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Offline TahoeBlue

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ZIRP slowly killing Pension Funds
« on: May 25, 2015, 02:11:30 pm »
The only reason pension funds have not been hit dramatically has been that bond funds have not yet collapsed and the stock market has continued to improve ... we seem to be at the end of that string ....

http://www.talkmarkets.com/content/us-markets/deformations-on-the-dealer-lots-how-the-feds-zirp-is-fueling-the-next-subprime-bust?post=53248
Deformations On The Dealer Lots: How The Fed’s ZIRP Is Fueling The Next Subprime Bust
By David Stockman of David Stockman's Contra Corner

  Wednesday, November 19, 2014 5:37 PM EDT

On any given day, Janet Yellen is busy squinting at 19 essentially meaningless labor market graphs on her “dashboard” looking for evidence that ZIRP is working. Well, after 71 months of zero money market rates—-an unprecedented financial absurdity—-there are plenty of footprints dotting the financial landscape.

But they have nothing to do with sustainable jobs. Instead, ZIRP has fueled myriad financial bubbles and speculations owing to the desperate scramble for “yield” that it has elicited among traders and money managers. indeed, the financial system is literally booby-trapped with accidents waiting to happen owing to the vast mispricings and bloated valuations that have been generated by the Fed’s free money.

Nowhere is this more evident than in the subprime auto loan sector. That’s where Wall Street speculators have organized fly-by-night lenders who make predatory 20% interest rate loans at 115% of the vehicle’s value to consumers who are essentially one paycheck away from default.

This $120 billion subprime auto paper machine is now driving millions of transactions which are recorded as auto “sales”, but, in fact, are more in the nature of short-term “loaners” destined for the repo man. So here’s the thing: In an honest free market none of these born again pawnshops would even exist; nor would there be a market for paper backed by 115% LTV/75-month/20% rate loans to consumers who cannot afford them.

Indeed, instead of the BLS concocted “quit rate” and other such aggregated data noise about the nation’s massive, fragmented, dynamic and complicated complex of thousands of local and sectoral labor markets—- about which the Fed can and should do nothing—-Yellen might be gazing at the $1.6 billion in bids attracted earlier this year by Prestige Financial Services of Utah. That occurred in the junk bond market, which the Fed does heavily impact, and could not have possibly happened in the absence of ZIRP.

In a word, the $390 million offering was 4X oversubscribed–even though the bonds were  issued by a newly minted financial conduit that has no operating history; and its only assets are piles of 20% interest rate loans made to people who have been in bankruptcy:

“Investors, seeking a higher return when interest rates are low, recently flocked to buy a bond issue from Prestige Financial Services of Utah. Orders to invest in the $390 million debt deal were four times greater than the amount of available securities.

What is backing many of these securities? Auto loans made to people who have been in bankruptcy.
...

Now the purpose of the financial market meltdown in 2008 was to purge the market of exactly this kind of dodgy lending by predators like Prestige Financial Services. And initially that’s exactly what happened.

As shown below, the subprime market shrunk from more than $125 billion at the bubble peak in 2007 to only about $60 billion by 2009. Market discipline was finally being brought to bear in this dodgy corner of the junk credit market and sketchy loan books were being drastically liquidated. That in turn meant that the US auto market was being downsized to a more sustainable level of demand based on consumer incomes, not unrepayable debt.

But the cleansing action didn’t last long. The Fed’s lunatic ZIRP policy steadily forced more and more institutional bond managers, pension funds, insurance companies and retail mutual fund investors desperate for yield into junk ABS paper. So as shown below, the subprime auto market—something which would exist on the fringe of the financial markets, if at all—came roaring back. At the end of 2013 it had re-attained the bubble peaks of 2007, and by the end of this year will be at all-time highs.

| - - - - -

http://www.keeptalkinggreece.com/2015/04/16/how-the-ecb-plunders-pension-funds-and-deposits/
How the ECB plunders Pension Funds and Deposits
Posted by keeptalkinggreece in Economy

Are you one of the few chosen ones with euro savings at the bank? Are you shocked every time you go get your “profit” from the interest rates to see a handful of coins landing in your purse?  You complain to the bank and get the standard answer “There is nothing we can do, it’s decision by the ECB.”

That is the well-known European Central Bank that is holding interest rates at record lows and it is using the euro deposits, – 60 billion euro every month – to buy bonds of weak economies of the eurozone and to boost inflation. Mario Draghi calls it Quantitative Easing (QE).

You are not alone with your frustration. It was he himself personal, the Euro master, German Finance Minister Wolfgang Schaeuble who officially complained about the low interest rates policy of the European Central Bank.

End of March, Wolfgang Schaeuble has expressed concern about the impact on Germany of the European Central Bank’s interest rate policy and warned about the possibility of bubbles forming.

“We have an interest-rate environment that of course is causing huge problems for us in Germany, this is out of the question. The interest rate level is of course too low for Germany” Schaeuble
said as the representative of a nation that is notorious for its saving traditions: bank deposits, pension funds, seniors’ care, real estate… you name it.


Unintended consequences of the ECB

The ECB plunders the Pension Funds of the euro zone and other savings in a less obvious and more subtle way by the combination of interest rates of zero percent and creating inflation.

The money which has been robbed from savers in the euro zone […] is used to buy sovereign debt of countries in difficulties . As a result, the purchasing power of pensioners is reduced.

The ECB’s program of Quantitative Easing together with the zero interest rate policy has other unintended and negative consequences. Lots of cheap money leads to less risk aversion in investment and creates bubbles.
The current stock market rally is  a sign for this. The real estate markets give also a big cause for concern. (Geopolitical Information Service)


As the author is a Prince from Lichtenstein
he is a polite man and he sees no bad intention in the ECB low interest rates policy.
...
PS things could be even worse, like “negative interest rates” as the case in Switzerland and Denmark.
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #1 on: May 25, 2015, 02:30:13 pm »
http://www.swissamerica.com/ZIRP.php
THE BIGGEST BANK HEIST IN HISTORY!
How You Can Avoid Paying The Price For Banks and Government Getting Free Money

 by Craig R. Smith
 Chairman, Swiss America Trading Corporation
 and Lowell Ponte

"Virtually zero percent interest rates are to long-term economic policy what junk food is to nutrition – it tastes great going down, but later come horrible results....[that] pose dangers for all of us.... ZIRP [is]...how the Fed gave the U.S. Financial Diabetes." – Gregory Bresiger, Business Journalist [1

Introduction

The biggest bank heist in history began on December 16, 2008 amidst the uncertainty and fear of the worst financial crisis since the Great Depression. The heist began with the Federal Reserve's Zero Interest Rate Policy, known as ZIRP, that has been used to take trillions from some and give it to others – especially to the giant banks and the government itself.

On that day in 2008, with one of America's largest banks in ruins and several others at risk of collapse, the Fed Open Market Committee (FOMC) ended almost a century of tinkering up and down with interest rates and simply slammed its economic accelerator pedal to the floor – driving the short-term Fed Funds Rate at which banks could borrow money from each other and from the Fed as low as it then could go – to between Zero and 0.25 percent.

In essence, the Fed offered the big banks and certain other entities virtually free money, a policy that continues almost seven years later.

ZIRP began, we are told, as an effort to provide the liquidity to stave off economic freeze-ups, meltdowns and burn-downs of “Too Big To Fail” financial institutions during a crisis. It continues because, although it hurts many, ZIRP greatly benefits government and other key powerful entities.
But by imposing wildly unreal low interest rates, it has created a distorted, unnatural economic system.

