11.20.10
Posted in Politics at 4:36 pm by Administrator
With a new Congress incoming, the hopefully fortunate news for voters is the focus on restoring fiscal sanity. We have mountains of debt to work through, and cannot pretend that select groups will not have to bear burdens.
One proposal from the deficit cutting commission is to revisit inflation indexing in Social Security. This will likely happen. It’s a “technical” fix that is needed. They were vague about Medicare from newstories, but I believe Medicare should be more related to income. The trajectory of expenditures with Baby Boomers arrival over the next two centuries is overwhelming. Also, the incentives to overuse health care services exists in the program. If Republicans are really serious about cutting spending, they will quite playing politics with Medicare and do the hard work, the honest work.
So our message to retirees and those planning for now is— minimize the risk of large health care liabilities and find a balance between growth and conservatism in your retirement portfolio comprising all sources of income and investment. The economic picture is still a bit foggy, but the proper raincoat can protect you, whether grey clouds or downpours.
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11.03.10
Posted in Econ, Politics at 3:11 pm by Administrator
In spite of Republicans taking the House, the economic fundamentals of yesterday are still the same.
I read a recent analysis of the political and policy environment we face that was resonant. The facts remain.
1. The types of policies that led us to this financial crisis have not been fixed. Spending will need to be reigned in, tax policies reflect reality, and pro-growth polices adopted. Quit the tinkering around the edges and get to the hard decisions. Entitlement spending is out of control. Think longer term please.
2. The Fed needs to move from QE2 and onto developing better policies. Lower rates for savers (which we lacked too many pre-crisis) will not inspire consumption. “Monetary policy plays a key role in post-crisis economies, ” states a smart analyst, Michael Lewitt. Many top business leaders in financial services question the Fed’s actions and rationale. (See section on ‘The Stock of the Fed is Dropping’) The whole analysis “Keynesian Confusion” is well worth the read. Lewitt refers to many of the issues raised and dissected, more simply, in the RSI’s last two reports.
3. Create policies that inspire confidence and “real” economic growth prospects. Much of the American public gets the window-dressing charade played by Washington. Health care reform (tinkering with 15% of the economy) is a case in point. Stop it. Or else you will stunt or reverse one of the greatest economic dynamos in the world. Even China has more discipline than us right now. The whole currency manipulation thing is often a distraction for politicians who will not take responsibility and make hard choices. Our demographic profile is such that only sane policies can get us to the other side. Since government cannot support all the promises made in health care (Medicare) and social security somewhat, encourage private market solutions that complement what the public sector can realistically deliver.
Incrementalism that is reasonable is much better than shock-and-awe policies that please politicians, pacify the public for a day or two, and ultimately constrain future economic potential and choices. We need to step back into our leadership role in the global economy. This can be done gracefully and methodically, or painfully, with fits and starts, doing much damage to our image across the globe and Americans’ confidence along the way.
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10.17.10
Posted in FYI at 7:25 pm by Administrator
After reading The Economist’s survey “How To Grow” of Oct 7th followed by their articles on U.S. public pensions’ overpromises of Oct 14th, the RSI report launched in February cited the very same problems of overpromises and issues with growth. The research contained in that report also covered health care issues as they relate to retirement security and obstacles foreseen on the horizon (also noted in The Economist).
The cover story of Foreign Policy also relates to global aging. It covers a lot of the trends discussed across RSI’s papers and presentations. The author does a nice job intertwining policy narrative in between data.
I think there needs to be a new pact between government and workers that reflects current and future realities. Voters are really ready for sensible solutions that will offer reasonable claims on their future taxes. Heck, it might even help the economy grow–by implying that there will be some fiscal sanity. That might just inspire confidence in those creating jobs, deciding whether to spend now or save, and those planning retirement now and in the future. State pension funds may have to fast-track their new policies toward sustainable pensions (or make riskier investments). Don’t let this crisis go to waste. Make the tough choices now. That was our message to public pension funds last year. And it rings especially true given growth scenarios ahead.
I don’t care how much money the Fed pumps in (I do but), there is a wholesale change in the way we will consume and save ahead. The 80s and 90s are over. The consciousness of today reflects this; those looking at forecasts alone without new recently-adopted behavioral and attitude changes will come to the wrong conclusions.
Advisors may want to read our financial crisis analysis in the report to truly understand what happened and who was responsible to make proper future recommendations. Diversify risk, not just returns. That is one of our other central messages.
