Looking in the TIPS Jar

TIPS are Treasury Inflation Protected Securities. They are issued by the U.S. Treasury and have the “full faith and credit” of the United States government. Of all bonds issued by the Treasury for any given maturity, TIPS pay the lowest interest rate, because they are “inflation-protected”, which means they pay extra to keep the purchasing power of the bonds roughly equal to inflation. For investors concerned with inflation, this is attractive, because the low interest they receive is AFTER inflation.

Today, the Treasury auctioned off $11 billion of 5-year TIPS. Normally, they receive bids to buy about 2.2 to 2.4 times the amount of TIPS being offered. Today, there was 3.15 times. In other words, the government could have sold 3.15 as much as they had ti sell. It was the best since October of 1997.

This is a huge difference and strongly suggests more people are getting worried about inflation. One of the biggest fears of Fed Head Ben Bernanke is an increase in inflationary expectations, because those inflationary expectations completely become a self-fulfilling prophecy, actually creating inflation and requiring Bernanke to start raising interest rates sooner than he would like.

Disco Diva on Financial Regulation

Today, I watched the President when he visited Wall Street to discuss his pending re-regulation of financial services. Some pundits called it his “closing argument”. Maybe, it was. I don’t know. However, it was certainly not the scolding many of us expected. In his campaign, he said there is no Red America nor Blue America, just America. Today, he said there is no Wall Street nor Main Street, just America, and I have to agree with that.

The nagging problem of derivatives was discussed. While the problem is bad, derivatives are certainly not evil. They serve very valuable purposes. Hopefully, the new bill will not kill them. As always, the details are in the details. If the 1300-page bill does damage to Wall Street, we have brought it upon ourselves and deserve what we get. The worst case is that we drive the “shady” derivatives offshore to another nation. If so, good riddance! With apologies to Gloria Gaynor . . . We will survive!

Enron Redux?

Years ago, I was lucky not to have been one of the many investors who lost money in the Enron debacle. About a year before their fall, Enron got into trouble with the State of California about electricity rates. It quickly became apparent that the people at Enron enjoyed a very high opinion of their own intelligence. Remembering that “pride goeth before the fall”, I got out. It is no small irony that the best-selling book about Enron was later titled “The Smartest Guys in the Room”.

Last month, I sold Goldman Sachs for largely the same reason. Intelligence becomes over-rated and dangerous when it becomes hubris. Their current legal difficulties are no surprise, and I have no plans to ever buy GS again. Maybe, it is true that justice comes in many guises. I hope so!

Beware: Danger

The most dangerous words on Wall Street are “It’s different this time”. Take a look at this chart of the long-term unemployed, which is 27 weeks or more, as a percent of the total unemployed. Almost 45% of the unemployed have been out-of-work over six months, which is the highest percentage since the government began compiling this data. It is not just a little worse! This does not include people just entering the workforce like students, nor part-timers, nor those who have given up, nor the short-term unemployed, all of whom are usually the vast majority of unemployed. Because workers have usually taken on more financial obligations than others, the financial consequences of this graph becomes even more worrisome.

But, is it different this time? Or, is it just an extreme case? I do believe that things can indeed be different, such as the opaque nature of derivatives. I think this is just an extreme case and was probably the same after the Great Depression.

And, you thought you didn’t like rap music . . . .

Long time readers will remember about a year ago I was asked to speak to the twenty brightest seniors in Virginia Beach about economics, which I was happy to do. The biggest shock to me was when one of them asked me about the difference between Keynesian economics and Austrian economics. Since I was probably a senior in college before I knew about such things, it was a pleasant surprise to hear a high school student ask the question. Hopefully, I gave a cogent answer. Unfortunately, I didn’t have the benefit of a delightful viral video, answering the question by using rap music. For a good time, click on http://www.econstories.tv/home.html.
Enjoy!!

Current Currency Thoughts

In my last column for Inside Business, I commented that the fear of the dollar losing its status as the world’s reserve currency was over-blown. This worried a number of readers. If this loss does occur, it will not happen for many years. In the meantime, we need to remember that responsibility comes along with the status of being the reserve currency. Since the Asian Contagion in the late 1990’s, when currencies could not be borrowed, the need for national reserves has been increasing about $600 billion a year and 60% of all reserves are in the dollar. We have to provide that currency.

