(CFD.net.au – Contract for Difference, Share, Forex, ETFs, Commodities Traders) – March, investors are leery of overpaying for hedge fund investments, Hedgebay said. “The fact that prices declined sharply in September against the backdrop of stable equity markets and the generally strong year-to-date performance of hedge funds is telling,” Hedgebay said in a statement ment today. “Investors didn’t want to “take the hit.” Nassau, Bahamas-based Hedgebay said Investors typically paid more than net asset value until August 2008, when they started dumping stakes. The firm has operated a secondary market on which pension plans, endowments and other institutional Investors can buy or sell hedge fund holdings since 1999. The volume of trading in September was 25 percent higher than last year and 15 percent higher than in the first nine months of the year, Hedgebay said. To contact the reporter on this story: Tom Cahill in London at tcahill@bloomberg.net Last Updated: October 25, 2009 20:01 EDT Hedge Fund Prices Decline for Fourth Month, Hedgebay Data Show – Bloomberg.com

Source: By Tom Cahill Oct. 26 (Bloomberg) — Hedgebay Trading Corp. , operator of the oldest site for swapping

Underfunded defined benefit plans raise significant liability risks for businesses that sponsor or who belong to control or affiliated service groups that include a business that sponsors an underfunded defined benefit plan as well as for businesses contemplating purchasing assets from these businesses.

Radical drops in plan asset values attendant to the economic down turn and Congress’ amendment of federal funding rules to accelerate the funding requirements for defined benefit plans have triggered a defined benefit plan epidemic.  Meanwhile, recently released Internal Revenue Service and Pension Benefit Guarantee Corporation guidance makes it necessary or desirable that sponsoring businesses or fiduciaries of defined benefit plans take action before year end or shortly thereafter  to meet critical compliance deadlines.

The American Bar Association RPTE Employee Benefits & Other Compensation Group (Group) invites attorneys and others concerned about these new requirements to participate in a free one hour “Study Group” conference call December 10, 2009, at 1 PM Eastern, Noon Central, 11 AM Mountain and 10 AM Pacific, to discuss a number of current/breaking issues of interest to practitioners and their clients dealing with single-employer defined benefit plans.  Key topics will include:

• Recent Regulatory Guidance on Funding and Benefit Restrictions
• Mandatory and Optional Amendments to be Adopted by 2009 Plan Year End
• PBGC Proposal to Eliminate Most Reporting Waivers and Extensions (and PBGC Interim Guidance)
• Pre-Standard Termination Irrevocable Commitment Purchases (PBGC Comment Request)
• Update on PBGC Pursuit of “Downsizing” Liability (ERISA Section 4062(e))

The conference call will be moderated by:

• Group Chair, Cynthia Marcotte Stamer, Curran Tomko Tarski LLP, Dallas, TX;
• Group’s Plan Termination Committee Chair, Harold Ashner, Keightley & Ashner LLP, Washington, DC, and
• Group’s Plan Termination Committee Vice-Chair, Henry Talavera, Hunton & Williams LLP, Dallas, TX.

Interested persons can participate in the Study Group by dialing 1-800-504-8071 and entering the passcode 9885683.  To assist the Group in anticipating the number of participants, the Group encourages those planning to participate to e-mail Group Chair Cynthia Marcotte Stamer at cstamer@solutionslawyer.net to RSVP.

Curran Tomko Tarski LLP Attorneys Can Help

If your business needs assistance with defined benefit plan funding or other employee benefit, human resources, corporate ethics, and compliance practices, or responding to employment or employee benefits related charges, audits, investigations or suits, please contact Curran Tomko Tarski Labor and Employment Practice Chair Cynthia Marcotte Stamer at cstamer@cttlegal.com, (214) 270-2402, or your favorite Curran Tomko Tarski, LLP attorney.

Curran Tomko Tarski LLP Labor and Employment Practice Group Chair Cynthia Marcotte Stamer and other members of Curran Tomko Tarski LLP are experienced with assisting employers, fiduciaries, bankruptcy trustees, investors, purchasers and others about defined benefit plan and other employee benefit, labor and employment, compensation and other related concerns involved with distressed businesses or benefit plans, bankruptcy and restructuring transactions and other corporate or plan related events. 

Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization, Ms. Stamer has advised and represented these and other business clients on employee benefit, labor and employment, compensation, employee benefit and other personnel and staffing matters for more than 20 years.  Ms. Stamer also speaks and writes extensively on these and other related matters.  See here for additional information about Ms. Stamer and her experience, here to review other recent updates, here  for other articles and publications, and review selected training and presentations here or contact Ms. Stamer directly.

For additional information about the experience and services of Ms. Stamer and other members of the Curran Tomko Tarksi LLP team, see here.

Other Helpful Resources & Information

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile here or e-mailing this information to cstamer@cttlegal.com or registering to participate in the distribution of these and other updates on our CTT HR & Employee Benefits Update distributions in blog form via RSS feed here.  You also may be interested in staying abreast of emerging internal controls and compliance challenges by reviewing and registering for our Corporate Compliance, Risk Management & Internal Controls distributions.  For important information concerning this communication click here.  If you do not wish to receive these updates in the future, send an e-mail with the word “Remove” in the Subject to support@cttlegal.com.

©2009 Curran Tomko Tarski LLP.  All rights reserved.

What’s left of the American pension system is a  pit of unexplored corruption.  Corporate management has used the pension fund as a piggy bank to make speculative investments, and cover its ass in any number of ways. The pensions themselves are supposed to be guaranteed by a government insurance fund, but during the Bush administration there was much speculation it was being used by its leaders to speculate in stocks and bonds.

As for the  happy-go-lucky “seniors”  enjoying their  so-called “golden years”–well,  a lot of them are scrounging around trying to make ends meet due to their companies having dumped them into loser 401k plans. Those that were left with old fashioned pensions are getting screwed by their CEOs who rip off the company for millions, leaving the pension in arrears, then bundle everything up and sling it to the government  backed pension insurance fund. 

USA Today provides some particularly grotesque examples:

Top executives at four companies that jettisoned their employee pension plans received $49.5 million in retirement and severance benefits in the years before the companies filed for bankruptcy, while retirees saw their benefits cut by as much as two thirds, congressional investigators conclude in a report released Thursday….

The Government Accountability Office (GAO) reports that pensions at the companies, United Airlines, US Airways, Polaroid and Reliance Insurance, were underfunded by more than $11 billion when the companies turned them over to a government-backed insurance fund. The report says executives at those four companies and six others that abandoned their pension plans took in a total of $350 million in pay and perks in the years leading up to the bankruptcies.

