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alstry (34.92)

Will Many Go Broke Without A Pension?

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August 12, 2009 – Comments (9)

IF YOU THINK  HEALTH CARE IS A BIG ISSUE?

PRICHARD, Ala. -- Prichard's municipal pension fund doesn't have enough money to pay retirees next month, according to a letter from the pension board's chairman and City Council member Troy Ephriam.

With less than $50,000 left in Prichard's pension fund and monthly payments of about $150,000 to the city's 193 pensioners, Ephriam asked Mayor Ron Davis on Tuesday for an answer this week on "how the city plans to make the required September pension payments."

Ephriam wrote that "Wachovia Bank, the custodian of the funds, has requested direction in the winding up of the fund."

Ephriam told the Press-Register that only $43,872.27 was left in the account.

Davis did not respond to phone messages left Tuesday with his spokeswoman.

http://blog.al.com/live/2009/08/prichards_pension_fund_may_be.html

AND THIS FROM OUR BUDDY KARL DENNINGER:

Now, CALPERs chief actuary is finally speaking up:

Ron Seeling, the CalPERS chief actuary, described the process used to “smooth” the rate increases that will be imposed on the 1,500 local government agencies in CalPERS in 2011 in the w ake of the stock market crash.

Instead of a rate increase of 4 to 20 percent of pay, the smoothing will reduce the rate hike to a more manageable 0.5 to 2 percent of pay.

“I don’t want to sugarcoat anything,” Seeling said as he neared the end of his comments. “We are facing decades without significant turnarounds in assets, decades of — what I, my personal words, nobody else’s — unsustainable pension costs of between 25 percent of pay for a miscellaneous plan and 40 to 50 percent of pay for a safety plan (police and firefighters) … unsustainable pension costs. We’ve got to find some other solutions.”

Oh, but he DID sugarcoat it. 

http://market-ticker.denninger.net/

Hmmmmm.  How will Americans be told that the pension they depend on to live is simply broke?

And so is social security, and medicare, and medicaid, and unemployment if we want  to keep 20,000,000 people employed for government and prosecute a few wars?

The numbers just don't add up, unless Obama starts taxing our all of our income and assets as well.

9 Comments – Post Your Own

#1) On August 12, 2009 at 11:42 AM, alstry (34.92) wrote:

The Needy Getting Needier as States Cut the Needy

MADISON, Wis. – Struggling with budget shortfalls that reach into the billions, several states are making deep cuts in college financial aid programs, including those that provide a vital source of cash for students who most need the money.

At least a dozen states are reducing award sizes, eliminating grants and tightening eligibility guidelines because of a lack of money. At the same time, the number of students seeking aid is rising sharply as more people seek a college education and need help paying the tuition bill because they or their parents lost jobs and savings during the recession.

http://news.yahoo.com/s/ap/20090812/ap_on_re_us/us_financial_aid_states

Just what colleges and universities need in this time of evaporating endowments and shrinking revenues.

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#2) On August 12, 2009 at 12:12 PM, alstry (34.92) wrote:

America Cheers as Prices Crash!

Median home prices fell a record 15.6% during the three months ended June 30, compared to the same period in 2008, according to an industry report.

America Cheering as More and More Go Broke:

Aug. 10 (Bloomberg) -- Consumer bankruptcies show no sign of abating after rising more than a third this year and may hit 1.4 million by Dec. 31 as jobs are lost and loans are harder to get, according to the American Bankruptcy Institute.

More than 126,000 consumers filed for bankruptcy in the U.S. last month, 34 percent more than in July 2008, the ABI said in its latest report on Aug. 4. The increase came after a 36.5 percent rise in personal bankruptcies nationwide in the first six months, to 675,351, according to the ABI research group, which interprets data collected by the National Bankruptcy Research Center.

Let's see how high we can take the S&P PE?

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#3) On August 12, 2009 at 12:20 PM, Tacomatight (73.64) wrote:

9/09 Baby....Are you prepared?

