CONservative pension strategy

The Bush McCain-Palin Pension Plan:

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.

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.

No statistics on the fund’s subsequent performance were released. [link]

We’re lucky the Wall Street ‘free market’ busted just prior to moving our entire government to New York.

The last suckers:
“…the main takeaway here is the roughly $500 billion in underfunded private pension plans… in this financial Armageddon, there isn’t a model that hasn’t been laid to waste.”

A vast number, maybe even a majority of U.S. private equity firms, owe their existence to CalPERS. Exxon Mobil filed a lawsuit against Northern Trust alleging a breach of fiduciary responsibility, investing funds “recklessly and imprudently, by acting disloyally and causing massive losses.” This type of lawsuit may be a seachange in terms of corporate pension funds, who are on the hook for massive losses, turning their anger toward Wall Street.