Now that the year-end figures are in, the silence of the pension funds on their mortgage and financial institution losses is eerie. This includes the NY pension funds:
Unanswered Questions About NY Pension Funds
New York’s Pension Funds
Morgan Bags The Bear
Remember, UBS, Merrill, Citigroup and the various banks and investment banks package mortgage paper into securities which they sell to pension funds, insurance companies, mutual funds and other institutional and retail investors. They traditionally do not hold significant inventory. Are their write downs mortgage securities or are they derivatives and other types of paper?
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The really big write offs should be in the pension funds — albeit a significant portion is hiding behind the federal credit — FHA and Ginnie Mae — and indirect federal credit — Federal Home Loan Bank Board, Freddie Mac and Fannie Mae. (For a description of these and other mortgage market players, see Who’s Who in the Housing & Mortgage Bubble.)
While there is silence about mortgage backed securities deals, there seem to be plenty of pension fund leaders under fire. The SEC is investigating oversight of the NY Pension Funds. In California, leadership at Calpers is leaving with implications of land development deals gone bad.
The silence about losses and investigations of leadership by federal enforcement is of particular concern because heaven only knows what crap is being pushed into the pension funds as the system becomes more and more aggressive in the search for liquidity.
Jim Sinclar sent out a message on May 1, as follows:
I received a very important call from a steel worker who just received a DEFICIENCY NOTICE from his pension plan. I understand that the Teamsters Union has sent out the same notice to its members.
I would like to add another item that needs to be attended to. Those of you that have the ability to withdraw from your pension plans do so immediately, hopefully at the last stated value as many of these entities are up to their nose in SIVs and multiple other forms of derivatives.