[quote=flu]
[quote]
sure looks like an un-appreciated trend that indicates its only a matter of when TSHTF WRT the muni “bond” funds sector,… so I’d suggest caution as per specific OP query (i.e. What does everyone think of municipal bond funds?… Any thoughts would be appreciated.)
PS WRT “actual insight”
[/quote]
Just curious, did you even both to look at the fund to see what the majority of the holdings of that fund is? Because the articles you quote and what the fund contains just seem, well never mind, you can do your own due diligence, or not, in your case.[/quote]
yup, and the question investors should have about the overall viability of ALL muni bonds is what of “new” accounting rules which among other thing are suppose to fully account for retirement costs on the balance sheet BUT in reality stuff is basically being swept under the carpet, much like news of the head of calpers who was exposed as being corrupt because of bribes that surfaced, the local pensions (mis)use of derivatives, leverage and other bull$hit stuff like giving away an extra 13th pension payment for the last three decades, etc., etc., etc!!!
[quote=governing.com] Why Some Public Pensions Could Soon Look Much Worse
The discount rate rule, known as GASB 67, is just part of the story. Another piece of the new rule, GASB 68, will hit financial statements starting later this year. Under that new rule, governments that are members of a pension plan — say, localities that pool their money with a state plan — are required to report their share of that plan’s unfunded liability on their governmentwide balance sheet for the 2015 fiscal year, something most of those governments have never before had to do.
[quote=californiapolicycenter.org] UNMASKING STAGGERING PENSION DEBT AND HIDDEN EXPENSE
The Fatal Flaw is that pension expenses that create unfunded pension debt are reported in the future as that debt is paid. That’s absurd – the payments of a debt eliminate the debt, they don’t create it. Unfunded pension debt is created by pension expenses in the past – most of which have never been reported to the people. GASB is changing that.
GASB’s changes are only about how governments must report pension finances.
as it stands public pensions share many traits of the old USSR five year economic plans,… in other words both are bureaucratic programs w/ lots of corruption/mis-management and w/ horse$hit propaganda that tries to justify management decisions/operations (the following for example is an article bearishgurl shared as evidence of how well managed the local public pension was doing)
[quote=sandiegouniontribune.com] SDCERA uses smart investment strategy for pension fund
Recent media coverage of the San Diego County Employees Retirement Association (SDCERA) has suggested its retirement fund’s portfolio managers have recklessly pursued riskier investments in pursuit of higher returns to close the pension funding gap. In fact, nothing could be further from the truth. SDCERA is answering the real concern impacting public pensions by using tried and true principles of asset liability management and diversification, and not relying heavily on more volatile equities to close this gap.
For the past decade, San Diego County and its employees paid 100 percent or more of their annually required contribution to the SDCERA retirement fund. Consistent employee and employer contributions over the years have laid a foundation for investment gains and asset growth. SDCERA’s investment strategy helps the employer’s budgeting process and stabilizes employer costs by reducing the volatility of returns and steadily achieving the rate of return needed to fund the benefit.
At $10 billion, the SDCERA fund is able to pursue certain investment strategies that larger plans like CalPERS cannot access and smaller plans do not have the resources to deploy. SDCERA’s investment strategy is purposely designed to be no riskier than traditional pension fund asset allocation strategies. Risk-parity and trend strategies, which utilize leverage, are limited to 25 percent of the SDCERA portfolio, not the entire set of portfolio assets. The other 75 percent of the portfolio is managed using traditional asset allocation and rebalancing approaches.
SDCERA’s meticulous risk management is the opposite of “gambling” — it is prudent governance. Managing risk exposure has been a long-standing practice at SDCERA, and one that continues in the fund’s current investment strategy. This context is crucial to fully understanding SDCERA’s approach to portfolio management.
as with any other game one should be aware of rules that gover the way the contest is played/perceived and also should ponder the role of luck vs skill when it comes to the game of “investing”
basically how “lucky” an investor is, mostly depends upon the over all direction/mood of the economy because in general when the market is going UP most everyone looks like a genius and when the market is going DOWN most everyone looks like an idiot!
