Thursday, October 30, 2008

More on those soon to be non existent pensions

Here is a link to an excellent sight call the "pensiontsunami".

All of the big pension funds have invested oodles of capital in private equity funds and investment hedge funds.  If you think hedge funds have been cleared out, wait till you get a load of what the private equity guys have done to their investors.



These guys have outdone Religion in the "False Promises, Manipulation, and Exaggerated Claims" department.  I did not know that was even possible.

But I digress...

Private equity used leverage that would scare the snot out of a drunken hedge fund manager, and hedgies have notoriously strong constitutions.  And these guys are PANICKED.  I love reading their BS... "structural issues", "strategic unwinding" (whenever you hear strategic, check for your wallet and your watch), "debt restructuring".... these guys are doomed, and their investors are, too.  That would be your kid's schoolteacher, the fireman that just got the cat out of your tree, and the cop working the cross walk.  These are the beneficiaries of those pensions.

But notice a similarity between these folks?  They work for local and state GOVERNMENTS.  If THEIR investments go south... NO PROBLEM - they will simply extract it BY FORCE from homeowners, business owners, and other tax payers.  Or at least that was the plan.  Unfortunately, the massive recession we are looking into ass end of as we speak is going to trash that idea.    People will simply not be able to pay.  So the Fed and the Treasury will have to step in, AGAIN.

Hmmm...  Interest rates are going down, the federal budget deficit is rising briskly, employment (productivity) is going down, and the Federal Government is printing money like there is no tomorrow.  

Brother, can you spare a (silver) dime?

Waiting in the wings is an energy shortage that is going to finish off in the economy what the credit crisis left standing.

This is it.  There will likely be NO MORE "REAL" ECONOMIC GROWTH in the U.S. (+ or - 3 years, though there might be some inflation masquerading as growth).  What will a static state economy be like?  How will capital move in such a system?  WHAT WILL HOLD VALUE?

Good Luck!

Mentatt (at) yahoo (d0t) com

2 comments:

bureaucrat said...

For deflation: Mark Hulbert says in an article that the bond market is indicating deflation for the near term. The 10-year Treasuries are yielding 3.95% while the TIPS inflation-adjusted Treasuries are yielding almost a point less, the difference being about a point. The bond market is expecting inflation to be around 1% or less for the next 10 years. Deflation.

Anonymous said...

Yep, as we have spent the last 35 de-industrializing and made ourselves capable of providing less and less, we have made increasing promises of providing more and more.

I always thought the "information economy" and "post industrial economy"
stuff was a lot of Ivy League intellectual crap. Well, here you have it.

These intellectual, socialist idiots have no idea how hard people work or how many it takes to make the the stuff we need. They actually think that if they print the money, they can just go to the store and buy it. Magic!

This rotten smoke and mirrors investment activity is occurring because it is almost impossible today, in this country, to find honest investments that will produce REAL economic growth, or appreciate because of real growth.

As a side note, as I was driving to work today, I saw a brand new septic tank cleaning truck. On the back of the tank was written, in beautiful blue letters,

"Warning, may be full of Political Promises."

Best laugh I've had in a week.

Coal Guy