Entries in deleveraging (3)


Aggregate funded and unfunded liabilities of the states divided by the number of taxpayers

We came across The 2013 Financial State of the States and wanted to bring broader attention to it. The report addresses the scale of the problem of unfunded liabilities of state pensions & other retirement benefits. Recall these amounts are typically off balance sheet items, unseen & poorly understood by the public, and therefore a great source of financial & fiscal abuse by politicians. They are very real and large.

Below is an estimate of the scale of the aggregate problem: you can see that only $195 billion of the estimated $1.1 trillion of liabilities are actually reported on states’ balance sheets. So how is a citizen to know? Well, the intent was that citizens were not supposed to know and that’s the point of abuse. The deception has largely been successful:

Click to read more ...


Q2 2015 Commentary: the pruning knife vs two issues

Updated on Saturday, July 18, 2015 at 11:27AM by Registered Commenterhb

Updated on Monday, July 20, 2015 at 02:53PM by Registered Commenterhb

Our market outlook is simple. Nothing will happen between now and November 8, 2016, that is, nothing particularly good. Anticipate no reform of policy or regulations...  tax, fiscal, monetary, environmental, energy, labor, or educational matters. We may see futile, symbolic, political gestures, and we will most certainly see Obama launch a last wave of initiatives, mostly by Presidential fiat, and some will likely be materially destructive. A cynic might argue Republicans have incentive to let them roll, to sit and watch the rubble in advance of the elections. But who among us would be a cynic?

Meanwhile the big economic picture remains the same. Our national problems remain unsolved, and so they compound, become more deeply embedded, more complex & costly to remedy.

Click to read more ...


Gary Shilling on deleveraging

Steve Forbes interviews Gary Shilling, and it warrants a listening. 

You find some familiar themes put differently:


  • an expectation sustained low growth induced by deleveraging
  • risk on trade & asset quality
  • concern about  the dis-connection between monetary policies and real economies that creates a growing risk of chaotic re-adjustments 
  • concern with and an explanation for the decline in money velocity 


Agree or not with the particulars, and we make no endorsement in that regard, we're in for a long ride... so we have some time to think about loading up on 30 yr zeros.