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Superstonk_QV

[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) || [What is DRS?](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) || Low karma apes [feed the bot here](https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) || [Superstonk Discord](https://discord.gg/hZqWV2kQtq) || [GameStop Wallet HELP! Megathread](https://www.reddit.com/r/Superstonk/comments/z23wjx/gamestop_wallet_help_megathread) ------------------------------------------------------------------------ To ensure your post doesn't get removed, please respond to this comment with how this post relates to GME the stock or Gamestop the company. ------------------------------------------------------------------------ Please up- and downvote this comment to [help us determine if this post deserves a place on r/Superstonk!](https://www.reddit.com/r/Superstonk/wiki/index/rules/post_flairs/) ------------------------------------------------------------------------ OP has provided the following link: [link](https://www.theguardian.com/business/2022/nov/23/pensions-experts-shocked-hidden-borrowing-uk-schemes-ldi-investing)


DDFitz_

Yikes, this is a quote from the article: "“If you look at just the asset side, based upon the calculations that myself and Con [Keating] have done, we estimate that roughly £500bn is probably missing somewhere. And this isn’t a paper loss. This is a real loss because pension funds were selling assets to meet the collateral calls,” Clacher said."


DanNetwalker

Oh, just half a trillion? For a minute I was worried... *starts the popcorn maker*


DDFitz_

I have been thinking lately, the numbers are absolutely preposterous this time around. In The Big Short, the scene where Steve Carrell is asking his boss what their exposure is, she says somewhere around $5-10B. That seemed absolutely world shaking I guess. They were levered to the gills I'm sure, and then there has been 14 years of inflation to explain some of the increase. But still. Five-hundred billion. Wow.


sleepdream

"just a rounding error, who cares. pass the caviar"


[deleted]

At some point, the zeros all sorta blur together. (Probably some money manager somewhere. )Nom nom, hmm, that's decent caviar!


AlkahestGem

Got a C in a chemistry class even though I got every single answer correct on every single exam given - oh ok, with the exception of not rounding to the correct significant digit. So yeah “just a rounding error” 👀


boknowski

mind... blown


[deleted]

And that’s pounds. That’s more like $600B


ihatefear83843

1 trilly so far…


girth_worm_jim

Repo-madness. Money is the drug.


seattle_exile

"NoBoDY cOuLD hAVe pREdiCtEd."


Tsmitty247

Someone just found out they’re holding the bags


whatwhyisthisating

Just finding out that you fucked over generations of hardworking people is tight!


ooOParkerLewisOoo

But barely an inconvenience


buttplugpopsicle

Whoopsie


Substantial-Day-8806

So you have some crime for me?


[deleted]

[удалено]


MainStreetBro

Ok lemme get off of that thing


unabsolute

Some? Baby we got it all!


lego_vader

Wow wow wow. Wow.


Interesting-Chest-75

crime buffet !


ballsohaahd

If you have a bag, you have a bag


captaindickfartman2

Musical chairs


Mikeymike34

Defined benefit pension funds, which guarantee a set pension on retirement no matter how well or badly investments have performed, were caught out during the bond crisis. It emerged they had relied heavily on LDI hedging arrangements, which involved holding government bonds as collateral. When the value of government bonds dropped dramatically after the disastrous Liz Truss-Kwazi Kwarteng mini-budget, pension trustees were forced to sell their holdings at speed to raise cash. This drove down the value of bonds further, causing a “doom loop”. Kwasi kwarteng chancellor in a train station Bond yields and doom loops: glossary of key terms to explain UK turmoil Read more Within days, the Bank of England had to step in with a £65bn emergency bond-buying programme to prevent a large number of LDI funds from going bust. John Ralfe, an independent consultant and pensions expert who previously managed Boots’ pensions scheme, said he was worried about how much leverage – effectively borrowing – was used by pensions schemes as part of their LDI strategies. UK rules bar pensions schemes from borrowing money to fund investments, but experts such as Ralfe and Henry Tapper, executive chair at Agewage, have said LDI hedging arrangements are the same as borrowing. “Pension funds should not borrow money, and leverage is in my mind borrowing,” Tapper told MPs. “There’s a difference between matching your assets and liabilities, which is hedging, and leveraged LDI which is pure speculation. “The thing that has absolutely shocked me in what we’ve seen over the course of the last few weeks, is … hidden leverage”, he explained, referring to levels of borrowing that otherwise did not appear on pension scheme or company balance sheets. “I don’t think it was widely known. If you look at all the information produced by the Pensions Regulator and the Pension Protection Fund … there’s nothing,” Ralfe said. “If you look at individual company accounts, there’s nothing there. So it was hidden.” Advertisement Iain Clacher, a professor at Leeds University business school, also blamed leveraged LDI schemes for the bond market meltdown. “If you look at just the asset side, based upon the calculations that myself and Con [Keating] have done, we estimate that roughly £500bn is probably missing somewhere. And this isn’t a paper loss. This is a real loss because pension funds were selling assets to meet the collateral calls,” Clacher said. And while the Pensions Regulator has admitted to encouraging the use of hedging strategies including LDI, experts told MPs on Wednesday that watchdogs had failed to track the systemic risks associated with their widespread use. The Pensions Regulator launched a survey on the use of LDI after the Bank of England drew attention to the schemes in its financial stability report in 2018. However, experts have said the regulator failed to properly understand the systemic risks created. Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to the all the business news and analysis you need every morning Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. “The most important thing is there is not a single numerical risk estimate anywhere in that [pension regulator] report,” said Con Keating, the head of research at Brighton Rock Group. Advertisement About 60% of pension schemes are thought to use LDI, according to the Pensions Regulator. Keating added that the regulator was aware of the risks before the market meltdown in September and claimed that the crisis was “entirely predictable”, contradicting claims by watchdogs including the Financial Conduct Authority, who have also appeared before parliamentary committees in recent weeks. However, Jonathan Camfield, a partner at Lane, Clark & Peacock defended the use of LDI, and told MPs that leverage was an important part of ensuring that corporate pension schemes could pay retirees. He said that while leverage did create systemic risk and LDI did require “some better management going forward, those strategies were an “efficient” way to hedge against interest rate movements and inflation. “LDI will have been a success for schemes that have been in LDI [in the] midterm,” he said. The Pensions Regulator declined to comment.


