There is a hidden monster off corporate balance sheets that is not being discussed yet, even by the most disgusting bears.
Unfunded pension liabilities.
Due to the recent market drop, healthcare and unfunded pensions now stand at around $500 billion, significantly higher than even the 2008 lows. That equates to $1.50 in earnings, for the S&P, next year. Should the market continue lower, there will be serious consequences that will fuck up and destroy a plethora of organizations. Remember, insurance firms are not the only companies that invest in stocks. The big pension plans at GM, F or GE invest billions and have been raped, due to the absence of risk free yield. Since rates are at 0%, pension funds were forced to take on more risk. As a result, they are now albatrosses around the necks of dozens of corporations.
So, that $2 trilly in sideline cash isn’t exactly a net net number, if you know what I mean.
I will highlight some real risk names for potential short sale, whenever the fuck I get in the mood to short.
For now, I spit in the face of S&P and welcome any and all to “GET IN THE HOLE,” ahead the gentleman Ben. Thanks to today’s 5.5% gain, I am now up north of 7% for the year.
NOTE: iBC’s web redesign is pending.
Related: The State of California admits to a $1 trillion pension liability.
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Discussed this tonight. In a “the market is looking to rape you” hypothetical manner – does the anticipation of printing make us trade down if bernanke make its rain and conversely does no printing make the market stabilize and find legs.
“provocative”-mitch hedberg
Throw in the unfunded pension liabilities of the public sector, federal, state and localities, and the unfunded Social Security and Medicare costs . . . ho boy!
http://www.usdebtclock.org
As for the Hole, everyone out there wants the Fed and Pres/Legislative to stop, and thats yhe way Europe is handeling it, but no one seems to like that. Which is it? Hands on or hands off. Can’t be both.
…been discussing it plenty at my house.
We have family meetings to discuss unfunded pension liabilities…
The Bernanke and his friends will push the market higher somehow, for this very reason– to keep unfunded pensions from strangling what is left of U.S. companies. It’s possible we get another low in Sept. or Oct., but after that I expect it’s off to the races.
Meh, hit their pensions or hit their grocery, utility and gasoline bills? There’s no free way out here.
Groceries are hedged with food stamps.
Fed sides with pensions every single time.
FUCK HIG
By the look of the futures it looks like the machines are still in control. They sure did a good job today to fuck you into buying though!!! Fucked the shorts into covering and fucked new buyers into initiating positions.
……hmmmmm???
– still a daytrader’s market until proven otherwise.
Futs don’t mean shit. You know that.
True. Yet lots of folks act like they do mean something.
I don’t know why there are so many market superstitions that could easily be disspelled by just observing. You would think these folks had never looked at the futs before, and then looked at the market the next day going hundreds of points higher or lower than the futs were the night before.
Fly,
Is this your plea to the Chairman to ram through QE3? Perhaps, though, a plea doesn’t need to be made.
I tend to agree with many that we’re already easing our way into QE3 vis a vis commitment to lower interest rates and expected reinvestment of short term securities for longer term ones. In other words, you’re pretty much guaranteed to see the 10-year worth nothing, making GLD, SLV and SPY all attractive as shit.
If you go back and watch the 60 minutes interview that Ben Bernanke did last year in slow motion. You will notice that one of his computer screens showed the iBC homepage.
Coincidence? Nope.
Ben reads this blog daily.
Thanks Fly for bringing this pension funding issue to his attention.
Read a great article about the unfunded pension issue about this time last year. I wish I could dig it back up because it had a pretty extensive list of companies in deep shit.
This is a fact: the Fed will do everything is can to support asset prices, specifically stocks.
Even $SODA and $OPEN?
Agreed, Bernanke has stated that rising stock markets help the economy by making corporations and consumers feel good, but I just don’t see them announcing anything dramatic enough on Friday to reverse the negative psychology. First, I believe they will wait to see if things worsen before using up what limited ammo Bernanke has left. Second, there is the threat that the Fed’s actions could spark another round of speculative buying in commodities that once again drives up oil and food prices, among other things. Third, there is tons of anti-Fed political rhetoric coming from the Tea Party which could tie Bernanke’s hands in terms of doing something shocking.
