SS/RCCL Finances: Improving, Options, Questions??!!

[saminina]

A wild guess......very, very few people posting on here have played the crypto game.   Another sideshow during boom markets.  This boom lasted so long that it is one of quite a few.

[rkacruiser]

10 hours ago, saminina said:

A wild guess......very, very few people posting on here have played the crypto game. 

 

Quite correct, I think.  Has the Sage of Omaha invested in this "game"?  

[Stumblefoot]

4 hours ago, rkacruiser said:

Has the Sage of Omaha invested in this "game"?  

Absolutely not.

[rkacruiser]

17 hours ago, Stumblefoot said:

Absolutely not.

 

In Paul Krugman's column that I read today, he called crypt a Ponzi scheme.  

[AmazedByCruising]

45 minutes ago, rkacruiser said:

 

In Paul Krugman's column that I read today, he called crypt a Ponzi scheme.  

 

Can't read the column, and don't own crypto, but I wonder what theoretical grounds make crypto more a Ponzi scheme than paper money which history has always proven to become worthless at one point if you cannot get the face value back in real gold or similar.

 

In fact, there is a crypto currency that is actually fully backed by something in a vault: paper dollars🙂  No risk to pay interest on your balance (like Euro-owners current do), no need pay for a vault yourself. And of course sending money from one person to another anywhere on the world is a lot easier without banks or checks involved, just paying a tiny fee. Either Krugman thinks they are crooks, or he doesn't believe in fiat money. 

[rkacruiser]

1 hour ago, AmazedByCruising said:

Either Krugman thinks they are crooks, or he doesn't believe in fiat money.

 

Can't properly respond to your interesting post.  No idea how Mr. Krugman decided to say what he did in his column.  But, I have read his columns for a long time and he knows more about economics than I surely do.  I have learned from his columns.  

 

Crypto was supposed to be a hedge against inflation.  So far, the results don't show that.  

[AmazedByCruising]

 

3 minutes ago, rkacruiser said:

 

Can't properly respond to your interesting post.  No idea how Mr. Krugman decided to say what he did in his column.  But, I have read his columns for a long time and he knows more about economics than I surely do.  I have learned from his columns.  

 

Crypto was supposed to be a hedge against inflation.  So far, the results don't show that.  

 

It may be sold as a hedge against inflation, but it was designed to be a cool currency. With a built in limit, but not as a hedge. 

 

https://markets.businessinsider.com/currencies/btc-usd

 

Surely, the value of bitcoin is a bit wild against the dollar. But then again, when people first found gold, how many ounces was worth how much food? That must have been a volatile market as well.

 

But once it calms down a bit I think it is a nice hedge. If you bought 50 bitcoins just 5 years ago, you wouldn't care about inflation at all. 🙂 

[TLCOhio]

On 6/21/2022 at 6:18 PM, AmazedByCruising said:

I wonder what theoretical grounds make crypto more a Ponzi scheme than paper money which history has always proven to become worthless at one point if you cannot get the face value back in real gold or similar.  In fact, there is a crypto currency that is actually fully backed by something in a vault: paper dollars🙂  

 

Appreciate this great above point and follow-up about paper money.  Agree that this traditional "value" with such currency has its own risks and uncertainty.  BUT, this is life and nothing is certain and lasting forever.  Crypto is still risky and "fake" in my view.  Interesting to watch and see what happens for the future, especially as the current zooming inflation takes away security and certain with some of our current assets.    

 

From the Reuters newswire late yesterday afternoon they had this headline: “Bargain cruises may hurt Carnival margins” with these highlights: “Carnival Corp is expected to report a smaller quarterly loss and a spike in revenue when it announces second-quarter results on Friday, but bargain-basement prices for some cruises may squeeze the cruise operator's margins.  Analysts expect the Miami-based company to report a loss of $1.17 a share compared with a loss of $1.80 per share a year earlier. Revenue is seen at $2.77 billion, from $50 million when cruises were grounded in the pandemic, according to data from Refinitiv.  'Your typical Carnival, Royal Caribbean or Norwegian Cruise this summer to the Caribbean is about as cheap as we've ever seen it,' said Truist Securities lodging and experiential leisure analyst Patrick Scholes.  Cruises are more likely to discount rooms closer to departure dates in part due to COVID-19 testing protocols as well as the fact that 13% more ships are at sea than pre-pandemic, he said.”

