No, I was informed beforehand. I know a thing or two about annuity accounting. And I just have to shake my head at all of the plans that rest of shoddy assumptions and accounting. It does not have to be that way – we have a choice.
There are low fee annuities out there. And by annuities I mean immediate annuities, not the variable ones. I would start with those with mutual ownership.
As for high contribution – well - being bullet proof comes with a price. The assumptions and investments are extremely conservative. In this low interest rate environment it is even worse.
But if you offer a guaranteed pension payoff then the annuity model is what you have to follow, very high contributions. The Bank of England puts it at 50% of your wages. If you want a lower contribution to your retirement plan that is going to involve risk and that risk has to land someplace.
Of course not, but then again the bond holders also had a contract with GM.
In bankruptcy law there is an order of payment.
Payroll (as you mentioned in the AIG case) and taxes are first,
Secured lien holders are second.
Unsecured lien holders – which includes pension obligations - are third.
Stock holders are last.
Obama jumped the pension obligation ahead of the secured lien holders. There was no legal reason for this and it was wrong.
If you think the order of payment is wrong then get the law changed. Don’t retroactively change the rules because you have political debts to pay off.
Of course not – but I am not sure what that has to do with anything. If you don’t like the law, change the law. Can you explain why GM pensions are more important than other pensions that held GM debt? Or do you think the President should ignore the law anytime he feels it is inconvenient? Or maybe only sometimes? If so, when can he break the law?
America is a nation of laws, not a kleptocracy where elected officials buy votes by throwing cash at their privileged base. I am exaggerating to point out the principle involved but it is a principle that I think should be robustly protected.
Yeah – that is one of the reasons why I hated that Obama jumped the Unions pension’s benefits ahead of the other unsecured bond holders. The union knew that there were issues with the plan’s structure, funding and asset composition. They had the power to insist that it be placed on firmer ground, did not, than cried foul when it blew up.
Probably not in the automotive industry. It’s too big and too complex for a start-up to easily step in.
Either a existing company would step in (as Fiat did with Chrysler) or the bond holdings would be converted to equity and the company would keep on ticking under new management.
Then don’t invest in stuff with uncertain returns.
Treasury Inflation Protected Securities (TIPS) are absolutely bullet proof. Of course, they offer around a 1% rate of return after inflation. A good stock / bond portfolio will offer around 5%. So you have to save 2 to 3 times as much if you only use TIPS so there is a trade-off.
Actually, GM has had problems since the 70s. It has been a long slow decline. Sadly, no one had the courage to make the radical changes that were needed.
No, it should be fine if the stock market is up or down.
I will point the insurance companies who offer annuities – which basically is the same thing as a pension. While insurance companies blew up the policies did not. You have a choice – you can either make high contributions to a low risk plan or one can make low contributions to a high risk plan. The problem is the lax accounting rules around pensions. Insurance companies would never have gotten away with such lax assumptions. It saddens me that management and the union took the cheap path.
A pension plan like GM, with lots of retries or people close to retirement age (which means fixed, guaranteed, well defined payments), should have been stuffed with bonds earning 5%(which offers fixed, guaranteed, well defined payments). Instead GM (with the union’s blessing) chose lots of stocks on the assumption that they would earn 10%. And stuff lots of GM stock into the plan because that was cheap. And any shortfall would be made up by GM – which is basically a promissory note.
½ right. Bush stared the process but Obama finsihed it - and Obama did make some of the decsions.
My biggest grip is that Obama reward the union by putting their claims ahead of the other unsecured borrowers and bullied those who opposed them. If you want to argue that pension benefits should be ahead of unsecured debt that’s fine – please change the bankruptcy law – don’t retroactively change the rules to benefit your constituents.
Nixon tried to pass a negative income rate. I like the idea. The Earned Income Work Credit comes close.
