This page has been archived and commenting is disabled.
Eric Sprott: The Financial System’s Death Knell?
From Eric Sprott And David Baker (previously more on the topic from Zero Hedge: Europe's "Monetary Twilight Zone" Neutron Bomb: NIRP)
NIRP: The Financial System’s Death Knell?
On July 18th, 2012, the German government sold US$5.13 billion worth of 2-year bonds at an average yield of -0.06%. Please note the negative symbol in front of that yield number. What this means is that the German government was able to borrow money for less than nothing. When those specific bonds expire in two years’ time, the German government will pay back the original $5.13 billion minus 0.06%. Expressed another way, investors knowingly and willingly bid the German government $5.13 billion in exchange for bonds that will pay no interest and are guaranteed to lose them money on expiration.1 Welcome to the new status quo.
Germany is not alone. Over the past six months, the countries of Netherlands, Switzerland and France have also issued short-term government debt at negative yields. Like Germany, they’ve been able to do this because European bond investors are so shell shocked that they’d rather park money in a bond that’s guaranteed to only lose a miniscule amount rather than risk losing more in a PIIGS bond that actually pays some interest. In addition, many investors view German, French and Dutch bonds to be cheap options on the break-up of the Eurozone. If the EU currency union collapses, euro-denominated bonds issued by those specific countries may be paid back in re-issued deutschmarks, francs or guilders, which will be far more valuable than the euros that were spent to buy the bonds in the first place… or at least that’s the idea. As a result of this thinking, the bond market auctions for these select countries have seen overwhelming demand, making NIRP (Negative Interest Rate Policy) the new ZIRP (Zero Interest Rate Policy).
The NIRP acronym is misleading, however, because unlike ZIRP, NIRP isn’t actually an official “policy” per se, but rather a symptom of a broken financial system increasingly starved for good ‘collateral’. Aside from those speculating on a Eurozone currency collapse, a large portion of the bond investors participating in NIRP bond auctions are the banks. As the euro crisis has dragged on, banks in perceived “strong” countries like Germany and Switzerland have seen record inflows of deposits from banks in peripheral EU countries, like Spain. As most of these “strong country” banks have been hesitant to lend those deposits out (for obvious reasons), they are forced to park them in short-term government bonds. Moreover, new rules imposed by various regulators such as Basel III have forced all banks to hold a larger percentage of their balance sheet in government bonds, regardless of their country of domicile. The result has been a mad dash into the bond auctions of select “safe” countries just as the pool of available AAA-bonds has been drastically reduced. Banks are piling into NIRP bond auctions today because they have nowhere else to go. This is why nobody seems to be alarmed by the recent ubiquity of NIRP bond auctions – they are merely thought to be a short term phenomenon that will pass in time… just like zero-percent interest rates were supposed to be when they were widely introduced four years ago (sigh).
NIRP is different than ZIRP, however. NIRP causes outright financial destruction. Economies can hardly survive extended periods of ZIRP rates, let alone survive a long-term NIRP environment. It just doesn’t work. Institutional investors like pension plans and life insurance companies cannot earn enough “spread” to function properly. And many aren’t allowed to buy different asset classes that might produce a better “spread”, even if they wanted to. They are stuck holding the AAA government debt issuers – positive-yield, or not.
Negative rates also punish the individual investor. Try going online and using one of the banks’ retirement savings simulators and plugging in a negative expected return – you’ll break the program. The same also goes for the investment advisory business. When so-called safe-haven bonds start to consistently produce a negative return, try charging advisory fees to clients while recommending a 50% allocation to negative-yielding government debt. Advisors can try it for a while, but investors won’t put up with it for long.
The recent emergence of NIRP auctions are a signal that the relationship between governments, banks and investors has broken down. While the market still presumes that NIRP is a short-term phenomenon confined primarily to Europe, the dearth of AAA-assets coupled with banks’ captive bond purchasing suggests it may be structurally enforced for a long time to come. There’s even the potential for NIRP to emerge in the US bond market. As Bloomberg reports, the gap between US bank deposits and loans hit a record $1.77 trillion at the end of July 2012, representing an expansion of 15% since May.2 “Banks have already bought $136.4 billion in Treasury and government agency debt this year, more than double the $62.6 billion purchased in all of 2011, pushing their holdings to an all-time high of $1.84 trillion.”3 The current 2-year US Treasury bill is yielding a paltry 0.29%. If something exciting happens in Europe, what’s to stop the bond market’s typical knee-jerk move into US Treasuries from pushing that yield down past zero? Not much. We could be there before the end of the year, especially if the banks continue to gorge on ongoing US Treasury auctions in the meantime.
