Miss Moneypenny Posted March 6, 2003 Report Share Posted March 6, 2003 Looks like the pension monster is crawling out from under the bed at last. As more and more of these stories emerge, this should be a catalyst for the next decline: Raytheon warned after hours that 2004 earnings would fall short of Wall Street forecasts, citing higher pernsion costs, and said higher labor costs from power plant construction would increase a 4th quarter 2002 charge. Link to story Shares down after hours... Link to comment Share on other sites More sharing options...
Metamucil Posted March 6, 2003 Report Share Posted March 6, 2003 Miss MP, Definitely a HUGE story to come. A large # of companies have used hypothetical future pension gains to beef their bottom lines......not actual results. No routine mark-to-market here....yet.... That should get some selling going........ Link to comment Share on other sites More sharing options...
Ned38 Posted March 6, 2003 Report Share Posted March 6, 2003 Lemme tell ya. Here on Long Island every town has it's own little local newspaper.Maybe 8 pages-once a week. Ya know the kind that tells ya who the homecoming queen was and how well the cub scouts tied their knots this week. Anyway it seems the teachers union pension fund for our little district is suddenly ---that's it you guessed it----underfunded. Why? The usual reason------investing it in the stock market. So quietly and without any fanfare , debate or finger pointing , our taxes will go up to cover this little shortfall. And as it is discovered that the county workers, police, garbage men, etc etc. are all in the same boat, they will inch up the taxes little by little, quietly and in the dead of night when no-one is looking. So when the WSJ or The Times run stories about public companies like Ford or whomever being underfunded, we must be aware that they are the tip of the iceberg and that local townships , municipalities, counties etc. are all about to become an even bigger drain on the economy than ever. Link to comment Share on other sites More sharing options...
Bird D Durr Posted March 6, 2003 Report Share Posted March 6, 2003 COMING TO A THEATER NEAR YOU.................... F, GM, IBM................etc., etc......................... It is going to be painful watching the "gubbamit" subsidize these schmoes just like the airlines.................. Don't worry Uncle Al will print with abandon............... Link to comment Share on other sites More sharing options...
Miss Moneypenny Posted March 6, 2003 Author Report Share Posted March 6, 2003 My favorite of them all is GM: Market cap: $26.1 billion Pension Plan Assets: $73.7 billion Pension Plan Obligations: $86.3 billion Unfunded Amount: $12.6 billion Link to comment Share on other sites More sharing options...
Bird D Durr Posted March 6, 2003 Report Share Posted March 6, 2003 GM...................... The horse is blind................The wagon is going too fast.............. The gubbamit is the only answer............... Must be nice to print free moeny................. Link to comment Share on other sites More sharing options...
Sphinxter Posted March 6, 2003 Report Share Posted March 6, 2003 As per GM, note that their response to being woefully underfunded in the pension department was to 'true it up' by (get this, it's good) lowering their projected rate of return to 9.5% from 10% and then covering the difference. That little difference turned out to be just north of $1b (!!!). This impacted their earnings but good. Imagine if they'd adjusted it to a more realistic return of, say 4% (5.3% on their bonds and negative returns on their stock portfolio...). This crappy, obvious pension gaming is still confusing the 'experts' who can't seem to figure out that the story is there is a HUGE problem here. Hey Krudlow, what's the correct multiple for a market with no growth and no earnings again? 30.4? And Ned38 - the homeowners/property owners are going to catch it in the shorts badly over the next few years because, as Yobob points out a full freaking 1 in 6 people work for the government! How can this be?!? I gotta pay for all their bennies? Foreever? This ain't going to be pretty. Link to comment Share on other sites More sharing options...
Guest Posted March 6, 2003 Report Share Posted March 6, 2003 MISS MONEYPENNY--I guess you've heard what the wags are saying about G.E.--it's a pension fund that happens to manufacture cars--I'd reckon one could apply that to many other entities....thanks for the stats-to see them in that format really bring into focus the "sickness unto death" of the current corporate financial landscape--remember from about 1995-2000 how the "American financial model" was trumpeted as the one to emulate?--At that time we cognoscenti immediately thought back to Japan in the 80s when American management had visions of American workers becoming vacation-eschewing robots like the Japanese...as t'is written in Kohellet: "Aiyn ha-dash tachat ha-shemesh"-(nothing new under the sun). Link to comment Share on other sites More sharing options...
ThorAss Posted March 6, 2003 Report Share Posted March 6, 2003 MISS MONEYPENNY--I guess you've heard what the wags are saying about G.E.--it's a pension fund that happens to manufacture cars--I'd reckon one could apply that to many other entities....thanks for the stats-to see them in that format really bring into focus the "sickness unto death" of the current corporate financial landscape--remember from about 1995-2000 how the "American financial model" was trumpeted as the one to emulate?--At that time we cognoscenti immediately thought back to Japan in the 80s when American management had visions of American workers becoming vacation-eschewing robots like the Japanese...as t'is written in Kohellet: "Aiyn ha-dash tachat ha-shemesh"-(nothing new under the sun). Electric Cars? Link to comment Share on other sites More sharing options...
K Wave Rider Posted March 7, 2003 Report Share Posted March 7, 2003 Expect to see some more pension surprises this coming earnings season. SEC Faults Pension Reporting, Wants More "Reality" SEC Commissioner Cynthia Glassman says that companies aren't cutting their expected rates enough. ``I think in the current environment at some firms they may be too high,'' says Glassman, without referring to any particular company. ``It's important that companies can justify the rates they are using, and take into account both the good times and the bad that we've been experiencing over the last ten years.'' Link to comment Share on other sites More sharing options...
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