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:
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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]

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