In order to share in hard times, we have reduced the pricing on works published in 2010: Forecast 2010 report and The Truth About Annuities e-brochures and slide presentation. If you are struggling, ask for a further discount.
Regarding new work, we have an outline brewing for a new report. We are looking for sponsors, large or small. Those ready to break new ground, please contact us. We are happy to provide the outline for the seriously interested. With proper support we can get this information and message out sooner than later.
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10.14.10
Posted in Uncategorized at 4:50 pm by Administrator
In the RSI’s last report “Forecast 2010: Navigating Retirement Unknowns,” we are pleased to acknowledge the recognition of the paper on the financial crisis by Finance Professor Kumar Venkatarman. His paper “Market crashes and institutional trading: Evidence from U.S. equities during the financial crisis of 2007-08″ was heavily cited in our report. I recently learned the paper has won a best paper award in a major financial conference. A full summary of the paper is here.
Also if you are interested in the report, we are offering a “pay as you can” mode, meaning we recognize the economy and pocketbooks are tight. Make an offer!
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10.11.10
Posted in Uncategorized at 8:35 pm by Administrator
A recent speech by President Richard Fisher of the Dallas Fed indicates that more Fed actions could have adverse consequences. He and many others believe businesses are not hiring and moving forward due to fiscal and regulatory uncertainty. Flooding more dollars into the economy will add more liquidity, but that is not what is lacking.
Basically, it’s a lack of confidence and fear of how new laws in health care will impact their bottom line. Obama’s health care push has in fact done more harm already than good.
Additionally, with low interest rates and therefore low returns on savings, CDs and other fixed income assets, flooding more dollars into the economy will only exacerbate the low yields. Citizens have more of a stake in this round of intervention than they know. Policymakers of the fiscal type need to quit looking for easy fixes for their evolving mess, step back and look at things for what they really are.
I appreciate the flow of ideas across the airwaves, but it is a sad state of affairs when the people we are supposed to trust to run things want to run OUR economy into the ground. Really. As an alternative to the tea party, perhaps there will be a “serious dollar” party.
See Fisher’s speech here. He speaks for broader parts of the economy than do the theorists he speaks of.
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10.07.10
Posted in Health care at 7:29 pm by Administrator
In parsing some research on peak theories of resource scarcity, an interesting outcome was noted. In the presence of continuous technological change, prices are higher before declining later in the exploitation cycle. This has implications for health care. As we are well aware, health care costs/prices have risen markedly for the last couple of decades, during a time of continuous innovation and technological change. More advanced diagnostic equipment, drugs, and so forth. But health care is not an exhaustible resource (which is good), so there is no peak to apply here exactly. But the rationale clicked in my mind. Will we ever reap lower prices at some future date after the upfront costs of innovation are recovered?
In health care, hard to say. There are so many market distortions, for example consumers are divorced from pricing because of insurance from employers and government. If market forces were more possible in health care, like in energy, there might be some discipline for prices and costs.
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09.10.10
Posted in Health care at 5:38 pm by Administrator
News about new study finds a growing health care sector and more government admin expansion. This doesn’t sound like a more cost-effective, efficient health care system. Wasn’t that the purpose of the reforms? Link here to Reuters story.
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09.03.10
Posted in Uncategorized at 4:02 pm by Administrator
This sort of backs into retirement security from the pension side of things. Research indicates that pensions could save their beneficiaries significant amounts of money by being mindful about who they use to execute their trades. Important stuff in an era of minimizing costs. This research profile can be downloaded.
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07.21.10
Posted in Uncategorized at 7:58 pm by Administrator
Following the release of the “Truth About Annuities” digital brochure and presentation, the RSI was cited in the June 2010 article “Annuities 101: A Course for Advisers and Clients.” The article suggests that retirement savers will need education about complex products delivered through technology, a focal point of this well-written and insightful insurance industry publication.
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05.11.10
Posted in Uncategorized at 2:25 pm by Administrator
We just launched the new edition of the guide “The Truth About Annuities and Retirement Income.” It is a very succinct presentation about what a fixed annuity is, how it fits into a retirement portfolio, and what its income generation potential is. The guide is presented from the risk mitigation point of view, namely sparing a retirement portfolio from burning out in later years.
This guide can be used by advisors of all stripes—whether an insurance broker, a retirement plan sponsor or other type of retirement plan fiduciary. With many calls for better education about retirement choices, limiting risk, and so on, this publication actually delivers.
ProducersWeb recognized its release.
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