Gambling sure enough

Mark Thoma cites an important Paper on Social Security by Kotlikoff, Marx, and Rizzo (which I have not read because of the Price tag). Mark provides a good summation, though, which projects losses of Living standard accountable with reductions in Social Security benefits; the seeming orientation of the Paper. I would use it in alternate manner if I could verify the math models. It appears an excellent weapon to prove individual retirement savings can never compete against an effectively organized Pension plan. Individual retirement Savings will always suffer erosion of the capital base, no matter how luxurious the Worklife funding. They will additionally suffer from unknown rates of Inflation. Pensions, on the other hand, are still clamped onto and within the Production process, and are sustainable as long as the Production process is economically viable.

Andrew Ross Sorkin provides some simple rules for Buyouts among the corporate world. Will his Rules make Buyouts a safer deal for Stockholders? Some, but the major components of Risk for Stockholders are left wide open. Corporate leadership is left free to distribute the liquid assets of the corporation as they please. A Solution would state all stored Profits must be distributed equally to all Stockholders, before such a Buyout can be made. Sorkin makes an issue of stapling, where the advisor and the Lender as one and the same. He may not have checked the corporate boardrooms, but a considerable number of corporations possess the liquid assets to pay off the lending very rapidly, actually paid by the old Stockholders who did not get a Profits distribution. It is not only Highway Robbery, but contains all the elements of 3-Card Monte.

The IMF Director Rodigo Rato gave an upbeat Report at the G20 meeting, but warned against inflationary pressures all over the World, including emerging nations. Lehman Brothers issued a Report stating that Oil prices will rise through 2007 to around $72/barrel. I would contest this forecast for Oil, the future will tell. China has made a lot of commitments, Chinese Wages are going up, and Trade orders to China will level out; the roar in China will soften in 2007 if I am right. Prices for Oil will descend even further dependent upon what happens in China and India, and how closely OPEC can enforce the Pumping reduction. lgl