Friday, March 16, 2012

Another 2% And Apple Worth More Than Entire US Retail Sector

Apple now stands less than $14bn or approximately 2% away from being worth more the entire US retail sector after a 1% move to $558 today.

While it is certainly inconceivable to the rest of us, another 2% move upward in Apple’s stock price and the company will be worth more than the entire US retail sector.
That comes after Apple took over the value of the entire semiconductor sector earlier this year.
Still that didn’t raise a red flag and neither did today’s move within striking distance of taking over the retail sector.
Perhaps Wall Street may have caught that irrational exuberance bug once again,  you know the one they caught that caused the Great Financial Collapse of 2008.
But for now let’s surmise that the hedge funds on Wall Street are so damn smart that they have been granted an exemption to  laws of physics that the rest of universe is bound to obey.
For now we can just continue to pretend that Apple could possibly be worth more than these sectors because that iEconomy of theirs affects a huge portion of our stock market.
Let’s keep our fingers crossed that Wall Street’s iFantasy doesn’t come undone anytime soon because if it does the entire US economy is going to experience on hell of an iCrash
Via  Zero Hedge:
As Apple gaps open by another 1% at $558, it stands less than $14bn (in market cap) away from being larger than the entire US retail sector. The good news: it still has a ways to go before eclipsing the retail and the semi sectors combined.
Stock Chart: Apple stock value vs that of the entire US Retail and Semiconductor sectors
Stock Chart: Apple stock value vs that of the entire US Retail and Semiconductor sectors

Chart: Bloomberg

Americans Will Need “Black Markets” To Survive


As Americans, we live in two worlds; the world of mainstream fantasy, and the world of day-to-day reality right outside our front doors.  One disappears the moment we shut off our television.  The other, does not… 

When dealing with the economy, it is the foundation blocks that remain when the proverbial house of cards flutters away in the wind, and these basic roots are what we should be most concerned about.  While much of what we see in terms of economic news is awash in a sticky gray cloud of disinformation and uneducated opinion, there are still certain constants that we can always rely on to give us a sense of our general financial environment.  Two of these constants are supply and demand.  Central banks like the private Federal Reserve may have the ability to flood markets with fiat liquidity to skew indexes and stocks, and our government certainly has the ability to interpret employment numbers in such a way as to paint the rosiest picture possible, but ultimately, these entities cannot artificially manipulate the public into a state of demand when they are, for all intents and purposes, dead broke. 

In contrast, the establishment does have the ability to make specific demands or necessities illegal to possess, and can even attempt to restrict their supply.  Though, in most cases this leads not to the control they seek, but a sudden and sharp loss of regulation through the growth of covert trade.  The people need what the people need, and no government, no matter how titanic, can stop them from getting these commodities when demand is strong enough.

This process of removing necessary or desirable items from a trade environment leads inevitably to counter-prohibition often in the form of strict cash transactions, barter markets, or “black markets” as they are normally derided by those in power.  The problem for economic totalitarians is that the harder they squeeze the masses, the more intricate the rebellion becomes, especially when all they want is to participate in free markets the way our forefathers intended. 

The so called “drug war” is proof positive of the impossibility of locking down a product, especially one that has no moral bearing on the people who are involved in its use.  Only when a considerable majority of a populace can be convinced of the inherent immoral nature of an illicit item can its trade finally be squelched.  During any attempt to outlaw a form of commerce, a steady stream of informants convinced of their service to the “greater good” is required for success.  Dishonorable governments, therefore, do not usually engage in direct confrontation with black markets.  Instead, they seek to encourage the public to view trade outside mainstream legal standards as “taboo”.  They must condition us to react with guilt or misplaced righteousness in the face of black market activity, and associate its conduct as dangerous and destructive to the community, turning citizens into an appendage of the bureaucratic eye.

But, what happens when black markets, due to calamity, become a pillar of survival for a society?  What happens when the mainstream economy no longer meets the available demand?  What happens when this condition has been deliberately engineered by the power structure to hasten cultural desperation and dependence?

In this event, black markets not only sustain a nation through times of weakness, but they also become a form of revolution; a method for fighting back against the centralization of oppressive oligarchies and diminishing their ability to bottleneck important resources.  Black markets are a means of fighting back, and are as important as any weapon in the battle for liberty.  Here are just a few reasons why such organizational actions may be required in the near future…

The Mainstream Economy Is Slowly Killing Us


There are, unfortunately, some Americans out there who have not caught on yet to the grave circumstances in which we live.  Obviously, the stock market seems to have nearly recovered from its epic collapse in 2008 and 2009, and employment, according to the Labor Department, is on the mend.  The numbers say it all, right?  Wrong!  The numbers say very little, especially when they are a product of “creative mathematics”.

