Tag: MarketWatch

The biggest Fed rate hike in 40 years? It could be coming next week.

Mary Pat Campbell

Link: https://www.marketwatch.com/story/the-biggest-fed-rate-hike-in-40-years-it-might-be-coming-11663097227

Excerpt:

After another dismal U.S. inflation report, economists at the brokerage Nomura Securities on Tuesday became the first on Wall Street DJIA, 0.12% to predict a full-percentage-point increase in the Fed’s benchmark short-term rate.

“We continue to believe markets underappreciate just how entrenched U.S. inflation has become and the magnitude of response that will likely be required from the Fed to dislodge it,” the economists at Nomura wrote in a report to clients.

The last time the Fed made such a drastic move was in the early 1980s — another period marked by sky-high inflation.

At each of the last two meetings, the monetary-policy-setting Federal Open Market Committee raised the targeted rate by 0.75 point.

Author(s): Jeffry Bartash

Publication Date: 13 Sept 2022

Publication Site: MarketWatch

Influential fund manager Green Century tells insurers to drop Big Oil

Mary Pat Campbell

Link: https://www.marketwatch.com/amp/story/influential-fund-manager-green-century-tells-big-insurers-to-drop-big-oil-11645049047?twclid=11498308136175906819

Excerpt:

Green Century Capital Management tried to use shareholder muscle to persuade at least a trio of insurance companies to drop fossil-fuel clients.

So far, the insurance firms aren’t biting; all three have filed no-action requests with the Securities and Exchange Commission.

The resolutions, in advance of proxy season this spring, call on Chubb CB , Travelers TRV and The Hartford HIG to take this bold step as private-sector efforts to curb global warming from the burning of coal, oil CL00 and gas NG00 pick up, alongside global government action.

The insurance resolutions represent the first time that shareholders have laid down this sizable challenge to this industry for what the activists say are its contributions to the climate crisis. 

Author(s): Rachel Koning Beals

Publication Date: 17 Feb 2022

Publication Site: MarketWatch

ARP: “Actuarial Equivalent of a Guillotine”

Mary Pat Campbell
ARP: “Actuarial Equivalent of a Guillotine”

Excerpt:

Right now on the American Rescue Plan (ARP) website:

Status of Applications [.xls] – Coming Soon

Until those spreadsheets start popping up we have no clue as to why, by whom, and how these bailout applications are being made but, before seeing any numbers, one thing bothers me.

A footnote on that ARP website reads:

**MPRA plans can restore benefits under 26 CFR 1.432(e)(9)-1(e)(3) at any time, including before applying for SFA.

So why aren’t plan participants like Carol Podesta-Smallen in the MarketWatch story not having their monthly pension amounts restored to pre-MPRA levels and getting large checks to make up for past reductions? It would reduce asset values in those plans but isn’t that a good thing when applying for bailout money?

Author(s): John Bury

Publication Date: 31 August 2021

Publication Site: burypensions

‘I’ll be robbed twice in one lifetime’: Retirees fearing financial disaster wait for pension rescue

Mary Pat Campbell

Link: https://www.marketwatch.com/story/ill-be-robbed-twice-in-one-lifetime-retirees-fearing-financial-disaster-wait-for-pension-rescue-11630018883

Graphic:

Excerpt:

A law passed in Congress earlier this year promised to reverse some of that damage by offering taxpayer-funded financial assistance to certain troubled pension plans like Podesta-Smallen’s, allowing them to restore benefits to retirees who suffered cuts. But the implementation of the rescue plan has been met with a barrage of criticism from plan trustees, participants and members of Congress who say it’s too tight-fisted with the financial assistance and could leave some plans in a worse financial position than they are in now.

….

When the American Rescue Plan was signed into law in March, many of these struggling plans and retirees with sharply reduced benefits thought their troubles were over. The law is expected to provide about $94 billion to eligible multiemployer plans through a financial assistance program designed to stabilize the plans for decades to come and reinstate previously reduced benefits.  

The sense of relief was short-lived, plan trustees and participants say. The Pension Benefit Guaranty Corp., the federal agency charged with protecting the retirement incomes of participants in private-sector defined-benefit pension plans, in early July released regulations detailing the formula for calculating the financial assistance for troubled plans.

