[razorback-bert]

Companies must pour billions into retiree plans after betting on stocks
 
Amid the wreckage of the worst bear market in at least three decades, hemorrhaging corporate pension plans are rapidly becoming Wall Street's biggest new worry. They have lost hundreds of billions of dollars, and now companies face the end of their long-running holiday from writing checks to the plans. Over the next 18 months or so, companies ranging from General Motors to United Technologies face having to pump billions into their plans to comply with federal laws to protect pensioners.
 
Even if plan investments somehow manage to eke out 5% returns this year, companies in Standard & Poor's 500-stock index will be $40 billion short of their projected pension obligations, according to Morgan Stanley estimates. If plans lose 5%, they'll be $150 billion in the hole. Either way, it is a world away from 1999 when the plans had a $292 billion surplus and a 30% cushion over their commitments. "The squeeze on U.S. pension funds has the potential to be the defining U.S. financial crisis of the 2000s, like the savings and loan squeeze of the 1980s," says Bob Prince, director of research and trading at money manager Bridgewater Associates.

[junta]

As far as financial disasters go my bet is still on the GSEs and what they have done. I read somewhere that one of the smaller government boondoggles (not FNM or FRE) has a 10% non-performing rate and all this while the economy is still growing and credit card apps are still being sent out to anyone with a pulse. Wait till a contraction of both happens in ernest and all those 50% gross income mortgages become junk.