“If the pension is getting deeper into trouble and the executives are getting richer, there’s something wrong with that picture,” said House Education and Labor Committee Chairman George Miller, D-Calif.

No kidding.

Let us see if we can get this right, for 2010, there is no increase in Social Security benefits, and  Congress is considering legislation to stop the scheduled increase in Medicare premiums.  Inflation is low so there is no increase in Social Security, but health care inflation is high so there should be no increase in Medicare premiums despite the fact there failing to increase premiums in 2010 will add to the Medicare financial problem and may cause higher increases in subsequent years.

More Congressional math. 

Sooner or later they are coming home to roost

It seems to me that a 5.8% increase in Social Security in 2009 should be good enough for two years at a time when there is virtually no inflation and workers are seeing no pay increase or worse.  On the other hand, I have been unable to convince my wife who is receiving Social Security of my logic so I suspect the AARP has the same problem.  We seniors are a greedy lot. 

Now, because there is no inflation the amount you can place in your 401(k) or receive from a qualified pension plan is not increasing either from 2009 levels. This should not matter much as pensions are disappearing, people are not getting raises, they cannot afford to save and probably are not motivated to save because their employer match is gone from the 401(k) as well.   

However, my favorite is the pending legislation that will stop the cuts in Medicare payments to physicians (again) to appease the AMA while adding to the deficit to the tune of a quarter billion dollars or so.  Now, to avoid confusing us Congress insists that this is not part of health care reform so the planned “saving” from Medicare of $404 billion are unaffected by spending half of it.   

Hey, it’s only money…yours.

blogsurfer.us

By Eric J. Fry

Pension plans are selling stocks. Headline or footnote?

Recent history suggests this little news item should be a headline. Pension plans – like supertankers, but unlike politicians – take a lot of time to reverse direction. But once plan fiduciaries decide to proceed in a given direction – investment-wise – they typically continue down that path for years, if not decades.

This tendency provides the mother of all long-term indicators for the financial markets. Although pension plan fiduciaries tend to be VERY wrong at major, long-term turning points, they tend to be right – more or less – as markets transition from one extreme to the other.

Confused?

The principal is actually very simple: pension plans behave like long-term momentum investors. So they tend to buy into rising markets…until after those markets have peaked and begun a major decline. Conversely, fiduciaries tend to sell into falling markets until after those markets have bottomed out and begun a decisive uptrend.

In aggregate, therefore, pension fund fiduciaries tend to behave like novice investors – buying high and selling low. But since their momentum investing unfolds over such long timeframes, this group of investors tends to be very right during the middle of a big move – up or down – in any particular asset class.

The world’s fourth largest pension provides a classic case in point. The California Public Employees’ System (CalPERS) with $181 billion of assets at last count, ranks fourth on the list of the world’s largest pensions plans. But it might rank first on the list of worst market-timers. Between 1983 and 2000 the pension giant doubled its allocation to equities…just in time for one of the stock market’s worst decades ever.

During the middle of this giant bull market, CalPERS was correct to up its allocation to stocks. But by continuously upping its exposure to a rising stock market, CalPERS eventually overdid it.

In September of 2000, as the U.S. stock market was beginning its colossal collapse from the then-record highs set earlier that year, your editor highlighted the vulnerability of CalPERS’ stock-heavy portfolio. In an article entitled “Golden State Bulls,” he observed, “In 1983, with a moribund Dow Jones Industrial Average hovering around 1,200, the powers that be [at CalPERS] deemed 30% to be the optimal equity weighting for the fund. But 17 years and 10,000 Dow point later, the CalPERs…investment committee now allocates a whopping 67% of assets to equity investments.

“Meanwhile,” the article continued, “the fixed-income allocation has atrophied to but a shadow of its former self: from 67% back in 1983 to little more than 28% [today]…That’s been a swell situation for the last few years. CalPERs – ominously referred to as the ‘The System’ in the fund’s literature – earned a 10.5% return on its investments for the year ending June 30, 2000, marking the sixth straight year of double-digit returns.”

Despite these pleasing investment results from the recent past, your editor wondered aloud about the immediate future: “If the bull market of a lifetime commenced when CalPERS was wading only ankle- deep in equities (some 30%), what does it mean that the pension giant now fairly bathes in them?”

Investors did not have to wait long for the answer: The stock market stunk up the place for the next nine years. Your editor highlighted this exact risk in his article.

“A back-of-the-envelope calculation shows that if the equity component [of the CalPERS portfolio] were to merely break even [during the next six years],” he warned, “the balance of the portfolio would need to generate a 25% return to meet the [fund’s] actuarial assumption. And you know, that may not happen every year.”

CalPERS did not welcome your editor’s pro bono investment advice. In an October 8, 2000, story in the Sacramento Bee, CalPERS spokeswoman, Patricia Macht, countered, “That’s (the magazine’s) back-of-the-envelope calculation. We don’t manage people’s money on back-of-the-envelope calculations…We’re not in stocks because we make a lot of money, we’re in at the level that’s prudent to be.”

Your editor, defending his criticism in that same Sacramento Bee story, replied, “Just because [CalPERS’ equity-heavy allocation] has worked doesn’t mean that it’s responsible.”

CalPERS would have none of this criticism…and neither would any of the giant pension’s many defenders and apologists. An influential money manager, who’s name your editor will mercifully withhold, ended the Sacramento Bee by scorning your editor’s concerns as “dead wrong.”

As it turns out, of course, your editor’s concerns were “dead right.” (The S&P 500 Index has produced a total return of minus 12% from the end of September 2000 to the present). But anybody can get lucky once or twice.

More to the point, CalPERS “knew better”…or it should have. It should have known that stocks sometimes go down. So it should have also known that a fund that must dispense billions of dollars every year to retirees cannot prudently allocate 70% of its portfolio to such a volatile asset class. But the investment mavens at CalPERS could not bring themselves to worry about worst-case scenarios while best-case scenarios were delivering such delightful returns.

And besides, the stewards of the giant pension fund certainly understood that – come what may – they could always cite chapter and verse of the long-term bull case for equities. They could simply remind their would-be critics that equities had outperformed bonds by a large margin over almost any timeframe during the preceding 100 years. Between 1900 and 1999, for example, U.S. stocks gained an average of 12.9 percent a year, while bonds returned only 4.7 percent annually, according to the data from the London Business School and Credit Suisse. Armed with such rear-looking data, and lots of pretty charts, the CalPERS pension fund charged into the new century loaded for bull.

This equity-heavy allocation seemed unassailably prudent to the stewards of CalPERS, who rarely missed an opportunity to congratulate themselves for a job well done. Not content to merely draw a paycheck, without also drawing attention to himself, Michael Flaherman, then-chairman of the CalPERs investment committee, crowed in mid-2000, “Our performance is the culmination of superior investment and risk management.”

