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Economic Teachings from Ancient Greece

How much can be learned from the past? Quite a lot, according to financial expert and experienced money manager Dawn J Bennett, host of the “Financial Myth Busting with Dawn J Bennett” radio talk show. In Greece’s current climate of turmoil, which threatens to send economic shockwaves throughout Europe and the world should it succumb to economic failure, Bennett sees lessons of the past as highly applicable to the Greece of today.

How can Greece, with its closed banks and impending July 30th payment to the International Monetary Fund, take a few pages from history as it attempts to move forward?

  • Wisdom from the Oracle of Delphi

While the story of the Oracle of Delphi features some interesting “words of wisdom” from priestesses like Pythia, there are two truly important messages to take from the story: “know thyself” and “nothing in excess.” As Greece navigates the difficult waters of the terms of its latest bailout agreement, which include even more tax and pension reforms—both its creditors and itself should keep these dictums in mind and refrain from actions that are either extreme or a poor fit for the struggling nation.

  • Homer’s Odyssey

The story of Homer’s journey following the fall of Troy exemplifies the power of persistence and determination. When Homer returned home to find his house occupied by 108 suitors vying for the hand of his wife, he didn’t back down; rather, he fought and was successful. Bennett sees Homer’s resilience in spite of unlikely odds a beneficial attitude for the present-day Greek government and citizens. Numerous signs—including a skyrocketing suicide rate and greater dependence on welfare—suggest that some Greeks are simply giving up. If Greece hopes to bounce back from its depths of despair, it will need a healthy spirit of determination to do so.

  • The Questions of Socrates

Socrates was a man known not only for his wisdom, but his questions. He cross-examined practically everyone he met as a way to learn more about the world around him and heighten his wisdom. The lesson here is that asking questions of others can lead to greater knowledge and insight, and is essential when attempting to understand complex problems. It’s unlikely that anyone will have all of the answers; but the answers they do have can shed valuable light upon a situation. Greeks must remember this aversion to “accepted wisdom” and refrain from taking statements from governments and central banks as gospel without asking questions of their own.

  • The Teachings of Heraclitus

One of Heraclitus’ most well-known teachings includes the dictum, “You can’t step in the same river twice,” which refers to the belief that the universe is in a constant state of change. Bennett believes that Greece should take a revised perspective of this teaching in the upcoming weeks as the Greek market experiences intense fluctuations; change may coming, but solid ground—whatever it is that can be an economic back up or constant (like gold)—is key.

Will Greece pay mind to these important lessons in the coming months? Though Greece reached an agreement with Eurozone creditors to continue bailouts after a marathon summit on July 12, it still faces a slew of economic hurdles. Legislation must be passed immediately to reform the nation’s tax and pension systems, as well as liberalize the labor market, and Greece must learn to adjust in the aftermath. The lessons of its ancient history couldn’t be more pertinent.

Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.

For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com

Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.

About Dawn Bennett

Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com

She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.

She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett ordbennett@bennettgroupfinancial.com

 

What’s the Real Solution to Urban Poverty?

Recent unrest in cities like Baltimore have sparked an array of conversations about race, poverty, and the government’s role in helping individuals in these challenged communities find ways to build better lives. While some see poverty and ensuing violence in these areas as the product of lack of government initiative and funding, others like Fox News and Financial Times columnist Liz Peek take a different perspective.

Peek recently sat down with financial expert Dawn Bennett, host of the “Financial Myth Busting with Dawn Bennett” nationally-syndicated radio show, to discuss what she believes to be a lack of social structure, rather than a lack of funds.

Peek’s main point? Struggling cities like Baltimore aren’t hurting for government dollars; in fact, they’re some of the most heavily federally-funded areas in the country. If dollars alone could fix unemployment and persistent poverty, it would have solved the problem by now. Rather, money is squandered by corrupt public officials and is not directed toward programs that help urban youth develop the skills they need to become self-sufficient.