In interviews and more than 100 comment letters to the PBGC, plan trustees, consultants, participants and lawmakers say that the rule’s stringent approach to calculating financial assistance means that many plans receiving the assistance won’t make it through the next 30 years as Congress intended, and some won’t even get enough money to cover the benefits they must restore as a condition of getting the cash.

Author(s): Eleanor Laise

Publication Date: 30 August 2021

Publication Site: Marketwatch

Public pensions don’t have to be fully funded to be sustainable, paper finds

Mary Pat Campbell

Link: https://www.marketwatch.com/story/public-pensions-dont-have-to-be-fully-funded-to-be-sustainable-paper-finds-11622210967

Excerpt:

Governments “don’t have to pay off their debt like a household does,” said Louise Sheiner, policy director for the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution. “They can just keep rolling it over. They’re never going to go out of business and have to pay all at once.”

Sheiner is co-author, along with Jamie Lenney of the Bank of England, Byron Lutz of the Federal Reserve Board of Governors, and Brown University’s Finn Schüle, of Sustainability of State and Local Government Pensions: A Public Finance Approach, which was presented at a Brookings conference in March.

State and local liabilities can also be likened to the federal government’s deficit and debt, Sheiner said in an interview with MarketWatch. Most economists think that as long as those numbers stay constant as a share of the economy, it’s not problematic.

Author(s): Andrea Riquier

Publication Date: 2 June 2021

Publication Site: Marketwatch

American cities and states have issued $72 billion of pension bonds. Here’s what that means

Mary Pat Campbell

Link: https://www.marketwatch.com/story/american-cities-and-states-have-issued-72-billion-of-pension-bonds-heres-what-that-means-11621971315

Graphic:

Excerpt:

In his 2022 budget address, Milwaukee Mayor Tom Barrett wrote of his city’s predicament, “We are facing an unsustainable demand driven primarily by the pensions for public safety employees. We must begin preparing now, setting aside money to blunt the impact of the massive payments coming due in just two years.”

For many local governments, making a big deposit all at once and being able to budget for more manageable payments in the future, for both debt service and annual pension payments, can feel like a relief.

But there are many reasons it’s a bad idea, and one that many municipal-finance observers find problematic.

Author(s): Andrea Riguer, Katie Marriner

Publication Date: 26 May 2021

Publication Site: MarketWatch

Public pensions won’t earn as much from investments in the future. Here’s why that matters

Mary Pat Campbell

Link: https://www.marketwatch.com/story/public-pension-systems-dont-think-theyll-earn-as-much-from-investments-heres-why-that-matters-11620674757

Graphic:

Excerpt:

State pension systems dropped the rate of return they assume for their investment portfolios again, continuing a two-decade long trend that public-finance experts say is necessary, even as it presents some challenges for the entities that participate in such plans.

The median assumed return in 2021 is 7.20%, according to a report published early in May by the National Association of State Retirement Administrators, down roughly 1 percentage point since 2000, as the investment managers charged with managing trillions of dollars for municipal retirees have adapted to a more challenging market environment.

Author(s): Andrea Riquier

Publication Date: 11 May 2021

Publication Site: Marketwatch

Blood clots as prevalent with Pfizer and Moderna vaccine as with AstraZeneca’s: study

Mary Pat Campbell

Link: https://www.marketwatch.com/story/blood-clots-as-prevalent-with-pfizer-and-moderna-vaccine-as-with-astrazenecas-report-2021-04-15

Excerpt:

A study by Oxford University found the number of people who receive blood clots after getting vaccinated with a coronavirus vaccine are about the same for those who get Pfizer PFE, 2.43% and Moderna MRNA, 6.67% vaccines as they are for the AstraZeneca AZN, -0.16% vaccine that was produced with the university’s help. According to the study, 4 in 1 million people experience cerebral venous thrombosis after getting the Pfizer or Moderna vaccine, versus 5 in 1 million people for the AstraZeneca vaccine. The risk of getting CVT is much higher for those who get COVID-19 — 39 in a million patients — than it is for those who get vaccinated. AstraZeneca’s vaccine use has been halted or limited in many countries on blood clot concerns.

