Live with Leo Kolivakis

Published on
December 6th, 2019
Duration
57 minutes

Live with Jim Bianco – How the Fed Affects Equities


Live with Leo Kolivakis

Live ·
Featuring Leo Kolivakis

Published on: December 6th, 2019 • Duration: 57 minutes

Leo Kolivakis is the publisher of Pension Pulse - a Canadian based publication focusing on pension funds and investments in both public and private arenas. Kolivakis has covered the pension industry and financial markets for 15 years, and is a contributor for other popular financial publications.

Comments

Transcript

  • YC
    Yu C.
    13 December 2019 @ 05:10
    is it possible for us to request a guest?
    • MW
      Max W. | Real Vision
      13 December 2019 @ 13:55
      Of course! We are always open to suggestions and introductions. Who did you have in mind?
    • YC
      Yu C.
      14 December 2019 @ 12:51
      Jeff Snider, Mark Dow, John Burbank, Michael Howell, David Zervos
    • ET
      Eugenia T.
      15 December 2019 @ 05:35
      @max: Juliette declerq, long form. She is always very erudite and clear-minded and I learn a lot from how she analyzes the world economy
    • YC
      Yu C.
      15 December 2019 @ 12:21
      that's right. Juliette decluerq as well. great mind
    • IC
      Ibrahim C.
      16 December 2019 @ 02:24
      Few names you listed below are regular contributors (even weekly timing) to MacroVoices Podcast and you can listen to them free of charge. The last week's guest was Juliette Declerq.
    • TM
      The-First-James M.
      19 December 2019 @ 22:40
      Chris MacIntosh, Keith McCulloch.
  • CL
    Chris L.
    15 December 2019 @ 21:51
    Audio better, but how the hell can you justify $349 for a mere weekly video (whooo). Then $399 and then $499? Lol
    • JL
      J L.
      18 December 2019 @ 14:34
      all about the access
  • BB
    Bob B.
    17 December 2019 @ 04:12
    Leo/Ed - We may have reached 'Peak' pension funds? As hinted, pension funds tend to follow each other in asset classes and products. Given their size, what effects might be seen in investing and pension fund performance?
  • ML
    Mark L.
    13 December 2019 @ 14:42
    Leo's argument for DB being much better in the long run vs. DC is ridiculous, except for his point on pooling of longevity. Saying that the 2008 proved the superiority of DB over DC ignores all of massive underfunding of the DB plans that occurred. The main difference is that DC plans are market to market and DB plans are marked to delusion. An underfunded DB plan is basically a ponzi scheme. DB plans immediately showed the reality and the DB ignored the reality. DB plans cannot magically make assets pay higher returns just because their actuarial assumptions need them. The same asset in a DB plan has the exact same return as that asset would have in a DC plan. In my opinion, the problem with DB plans has their discounting based on expected returns (based on hope) instead of using actual interest rates. A DB liability is an almost pure interest rate liability with some mortality variability (which will average out in large numbers) and this should be valued based on a portfolio of zero coupon Treasury bonds that match these cashflows. Adding risk premiums to this discount rate is ridiculous, as the pension payout is supposedly not subject to market risk. A risk free liability should be valued based on risk free asset yields. The DB mark to hope has hidden the true cost of pension benefits and allowed the problem to grow and grow until it becomes unfixable.
    • BB
      Bob B.
      17 December 2019 @ 03:40
      Any fund management, pension or otherwise, stands on the design and abilities of the fund. The vast majority of pensions contributors (joe sixpack) has no clue about investing. DB plans should be a shinning demonstration of employer commitment to employees. Sadly, maybe it is :(
  • CS
    Charles S.
    16 December 2019 @ 05:28
    Leo is making Liabilities the key point of any pension plan. Liabilities are estimates of what returns will be in the future, it is the actual returns that matter and actual cash flow needed to pay pension recipients. Consider a simple case pension plan formed and it is estimated that future needs when the first qualified pension recipients can take a payment is 27 years in future and future need is $9,399,000, and the plan by a business owner Gill Bates is to put a one time payment of one million into the fund and let it grow to meet the future obligation because he estimates an 9% annual return over the 25 years. If instead Leo made the billionaire use 8.5% as the discounted rate the Gill Bates would need to put $126,000 extra dollars into the fund in order to meet the anticipated future value. Now imagine in year 2 the fund actually earned the nine percent and the original funding of one million is all the cash ever put into the fund, but Leo Lawmaker through an act of congress, gets the discount rate used to record the liability required to be 6.5%, this will cause Gill Bates to be underfunded by $858,950, funding status will be at 55% and Gill Bates will have 10 years