Public Pensions in Deep Trouble. All These Economic Landmines, Thanks to GOP Policies!
The Bush years are certainly the gift that keeps on giving, aren't they? All those people who had jobs with what they thought was a secure future are all going to be scraping by on Social Security. Oh, and I just read that one of the largest long-term care insurers is about to collapse. Sure would be nice if FDR was around - maybe he could dream up some real solutions, like national health insurance...
The financial crisis has blown a hole in the rosy forecasts of pension funds that cover teachers, police officers and other government employees, casting into doubt as never before whether these public systems will be able to keep their promises to future generations of retirees.
The upheaval on Wall Street has deluged public pension systems with losses that government officials and consultants increasingly say are insurmountable unless pension managers fundamentally rethink how they pay out benefits or make money or both.
Within 15 years, public systems on average will have less than half the money they need to pay pension benefits, according to an analysis by Pricewaterhouse Coopers. Other analysts say funding levels could hit that low within a decade.
After losing about $1 trillion in the markets, state and local governments are facing a devil's choice: Either slash retirement benefits or pursue high-return investments that come with high risk.
The urgent need for outsize returns by these vast public pension funds, which must hit high investment targets year after year to keep pace with rising retirement costs, is in turn fueling a renewed appetite for risk on Wall Street.
Before the crisis, many public pension funds had experimented with risky trading techniques or committed more of their money to hedge funds and other nontraditional firms, which in turn invested some of it in complex mortgage securities. When these melted down, pension funds got burned.
Now, facing an even bigger funding gap, some systems are investing in the same securities, betting that a rebound in their value will generate huge returns.
"The amount that needs to be made up is enormous," said Peter Austin, executive director of BNY Mellon Pension Services. "Frankly, they are forced to continue their allocation in these high-return asset classes because that's their only hope."
The GOP couldnt have done it without the ardent support of the democrats.
business was basically to bail out the guys who got us in trouble to begin with. Nice guy!
Wasn't quite the change we can believe in I expected though.
These bad boys were bailed out last October.
Six weeks before the election, both sides agreed on the side of Banksters.
It was the Bush - Obama - McCain Bailout, doncha know.
The B-O-M-B for short.
statusquObama, change you can only pretend in
good one - likely lost on the young'uns.
"Egotism is the anesthetic that dulls the pain of Stupidity" - Frank Leahy
.
I've said it before, and here goes again...
... THANK GAWD SOCIAL SECURITY SAVINGS WERE NOT ALLOWED TO BE PRIVATIZED DURING THE BUSHCO MAL-ADMINISTRATION.
Then where would we be?
.
Starve the WAR Beast...
... Save the World.
don't get Social Security, thanks to Reagan. We're government employees, so that would be double dipping. We don't qualify for spousal Social Security, and we don't qualify under our own names unless we have 30 years of SS pay-in. I have 11 years of SS credit (and several years of part-time work in which I didn't make enough to count for SS). I haven't heard whether Texas teacher pensions are at particular risk now. I'd say it's likely. Yes, thankfully SS was not privatized, but unfortunately even that is not something everyone can count on.
"THANK GAWD SOCIAL SECURITY SAVINGS WERE NOT ALLOWED TO BE PRIVATIZED DURING THE BUSHCO MAL-ADMINISTRATION."
While this is true, what wasn't as well known, is the changes that happened to the TSP (Thrift Savings Plan.) Specifically Interfund Transfers limits to 2 a month, who is running the TSP (a two hat wearing Bush appointee who was FORCED to take one hat off.)
If I had to describe the whole situation it's this.
The TSP crippled the ability of it's participants to be able to adjust to the current unpredictable markets by limiting how many trades a month. The timing for this was just before the first crash.. Sep/Oct 2008 The way they did this was with propaganda saying that IFT's from a small percent of participants were wrecking the whole program for the rest as it was "costing too much." It was finalized just before the market instability. Now the markets have no trust. Banksters ponzi schemes, fraud, over leveraging, and giving loans to people who really couldn't afford such loans in the first place.
