Mass

Delusion

“The problem with police officers and firefighters isn’t a public-sector problem; it isn’t a problem with government; it’s a problem with the entire society. It’s what happened on Wall Street in the run-up to the subprime crisis. 

It’s a problem of people taking what they can, just because they can, without regard to the larger social consequences.

It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans.

Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom.

 They’d been conditioned to grab as much as they could, without thinking about the long-term consequences.”

― Michael Lewis, Boomerang: Travels in the New Third World

Welcome To The Third World, Part 21: This Pension Thing Is About To Get Real

And this, remember, is happening at the tail end of a 30-year bull market in bonds and a 7-year bull market in stocks, which took the main asset classes held by pension funds to record valuation levels. So the rubber truly meets the road during the next recession when stocks will, if history is a reliable guide, drop by 20% or more. The current gaps in thousands of pension funds will become gaping holes, and the experience of Teamsters and Dallas cops will be replicated across the country.

DYI:  If history is any guide?  Stocks are going to drop far greater than 20% expect a magnitude of 45% to 60% only to bring valuations back to its mean!  The bond market has been a raging bull since 1981 only a fool would believe rates are to stay sub atomic low for another 10 or 15 years.  This is going to an ugly time for Americans especially for those up in age many will die in poverty.

DYI