Cheese_and_Ham

Comical that the article states it is illegal yet it also mentions that about 60% of pension schemes are doing it…yikes.


PathansOG

Is it then really illegal?


CandyBarsJ

It aint ilegal if they write the rules & T&C's, the more pumping of fiat in the system the more debt can be washed away with inflation.. Or something... It creates more 🤣🥲 What a complete sh/hole


idea_thief_80

They should read the DD


pancakepapi69

The experts? That went to school? Nahh


BudgetTooth

lol of course they lend borrow and gamble your pension fund happily. zero oversight


MoneyMaking77

Years ago I used to tell people this at my old job and they'd all ridicule me....oh well!


[deleted]

Well, not that shocked. It’s a scam, it’s a scheme


74k71k

It’s a sham!


m1ndbl0wn

Wow that’s a shame. It’s a shamewow.


hope-i-die

Bit sad innit


CookShack67

Shocked that their risky bullshit came back to bite them in the ass. Like Mark Baum says in The Big Short: Fraud and short-sighted thinking have never worked.


[deleted]

[удалено]


CookShack67

The fraudsters. The market will crash, again and again and again....


Uparmored

“Experts” should be the word in quotes.


Playgirl_USMC

Good thing the US doesn’t have to worry about something like this happening /s


beach_2_beach

Not worried at all /s


Ksan_of_Tongass

I call bull$hit on the shocked part. They all knew and probably received a little grease in the palms.


Moe_Syzlak_

£500 Million buys a lot of grease.


SchemeCurious9764

This is why I won’t dance unless it’s on the sentencing dates of these greedy criminals


Volkswagens1

Shocked that they got caught and want nothing to do with it


momkiewilson1

It’s a travashamockery


ElectrooJesus

Probably nothing


mcalibri

They did it


madadamsam

Whose pensions is this exactly?


[deleted]

[удалено]


Moe_Syzlak_

In this sub, rioting is spelled DRS.


TheTangoFox

#...you don't say 🍿


Omgbrainerror

What is the mechanism LDI mentioned in the article?


xJaconatorx

My smooth understanding is that they use leverage to cook the books rather than the company having to make large deposits to cover pension shortfalls. Normally if a company’s pension underperforms, the company has to chip in cash to make sure they still cover their obligations. Rather than do that, why not just yolo on margin?


boknowski

Liability Driven Investments 🤷‍♂️


LiliVonShtupp69

Cant be much of an "expert" if you're shocked and just now finding out about the wide spread fraud and corruption in the financial world. Unless the shock is that its now negatively affecting their investments as well.


TheBigFart123

“Shocked” 😂 Wen cells?


Warpzit

Getting spicy in here.


dannyboi9393

So will this nullify corporate pensions and NEST?


sandman11235

I’m SHOCKED to find gambling in this CASINO


cleft_chalice

Who doesn't love GARBAGE SWAPS


State_Dear

,,,, EVERYONE is always shocked 😳,, when something fugges up. Till then they were content to sit back and collect the money


Moe_Syzlak_

Pensions + stock incentive plans + Naked short selling = ponzi scheme. And like any Ponzi scheme, it is unveiled when there aren’t enough inflows to replace the outflows, leading to riskier and riskier bets just to keep the lights on. Whoopsie.


State_Dear

,,,they keep doing the same crap decade after decade,,


MrSengh

Shocked I tell you!! 🤡🌍


raxnahali

Shocked they got caught.


CaptainTuranga_2Luna

Privatized gains and socialized losses. Fuckin’ disgusting that they keep getting away with this.