Archive - Apr 2010 - Blog entry

According to a report by the Government Accountability Office, GM will need to add $12.3 billion into its pension fund by 2014. Underfunded pensions are a widespread problem, not just for the private sector. The New York Times reports, an independent report of California's three big pension funds found a shortfall of more than half a trillion dollars. This could lead to a major political problems, especially when and if states raise taxes to bridge the gap. Will pension gaps spur a tax revolt?

Even folks inside the belly of the beast think they should be broken up ...

In order to manipulate bond fund NAVs, two employees "actively screened and manipulated dealer quotes", "fraudulently published NAVs", made "price adjustments" that "were arbitrary and did not reflect fair value." The list keeps going. "This scheme had two architects - a portfolio manager responsible for lies to investors about the true value of the assets in his funds, and a head of fund accounting who turned a blind eye to the fund's bogus valuation process," - Robert Khuzami, Director of the SEC's Division of Enforcement. Sharp Mary barked today. FINRA & the SEC bit.

Barack Hoover?

The overly optimistic IMF has just released strategies for fiscal consolidation. Here is a summary.

Ontario Teachers' Pension Plan, which manages the assets of one of Canada's biggest pension funds, said it had a strong year in 2009, with the value of its assets rising to C$96.4 billion (US$96.3 billion), and a return of 13%—more than four percentage points over its benchmarked return. Unfortunately, plummeting interest rates made it harder to meet its future obligations, sending unfunded liabilities soaring to C$17.1 billion—almost seven times what it had been the year before.

In an effort to dredge a moat around market share for Amex & Arca, the NYSE has implemented a new Penny Pilot "Premium Tier" pricing schedule for the options of 15 specific issues. Liquidity providers transacting serious size across these anointed sticker symbols ... AAPL, BAC, C, DIA, EEM, FAZ, GDX, GE, GLD, IWM, QQQQ, SPY, UNG, USO & XLF ... will (yet again) enjoy additional rebates as the NYSE attempts to [1] stave off competition from other options exchanges and [2] further buoy an anemic equity market, which continues to plow forward on phantom volume at 3 am on Sunday night (like the accelerator of a Toyota Camry beneath a sleep-driving Ambien junkie approaching a raised drawbridge with both eyes closed shut, one hand on the wheel and the other on his sixth bear claw).

As digital cash flows across 21st century capital markets with the speed of a Mahwah server farm fart, increasingly inter-connected exchanges continue to roll out new derivative product offerings. With so many market participants discussing inflation expectations, deflationary data and central bank exit strategies, the NYSE Liffe U.S. has stepped up to the plate by pitching new interest rate futures contracts and futures options to be launched Q3 / Q4 2010 on the Eurodollar and 2-year, 5-year, 10-year & 30-year US Treasuries.

There are many factors which affect rental prices, including: (1) the general health of the economy; (2) demographics; (3) housing strength; (4) population growth; (5) migration patterns; and (6) wealth distribution.

A response to those who want to turn back a clock.

These are the news items from the Easter weekend that those who're asleep at the wheel probably missed. Yes, of course they're important and deserving of your attention, that's why they were buried into the Easter weekend!
No need to fret, I condensed them and supplied supplementary analysis to show my love:-)

Of course they knew ...

For a few months now, I've been sensing a shifting vibration in the comment section of ZH and it’s something I wanted to talk about. There’s a growing undercurrent of inevitable defeat and resignation in the air and if nothing else, we need to be aware of and acknowledge it.

More self-serving drivel on how Canadian public pension funds are leading the world by "internalizing" asset management. Please take the time to read this comment carefully.

 The IMF has recently released the results of their staff consultations with Greece. Some may find
it interesting, particularly where it intersects with relevant
BoomBustBlog research. Let's not mince words here. Greece is going to
effectively default on its debt, one way or another, and it is probably
going to do it relatively soon. Shall we walk through the IMF findings
from LAST YEAR and how they are actually optimistic compared to the facts that my
team and I have dug up?