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Tag: pension plans

A retirement plan is an arrangement to provide people with an income during retirement when they are no longer earning a steady income from employment. Often retirement plans require both the employer and employee to contribute money to a fund during their employment in order to receive defined benefits upon retirement. Funding can be provided in other ways, such as from labor unions, government agencies, or self-funded schemes. Pension plans are therefore a form of “deferred compensation”. (Wikipedia Feb 2010)

Financial Reform

Why Dodd-Frank won’t bring economic recovery

Financial markets can be extremely complex, with many areas that can fail and break.

Unfortunately, instead of a ‘game-changing’ confidence-inspiring reform, the Obama administration presented the United States with the Dodd-Frank Act — a legislative miscarriage that has the potential to hold back recovery and impair the position of New York as a world financial center for decades — unless repealed or drastically amended.

Social change:

Thriving without a credit card

The Crash of 2008 is restructuring the availability of consumer credit as well as household spending and saving habits.

Restricted availability of consumer credit and a greater propensity of households to save before spending, may result in less use of credit cards and smaller mortgages. A return, even partial, to saving habits of the 1950s could stimulate economic recovery.

The popular Dave Ramsey radio and TV shows suggest that a societal change in this direction is at least possible. Lower levels of personal debt would boost the economy and make people happier.

Blood in the Streets:

Economic Recovery from an Inefficient Market

Inefficient markets have consequences that may be prickly for incautious investors.

Markets can be inefficient for different reasons and persist for long periods. The transition between one type of inefficient market to the next is usually a period of strife and uncertainty which may last five to fifteen years. Looking back at how the economy emerged from previous transitions, I note that in each new period, equity prices started at reasonable levels. This was true at the beginning of the Roaring Twenties, the Post WW II Period, and the Reagan Era. It is as if markets, recognizing prior inefficiencies ‘reset’ and start over. However, for the current market to ‘reset’, it will be necessary for equity prices to fall considerably, which will have dire consequences.

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Featured articles on inside pages

Stock buybacks

WSJ exposes the 9/11 caper

In a major exposé of misused executive options, the Wall Street Journal ran a front page article, reporting that as stocks sank after the the 9/11 attacks, scores of companies rushed to issue options to top officials. Some executives reaped millions.
More ...

Securities Analysis

Jeff Skilling explains US corporate ethics

Unfortunately for society, Jeff Skilling of Enron told the truth according to tenets of moral relativism learned at the Harvard Business School and with McKinsey and Company, when, on being sentenced to decades in prison, he said, "That's the way the game is played. You win some, you lose some."
More ...

US Politics

What is the future of private pension plans?

Between 1999 and 2002, US private pension funds lost US$ 1.2 trillion in value. It would almost seem that pension fund managers had been speculating with retirement money, attempting to beat each others' short-term performance statistics, with little interest in safeguarding the assets of plan beneficiaries. More ...

US equities

GAO favors overly-optimistic projections

In a study of the effect of the retirement of Baby Boomers on the price of equities, the GAO assumed that equities will provide real returns of 7% over the next decades. This figure is often cited in Wall Street promotional literature, but has no scientific basis.
More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

Working off the US trade deficit

Foreigners hold $16.8 trillion in US financial assets as a result of selling more goods to Americans than they buy from them. Since the 'deficit' is in dollars, the US has no problem in 'paying it off'. More ...

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2010-07-23 16:02