• 04 Jan 2013 at 2:35 PM

Twinkie Economics In Spain

The good people who used to run Hostess Brands aren’t the only people who came up with the idea of raiding pensions to pay bills:

Spain has been quietly tapping the country’s richest piggy bank, the Social Security Reserve Fund, as a buyer of last resort for Spanish government bonds, raising questions about the fund’s role as guarantor of future pension payouts.

Now the scarcely noticed borrowing spree, carried out amid a prolonged economic crisis, is about to end, because there is little left to take. At least 90% of the €65 billion ($85.7 billion) fund has been invested in increasingly risky Spanish debt, according to official figures, and the government has begun withdrawing cash for emergency payments….

Spain’s continued use of those reserves to buy its own bonds appears to violate a rule set by government decree that mandates their investment only in securities “of high credit quality and a significant degree of liquidity.”

Spain Drains Fund Backing Pensions [WSJ]
Hostess Maneuver Deprived Pension [WSJ]

14 comments (hidden to protect delicate sensibilities)
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Comments (14)

  1. Posted by Quant me maybe | January 4, 2013 at 3:02 PM

    You know, if this was Matt Levine'd it would be 1 sentence and a footnote. Not over the have phase, Jon. Not even close.

  2. Posted by Guest | January 4, 2013 at 3:04 PM

    25 words and half of them links, you aren't even worthy of our insults.

  3. Posted by Guest | January 4, 2013 at 3:04 PM

    Occupy Shazar '13

  4. Posted by Bored Gourd | January 4, 2013 at 3:10 PM

    Speaking of twinkies, Jon, you remind me of Homer Simpson – especially where the "camera" zooms in on his brain only to find an empty hamster wheel, a cartoon from the '30s, etc.

  5. Posted by ILoveLamp | January 4, 2013 at 3:37 PM
  6. Posted by Guest | January 4, 2013 at 3:40 PM

    Spain: let's talk. We've been raiding "Twinkies" for years.

    — ManHunt PM

  7. Posted by Guest | January 4, 2013 at 3:45 PM

    Tickle FIGHT!!!!

    -Levine

  8. Posted by Poindexter | January 4, 2013 at 4:14 PM

    "Only 36% of Jon's written words were links," thought Matt as he pushed his spectacles back up his nose.

  9. Posted by D.B. IT Hamster | January 4, 2013 at 4:42 PM

    What can I say? DB made me an offer I couldn't refuse.

  10. Posted by Guestest | January 4, 2013 at 6:36 PM

    Ai Chihuaha!

  11. Posted by The Joker | January 4, 2013 at 7:21 PM

    Seriously unimpressed by the commentariat.

    Shazar, pay these fools no mind.

    Fools, don't pay Shazar.

    GL and good night.

  12. Posted by Successful blackmail | January 5, 2013 at 11:31 AM

    Ok, Matt, Bess – We give in.

    I guess the ad revenue from the site was just not enough eh?
    You wanted to subsidize your income? It worked. I'm ready to pay.

    So go on. Name your price.

    How much to make this guy just go away?

  13. Posted by sohbet | May 12, 2013 at 6:50 PM

    telling these little stories, here's a good idea: Have a point. It makes it so much more interesting for the listener.

  14. Posted by Arwana Red | January 16, 2014 at 12:37 PM