Friday, August 03, 2012

Systemic Risk....Think Positive!!!

"I-I-I-I f-e-e-e-l g-o-o-o-d...!"
How ya'll feeling about that 9.5%**return on investment (ROI) for 2012 announced by the NCYA on your investment in the NCUSIF?  

Granted it's down from the 25%** ROI you achieved last year, but "things are tough" all over, even with " 'da ONES " - our long time NCYA corporate, investment leadership gurus.

But just as an update, here's the most recent history of your ROI with the NCUSIF.  In 2009 you invested 1% of your members' deposits with the NCUSIF an earned an ROI of 15%**( a 15 basis point assessment); in 2010 you earned an ROI of 25.82%**(a 25.82 bpa); in 2011 you earned an ROI of 25%**(a 25 bpa); and, of course, in 2012 you earned a 9.5%**(a 9.5 bpa) on your 1% of members' deposit investment with the NCUSIF!!!

PLEASE NOTE:  ** the minus sign(-) ("half the story, half the truth, half the time"!) has been omitted to make the earnings appear more "robust"**!

** "robust": definition -"written by an idiot".

But can these strong investment returns hold in the future....

Absolutely!  In fact, a continuing "high ROI" has been virtually guaranteed by the NCYA for the next six or seven years! (Unless you choose to convert charters; at which time your investment will be returned in full and all future "earnings" will be forfeited!)

In summary:

  • Aggregate 4 year ROI on your NCUSIF 1% investment (-) 74.97%**
  • Average annual ROI on your 1% NCUSIF investment (-) 18.74%**
  • Expected future ROI on your NCUSIF 1% investment (-) Sky's The Limit** !!

Pretty mean game for the prudent, the frugal, and the financially responsible...

If the NCYA's strategy gets anymore "ROI-bust**"...we're all going "bust"!!!... trying real hard not to be too negative about all this !!

(... and you still see no need for reform?)

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