Yeah let's keep rates at permanent ZIRP good idea!
Down $20 billion, Boeing stuffs pension fund with its own shares https://t.co/KvDDWYqGRm via @k_chiglinsky pic.twitter.com/QwaoCn0jIM
— Bloomberg Markets (@markets) September 15, 2017
Help from higher risk free rates is on the way this effect of the moron ZIRP policy should start to go away soon.
5 comments:
Great deal.
Because there is no public purpose to marketable, transferable government welfare.
If you want government paid pensions, have a federal state pension.
This is not a govt pension Neil this is Boeing retired employee's pension... it's a private pension...
The projected returns are a lot higher than what has been realized in all of these ERISA accounts due to the 8 years of ZIRP so this is a big problem for retirees not just Boeing....
Advocating for permanent ZIRP under current arrangements is misguided at best...
It looks to me like the problems started or were magnified when Big Labor used politics to force responsibilityCaptial to partially fund pensions and health care instead of realizing that this would later blow up and forging a plan for the federal government to do it.
But that would have been difficult in an environment where it was widely believed that taxes and borrowing are necessary to "pay for" social programs funded by the US federal government.
The solution is to get business out of this and put the social responsibility where it logically and operationally should be, with the currency sovereign.
But that would require smarts and the US seems to have a dearth of those resources, or less a masochistic tendency.
Well this is how it is arranged now Tom so competent people have to deal with it....
Problem is the economists don't understand the systemic relationships between the regulatory policy risk free rate and growth/income/ROI in the different economic sectors...
Economists generally believe lower is better this has been empirically demonstrated to be false over the last 8 years... we have had lackluster growth due to the low policy rate of 0.25% for the same period....
Just like "taxes dont fund govt spending", This is going to be another hard one to swallow for the libertarians, i.e. Govt rate policy regulates growth.... get over it...
The MMT position of permanent ZIRP and at the same time advocating for increased growth doesn't make any sense... we obviously don't get adequate growth with policy rates at 0.25%... else equal...
They don't have the right training...
Good luck to politicians explaining to voters that we have to subsidize bond holders with high rates in order to fund social programs like corporate pensions.
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