Juggling Dynamite

A must read article in the Globe and Mail on Saturday from the President of the CD Howe Institute, points out rarely admitted facts about the return assumptions that have been baked into most pension and retirement planning forecasts.  This is something I have been trying to educate people on for many years.  In saving plans it is important to be conservative in return expectations.  To over-expect is to under-save and make risky bets with capital that creates insurmountable deficits over time.  Believing in false prophets (and profits) in the investment industry is a fatal error.   Read:  Assuming big returns on pensions–what could go wrong? (plenty):

What returns can we earn on our saving? In planning for retirement, few questions matter more. Project prudently and all should be well; count on a bonanza that falls through – not so good. What is true for individuals is true for pension plans. Those that forecast conservatively and back their obligations well tend to pay what they promise; those assuming turbo-charged returns to fund rich benefits on the cheap might not. So far, the debate over a bigger Canada Pension Plan (CPP) and the Ontario Retirement Pension Plan (ORPP) has skirted this question.

The going assumption – explicit in the ORPP’s numbers; implicit in conversations about “fully funded” CPP expansion – is that assets in these plans will earn 4 per cent annually in real (inflation-adjusted) returns over decades. Few people have noticed this…

A must read article in the May 23 Time Magazine carefully and clearly lays out how the finance sector has come to dominate, control and suck the strength and stability out of our economy while undermining capitalism and social order.  See: American Capitalism’s Great Crisis

America’s economic illness has a name: financialization. It’s an academic term for the trend by which Wall Street and its methods have come to reign supreme in America, permeating not just the financial industry but also much of American business. It includes everything from the growth in size and scope of finance and financial activity in the economy; to the rise of debt-fueled speculation over productive lending; to the ascendancy of shareholder value as the sole model for corporate governance; to the proliferation of risky, selfish thinking in both the private and public sectors; to the increasing political power of financiers and the CEOs they enrich; to the way in which a “markets know best” ideology remains the status quo. Financialization is a big, unfriendly word with broad, disconcerting implications.

A startup in Spain called Vortex, has come up with a new design for wind turbines. It’s called Bladeless, and it’s a wind turbine with — you guessed it — no blades.

The bladeless turbines are massive poles jutting out of the ground. Because they’re thinner than a regular wind turbine and have no blades, more of them can fit into a space, meaning more electricity can be generated while taking up less real estate. See more here: Try not to jiggle while watching these amazing wind turbines.  Here is a direct video link.