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June 06, 2009 – Comments (3)

Pension pulse has a piece on the degree to which pension funds have declined.

As a group the S&P companies were 4% over and now are 22% under funded.

I have no idea about how many people the S&P companies represent, however, if you consider a $2 trillion deficit in one year and pensions are supposed to pay benefits for the rest of one's life, the numbers look like either:

1) There are very few people represented by S&P companies, and/or

2) The pension funds are far more underfunded then reported, and/or

3) There are no words to describe the magnitude of enormous size of the deficit.

The $2 trillion deficit is about 5-6 times the size of the pension underfunding and the deficit is for merely a one year period, whereas the pension money pays out an average of 15-20 years.  These numbers look disturbingly like lots is owed and little is saved.

3 Comments – Post Your Own

#1) On June 06, 2009 at 11:45 AM, AdirondackFund (< 20) wrote:

Uhmmmm, exactly correct again.  This is why the bear camp is wrangling.  WE KNOW what all else is broken and has yet to be addressed.  There simply isn't the money to fix all of the problems.  That intimates that a Depressionary Cycle is near, or even upon us at this very minute. 

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#2) On June 06, 2009 at 12:14 PM, dwot (97.03) wrote:

Rather then do another post today, I will just link this Big Picture post.

I had to read it fairly carefully and study it to understand what it was saying about jobs.  Some of it was easy to understand, but the graph took some thinking about it.

Basically, the optimism over the jobs this week is highly suspect.  You simply can not have the jobs they suggest and the decline in GDP.  The two have lost correlation right now.

So, I suspect when the implications of this are more apparent in the market we'll have all the "who could have known" rectoric, again...

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#3) On June 06, 2009 at 12:22 PM, alstry (35.03) wrote:

DWOT,

As you may know I sleep with a school teacher every night......by my guess is soon you too will adopt Alstrynomics.....but I have little doubt that you will be far more civil in your behavior.

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