Legislature(2011 - 2012)SENATE FINANCE 532
02/21/2012 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Capital Markets Outlook and Permanent Fund Performance Review | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
February 21, 2012
9:06 a.m.
9:06:47 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:06 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
ALSO PRESENT
Michael Burns, Executive Director, Alaska Permanent Fund;
Michael O'Leary, Executive Vice President, Callan
Associates
SUMMARY
^Capital Markets Outlook and Permanent Fund Performance
Review
9:07:17 AM
MICHAEL BURNS, EXECUTIVE DIRECTOR, ALASKA PERMANENT FUND,
presented a PowerPoint presentation, "Alaska Permanent
Fund, Designed for Sustainability." He looked at slide 2,
"FY 2011 Performance", and noted that the total return was
20.6 percent, the benchmark return was 21.5 percent, the
ending balance was $40.1 billion, the change from FY 11 was
$6.9 billion, and the dividend was $801 million.
Mr. Burns discussed slide 3, "FY 2012 to-date", and
explained that the total return was -4.5 percent, the
benchmark return was -4.6 percent, the ending balance was
$39 billion, and the change from FY 11 was -$1.1 billion.
Mr. Burns highlighted slide 4, "Renewable Resource", and
stated that $15.6 billion had been deposited into the Fund
to date; $19.2 billion had been paid in dividends to date;
and the current value of the fund was $40.7 billion.
Co-Chair Hoffman wondered how much the legislature had
deposited since the Permanent Fund's inception. Mr. Burns
replied that the number was included in the $15.6 billion,
and estimated that it was approximately $15.5 billion. He
stressed that the Fund mostly consisted of oil royalties.
Mr. Burns discussed slide 5, "Tysons Corner Center." He
explained that Tysons Corner Center in Washington, DC had 2
million square feet developed, and 1.4 million square feet
were entitled. The building held apartments, office space,
and a hotel; and train access was in under development from
DC to Dulles.
Co-Chair Stedman requested an analysis of the three, five,
and ten-year compounded returns. Mr. Burns stated that the
compounded returns would be presented later in the meeting.
9:13:17 AM
Mr. Burns looked at slide 6, "299 Park Avenue." He stated
that 299 Park Avenue was a recent acquisition. The partners
were the Fisher Brothers, and it was 1.1 million square
feet of office space. The total property value was $1.2
billion. He stressed that it was a major investment, and
the Permanent Fund Corporation was a 50 percent partner
with the Fisher Brothers. He noted that the Fisher
Foundation, which was founded by the Fisher Brothers,
opened a Fisher House at the Elmendorf Hospital. He stated
that there were 56 Fisher Houses at military and veterans
hospitals. He felt that the Fisher House was beneficial to
families of wounded soldiers.
Co-Chair Stedman surmised that 299 Park Avenue was worth
approximately $1 billion. Mr. Burns expounded that it was
worth $1.2 billion. Co-Chair Stedman surmised that the
State had a 50 percent share. Mr. Burns agreed. He
furthered that the State contributed $400 million, and
there was some debt on the State's share.
Co-Chair Stedman wondered if the State's leverage equaled
that of the Fisher Brothers. Mr. Burns responded that the
debt was already on the property, because the State bought
out another partner.
Co-Chair Stedman wondered if the $400 million was for the
entire property or strictly on the State-owned portion. Mr.
Burns replied that the $400 million was on the entire
property.
Co-Chair Stedman requested further information regarding
how the real estate was managed. He believed that the real
estate owned by the Permanent Fund Corporation was mostly
equity. Mr. Burns replied that the preferred method was to
own the properties outright, although, if there was some
existing debt it would be managed appropriately. He
explained that there was some debt at the Tyson Center, and
the real estate investment trust that handles the retail
end calls for use of modest leverage.
Mr. Burns discussed slide 7, "City Centre II & III." He
stated that City Centre was located in Houston, Texas. It
was 150,000 square feet of retail and office space, and
would be 270,000 after construction. The City Centre II and
III had a $50 million property value. He added that there
was going to be a City Centre IV. He explained that City
Centre III would be the campus for the Texas A & M Business
School. He stressed that it was currently an active year
for real estate.
9:18:08 AM
Mr. Burns introduced Mr. O'Leary. He explained that Callan
Associates had been the Permanent Fund Corporation's
investment consultant since 1990.
