Where do we go from here?

Considering the economic disaster the United States government has now subjected the taxpayers with the infamous “Wall Street bailout” I am left to conclude that many within the country’s financial sector will be revealed as being the greatest manipulative financial thieves the world has ever known. As for the agencies responsible for failed oversight of the financial sector, including those committees of Congress, it vividly points out that we are governed by rank amateurs. Pity the same can’t be said of financial swindlers and predatory lenders.

I don’t know if you have ever thought about it or not but being governed by amateurs can be costly as they make serious mistakes. As long as the country was rich it didn’t matter so much as we could afford the expense of their mistakes. But the U.S. is not so rich anymore—it’s a debtor nation and we are now going to feel the results of incompetence in government.

Any government agency; private financial institution; member of a Congressional committee or individual previously in a position to have foreseen the present economic situation and failed to sound the alarm should have no future role whatsoever in recommending a solution. Their advice is not creditable.

I can’t imagine a more despicable scenario than having the public pay the cost of the poor judgment and irresponsibility of those politicians who brought about the unfortunate economic situation now facing the American taxpayer over the long-term.

I know that I can speak for all who agree with me: We have simply had enough of lobbyists; self-serving government bureaucrats; financial manipulators; and an uncooperative, individually politically motivated partisan Congress and their sycophants.

As for the adverse impact the federal “bailout” will have on the NMI Retirement Fund, it’s probably too early to tell, but my instinct tells me it won’t be good. In fact it will be very bad.

Without the benefit of Fund financial data, I would not be surprised to learn the members have lost as much of one quarter, if not more, of the total remaining value of its investment portfolio (considering also the amount drawn down to pay pensions).

The loss is seriously compounded by the central government’s failure to meet its financial obligation to the Fund by neglecting to pay the millions it owes. Why is it I have the uneasy impression that the central government is trying to break the Fund by its obvious neglect?

The delay in the Fund’s lawsuit against the government doesn’t help the condition of the Fund either.

If something isn’t done regarding these two important issues, the Fund will very soon have its own financial meltdown. If you don’t believe me ask a current or previous member of the board of trustees.

I can’t help but wonder how many government employees switched from the defined benefit plan to the defined contribution plan at the urging of the central government and subsequently participated in a 401K savings plan. They may regret that move in the not too distant future.

I hope the Fund’s board of trustees is aware of the fiduciary standards to which its members are held and I hope they have formally sworn an oath to uphold such standards by written acknowledgement.

As far as financial records are concerned many of my readers have mentioned, and I must agree, what little information does emanate from the Fund relative to its financial condition usually appears to have been generated at the instigation of a news reporter’s interview with Fund officials and not provided directly to the retirees from the board. A most recent case in point is the status of the Fund’s lawsuit against the central government for which no information has been forthcoming from the board.

In this regard, and in keeping with the board’s fiduciary responsibilities, may I suggest that consideration be given to periodically issuing a news letter to the members. I’m certain such would be most welcome.

Also, of great importance in my judgment is the Fund’s best estimate as to how long the portfolio can sustain the payment of pensions at the projected rate of depletion. While this information may not be considered politically expedient by some in the central government and Legislature, such is certainly not the case for those retirees directly effected as owners of the Fund’s remaining resources.

I do not recall having ever received, or indeed, been notified of the availability of an annual audited financial statement on the condition of the Fund as developed under the generally accepted uniform standards of accounting principles. This too is greatly needed by the members.

Knowledge on almost every subject (except Fund finances) is now widely accessible and as a result many members of the Fund are very well informed; they are experienced and many are highly educated. They are a new breed. They can certainly read financial statements if they had them available.

Conversely, old, formerly reliable financial institutions, banks and brokerage houses are being crushed under the weight of market and government forces unforeseen just a few years ago and are going bankrupt every day in part as a result of resistance to change and failure to anticipate the unintended consequences of their failure to adapt and change. Unbridled greed also played a major role in the predatory lending practices of many banks and credit card issuing companies with their exorbitant, usurious interest rates.

Indeed, government at all levels appears unable to function in solving the pressing problems of the day. We don’t have to look far to see visible proof of this. I hope the Fund will review its management and administrative procedures for needed modification and change several of which I have suggested above.

As for the current economic situation in the United States, what a pity—it’s all a result of greed. Write it on the wall: As a result of the debacle within the financial sector I predict the U.S. will lose its preeminence as the most financially reliable nation in the world. A position which previously saw so much of the world’s financial transactions being dollar based. Our country’s political ineptness and complete disregard for adequate control of the financial sector will—in the near future—result in the transfer of confidence away from the United States to some other nation or conglomerate of nations, probably based on several oil exporting countries.

As we both hear and read, uncertainty is spreading through the worldwide financial markets, because no one knows which institutions, and to what extent, now hold the billions of bad loans, and the bonds and other investments piled on those bad loans. I fear we will all soon find out. Lets hope that the impact on the Retirement Fund will be minimal but it probably will not be.