No Equity and No Pension; PBGC Debacle to Come
We have nattered about the Pension deficit debacle before...
With $2 Trillion in home owner equity already wiped out, MSN's Jim Jubak notes the gamblers mentality being enabled by the PBGC.
The Pension Benefit Guaranty Corp. $14 billion deficit will grow and the pensions of 44 million workers will be lost, as they double down in the stock market...
Reducing fixed income from 72% by increasing stocks from 28 to 45% of the portfolio; and committing another 10% to alternative investments (hedge funds).
In other words, facing a $14 billion deficit and even larger projected shortfalls,
the PBGC decided not to save (by raising premiums) or to live within its means (by cutting benefits) but to gamble in the financial markets by taking on more risk.
If the PBGC it gets this wrong, 1) the folks who made the mistake will be long gone and collecting six-figure salaries as Washington lobbyists,
and 2) the taxpayers who have to pick up the tab, and the workers without pensions, will bear the pain.
This is a sterling example that those of us who play by the rules (work hard, live within your means, save) are chumps.
The way to get ahead is to gamble big and then, if you lose, find someone to cover your losses.
This behaviour fosters a deep anger from those of us who played by the rules and didn't buy more house than our income would cover
and are now paying the price in falling home values, a slowing economy, jobs lost and a sinking stock market.
Dont worry, if you played by the rules, you'll be picking up the tab not just for honest mistakes but for greed and fraud as well.
Just look at the "economic stimulus" bills increased loan limits as a prime example of White Collar Welfare.
I can't wait for the PBGC to double down, then have the stock market sink further, taking 45 million pensions into oblivion
along with the already bankrupt Social Security system and soon to be bankrupt GSE's.
With $2 Trillion in home owner equity already wiped out, MSN's Jim Jubak notes the gamblers mentality being enabled by the PBGC.
The Pension Benefit Guaranty Corp. $14 billion deficit will grow and the pensions of 44 million workers will be lost, as they double down in the stock market...
Reducing fixed income from 72% by increasing stocks from 28 to 45% of the portfolio; and committing another 10% to alternative investments (hedge funds).
In other words, facing a $14 billion deficit and even larger projected shortfalls,
the PBGC decided not to save (by raising premiums) or to live within its means (by cutting benefits) but to gamble in the financial markets by taking on more risk.
If the PBGC it gets this wrong, 1) the folks who made the mistake will be long gone and collecting six-figure salaries as Washington lobbyists,
and 2) the taxpayers who have to pick up the tab, and the workers without pensions, will bear the pain.
This is a sterling example that those of us who play by the rules (work hard, live within your means, save) are chumps.
The way to get ahead is to gamble big and then, if you lose, find someone to cover your losses.
This behaviour fosters a deep anger from those of us who played by the rules and didn't buy more house than our income would cover
and are now paying the price in falling home values, a slowing economy, jobs lost and a sinking stock market.
Dont worry, if you played by the rules, you'll be picking up the tab not just for honest mistakes but for greed and fraud as well.
Just look at the "economic stimulus" bills increased loan limits as a prime example of White Collar Welfare.
I can't wait for the PBGC to double down, then have the stock market sink further, taking 45 million pensions into oblivion
along with the already bankrupt Social Security system and soon to be bankrupt GSE's.
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