MICHAEL O'LEARY, EXECUTIVE VICE PRESIDENT, CALLAN
ASSOCIATES, stated that he was going to present the final
performance numbers and the benchmark number for the first
six months. He remarked that the performance was slightly
better than previously reflected, because the benchmark
index reflecting all categories was slightly worse than
what Mr. Burns had indicated. He stated that the half-year
saw a negative return of $466 million, versus a benchmark
return of -$526 million (six months, ended December 2011).
Co-Chair Stedman requested a table format of the various
nominal and real returns. Mr. O'Leary agreed to provide
that information.
Mr. O'Leary discussed the PowerPoint presentation "2012
Economic Environment and Capital Markets Review Senate
Finance Committee" (copy on file). He stated that the
intention of his presentation was as follows:
Evaluate the current environment and economic outlook
for the U.S. and other major industrial countries:
-Business cycles, relative growth, inflation.
-Examine the relationships between the economy and
asset -class performance patterns.
-Examine recent and long-run trends in asset class
performance.
Apply market insight:
-Consultant experience - Plan Sponsor, Manager Search,
Specialty
-Industry consensus
-Client Policy Review Committee
Test the projections for reasonable results.
9:23:01 AM
Co-Chair Stedman requested a definition of "strategic"
within the industry. Mr. O'Leary replied that the word,
strategic, referred to the general level of long-term risk
and return that a particular fund or advisor was pursuing.
He explained that an equity mutual fund had a strategic
allocation, and a balance fund typically had a strategic
target of 60 to 65 percent in equities and the remainder in
bonds. Short-term actual asset allocation may vary from the
strategic allocation target, but not typically by very
much. He noted that major funds like the Permanent or State
pension systems tending towards strategic targets, and
recognized that many investments were not liquid.
Mr. O'Leary stressed that he and his associates were not
considered economists. He furthered that their expectations
were incorporated with the economic setting and important
secular relationships with respect to long-run growth,
estimates, and inflation.
Mr. O'Leary highlighted slide 2, "Themes Explored in
Setting the 2012 Expectations." He stressed that the
projections were made for every major asset category. He
explained that the focus was on a range of expected
returns. The middle of the range was projected, followed by
the extremities of the range. He stated that the range
would be broader, if the time-horizon was shortened. He
stated that the projection process began in late 2011, and
reminded the committee that the first quarter in 2011 was
pretty good, the second quarter was "not terrible", and the
third calendar quarter was "a disaster." The third quarter
was bad, because the equity markets plummeted; the interest
rates spread widened markedly between credit instruments
and government instruments; and the dollar strengthened
markedly as the worldwide investors were very concerned
with developments in Europe. He noted that the fourth
quarter saw a significant recovery in the equity market,
and a slight narrowing credit spreads. He stated that there
was an expectation of greater growth than what was
ultimately realized, due to the effects of the earthquake
in Japan. He noted that the pace of the recovery was slower
than other economic recoveries. He explained that during
the formulation of expectations, a broad range of outcomes
was considered.
9:28:56 AM
Mr. O'Leary briefly discussed slide 3, "The Capital Markets
in 2011." He noted the extremely low level of cash returns
in 2011, and the consumer price index (CPI) had increased
by almost 3 percent. He remarked that the Barclays Capital
(BC) aggregate had increased by almost 3 percent. He
furthered that the international stocks were significantly
lower than expected.
Mr. O'Leary displayed slide 4, "Stock Market Returns by
Calendar Year." He stated that the histogram displayed the
returns for the prior four calendar years. He announced
that the current day's market had reached a point that had
not been achieved since May 2008, which was before the
onset of the financial meltdown.
Mr. O'Leary discussed slide 5, "Below-Par Recovery for the
U.S. Economy." He stated that the graph displayed the
annualized rate of real Gross Domestic Product (GDP)
growth, with the gold bars representing projections.
Mr. O'Leary highlighted slide 6, "Deeper Recession, Slower
Recovery." He explained that the graph displayed the
comparison between the current economic recovery and the
average post-1950 economic recovery. He stated that the
graph highlighted the GDP growth from the low-point, and
stressed that the current recovery was a "muted" recovery
compared to the 1950s, 1960s, 1970s, 1980s, or 1990s.