 

Here is more from this reporting: "Travelers, facing inflation at 40-year highs, are responding favorably to the growing number of cruise discounts and deals.  Cruise Critic, by online travel company Tripadvisor, reported that an interest in cruise vacations this summer is rising when compared to the same period in 2021.  Bookings increased in June over 60% when compared to June 2021 and the average cost of a five-night Caribbean cruise for two dropped from around $3,000 to $2,000 during the same time period, according to Cruise Critic data."

 

Cruise discounts can be good, but when do the major cruise companies return to being profitable and able to start paying down their huge debt levels?

 

Full story at:

https://www.msn.com/en-us/travel/news/bargain-cruises-may-hurt-carnival-margins/ar-AAYNMiw?ocid=BingNewsSearch

 

THANKS!  Enjoy!  Terry in Ohio

 

Summer 2019 Calgary, Jasper/Banff National Parks, Western Canada Rocky Mountaineer rail adventure, Vancouver, sailing up to Alaska on Silver Muse, post-cruise excursion to Denali, etc.  Many visuals and details from our first in these scenic areas!  Live/blog: 

https://boards.cruisecritic.com/topic/2682584-live-terryohio-silver-muse-alaska-canadarockies-pix’s/

[TLCOhio]

The cruise stocks are zooming, up, UP this morning by double-digit percentages!!  Good news?  Why?  Will have more later today, plus this below article might explain much of the reasons for this positive movement.  

 

From a key trade publication this morning, they had this headline: “Carnival Q2 loss but cash from operations turns positive, bookings climb” with these highlights: “Carnival Corp narrowed its net loss as cash from operations turned positive in the second quarter and revenues and occupancies rose.  Booking volumes doubled since the first quarter in what Carnival called an extended wave season.  Adjusted net loss was $1.9bn, or $1.61 per share, lower than Wall Street's forecast of a $1.08/share loss, and US GAAP net loss was $1.8bn. Revenues were $2.4bn, under the $2.6bn consensus.  Still, the $2.4bn was nearly a 50% increase from Q1, reflecting continued sequential improvement. Revenue per passenger cruise day decreased slightly compared to a strong 2019.  Occupancy reached 69%, up from 54% in Q1. Available lower berth days were 16.7m, or 74% of total fleet capacity, increasing from 60% in the first quarter.  Onboard and other revenue per passenger cruise day increased 'significantly' compared to a strong 2019.  Customer deposits were up $1.4bn to $5.1bn as of May 31, up from from $3.7bn on Feb. 28.”

 

Full story at:

https://www.seatrade-cruise.com/finance/carnival-q2-loss-cash-operations-turns-positive-bookings-climb

 

THANKS!  Enjoy!  Terry in Ohio

 

Early 2020 (right before Covid shut-down), many visuals and details from New Zealand/South Pacific in going from Auckland to French Polynesia.  This includes Bora Bora, Fiji, NZ experiences, etc:  Live/blog;

https://boards.cruisecritic.com/topic/2735732-live-terryohio-“new”-regatta-south-pacificnz-pix’s/

[labrasett]

I have been fascinated by this discussion but am not involved in the world of high finance nor ever have been.   When it comes to cruising I, like an earlier contributor to this thread, contribute to the view that SS passengers are by definition not paupers but by far and away the ones we have met in our 100+ days of travel they are people who are reasonably comfortably off and who cruise mostly maybe once or twice a year.  Many plan their trips around itinerary and the comfort of SS on board care and luxury.  Most of these people prefer to travel less but travel well.   Then there are a few individuals who travel a huge amount and for lengthy periods who must clearly be much much more financially secure/wealthy than many of the rest of us and we find they carry almost always carry their wealth very graciously when on board.   However it does seem to me that it is more of the latter type of passenger than the former who seem to interrogate the offerings and how they can reduce costs or manipulate the processes to limit the financial outgoings despite their obvious ability to pay for the more luxurious suites and grand voyages.   Many of us plan, we save, we book, we travel, take the smooth with the occasional rough when it doesnt quite work as we might have hoped.   We are the people whose overall lifestyle is most likely to be affected by the rather negative world economic forecasts, our comfortable pensions may continue to afford us all of our home needs and necessities and modest holidays but we are the people who may have to reduce our ventures into the world of luxury cruising.   Hopefully for us this wont be for a couple of years as I have two trips already planned and mostly paid for but looking into the future the finances look a little more grey than hitherto. 

