It’s all in the math

We have beaten the drum for years, here at the blog.

Pension security is nothing more than a math equation.  Whether you’re talking about private pension plans, multiple employer pensions, or the grandadday of them, Social Security, you cannot continue to pay existing benefits without bankrupting the fund.  It’s simple math.

pension cutsIt’s emotional, too.  Especially if you’re passed your optimim working age, and have made your financial plan using the rules at hand.  It’s not like you can  just jump back into the workforce.  This is a situation that we Baby Boomers are going to have to face, and overcome if our retirement years are anything like we desire.

And now, one of the nation’s largest private pensions is crying uncle.  Uncle Sam, that is.  they have applied to the US Treasury for a waiver of the rules, allowing them to reduce their pension payments.  Significant reductions:

“This is going to be a national crisis for hundreds of thousands, and eventually millions, of retirees and their families,” said Karen Friedman, executive vice president of the Pension Rights Center.

It’s the math.  You can argue with me all you want, but it doesn’t change the math.  Time to get busy, folks.  Nobody is going to do it for you.

Source

 

 

 

Get the Strategic Petroleum Reserve Filled Now

About a year ago, the Obama administration ordered the release of several million barrels of oil from the SPR at a time of high oil prices.  It has not been replenished.

sprCurrently the SPR is about 30 million barrels shy of full capacity.  source

I can’t think of a good reason not to get it back to full capacity, especially since prices are at a multi-year low.

Can you?

RINO spending bill Grubers the american voter

We are so screwed.

One of the provisions of the Boehner spending bill places the full exposure of the US derivatives market on the backs of the US taxpayer (aka the FDIC).

The bill would reverse Dodd-Frank requirements that banks “push out” some of derivatives trading into separate entities not backed by the FDIC.  Ever since being enacted, banks have been pushing to reverse the change. Now, the rules would go back to the way they used to be.   source

 

boehner spending bill-wapoThe FDIC insurance fund, which  guarantees $12 Trillion customer deposits in 7500 banks across the country is around $40 Billion, after going negative in 2009, and 2010.  This is still less than the statutory 1.15 % required reserve amount.  That amount is supposed to go to 1.35 by 2020 under Dodd-Frank.  IKR!

And how big is the US Derivatives Market?  Nobody really knows.  It’s a black box.  The estimate I’ve seen is $ One Quadrillion in notional value.  Estimating the amount of cash at risk using only 1%  still leaves an exposure of $10 TRILLION, which will now be backed up by you and I.

This is just the beginning.  Now that the get out of jail free card has been issued by the RINOs, we can only expect this market to grow unrestrained, like a weed in your flower garden.  Capitalism for the bankster profits, and socialism for the inevitable crash.

This isn’t what the Republicans were elected to do.  It is not why they were given the majorities in both houses of Congress.  It a complete and utter backhand to the voters who sent a clear message, received lip service, and received a giant Gruber in return.

Get ready.  It won’t be long now.

 

Zero

For the first time since 1945, the federal government reported a net monthly job change of  Z-E-R-O.

“The bottom line is this is bad,” Diane Swonk, chief economist with financial services firm Mesirow Financial, told CNBC Friday.

source

Kind of adds a whole new dimension to the nick-name “zerobama”, doesn’t it?

Top 10 recession proof careers

h/t Candice

Recession Proof - 10 Hot Careers
Created by: Online Graduate Programs

DOES A WEAK AUSSIE DOLLAR SIGNAL A SLOWDOWN IN BUSINESS?

The economic turmoil witnessed over the past few weeks is a reminder that fundamentals play an important role in determining price trends in our various trading markets. A debt crisis is a basic fundamental, and due to the interdependence of our global markets, it can send shockwaves felt around the globe. Currencies weaken and strengthen. Commodity and futures markets react since the price for farming exports will be impacted down the road come harvest time. Balances between exports and imports become disrupted. Inventories may have to be revalued. Management teams must suddenly review their near term plans and adjust where necessary.

The European debt crisis and the uncertainty surrounding the Euro and its future were quick to cause the expected flight of capital to safe havens. In this case the U.S. Dollar and the Japanese Yen were the primary beneficiaries in the forex market. The flight into precious metals, Gold and Silver, was more pronounced. Traders, that had graduated from forex demo accounts and had dabbled in the “carry trade” business, raced to their respective trade desks to unwind unprofitable positions.

A “carry trade” is a strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a higher yielding security, a bond or stock, in a different currency.  A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage used. If the destination currency weakens, then the trader is exposed to a loss unless he has hedged his bets.

Many hedge funds and traders have used the Dollar and Yen as the “base” currency and invested where rates were higher, typically in Australia and New Zealand this time around. The Australian economy has been one of the strongest of the G20 countries.

The unwinding of carry trade volume could signal a further downturn in the Aussie Dollar. If it breaks through 0.85, then deeper cuts can be expected.

The Australian economy has outperformed many around the globe. GDP was up 2.7% in 2009, unemployment is half of what other countries are experiencing, machinery and equipment spending is also up, and China’s demand for resource exports remains unabated. The Central Bank has raised interest rates, and it appears that Australia may have skirted the global recession that has gripped Europe and America.

If the Australian economy is performing at near trend, then what are businessmen to make of all of this global turmoil? Fear and uncertainty, not market fundamentals, drove the Aussie Dollar to an eight-month low of 0.8517 on Wednesday. The consumer sentiment index showed a seven per cent slide for May, its biggest percentage drop since the height of the credit crunch in October 2008. Global turmoil and uncertainty suggest caution as the best strategy, or as the old adage goes, when in doubt, hold onto your position.

SEIU mortgage shakedown

Tired of paying your mortgage? Here’s an idea …

Just demand to see the original note on your mortgage.

And, to make it easier,your friends at  SEIU offer this handy-dandy tool to contact your bank.

In a few days the mortgage bank must tell you if they do in fact have your original mortgage note. And if not, then welcome to Easy Street. I suspect, if your mortgage is post 2006, the chances are good they won’t be able to produce the note.

Hello systemic financial meltdown.

Or, maybe not. This “crisis” has all the makings of a grand shakedown.

Consider this:  Linkage between SEIU and Barack Obama is well-documented and without question.  So, why would Obama veto the recent foreclosure moratorium bill, and take a position in direct opposition to his co-religionists at SEIU?

I think Obama is triangulating, and just maybe this was the plan all along.

From Zero Hedge

If these issues do in fact escalate, the Administration may try to broker some sort of settlement… The endgame will likely end up being the extraction of material concession from the banking syndicate, in the form of systemic mortgage writedowns, with Obama’s blessing, which will likely put the 25% of homeowners who are underwater on equal footing with the other 75%.

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