Bolivia's Morales hopes to build railway to Peru (AP)

LIMA, Peru ? Bolivia's president said Monday that he hopes to build a new railway linking his country to Peru that would facilitate exports to Asia.

Bolivian President Evo Morales said he has discussed the plan with Peruvian President Ollanta Humala. Morales told the Peruvian radio station RPP that the railway would run from Puerto Suarez, on Bolivia's border with Brazil, to the Pacific port of Ilo in Peru.

"It's my great dream," Morales said, adding that Brazil and Peru would also gain from having a railway link. He said it would carry agricultural products as well as other commodities to Asian countries.

Morales said in August after a visit to China that Chinese officials expressed interest in making the railway project a priority. It's not immediately clear how much the railway would cost, or how much financial support China might provide.

Bolivia and Peru currently export minerals to China including zinc and lead. Bolivia currently uses roads to truck shipments to Pacific ports in Chile.

Morales made the remarks Monday in the Peruvian city of Cusco, where he spent Christmas after meeting with Peru's president.

Humala also reiterated his support last week for Bolivia in its long-standing request that Chile provide the landlocked country with a corridor of land to access the Pacific coast.

Source: http://us.rd.yahoo.com/dailynews/rss/latam/*http%3A//news.yahoo.com/s/ap/20111226/ap_on_re_la_am_ca/lt_bolivia_peru_train

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American troops will not solve Iraq's problems

For nearly a year now, most of the articles written about Iraq by western observers and journalists have focused on the ongoing departure of American troops, drawing a gloomy picture of post-withdrawal Iraq at the end of this month. Their arguments are usually based on the insufficient readiness of Iraqi security forces, concerns about the return of sectarian violence, ethnic conflict between Arabs and Kurds, the instability that can be caused by unresolved political disagreements, and Iran's increasing influence in Iraq filling the gap left by the withdrawal of American troops.

These observers often conclude that the national security interests of both the United States and Iraq require extending the Status of Forces Agreement and retaining a smaller but still substantial US military footprint in Iraq. What is puzzling is the pessimism of these analyses, the mixing and overlapping of Iraqi and US interests, and the level of ignorance of realities in Iraq.

It is a fact that the Iraqi armed forces do not have the readiness to defend Iraq against an external threat. It will take years to have an effective air force, air defense, navy, and ground combat forces with sufficient fire support. But what analysts miss is that no classic external military threat against Iraq is anticipated within the next few years. Yes, some neighbors may try to intervene in Iraq by supporting militant groups, proxies, terrorists, etc. But such a threat in any case cannot be dealt with by American troops. Iraqi security forces perform better in this area, as they do in maintaining internal security.

A return to sectarian violence is possible but not highly probable. Iraqis learned their lesson during the 2003-2008 period of sectarian violence and don't want to repeat that experience. The campaigns and outcomes in the 2009 provincial elections and the 2010 national elections showed clearly that the majority of Iraqis, Sunni and Shiite, may vote for candidates from their own sect but would not vote for someone they perceive to be promoting a sectarian agenda or sectarian violence. Anyway, even if the least probable scenario emerges and sectarian violence starts again, American troops can do very little about it. At the height of sectarian violence, when the American troop contingent exceeded 140,000 combatants, they could not do much.

Kurdish parties played an important role alongside Iraqi opposition parties-in-exile during the Saddam Hussein era. After the toppling of Saddam's regime in 2003, Kurds played a key role in drafting the 2005 Iraqi constitution. The federalism embodied in that constitution was perceived as the solution for the Kurdish problem in Iraq. But there remain unresolved issues that present national security challenges such as the future of Kirkuk, the future of the areas of common interest, the distribution of wealth, and the deployment of Kurdish Peshmerga troops outside the Kurdistan region.

American troops did play the role of arbitrator in 2009 in preventing security friction between Peshmerga and Iraqi security forces from developing into a political crisis. Their presence also had a psychological effect in easing the fears of some Iraqi factions. But in the bigger picture, they were not able to bring Kurds and Arabs to resolve their key differences. Nor could they facilitate Iraqi national reconciliation. There is no reason to believe that a smaller presence of American forces with fewer assets could do what a bigger and more resourceful troop presence could not do.

