“Facebook with no clothes”, Ping Pong and Skimpflation

SAS Financial Advisors, LLC |

This has been the week of Facebook so far. The “Facebook Paper” whistleblower gave volumes of research to journalists from many newspapers who published articles dissecting the Facebook strategy of putting profits over doing right by its users or for social good. Facebook created a fictional person living in North Carolina who expressed mild interest in conservative politics and within a week she was receiving advertisements and links to QANON, the conspiracy-laced right-wing group.

Facebook was able to view and analyze the algorithms in a very systematic, definitive way. They published internal research on the results yet did nothing to alter the algorithms. Turns out there were at least two rules at play: one for politicians and one for everyone else. This became a license to spread falsehoods and wrap untruths around the mantle of “politicians.” Turns out that outrage sells and increases views vs. boring facts! No surprise and also interesting food for thought as we analyze human behavior.

Watching the news fascination with Alec Baldwin and Gabby Petito makes me wonder why human nature leads us down the outrage pathway. Both are tragedies and this kind of news sells just the same as outrage sells on Facebook. Each of us should do a personal survey as we spend time online and see advertisements or teasers and be mindful whether each tempts us to click on it or not. How would we categorize the temptations? Outrageous or sensational? The Ten biggest…..? For example: “What they looked like before they were stars,” “The Next Amazon!,” “The Five Richest,” and so on. Less likely to be click-bait, less likely to click on: “The biggest cause of poverty,” “How to Improve relationships with your family,” and also so on. Though if we’re identifying that humans are always looking for fervor, perhaps the factual, or just wholesome stories just need some rebranding to pique our interest the same way disaster reporting does?

 

Human Infrastructure Plan

The game of Ping Pong would describe the negotiations involving the human infrastructure plan originally priced at $3.5T and now closer to $1.5-$2T. And the “pay for” provisions are the ping with “the benefits” as the pong. As we write our newsletter, the “pay for’s” consist of a 15% minimum corporate tax or a “tax on billionaires.” The tax on billionaires will be very complicated and focuses on the 10 richest Americans. Can you guess who they are? Now I bet that gets a lot of fascination clicks as a headline. Bottom line: if the tax is focused on the richest 10 Americans, how much will they spend to find a workaround? Not to mention the possible constitutional violations. Seems like it would be easier, constitutionally sound, and result in more revenue bypassing the original tax increase proposals with an increase in marginal tax rates, increase in corporate tax rates, and limiting capital gains and qualified dividends for Americans earning over $1M. But the enigma of Kyrsten Sinema prevails. As President Biden said in his town hall with an evenly divided Senate, everyone is President.

 

Skimpflation

Paying the same and getting less. Prices are not increasing but the packaging is getting smaller and smaller, services are shrinking, and wait times are increasing. Read more:

https://www.npr.org/sections/money/2021/10/26/1048892388/meet-skimpflati...

 

Retirement Plan and IRA Required Minimum Distributions FAQs

For 2021, Required Minimum Distributions, or RMDs, will be required from all eligible accounts before 12/31/2021. Last year, 2020, the CARES Act provided a one-year suspension on Required Minimum Distributions. That suspension ended on 12/31/2020.

To determine if you may be required to make a Required Minimum Distribution in 2021, consider the following two questions:

  • Yes/No: Are you age 72? OR were you age 70.5 years old as of 1/1/2020? OR Regardless of age, do you own an inherited or beneficiary retirement account of any kind?
  • Yes/No: Do you own any of the following employer-sponsored retirement plans? Profit-sharing plans, 401(k) plans (including Roth 401(k) plans), 403(b) plans, and 457(b) plans. Do you own any traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs? (Note: RMD Rules do not apply to Roth IRAs while the owner is alive).

If you answered "Yes" to both of the above questions, you may be required to make a distribution from each eligible account before 12/31/2021.

For SAS managed accounts eligible for a 2021 RMD, please contact the SAS Advisor Team with the following information before 10/31/2021:

  1. If you would like your RMD to be completed with the same instructions as 2019
  2. The percentage to be withheld for federal *and* state taxes, or mark none
  3. The account to receive the RMD funds into either another owned Individual, Joint, or Trust account managed by SAS, or an external linked account not managed by SAS
  4. If banking instructions are not on file, please complete, sign and send back the following form to the SAS Advisor Team along with your responses: https://veoone.tdainstitutional.com/teamsite_vdh/resources/documents/downloadforms/TDAI9341.pdf

For non-SAS managed accounts eligible for a 2021 RMD, contact that account's advisor, custodian, or plan administration to complete the 2021 RMD before 12/31/2021.

IRS RMD Reference Link per the date of this blog 10/15/2021: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions

 

Halloween

Happy Halloween this weekend! Not sure how thick the trick-or-treating crowd will be this year, but I have a feeling it will be cheerier (spookier?) than last year. Have a fa-boo-lous weekend.

 

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The SAS Newsletters are posted on the SAS Blog weekly: https://www.sasadvisors.com/blog