Tuesday, July 24, 2012

Question on money-making

If I had a lot of money, how would I make giant sacks of cash by betting on the following two outcomes?
  1. Public pensions (eg, IL state government pensions) are going to explode because of unrealistic assumptions and chronic underfunding even if the unrealistic assumptions were correct.
  2. We're going to screw the pooch on global warming. If and when we do act, it will be so late that the price for a ton of carbon will be exorbitant.
There are other similar problems. But, really, who can get (viz) 8% on billions of dollars of investments these days? Nobody, so these state pension funds are going to get crucified. Who can convince any government of the necessity of uncomfortable action now to prevent bad stuff from happening thirty years from now? Nobody, that's why there will be no arctic polar ice at some point in a summer before 2020.

There has to be some way to make money off of these known future failures. It's like having a 2020 Almanac. A very depressing 2020 Almanac.

So, in short, how can I bet against rational long term thinking?