The Center for Due Diligence

CFDD Investment Commentary

06/09/2009--The long-term lack of fiscal discipline could result in a rate spike that would increase the cost of debt service. If the spike goes beyond the narrowing of credit spreads and a minor uptick in long-term rates, the increase could limit recoveries in the economy, equities and the housing market. The financial and credit markets have improved since the credit crisis, but maintaining confidence will require a restoration of fiscal balance. The US dollar and the bond markets have already come under pressure. To preclude something much worse, policymakers must make some credible - and perhaps unpleasant - decisions to restore the nation's long-term fiscal health.

CFDD Retirement Plans Commentary

06/09/2009--The nation's $11+ trillion in national debt is already alarming, but when unfunded Social Security & Medicare benefits are added, the debt rises to almost $60 trillion, or $187,000 per American. Managing the federal debt will require a Herculean effort, but on a personal business level, advisors should note that a rate spike would set the stage for a jump in DB plan terminations. Like BOR consolidation, the bull market in DB plan consulting & plan terminations should last a decade. Corporations are re-evaluating their DB plans and this presents a timely opportunity for advisors to offer value added DB plan consulting services with teeth.