What the Fed did in 2008 was no mere adjustment. Imagine those episodes of “Star Trek” where the Starship Enterprise escapes danger by going into warp drive, only to find itself in a whole different galaxy where the old familiar laws of economics and star charts that point the way home no longer work.

The former Vice Chairman of the Fed, Alan Blinder, in his 2013 book After the Music Stopped wrote of ZIRP: “To call such a low interest rate abnormal is an understatement.”

...

Losing Interest

The Federal Reserve almost openly is practicing what economists call “financial repression,” deliberately holding the rate of interest banks can pay savers below the rate of inflation. This guarantees that savers every day will lose more in purchasing power to inflation than they gain in interest paid on their bank accounts. [33]

Forget about accumulating a pleasant retirement nest egg safely through compound interest. ZIRP eliminates the cautious, prudent saver that uses traditional low-risk forms of savings
. Like the 1923 hyperinflation in Weimar Germany, ZIRP erodes bedrock middle-class values on which genuine prosperity and free enterprise depend – thrift, prudence, independence, a work ethic and entrepreneurial virtues, among other things. [34]

This financial repression, it appears, is intended to force savers to look elsewhere and face moral hazard in order to receive a reasonable rate of return on what they have earned
. As we argue in Don't Bank On It!, the government and Fed appear to be systematically closing off the relatively safe havens for savings – and to be herding ordinary Americans into the high-risk casino of the stock market, where they can be sheared by its sharpers.
...


Unyielding

The fashionable new term among these investors is “ZYNY,” which stands for “Zero-Yield to Negative-Yield,” as they seek desperately for some place to put their savings that will create some kind of gain. They listen when JPMorgan Chase reported in January 2015 that 16 percent of its Global Bond Index – roughly $3.6 Trillion worth of developed market government bonds – was at negative yield. [41]

“Zero yields on safe government debt pushes the search for yield into hyperdrive, swamping local fundamentals,” said JPMorgan. “Term Premia, liquidity premia, and volatility premia are all under pressure.” This is how hyperdrive likewise takes us to a strange, troubled future on what CNBC calls “A ZYNY world.” [42]

Perhaps such buyers are gullible and unthinking. Or perhaps they sense that economies are in trouble all over the world, that huge losses are coming, and they are content if some entity can preserve most of their money. They hope their profit will come if their paper money rises in value after the crisis begins.

Many seem unaware that today's fiat currency in a crisis might lose value faster than the promises of the politicians who printed it out of thin air. Never having lived under the stability of America's historic gold standard, many simply do not understand that far more reliable wealth preservers exist than paper money.

Up to a point, ZIRP and negative interest rates increase inflation in an economy. However, as current Fed Chair Janet Yellen testified during her 2013 confirmation hearing, the closer the deposit rate gets to zero, the bigger the risk of disruption to the money markets that help fund banks. [43]
...

Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline Geolibertarian

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Re: ZIRP slowly killing Pension Funds
« Reply #2 on: May 25, 2015, 03:21:46 pm »
The more things "change"...

https://soundcloud.com/guns-and-butter-1/the-bush-world-economic-depression-webster-griffin-tarpley-153

https://soundcloud.com/guns-and-butter-1/the-bailouts-new-financial-oligarchy-michael-hudson-160



http://www.globalresearch.ca/obama-s-big-sellout/16488

Obama's Big Sellout
The president has packed his economic team with Wall Street insiders

by Matt Taibbi



Global Research, December 10, 2009
Rolling Stone - 2009-12-09

The president has packed his economic team with Wall Street insiders intent on turning the bailout into an all-out giveaway

Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers "at the expense of hardworking Americans."

Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.

Then he got elected.

What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history. Elected in the midst of a crushing economic crisis brought on by a decade of orgiastic deregulation and unchecked greed, Obama had a clear mandate to rein in Wall Street and remake the entire structure of the American economy.

What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place. This new team of bubble-fattened ex-bankers and laissez-faire intellectuals then proceeded to sell us all out, instituting a massive, trickle-up bailout and systematically gutting regulatory reform from the inside.

[Continued…]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline Geolibertarian

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Re: ZIRP slowly killing Pension Funds
« Reply #3 on: May 25, 2015, 03:38:24 pm »
What's taken place in the year since Obama won the presidency has turned out to be one of the most dramatic political about-faces in our history.

Only it wasn't a political about-face.

Those who gushed and fawned over Obama for all of 2008 merely want to believe it was so they won't have to admit to how badly they allowed themselves to be punked by a glorified con artist.

http://www.counterpunch.org/2008/05/05/obama-s-money-cartel/

Obama's Money Cartel

How Barack Obama Fronted for the Most Vicious Predators on Wall Street

By Pam Martens
CounterPunch
May 5, 2008

Wall Street, known variously as a barren wasteland for diversity or the last plantation in America, has defied courts and the Equal Employment Opportunity Commission (EEOC) for decades in its failure to hire blacks as stockbrokers. Now it’s marshalling its money machine to elect a black man to the highest office in the land. Why isn’t the press curious about this?

Walk into any of the largest Wall Street brokerage firms today and you’ll see a self-portrait of upper management racism and sexism: women sitting at secretarial desks outside fancy offices occupied by predominantly white males. According to the EEOC as well as the recent racial discrimination class actions filed against UBS and Merrill Lynch, blacks make up between 1 per cent to 3.5 per cent of stockbrokers --  this after 30 years of litigation, settlements and empty promises to do better by the largest Wall Street firms.

The first clue to an entrenched white male bastion seeking a black male occupant in the oval office (having placed only five blacks in the U.S. Senate in the last two centuries) appeared in February  on a chart at the Center for Responsive Politics website. It was a list of the 20 top contributors to the Barack Obama campaign, and it looked like one of those comprehension tests where you match up things that go together and eliminate those that don’t. Of the 20 top contributors, I eliminated six  that didn’t compute. I was now looking at a sight only slightly less frightening to democracy than a Diebold voting machine. It was a Wall Street cartel of financial firms, their registered lobbyists, and go-to law firms that have a death grip on our federal government.

Why is the “yes, we can” candidate in bed with this cartel? How can “we”, the people, make change if Obama’s money backers block our ability to be heard?

Seven of the Obama campaign’s top 14 donors consisted of officers and employees of the same Wall Street firms charged time and again with looting the public and newly implicated in originating and/or bundling fraudulently made mortgages. These latest frauds have left thousands of children in some of our largest minority communities coming home from school to see eviction notices and foreclosure signs nailed to their front doors. Those scars will last a lifetime.

These seven Wall Street firms are (in order of money given): Goldman Sachs, UBS AG, Lehman Brothers, JP Morgan Chase, Citigroup, Morgan Stanley and Credit Suisse. There is also a large hedge fund, Citadel Investment Group, which is a major source of fee income to Wall Street. There are five large corporate law firms that are also registered lobbyists; and one is a corporate law firm that is no longer a registered lobbyist but does legal work for Wall Street. The cumulative total of these 14 contributors through February 1, 2008, was $2,872,128, and we’re still in the primary season.

