that the policies he syupported means he is fucked.
____________
To: greyfoxx39
Here's some information from :
http://www.moneyandmarkets.com It's not about Nortel specifially, but there's some interesting stuff on pension funds. Pension funding picture deteriorates dramatically …
Then there’s the dismal picture for the nation’s pension funds.
States, corporations, municipalities … they’ve all promised benefits to retirees based on assumptions about the returns for various asset classes. But those returns are being blown to smithereens, causing funding shortfalls of epic proportions.
The PBGC is $11 billion in the red. And with so many companies in bankruptcy, it may need a government bailout to rescue failed pension plans.
The PBGC is $11 billion in the red. And with so many companies in bankruptcy, it may need a government bailout to rescue failed pension plans.
The consulting firm Mercer recently estimated that the pension funds of big U.S. companies are underfunded to the tune of $409 BILLION! At the end of 2007, they were running a $60 billion surplus. That huge swing could drive up corporate borrowing costs and drive down corporate earnings.
It could also lead to reduced business investment as companies are forced to divert money from equipment and facilities budgets to their pension funds. Advisory firm Watson Wyatt recently estimated that U.S. corporations will have to boost pension fund contributions to $111.2 billion in 2009 from $50.5 billion last year.
Now it’s true that the government-backed Pension Benefit Guaranty Corporation (PBGC) insures the basic benefits for more than 29,000 plans. But with so many companies falling into bankruptcy these days, it’s increasingly likely the insurance premiums the PBGC receives won’t be enough to cover its obligations.
The agency was already running a deficit of more than $11 billion as of September 30. And that number is poised to rocket higher.
Result: Yet ANOTHER black hole the government will have to fill somehow, either by bailing out the PBGC or bailing out corporations.
So at this point, I think it’s reasonable to ask three simple questions …
1. Can the government continue its policy of bailing out anyone and everyone?
2. Can the Fed and Treasury afford to keep filling black hole after black hole, without a heck of a lot to show for it … except more black holes? Heck, even the black holes they thought they had filled are opening up again! Just look at Bank of America. The firm got a whopping $25 BILLION in bailout money several weeks ago, and now it’s back in Washington begging for billions more!
3. At what point are policymakers just going to have to give up and let more banks fail, more companies fail, and more asset markets trade down to where they are going to go anyway, rather than waste hundreds of billions of dollars trying to retard the process?
Some food for thought the next time you hear yet another speech out of Washington promising the sun, the moon, and the stars — if only we bail out (fill in the blank).
Until next time, Mike
About Money and Markets For more information and archived issues, visit
http://www.moneyandmarkets.com10 posted on 17 January 2009 01:05:04 by GOPJ ("A consensus of 100 scientists is undone by one fact." - - Einstein (take that Al Gore))
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