Stock portfolios at large pension funds had a blockbuster run. Now, managers are cashing out.
Corporate pension funds are shifting money into bonds. State and local government funds are swapping stocks for alternative investments. The nation’s largest public pension, the California Public Employees’ Retirement System, is planning to move close to $25 billion out of equities and into private equity and private debt.
Like investors of all kinds, the funds are slowly adapting to a world of yield, where they can get sizable returns on risk-free assets. That is rippling throughout markets, as investors assess how much risk they want to take on. Moving out of stocks could mean surrendering some potential gains. Hold too much, for too long, and prices might fall.
Disruptions in mental-health care during the pandemic left many Americans vulnerable. Among people ages 18 to 44, insurance claims related to psychotic episodes rose 30% to 2 million in 2023 from 2019, according to LexisNexis Risk Solutions, a data-analytics company. Around the U.S., hospitals are overwhelmed. Emergency rooms are adding security guards. Jails serve as a last resort for those unable to care for themselves.
A Harvard University probe into prominent researcher Francesca Gino found that her work contained manipulated data and recommended that she be fired, according to a voluminous court filing that offers a rare behind-the-scenes look at research misconduct investigations.
It is a key document at the center of a continuing legal fight involving Gino, a behavioral scientist who in August sued the university and a trio of data bloggers for $25 million.
The case has captivated researchers and the public alike as Gino, known for her research into the reasons people lie and cheat, has defended herself against allegations that her work contains falsified data.
The investigative report had remained secret until this week, when the judge in the case granted Harvard’s request to file the document, with some personal details redacted, as an exhibit.
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An initial inquiry conducted by two HBS faculty included an examination of the data sets from Gino’s computers and records, and her written responses to the allegations. The faculty members concluded that a full investigation was warranted, and Datar agreed.
In the course of the full investigation, the two faculty who ran the initial inquiry plus a third HBS faculty member interviewed Gino and witnesses who worked with her or co-wrote the papers. They gathered documents including data files, correspondence and various drafts of the submitted manuscripts. And they commissioned an outside firm to conduct a forensic analysis of the data files.
The committee concluded that in the various studies, Gino edited observations in ways that made the results fit hypotheses.
When asked by the committee about work culture at the lab, several witnesses said they didn’t feel pressured to obtain results. “I never had any indication that she was pressuring people to get results. And she never pressured me to get results,” one witness said.
Of the graduates in non-college-level jobs a year after leaving college, the vast majority remained underemployed a decade later, according to researchers at labor analytics firm Burning Glass Institute and nonprofit Strada Education Foundation, which analyzed the résumés of workers who graduated between 2012 and 2021.
More than any other factor analyzed—including race, gender and choice of university—what a person studies determines their odds of getting on a college-level career track. Internships are also critical.
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Bachelor’s degree holders in college-level jobs earn nearly 90% more than people with just a high-school diploma in their 20s, according to a Burning Glass analysis of 2022 U.S. Census Bureau data.
By comparison, underemployed college graduates earn 25% more than high-school graduates.
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Contrary to conventional wisdom, not all degrees in science, technology, engineering and math, or STEM, disciplines are a sure bet to landing a job that reflects a college education, the study found.
Nearly half of people who majored in biology and biomedical sciences—47%—remained underemployed five years after graduating. Likewise, business majors less focused on quantitative skills, such as marketing and human resources, were twice as likely to be underemployed than those with math-intensive business degrees, such as accounting or finance. The data cover graduates who didn’t get master’s or other advanced degrees after college.
As budget deficits surge toward the stratosphere, Congress will soon have to get serious about savings proposals. Yet reforming Social Security and Medicare—the leading drivers of long-term deficits—remains a political nonstarter. Neither party is willing to raise middle-class taxes. And cutting defense and social spending would save at most $200 billion annually from deficits that are projected to approach $3 trillion by 2034.
That leaves one option: Tax the rich. It won’t be nearly enough.
There are a few excessive tax loopholes and undertaxed corporations that lawmakers could address. It’s farcical, however, to suggest that the tax-the-rich pot of gold is large enough to rein in our deficits and finance new spending programs. Seizing every dollar of income earned over $500,000 wouldn’t balance the budget. Liquidating every dollar of billionaire wealth would fund the federal government for only nine months.
In a study for the Manhattan Institute, I set upper-income tax rates at their revenue-maximizing level, while paring back tax loopholes and fighting tax evasion. As background, the Congressional Budget Office projects that our budget deficits—which currently exceed 7% of gross domestic project—will surpass 10% of GDP over the next three decades. My research shows that the “tax the rich” model would raise at most 2% of GDP in additional revenue over the long term.
Franklin, who was a printer, among his other roles, was known for marking his early paper money with images of intricately veined leaves that were nearly impossible for counterfeiters to copy, using a variety of fonts, some available only to him, and intentionally lacing the text with misspellings.
But scientists say Franklin took things a step further to stave off fraudsters. Other distinguishing characteristics of Franklin’s money—the new research revealed through advanced atomic-level imaging methods—were more subtle. He used a unique black ink. His paper glimmered. Blue threads decorated the surface, and finer fibers were woven throughout.
Researchers detailed the innovations in a paper published Monday in the journal Proceedings of the National Academy of Sciences. The findings describe previously unknown methods Franklin developed to safeguard printed money notes against counterfeiting.
The downgrade, the first by a major ratings firm in more than a decade, is evidence that increasingly frequent political skirmishes over the U.S. government’s finances are clouding the outlook for the $25 trillion global market for Treasurys. Fitch’s rating on the U.S. now stands at “AA+”, or one notch below the top “AAA” grade.