No sooner had Flaherman slapped himself high-fives than the stock market Fates began conspiring to punish his unabashed hubris. Since the end of the last millennium, stocks have produced an average annualized loss of 2.3 percent, compared to an annual gain of about 6.3 percent for bonds. Not surprisingly, therefore, CalPERS’ equity- heavy fund has generated a meager 2.2% average annualized (gross) return since 1999. (For some mysterious reason, CalPERS discontinued reporting its investment returns net-of-fees in 2002. All of which means that the stated return of 2.2% would actually be a much smaller number).

But now that the bear market pony has frolicking outside the barn for several years, the CalPERS investment team is slamming the barn door shut. The team is drastically reducing its allocation to equities. As of last June, CalPERS reduced its equity target from 56% to 49% – the lowest such allocation since 1993. (Including “alternative” equity assets like hedge funds, the revised equity target would be 61.4%, down from 66%).

Net-net, CalPERS is now a seller of equities…or at least not a buyer. Most of the other pension plans in the U.S. (and in the rest of the world) will likely follow CalPERS’ lead.

“Equity assets in the U.K. fell to 41 percent of holdings at the end of 2008, according to data compiled by New York-based Citigroup,” Bloomberg News reports. “The last time British pension funds held so little in equities was in 1974…”

Meanwhile, Bloomberg continues, “Four of the world’s seven largest pension funds…have cut their equity target allocations…” It’s probably safe to assume, therefore, that “caution” is the new buzzword in the halls of most pension fund managers. So it seems highly unlikely that they will exhibit their former exuberance for equities any time soon.

Demographic trends, as well as caution, will prohibit aggressive equity allocations. In California, for example, the baby boomer retirement wave is just beginning, which means that CalPERS must begin favoring capital preservation over “long-term growth.” Ditto most other pension funds on the planet.

“The number of people worldwide 65 and older may jump to 1.3 billion by 2040 from 506 million last year,” Bloomberg reports. “Their proportion of the total population will double to 14 percent in the same period, according to a June report from the U.S. Census Bureau.”

“[Since] the heavy equity weightings of public pension funds in this great land of ours comprise not only the mother of all sentiment indicators, but also a monstrous overhang of stocks, what if the funds sell?” your editor wondered in his mid-2000 article. “No sane fiduciary would choose to sell stocks of course – not if he or she wished to retain a comfortably feathered nest. But demographic trend may force the hand…Probably, the looming overhang is nothing to worry about – right now. But when the overhang threatens to break loose, remember: you heard it hear first.”

That moment may have arrived.

Of those who have reviewed their pension arrangements, 37 per cent of those polled by Barings did not know where their pension was invested.

The study showed a further 36 per cent of those who have reviewed their pension plans, opted for the default option where the pension provider chooses what funds to invest in.

Nearly one in five (18 per cent) of these said that the default option offered by their pension provider and employer schemes was either poorly explained or not explained at all.

Despite growing concerns around generating enough capital for a comfortable retirement, only 12 per cent of working people who have reviewed their pension plans took recommendations given to them by their financial adviser on where to invest their pension pot, while a further 15 per cent (2.85m) selected the funds themselves.

About 14 per cent (5.07m) of working Brits surveyed by Barings said they would go to a friend or family member for advice on asset allocation.

Many people give very little thought to their pension despite the huge importance it has in deciding our quality of life in later years.

A pension pot is often your second largest investment after a home, yet in many cases not a moments thought is given to where the money is invested. It is like buying an expensive car without taking any advice on the make or model.

Consumer behaviour will only change if the industry changes too and that means improving the way in which pension advice is given. Advisers need to help people view their pension as part of a wider retirement savings plan and think more clearly about levels of risk and return.

Pension holders should get into the habit of reviewing their schemes on an annual basis and I would urge them to take independent financial advice.

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The trend continues, the defined benefit pension is dying a slow death and with its passing will come a changed society, a changed workforce and millions more Americans left on their own to fund and manage their retirement income.  Watson Wyatt reports that even among Fortune 1000 companies, the number sponsoring a defined benefit plan has dropped from 59% to 42% between 2004 and 2009 and more have eliminated them for new hires. 

You can imagine the reasons for all this, but it all comes down to one thing, earnings for the next quarter are more important than the employees who may have counted on these programs for the last several decades.  Just as pensions are funded over many decades so there should be a long-term commitment to workers, in some cases even before a commitment to shareholders who know or should know about these obligations before they invest.  One may make the case that when there is a true survival situation it is better to keep a Company going and freeze a pension plan and I can buy that, but otherwise, a deal is a deal in my view. 

If I'm late for the staff meeting one more time, I've had it.

I frequently sound the call of unintended consequences and this is a good example.  A myriad of laws and regulations related to funding, reporting, disclosure etc. intended in large part to protect plan participants, have in reality contributed significantly to the demise of the pension.  The same holds true for retiree medical, accounting rules designed for transparency, killed this coverage and while the majority of Americans never had this benefit, its elimination will have a profound impact on future generations and on the future workforce. 

Better prepare for a “normal” retirement age of 80.  Are the halls wide enough for those mobile chairs?

It’s PRIME TIME: Stage 2 of the U.S. Collapse

Dave “Dave From Denver” Kranzler

To listen to our political leaders, the mainstream media and financial bubblevision t.v. programs, you would think that the financial crisis has stabilized and the housing market is bottoming. But if you un-spin the data fed to us by the Government and the media, the facts show that the financial system is on the precipice of another very large crisis. As the housing market collapse spreads into the prime-rated mortgage sector, a veritable avalanche of foreclosed middle to high-end homes will flood the market, triggering a much larger credit and economic crisis than what was experienced during the past 18 months.

The onset of the financial crisis in this country last year was largely precipitated by the inevitable bursting of the housing and mortgage bubble. In what was an unregulated multi-trillion dollar Ponzi scheme, the price of houses rose to unsustainably insane valuation levels, fueled by the reckless and tragic use of no-holds-barred mortgage financing. This “Stage 1″ of the financial collapse was triggered by an escalation in defaults and foreclosures primarily in the subprime and Alt-A mortgage sectors. The associated collateral damage from this reverberated into the implosion $100’s of billions of off-balance-sheet assets and derivatives, many of which were fraudulently rated by the rating agencies and recklessly pumped into investors by Wall Street. This took the Dow from 14,000 to 6,440 and was addressed by the Government/Fed with as much as $24 trillion in direct monetary injections and financial guarantees. During this Stage 1 we saw the Government takeover of Fannie Mae, Freddie Mac, the de facto Government takeover of AIG, the collapse of Bear Stearns, Lehman, Merrill Lynch, Countrywide, Washington Mutual, Wachovia; the U.S. auto industry, among many any other corporate failures and smaller regional bank collapses (64 smaller bank failures this year as of 7/24/09).