It will take a significant worsening before the Fed will do something dramatic enough to appease Mr. Market–such as further 20% drop in the markets–at which point anything is on the table including the maniac Bernanke outright purchasing stocks and corporate bonds.
The big question (to me) is simply this: At what point does the Fed decide they can’t do anymore without screwing things up even more than they already have? When will other factors outweigh the desire to boost asset prices? Hmmm, maybe never.
Bernanke is a mad man. He built his entire academic career on the merits of asset manipulation using Federal Reserve policy tools to prevent Japanese-style deflation/stagnation–and he will be damned if he doesn’t prove his thesis is correct.
You’re probably right. Way back in the mid 90’s when I was getting my undergrad in economics, I used to get in some heated discussions with my professors over the application of Keynesian dogma. All of these guys really believe that they can just pull a lever and the economy will simply play along.
But when I’d confront them with real life example of Keynesian failures, I’d basically get this answer: It can’t happen here, but if it did, the Fed can just make it rain. And oh yeah, never you mind Japan.
Essentially, I’m of the opinion that the Fed’s true power is it’s illusion of power. They can really only do so much, and the sooner people figure this out, the better off we’ll be in the long run (and yeah maybe we’ll be dead). But there are so many megalomaniac egos at the top of the power structure, it will require near catastrophic failure to induce any real changes.
Great comment!
just for u fly, there r people who trust u. they play ur plays. they dont have a million to lose. they trade there life savings on u . the weight of the world is on ur sholders. so in my eyes u r king , but if ur wrong realise u will take the very people who worship u down.i hope u know this. fuck the ego help who u can, deflate ur head.this is not a rookie mkt , this is for pros only. u c unrest in all of the world and still think things r ok. its not that easy.things dont always go up, its easy on the up side n hard on the down. i hope u think im sayin bad of u but look at whats goin on, the real dealis this is a hard mkt, people can lose.
God damn. You must have done an 8 ball tonight.
2n and a 1/5
quit being a bitch. People should not look to me for investment advice. I am merely blogging with the wind, sharing my experiences. You need to understand, I have enough pressure with managing real money than to have to worry about some fucktard throwing his whole life savings in WNR because I am buying it.
If you cant understand asset allocation, you should not be investing.
my bad what was i thinkin, i only read the blogs, i only see the result. u r better than this.
razorsedge….go away
It’s YOU. Are you so lazy you can’t type two extra letters?
why type do u not understand a man with passion, if i said it to u would it make a difference?
Saying and reading are different things. When every other word is some mish-mash, cutesy, borderline illiterate text messaging abbreviation it makes your posts incomprehensible.
You don’t have to pay by the letter to post here.
im gonna have a samich,,
BANNED!
dont think im sayin bad about u,
WTF Razor? People can lose? People will lose, others will win. It’s a fuckin market Razor. We are all grown ups here, we all know the risks.
I went against the market (and Fly’s advice) last Friday and had a 16 percent day only to have it shoved up my ass today. You listen to Fly, then do what the fuck you want.
I lost money! I trusted Fly! Get the fuck outta here with that lame shit.
u lost money? why r u here, lamo, i made money .. my be good,lol, look at my post, i dont think fly is tryin to lose u money,
u r a retard, u dont understand shit, my point was not to u ,
Yeah, I lost money today. Friday I made a killing. Your post was childish. “The weight of the world is on ur shoulders, you are king, people worship you”. Grow up you kissass wannabe.
“This post is pissing on the worn out PF Flyers of razor.”
p.s. fuck u. why r u here, im not a kiss ass at all, u have a chip on ur sholder. dont point it at me.
Today you coulda taken profits at the opening bell, though, no? Or at least in the second hour?
Yes, and all day yesterday. I was wrong. I blame me. No weight of my world on anyone but me.
Name, I’ll go you one better. A couple weeks ago, Fly not so pleasantly rebuffed a post of mine saying the best tool is mean reversion, he then posted for all, a reference to accepting from a gift horse. In retrospect, I didn’t listen to either nuggets offered me. I am new to this site and trying to learn the PPT to the point that I understand it and am comfortable with it. Until then, I will do the best my brain allows.
