Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: russwinter who wrote (13444)	10/14/2004 10:54:41 AM
From: mishedlo	of 116555

Since GM funded its pension plan with GM stock, it appears that pension plan just might be in even bigger trouble. A debt downgrade to junk and all kinds of bond funds will be forced to sell their GM bonds. Obviously both the downgrade and the forced selling will put huge pressure on GM. This was a moral hazard of GM funding its plan with GM's stock. If that stock plunges GM's pension plan will be grossly underfunded. Well I mean even more grossly underfunded. IMO GM can easily have negative returns in pension plan soon. What were those assumptions anyway? 9%? If they wanted those returns why didnt they just buy leap puts? Mish

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