Stage 2 of the financial collapse of the U.S. is being triggered by the accelerating rates of default/foreclosure in the prime-rated mortgage market, as well as the collapse of commercial real estate. I am going to focus on the residential mortgage component, as it is three times as large as the commercial real estate mortgage market. Whereas the subprime and Alt-A mortgage markets are roughly $1.5 trillion combined, the prime-rate mortgage market is in excess of $10 trillion, depending on your source of data. For purposes of my analysis, I am using data presented by Mark Hanson of Field Check Group in his “7-19 Mortgage Default Crisis – Brutal Past Two-Months” article posted here (any housing/foreclosure data I use comes from this article):

http://www.fieldcheckgroup.com/2009/07/19/7-19-mortgage-default-crisis-brutal-past-two-months/

I have been asserting that the housing collapse would not end until prices fall enough to balance out the supply/demand equation. This includes the inventory of new and existing homes for sale, the inventory of foreclosed homes either on the market or being held by banks but not listed for sale AND the inventory of rental units. Data released this past week show that the rental unit vacancy rate surged to an all-time high. This will put downward pressure on rental rates, of which I am already seeing evidence in Denver. As rental rates decline, it becomes relatively more attractive to rent rather than to own, putting more downward pressure on the price buyers will be willing to pay to buy a home vs. rent.

The biggest problem, however, facing the housing market, is the impending surge in bank foreclosure inventory, fueled by the rapid increase in defaults and foreclosures in the $10 trillion prime mortgage sector of the market. Delinquencies surged in May and foreclosure inventories hit new highs. The May foreclosure rate hit 2.79% of all mortgages. This foreclosure rate increased from April to May by 6.2% and surged from May 2008 by 88.3%. Further troubling is the 5% spike in the rate of delinquencies from April to May. This compares to the April to May average increase in delinquencies over the past four years of 1.1%. The increase in delinquencies from May 2008 to May 2009 spiked up by 50%.

What’s most troubling about this data is that the main source of these horrific foreclosure/default numbers is the rapid increase in defaults in Prime-rated mortgages over the last six months. Once a mortgage defaults, it typically takes 12 to 18 months for the property to be foreclosed and either listed for sale for held in suspense by banks hoping for a miracle in the condition of the housing market.

The default/foreclosure statistics for Prime mortgages are starting to follow the same statistical path experienced in the subprime and Alt-A markets. Currently, over 12% of all subprime mortgages and 8% of all Alt-A mortgages have been foreclosed. Let’s assume that the total foreclosure rate for the prime mortgage market eventually hits 5%. I believe this is a conservative estimate given what has already occurred in subprime and Alt-A, the surging rate of delinquencies in the prime sector and the rapidly escalating rate of unemployment, which directly correlates to mortgage defaults. Assuming 5% means that $500 billion in prime mortgages will be foreclosed. This equates to the entire size of the subprime mortgage market. Imagine the damage this is going to cause to the entire financial system in this country. And my guesstimate may well be way too low (it is not too high, I can assure you of that).

To put this in perspective, Stage 1 of the financial collapse primarily affected the middle to lower income demographics who purchased a home using subprime and Alt-A financing. A lot of these properties are being purchased and turned into rentals, fueling the rental inventories. In what will be a much larger and more severe Stage 2, accelerating defaults in the prime mortgage sector will cause foreclosures to balloon in the upper-middle (think of overbuilt suburban McMansion developments or overvalued renovation homes in trendy urban areas) and high income neighborhoods. Anecdotally, as I drive through all the trendy renovated urban enclaves around Denver, I see “for sale” and “for rent” signs popping up like uncontrolled weeds as homeowners attempt to avoid foreclosure by selling or renting. It’s one thing for an investor to scoop up several low-priced homes and rent them out, hoping for future price recovery. But how will the housing market ever absorb a massive increase in larger, overvalued homes which would never have been built in the first place if a housing bubble never occurred?

As this prime mortgage-financed foreclosure inventory balloons, it is going to drive prices down to levels thought unimaginable. As the value of the collateral for the mortgages declines, banks and investors who own the associated mortgage and mortgage-related paper will suffer massive hits to the value of their assets. Even worse, we will see another round of derivative-related bank and insurance company implosions, some of which will vaporize into thin air the way Bear Stearns and Lehman did, and Countrywide, Wash Mutual, Wachovia and Merrill should have, were it not for the taxpayer financed bailouts of these firms. This Stage of the financial collapse will likely bring down several large State and corporate pension plans as well.

And finally, how will the Federal Reserve and Treasury deal with this impending financial explosion? If it took $24 trillion of direct and indirect financial support and monetary printing in order to “stabilize” the shock of Stage 1, how much money-printing will it take in order to hold the system together as Stage 2 materializes and engulfs our system with multiple financial disasters? It can be argued that the collapse of CIT is the first sign of Stage 2 hitting. It will be interesting to see which other financial firms hit the wall. We know that Bank of America – which sits on Countrywide and Merrill Lynch’s subprime mess, Wells Fargo – which sits perched on Wachovia’s $122 billion of explosive Pay-Option ARM paper, and GE Capital – a giant-sized CIT – are prime candidates to be vaporized by their nuclear balance sheets.

To conclude, based on the spin-free data presented above, a bottom to the housing market is nowhere in sight. In fact, I would argue that housing prices have at least another 30-40% to fall from where they are now. This is a guesstimate based on all of the above evidence. I don’t know what general level of valuation will mark the end of the housing market freefall. I do know that all the so-called experts (like Ben Bernanke et. al.) who said less than 18 months ago that the financial crisis would be contained to the subprime mortgage market and would top out at $200 billion were tragically wrong in their assessment. I also know that I am on record saying prices will revert to 1981 levels and that this crisis would end up costing $5-10 trillion. Looks like the jury is out on home prices and I was way too low on the dollar cost. I also know that, not only are we nowhere near a bottom, but that the worst is yet to occur.

Clearly, the above analysis means that investors should be taking advantage of this bear market stock rally to sell their stocks, sell all of their bonds except for maybe Treasury TIPS and start moving as much money as possible into physical gold, silver and mining stocks.

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Why people dread being old..?

Is it because of the incompetence that comes with age, reduced memory, loneliness, or physical discomfort due to illness… what is it actually..?

I am thinking a lot about old age these days.

