Friday, August 31, 2012

Face Plant

August 31, 2012
Public pension funds stung by Facebook's falling stock

Although public pension funds staked only tiny portions of their multibillion-dollar portfolios on Facebook's fortunes, the stock's poor performance has added to the funds' woes. Chronic underfunding and poor returns could lead pension funds to pursue riskier investments such as hedge funds, private equity, commodities and real estate, or even cut benefits for retirees.

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Urban Dictionary: face plant


Troy said...

I need to go beyond spreadsheeting and make an actual programmed model of the US economy.

The who/what/where is wealth being created and consumed here, and how this will be changing over the next 20 years (when I get my gold watch and check out of the labor force).

Or I could write DSR and throw in an economics subsystem : )

Stagflationary Mark said...


Or I could write DSR and throw in an economics subsystem : )

Part of me wants to write it too.

Please write it so I don't have to do it, lol.

Troy said...

blue is jobs/population ratio, red is hours/job.

savings can only be paid out of current production.

Maybe robotic manufacturing will help, but this chart shows max q on the newly retired is going to be hit in 2026.

1% yields aren't going to cut it. Krasting made a similar point about the SSTF's falling treasury yields, that's going to bring in the fund exhaustion by many years now.

Not that wage earners can't handle another 2% or so FICA burden, but it's just another brick in the wall of anti-stimulus this nation needs to deal with.

Or not. The Japan Option is still open I guess.

Troy said... is annual increase in age 62+ population.

This is good for systemic stress of SSA payments but not so good for Medicare, since I would think the dominant Medicare expenses are incurred when people leave the program and not their enrollment year.