I will say that a couple weeks ago when everyone was getting killed, I did very well, but didn’t say a word. Today, stepped on my dick. Be nice, tomorrow it may be your dick.
im sorry , didnt mean to step, everybody is gettin fucked. its easy to blame. u r better than this, we can over come, sorry for my bad judgement aginst u, trade well, lov ur family, im old and set in my ways forgive me.
How old?
Heh heh heh heh heh……
53
Fucking banned!
If you are not HEDGED here … YOU are irresponsible !!!
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Simple as that !!!
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THIS IS A DANGER ZONE !!!
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If you are “IN” this Market … LONG or SHORT … you better have a “protection strategy” !!!
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Now bring on tha thumbs down you fuckin’ clueless degenerates !!!
LOL
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… only referring to tha “plebs” !!!
Certainly no disrespect intended … ‘cept for tha “plebs” !!!
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As it were !!!
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WOW Alf. Real close to a ban there. You can sense the tension between you and I can’t you? THAT’S BECAUSE I AM GOING TO FUCKING MURDER YOU.
At the risk of being redundant … I LOVE YOU, MAN !!!
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That said … I have skin in the game … and I’m speakin’ my heart here !!!
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lol, i give u a thumbs up, cuz im that way, i dont understand ur reff but ,lol
I am LONG here … BUT … I am reasonably protected to the DOWNSIDE !!!
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That is tha point !!!
THIS IS A DANGER ZONE !!!
You MUST protect yourself … yet remain flexible enough to “play tha moves” …
… UP … or … DOWN !!!
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It’ s NOT ABOUT … Bull or Bear … It’s NOT ABOUT … being a “HERO” here !!!
It’s NOT EVEN ABOUT MAKIN’ MONEY HERE !!!
What it IS about is … POSITIONING YOURSELF FOR THE NEXT MOVE …
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Tha Next BIG Move. !!!
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WHY DO YOU POST LIKE YOU HAVE ADHD?
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In The Land Of The Blind … The One Eyed Man Is King !!!
,
Oh !!!
And I might just actually HAVE … ADHD !!!
The wife seems pretty convinced ! fwiw
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What exactly is your point ?
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Good Luck everyone !!!
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Tomorrow could be worrisome !!!
I’m GOLDEN !!!
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Dick
Bullseye that is…
You said that already.
The Fed is in a tough spot. There aren’t many bullets left in the gun so they need to be efficient. I think they hint at a QE3 but wait for tougher times. Europe’s banks need their help and so does BAC.
Ben’s got tough decisions to make.
u read to much, or i read too little, either way we r fucked,
Benanke has many options .. Read his Deflation Speech. He’s about half way through the playbook, and as someone posted above he will do everythibg he can to not go Japanese.
I hate al this “he doesnt have any bullets left” Bull Shit. The question is dies he fire one of Friday or hold back.
ok sp. sorry
im college, i opted out of english, n took shakespeare, it was easy for me.sorry for my spelling erors,3 yrs
Buffalo waived any and all English requirements for me. They said I spoke good enough…
lol me 2
Shakespeare is an English elective, numbnutz.
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yes , but not a formal sence numnutz
university of maryland, lol
Fly, can you please ban this guy?
Fly what do you mean when you say “GET IN THE HOLE”? I’m missing the context. Sounds like you’re banking on further downside if I understand you correctly. I certainly see a bunch of chop & awe but & I’ve been pretty steady buying the lows & selling the rip. Obviously a tuff market & I’m learning more now than I ever have in my Trading experience.
