Wonkette
Quick, stop selling your pitchforks on eBay — it’s time to stab people again! “WASHINGTON - Just months before the start of last year’s stock market collapse, the federal agency that insures the retirement funds of 44 million Americans departed from its conservative investment strategy and decided to put much of its $64 billion insurance fund into stocks.” And then the stocks PLUNGED of course but who could have known! They were at all time highs! Buy high sell higher, RIGHT?
Again, it’s the federal agency that exists to protect your life’s savings in the event of, say, every bank going broke and destroying the world in the process of raising national homeownership by 4%:
Switching from a heavy reliance on bonds, the Pension Benefit Guaranty Corporation decided to pour billions of dollars into speculative investments such as stocks in emerging foreign markets, real estate, and private equity funds.
The agency refused to say how much of the new investment strategy has been implemented or how the fund has fared during the downturn. The agency would only say that its fund was down 6.5 percent - and all of its stock-related investments were down 23 percent - as of last Sept. 30, the end of its fiscal year. But that was before most of the recent stock market decline and just before the investment switch was scheduled to begin in earnest.
So it is probably down 20-30% or something, according to our made-up calculations. It is insane enough that private pension fund managers would hurl money at housing developments offering $2.9 million trailers (stacked on top of each other, in tundras of dirt), but hey, competitive advantage deemed it necessary!…??…
Here’s what the Pension Benefit Guaranty Corporation guy said last year, in response to people warning him about being retarded with public pension insurance money:
However, Charles E.F. Millard, the former agency director who implemented the strategy until the Bush administration departed on Jan. 20, dismissed such concerns. Millard, a former managing director of Lehman Brothers, said flatly that “the new investment policy is not riskier than the old one.”
He said the previous strategy of relying mostly on bonds would never garner enough money to eliminate the agency’s deficit. “The prior policy virtually guaranteed that some day a multibillion-dollar bailout would be required from Congress,” Millard said.
Don’t you feel safe when our public money managers offer “double-or-nothing” as a financial strategy?
Pension insurer switched to stocks [Boston Globe]
Somehow, this is the fault of minorities
It is also important that we stop teaching librul subjects like Ethics to people who would manage other people’s money. After all, such things are Impractical.
pitchfork? hellz, with all the recent shenanigans I have created my own Wolverine type steel claws and wear them attached to my wrists with duct tape 24/7.
Analysts also believe the strategy would not have been approved if the government had foreseen the precipitous decline in the stock market.
Unless they did foresee the decline and bet the pension fund on the last-ditch hopes that it would keep stock values pumped up. Not that any failure with an MBA has tried that sort of tack before.
http://politicallyhomelesslibertarian.blogspot.com/
Saw this bit of news this morning and had to wonder what kind of morans were running things, but then realized it was the Bush administration, so there was probably some wide-stance stuff as well. Think there were commissions paid on this?
I blame ACORN!
“Funded” pension plans are for suckers, of course, but this taking the thing to a new low in terms of incompetence and/or dishonesty. Who benefited from the switch? Don’t tell me Millard did it to save taxpayers money.
libertarian: Nice posts on your blog. I would like to point out that Stossel is a liar and a corporate tool. Can’t have much freedom when a few corporate oligarghs run the economy. Freedom to starve ain’t very free.
“The prior policy virtually guaranteed that some day a multibillion-dollar bailout would be required from Congress,” Millard said.
It burns, in my brain, now. Is that supposed to happen?
Take me away to the crazy house now, please. They probably have a little more foresight there.
I only wish we would have been allowed to put our Social Security monies into the stocks. Stoopid citizens should have done what Dictator Bush wanted instead of being all thoughtful and shit.
…but imagine how TOTALLY AWESOME it would have been if we listened to the Rethuglicans and bet social security on the Wall St. roulette wheel!?!?
Well looks like I’ve spent far too many years working for the gummint in an undeniably inferior region of the country, tied by my risk-averse nature to the promise of a pension that some jackhole seems to have gambled away.
Ha! Git in the car, kids! We’re moving someplace better, and you’d better grow up to be rich cause you’ll be supporting mommy and daddy’s elderly asses.
Kind of puts that whole “privatize Social Security” idea into a different light, doesn’t it?
libertarian: Pimp your blog if you want, but at least make an immature sexual pun also.
Let’s see… Tar & Feathers sounds good right now!
Here’s the joke: companies like Bethlehem Steel and United Airlines say, “Oh boo-hoo, we’re broke because of exorbitant pension costs.” PBGC takes over the obligation and (we now see) bets it all on hedge funds. PBGC, like Fannie Mae and Freddie Mac, is a quasi-governmental outfit. So guess who’s really on the hook? The first name is “Tax” and the last name is “Payers.”
AngryBlakGuy:
Of course. But then again, you guys would also be living in the People’s Republic of the United States at this moment with most of the political establishment’s heads on pikes thanks to all the old angry crazy guys of the “greatest” TM Tom Brokow Generation going all pitchforky and torchy on them.
space stout:
That is TOTALLY my kind of crazee!
libertarian:
Poop jokes! Say “vagina” or “truck-nutz” or something. Then deftly, cleverly linky-the link.
Blogwhoreing has rules, just like insurance regulations or negotiating crack prices with your favorite tranny hooker. You don’t just leap in with the money shot all at once. This isn’t 3:00 in the morning after your prom!
I’d like to slap that smug son of a bitch across the face.
libertarian: Try again.