Mr. O'Leary discussed slide 7, "Will We Fall Back Into
Recession?" He highlighted the reasons why there could be
another recession: an economy near stall speed is
vulnerable to shocks; the Fed cannot help much; there were
risks of policy mistakes like premature fiscal tightening
and policy paralysis; the Eurozone is the immediate risk;
and oil shocks are a perennial threat. He also highlighted
the reasons why there would not be another recession: U.S.
banks were in better shape than 2008; nonfinancial
corporation's balance sheets were strong; exposures to
Eurozone sovereign debt were better understood than were
the exposures to sub-prime debt; and Europe was unlikely to
allow a major institution to collapse similar to Lehman.
9:33:46 AM
Mr. O'Leary displayed slide 8, "Modest Employment Growth
and High Unemployment Sapped Confidence." He explained that
the red line represented the unemployment rate. He felt
that the unemployment rate was not as good as the
statistics portrayed, and did not see anything devious. He
stressed that there was employment growth, but there was a
significant contraction in the labor force participation
rate. He noted the unemployment indicator known as "USCIS"
pointed out that the broader number of part-time,
discouraged workers and those receiving unemployment
benefits was near 15 percent.
Mr. O'Leary discussed slide 9, "Good News: Initial
Unemployment Insurance Claims Are Edging Down." He stated
that the slide showed some improvement in unemployment
insurance claims.
Mr. O'Leary highlighted slide 10, "A Rebound in Household
Formation Required for Recovery in Housing Starts." He
noted that the household formation had risen, so there was
a new focus on house demand.
Co-Chair Stedman queried the definition of "household
formation." Mr. O'Leary replied that he understood
"household formation" to mean two or more people living
together.
Mr. O'Leary discussed slide 11, "Consumers Spending Has Not
Been a Strong Driver of Recovery." He explained that
consumer spending had been a source of some growth, but was
not robust.
Mr. O'Leary displayed slide 12, "Pent-up Demand for Durable
Goods Drives Growth in Consumer Spending." He noted the
sharp turn-around in durable goods, specifically related to
auto sales.
Mr. O'Leary highlighted slide 13, "So is Rising Inflation
an Emerging Threat?"
Economic theory says inflation HAS to take off:
-Unprecedented, synchronized global monetary stimulus.
-Interest rates at historic lows.
-Unprecedented fiscal stimulus.
-Corresponding unprecedented federal budget
deficit.
-Inflation beneficial to debtors-moral hazard?
-Commodity prices itching to rise at the first sign of
growth.
-Dollar must weaken, furthering pressure on inflation.
Practical reality:
-The U.S. and the rest of the world face very slow
recoveries:
-Fiscal and monetary stimulus kept us out of a
longer, deeper recession, but
-Aggregate demand is weak, no post-recession
surge as fiscal stimulus fades.
-Capacity utilization has plummeted in the U.S.;
we are awash in new capacity overseas, and still
importing deflationary pressure.
-Weak job market, no wage pressures.
-Interest rates may rise sharply without a surge in
inflation.
-Inflation a very real threat, but it may be up to
five years off.
-Commodity prices represent a wildcard threat in the
shorter term, particularly a supply-side disruption.
-Commodity spike more likely to trigger another
slowdown than a general price spiral.
Mr. O'Leary discussed slide 14, "Consumer Price Inflation
Expected to Ease in 2012." He pointed out that inflation
should relax in 2012.
9:38:40 AM
Mr. O'Leary displayed slide 15, "Corporate Liquidity and
Growth." He stated that the graphs were sourced from a J.P.
Morgan publication, and illustrated that the aggregate
corporate balance sheet was doing well. He explained that
the cash graph was represented as the percentage of total
current assets. He remarked that dividends had increased,
but not as rapidly as the cash increase. He remarked that
the tax uncertainty had an impact on individual's dividend
pay-out decisions that some share-holders may regret. He
furthered that share-holders could retain assets through
stock buy-backs; cash for capital expenditures; and mergers
and acquisitions. He stressed that asset-retention did not
have meaning related to mergers and acquisitions, but the
capital expenditures were a driving force in the economy.
Co-Chair Stedman wondered how the current economy would
compare to the economy at the end of World War II. Mr.
O'Leary did not know, but agreed to provide that
information.
Mr. O'Leary highlighted slide 16, "Business Equipment
Demand is Strengthening." He remarked that business
equipment demand was currently strengthening.