Much has been said about Iranian influence in Iraq and the danger that Iran will take over Iraq once the American troop presence is ended. This is an oversimplification of a complicated issue. Iraq suffers from intervention and intelligence penetration by neighbors and more distant countries. Americans troops are not counter-espionage forces. They could not solve this problem in the past, and they cannot solve it in the future. In fact, they are part of the problem. American troops on Iraqi territory render Iraq a "battlefield" with Iran ? something Iraqis do not want. The only way Americans can help in this regard is by developing the capabilities of specialized Iraqi agencies. And this can be done far more effectively through training, equipping and intelligence-sharing under the Strategic Framework Agreement of 2008.

The departure of the last American combat units is a significant milestone that will end Iraqis' concerns about sovereignty, enhance the legitimacy of the Iraqi government and create the right climate for Iraq to engage its neighbors. The withdrawal allows normalization of a solid strategic relationship between Iraq and the US based on the Strategic Framework Agreement. Lastly, while withdrawal could encourage insurgents to increase their attacks in the short term, it prevents them from using the occupation to justify their crimes, thereby positively impacting stability in the longer term.

Safa A. Hussein is a former deputy member of the dissolved Iraqi Governing Council. He served as a brigadier general in the Iraqi Air Force. Currently he serves in the Iraqi National Security Council. This commentary is published by DAILY NEWS EGYPT in collaboration with bitterlemons-international.org

Source: http://thedailynewsegypt.com/rssRedirect.php?id=134876

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Investing Mostly in Bonds Means a Lower Lifestyle in Retirement ...

The following is a guest post from Marotta Wealth Management.

Everyone worries about running out of money in retirement. Few people feel secure about government spending and Social Security. Even fewer retirees are confident about the future returns of the stock market.

In the midst of this turmoil, especially after this past summer's sharp drop, many investors wonder if they should put all of their investments into something safe and avoid the markets altogether. What people perceive as secure varies and includes bonds, cash, gold bullion or immediate annuities.

Recent history has proven that safe investments generally don't produce decent returns. For example, bonds get downgraded, and even entire countries default. Cash is currently paying close to zero. Gold bullion lost 69% of its value over a 21-year slide for a consistent annualized loss of 5.5% ending in 2001.

Safe withdrawal rates in retirement are mathematical attempts to determine what percentage of your portfolio you can spend in a given year. That amount is increased by inflation each year. In other words, what is the maximum standard of living you can maintain for the rest of your life and not run out of money before you die?

In financial planning, a good chance means at least an 80% likelihood of staying solvent. Any failure rate less than 20% is considered acceptable. If you aimed for a 100% success rate, your spending rate would approach zero. Financial systems are not well behaved statistically. They are often subject to events that are multiple standard deviations away from the norm. That's why I always describe the markets as inherently volatile. In mathematical terms, market events are not Gaussian; they are subject to power laws. That is, rather than a predictable bell curve of results, they have lumpy tails or more wild returns than you would normally expect.

Government pensions could fail. The markets could drop precipitously. The Treasury could default. Tax rates could double. We could experience hyperinflation. These unexpected occurrences, often called "black swan" events, mean it is nearly impossible to achieve a 100% success rate in retirement.

Multiple studies have tried to compute the safe withdrawal rate at age 65. The original studies suggested 4% was overly safe and 5% was too much. Planners later argued these conclusions were either too aggressive or too conservative. The original allocation was 50% stocks and 50% bonds. Subsequent studies show a better success rate with 75% stocks and 25% bonds. Most studies rebalanced back to a constant asset allocation. But some research suggests that adjusting the asset allocation to gradually grow more conservative provides a higher success rate. Others set the safe withdrawal rate and then blindly increase it by inflation. In the real world, however, people adjust their spending depending on good or bad years in the markets.