This discussion began with comments by the Chinese finance minister who suggested the dollar could lose its status. He never suggested the Yuan could take its place, for good reason. It is not freely convertible, and its capital markets are rudimentary. Most importantly, they have demonstrated they will manipulate their currency to help their exports. Likewise, the Euro is not a good candidate either, because they have no central Treasury. Don’t forget, there could never be a two-currency reserve system, as that is inherently unstable.

For now, the dollar remains the loser in the ugly currency contest, i.e., it is not as ugly as the others. Besides, America has many problems more worrisome than this.

Not Market Timing, Cycle Timing.........

The National Association of Business Economics is an organization of “working” economists, as opposed to “theoretical or academic” economists, and I have been a member for years. This week, we held our annual policy conference in Washington, and it was fascinating as always.

If asked what was most interesting to me, it is that the developed nations actually got their act together at the beginning of this global recession and implemented a synchronized set of responses together. That alone semi-renews what little faith that traditional institutions work effectively any longer. But, now comes the hard part: How to implement a non-synchronized set of exit strategies?

Because different nations suffered different degrees of damage, each needs a different exit strategy from all the government stimulus. Indeed, major commodity exporters, such as Australia, have already begun withdrawing stimulus. When nations running large surpluses, like China, begin exhibiting inflation, their exit strategies will have to be implemented more quickly. Failure to coordinate our exit strategies could push us back towards a “double-dip” or at best, delay the recovery. The U.S. and England were arguably damaged the most, primarily because finance is a larger share of GDP than anywhere else in the world. They will also be the last to implement their exit strategies, which is convenient because it will require “tough love”, which our politicians are loathe to do and maybe incapable of doing.

Credit Where Credit is Due.....and Needed

Most people know that individual home mortgages are put into bundles, which is funded by bond purchases to repay the mortgage originators. This greatly expanded the amount of money available for home mortgages by allowing bond buyers to provide it, a lot of it. Less well known is that the same is done for auto loans, student loans, and equipment loans. When the market collapsed last year, no bond buyers were putting money into anything, for obvious reasons. To get this market for consumer loans functioning again, the Fed made non-recourse loans to bond buyers if they would buy this consumer debt. Effectively, the Fed put $100 billion into consumer loans to kick-start the market. The program was called TALF or Term Asset-backed securities Loan Facility, one of an alphabet variety of surprisingly innovative programs.

The good news is that the program quietly ended last week, as the market for bonds collateralized with consumer debt was functioning normally again. Not only did the taxpayer get all their money back, they even made a profit. I hate to say it but . . . Kudos to Ben Bernanke and the Fed!

Recovery Postponed...due to weather delay?

While few economists disagree, the most important monthly economic statistic released each month for investment strategists is the “Jobs Report”, which is released the first Friday of each month. Today, the Labor Department announced the unemployment rate remained unchanged at 9.7%. The good news is that we only lost 36 thousand jobs last month, compared with a loss of 26 thousand in January. The reason this is good is because that we were expecting a loss of 50 thousand jobs, primarily due to the terrible weather last month. Clearly, there had to be some impact but it is not measurable. As a result of this pleasant surprise, futures jumped from 29 to 65 immediately, indicating a strong open for the market today.

The sad news is that the rate of under-employment increased from 16.7% to 16.8%. If we stopped losing jobs, the rate stays like that. To restore full employment within five years, we need to see over 200 thousand job created each month. It will be a long, hard slog, and this weather delay didn’t help.

Return to the Future . . . I hope not!

Today, the Commerce Department reported that consumer spending in January increased for the fourth straight month and increased by more than expected. They also announced that the December increase was greater than earlier reported. Unfortunately, spending increased five times as fast as personal income increased, which only increased about one-fourth of what was expected. Hopefully, we are not returning to our old habits. The US savings rate got as low as 1.2% in early 2008 before rising to 5.1% last Spring and declining since then.

At the same time, our economy is still losing jobs, albeit at a slower rate. Obviously, those who feel secure in their jobs are really ramping up their spending. The question is whether the 17 million people who are either unemployed or under-employed will ever feel that secure again? While we have experienced numerous recessions, this was the Great Recession. If the spending psyche of 17 million workers is damaged, it will be a drag on our consumption-based economy. Just maybe, that is a good thing.

