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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (85334)	8/19/2007 10:19:02 PM
From: Joe Stocks	Read Replies (1) \| Respond to of 110194

Notice that GM is on that list. With $300 bil in bonds outstanding they have to be - they are too big to fail. <VBG> Interesting thing happened several years ago. GM's debt was very much in question. GM's pension deficit was reported as huge. Something like $20 bil as I recall. AS I recall GM took on a big loan of additional debt. They put it in their pension fund. The pension fund invested most of it in one stock. Now why would a money manager not diversify more? Anyway, that one stock was GM. In the next 6 months GM's stock doubled or more. The pension fund sold the stock right at it's top. Presto! Pension deficit not nearly as bad anymore - Fears of the bonds collapsing are gone. The CRMPG did their job - counterparty risk management at it's best.