There is this ad on TV these days for ‘Pension Plans’ which has a tag line “Jab na paison ki kami ho aur na waqt ki, to awaragardi to hogi hi” (when there is no scarcity of money and time then there will be a lot of loitering around)

I love this ad as it shows exactly how old age should be. It is the second childhood, of no responsibilities and a lot of fun. Why people don’t understand that.

Everyone wants to have a peaceful old age but they are not ready to work towards it. Not only everyone should be monetarily stable and independent, one should also be ready to take care of themselves, and should not be dependent on the kid(s) in any way. It is a different case if you have any ailment that needs support but if you are a fit grandparent why sulk and start the countdown to expiry.. Wouldn’t it be better to live life like you never could in those days? Do what ever you wanted and didn’t have time for.

Yesterday there was a movie on Star Gold called “Detective Naani”.  Maybe an Indian effort to copy Granny.

This movie has released in 2009, which I only came to know after Googling it.

It is a story of a Naani (maternal grandmother) everyone calls her that.. Who plays the detective in solving a murder mystery. Read review here.

It is not the detective skills that caught my eye but her lifestyle in total. The movie begins with a morning walk with the dog, surveying the surroundings and making small talk with all neighbours. Be it adults or kids she is friendly and welcoming to both.

She lives alone with her dog Bruno. But her grandchildren frequently visit her as she helps in babysitting them for their working parents. How useful and wonderful. She gets to spend so much time with the grandchildren also she is helping her kids.

There is a scene where her son tries to give her money if his son (whom she is babysitting) needs anything. But the reply comes ‘he will get whatever he needs’. And she refuses to take the money.

This is the kind of grand parent I want to be. Solving mysteries.. Well I don’t mind.

Why people have reduced sleep cycles in old age is so that they can do more. It takes them more time than before to do the same chores and things. So if they sleep less they can actually do more.

Instead what they do with the extra time…? They spend this time worrying and feeling low and depressed. They complain that no one cares about them and leaves them alone all the time. Do they ever try to remember how it was when they worked and were busy all the time? They should give the younger generation some time and understanding and should be friendly enough that the kids look forward to the time with the grandparents.

Grand parents can be great companions. As they have so much time and knowledge and love and affection. They just need to learn to curb that affection and give the youngsters their space and privacy.

Neeya Naana a show on Star Vijay recently showed an episode on problems/ differences between old and new generation…

The problems were very day to day and some things that just happen in all homes. Oldies (no offence) keep repeating what they have said 20 times already and think that if they do not say that 5 more times that work might not happen. The younger generation is uncomfortable in obeying as they think they could do it as efficiently even when not told to do so. This one is very common. There was a family where parents and their 2 married daughters had come where they had named the mother “Peter repeater”.. Funny but true.

There was one more MIL, DIL duo who had similar problems. Also an old man who had lost his wife and was feeling very lonely.

Finally there were guest speakers who put in their views on this. The Doctor summarized it beautifully. He talked about how we spend our whole lives living for others and fulfilling responsibilities and not doing much for ourselves, and when we reach that age of retirement we have nothing to for ourselves as we are not habitual of it.

So that is the best time to rekindle your hobbies and live life to its fullest.

I have made my plans already. A nice little home where I live with my hubby, we’ll have a dog that’ll serve both purposes of safety and of having a kid as we might be going through the ‘Empty Nest Syndrome’. I’ll start my days with music and probably end it with music too. I will have my collection of Cds, DVD’s, mini DVD’s or whatever that will be used in those days for storing and playing music. We’ll have nice walks in the evening. You know I am not a morning person. I’ll spend a lot of time on net with my blog or other sites. Read a lot of books. Maybe join some photography class. Have a simple little life. I am all set.

Grandkids.. I will love to spend time with them too. Will be the coolest Granny in town.

So how do you plan your old age life?

Below is a list of employers that have announced significant changes to their defined benefit pension plans this year according to Pension Rights Center. Changes include plan terminations, plan freezes for new and/or current employees, and changes to the formula by which pension benefits are calculated.

Note: this is not a comprehensive list. These are only the changes that Pension Rights Center are aware of, based on corporate press releases, news reports and other sources. This list does not include changes that have been made through the collective-bargaining process.

Source: Pension Rights Center

SMC

Insurance Broking :

SMC provides insurance broking services for both life and general insurance.

SMC believes that ‘a transaction is for a moment, but a relationship is forever’.Hence it gives all transactions equal importance and strives to offer its esteemed clientele an unmatched service.

SMC is licensed as a Direct Insurance Broker with Insurance Regulatory and Development Authority (IRDA) for providing a wide array of insurance services under professional guidance by experienced and experts of the field.

SMC is authorized to offer all types of insurance products, insurance consultancy besides risk assessment and policy servicing for all life and general insurance companies in India.

* Insurance solutions for both life and general Insurance

* Honesty, Transparency , Fairness and Customer care upheld in every transaction

* Product customization to meet client’s requirements

* Ability to quote quickly and efficiently

* Personalized solution and attention offered to each client

* Insurance product products of all the insurance provides under one umbrella

* Ability to settle Claims Quickly

SMC understands the needs of its clients and meet their requirements on a pre-agreed basis within well defined time frames and quality assurance. SMC Global Offers :

Insurance Product (LIFE)

Individual Products

* Terms Insurance

* Key Man Insurance

* Unit Linked Investment Plans(ULIP)

* Endowment Plans

* Pension Plans

* Child Plans

Group Products

* Terms Insurance

* Gratuity Plans

* Super Annuation plans

* EDLI (Employees Deposit Linked Insurance)

* Leave Encashment Policies

Insurance Product (GENERAL)

* Motor Insurance

* Mediclaim (individual, group, overseas)

* Personal Cover

* Safeguard against fire hazard (office/shop/factory/godown/ house)

* Household Insurance (furniture, jewellery, electronics etc.)

* Protection against burglary & house breaking

* Office Umbrella

* Marine Insurance ( inland & overseas)

* Professional Indemnity

* Baggage Insurance

* Aviation hulk & loss of license

An Often Overlooked Issue!

Professor von Braun
The Rocket School of Economics

May 22^nd, 2009.

What I have referred to before in earlier articles as the great credit contraction is now well and truly underway. The credit expansion period is over and what we are seeing now is the effects of what happens when a fiat monetary system reaches the limits of its ability to both inflate the value of non productive assets and defer settlement, via the ongoing renewal of existing debt.

Attempts by governments and central banks to reinflate declining asset prices via large infusions of psuedo capital into the banking system so that the issuing of credit can be ‘kick started’ are doomed to fail.

