UK pensions hit with margin calls as gilts and sterling slide
I’d like to make kind of a meta-point about what I see as two different ways that people are talking about the issue in this rather contentious thread.<p>To oversimplify a bit, there seems to be a crowd saying: “these pension fund managers gambled with my retirement to enrich themselves”.<p>There seems to be another crowd saying: “if you examine the details of these transactions you’ll find that it’s neither that simple nor fundamentally even true”.<p>I’d like to submit that the latter group, which I suspect is probably technically correct (the best kind) should possibly examine the possibility that while any isolated derivatives transaction probably makes sense and is governed by deep and sophisticated mathematics, it does seem to be the case that <i>in sum total</i> we see, decade after decade, a cumulatively destabilizing effect on both financial markets and the financial security of everyday folks: somehow the emergent system either is or <i>really, really fucking appears to be</i> privatizing profits while socializing losses while simultaneously driving up the swings of the business cycle.<p>I love the financial mathematics stuff intellectually and this is certainty a forum that welcomes experts discussing details, but at some point we need to acknowledge that it’s high finance’s job to convince the public that they’re actually helping, not the public’s job to learn high finance.<p>Elites that forget this for too long have historically come to very bad ends.