STOP THIS NOW!

[Joanne98]

February 10, 2009
A Proposal to Shore Up Banks With Pension Funds
By MARY WILLIAMS WALSH
Financial institutions in the United States probably need hundreds of billions of dollars in additional assistance, and one congressman wants to harness state and local pension funds to help them.

Rather than rely more heavily on the Treasury, which has already put $350 billion in the nation’s banks, Representative Gary L. Ackerman sees an opportunity in the trillions of dollars in public pension funds. Most of the funds suffered giant losses last year in the market turmoil. But they do not need all of their assets immediately, because their time horizon for paying benefits is decades long.

Mr. Ackerman, Democrat of New York, is sponsoring legislation that would allow public pension funds to pool some of their money and use it to create a sole-purpose entity that would buy $50 billion to $250 billion worth of preferred stock in America’s banks. That would strengthen the banks’ balance sheets and, Mr. Ackerman hopes, get them lending again.

“Some of us are getting tired of writing checks with public money” and seeing no results, Mr. Ackerman said. He said pension fund officials who had heard about the measure so far were eager to participate.

http://www.nytimes.com/2009/02/10/business/economy/10pension.html?_r=4&scp=1&sq=proposal%20to%20shore%20up%20banks&st=cse

OH! So we're going to write checks with pension money to get no results either? NOT!

[Uben]

1. Oh, wouldn't they love to get their hands on that money!

It would be gone in a heartbeat! They seem to think we trust banks now......do you? I keep my money in a local credit union. It's gonna take some time before I ever trust a bank again.

[NV Whino]

2. Good Gawd!

[ixion]

3. my, my, my... notice how our government just can't slather enough money on the banking system

It's just so cute how generous they are with our money, until, of course, WE need to use OUR money. Then they get all pissy and give everything to the banks, who in turn throw big parties and give bonuses while our economy careens off a cliff.

This just sucks. :argh:

[FieldsBlank]

4. the government ...

will seek to spend any funds they can lay their hands on
didn't there used to be a surplus in social security?

if they can weasel their way into pension funds
401K's would be the next target

[dixiegrrrrl]

5. What pension funds? They are already gone.

Cal. Calipers...invested with Madeoff.

Pension funds have been used and ripped off by the states, and some companies, for years.

Wehre's the GM pension now?

Actually, 2 years ago Paulson an Bernanke floated the idea of banks being able to use retirement money to play with.

So this is another Shock Doctrine moment.

[marketcrazy1]

6. watch your money

the government has a secret cash stash, about 2.5 trillion dollars socked away for a rainy day. it`s your 401K!!...... oh look! it`s pouring!!!!!!!

[ozymandius]

8. Our Republican pig of a Governor in Georgia wants to raid the

teacher retirement system for venture capital investment. This fund has taken a hit but remains very healthy. We are lucky in that our teacher lobby is very effective in keeping these scoundrels away from the retirement accounts.

[ozymandius]

7. What a spectacularly stupid idea.

Prop the banks up. They start issuing credit. The rules by which they operate stay the same. Abuse, neglect, ballooning salaries for the execs continue unabated. Yeah, sure - this will end well.

The investment question is this: why should one buy stock in a bank when the bank has negative equity?

The moral question is this: why should relatively safe pension funds be used for direct venture capital investment?

The common sense question is this: when checks to banks written with public money have little or no effect - then why would checks written with pension money be an different?