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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

#251

Post by lokar »

lokar wrote: post #240
criddell wrote: post #116

Earlier quoted context omitted.

> encourage universities to grow fatter In a typical state school, where's most of the fat accumulating? What could be cut significantly without affecting the quality of education?

I'm not an expert, but a lot has been written on this. Some areas: - more and more administrative staff and "middle management". The assistant to the assistant vice chancellor for elm trees. - Building and running very expensive science research operations. These may well be worthwhile efforts, but conflating them with undergraduate educations is a problem. - more and more student amenities. Fancy dorms, student cent…

Also, I should mention: highly competitive employers do filter based on school ranking, both in recruiting (acting looking for people), but also in hiring. For example, requiring extra approvals to hire someone who did not attend a top N school for their major. So it can be rational for a student to stretch hard to get into a higher ranked school.

(I know this from being personally involved in this at more then one company)

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

#252

Post by amluto »

Aurornis wrote: post #123
codexb wrote: post #68

Earlier quoted context omitted.

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…

I’m always surprised that student loan forgiveness appeals to anyone who should otherwise be able to think about all of the bad second order effects. The more we inject money into the education system, the higher prices go. Setting a precedent that the government will just pay off your loans if you don’t pay them off only encourages more people to take out loans without thinking about paying them back. There are so m…

If this were done in a less ridiculous manner, it might actually have the desired effect. Make student loans dischargable in bankruptcy (just like any other loan) and don’t give them government backing. Then private lenders could decide how much money to lend out, and the answer might well be “not very much.”

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

#253

Post by jahsome »

AlexandrB wrote: post #145
jahsome wrote: post #106

Earlier quoted context omitted.

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.

What if someone else thinks that there are better (more kind, empathetic) uses of that money than funding someone's college? Why is "free college" the most kind and empathetic thing we can do with this money?

I don't recall saying or even implying it was "the most kind and empathetic thing we can do" -- can you point me to where I gave that impression?

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

#254

Post by AnthonyMouse »

46493168 wrote: post #238
AnthonyMouse wrote: post #158

Earlier quoted context omitted.

Bankruptcy affects your credit score for 7-10 years. Someone who graduates from college in their early 20s with six figures in debt could file for bankruptcy immediately and have it be off their credit history by the time they've saved up a down payment and want to get a mortgage. There is also the obvious drawback that if more people can discharge the debt, the interest rate goes up, and then everyone else has to pa…

> Someone who graduates from college in their early 20s with six figures in debt could file for bankruptcy immediately and have it be off their credit history by the time they've saved up a down payment and want to get a mortgage. So change the bankruptcy law? It’s a pretty easy fix. Create a whole new chapter if that’s what it takes. Make it dischargeable only after 7 years of nonpayment, do means testing… bankruptc…

> Make it dischargeable only after 7 years of nonpayment

You don't really want to give people an incentive for nonpayment.

> do means testing

Bankruptcy already does that. But what are your "means" the day you graduate from college and haven't yet found a job, or temporarily take a low-paying one on purpose to meet the eligibility requirements?

You would need something like, deferred payments while you're unemployed but if you subsequently find a job then you have to pay, instead of one-time permanently discharging the loans. Except that's how it already works.

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

#255

Post by teeray »

jazz9k wrote: post #45
epistasis wrote: post #24

> Larry Summers warned against “moral hazard lectures” and demanded SVB depositors be made whole immediately in 2023, months after calling student loan relief inflationary and unfair. Moral hazard for borrowers, bailouts for banks. Not lost on the public. I can't believe I'm about to say something that could be construed as a defense of Larry Summers, but here goes: bank depositors are not engaging in risky behavior,…

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.

It’s interesting that not being able to discharge the loan in bankruptcy is because “you can’t take back the knowledge.” While true, you can still make the credential mostly useless. Everyone needs to do certain verification in a new job (e.g. I-9). If a job was posted that requires some degree, and a new hire used the degree they discharged in bankruptcy to get that job, the debt can come roaring back into existence when it’s caught during onboarding. Like anything, there are edge cases (e.g. starting a new company). But even there you might be able to have gates at financing stages that would trip the debt resurrection.

