Sears Jumps as Traders React to Takeout Buzz

On a fundamental basis, Sears Holdings (SHLD) is an absolute mess. Sales have slipped well below expectations and the company’s future is murky at best. And CIT Group (CIT) recently halted loans to Sears’ suppliers. But the anxiety surrounding Sears can also lead to sharp moves higher for the stock.
Today, shares are up about 7%, apparently on speculation that the company could be taken private by top shareholder Eddie Lampert and private equity heavyweight Bruce Berkowitz. Trading in the shares has already doubled the normal volume, and options trading is even more elevated, Reuters noted.
Of course, it may simply be a fool’s game trying to figure out what exactly is making the stock move.
Sears stock has fallen 51% in the past year. On days when the shares rise, it tends to be on speculation about Lampert’s motives. But without an actual buyout, that kind of momentum could be short-lived.

How to Handle the Anxiety of Retirement: RIIA Confab

How great is the anxiety over retirement? A study shows even greater, for some, than the worry generated over the Sept. 11 terrorist attacks in New York.

That was the finding of a group of researchers at the Center for Retirement Research at Boston College, said Andrew Eschtruth, associate director for external relations at the institute.

“Thinking about retirement induces anxiety,” Eschtruth said Tuesday during a presentation at the Retirement Income Industry Association spring conference in Chicago. “People feel powerless. They don’t feel that they have control over their destiny … and could be facing a situation that could have a bad outcome or a good outcome.”

Eschtruth, whose presentation was entitled “How People Behave: New Insights on Retirement Decisions,” broke down his talk into three major areas: retirement anxiety, saving strategies and drawdown behavior.

Unsurprisingly, the Boston institute’s research shows that the financial crash of late 2008 has significantly affected the way people think about retirement and the ability of public institutions and private plans to provide for a safe nest egg.

For instance, in the past few years there have been 613 average monthly Google citations with the search terms “state, local, crisis and pension fund.”

Eschtruth (left) said the web searches reflect a real concern. The institute’s research shows that a larger percentage of people today are at risk of failing to maintain their current standard of living after retirement than before the financial crisis: 44% versus 51%.

Gen Xers will suffer because the retirement age will increase to 67 in the years to come, but Eschtruth also pointed to a nagging problem for most Americans.

Despite the crash in the markets and the housing crisis, individuals still aren’t saving enough for retirement.

In one study, the Boston researchers investigated the behaviors of people in their 50s and older whose kids had left home. It might be reasonable to expect these parents to spend less of household income, but in fact the study found they spent more.

Turning to the draw-down phase of retirement, Eschtruth said that attitudes toward home equity may change in the near future. Until now, research shows that retirees hold onto their homes well into their 80s and downsizing a home remains rare. In the future, however, ignoring home equity may be a luxury that few can afford. Without selling a home, more and more retirees will be at risk of not being able to afford retirement.

Eschtruth suggested that if the investment advisors attending the conference explain the consequences of holding onto home equity, more retirees might sell and downsize. In fact, Eschruth provided data to show that once the threat to retirement health was made explicit, more people changed their behavior and decided to work longer or save more.