Bush Deficit Widens to Record as Treasuries Deter U.S. Pensions

[marmar]

from Bloomberg:



Bush Deficit Widens to Record as Treasuries Deter U.S. Pensions

By Daniel Kruger and Sandra Hernandez

March 3 (Bloomberg) -- Philadelphia's $4 billion pension deficit is causing the city's retirement-fund manager to shun Treasuries at a time when the Bush administration needs him most.

Yields on 30-year U.S. bonds that fell to a record low of 4.10 percent this year are forcing pension funds to favor equities, corporate debt and commodities in an attempt to cover unfunded liabilities and meet return objectives of about 8 percent. Even the federal government's own Pension Benefit Guaranty Corp. said on Feb. 19 that it plans to shift $15 billion to stocks from debt.

``The reality is there's not a lot we can do'' other than buy high-risk securities to close a pension shortfall in a short period, said Chris McDonough, chief investment officer of the Philadelphia Pensions Department. The sixth-largest U.S. city will probably also issue debt, he said.

Fixed-income holdings at 1,100 funds fell to 23 percent in 2006 from 27 percent in 2003, said Dev Clifford, a consultant at financial market research firm Greenwich Associates in Greenwich, Connecticut. Results of a survey covering 2007 will be released this month and likely show that funds own an even smaller percentage of bonds, he said.

Philadelphia's predicament couldn't come at a worse time for George W. Bush, whose administration forecasts a $410 billion budget deficit for this fiscal year ending Sept. 30, approaching the record of $413 billion set in 2004. The figure may eventually reach as much as $800 billion, according to Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co. in Newport Beach, California. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a6fTHIHgTnqs&refer=home

[Vincardog]

1. Bush Deficit Widens to Record as Treasuries threaten US lives

[defendandprotect]

2. Basically is this not saying that citizens funds are being privatized --- ?

I can see the problem here --- and what then leads to a multiplying of the problem --- !!!

On the other hand, what kind of influence will citizens have if we OWN a large chunk of VISA
.... or banks?


Basically, I think when we bail out any company . .. we should own it !!!