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jerryking : roger_lowenstein   7

The Long, Sorry Tale of Pension Promises - WSJ.com
September 20, 2013 | WSJ | By ROGER LOWENSTEIN

The Long, Sorry Tale of Pension Promises
How did states and cities get into this mess? It's a simple case of human frailty; where to go from here

Pension benefits aren't paid out of thin air; sponsors are supposed to set aside a sum of money proportional to the benefits that will eventually come due. If the money is invested prudently, the fund will have enough assets to meet its obligations.

Here's the rub: While Studebaker was nominally increasing benefits, it hadn't the slightest hope of making the requisite contributions. The "increases" were a fiction, but when you have no cash, promising future benefits is the best you can do, whereas raising salaries is out of the question. The United Auto Workers was complicit in this fiction. Union officials reckoned that it was better to tell the members they had won an "increase" rather than to admit that their employer was going bust.....Public pensions—and here we come back to our current straits—replicated this behavior. Cops, firefighters and teachers had pensions well before most private-sector workers, but benefits weren't so high as to cause a problem, since government employers unilaterally set benefit levels (as well as salaries) without resorting to anything as unpleasant as collective bargaining....Before we get more Detroits, or more Studebakers, the federal government should enact an Erisa (with teeth) for public employers. More simply, it could announce that local governments that fail to make timely and adequate contributions to their pension plans would lose the right to sell bonds on a tax-free basis. That would get their attention.

The point isn't to punish public retirees. The point is that, when governments make contractual promises, they ought to fund them.
pension_funds  Roger_Lowenstein  liabilities  human_frailties  unions  public_sector  public_servants  public_pensions 
september 2013 by jerryking
In the Insider Trading War, Market-Beaters Beware - NYTimes.com
Sep 22, 2011 |NYT|ROGER LOWENSTEIN.A problem with the SEC’s
focusing on high-return funds is that it skates over the crucial
distinction between short- & LT investing. Some of the 8,000+ hedge
funds in the US are engaged in rapid-fire trading —trying to outguess
the competition w.r.t disclosures that’ll become public in a week.Some
are obsessed with trying to outguess Wall Street “whisper
numbers”.Absent tips regarding forthcoming news, their managers have no
value added/edge. For investors working longer horizons the picture is
different.Skillful, L.T. investors can make $ without tips, by analyzing
info. that’s already public...Society has an interest in genuine
research (e.g. whether GOOG will be a more dominant biz.)...Hedge fund
hypertrading doesn’t add to economic output--it ratchets up mkt.
volatility...A marked increase in volatility complicates the SEC’s
job...the payoff for trading on insider tips rises as well.Ferreting out
the prescient & the crooked becomes more important.
insider_trading  insider_information  SEC  Roger_Lowenstein  white-collar_crime  Wall_Street  hedge_funds  SAC_Capital  volatility  long-term  investing  personal_payoffs 
september 2011 by jerryking
When Latte Lost Its Luster
MARCH 29, 2011 | WSJ | By ROGER LOWENSTEIN. Oh, no—the aroma
from Starbucks's profitable breakfast sandwiches was masking the java's
ambrosial bouquet....Onward

By Howard Schultz
Rodale, 350 pages, $25.99
Roger_Lowenstein  Howard_Schultz  Starbucks  coffee  book_reviews 
april 2011 by jerryking
Chronicling Wall Street’s collapse: three gripping and useful takes
Jun. 11, 2010 | The Globe and Mail | HARVEY SCHACHTER. Reviews
13 Bankers, By Simon Johnson and James Kwak,
Pantheon, 304 pages, $32.; The End Of Wall Street, By Roger Lowenstein,
The Penguin Press, 339 pages, $35; The Big Short, By Michael Lewis,,
Norton, 266 pages, $35.
books  book_reviews  economic_downturn  Harvey_Schachter  Roger_Lowenstein  Michael_Lewis  Wall_Street  investment_banking 
june 2010 by jerryking

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