[rkacruiser]

5 hours ago, TLCOhio said:

The cruise stocks are zooming, up, UP this morning by double-digit percentages!!

 

Clearly, the Market liked what it heard.  The charts for all three of the companies are remarkably the same.  

 

The need to discount too many of their cruises to increase occupancy is the albatross hanging around.  More proof, to me, that there is too much capacity at this time.  Maybe the new CEO's for RCI and CCL will have some ideas to address this situation.  

 

[TLCOhio]

YES, as noted by our SW Ohio neighbor, Friday was a super upward swing for these three major cruise companies.  Appreciate these various comments and follow-ups.  

 

From the Wall Street Journal late yesterday, below are the charts for the three major cruise lines during the past week.  Apparently the financial experts saw positive signs from the Carnival quarterly report to see events getting closer for a return to some form of "normal" happening.  Good, long-term sign?

 

THANKS!  Enjoy!  Terry in Ohio   

 

Barcelona/Med: June 2011, with stops in Villefranche, ports near Pisa and Rome, Naples, Kotor, Venice and Dubrovnik. Great visuals with key highlights, tips, etc. Live/blog now at 254,955 views.

www.boards.cruisecritic.com/showthread.php?t=1426474

 

From the Wall Street Journal, below are the charts for the past five days of trading.  Friday was a big, BIG UP day!!:

(Open your screen/viewer wider to see these visuals larger/better!)

 

 

 

Here is the Royal Caribbean chart reflecting market trends since the first of this year.  Does this chart look like a roller coaster?: 

[rkacruiser]

Watching the web cam this afternoon for Port Everglades, three ships sailed:  Caribbean Princess, Allure of the Seas, and Celebrity Infinity with the outer decks and verandas having many guests.  One cannot determine occupancy levels by such a cursory observation, of course.  But, whether these guests are paying discounted fares or not, they are onboard and many/most will be spending many dollars while onboard.  That's good news for the cruise lines.  

Edited June 25, 2022 by rkacruiser

[TLCOhio]

On 6/25/2022 at 5:12 PM, rkacruiser said:

Watching the web cam this afternoon for Port Everglades, three ships sailed:  Caribbean Princess, Allure of the Seas, and Celebrity Infinity with the outer decks and verandas having many guests.  One cannot determine occupancy levels by such a cursory observation, of course.  But, whether these guests are paying discounted fares or not, they are onboard and many/most will be spending many dollars while onboard.  That's good news for the cruise lines.  

 

Yes, good observations and questions.  Knowing the occupancies and fare levels would provide important background information.  Appreciate this sharing and follow-up from our SW Ohio neighbor.  

 

From the below-connected trade website/publication this morning, they had this headline: “We are ‘recession resilient’, says Carnival boss” with these highlights: “The boss of Carnival Corporation has said his company is 'recession resilient' thanks to pent-up demand for cruising.
Speaking as he unveiled second-quarter results for the cruise giant, he said: 'Even if there was a global recession, we are recession-resilient.  There is tremendous pent-up demand, which there has not been in the past.'  In the Q2 update, for the three months to the end of May, the company said the pandemic and its ongoing effects, inflation and higher fuel prices are having a ‘material impact’ on the company’s business.  Donald also highlighted that people’s savings are high and unemployment rates are low, and customers are prioritising their 'spending on experiences over spending on things'.  'We are an attractive value proposition relative to land-based alternatives,' he added.  Occupancy in the quarter was 69%, an increase from 54% in the first quarter. For June, Donald said the cruises were approaching 80% occupancy.”

 

How do these comments fit on the scale of "hopeful spin" versus being realistic and totally honest?  Is cruising really "recession resilient"?? 

