{"id":45299,"date":"2019-04-12T09:52:29","date_gmt":"2019-04-12T14:52:29","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45299"},"modified":"2019-04-12T09:52:32","modified_gmt":"2019-04-12T14:52:32","slug":"what-went-wrong-with-pensions-and-why-the-whole-world-should-be-worried","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45299","title":{"rendered":"What Went Wrong With Pensions \u2014 And Why The Whole World Should Be Worried"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.dollarcollapse.com\/what-went-wrong-pensions\/\">What Went Wrong With Pensions \u2014 And Why The Whole World Should Be Worried<\/a><\/h3>\n\n\n\n<p>The past decade was a uniquely smooth stretch of financial highway. Pretty much every major asset class \u2013 stocks, bonds, real estate, fine art, you name it \u2013 did well, making it hard for conventional investors to lose money and easy for them to earn outsized returns.&nbsp;<\/p>\n\n\n\n<p>So why then are US public sector pensions (which own a ton of the above assets) a looming disaster that could trigger the next great financial crisis? Several reasons, ranging from negligence and criminality.&nbsp;<\/p>\n\n\n\n<p>Let\u2019s start with the fact that Wall Street preys on the ignorance of pension fund managers to extract huge fees for little or no excess return. Here\u2019s a video in which pension expert and \u201cforensic lawyer\u201d Ted Siedle lays it all out for Peak Prosperity\u2019s Chris Martenson:<\/p>\n\n\n\n<figure><iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/rL-UV0GvRFo\" allowfullscreen=\"\"><\/iframe><\/figure>\n\n\n\n<p>An even bigger problem is the tendency \u2013 understandable but still despicable \u2013 of state and local politicians to underfund pensions and then lie about it, pushing the eventual reckoning onto their successors.&nbsp;<\/p>\n\n\n\n<p>As baby boomer teachers, police and firefighters retire, the required pension payouts are soaring. Combine this with inadequate contributions, and the liabilities of major U.S. public pensions are up 64% since 2007 while assets are up only 30%.<\/p>\n\n\n\n<p>This math is simple enough for even a politician or fund trustee to grasp, but because there\u2019s no immediate penalty for underfunding a pension system, it has become normal practice in a long list of places.&nbsp;<\/p>\n\n\n\n<p>Another, related problem is also mathematical, but it\u2019s harder to manage in a boom-and-bust world: When pension plans suffer a big loss, as they tend to do in bear markets, the next few years\u2019 returns have to go towards making up that loss before plan assets can start growing again. The following chart, from\u00a0<a rel=\"noreferrer noopener\" href=\"https:\/\/www.wsj.com\/articles\/why-the-longest-u-s-bull-market-has-failed-to-fix-the-nations-public-pensions-11554888600%20Ha\" target=\"_blank\">a recent Wall Street Journal article<\/a>, shows pension fund assets falling behind in the past two bear markets and having increasing trouble catching up with steadily-growing liabilities.<\/p>\n\n\n\n<p>&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What Went Wrong With Pensions \u2014 And Why The Whole World Should Be Worried The past decade was a uniquely smooth stretch of financial highway. Pretty much every major asset class \u2013 stocks, bonds, real estate, fine art, you name it \u2013 did well, making it hard for conventional investors to lose money and easy [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[39,213,312,7544,1816],"class_list":["post-45299","post","type-post","status-publish","format-standard","hentry","category-economics","tag-assets","tag-dollar-collapse","tag-financial-crisis","tag-john-rubino","tag-pensions"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45299","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45299"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45299\/revisions"}],"predecessor-version":[{"id":45300,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45299\/revisions\/45300"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45299"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45299"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45299"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}