Posts
Click to enlarge.
Click to enlarge.
Ben Bernanke must be very pleased with the results. Who doesn't love certainty?
First the bad news. A decade ago we entered the era of unpredictably poor long-term investment returns. Few could see it coming.
Here's the good news. We now appear to be entering the era of predictably poor long-term investment returns. Everyone should see it coming. It shouldn't take a rocket scientist to see that negative real yields on 10-year bonds won't create prosperity. Of course, we can't all be rocket scientists.
February 14, 2012
Calpers Actuary: Consider Lower Assumed Return
California Public Employees’ Retirement System, the largest U.S. public pension, should consider changing its assumed rate of investment return, its actuary said. Trimming the forecast may add to taxpayer costs.
The rate, now 7.75 percent, is used to calculate how much money the $234 billion fund expects to have and how much it needs to cover benefits promised to workers, as well as the size of annual contributions by state and local government.
You think? Perhaps what they lose in the bond markets can be made up in the equity markets. That seems to be the thinking. Good luck on that theory long-term!
Source Data:
FRB: Selected Interest Rates
US Treasury: Interest Rates
5 comments:
"Trimming the forecast may add to taxpayer costs."
LOL. If we're going to be making our own reality they should just up the forecast and save us all money.
but . . .
What's odd is that corporate profits come from their customers, who are taxpayers.
So customer money passing through higher corporate profits boost equity prices which gives pension funds money.
Less corporate profit result in raised taxes.
I'd go back to Japan but I still can't figure out who is more screwed.
Troy,
LOL. If we're going to be making our own reality they should just up the forecast and save us all money.
The quote is even funnier to me than you imply.
Trimming the forecast may add to taxpayer costs? May?
I wish I could plan my retirement like that.
Although lower investment returns *may* require me to save even more money, perhaps it won't. Perhaps I'll spend even more money at this country's many shopping malls and restaurants and see what happens. ;)
Bonus thought.
"I'd go back to Japan but I still can't figure out who is more screwed."
You could always split the difference.
Here are the driving directions from Seattle to Tokyo. Just stop halfway. It's a nice place. Plenty of water, lol. ;)
You *must* read the directions. Too funny.
25. Kayak across the Pacific Ocean
I'm serious! No joke.
6,734 mi, 34 days 8 hours?
My arms would sure be sore, lol.
That's 8 miles per hour each and every hour, mostly by kayak.
That's nothing. I'd get there a day early no doubt. I climb 20 flights of stairs a day. I'm an iron man.
Hahaha!!!
(I love sarcasm, but you already knew that.)
Post a Comment