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Podcast: Choices Have Consequences - Pension Obligation Bonds  

by meep

I look back at why pension obligation bonds were pursued by public pension plans, whether they were a good idea, and specifically what makes them OF THE DEVIL (and what that means). Yes, I hope that got your attention.

To be sure, with increasing interest rates right now, POB deals will be few and far between, but I want to take a snapshot of why POBs are not ONE CLEVER TRICK for solving public pension plan problems. They’re more a way to make a bad situation worse.

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Fewer than 4000 people just approved boosting Providence Rhode Island liabilities by $515 million  

by meep

There was a special election on Tuesday, June 7, in which less than 4% of Providence, Rhode Island voters showed up.

Of that 4%, 70% agreed to the issuance of $515 million in pension obligation bonds. This would be a new liability, on top of the liabilities they already have....

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Positioning for a Potential Interest Rate Hike: Public Finance and More  

by meep

Given how mortality-heavy this blog has been for at least 18 months now, you may be unaware that my blogging was originally about public finance and not death.

(But death and taxes do go so well together.)

With a little help from my meme brain trust (they know who they are), I...

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Chicago Pension Obligation Bond Idea: It's the Discount Rate, Stupid  

by meep

Ugh, I guess this thing is being trial-ballooned-out-the-wazoo. I reiterated my hatred of POBs recently, and explained why Chicago specifically is not credible in this sphere.

But it’s rolling on.

So let’s see what is being said.

TWITTER INTERLUDE

Eat more and lose weight...

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Chicago Stupidity: Universal Basic Income, Pension Obligation Bonds, and Divestment  

by meep

So the “usual” Chicago Stupidity we hear about is the type headlined on Hey Jackass!, my favorite site for Chicago shooting stats.

Well, the trend for murders in Chicago is not quite as bad as the prior two years…but there was a particularly bad weekend recently.

But I don’t want...

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Around the Pension-o-Sphere: MEPs, Illinois, and Divestment  

by meep

I let myself take Thursday and Friday off, as I am under a crunch for multiple projects, but also on last Wednesday morning, I got to attend a really interesting meeting, and I am still digesting some of what I heard. It’s more of the political strategy to implement...

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Two Awful Tastes That Go Great Together: Pension Obligation Bonds and 80% Funding Myth  

by meep

I thank my readers who emailed me these stories – (note: email me at marypat.campbell@gmail.com) – my normal news searches would have missed the crucial items.

I THINK IT’S A CONSPIRACY!!!

via GIPHY

Okay, maybe not, but there is some awfully suspicious...

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Illinois Idiocy: Scenario-Testing the Pension Obligation Bond Idea  

by meep

Last week, I set up a basic spreadsheet to project potential cash flows related to the proposed Illinois POB plan.

I used historical data for projection purposes.

This week, I’m using an economic scenario generator hosted by the Society of Actuaries to run a bunch of random scenarios.

And sorry, I’m...

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Illinois Idiocy: Projecting Potential Cash Flows for Proposed Pension Obligation Bonds  

by meep

Here we go.

I have listened to the audio of the POB presentation from last week.

The slides can be found here.

I have transferred over the numbers from some of the slides into a spreadsheet, and I’m trying out multiple scenarios. For this post, I’m doing extremely simplistic scenarios...

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Illinois Idiocy: Digesting the Presentation of the Mega Pension Obligation Bond Idea  

by meep

I got a hold of a copy of the presentation given January 30, to present the idea of a $100+ billion in pension obligation bonds to get Illinois state pensions up to the dizzying height of 90% funded. And something something arbitrage.

The file is kind of large, as it...

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