Is a Pension Fund Crisis Next?
“U.S. pension funds are on the brink of implosion”
by Bob Stokes
Updated: May 09, 2023
Did you get a heads-up from the financial media that the U.S. banking system was vulnerable before the failures of Silicon Valley, Signature and First Republic banks?
There may have been outlier articles here and there but no real warnings.
By contrast, the 2021 edition of Robert Prechter's book Conquer the Crash, Last Chance to Conquer the Crash, reminded readers that:
In a crash and depression, we will see falling asset values, massive layoffs, high unemployment, corporate and municipal bankruptcies, pension fund implosions, bank and insurance company failures and ultimately social and political crises.
As you know, some of these things have recently been unfolding.
Let's focus on pension funds for a few moments. Yes, some recent articles have provided warnings, but they have not been widespread.
The headline of one of those news items is from the Washington Post (Feb. 14):
Time Bomb of Public Pension Funding Ticks Louder
Many public pensions suffer from funding shortfalls. In other words, they don't have nearly enough money to meet their obligations. More than that, investments are being made in potentially financially dangerous assets to boost returns, such as private equity.
Many people who are counting on a pension probably don't know that some private equity firms have invested pension-fund money in the housing market since the Great Recession -- yes, they bought actual houses. As the Atlanta Journal Constitution reported (Feb. 12):
Private equity firms like Blackstone Group, Pretium Partners and Amherst convinced public pension funds and other large institutional investors to bankroll their homebuying sprees.
If the housing market crashes, you guessed it, some pension funds will take a big hit.
Here's another headline from a British newspaper, the Guardian (Feb. 2):
US pension funds are on the brink of implosion -- and Wall Street is ignoring it
However, Elliott Wave International is not ignoring it.
As the Elliott Wave Theorist said in February:
Unfunded liabilities of states' pension funds in the U.S. stood at $1.3 trillion as of year-end 2022. Private pension funds are underfunded as well. The whole system has made promises it can't fulfill.
Get more insights into why the next financial crisis may be even more severe than what occurred in 2008 as you follow the link below.
The Biggest Financial Shift of a Lifetime
If Elliott Wave International's analysis is correct, the next financial crisis will surpass the severity of what occurred in 2008.
Yes, that's saying a lot.
However, just know that EWI's analysts are not given to alarmism to merely attract attention.
We might be wrong. Obviously, however, we don't think so.
Learn why EWI has a high confidence level that the next financial crisis will be "the one" by choosing a link below.
Financial Forecast Service
All month long, Financial Forecast Service helps you stay ahead of the waves in the U.S. markets on the timeframes that matter the most. FFS covers the stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. It is our most popular service.
Comprises the monthly Elliott Wave Financial Forecast, 3x-per-week Short Term Update and at least 12x-per-year Elliott Wave Theorist.
Last Chance to Conquer the Crash
Last Chance to Conquer the Crash is your guidebook for total preparation—and total safety—during a time of a financial crash and economic depression. It offers a unique set of secrets for financial survival.
The new edition includes exciting new information on offshore banking, foreign citizenships and low-cost international precious metals storage.
Financial markets which are driven by fear usually move much faster than those driven by hope. It appears the setup is in place for just such an occurrence. Here's what I'm talking about.
The wild card for the global markets remains China. You've heard about its real estate problems; now the yuan is on the rocks. Here's our monthly Global Market Perspective contributor, Mark Galasiewski, with a handy chart and a few under-the-radar highlights from the October issue to give you a unique perspective on the situation.
October is almost here, and so far, "things are quiet" in the markets, says our monthly Global Market Perspective contributor Brian Whitmer. But watch as he lists a few items on his radar as he gives you highlights from the new, October issue.