Pension funds doing this?
What happens in California when the cities all face the same regulatory environment, and their pensions are managed by one or two large funds? Right now, the cities are stretched,the hiring is done for nowso senior union members rush to the earlier retirement and catch the retirement funds off guard. Funds have to sell to make the cash payouts.
On a volatility weighted basis the ten year and one year both look good,until the pension funds have done their thing. The pension funds were never set up under the assumption that the funds themselves are not significant market movers. This is not the case, andthe lowered forward market price feeds back into the city budget with lowered future returns. Hence we get huge employment swings, mostly dominated by hiring changes in local governments.
It does not help much that federal taxpayers are promising nearly 3% on ten year rate, the taxpayer cannot afford it.
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