Posted on 11/11/2013 4:17:31 PM PST by Olog-hai
I'm shocked.
Thought San Jose CA was at the top with Detroit and Chicago
I’d make the politicians and union leadership sell private property first.
Crash and burn, b*tches...
These soon to be bankrupt cities are looking for somewhere to dump the healthcare they cannot pay for.... obamacare is nothing more than a bailout...
Very common thing, doling out pensions based on formulas figuring a rosy return on fund investments. Projecting big returns like 8 percent when reality is not even half that. By contract, the cities are on the hook to make up the shortfall. They need to change the contracts with the unions so the cities won't have to make up the difference. But they won't.
Roadcat go here...http://www.cnbc.com/id/100963307
From the article...
"Shanks said Ford is maintaining its goal of fully funding and taking the risk out of its global funded pension plans by mid-decade. As the company takes the risk out of the pension plans, it wants to increase fixed-income asset allocations. Shanks said the goal is to have an asset mix of 80 percent fixed income and 20 percent growth. Currently, the fixed-income asset mix is 60 percent, up from 55 percent last year, Shanks said."
What they are doing is brilliant IMHO and no one noticed this methodology when it surfaced, I did. They are not assuming 8 or 10% like everyone else is and assuming the blended rate of Corporates and the 20% equity which maybe their own stock which is on a tear. So they suck it up and the front end with realistic expectations, a defined total "nut" if you will, and it seems they are not to get whipsawed in a down market later, as they move forward to eliminate the liability, period.
Unfortunately, a City like Cinnci, doesn't have a product line that is a cash generating machine to fill the gaps.
Yep, they believed that they can kill the golden goose and still collect the eggs.
No offense, but I think you are gonna do it, one way or the other...
No New Suit of Clothes for anyone not connected to funds minute by minute shifted into “parked financial vehicles.”
The 2008 Bailout never happened, parked in the QE s, until the Extortion-Care Concentration Camp U.S Territory is mechanized.
Extortion-Care is the Government Work-Camp: Arbeitsziehungslager
My Omaha auntie explains that the Democrat narrowly elected mayor ten years ago gave away the store to the public unions - public unions whose lawyer was the new mayor’s brother.
Omaha is a good town but even here the public union rot eats away ....
Interesting.
That’s always been a dangerous cycle.
Pay union employees big money, get contributions and workers for campaign, get reelected.
And repeat.
Happened here in San Francisco. Unions got the city to agree on generous pensions, based on rosy predictions of growth for fund investments. When it didn't pan out, the city had to make up the shortfall gaps for pensioners. Fortunately for SF, the business climate is good so it didn't sink the city (almost, but there's a lot of waste in local government that can be eliminated). The unions may yet destroy the city in future negotiations.
It would be useful to know what percentage of the average pension fund’s investments are in federal government bonds. To a rather scary degree, it has become a sort of financial circle jerk, if you will pardon the colloquialism.
Funded portions of the pensions are “invested” somewhere. That means that if investments lose value the pension’s funded percentage will drop. The portion that is US government bonds is, in a manner of speaking, a tax payer bailout in advance, since the only value the bonds have is a promise by the government to confiscate taxpayer assets to pay the returns.
What do you say about those deep red areas? I am shocked. They don’t even have good education systems so what are they spending their money on????
The low interest rates also hurt the pension funds on the liability side, because the liability is the value of future benefits, discounted at the assumed future rate of investment earnings. The lower that rate is, the higher is the liability, and thus the higher the unfuded liability. Low current interest rates put a downward pressure on what the pension funds can assume for the future earnings rate (although they still abuse it).
Most of the tax increases in CA are going to pensions.
Surprised to see Manchester, New Hampshire on the list. Back in the “bad old days” of Manchester Union Leader editor Bill Loeb (a friend), the whole state was in good shape.
Then came the Demonrat influx from New York and it has been going downhill ever since. These carpetbaggers did the same thing to Vermont (a leftist plan that began about 1975), Maine, and Connecticut (illegals finished it off).
My opinion is, that if the low educated voters and white rich liberals want these incredibly stupid pension programs, let them pay for it while their cities go to hell like Detroit.
Then they have have shoot-outs in the street for what is left, high crime rates, physically disintegrating structures, and unemployment so high that they will need oxygen masks just to survive.
Sometimes you just can’t fit STUPID and the Democrats are STUPID on STEROIDS. Getting what they voted for.
Sane people should leave for Texas.
I just emailed this article to my two local conservative radio guys here in Omaha. That is really scary.
Printing additinal massive quantities of Bernake Bucks is the answer!!
/s
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