the skill factor(s) of investing, involve using god given traits of perception, patience, intellectual capacity and nerve to protect gains produced during the good times so one can survive the bad times
so IMHO if the goal is to be a succesful investor (who beats the averages), then it’s all about identifying what kind of economy we’re in, then ask how is the market climate currently trading (i.e. up, down or sideways) and only after all the data has been looked at, develop and deploy an appropriate strategy
for example prior to the bust of the housing bubble in 2007/08 because most people felt gun shy after the dot com bubble, the majority only focusing on RE and all but ignored “equities”
back then when I looked at the data, came to the conclusion that a “momentum” (i.e. the trend is your friend) equities strategy which was a method ignored by many, was an opportunity to stay a few steps ahead of the crowd and beat the so called market average
markets its been said are driven by fear and greed, and eventually switch course because of various thresholds and convictions
during the housing bubble, fear of missing out and greed of wanting to keep up w/ the joneses is what caused the mass of lemming w/out the necessary intellectual and financial firepower (backup) to jump into the housing market AND things kept going up, up and up until the threshold of “math” reality hit which indicated there was no way in hell it made sense financial to support the unrealistic prices, so the overall conviction of all the market players then pushed prices down ward
cut to the present where we see that the numbers indicate the lowest growth rate in the economy since WW II, which manifests into sucky feelings (for many) who then look for new political leadership who says they have answers… yeah right, a motto and a few crowd pleasing remarks at an election rally is going to fix the economy
[quote=wsj.com] Seven Years Later, Recovery Remains the Weakest of the Post-World War II Era
…seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.
The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released
…The average economic expansion since 1949 has lasted just more than five years. Only the expansion during the 1990s made it 10 years.
IMHO the economy had been sluggish for key three reasons:
1st, because advances in technology has boosted global productivity, so there exists much more production capacity than there is need/demand (which is why prices in oil markets is so low, and each player KSA vs Iran for example knows this, but they all still keep on pumping because that is how they make money)
2nd, there is lots of existing debt that is unserviceable (FYI aside from non-performing RE that is being juggled around on various balance sheets, unserviceable debt includes public pensions and stuff like social security)
for a glimpse of a future in the USA where unserviceable debt due to corruption and mis-management causes problems w/ in the economy, just watch news reports and read up on events in venezuela, greece, argentina, mexico, nigeria, etc…
3rd reason is because a thus far a lack of ‘the next big thing’ (i.e. new industries/products/services) that create jobs for society (and in turn allows for even more trade, etc., etc.)
granted there have been a new class of consumer products, like the iPhone…
[quote=money.cnn.com] Apple probably just sold its billionth iPhone
Wall Street analysts predict that Apple sold its 1 billionth iPhone on Monday.
Here’s how the math works: Between June 29, 2007 — when the iPhone first went on sale — and March 2016, Apple sold 948 million iPhones. That means Apple only had to sell 52 million iPhones over the past four months to reach the billion mark.
Analysts polled by FactSet predict that Apple sold 40 million iPhones during the spring, pushing total sales to 988 million by the end of June. They expect Apple to sell 43 million iPhones during the current quarter, or roughly 500,000 per day.
The iPhone is one of the bestselling tech products of all time. For perspective, Apple also makes the bestselling tablet (the iPad) and music player (iPod), and the Mac is among the top selling PCs. Yet Apple has sold more iPhones than Macs, iPads and iPods combined, dating back to 1993.
BUT although an iPhone or a knockoff “smartphone” is a stylish fashion accessory and potentially useful tool, its not a true necessity for modern life un-like the basics of clean water and electricity,… actually if you think about it clean water and electricity were products/services that allowed the trend of growing populations and longer life spans to happen, this in turn created the problem we on plant earth face now face,… too many users of an iPhone or a knockoff “smartphone” have expectations they are entitled to live just like the “idealized” american consumer lifestyle shown in slick ads and marketing champaign’s, yet are basically “redundant” in the grand scheme of things
truth is the unpalatable solution to get the economy booming again is a darwinian flush AND using the metaphor just as night follows day, most are going to be caught off guard when the “economic” day (which is the phase we’re in right now) inevitably turns into night (the only unresolved questions is “when” and the “magnitude”)
PS my economic assessment isn’t a tin-foil-hat theory, seems the dude who made a name for himself running a bond fund, kinda is telling the world the same damn thing!
[quote=cnbc.com] Bill Gross: I don’t like stocks or bonds
“I don’t like bonds; I don’t like most stocks; I don’t like private equity,” the Janus Capital portfolio manager said Wednesday in his latest letter to investors.
There’s “too much risk for too little return” for banks to lend in the current climate, while the low-interest atmosphere helps asset prices but crimps savings and business investment.
“Banks, insurance companies, pension funds and Mom and Pop on Main Street are stripped of their ability to pay for future debts and retirement benefits,” Gross wrote. “Central banks seem oblivious to this dark side of low interest rates. If maintained for too long, the real economy itself is affected as expected income fails to materialize and investment spending stagnates.”
So where does he think people should invest? Well, that’s also difficult.
“Real assets such as land, gold, and tangible plant and equipment at a discount are favored asset categories,” he said. “But those are hard for an individual to buy because wealth has been ‘financialized.'”
