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Wall Street Hedge Funds Are Looting the Pension Funds of Public Workers
Matt Taibbi on How Wall Street Hedge Funds Are Looting the Pension Funds of Public Workers
In his latest article for Rolling Stone, Matt Taibbi reports that Wall Street firms are now making millions in profits off of public pension funds nationwide. "Essentially it is a wealth transfer from teachers, cops and firemen to billionaire hedge funders," Taibbi says. "Pension funds are one of the last great, unguarded piles of money in this country and there are going to be all sort of operators that are trying to get their hands on that money.
Interview and transcript at :
http://www.democracynow.org/2013/9/26/matt_taibbi_on_how_wall_street
In his latest article for Rolling Stone, Matt Taibbi reports that Wall Street firms are now making millions in profits off of public pension funds nationwide. "Essentially it is a wealth transfer from teachers, cops and firemen to billionaire hedge funders," Taibbi says. "Pension funds are one of the last great, unguarded piles of money in this country and there are going to be all sort of operators that are trying to get their hands on that money.
Interview and transcript at :
http://www.democracynow.org/2013/9/26/matt_taibbi_on_how_wall_street
" I'd say this was the motivation behind moving away from Social Security and union pension funds and into the '401k-every-worker-is responsible-for-his-own-retirement' system." I believe I've read the average person spends more time on planning their vacations than on their finances.
I do agree with you, and it appears corporate america does as well, as it is already happening to new hires.
tough nut to crack.
I do agree with you, and it appears corporate america does as well, as it is already happening to new hires.
tough nut to crack.
The problem is, unless you throw the cash under your mattress it is always a gamble. Even if you did that, you'd lose money to inflation. As we know, pensions are not savings banks, they are in themselves investment groups.
When you see the stock markets have gone nowhere over the past ten years and interest rates for savings accounts are a 3rd of a percent, this is what happens. More coming out than going in..I think it is called a ponzi scheme :)
When you see the stock markets have gone nowhere over the past ten years and interest rates for savings accounts are a 3rd of a percent, this is what happens. More coming out than going in..I think it is called a ponzi scheme :)
"If you look on the prospectuses of a lot of these investments, they say right in the front, in huge letters, these are high risk investments, you may lose everything."-----------------------------------------------------------------------------------
This is what frightens me.
Does a worker have a choice of investing or is it just done for them? If they gamble with the pensions and lose, who are the losers? The people who have paid into their fund and who are counting on it to live on in their old age.
How can this be legal let alone ethical?
This is what frightens me.
Does a worker have a choice of investing or is it just done for them? If they gamble with the pensions and lose, who are the losers? The people who have paid into their fund and who are counting on it to live on in their old age.
How can this be legal let alone ethical?
I had a pretty long response written last night on this subject and decided to delete it..Comes down to one issue--actuaries make poor assumption (far to high) on return on invested capital.Period. So they gamble for higher returns with the hedgey's (which have had horrible returns, far under performing your basic S&P index fund)..They being, corporate funds, endowment funds (think, yale, harvard and yes, brown) foundation funds etc.
The hedge funds like it, 2 and 20 as they say. They get paid 2% of the money managed and take 20% of the profit..Sweet deal for them.
To nice of a day here to stay inside.
The hedge funds like it, 2 and 20 as they say. They get paid 2% of the money managed and take 20% of the profit..Sweet deal for them.
To nice of a day here to stay inside.
"JUAN GONZALEZ: You know, decades ago, pension funds used to invest conservatively, basically in bonds, because they knew that this was retirement money of workers that they couldn’t risk. But increasingly then over the last 20 to 30 years, they have shifted more of their money into the stock markets, to the gambling of the stock market, so when the market went down then suddenly the investment returns of these pension funds went down and they were stuck then because they were projecting continued increases on those returns.
MATT TAIBBI: Sure, and among the problems here is that state and municipal pension funds are actually not covered ERISA which is the federal law governing pensions. So if there is no prudent man rule that requires a certain level of reasonability or prudence in investment, hedge funds probably would not have been a typical public or municipal investment a long time ago, but now they are being used in some cases 10%, 15 to 20% of these state funds are being put into these alternative investments. If you look on the prospectuses of a lot of these investments, they say right in the front, in huge letters, these are high risk investments, you may lose everything. It is exactly the opposite of what you want to put public money into."
At the risk of earning myself a tin-foil conspiracy hat, I'd say this was the motivation behind moving away from Social Security and union pension funds and into the '401k-every-worker-is responsible-for-his-own-retirement' system. The Market needs huge amounts of cash and a large pool of winners/losers to even function. And that's what's important - right?
MATT TAIBBI: Sure, and among the problems here is that state and municipal pension funds are actually not covered ERISA which is the federal law governing pensions. So if there is no prudent man rule that requires a certain level of reasonability or prudence in investment, hedge funds probably would not have been a typical public or municipal investment a long time ago, but now they are being used in some cases 10%, 15 to 20% of these state funds are being put into these alternative investments. If you look on the prospectuses of a lot of these investments, they say right in the front, in huge letters, these are high risk investments, you may lose everything. It is exactly the opposite of what you want to put public money into."
At the risk of earning myself a tin-foil conspiracy hat, I'd say this was the motivation behind moving away from Social Security and union pension funds and into the '401k-every-worker-is responsible-for-his-own-retirement' system. The Market needs huge amounts of cash and a large pool of winners/losers to even function. And that's what's important - right?
You can contact MH with your concerns... Scroll to the very bottom of the page where there are some options printed in blue... one of them is "Contact Us"... near the right hand side of the screen.
I'm glad I was able to get my pension fund in a lump sum, so I could roll it into investments of my own choosing.
I'm glad I was able to get my pension fund in a lump sum, so I could roll it into investments of my own choosing.
I'm certainly not happy with medhelp for highlighting Hedgefund, only to bring you to advertisements selling them :(
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