Frans van Wagenberg
5 comments By Frans van Wagenberg
What Draghi is saying that a watch that does not work is always indicating the right time twice day.!!!
The fixed income market is destroyed and with typically 60% in this market, the whole risk spectrum has changed. On the other side sits the DNB who prevents Pension funds to take on more risk to compensate for the fixed income stability. Yes eventually everything will work out, but it wouldn't be because of the ECB and/or DNB. All in the name of "PROTECTION".What a poppy cock from Dijselbloem. Purely and deliberately misleading the public. The QE may have an impact for a short period, as an emergency measure, but not for this sustained period.
Now QE serves the highly and irresponsibly indebted governments mostly. What will happen to our government debt interest payments and resulting budgets if we were to return to normal free market efficient allocations???
QE has devastated the savings of everybody, in particular the elderly, but also for the young that now cannot build up a reliable source of future revenues. It has dislocated investments, is miss-allocating capital disproportionately to equities. Where will this end? If we are honest, we know; an even bigger mess. Why not have a claw back provision for politicians benefits and pensions!!! No Mr. Dijselbloem. This policy is extremely damaging with high inflation and even higher taxes to follow. Of course the simplest solution is to reduce regulation, have markets allocate capital and labor. That gets growth, not government regulation and that may restore some faith in politicians.I made a comment yesterday about the artificially low interest rate environment along the line of Klaas Knot and consequently then asking the Dutch Pension Funds to take the blame for the low earnings rate.
Never saw the comment and do not know where the comment would appear.
ThanksEverything is "artificial" even the current nFTK and the QE's and all the measures that keep interest rates artificially low.
So, maybe the DNG and the ECB should take a lot more blame, rather than setting new little minded, costly rules that are in their own PR interest. Their policies have devastated returns for retirees in general. Pension Funds have been able to manage it a lot better than the individual pensioners.It is a mistake to have the institutional investors involved in moral or societal issues other than returns. That is why we have politics.
Diversification in all its aspects of "over-exposure"; business risk, governmental risk, labor risk, market risk, interest rate risk, governance risk and yes environmental risks are or should be all reflected in the returns.
Like with any new technology/market, there are winners and losers. When governments start to subsidize (heavily) certain industries, these subsidies will be gradually withdrawn until the ventures are profitable or not, so your chances for better than low returns are minimal for quite a while. It may look wonderfully to the "world" but the returns will be sub par almost by definition, and thereby hurt the fiduciary obligations to the pensioners to protect their future payouts.
Commented on: 19 May 2017
ECB: Pension funds will ultimately benefit from low interest rates