[Continued...]
"Abolish all taxation save that upon land values." -- Henry George

"If our nation can issue a dollar bond, it can issue a dollar bill." -- Thomas Edison

http://schalkenbach.org
http://www.monetary.org
http://forum.prisonplanet.com/index.php?topic=203330.0

Offline larsonstdoc

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Re: ZIRP slowly killing Pension Funds
« Reply #4 on: May 25, 2015, 06:14:59 pm »
The only reason pension funds have not been hit dramatically has been that bond funds have not yet collapsed and the stock market has continued to improve ... we seem to be at the end of that string ....



http://www.telegraph.co.uk/finance/economics/11625406/The-world-is-drowning-in-debt-warns-Goldman-Sachs.html


The world is drowning in debt, warns Goldman Sachs

Ageing populations mean countries' debt piles risk growing out of control, warns European head of Goldman Sachs Asset Management


The world is sinking under too much debt and an ageing global population means countries' debt piles are in danger of growing out of control, the European chief executive of Goldman Sachs Asset Management has warned.
Andrew Wilson, head of Europe, Middle East and Africa (EMEA), said growing debt piles around the world posed one of the biggest threats to the global economy.
"There is too much debt and this represents a risk to economies. Consequently, there is a clear need to generate growth to work that debt off but, as demographics change, new ways of thinking at a policy level are required to do this," he said.



I'M A DEPLORABLE KNUCKLEHEAD THAT SUPPORTS PRESIDENT TRUMP.  MAY GOD BLESS HIM AND KEEP HIM SAFE.

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #5 on: May 25, 2015, 07:26:15 pm »
Check this out, I really didn't know how bad it was ....

http://www.wsj.com/articles/andrew-g-biggs-public-pensions-need-gamblers-anonymous-1417563447
Commentary 
Public Pensions Need Gamblers Anonymous
Retirement funds for Illinois and California hold 75% risky investments. The Texas teachers’ plan: 81%.
By Andrew G. Biggs
 
Dec. 2, 2014 6:37 p.m. ET
 
State and local pension plans invest roughly twice as much in risky assets as would a prudent individual saving for retirement. Indeed, the Society of Actuaries, which represents the actuarial profession, recently pointed to public-pension investment practices “that go against basic risk management principles.” With $3.7 trillion on the line, risk-addicted pensions need an intervention. The question is who can do it.


...

Yet public-plan managers may see little option other than to double down on risk. In 2013 nearly half of state and local plan sponsors failed to make their full pension contribution. Moving from the 7.5% return currently assumed by Calpers to the roughly 5% yield on a 38%-62% stock-bond portfolio would increase annual contributions by around 50%—an additional $4 billion—making funding even more challenging.

...

| - - - -

http://www.zerohedge.com/news/2015-01-28/teachers-retirement-funds-are-piling-manhattan-real-estate-record-high-prices
Teachers' Retirement Funds Are Piling Into Manhattan Real Estate At Record High Prices
Tyler Durden's picture
Submitted by Tyler Durden on 01/28/2015 23:50 -0400
...
TIAA-CREF and KTCU are seeking to invest in mortgages backed by office towers, retail properties, warehouses and apartments in major U.S. cities. The venture between the two companies, which manage teachers’ savings in their respective countries, is 51 percent owned by TIAA-CREF and 49 percent held by Seoul-based KTCU.
...
TIAA-CREF stands for Teachers Insurance and Annuity Association – College Retirement Equities Fund. According to the company’s own website,

it:  We specialize in the distinctive needs of those who work in the academic, research, medical and cultural fields. We’re here to listen to you, to advise you, and to help you feel confident about making financial decisions.

So it essentially manages the investments of people who know the least about investing, i.e., muppets. As such, it came as no surprise that TIAA-CREF might serve as an important bag-holding vehicle for bubble assets just before a fall, tempted by juicy 4% yields. As my friend noted: “In other words, teachers and nurses are shattering property records to fund their retirement.”
...

This is a classic case of groupthink amongst asset managers. Everyone thinks these assets are safe and untouchable, so they are all piling into the same trade.

It appears clear that pension funds are being set up as the ultimate bag holders when the latest Central Bank bubble pops, and in the meantime, they are a perfect source of illegal fee gouging. A win-win for financial oligarchs.
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #6 on: May 25, 2015, 08:54:35 pm »
oh and here is infowars today on drudge:

http://www.infowars.com/economist-government-preparing-to-seize-401k-pensions/
Economist: Government Preparing to Seize 401(k) Pensions
Supreme Court ruling sets the stage for "economic totalitarianism"
by  Paul Joseph Watson  | May 25, 2015

Economist Martin Armstrong warns that a Supreme Court ruling last week has set the stage for the federal government to begin seizing private pension funds.

According to Armstrong, the outcome of Tibble v. Edison, which found that employers have a duty to protect their workers’ 401(k) plans from mutual funds that perform poorly, will grease the skids for the feds to seize private funds and prosecute companies who manage mutual funds badly.

“Between the court ruling and the Obama administration’s push for stronger fiduciary rules,” the developments send a, “strong message that government can much easier seize the pension fund management industry of course to “protect the consumer,” writes Armstrong, warning that the ruling, “sets the stage to JUSTIFY government seizure of private pension funds to protect pensioners,” when the economy gets “messy”.

,...

Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline windyacres

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Re: ZIRP slowly killing Pension Funds
« Reply #7 on: May 25, 2015, 09:36:15 pm »
The state of Florida also has a high exposure
to risky investments for their teacher's union pension funds.
Last week on drudge he had a headline about the Teamster's Union
preparing to cut retirement pensions.  Some people a few years
ago have liquidated their 401K's and purchased old farm houses
on acreage in the boonies so when everything collapses they at
least can be somewhat self sufficient.    It's not looking good anywhere
on the economic front, be ready...
Be Prepared

Offline larsonstdoc

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Re: ZIRP slowly killing Pension Funds
« Reply #8 on: May 25, 2015, 09:44:43 pm »
Check this out, I really didn't know how bad it was ....

http://www.wsj.com/articles/andrew-g-biggs-public-pensions-need-gamblers-anonymous-1417563447
Commentary 
Public Pensions Need Gamblers Anonymous
Retirement funds for Illinois and California hold 75% risky investments. The Texas teachers’ plan: 81%.
By Andrew G. Biggs
 
Dec. 2, 2014 6:37 p.m. ET
 
State and local pension plans invest roughly twice as much in risky assets as would a prudent individual saving for retirement. Indeed, the Society of Actuaries, which represents the actuarial profession, recently pointed to public-pension investment practices “that go against basic risk management principles.” With $3.7 trillion on the line, risk-addicted pensions need an intervention. The question is who can do it.


...

Yet public-plan managers may see little option other than to double down on risk. In 2013 nearly half of state and local plan sponsors failed to make their full pension contribution. Moving from the 7.5% return currently assumed by Calpers to the roughly 5% yield on a 38%-62% stock-bond portfolio would increase annual contributions by around 50%—an additional $4 billion—making funding even more challenging.

...

| - - - -

http://www.zerohedge.com/news/2015-01-28/teachers-retirement-funds-are-piling-manhattan-real-estate-record-high-prices
Teachers' Retirement Funds Are Piling Into Manhattan Real Estate At Record High Prices
Tyler Durden's picture
Submitted by Tyler Durden on 01/28/2015 23:50 -0400
...
TIAA-CREF and KTCU are seeking to invest in mortgages backed by office towers, retail properties, warehouses and apartments in major U.S. cities. The venture between the two companies, which manage teachers’ savings in their respective countries, is 51 percent owned by TIAA-CREF and 49 percent held by Seoul-based KTCU.
...
TIAA-CREF stands for Teachers Insurance and Annuity Association – College Retirement Equities Fund. According to the company’s own website,

it:  We specialize in the distinctive needs of those who work in the academic, research, medical and cultural fields. We’re here to listen to you, to advise you, and to help you feel confident about making financial decisions.