Technically speaking on the short term side, I’m playing the chop. I think we’ll open up lower tomorrow and fade down a bit mid way to shake all the weak hands, beleaguer all the moron longs. But ultimately we close higher than today’s low.
http://i83.photobucket.com/albums/j293/philonofsky/Screenshot2011-08-23at61202PM-1.png
GET IN THE (JACKSON) HOLE.
i often wondered,that even though my pension with the teamsters,a sound union to be sure.makes me queasy thinking about how the central states pension fund is actually doing these last few years.and for the many of years it was controlled by unsavory folks who were in charge of said funds. about 5 years ago,ups stepped in and bought out central states and took over the fund.i have a long ways to go until i can collect, but what the hell will be left of it by the time i step up to the plate,or if i’m even alive. slippery slope indued.
hey that why i opted out of the plumbers union, nuf said,
Contact cement. It’s all so clear now!
eienstine, had to be drivin home he couldnt remember where he lived, he also had many of the same suit, because he said making a choise was a waist of time.
How would one go about changing their Avatar in the PPT?
It will cost you $49.95 for the application and you will be required to be at Jackson hole next Friday with two thongs, a rodent of your choice and a jar of KY Jelly. Please make sure your shots are current. Good luck sir, we will be pulling for you.
@isaretard: I promise you if we met in person I would choke you out much faster than than you blew your load the first time with a dude.
And this will be the end of this pointless discord.
c and he could spell good !
Was a joke Pope, nothing more. I apologize.
Mental Note…”No more jokes of Pope’s gay avatar.”
The problem is that with the anonymity of the internet pussies such as yourself are able compensate for their lack success in life with unprovoked attacks. In person I would destroy you both mentally and physically. I suggest you learn some character from Sir Greg Solomon himself.
jesus christ already.if the fly ever had a yearly meet up, bbq, there wouldnt be a slip-in-slid for the kids..there would be a boxing/fighting ring instead for all’s entertainment.so when you’allz get back to the keyboard you can all really take better shots of each other.rof
Well the bulls got their rally….The Clam is wishy washy from the higher core PMI’s. He will promise he will do everything possible but he won’t go all QE there.
Also, here in California we are really aware of CalPers, etc is not funded…its getting really ugly.
nymph i always give ya a thumbs up, because u give good info, and r not on any side.
Thank you Razor….If I even say Hi, I normally get a handful of Down Thumbs…It always amuses me that I am hated so much by so many.
Here are my thoughts. The market wants to bounce. It is in bear rally mode. We’ve put in swings lows on both the QQQ and the SPY.
The Fed will stand pat, but tell us it’s ready to act if need be. This lead to a rally up to at least the 200 day or maybe even old highs.
Not so fast, Savage acolyte.
If this shit were easy, every one would be doing it….
And this shit ain’t easy. Not Lionel Richie Easy at least.
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And your Acolyte.
You and Savage are nailing it if you ask me. Except for the PM trades in late April which were killers (but that’s my fault ’cause I got in late), I haven’t lost a dime. So I think savage is now erring on the side of caution, which is fine by me.
And I can’t believe you got out just yesterday. Is that timing it or what? Wow! If you can do the again, I’ll erect a shine on the Big Island right next to my Macnut tree.
see, u find the oyster in a corn field. amazing
The Federal Reserve’s mandate needs to be rewritten. This whole shenanigan of tampering with interest rates every time the stock market drops has got to end. Remember, the Fed has lowered rates for even non-financial events like Y2K (laugher), the Gulf War, and 9/11…and now we find ourselves in a post-housing bubble malaise induced by a Fed with no levers left to pull when we may actually need them. I personally hope we crash to give us a reason to reform the whole system. It will be good for us in the long-term.
what and have an honest mkt, good call
econ 101. interest rates are tied to unemployment,they have been for years. events,this that or another means naught.take the unemployment #’s they provide…………now double it. we are in severe shit.and thats what interest rates are telling you. nothing more, nothing less.
http://youtu.be/AEzTdBJUHO8 before u get crazzy
im getting the outer bands of irene now, was busy all day helpin friends sto shit away. hope it doesnt hit here,,
I’m over here hysterically laughing at what you people thumb up or down. This business of thumbing adds a whole new element to internet dickery.
Funny as shit.
It’s really fucking late. Go to bed.
Should be dick up or dick down. Don’t deny that wins makes you hard.
Need a question mark to click on too. Or a WTF button. But I agree. It is hilarious!
“NOTE: iBC’s web redesign is pending” Hope it will not become an other “pay to subscribe website”…
Good job all the same for the actual site…
Don’t forget the company with the absolute largest unfunded pension liability out there…it goes by the initials USA.