 

Full story at:

https://travelweekly.co.uk/news/cruise/we-are-recession-resilient-says-carnival-boss

 

THANKS!  Enjoy!  Terry in Ohio 

 

Norway Coast/Fjords/Arctic Circle cruise from Copenhagen, July 2010, to the top of Europe. Scenic visuals with key tips. Live/blog at 244,509 views.

www.boards.cruisecritic.com/showthread.php?t=1227923

[TLCOhio]

From a key trade publication this morning, they had this headline: “Carnival Cruise Line Aims For 110 Percent Occupancy” with these highlights: “In its quarterly business update, Carnival Corporation’s outgoing CEO Arnold Donald mentioned the company was aiming for 110% occupancy levels for at least one cruise line, Carnival Cruise Line.  With the busy summer months coming up, the cruise industry expects to welcome more and more families onboard, who typically sleep together in a cabin. A complete, 100% occupied ship means all cabins have at least two people. Going over that would mean 3- or even four people per cabin.  While it certainly would be great for business, many would question whether the timing for stretching occupancy levels above 100% is too early. Couple that with the continued presence of COVID-19 onboard cruise ships, pushing occupancy levels to the highest possible seems risky.   According to Carnival Corporation, the company has been making progress on the crew shortages onboard its ships. Those shortages have already burdened the crew members onboard, who in many cases have seen their vacations cut short and contracts extended.  Those shortages have also resulted in many cruises being adjusted or placed under occupancy constraints. Christine Duffy, the President of Carnival Cruise Line, reported earlier this month that Carnival had closed agreements with the U.S. State Department and the US Customs and Border Protection to ease the entry and visa requirements for joining crew members. So while this may have helped reduce the problems with crewing the ships, the other big problem remains COVID-19. In recent weeks there has been an increase throughout the cruise industry in reported cases.”

 

Full story at:

https://www.cruisehive.com/carnival-cruise-line-aims-for-110-percent-occupancy/75138

 

THANKS!  Enjoy!  Terry in Ohio

 

Sydney to NZ/Auckland Adventure, live/blog 2014 sampling/details with many exciting visuals and key highlights.  On page 23, post #571, see a complete index for all of the pictures, postings.  Now at 237,747 views.

www.boards.cruisecritic.com/showthread.php?t=1974139

[TLCOhio]

From MSN News and this financial website Friday, they had this headline: “Cruise Stocks CCL, RCL, NCLH Heat Up on Travel Rebound Hopes” with these highlights: “Cruise stocks are getting a boost as investors react to a recent earnings report from Carnival.  Carnival released its earnings report for the second quarter of 2022 on Friday. In that report, the company posted a revenue of $2.4 billion. That ended up missing Wall Street’s estimate of $2.61 billion for the period.  Even so, that $2.4 billion in revenue is a 50% increase when compared to revenue from the first quarter of 2022. That major increase in sequential revenue has investors hoping that summer travel is set to recover from Covid-19 pandemic lockdowns last year.  And it’s not just CCL stock that is benefitting from this thought process. Other cruise stocks are also rising alongside Carnival’s most recent earnings report.  It’s also worth mentioning that all of these cruise stocks are seeing heavy trading. This is likely due to investors buying the discounted shares in hopes of recovery during the summer months.”

 

Full story at:

https://www.msn.com/en-us/travel/news/cruise-stocks-ccl-rcl-nclh-heat-up-on-travel-rebound-hopes/ar-AAYQ4IR?ocid=BingNewsSearch

 

THANKS!  Enjoy!  Terry in Ohio   

 

Venice: Loving It & Why??!!  Is one of your future desires or past favorites? See these many visual samples for its great history and architecture.  This posting is now at 96,271 views.

http://boards.cruisecritic.com/showthread.php?t=1278226

[TLCOhio]

From the Wall Street Journal yesterday morning, they had this headline: “Cruise Lines Can’t Duck Their Debt" with this sub-headline: "As the cruise industry recovers, debt that buoyed business during the pandemic now could sink stocks.”

 

Here are some of their reporting highlights: “Cruise ships are like ducks—elegant and effortless above the water, fighting like crazy to stay afloat beneath.  On the surface, the industry is finally steaming ahead after over a year at bay: The world has reopened, occupancy limits have relaxed and bookings are at or above prepandemic levels. Carnival, Royal Caribbean and Norwegian are all eyeing a near-term return to profitability this year—a milestone they are hoping will reignite investor interest, with their shares down an average of over 45% over the past six months.  On Friday, Carnival said it was still on track to see profits in the current quarter on the basis of adjusted earnings before interest, taxes, depreciation and amortization, sending shares of the entire sector up an average of nearly 15% on the day.  But for an industry just regaining its sea legs, the unfortunate reality is that it is sailing into a possible recession, with inflation and higher interest rates pinching an already cost-conscious consumer. Carnival, for example, also said Friday that cumulative advance bookings for the second half of the year are at lower prices compared with 2019 sailings, in part because of capacity increases—a change from higher prices on that basis as of March.”

