Richardcyoung.com

The Online Home of Author and Investor, Dick Young

  • Home
  • How We Are Different
  • About Us
    • Foundation Principles
    • Contributors
  • Investing
    • You’ve Read The Last Issue of Intelligence Report, Now What?
  • Your Survival Guy
  • The Great Reset
  • COVID-19
  • My Rifles
  • Dividends and Compounding
  • Your Security
  • The Swiss Way
  • Dick Young
  • Debbie Young
  • Key West
  • Paris
  • Dick’s R&B Top 100
  • Liberty & Freedom Map
  • Bank Credit & Money
  • Your Survival Guy’s Super States
  • NNT & Cholesterol
  • Work to Make Money/Invest to Save Money
  • Your Health
  • Ron Paul
  • US Treasury Yield Curve: My Favorite Investor Tool

Bubble after Bubble after Bubble

August 7, 2012 By E.J. Smith - Your Survival Guy

California’s mismanaged state pensions and budgets are wreaking havoc on the state as Kevin D. Williamson’s writes at National Review in Penniless in Paradise:

“In 1999, at the peak of the dot-com stock-market bubble, California reformulated its pensions and other public-employee-compensation practices, making them much, much more liberal than they had been. The state’s Democrat-run legislature did this on the theory that pension investments would keep offering double-digit returns more or less forever, which led elected officials to make big promises and set aside approximately zilch to make good on them. If borrowing money to acquire an asset based on the theory that the appreciation of that asset will more than offset the cost of financing the borrowing sounds to you like the woeful tale of a million subprime mortgages, then they really could have used you in the California legislature a decade or so ago, or at Fannie Mae. In bubble after bubble after bubble, the country keeps repeating the practice that everybody swore off after the great market crash of 1929 and the Great Depression: investing on margin. California took out something very much like an adjustable-rate mortgage, financing present political consumption by in effect borrowing against future returns on the assets in its pension system — but the returns didn’t materialize. CalPERS, the gigantic statewide pension system, was until a few weeks ago projecting 7.5 percent returns on its investments. Real returns: just over 1 percent. The entirety of the state’s finances are from top to bottom exactly what one San Bernardino resident called his city’s fiscal charade: a shell game.”

Related Posts

  • Dan Crenshaw Bursts Bernie's Green New Deal Bubble
  • Fewer and Fewer New Highs: Is the Bubble Ready to Pop?
  • Bond Market Bubble and a One Term President
  • Author
  • Recent Posts
E.J. Smith - Your Survival Guy
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998.

E.J. has trained at Sig Sauer Academy in Epping, NH, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention.

E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@yoursurvivalguy.com

Click here to sign up for my free monthly Survive & Thrive letter.
Latest posts by E.J. Smith - Your Survival Guy (see all)
  • 4 Life Changing Words for Your Survival Guy: “You Should Try This” - January 26, 2023
  • Why Investors Should Forget Prices and Focus on Income - January 26, 2023
  • Welcome to Hotel California, Where You Can Never Leave - January 25, 2023

Dick Young’s Must Reads

  • Protection While Traveling in France
  • America’s States Rights Revolution
  • Tucker Carlson Interviews My Favorite Florida Farmer
  • V4 Stands Against North African and Middle Eastern Invasion
  • Your Sheriff Can Thwart Federal Gun Control Efforts
  • Yes! Money Can Bring You Happiness
  • America’s Colleges Have Become Progressive Liberal Rat Holes
  • Your Life on Main Street will Never be the Same
  • The Worst President in American History, Part I
  • Is It All Coming Apart in the Government’s Face?

Our Most Popular Posts

  • Pfizer CEO Terrified of Real Questions About His Vaccines
  • America's Super States and Stocks that Respect YOU
  • Give Me Clean, Efficient Gas
  • How the Biden Administration Is Destroying Our Energy Infrastructure
  • The Rich Seek More from Bank Accounts
  • Artificial Intelligence Is Coming, But It's Not Quite There
  • Is Kevin McCarthy’s GOP Willing to Do What It Takes on Debt?
  • The Sound of Silence
  • Strengthen Your Defenses Against Stroke
  • Forty Years Ago, Jogging a Mile a Day and Still Going

Disclosure

RSS Youngresearch.com

  • 4 Life Changing Words for Your Survival Guy: “You Should Try This”
  • Suddenly, Holding Cash Looks Good Again to Many
  • Anti-Carbon Crusaders in Davos Talk ESG and OPM
  • Is Passive Investing Already Passé?
  • Welcome to Hotel California, Where You Can Never Leave
  • What You’re Telling Me Matters
  • Can Banks Compete with Apple Pay and PayPal?
  • America’s Super States and Stocks that Respect YOU
  • Markets Are Calling the Fed’s Bluff
  • Don’t Let Your Lazy Cash Eat all Your Food

RSS Yoursurvivalguy.com

  • 4 Life Changing Words for Your Survival Guy: “You Should Try This”
  • Anti-Carbon Crusaders in Davos Talk ESG and OPM
  • Welcome to Hotel California, Where You Can Never Leave
  • What You’re Telling Me Matters
  • The Rich Seek More from Bank Accounts
  • California’s Wealth Tax Will Drive Out Remaining Rich Residents
  • Political Establishment Irate over Conservative Challenges to ESG
  • Congratulations Mikaela Shiffrin on 83rd Win
  • America’s Super States and Stocks that Respect YOU
  • NYC Bleeding Revenue as Wealthiest Flee the City

Will Western Tanks Be a Game Changer in Ukraine?

The Power of Words

4 Life Changing Words for Your Survival Guy: “You Should Try This”

Is Putin’s Meat Grinder Working?

California Unions Could Spike the Slowly Recovering Supply Chain

Ukraine Filled with Russian Sympathizers and Collaborators

Copyright © 2023 | Terms & Conditions | About Us | Dick Young | Archives