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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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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10.28.09
Posted in Uncategorized at 6:07 pm by Administrator
I am relieved to find an analysis of the financial crisis from a veteran which points to real causes underlying the crisis we’re recovering from. Wharton’s Jeremy Siegel, professor of finance, just makes sense. Here’s his take:
Rating agencies that rated subprime mortgages as investment grade made faulty assumptions about continuously rising home prices. The yields on these mortgages were high in spite of their investment grade rating (and markets were right to be suspicious of them, thus adding a higher risk premium). Wall Street, reaping fat rewards, and Congress, happy of the American Dream being realized by more, ignored red flags along the way. Government-sponsored Fannie Mae and Freddie Mac helped fuel the subprime boom.
This misreading of economic trends did not reside within the private sector. Large financial firms put their shareholders at risk and their leverage threatened the entire financial system. The Fed failed to see these problems. His summation: financial firms drove too fast, the Fed failed to stop them, and housing deflation crashed the banks and the economy. The Great Moderation — a period of less fluctuation in GDP, industrial production, and employment since WWII — is still alive though temporarily dazed.
See WSJ Opinion page Oct. 27, 2009, “Efiicient Market Theory and the Crisis.”
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10.20.09
Posted in Uncategorized at 2:43 pm by Administrator
This research I recently summarized is more in the psychology and marketing realms. It has some interesting insights for those working with retirees though, and could prove helpful in how you communicate with them. Enjoy.
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07.24.09
Posted in Health care, Uncategorized at 4:16 pm by Administrator
I’ve been mostly silent about the legislation and debate being waged in health care, partly because it’s a moving target and partly because many of the proposals were ill-conceived. But I’ve heard one idea proposed that makes sense, and of course all the interest groups and their respective lawmakers are airing opposition. The idea is to allow the MedPac report to recommend cuts to the Medicare program. I used to read MedPac reports in the late-90s when I was solely focused on health care. Allowing the objective, non-politicized information to be informative and do some of the heavylifting in Medicare makes sense. Congress will not do their job on this. Perhaps MedPac data can help them.
The WSJ writes on July 24th: “The Medicare Payment Advisory Commission, created by Congress in 1997, has recommended more than $200 billion in cost cuts in the last year alone that lawmakers have ignored. Mr. Orszag wants to reconstitute the commission as an independent agency whose recommendations would automatically take effect — unless Congress expressly stops them.”
The Medicare problem will start eating all of our proverbial lunches. It needs to be reset, especially in light of the aging population. AARP doesn’t like the savings idea from MedPac unless the savings are spent to cover the uninsured, and I’m not sure that logic makes sense. AARP has had a strangehold on Medicare and all things “senior” for a while. It’s time to get real and think about generations to come.
How can we compete in a globalized world while bleeding and wasting so much on health care. Starting next year when Baby Boomers begin retiring, and into the following decade, soaring Medicare costs will put us in deficit even more. You think bank bailouts and economic stimulus deficits scare us now, wait til the public realizes they are paying for motorized wheechairs for those who may not need them, Viagra, and the like. It’s shameful. Frankly, Medicare pays for too many non-essentials already, in addition to incentives which encourage excess spending.
Retirees will also pay for this in terms of a less secure retirement. Excessive spending in Medicare will cause taxes to rise and the productivity gains of the last decade to evaporate. This spending will crowd out funds for education, which can create long-term growth of the economy to support government programs in turn. There is a whole feedback loop that the AARPs and lawmakers who want to spare their oxygen-supply provider constituents fail to acknowledge. If these deliberated ideas are not adopted, cuts will come somehow, and be very, very painful.
The US economy and political system took a big hit financially and in terms of reputation. If we cannot put the brakes on unbridled health care spending, we are going to see a crisis of another sort. Financial markets get it; there’s no where to hide, except of course behind politics.
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07.03.09
Posted in Uncategorized at 6:37 pm by Administrator
For some reason I had taken to reading the tea leaves about year 2008 on Dec 12, 2007 on PBS The World site. Here’s what I wrote, for your interest or entertainment:
• The volatility witnessed in U.S. financial markets will cause new thinking about retirement security in both private and public sectors. Risk/return tradeoffs will begin to resemble more rational thinking, ie., that financial innovation cannot hedge risks to the degree many theorists or sophisticated investors believed due to excess risk-taking not being incorporated into the models. Everything old becomes new and many things new become history. The Wild West of financial markets gets tamed until another day.
If you want to read the rest of my predictions, go here: http://tiny.cc/6SyGB
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06.05.09
Posted in Uncategorized at 8:39 pm by Administrator
Indeed health care costs are over the top, and better efficiency is needed in the sector as well as properly aligned incentives. An op ed by former Lt. Gov of NY Betsy McCaughey in today’s WSJ spoke rationale that has been lacking in the debate. She accurately points out the fallacy of the Obama admins logic: that the only way to slow Medicare spending is to slow overall health care system spending thru comprehensive reform and legislation, carefully crafted of course. Medicare is fiscally unsound because of a lack of properly aligned incentives including distortions that increase supply and procedures, increasing numbers of beneficiaries, and the lack of updating needed to reflect demographic changes and levels of wealth appropriate for the times.
She points to the CBO suggesting wealthy seniors pay more and inching up eligibility ages similar to how social security has done. I have suggested this in my white paper; it’s really a no-brainer. Until we have greater transparency, policies which drive sustainability, and economic reality-based payments and benefits in Medicare, the administration’s PR team can fool many of the people much of the time as they try to expand coverage. The goals of squeezing HC costs and Medicare, and expanding access are two separate issues with their own differing sets of dynamics. Painting a broad brush stroke over the immensely complex health care system is futile.
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