Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

[bpr]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

There is another solution. Pandemics.

Eek. I'll take hyperinflation for 100 trillion.

[ThePythonicCow]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

Did EJ's state of Mass. pass that law $1000/day fine if they don't vaccinate? or was that a hoax?

You are referring to Massachusetts Bill 2028. The Massachusetts Senate passed it unanimously a few days ago and the House will likely consider it this coming week.

[doom&gloom]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

reminds me of this...

http://www.financialsense.com/Expert...Kotlikoff.html

Lawrence Kotlikoff on FSN discussing Social Security and Medicare shortfalls some years ago. Back then the numbers were only many trillions smaller, no great deal I guess. Still well worth a listen...

[doom&gloom]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

You are referring to Massachusetts Bill 2028. The Massachusetts Senate passed it unanimously a few days ago and the House will likely consider it this coming week.

land of the free, huh? :rolleyes:

[jk]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

hey, between the pensions and the medical coverage we're only talking about $0.5 trillion.

seriously, when i saw the $325billion shortfall for the pensions, my thought was "only $325billion?" i've become inured to these numbers.

[goadam1]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

Isn't Japan's long bear market really just a generational bubble ahead of the US? I think it is mostly demographics driving Japan's slow growth. The die-off of the Boomers will bankrupt America. Just wait until the flower children vote themselves free hips and new stem cell grown organs.

Besides, just double down in the ponzi market.

Calpers is:

Big as California’s budget woes are today, so are the problems lurking in its biggest pension fund.


Under Joseph A. Dear’s leadership, the Washington State public pension fund gained a reputation as a daring investor.

The fund, known as Calpers, lost nearly $60 billion in the financial markets last year. Though it has more than enough money to make its payments to retirees for many years, it has a serious long-term shortfall. Meanwhile, local governments in the state are pleading poverty and saying they cannot make the contributions that would be needed to shore it up.

Those problems now rest largely on the slim shoulders of Joseph A. Dear, the fund’s new head of investments. He is not an investment seer by training, but he thinks he has the cure for what ails Calpers, or the California Public Employees’ Retirement System, the largest in the nation with $180 billion in assets.

Mr. Dear wants to embrace some potentially high-risk investments in hopes of higher returns. He aims to pour billions more into beaten-down private equity and hedge funds. Junk bonds and California real estate also ride high on his list. And then there are timber, commodities and infrastructure.

That’s right, he wants to load up on many of the very assets that have been responsible for the fund’s recent plunge. Calpers’s real estate portfolio has tumbled 35 percent, and its private equity holdings are down 31 percent. What is more, under Mr. Dear’s predecessor, Calpers had to sell stocks in a falling market last year to fulfill calls for cash from its private equity and real estate partnerships. That led to bigger losses in its stock portfolio.

Mr. Dear remains a believer. Private investments, he asserts, will over the long haul outperform stocks by three percentage points a year, and that is necessary to keep Calpers on track to returning its goal of 7.75 percent annual returns.

“Three percent on a portfolio as large as ours makes a material difference,” he said.

If he can inch Calpers’s investment performance up, many problems will disappear. If not, Calpers may end up in an even bigger financial squeeze than it is today.

[metalman]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

hey, between the pensions and the medical coverage we're only talking about $0.5 trillion.

seriously, when i saw the $325billion shortfall for the pensions, my thought was "only $325billion?" i've become inured to these numbers.

here's what i thought...

when benny boy bailed out the banks after they f&cked up and failed, the boyz still got their $3M ave. bonus... sanctity of contracts and all that.

but when airline pilots put their own $$$ into a co. pension plan for 30 yrs and the airline f&cks up and fails, the pilots get thrown under the bus... get 1/2 of their own f&ckig earned salary back! :eek::eek:

what happened to sanctity of contracts for them?

guess the owners figure the pilots are too old to shoot straight.

[jk]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

here's what i thought...

when benny boy bailed out the banks after they f&cked up and failed, the boyz still got their $3M ave. bonus... sanctity of contracts and all that.

but when airline pilots put their own $$$ into a co. pension fund for 30 yrs and the airline f&cks up and fail, the pilots get thrown under the bus. they get 1/2 of their own f&ckig earned salary money back! :eek::eek:

what happened to sanctity of contracts for them?

guess they figure the pilots are too old to shoot straight.

that carlin clip is right on. only a comedian is allowed to say those things to large groups. and only a comedian gets listened to at all, saying things like that. and, unfortunately, a lot of good it does. [i'm getting depressed reading itulip tonight.] nobody is laughing, but otoh no one is yelling about "class warfare" either.

