Free Republic

The global debt market is orders of magnitude larger than the stock market, and debt instruments across the globe have nearly reached the breaking point due to the Fed’s steady increase in interest rates this year (combined with seemingly endless money printing and other disastrous fiscal policies). Because bond values have an inverse relationship with interest rates, as interest rates go up, the value of bonds and other debt instruments already issued goes down. With each Fed rate increase, bond values are cratering, leaving debt investors holding substantial losses and leading to a collapse in the number of potential buyers...

The pro-Biden yahoos at The Hill are flailing over Americans blaming President Joe Biden for the obliteration of trillions of dollars from the embattled U.S. stock market. The Hill whipped out the exhausted “Republicans pounce” angle to harangue Biden’s critics in a story headlined: “Republicans pounce on ailing markets to criticize Biden.” The liberal outlet mourned that “[w]hile Biden has so far been able to dodge blame for the recent stock market declines in the wake of interest rate hikes by the Federal Reserve, Republicans are increasingly tying the faltering markets to the White House.” Perhaps the outlet is trying...

The Bank of England took emergency action on Wednesday to avoid a meltdown in the UK pensions sector, unleashing a £65bn bond-buying programme to stem a crisis in government debt markets. In a nutshell what happened is that a whole lot of UK pensions (technically called liability-driven investment, or LDI funds) failed to appropriately hedge their rate risk - despite it being telegraphed months in advance - and got margin called on billions in gilt securities, forcing them to sell treasuries into a thin market that suddenly froze and turned bidless, creating a "death spiral", and then realizing they were...

Stock market values have collapsed 20% this year compared to last. Many 401K and defined contribution pension plans have retirement benefits, or some portion, pegged to stock values. When those plans start registering their stock losses, there will be some decline in pension benefits for some segment of retireees. As that takes place that demographic will make adjustments including reduced spending in some areas. While that will be somewhat deflationary, it will also support an advancing recession. Together that could complicate some expected additional Fed Reserve rate increase(s). Its all a hot mess. In 2009, my Pension benefit lost $400+...

(The Center Square) – President Joe Biden on Wednesday touted a federal program to delay insolvency for private unions’ pension funds, but critics say taxpayer dollars should not be used to “bail out” pensions negotiated by unions. Biden spoke in Cleveland, Ohio, about the American Rescue Plan’s Special Financial Assistance program, which will protect more than 10 million Americans in multi-employer plans from seeing their benefits slashed when their plan becomes insolvent, which many are projected to do in the next few years. Biden called the plan "historic." “This was $90 billion, O.K.?” Biden said in his remarks. "But it...

Alarm! Particularly if you are a pension fund and hold US Treasuries and Agency Mortgage Backed Securities. The bad news is that the 10-year US Treasury Note declined in price, sending the yield up over 10 bps today. As The Fed is projected to raise its target rate over 10 times by February 2023, 10-year Treasury Note prices and agency MBS 3.5% prices continue to decline. Here is a video of The Biden Administration and The Federal Reserve attacking pension funds and Social Security.

US President Biden went green and signed executive orders on his first day to limit oil and natural gas exploration of Federal lands and offshore (also, killed the Keystone Pipeline), helping to drive up energy prices and food prices. These orders begat inflation (also caused by the massive Covid relief by the Federal government). The highest inflation in 40 years begat The Federal Reserve signalling a tightening of Fed monetary policy … to fight the problem caused by The Fed in the first place … too much monetary stimulus for too long. Fiscal and monetary fanaticism and ignorance is forever...

NEW YORK, Jan 31 (Reuters) - U.S. public pension funds will likely have to switch to more aggressive investment strategies in the coming years to fill funding gaps despite assets held by sovereign investors having grown to record levels amid the 2021 equity market boom, a new report said. On average, the difference between assets and liabilities at U.S. public pension funds, known as the "funded ratio," remains "unsatisfactory" at less than 75%, sovereign investor specialist Global SWF said in a report. To boost returns, many will likely have to focus on alternative assets, including private equity and private credit,...

Consumers’ Research, the nation’s oldest consumer advocacy organization, sent a Dec. 2 letter (pdf) to ten U.S. governors warning them about the reliance of their states’ pension funds on BlackRock’s strong ties to China. BlackRock, under its CEO Larry Fink, is the first foreign-owned company to receive a license to operate in China’s $3.5 trillion mutual fund industry, Forbes reported. Consumers’ Research executive director William Hild sent the warning to the governors of Washington, Florida, New York, Nevada, South Carolina, Oklahoma, Pennsylvania, Montana, Nebraska, and West Virginia—the ten states with the most investments in BlackRock. Washington has invested the most...

Democrats now assert their bailout of multiemployer union pension plans in March's American Rescue Plan Act was deeply flawed and are demanding the Pension Benefit Guaranty Corporation (PBGC) rescue multiemployer union pension plans from the act's botched rescue. Democrats' admission this bailout will cost much more than advertised should raise concerns about the real costs of the third massive bill they are rushing to enact this year with new social spending schemes. The American Rescue Plan Act provided an $86 billion "taxpayer bailout" to some multiemployer union pension plans, according to the Congressional Budget Office, but not enough to make...

