Bailouts Start: Union Pensions Get $36 BILLION as BIS Warns of Potential Catastrophic Financial Collapse in 2023 Comments by Brian Shilhavy, Editor, Health Impact News
After betraying the U.S. Railroad Unions last week by forcing them into a labor agreement they did not want, the Biden Administration announced $36 BILLION bailout of pensions with 350,000 union members, including many truck drivers.
President Joe Biden Thursday announced a $36 billion bail-out of financially troubled pension plans covering some 350,000 union members, including many truck drivers.
The funds are part of $80 billion for multi-employer pension funds included in the American Rescue Plan, which was approved in 2021 to help stave off the fiscal impact of the COVID-19 pandemic. Some of those funds will be used to shore up the Teamsters’ Central States Pension Fund, which includes employees and retires in more than 1,000 companies.
“… today, my administration is announcing that $36 billion of that money was going to — going to prevent the drastic cuts to workers’ hard-earned pension benefits — cuts that had been scheduled to occur within the next few years,” said Biden during a ceremony Thursday. “That’s not going to happen. The cuts are not going to occur.”
Biden said union workers and retirees were facing cuts of up to 60% of their benefits, starting in the next few years. That, said Biden, means some folks would have lost as much as $10,000 each year of their retirement.
“Instead,” said Biden. “Thanks to today’s announcement, tens of thousands of union retirees and workers in states like Ohio, Michigan, Texas, Minnesota, Wisconsin, Missouri can go to bed tonight knowing their pension they worked so damn hard for is going to be there for them when they need it.”
The announcement comes just days after some unions criticized the self-proclaimed pro-union president for signing legislation that imposed a contract settlement on the nation’s freight railroad workers. (Source.)
I wonder how many union members will actually sleep soundly after this promise by President Biden? Will that money actually be there when they retire, and if so, what will its value be?
The big financial news of the past week came out of Switzerland and the Bank for International Settlements (BIS) which reported that there are $80 trillion of hidden, off-balance sheet dollar debt in FX swaps (derivatives).
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Pension funds and other “non-bank” financial firms have more than $80 trillion of hidden, off-balance sheet dollar debt in FX swaps, the Bank for International Settlements (BIS) said.
The BIS, dubbed the central bank to the world’s central banks, also said in its latest quarterly report that 2022’s market upheaval had largely been navigated without major issues.
Its main warning concerned what it described as the FX swap debt “blind spot” that risked leaving policymakers in a “fog.”
The $80 trillion-plus “hidden” debt estimate exceeds the stocks of dollar Treasury bills, repo, and commercial paper combined, the BIS said. It has grown from just over $55 trillion a decade ago, while the churn of FX swap deals was almost $5 trillion a day in April, two thirds of daily global FX turnover.
For both non-U.S. banks and non-U.S. “non-banks” such as pension funds, dollar obligations from FX swaps are now double their on-balance sheet dollar debt, it estimated.
“The missing dollar debt from FX swaps/forwards and currency swaps is huge,” the Switzerland-based institution said, adding the lack of direct information about the scale and location of the problems was the key issue. (Source.)
Shortly after this report was issued, analysts at BlackRock stated that we should “get ready for a recession unlike any other,” and that Central Banks will not be able to bail out everyone.