1+1=0

The Conference Board issued the Consumer Confidence Index this morning, which dropped from 56 to 46, the lowest in ten months and the biggest one-month drop in history, even larger than after 9-11. There have been grumblings about their methodology for many years, but today’s reading is so un-realistic that I feel safe in dismissing it.

This afternoon, many of us were watching the Treasury’s sale of $40 billion in 2-year bonds. When they have trouble selling bonds, interest rates will likely start rising. To everybody’s relief, there was a huge demand. In fact, they could have sold $3.33 for every $1 they wanted to sell. However, I think that is also misleading, as investors who were spooked by the weak reading on the Consumer Confidence report this morning, ran to the safety of Treasury bonds this afternoon. This is a good day to simply ignore the data! I still expect the market to trade within a 10% band until the middle of the year, before beginning a slow rise. We’ll see . . .

A Shot Over the Bow

Last Wednesday, during the snowstorm that shut down Washington, something odd happened. Even though the testimony of Fed Chief Ben Bernanke was cancelled, the Fed still released his planned comments anyway, which laid out their tentative plans to remove stimulus from the economy, beginning with an increase in the discount rate. This Thursday, the Fed, as promised, raised that rate by a quarter-point. This is the rate charged to banks needing quick cash. At one time last year, the Fed had issued over $500 billion in these short term loans. Today, it is less than $30 billion and relatively unimportant. So, why did the Fed do this, since so few banks will be affected?

One reason is to flatten the yield curve a little. The difference between two-year and ten-year Treasury rates is a historically high 2.9 percent. This is a subsidy to the banks, who can borrow very cheaply, while lending money out expensively, creating a fat margin of profit. Apparently, the Fed believes the banking system no longer needs the subsidy, which would be a good thing.

Another reason is to encourage China to continue buying our debt. Their holdings of our Treasury debt has stabilized, and we need them to continue buying confidently. Since our bonds are denominated in dollars, China was losing money by holding dollars when the dollar was depreciating. Yesterday’s action is very bullish on the dollar and should help the Treasury to sell their bonds.

More importantly, inflation is much harder to control once inflationary expectations have been created. Many analysts, such as myself, believe inflation is inevitable and maybe even desirable. To keep that inflationary expectation from growing, the Fed last week laid out their plan to curb inflation and implemented the first step this week. They want to demonstrate their conviction to combat inflation, and I wish them well.

The next step is likely to be an increase in the interest rate that the Fed pays on bank reserves it holds at the Fed, which is a more important step. A big increase would encourage banks to leave money in reserve at the Fed and not to lend money into the economy, which would further dampen inflation expectations. Logically, the next step would be taken when unemployment is not such a problem, but inflationary expectations would have already hardened by that point and would be too late. When that happens, it is time to sell any long term bonds, quickly.

While this was clearly a warning shot over the bow, I don’t think they are ready to dampen the economy anytime soon. While I think inflation is still the most likely and most desirable outcome, the Fed has reminded us that they do indeed have the power to prevent it. (Think: Paul Volcker) But, do you think they will? . . . in this political environment . . . with stated unemployment at 9.7% and under-employment at 17% . . . when core CPI inflation is only 1.6% . . . I don’t think so!

A Tiger Changes His Stripes....?

Dr. Nouriel Roubini is widely known as “Dr. Doom” after being the lonely voice predicting the Great Recession. Today, he actually found reason to be optimistic, i.e., the return to growth in global trade.

In 2008, global trade grew 3%. In 2009, it actually contracted by 13%, the first contraction in 27 years. Today, he predicted global trade will actually increase 4.5% to 5% this year. This would be good news, indeed! Take a look at the Baltic Dry Index, which measures shipping rates and is often used as a de facto indicator of globalization.

We’re unlikely to see the euphoria of early 2007, but we can hope . . . especially if “Dr. Doom” is right

Waiting for the Fat Lady to Sing.....

Wall Street is always climbing a “Wall of Worry”. The current one is the Greek debt crisis, and it does indeed have the potential to be a big problem. Fortunately, it is becoming increasingly apparent that it is definitely in the best interests of the entire European Union to keep Greece from defaulting. While the EU constitution expressly forbids direct assistance, there are many indirect ways to do so. Now, there is a feeling that Greece must not get off too easy and must “twist in the wind” for awhile. It is also important the other nations see Greece suffer before they ask the EU for help. I'm now confident this problem will be solved satisfactorily . . . but not as soon as the market would like.

