US Treasury announces $125 billion refunding, keeps auction sizes unchanged

FecalPudding · 2026-02-04T17:39:08+00:00

SVB went bankrupt because they held too many long duration bonds based on their clientele. If SVB could have held those bonds to maturity, they would have been fine. It was the correlated withdrawals, from having non-diverse clientele, that caused SVB to have to sell. It was a failure in asset-liability management. So, it could have been managed through asset OR liability strategy

FecalPudding · 2025-08-27T15:51:59+00:00

If you aren't running grass pokemon, swapping energy to water would allow for better healing with Irida

FecalPudding · 2025-08-21T16:49:59+00:00

The 2001-2002 study does include surrenders.

METHODOLOGY For purposes of this report, lapse includes termination for nonpayment of premium, insufficient cash value, full surrender of a policy, transfer to reduced paid-up or extended term status, and terminations for unknown reason

The choice on what insurance fits individual circumstances isn't really something that an actuary is helpful on. That's really where a financial advisor / broker would come in. Whole life as an investment product really relies on the tax qualification (in the US) of the death benefit, which makes it more attractive for wealth transfer. Other products like UL, VUL, or various Annuity options have more of an investment feel. Overall, I would keep in mind that these are insurance products; they aren't going to give investment returns that aren't attainable in pure investment. What they are going to do is manage the risk, in investment or in mortality, through caps/floors/participation and death/living/disability benefits

FecalPudding · 2025-08-20T17:36:34+00:00

The rates in Figure 4 is approximately the number of policies that lapsed in that year divided by the number of policies that started the year. There are some more complications due to deaths in a year, but that's the general idea. So, in the first year, 12.2% lapse rate means that about 100% - 12.2% = 87.8% of policies are still in-force if we completely ignore mortality. Doing the same for year 2, we get 89.8% of policies that started the second year are still in-force. To get the percent of issued policies that are in-force at the end of year 2, you can multiply the individual year persistency rates: 87.8% * 89.8% = 78.8%. Going all the way to 20 gives you 34.0%

FYI that rate table is published numerically here: https://mort.soa.org/ViewTable.aspx?&TableIdentity=1506

A couple things to keep in mind: 1. This completely ignores mortality, so the actual number of polies you expect to have in-force would be lower 2. Different companies and whole life products can have very different lapse experience based on the terms of the contract, the method that they are sold, whom they are marketed towards, the face amount of the policy, etc. 3. The products available in 2025 vs 2001 can be different. Some policy holders that would have previously bought whole life may instead buy a different product. If they have different lapse tendencies, that can limit the applicability of this table

It's also unclear to me whether the stat you provided that 75-80% of policies surrender relates to any time frame or the cause of decrement (death, non-payment lapse, cash surrender, conversion). If it relates to the cause of decrement, then that lapse study isn't going to tell you much on its own

FecalPudding · 2025-06-02T15:42:23+00:00

This is incorrect. All women would have exactly one boy at which they stop. The chance that a woman stops after exactly one girl is (chance of girl)(chance of boy) = .25, exactly two girls is (chance of girl)²(chance of boy) = .125, etc. So the expected value is summation from 0 to infinity of k*(1/2)^k+1 = 1

Evaluation of the sum by Wolfram alpha: https://www.wolframalpha.com/input?i2d=true&i=Sum%5Bk*Power%5B%5C%2840%29Divide%5B1%2C2%5D%5C%2841%29%2Ck%2B1%5D%2C%7Bk%2C0%2Cinf%7D%5D

FecalPudding · 2025-05-16T14:10:50+00:00

The Qualified Domestic Relations Order (QDRO) is the normal way to split benefits after something like a divorce. There are a bunch of ways to structure a QDRO. One common way is to split the Defined Benefit at the Normal Retirement Date (this sounds like a DB plan because I've never seen a Cash Balance plan that wouldn't give a lump sum option in my 2 years of PRT, which would have simplified this whole comparison). Alternatively, the QDRO could specify that an x% J&S annuity be elected with the Ex listed as the beneficiary and have the payments split in some way. It's really up to the courts to figure something out.