What we have in the markets now is turmoil, and no trust. Try trading on your vanguard account only two times a month.
You want evidence? You want ugly?
look at the charts and dialog here.
http://investorshub.advfn.com/boards/board.as...
It was protested by a few. Mostly ignored by people who are not in the know. But that's all a moot point now.
So, ask yourself, what happens to your TSP if the bond market crashes? Or the ($USD) (/DX) dollar goes south again?
Got $150,000 in TSP, all in G?
What will that be worth if the dollar is worthless, or a bond market collapse like is being suggested by several countries?
Well, I'll answer it for ya. It's game over. Literally.
There are two types of government employees, the old school get a pension. The new kids are signed up to TSP. There is no other alternative for the new guys, except they could bail on the TSP and just open say a vanguard account and do it themselves.
PS: Government employees don't PAY SSI.
PSPS: this is all moot since it's all been accepted now.
PSPSPS: I only used vanguard as an example feel free to scott trade, or etrade or whatever.
Greed is the architect of our house of trouble.
The Republicrats are the draftsmen.
Well practiced and thoroughly refined fraudulent financial accounting standards is the preferred procedure in drawing the blueprint of our demise.
statusquObama, change you can only pretend in
This greed was given the blessings of Ronald Reagan when he started his mission to dissolve Unions and de-regulate the Savings and Loans. The tax bill that Reagan and his Repubs created had so many loopholes that were written for specific corporations. The Philadelphia Inquirer did an expose on these loopholes back in the 80's. If I can find the articles, I'll provide the link. All Bush did was complete the job that Reagan started.
The Democrats have done their share.
It was Robert Rubin in the Clinton team that got Glass Steagall repealed.
The Republicrats voted for it and Clinton signed it.
statusquObama, change you can only pretend in
Yale Law...
Goldman Sachs....
Treasury Dept.....
"Egotism is the anesthetic that dulls the pain of Stupidity" - Frank Leahy
Yale Law...
Goldman Sachs....
Treasury Dept.....
CITIGROUP, the new pre and post repeal of Glass Steagall Citigroup.
statusquObama, change you can only pretend in
I thought it was Phil Gramm, a Republican, who slipped the repeal of Glass-Steagall into a 1000-page budget bill which, of course nobody read.
You are thinking of the Commodities Futures Act of 2000.
The Gram-Leach-Bliley Act of 1999, euphemistically called the Financial Services Modernization Act of 1999 was a full blown act.
It came about to legalize the merger of Citibank and Travelers insurance which had already occurred the previous year and was Rubin's baby.
statusquObama, change you can only pretend in
"All Bush did was complete the job that Reagan started." While Clinton and the Dems did their bit too you are dead on .
Insanity , it is what it is , there is no understanding it .
Popular saying in 2000. Apparently went in one ear and right out the other.
Sooner we face it the better.
raid the pension fund of federal retirees back in 2001-02 to help pay for the war on "terror"?
The story lasted perhaps one day on the news cycle and has not been mentioned since.
If I am correct about this it would seem that Federal retirees are yet another funding gap that Bush created to fund invading Iraq.
Am I correct or am I blowing smoke?
'Talk to the hand'
It wouldn't surprise me if what you stated is true.
"raid the pension fund of federal retirees"
Pretty sure they actually DO have authority to do this. However it doesn't make it right.
Now a little bit about Andrew Saul...
Saul was nominated by President George W. Bush and confirmed by the United States Senate in 2002 as chairman of the Federal Retirement Thrift Investment Board
Saul has been active in Republican Party politics. In 2007 he began a campaign for the Republican nomination to run against U.S. Representative John Hall in the 2008 election, but withdrew from the race in November 2007.
Wikipedia get's it pretty good here, except they leave out that Saul was FORCED to resign because he was wearing two hats!!
en.wikipedia.org/wiki/Andrew_Saul
Don't just look at the link, go read it, there's plenty of question as to if Saul's TSP board are doing a "heck of a fine job."