So, don’t expect this opera to end soon! This still has the potential to become a heart attack and therefore will hang over the market for awhile, which is just fine, since the market is ahead of the economy anyway.

Pearls of Wisdom...?

Thinking back on President Clinton and President Bush sitting together as friends to discuss lessons learned in life, there are two observations that stick in my mind. First, President Clinton said that, as he aged, it becomes increasingly important to talk with others long enough to find something they agree about. Of course, it is easier to renew a discussion if the last one ended pleasantly. Second, President Bush said the only way he could save the American financial system and prevent a depression was to “swallow my principles”. i.e., minimize Federal involvement in the economy. I could see that caused him a good deal of anguish. Clearly, he did the right thing . . . but is it ever right to expect a person to swallow their principles? Or, do we have the right to expect others to swallow their principles for the good of everybody else?

Chest Pains...?

Some analysts worry about a double-dip recession. While I am not worried about that, I do worry the economy will suffer a “heart attack”, which usually comes from the world of finance. For the last 10 days, the world markets have worried about sovereign debt. This is definitely a chest pain and should not be ignored. The problem started with the PIGS (Portugal, Italy, Greece, and Spain) and should be contained within Europe. However, we remember the “Asian Contagion” a decade ago, when a regional problem spread throughout the world. That could definitely happen again, starting in Europe.

But, there is a difference. Asian had no European Union, to backstop individual countries. This 11-year-old Union of 16 nations cannot allow one of their own to default on its debt. So, when do chest pains stop and a heart attack begins? If the European Union does not help their sick members, I will be selling stocks. It is not imminent as Greece has two bond issues this month. If they sell easily, there may be little for the EU to do. If not, it will be time for the Union to step up to the plate. If they don’t, there goes the Union, and there goes the Euro! They have no choice.

Saying the financial sector is unhealthy is like saying your heart is bad. As Bob Doll, who is Chief Investment Officer of massive BlackRock, said yesterday “this is not the last credit problem we’ll hear about”. He’s right . . . unfortunately!

Remenbering Civility

I try to use this blog to discuss economic events and changes in the investment climate, hopefully in an understandable way, preferably with a touch of whimsy. I assiduously avoid talking of personalities, with the recent discussion of Bernanke being an exception. But, I cannot resist this opportunity.

Long time readers know my greatest fear is that America is no longer governable, that our unique brand of democracy has become obsolete. The D’s and the R’s of DC have so polluted the “Well of State” that we are no longer governable . . . by anybody! Today, I was fortunate to listen to President Bill Clinton AND President George W. Bush sit on the stage together and talk. That’s all, they just talked like two old friends.

During the terrible tsunami a few years ago, President Bush (41) and President Clinton became good friends. (Clinton even slept on the floor one night, so the older Bush could use the one available cot.) That friendship has continued to grow over the years. Now, President Bush (43) and President Clinton are working together on relief for Haiti, and they have also become friends. Am I more surprised or shocked? When President Bush told his mother, Barbara, he was on his way to appear with President Clinton, she instructed him to “say hi to your step-brother”.
Do you hear the theme song from Twilight Zone playing?

Cats and dogs can play together, like it used to be in Washington when elected officials were civil to each other, before gerrymandered districts insured the election of extremists from both parties, before elections required officials to return home every weekend to raise funds instead of networking with fellow legislators of both parties, and before each party had their own cable channel.

Clinton was not surprising. His responses were thoughtful, sensitive, nuanced, but ponderous. (However, he did look much older and had an alarming amount of age spots on his hands.) Bush was still “preachy” in his responses but absolutely stole the show with some great one-liners. For example, when asked how he would have prepared differently if he had known he would someday be President, he replied that he “would have been much better-behaved in college”! Where was this guy during his eight years in the White House?

Anyway, I’ll talk about their policy differences another time. For now, it is simply uplifting to see politicians being decent and civil to each other. Of course, neither one lives in Washington any longer . . .

Prepare for Boredom...?

Wall Street attaches some significance to the “January Effect”, which basically says that January predicts the whole year. In fact, when the market is up in January, it is usually up 10.4% for the whole year. If it is down in January, the year is essentially flat. January 2010 was down 2.9%, suggesting a flat year. Since the market was so hot the last part of 2009, a cooling off period is quite appropriate and probably good for us.

