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AI Bubble Teetering on the Brink as OpenAI Admits to Massive Financial Failure: A $20 billion setback. (futurism.com)
submitted 1 month ago by to c/technology@lemmy.world
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[–] 2 points 1 month ago (4 children)

Some countries, like Australia, where I live, have transitioned from defined benefits to defined contributions. Bond yields are still higher here.

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  • [–] 1 point 1 month ago (3 children)

    It's ultimately a global market. But every defined benefits plan active, adds to demand for bonds. Lowering the yield.

    Defined contribution schemes are bad for the people selling bonds, e.g. people buying homes, governments and mega corps

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  • [–] 1 point 1 month ago (2 children)

    However, they are good for stock markets and large projects as investment vehicles, so they do hekp government, businesses and can be used to promote projects that benefit their members, eg union based ones can promote tjeir own industry.

    The suoerannuation funds in australua have now grown large enough in aggregate to be market movers.

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  • [–] 1 point 1 month ago (1 child)

    But that's two different funding mechanics.

    Defined benefit, buys bonds. So the government wants to build a metro in Sydney, borrow the money and own 100%.

    Defined contribution, buys ownership. So the government wants to build a metro in Sydney, sells 40% ownership to fund the building phase.

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