The question now is how well the financial system can cope in a relentless low-to-no yield environment for bonds. The last four years of low rates have already wreaked much damage to ‘spread’-dependent industries. One need only look at the insurers: In its latest Q2 report, after reporting an 88% drop in Q2 year-over-year earnings, Sun Life Financial stated that if current interest rates persist its profits for the period from 2013 to 2015 could be hurt by up to CAD$500 million.4 Manulife recently reported a Q2 loss of CAD$300 million, which was mainly attributed to a CAD$677 million charge it took to revalue long-term investment assumptions to account for falling bond yields.5
The pension plans are also deteriorating: According to recent reports from BNY Mellon and Mercer, the funded status of US corporate pension plans hit a record low in July 2012. Benefits Canada writes, “The average funded status dropped 2.9 percentage points to 68.7%… while the latest figures from Mercer show that the aggregate deficit in pension plans sponsored by S&P 1500 companies grew US$146 billion during July, to a record high of US$689 billion.”6 That’s a one-month increase of 27%.7 In the pension business, lower yields on long-term AAA bonds results in higher plan liabilities, plain and simple. As Reuters reporter Jim Saft writes, “To give an idea of exactly how powerful the effect of falling rates is on pension liabilities, consider that, according to Mercer, though US shares rose 1.4 percent in July, the 30-55 basis point fall in discount rates drove an increase in liability of between 3 and 11 percent. In a single month.”8
It’s even worse for the public pensions. According to the Washington Post, new pension accounting rules imposed by bond-rating firm Moody’s are expected to “triple the gap between what states and municipalities report they have in their funds and what they have promised to pay out retirees.”9 If implemented, that new public pension gap will balloon to $2.2 trillion. Michael Fletcher from the Washington Post writes, “Among other things, the new accounting rules from Moody’s and the Governmental Accounting Standards Board (GASB) limit the rate of return on future investments that pension funds can assume for accounting purposes. Most government pension funds assume a 7 percent to 8 percent return, which critics say overstates future investment income.”10 With the US 10-year bond now paying less than 2% a year, assuming a 7-8% return isn’t an overstatement, it’s a fantasy. Chart 1 shows how the last four years of low-to-no rates has impacted the average Canadian pension plan. Extend that trend another four years and we might as well redefine the entire purpose of pensions altogether.
CHART 1: THE SOLVENCY POSITION OF DEFINED-BENEFIT PENSION FUNDS IN CANADA IS AT AN ALL-TIME LOW Indexes (December 1998 = 100)
a. Solvency position is equal to assets divided by liabilities.
Source: Mercer (Canada) Limited. Last observation: May 2012.
Banks are also suffering from NIRP and ZIRP, as evidenced by the performance of Wall Street’s five biggest banks thus far in 2012. Bloomberg writes, “JPMorgan Chase & Co. (JPM), Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley had combined first-half revenue of $161 billion, down 4.5 percent from 2011 and the lowest since $135 billion in 2008. The firms blamed the decline on low interest rates and a drop in trading and deal-making.”11 (Emphasis ours.) Banks make money on the spread between the interest they charge on loans and the interest they pay on our deposits (this is called the net-interest margin). Chart 2 shows the impact low rates have had on the net-interest margin for the Big 6 Canadian banks, and how tightly correlated their profits are to bond yields themselves. The average net-interest margin for the Big 6 was 2.55% in fiscal Q2 2012, while the average yield on the Canadian 5-year Treasury bond was 1.54%. According to our calculations, for every 100 basis point decline in the 5-year Treasury yield, the Banks’ net-interest margin will fall roughly 20 basis points. All else equal, a 1% drop in 5-year bond yields will result in a -15.6% impact on the banks’ net income. Like the insurers, the persistence of low bond yields hurts their profit margins… and the more deposits the banks take on, the more they are inadvertently forced to participate in short-term bond auctions – thereby supporting the very market causing the margin compression in the first place. It’s a vicious catch-22.