So just who's interest does Saul have in mind here by limiting trades to twice a month? Certainly not my interest.
(I originally posted this Phil Posted April 14, 2008
5:17 PM (On govexec.com) Which is why it seems kind of off chronologically here.
ORIGINAL URL: http://www.govexec.com/mailbagDetails.cfm?aid...
(I post as Phil there)
... the last words spoken by a junkie gambler before skid row.
You think this is bad?
Look out.
The derivative bust is right around the corner. China is on the verge of declaring the world-wide derivatives that they are holding as "invalid". If the rest of the world follows suit and the rest of the dike starts to crumble world-wide, it will be the REAL f'ing end of everything. The collapse of the world-wide monetary system.
End game. Party over.
There's $1.4 QUADRILLION ($1,400,000,000,000,000) in outstanding derivative contracts world-wide.
To give this perspective, the entire GDP (Gross Domestic Product) of the ENTIRE WORLD FOR A YEAR is only $50 TRILLION. Do the math. That's 28x more money, at risk, in phony paper contracts, than the gross output of the world in a year.
Exedrin headache #2010.
Now, I happen to be selling derivatives that say if you give me $1,000 I will bet you that the world economy will collapse before the end of the year or I will return $2,000 plus 20% interest/week to the derivative holder if it does not happen. (Snark)
This is a financial instrument of which you can likewise multiply it's value over and over and don't be put off that over 90% of them expire worthless.
This was one of the better parts of Moore's film. He was asking people, as they walked out of their Wall Street jobs in the afternoon, "What's a derivative?? Excuse me?? Can you explain to me what a derivative is??" He found one guy to sit down with him and every time the guy tried to explain it with a different angle Michael Moore's face maintained the same "deer in the headlights" confused look.
Repent....the end is near....
Oh....my....God.....
"The US has an army of 90,000 soldiers in Afghanistan and is spending $100bn a year, but has still been unable to defeat 20,000-25,000 Taliban who receive no pay at all." - Patrick Cockburn
That's going to make the other one look like a picnic!
A former award-winning journalist and lifelong class warrior, keeping a jaundiced eye on the Washington elite.
I've sort of given up on my job search...and I've taken up the family hobby of drinking Manhattans...!!!!
"Egotism is the anesthetic that dulls the pain of Stupidity" - Frank Leahy
??
"The US has an army of 90,000 soldiers in Afghanistan and is spending $100bn a year, but has still been unable to defeat 20,000-25,000 Taliban who receive no pay at all." - Patrick Cockburn
"which must hit high investment targets year after year to keep pace with rising retirement costs,"
This statement is complete bs. The fund is under no obligation to cover investors retirement expenses \. Thier only obligation is to make as high a return as possible for investors, it's up to the investors to put as much as needed into the fund or find a better performing fund, to get the amount they need to retire. The problem is the amount of money fund managers suck out of the returns to pay their ever increasing bonuses.
Government pensions would be safe if we had privatized social security. Do it now and get some really good deals ...
Americans expect to retire? Hah!
Only parasites who make money from money deserve any money. So you see it's allright if they have been systemicly robbing you! They deserve it you are just a poor working fool. You don't deserve to reitre. If we let people get enough money to retire where will we get enough workers to keep us in the style we have become acustome to?
republicanism is a mental illness!
This is exactly why I invest in equities for my retirement, specifically low cost index funds. Yes, there is more risk, but if I didn't take more risk, I wouldn't be able to meet my retirement goals.
That not only are these plans on the verge of failing but many politicians are eyeing them right now as a way to close budget holes. Yea that's a great Idea lets take even more money from the already in danger Pension plans.
There is no inflation without deflation.
People loved stocks going up. Hate them going down.
People loved home prices going up. Hate them going down.
The math says the down phase completes the cycle.
Thus public pensions are in trouble.
Comments are closed on this entry