Peek believes the driving force behind these issues to be the inability of impoverished youth to envision a future for themselves, a future in which they’re gainfully employed and can provide for their families. Many students are also graduating high school with little to no knowledge of how to balance a checkbook or handle basic finance; thus, even if they could envision a future of financial stability, they’d lack the skills to manage it.  Peek also argues that the absence of adequate role models is a major contributing factor to this dilemma, as is the fact that schools no longer teach the technical courses that many students could put to use in promising careers. Skills like carpentry, mechanics, and other vocational skills have all but been eliminated from the high school classroom; yet, these exact skills are what urban youth could use to secure well-paying jobs and carve out a future for themselves.

Though President Obama has funneled millions of dollars into stimulus packages to spur the economy and has campaigned tirelessly for a higher minimum wage, Peek argues that neither of these initiatives actually creates jobs for low-to-middle income Americans. Stimulus dollars simply weren’t dedicated toward job-creating projects while higher wages only tighten the labor market, making it far less likely that employers will hire more workers. Higher wages might help those already gainfully employed, but it certainly won’t help the millions in poverty looking for a job.

Ultimately, Peek and Bennett believe that if we are to work toward stemming violence and poverty in some of the country’s most challenged urban neighborhoods, we’ll need to focus on providing the skills and resources its youth need to be independent and successful, rather than relying on money alone.

Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.

For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com

Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.

About Dawn Bennett

Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com

She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.

She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett ordbennett@bennettgroupfinancial.com

 

Are We Actually Out of Recession?

The 2008 global recession was devastating in numerous ways as all of us know.  One of the most damaging impacts from the recession has been the damage caused to our financial markets and their fundamental infrastructure.  The recession triggered unprecedented involvement in the private sector by central banks like the Federal Reserve and this has greatly altered the economy and its overall stability.  Whether or not we can extricate ourselves from this mess is a big question.  For investors, it means we need to reevaluate our traditional tried and true indicators for whether or not we’re heading into recession or about to have other financial problems.

One example of a lost indicator appears to be the inverted bond yield curve.  So far one hasn’t appeared, but that doesn’t mean what it used to.  For those not familiar with this indicator here’s a quick breakdown: short term treasury bond yields are lower than long term yields in a normal yield curve.  An inverted curve is when the short term bond yields have a higher payback than the long term even with the same credit quality.  Dawn J Bennett points out that this indicator may have broken down because of the Keynesian policies practiced by the Federal government have “divorced” the markets from the basics.  Another disturbing sign which investors should be aware of is the internal relationship between the two-year and ten-year Treasury bonds seems to have completely loss their correlation.

More interesting information is being released that should give investors and everyone a better idea of the trouble we are in.  The St. Louis Federal Reserve recently released a report that removed the deferment and forbearance from the denominator of the student loan delinquency rate equation.  This gave us a better understanding of what the true numbers look like and the reality is only 55% of student loans are being repaid and 27% of those are delinquent.  Dawn Bennett says it’s reasonable to imagine that of those remaining 45% it is likely a similar percentage will also wind up being delinquent.  What does all of that delinquent student debt add up to: the answer is 400 billion.

This is important to investors because this debt is packaged and sold as asset backed security bonds.  Since these numbers came out Moody’s Investors Services declared that they would be downgrading the ratings for 14 tranches in 14 securitizations under the Federal Family Education Loan Program (FFELP).  This threat of downgrade is something investors need to be wary of.

The U.S. isn’t the only country with a debt issue either, China has recently begun taking steps to secure itself in preparation of a “global liquidity shock”.  They’ve started banning certain financing for over-the-counter stocks and margin trades.  The Eurozone is also taking similar preparations in the event that Greece defaults and exits from the Eurozone.  Another worrisome matter is how little money states have in their reserves.  Several states don’t have the needed cash on hand to survive another recession without cutting services or raising taxes.  As an investor it’s time to bunker down and find the right solutions which can handle another recession because it appears we may be hitting one soon.

Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.

For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com

Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.

About Dawn Bennett

Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com

She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.

She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or dbennett@bennettgroupfinancial.com