Tag Archive for NIFCU$

| May 1, 2013
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US Economy – Moving Toward Solid Growth

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Guest post written by Hillary Elder, Director, Money Market Strategies for HighMark Capital Management.

HighMark Capital Management is the fund manager for National Investment Fund for Credit Unions (NIFCU$), the NAFCU Services Preferred Partner for Credit Union Investments.

After just avoiding the “fiscal cliff” as we entered 2013, the U.S. economy has so far defied the odds to grow at a faster pace than first projected. Employment now appears to be increasing steadily, housing is picking up sharply, and the broader stock market has rallied strongly since January. Even the implementation of the dreaded budget “sequestration” on March 1st has not derailed the recovery. Dire warnings of cuts to government programs proved hyperbole as, in reality, sequestration amounts to reductions in the growth rate of spending from the current base. Sensing the public’s exasperation, lawmakers quietly agreed on a spending resolution to continue funding the U.S. Government past March 27th for the six months remaining through the end of the fiscal year.

While long term budget negotiations continue, and there remains the need to increase the U.S. debt ceiling sometime over the summer, other issues such as immigration reform are now being debated.

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Category: Management & Operations | Tags: , ,
| January 9, 2013
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Fiscal Cliff Averted. Fight to Raise the U.S. Debt Ceiling and Implement Budget Cuts Comes Next

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Guest post written by Hillary Elder, Team Leader, Taxable Money Fund Strategies, HighMark Capital Management, Inc.

While the fiscal cliff deal approved by both the Senate and the House of Congress in the wee hours of January 1, 2013 does avert most of the previously scheduled tax increases, it does not include any provision to raise the debt ceiling, and it defers the scheduled spending cuts for two months. Given the confrontational tone of the negotiations over the last two weeks of 2012, the upcoming negotiation over these key issues could lead to a shutdown of the Federal government by late February or early March.

The bruising 2011 battle to raise the debt limit was instrumental in Standard & Poor’s decision to lower the long-term debt rating of the United States. Moody’s Investors’ Service indicated back then that they needed to see a stabilization of the ratio of federal debt to GDP, as well as a long-term plan to reduce this ratio.

The temporary 2% reduction in the payroll tax rate paid by employees was not extended, which will increase taxes by roughly $120 billion per year, for about a 1% reduction in personal incomes. This impacts all workers’ incomes. Lawmakers settled on higher tax rates (39.6%) for income in excess of $400,000 for individuals ($450,000 for couples), up from the current 35%. This impacts the top 1% of incomes.

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Category: Growth & Retention | Tags: ,
| November 1, 2012
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Uncertain Financial Markets Ahead

uncertain-financial-markets-ahead

Guest post written by Hillary Elder, Director, Money Market Strategies, HighMark Capital Management

Five years after the onset of the global credit crunch, targeted U.S. short-term interest rates remain near zero and an anemic recovery poses the risk of the country slipping back into recession. Meanwhile, Euro-zone turmoil haunts the financial markets while regulatory burden increases. What’s a credit union manager to do? Here’s what you need to know about the months ahead.

Investment Landscape

For investors, the past five years have been characterized by steep declines in short-term interest rates. U.S. government bonds delivered exceptionally strong returns while the U.S. stock market has been somewhat lackluster. Given that yields are already low, our expectation is that returns on U.S. government investments will be less robust over the next two years, yet still slightly better than returns from large-company U.S. equity securities.

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Category: Growth & Retention, Management & Operations | Tags: , , ,
| October 4, 2012
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The Upcoming U.S. Presidential Election and the Fiscal Cliff

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Guest post written by Hillary Elder, Director, Money Market Strategies, HighMark Capital Management

In November 2011, after months of debate, Congress was unable to arrive at an agreement to gradually reduce the U.S. deficit. As a result, they deferred any decision by implementing a process called sequestration, scheduled to take effect in January 2013. This draconian option was thought sufficient to motivate both political parties to focus on resolving their differences. It was never intended to actually take effect, as it will trigger across- the- board spending cuts of $1.2 trillion over 10 years to both domestic and defense programs.

Since that time, there has been no progress on dealing with the nation’s long term budget problems as partisanship and electioneering have prolonged the stalemate. The hope is that following next month’s election lawmakers will refocus to tackle this issue. There is also the expectation that discussions will need to be held as soon as February 2013 regarding once again raising the statutory debt ceiling from the current $14.7 trillion. Last month, before leaving to campaign, Congress passed a six month continuing resolution to fund the U.S. government through March 2013.

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Category: Growth & Retention, Management & Operations | Tags: , ,
| August 11, 2011
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Just When You Thought It Was Safe To Go Back In The Water – Will The Downgrade Have A Lasting Effect?

I tend to be an optimist, and thought (hoped) that once the debt ceiling deal was finalized, the nation would refocus and we could get back to the business of economic recovery.

It is usually the Federal Reserve that is accused of taking the punch bowl away just when the party gets rolling, but this year Standard & Poor’s stepped in to be the “bad cop” by downgrading their U.S. Government long-term AAA debt rating to AA+ for the first time since granting it in 1917.  This last week has brought back painful memories of 2008, with all-too-familiar volatility in the equity markets and plunges in the value of retail investor portfolios and 401(k)s.

But what will the long-term effect be?

Dave Goerz, SVP and Chief Investment Officer for HighMark Capital (the Adviser which manages our National Investment Fund for Credit Unions) has posted an excellent commentary that puts the recent debt rating downgrade into historical context and outlines some of the steps that can be taken to address the deficit and political concerns that prompted the downgrade. Read more

Category: Management & Operations | Tags: , , ,
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