2012 March | timiacono.com - Part 4

Retirement Confidence At Record Lows

Some highlights from the Employee Benefits Research Institute’s Retirement Confidence Survey in which we find Americans as ill-equipped as ever to enter their golden years:

Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.

Although 56 percent of workers expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer.

That second one is kind of a shocker, that is, unless those 23 percent of respondents who said there were going to receive a pension but didn’t have a pension retirement plan thought they were being asked about social security.

And this chart says a lot about how the fortunes of aspiring retirees are changing:

Retirement Confidence

That area circled in red has gone from around 50 percent to 60 percent over the last ten years and will likely continue to go higher in the years ahead as long as Ben Bernanke is running the Federal Reserve and savers continue to be punished.

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Dylan Grice On When To Sell Your Gold

Via this item at Business Insider and this one at BullionVault come some much needed words of reassurance for precious metals investors (it’s been another rough week) from Société Générale strategist Dylan Grice:

Some would say the time to sell gold is now… Gold just isn’t the misunderstood, widely shunned asset it was a few years ago. Isn’t the bull market now long in the tooth, with better opportunities to be found elsewhere?

The reason I own gold is because I’m worried about the long-term solvency of developed market governments.

Eventually, there will be a crisis of such magnitude that the political winds change direction, and become blustering gales forcing us onto the course of fiscal sustainability. Until it does, the temptation to inflate will remain, as will economists with spurious mathematical rationalisations as to why such inflation will make everything OK (witness the IMF’s recent recommendation that inflation targets be raised to 4%: IMF Tells Bankers to Rethink Inflation – WSJ). Until it does, the outlook will remain favorable for gold. But eventually, majority opinion will accept the painful contractionary medicine because it will have to. That will be the time to sell gold.

Grice also gets in a in a jab or two at economists:

…economists look down on disciplines which might teach them it, such as history, because they aren’t mathematical enough. True, historians don’t use maths (primarily because they don’t have physics envy) but what they do use is common sense, and an understanding that while the economic laws might hold in the long run, in the short run the political beast must be fed.

I don’t know about you, but I feel much better now…

Goldman Sachs: “Toxic and Destructive”

Quite the bombshell today in this New York Times op-ed by Greg Smith, a London-based ex-Vampire Squid executive director of equity derivatives on his last day at work as he details how the firm “rips off” its clients that at least five managers refer to as “muppets”

He calls the environment at the firm “toxic and destructive” and lays the blame at how leadership has changed, noting that “if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence”. The conclusion? Get rid of the “morally bankrupt people, no matter how much money they make for the firm”.

FT Alphaville had this interesting take on what may have motivated Mr. Smith to vent:

I wonder how his exit interview went. He must have had a little twinkle in his eye…

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Wednesday Morning Links

MUST READS
Why I Am Leaving Goldman Sachs – NY Times
Reacting to Goldman Executive’s Resignation Letter – DealBook
Public Exit From Goldman Sachs Hits Wounded Wall Street – NY Times
Four US banks fail Federal Reserve stress test – Bloomberg
Fed’s Stress Test Results Can’t Be Trusted: Strategist – CNBC
Stress Tests Show How Fed Pushed Banks to Bolster Balance Sheets – Bloomberg
SocGen: Tuesday FOMC was “as good as it gets” for QE3 hopefuls – Zero Hedge
PIMCO’S Gross disagrees with Fed on inflation – Reuters
Retirement dreams shattered by massive mortgage debts – Telegraph
Payroll tax extension adds to deficit, analysis finds – Reuters
Zombie Banks and Vampire Governments – LewRockwell.com
California: The Sick Man Of America – IBD

MARKETS/INVESTING
Oil falls to near $106 after US crude supply jump – AP
Dollar, Fed push gold to lowest since late Jan – Reuters
Stocks: 3-year-old bull market still has legs – CNN/Money
IEA sees ‘bumpy ride’ ahead for oil market – Globe & Mail
Shaming the Non-Stock Buyer – Daily Capitalist
Will Treasuries be this decade’s bubble? – Peter Brandt
SocGen’s Dylan Grice Writes The Ultimate Guide To Gold – BI
Is the Banque de France eager to show it still has its gold? – GATA
How can gold and silver not rise? – Mineweb
HUI Stocks vs Gold – Profitimes

ECONOMY/WORLD/HOUSING/BANKING
Jobless Rates Fall in Most States – WSJ
What Higher Gas Prices Could Really Do to the Economy – The Atlantic
Many Moving Parts: The Latest Look Inside the U.S. Labor Market – St. Louis Fed
Has the Global Economy Become Less Vulnerable to Oil Price Shocks? – The Oil Drum
India consumer prices rise as fuel and power costs jump – BBC
Japan to buy $10.3b in Chinese govt bonds – China Daily
Wen Says Curbs Needed to Avoid China Property ‘Chaos’ – Bloomberg
Canada’s housing market flirts with bubble – MarketWatch
Spring Ritual Returns: ‘For Sale’ Signs Sprout – WSJ
ForeclosureRadar: Nevada foreclosure filings and sales plunge – Housing Wire
Everyone hates the mortgage settlement, except the banks – O.C. Housing News
Federal Open Market Committee forecasts: Guesses or guidance? – voxeu
In Otherwise Dour Report From Fed, a Touch of Optimism – NY Times

 
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