As to your specifics, I would nix them. It is a one size fits all solution and ignores what is actually happening on the ground. There will be unforeseen consequences as firms try to dodge the rules. I personally would advocate union reform. Germany seems to be able to do the union thing much better then the US.
Right - expect all of the patents we are talking about are on handsets, not their telecom gear. So, from a handset perspective, they would be a NPE. (Which I am fine with. I assume Nokia's patents are of high quality and actually mean something. Now, if the patents were overly broad and a vague statement of things that could be done - that is what I hate.)
O.K. - Would it sound better if I said pursuit of knowledge of knowledge's sake?
And I would be careful on how I would frame "results". The big pay offs comes from the high risk long shots. Daring thinking that fails 9 times out of 10. Stuff that takes years to pan out. Which is not to say we should not demand hard, high quality work and for that work to be freely published. Just saying you need to be careful how you measure things because that is what you will tend to get.
Apples to Oranges. IIRC the tsunami was a once in 700 year event, so even if you have a 100 year time frame you may not consider it worthwhile. The human mind is not built to handle that scale. But it can handle the remote possibility of 30 minute deliveries. One is about loss, where one hopes that the low probability events don’t happen. The other is about gain, where you want low probability events to happen. The standard risk / reward models business use are worthless in this kind of situation.
I would recommend Nate Silver’s The Signal and the Noise.
The difference is that Motorola is actually making phones and doing research while Nokia is just riding the coattails of a division that no longer exists.
Since Motorola is still in the game it still uses other people patents. If they are a dick towards others then the other patent holders will be dicks towards Motorola. There is an incentive for Motorola to play fair. Nokia does not have that restraint. They could be huge dicks and the other handset manufactures could not retaliate directly against them. Not saying that Nokia will be a dick – just that they could.
Not really. Both before and after WWII “computers” was a female dominated field, like nurses or teachers.
After WWII, well, I am not sure displaced is the right word. We are talking about a rapidly evolving field. Most of the jobs that men took in the computer field just did not exist at the start of the war. Virgin ground so to say. Not so much as displacing but rather being left behind.
We are not focusing on the next quarter, we are focusing on the next century – almost any Japanese CEO from the 80s, as they explained investments in real estate, AI, next gen mainframes, jets, robots, etc.
The rule of thumb is a 10 year time horizon for most projects. The further one plans out the shakier the assumptions are. Which is one of the reasons why I am for public spending on basic science and research. They are just looking to do cool things – the practical for profit stuff will follow.
Consider voice recognition software like Apple's Siri. It requires a lot of CPU power and your phone does not have enough. So, instead, it is offloaded to a server on the internet. Now you don't have to upgrade your phone every two years to the get the latest, greatest version - it is now done on the backend.
There is a slight difference between the two. The Japanese sub had to surface and then the crew had to unfold the airplane wings. The one can be launched while the sub is underwater.
Last year it was 4%. Over the past 20 years it has averaged about 10%.
Whenever prices shoot up, the amount used in manufacturing goes down which implies there are many close substitutes – or that audiophiles are not willing to pay for gold plated cables (a.k.a. Monster cables)
Historically, the physical things that you are talking about, was about 1/3 the cost of recording an album. And yes, those costs are falling. The other 2/3rds is spent on talent – be it songwriters, sound technicians, backing instruments, etc. Those costs are not going down.
Value, or Utility, is an economic concept. Ordinal i.e. we can rank but not measure different things for value. Subjective, so no interpersonal comparisons can be made. As such it can never be directly measured.
Intrinsic Value is more of a financial concept. It is cardinal (can be measured) and objective.
You can’t bridge the gap between these. There are some partial solutions out there – such as the Consumer Price Index and surveys, but they make assumptions that you correctly state are wooly.
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No, I was informed beforehand. I know a thing or two about annuity accounting. And I just have to shake my head at all of the plans that rest of shoddy assumptions and accounting. It does not have to be that way – we have a choice.