CHART 2: CANADIAN BANKS’ NET-INTEREST MARGINS TRENDING DOWN Correlation: 87%
Source: Bloomberg, Big 6 Canadian Banks’ Financial Reports.
From a government perspective – especially governments like Germany who currently issue short-term debt for less than nothing, the current abundance of NIRP and ZIRP bond auctions represent a sweet irony. Here we are, on the interminable verge of collapse in Europe, and at a time when Western governments have never been more indebted, and bond investors are lining up to pay for the pleasure of owning their bond paper! It’s actually quite ridiculous. But no matter how much pain the current low-to-no yield environment causes the rest of the financial industry, governments will not do anything to change their current set-up. No government is incentivized to proactively raise their bond auction yields for the sake of savers, and barring the surprise emergence of major inflation, no central bank would ever raise interest rates and risk curtailing their expensive efforts to foster growth through money-printing. The banks’ continuing need for safe “collateral” means they’ll buy government bonds at virtually any price, leaving the governments with a “captive” buyer for their bonds. It’s almost perfect for the governments… and as it now stands, unless the banking system diversifies into different forms of AAA-collateral (like gold), or until we experience a default or major inflation – both clearly negative events, investors will be forced to survive with a AAA-bond market that pays absolutely nothing, just like Japanese investors have suffered through for the past twenty years.
Under widespread NIRP, pensions, annuities, insurers, banks and ultimately all savers will suffer a slow but steady decline in real wealth over time. Just as ZIRP has stuck around since the early 2000’s, NIRP may be here to stay for many years to come. Looking back at how much widespread damage ZIRP has caused since its introduction back in 2002, it’s hard not to expect that negative interest rates will cause even more harm, and at a faster clip. In our view, NIRP represents the death knell for the financial system as we know it today. There are simply too many working parts of the financial industry that are directly impacted by negative rates, and as long as NIRP persists, they will be helplessly stuck suffering from its ill-effects.
Although it’s been a quiet summer for “hard assets” like gold and silver, this low-to-no rate environment should prove to be beneficial for them over time. The tide is definitely turning in their favour. Various bond commentators have recently come out in support of hard assets, including PIMCO’s Bill Gross, who opined in his August month-end letter that, “Unfair as it may be, an investor should continue to expect an attempted inflationary solution in almost all developed economies over the next few years and even decades.”12 NIRP and ZIRP are critical components of that solution, and are here to stay until something unpredictable disrupts the current relationship between the banks and government bond auctions. In our view, the factors that have led to the emergence of NIRP bond auctions are the same factors that will drive demand for physical gold in the coming months: savers have nowhere to go for a “safe” return. It’s only a matter of time before they realize they’ve overlooked a unique financial asset that would perfectly suit their needs. When they do, we would strongly advise them to take delivery.
a. Solvency position is equal to assets divided by liabilities.
Source: Mercer (Canada) Limited. Last observation: May 2012.
| 1 | Bartha, Emese and Chaturvedi, Neelabh (July 18, 2012) “Negative Yield on German 2-Year Note”. Wall Street Journal. Retrieved on August 8, 2012 from: http://online.wsj.com/article/SB10000872396390444330904577535102520070554.html?mod=googlenews_wsj |
| 2 | Eddings, Cordell and Kruger, Daniel (August 20, 2012) “Banks Use $1.77 Trillion to Double Treasury Purchases”. Bloomberg. Retrieved on August 20, 2012 from: http://www.bloomberg.com/news/2012-08-20/banks-use-1-77-trillion-to-double-treasury-purchases.html |
| 3 | Ibid. |
| 4 | Perkins, Tara (August 8, 2012) “Sun Life hammered by markets, low rates”. The Globe and Mail. Retrieved on August 10, 2012 from: http://www.theglobeandmail.com/globe-investor/sun-life-hammered-by-markets-low-rates/article4470289/ |
| 5 | Reuters (August 10, 2012) “Manulife takes loss, to revisit profit target”. Reuters. Retrieved on August 12, 2012 from: http://in.reuters.com/article/2012/08/09/manulife-results-idINL2E8J90LV20120809 |
