Canada’s Biggest Pension Suffers Fiscal Q1 Loss

The name of Canada’s largest pension fund is Canada Pension Plan Investment Board and the developing bear market has taken a toll on its value.

Here’s an August 11 Bloomberg headline:

Canada’s Biggest Pension Posts 4.2% Drop on Equity Meltdown

The fund also experienced a negative return in its fixed-income investments.

Elliott Wave International anticipates many more headlines about the deflation of the value of pension funds in the months ahead.

Here’s the first of two quotes from Robert Prechter’s Last Chance to Conquer the Crash:

In a crash and depression, we will see falling asset values, massive layoffs, high unemployment, corporate and municipal bankruptcies, pension fund implosions, bank and insurance company failures and ultimately social and political crises. The average person, who has no inkling of the risks in the financial system, will be shocked that such things could happen, despite the fact that they have happened repeatedly throughout history. [emphasis added]

This second quote provides insight into pension fund investments:

The bull market in stocks has gone on so long that pension funds, formerly boasting conservative portfolios, have embraced stocks as a safe investment. An amazing 81% of the value of all pension funds is committed to stock shares. Many managers have “diversified” into risky commodities and private equity deals.

Equally dangerous, banks and mortgage companies lend money to consumers via credit cards, auto loans and mortgages and then package and re-sell those loans as investments to pension funds as well as portfolio managers, insurance companies and even trust departments at other banks.