Despite the extreme spike in the Dow Jones since 2010, and all the talk of recovery, what the mainstream rarely mentions are the details surrounding this miraculous return from the dead for stocks. 

One of the most important factors to consider when gauging the health of the markets is “volume”; the amount of shares being traded and the amount of investors active on any given business day.  Since the very beginning of the Dow’s meteoric rise, the markets have been stricken with undeniably low volume interspersed with all too brief moments of activity.  In fact, this past January recorded the lowest NYSE volume since 1999:

http://www.bloomberg.com/news/2012-01-23/stock-trading-is-lowest-in-u-s-since-2008.html

Market volume has tumbled over 20% since last year, and is down over 50% from 2008 when the debt implosion began:

http://blogs.wsj.com/marketbeat/2012/02/24/trading-volume-anemic-this-year/


So then, if trade is sinking, why has the Dow jumped to nearly 13,000?  Low volume is the key.  In a low volume market, less individual investors are present to counteract the buying and selling of larger players, like international banks.  When this happens, the big boys are able to trigger market spikes, or market drops, literally at will.  Add to this the high probability that much of the stimulus that the Federal Reserve has regurgitated into the ether probably ended up in the coffers of corporate banks which then used the funny money to snap up equities, and presto!  Instant market rally!  But, a rally that is illusory and unstable.

Improving employment numbers are yet another financial hologram.  As most of us in the Liberty Movement are well aware, the Labor Department does not calculate true unemployment in the U.S.  Instead, it merely calculates those people who currently receive unemployment benefits.  Once a person hits the extension limit (99 weeks in many states) on his benefits, he is removed from the rolls, and is no longer counted in the “official” unemployment percentage.  While Barack Obama and MSM pundits are quick to point out the drop in jobless to 8.3%, what they conveniently fail to mention is that MILLIONS of Americans have been unemployed for so long that they have been removed from the statistics entirely, and this condition is what has caused the primary fall in jobless percentages, not burgeoning business growth.

Roughly 11 million Americans who are jobless have nonetheless been excluded from the statistical government tally because of a loss of benefits:

http://dailycaller.com/2012/02/17/white-house-economic-report-hides-sharp-drop-in-number-of-working-americans/

According to the Congressional Budget Office, over 40% of the currently unemployed have been so for over 6 months.  It also points out that America is suffering the worst case of long term unemployment since the Great Depression:   

http://www.cbo.gov/sites/default/files/cbofiles/attachments/02-16-Unemployment.pdf


More than 10.5 million people in the U.S. also receive disability payments, which automatically removes them from the unemployment count, making it seem as though jobs are being created, rather than lost:

http://www.foxnews.com/politics/2012/02/19/report-millions-jobless-file-for-disability-when-unemployment-benefits-run-out/


Around 8.2 million Americans only work part time, meaning they work less hours than are generally considered to be necessary for self-support.  These people are still counted as “employed” even if they work a few hours a week.

True unemployment, according to John Williams of Shadowstats, is hovering near 23%:

http://www.shadowstats.com/alternate_data/unemployment-charts


Combine these circumstances with the ever weakening dollar, price inflation in foods and other commodities, and rocketing energy costs, and you have an economy that is strangling the life out of the middle-class and the poor in this country.  It is only a matter of time before the populace begins searching for alternative means of subsistence, even if that entails “illegal” activities.

Government Cracking Down On Freedom Of Trade


I was recently walking through the parking lot of a grocery store and ran into a group of women huddled intently around the back of a mini-van.  One of the women was reaching into a cooler and handing out glass containers filled with milk.  I approached to ask if she was selling raw milk, and if so, how much was she charging.  Of course, they turned startled and wide eyed as if I had just stumbled upon their secret opium ring.  Somehow it had slipped my mind how ferocious the FDA has become when tracking down raw milk producers.  The fact that these women were absolutely terrified of being caught with something as innocuous as MILK was disturbing to me.  How could we as a society allow this insanity on the part of our government to continue? 

That moment reminded me of the utter irrelevance of petty law, as well as the determination of human beings to defy such law. 

