Bill uses the tame sentence in his conclusion "This whole pension mess is just another lurking time bomb that folks need to be aware of."

But, it is designed to fail. It was designed to fail from the beginning, like the aluminum parts of Vega engines.

The cause of the 1929 crash was the bubble that preceded it. Banks were allowed to take the face value of stocks and accept that value as collateral for extending a loan that could be used to buy more stocks. The pension funds contain investments in stocks where the face value (fair market value) is taken as gospel and then the pension operators base fixed payout streams to retirees on those presumed values. The Pension folks go one step further though in that they also presume the bubbling will go on into the future and thus justify even higher fixed payout streams. The only difference from the 1920’s banks, from the perspective of the depositors, is that you are sort of restricted from making a run on the bank because it is called a pension.

Bill had one more important point; that a given company may lose their market share in a flash. Of course, he might be noting, implicitly, that stocks (like growth stocks) factor in to the price today the expectation of uncertain growth or stability in the future. This is just another device (or rationalization) for paying top dollar for a company. For a quick ball-park test of value, compare the cost of a one-building restaurant operation in your local town to the total capitalization of a stock for a chain of restaurants divided by the number of individual buildings in the chain. You will be shocked by the disparity. There is more money chasing after stocks than there is chasing after mom and pop family restaurants – this is largely because local banks have been fully replaced by pension trust funds. The difference in name, pension trust versus a bank, is hardly a reason to end the inquiry into their similarity.

I think people have begun to cross over into the realization that the pension trust fund pyramid fraud scheme has run its course until another generation or more has passed and the people with a living memory of today’s problems have passed on.

Bombs away. Clear a path, but a path to where? There is no escape.