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Is the UK Pension Crisis a Fat Tale?
The UK pension crisis was somewhat predicated on a lot of buying of gilts by pensions as part of liability hedge programs. I think that people thinking about sterling at point nine and so on is one of those classic extrapolation things where they just got over excited. You know, you buy something for 25 years with a two and a half percent negative real rate per annum. It's hard to create by yields going high rapidly again because they have to go a long way. If we see those indexing guilt yields going negative again, I'm not sure any lessons have been learned in the LDI crew about not buying them when they have negative real yields. And then secondly,I can