So it essentially manages the investments of people who know the least about investing, i.e., muppets. As such, it came as no surprise that TIAA-CREF might serve as an important bag-holding vehicle for bubble assets just before a fall, tempted by juicy 4% yields. As my friend noted: “In other words, teachers and nurses are shattering property records to fund their retirement.”
...

This is a classic case of groupthink amongst asset managers. Everyone thinks these assets are safe and untouchable, so they are all piling into the same trade.

It appears clear that pension funds are being set up as the ultimate bag holders when the latest Central Bank bubble pops, and in the meantime, they are a perfect source of illegal fee gouging. A win-win for financial oligarchs.

  How many times has AJ said---they are coming for your pensions?  1000.  Maybe closer to 2000. 

  The bankers will do anything TO SAVE THEMSELVES.

  Very few have worked an honest day in their life. 
I'M A DEPLORABLE KNUCKLEHEAD THAT SUPPORTS PRESIDENT TRUMP.  MAY GOD BLESS HIM AND KEEP HIM SAFE.

Offline windyacres

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Re: ZIRP slowly killing Pension Funds
« Reply #9 on: May 26, 2015, 03:54:03 am »

 
Quote
How many times has AJ said---they are coming for your pensions?  1000.  Maybe closer to 2000. 

  Almost every show Alex says they are coming for your pensions
and every time I hear it I know he's right.
Be Prepared

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #10 on: May 26, 2015, 10:49:42 am »
http://www.bankaholic.com/four-years-and-counting-without-3-cds/
Four Years And Counting Without 3% CDs
Posted in CD Rates by Sabrina Karl
May 25, 2015 08:00 AM - 2 Comments   
...

Psychologically, we think the drop below 3% for those CDs was a huge blow to savers.

If you can’t make at least that much with a 5-year commitment, many savers concluded that CDs could simply not provide a reasonable return on their money.

It’s why the amount invested in CDs fell from a record $1.4 trillion dollars in late 2008 to less than $500 billion today.

Now we’d like to think this will be the last time we’ll have to note this sorry anniversary.

But whether nationally available 3% yields are back before next May depends entirely on when the Federal Reserve finally begins pushing interest rates back toward more normal levels.

Back in February 2007, before irresponsible mortgage lending led the economy over a cliff, the national average return for 5-year CDs was 4.02% APY.

By most historical standards, that’s a reasonable rate for savers to expect.

Then the Fed stepped in to talk the markets off a ledge by embarking on a path of artificially repressed interest rates that has continued for six years now as the economy strives toward full recovery.

As we’ve been reporting, all signs point to the Fed finally beginning to raise interest rates sometime this year, and — we hope — continuing cautiously on an upward path over the coming years.

But we still have no idea when that first hike will come, or what pace the central bankers will deem appropriate for future increases.

Although the first quarter-point rate hike could come as early as June, the minutes of the Fed’s April rate-setting meeting released last week indicate that’s unlikely.

Indeed, since the minutes’ release, Wall Street’s FedWatch calculates the probability of the first rate increase occurring in July to be 7%; in September, 23%; and in October, 40%.

It isn’t until December that FedWatch’s odds are better than even, at 56%.

If, however, the Fed starts raising rates anytime during this year, there’s a good chance we’ll see 3% CDs before next May.

When we finally reach that benchmark again, you can count on us to shout it from the rooftops. It will be the signal savers have been waiting for that certificates of deposit are back as a worthwhile investment


| - - - -

http://www.bankaholic.com/fed-continues-to-waffle-on-when-it-will-begin-raising-rates-june-fall-or-later/
Fed Continues To Waffle On When It Will Begin Raising Rates … June, Fall Or Later?

Posted in Banking News, Popular by Reed Karaim
 April 29, 2015 12:21 PM - 0 Comments   
...

The Fed did not rule out June in its latest statement. But it now looks as though July, or more possibly the fall, is more likely for the Fed to begin inching rates upward.

Based on public statements, some members of the Fed even believe it might be wiser to wait until 2016.

In other words, things are getting better, but not fast enough for the Fed to provide any relief for America’s long-suffering savers.

The central bank has driven interest rates to record lows by drastically reducing what’s called the federal funds rate, which is what commercial banks pay to borrow money from each other through the Fed.

The rate has been essentially zero since December 2008 — the longest period in the Federal Reserve’s history.

Making borrowing cheap — or in this case, free — is intended to bolster growth by making it easy for businesses to make new investments.

But when banks can borrow money basically for free, they don’t need to offer you much in the way of interest to get you to put your money in their institutions so they can lend it out.

One measure of how little savers are being paid is the Cost of Funds Index compiled by the Federal Home Loan Bank of San Francisco. It asks banks in California, Arizona and Nevada how much they’re actually paying for deposits.

The index hit a record low of 0.663% in September. Although it’s rebounded slightly since then, it still sat at only 0.700% this February.

Back in 2008, before the Feds lowered the federal funds rate to zero, it was nearly four times more — 2.757%.

Savers have responded by reducing the amount of money invested in CDs from a record $1.4 trillion dollars in late 2008 to less than $500 billion today.

Once it begins, the bank is expected to boost the fed funds rate by a quarter point every few months.

The most recent official survey of the Fed’s 17 governors shows they expect the federal funds rate to be just below 1% by the end of this year, just below 2% by the end of 2016, and to reach their ultimate target of 3.75% sometime in 2018.

Savers have waited years for what the Fed calls a return to financial “normalcy,” and what we would call a reasonable return on our bank deposits.

| - - - - -

http://assetbuilder.com/scott_burns/coping_with_the_zero_interest_rate_policy
Jan 4, 2013
Coping with the Zero-Interest-Rate-Policy
Scott Burns

 “You don’t need to tell me that interest rates are low and that retirees are getting a bum deal. What I need you to tell me is what to do about it. I need a decent income from my savings.”

That’s the thumbnail summary of what readers have said about my columns on the difficulty the Federal Reserve Zero Interest Rate Policy is causing. In fact, the menu of safe (or relatively safe) responses to pathetic rates on CDs and other safe investments is painfully short, but here’s my list of good tools:


Debt Is the New Thrift.

If you owe money you’ll find more opportunity in refinancing or paying down debt than in finding yield on your savings. This would be irrelevant for retirees and near-retirees if no one had any debt. But the reality is that debt has been increasing among older people. So this may be a big-time opportunity.

Let’s start with the obvious: credit cards. If you run a $2,000 balance on your credit cards and pay 18 percent a year the annual cost is $360. With the highest yielding one year CDs on Bankrate.com yielding about 1 percent, you’d need $36,000 in CDs to produce that $360 in interest income.
...

And if you have a home mortgage, start looking at opportunities to refinance at rates lower than 4 percent. Also, don’t forget that refinancing can reduce your income need as well as the current interest you pay.
...

Spending Smart Is Better Than Saving Dumb.

Low yields also make good buying decisions immensely more valuable. If you take a close look at every dime you spend, you’re likely to find expenses that can be cut. Do you really need or want all the cable TV channels you get? Have you minimized your bank account expenses? Have you thought about using the public library rather than buying books? Could you buy more, at lower prices through Amazon? If you save only $100 a month from more attention to spending, a person in the 15 percent tax bracket is eliminating the need to earn $117.65 from their savings, or $1,411.76 a year. You’d need $141,176 in a one year CD at 1 percent to produce the same interest income. Even in the long lost wonder days of 5 percent CD yields you would need to have over $28,000 in a CD to have an effect equal to $100 of smarter spending.

