Global Pension Tension: September 2010

Leo Kolivakis's picture
A few pension related articles for you to read while I am vacationing in Crete:

As you can see, global pension tension is heating up all around the world. This is all part of the "new normal" which basically means get ready to work longer and get a lot less during your golden years. On that cheerful note, I will get back to my vacation and enjoy this beautiful island.

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Mentaliusanything's picture

Enjoy your Holiday Leo, just give you some light reading on Greek Bonds you think are the 'ducks nuts'

http://www.abc.net.au/lateline/business/items/201009/s3011862.htm

Quote 'Well, it's certainly illiquid; it may or may not be insolvent. But we're absolutely certain that it is going to have to restructure its debt. 

Now, that is the great problem that the markets and investors have got to face up to. At some point, Greece will declare that it is unable to repay all its debs in full. 

Now, it won't, we don't think, default entirely. What it will do is give a haircut. It'll repay at a discount. We're thinking somewhere of the order of 30 per cent. But you know what? That's exactly what's reflected in the market currently. 

Greek 10-year bonds with a face value of 100 are trading today in the market at $69.25. So I think the whole process that's began in spring and will probably carry on for another 12 to 18 months is designed to lead investors to a position where Greece can restructure without it being a shock, without it being a cataclysmic event for debt markets.' unquote 

Leo Kolivakis's picture

Thx, very interesting, and I will tell you, some very big funds are starting to take a closer look at Greece and Greek bonds. Last year, I was more pessimistic, and recommended everyone short the euro. This year, things are bad, it will be a difficult winter, but I am more optimistic than almost everyone on Greece and other southern European nations. Euro will likely fall to parity, but the level of pessimism is totally exaggerated.

pitz's picture

If those Social Security-collecting, or government-pension mofos think that I'll be working and paying taxes so they can sit around and 'enjoy' their retirement, they got another thing coming.

 

kalum's picture

Hey Leo , while you are gone, what"s doing with Copper Fox? Been on fire.

Buck Johnson's picture

Good link Mephisto, the people in Greece are tired and have no money so they are demanding prices be lower and/or non existant.  In America it won't be as civil they where doing in line.  Remember, this country has alot of people that care about themselves and nobody else.  So instead of standing in line, people will cut and run with the items they have.  Also This pension thing is going to implode, both private and public.  The federal govt. have allowed both to hold off funding when they wanted to and now the bill is coming due.  What I didn't know until a few days ago is that the PBGC which takes over private pensions in the US won't take over the public ones in the states.  And the PBGC has a cap that is no where close to what many would be getting (also it has funding issues itself).  The states in private want the Fed to bail them out, but they won't do it.  Because as soon as one state gets bailed out, the other 49 will want a bailout (even it they don't need it). 

We are screwed and slowly people are finding out that the "emperor has no clothes".  Our govt. along with others have made promises that where based on a ponzi scheme.  You see a govt. can do a ponzi scheme, but if you or I ever did something like Social Security or Pensions we would be locked up.

Dirtt's picture

This is where you shine Leo. Good stuff. Thanks.

Leave the sunshine peddling to the White House and General Electric.  You don't look your best in rose colored glasses.

Gordon Freeman's picture

This isn't going to take 5-10 years to self-destruct.  No more stomach for bailouts, and no real money anyhow.  Fewer people working, less tax revenue, etc.  No mun, no fun.

It only seems it's taking forever because of the endless news cycle.  Check back on this topic on September 14, 2011--today will seem like the days of wine and roses...

DoChenRollingBearing's picture

FWIW, our daughter just came back from Sweden (her first vacation from her job).  She mostly hung out with Americans there, but also talked with lots of Swedes.

Firstly, she was very impressed with how clean and new everything is in Stockholm.

Then she said that the single biggest talked about topic over there is:

PENSIONS!  Even Sweden is worried...

Hulk's picture

DCRB, did she go to Sweden a daughter? just askin...

RockyRacoon's picture

Ok, here goes:  Natural Selection, bitchez!

I'm already missing Johnny Bravo.

NOT

ZackAttack's picture

Here's some pension tension for you. Check out the comments in this article about NY police pensions:

http://www.newsday.com/long-island/nassau/7.1475711?view=article

 

Sudden Debt's picture

looks like we'll be needing to terminate some surplus retired folks.

I propose a lottery of some kind.

RockyRacoon's picture

Define "surplus".  I think I'll need to know...

ZackAttack's picture

"Soylent Green is pensioners!"

Azannoth's picture

Hopefully this whole fuking system will collapse in the next 5-10 years and I wont have to contribute to OTHER people pension just my own(fully backed by gold and silver)

RockyRacoon's picture

How about tomorrow?  I'm ready -- tired of all the hoopla, smoke & mirrors.

johnnynaps's picture

I agree, why is everyone still working for worthless money and everyone else? Count me in for tomorrow Rocky, I'm gonna start my drinking now!

doomandbloom's picture

Leo, if a pension fund is underfunded...then does it become a Ponzi scheme?

mephisto's picture

Yes, of course. Question - when is a pension scheme not Ponzi finance?

tewkatz's picture

When you have death-panels...a second wrong that appears to solve the first.

Rahm's picture

bankrupt bitchez!

Mercury's picture

What no Greek pension woes?

I wouldn't worry about it too much in The U.S. though, I'm sure there's a provision in the ObamaCare bill that provides for the production of a little pill -the Eziekiel Emanuel Black Beauty- guaranteed to relieve all symptoms of pension tension.

apberusdisvet's picture

Actually, the solution in the US will be the infamous death panels and the rationing already quite evident in the Massachusetts plan.  Disguised genocide for the elderly.

Ripped Chunk's picture

And 1099's for all !!!  A healthcare bill is a great place for this little nugget.

mephisto's picture

Thx Leo, enjoy the holiday.

For the few remaining who think Greece is contained and europe is OK now that EURUSD is approaching 1.30, take a look at this - greek 'militant shopping'. Leo is the guy at the back trying to get discounts on his solars.

http://www.bbc.co.uk/news/world-europe-11256557