Another rule of thumb is that, during election years, the second half of the year is better than the first half. The thinking is that uncertainty about the election outcome is greatest early in the year, but the “smart money” already has the election figured out before it happens, reducing uncertainty.

This suggests that 2010 will be a boring year for traders, who make short term bets, and a good year for investors, who invest in long term trends, so they can think about those long term trends. For those who need to worry, think about the problem of sovereign debt in general and Greek bonds in particular, as well as the continuing lack of transparency for the derivatives, which Warren Buffet defined as “financial weapons of mass destruction” and were a huge contributing factor to the Great Recession.

Worry is never boring . . . darn it!

Successful Rehab?

Today’s announcement that the GDP grew at 5.7% was clearly good news. In addition, the Chicago Purchasing Managers Index jumped from 58.7 in December to 61.5 in January. If that wasn’t enough, consumer sentiment increased from 72.8 in December to 74.4 in January. What a great day!

OK, celebration over . . . the question immediately becomes whether the good news is sustainable? Or, is this just an inevitable snapback from inventory levels being depleted during the Recession and now being re-built?

As I’ve written before, this economy is showing a Nike-shaped recovery, i.e., a rounded bottom with a slow recovery. The damage was too profound for a rapid recovery, and the current political disarray is not helping. Nonetheless, the recovery will continue, just not as sharply as today’s numbers indicate. But, as cardiac patients can progress successfully before having another heart attack, I am currently concerned about the problem with Greek bonds. Their debt substantially exceeds their GDP (roughly 120% vs 80% in the US). Their profligate ways have caught up to them, and they are having trouble selling more bonds, to keep spending without raising taxes. Holders of existing bonds have gotten crushed. Farmers are already blocking roads to demonstrate against cutting farm subsidies and other governmental services. It is all too reminicient of the “Asian Contagion” in the late 1990s. This could be different, if the European Union will use this opportunity to show a benefit to membership, like providing tax benefits for Europeans who buy Greek bonds, for example. But, it bears careful watching!

In 2007, the world economy had a cardiac event, originating from the financial systems. If we have another one in the near future, it will be from soverign debt. But, how do you make a soverign government rehab itself?

A Thousand Points??

CNBC super-star Jim Cramer said the loss of either Fed Head Ben Bernanke or Treasury Secretary Tim Geithner could cause the Dow to immediately drop a thousand points. If either happened un-expectedly, Cramer might be right, but I doubt either will happen. Ben Bernanke is clearly guilty of not seeing the recession coming, but very few economists did. However, once it happened Bernanke was extraordinarily innovative combating it. He used everything in his toolbox and then invented some more. If only to unwind what has been done, it is in the best interest of the United States that he be re-appointed, and I’m confident he will be.

I’m more agnostic about Tim Geithner. There is no pending Senate action on him anyway. However, he has done a good enough job to keep his job, but this is an election year, and a sacrificial lamb may be required. The market will most assuredly not drop a thousand points if he resigns “to spend more time with his family”. He will then be inundated with job offers and become a wealthy man.

President George H. W. Bush used to talk about a “thousand points of light” illuminating our nation’s future. Two of them would be Bernanke and Geithner.

More Form Than Substance

The Tea Party demonstrators were livid at the big banks, especially when the taxpayers had to bail them out. It is fair to say that profits were privatized, while losses were socialized. This means the banks and their shareholders got to keep the profits, while the taxpayers got to pay for their losses. Their anger is understandable. President Obama, anxious to prove he has heard the Tea Party complaints, went on the attack today.

During the Clinton Administration, the Glass-Steagall Act was repealed. This law kept commercial banks separate from investment banks. Commercial banks accept consumer deposit and commercial loans. They are more conservative, and commercial bankers make decent salaries. Investment banks help companies raise money from the stock and bond markets. Most of the new financial products like derivatives were developed by and traded by the investment banks. They are not as conservative, and investment bankers make huge, maybe obscene, salaries. The President’s comments would start separating the two functions again.

