WTF? ..... The FDIC tries to get pension funds to invest in failed banks

[marmar]

from 247WallStreet:



Never Give A Sucker An Even Break: FDIC Markets Failed Banks To Pensions
Posted: March 8, 2010 at 6:09 am



“Never give a sucker and even break; never wise up a chump”–W.C. Fields


The FDIC has come up with the notion that it will market investments in failed banks, or perhaps some of their assets, to pension funds. These are the same funds which lost much of their value in the market collapse of a year ago or from the purchase of exotic derivatives caused by the drop in the real estate market.

“Direct investments may allow public retirement funds to reduce fees for private-equity managers, and the agency to get better prices for distressed assets,” Bloomberg reports. The improvement in fees does not mean much if the assets continue to lose value. A drop in value is clearly what caused the FDIC to shutter the banks in the first place.

Pensions are underfunded now corporations in the private and public sectors. That means the day may come when some workers will lose part of their retirement or healthcare benefits. One way that pensions can take to solve their problems is to make risky investments on the chance that they will get remarkable rewards. The method only works if the “trade” does not move against them.

What endowments failed to learn in 2007 and 2008 may cause them to have another unpleasant schooling this year and next. But, at least the FDIC will have dumped some problems to the benefit of its balance sheet.

-- Douglas A. McIntyre


http://247wallst.com/2010/03/08/never-give-a-sucker-an-even-break-fdic-markets-failed-banks-to-pensions/#more-61484

[RKP5637]

1. They're grabbing up any loose change on the table IMO. No sense not screwing

over anyone still left standing.

[Liberal_in_LA]

2. uh oh

[high density]

3. The funds are probably already investing in these instruments

If they can cut out the middle men and lower their fees, it seems good for everybody but the middle men.

[DrDan]

4. I think I might feel better giving my money to someone headed to Las Vegas than to put it in the

failed banks.

[marmar]

5. Better chance of a return on your investment

[dixiegrrrrl]

6. Bad loans, derivatives, and soon, Treasuries.

Pension fund Trifecta.

Might be time to find out who is really running your pension fund.
You KNOW money is changing hands somewhere along the line.

Clever way of FDIC to recoup some of the losses to the FDIC fund tho.