Was it just me that got smoked in the market today?

[Lucy]

I don't know. Seems a little naive to say, I see no evidence just because it hasn't happened here yet. There are plenty of demographic studies that have forecasted this. Entitlements which are floating around are ludicrous and bad business. No one in the private sector retires at 57 with 70% pay because it's bad business and they can't run a ponzi scheme. This ponzi scheme is coming to a close and the writing is on the wall. Just because Canada's real estate market has not collapsed yet, does not mean it is not going to happen. "I see no evidence?". Evidence is for sheeple. Smart investors forecast the future. How much more tax can the Canadian endure so their neighbors can retire with $75,000 a year pensions. You think I want to pay for that stupidity? I need $1.5m of paid income property to duplicate that and I must remain a diligent landlord to retire like that while they collect their fat cheques from my hard work. This stupidity needs to end now and it's all coming to the surface. The fact that it's all over the news and we are talking about it is your evidence. This is not going away. My father retired at 56 from the city of Toronto with over 400 fully paid sick days. Try duplicating this stupidity in the private sector. Read some studies on demographics.

Canadians never signed up to pay outlandish outrageous taxes so politicians can bribe government employee vampires with crazy incomes and ridiculous pension plans and benefits so the politician himself can get elected and have his own juicy non sensical pension plan with crazy benefits.

[HaroldCrump]

You think I want to pay for that stupidity?

Yet, you are paying for it.
And have been paying for it all your working life.
You and I may not like it, but we are compelled to do so by law.

The question here is not whether it is right or wrong, stupid or not.
The question is whether there is any gumption and willingness among the various levels of govt. to change any of that.

Canadians never signed up to pay

Well, sorry to break the news to you, but we did.
We did so by casting our votes in certain manner.

You are from Ontario, right?
What do you make of the voters of Ontario voting for precisely the type of politician you are describing - not once, not twice, but three times in a row.
That is exactly how we have "signed up to pay".

You may scream that we did not sign up for this, yet we did.

[HaroldCrump]

The number of bank loans have skyrocketed since QE as evidenced by this graph below

Your previous post said : yet loans from banks are declining.
So, which is it?
Note that a quarter to quarter, or even a year to year change in commercial lending does not necessarily indicate long term projections.

I think we strayed from your original claim 2 posts back i.e. the increase in money supply will cause governments to reduce public pensions.

The data you are presenting is all from the US Fed.
Yet, we are talking about Canadian public sector pensions.

There is a wide degree of difference in price rises (an effect of inflation) between the US and Canada.
The US is experiencing deflation, esp. led by housing prices.
A 50% - 60% deflation in real estate is bound to create deflation across the board.

The situation in Canada is the exact opposite.

Similarly, there is, in fact, clear evidence in the US as well that public tax coffers are being pillaged by various levels of govt. to make up the deficits in public sector pension plans.
Just last month, the state of California declared that they will be pillaging millions from the general tax revenues to make up the deficit in the state employees pension plan, which is the largest in the US.
Their projected RoR was 7.5%, yet the plan made barely 1% last year.

Similarly, I don't think the growth in Canadian money supply will lead to any substantial clawback in public pensions.
Quite the opposite.
With more money at the disposal of the various levels of government, pensions and benefits can only increase, not decrease.
If that leads to a substantial rise in reported inflation (CPI), the nominal pension payments will go up accordingly because almost all public sector pension plans are fully indexed to the CPI.

An increase in money supply (as you claim) will have the opposite effect of what you desire (reduction is public pensions and benefits).
Inflation is a carte blanche for the government.

And as for convincing the unions and various levels of government and agencies to slash the public sector pensions, good luck with that.

[CJOttawa]

...There are plenty of demographic studies that have forecasted this.

Please, cite your sources.

...Entitlements which are floating around are ludicrous and bad business. No one in the private sector retires at 57 with 70% pay...

Sure they do. That's 35 years of service. Let's look at a sample defined contribution plan, shall we?

