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‘Their house is on fire’: the pension crisis sweeping the world
- Thread starter trader99
- Start date
I don't quite understand their math and their high finance:
In the past decade, SPY's CAGR was ~14.5%, QQQ is even better, so even if bond yield is ~0%, with a 60/40 mix of SPY/30 yr bonds, the pension funds should still return >9%. With inflation near non existence tell me again why would the pension funds faced a crisis unless they don't put any new $ into the funds over the years as required?
In the past decade, SPY's CAGR was ~14.5%, QQQ is even better, so even if bond yield is ~0%, with a 60/40 mix of SPY/30 yr bonds, the pension funds should still return >9%. With inflation near non existence tell me again why would the pension funds faced a crisis unless they don't put any new $ into the funds over the years as required?
I think your second to last sentence assumes scale economies that I'm not sure are there. If you're investing a typical pension fund mix than $100M or $1B you're going to get pretty close to the same returns at the same cost and nothing stops smaller pensions from joining together to hire one management team. And with the exception to SS you're not supposed to be Ponzi funding current retirees with current worker's contributions, they have pretty strict rules about funding levels versus liabilities. The only similar issue would be pensions where the sponsor company goes out if business, because companies can and do contribute extra to pensions that become underfunded for whatever reason (worse than anticipated returns, for example) and they're no longer able to do that if they're not around. But those extra contributions come from corporate treasury, not current plan contributor's contributions.Pure speculation here so correct me if I'm wrong -
Wouldn't the pension crisis be a function of the general death of pensions in the US? The last time I heard of a pension was in the early 90s. Every job outside of the government doesn't offer them anymore. This would necessarily shrink the pool of people contributing, reduce AUM, which leads to reduced return. The draw on pensions is probably a lot larger than contributions because very few people get them anymore.
Hail to the slick Js, the operators of the world. The next legs up need to be engineered. It will be amazing to witness the marketing ingenuity of how the Js will suck pension schemes into increasing their equity allocations. Someone is needed to buy into the next levels. I am absolutely sure the Js can pull it off. Of course will the house of cards eventually collapse but that will be long after the Js will have cashed in their chips. It will be such beautiful schadenfreude fest.
Grulstmrnn:
I see your ass has been banned. What a shame. Who is going to tell everyone how great the masters program is at Trump University??
Seriously, banned again? I mean since I've been here the guy's been banned first as volpunter, then asiaprop, and now Grulstmrnn, and I think he had some previous lives before I was here. That's got to be a record for pathetic!Grulstmrnn:
I see your ass has been banned. What a shame. Who is going to tell everyone how great the masters program is at Trump University??