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Laid-off Beneficial employees weigh options

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And now his great-grandson. . . | 8:17 a.m. June 17, 2009
. . . Kent Cannon, presides over its dissolution. It's yet another sad story in the business world we are now confronted with. In relative terms their loss was "only" $600 million, but the structured loan vehicles that were conjured up out of thin air as highly-rated investments have led to this failure.

In fairness to Beneficial's management, these "CDOs" (collateralized debt obligations) came to their attention bearing the stamp of approval of traditionally highly respected rating agencies like Moodys and S&P, who declared they were "AAA" risks.

Unfortunately, the subprime mortgage bubble proved disastrous when it was discovered that the highly respected rating agencies were little more than hinge-heeled hookers selling their seals of approval for a mess of pottage.

Building back confidence in the market is going to prove to be a formidable task so that companies like Beneficial and others can survive in their future selections of what to put in their investment portfolios.

Having worked in the credit markets for many years, I can attest to the disastrous effects -- right now nobody trusts anybody. When America caught a cold on CDO, markets worldwide were put on life support.

The employees are the innocent victims.
Looking for someone to blame | 8:40 a.m. June 17, 2009
Senator Robert Bennett was NPR and other media outlets in the fall last year, advocating passionately for swift passage of the $700 billion TARP legislation. He predicted very serious economic consequences unless Congress approved the $700 billion forthwith. How serious? Bennett suggested that the Dow would fall by twenty to thirty percent by Monday if the bailout were not passed by then, adding: If we say, no, we want to take the time to do this right, we want to put this provision in, and that provision in, and lets debate it for another week, and thus send the signal that were not serious, I think the markets are going to fall off the cliff.

Bennett, incidentally, serves on the Senate Banking Committee and its easy to see why he was in such a hurry. The top industries that have funded his political career are (according to Opensecrets.org) Securities & Investment ($484,236), Commercial Banks ($377,074) and Insurance ($284,855).

Bennetts six leading individual PAC donors are, in order, Morgan Stanley, JPMorgan Chase & Co, Citigroup, Fannie Mae, Bank of America, and the American Bankers Association.

Bennett's the poster child for what happened. Blame him.
Anonymous | 9:54 a.m. June 17, 2009
No, if you want to blame someone, blame the people at BenLife who wanted to get into mortgage backed securities.
Comments continue below
Anonymous | 9:55 a.m. June 17, 2009
I think the author of this article should look up the word ironically. I didn't see any example of why the guy finding out on his wedding anniversary was ironic.
Anonymous | 10:37 a.m. June 17, 2009
We can all blame ourselves for many of these problems and our big helper GREED.
I don't have to work, I still have a good income, my house is paid for but my life will never be the same. I don't blame anyone one person for what has happened we all participated in this problem.
Troubled | 12:01 p.m. June 17, 2009
We can blame the current president and his regime!
Anonymous | 1:53 p.m. June 17, 2009
How can one say that monies contributed by Deseret Management - to bail out Beneficial lossses - are any less important than those contributed from tithing monies. In the end, are they not all the same resource- Church money.
Shaun N | 2:15 p.m. June 17, 2009
The first poster hit the nail on the head. It is hard to fault a company for buying Triple A rated bonds. The rating agencies were putting their stamp of approval on financial derivates that they had no clue about. There risk models did not account for a nationwide real estate collapse. They figured if the CDO was collaterized with different property types in different parts of the country that it was a relatively safe investment. It is sad to see a great company like Beneficial go down the people there are top notch.
R. Thomas | 2:38 p.m. June 17, 2009
I feel sorry for all the employees who are losing their jobs. My prayers go out to them and their families. It's sad to see a company like Beneficial go down the drain. It goes to show that none of us can take anything for granted.
Anonymous | 4:43 p.m. June 17, 2009
Hey troubled you can't blame the new president! This problem that the country is in is due to a bad and greedy financial system that has been put in this country for years before the new president came to power and even Bush.
If you are going to blame it on the new president how about you provide proof first before writing something down.
Bennett richly deserves blame | 4:44 p.m. June 17, 2009
And I chose "richly" purposefully -- when you sit in a ranking position of leadership on the Senate Banking Committee, tasked with protecting the public from the predators, say nothing, do nothing and go along with the Democrat majority behind Chris Dodd's leadership, while accepting campaign donations from the very institutions you are charged with regulating, then go on national television cable news outlets and proclaim the instantaneous passage of what amounts to a massive bailout for your benefactors, then come back to your home state to ask the voters to return you to the Senate when you are 77 years old, and you start running an ad early in the election cycle with Mitt Romney's endorsement of you as a "conservative," then it goes beyond blame. Senator Bennett, your candidacy will forever be linked to the demise of a great company, Beneficial Life, and their employees. Not only did you not protect them, you failed in your public trust as the watchman for the corruption that occurred and was spurred on by the advocates on your committee in the Senate and in the House, who kept asserting the great public service of Freddie and Fannie. Blame? Sure!!
Andrew | 3:13 p.m. June 18, 2009
Finally! People who purchase Life Insurance and other Financial Products will start to look at their chosen company's actual performance and strength rather than if their church owns a stake in it.
Working in the Life Insurance Industry in the Rocky Mountains, I have been told numerous times that a client would choose to work with Beneficial because of the Church's relationship. Agents for Beneficial often leveraged this relationship in a very dishonest manner - some going so far as to say that paying premiums on a Beneficial Policy was basically like paying a tithe to the Church. While I am sorry to see the impact this closure will have on many good and honest people, I am glad to see an end to this rediculous sales practice.
And don't blame the ratings agencies! Just because a bond is rated AAA, doesn't mean you shouldn't do your own research into the bond payer. Many companies avoided most of the subprime mess by choosing not to invest in bonds paid by people who did not have a realistic shot at paying them off, despite their AAA rating. It wasn't rocket science.
Arlington | 4:23 p.m. July 21, 2009
Wouldn't it make sense to find a highly rated company so you don't have to worry about these things. I have been with Northwestern Mutual for years and there is no comparison by far!

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People leave the Beneficial Financial Group building in Salt Lake City on Tuesday, the day 150 layoffs were announced.

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