Courtesy of Mish
In response to Pension Problem Too Big To Ignore? Jack Dean at Pension Tsunami pinged me with an interesting anecdote:
Hello Mish
I had a call today — the first of its kind — from a retired teacher who is drawing a CalSTRS pension. She has a disabled son and is scared to death about the future solvency of the fund — mainly for his sake, because when she dies he’ll really need the pension that she’ll pass on to him.
It’s disturbing to see what our politicians have put in motion.
She is correct to be worried, very worried. Promises that cannot be met, won’t be met.
Pension debt keeps racking up despite the soaring stock market.
Chart from the Bloomberg article Pension Crisis Too Big for Markets to Ignore.
Meanwhile, market valuations are the most stretched in history by many measures.
GMO 7-Year Expected Returns
Source: GMO