Mr. O'Leary discussed slide 17, "U.S. Economic Growth by
Sector." He explained that the spreadsheet displayed the
year to year percentage change for the major sectors of the
economy. He pointed out that in 2011, real GDP growth was
only 1.8 percent.
-GDP hit bottom in Q2 2009. After inventory and
stimulus boost, economy was fully expected to slow in
second half of 2010 and through 2011, but the bottom
seemed to fall out of economic growth, particularly
during the first half of 2011.
-As confidence deteriorated with the European debt
crisis and the US budget impasse over the summer,
concerns rose for a return to recession,
-However, data on the U.S. economy began to surprise,
notching solid growth in the 3rd and 4th quarters.
Indicators ranging from orders to jobs to consumer
spending all strengthened in direct contrast to
depressed reports on consumer and business confidence.
-Note: Imports are a negative number in the
calculation of GDP.
Mr. O'Leary displayed slide 18, "What Will the Fed Do?"
-The Fed is worried; it had expected 2.7-2.9 percent
growth for 2011, 3.3-3.7 percent for 2012.
-2011 came in at 1.8 percent.
-Global Insight (and consensus) forecast now: 2.0
percent (2012), 2.4 percent (2013).
-Fed has used its prime ammunition already.
-No rate hike till mid-2013 "promised."
-Market assumes no hike before 2014.
-Hurdle for QE III is high - but we may clear it.
9:43:40 AM
Senator Thomas wondered if there was more science regarding
what was currently occurring, or if the focus was mainly
historical. Mr. O'Leary replied that the focus was
historical. He stressed the significance of emerging
economies, those economies were much more stable than many
developed nations. The emerging economies had lower debt
burdens.
Mr. O'Leary highlighted slide 19, "Federal Funds Rate Near
Zero Until 2015." He explained that the federal funds rate
was near zero, and long rates would also stay low, with a
steep yield curve. He explained that the red line
represented federal funds, the yellow line was the 10-year
treasury, and the blue line was the 30-year mortgage rate.
Mr. O'Leary discussed slide 20, "The Economy and the
Capital Markets."
The economy was fully expected to meander through a
weak recovery, as the combination of recession,
financial crisis and deleveraging required time to
work through the system.
-GDP growth was expected to slacken in 2011, but
events and emotions combined to spur investors into a
series of risk on/risk off trades that drove market
volatility.
-Economic data suggest the economy continues to grow,
but such growth will remain modest.
-Double-dip recession is possible, but not the
expected outcome.
Callan's outlook:
-Inflation will likely drift higher, but not
immediately. Painfully low interest rates will
persist, now that the Fed has "guaranteed" low rates
through 2013. We expect interest rates to rise
gradually after 2013.
-Historic nominal return averages will be hard to
achieve over the short, medium and even the longer
run.
-Stocks rallied in the fourth quarter of 2011, saving
the results for the year. However, prospects for
above-trend growth are weak; companies are strong
enough to attain trend profit growth, but not a lot
more.
-The housing market has yet to truly hit bottom,
despite mortgage rates at an all-time low. The "shadow
inventory" of homes yet to foreclose still hangs over
the market.
-The chance that we could see another leg down on
housing is the greatest risk to the economy, and to a
deflationary spiral.
-The dollar should face substantial downward pressure
as a result of U.S. policy. The problem, of course, is
what other currency can take the dollar's place?
-The path to a rational set of long-term capital
market outcomes is likely through an ugly shorter term
period of rising interest rates, capital losses in
fixed income, and volatile equity markets.
9:48:33 AM
Mr. O'Leary highlighted slide 21, "Equity is more
Reasonably Priced." He explained that the price-to-earnings
ratio for the Standard and Poors 500 (SP 500) was trailing
below its long-run (1954-2011) average. He stated that if
interest rates rise 1 percent from their end-of-year level,
a 30-year treasury would decline in value by nearly 20
percent. There is no yield cushion to protect bond
investors.
Mr. O'Leary displayed slide 22, "Building U.S. Equity
Expectations."
Dividend Yields Likely to Stay Near Current Levels.
-Financing uncertainty continues so cash unlikely to
be returned to investors.
-Fixed income yields expected to remain low.
Equity Valuations Currently Moderate to Attractive
After Market Angst During 2010 and 2011.
Corporate Profits Near Long-Term Growth Rate.
