What happens to state/local pensions if stocks ever go down?
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Date: October 20th, 2017 8:47 PM Author: Dashing jade pervert
pension funding is LOL but not sure what you're saying here
"but some of the bonds are issued by the municipalities themselves, and are tied into the equity market anyway"
If you're saying NYC bonds would lose money when the stock market falls because NYC's pension system owns NYC bonds, that's not correct.
(http://www.autoadmit.com/thread.php?thread_id=3770080&forum_id=2#34491059) |
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Date: October 20th, 2017 9:01 PM Author: mauve mind-boggling azn
the way i have seen it described is like a feedback loop.
eg:
-illinois pension buys IL bonds
-IL is able to pay on those bonds because a rising stock market eases its overall financial situation to an extent
-stock market falls
-IL edges closer to insolvency and cannot pay on its bonds
-IL pension fund holding equities and bonds gets nailed twice (unpaid bonds + sinking equity returns)
(http://www.autoadmit.com/thread.php?thread_id=3770080&forum_id=2#34491149) |
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