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Interest Rates Tell the Story…an Update

This is an update to “Interest Rates Tell The Story” which we posted on June 24th of this year. We wanted to post this lecture by Danielle DiMartino Booth of Quill Intelligence., as she addresses some very important points regarding interest rates and the “real” stat of the economy and financial markets. Danielle gave this lecture at the Stansberry Conference on October 20th, 2019 in Las Vegas, Nevada.

As a former insider at the Federal Reserve in Dallas for nearly 10 years, and many years experience working on Wall Street, we believe it would be of value to our readers to LISTEN to what she has to say. More specifically about what Danielle has to say about interest rates, the state of the economy, the Federal Reserve, and finally on how all this information can be used in making strategic and tactical decisions for you personally and professionally. Remember, interest rates tell the story of what’s really going on in the economy. As we always say, “Do your own research, then make better informed decisions.”

GMS BUSINESS CONSULTING, INC. – provides lawyers/law firms, for-profit & non-profit organizations, and business professionals with Accounting Services, Business Development Services, Business Optimization Services, and Digital Marketing Services. We help business professionals strategically manage and tactically grow their businesses more effectively and efficiently.  We do NOT provide investment advice.  Contact Us  if you are interested in learning more about our services, and in particular about M.A.P. (our 3-phase business development & management solution), designed to help you strategically focus and tactically grow your business.  We would welcome the opportunity to speak with you.

info@gmsbusinessconsulting.com

707-218-3135

GMS Business Consulting No Comments

PENSION CUTS – THE HEADWINDS AHEAD…

General Electric – Cutting Pension Benefits

Pension Headwinds Ahead is the title for today’s post. As most of you know already, many of the largest pensions here in the U.S. are in deep trouble. With under-funded reserves coupled with low interest rates and declining contributions, for many pension funds, the outflow is greater than the inflow.

We first saw the reality of this situation coming to a head back in 2015. Central States Pension Fund (with over 410,000 employees) applied for benefit cuts. (For a sample listing of pension funds that have applied to cut benefits under the Multiemployer Pension Reform Act click HERE.) Today, according to Bloomberg News, General Electric (GE) announced that they are “taking steps to cut the worst pension deficit in corporate America, by freezing benefits for more than 20,000 employees.” If you think this is just an anomaly, think again. We believe this is only the beginning as pension costs continue to rise, and interest rates near their historical lows, this is just the beginning of additional ones to follow.

This situation is very straight forward. The cash outflows are simply greater than the inflows. As fewer people pay into the pension funds and an increasing number of new retirees begin collecting their pensions, the outflow exceeds the inflow. In addition, with interest rates so low, the investment income received isn’t nearly enough to cover the outflows either. It’s a perfect storm for pension funds.

To better prepare retirees relying on fixed pensions, we recommend they fully inform themselves by taking the following action steps:

  • 1st – Check the status of your pension fund. Do your research if their pension fund has applied for benefits cuts under the Multiemployer Pension Reform Act.
  • 2nd – Meet with your accountant and financial adviser to proactively plan, budget, and make any investment re-positioning for possible pension cuts in near to medium future.
  • 3rd – Reduce your debt…period. Streamline and cut unnecessary expenditures. Seriously consider downsizing your current lifestyle to better position yourself for any unseen pension reductions in the future.

It’s far better to develop a plan and implement now, rather than waiting and being forced to do so at a later time. Remember, it’s up to you to do your own research, then make better informed decisions.

GMS BUSINESS CONSULTING, INC. – provides lawyers/law firms and business professionals with Accounting Services, Business Development Services, Business Optimization Services, and Digital Marketing Services to help business professionals successfully manage and grow their businesses more effectively and efficiently.  We do NOT provide investment advice.  Contact Us  if you are interested in learning more about our services, and in particular about M.A.P. (our 3-phase business development & management solution), designed to help you strategically focus and tactically grow your business.  We would welcome the opportunity to speak with you.

info@gmsbusinessconsulting.com

707-218-3135