Financial News

[southsider2k5]

Pension funds aren't investment funds that receive money and invest them? Huh?

 

I pointed this out yesterday but I'll point it out again now. In the period 1970-2010, Pension funds averaged returns of about 8%. If you look at the period 2007-2010 alone, they returned about 0.5%.

 

They're underfunded now because the economy and the markets have yet to recover to 2007 boom levels. That of course does not mean that there are other problems, but saying that they are underfunded now is exactly the same as saying that your 401k is underfunded now because it hasn't made up the dent from the 2008 implosion.

 

If they aren't funded, they aren't receiving money.

[Balta1701]

And for some happy news, Dollar is up big today, Crude is trading an 80 handle, and gas futures are down nearly 20 cents a gallon.

Actually, for once that is good news, I'm planning a ****load of driving in 2 weeks.

[Balta1701]

If they aren't funded, they aren't receiving money.

I give up on this one.

[southsider2k5]

Actually, for once that is good news, I'm planning a ****load of driving in 2 weeks.

 

You won't see that reflected at the pumps for a while, but the prices should be falling anyways as prices have been on a pretty steady decline for the few weeks anyway. I saw $3.55 when I left this morning.

 

[Balta1701]

You won't see that reflected at the pumps for a while, but the prices should be falling anyways as prices have been on a pretty steady decline for the few weeks anyway. I saw $3.55 when I left this morning.

If it was going up though, we'd see the increase reflected immediately, so I'll be content with the dropping.

[NorthSideSox72]

You won't see that reflected at the pumps for a while, but the prices should be falling anyways as prices have been on a pretty steady decline for the few weeks anyway. I saw $3.55 when I left this morning.

I haven't seen a price that low in a while. Still around $3.90-ish in my area.

 

[southsider2k5]

If it was going up though, we'd see the increase reflected immediately, so I'll be content with the dropping.

 

Unless it was something earth-shattering, it still takes about a week for the big ones to move through to retail. It is still shorter than it takes the drops though.

 

Still it would be nice to see a two handle again.

[Balta1701]

Ah, this is why oil plummeted.

The U.S. Department of Energy said it will release 30 million barrels of oil from the Strategic National Reserve to alleviate Libyan oil supply disruptions, in the midst of already-plummeting oil prices.

 

The U.S. release is part of a 60 million barrel increase in supply announced Thursday by the International Energy Agency, which includes the U.S. as one of its 28 member nations, "in response to the ongoing disruption of oil supplies from Libya."

 

The U.S. Energy Department said the reserve is at the "historically high level" of 727 million barrels.

Personally, I have no idea why you'd do this now and not 3-4 months ago when we first started bombing Libya.

[southsider2k5]

Ah, this is why oil plummeted.

Personally, I have no idea why you'd do this now and not 3-4 months ago when we first started bombing Libya.

 

Yeah, this should have been done right after OPECs mini-meltdown at their last meeting.

[Jenksismyhero]

Yeah, this should have been done right after OPECs mini-meltdown at their last meeting.

 

why isn't this done on a regular basis? Once every 6 months, or once a year, etc?

[southsider2k5]

why isn't this done on a regular basis? Once every 6 months, or once a year, etc?

 

Release from the strategic reserve or OPEC meetings? The OPEC meetings do happen regularly.

[Jenksismyhero]

Release from the strategic reserve or OPEC meetings? The OPEC meetings do happen regularly.

 

No I mean the release of a small percent of our reserves.

[southsider2k5]

No I mean the release of a small percent of our reserves.

 

It is meant to be for emergencies. It was founded in response to the OPEC embargo in the 70's to try to mitigate any major supply disruptions that could happen. Anymore it has turned into a symbolic political tool that has no real impact on the markets. The 30 million barrel release is equal to what OPEC produces in one day.

[southsider2k5]

It is meant to be for emergencies. It was founded in response to the OPEC embargo in the 70's to try to mitigate any major supply disruptions that could happen. Anymore it has turned into a symbolic political tool that has no real impact on the markets. The 30 million barrel release is equal to what OPEC produces in one day.

 

Looking at the totals on-line, if we released the entire reserve, we could replaces OPEC product for about 25 days.

[southsider2k5]

I didn't realize this was coordinated with 27 other nations for a total of about 60 million barrels. Interesting.

 

http://www.ibtimes.com/articles/168476/201...ic-reserves.htm

[Jenksismyhero]

I didn't realize this was coordinated with 27 other nations for a total of about 60 million barrels. Interesting.

 

http://www.ibtimes.com/articles/168476/201...ic-reserves.htm

 

Right, but if you did this every six months, couldn't you affect prices like it just did? For example when oil prices jump in reaction to world events (like Egypt and Libya)? Or is 60 million barrels not enough to do that?