-Companies may be able to sustain trend or above trend
profit growth even in a weak recovery.
Company Balance Sheets Are Strong, But No One is Eager
to Spend. Large Cash Holdings a Drag on ROE.
Consumption Still Dominates Economic Growth.
-Unemployment high but finally declining,
-Wealth depleted,
-Deleveraging continues,
-Savings replenished.
Exports Remain Strong, in Spite of Strengthening
Dollar but Impact Muted by Size of Economy.
Mr. O'Leary discussed slide 23, "Current Yield is
Exceptionally Low." He stated that the BC aggregate bond
index daily yield was the worst from January 2, 2001 to
December 30, 2011. He stated that the index that was
displayed in 2011 had a duration of almost five years. He
stressed that the yield-to-worse for the investment grade
bond market represented in the chart was a "naïve"
predictor of the next five-year return for bonds, or 2.25
percent.
Co-Chair Stedman requested a definition of duration. Mr.
O'Leary replied that duration was a measure of interest-
rate sensitivity and cash-flow. He explained that a
duration of five, would suggest that if there was a 1
percent change across the entire yield curve, there would
be a 5 percent change in the price of the bond.
9:52:37 AM
Mr. O'Leary highlighted slide 24, "Treasury Rates Fell with
Fears of a Faltering Recovery." He communicated that the
graph showed the U.S. Treasury yield curve at the end of
the six years, prior. He noted that the change from 2010 to
2011 was represented by the gold arrow. He urged the
committee to study the chart, because it demonstrated the
magnitude of the change primarily at the "front-end" of the
yield curve. He noted that the change was due to decreasing
demand, but also due to monetary policy actions. He
explained that the 2.75 percent short-term interest rate
projection over ten years was due to the unremarkable
history.
Co-Chair Stedman inferred that there would be substantial
"bleeding" within the bond market. Mr. O'Leary affirmed,
and added that the long-term rates had fallen, so when the
short-term rates rise, customers would demand a premium to
incur the risk of longer term rates rising.
Co-Chair Stedman requested a bond portfolio projection
recommendation to the Permanent Fund Corporation. Mr.
O'Leary suggested that the Permanent Fund Corporation be
flexible in their intentions. He felt that the Permanent
Fund Corporation should not "lock up" the 3 percent, 30-
year treasury bonds. He noted that the bond market
reflected a widening in spreads between non-government
issuers and the reserve currencies.
Co-Chair Stedman queried the treasury inflation-protected
securities (TIPS). Mr. O'Leary replied that TIPS had been
the highest performer in his personal retirement savings.
He felt that the real yields on TIPS were currently very
small, but provided good long-term inflation protection.
Mr. O'Leary highlighted slide 27, "Capital Market
Expectations, Return and Risk." He stated that a geometric
return was a compound annual return, and an arithmetic
return referred to a return for a single year. He explained
that the more volatile an asset category, the greater the
difference between the expected arithmetic and geometric
returns. He noted that the focus should be on the risk of
the geometric mean return related to the expected standard
deviation.
10:01:16 AM
Mr. O'Leary looked at slide 28, "2012 Capital Market
Expectations Largely Unconstrained, Asset Mix Return and
Risk Absolute Return Capped at 5 percent."
Co-Chair Stedman queried the 2011 tenure geometric return
versus the projected 10-year geometric return reflected in
the fourth column. Mr. O'Leary responded that the far
right column reflected the 2011 expectations. He noted that
interest rates had changed, so the starting-point for bonds
was even lower than what was expected. He stressed that
there was a different 10-year period than the 10-year
period that was expected the year prior.
Co-Chair Stedman observed that the projected 10-year
geometric return only showed two years with higher than 8
percent emerging markets, equity and private equity. He
wondered how the goal would be achieved with an 8 percent
benchmark. Mr. O'Leary responded that 8 percent would be a
very aggressive benchmark. He noted that the benchmarks
could be considered an estimate of long-term returns, but
the orientation would be mostly equity based. Co-Chair
Stedman asked if 60 percent was put in the SP 500, and 40
percent in TIPS, a balance portfolio would reflect a 4.68
percent return. He wondered if that was a proper
interpretation. Mr. O'Leary responded with page 28,
"Fallout of 2012 Capital Market Expectations."
