Many salient points in this clip. Here is a direct video link.
Also see The Bailouts for the Rich are Why America is so Screwed Right Now for some further historical context on how financial crisis and resulting lack of trust in the status quo have repeatedly led to populist uprising and autocratic leaders.
I have repeatedly cited the Obama Administration’s failure to break up big banks and prosecute individual executives for their financial crimes, as being a leadership failure of historic proportions. Author Michael Lewis reported that he directly asked Obama about his lack of action on these issues when Lewis was interviewing the then President for a Vanity Fair article in 2012. Lewis said that Obama simply didn’t see the systemic financial corruption before him as a defining issue.
There is no excuse for this epic misjudgment on Obama’s part, but it turns out there is also more to the story. Apparently, Obama did, in fact, order the break up of at least Citigroup in 2009, but his then-Treasury Secretary Timothy Geithner (fresh from heading the New York Fed and on his way to running a hedge fund today), simply ignored the President’s order. See He was the Resistance inside the Obama White House:
According to credible accounts, Geithner slow-walked a direct presidential order to prepare the breakup of Citigroup, instead undertaking other measures to nurse the insolvent bank back to health. This resistance to accountability for those who perpetrated the crisis, consistent with Geithner’s demonstrated worldview, had catastrophic effects—including the Trump presidency itself.
…Geithner and his bank regulator colleagues made sure a breakup wouldn’t be needed by using Federal Reserve loans, guarantees, and a third bailout to save Citi. Little was asked from the company in return. Geithner had devised “stress tests” to judge how large banks would handle another downturn, and Citi’s initial test estimated that the bank would need $35 billion in additional capital to reassure markets that it was safe. But Citi haggled with regulators, dropping their capital requirement to $5.5 billion, about the same as what the bank paid out in bonuses that year.
Democracy? Rule of Law? Accountability? Not in a world ruled by bankers for bankers. We, the people, must demand resistance to the finance cartel if we are to build a sustainable economy and more stable future.
This video segment discusses the $1 trillion+ deficit in corporate pension plans and how the average fund today is missing 20% of the capital needed to pay benefits promised. It is critical to note that this capital hole persists even at the end of the longest financially engineered rise in asset markets and corporate profits ever in history!
Here is a direct video link.
Publicly funded government pension deficits are worse, as shown in the table below, the average pension has gone from a capital surplus in 2001 to a 30% deficit by 2016.
In an environment of falling interest rates and yields, secular highs in asset valuations and capital risk, and increasingly unfavorable demographics, pension plans have responded by–you guessed it–increasing their risk exposure to further capital losses! As shown in the next chart, the percentage of lowest risk, interest paying bonds, and cash fell from nearly 100% of public pension holdings in 1952 to just 25% by 2012 as double-or-nothing management styles have become the reckless, misguided norm worldwide.
Twenty years of levered risk-taking–subsidized by taxpayers, aided and abetted by central bankers and politicians–have helped push asset values back up to all-time highs, and still, savings deficits have deepened. That’s because the current system is not designed to balance and sustain retirement payouts, but rather to allow financial intermediaries, some politicians, and corporate executives to extract the most for themselves above all else.
The way out of savings deficits is not more magical financial gimmicks, but rather the old-fashioned, tried and true method of contributing more, taking less capital risk with the funds, and at this point, paying out later and lower benefits until balances recover to fully funded status once more.
As I explained here in Wishful Thinking and Willful Blindness Yield Pension Plan Disappointment, even the relatively well managed Ontario Municipal Employee Retirement Security (OMERS) has recently admitted how the plan must remedy its funding deficit, as laid out on their website:
“Deficits will be funded through a combination of contribution rate increases and benefit reductions.”
Time to face facts and get started. The longer truth is denied, the larger the disappointments and hardships will be.