So anyone taking bets on how many Ponzi schemes the Bush Administration left in place to blow up after he left office?
sati demise: Isn’t the entire country a Ponzi scheme made of shit at this point? But put me down for ten more Ponzi schemes.
Privatize social security! Truck nutz for all our oldsters!
Libertarian: Yes John Stossel is a corporate tool and a liar too; Christopher Hitchens is mentally unbalanced. Andrew Sullivan’s okay.
Sati demise: My money’s on the magic 108.
Not to excuse their stupidity completely, but these guys were facing an all lose situation. The State of Washington public employees retirement system went through a similar thing. Basically you had all these public employees out here working for their defined benefit retirement packages living next door (or next neighborhood) to the Microsquishies and the Amazonians and the Starbuckmeisters who were getting stock options and what not. Meanwhile the Prez and the ‘Publicans are saying over and over how people are smart enough to have their own little investment accounts and damn the gubment for taking their money and keeping it safe for a rainy day when they could be taking that same money and turning it into BILLIONS.
So in part because it saved the state money but also because people were almost rioting for it, the state came up with a new “defined contribution” plan where you get to invest all that money yourself and live large on all the profit you make, and then the market tanked. Myself, I was shortsighted enough to refuse to switch to the new and improved plan, so the state’s gonna owe me my retirement no matter what.
My point, and I do have one, is that this sounds like what we went through here, and it was as much the result of a kind of mass societal insanity as the stupidity of some fund managers.
Millard, a former managing director of Lehman Brothers, said flatly that “the new investment policy is not riskier than the old one.”
I, for one, welcome our former Lehman Brother overlords.
Looking up at the 23% loss as of September. Well that was my loss which I didn’t think was so terrible at the time. Now those very special mutuals which were sold by our bank to us as very very safe for old people are showing a 50.23% loss on the one with all the money in it. Too bad but not the end of world because we have our Pensions. Oh right.
I can certainly live off the fat on my ass for at least a month and I’m sure there are some baseball cards in storage somewhere I can sell unless I threw them out. No problem.
Vaginal extenders, large bags of burning shit, hummer sized truck-nutz and telephonically attended meetings will not solve AMERICA’S!! problems with the telepr0mpters.Do notruin the businessses of the hard working.
I’m calling for a Citizen’s Bridage (not the Upright one, though) to gather (I didn’t say kidnap) all the Bushies who fucked us in similar manner, plus their corporate friends. Then us real Americans will pay $100 for five minutes each where we use a 36oz baseball bat to beat the fucking shit out of the fucktard of our choice.
No, it won’t save the economies, but it will make us feel better, and them feel worse. At the end of each day the beaten fucktards will be allowed to visit the emergency room of their choice, which their ass clown president so flippantly recommended to folks w/o health insurance. But they sure as fuck better be back the next day ready for their next beating. Should an accident occur & one of the participants slip into the loving hands of god, their estates will be broken up and used to fund unemployment insurance in the several states.
Charles E.F. Millard
Epic Fail?
hobospacejunkie: I’d stand in line for hours to beat on those assholes. Can we incorporate some raping too?
ALL YOUR SHIT ARE BELONG TO FUCK
http://www.harpers.org/archive/2005/04/0080499
“In the end, it is the PBGC that pays when the plans go bust. Here, however, the problem deepens considerably, because picking up the total bill for the corporate sector’s underfunding would bankrupt the PBGC itself.
Last November the PBGC reported that although it had “operated for several years with virtually no claims,” the end of the stock-market boom has given way to “a period of record-breaking claims.” As recently as 2001, the PBGC had a surplus of $8 billion, but a series of bankruptcy cases pushed it $23 billion into deficit last year, a year in which it took in only $1.5 billion in premiums. The PBGC would need more than fifteen years just to make up its current deficit, with new claims arriving all the while. The PBGC has proposed that companies follow more realistic accounting rules and pay premiums that reflect the true risks of their underfunding. It also is asking for stricter limits on the ability of companies to escape their pension debts by declaring bankruptcy.”
I think this Sorry Episode is yet but another step down the Slippery Slope to a World Currency. Wingnutz take note. Also.
hobospacejunkie: I am so there.
And don’t underestimate people - by the time you ran out of Bush Admin fucktards you’d have half a trillion dollars or so. That’d hold GM for at least four months.
hobospacejunkie:
I call Rumsfeld!
At least they found a person with the requisite experience to execute a financial 9/11 on everyone’s pension. From the late lamented Lehmans: you’re welcome America!
stopmebeforeitypeagain: I will be happy to take my pension in Ameros.
populucious: What the fuck are you even talking about? How does a wholesale shift in investment strategy, timed to coincide with a historic collapse of the market and the end of an outgoing administration have fuck all to do with your putative experiences in Portland or wherever the fuck? You are saying that the steps taken were sensible, but regrettably money was lost? IS that what you are fucking saying? Who the fuck are you again? Next time put out an alert before you post so I’ll have time to arrange for you to sit on my face.
SayItWithWookies: What are you suggesting? That’s the kind of thinking Lehman Brothers was engaging in, and of course there is no connection between a government pension fund and Lehman Broth…oh shit
Mr Blifil: Also the way Dubya wanted to save social security — pump a bunch of it into the stock market. Who knows — maybe if he had gotten his plan passed, the market wouldn’tve tanked until Obama had been in office a few months and Dubya could’ve claimed blamelenssness.
Bushed! Again!
“Switching from a heavy reliance on bonds, the Pension Benefit Guaranty Corporation decided to pour billions of dollars into speculative investments such as stocks in emerging foreign markets, real estate, and private equity funds” and it’s gone.