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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

#61

Post by terminalshort »

calcifer wrote: post #35
nradov wrote: post #14

Earlier quoted context omitted.

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.

> You can certainly find examples of destructive or unethical behavior if you dig deep enough Dig deep enough? Please. Merely tilt your head slightly upwards, and let your eyes feast on countless examples.

And yet you didn't give one

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

#62

Post by Moldoteck »

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,…

It's expensive because it's not built in series, unlike say korea or china or russia.

Both loan forgiveness and nuclear have huge benefits

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

#63

Post by triceratops »

anonporridge wrote: post #33
tempest_ wrote: post #3

I do wonder when some unforeseen 2008 like crash someone crashes ETFs. I can't really see how it would happen and that I suppose is part of the fun.

A US wealth/unrealized gains tax might trigger it, because it would likely create a cascade of forced selling, with the proceeds of sales getting burned as tax revenue for entitlement programs or debt payments rather than reinvested.

What if wealth taxes could be paid with shares instead of cash? And the shares went into a sovereign wealth fund? No forced selling, no crash.

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

#64

Post by tehjoker »

lokar wrote: post #39
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,…

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

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

#65

Post by terminalshort »

budududuroiu wrote: post #20
mr_important wrote: post #9

Earlier quoted context omitted.

Private equity is capitalism. That's the capitalism part of the economy.

Im gonna speculate they were referring to the part of private equity where you buy businesses to load them up with debt to buy more businesses ad nauseum

You can't load someone else with debt. That's obviously illegal. When you buy a company it isn't "them" anymore. And the new owners have exactly the same rights to borrow money as the old ones.

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

#66

Post by AnimalMuppet »

bondarchuk wrote: post #49
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).

The student loan system is fucked up, so what should happen is an acknowledgement that it's fucked up, forgiving the fucked up loans, and also changing the system to be less fucked up so it won't have to happen again.

A reasonable option. But was that on the table? Or was "just student loan forgiveness with no change to the system" what was being proposed?

And if that was the proposal, would that be better or worse than the current status quo?

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

#67

Post by terminalshort »

triceratops wrote: post #63
anonporridge wrote: post #33

Earlier quoted context omitted.

A US wealth/unrealized gains tax might trigger it, because it would likely create a cascade of forced selling, with the proceeds of sales getting burned as tax revenue for entitlement programs or debt payments rather than reinvested.

What if wealth taxes could be paid with shares instead of cash? And the shares went into a sovereign wealth fund? No forced selling, no crash.

What if the government owned all the corporations?

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

#68

Post by codexb »

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.

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 after X number of years after graduation. Lenders need to accept the risk. With no risk, they can loan as much as they want and have guaranteed repayment. This drives tuition higher and higher.

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

#69

Post by Ajedi32 »

toomuchtodo wrote: post #43
Ajedi32 wrote: post #15

Earlier quoted context omitted.

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.

Longbets: “Over a ten-year period commencing on January 1, 2008, and ending on December 31, 2017, the S&P 500 will outperform a portfolio of funds of hedge funds, when performance is measured on a basis net of fees, costs and expenses.” - https://longbets.org/362/ (won by Warren Buffett) Should New York’s $270B pension fund abandon Wall Street? - https://www.semafor.com/article/08/07/2025/new-york-comptrol... - Augus…

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 investing in index funds, but rather into other projects the OP considers morally superior and that he personally believes will give better returns then hedge funds. To me that just feels like trading one set of hedge fund managers for another.

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

#70

Post by etchalon »

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.

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.

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