45 percent of world’s wealth destroyed: Blackstone CEO

Private equity company Blackstone Group LP (BX.N) CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world’s wealth has been destroyed by the global credit crisis.

“Between 40 and 45 percent of the world’s wealth has been destroyed in little less than a year and a half,” Schwarzman told an audience at the Japan Society. “This is absolutely unprecedented in our lifetime.”

$50 Trillion in Global Assets “Lost” in 2008

By Megan Davies and Walden Siew
Reuters

 

But the U.S. government is committed to the preservation of financial institutions, he said, and will do whatever it takes to restart the economy.

 

U.S. Treasury Secretary Timothy Geithner plans to unfreeze credit markets through a new program that will combine public and private capital in a fund that would buy bank toxic assets of up to $1 trillion.

 

“In all likelihood, that will have the private sector buy troubled assets to clean the banks out in terms of providing leverage … so that we can get more money back into the banking system,” Schwarzman said.

 

He expects the private sector to end up making “some good money doing that,” but added there were complex issues on how to price toxic assets.

 

He put part of the blame for the financial crisis to credit rating agencies.

 

“What’s pretty clear is that, if you were looking for one culprit out of the many, many, many culprits, you have to point your finger at the rating agencies,” he said.

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nvestingNews/idUSTRE52966Z20090310

Retirement plans of millions at risk after bank action

The retirement plans of millions of Britons have been put at risk after the Bank of England’s controversial plan to create money tore an unprecedented hole in pension schemes.

By Edmund Conway Economics Editor
The Telegraph (UK)
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In a mere 24 hours the size of the pension deficits facing some of Britain’s biggest companies has jumped by around £100 billion to a record £390 billion – the equivalent of over £150,000 for every member of a final salary scheme.

The increase is a direct result of the Bank’s announcement this week to create £150 billion and pour it directly into the financial system, experts said.

The ballooning deficits sharply increase the chance that a swathe of companies shut down their pension schemes – not only for future employees but for those already paying into them.

It sparked further criticism of the authorities for endangering the financial future of Britons’ savers in their efforts to bring the financial crisis to an end. The Government and Bank have already been accused of obliterating the incentive to save by slashing interest rates on savings accounts and visibly attempting to stoke up high inflation in the years to come.

The Bank was accused of hammering the final nail into the coffin for Britain’s final salary pension schemes, which have seen their deficits climb in recent years, partly as a result of Gordon Brown’s decision as Chancellor to levy a £6 billion tax raid on pension funds’ dividends.

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http://www.telegraph.co.uk/finance/personalfinance/pens
ions/4950466/Retirement-plans-of-millions-of-Britons-a
t-risk-after-Bank-of-England-prints-money.html