I hope you have new hobbies lined up. 9/09 is a commin'! You promised to us all that if the world didn't end on 9/09 you'd retire. So I thought I'd help out and "prepare" you for after 9/09. 

Here's a few ideas to help you bide your time after 9/09:

1) looking at the newspaper to find hidden combinations of letters, symbols and numbers that "prove" that the end will come on 9/09/2010;

2) monitoring the dogs in the neighborhood to see if they have any have large lumps on their backs (secret government monitoring devices which are used to watch your every move because you are telling the truth on Caps).

3) passing blacklights over various neighboorhood cats' eyes to see if they are infact sofisticated government monitoring devices implanted to watch you because you are telling the truth on Caps;

4) telling your neighbors that fluoride in water is infact a government conspiracy to pacify population into accepting economic recovery when in fact our economy is worse than the dark ages in Europe(helps if you also wear a suit of armour when you give this speech).

5) Continually blog 10 times a day on the Motley Fool about the end of the world on 9/09...oh wait sorry, you already have that one....scratch that one...you promised. We're gonna miss you man.

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#4) On August 12, 2009 at 12:30 PM, alstry (34.92) wrote:

Tacoma,

It is a simple math problem.....

Your government is running out of money and your politicians are borrowing trillions from bankers.......

pretty soon, the bankers will want to be paid......and when your government needs to  pony up the cash....guess where they are coming baby;)

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#5) On August 12, 2009 at 1:00 PM, alstry (34.92) wrote:

MAYBE WE SHOULD BE CHEERING ABOUT EXPORTS CRASHING......BABY?

California exports were sharply down for the eighth straight month in June as the state's struggling economy and fiscal problems among trading partners continued to put the brakes on trade.

In June, merchandise exports from the Golden State were valued at $9.98 billion, down 24.9 percent from their June 2008 level, according to the University of California Center Sacramento. The center based its analysis on data released today by the U.S. Department of Commerce.

http://www.sacbee.com/latest/story/2103519.html

Strange isn't it, historically during periods of earnings DECLINES, PEs contract......now we are approaching 150?  But then again, Alstry views the world a bit differently these days than most.

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#6) On August 12, 2009 at 1:34 PM, TheClub55 (< 20) wrote:

I actually think the reduced grants and financial aid will be beneficial for students in the future b/c schools will actually be forced to lower costs, but I do feel bad for the current crop of student… though it could be a blessing in disguise since it likely they will have a $50K loan bill and no job upon graduation (better to starting working for $7.25 per hr today).  

 

I’ve read a number of papers that show school cost rises can be correlated w/ the increase in financial aid and governments backing of student loans… school know that crazy tuition hikes will be matched by increased loans (lowering the incentive to make school affordable).  Also, its interesting that college tuition is of the few segments of the economy (other than health care and government) that has had costs have outpaced inflation – which I point to government policies and interventions.

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#7) On August 12, 2009 at 1:57 PM, debtRichQuick (< 20) wrote:

I still can't see what 9.09 is about. The only things I can come up with are the treasury pruchase program expiring, and the treasury's guarantee on money markets expiring.

The easiest way out of this is to talk about the truth, and that is deflation is here. Why support programs the market will support? Plus, as we can see from the current rally, the market will takes things well beyond fundamentals.

 Now....if we can just get the sheep to speculate on treasuries, they may drive rates to zero, just to get gains in PAR. LOL!

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#8) On August 12, 2009 at 2:19 PM, QualityPicks (78.76) wrote:

Will Many Go Broke Without A Pension?

Of course, but it is a small price to pay if we can save Goldman Sachs and their bonuses. 

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#9) On August 12, 2009 at 6:05 PM, ETFTimer (< 20) wrote:

I guess I'm an official Alstrynomics convert as of today.  This group of news items looks a heck of a lot like the "concentric contraction" that you talked about eariler.

Club55: I agree that college tuition has risen as a result of ever-increasing grants and loans, and cutting off financial aid is probably the only way to fix the problem.  It's too bad that it has to happen at a time like this, but I guess that's how the world works.

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