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America's pensions can't beat Vanguard but they can close a hospital

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Re: America's pensions can't beat Vanguard but they can close a hospital

#101

Post by nostromo95 »

Ajedi32 wrote: post #15
wongarsu wrote: post #7

Ah, a classic paperclip maximizer. Pension plans got the goal of multiplying the money so pensioners have more of it. Nobody bothered to mention that they should also make sure there's a world the pensioners can live in, so now that gets slowly sacrificed in the pursuit of the only explicitly stated goal

If multiplying money is the goal why does the article say they're doing a worse job of that than just buying index funds? If that claim is true, then clearly there are other issues at play than just that.

Pension funds have a different time horizon / cash flow needs than individual investors (namely, they need to meet their liabilities every month) and so are going to have a more conservative asset mix (read: lower expected returns w/ lower volatility) than your average S&P500 index funds.

For example, CaLPERS has ~45% of their assets under management in debt / real estate.

Re: America's pensions can't beat Vanguard but they can close a hospital

#102

Post by SpicyLemonZest »

nradov wrote: post #14
OGEnthusiast wrote: post #2

I don't understand why we don't just ban private equity. Seems like zero value-add to the actual real economy.

Ban companies from owning other companies? How would that work exactly? Private equity is a convenient whipping boy for ignorant, low-information HN users who don't understand the basics of how finance works. You can certainly find examples of destructive or unethical behavior if you dig deep enough. What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.

When laypeople criticize private equity, what they almost always mean to refer to are leveraged buyouts. I suspect you’d acknowledge that, if a private equity firm sees a strategy to turn around a business operationally but doesn’t produce enough returns to service their debt, they won’t pursue it even though the original owner likely would have.

Re: America's pensions can't beat Vanguard but they can close a hospital

#103

Post by toomuchtodo »

nradov wrote: post #14
OGEnthusiast wrote: post #2

I don't understand why we don't just ban private equity. Seems like zero value-add to the actual real economy.

Ban companies from owning other companies? How would that work exactly? Private equity is a convenient whipping boy for ignorant, low-information HN users who don't understand the basics of how finance works. You can certainly find examples of destructive or unethical behavior if you dig deep enough. What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.

The rules are arbitrary, the rules can be changed at any time. Finance is simply a construct on top of lower level primitives (primarily the legal framework around property ownership and corporate entity law). Totally fine for folks to ask which rules matter, which don't, and which can be changed and how long it will take. Be curious!

If the President can sign EOs banning private equity/institutional ownership of homes [1], OP's ask does not seem to be that out there imho; again, all of these rules are arbitrary and can change at any time. How do we change rules around ownership? We change laws or how they're applied.

[1] Congressional housing deal faces new hurdle as Trump pushes investor ban - https://www.politico.com/news/2026/02/13/housing-deal-faces-... - February 13th, 2026

> What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.

Please provide citations of companies worth saving were saved by PE. I will start with the only one I know: Barnes & Noble.

Re: America's pensions can't beat Vanguard but they can close a hospital

#104

Post by lotsofpulp »

epistasis wrote: post #74
steveBK123 wrote: post #50

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior Supposedly intelligent investors leaving money in accounts above FDIC limits ($250k per holder per bank, so $500k for joint account) were engaging in risky laziness.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

Use your political power to lobby for making electronic money transfers a government operated utility.

Re: America's pensions can't beat Vanguard but they can close a hospital

#105

Post by PlatoIsADisease »

Starman_Jones wrote: post #80
jazz9k wrote: post #45

Earlier quoted context omitted.

I disagree about student loans. The entire system needs to be dismantled. Universities don't care if their majors will result in a job and the student loans are a source of risk-free money. They need to start taking on the risk of all student loan, not me, the tax payer.

I agree with you about student loan forgiveness, but disagree with your assessment of universities as a system. The humanities (which are highly profitable for the university) are suffering an existential crisis because their funding keeps getting cut, while STEM programs (which have low or even negative ROI after lab/equipment/resource costs) keep getting expanded. There's obviously more nuance to that, but at a hig…

Is this actually true?

