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The funded status of the typical US corporate pension plan stands at its best position since March 2010.
Thanks to the strong stock market performance in December, the average pension's funded status surged 3.8 percentage points in December, to 84.3 percent, according to BNY Mellon Asset Management.
Steve Taub and I were just remarking on how often we see wind farms these days while driving in the countryside, especially in the more remote areas of states such as New York, Minnesota, Texas and Wisconsin.
That discussion followed my mention of data I came across yesterday that shows how little we and the rest of the world are investing in alternative energy and other so-called "green" initiatives, as measured in terms of GDP.
Cash concentration is a critical tool in the corporate cash management toolbelt, and companies are now faced with the need to figure out what to do with excess cash given ridiculously low rates on both accounts and short-term investment products.
Improved cash concentration can create value through process improvement —by moving excess cash from various bank accounts automatically into one account either for investment purposes or to manage deficits.
Bloomberg News reported on Monday that the Federal Deposit Insurance Corp. is encouraging public pension funds to inject capital directly into the banking system by buying failed banks.
On the surface, this feels like the act of one troubled, somewhat desperate government agency trying to take advantage of a troubled, somewhat desperate group of investors.
It's not at all clear how these investments would work. Pensions don't typically dabble in direct investments, though the success of the Ontario Teachers' Pension Fund could lead others to reexamine that strategy. And banking would be a somewhat strange place to start, especially in the current environment.
Anyone who thinks sovereign wealth funds are passive, long-term investors ought to think twice as a result of this development.
But contrary to this take on the topic, what's happening is entirely to be expected. As managers of the Norwegian state pension fund with significant equity holdings, Norges Bank Investment Management is seeking to have four U.S. companies split the role of CEO and chairman, including Harris Corp., Clorox, Parker-Hannifin, and Cardinal Health, after getting Sara Lee to do just that.
Liverpool Football Club takes on Italian side Fiorentina today in an early Champions League match. The game in Florence promises to be a tense, nail-biting affair.
Off the pitch, Liverpool co-owner Tom Hicks will probably be feeling a little more relaxed about the outcome. In past years, Liverpool has relied on advancing in the Champions League to bring in much-needed revenue. But now it appears that the club's balance sheet, shaky at best, could get a very big boost.
The last year or two hasn't been the best for the retail brokerage industry. Besides plummeting profits, brokerages have been besieged by lawsuits filed by scores of disgruntled customers.
Many of those suits stem from brokers' alleged depiction of auction rate securities as liquid instruments. Beyond litigation, brokerages have taken a beating in the press. Stories continue to run about customers who got burned in the stock market meltdown in 2008. The most common customer compliant: sales reps kept them in equities solely to turn over their portfolios-and thus earn more commissions.
Reports indicate that regulators in Washington are still hammering out their guidelines for private equity investments in distressed banks.
It appears that the initial guidelines, first announced in July, will be eased considerably.
When a deal is too good to be true, it usually is.
Purchasers of auction-rate securities probably should have considered that old bromide before actually handing their money over to eager-beaver brokers. And bear in mind, it wasn't just individual investors who bought the securities-not just the Clem Kadiddlehoppers and Haystacks Calhouns of the world. No, supposedly sophisticated financial managers went whole-hog for the dutch-auction bonds. Indeed, state and municipal treasurers were among the biggest buyers of the instruments.
Surely, the recent report from the Congressional Oversight Panel that banks have done little to address the toxic assets on their books, underscores a fundamental point: The government bailout has mostly allowed the usual suspects to keep on conducting business as usual.
In fact, here's more evidence. A bunch of banks have come up with new and improved products and investments, and, while they don't have the potential to bring down the global economy, they sound pretty risky to me.
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