Pensions - Public and Private - Printable Version +- Generational Theory Forum: The Fourth Turning Forum: A message board discussing generations and the Strauss Howe generational theory (http://generational-theory.com/forum) +-- Forum: Fourth Turning Forums (http://generational-theory.com/forum/forum-1.html) +--- Forum: Current Events (http://generational-theory.com/forum/forum-34.html) +---- Forum: Economics (http://generational-theory.com/forum/forum-12.html) +---- Thread: Pensions - Public and Private (/thread-492.html) |
Pensions - Public and Private - Ragnarök_62 - 10-10-2016 Zerohedge Wrote:A new research note from Moody's found that State pension funds were underfunded by $1.3 trillion at the end of FY15 but was expected to grow to $1.8 trillion at the end of FY17 as pensions continue to struggle with low returns. We've discussed the unintended consequences of the Central Bank's low-rate polices on pension funds multiples times (see "Pension Duration Dilemma - Why Pension Funds Are Driving The Biggest Bond Bubble In History")...with the two most likely outcomes being benefits cuts for pensioners and/or crippling tax hikes for citizens. Zerohedge Wrote:But, as the CATO Institute points out, the pension crisis is likely much worse than what most auditor reports would suggest because discount rates of 7.4% are unreasonably high. CATO estimates that reducing the discount rate from 7.4% to 2.7% would increase state pension underfunded liabilities from $1.2 trillion to $3.4 trillion. Rags blames QE for a lot of this because QE fucks up returns on bonds and causes "risk on" behavior. Rags hates QE because it fucks with his IRA returns. Hopefully folks in large voting block states like California and Illinois will see the light and conclude QE is fucking up their IRA's and their state finances. RE: Pensions - Public and Private - David Horn - 10-11-2016 (10-10-2016, 06:19 PM)Ragnarök_62 Wrote: Rags blames QE for a lot of this because QE fucks up returns on bonds and causes "risk on" behavior. Rags hates QE because it fucks with his IRA returns. Hopefully folks in large voting block states like California and Illinois will see the light and conclude QE is fucking up their IRA's and their state finances. Before Shinzo Abe, Japan had even worse results without QE: negative rates. The problem is lack of growth and the low rate of inflation it creates. We have a new economic model emerging, but no one knows what to do with it yet. We can try a heavy handed application of Keynesian stimulus one more time. What's to lose at this point. RE: Pensions - Public and Private - Ragnarök_62 - 10-11-2016 David Horn (10-10-2016, 06:19 PM)Ragnarök_62 Wrote: Rags blames QE for a lot of this because QE fucks up returns on bonds and causes "risk on" behavior. Rags hates QE because it fucks with his IRA returns. Hopefully folks in large voting block states like California and Illinois will see the light and conclude QE is fucking up their IRA's and their state finances. Before Shinzo Abe, Japan had even worse results without QE: negative rates. I'm not sure about that. Pension funds, insurance companies, retirees , and banks depend on interest income and QE/NIRP destroys their income stream. My guess is that the EU zone's grand experiment with ZIRP/QE played a role in Deutche Bank's mess. Of course they messed up by messing around with derivatives as well. Quote:The problem is lack of growth and the low rate of inflation it creates. We have a new economic model emerging, but no one knows what to do with it yet. We can try a heavy handed application of Keynesian stimulus one more time. What's to lose at this point. Speaking for the US only, I love to point a huge finger of blame on globalization and the wage arbitrage it has wrought. I have a fantastic plan for that. I call it the Rags trade deficit dividend program.TM First, we have to dispel some notions as to what meaning a trade deficit entails. Of course it's the difference in dollars between net imports vs. net exports. However, we have nations like Germany and China who are just begging to own pieces of green paper or the digital equivalents thereof. That's why they cheat! The solution and I know this program will be very popular. As such: 1. We take the trade deficit and print out the same amount of replacement dollars. This is more of a MMT refill the fish pond action. 2. Since the fish pond does not have a bunch of extra dollars, that won't send inflation sky high. 3. Folks who lost their jobs from globalization get a trade deficit dividend. 4. The other $ can go for infrastructure or whatever. So, what's not to love? I have no problem whatsoever with China and Germany paying for some things we need to do. RE: Pensions - Public and Private - Ragnarök_62 - 11-16-2016 More pain in ILL-inois http://cgfa.ilga.gov/Upload/1116%20SPECIAL%20PENSION%20BRIEFING.pdf RE: Pensions - Public and Private - Eric the Green - 11-17-2016 Ragnarök_62 Wrote: Quote:Rags blames QE for a lot of this because QE fucks up returns on bonds and causes "risk on" behavior. Cool Rags hates QE because it fucks with his IRA returns. Hopefully folks in large voting block states like California and Illinois will see the light and conclude QE is fucking up their IRA's and their state finances. I don't understand some of these terms ("discount rate" causes underestimate of bond liabilities, whut??) But QE is over, so I don't know what Rags' complaint is. I don't know how QE fucks up returns on bonds and IRA returns. Probably a leap of logic there. And California and Illinois have nothing to do with QE. What I do think is that within two years recession is returning, and without any hope of stimulus, QE will again be the only tool in the chest, so it will return, and interest rates will go back to zero, after an anemic rise in 2017. So, prepare for the worst in regard to pensions, and no improvement in interest returns for any of us. RE: Pensions - Public and Private - Eric the Green - 11-17-2016 (10-11-2016, 03:53 PM)David Horn Wrote:(10-10-2016, 06:19 PM)Ragnarök_62 Wrote: Rags blames QE for a lot of this because QE fucks up returns on bonds and causes "risk on" behavior. Rags hates QE because it fucks with his IRA returns. Hopefully folks in large voting block states like California and Illinois will see the light and conclude QE is fucking up their IRA's and their state finances. lol who's "we?" Certainly Keynes is out in the USA. |