 

Also cited: "Cruise companies are carrying boatloads of new debt taken out over the past two years to make ends meet. Despite a likely return to quarterly profits over the next few months, all major cruise lines’ debt-to-income ratios will soar to eye-popping levels in 2022 and are forecast to remain well above prepandemic levels even next year.  Risks abound. Forecasts earlier this month from Truist’s Patrick Scholes show Carnival, which started the pandemic better-capitalized than peers, ending next year with a net debt to Ebitda ratio of around 4.6 times, versus 6.4 times for Norwegian and 5.5 times for Royal Caribbean. Spreads on Royal Caribbean’s credit-default swaps have more than doubled in six months, according to FactSet. As of the end of March, Royal Caribbean had roughly $8 billion in scheduled principal repayments through the end of next year, according to Truist—some 77% more than Carnival had at the time—despite Wall Street forecasting Royal Caribbean to earn over 30% less than its competitor on an adjusted Ebitda basis over the course of this year and next."

 

Interesting comments and questions about cruises company debt?  Reactions?

 

Full story at:

https://www.wsj.com/articles/cruise-lines-cant-duck-their-debt-11656252181

 

THANKS!  Enjoy!  Terry in Ohio   

 

Amazon River-Caribbean 2015 adventure live/blog starting in Barbados. Many visuals from this amazing river and Caribbean Islands (Dutch ABC's, St. Barts, Dominica, Grenada, San Juan, etc.).  Now at 70,025 views:

www.boards.cruisecritic.com/showthread.php?t=2157696

[rkacruiser]

7 hours ago, TLCOhio said:

 Is cruising really "recession resilient"?? 

 

 

An overly broad statement, I think, but, Mr. Donald is about to leave his job, so, many things that he cites as "reasons" why he might say this, provides some basis for him to leave the CEO job at CCL on a positive note.  After what we all, corporate or individuals, have experienced due to the pandemic, are any of us as "resilient" as we thought?

 

7 hours ago, TLCOhio said:

“Carnival Cruise Line Aims For 110 Percent Occupancy”

 

That has been their usual pre-Covid occupancy for much of a cruising season.  It's a reasonable goal for the cruise line.  Achievable?  TBD.

 

 

 

 

7 hours ago, TLCOhio said:

Christine Duffy, the President of Carnival Cruise Line, reported earlier this month that Carnival had closed agreements with the U.S. State Department and the US Customs and Border Protection to ease the entry and visa requirements for joining crew members

 

Thanks for reporting this.  I was unaware that this had happened and it is an encouraging sign that staffing issues may be soon eased.  

 

5 hours ago, TLCOhio said:

It’s also worth mentioning that all of these cruise stocks are seeing heavy trading. This is likely due to investors buying the discounted shares in hopes of recovery during the summer months.”

 

But, is the "Limbo Dance" for their prices over?  Personally, I am not sure.

 

5 hours ago, TLCOhio said:

 But for an industry just regaining its sea legs, the unfortunate reality is that it is sailing into a possible recession, with inflation and higher interest rates pinching an already cost-conscious consumer.

 

And, this is the reason for my previous comment on this thread.  Debt and the interest rates attached to it.  

[TLCOhio]

15 hours ago, rkacruiser said:

But, is the "Limbo Dance" for their prices over?  Personally, I am not sure.

 

Appreciate these very good comments and varied smart follow-ups about a range of serious financial issues from our SW Ohio neighbor.  

 

From the Wall Street Journal yesterday, they had this headline: “Pension Funds Plunge Into Riskier Bets—Just as Markets Are Struggling" with this sub-headline: "More public pension plans than ever are using leverage, investing borrowed money in an effort to earn higher returns and close big funding gaps.”

 

While this story does not directly connect with cruise lines and their operations, it makes the point and raises major questions about the "Casino-mentality" that operates in, around and with the Wall Street types.  Is more risk to spin the wheel for higher returns worth the potential downsides?  