Dare To Invest In Equities.

When you have exhausted refinancing and smart spending you will have exhausted the no risk options. Then, the best step is to begin investing in a broad index fund. SPY, the SPDR S&P 500 index exchange traded fund, provided a yield of 2 percent during 2012. That’s more than the yield on a 10-year Treasury.

And by the way, the index also appreciated about 12 percent during the year.
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #11 on: May 26, 2015, 11:08:46 am »
As a remark ... a lot of retiree's took their retirement funds OUT of the stockmarket and went to cash / CD's with the financial breakdown in 2008 ... So they have not necessarily benefited from the rise in the stock market ... and NOW ... the stock market maybe ready for a retracing downward IF the fed raises interest rates ... You see now the push for retiree's to put money in the stock market bubble ...
They also have repressed the value of gold and silver to make that a no go investment ...



http://www.zerohedge.com/news/2013-07-17/savers-and-real-108-trillion-cost-zirp
Savers And The 'Real' $10.8 Trillion Cost Of ZIRP

Submitted by Tyler Durden on 07/17/2013 22:25 -0400

...

Let’s apply some thought experiments and make a couple calculations – what would happen if the FOMC were removed and the Fed Funds rate “floated?”  Using average historical rates from the 1920’s for the 10 year note– the mean rate would sit around 5.82%.  With a floating Fed Funds rate, banks would be competing for money and providing responsible savers with some interest income.  Voila, a calculation is borne:


By calculating the estimated interest income from historical ratios (orange shaded area), we can see that as of July 2013, approximate interest income would be just over 3 trillion (1/5th of GDP) on savings of 6.8 trillion (using the left scale). 

Whereas the actual interest income reported by NIPA remained at 1.1 Trillion, the difference in interest received and lost interest equals roughly 2 Trillion. 

Remember, this is interest income to SAVERS forever lost since 2001. By aggregating the entire shaded orange area, SAVERS have missed out on a whopping 10.8 Trillion in earned interest usage.  The final chart above makes a loud and clear statement toward the beneficiaries of the low interest rate environment.
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline larsonstdoc

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Re: ZIRP slowly killing Pension Funds
« Reply #12 on: May 26, 2015, 11:16:00 am »
^^^^^^^

  Almost every economy in the world is suffering.

  The reason why they keep the CD interest rates below 3%---to get that money into Wall Street.

  You can count on the Fed to NEVER raise interest rates or barely raise interest rates.  They know that that would kill the economy.  And they love the 0 % rates where the Big Banks can steal money and invest in things such as foreclosed properties.  THE BANKS ALSO REALLY LOVE GIVING CREDIT CARDS TO CONSUMERS AT +20% interest rates.


I'M A DEPLORABLE KNUCKLEHEAD THAT SUPPORTS PRESIDENT TRUMP.  MAY GOD BLESS HIM AND KEEP HIM SAFE.

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #13 on: May 26, 2015, 11:25:28 am »
^^^^^^^
  Almost every economy in the world is suffering.
...

This is a part of the "rebalancing in a Global economy ... forcing downward mobility on the western world ... while the "globalists" get ever more rich and more powerful ... immune to the financial Armageddon for the 99.9 percent

They want western world people to have the same economic footprint as the "average" Chinese or Philippino

Didn't you know you have a "very high quality of life" ?


ClimateGate -  They want you to live like a slave

Note these graphs. Notice China, "Average Quality of life" and less than 2400 Kgoe/person
Note where the U.S. is on these graphs. I see alot of rice in our future.

http://www.thewatt.com/node/168



Notice where China is on this graph (Low Productivity) :

http://en.wikipedia.org/wiki/Energy_intensity
http://en.wikipedia.org/wiki/File:Gdp-energy-efficiency.jpg

Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #14 on: May 26, 2015, 01:19:09 pm »
Here is another bit of propaganda ... Demographics are the problem!!!  there was also a theory of a "Global Savings Glut" .... oh, that is what is suppressing Bond yields ... Not Globalists skimming from the top  and contracting the economy rather then expanding the global economy  ...  ( an expanding population REQUIRES an expanding economy !!!  Expanding the Global economy would create a demand for more investment which would drive bond and interest rates higher !!!

If on the other hand , you knew there would soon be a global disruption, breakdown in trust, or economy ( like WWIII say or realizing the game was rigged against you ) ,,, you would hold back from global investment or investments of any kind !!!! )
 )


http://www.ft.com/cms/s/0/fda6e646-e4d1-11e4-8b61-00144feab7de.html#axzz3bGlzhX00

Global savings glut suppresses bond yields

April 17, 2015 9:12 am
Robin Wigglesworth

Demographics has sting in the tail for capital markets

...

At the moment, investors are desperately trying to divine when and how quickly the Federal Reserve will begin to raise interest rates, and the impact on bond markets.
The consensus is that any turbulence will be transitory, and bond yields will continue staying “lower for longer”. But don’t bet on them staying low for ever.
...
One of the most notable developments in global markets in recent decades is the inexorable march downwards in bond yields. Since Paul Volcker’s Federal Reserve broke the back of inflation in the 1980s by aggressively hiking interest rates, bond yields have fallen steadily to unforeseen, record-breaking lows — almost irrespective of where the Fed’s main policy rate has been set.

This is partly a result of dissipating inflation, the historical nemesis of fixed income. More recently, extraordinary monetary stimulus has suppressed yields further, driving investors into bonds, with pension plans and insurers major buyers of long-term debt.

But according to many economists, it is also a product of a “global savings glut” from baby boomers stashing away their earnings for their retirement, and developing countries building up their reserves. This has lifted demand for bonds and subduing borrowing costs in the process.
....

This hypothesis was first articulated by former Federal Reserve chairman Ben Bernanke in 2005. He recently revisited the thesis in a blog post at his new home at the Brookings Centre, arguing once again that the savings glut is a leading cause of low bond yields, not just central bank interest rates or quantitative easing
...

see: http://www.networkideas.org/ideasact/dec09/muttukadu/pdf/prabhat_patnaik.pdf

THE THEORY OF THE GLOBAL “SAVINGS GLUT”
For some time now, Mr. Ben Bernanke, Chairman of the Federal Reserve Board, has been arguing that three observed phenomena in the world economy in the decade after 1996, viz. the substantial increase in the U.S. current account deficit, the swing from moderate deficits to large surpluses in “emerging-market countries”, and the significant decline in long-term real interest rates, can all be explained as the fall-out of a world “savings glut”. While Mr. Bernanke himself has not explicitly linked this “savings glut” to the world financial crisis, others have, especially authors from the IMF stable. They have argued that the low long-term real interest rates caused by the “savings glut” gave rise to the asset price inflation whose inevitable collapse has precipitated the current crisis. The present paper is devoted to a close examination of this “savings glut” theory. For the sake of simplicity, it looks at the basic analytical issues in a single-period context.
....
A rejection of the “savings glut” argument does not mean an underestimation of the problem of world economic imbalances. In particular the fact that rapidly growing Asian economies, instead of improving the living standards of their own workers and peasants, continue to run huge current surpluses, cannot but be a matter of concern. But the explanation offered for these imbalances by the “savings glut” theory and the resolution suggested by it for the problem are both seriously flawed. The explanation does not lie in the spontaneous savings behaviour of these economies; and the resolution does not lie in mere fiscal measures on the part of the EMEs without a degree of “delinking” of their economies from the vortex of commodity and capital flows in the world economy.