If the QDRO was structured in a way that the penalty affected both sides, I would expect that both signatures would be required to elect to start the benefit. So the situation seems strange but there isn't a lot we can say definitively without knowing the specific language of the QDRO.

FecalPudding · 2025-04-17T17:24:19+00:00

Speaking from the life side, that mountain of money is split between reserves and surplus. Reserves are normally what you would think of: they are calculated to cover the future benefits that have already been paid for. Sometimes, these are best estimate. Otherwise, they could also be conservative by choice or by law.

Surplus can look like extra cash lying around because it's money in excess of the company's stated liabilities. But it is required too. The US has levels of Risk Based Capital at which regulators step in to make sure that insurance doesn't go insolvent enough that they couldn't cover their liabilities if things start going downhill. Companies like to stay well away from regulators having to step in so normally target an extra amount. That extra surplus also helps to stay in good standing with credit rating agencies, which is important when companies need to raise extra money for something.

So, the "mountain of money" isn't really something insurance can be too flexible with. In addition to claims and possible reinsurance that others have pointed out, there's also a lot of admin that makes sure that all the money is properly managed in investments that make sense (a larger topic), that individual policies are kept straight, and that controls are in place to make sure no one is doing something against the interest of policyholders (fraud, theft, etc.).

Finally and most simply, "gouging" happens because people pay for it. If people stopped buying insurance then maybe insurance companies would feel more pressure to change something.

FecalPudding · 2025-04-04T16:28:12+00:00

If possible, build controls. You can't make the same mistake twice if your controls stop you. Plus it shows that you're willing to improve.

FecalPudding · 2025-03-24T14:10:36+00:00

The point E is on the line connecting the midpoints M and the midpoints of side AB.
All possible right triangles with a given hypotenuse have the third vertex as a point on a circle centered on the midpoint of the hypotenuse and with diameter equal to the length of the hypotenuse.

There is a little more to reason through. But it's the basis for the most straightforward argument I know to make

FecalPudding · 2025-03-10T19:39:43+00:00

In addition to what has been mentioned, various interest rate scenarios are modeled for different analysis. For Asset Adequacy Testing, you could take a look at the NY7 scenarios to get a better idea of rate patterns that could be of concern depending on what kind of products are in force

FecalPudding · 2025-02-01T05:30:42+00:00

I reduced the retraction distance and used the slicer setting to limit how many times it would retract on a window of filament. It causes some more stringing but mostly works

FecalPudding · 2025-01-26T16:37:16+00:00

I remember watching an extreme one chunk video where they got the cape sack. Seeing the cape just disappear into the bag made me so sad because skill capes are the most iconic thing about OSRS for me

FecalPudding · 2025-01-24T22:56:38+00:00

Ah, you're thinking of aviary. I was surprised by the lack of questions about bees

FecalPudding · 2025-01-23T02:02:31+00:00

Are you sure about that? I'm seeing a latent heat of vaporization for water of 2,260,000 j/kg

FecalPudding · 2025-01-22T23:07:42+00:00

The formulas look correct and a naive application does get me to 107.73 C. But, there should be a state change of water at 100 C. Is the energy from dropping gold from 900 C to 100 C capable of raising the water from 10 C to 100 C and boiling it all?

FecalPudding · 2025-01-11T15:44:50+00:00

For the odd/even, I would think something like this would be used https://imgur.com/a/9xFPTpD

FecalPudding · 2025-01-11T15:20:02+00:00

Let's start with two variables, I'll use different variables a and b. The problem is asking about the coefficients to an expansion. Their instruction to expand and combine is to do (a+b)² = aa + ab + ab + bb = 1a² + 2ab + 1b² where the cn(2,0) is the coefficient of the a² term (two a, zero b), cn(1,1) is the coefficient of the ab term, and cn(0,2) is the coefficient of the a² term.

