “And yes, he still wears his khakis at home.”

His family asked for privacy in light of COVID-19 restrictions.

“He has spent his life connecting people and wildlife because he has always believed that having people see and experience animals is key to engaging them in more impactful conversations,” his family said. “Even though Dad is no longer able to travel and work in the same way, we know that his infectious enthusiasm has touched many hearts and will continue to be his legacy.”

Archives for April 2021

Nearly Useless Factoid

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