Prabhat Patnaik


or see: http://en.wikipedia.org/wiki/Global_saving_glut
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline windyacres

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Re: ZIRP slowly killing Pension Funds
« Reply #15 on: May 26, 2015, 09:56:09 pm »
If this thread (which is packed with information!)
doesn't show someone the writing is on the wall
with the rigging of the economy then they are in denial
or have their heads stuck in the sand.
Be Prepared

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #16 on: June 03, 2015, 10:46:46 am »
http://www.maxkeiser.com/2015/04/kr744-keiser-report-those-who-plow-zirp-those-who-sow-qe/
[KR744] Keiser Report: Those who plow ZIRP & those who sow QE
Posted on April 14, 2015 by Stacy Herbert

We discuss those who plow ZIRP (zero interest-rate policy) and those who sow QE (quantitative easing) reaping it as taxi cab medallion owners ask for bailouts. In the second half, Max interviews Sandeep Jaitly about negative yielding bonds.

https://youtu.be/osbyFhKxJuA

Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #17 on: June 03, 2015, 10:59:19 am »
Well if you can't pay the bills and your retirement money is gone ... and you're not disabled ( SSDI has zoomed up since QE/ZIRP ) then you find whatever work you can ... ( 'cause if you're not a minority of some stripe there is not much in the way of a government handout ) . And that's what has happened , Older workers have gone back to work displacing young workers:

http://www.zerohedge.com/news/2015-04-03/no-country-young-workers-only-americans-55-and-older-found-jobs-march
No Country For Young Workers: Only Americans 55 And Older Found Jobs In March
Tyler Durden's picture
Submitted by Tyler Durden on 04/03/2015 09:51 -0400

We first showed back in October 2012 that in America, courtesy of the Fed's micro-mismanagement of everything, the labor force has been turned upside down, and the only jobs being created are those for aged workers, Americans 55 and over. The reason is two-fold: with savings rates at zero, Americans who were on the verge of retiring found that the fruit of their labor was worth nothing under ZIRP (and may well be punished under the upcoming NIRP) as their savings (and fixed income investments) generate zero interest income, while young Americans would rather stay in college by the millions funded generously by trillions in Uncle Sam student loans.

In any event, this is nothing short of a recipe for disaster, as aged workers have no leverage to demand higher wages (hence the lack of any broad wage growth), while Millennials and other young Americans, instead of entering the work force and accumulating job skills as well as wages, get more and more in debt.

All of this was on full display in today's jobs number, which while disappointing wildly based on Establishment survey data, was even worse based on the Household survey where only 34,000 people found jobs in March. But it was the age breakdown that was the stunner, and it can be seen best in the chart below.

In short: America continues to be a country where there are only jobs for old men, those 55 and older, who saw a 329,000 increase in jobs in the past month. Every other age group saw job losses!



And the real kicker: since the start of the Second Great Depression, only the 55 and older age group has seen job increases. Those 55 and younger are still 1.2 million jobs below the level they were are on December 2007.

...

Oh, and finally, for those who may be wondering. It isn't because of early retirement. Unless of course, those retiring early are workers aged 25 to 54.


...
Comments:

corporatewhore

Hey.  I'm older than 55 and the quality of jobs available are shit.  Beyond shitty.  But at least I'm working 80 hours per week and surviving at less than 50% of what I made prior to 2008.

...

pods Fri, 04/03/2015

This country is a snake eating it's tail. 

They have shipped out whatever they can ship out, and use retirees to fill the remaining slots the H1Bs and Mexicans cannot fill.  Part time, plenty of them.  Young, non medicare folks just cost too damn much.

Ship is going down. Local Walmart just removed like 10 checkout stations and put in self checkout.  One frazzled almost ready to go postal person in charge of 10 stations?  Lol.

...

rejected Fri, 04/03/2015

At 66 I still haven't taken SS. I still consider myself a productive person in this mess we laughingly call a country. I don't look at SS as something I am owed,,, rather like insurance I will use it when the need arises. For those that do not think SS a form of insurance than take a gander at what FICA means. This acronym is from a different time,,, before gov started their propaganda that it is only a pay as you go scheme so they could spend the monies on the wars, MIC and ---student loans--- ......

Today gov has trashed any sense of independence by offshoring the jobs and onshoring cheap labor making most/many Americans nothing more than beggars in their own country AND pitting them against each other by race, age, gender and ethnicity.

Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline larsonstdoc

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Re: ZIRP slowly killing Pension Funds
« Reply #18 on: June 03, 2015, 11:11:12 am »
Well if you can't pay the bills and your retirement money is gone ... and you're not disabled ( SSDI has zoomed up since QE/ZIRP ) then you find whatever work you can ... ( 'cause if you're not a minority of some stripe there is not much in the way of a government handout ) . And that's what has happened , Older workers have gone back to work displacing young workers:

http://www.zerohedge.com/news/2015-04-03/no-country-young-workers-only-americans-55-and-older-found-jobs-march
No Country For Young Workers: Only Americans 55 And Older Found Jobs In March


  So sad.  We can only blame TPTB.

  THE DEATH OF A NATION
I'M A DEPLORABLE KNUCKLEHEAD THAT SUPPORTS PRESIDENT TRUMP.  MAY GOD BLESS HIM AND KEEP HIM SAFE.

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #19 on: June 03, 2015, 05:56:35 pm »
http://www.foxbusiness.com/personal-finance/2013/08/28/tips-for-going-back-to-work-after-retirement/
Tips for Going Back to Work After Retirement
By Ann Hynek
·Published August 28, 2013 ·FOXBusiness

Lack of savings, rising health-care costs and prolonged life expectancy are forcing more Americans to remain in the workforce for longer than previous generations and re-enter it during their golden years.
...
A 2013 retirement study from Merrill Lynch revealed more retirees are returning to work for a multitude of reasons, including personal connections, concerns about health care costs and having to support adult children
...

A Growing Trend

Anyone re-entering the workforce should rest assured they’re not alone. Between 2006 and 2011, the change in employed workers by age group decreased on every level except for those aged 55 and older. According to Merrill Lynch and the Department of Labor, this segment of the population saw an increase of more than 4 million jobs.

| - - - - 
https://chroniclevitae.com/news/818-suicide-is-my-retirement-plan
'Suicide Is My Retirement Plan'

Ask Debra Leigh Scott how she plans to make ends meet after her teaching career is over, and her answer is direct. “Suicide,” she says, “is my retirement plan.”

Of course, she doesn’t want to kill herself. But there might come a time, she says, when ending her life would be the only “dignified” escape from the indignities of growing old with no safety net.

Scott, an artist who just turned 60, is an adjunct professor teaching in Temple University’s intellectual-heritage program. She’s a member of the first generation of a relatively new breed of adjunct: the teacher who wanted to become a full-time professor but never got the opportunity. A divorced mother of two grown children, she has now been teaching for over 25 years, cobbling together different types of jobs to scrape by. She got beaten down by the recession, lost several jobs and her home, and she’s used what little savings she had to stay afloat. - See more at: https://chroniclevitae.com/news/818-suicide-is-my-retirement-plan#sthash.6cmbWuE5.dpuf


| - - - -

http://www.badgeoflife.com/retirees.php
POLICE RETIREMENT - THE FINAL TRAUMA

January 29, 2009:  A retired police officer died in his home of a self-inflicted gunshot wound.  He was 62, a military veteran, and had served 26 years as a police officer, retiring in 1998.  It was learned that he lived alone and could find no one that could stay at the hospital that day with him, a requirement, for routine surgery on his foot. He had also lost much of his retirement savings in the recent stock crash and had recently been robbed and assaulted, considered a humiliation by many cops.  An officer at the nearby station had agreed to take him and drop him off and then return to pick him up, but the retiree was afraid the officer wouldn't be able to stay through the procedure.  He was afraid to ask.

