News. The dubious honor of being the first city in the nation to completely default on pension obligations goes to Prichard, Alabama. The city has sought bankruptcy protection twice and is flat broke. It faces a choice of paying to keep city services like police and garbage running or pay pensions. It selected the former.It's only a matter of time before a major city decides to do what Prichard, Alabama, and Vallejo, California, did: declare bankruptcy to shed pension promises forced by state legislatures.
City employees were promised lavish pensions because the managers of the funds assumed rate of returns that were unrealistic. Now the pension funds are almost empty. This is a sign of poor management. Unfortunately people counted on that money. They believed in unrealistic promises.
The good news is that the markets eventually bring some sanity in our thinking. It is unfortunate. The markets always win.
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked second best gold timer by Timer Digest
To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific investment portfolio.
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