The Orwellian hammer has been thrust in the face of those who trade in raw milk, organic produce, and herbal supplements, while small businesses are annihilated by government dues and red tape.  In the meantime, law enforcement officials have been sent strapped to shut down children’s lemonade stands (no, seriously): 

http://www.cbsnews.com/2100-500164_162-20079838.html


Government legislation which would give the FDA jurisdiction over personal gardens has been fielded.  Retail gold and silver purchases of over $600 are now tracked and taxed.  The IRS even believes it has the right to tax barter exchanges, even though they do not explain how bartered goods could be legally qualified as “income”, or how they can conceive of ever being able to trace such private trade:

http://www.irs.gov/newsroom/article/0,,id=205581,00.html

Want to choose what kind of currency you would like to use to protect your buying power?  Not if  the Department Of Justice’s Anne Tompkins has anything to say about it. After the railroading of Liberty Dollar founder Bernard von NotHaus, she stated:

“Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism…”

“While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country,” she added. “We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.”


http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency

As our economic situation grows increasingly precarious in this country, more and more people will turn towards localized non-corporate, non-mainstream business methods and products.  And, the government will no doubt attempt to greatly restrict or tax these alternatives.  This mentality is driven in part by their insatiable appetite for money, but mostly, it’s about domination.  They do what they do because they fear decentralized markets, and the ability of the citizenry to conceive of choices outside the system.  Slaves are not supposed to choose the economy they will participate in…

A “black market” is only a trade dynamic that the government disapproves of, and the government disapproves of most things these days.  Frankly, its time to stop worrying about what Washington D.C. consents to.  They have unfailingly demonstrated through rhetoric and action that they are not interested in the fiscal or social health of this nation, and so, we must take matters into our own hands. 

Black Market Advantages


If the events in EU nations such as Greece, Spain, and Italy are any indication, the U.S., with its massive debt to GDP ratio (real debt includes entitlement programs), is looking at one of two possible scenarios:  default, austerity measures, and high taxes, or, hyperinflation, and then default, austerity measures, and high taxes.  In the past we have mentioned barter networking and alternative market programs springing up in countries like Greece and Spain allowing the people to cope with the faltering economy.  Much of this trade is done away from the watchful eyes of government, simply because they cannot afford the gnashing buffalo-sized bites that bureaucrats would take from their savings in the process.  When a government goes rogue, and causes the people harm, the people are in no way obligated to continue supporting that government. 

Black markets give the citizenry a means to protest the taxation of a government that no longer represents them.  In a country stricken with austerity, these networks allow the public to thrive without having to pay for the mistakes or misdeeds of political officials and corporate swindlers.  In a hyperinflationary environment, black markets (or barter markets that have been deemed unlawful), can be used to supplant the imploding fiat currency altogether, and energize community markets that would otherwise be unable to function.  Ultimately, black markets feed and clothe the grassroots movement towards economic responsibility, and every man and woman with any sense of independence should rally around this resource with the intention to fight should it ever be threatened. 

“Legality” is arbitrary in the face of inherent conscience, or what some call “natural law”.  Without arbitrary legality, and unjust and unwarranted regulation, many federal alphabet agencies would not exist, including the FDA, the IRS, the EPA, the BLM, etc.  These institutions do not matter.  What they say has no meaning.  What matters is what is honorable, what is factual, and what is right.  Our loyalty, as Americans, is to our principles and our heritage.  Beyond that, we don’t owe anyone anything.  A black market in one place and time is a legitimate market in another.  For now, private localized trade is able to flow with only minor interference, but there will come a day when even the most practical and harmless personal transactions will be visited with administrative reproach and vitriol.  Alternative market champions will be accused of “extremism”, and undermining the mainstream economy.  We will be vilified as separatists, isolationists, terrorists, and traitors.  I believe it will be far more surreal than what we can possibly imagine now.  

They are welcome to call us whatever they like.  Honestly……who cares?  Let the paper pushers do their angry little dance.  The goal is freedom; in life, in politics, and in trade.    If we do not change how this country does business ourselves, the results will be far more frightening than any government agent at our doorstep, and the costs will be absolute…


You can contact Brandon Smith at:  brandon@alt-market.com
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The Reasons Why We MUST End The FED!!!

Obama Healtcare More Costly Than Expected (Shocker!)