...

  The rate of suicides for retirees is no doubt higher than it should be (an estimated 40 per year), yet departments do little to prevent this.  Why?  The attitude is one of "Out of sight, out of mind." The retiree is no longer the police agency's problem once they retire. 
 
The result is that officers are lost, with minimal or shallow plans on what to do--for many, security management jobs become unsatisfying, great promises made by potential employers before retirement go unfulfilled, and hunting and fishing every day become impossible.  Visits to the old office seem to lose their luster, and the "family" seems to be withdrawing.  Anxiety hits unexpectedly, often due to the change of pace and the decades of unresolved trauma.
...
The retiree may have spousal problems, drink, fall into depression--and commit suicide


| - - - -

http://www.forbes.com/sites/edwardsiedle/2013/03/20/the-greatest-retirement-crisis-in-american-history/
The Greatest Retirement Crisis In American History
 3/20/2013 @ 5:49PM

We are on the precipice of the greatest retirement crisis in the history of the world. In the decades to come, we will witness millions of elderly Americans, the Baby Boomers and others, slipping into poverty. Too frail to work, too poor to retire will become the “new normal” for many elderly Americans.

Corporate America and the financial wizards behind the past three decades of so-called retirement innovations, most notably titans of the pension benefits consulting and mutual fund 401(k) industries, are down-playing just how bad things are already and how much worse they are going to get.


...

Americans also know the great 401k experiment of the past 30 years has been a disaster. It is now apparent that 401ks will not provide the retirement security promised to workers
. As a former mutual fund legal counsel, when I recall some of the outrageous sales materials the industry came up with to peddle funds to workers, particularly in the 1980s, it’s almost laughable—if the results weren’t so tragic.

...
The impending crisis will come in what I call “waves,” as opposed to a tsunami hitting all at once. With each successive wave, more elderly will be drowned. The older you are, the harder it is to recover from a set-back

Wave 1: Retirees Come Back To Work
...
Wave 2: Workers Delay Full Retirement
...
Wave 3: Full Retirement Is Unachievable
...
Wave 4: Drowning

At some point, lack of savings, lack of employment possibilities and failing health will catch up with the overwhelming majority of the nation’s elders.  Let me emphasize that we’re talking about the overwhelming majority, not a small percentage who arguably made bad decisions throughout their working lives


Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline larsonstdoc

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Re: ZIRP slowly killing Pension Funds
« Reply #20 on: June 03, 2015, 07:09:50 pm »
^^^^^^

   BAD NEWS TAHOE AND IT'S GOING TO GET WORSE.

  Job losses everywhere.

  Pensions that cannot be paid.

  When the dollar collapses, people will be jumping out of windows.

  Obama has let millions of refuges and illegals in from all parts of the earth.

  Not enough doctors to take care of the old people and d the illegals.

  The price of gasoline is nearing $3.00 again.  I heard in LA is over $4.00 in some areas.

  The biggest elephant in the room---unfunded liabilities and US government debt is over $250 trillion.  Not the reported $18 trillion.

  etc etc etc etc

  WE ARE DOOMED THANKS TO THE US GOVERNMENT/CENTRAL BANKERS/WALL ST/ET AL.

 
I'M A DEPLORABLE KNUCKLEHEAD THAT SUPPORTS PRESIDENT TRUMP.  MAY GOD BLESS HIM AND KEEP HIM SAFE.

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #21 on: June 17, 2015, 03:21:12 pm »
Jellying with Yellin ... Zirp there you are ...
There is absolutely no demand for dollars at interest .... the globalmasters get all the money they need for free...
Destroy all those commoners living on interest income for the last 10 years !!!
Try to get a decent annuity now !!!


http://www.latimes.com/business/la-fi-federal-reserve-interest-rate-20150617-story.html
Fed holds off on interest rate hike, downgrades economic forecast
By Jim Puzzanghera  contact the reporter
June 17, 2015, 11:02 AM |Reporting from Washington

Federal Reserve policymakers on Wednesday kept the central bank’s benchmark short-term interest rate near zero, opting against the first increase since 2006 after determining the economy still isn’t strong enough to handle it..

Fed officials sharply downgraded their economic forecast for this year. They projected the economy would grow between 1.8% and 2% this year, well below the range of 2.3% to 2.7% in its last forecast in March.
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline larsonstdoc

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Re: ZIRP slowly killing Pension Funds
« Reply #22 on: June 17, 2015, 04:43:02 pm »
Jellying with Yellin ... Zirp there you are ...
There is absolutely no demand for dollars at interest .... the globalmasters get all the money they need for free...
Destroy all those commoners living on interest income for the last 10 years !!!
Try to get a decent annuity now !!!


  Their next trick is the cashless society SO THEY CAN ACCESS ALL OF OUR MONEY.

  No more selling used cars/trucks to friends and neighbors without the government getting a piece of the action.
I'M A DEPLORABLE KNUCKLEHEAD THAT SUPPORTS PRESIDENT TRUMP.  MAY GOD BLESS HIM AND KEEP HIM SAFE.

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #23 on: June 29, 2015, 02:11:42 pm »
https://www.youtube.com/watch?v=c8AyVhs3gJU
Whoomp There It Is - Tag Team
https://www.youtube.com/watch?v=Z-FPimCmbX8
Whoomp There It Is - Tag Team

http://www.telegraph.co.uk/finance/economics/11704051/The-world-is-defenseless-against-the-next-financial-crisis-warns-BIS.html
The world is defenceless against the next financial crisis, warns BIS
By  Peter Spence, Economics Correspondent
11:30AM BST 28 Jun 2015

Monetary policymakers have run out of room to fight the next crisis with interest rates unable to go lower, the BIS warns  ...
...

The so-called central bank of central banks launched a scatching critique of global monetary policy in its annual report. The BIS claimed that central banks have backed themselves into a corner after repeatedly cutting interest rates to shore up their economies.


These low interest rates have in turn fuelled economic booms, encouraging excessive risk taking. Booms have then turned to busts, which policymakers have responded to with even lower rates.
...

https://www.bis.org/publ/arpdf/ar2015e.pdf
BIS - 85th Annual Report

Is the unthinkable becoming routine?

Interest rates have never been so low for so long (Graph I.1). They are low in nominal and real (inflation-adjusted) terms and low against any benchmark. Between December 2014 and end-May 2015, on average around $2 trillion in global long-term sovereign debt, much of it issued by euro area sovereigns, was trading at negative yields.
...
... policies have been unable to constrain the build-up and collapse of damaging financial booms, ie the global economy exhibits “excess financial elasticity” – think of an elastic band that can be stretched out further and further until, eventually, it snaps back more painfully.
...
The prolonged period of low interest rates has been particularly challenging for institutional investors. In the face of ballooning liability values and muted asset returns, insurance companies have explored new investment strategies and have increasingly offloaded risks onto their customers. Even though these measures have paid off so far, they may not be enough to counter future headwinds stemming from plateauing equity valuations and the erosion of fixed income returns.
Confronted by similar difficulties, pension funds are posting large and widening deficits that could take a toll on the real economy.
...

