Desrat the problem is that all these guys have been chasing yield for that reason for the last four to five years, and the marks on what's in their portfolios is in question.

This situation is going to blow up in ways you can't imagine. The actuarial reality of defined-benefit plans into a decreasing investable capital base within the nation is a major problem and this little mess with housing has only accelerated the inevitable.

I wrote a big blog posting on this a number of years ago but this has brought the "aw ****!" date forward materially. I was originally expecting that we had until 2015 or so - not any more. We're going to be lucky if we get through '10, especially with a Democrat in the WH who WILL raise taxes and choke off economic growth.

We can't fund this with debt any more. We are consuming about 22% of our GDP just to service private debt, not counting government debt service. It is absolutely unsustainable and the "reach for yield" trades are going to all blow up in these folks' faces.

That it is now starting with deficiency notices means that the timeline I had originally been working from was WAY too conservative. I didn't think we'd be seeing those for quite some time, as those don't go out until things get pretty bad.

So this week Buffet matters? And a couple a months ago I remember a rant about Buffet talking his book. Ability to do basic math? You mean Fuzzy math don't you? Yep, I am blind. Blind to the fact the market has continued to grind from left to right for the last month and a half! Blind to the fact my neighbors care about themselves. Blind to the fact unemployment is most likely already near 20%. It does not count all the illegal immigrants who are unemployed at the current time. Why do you think the dollar is **** & closing the borders has become an issue? A hint, no motive when the exchange rate is not worth it to stay here. Maybe your crash has happened already? Could you be blind to that? Or is it fuzzy math to factor the drop in the market & the drop in the buying power of the dollar. Sorry to***** on your parade. I know I am a guest but I have already learned my lesson by being obsessed about being right. It causes tunnel vision. It causes the inability to consider alternatives to what must be right. Or does it? As long as you know what mine is mine & what's yours is mine how can you be wrong?

Here is a Link regarding Class Act Lawsuits for misleading statements in Auction Rate Securities. There is one regarding Goldman Sachs on April 18, 2008

Also Wells Fargo and The Blackstone Group. More recent filings.

http://securities.stanford.edu/index.htm....

Buffett IS talking his book.

So what?

BTW, Buffett SOLD long-term PUTs. You remember that right?

He's also wrong, but he'll be dead before he has to pay, and he knows that.

Whatever B4. You weren't in the market in 2000-03 were you? Never observed a market like this, right?

Ever been in a Hurricane? The eye is nice and calm.

Go on - go outside. A good long way from the safety of your door.

The math is indisputable on this one B4. I wish it wasn't - but it is.

Yep Buffet was out of the dollar years ago.

You ever been in a Back Draft in a structure fire? It gets real hot, the smoke drops to the ground & you cant see a thing just before the flash. You open the line & you begin to burn & just when you think you can't stand it any more it lifts leaving charred remains.

In retro spec I was around many wealthy people in 2000-03. The day of the "crash" I walked in a guys office to find him with his head on the desk. & today is 2008. Those people have a lot more money today than they did back then.

Me, I am just Joe Six.

Each morning the lights come on, the water runs & I do the three S's.

Put it in perspective. You have to take a step back when the Bear of all Bears actually complains about the no uptick rule. Come on, "It is too easy to take the short off & put it back on", that sounds an awful lot like rationalizing ones thesis.

The fact's are what they are but it does not dictate the actions of the market. The Pig Men do.

By the way, I am short oil.

And the math is not really decipherable either. You are trying to base it upon something that does not exist. Money.

When we run low we will take it from those who have it. Basic animal behavior. Learned it on Animal Planet.

I have a real world example of a pension going straight down the toilet. My father worked for United Airlines for 35 years and retired in 2001. United obviously went through banruptcy and part of that "restructuring" entailed United dumping their pension on the PBGC. My father's pension was initially cut by 40%. Last week my dad received a letter from the PBGC that his monthly check will be cut by 60% or so. The reason for this is that my parent's chose to continue payments if my father died so my mother would not be without any income. The nuts and bolts of this scenario is that before the bankruptcy preceedings my father's pension was scheduled to be $4400/month, in 8 months it will be $1000.

My father is one of thousands who have been affected by this mess. Mr. Denninger is correct, if you are a pensioner or contributing to one find out it's status so you won't get screwed.

Vyenter, I know.

I know people who got raped by that and that was doing reasonable economic times.

This is anything but.

Go read the latest ticker I just put up.

It should all snap into focus.

We'll see if the leadership of this generation of union members have what it takes. I've been in the middle of industrial union/corporate work environment for 20 years. These deficiencies are the type of issue that would cause serious violence, not funny look at that type violence, a mere 20 years ago. 10 years ago, maybe. This is a sucker punch to the gut, on top of rising food and gas prices. You don't want to be trying to take fluffy to get her nails clipped in your Lexus if this keeps playing out.

I don't think they do.

I don't advocate violence.

I do advocate making the fraudsters pay, and the best way to do that is to stop working.

It sounds like "destroy Rome to save it" but in fact its more subtle than that. See, the entire Wall Street Debt Machine requires food, and if you effectively blockade the ports you'll get paid - immediately - because the alternative is that the Wall Street Boyz are forced out into the streets, and they don't want that.