Our safe withdrawal rate assumes an age-appropriate asset allocation, starting at age 65 with about 75% stocks and 25% bonds. Normally such a portfolio would average 5.6% over inflation. But the stock market can have wild returns for a decade. We can only count on getting returns that average 3% over inflation, close to the average return of a bond portfolio. The glide path for our top-level asset allocation starts with 75% stocks, but by age 96 the portfolio is completely in bonds. We also recommend making annual adjustments to your safe spending rate rather than blindly increasing your withdrawal rate by inflation regardless of what happened the previous year in the markets.

Given this methodology and investments strategy, our safe withdrawal rate at age 65 is 4.36%. Thus for a $1 million portfolio, the annual safe withdrawal rate is $43,600.

We use projections for average portfolio returns to last until age 100 to ensure an 80% success rate at the average life expectancy. Then we run a Monte Carlo simulation to ensure that 80% success rate. Sometimes clients ask us not to use age 100 so they can safely spend more money. We do not oblige. A 50-50 chance of having money through age 100 provides only an 80% success rate through the end of your life. Our analysis gives you the freedom to spend as much money as you safely can in retirement.

But our safe withdrawal rate is only appropriate if your asset allocation strategy was also designed to maximize success. It should not be used with other investment strategies.

For example, if you put most of your money in more stable fixed-income investments, the odds of averaging 3% over inflation are much less likely. With a bond portfolio, you only have an 80% chance of keeping up with inflation. And simply keeping up with inflation means a much lower withdrawal rate.

A portfolio with an 80% chance of keeping up with inflation has a safe withdrawal rate at age 65 of only 2.78%. At age 65 you have 36 years through your 100th year. With this withdrawal rate you have a 50-50 chance of making it through age 100 and an 80% chance of not running out of money before you die.

Keeping all of your investments in stable bonds might look like an attractive option during volatile markets. But spending only 2.78% of your portfolio at age 65 certainly is not. With 75% of your investments in equities, you can spend $43,600 of a $1 million portfolio. If you keep everything in bonds, you can spend $27,800, less than 64% of your budget otherwise.

A bond portfolio at least keeps up with inflation. Other investments will not. Cash, gold bullion and real estate with no income may not. Keeping your money in cash is probably one of the riskiest strategies. The biggest concern in retirement normally is inflation. And the biggest danger is a black swan event for inflation.

In recent years inflation has averaged 5%, partly because of the double-digit inflation of the 1970s. Official inflation numbers were recently skewed downward because in 1997 the government changed the way it calculates inflation. Assuming an average 5% inflation, safe withdrawal rates for a portfolio invested in cash-like investments is only 1.04% at age 65.

So instead of being able to spend $43,600 of a $1 million portfolio, you would only be able to spend $10,400 at age 65. Spending less than a quarter of your lifestyle is not worth running to cash every time the markets drop. In fact, given market volatility, turning to cash when the markets drop will likely lock in losses at the lowest point.

The markets are inherently volatile. What you must give up in your lifestyle to avoid market volatility is not worth it for most retirees. Make sure your portfolio asset allocation is set appropriately and well diversified across all six asset categories. And then moderate your spending each year in accordance with the safe percentages for your age. Having an appropriate asset allocation matters for what you can safely spend in retirement.

Source: http://www.freemoneyfinance.com/2011/12/investing-mostly-in-bonds-means-a-lower-lifestyle-in-retirement.html

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Ask and Answer Questions About Traditional Holiday Food and Drink [Help Yourself]

Every day we're on the lookout for ways to make your work easier and your life better, but Lifehacker readers are smart, insightful folks with all kinds of expertise to share, and we want to give everyone regular access to that exceptional hive mind. Help Yourself is a daily thread where readers can ask and answer questions about tech, productivity, life hacks, and whatever else you need help with.

The holiday season usually brings out food and drink that you don't typically see during the regular course of the calendar year. We've featured holiday drink recipes and even stronger eggnog recipes. Of course, you could always spice up your holiday cocktails with some rum-flavored caviar. Then there is what to do with that fruitcake you got as a gift. We want to know what holiday food and drink you enjoy and maybe share some recipes. Ask and answer questions about traditional holiday food and drink in the comments.

