Pension Pulse

Mary Kristof of Kiplinger reports, Best S&P 500 Stocks of 2013 : Comebacks and momentum stories dominate the list of the hottest companies in Standard & Poor’s 500-stock index this year. Meanwhile, the names that did the worst in 2013 were once-hot shares that have turned suddenly cold, either because of industry woes or corporate stumbles. It’s a familiar theme. On Wall Street, one of the best ways to be this year’s darling is to be last year’s dog, and vice versa. “The market exaggerates,” says R.J. Hottovy, an analyst with Morningstar Investments in Chicago. “In some cases, companies get oversold…and then they get overbought.” Netflix (symbol NFLX ) is a prime example. The subscription movie company saw its shares slammed in 2011, thanks to a price hike and shift in its business model that alienated a huge number of subscribers. The company’s stock, which sold for $295 in July 2011, dropped to $54 in July 2012 as Netflix pressed forward with an expensive technology up...

David Cay Johnston, contributing editor at Newsweek and columnist for Al Jazeera, National Memo and Tax Analysts, sent me his latest article, District Court Rebukes IRS Church Plan Rulings : The IRS Office of Chief Counsel came in for sharp criticism from a federal judge in the first significant decision in five lawsuits by workers who complain that the IRS is helping employers quietly strip away their pension rights. Hundreds of thousands of workers at hospitals and other nonprofit organizations have been moved into so-called church pension plans, which are exempt from ERISA. IRS private letter rulings enabled each of these moves. Most of the nonprofits that were granted IRS approval to operate as church plans exempt from ERISA were seriously under funded, the trustees having failed to set aside enough money to pay the old-age benefits workers had earned. The federal government guarantees the pensions of workers in ERISA plans, although when a plan fails, workers typically g...

Camilla Hall of the Financial Times reports, Short-focused fund to launch in Canada : Investors in Canada are to get the chance to bet against their own real estate market as one of the first short-focused funds is set to launch in the country, where concerns have grown that there is a housing bubble ready to burst. The Spartan/Libertas Real Asset Opportunities Fund, set to launch in Toronto in the first quarter of next year, will allow Canadian brokers, developers or pension funds to mitigate their exposure towards a possible downturn in the real estate market, Michael Brown, manager of the fund told the Financial Times. The new fund reflects broader investor interest in shorting or hedging risk to Canada after high-profile names from Steve Eisman, featured in Michael Lewis’s The Big Short, to Robert Shiller, the Nobel-prize winning economist, have raised questions over the challenges facing the Canadian real estate market. Under the watch of Mark Carney, the former Bank o...

Mark Cobley of Dow Jones Financial News reports, Solving the pensions crisis across the globe : In 2014, it will be the 125th anniversary of the pension scheme. Otto von Bismarck, the Chancellor who unified Germany, introduced the world’s first state pension in 1889 – but the concept has not aged well. The basic design of the Bismarckian contributory pension – you pay into a fund throughout your working life, which entitles you to a guaranteed income from the age of 65 onward that is closely related to your previous salary – has been undermined by radically shifting demographics. Ageing societies in the west can no longer afford these pensions, and most people in the world’s poorer countries have never had one anyway. Yet something must be done to finance the world’s old age. Global policymakers, together with private-sector leaders, have finally accepted that they can no longer delay. Larry Fink, the chief executive of BlackRock, the world’s largest asset manager, has bee...

Daniel Worku wrote a comment for Liberty Voice, Federal Reserve System’s Mythical Taper has Finally Arrived : The Federal Reserve System’s long dreaded taper fade has finally been announced. After leading on the markets for some time now, the fed-heads in charge of printing and minting currency, along with confidence, have decide that the time has come for a multi-billion dollar taper fade to be implemented. Stocks have shot up on the news that fed-heads in charge of the Federal Reserve System have actually decided to take on the taper that they’ve been hinting would eventually happen. The reasons cited by the money wizards behind the curtain were that we now have a stronger economy, which among other things signals an appropriate time to begin scaling back the $85 billion a month bond purchase stimulus to something more conservative. The more conservative figure that has been agreed upon is a taper fade special of $10 billion a month, leaving the new monthly bond purchases at ...