Big news in pensions today: Silverdex, a major US-based conglomerate with fingers in just about every economic pie, from mining to solar cells, turns out to have been stuffing its main pension fund full of . . . it's own corporate bonds.  For decades.  It's still not clear how this happened without anyone noticing, but essentially the pensions that current workers have been counting on for thirty years turn out to be backed by nothing more solid than the company's promise to pay.  Amazingly, when confronted by reporters about this behavior, a representative declared that this was a big fuss over nothing.

"It is perfectly legal to invest a pension fund in corporate bonds.  That is what we have done.  These bonds are backed by the full faith and credit of Silverdex, and it is defamatory to suggest that they will not be paid."  

Silverdex is still pretty profitable after all these years, but "defamatory" seems absurd; obviously, it's quite conceivable that the firm will run out of money, and the workers will be left with no jobs, no pensions, and no retirement.  Though no charges have yet been filed, a congressional hearing is scheduled for next week, and observers expect high-level resignations from the Pension Benefit Guaranty Corp, which regulates pensions, to follow.  

I don't really know how to say this, but sorry, I lied a little bit.  I'm not talking about a private company at all, because of course, if a private company did this, it would be completely and totally illegal.  Regulators would have shut this down decades ago and probably at least a few lower-level executives would have spent a little time in the pokey.  Instead this is, of course, a description of how the United States Social Security "trust fund" works.

(Emphasis mine.) As usual, if a corporation did what the Federal government does, people would be howling for blood. But it's the government, so somehow it's OK. Via Assets in Name Only - The Daily Beast.