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Massive Taxpayer Backlash Over Pension Crisis Is Coming
Mish's Global Economic Trend Analysis —
... "Your assumptions were invalid in 2007, they are invalid now, and they are going to be invalid after you change your asset allocations." Pension plans are struggling to make their assumptions. That is because assumptions are too high. But rather than change those assumptions, plan managers are going to shift into or stay in riskier assets. This is what happens when promises cannot be met. Think this is just a US problem? Think again. Canadian Pension Plans Want To Ignore The Problem Struggling Canadadian pension plans call on government to relax funding rules A series of ...
Liquidity Management is the First Priority of Risk Management
The Aleph Blog —
... violated many times:
Taking on mortgages where the payments can reset upward.
Hedge fund investors thinking that their funds were liquid.
Venture capital investors presuming that they would easily have the money to fund future commitments.
Banks financing illiquid assets with liquid deposits.
Pension plans and endowments going overboard to buy alternative assets. (More on pensions: one, two, three)
General Growth, and other REITs choking on maturing short-term ...