What happened in 2011? The economic recovery appeared
to lose steam, investors lost faith, the equity market
took beating through Q3, and interest rates fell
sharply, from already-low levels. Strong fourth
quarter pushed U.S. equities back up, but only enough
to end the year flat sharply; non-U.S. markets were
not so fortunate. Bonds recorded yet another
(unexpected) stellar year as interest rates dropped in
the flight from risk.
Bond returns going forward- not a lot of room for
optimism. Interest rates have nowhere to go but up,
right?
Cash cannot sustain a negative real yield over the
longer term. Or can it? We project an upward sloping
yield curve, with very a slim risk premium for bonds
over cash.
Building equity returns from long-term fundamentals:
-Earnings growth - outlook now in jeopardy.
-Real GDP - how slow can we go?
-Dividends & other returns on free cash flow - can
dividends surpass Treasury yields? For how long?
-Valuation - cheaper, but cheap enough?
Co-Chair Stedman expressed concern regarding the
substantial deviation from the expectations and forecasts.
Mr. O'Leary agreed to be available for further meetings.
10:12:50 AM
Mr. O'Leary continued to discuss slide 29:
How to make investors very unhappy in 3 easy numbers:
-Bonds = 3 percent, or less
-Stocks = 8 percent, or less
-60/40 = 7 percent, or less…
-Our 2012 numbers reflect our optimism for the
economy, for inflation, and for the capital markets.
-The challenge: to refrain from translating these
expectations into a need to take on more risk in
pursuit of return.
-How does one keep invested in fixed income - a
prudent investor's anchor to windward -when we all
KNOW it's going to lose money while interest rates
rise?
Co-Chair Stedman expressed concern regarding the ten-year
geometric expected return. Mr. O'Leary responded that if
there was a significant portion of the portfolio earning 3
percent, there would not be an expectation beyond 7
percent.
Mr. O'Leary discussed slide 31, "10-Year vs. 30-Year
Capital Market Expectations."
Over a 30-year time horizon, our capital market
expectations would reference long-term historical mean
results, with an overlay of informed judgment. Key
elements to consider:
-Nominal returns
-Inflation
-Real returns
-Risk premia - bonds over cash, stocks over bonds,
long duration over short
-Long term underlying economic growth (real GDP).
Current expectations:
-Stocks: 7.75 percent nominal, 5.25 percent real, 4.50
percent premium over bonds
-Bonds: 3.25 percent nominal, 0.75 percent real, 0.50
percent premium over cash
-Cash: 2.75 percent nominal, 0.25 percent real
-Inflation: 2.5 percent
-Underlying economic growth (real GDP) - 2 to 3
percent per year.
Long-term (30-year) expectations:
-Stocks: 9.5 percent nominal, 6.5 percent real, 4.5
percent premium over bonds
-Bonds: 5 percent nominal, 2 percent real, 1 percent
premium over cash
-Cash: 4 percent nominal, 1 percent real
-Inflation: 3.0 percent
-Underlying economic growth (real GDP) - 3 to 3.5
percent per year.
Mr. O'Leary concluded his presentation. He stressed that
his company routinely compares its approaches to others.
10:17:49 AM
Co-Chair Stedman requested an additional presentation
regarding the Permanent Fund Corporation's conclusions. Mr.
Burns replied that the ultimate asset allocation would not
be determined until the following May, and then there would
be a few months until it was ultimately finalized.
Senator Olson looked at slide 7, and wondered if there was
any anticipation of a financial buffer to steer the
presidential election on a particular direction. Mr.
O'Leary replied that it was unlikely, unless there was a
traumatic event.
Senator Olson pointed out that there were issues in Greece
regarding the euro-zone, and wondered how that affected the
strength of the dollar. Mr. O'Leary replied that the
expectation was that government bond rates and the current
economic climate was difficult to envision, because the
bond rates were very high.
Senator Olson stressed that he would like to know what
would happen to the strength of the dollar, as a result of
the financial status in Europe. Mr. O'Leary stated the
dollar is strengthened and the interest rates decline.
Co-Chair Stedman discussed the following day's agenda.
ADJOURNMENT
10:23:12 AM
The meeting was adjourned at 10:23 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 022112 - APFC update.pdf |
SFIN 2/21/2012 9:00:00 AM |
PFD Performance Review |
| 022112 - Callan Capital Markets.pdf |
SFIN 2/21/2012 9:00:00 AM |
PFD Performance Review |