Source: http://feeds.gawker.com/~r/lifehacker/full/~3/Jcu6Pj7E4NU/ask-and-answer-questions-about-traditional-holiday-food-and-drink

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VOTE! Would You Rather Date Daniel Craig or Matt Damon?

James Bond or Jason Bourne? Tough choice!

Source: http://www.ivillage.com/vote-would-you-rather-date-daniel-craig-or-matt-damon/1-a-413198?dst=iv%3AiVillage%3Avote-would-you-rather-date-daniel-craig-or-matt-damon-413198

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Obama urges public help pushing payroll tax cuts

President Barack Obama delivers remarks at the White House Tribal Nations Conference, Friday, Dec. 2, 2011, at the Interior Department in Washington. (AP Photo/Haraz N. Ghanbari)

President Barack Obama delivers remarks at the White House Tribal Nations Conference, Friday, Dec. 2, 2011, at the Interior Department in Washington. (AP Photo/Haraz N. Ghanbari)

President Barack Obama listens while touring a building under construction in Washington, Friday, Dec. 2, 2011, part of his Better Building Initiative to promote energy efficient buildings. (AP Photo/Carolyn Kaster)

WASHINGTON (AP) ? President Barack Obama wants voters to get involved in the debate over extending the reduced payroll tax and he's asking them to tell members of Congress to keep the cut in place.

"Let your members of Congress know where you stand," Obama said Saturday in his weekly radio and Internet address. "Tell them not to vote to raise taxes on working Americans during the holidays. Tell them to put country before party. Put money back in the pockets of working Americans. Pass these tax cuts."

Obama's address directs listeners to the whitehouse.gov website, where an online calculator lets them determine how much money it's worth to them to continue the 2 percent reduction in the payroll tax that took effect this year. A family with income of $50,000 a year would pay $1,000 more in payroll taxes if Congress does not act by the end of this year to extend that reduction.

Democrats want to expand the reduction in addition to extending it. Republican leaders say they're committed to passing an extension, fearing political fallout if payroll taxes rise on Jan. 1 on 160 million wage-earners. The GOP rank-and-file appears divided, with many Republican senators voting against an extension supported by their leadership this week.

There's also disagreement about how or whether to pay for any extension. Democrats favor a new tax on millionaires; Republicans prefer to cut federal spending.

"We're going to keep pushing Congress to make this happen. They shouldn't go home for the holidays until they get this done," Obama said in his address. "And if you agree with me, I could use your help."

Obama also took note of a new monthly jobs report out Friday that showed the economy added 120,000 jobs in November, a positive number. "We need to keep this growth going and strengthen it," the president said.

Republicans devoted their weekly address to promoting a balanced budget amendment to the Constitution, which is headed for a vote in the Senate after failing in the House last month.

Democratic leaders worked aggressively to defeat the measure in the House, saying that such a requirement could force Congress to cut billions from social programs during times of economic downturn and that disputes over what to cut could result in Congress ceding its power of the purse to the courts. The result was that the amendment got majority support but fell short of the two-thirds needed to advance a constitutional amendment.

Sen. Olympia Snowe, R-Maine, said "the impending vote to amend the Constitution represents a choice between changing business as usual in Washington or embracing the status quo that we can no longer afford."

"The real reason many lawmakers don't want a balanced budget amendment is the exact reason why it's so essential," Snowe said. "They don't want their hands tied; they want to continue to spend without restraint."

Like Obama, she asked listeners to make their views known.

"Contact your senators and urge them to support our balanced budget amendment," Snowe said, "so that we finally seize the fiscal reins and reclaim our future for our children and our grandchildren."

___

Online:

Obama address: www.whitehouse.gov

GOP address: http://www.youtube.com/gopweeklyaddress

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/89ae8247abe8493fae24405546e9a1aa/Article_2011-12-03-Obama/id-d05d1591bbc24b38a05e58aaf790d5f6

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