Comment for Public Information Collection 77 FR 8817

  • From: Z A N
    Organization(s):
    JPMorgan Chase
    Comment No: 57019
    Date: 3/14/2012
    Comment Text:
    Dear CFTC Staff,

    Hello, I am a current JPMorgan Chase employee. This is an open letter to all commissioners and regulators. I am emailing you today b/c I know of insider information that will be damning at best for JPMorgan Chase. I have decided to play the role of whistleblower b/c I no longer have faith and belief that what we are doing for society is bringing value to people. I am now under the opinion that we are actually putting hard working Americans unaware of what lays ahead at extreme market risk. This risk is unnecessary and will lead to wide-scale market collapse if not handled properly. With the release of Mr. Smith’s open letter to Goldman, I too would like to set the record straight for JPM as well. I have seen the disruptive behavior of superiors and no longer can say that I look up to employees at the ED/MD level here at JPM. Their smug exuberance and arrogance permeates the air just as pungently as rotting vegetables. They all know too well of the backdoor crony connections they share intimately with elected officials and with other institutions. It is apparent in everything they do, from the meager attempts to manipulate LIBOR, therefore controlling how almost all derivatives are priced to the inherit and fraudulent commodities manipulation. They too may have one day stood for something in the past in the client-employee relationship. Does anyone in today’s market really care about the protection of their client? From the ruthless and scandalous treatment of MF Global client asset funds to the excessive bonuses paid by companies with burgeoning liabilities. Yes, we at JPMorgan that are in the know are fearful of a cascading credit event being triggered in Greece as they have hidden derivatives in excess of $1 Trillion USD. We at JPMorgan own enough of these through counterparty risk and outright prop trading that our entire IB EDG space could be annihilated within a few short days. The last ten years has been market by inflexion point after inflexion point with the most notable coming in 2008 after the acquisition of Bear.

    I wish to remain anonymous as of now as fear of termination mounts from what I am about to reveal. Robert Gottlieb is not my real name; however he is a trader that is involved in a lawsuit for manipulative trading while working with JPMorgan Chase. He was acquired during our Bear Stearns acquisition and is known to be the notorious person shorting in the silver future market from his trading space, along with Blythe Masters, his IB Global boss. However, with that said, we are manipulating the silver futures market and playing a smaller (but still massively manipulative) role in manipulating the gold futures market. We have a little over a 25% (give or take a percentage) position in the short market for silver futures and by your definition this denotes a larger position than for speculative purposes or for hedging and is beyond the line of manipulation.

    On a side note, I do not work directly with accounts that would have been directly impacted by the MF Global fiasco but I have heard through other colleagues that we have involvement in the hiding of client assets from MF Global. This is another fraudulent effort on our part and constitutes theft. I urge you to forward that part of the investigation on to the respective authorities.

    There is something else that you may find strange. During month-end December, we were all told by our managers that this was going to be a dismal year in terms of earnings and that we should not expect any bonuses or pay raises. Then come mid-late January it is made known that everyone received a pay raise and/or bonus, which is interesting b/c just a few weeks ago we were told that this was not likely and expected to be paid nothing in addition to base salary. January is right around the time we started increasing our short positions quite significantly again and this most recent crash in gold and silver during Bernanke's speech on February 29th is of notable importance, as we along with 4 other major institutions, orchestrated the violent $100 drop in Gold and subsequent drops in silver.

    As regulators of the free people of this country, I ask you to uphold the most important job in the world right now. That job is judge and overseer of all that is justice in the most sensitive of commodity markets. There are many middle-income people that invest in the physical assets of silver, gold, as well as mining stocks that are being financially impacted in a negative way b/c of our unscrupulous shorts in the precious metals commodity sector. If you read the COT with intent you will find that commercials (even though we have no business being in the commercial sector, which should be reserved for companies that truly produce the metal) are net short by a long shot in not only silver, but gold.

    It is rather surprising that what should be well known liabilities on our balance sheet have not erupted into wider scale scrutinization. I call all honest and courageous JPMorgan employees to step up and fight the cronyism and wide-scale manipulation by reporting the truth. We are only helping reality come to light therefore allowing a real valuation of our banking industry which will give investors a chance to properly adjust without being totally wiped out. I will be contacting a lawyer shortly about this matter, as I believe no other whistleblower at JPMorgan has come forward yet. Our deepest secrets lie within the hands of honest employees and can be revealed through honest regulators that are willing to take a look inside one of America's best kept secrets. Please do not allow this to turn into another Enron.

    Kind Regards,
    -The 1st Whistleblower of Many

Both the Government and the Market are Irrational

Paul Craig Roberts
Paul Craig Roberts
Activist Post

One of the great economic myths is that markets are rational. Not a day passes without this myth being disproved scores of times, but the myth persists.

For example, today (March 14) Bank of America/Merrill Lynch reported that “yesterday US markets started the day off with a strong rally after the solid retail sales report. . . . tailwinds are helping boost global equity markets today.”