to pay into the fund to make up the difference. Leo would warn of the impending crisis, but in actuality he has no idea what returns for the fund will be for the next 24 years. As a matter of fact if the fund earned nine percent each and every year exactly the fund would show funding as a worrisome 79% of funding in year 17 despite earning 9 percent each and every year! and the actual dollar shortage at year 17 has increased from the 858K to over a million dollars, despite hitting Gill Bate's original target each year. This is clearly a mathematical absurdity, anyone that pushes for returns to be utilized as lower than any reasonable person would obtain does not belong making pension rules, the end result is to cause pensions to be ended. In Leo's world this is why liabilities matter, what the actual return will be doesn't matter because the liability is never needed. Consider further once payments are started for the pension fund it will be over a long stream of years. At that point it is the actual cash withdrawal rate of the portfolio (earnings plus cash contributions less payments and less fees) that becomes the problem, yet this number is almost never released by pension funds. But who is helped by having low assumed rates of returns? Hedge fund and Portfolio managers because low expected returns requires larger assets resulting in higher fees.
    • BB
      Bob B.
      17 December 2019 @ 03:32
      Pension plan contributors and recipients are benefited by low rates of return. Pension recipients benefits from security of being fully funded and COLA payouts, Contributors benefit from contribution holidays when plans are significantly over funded. Under funded is ALWAYS a nightmare. Over funded is ALWAYS easy to address.
  • TO
    Toby O.
    13 December 2019 @ 19:58
    Milton, I'm normally a positive, glass half full kinda guy. Please don't mistake me for a complainer; rather, consider my comment a critique. I (We?) need more than I'm getting from Access. Not to knock any Access guests....my reality is that in the last week I've gotten more value from the RV TV interviews I've watched (Jim Grant/Ben Melkman, Ed Harrison/Lakshman Achuthan, and Raoul/Mike Green (& I haven't even completed this one) than from the last month of Access interviews. I honestly don't recall what RV TV costs, but I think I'm paying less and getting more. WAAAY more. I'm busy. For me, tuning in to catch something live is more trouble than it's worth (Live interviews can't be edited in post-production.). Even with Ed Harrison's aptitude re: financial concepts/knowledge AND at interviewing, subscriber's questions asked mid-interview often detract more than they add to the interview (IMO). I'm sure some subscribers are simply looking for answers (i.e. buy bonds (wear diamonds ;-) ). Me, I subscribe to gain perspective & understanding (WHY buy bonds, wear diamonds). RV guests expand and deepen my knowledge and my thinking (I'm hugely grateful for RV). I think there is definitely a place on this platform for subscribers to ask questions of guests. For me, it'd help elucidate ideas or problems or opportunities that I'm considering. If the idea of Access is for subscribers to be able to interact with guests and to get questions answered, perhaps there is a better way to facilitate this. Perhaps a panel or round table, or point/counterpoint discussion around a particular topic or issue which is facilitated (Ed seems perfect to play this part). Questions could follow the discussion or be gathered prior to the discussion (which could give guests time to gather their thoughts and charts/data). I hope this comment is helpful as you think about ways to improve Access.
    • M.
      Milton .. | Founder
      16 December 2019 @ 18:10
      Toby, I won’t take anything from your message as you are right, Access needs some work and I appreciate your constructive feedback. As I discussed in the background with other users, there’s a team of dedicated people in the back that are implementing some of the ideas that we discussed. Thanks again, be sure that Access will grow in the next couple of months both in functionality and talent.
  • GS
    George S.
    16 December 2019 @ 17:50
    More on the topic from Leo in a recent post - https://pensionpulse.blogspot.com/2019/12/the-american-retirement-nightmare.html
  • DP
    Dimple P.
    16 December 2019 @ 02:48
    Audio better! Decent guest list so far but this access product is a substantial haircut from think tank. The pricing for a once a week interview is a real punch in the mouth to loyal patrons of TT. #moneygrab!
  • RC
    Ronald C.
    13 December 2019 @ 02:08
    I have the perception that the majority of U.S. defined contribution plans are managed either directly or indirectly by "smart wealth management" groups so Leo's suggestion of getting government out of the pension business wouldn't hold water.
  • KB
    Kreso B.
    12 December 2019 @ 23:24
    Leo lost a lot of money on solar panels manufacturers and was laughed out from Zerohedge.
  • GS
    George S.
    12 December 2019 @ 20:45
    Great in depth conversation.