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Strategies & Market Trends : The coming US dollar crisis
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To: ggersh who wrote (19318)3/30/2009 10:47:29 PM
From: RockyBalboa1 Recommendation  Read Replies (3) of 71455
 
Oh, its the market stupid says the Lehmanite:
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."

(and Lehman stock, for example is not riskier than - U.S. bonds. That true?)

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.

...

Now, they warn about a "perfect storm" scenario in which the agency's fund plummets in value just as more companies go into bankruptcy and pass their pension responsibilities onto the insurance fund. Many analysts say it is inevitable that the agency will face significantly increased liabilities in coming months.

Well ok then let us piss it away in record time. And we don´t need to bother anymore.

But Bodie, the BU professor who advised the agency, questioned why a government entity that is supposed to be insuring pension funds should be investing in stocks and real estate at all. Bodie once likened the agency's strategy to a company that insures against hurricane damage and then invests the premiums in beachfront property.

Isn´t it great? There´s A.I.G written all over it!
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