There are low fee annuities out there. And by annuities I mean immediate annuities, not the variable ones. I would start with those with mutual ownership.
As for high contribution – well - being bullet proof comes with a price. The assumptions and investments are extremely conservative. In this low interest rate environment it is even worse.
But if you offer a guaranteed pension payoff then the annuity model is what you have to follow, very high contributions. The Bank of England puts it at 50% of your wages. If you want a lower contribution to your retirement plan that is going to involve risk and that risk has to land someplace.
Of course not, but then again the bond holders also had a contract with GM.
In bankruptcy law there is an order of payment.
Payroll (as you mentioned in the AIG case) and taxes are first,
Secured lien holders are second.
Unsecured lien holders – which includes pension obligations - are third.
Stock holders are last.
Obama jumped the pension obligation ahead of the secured lien holders. There was no legal reason for this and it was wrong.
If you think the order of payment is wrong then get the law changed. Don’t retroactively change the rules because you have political debts to pay off.
Of course not – but I am not sure what that has to do with anything. If you don’t like the law, change the law. Can you explain why GM pensions are more important than other pensions that held GM debt? Or do you think the President should ignore the law anytime he feels it is inconvenient? Or maybe only sometimes? If so, when can he break the law?
America is a nation of laws, not a kleptocracy where elected officials buy votes by throwing cash at their privileged base. I am exaggerating to point out the principle involved but it is a principle that I think should be robustly protected.
Yeah – that is one of the reasons why I hated that Obama jumped the Unions pension’s benefits ahead of the other unsecured bond holders. The union knew that there were issues with the plan’s structure, funding and asset composition. They had the power to insist that it be placed on firmer ground, did not, than cried foul when it blew up.
Probably not in the automotive industry. It’s too big and too complex for a start-up to easily step in.
Either a existing company would step in (as Fiat did with Chrysler) or the bond holdings would be converted to equity and the company would keep on ticking under new management.
Then don’t invest in stuff with uncertain returns.
Treasury Inflation Protected Securities (TIPS) are absolutely bullet proof. Of course, they offer around a 1% rate of return after inflation. A good stock / bond portfolio will offer around 5%. So you have to save 2 to 3 times as much if you only use TIPS so there is a trade-off.
Actually, GM has had problems since the 70s. It has been a long slow decline. Sadly, no one had the courage to make the radical changes that were needed.
Well, to be fair, the world has changed but the Unions have not.
Or at least not the tradtional American unions. I can point to other examples where unions have changed and done well.
No, it should be fine if the stock market is up or down.
I will point the insurance companies who offer annuities – which basically is the same thing as a pension. While insurance companies blew up the policies did not. You have a choice – you can either make high contributions to a low risk plan or one can make low contributions to a high risk plan. The problem is the lax accounting rules around pensions. Insurance companies would never have gotten away with such lax assumptions. It saddens me that management and the union took the cheap path.
A pension plan like GM, with lots of retries or people close to retirement age (which means fixed, guaranteed, well defined payments), should have been stuffed with bonds earning 5%(which offers fixed, guaranteed, well defined payments). Instead GM (with the union’s blessing) chose lots of stocks on the assumption that they would earn 10%. And stuff lots of GM stock into the plan because that was cheap. And any shortfall would be made up by GM – which is basically a promissory note.
½ right. Bush stared the process but Obama finsihed it - and Obama did make some of the decsions.
My biggest grip is that Obama reward the union by putting their claims ahead of the other unsecured borrowers and bullied those who opposed them. If you want to argue that pension benefits should be ahead of unsecured debt that’s fine – please change the bankruptcy law – don’t retroactively change the rules to benefit your constituents.
Nixon tried to pass a negative income rate. I like the idea. The Earned Income Work Credit comes close.
As to your specifics, I would nix them. It is a one size fits all solution and ignores what is actually happening on the ground. There will be unforeseen consequences as firms try to dodge the rules. I personally would advocate union reform. Germany seems to be able to do the union thing much better then the US.