House prices will continue to decline, unemployment will rise, tax revenues will decline further, government debt levels will continue to rise and peoples net worth will also decline. This is a given!

This is what happens when you get a major credit contraction. In simple terms it is like the tide going out prior to the tsunami coming in.

Since a monetary debacle of this size has not been seen before, there is nothing to compare it with, for not even the depression of the 1930’s comes close. Then people still had savings and the US $ was, until late 1933, pegged to gold at $20.67 per ounce.

Today all debts are now due, since the banking system can no longer lend its way out of its own dilemma and this is what needs to be clearly understood by investors. The dollar is a liability and as such being in cash is also a liability. Government securities are also liabilities but the issue of liabilities versus real assets is more widespread than that.

The precious metals are not a liability and ownership of them is a very wise move given the uncertainty surrounding everything else that is happening. We have seen calls by some market analysts for the Dow to be at 400, 600 and ‘under a 1000.’ What does that mean you may well ask?

It means that you have a collapsed banking system along with massive unemployment and no cashflow of any consequence being generated within the system itself. What will happen to brokerage houses if you have the Dow at 400? What will stock exchanges look like if there is a collapse through to these levels? How will capital be raised when there is no capital left?

Cashflow during the credit expansion period was ‘created’ by the banks themselves via home equity lines, credit cards, and a series of market bubbles. Productivity, which should have been the benchmark by which to measure cashflow went off to all sorts of different places such as Asia, India, China and now we have a situation that the holders of US dollar denominated ‘reserves’ are located outside the US. There is little by way of actual ‘reserves’ within the US itself, hence the need to issue more debt.

In addition money that has been spent within in the US by its residents has mostly been spent on items that have little, if any, appreciative value. On the contrary electronic gadgets tend to depreciate, as do autos, as do fridges, freezers, washing machines and dryers. The real estate bubble has now clearly demonstrated that house prices can and do decline. Those who have been saving for their retirement are in a double bind, since in most cases what they believed was assets are now being seen as liabilities. That second house purchase is now a liability and even the primary residence is, in many cases, under water.

The root cause of all of this is the banking system itself and its mismanagement, with some not so little help from both Congress and the Senate, along with the failure of the deregulation of the systems put in place during the 1930’s to stop this from happening. There still seems to be a complete lack of understanding of what the problem actually is, which is clearly demonstrated by the attempts so far to fix the banking systems dilemma.

The often overlooked issue is CASHFLOW! Where is your income going to come from now that the capital gains machine is broken? Even if you are sitting in cash and own high quality government securities (whatever they are), with a 3% return, what can you buy into that can offer a cashflow that is reasonably safe and secure?

What is going to be left to buy when the music stops, when Mr. Fiat finally succumbs to Alzheimer’s disease and you are left holding his empty bag of promises to pay?

Anything that has debt attached to it is a liability that won’t go away. Any sector that is dependant on people spending money on goods or entertainment that provides revenue to service their debt has a problem and all aspects of the economy are at risk. Real estate, both residential and commercial, travel & leisure, retailing, the auto industry, even the medical profession will be facing lower revenues. The economy is not something that can be easily isolated into safe & unsafe sectors as it is all interconnected via the banking system which can no longer inflate the value of the underlying assets, regardless of what they are.

The example given by President Roosevelt’s revaluing of gold in 1934 is of interest and contains pointers to the issue of cashflow. Small mining operations sprung up in many parts of the US. The reworking of tailings dumps from previous operations became common and with the increase in price gold mining became one of the few sources of consistent cashflow. Employment for miners was assured and towns that were close to producing mines did not nearly suffer the downturns and bank closures of areas that were not.

The production of gold is as close to guaranteed cashflow as you can get, even if gold is confiscated and a new ‘official’ price created, the gold that is being mined does have to be purchased and paid for by somebody. Will there be a resurgence of small privately owned gold mines?

Very few have understood the predicament the banking industry is in. The banks have been in the business of asset inflation and for a while it seemed to be working. But when it became the only game in town, everybody joined in and the ability to keep a lid on the issuance of debt was lost. Productivity was forgotten about as the technological advances gave people access to what appeared to be the goods, but was nothing other than an image.

The need for savings was ignored and now we have a compounding to the downside as assets continue lose their value. Ownership of debt is now being seen for what it is, something that can become problematic very quickly. Investors with capital are few and far between and assets that have strong cashflow potential are also few and far between.

The coming cashflow shortage will affect all entities from the Federal Government, to the states, the counties, pension plans, investors and homeowners alike.

A G.M. plant in Kansas City, Kan. A government takeover of an industry’s retiree obligations could imperil the tradition of company pensions.

__________

Full article and photo: http://www.nytimes.com/2009/04/24/business/24pensions.html?hpw

CorporateCounsel.Net blog warns that pension assets may be another shoe to drop…surprise, they’re underfunded!

One item to be closely watched in the annual reports being filed now is how the pension liabilities of companies are faring. For example, this recent report states that among the 100 largest corporate pensions, they suffered asset losses of $49 billion – partially offset by declines of $26 billion in liabilities due to changing the discount rates used to calculate the amount of the liabilities. The report notes that the funded status of these plans has fallen by 22% over the past twelve months, a decrease in funded status of $308 billion.

* GM in talks over bailout plan as it reveals $31bn losses (Scott Reid, The Scotsman)

The grim results came as GM chief executive Rick Wagoner and other executives met members of the car industry task force headed by US Treasury secretary Timothy Geithner and White House economic adviser Larry Summers.

* Official: Budget projects $1.75 trillion deficit (Martin Crutsinger)

President Barack Obama is sending Congress a budget that would boost taxes on the wealthy and slash Medicare to make way for a $634 billion down payment on universal health care.Obama’s first budget predicts the deficit for this year will soar to a whopping $1.75 trillion, reflecting spending to pull the nation out of recession. The numbers come from administration officials who spoke on…

* Conn. town sues companies after losing pension money in alleged Madoff fraud

FAIRFIELD, Conn. – Fairfield officials have filed a lawsuit against two companies after losing $42 million in municipal pension money invested with the disgraced New York financier Bernard Madoff.

* My Year in Hell (Kiplinger’s Personal Finance)

“I am losing so much money,” one of my hedge-fund clients told me recently. “You are doing a terrible job. Why should I pay you to lose so much of my money?” The call seemed like a bad dream, but it was all too real. After apologizing to my disconsolate client, who clearly had one foot out the door, I asked her to give me two more months to demonstrate the investment prowess I used to have — b…

* World Markets Remain On Shaky Ground (CBS News)

World Markets Remain On Shaky Ground Lack Of Details On Possible Nationalization Of U.S. Banks Rattles Overseas Investors

* GM posts deep loss, auditors may question viability (Kevin Krolicki, Reuters America)

DETROIT (Reuters) – General Motors Corp posted a loss of nearly $31 billion on Thursday for 2008 and said its auditors were likely to cast doubt on its viability as it seeks an expanded federal bailout to stay afloat.

