Watching the Economy, Pensions and Resting

The Telegraph - US banks no longer 'too big to fail', says Tucker. We read and hear a lot about "too big to fail" and how this was a bad thing. We are told that the government decided which companies were too big to fail and bailed them out and theoretically have now paid back their loans.

There are some interesting things said in the article. "Paul Tucker claimed that America's biggest banks are now in a position to go bust without state intervention." What does that mean? What it means is that when the banks fail, the state will not bail them out and we will see bail ins. The article also says that over the past 5 years laws have been put into place to allow for their failure in a bail in situation. One of the people in the article says that they will be perfectly prepared in a year; but, if they had to are ready now. It is like saying that you have filled the lifeboats and are ready to hit the iceberg now.

Yahoo - Reuters - Two years after bankruptcy, California city again mired in pension debt. This is pure nonsense. The author also talks about San Bernadino and fails to mention that Calpers caught them lying and hiding the funds that would have meant the pensions were current.

The article claims that the biggest cost to the city of Stockton is it's pension obligation. Think about it and you see how silly it is. The biggest cost to any organization is personnel costs, straight up salary. Stockton does not pay more in pension than they do in salary and most of that is already covered from deposits in their pension fund that have been made by the government and it's employees for decades.

The problem is not pensions, the problem is that people are living longer and we want them to work longer. We don't have anyone to replace the aging baby boomers. We have an aging population and fewer and fewer people having children. In the article it states that the pension obligation is 14% of the general fund budget. The general fund is money that can be used for anything. Special Funds are limited to people doing specific work. The people who work in Sanitation may be special funded and the payments to the City from that fund also go to pension obligations for the people doing that work not from the general fund.