Pension Pulse

Howard Gold, MarketWatch columnist and founder and editor of GoldenEgg Investing reports, The world’s best market timers: the Federal Reserve : Things were looking grim last week, especially on Wednesday, when the Dow Jones Industrial Average was at one point down by 460 . The CBOE VIX indicator soared to the mid-20s for the first time in two years. Fear was palpable as investors had a classic panic attack . But then, like the cavalry in those classic John Ford westerns, the Federal Reserve rode to the rescue. James Bullard, president of the Federal Reserve Bank of St. Louis, said inflation far below its 2% target could lead the Fed to “ go on pause on the taper … and wait until we see how the data shakes out into December.” The Fed is on track to finish “tapering” its extraordinary bond buying, or quantitative easing (QE3), at next week’s meeting. But, he added: “If the market is right and it’s portending something more serious for the U.S. economy, then the committ...

Theodore Economou, the CEO and CIO of the CERN Pension, sent me an announcement a few weeks ago from Europa, New pan-European pension fund to boost researcher mobility : Mobility of researchers in Europe received a boost today with the launch of a consortium that aims to establish a new pan-European pension arrangement. Once put in place, the RESAVER initiative would mean that researchers could move freely without having to worry about preserving their supplementary pension benefits. The consortium plans to set up the pension arrangement in 2015. It will enable researchers to remain affiliated to the same pension fund, even when changing jobs and moving between different countries. The European Commission will cover the initial set up costs through a four-year framework contract that will be awarded before the end of 2014. The consortium will be working as an international not-for-profit association registered in Belgium. The founding members are: Central European University...

Dominic Coyle of the Irish Times reports, Warning retired Irish workers not guaranteed State pension : Irish workers cannot be sure of receiving a State pension in retirement in future generations, according to a report published this morning. The cost of existing hidden state pension liabilities are estimated by the Pensions Authority to be €440 billion – more than double the €203 billion national debt estimate for the end of this year, a figure that already amounts to 111 per cent of GDP and requires significant reduction under European budgetary rules. That raises doubts about the sustainability of the State pension promise, the Irish Association of Pension Funds annual benefit conference will hear today. A study of 25 state pension systems by the Australian Centre for Financial Studies and Mercer finds that Ireland’s State pension is among the best in the world in terms of adequacy. However, Ireland’s overall score is dragged down by doubts over its sustainability, wher...

Gretchen Morgenson of the New York Times reports, Behind Private Equity's Curtain : From New York to California, Wisconsin to Texas, hundreds of thousands of teachers, firefighters, police officers and other public employees are relying on their pensions for financial security. Private equity firms are relying on their pensions, too. Over the last 10 years, pension funds have piled into private equity buyout funds. But in exchange for what they hope will be hefty returns, many pension funds have signed onto a kind of omerta, or code of silence, about the terms of the funds’ investments. Consider a recent legal battle involving the Carlyle Group. In August, Carlyle settled a lawsuit contending that it and other large buyout firms had colluded to suppress the share prices of companies they were acquiring. The lawsuit ensnared some big names in private equity — Bain Capital, Kohlberg Kravis Roberts and TPG, as well as Carlyle — but one by one the firms settled, without ad...

Heather Pelant, Managing Director of Blackrock comments, An investing Secret for When the Market Drops : Back in August, I wrote a piece called “Why Cash is Not a Strategy.” I confessed then that like many people, I was sitting on more cash than I knew was good for me. Well, here’s an addendum: I’ve started moving off the sidelines. Yesterday I rode the market roller coaster with countless other investors, wondering how low it would go and how to react. Shock set in when the 10-year Treasury yield – a key economic indicator – dipped below 2%. Practicing what I preach, I decided to take the cash I’d been keeping on the sidelines and bought in when I saw the Dow drop 245 points. But it wasn’t easy particularly as I watched the images of red faced traders trying to make it through what turned out to be one of the worst days in the market in the last 4 years. My stomach flipped again when I saw the market had dipped further down 460 points and I thought should I have waited a lit...

Steve Matthews and Craig Torres of Bloomberg report, Bullard Says Fed Should Consider Delay in Ending QE : The Federal Reserve should consider delaying the end of its bond-purchase program to halt a decline in inflation expectations, said St. Louis Federal Reserve Bank President James Bullard. Bullard, who helped lay the intellectual groundwork for the Fed’s quantitative easing program, said U.S. economic fundamentals remain strong, and he blamed recent financial-market turmoil on downgrades in the outlook for Europe. “Inflation expectations are declining in the U.S.,” he said in an interview today with Bloomberg News in Washington. “That’s an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE.” Bullard is the first Fed official to publicly suggest the central bank should extend its asset-purchase program when policy makers meet later this month. U.S. stocks erased losses ...