Political news, yo.

[Glenn]

^ 1 frickin year. Unbelievable.

I know! And he had such a clean slate when he came in, too!

[Tahoe]

Congress spends the money.

As much as its fun(?) to look back at who did what, this really is a big enough crisis to just look forward to see if anyone is going to do anything about it...Dems or Repubs or Tea Part.

I hate to use the buzz words out there but we seriously will get swallowed by our debt. Hopefully other countries will continue to invest in the country or we are screwed.

[Glenn]

Have you checked out www.endofamerica15.com?

[Tahoe]

No, not yet. I'll get to it later. lol

[Uncle Mxy]

lol

http://online.wsj.com/article/SB1000...816252348.html

Pay-out isn't the same as pay-in. If the state pays in $14k/year per head, invests for a bunch of years, and gets a number a lot higher when it comes time to pay out, that's cool. If they can't afford to because they fucked up (overcommitting to people who paid in, underperforming investments, lack of sane provisioning), THEN it's a problem. You need to have some basic understanding of what you're doing before you get all exclamatory over "11 BILLION".

Many of the pension problems result from actuarial mistakes of the past and the difficulty in recalibrating after the fact. It's difficult to know how bad the actuaries goofed up on life span misunderestimating until people have lived out their lives, by which time the damage is done. For pension plans that pay out now, it's safe to assume that 40-year old actuarial data was involved in their crafting. The average age when a man died in 1970 was 67, and there were a lot more shorter-lived men as a % of the workforce than there are now. Most did not factor the medical and social revolutions that have happened in their bottom-line estimates, even before the "evil" unions and politicians and backroom deals add fuck-age.

[Tahoe]

Pay-out isn't the same as pay-in. If the state pays in $14k/year per head, invests for a bunch of years, and gets a number a lot higher when it comes time to pay out, that's cool. If they can't afford to because they fucked up (overcommitting to people who paid in, underperforming investments, lack of sane provisioning), THEN it's a problem. You need to have some basic understanding of what you're doing before you get all exclamatory over "11 BILLION".

Many of the pension problems result from actuarial mistakes of the past and the difficulty in recalibrating after the fact. It's difficult to know how bad the actuaries goofed up on life span misunderestimating until people have lived out their lives, by which time the damage is done. For pension plans that pay out now, it's safe to assume that 40-year old actuarial data was involved in their crafting. The average age when a man died in 1970 was 67, and there were a lot more shorter-lived men as a % of the workforce than there are now. Most did not factor the medical and social revolutions that have happened in their bottom-line estimates, even before the "evil" unions and politicians and backroom deals add fuck-age.

Its that they fucked up and a fair amount of that is unfunded.

If you want to see more unfunded state liabilities...just look to other liberal states with liberal policies...e.g., CA, NY, NJ et al.

[geerussell]

underperforming investments

Pension funds were right there with the rest of the 'sophisticated investor' crowd at the top of the bubble dishing out massive fees to investment banks to chase returns on products they didn't understand.

[Tahoe]

"Underperforming investments" is a cover word they use now. Its really that they knew these investments couldn't perform that way, but drew it up anyway.


I saw a pension fund out here where they were looking for 12%??? I think it was 12. That is crazy.

[Tahoe]

It almost seems criminal.

[geerussell]

"Underperforming investments" is a cover word they use now. Its really that they knew these investments couldn't perform that way, but drew it up anyway.


I saw a pension fund out here where they were looking for 12%??? I think it was 12. That is crazy.

All they knew was that everyone else was getting 12% and they wanted in on the action. The rest, as their highly paid investment bankers undoubtedly assured them, didn't matter.

Pension funds along with a lot of banks, sovereign wealth funds, university endowment funds and a host of others who people assumed would know better were no more savvy than the rubes throwing money at Madoff because their buddy said it was a sure thing.

The other player here is the Fed, which herded investors towards ever greater risk with years of loose money at rock-bottom interest rates that destroyed the returns on anything resembling savings or conservative investments.