to give ya an idea how bad I think it is consider that Fannie Mae and Freddie “The two GSEs have outstanding more than US$ 5 trillion in mortgage-backed securities (MBS)”
That’s not bad. MBS means the assets of Fannie and Freddie are backed by the equity in the homes of Americans. I believe the homes in America are worth that much and more.[/quote]
you are missing the multi TRILLION dollar point, I used MBS as a datum to illustrate the magnitude of the economic problem w.r.t. unfunded pensions!
with MBS there is indeed RE assets backing things up; HOWEVER with unfunded public pensions the magnitude of the problem is in the TRILLIONS and those “promises” were made by individuals with oversized political egos (who have no understanding of math or markets) and didn’t set aside enuf monies so there are insufficient assets to backup ALL the public pension IOUs!!
just like hollywood or communist propaganda which exists in a fantasy world (with little or no basis in truth) past and present oversized political egos want to save face
therefore bureaucrats would like tax payers make up the difference of what is in the till and what was promised to various public employees over the years.
figure since you have “flyer” as part of your web moniker, you might be familiar with the old top gun movie line:
“Your Ego Is Writing Cheques Your Body Can’t Cash”
from 2007 to the present we have seen that when RE is mismanaged and accounting standards relaxed, we get an economic bubble and a long sucky economic era (which 99% of people live in)
what too few have pondered is what is going to happen to future generations, by ignoring the multi TRILLION dollar economic problem of unfunded pensions
said another way big egos wrote checks that can’t be cashed!!!
basically by ignoring the unfunded pension problem, its akin to stress building up more and more on a tectonic plate
the economic environment is OK for most part now, and at the current moment san diego seems to appeal to “millennials” so rents and RE prices reflect that “reality”
BUT its important to have a road map for times ahead, to try and be aware of problems
if you have a chance read an article about what happened in japan because “millennials” I seem to think are following what happened over there….
“When Japan’s real-estate bubble burst, young people had no point of reference other than boom times. So when the job market dried up, many of them welcomed the chance for self-exploration.
But we should spare a thought for our friends across the Pacific—not just for their sake but for ours as well. No one knows why Japan’s economy never fully recovered, but some economists are starting to trace the problem to young people like Iwabuchi who cannot find good jobs, don’t learn new skills, and neither earn nor spend enough to help get the economy moving.”