| 6 | Benefits Canada (August 3, 2012) “U.S. pensions hit all-time funding low”. Benefits Canada. Retrieved August 5, 2012 from: http://www.benefitscanada.com/pensions/other-pensions/u-s-pensions-hit-all-time-funding-low-31130 |
| 7 | Mercer (August 3, 2012) “US Corporate Pension Plans’ Funding Deficit Reaches All-Time High”. Mercer. Retrieved on August 21, 2012 from: http://www.mercer.com/press-releases/funding-deficit-reaches-all-time-high |
| 8 | Saft, Jim (August 14, 2012) “Negative rates and pension pain”. Reuters. Retrieved August 14, 2012 from: http://www.reuters.com/article/2012/08/14/us-column-saft-idUSBRE87D03U20120814 |
| 9 | Fletcher, Michael (August 16, 2012) “New rules expose bigger funding gaps for public pensions”. The Washington Post. Retrieved on August 16, 2012 from: http://www.washingtonpost.com/business/economy/new-rules-expose-bigger-funding-gaps-for-public-pensions/2012/08/16/c183fe1a-d507-11e1-b2d5-2419d227d8b0_story.html |
| 10 | Ibid. |
| 11 | Eddings, Cordell and Kruger, Daniel (August 20, 2012) “Banks Use $1.77 Trillion to Double Treasury Purchases”. Bloomberg. Retrieved on August 20, 2012 from: http://www.bloomberg.com/news/2012-08-20/banks-use-1-77-trillion-to-double-treasury-purchases.html |
»
- 32570 reads
- Printer-friendly version
- Send to friend
- advertisements -
Further O/T.
Looks my beloved TD11 is going to rejoin with Issac on the latest picture.
Issac is gonna be huge - like Ivan.
Adieu, time to get more shutters up.
"So many minds so little time." when will the truth and reconciliation become? All that is known and will be is now not only known but programmed with a .exe. What to say to a thing that truly believes it can reconcile love with a command?
And yet our young kids just dont see it coming. http://xanalyser.blogspot.com/
I just shit a bright yellow turd, have no idea what this means.
Prolly nothing, just like the implications of this article 99.99 of the masses dont seem understand.
You must be one of "those" baby boomers.
There is another aspect published by someone right here on ZEROHEDGE that clearly shows that as investors retun on their money comes down via ZIRP/NIRP, etc, there is an unintended consequence which is reduced consumption over and above all the other reasons that are driving reduced consumption such as,
high gas prices , high food prices, high health care costs, lower income growth or straight income reduction,etc.
When you consider all this in a ZIRP/NIRP environment, if you are lucky to have some savings , YOU WILL REDUCE YOUR CONSUMPTION as your RRSP or 201K will not grow anywhere near to where you want it to be at retirement, so what the bernank and all these clowns have done is kill the financial system and the economy in the process via a slow death experience , Japan comes to mind again......but a bit faster in the US as it is traditionally a low savings economy compared to Japan......
This should be the biggest crime committed agains the population at large and hope that one day these clowns get what they fully deserve....and get to be fully accountable for.....
LIBOR, Corzine's robbery and all the other crimes committed pale in comparison to these ill advised policies the bernank has put in place.
And grrenspan should go to hell for setting everything up.
So buy Physical Gold and then turn it over the Facist Dictator in the US when he/she/it passes the executive order, just like FDR.
Or have it taken at gunpoint in exchange for a bullet.
Watcha gonna Doo when Day Cum 4 U, bad boys?
The Bozos can't stop illegal immigration. You thnk they can come for your Bling? If history repeats itself the Civil War Part II ought to be a blast...
Oh please! The administration sues any state that tries to enforce immigration laws that are verbatim of Federal laws on the books! They gun run across the border. They jail border patrol agents that shoot drug runners. They promulgate rules that completely contravene federal law that border agents are forced to follow. Hell, several states have had to go to court just to allow a fucking cop to ascertain whether someone is here legally. Now the cocksucker in chief has amnestied several million illegals and is ordering the states to issue them licenses. Now they can vote, guess for who? This has nothing to do with what "the state" can stop or not and everything to do about what it wants to happen.
I am just sayin..
When you try to cash in some Bling Gold for something you can eat, medicine, fuel, etc. The Boyz will be waiting for you.
-Who you gonna do business with when the Biz is Facist/Gov't Matrix? You going to run your own gasoline refinery?
Think it through Idgitz.
I want you all to survive and prosper. Death to the next Hitler, call him Romney, Obama, makes no freakin difference. Puppet masters, all of them.