[southsider2k5]

Right, but if you did this every six months, couldn't you affect prices like it just did? For example when oil prices jump in reaction to world events (like Egypt and Libya)? Or is 60 million barrels not enough to do that?

 

If you did this regularly, you either would run out of reserves, or the price drops related to the releases would be negated by buying oil to refill the reserves to release again later.

[Jenksismyhero]

If you did this regularly, you either would run out of reserves, or the price drops related to the releases would be negated by buying oil to refill the reserves to release again later.

 

I guess i'm assuming that we have some set rate of reserving incoming oil (since we got 700 something million laying around), so that in every 6 month or a year period (make it sporadic) you're gaining most of it back. But yeah, obviously you couldn't do this consistently for an extended period without running out pretty quickly.

[southsider2k5]

I guess i'm assuming that we have some set rate of reserving incoming oil (since we got 700 something million laying around), so that in every 6 month or a year period (make it sporadic) you're gaining most of it back. But yeah, obviously you couldn't do this consistently for an extended period without running out pretty quickly.

 

The other factor would be if you did it regularly the market would just price in the expected release. The fact that it was a complete surprise is what destroyed the commodities prices this morning.

[Balta1701]

Looking at the totals on-line, if we released the entire reserve, we could replaces OPEC product for about 25 days.

"All of OPEC production" or "OPEC imports to the U.S."?

[Balta1701]

The other factor would be if you did it regularly the market would just price in the expected release. The fact that it was a complete surprise is what destroyed the commodities prices this morning.

There are a couple possible benefits of that though...in particular, if you had some mechanism where a rapid oil price increase or decrease triggered an SPR response, you might well kill off any speculation-only driven price spikes.

[StrangeSox]

The head of PIMCO is out publicly arguing that anyone who thinks the U.S. ought to be focused on deficit reduction right now needs to come back out of "left field".

He recommends a swift and substantial investment in infrastructure.

 

Bernanke, that dastardly liberal, is again warning against short-term spending cuts.

 

I don't think that sharp, immediate cuts in the deficit would create more jobs. I think in the short run that we're seeing already a certain amount of fiscal drag coming from state and local governments from the withdrawal of previous federal stimulus, so I think in the short run, you know, the fiscal tightening is at best neutral and probably somewhat negative for job creation.

 

OTOH Republicans have managed to convince 55% of Americans that spending cuts and tax cuts will magik up some growth despite all sorts of economists, left & right, saying that implementing Republican economic mythology would have disastrous results.

[StrangeSox]

Staggering and pervasive ignorance of what's actually in the federal budget may be why a majority of Americans think we can slice and dice our way out of problems.

 

With Washington tied in knots over the budget deficit, pollsters lately have been trying to get a sense of exactly where voters stand on the issue. What they’re finding would not be terribly helpful to those trying to solve the problem.

 

That’s because many Americans’ perception of how federal spending is divvied up is just plain wrong. In fact, if their answers about the federal budget were even close to correct, slashing the deficit would be a breeze.

 

In a recent CNN-Opinion Research survey, 30 percent of the respondents guessed that a fifth or more of the budget goes for foreign humanitarian and development aid. The real figure is closer to six-tenths of 1 percent.

 

In a Bloomberg survey, 70 percent said cutting foreign aid would make a large dent in the deficit. Fewer than half said the same about cutting Medicare.

 

About 22 percent of the respondents, when surveyed, thought the Corporation for Public Broadcasting consumes more than a tenth of the budget. The reality is closer to a hundredth of a percent.....

 

At a time when the deficit is driving every debate in Washington, the fiscal intelligence of the citizenry is troubling but not surprising to experts on public opinion. Mostly, pollsters say, people are in a state of confusion on a broad variety of issues.

 

It isn’t that they don’t care. Between 80 percent and 90 percent of those responding in most surveys see the deficit as a “major problem.” It’s that they don’t know....

 

Failed quizzes about the budget only scratch the surface. Research demonstrates fundamental misunderstandings across the spectrum about across the spectrum about government, about which level of government does what and which official is accountable for what. Presidents get blamed for local problems, mayors for national problems. Incumbent office holders can even get a boost on voting day if their local team wins a major championship just prior to an election.

 

This ignorance creates a vacuum that politicians and activists are all too happy to fill — with their own spin.

[NorthSideSox72]

Staggering and pervasive ignorance of what's actually in the federal budget may be why a majority of Americans think we can slice and dice our way out of problems.

That's depressing.

 

[bmags]

That's depressing.

There was an article, unfortunately, also showing that a tax payer receipt did little to change their opinions.