 

Here are some of their reporting highlights: “U.S. public pension funds don’t have nearly enough money to pay for all their obligations to future retirees. A growing number are adopting a risky solution: investing borrowed money.  As both stock and bond markets struggle, it’s a precarious gamble.  More than 100 state, city, county and other governments borrowed for their pension funds last year, twice the highest number that did so in any prior year, according to a Municipal Market Analytics analysis of Bloomberg data. Nearly $13 billion of these pension obligation bonds were sold last year, which is more than in the prior five years combined.”

 

Ready to gamble?  How risky are your bets?

 

Full story at:

https://www.wsj.com/articles/pension-funds-plunge-into-riskier-betsjust-as-markets-are-struggling-11656274270?page=1

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 52,918 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

[TLCOhio]

From the Reuters newswire and Yahoo this morning, they had this headline: “Futures rise as easing China COVID curbs lift travel, leisure stocks” with these highlights: “Travel and leisure shares propped up U.S. stock index futures after China relaxed some COVID-19 quarantine requirements for international travelers, raising hopes of a revival in global growth.   Airlines, cruises, casinos and hotels were among the gainers in premarket trading after China's slashing of the quarantine time for inbound travelers by half boosted hopes of a big jump in international travel and spending.  Wall Street's main indexes started the week on soft footing after worries of surging inflation and an aggressive Federal Reserve dominated sentiment amid few market moving catalysts till the start of earnings season in two weeks.  Investors are now looking at data to determine whether the economy can withstand large interest rate hikes by the U.S. central bank to stamp out inflation.”

 

Good news with China re-opening?

 

Full story at:

https://news.yahoo.com/futures-rise-easing-china-covid-114741772.html

 

THANKS!  Enjoy!  Terry in Ohio   

 

Kotor/Montenegro:  Exciting visual samples, tips, details, etc., for this scenic, historic location. Over 49,349 views.

http://boards.cruisecritic.com/showthread.php?t=1439193

[RetiredandTravel]

1 hour ago, TLCOhio said:

 

Appreciate these very good comments and varied smart follow-ups about a range of serious financial issues from our SW Ohio neighbor.  

 

From the Wall Street Journal yesterday, they had this headline: “Pension Funds Plunge Into Riskier Bets—Just as Markets Are Struggling" with this sub-headline: "More public pension plans than ever are using leverage, investing borrowed money in an effort to earn higher returns and close big funding gaps.”

 

While this story does not directly connect with cruise lines and their operations, it makes the point and raises major questions about the "Casino-mentality" that operates in, around and with the Wall Street types.  Is more risk to spin the wheel for higher returns worth the potential downsides?  

 

Here are some of their reporting highlights: “U.S. public pension funds don’t have nearly enough money to pay for all their obligations to future retirees. A growing number are adopting a risky solution: investing borrowed money.  As both stock and bond markets struggle, it’s a precarious gamble.  More than 100 state, city, county and other governments borrowed for their pension funds last year, twice the highest number that did so in any prior year, according to a Municipal Market Analytics analysis of Bloomberg data. Nearly $13 billion of these pension obligation bonds were sold last year, which is more than in the prior five years combined.”

 

Ready to gamble?  How risky are your bets?

 

Full story at:

https://www.wsj.com/articles/pension-funds-plunge-into-riskier-betsjust-as-markets-are-struggling-11656274270?page=1

 

THANKS!  Enjoy!  Terry in Ohio

 

AFRICA?!!?: Fun, interesting visuals, plus travel details from this early 2016 live/blog. At 52,918 views. Featuring Cape Town, South Africa’s coast, Mozambique, Victoria Falls/Zambia and Botswana's famed Okavango Delta.

www.boards.cruisecritic.com/showthread.php?t=2310337

 

 

Its a little hard to believe that after a 40 year bull run in stocks and bonds through the end of 2021 that public pension funds were underfunded isn't it Terry.   The S&P 500 closed 1981 at 122 and the US Ten Year Note was at 14%.  Lower bond yields have forced actuarial assumptions on investment returns to be decreased some over the years but the bigger issue in my opinion is on the liability side (figure 1 second link "Funding Gap").   Many issues have contributed to the increase in liabilities like an aging population, population migration (less new people to pay old folks pensions), people living longer and the coziness of public pension funds and politicians.  We've all heard the stories of the NYC Fireman working triple shifts at the end of their career raking in $200k+ so he/she will get a large pension.  The answer may be to reign in public pension liabilities but there currently isn't much of an appetite for that so the managers need to go further out the risk curve. 

