Re: pension liabs., stock comp., greenspan.........
Robert, it certainly is a problem that will plague many bellweather companies in the not to distant future. However, acutuaries here are hired to determine ways of achieving the return needed without affecting the Company. I'm sure many Co.s have saved a great deal because of the unrealized gains, but a good pension fund mgr. will have an asset allocation that should weather the storm. Most pension fund mgrs. are free to invest in real estate and other hard assets that appreciate when inflation hits, plus they all buy far out on the yield curve, much like insurance co.s, so they have fat gains on the bonds to offset a 20% decline in the stock allocation's portion.
I doubt the Japanese pension funds go so far as they ones here do, as far as risk mgmt. is concerned.
As for Ramsey's mention of the stock comp., the SFAS/FASB passed SFAS #123 and it took effect in the 12/97 10-K's filed by any Co. It shows what earnings really are after accounting for stock based comp.
Out of all the Companies I've written up at my current position, the worst case of reduced earnings I've ever seen is Interstate Baking (IBC).
Lastly, Greenspan trashes the IMF, and hours later Rubin is on Jim Leahrer extolling 'em! |
