Comments on: Pensions vs Big Banks – fight to the death

By: Rob

Rob — Thu, 14 Oct 2010 19:38:27 +0000

The law firms must be rubbing their hands together and making Kerching noises - but then they always are

http://blogs.reuters.com/felix-salmon/2010/10/13/the-enormous-mortgage-bond-scandal/

By: Benek99

Benek99 — Thu, 14 Oct 2010 15:03:23 +0000

On the money again, Golem. This story has now surfaced in the UK press: http://www.guardian.co.uk/business/2010/oct/14/wells-fargo-mortgage-foreclosure-robo-signer

Of course the article is focussing on the wrong point, the practice of hiring inexperienced labour to sign off mortgages, rather than the legality of the entire process and the possibility of fraud. But (as usual), the below-the-line posters are refocussing on the real issue or asking the right questions. Great work, keep it up!

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Wed, 13 Oct 2010 18:36:13 +0000

thelonggrass,

Pension funds are relying on the securities and on bonds. That's undoubtedly true. But if those bonds are based on assets that are in reality depreciating then the last thing the fund really wants is to hang on to them. What would be better for them, is to seek to get the full or at least some of the amount they paid in the first place BACK. They can do this because the banks have more assets and worth than just the mortgages.

The pension fund should get in and carve out as much flesh from the bank as it can as quickly as it can.

If it waits other may get there first. Or the banks may survive unscathed and the pension fund will keep the securities which it bought which are now depreciating further.

This is their chance to get out.

I'm not saying this is the globally best solution, though it may be, but it is certainly the only chance for a great many, perhaps most pension funds who are otherwise fatally underfunded.

As you say, pension fund collapses are the last stage in the financial collapse.

By: Tam

Tam — Wed, 13 Oct 2010 17:14:59 +0000

Not sure about this. Regardless of what various groupthink commentators. (probably individuals with expensive pension plans in place, but that's beside the point) were saying about saving pension funds being the most important reason, I'd say that keeping the ATMs working was the main reason the banks had to be 'saved'. When people can't get hold of their money, things can turn nasty surprisingly quickly

By: thelonggrass

thelonggrass — Wed, 13 Oct 2010 16:24:18 +0000

The problem is that the pension funds are relying on the bonds/securities that they bought from the banks to pay future pensions. If the debts turn worthless, ripping apart the banks won't fill the gap. The destruction of pension fund value is the final part of the tsunami financially, and possibly the first part of the social chaos to follow.

By: Golem XIV - Thoughts

Golem XIV - Thoughts — Wed, 13 Oct 2010 15:03:20 +0000

"many facing re-election" Democracy at work. Outstanding! As the Americans love to say.

By: Testa

Testa — Wed, 13 Oct 2010 14:18:53 +0000

From reuters.

"Later on Wednesday about 40 state attorneys general, many facing re-election, are expected to announce a joint investigation into the allegations that some banks used shoddy paperwork to kick struggling borrowers out of their homes."

http://www.reuters.com/article/idUSTRE69B4UY20101013