Today, the stock prices of the big banks got crushed, but a curious thing happened. The regional banks, like SunTrust, did great. Clearly, the market sees them as the winner in this effort to re-regulate an industry that needs to be re-regulated. Bringing back Glass-Steagall would help reduce risk but is also unnecessary, if we would start by enforcing the existing regulations. (The Bernie Madoff scandal is a perfect example of that.) Many analysts agree with that position. But, we ALSO need meaningful punishment for excessive risk-taking. There are many bond salesmen who lost their great jobs and are now unemployed, but sitting on some beach AFTER making millions of dollars. Why wouldn’t they take excessive risk?

Today’s comments by the President were required political theatre, and I expect the big banks to recover shortly, once the uncertainty wears off.

Good News = Bad News?

Hyman Minsky was an economics professor at Washington University in St. Louis. He pointed out the credit availability is cyclical, i.e., that credit will expand until it bursts. In other words, credit doesn’t slowly deflate or get paid down. It bursts! Describing the 1998 financial crisis that began in Russia and ended with the collapse of Long Term Capital Management, Paul McCulley of Pacific Investment Management in California described that bursting as the “Minsky Moment”. Currently, analysts argue whether that Moment for this crash was in June or August of 2007.

Of course, that was in a pre-globalized world. Today, credit to Americans is going down, while credit to America is going up. Neither Presidents, professors, nor economists have any control over the world’s “bond vigilantes”. To sustain an annual deficit of $1.4 trillion, we need to sell a record amount of bonds, but who will buy them? The Chinese have politely said they are starting to get “a little worried”. (Of course, the Fed could buy them all, but the dollar would get crushed.)

Here’s the good news: There is no immediate problem. Estimates are that our debt level, as a percent of GDP, will not catch up to Japan for at least ten years. Here’s the bad news: There is no way to fix a problem, under our method of governing, unless it is an immediate problem.

Here Comes Santa Claus...???

Today, on Christmas Eve, the market set a new high for the year. That is always good news, even if it is still down 25% from its high two years ago. Often called a "Santa Claus Rally" (SCR), the market is usually good this time of year and extends through the first two trading days of the New Year. But, does it predict a good year for next year? As it turns out, a good SCR doesn't necessarily mean a good next year, but a bad SCR usually predicts a bad next year. So stay tuned for the news next week.

More importantly, I do wish you and your family a warm, healthy Holiday Season....and a bull market next year.

Golden Vices???

For many years, I managed the portfolio for a wonderful gentleman in Williamsburg, who died a few years ago at the age 99. He was a great guy, and I miss him. Coincidently, his son-in-law was Morgan Stanley’s legendary investment strategist, Barton Biggs, whom I have followed closely over the years and have read both of his books. Last week, he was interviewed by Advisor Perspectives and updated his thoughts. You can read the short interview at:

http://www.advisorperspectives.com/newsletters09/Barton_Biggs_on_Undervaluation_in_the_SP_100.php

But, there is one subject that made me laugh. Talking about gold as an investment, he said: “What is the P/E ratio on gold? What’s the yield on gold? It doesn’t have one, whereas I can prove to you that US high-quality, large-cap stocks are as cheap relative to value and to their history as they have been in hundreds of years. As Winston Churchill once said of one of his political opponents – who was vegetarian, a teetotaler and very liberal – the same is true of gold; it ‘has all the virtues I dislike and none of the vices I admire.’”

The only disagreement I have with him is that a good part of the current demand for gold results from the concern that the dollar will lose its status as a reserve currency, and that may have caused the demand curve to have permanently shifted to the right, which is “econo-speak” for a fundamental change in supply and demand, which drives the price upward. While I am bullish on gold in the long run, it did get ahead of its fundamentals recently.

Regardless, Barton Biggs is a genuine sage, and I recommend him to you!

Farewell to Arms............

Long-time readers know that I have proudly served for many years on the certification committee of a prestigious national investment association. For a number of reasons, we recently began making the examination process more difficult, which was fine. But, we became increasingly technical, finding a formula for every question. I recall Warren Buffett saying “Don’t do equations with Greek letters in them.” Given the collapse of almost every asset class last year, the whole concept of Modern Portfolio Theory has been called into question. However, instead of incorporating new information into our concept of investing, I felt we were desperately clutching what we were originally taught, fearful it might need to be updated.

It was a very wise person indeed who said “neither investing nor war making nor love making is hard science”. Nothing supplements education like years of experience, proven judgement and the ability to keep learning. I felt like we were giving a new toolbox full of shiny tools to a bunch of grade-school kids calling themselves financial advisors.