• 6% employee contribution + 6% employer matching into an RRSP. Let's use $100,000 as the figure, for ease of numbers.
• Total of $12,000 per year contributed.
• 35 years of contributions would be $420,000.
• The average is the start balance (zero) plus the end balance ($420,000) divided by two, which equals $210,000.
• Assuming a 7.5% rate of return, that's an average return of $15,750 per year.
• $15,750 multiplied by 35 years is $551,250. Added to the contribution of $420,000, that's $971,250.
• Assuming a return of 7.5% after retirement, $971,250 nets $72,843.75 or about 73% of the gross $100,000 salary.

Further reading: http://www.psac-afpc.org/petition-pension/mythes-e.asp

...Evidence is for sheeple. Smart investors forecast the future.

Wise investors know better than to assume they can forecast the future.

How much more tax can the Canadian endure so their neighbors can retire with $75,000 a year pensions.

Examine how the public service pension plan is funded and managed.

Those retired public servant neighbours are, as they were before retirement, taxpayers. The taxes they have paid and continue to pay help to fund their plans.

More details on how the Public Service Pension Plan assets are being managed is available here: http://www.investpsp.ca/en/public-se...n-plan-ff.html

It seems to be doing quite well generating returns. (targeted actuarial rate of return is 4.2% after inflation BTW, so, somewhere in the neighborhood of 7.5% gross return)

Prior to being retirees those people were providing you, directly or indirectly, with services like clean water, paved roads, safe medicines, and consumer goods that you might appreciate having.

My father retired at 56 from the city of Toronto with over 400 fully paid sick days. Try duplicating this stupidity in the private sector.

That's not the way a lot of public service benefits work. For many, sick leave is like "an insurance policy." If you need it, great. If you retire without having to use a day of it, count yourself lucky you didn't need to. It doesn't get paid out.

A contract that pays out unused sick leave should never have been signed by the employer in the first place but you can't blame the employee for that.

[Belguy]

Public service retirees, with their guaranteed indexed pensions, are pretty much immune from poor investment market performance. They are significantly less vulnerable than someone who has to build up and manage their own retirement nest egg and has to be very concerned about what is happening in the marketplace.

Ivar Grimba CFP, Assante Capital Management, Toronto Star, June 4, 2012

[Lucy]

https://www.cfib-fcei.ca/cfib-documents/rr3262.pdf

Most public sector pensions are unfunded or underfunded and defined. Therefore do not collect the generous 7.5% after tax return you forecasted.

[sags]

Public service retirees, with their guaranteed indexed pensions, are pretty much immune from poor investment market performance. They are significantly less vulnerable than someone who has to build up and manage their own retirement nest egg and has to be very concerned about what is happening in the marketplace.

Ivar Grimba CFP, Assante Capital Management, Toronto Star, June 4, 2012

You will remember on the old 55plus forum, a lengthy thread where people wanted the government to hand over all of their pension benefits in the belief they could manage a better return on their own.

There are threads on this forum with people questioning if they should keep their pensions or take out the commuted value.

When a healthy return on investments is easy.........everyone wants the cash.

When it is difficult to earn a return on investments...........everyone wishes for a pension.

I suspect if investments were returning high gains each year, nobody would be talking about pensions.

I remember when the fight was over who owned the pension surpluses.

[CJOttawa]

https://www.cfib-fcei.ca/cfib-documents/rr3262.pdf

Most public sector pensions are unfunded or underfunded and defined. Therefore do not collect the generous 7.5% after tax return you forecasted.

The PSPP 2011 return was 14.5%.

You can look at all returns here: http://www.investpsp.ca/en/public-se...n-returns.html

CFIB relies on data from the CD Howe institute which is not necessarily without bias.

[KaeJS]

I just wanted to let everyone know that I got smoked in the market today and it was all my fault.

I borrowed $41,000 and lost $477 on that trade (so far - I didn't sell).

BUT -

To all you "buy and holders", I am still outperforming the TSX, DOW and SP 500.

Have a GREAT night everyone, because the day sure as hell sucked!

[Belguy]

I would imagine that one could beat the indexes these days with a combination of some skill and blind luck. Normally however, I would say that you will not be successful in beating the indexes over the longer term but these are hardly normal times.

Day trading and investing in dividend payers may be two ways to beat the index returns going forward but day trading requires skills that many of us don't have or time that some of us do not want to devote to investing. I, for one, am not into pouring over financial statements and keeping up with the latest news for several different companies at a time.

To each his own.