Well the SS, errr, I mean the DHS just ordered 100 million rounds of hollow point ammo per year for the next five years. With Osma already "a dead terrorist", how many terrorists are the DHS planning on finding in the grand ole US of A?
Maybe they know some people who know how to shoot guns. Dunno. But if they don't, and assholes get the guns, that still ain't good news for the sheeple at the other end of the trajectory of a .40 caliber hollow point.
IMHO, anyone with a gun is an idgzit. I wish the DHS had ordered 750 million toothbrushes instead and we had a war on cavities. But I am a dreamer.
When PIMCO goes balls all in on gold---ya just don't have to be a fucking rocket scientist to read the writing on the wall.
Someone please help explain this in simple terms... WHO and WHY would anyone put cash money into an instrument that is guarateed to lose money? Makes no sense at all.
+1
Amazing that assclowns invest Treasuries, which are nothing but Bernie Bayou, Bernanke Ponzie fucking debt. Uber safe will soon equal uber ass fucking.
I hope they create an exclusive FEMA camp for ZH posters, only. And that is the one I want to be sent to. We will have a good ole time talking about the good ole days. You know the NSA is crawling this server 24/7/365 farming IPs and the rest like the Squid they are.
they just can't pass up a "guaranteed" investment
Breaking NewZ: FOMC’s New QE3 Plan to Marginalize Loses and Ease Monetary Policy.
La la la la la la la... do do do do do
Hysterical, good visual on the ass fucking that I mentioned a few lines up!
Nice position from Eric. Gave up the gold bullhorn for a minute. But who better to critique the game than somebody with no skin in it? Kudos, ES. (Ooops, tragic initials). I will read through again, but this is important stuff I think everybody is not giving enuf attention to. Sure, San Bernadino's largest creditor is the pension fund, but the bills from that pension will be CLIMBING higher every year that their returns are NIRPED. The very first thing I learned at Pru-Bache in Smithtown was the Rule of 72, and no it was not like the Rule of 69. But it involved an 8% return in the example. At 1% what is it?
Also, to take the other side, The Canadian Pension Fund is not exclusively invested in interest rate sensitive income products. They own actual business entities. Railroads. Toll roads. Power plants. Globally. Their demise will not be 0% interest rates.
" Chart 1 shows how the last four years of low-to-no rates has impacted the average Canadian pension plan. Extend that trend another four years and we might as well redefine the entire purpose of pensions altogether. CHART 1: THE SOLVENCY POSITION OF DEFINED-BENEFIT PENSION FUNDS IN CANADA IS AT AN ALL-TIME LOW Indexes (December 1998 = 100)"
Hey, what's Leo K doing now? I thought his Chinese Solars would beat the trend.
Leo? Leo? Helllllooooo.
Leo K. you say?
Why, I had breakfast with him just the other day!
(PS: His table manners were atrocious, he chews and talks with his mouth open, his every third word was "I", and he was a crappy tipper on top of it all.)
So whoever takes over in January is facing the Maestro and Bennie's mess. In an attempt to induce economic growth they have left the economy impossibly broken. There are no real options left that can be implemented without significant pain.
Raise rates? Destroy the Fed balance sheet and bankrupt the Federal Government.
Keep rates the same? We are stuck in a Japan like bi-flation with no economic growth, higher commodity prices and increasing amounts of unpayable debt.
Lower rates a little more? Watch granny eat dog food as her pension fund collapses and her life savings returns a paltry 1%.
Thanks Bennie, so much for trying to out smart the laws of economics.
This crash is going to make 1982 look like a boom.
sschu
The arrogance of Ben and company is stunning. Economists who fix things by breaking the price mechanism. Must have been smoking pot during Econ 101.
Pssst. Come here so I can whisper into your ear. < That’s the plan. The system is unfixable to repay debt obligations>.
Why do you think another 1.5 to 7 trillion really doesn’t fucking matter to them? May only GOD help them once the others figure it out! This will become the best reality TV show ever seen on a little place called EARTH. Winks
It's beyond a joke when Congress changes the accounting rules to allow companies to report a fictitiously low pension obligation so they don't have to fund it and can show overstated earnings.
Print more money bozos. Take the whole joke of a system down faster.