I love Wall Street. Each rat for his rat for himself.
On Paul Tudor Jones in the WSJ
“The firm suffered in 2008 and Tudor suspended withdrawals for a month, though its key fund lost less than the overall market. At the time, Mr. Jones told his investors that his own performance was better than others at the firm during that bleak period, according to a letter sent to clients.”
http://online.wsj.com/article/SB10001424053111904279004576526840351026926.html?mod=WSJ_article_forsub
GOOG thanks for $8K in 40 minutes. God Bless America!
Unfunded pension liabilities? Problem? You betcha. Why do they exist in such magnitude? This cynic says corporate and public executive officers and boards find it easier to defer pension contributions and use those funds for capital allocation. Well duh! But why? I suspect these elite crafty banditos tell themselves it doesn’t matter because if it all goes haywire there will always be the Pension Benefit Guaranty Corporation to bail them out and protect the pensioners. Not so schmucks, stop lying to yourselves and each other.
This comment is meant to be a preamble to a stirring message.
Put every fuckin’ public employee on a 401K program. The government matches half
up to 6% of salary. And 35 years of service before full benefits.
The fuckin’ cops and firemen retire at age 44 on a $50,000 a year pension the way it is now.
fuckin’?
Yeah. FUCKIN’. The bloated, red-faced donut-eaters who exist only to protect the rich,
the drug dealers, and the judges – and pinch Mexicans hauling trash..
And the Pinochle players who fuck their female associates on the firehouse pool tables,
and make a fire run every two weeks so they can do $75,000 water and axed-roof damage
to a house that suffered the ravages of a burned pancake in the kitchen.
50k is chicken feed, bro. Check into it.
Except in some places they do a rotation into a higher paying position, or include overtime in the final salary calculation so that their pension payment can be even higher then their actual base salary…People have gotten good at playing the system….
The only way a pension payment can be higher than a salary including overtime ,is when you
include the variable supplement (NYC only)
The variable supplement is a payment to each retiree instead of a lump sum payment plus interest, when PD & FD LOANED the city over 200 miliion dollars of our cash. (bankrupt city in the 70’s)
I’ll say it again, OUR CASH……….. LOAN REPAYMENT
Good deal for the unions, right ? Why didn’t YOUR union do the same for you ?
Bloomturd actually stated publicly that he wanted to SEIZE that money, then backed down when he realized it was impossible. What a jackasss. Didn’t even have any legislature backing on stealing the money.
Int. rates to -0- and declining stock market makes them underfunded.
Agreud on FD, what a scam. But with PD, do you really want 50 year old cops jumping fences to catch a 22 year old burglar ?
No, you don’t. Reality calls for a career from 20 to 40 and retire. Before the recession, NYPD couldn’t attract candidates at 60k base, yes BASE salary. Promotions and massive ot easily jacks it up over 120k.
Then they retire at half of 150k at a BARE minimum. (in NY, at least)
The early retirement and decent salary was the only way to attract 20 year olds who could do better in the recession in the private sector.
http://youtu.be/tieA5wfcgH4
After the recession, both jobs were flooded with applications by the dreggs of society.
The city saw that , and used it as a bargaining chip at the table to keep salaries down.
The city also realized that the private sector couldn’t compete any more, so 20 year old fresh meat without any convictions became easier to hire.
Both are professions, not jobs. Why not become an electrician and rake in the big bucks if you
have a chip on your shoulder ? A lot of us did, LOL.
That said, Nassau and Suffolk get paid 30% more, and do MUCH LESS !
Cry me a river, they have a smaller department, easier to afford the pay hike.
But with PD, do you really want 50 year old cops jumping fences to catch a 22 year old burglar ?
A Smith and Wesson is the great equalizer in this equation. Long SWHC.
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SOLD some LONGS !
ADDED some SHORTS !
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AM NOW 3:1 NET SHORT !!! fwiw
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…just sayin’
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Amazing things here. I am very glad to peer your post. Thanks a lot and I am having a look forward to touch you. Will you please drop me a e-mail?