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

#256

Post by ecshafer »

epistasis wrote: post #236
steveBK123 wrote: post #173

Earlier quoted context omitted.

Things I learned in Econ 101 like 25 years ago, and one of about four options if you google "how do companies manage payroll with fdic limits". But people with [mb]illions of funding just plopped money in a single account ..

Indeed, most of SVBs customers were those who had almost zero business finance experience. There were lots of startups but there were also lots of normal businesses and non-profits in the Bay Area that used SVB. Perhaps the slow depositors should be punished for not being sufficiently sophisticated, or as quick as the Thiel-backed startups that got the bat-signal to do a bank run. But the "moral" value of letting all…

> Indeed, most of SVBs customers were those who had almost zero business finance experience. There were lots of startups but there were also lots of normal businesses and non-profits in the Bay Area that used SVB.

The thing is that you don't need to be a financially sophisticated. Why are they making companies without talking to a CPA? They can get an account with PayChex and they will literally handle everything related with payroll. If your average mom and pop restaurant didn't do this we would fault them for being irresponsible.

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

#257

Post by LanceH »

gruez wrote: post #237
LanceH wrote: post #115

Earlier quoted context omitted.

How about clawbacks from the universities.

Seems massively unconstitutional to retroactively impose penalties, especially if the previous behavior didn't violate any laws. Not to mention the reputational risk on the trustworthiness of US as a place to do business and the risk of abuse from future administrations. You might cheer that universities are getting their just desserts for scamming students, but your political adversaries might use it to claw back fu…

> Seems massively unconstitutional to retroactively impose penalties

For existing agreements, of course.

Going forward, for those who are the real beneficiaries of the loans, they should have a skin in the game.

Why aren't universities standing behind their product and offering financing without the unusual non-dischargeable nature of the loans? Do they not stand behind their products?

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

#258

Post by vondur »

ineptech wrote: post #17
vondur wrote: post #4

CalPers, the largest public employee retirement system in the US was not getting the kind of returns that they needed. They were restricted from purchasing stocks in certain industries, such as oil, weapons, etc.. However, they recently switched to investing in private equity funds and now they are getting much better returns, without all the pesky moral issues involved with it.

> However, they recently switched to investing in private equity funds and now they are getting much better returns TFA says otherwise, in detail and with a lot of supporting data. If you're going to contradict it you ought to cite a source.

Here's a link to their private equity fund status: https://www.calpers.ca.gov/investments/about-investment-offi...

And here's a link to the CalPers celebrating their new ROI: https://news.calpers.ca.gov/celebrating-10th-anniversary-cal...

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

#259

Post by Ajedi32 »

toomuchtodo wrote: post #233
Ajedi32 wrote: post #69

Earlier quoted context omitted.

Yes, that's my point. That bet ended 8 years ago. If "multiplying money" is really the sole goal then why didn't all the pension funds switch to investing in index funds back then? There are clearly some structural issues here which don't align well with the idea that pensions are a "paperclip maximizer" with the goal of maximizing returns. I find it interesting that the OP isn't arguing pensions should switch to inv…

Are you asking why people getting paid to manage pensions inefficiently want to continue to get paid to do so?

Why would it matter what they want? I'm making a rhetorical point that "multiplying the money" is de facto not the sole goal of these funds, there's clearly something else at play.

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

#260

Post by scruple »

FireBeyond wrote: post #112
epistasis wrote: post #52

Earlier quoted context omitted.

The FDIC insures $200k of deposits because banks are not supposed to be risky. Thats taxpayers bailing out everybody in order to keep banks as "not risky" In particular the article incorrectly states that the bank was bailed out. It was not. The bank failed. Depositors who were running their non-profit in the Bay Area did not lost all their charitable contributions. The bank failed because it had placed deposits into…

> When Peter Thiel started a bank run by telling all his investments to pull their funds, that exposed the SCB mismanagement. I think he did more than that. He either has precognition Nostradamus would be proud of or he absolutely had insider information, and a good amount of it. 1. He knew that when the bank closure would be, because despite how the FDIC has very detailed and historically very successful efforts at…

In the end it's a distinction without a difference. The result is the same, and Thiel was building the fire escape before anyone could smell smoke.
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