I think about my lab classes and typically these were separate credit hours. More money to the university. Outside chemistry, we were using outdated equipment that wasn't getting refreshed/bought new.

If what you are saying is true, Humanities needs to cut costs of their credit hours or double down. For entertainment degrees (art, music), its prohibitively expensive to casually obtain the education. For business/politics/psychology, there is at least some sort of return on investment to be expected.

Re: America's pensions can't beat Vanguard but they can close a hospital

#106

Post by jahsome »

sejje wrote: post #87
etchalon wrote: post #70

Earlier quoted context omitted.

So you believe universities have taken advantage of students by crafting, encouraging and financing education programs with an understanding that those programs would not result in jobs which would be sufficient to repay the debt needed to complete them, but you think the 18 year olds who were taken advantage of should be forced to suffer for their failure to make perfect decisions at 18. Cool. Cool.

So you believe uninvolved taxpayers should be on the hook when the 18 year olds make bad decisions. Cool cool.

Do I believe in community, empathy, kindness toward my fellow human beings? Why, yes. Yes I do. Am I willing to pay a few bucks to put my money where my mouth yes. Why yes, yes I am.

Re: America's pensions can't beat Vanguard but they can close a hospital

#107

Post by cj »

codexb wrote: post #68
jazz9k wrote: post #45

Earlier quoted context omitted.

I disagree about student loans. The entire system needs to be dismantled. Universities don't care if their majors will result in a job and the student loans are a source of risk-free money. They need to start taking on the risk of all student loan, not me, the tax payer.

Ok, but forgiving student loans doesn't do that. It signals to borrowers that they don't have to repay high loans if their career can't support it. It tells borrowers that they can make risky loans without a chance of default. It tells universities that they can keep charging exorbitant tuitions because kids can still get loans to pay them. The solution is to allow judges the discretion to default them in bankruptcy…

Allowing student debt to be canceled during bankruptcy would be a good first step (possibly even better than canceling student debt across the board).

To your point, making it easy to cancel debt teaches borrowers that debt isn’t a serious thing.

Requiring someone go through bankruptcy (and all of the associated negatives on your credit score, etc) seems like a good tradeoff. Allows you to get out from under the debt (the entire purpose of bankruptcy in the first place..) while not letting everyone pretend the debt never existed (need to live with the impact of bankruptcy on your ability to borrow in the future)

I don’t know why we don’t hear more people lobbying for this. I guess it’s because the sound bite isn’t as sexy.

Re: America's pensions can't beat Vanguard but they can close a hospital

#108

Post by p_j_w »

epistasis wrote: post #74
steveBK123 wrote: post #50

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior Supposedly intelligent investors leaving money in accounts above FDIC limits ($250k per holder per bank, so $500k for joint account) were engaging in risky laziness.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

Buy private deposit insurance.

Re: America's pensions can't beat Vanguard but they can close a hospital

#109

Post by creato »

tehjoker wrote: post #64
lokar wrote: post #39

Earlier quoted context omitted.

One round of loan forgiveness is fine, but it builds an expectation of it in the future. All of the loans, growing larger and larger, just encourage universities to grow fatter and raise costs to students. If students could not borrow enough to attend, they would be forced to lower costs (not necessarily the very top universities, but all the rest).

other poorer countries just pay all or most tuition for students and own the universities

In most such countries there is also an entrance exam requirement that would exclude most student loan borrowers in the US.

Re: America's pensions can't beat Vanguard but they can close a hospital

#110

Post by justin66 »

epistasis wrote: post #74
steveBK123 wrote: post #50

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior Supposedly intelligent investors leaving money in accounts above FDIC limits ($250k per holder per bank, so $500k for joint account) were engaging in risky laziness.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

A corporation can hold t-bills and cash equivalents instead of relying on a bank account where the $250K FDIC limit will bite them.

This notion that the $250K FDIC insurance limit is an acceptable part of our system, except in cases where a bank fails and the depositors are... sympathetic? It's incredibly silly.

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