“We asked a simple question: Are we getting value for the fees we’re paying to Wall Street?” Mr. Stringer said. “The answer, based on this 10-year analysis, is no.”
The party is over.
At great political risk to his own ambitions (given the local campaign-funding base), New York City Comptroller Scott Stringer took a look at how much the city’s been paying to Wall Street (or Greenwich) to manage its money over the last decade and what they’ve gotten in return.
It doesn’t look good.
via the New York Times (emphasis mine):
over the past 10 years, the five pension funds have paid more than $2 billion in fees to money managers and have received virtually nothing in return…
Until now, Mr. Stringer said, the pension funds have reported the performance of many of their investments before taking the fees paid to money managers into account. After factoring in those fees, his staff found that they had dragged the overall returns $2.5 billion below expectations over the last 10 years.
Over the last 10 years, the return on those “public asset classes” has surpassed expectations by more than $2 billion, according to the comptroller’s analysis. But nearly all of that extra gain — about 97 percent — has been eaten up by management fees, leaving just $40 million for the retirees, it found.
It’s bordering on parody. They report investment returns gross of fees and then add the fee information onto their statements as footnotes. Do you know of anyone who can eat their returns gross of fees and taxes? I don’t.
“US getting real competition…..the world is sick of us.”
China’s Minister of Finance Lou Jiwei, left, delivers a speech next to other representatives of founding member countries at the signing ceremony establishing the Asian Infrastructure Investment Bank in Beijing, Oct. 24, 2014
On Tuesday April 7th, Ukravtoprome (the Ukrainian Association of Automobile Manufacturers) reported that, in the three-month period January-March 2015, as compared to the same three months of 2014, production of passenger cars plunged 96%, commercial vehicles 23%, buses 43%, for an overall decline of 92%.
In March alone, as compared to March 2014, passenger-car production plunged 94.3%, commercial vehicles fell 31%. The figure for buses was not shown.Continue reading »
Regular readers of this column will remember when I “boldly” predicted that Syriza would change nothing regarding the Greek status quo and that those celebrating the party’s election win earlier this year were going to be as sorely disappointed as Obama’s “Hope & Change” cheerleaders. Actually, it wasn’t such a bold prediction for those who understand that the only meaningful changes that are ever going to happen are going to be structural changes implemented bottom-up in peer-to-peer decentralized economic systems that have nothing to do with regional currencies, central banks or deals with the IMF, but some people treated it as a bold prediction.
It wouldn’t be a first, but it would certainly be a – bigger – shock. That is to say, the Bank of England hijacked the head of Canada’s central bank some time ago, but, while unexpected enough, that would pale in comparison to the US hiring the present Governor of the Russian central bank, Elvira Sakhipzadovna Nabiullina. It would still seem to be a mighty fine idea, though.
Not that I think it will happen, not to worry if you think Yellen is just what it takes at the Fed. But Nabiullina is both razor sharp and fiercely independent. Yellen is obviously neither; she’s a cog in a machine that huffs and puffs and pumps and dumps to make sure her overlords in the blissful world of US finance make ever more profit no matter how bad things get in American society.Continue reading »
A few weeks back, we noted that China (via a state-run media outlet) appeared to be adopting a more conciliatory approach when it comes to describing Beijing’s vision for the Asian Infrastructure Investment Bank. The venture, which Washington did its best to undermine last year, has made an unlikely run at taking center-geopolitical-stage even as other, more ostensibly newsworthy events (such as the veritable collapse of the Yemeni state and the ongoing crisis in Greece) vie for the market’s very limited attention span.
And while we, more than perhaps any other news outlet, have gone to great lengths to demonstrate the importance of what is not only a move by Beijing to inaugurate a sino-Monroe Doctrine but to simultaneously start the world on the path to yuan hegemony, we were also quick to note that there’s such a thing as being too successful, especially when it comes to making sure a whole cohort of Western nations who have just gone out on the proverbial limb in defiance of The White House, are left with some assurance that there’s at least some part of the institution which is actually aimed at promoting infrastructure development rather than operating solely as Beijing’s newest foreign policy tool.
Sure enough, as both the NY Times and FT report, China “can’t believe its luck.” Continue reading »
The data keeps pouring in. The U.S. economy is in trouble. All of the official statistics like job growth and economic recovery are based on lies and fabrications.
As Christopher Green of Alternative Media Television explains in his latest video commentary, those lies will eventually catch up with us and when they do the consequences will be impossible for most people to imagine.
