[sarcasm]

``This legislation will weaken the pension insurance system,'' says Bodie, referring to the U.S. law, which he says may require a PBGC rescue similar to the $200 billion U.S. savings and loan bailout in the early 1980s.

[neutrino]

Thanks for the paint, Sarcasm! Pension insurance, though, will never be able to stem the fundamental crisis behind the funding gap. Benefits can only be paid when combined investment returns and contributions cover future payments.

As the article points out, new accounting rules require that pension fund obligations be reflected in corporate earnings statements. Over the past century there has never been a period when price-earnings ratios of the overall market do not revert to the mean.

This implies that we will probably see a decline to an average price-earnings ratio of ten over the next decade. If we're lucky, this will occur slowly and will reflect a time of anemic stockmarket returns. If were not lucky, the reversion will be rapid and will result in a severe and painful recession.

The pension insurance system will be used to bail out corporations that made wildly optimistic assumptions -assumptions that inflated earnings in the short term - and $200 billion will hardly be a down payment.

It is interesting the Corporations demand unfettered capitalism when times are good, but howl for taxpayer assistance when their own extravagant promises cause them discomfort.

Corporate socialism at its finest.