FRANKFORT, Ky. (AP) — Kentucky’s state pension systems are expected to need nearly $4.6 billion from the next two-year state budget, mostly to cover pension debts, officials told lawmakers. The largest share will go to the Teachers’ Retirement System of Kentucky, the Lexington Herald-Leader reported. For fiscal year 2023, TRS expects to need $1.25 billion from the state; for fiscal year 2024, it’s $1.33 billion, lawmakers were told Tuesday. TRS provides retirement benefits to 56,629 retired Kentucky educators, with 73,151 more educators actively enrolled. The state’s General Fund is about $12.5 billion a year, Rep. Jim DuPlessis said. “So that’s...

Peter Navarro, former director of the office of trade for the Trump white house, joins "Squawk Box" to discuss China's tech crackdown and how it affects the U.S. (Four minute video clip)

TOKYO – China is so keen to maintain control over its sprawling and expanding economy that it’s even willing to go communist. For all the claims from Communist Party bigwigs that President Xi Jinping isn’t on an anti-wealth crusade, the losses are too jarring to dismiss as “capitalism doing its thing.” Indeed, the more than US$1 trillion of market capitalization losses tied directly to Xi’s recent policies has China bulls mutating into China bears. First, it was Jack Ma’s Ant Group getting stomped by Xi’s regulators. Then Didi Global and the $100 billion private tutoring sector got the boot. Next...

Indications that inflation is rising is roiling markets and unnerving consumers who must pay unexpectedly higher prices for basic necessities. Gasoline prices, for example, are up nearly 50% from a year ago. Presidential Press Secretary Jen Psaki pooh-poohed concerns, calling them "unnecessary fretting. Rising prices are a positive in so many ways." "Take the jump in gasoline prices," she suggested. "This is not an unplanned phenomenon. It is the President's policy to wean the country off of fossil fuels. To accomplish this it is necessary to make gasoline unaffordable for as many drivers as we can. The Colonial Pipeline hacking...

Early in your career, start by saving what you can, with the ultimate goal of putting away 15% of your salary. That 15% will put you on track to have the equivalent of your salary saved by 30, which is the milestone retirement-plan provider Fidelity recommends aiming for in order to retire comfortably.And if your employer offers a 401(k) match, try to contribute enough to qualify for the full amount, which is essentially free money.That means if you earn $50,000 a year, you should aim to have $50,000 in retirement savings by the time you are 30. If your annual...

Democrats stipulated in their $1.9 trillion spending bill that none of the $350 billion going to states and localities could be “deposited into a public pension fund.” That always looked like a trick, and Vermont is the first state to prove the point. Vermont’s Democratic Legislature broke the code when it dared to propose pension reforms while the state is flush with federal bailout money. Vermont’s pension funds are 35% to 50% underfunded, and rising payments are squeezing government services.

PROTECTING AMERICAN AUTOWORKERS: President Donald J. Trump is taking action to address the Obama administration’s decision to terminate the pension plans of non-union and salaried autoworkers of the Delphi Corporation. Today, President Trump issued a Presidential Memorandum directing his Administration to review the Obama administration’s decision to terminate the pension plans of Delphi Corporation’s non-union and salaried workers. When Delphi Corporation spun off from General Motors (GM) in 1999, its union workers received a deal from GM to protect their pensions, while non-unionized and salaried workers did not.After both companies went bankrupt, Delphi’s union pensions were fully protected while its...

Over the next several weeks, the Department of Labor will begin to sift through the public comments on their recently proposed rule “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights,” seeking the best course of action to ensure that pension beneficiaries across this country receive the benefits they deserve. This rule reaffirms the fiduciary obligations that ERISA-backed pension fund managers owe to their beneficiaries, and puts forward much needed reforms in a proxy advisory industry that for too long has neglected to serve the best interest of pensioners.  In this tumultuous election season, where even non-controversial issues have become political,...

Austrian Chancellor Sebastian Kurz warned Tuesday against any attempt to force EU countries to take in asylum-seekers as the European Commission prepared to unveil a new strategy for handling migration to the bloc. Speaking to AFP in an exclusive interview, Kurz alluded to previous efforts by the European Commission to introduce mandatory quotas for refugees for all EU members, which were rejected by many eastern and central European countries. "We find that the distribution in Europe (of asylum seekers) has failed and many states reject this. It won't work like this," the 34-year-old conservative leader said. On Wednesday, Brussels will...

For pension beneficiaries across the country, the recent proposals by the Department of Labor are a positive step towards ensuring that accountability and fiscal responsibility take precedence over any other considerations. Two new rules are currently being weighed. The first, for which the department is currently in the process of sorting through public comment, concerns the role of environmental, social, and governance (ESG) investments in ERISA-backed pension funds. The second takes aim at “proxy voting,” examining the outsized roles that proxy advisory firms have in investment decisions and examining whether their recommendations are always economically beneficial to pensioners.These rules rightly reaffirm a...