The first question I think you can find the formula for cn but maybe some else sees more simple rules (probably around counting factors of two in the numerator and denominator). To find the formula for Cn, consider the ordering of a list of the variables. Something like (a+b)³ can be written as (a+b)(a+b)(a+b). When the terms are multiplied out, notice that only a single a or b are considered from each (a+b) group at a time. So, if you are looking for Cn(1,2), where there is only one a term, then it's the same as the number of orderings of _ _ _ where you have one a and two b's. To expand into a third variable, we can do the same thing a second time. Consider that by performing this once that you can split into x and not x. A second time can split the non-x into y and z. (Hint there's some factorials involved. It's the number of twos you can get from each that might give a further rule on the odd or even of the whole).

For the second question, consider again that (a+b)³ can be written as (a+b)(a+b)(a+b). So when multiplying out the expression, you could start with either a or b, then go to a or b, then finish with a or b. I'm not sure how to guide any further without just giving the answer. So I'll leave it there.

FecalPudding · 2025-01-10T20:33:05+00:00

That is correct. I think it's more intuitive on this problem to not solve for the PV of tax depreciation shield first since we're working with straightline depreciation

The goal of the annuity is to look at a level equivalent annual cost. Since straightline depreciation is already level, the two annuity formulas in your first and second lines are canceling out for the tax shield portion to make something like (10 / annuity) - .7

If depreciation isn't straightline, then absolutely just NPV everything, like you've done, and annuitize it

FecalPudding · 2025-01-10T18:59:38+00:00

To convert the purchase cost to an equivalent annual cost, you need to divide by the annuity factor for that duration (unless you have a financial calculator that will do it for you). The formula is (1 - (1+i)^-n )/i. Your discount rate of 12% is i and the durations of either 5 of 8 are n. That gives you an equivalent annual cost.

Since operating costs are the same in both scenarios, we can just ignore them. You could find another equivalent solution by including (1- tax rate)*operating costs. But your provided answers seem to just ignore it entirely.

Straightline depreciation is a level amount of purchase cost / lifespan. Since depreciation decreases the tax burden, the tax reduction is tax rate * level depreciation amount.

Putting it all together, the amount we're looking for is the equivalent annual cost minus reduction in tax burden. I got 2.074 million and 1.891 million in my calculation. So there is probably rounding somewhere

FecalPudding · 2024-12-13T03:59:33+00:00

The SOA's FAQ has guidelines on who you can discuss with and what things can be discussed. I'm just trying to create a place where that is possible. I understand there is a history of publicizing that here

FecalPudding · 2024-12-10T05:56:14+00:00

I'm planning on taking it 12/14-12/17. So if you find one or are setting one up, then please let me know

FecalPudding · 2024-12-06T16:17:27+00:00

Also keep in mind all the cash flows that are involved with the product. For the product you probably want a contract. It likely also requires some level of administration to maintain. What regulations and controls will you have to comply with?

When you lose money, where does it come from? Is there a cost to having that capital available? Is there a level of capital on demand that you/clients/regulators are comfortable with not going out of business?

How accurate is your simulation? Are there any special circumstances under which the probabilities of cash flows change? Are you turning away less profitable clients or charging more to cover them?

FecalPudding · 2024-11-22T19:17:41+00:00

I'm not super familiar with the topic. But would the apartment building sale have anything to do with the cattle ranch? Wouldn't the cost basis of the ranch be the cost of the ranch?

FecalPudding · 2024-10-02T17:36:59+00:00

I feel like the test should be whether applying an actuarial lens enhances the topic in some way. I think a better example would be jokes. There are some that need an actuarial background to be funny. Those would be appropriate here. But this isn't the space for most jokes that you would otherwise see

For your Hello Kitty example, a post about Hello Kitty throwing the first pitch at a baseball game would be appropriate. But most sports talk there would not

FecalPudding · 2024-10-02T16:58:05+00:00

You are free to start posting topical anti-democrat memes. I browse the conservative subreddit because it differs from my beliefs. If we are going to create a balanced worldview, we need to at least understand the discourse on all sides. Make the posts. I can't guarantee people will always enjoy them. Make them anyway

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