Shane's Feed
Apr 14, 2014
via Counterparties

The great retirement shift

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Last year, Lydia DePillis gathered a group of charts from the Economic Policy Instituteon the rise of the 401(k) and the fall of the pension. In 1980, 38% of workers had pension plans. In 2008, just 20% did. Retirement saving is now predominantly individual, and reflects wider inequality trends. Since 1990, the retirement savings of the top-fifth income earners have increased more than 3.5 times, “while they’ve declined or risen only slightly for most everyone else”, DePillis wrote.

If you can’t rely on a pension, and have to take matters into your own hands, then you have to pay a lot of attention to fees. Matthew O’Brien shows how a 1.25% difference in fees between an actively managed fund and an index fund can make a six-figure difference in retirement funds.

Apr 14, 2014
via Counterparties

The great retirement shift

Want to sign up for the Counterparties email? Click here.

Last year, Lydia DePillis gathered a group of charts from the Economic Policy Instituteon the rise of the 401(k) and the fall of the pension. In 1980, 38% of workers had pension plans. In 2008, just 20% did. Retirement saving is now predominantly individual, and reflects wider inequality trends. Since 1990, the retirement savings of the top-fifth income earners have increased more than 3.5 times, “while they’ve declined or risen only slightly for most everyone else”, DePillis wrote.

If you can’t rely on a pension, and have to take matters into your own hands, then you have to pay a lot of attention to fees. Matthew O’Brien shows how a 1.25% difference in fees between an actively managed fund and an index fund can make a six-figure difference in retirement funds.

Apr 10, 2014
via Counterparties

Gross behavior

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Sheelah Kolhatkar has a long profile of Pimco’s Bill Gross, in which Gross makes an attempt to rationalize his somewhat erratic behavior over the last few months. (The front cover of the magazine uses the headline, “Am I really such a jerk?”) Gross’s strange behavior has been chronicled since Pimco CEO and co-chief investment officer Mohamed El-Erian, the heir to Gross’s throne at the company, announced he was resigning from his post back in January.

Then, in February, a devastating article in the WSJ painted Gross as a terrifying and brutal manager who referred to himself as Secretariat. Not long after the WSJ article came out, Gross told Reuters’ Jenn Ablan, “I’m so sick of Mohamed trying to undermine me”. He also “indicated he had been monitoring El-Erian’s phone calls”. Last week, Gross devoted much of his Investment Outlook letter to remembering his dead cat, Bob.

Apr 10, 2014
via Counterparties

Gross behavior

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Sheelah Kolhatkar has a long profile of Pimco’s Bill Gross, in which Gross makes an attempt to rationalize his somewhat erratic behavior over the last few months. (The front cover of the magazine uses the headline, “Am I really such a jerk?”) Gross’s strange behavior has been chronicled since Pimco CEO and co-chief investment officer Mohamed El-Erian, the heir to Gross’s throne at the company, announced he was resigning from his post back in January.

Then, in February, a devastating article in the WSJ painted Gross as a terrifying and brutal manager who referred to himself as Secretariat. Not long after the WSJ article came out, Gross told Reuters’ Jenn Ablan, “I’m so sick of Mohamed trying to undermine me”. He also “indicated he had been monitoring El-Erian’s phone calls”. Last week, Gross devoted much of his Investment Outlook letter to remembering his dead cat, Bob.

Apr 8, 2014
via Counterparties

Who’s afraid of rising prices?

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Minneapolis Fed chief Narayana Kocherlakota — the only FOMC member to vote against the taper last month — said in a speech in Buffalo today that inflation is likely to stay under the Fed’s 2% target for another four years. Further, he said, that fact “tells us that resources are being wasted” because “demand for goods and services is too low to fully use the available resources in society”.

Paul Krugman agrees that inflation is too low, and blames bad policy for keeping it that way. The problem, he says, is that the very wealthy, who have more assets than income, have a lot of influence over policy decisions. “Modestly higher inflation, say 4%, would be good for the vast majority of people, but it would be bad for the superelite”, he writes.

Apr 8, 2014
via Counterparties

Who’s afraid of rising prices?

Want to sign up for the Counterparties email? Click here.

Minneapolis Fed chief Narayana Kocherlakota — the only FOMC member to vote against the taper last month — said in a speech in Buffalo today that inflation is likely to stay under the Fed’s 2% target for another four years. Further, he said, that fact “tells us that resources are being wasted” because “demand for goods and services is too low to fully use the available resources in society”.

Paul Krugman agrees that inflation is too low, and blames bad policy for keeping it that way. The problem, he says, is that the very wealthy, who have more assets than income, have a lot of influence over policy decisions. “Modestly higher inflation, say 4%, would be good for the vast majority of people, but it would be bad for the superelite”, he writes.

Mar 26, 2014
via Data Dive

Case-Shiller Index shows modest growth in home prices

The housing recovery continues, albeit modestly. The S&P/Case-Shiller composite index of house prices in 20 metro areas rose 0.8% in January (seasonally adjusted), according to a report released yesterday. Economists had predicted an 0.7% rise. On an year-to-year basis, home prices are 13.2% higher than they were in January 2013.

It’s not all good news, though. Unadjusted prices actually fell by 0.1% from December to January, according to ReutersBill McBride sees signs of a slowdown in housing prices coming:

Mar 26, 2014
via Data Dive

Case-Shiller Index shows modest growth in home prices

The housing recovery continues, albeit modestly. The S&P/Case-Shiller composite index of house prices in 20 metro areas rose 0.8% in January (seasonally adjusted), according to a report released yesterday. Economists had predicted an 0.7% rise. On an year-to-year basis, home prices are 13.2% higher than they were in January 2013.

It’s not all good news, though. Unadjusted prices actually fell by 0.1% from December to January, according to ReutersBill McBride sees signs of a slowdown in housing prices coming:

Mar 25, 2014
via Counterparties

Discovering pyramids

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The hedge-fund equivalent of Stalingrad grinds on. Two weeks ago, the Federal Trade Commission launched a formal investigation into Herbalife, asking whether the company is set up as an illegal pyramid scheme — a process that could take 12-18 months. The move, which is “not an indication of wrongdoing”, nevertheless caused Herbalife’s stock to drop from more than $66 a share on March 10 to $53 today. On Saturday, with the stock at $49, Bloomberg reported that Bill Ackman is near breaking even on the $1 billion short he’s had against the company since December 2012. (Ackman was down as much as $500 million near the end of last year.)

Mar 25, 2014
via Counterparties

Discovering pyramids

Welcome to the Counterparties email. The sign-up page is here. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com.

The hedge-fund equivalent of Stalingrad grinds on. Two weeks ago, the Federal Trade Commission launched a formal investigation into Herbalife, asking whether the company is set up as an illegal pyramid scheme — a process that could take 12-18 months. The move, which is “not an indication of wrongdoing”, nevertheless caused Herbalife’s stock to drop from more than $66 a share on March 10 to $53 today. On Saturday, with the stock at $49, Bloomberg reported that Bill Ackman is near breaking even on the $1 billion short he’s had against the company since December 2012. (Ackman was down as much as $500 million near the end of last year.)