They'll pay you.

Its unfortunate that nobody else has the nutz to get out there and make this happen for themselves (e.g. non-union pensioners) but the facts are what they are.

Hoop

Then you know that the card carrying members in Detroit has dwindled to less than a third of what they were 10 years ago.

"I do advocate making the fraudsters pay, and the best way to do that is to stop working."

But you haven't even found out exactly if there is any loss, or in fact if the rumor is true the loss comes from mortgages, or simply bad investment, or good investment but bad asset-liability management. Calling a strike like this is real crazy serious.

In fact I talked to a guy who used to work with GSEs buying their debt and agy mortgages that it's pretty much freddie fannie securities.

CDO can and do infect funds, but funds who is chartered to invest in CDO usually invest heavily and the market centers around them. So although the loss is more than total (>100% loss), it's on those guys and their guarantors. Mortgage CDO is probably $200B total and the unknown is just with IBs like GS - to the extent it's serious it will show up in earnings at some point.

If pension funds have CDOs usually the dealer "settled" with them, judging from the trend since FL pension plan had issues with CDOs. Wholesale infection of mutual funds are unlikely, because you can see anecdotally from their prospectus like 5% in "cash equivalent", etc.

Uh, Mtg, no.

Florida is suing over those losses in their pension funds. Announced today.

Those losses are real and were realized.

Yep, the problem is that there was just enough of a fall back position in employment opportunities to keep people happy or at least preoccupied. When people get pushed to their limit to FEED, CLOTHE, and SHELTER their children, then they will get off their ass. That is time proven. I don't know if we're quite there yet, but from what I see, we're getting close. Then you'll see memberships start to swell. It's getting crowded at the lower end of the economic spectrum. 20 years ago tires would have been slashed, then maybe a can of acid through the front window of your house. How fortunate your own children weren't in the way. If that doesn't work, somebody gets a taste of asphalt. The current leadership is too far removed from the efforts it took to achieve what gains the unions achieved. Nevertheless, these tactics can be re-invented. What sucks is that there can't ever be some kind of lasting balance, of course the pigmen don't want that.

Violence doesn't work because the backlash is worse than the event. Always.

There are better ways. The best way to hurt the fraudsters is in their wallets.

Quote:

20 years ago tires would have been slashed, then maybe a can of acid through the front window of your house. How fortunate your own children weren't in the way. If that doesn't work, somebody gets a taste of asphalt.

Jeez, hoopdog, you bring me back to the hallowed infant times of the internet...when I got death threats regularly from union members on various listservs.

All I'm saying is that that type of violence is on the horizon. I don't care for it myself. There hasn't been a seriously nasty strike in this country in some time, but that could be about to change. The French didn't storm the Bastille because they were bored.

I have no doubt if it's CDO the losses are very real and will be realized more than the capital behind it by several times. But - let me remind you that the CDO that blew up are made off the single-A and triple-B subprime bonds, which collectively are about 5-10% of the total subprime mortgage size. That's like $200B at most. And I have a good handle where more than half are located - not union funds. Also these funds money equivalent should not be more than 10-20% at anytime or long term they don't expect to pay liability stream.

These pension plans issues are most likely real bad asset-liability management, very typical of these things as you can see what happened to GM and Ford. Sometimes they can't even match duration on the fixed income side, that's how bad it is.

These guys were all reaching for yield in some fashion Mtg. Its the demographic problem, its real and its major.

The sad part of it is that like you said most of them don't "get it" but I'm willing to bet a huge portion of these folks bought something that was "safe as cash" and have gotten or will get a surprise, and not of the good kind.

I know the losses in the Florida "cash park" fund were extraordinary; I have to believe the pension fund here is no better off.

These guys really got ****ed, and they were allegedly pretty smart.

The scammers, however, were smarter.

Its a fine-print masterpiece, lousy criminal pigs....

whoever wrote it was paid big money....whoever bought it was theieved of even more money!

Violence doesn't work because the backlash is worse than the event. Always.???

Civil Rights Movement???

Rodney King???

France???

The sheltered world of Nice Ville. I never took you for a silver spooned type.

The Rodney King violence did something constructive? You mean burning down buildings and shooting people that had nothing to do with the offense was "constructive"?

Civil Rights was not about violence. Rosa Parks refused to sit in the back of the bus, but she didn't shoot the bus driver, did she?

A shutdown of commerce at the ports is non-violent, but it sure as **** would get the message across. In spades.

You tell that to my family who was shot at during civil rights movement. The hell it was not violent. & I never said it is good but it does/did get bleeding heart cowards to back down. They are repeatedly rewarded for those actions.

Long SWHC

Good Night!

I want constructive outcomes, not destructive ones.

Violence doesn't get there. Indeed, I pray that we never are forced as a nation to exercise the Second Amendment for its original purpose.

That would suck.

B4, saying this as a gunowner, and therefore perhaps as an ultimate hypocrit:

Violence begets violence. Even if it's only in thoughts, and emotions. Down thru the generations, over and over and over again. Each individual has the power to stop their part of the cycle.

Good night :)

FWIW Fidgit, if you were getting those death threats back then, they meant it. Lucky you.