Simon, perceptive as ever. As this story has unfolded I have reached the following conclusions:

1. There's always cause for concern when you see everyone doing the same thing. It rarely ends well. It's a consequence of herding among advisers, a regulatory regime that discourages independent thought and buyers who do not ask basic "what if" questions about things they don't understand.

2. As you point out, things go wrong when people stop thinking about pension balance sheets as two sets of long term cash flows and become obsessed by mark to market values.

3. I suspect there's also a problem, which is not peculiar to pensions, when people become seduced by ratios and differences and forget what's driving the underlying "big" numbers. It's why people lose sight of the power of leverage.

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Excellent piece Simon.

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