* French banks finalise merger deal (BBC News)

Two loss-making French banks, Banque Populaire and Caisse d’Epargne, have finalised details of their merger deal, which was announced last October.

* Madoff 101: Total Immersion for Lawyers (Money)

NEW YORK (Fortune) — If you think you dodged the Madoff bullet, can you really be sure? Say, for instance, you briefly invested five years ago in a fund, and that fund in turn invested in a fund-of-funds that invested in a feeder fund that invested with Madoff. Could the Madoff trustee knock on your door and demand that you return any profits?

* Hedges That Didn’t Get Hosed (David Landis, Kiplinger’s Personal Finance)

Hedge funds took a bath in 2008. But some low-cost mutual funds that use hedging techniques turned in respectable performances. None of the funds, which promise to limit losses during severe bear markets, made money, but most did better than Standard & Poor’s 500-stock index, which surrendered 37%.

* NJ dumps three hedge funds as values tank (Philadelphia Inquirer)

New Jersey, whose former $80 billion+ pension system has shrunk to $59 billion, was one of the last big pension plans to start buying hedge funds, over the initial objections of public employee unions, Republicans, and some veterans of the state investment staff.

How many times in a year you sit back and look at the year gone by. How many times do we think of the comforts we are living in? How many times in a year we think about our lifestyles after 30 years. Do we ever imagine how it would be or how we want it to be? For small facets of life, small happiness of life like shopping for the kids, buying a jewelery set for your wife or sending your parents for a holiday package to the lifes’ harshness like an open heart surgery of your father to hospitalization to your wife, a regular inflow of money other from monthly income is important. To enjoy the present and to be prepared for the future one needs a retirement plan which ensures a regular inflow of income.

Retirement Plans or Retirement Pension Plans are the ones which ensure a lifestyle after retirement somewhat similar to one you are living at present. A retirement insurance plan ensures that the milkman comes to your door everyday, your car has a full tank and regular service check, your grandchildren are loaded with gifts and most importantly, you don’t have to depend upon your children for daily and special needs. It ensures that you and your spouse remain the head of the family, with their heads held high, as are today!

An appropriate retirement plan ensures that sun shines and the flowers bloom with their full glow in your home after retirement. The only thing you need to do is to take a retirement plan at the correct time with adequate cover. So, if you are in the later half of your 30s’, it’s the best time to take the insurance cover.

An appropriate retirement pension plan would be in which you could invest in Lifestyle Fund ( which ensures maintenance of your lifestyle), gives you risk cover including rebalancing of premiums option, switching option where you can switch from one policy to another as per the changing times and gives you the partial withdrawal option. In addition to this, it should also give you the basic insurance policy options like surrender and death insurance value which are the most important parts of any policy.

So, to be assured that your life remains the way it is even after retirement, get a retirement policy today.

PPF account, NSS Schemes, Gold Bonds, 5 year Bonds are some of the common terms every working person knows. Everyone, whether he is a businessman or a working class man, does deposits some amount of money for his and his familys’ welfare. But, after these all are short duration source of income. For the life after retirement, one needs something which gives a regular monthly income – a retirement plan which ensures a lifestyle as normal as before retirement. For this you should opt for a pension plan which upholds your life even after retirement. Pension Plans, linked with insurance plans are the safest best. Life Insurance Pension Plans offered by various Life Insurance companies serve a three – fold purpose – they give a secured life after retirement, give a life cover to your spouse even when you are not there and give you the tax benefit at the time when you are working. Retirement Pension Plans are the best when they are invested in, in time. The best time to invest in Pension Plans is when you are in your 30s’. At this time, you don’t have many liabilities and so can easily afford a well suited, customized pension plan. For taking the pension plan, call the life Advisor of a reputed Life Insurance Company, choose your risks, calculate your premium counting the next 10 years, count on the benefits and then choose a Pension Plan which suits you best…

I’m pretty well off relative to most people and now I’m starting to doubt my ability to retire, so I can’t even imagine how the people of lesser means will ever make it. We are being hit from all sides, and scratch the surface just a little, and you’ll find some greedy bastard at the top of nearly every major corporation picking your pocket in any number of ways.

Many of us were counting on the value of our real estate to add that extra cushion, now real-estate is circling the drain and taking our life savings with it. We invested in stocks, they’ve plummeted and weren’t paying off all that well to begin with. Somewhere along the line we were all being sold on the idea that stocks didn’t need to pay much in the way of dividends, our profit would come from increased stock prices. It wasn’t always that way. Once upon a time investing in the stock market was about investing in business and receiving profits every quarter, now even the most profitable companies pay marginal dividends. The stock market is nothing more than a casino.

We were sold on the idea of investing for the long term which seemed reasonable, but we were never told that the long term really meant forever, never taking anything out, only investing more and more. Most 401K retirement plans haven’t performed well at all, many lost money even before the inevitable meltdown of the stock market in September of 2008. As I say, we’re being hit from all sides. The guys at the top of nearly every company in which your stocks were invested and the ones at the tops of the companies that managed those investments were raking in tens of millions of dollars a year as they did everything in their power to screw their employees, to loot the companies, and screw the shareholders other than themselves. They all seemed to work on the belief that they’d be able to inflate the stock price just prior to them cashing out and leaving everyone else holding the bag, and many did.

The fiascos at Enron, Tyco, WorldCom, United Airlines and hundreds of other companies are proof that this was and is the CEO culture. The collapse of Wall Street is further evidence. The raiding of pensions and the new culture of using the bankruptcy courts as a business strategy to screw pension plans and reward CEOs and upper management at the same time is now considered prudent business by those running the show. Nearly 40 million people that saved for retirement are now being told that retirement will never come, they’ll have to work till their dying day or live in poverty for their final years. 40 million people!  Also, nearly half of all employee’s haven’t saved anything for retirement, nothing at all, they’re counting on Social Security for everything at a time when Social Security is just about broke. The current financial crisis will most likely never end, instead, as this particular financial mess tappers off, people that weren’t devastated by the failing stock market, by job layoffs, and a foreclosure on their home will be forced to sell their homes just to survive, again flooding the real-estate market with tens of millions of homes for which there will be few buyers. This will drive prices down further, will shake the stock market all over again, and lead to more job layoffs and closed factories. It didn’t have to be this way but the guys at the tops of our corporate institutions with the help of immense staffs of richly rewarded lawyers and politicians have set the wheels in motion to bankrupt the entire economy as they pocket whatever they can while there is still something to grab. Add to that, the health insurance industry is now at war with the public; taking and ever growing share of families’ incomes for something that nobody considers optional while demonstrating just how impotent our nations leaders are. If you don’t think that the industry is at war with the public, consider that Aetna just decided to jettison 600,000 clients that they don’t deem profitable enough; leaving many of them without the possibility of any insurance with some other company. This is an assault on small businesses, individuals, and the economy. People without insurance impact the cost to the rest of us and make it even more difficult for people to save for retirement.