The "solid retail sales report" for February consists of 1% nominal gain. That is, the increase is not deflated by the month's inflation rate, which will be released on March 16. In other words, if very much of the 1%nominal gain in retail sales is due to higher prices, the inflation adjusted gain will not be statistically significant. The "rational market" took off without waiting to find out whether the gain was real.

Moreover, as statistician John Williams has established, the official Consumer Price Index (CPI) understates inflation. If an honest measure of inflation was used, retail sales could be in negative territory.

The “rational market” loves deception as long as it provides an excuse for equities to rise. The Federal Reserve’s focus on “core inflation,” which does not include rising food and energy prices, allows Federal Reserve officials to maintain that the inflation rate remains below target. By pretending that there is no inflation, the Federal Reserve continues to support banks with near zero interest rates while depriving savers and retirees of interest income. With no income from savings, people are forced to consume their capital. Thus, the Federal Reserve’s policy makes bankers richer and the country poorer.

 Meanwhile, those whose old age security is based on pensions are confronting insecurity. Many with private pensions were harmed by the financial crisis. Those dependent on Social Security and Medicare are finding that these programs are being blamed for budget deficits caused by multi-trillion dollar wars of choice. Those expecting pensions from state and local governments are finding that governments are unable to make good on underfunded pension benefits.

State and local governments counted on a growing economy and rising consumer incomes to provide the tax base to make good on underfunded pensions. These governments did not foresee that US corporations would destroy their tax base by moving manufacturing, engineering, IT, research and design jobs overseas. The absence of growth in real incomes for the vast majority of the people and the capture of productivity gains by capital at the expense of labor have added to the budget woes of most state and local governments.

John Rauh at Northwestern University estimates that the unfunded obligations of state and local governments amounts to $4,400,000,000,000, an amount that is within the ballpark of Joseph Stiglitz and Linda Bilmes’ estimate of the cost of the Iraq and Afghanistan wars.

Money that could have saved Americans’ pensions instead was allocated to profits for armament corporations and to advance Israel’s territorial hegemony.

When the Occupy Wall Street movement says that Washington rules for the benefit of the 1%, OWS is not far off the mark.

This article first appeared at Paul Craig Roberts' new website Institute For Political Economy.  Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His Internet columns have attracted a worldwide following.

Broken Promises: Pensions All Over America Are Being Savagely Cut Or Are Vanishing Completely

How would you feel if you worked for a state or local government for 20 or 30 years only to have your pension slashed dramatically or taken away entirely?

Broken Promises: Pensions All Over America Are Being Savagely Cut Or Are Vanishing Completely

The Economic Collapse
Tuesday, March 13, 2012
How would you feel if you worked for a state or local government for 20 or 30 years only to have your pension slashed dramatically or taken away entirely? Well, this exact scenario is playing out from coast to coast and in the years ahead millions of elderly Americans are going to be affected by broken promises and vanishing pensions.

