by
Chris Martenson
New Martenson Report: Where do we go from here?
by Chris Martenson
by
Chris Martenson
As I’ve been writing about in the Martenson Reports over time, including the last one, one of the next shoes to drop is going to be a pension disaster. This too will be more easily measured in trillions than billions.
I am expecting a public pension wreck based on “management” so flawed as to cross over into gross negligence or worse.
March 3 (Bloomberg) — The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.
The CTA, which manages the second-largest public transit system in the U.S., had to hope for a huge contribution from the Illinois state legislature. That wasn’t going to happen.
Then the authority found an answer.
“We’ve identified the problem and a solution,” said CTA Chairman Carole Brown on April 16, 2007. The agency decided to raise money from a bond sale.
So far so good, eh? I mean especially if you don’t think about it too hard. After all, the only way a scheme to borrow money to plug a fiscal hole can work is if you are earning more from investing that cash that you are paying out in interest. Makes sense right?
Your investment gains have to exceed your interest costs or the scheme becomes a sure-fire money loser.
Well, here’s the punch line:
The Looming Pension Disaster
by Chris MartensonAs I’ve been writing about in the Martenson Reports over time, including the last one, one of the next shoes to drop is going to be a pension disaster. This too will be more easily measured in trillions than billions.
I am expecting a public pension wreck based on “management” so flawed as to cross over into gross negligence or worse.
March 3 (Bloomberg) — The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.
The CTA, which manages the second-largest public transit system in the U.S., had to hope for a huge contribution from the Illinois state legislature. That wasn’t going to happen.
Then the authority found an answer.
“We’ve identified the problem and a solution,” said CTA Chairman Carole Brown on April 16, 2007. The agency decided to raise money from a bond sale.
So far so good, eh? I mean especially if you don’t think about it too hard. After all, the only way a scheme to borrow money to plug a fiscal hole can work is if you are earning more from investing that cash that you are paying out in interest. Makes sense right?
Your investment gains have to exceed your interest costs or the scheme becomes a sure-fire money loser.
Well, here’s the punch line:
by
Chris Martenson
Too Big to Save – New Martenson Report Ready
by Chris Martenson
by
Chris Martenson
Sunday, March 1, 2009
The latest government budget proposal from the executive branch is out, and it’s a masterpiece of fiscal irresponsibility. Clocking in at $3.6 trillion, it sports a deficit that is 12.5% of the projected GDP for FY2009 (fiscal year). It also displays no sacrifice in any quarter, as everything is funded, and then some. Sure, the priorities shifted between administrations, but a lack of spending limits did not.
"But this is an emergency!" we are told, implying that it’s not the right time to be pulling in our spending horns. This argument rests on the assumption that our problems can be fixed through additional deficit spending. However, the facts suggest that we are suffering from too much debt and too much deficit spending, not the opposite.
Too Big To Save
PREVIEW by Chris MartensonSunday, March 1, 2009
The latest government budget proposal from the executive branch is out, and it’s a masterpiece of fiscal irresponsibility. Clocking in at $3.6 trillion, it sports a deficit that is 12.5% of the projected GDP for FY2009 (fiscal year). It also displays no sacrifice in any quarter, as everything is funded, and then some. Sure, the priorities shifted between administrations, but a lack of spending limits did not.
"But this is an emergency!" we are told, implying that it’s not the right time to be pulling in our spending horns. This argument rests on the assumption that our problems can be fixed through additional deficit spending. However, the facts suggest that we are suffering from too much debt and too much deficit spending, not the opposite.
by
JW
by
Chris Martenson
A new Martenson Report is ready for subscribers. It explores the connection between baby boomers, the stock market returns of the 1990’s, bonds, and the trade deficit to make the claim that even if we somehow "fix" the economy here and now, significant headwinds probably remain that will prevent a full return to "how things were."
Here’s part of the conclusion:
Most people cannot imagine a future any different from the present. For many people, the coming changes will bring unexpected shock, inconvenience, trauma, or worse. By thinking about these possibilities now and reshaping your expectations of the future, you will be far better prepared for the ride. Some people are already experiencing unexpected and perhaps unwelcome challenges in their lives due to the economic transition that is already beginning to play out. At this point, not many are expecting change to be imposed upon them, and even fewer have thought about where this change will carry them. But some have thought about it, and making even simple changes to how you think about the future can be…well, a sound investment.
Link to The Great Asset Bubble
Best,
Chris
New Martenson Report Ready – The Great Asset Bubble
by Chris MartensonA new Martenson Report is ready for subscribers. It explores the connection between baby boomers, the stock market returns of the 1990’s, bonds, and the trade deficit to make the claim that even if we somehow "fix" the economy here and now, significant headwinds probably remain that will prevent a full return to "how things were."
Here’s part of the conclusion:
Most people cannot imagine a future any different from the present. For many people, the coming changes will bring unexpected shock, inconvenience, trauma, or worse. By thinking about these possibilities now and reshaping your expectations of the future, you will be far better prepared for the ride. Some people are already experiencing unexpected and perhaps unwelcome challenges in their lives due to the economic transition that is already beginning to play out. At this point, not many are expecting change to be imposed upon them, and even fewer have thought about where this change will carry them. But some have thought about it, and making even simple changes to how you think about the future can be…well, a sound investment.
Link to The Great Asset Bubble
Best,
Chris
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