In the 2002 bankruptcy of United Airlines, the president and CEO Glenn Tilton started his bankruptcy scheme by ensuring that his compensation and his $4.5 million pension was separated from all other UA pension plans and made his sacrosanct. The upper management was actually paid $400 million in bonuses to ensure they stayed on through the bankruptcy they caused. Next, he hired a team of several hundred high priced lawyers to figure out how to gut the retirement system, and in return for collective paychecks of somewhere in the neighborhood of $400 million, they did it. The lawyers, in return for these hefty paychecks, left most United employees sentenced to a lifetime of work without any chance of a reasonable retirement. Employees were forced to accept $3.3 billion in cuts in their own pay, health care and other benefits. Once the concessions were made, United then attacked the pension plan which the company had failed to properly fund and dumped the whole mess on the Pension Benefit Guarantee Corporation, essentially a public pension plan insurer. According to one report, 18,000 corporations have underfunded their retirement plans and at best are underfunded by $450 billion dollars, essentially implying that the American taxpayer will be left holding the bag and retirees will receive pennies on their retirement dollars.

Bankruptcy is now seen as a strategic tool in allowing poorly run corporations to game the bankruptcy laws and screw employees and the pension plans promised to them. These laws were written by a congress that had the interests of the banks and corporations in mind, not the lowly worker. The bankruptcy code allows corporations and their lawyers to prioritize debts, moving employees and pension plans to the bottom and moving banks to the top. What this means is that banks and management won’t lose a dime and employees will take the full hit from the mismanagement of the company and the pension plans. Banks don’t just get their money back, they get the full interest and enormous fees, hundreds of billions in fees and hundreds of billions in interest payments. These failed companies have people walking away with billions while the employees walk away with empty pockets. How these guys sleep at night is beyond me.

I’ve said it before, but what these guys are doing is as close treason as any domestic terrorist and with people such as those leading our corporations and the government, the future looks bleak and most crystal balls can only see dark clouds.

To make matters worse, people involved with 401K pension plans are required to manage their own accounts and make decisions about investing for which they are wholly unqualified and most get screwed by their own decisions. Layer on top of that, financial planners that steer their clients into investments that come laden with hefty sales loads that benefit the planner and penalize the investor and most will watch their investments grow far too slowly to even counteract inflation let alone grow enough to fund 20 to 30 years of retirement. On top of that, as more and more people fall on hard times, they raid their retirement accounts well in advance of retirement just to survive, suffering a 10% tax hit right off the bat and leaving their future even more bleak. Screwed again!

The bottom line on all this is that the vast majority of retirees will rely on Social Security with little or nothing else to help them pay their bills. A smaller workforce will be required to fund Social Security, those new contributions being used to pay benefits with nothing left to fund the future retirement of those paying into the system. In any other form, such a system is illegal, it’s called a ponzi scheme, the same thing Bernie Maddoff did to screw his impressive list of suckers.

Most people have been led to believe living longer was a good thing, perhaps not if most of us are living at or near poverty. So, we’ll be living longer with less money and less hope for an improvement in our condition, could it be worse? Sure, since we’ll likely see massive inflation as a direct result of the massive unfunded government spending currently underway to prop up the economy devastated by what some have dubbed the power elite. Now we’ll be living longer, living less well, and paying more for everything.

We are hanging a great deal of hope on re-inventing the country’s energy infrastructure to reinvigorate the economy and perhaps make retirement possible. and I sincerely hope that it does. The plan outlined in Profitable Renewable Energy:It Can be Done is my vision on how to make this happen without bankrupting the U.S. government, we can only hope it gains enough support.

Hello, my name is Suzanne Lavigne and this is my opinion…

As 2008 winds down we as entrepreneurs, need to focus on building a strong foundation for our home-based business in 2009, which soon will be upon us.  There are discussions in every household around the world about the changes that will be taking place, globally, locally and in all of our homes.  As people are preparing for what might be the worst economic times that we have faced in some time they are searching for a way to lessen that impact personally.

No longer should we take for granted that our parents and maybe even grandparents will be fine when everyone else struggles.  Those that were born between 1925 to 1945 (the Silent Generation they are called) started out their life with many trials and tribulations.  Between the Great Depression and a World War their numbers are few.  As that generation grew and started to become self-sufficient there were many jobs to be found.  “They were probably luckier than the baby boom,” states David Foot, author of Boom, Bust and Echo.  “They entered the job market in the 1950’s were promoted quickly, they did better than they ever expected to do and they’re the ones who are probably the richest people in the country.” They did exactly what was expected of them just like the generation before them.  “They were conservative, hard-working and they lived well below their means.  They were not big spenders and did not run up trillion dollars of credit card debt,” states Ken Gronbach author of the Age Curve: How to Profit from the Coming Demographic Storm. This silent generation saved more and accumulated less debt.  The future was supposed to be bright.

Fast forward to 2008, the markets are falling, pension plans are crumbling, the years that were supposed to be golden just do not look so bright anymore.  Those that were born in 1938 have to start their mandated withdrawals from their retirement funds in 2009.  Due to the market collapse this past fall the majority of seniors are finding that they have lost 45 – 50 % of their retirement fund.  What was meant to be a nest egg large enough to outlive them and allow these folks to live comfortably now looks like a broken dream.  “These people have no recovery” Mr. Gronbach said. “Depending on how long they live, they’re going to have an interesting 10 – 15 years.”

Some will take what comes and hope for the best, some will sit quietly not wanting to burden their children and grandchildren but others have already started to actively look for another income to help offset their investment loss.

This Christmas and into the New Year we have to remember these people, do not be afraid to approach them and offer our business to them so they have a means to live out their life the way they originally thought that they would be doing, with financial stability.

These people raised us, taught us right from wrong, and helped us when we were down.  Now is the time to repay that favor, offer a helping hand, encouraging words and insight into today’s marketplace.

Suzanne Lavigne is an Entrepreneur and a successful internet marketer. She believes that everyone can enjoy business success with the right gameplan and the right mentor. She enjoys helping others to live the life of their dreams.