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‘She can start repairing the damage in economic diplomacy’ — analysts react to Yellen as Biden’s Treasury secretary

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Economists and other analysts are sounding off following Monday’s news that President-elect Joe Biden has selected former Federal Reserve Chairwoman Janet Yellen to lead the Treasury Department.

Biden plans to nominate Yellen, said a Wall Street Journal article citing unnamed sources, and other news outlets also reported that she was picked. If confirmed by the U.S. Senate, she would become the first woman to serve as Treasury secretary.

Below are some initial reactions, as the main U.S. stock gauges
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 closed with gains on Monday after moving up toward session highs as the headlines about Yellen hit. Equities were rising again Tuesday.

• “She is well within the orthodoxy of the economics community, and I suspect that fact along with her familiarity will lead to a largely positive response from financial markets. More broadly, from what we have seen so far, Biden appears to be mainly choosing old Democratic hands to fill his most vital Cabinet and White House posts, people from the Obama (and in some cases, even the Clinton) years. Progressives had hoped to wield major influence in the next administration, but if Biden’s personnel choices so far are any indication, he intends to govern more from what constitutes the middle of the Democratic Party today than to push the envelope far to the left.” — Stephen Stanley, chief economist at Amherst Pierpont

From MarketWatch’s archives, December 2018:Yellen is worried about the next financial crisis

And see:Biden names Blinken secretary of state, Kerry as climate envoy

• “There’s a lot to be excited about, but here’s a big one: As a former Fed chair, she has great relationships across the globe. She can start repairing the damage in economic diplomacy from the past four years.” — Michael R. Strain, director of economic policy studies at the American Enterprise Institute, in a tweet

• “Ms. Yellen’s vast experience as a labor economist will be invaluable as the new administration and the Fed attempt to help the labor market regain its pre-pandemic footing. … Overall, Ms. Yellen will be a welcome addition to the administration at a time when the economy continues to be adversely affected by Covid-19 and needs ongoing support from both monetary and fiscal policy.” — Rubeela Farooqi, chief U.S. economist at High Frequency Economics

• “We expect her to easily win Senate confirmation. To us, Yellen is likely to support restarting 13(3) loan programs like Main Street and the Muni facility. She also could support help for housing. We see her economic background giving her more credibility to negotiate a stimulus package.” — Jaret Seiberg, analyst at Cowen Washington Research Group

Related:Mnuchin pulls plug on some coronavirus emergency lending programs

• “Investors should embrace former Fed Chair Yellen as the next Secretary of the Treasury. If nothing else, her stock track record is very good: the S&P 500 compounded at 13 percent/year on a price basis during her tenure, even as she raised rates. Our only concern is that as a trained economist and former central banker, Yellen is not the sort of individual who will champion novel disruptive technologies like a U.S. central bank digital currency. China’s lead on this count will therefore continue to grow, with unforeseeable consequences for the greenback.” — Nicholas Colas, co-founder of DataTrek Research

• “The market responded positively to the news of Yellen’s nomination. This reflects the market’s familiarity with Yellen as Fed Chair from 2014 to 2018. … We conclude by viewing Yellen’s nomination as a moderate selection, which should mitigate the risk of any material progressive rules or regulations that would be disruptive to the banking and financial services sectors.” — Edwin Groshans, analyst at Height Capital Markets

• “Yellen is an excellent choice for Treasury secretary. She was my boss when I was a Senior Economist for International at the Council of Economic Advisors in 1998-99. The most wise boss ever!” — Nouriel Roubini, New York University economics professor often called “Dr. Doom,” in a tweet

Read more:Yellen, pushed aside by Trump, returns to center stage of economic policy

• “Great to see there will be an experienced hand at @USTreasury. Every Treasury secretary has a learning curve (even former Fed chairs) but this is an excellent selection.” — Tony Fratto, founder of Hamilton Place Strategies and a former spokesman in the George W. Bush White House, in a tweet

This is an updated version of a report first published on Nov. 23, 2020.





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‘I could live on my Social Security and still save money’: This 66-year-old left Chicago for ‘calming’ Costa Rica — where he now plans to live indefinitely

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Editor’s note: This article was first published in September 2019.

A school break changed 66-year-old Martin Farber’s life forever.

In 2007, his daughter — who at the time was attending Illinois State University — decided she wanted to spend a college holiday volunteering in Costa Rica and staying with a local family, he explains. She came home raving about the experience, so, in 2008, Farber — who at the time was living in Evanston, Ill., just outside Chicago, and selling cars — took his first trip there.

“It was a big surprise to me — bumpy roads, dogs barking in the streets,” he says. “I wasn’t enamored at first.”

But as his daughter began traveling there more and eventually moved there for a year, he took additional trips to Costa Rica. It quickly grew on him — in particular, the people. “The Costa Rican people are warm, open and friendly. I felt less invisible in a strange country in a strange town where I didn’t speak the language than I did in Evanston.”

