Friday, April 03, 2009
PGBC had invested too much in stocks before Crash of 2008: what if GM goes under? Another bailout?
“The Street” has a major story (“Today’s Outrage” April 3) claiming that the Pension Benefit Guaranty Corporation (PGBC) had shifted more of its investments into the stock market ahead of last fall’s market meltdown.
Now there are serious questions as to whether the PGBC would be solvent if GM and Chrysler went into (Chapter 11) bankruptcy, and the PGBC had to pick up the union and white collar pensions of retirees.
The PGBC is supposed to be self-financed by premiums charged to employers (somewhat analogous to premiums for unemployment insurance) but in the end, guess what, it looks like we face a Congressional debate on – guess what – another bailout.
The link for the story is here.