In the old days, things were much different. You would get hired by a big company or a government institution and you knew that the retirement benefits that they were promising you would be there when you retired in a few decades. Unfortunately, we have now arrived at a time when government institutions and big companies have promised far more than they are able to deliver, and “pension reform” has become one of the hot button issues all over the nation. Many Americans that have been basing their financial futures on their pensions are waking up one day and finding that their pensions are either gone or have been cut back dramatically. According to Northwestern University Professor John Rauh, the latest estimate of the total amount of unfunded pension and healthcare obligations for state and local governments across the United States is 4.4 trillion dollars. America is continually becoming a poorer nation and all of that money is simply not going to magically materialize somehow. So where is that 4.4 trillion dollars going to come from? Well, either pension benefits are going to have to be cut a lot more all over America or taxes will need to be raised dramatically. Either way, we are all going to feel the pain of these broken promises.
There simply is not enough money out there to keep all of the pension commitments that have been made. Something has got to give. In the end, millions of elderly Americans will likely be plunged into poverty as pensions disappear.
Some local governments around the nation are already declaring bankruptcy and are either eliminating pensions or are cutting them very deeply. Just check out what just happened in Central Falls, Rhode Island….
For years, city officials promised robust union contracts and pensions without raising revenue to pay for them. Last August, the math caught up with them. Central Falls was broke, its pension fund short $46 million. It declared bankruptcy.
“My daughters grew up here, went to school here. It’s all gone,” said Mike Geoffroy, a retired firefighter.
He said he could not make the payments on his house after his pension was cut by $1,100 a month.
When will the math catch up with the city where you are living?
For years and years most of our state and local politicians have been ignoring this problem. But eventually a day comes when you simply cannot ignore it any longer.
Check out what Pensacola Mayor Ashton Hayward said about the situation in his city recently….
“When our annual pension liability is more than our yearly property tax revenues, we have to do something”
Keep in mind that taxpayers don’t get any new services for money spent on pensions. It is money that goes straight into the pockets of retired workers. State and local governments are desperately trying to pay retired workers what they are owed and fund ongoing government functions at the same time, but many have reached the breaking point.
All over the country, state and local governments are going broke. The following is from a recent article by Duff McDonald….
Alabama’s Jefferson County has actually gone bankrupt. Stockton, California is all but ready to do the same. And all you have to do is look to Detroit—or any of the nearby auto towns named after a Buick model of one sort or another—and you see fiscal crisis playing out right now. Look in your own backyard—or at the potholes on your neighborhood roads—and you will likely find the same.
Things are so bad in Stockton, California that they are actually skipping debt payments….
The city of 290,000 that rode the wave of the housing boom in the late 1990s and early 2000s now finds itself littered with foreclosed homes, saddled with pension, health care and other obligations it can’t afford, and unable to pay its bills.
The City Council voted last month to suspend $2 million in bond payments and begin negotiations with bond holders, creditors and unions.
And did you notice what is being blamed for the financial problems in Stockton?
Pension and healthcare benefits.
Sadly, we are seeing pension nightmares erupt all over the nation right now.
For example, check out what is happening to the Public School Employees’ Retirement System and State Employees’ Retirement System in Pennsylvania….
PSERS had an accrued unfunded liability of nearly $26.5 billion, the amount of money the fund is short to cover existing retirement benefits. That hole is expected to grow to $43 billion by 2019. SERS is $12.5 billion in the red, and that shortfall is expected to climb to nearly $18 billion by 2018. Unless the stock market makes giant sustained gains, taxpayers will have to refill those funds.
That doesn’t sound good at all.
In California, the Orange County Employees Retirement System is estimated to have a 10 billion dollar unfunded pension liability.
How in the world can a single county be facing a 10 billion dollar hole?
This is madness.
The state of Illinois is facing an unfunded pension liability of more than 77 billion dollars. Considering the fact that the state of Illinois is flat broke and on the verge of default, it is inevitable that a lot of those pension obligations will never be paid.
In fact, there are going to be a whole lot of broken promises all over the country.
Pension consultant Girard Miller told California’s Little Hoover Commission that state and local government bodies in the state of California have $325 billion in combined unfunded pension liabilities.
That comes to about $22,000 for every single working adult in the state of California.
So where is all of that money going to come from?
But at least most state and local government employees are still covered by pension plans, even if they are failing.
In the private sector, pension plans are vanishing at lightning speed.
According to the Boston College Center for Retirement Research, the percentage of workers in America covered by a traditional pension plan fell from 62 percent in 1983 to 17 percent in 2007.
That isn’t just a trend.
That is a tidal wave.
And many of the private pension plans that still exist are massively underfunded. For example, Verizon’s pension plan is underfunded by 3.4 billion dollars.
So what should Americans do in light of all this?
Well, the number one thing to realize is that the pension plan you have been counting on could disappear at any time.
We live in an economic environment that is extremely unstable, and about the only thing you can count on in this environment is rapid and dramatic change.
Do not plan your financial future around a pension plan. If you do, you are likely to be bitterly disappointed.
Americans that plan to retire in the coming years should do their best to try to fund their own retirements.
Unfortunately, most Americans are not putting away much of anything for retirement. As I have written about previously, one study found that American workers are $6.6 trillion short of what they need to retire comfortably.
Ouch.
Over the next 20 years approximately 10,000 Baby Boomers will be retiring every single day.
A lot of them are going to be blindsided by empty pension funds and broken promises.
We are facing a retirement crisis of unprecedented magnitude, and there is not much hope in sight.
And if there is a maor stock market crash, things are going to be much, much worse.
Most pension funds and retirement plans are heavily invested in the stock market. If we were to see a major financial crisis like we saw back in 2008 it would be absolutely devastating. Millions of Americans could see their retirement plans wiped out in short order.
Once again, please do not place your faith in the system.
If you do, you are likely to end up holding a bag of broken promises.
A gigantic tsunami of unfunded pension obligations is coming. A lot of state and local governments are going to go broke. A lot of promises are going to be broken.
If you hope to retire any time soon, you better plan on being able to take care of yourself.