On a relatively short time line .... all debt based in fiat would be worthless .... whether you're paid back or not !
Finally the Jones' are catching up to me instead of me trying to keep up with them.
Silver just hit $30.
GOOD NEWS: Winter coming and debt based fiat paper currency bag holders will have massive amounts to burn.
Surprised the Tylers didn't see Bernanke, I mean Hilsenrath, speak that QE XXXVVIIXXXX is coming sometime tomorrow morning at 10:17am and 32 seconds....he gives us his word this time. Gold, Oil, S&Ps, Euro, AD, Silver up up and away.....
http://online.wsj.com/article/SB10000872396390444358404577605451567479764.html?mod=WSJ_hp_LEFTWhatsNewsCollection
Two things the article overlooked:- possible downgrades of triple A assets and the so-called "investor" does not exist as such only central bankers and governments do and those are who are buying NIRP worthless papers
Seniors are really hurting. I know several retirees who lived off their $200,000 savings expecting a 5% return = $10,000.
Now they are scraping by with $1,000 and eating into their principal. How many are living this way I'm not sure but the fact that I know several tells me there are many. What happens when they get down to zero?
The Fed does not care. They will blame someone else. It's a sad and corrupt system. Work hard and save and they steal from you via zirp and money printing. Goodbye property rights, goodbye America.
Look at the stock chart of Sturm, Ruger. It says it's going to get ugly.
In questions of power, then, let no more be said of confidence in man, but bind him down from mischief by the chains of the Constitution. –Thomas Jefferson
The power granted to Congress in Article I, Section 8, “to fix the standards of weights and measure” meant taking precious metal and stamping it into coin as a medium of exchange. Allowing the Fed to proceed unchecked print fiat currency to confiscate private property is asking for the destruction of the United States.
Hence: The standard of living of the average American has to decline… I don’t think you can escape that. -- Former Fed Chair Paul A.Volcker, 1979. IOW, it bothers them not.
Karl Marx would have loved the Fed.
Narf.
In a lab somewhere H1N1 is being weaponized to "reduce the surplus population".
The elites will, of course, get the vaccine.
No more pension or debt problems.
"We don't foresee the subprime (add yours here) situation having any chance of spilling over into the larger economy."
OT...what the hell is going on with gold and silver in the after-market?
Silver has stormed over $30, closing in on $30.50...
...and there it is.
No balls.
Buy something.
MUST WATCH:
Biderman's Daily Edge 8/22/2012: Don't Lose Money While Waiting For Market Plunge
ancient dell wouldn't fire up.
logged in/ blew my cover with this one.
cunt help my'self..... nice work dudes.
long underwater metal detector's beeeeeyatches!
Widespread NIRP will be shortly followed by a market collapse. Book it.
Charts and setups post FOMC
http://capital3x.com/think-tank/charts-and-analysis-post-fomc/
It is all about trading the FOMC rather than focussing on its implications etc,
I never trusted any pension plans insurance equities etc...whatever. I bought metal instead. tee hee
Australia’s Mining Bonanza Is Over, Resources Minister Says“You’ve got to understand, the resources boom is over,” Ferguson told Australian Broadcasting Corp. radio today. “It has got tougher in the last six to 12 months.”
http://www.bloomberg.com/news/2012-08-23/australia-s-mining-bonanza-is-o...
Big Bro -- He Got Your Backside and remember, you didn't build it, McDonalds did.
http://oahutrading.blogspot.com/2012/08/big-bro.html
They all know how this is gonna end. Massive printing, hyperinflation, currency collapse.
But why are they taking that path? Currency collapse destroys everything. They have to know that.
Why would they destroy the economy? Why would they destroy themselves?
Maybe their plan is wipe out the economy, then one final $100 trillion "bailout", Wall Street buys up the entire nation for pennies on the dollar, then the currency collapses.
But they own everything now. Maybe that's the goal.
Australia is AAA and has high interest rates, this is why their $ is trading so high, its a safe place rated high and japan china swiss, are flocking here.
is kitco dead?
Riddle me this-
Imagine a time when the pension fund officers, just like the investment bankers and corporate executives before them, stop caring whether their assets perform or not, because they have no skin in the game, just their salaries and bonus packages.
A time when they will just offload their funds to any asset manager who can 'promise' a good return and beat the market.
Say goodbye to your pension.