You need to understand what’s coming… you need to understand the magnitude of the event ahead… this economic collapse that we’re living through today.
There is no recovery. There is no jobs recovery. There is no real growth in the U.S. today. It’s not that we don’t have great companies… it’s the system itself that is rotten to the core. It’s structural. that’s the problem with the system.Continue reading »
There was only bad news in the just released Fed consumer credit report for the month of February. First, the “good credit”, the one that consumer should load up on when they feel comfortable about the future, i.e., credit card, or revolving debt, continued its recent plunge, and in February crashed by $3.7 billion, following January’s $1 billion plunge. This was the worst month for revolving credit since December 2010 and explains perfectly why the consumer has literally gone into hibernation – it has nothing to do with the weather, and everything to do with the unwillingness to “charge” purchases, which in turn is a clear glimpse into how the US consumer sees their financial and economic future.
Back in 2013, when one cuts through the rhetoric and posturing, what the Cyprus depositor bail-in and subsequent capital controls were all about, was an attempt to confiscate deposits of ultra-wealthy Russian billionaires held the banks of this beloved by the Russian oligarchy offshore tax haven. At least that was the theory: in practice the wealthiest Russians got advance notice of what the Greek government in collaboration with the Eurogroup was planning, and quietly moved their funds to even safer offshore venues, leaving the local population to pick up the pieces.
Fast forward two years later, when Greece is on the verge of complete monetary collapse and which is now scrambling to “borrow” funds from local pensions and other public sources of scarce capital just to remain in compliance with IMF debt repayments and avoid a hard default. In fact, according to some, Greece may not have the funds to make its next mandatory payment due on April 9 to the IMF with the long overdue Greek exit from the Eurozone to follow in due course. Continue reading »
We probably haven’t seen the last of the troubles in the Eurozone. As the European Central Bank is trying to put out several fires with regards to Greece and its huge Quantitative Easing money-printing program, it’s important for the Eurozone to keep everybody on the same page. But as could be expected, some banks in the Eurozone aren’t really too keen on playing ball and have rejected the interference of the central bank.
An apotheosis seems to have reached as a German bank has now effectively sued the European Central Bank. The Landeskretitbank Baden-Wurttemberg (hereafter ‘L-Bank’) has protested against the fact it would now fall under the new regime whereby the ECB would assume supervision over in excess of 100 financial institutions in the Eurozone. Continue reading »
On Thursday morning, we took an in-depth look at what the progression of events is likely to be in the event a cash-strapped, negotiation-weary Greece finally, for lack of will or for lack of options, fails to scrape together enough cash to pay its creditors. As BofAML notes, a missed IMF payment and/or failure to make interest payments to either the ECB or private creditors over the coming weeks would likely lead to default within 30 days, at which point “mark-to-fantasy” becomes mark-to-market and then “mark-to-default” in very short order.
Although Greek officials came out midday with a “categorical” denial of reports that the country was set to run completely out of cash in just 7 days, it now appears Athens may be prepared to chance a missed IMF payment and all that comes with it if it means saving face and preserving Syriza’s campaign promises to the beleaguered Greek populace. Continue reading »
Max Keiser and Stacy Herbert discuss the hell (of a profit) to be made by killing a man – and his family – as Lockheed Martin assures analysts from Deutsche Bank there is enough fear of war to maintain its deadly sales. In the second half, Max interviews Swiss banker, Egon von Greyerz about QE, gold and the economic and financial disasters wrought by central banks.Continue reading »
Several months ago, the government of Australia proposed to tax bank deposits up to $250,000 at a rate of 0.05% (5 basis points).
Their idea was for the money to be invested in a rainy day Financial Stabilization Fund to insure against in the unlikely event of a banking crisis… or all-out collapse.
And as of this morning, it looks like the levy might just pass and become law in Australia. All parties support the idea. Which means that Australia might just have a tax on bank deposits starting January 1, 2016.
To be clear, the proposal seems to plan on taxing the banks based on the amount of deposits they’re holding—but it’s pretty obvious this will be passed on to consumers in the form of lower interest rates.
Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament.