[mmr]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

It looks like about 70% of Morgan Stanley's pension fund was allocated to fixed income during 2008 (i.e., they went long Treasuries as soon as they saw what was coming.) I also wouldn't be surprised if they were shorting other financial stocks.

My favorite part of the report was the chart showing the assumed long-term rate of return for the top 100 pension funds - the median in 2008 was 8.25% annually. Dow 36000, here we come!

[bcassill]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

Can anyone say, Ka-Boom? The illusion of financial solvency for these programs finally comes to an end. In the face of a rapidly aging population, these programs were dead before the ink even dried on the pension agreements. It is likely that Social Security and Medicare are in the same fix. At least I feel better knowing that we are in better shape than other advanced economies (including India and China) when it comes to the economic impact of an aging population.

[santafe2]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

here's what i thought...

Thanks for posting that infamous Carlin stand-up. It's the way this country works. He's not so much blaming as explaining. In the US you're either winning or you're losing. There is no in-between, this is not Sweden. Outside of your family and close friends, everyone here wants to eat your lunch. It is the thing that makes us great and awful at the same time.

I appreciate EJ's article but it's not surprising, we're the best pick-pockets in the world. It's going to get a lot worse for anyone in the US who has assumed we are a decent country with rules we'll honor. As a culture, we've always taken what we want and this won't be any different. I'm not blaming, just explaining.

[Jim Nickerson]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

There is another solution, hyperinflation. Even if the return on assets is lower than inflation, the liabilities can be funded with depreciated dollars.

There us another solution, cell phone induced brain tumors.

http://newsjunkiepost.com/2009/08/28...y-is-released/

I love to take a photograph
So mama don't take my mobilephone away

Mama don't take my mobilephone away
Mama don't take my mobilephone away
Mama don't take my mobilephone away

Mama don't take my mobilephone
Mama don't take my mobilephone
Mama don't take my mobilephone away

Mama don't take my mobilphone
Leave your boy so far from home
Mama don't take my mobilephone away
Mama don't take my mobilphone
Mama don't take my mobilephone away

[jtabeb]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

Yep. That's what happened in Russia as I understand.

"Here's your monthly pension. Have a nice cup of coffee."

What I expect to cause massive howls of rage will be when the government cancels adjusting federal pension benefits for inflation.

Disclaimer: my Dad's going to be one of those. I'm trying to prepare them.

Well they JUST Did EXACTLY that for social security.

[jtabeb]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

How many years for what? It's difficult to see what your eyes were looking at when you posted that query over the internet .

6-12 months. The kicker I think is the lack of any ATTEMPT at this point to try to keep the curtain covering things up.

When the put-up jobs are so blatent that joe-6 pack can see through it, you know the jig is about to be up, soon.

I said back in Jan that we had 6 months, and 6 months later we get the "Potempkin Recovery", I would therefor say that we are already dead in the water, they are just trying to find the right way to break it to the mass public. That's all this recovery has been, bid time to find a better way to cushion the blow. Only problem is, that the can't find any cushions because it just gets worse and worse by the day. So Now THEY are REALLY scared. Because of their delay tactics, things are revealing themselves MUCH more quickly and the situation is beyond irrepariable, so they do what any good politician does. LIE, JUST LIE and don't admit anything. They will keep doing this until we are eating sawdust and blood omelets (like my wife's grandmother did while she was in hiding in Nazi Germany before getting caught and placed in a concentration camp).

The lies will only get bigger and bigger and even more disconnected from realty.

1984? Shit, how about 2010.

[cbr]

Re: Corporate Pension Fund shortfalls weigh on recovery - Eric Janszen

i can speak with some authority on this, though i did not work directly on the pension funds issue, i juggled other interrelated senior management issues for a fortune 500 and can tell you a few things:

1) the entire basis for my going there was to carry out a non-union international subsidiary growth plan to a level that dwarfed the historical union multi employer pension obligations and domestic cost structure problems.

2) these obligations were the elephant in every room, with stock prices in 04-07 wildly unreflective of the $4b underfunded pension liability staring the company's future in the face.

3) the strategy was begun far too late, and though it was a good concept, I have moved on and the company will make it, if at all, by a belated but diligent effort by senior management combined with a macro rebound (not likely) as well as the miracle of market share inertia.

4) the stock price has crashed, the PBGC refused to face its own reality as of the time i was there, competitors who bought out of the multi employer fund at huge cost during the bubble peak were ironically forced to support our efforts, but ultimately the stock price is now 5% of what it was, and the pensioners will likely receive $1200 per month from the PBGC instead of the $5500 per month they planned their lives on. If the PBGC finds a source for its ever growing obligations.