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http://www.reuters.com/article/2015/06/28/us-global-economy-bis-banks-idUSKCN0P80C320150628
Markets  |  Sun Jun 28, 2015 6:44am EDT
Rising interest rates pose new risk for banks: BIS
LONDON  |  By Lionel Laurent
...

Rising interest rates after years of loose monetary policy will pose a fresh risk to banks' ability to absorb losses using capital buffers, the Bank for International Settlements said in its annual report on Sunday.

A prolonged period of ultra-low rates would further weaken the financial sector and squeeze banks' profitability, but a "normalization" of borrowing costs would reverse the debt-fueled inflation of asset prices and hit banks' own loss-absorbing equity capital, the BIS said.
...
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline larsonstdoc

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Re: ZIRP slowly killing Pension Funds
« Reply #24 on: June 29, 2015, 02:35:01 pm »
^^^^^^

  Hey Tahoe,  don't you wish we could borrow money at 0% interest and not pay it back?  That's what a lot of the big banks are doing.  Jamie Dimon and the rest of the crooks borrowed money during the crisis of 07 and 08 and never paid it back.  Since then, the Big Banks have been using QE money to prop up their god--the stock market.  Then they issue credit cards to the poor saps of America at 20 to 30% interest.  Then they started pounding on the students who borrowed money to go to college to pay back their loans--many of them do not have jobs that can make the student loan payments and pay for obamacare.  This to hide from the people what is really going on---THE BANKS STEALING MONEY BY THE TRILLIONS OF DOLLARS.  As Alex Jones would say--I'm sick of their lies.
I'M A DEPLORABLE KNUCKLEHEAD THAT SUPPORTS PRESIDENT TRUMP.  MAY GOD BLESS HIM AND KEEP HIM SAFE.

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #25 on: June 30, 2015, 11:57:19 am »
Infinate QE-ZIRP ....

http://www.cnbc.com/id/102799251
Yellen may have just gotten her excuse: Ex-Fed Gov. Lindsey
Matthew J. Belvedere   | @Matt_Belvedere
2 Hours Ago

The spiraling Greek debt crisis might just be the cover the U.S. central bank, led by Janet Yellen, has been looking for to put off increasing interest rates, former Fed Gov. Larry Lindsey said Tuesday.

"They are going to use this as another reason to delay,"
argued Lindsey, also director of the National Economic Council for President George W. Bush. "The problem is all the [rate hike] delays haven't solved anything."
...

Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #26 on: August 02, 2015, 09:47:34 am »
http://www.weeklystandard.com/blogs/2417-days-and-counting_1001984.html
2,417 Days and Counting...
12:01 AM, Aug 1, 2015 • By IRWIN M. STELZER

Hurry up and wait. Hurry to the announcement by the Federal Reserve Board’s monetary policy committee, and then wait for the next one. After 2,417 days of keeping its key interest rate at zero, on Wednesday of last week the Fed policy team decided that a few more weeks or months at that level might be a good idea. The Fed knows that zero is not a sustainable level for interest rates, but also wants to be certain it doesn’t abort the none-too-robust recovery. My guess is that Fed chairwoman Janet Yellen knows she has to move soon, but figured that doing so right before key data releases in the next few days and next week just wasn’t worth the risk of announcing an increase and then wishing she hadn’t. She was quickly proved right.
...

But for the Fed, reality is its index. As is pressure from congressional Republicans to begin raising rates lest new housing and stock market bubbles put paid to the current economic recovery. Were Yellen to continue to keep rates at zero, and an asset bubble to form and burst, political pressure to audit the Fed, in effect to reduce its independence, might become irresistible. After all, conservatives worried about another bubble, and Democrats who have always wanted to bring the Fed to heel are a lethal combination from the point of view of Fed independence and Yellen’s reputation.
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #27 on: August 07, 2015, 10:13:09 am »
http://www.kitco.com/charts/livegold.html
DJIA 17,324.21  -95.54


http://www.wsj.com/articles/stocks-pause-with-all-eyes-on-jobs-1438949797
Stocks Open Lower; Dollar, Bond Yields Rise on Jobs Data
Steadily strengthening labor market signals Fed remains on track to raise rates as soon as September
By Saumya Vaishampayan
Updated Aug. 7, 2015 9:59 a.m. ET
 
U.S. stocks opened slightly lower, ...
...
Investors have been scouring economic data, including Friday’s jobs report, for guidance on the timing of the first increase in U.S. short-term rates in nearly a decade. Fed officials last month said they were looking for further improvement in the labor market before making such a move.

The Fed has signaled its eventual increases in interest rates will be gradual. Still, uncertainty remains over how the market will adjust to slightly higher rates, since the central bank’s low-rate policy has helped fuel the six-year bull market in stocks that has lasted since the financial crisis.
...

http://davidstockmanscontracorner.com/why-yellen-the-feds-are-bubble-blind-they-apparently-believe-wall-streets-eps-scam/comment-page-2/
Why Yellen & The Feds Are Bubble Blind——They Apparently Believe Wall Street’s EPS Scam
by David Stockman • March 24, 2015   
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5

Offline TahoeBlue

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Re: ZIRP slowly killing Pension Funds
« Reply #28 on: September 08, 2015, 07:18:25 pm »
Pensioners must not feed  and starve for the fed ...

http://www.ft.com/cms/s/0/e5142190-5630-11e5-a28b-50226830d644.html#axzz3lC8JnJCo
September 8, 2015 8:33 pm
World Bank chief economist warns Fed to delay rate rise
Shawn Donnan and Sam Fleming in Washington

The US Federal Reserve risks triggering “panic and turmoil” in emerging markets if it opts to raise rates at its September meeting and should hold fire until the global economy is on a surer footing, the World Bank’s chief economist has warned.

... any rise would lead to “fear capital” leaving emerging economies as well as to sharp swings in their currencies ...

...

The Fed’s chair, Janet Yellen, has repeatedly signalled that she expects to raise rates this year for the first time since 2006.
...
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/e5142190-5630-11e5-a28b-50226830d644.html#ixzz3lCEujMjN

Mr Basu said the World Bank’s June forecast of 2.8 per cent growth for the global economy was now under threat from the slowdown in emerging economies such as China and Brazil as well as anaemic growth in industrialised economies bar the US.

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interesting jit pension funds say there getting out of stocks ? and into what? hedge funds? no risk there when the insiders have the "fix" in  and give you the "winners"

http://www.wsj.com/articles/giant-u-s-pension-fund-to-propose-shift-away-from-some-stocks-bonds-1441215041
Giant U.S. Pension Fund Calstrs to Propose Shift Away From Stocks, Bonds
Calstrs to discuss shifting up to $12 billion to Treasurys, hedge funds, other investments
By Timothy W. Martin
Updated Sept. 2, 2015 9:16 p.m. ET
   
The nation’s second-largest pension fund is considering a significant shift away from some stocks and bonds, one of the most aggressive moves yet by a major retirement system to protect itself against another downturn.

Top investment officers of the California State Teachers’ Retirement System have discussed moving as much as 12% of the fund’s portfolio—or more than $20 billion—into U.S. Treasurys, hedge funds and other complex investments that they hope will perform well if markets tumble, according to public documents and people close to the fund. Its holdings of U.S. stocks and other bonds would likely decline to make room for the new investments.
...
Behold, happy is the man whom God correcteth: therefore despise not thou the chastening of the Almighty: For he maketh sore, and bindeth up: he woundeth, and his hands make whole ; He shall deliver thee in six troubles: yea, in seven there shall no evil touch thee. - Job 5