– This Pension Fund Is Daytrading Your Retirement Funds, With Up To 500% Leverage (ZeroHedge, Sep 19, 2014):
While we have already noted the backlash against hedge funds as a result of their chronic underperformance of the market over the past 5 years, resulting in first Calpers and now Texas Pensions to pull money out of the asset class, the reality is that in a micro-managed world in which the Fed itself is the Chief Risk Officer of the S&P 500, there is no need to actively manage assets – after all the money printer itself is doing so on behalf of everyone. However, it is not just highly paid hedge funds – paid highly to hedge risk which simply does not exist until such time as central banks lose control – but pension, mutual and virtually every other class of actively managed money will underperform the S&P as long as the central banks are actively pushing asset values higher (and when they stop watch out below because no amount of shorts or puts will offset the carnage that will result).
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