“Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall “below zero”.
“We’re in a nasty environment,” said Tim Bond, the bank’s chief equity strategist. “There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth.” (more…)
Categories: Ambrose-Pierce · Barclay's · Barclay's Capital · Bernanke · Fed flubbed · Fed fluffed · credibility · financial storm · sub-zero credibility · the Fed · wealth management · wealth preservation
What happens when public employee pension plans lose money on the investments they rely on to pay benefits? Well, the government has to make up the shortfall or cut out the benefits. Today we see for example, New York City pension funds are losing money on their investments. The City of New York will have to make up the shortfall. With what? Tax revenues. Unfortunately, at current tax rates, those tax revenues are also falling.
This will affect every state and municipality. This will include pension plans for teachers, firefighters, police, and many more. It’s not just New York. But, for illustrative purposes, here’s the New York example: “In the nine months leading up to March 31, the city’s five pension funds lost a total of nearly $5 billion, or 4.4%, according to data from the city comptroller’s office. This is a far cry from projections published as recently as last month, when budget planners assumed the pension system would post no losses. (more…)
Categories: New York City · effect on pensions · firefighter pensions · fiscal condition · government pensions · municipalities · pension losses · pension plans · pension tsunami · police pensions · revenue shortfalls · states · tax revenues · taxpayer bailout · teacher pensions