And the more time he spent there, the more it impacted him: “On one of my trips there, I thought: My daughter’s life makes more sense than mine,” he says. “There was nothing wrong with my life, but I felt that my life was out of context with who I’d become. … I would have bills and make money to pay them, but that had ceased to be satisfying,” he recalls. “I knew I needed to change my life — there was no more joy in what I was doing.”

What’s more, when he’d return from his Costa Rica trips, people noticed. “I would come back, and my friends and therapist would say: You seem better after you go,” he says with a laugh.

A view from the hot springs near Martin Farber’s home in Costa Rica.


Martin Farber

So in 2014, he packed up and moved to Orosi — a picturesque, lush small town with waterfalls and hot springs a little over an hour’s drive from San Jose — promising himself he’d stay for two years. It’s been five, and he now plans to stay in Costa Rica indefinitely. (Though Farber notes that, to him, “it’s not a retirement; it’s a chance to lead a new and different life.”)

Here’s what his life is like, from costs to health care to residency to everyday life:

The cost: While many expats spend way more living in Costa Rica, Farber says: “I could live on my Social Security and still save money.” He says “a person can live on $1,200 per month, two people on $2,000.” The key, he says, is to live more like he does and as the Costa Ricans do — in a modest home, eating local food and purchasing local goods.

Indeed, Farber himself spends just $300 a month for rent (he rents a home from a friend who moved recently and gave him a good deal), roughly $225 a month on groceries and just $50 a month total on water and electricity (the temperate climate in Orosi means you rarely need heat or air conditioning). The veteran Volkswagen
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salesman saves money by not owning a car (those over 65 ride municipal buses for free), which can be a significant expense in Costa Rica; for his cellphone, “I pay as I go … roughly $10 may last me a couple weeks or more,” he says, adding that “many people handle there their cellphones this way. You can get them recharged anywhere.”

His major expense is travel: He goes back to the U.S. to visit his mother in Florida several times a year and lately has spent part of the summer in Chicago helping out a friend with a dealership there. He also spends a good amount of money on health care. He says that while flights can be had for as little as $350 roundtrip during offseasons, the cost can be much higher the rest of the year.

In the saddle.


Martin Farber

Health care: Farber, who has permanent resident status in Costa Rica, says he pays about $90 per month to participate in the country’s health-care system — adding that the health care he’s received has been very good. (A 2018 study of health-care quality and access in more than 190 nations ranked Costa Rica No. 62.)

When he developed a detached retina, though, he paid for the procedure out of pocket so that he didn’t have to wait for the required surgery, he says — adding that the entire procedure cost him about $5,000. “I would have had to have waited four days,” he says, if he had not paid to expedite matters. “That might have been fine, but it might not.” And he adds that the quality of care depends on where you get it in the country.

Lifestyle: Though Farber says that he “moved here with no goals and no agenda,” he’s found plenty to do. “I take Spanish lessons two days a week for two hours a day. It’s been great. I never thought I would acquire a usable language in my 60s,” he says. He also rides his bike all around the area, does some writing and belongs to a community group that undertakes projects to improve the area.

And he often simply takes in nature, which he says has been an essential part of why he feels calmer and more relaxed in Costa Rica than in the U.S. “I live at 3,000 feet but in a valley surrounded by coffee fields and lime trees and water. At night, if I open the windows, I can hear the river rushing by,” he says. “It is very calming … hundreds of trees everywhere … you know the Earth is alive.”

The historic Iglesia de San José de Orosi.


iStock

Cons: “I don’t want to overglorify. It’s not without its problems,” Farber says of Costa Rica. “There are social problems and downsides.” He notes that crime and petty theft can be a problem (“I am cautious,” he says of his approach) and seem to have increased since he moved there, and adds that he misses out on some cultural things because of where he lives. And, he says with a laugh, “I can’t order Thai food at 9 at night.” But, he adds: “These are trade-offs — in the afternoon, I get to walk in the coffee fields and see flocks of parrots.”

Residency: To qualify for Costa Rica’s pensionado visa, expats must prove that they have a pension of at least $1,000 coming in each month. (Here are the details of that program.) Once you have lived in Costa Rica for three years, you can apply for permanent residency. Farber used a lawyer to help him figure out the ins and outs of residency options; his entire path to permanent residency took about a year, he says.

The bottom line: “After five years I am still amazed and surprised that I made the decision to lead a life I never thought I would,” he says. And while he may not stay in Orosi forever — “the town doesn’t have an ambulance, [and] I don’t know what it will be like to be 80 there,” he says — he does plan to stay in Costa Rica in no small part because of the people and sense of community. “I have the feeling that life is good here,” he says. “It’s hard sometimes, but we are all in it together.”



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Mutual Funds Weekly: These money and investing tips can help you read the market’s signs and stay on your path

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These money and investing stories were popular with MarketWatch readers over the past week.





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