Right - expect all of the patents we are talking about are on handsets, not their telecom gear. So, from a handset perspective, they would be a NPE. (Which I am fine with. I assume Nokia's patents are of high quality and actually mean something. Now, if the patents were overly broad and a vague statement of things that could be done - that is what I hate.)
O.K. - Would it sound better if I said pursuit of knowledge of knowledge's sake?
And I would be careful on how I would frame "results". The big pay offs comes from the high risk long shots. Daring thinking that fails 9 times out of 10. Stuff that takes years to pan out. Which is not to say we should not demand hard, high quality work and for that work to be freely published. Just saying you need to be careful how you measure things because that is what you will tend to get.
Apples to Oranges. IIRC the tsunami was a once in 700 year event, so even if you have a 100 year time frame you may not consider it worthwhile. The human mind is not built to handle that scale. But it can handle the remote possibility of 30 minute deliveries. One is about loss, where one hopes that the low probability events don’t happen. The other is about gain, where you want low probability events to happen. The standard risk / reward models business use are worthless in this kind of situation.
I would recommend Nate Silver’s The Signal and the Noise.
The difference is that Motorola is actually making phones and doing research while Nokia is just riding the coattails of a division that no longer exists.
Since Motorola is still in the game it still uses other people patents. If they are a dick towards others then the other patent holders will be dicks towards Motorola. There is an incentive for Motorola to play fair. Nokia does not have that restraint. They could be huge dicks and the other handset manufactures could not retaliate directly against them. Not saying that Nokia will be a dick – just that they could.
Not really. Both before and after WWII “computers” was a female dominated field, like nurses or teachers.
After WWII, well, I am not sure displaced is the right word. We are talking about a rapidly evolving field. Most of the jobs that men took in the computer field just did not exist at the start of the war. Virgin ground so to say. Not so much as displacing but rather being left behind.
We are not focusing on the next quarter, we are focusing on the next century – almost any Japanese CEO from the 80s, as they explained investments in real estate, AI, next gen mainframes, jets, robots, etc.
The rule of thumb is a 10 year time horizon for most projects. The further one plans out the shakier the assumptions are. Which is one of the reasons why I am for public spending on basic science and research. They are just looking to do cool things – the practical for profit stuff will follow.
Well, maybe.
Consider voice recognition software like Apple's Siri. It requires a lot of CPU power and your phone does not have enough. So, instead, it is offloaded to a server on the internet. Now you don't have to upgrade your phone every two years to the get the latest, greatest version - it is now done on the backend.
No, it’s just that God prefers Allen wrenches.
There is a slight difference between the two. The Japanese sub had to surface and then the crew had to unfold the airplane wings. The one can be launched while the sub is underwater.
Last year it was 4%. Over the past 20 years it has averaged about 10%.
Whenever prices shoot up, the amount used in manufacturing goes down which implies there are many close substitutes – or that audiophiles are not willing to pay for gold plated cables (a.k.a. Monster cables)
Historically, the physical things that you are talking about, was about 1/3 the cost of recording an album. And yes, those costs are falling. The other 2/3rds is spent on talent – be it songwriters, sound technicians, backing instruments, etc. Those costs are not going down.
Value, or Utility, is an economic concept.
Ordinal i.e. we can rank but not measure different things for value.
Subjective, so no interpersonal comparisons can be made.
As such it can never be directly measured.
Intrinsic Value is more of a financial concept.
It is cardinal (can be measured) and objective.
You can’t bridge the gap between these. There are some partial solutions out there – such as the Consumer Price Index and surveys, but they make assumptions that you correctly state are wooly.
Yes. I doubt it they did or if they did it would be a large enough position to cause them troubles.
Of course, BoA is saying it’s worth $1300, which implies it wants the price to go higher, which – if shorted – would hurt it even more.