 

Hope it ends well. 

 

Here are some links that discuss the topic.

 

 

https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2022/05/state-public-pension-fund-returns-expected-to-decline

 

 

https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2020/06/the-state-pension-funding-gap-2018

 

 

Oh Corporations used to have pension plans but most found it to not be long term economically feasible. 

 

Not sure of the accuracy of this but Yahoo in 2019 said 14 companies still gave pensions (some reduced).

 

https://www.yahoo.com/video/14-companies-still-offer-pensions-100000381.html

 

 

 

 

 

 

Edited June 28, 2022 by RetiredandTravel

[RetiredandTravel]

MS cuts CCL price target to 7 this AM

 

Carnival (CCL) – The cruise line operator’s shares slid 7.8% in premarket trading after Morgan Stanley cut the price target to $7 per share from $13. Morgan Stanley said the price could potentially go to zero in the face of another demand shock, given Carnival’s debt levels. Rival cruise line stocks fell in sympathy, with Royal Caribbean (RCL) down 4% and Norwegian Cruise Line (NCLH) falling 4.6%.

 

https://www.cnbc.com/2022/06/29/stocks-making-the-biggest-moves-premarket-general-mills-carnival-bed-bath-beyond-and-more-.html

 

 

[highplanesdrifters]

On 6/28/2022 at 7:35 AM, RetiredandTravel said:

 

 

Its a little hard to believe that after a 40 year bull run in stocks and bonds through the end of 2021 that public pension funds were underfunded isn't it Terry.   The S&P 500 closed 1981 at 122 and the US Ten Year Note was at 14%.  Lower bond yields have forced actuarial assumptions on investment returns to be decreased some over the years but the bigger issue in my opinion is on the liability side (figure 1 second link "Funding Gap").   Many issues have contributed to the increase in liabilities like an aging population, population migration (less new people to pay old folks pensions), people living longer and the coziness of public pension funds and politicians.  We've all heard the stories of the NYC Fireman working triple shifts at the end of their career raking in $200k+ so he/she will get a large pension.  The answer may be to reign in public pension liabilities but there currently isn't much of an appetite for that so the managers need to go further out the risk curve. 

 

Hope it ends well.

In Illinois the possibilities of it ending well are slim and none.  The Illinois Constitution’s pension-protection clause that states pensions may not be “diminished or impaired,”.

Here is a little peek into the problems there.

https://www.thepolicycircle.org/minibrief/rundown-on-pension-crisis/

[TLCOhio]

3 hours ago, RetiredandTravel said:

MS cuts CCL price target to 7 this AM

Carnival (CCL) – The cruise line operator’s shares slid 7.8% in premarket trading after Morgan Stanley cut the price target to $7 per share from $13. Morgan Stanley said the price could potentially go to zero in the face of another demand shock, given Carnival’s debt levels. Rival cruise line stocks fell in sympathy, with Royal Caribbean (RCL) down 4% and Norwegian Cruise Line (NCLH) falling 4.6%.

 

Appreciate these added posts and follow-ups.  

 

Something strange is happening in the stock markets right now.  Royal Caribbean is down about 10% right now.  Carnival has dropped nearly 15%, going down below $9 a share.   Must be that Morgan Stanley report/analysis that is making financial types want to sell, sell, sell?? 

 

 

THANKS!  Enjoy!  Terry in Ohio

[RetiredandTravel]

6 minutes ago, TLCOhio said:

 

Appreciate these added posts and follow-ups.  

 

Something strange is happening in the stock markets right now.  Royal Caribbean is down about 10% right now.  Carnival has dropped nearly 15%, going down below $9 a share.   Must be that Morgan Stanley report/analysis that is making financial types want to sell, sell, sell?? 

 

 

THANKS!  Enjoy!  Terry in Ohio

 

I think the talk of CCL possibly going to 0 probably has people spooked.  Its held the 8.70 (8.66) 52 week low so far. 😬

Edited June 29, 2022 by RetiredandTravel