The nation’s largest public pension fund has filed suit in California state court in connection with $1 billion in losses that it says were caused by “wildly inaccurate” credit ratings from the three leading ratings agencies.
The suit from the California Public Employees Retirement System, or Calpers, a public fund known for its shareholder activism, is the latest sign of renewed scrutiny over the role that credit ratings agencies played in providing positive reports about risky securities issued during the subprime boom that have lost nearly all of their value.
The lawsuit, filed late last week in California Superior Court in San Francisco, is focused on a form of debt called structured investment vehicles, highly complex packages of securities made up of a variety of assets, including subprime mortgages. Calpers bought $1.3 billion of them in 2006; they collapsed in 2007 and 2008.
I don’t understand why Calpers is getting so worked up – the cushy retirement system provided to California state retirees under Calpers is 100% guaranteed by the taxpayers no matter what happens to their investments. The public employee BEAST, the overblown salaries, benefits and retirement system, is the top reason the State of California is broke. (That along with the other part of the BEAST – carte blanche social services delivered ad nauseum to illegals). I live in a community in California where there are many California state retirees, mostly teachers, who,, by the way typically retired in their fifties and not uncommonly have two houses, newer model cars, RVs, etc. – you get the picture. We who work in the private sector and saw our retirement, savings and investments decimated by all the fraud have to start over – no one to bail us out because we are the ones whom the BEAST feeds off of. I’m in my fifties and have to start over, Calpers recipients have billions in funds, taxpayer guaranteed AND the money to hire lawyers because they, the greedy, got bit by the greedy. Sorry, can’t shed a tear on this one. The California public employee unions are why many of us have either left California, or plan to as soon as we can unload our real estate and move on.
On a slightly different note, I wonder which of the insurance companies provided their E&O coverage.
They’ve had China since as early as the opium wars. It always had an emporer before then, last one 1911.
http://www-chaos.umd.edu/history/time_line.html
If they gave up on our country they haven’t let go. The Fed has always been their control, when we need money we go to the Fed. They may have known that would come under attack, because when bank frauds are exposed the villagers grab the pitchforks. Now when we need money we have to look to China for it with no expectations that the money won’t be used against us the people, or at least only for their purposes. The controlling hand out of range of the pitchforks.
I described a meeting that had occurred in April 1997, more than four years before that day in London. I had given a presentation to a distinguished group of U.S. pension fund leaders on the extraordinary opportunity to reengineer the U.S. federal budget. I presented our estimate that the prior year’s federal investment in the Philadelphia, Pennsylvania area had a negative return on investment.
We presented that it was possible to finance places with private equity and reengineer the government investment to a positive return and, as a result, generate significant capital gains. Hence, it was possible to use U.S. pension funds to significantly increase retirees’ retirement security by successfully investing in American communities, small business and farms — all in a manner that would reduce debt, improve skills, and create jobs.
http://solari.com/blog/?p=2058
Note reference to President of CalPERS….
The response from the pension fund investors to this analysis was quite positive until the President of the CalPERS pension fund — the largest in the country — said, “You don’t understand. It’s too late. They have given up on the country. They are moving all the money out in the fall [of 1997]. They are moving it to Asia.”
Sure enough, that fall, significant amounts of moneys started leaving the US, including illegally. Over $4 trillion went missing from the US government. No one seemed to notice. Misled into thinking we were in a boom economy by a fraudulent debt bubble engineered with force and intention from the highest levels of the financial system, Americans were engaging in an orgy of consumption that was liquidating the real financial equity we needed urgently to reposition ourselves for the times ahead.
Dumb people. They should all be fired over on the Calpers side. I bet they’re still investing with the same banks as we speak.
What they don’t understand their role in the pyramid of the sun? Fleecing the public…
Are you kidding me, is that really Calpers logo…. a sun bursting through a pyramid. The symbolism is killing me. These guy pee on every tree they can find.
On a more serious note, I wonder if this leaves an opening for media coverage of CALPERS total assets under management and the performance of those assets. I’ll have to do some digging, but isn’t CALPERs wildly overfunded?