Friday, April 23, 2010

From Wall Street Fraud to California Pension deficits, are they one in the same?

I am just sitting here wondering if I am a fool? I say that because here I am yelling the sky is falling and guess what? Everybody already knew that the sky or in this case the pension fund crisis was and has been with us for quite some time. What happen was while putting the finishing touches on my posting this morning I kept catching headlines that showed many other California counties or cities were all in similar trouble facing losses blamed on poor stock market performances. San Diego County has lost 2.5 Billion dollars, the City and County here both have yet to give us an accurate figures into our losses. Now when you add CalPers and all the numbers flying there it brought me to my next question. How could all the pension funds have similar losses at the same time? There are probably more reasons than I will ever be able to educate myself on but I can see they all share the first mistake. An over optimistic investment return expectations with no foundation to gage with any accuracy there commitment to the future liability. When a Billionaire such as Warren Buffet or Van Guard mutual funds founder John Bugle both warn the expectations on return requirements are just not realistic. You would think someone would listen and get into some kind of action. What makes matters even worse is that because of the long term commitment the Pension funds cannot even lower those expectations on returns. If that were to be allowed by even one point it would increase the funding gap by 100’s of billions and worsen an already dangerous situation. Now 17 States in the last 2 years have done some kind of reform in regards to Pensions. I know I have become a name dropper but with as little time as I have spent learning and reviewing this data it has created an increase in the interest an visits to my blog. Further more by extending myself past the Corruption I have been trying to expose for almost four years now in our local community I seam to have gained a new found credibility that I truly welcome. When reviewing some of the information available at the two web links listed below I found the next possible explanation for such simulations loss in value for California I find the California Pensions appear to have been pooling money as a group by the funds. I know that might not be a surprise to the savvy investor but I am not savvy. Now if that is so can you clearly see how risky that might be? It would seam only obvious to me one would not want both a county and city exposed to the same risk creating what one called a double whammy negative impact. You might recall I have asked in the past for reference the Data containing actual shares value both beginning and ending. Dates an times of investments an all the criteria that brought the investment opportunity before the decision makers. I can now see a possible correlation with the SEC fraud suit against Goldman Sachs and the possibility of future action to be taken in California. When you look at it in that perspective it begins to show why such drastic action was taken so rapidly to bail out Wall Street. The Federal government is looking into purchase habits of CalPers and who benefited from such investments with such negative results. Now I have always said the math did not add up on Wall Street and the Mortgage crisis.I have a different posting I have been working on before I realized today they just may be the same story!

As Always if you find some value in my thoughts please share them. This and other postings can be found at

The real question is, if I can see whats coming why has the media failed us?

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