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Few investors believe that Fitch’s downgrade will immediately challenge that role. Still, it is the first time a ratings firm lowered its headline assessment of the U.S. government’s propensity to pay its bills on time since Standard & Poor’s in 2011 lowered its rating one notch below the top grade. That decision followed another tense debt-ceiling standoff in Congress.
Moody’s, the other member of the three big U.S. ratings firms, continues to give the U.S. its strongest assessment.
Fitch said Tuesday that the downgrade reflects an “erosion of governance” in the U.S. relative to other top-tier economies over the last two decades.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.
Biden’s efforts to produce more inflation are nonstop, 24×7. His latest move is a set of regulations to force people into Obamacare despite the fact a District Court already ruled against his proposed regulations.
Biden Attempts to Make Healthcare Even More Expensive
To understand what Biden wants to do, and why the Supreme Court is likely to smack it down, we need to review a District Court ruling from 2020.
Behold the President’s plan to limit short-term health insurance plans in order to jam more consumers into the heavily subsidized and regulated ObamaCare exchanges. The Health and Human Services, Labor and Treasury Departments on Friday proposed rules to roll back the Trump Administration’s expansion of short-term, limited-duration insurance (STLDI) plans. Since 2018 these plans have been available in 12-month increments, and consumers have been able to renew them for up to 36 months.
These plans are especially attractive to young people whose employers don’t provide coverage. Why would a healthy 26-year-old want to pay for maternity, pediatric and other services he probably won’t use in the near future?
The Inflation Reduction Act sweetened ObamaCare’s insurance premium tax credits that are tied to income. As a result, a 60-year-old making just above four times the poverty level has to pay only 8.5% of his income toward his insurance premium while the government picks up the rest. If premiums increase, government is on the hook for more.
Beauty has its privileges. Studies reliably show that the most physically attractive among us tend to get more attention from parents, better grades in school, more money at work and more satisfaction from life. A study published in January in the Journal of Economics and Business found that good-looking banking CEOs take in over $1 million more in total compensation, on average, than their lesser-looking peers. “Good looks pay off,” the authors write.
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Scientists attribute the human tendency to give attractive people better treatment to something called the halo effect. Basically, we tend to assume that good looks are a sign of intelligence, trustworthiness and good character and that ugliness is similarly more than skin deep. “Personal beauty is a greater recommendation than any letter of reference,” Aristotle observed. This may help explain why attractive people are less likely to be arrested or convicted, even after controlling for criminal involvement, according to a 2019 study of nationally representative data published in the journal Psychiatry, Psychology and Law.
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Yet those of us who never got that genetic golden ticket should take heart: The halo effect appears to go both ways. A number of studies show that goodness often enhances our looks. A paper in PLOS One in February, for example, reports that people found faces in photos more attractive when they learned the subjects were honest, kind and not aggressive. The results suggest that “facial attractiveness is malleable,” the authors write. Or as Sappho observed: “What is beautiful is good and what is good will soon be beautiful.”
Casinos on the Vegas Strip are making it costlier to play and harder to win.
Payouts are lower for winning blackjack hands. Bets on some roulette wheels are riskier. And it is taking more cash to play at many game tables.
Blackjack players lost nearly $1 billion to casinos on the Strip last year, the second-highest loss on record, after 2007, according to data from the Nevada Gaming Control Board.
Some Las Vegas casinos cut back the number of blackjack tables with dealers,raised minimum bets during busy times and lifted their advantage over players in some games—doubling-down on a prepandemic practice of making subtle changes that favor the house, according to industry executives, researchers and gamblers.
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Blackjack, a fast-paced card game, historically paid out a ratio of 3:2 when a player hit 21 on the first two cards. That means a gambler wins $15 for every $10 bet. Now, many blackjack tables on the Strip pay out at 6:5, which means that same $10 yields only $12.
John and Kristina Mehaffey, owners of gambling-news and data company Vegas Advantage, have been cataloging these changes since 2011, walking miles-long routes through casinos to record the number of blackjack and roulette tables set outside of VIP areas.
According to the Mehaffeys’ data, more than two-thirds of blackjack tables on the Strip currently offer 6:5 payouts, as opposed to 3:2.
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Las Vegas visitors on vacation might not notice—or might not care—about the casinos’ increased advantage, says Bill Zender, a casino consultant who focuses on table-game management. But casinos risk losing business over time, he says.
“If you go into a casino and gamble, and you lose your money fairly quickly, almost every time, you don’t feel you’re getting the bang for your buck,” Zender said.
State Farm General Insurance Co. last week became the latest insurer to retreat from California’s homeowners market. The culprit isn’t climate change, as the media claims in parroting Sacramento talking points. The cause is the Golden State’s hostile insurance environment.
The nation’s top property and casualty insurer on Friday said it won’t accept new applications for homeowners insurance, citing “historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.”
In other words, State Farm can’t accurately price risk and increase its rates to cover ballooning liabilities. Other property and casualty insurers, including AIG and Chubb, have also been shrinking their California footprint after years of catastrophic wildfires, which are becoming more common owing to drought and decades of poor forest management.
China has one of the lowest retirement ages among major economies. Under a policy unchanged since the 1950s, it allows women to retire as early as at age 50 and men at 60. Now, local governments are running out of money just as a wave of retirees hits. That is leaving Beijing with little choice but to ask people to work longer—a move economists say is long overdue but one still likely to meet with resistance.
China’s version of “baby boomers”—those born after China emerged from devastating starvation in the early 1960s—are retiring in droves. Even with government subsidies, by 2035 China’s state-led urban pension fund will run out of money accumulated over the previous two decades, leaving it to rely entirely on new workers’ contributions, according to projections made in 2019 by the Chinese Academy of Social Sciences, a government think tank.
Former central bank Gov. Zhou Xiaochuan warned in a February speech that China must address its pension shortfall and communicate that many Chinese may need to rely on private pension savings