Author(s): Steve Goldstein

Publication Date: 15 April 2021

Publication Site: Marketwatch

Greensill Capital planning to file for insolvency in U.K. this week

Mary Pat Campbell

Link: https://www.marketwatch.com/story/greensill-capital-planning-to-file-for-insolvency-in-u-k-this-week-11614789098

Excerpt:

Embattled financial startup Greensill Capital plans to file for insolvency in the U.K. this week, as it simultaneously moved toward a deal to sell its operating business to Apollo Global Management APO, -1.69%, according to people familiar with the matter.

The deal with Apollo, which could be struck by the end of the week, would be part of a Greensill insolvency, similar to the U.S. bankruptcy process, the people said.

The Wall Street Journal previously reported the two sides were in talks for a deal that would pay Greensill around $100 million. Through the acquisition Apollo would take over Greensill’s core operations and inherit clients that generate around $7 billion in assets, according to the people familiar with the matter.

Author(s): Julie Steinberg and Ben Dummett

Publication Date: 3 March 2021

Publication Site: MarketWatch

The $1.9 trillion Biden stimulus plan is moving forward — here are the biggest parts of it

Mary Pat Campbell

Link: https://www.marketwatch.com/story/the-biden-stimulus-plan-moved-forward-today-here-are-the-biggest-parts-of-it-11614032251

Excerpt:

The House Budget Committee approved on Monday a $1.92 trillion bill to carry out President Joe Biden’s coronavirus relief plan, the first step toward likely House passage by the end of the week.

The vote was 19-16. Texas Democrat Rep. Lloyd Doggett voted with Republicans in opposition to the bill but a spokeswoman for him later said he had cast his vote in error and supported the legislation.

…..

Aid to state, local and tribal governments: This would provide money for states and local governments, as well as tribal governments, to offset tax-collection losses and increased spending resulting from the coronavirus pandemic. Price tag: $350 billion.

….

Multiemployer pension plan aid: The Pension Benefit Guaranty Program would be able to give grants to underfunded pension plans guaranteed by the PBGC. The PBGC revolving fund to help pay full benefits when pensions fall short is set to be exhausted in 2027 under current law. Price tag: $81.5 billion.

Author(s): Jonathan Nicholson

Publication Date: 23 February 2021

Publication Site: MarketWatch

Yellen meets with regulators over GameStop volatility, vows to protect investors

Mary Pat Campbell

Link: https://www.marketwatch.com/story/yellen-meets-with-regulators-over-gamestop-volatility-vows-to-protect-investors-11612480534

Excerpt:

Treasury Secretary Janet Yellen convened a meeting with the nation’s top regulators Thursday, who are continuing to review whether recent volatility in popular, so-called meme stocks, and brokers’ responses to it, “are consistent with investor protection and fair and efficient markets,” according to a Treasury Department statement.

Yellen met with the heads of the Securities and Exchange Commission, Federal Reserve Board, Federal Reserve Bank of New York and Commodity Futures Trading Commission to discuss the functioning of financial markets and practices of both investors and brokers in recent weeks.

“The regulators believe the core infrastructure was resilient during high volatility and heavy trading volume, and agree on the importance of the SEC releasing a timely study of the events,” according to the statement. “Secretary Yellen believes it is imperative to uphold the integrity of these markets and ensure investor protection.”

Author(s): Chris Matthews

Publication Date: 4 February 2021

Publication Site: Marketwatch

Opinion: Stop laughing about GameStop’s stock mania — no, really

Mary Pat Campbell

Link: https://www.marketwatch.com/story/stop-laughing-about-gamestops-stock-mania-no-really-11611760785

Excerpt:

“I get that people think it’s funny when bad things happen to Wall Street types, but this GameStop GME, -44.29% thing is not a joke,” I tweeted. “These are stock traders conspiring to manipulate the markets in open view of us all and using the ‘nah, its for the lulz, and the other side sucks’ as an excuse.”

…..

You may think it’s funny to value GameStop like it’s 2007 again and hurt some hedge funds in the process, but you might not think the next target is funny, nor the next, nor the next. You won’t laugh when you read the eventual feature about a teenager misplaying GameStop options on his dad’s account and costing them the house, or a first-time investor putting their savings into GameStop just before it all fell apart.

Author: Jeremy C. Owens

Publication Date: 27 January 2021

Publication Site: MarketWatch