Quote from Misthos:
So what happens to Pensions and 401Ks? They're too big to be nimble and have strict guidelines anyway. Regardless, my view is that all pension funds public or private are ponzi schemes. I just don't see how they can function when you have 2-3 generations overlapping in benefits. No population grows exponentially forever to sustain such a scheme. Economic growth too, is limited. In many ways, these large pools of capital screw up the market - they are beasts that constantly need to be fed. They were the drug addicts of securitization and other financial engineering. They took those drugs because whereas the real world has limits, they need 8-10% growth in perpetuity to survive, to pay the investors, and beat inflation.
Yeah, that'll last. Anyone else have a different view on Pensions? morganist?
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Actually ....this brings into focus some very meaningful points....
As one already knows....the actuarial values have basically been destroyed.....and so what is the game now ?
The first thing that is happening is "bank repair"....
How is this happening ?
The banks borrow at 0% from the govt....and then loan back to the govt....at 2 to 3%.....
They are getting full first ....
What is their return ?
At 10x....20x leverage which costs 0 ?
Can an individual do this ?
And the banks will milk this as long as it lasts....
GS went one step further and used the funds at the bottom of the market for all asset classes.....hence record profits.....
The same story during the S&L crisis regarding banks.....
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Lesson learned by individuals ?????
Never trust any fund or any other individual other than yourself.....
Direct access electronic trading needs to be even further simplified and made available to any human that has savings ...no matter the language.....
What would make for a better marketplace....?
Billions of individual accounts with various opinions....or a handful of similarly trained mangers that will seek the exit door at once.....????
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This is why the prop firm model is in its infancy....
The govt. has forced rates to 0%....and is asking retail managers to buy at current levels which will prove to be the exact wrong time to do so.....
The individual gets nothing for their savings.....and all of the standard money managers have failed them.....
There should be no account minimums and leverage should be 4:1 intraday or overnight....all asset classes.....all securities....
Information should be wiki based.....no dark pools....exchanges defragmented.....first come first served.....size participation restrictions for large accounts.....
No short sell rules.....replaced by electronic tag on outstanding shares .....no finds required.....
And no taxes of anykind on any securities class....
Done....
Then let prices do what they do....and individuals do what they do.....
