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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02.24.10
Posted in FYI at 8:30 pm by Administrator
National Underwriter recently picked up on a few choice ideas in the new report “Forecast 2010: Navigating Retirement Unknowns (and Charting a Course Anyway).” However, the scope of the report is much broader than how Boomers may impact asset pricing in the future.
We have also added a companion set of 47 slides into the mix, to help with identifying and tracking ideas and the flow of the report. I’m sure people will find ways to put them to use as well. It sort of offers an alternative view of the material, that might spark some stroke of genius. (At least that’s what I find when faced with the same material presented in different ways –but maybe not the genius part.) A sample of the seven follows.
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02.15.10
Posted in FYI at 4:53 pm by Administrator
In the early part of the report, an economic climate discussion and a summation of where we have been and where we are, takes place. There are occasional “outtakes” about the crisis for informational purposes, in addition to a section focused on crisis commentary. It’s important to view the crisis from different vantage points to make sense out of it for retirees and for helping them plan, if you are an advisor.
Some key points about demographics are presented, and how they relate to retirement security. In the section on longevity risk, a variety of forces which impact it are presented along with some common solutions. At present one of the few products that can guarantee against longevity risk is a fixed annuity, or a variable annuity with particular guarantees.
Following that discussion, the topic of heath care is covered, with a focus on Medicare’s challenges as it relates to retirement planning. We illustrate some of the growth trends which may help in anticipating future out of pocket expenses or areas for which one would want to insure against. Finally, some pressure points on the horizon are outlined such as: DB-DC tradeoffs, retirement ages’ issues and economic growth, asset prices and demographics.
One takeaway from this report would be that we are living in an era of uncertainty, even though some good news is occurring in spots. Be aware of the risks, and plan in a sensible way for their emergence. Be more vocal with those who represent your interests; ask questions of those who manage your resources. Understand the ways in which your retirement assets work, together and separately.
The link to the report page.
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11.04.09
Posted in Econ, FYI at 6:57 pm by Administrator
John Geanakoplos of Yale was asked by the Fed to present his views on the crisis at its peak in October 2008. His theories moved away from the efficient markets and rational expectations camps to a “leverage cycle” point of view. He shows how a group of certain types of investors that demand, say more “asset-backed” securities, encouraged banks to ‘stretch’ their available supply of collateral like mortgage loans. “Using large amounts of borrowed money, or leverage, these buyers push up prices to extreme levels, ” writes the Wall Street Journal (Nov. 3, “Crisis Compels Economists…” by Mark Whitehouse). Under usual circumstances, the less leveraged buyer would not venture into these securities at higher prices; therefore this phenomenon violates the idea of efficient markets, that all available information is contained in prices of securities.
Basically, Geanakoplos says the banks created myriad debt securities to meet demand. Central bank models missed this leverage cycle because their models focus mainly on interest rates. If new thinking proves out, the way in which we have viewed the financial world will change. Whatever new ideas become accepted as the norm may be a welcome change: “Our policy seems geared toward rescuing banks and bankers.” per Geanakolpos. He hopes a paradigm shift will occur so that people are protected against the excesses of the financial markets. He suggests central banks should collect and publish data on the amount of leverage in the system. Sounds like a good start.
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10.06.09
Posted in Econ, FYI at 10:44 pm by Administrator
This summer I began to scan the horizon for answers and insight about where we had been, and more importantly , where we are going. I approached a few sponsors but found this economic climate too harsh for new “knowledge” ventures. I was calling this report “Forecast 2010.” And it was meant to be a compilation of the best research, commentary, and experts surrounding the financing of retirement, and the many facets which impact it.
Since at this time, the report outlined below will not be immediately forthcoming, I thought it best to post my outline for the project. Any individuals, businesses or institutions that are interested in working with the RSI, please feel free to contact me. (Excuse the second slide; it is my pitch to sponsors, otherwise, the outline which follows serves as a trail of thought and intended content.)
See Project Forecast 2010.
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09.10.07
Posted in FYI at 2:04 pm by Administrator
Context, analysis, choice data, big picture — this is really the crux of the white paper.
Uses of it: education for professionals, share in seminars or workshops, customize portions for client education, etc.
I will use this blog to post occasional commentary when the makings of a trend emerge, events or news of significance arise, or there is a proverbial ‘aha’ moment. This could be seen as my version of a software update patch for the white paper. If demand is sufficient, I’ll offer a formal update of the paper at update pricing.
The format for distributing this work is the pdf in an attractive layout with a 55-slide set (plain formatting by design) for quick reference or other uses. There are several preview pages of both WP and slides. Have a look!
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09.06.07
Posted in FYI at 2:34 pm by Administrator
“Retirement Security in the 21st Century: Considerations and Risks in Building the Infrastructure” will be available hopefully by the end of next week. It should shave considerable research time from busy professionals’ lives.
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