Can’t see commercial banks in the western world be too happy with this. They must be contemplating wiping the island nation off the map. If accepted in the Iceland parliament , the plan would change the game in a very radical way. It would be successful too, because there is no bigger scourge on our economies than commercial banks creating money and then securitizing and selling off the loans they just created the money (credit) with. Continue reading »
It’s been seven years since the epic collapse of the US housing market, and there’s never been a better time to buy your first home. In Denmark for instance, the bank will tax depositors in order to pay you to take out a home loan. But before you move to a European country operating in NIRP-dom, consider Florida and New Jersey first because as Susan Rudolfi recently discovered, you can actually get a house for free by simply not making your mortgage payments.
Up until now, the world’s descent into the NIRPy twilight of fiat currency was a function of failing monetary policy around the globe as central bank after desperate central bank implemented negative and even more negative (in the case of Denmark some four times rapid succession) rates, hoping to make saving so prohibitive consumers would have no choice but to spend the fruits of their labor, or better yet, take out massive loans which they would never be able to repay. However, nobody said it was only central banks who could be the executioners of the world’s saver class: governments are perfectly capable too. Such as Australia’s.
Intelligence regarding the unintended altitude loss with incumbent loss of life related to Lufthansa 9525 from Barcelona to Dusseldorf is coming to light.
The plane may have been downed to end an investigation of massive banking fraud died to the CIA, Mossad, Crypto AG, Siemans and the Vatican Bank.
This event also gives us need to take a new look at the downing of Pan Am flight 103 over Lockerbie, Scotland in 1988. In the world of fax machines, Crypto AG had developed a hardware hack that created a backdoor on all encrypted fax communication, giving their “clients” virtual control of not only the world banking system but almost all diplomatic correspondence as well. Continue reading »
“A relatively low-profile entity in Austria – Pfandbriefbank Oesterreich AG (Pfandbriefbank) – is becoming the next critical chapter in the Austrian banking system story.” – Daiwa
When it comes to the sweeping of (trillions of) toxic assets until such time as the ECB starts purchasing not only government bonds but equities, bank loans and really anything else that in a normal world would have some “mark to market” value, Europe had a ready answer: bad banks. A tradition which started with Switzerland and the semi-bailout of UBS during the great financial crisis, “bad banks” have been proposed every time there are a few hundred billion in bad assets that need to be swept away or otherwise removed from the the public eye. Continue reading »
Earlier this month, we identified the reason why Chinese stocks have continued to rise in the face of overwhelming evidence that the country’s economy is decelerating quickly. While the first part of the 8-month run can be plausibly attributed to PSL, the furious buying that began in late November looks to be at least partly attributable to the fact that thanks to tighter regulations on lending outside the traditional banking system, China’s $2 trillion shadow banking complex needed somewhere to put cash to work and that somewhere turns out to be the giant bubble that is the SHCOMP. Here’s more:
Because according to Reuters, it is precisely China’s trust firms, with total assets of $2.2 trillion, and who together with Banker Acceptances comprise the bulk of China’s shadow banking pipeline, and no longer able (or willing) to lend to China’s small companies and individuals due to a spike in regulation, are shifting more cash into frothy capital markets and over-the-counter (OTC) instruments instead of loans.
In other words, instead of using their vast cash hoard of over $2 trillion to re-lend and stimulate China’s economy, China’s unregulated, shadow banking conduits are now directly buying stocks!Continue reading »
As we’ve discussed twice this month, the world has now officially given up any pretensions that Japan’s elephantine QE program isn’t underwriting the rally in Japanese stocks. Not only is the Bank of Japan buying ETFs, they’re targeting their purchases to (literally) ensure that stocks can’t fall by stepping in when things look weak at the open. Unfortunately, Kuroda looks set to run up against the extremely inconvenient fact that while, in his lunacy, he can print a theoretically unlimited amount of money, the universe of purchasable ETFs is limited and so eventually, the BoJ will own the entire market. Here’s what we said last week:
As it turns out, the central bank may now run into the same inconvenience in its efforts to control the stock market that it encountered on the way to monopolizing the JGB market: there’s only so much out there to buy. Here’s more from Bloomberg:
BOJ held 3.85t yen ($32.0b) of ETFs at end-2014 and plans to boost these holdings by 3t yen per year; at this pace, the current market value of 11.5t yen in ETFs would be entirely bought by BOJ by end-2017, data compiled by Bloomberg show.
You read that correctly — the Bank of Japan will own the entire Japanese ETF market within about 30 months. So with all of the JGBs marked for purchase and with all of the ETFs exhausted, there’s only one place to go next: individual stocks.Continue reading »