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Post by jeffolie on May 29, 2011 15:46:16 GMT -6
Public pensions bad investment (92% land loss) corrupt advisers California is huge and has huge public investments via its various pensions. Scandals over the last 3 years showed kickbacks via investment advisors, etc. Added to the raking off of kickbacks, brokers overcharged for FX trading, diverse investments in land proved to be horrible ideas that generated unbeliveable losses. Public Pensions now remain unfunded or underfunded resulting in governments being required to contribute more money to meet the horrible investment results from corrupt advisers and politically motivate investment selections. Illinois, California and others used a Madoff type assumption of an 8% investment gain per year into infinity which just this year was reduced by a mere .5% to assumption of an 7.5%. into infinity...this hide the lack of realistic payments into the pensions by governments and employees. 92% land loss investments, etc means down the road Public Pensions will run out of money to pay its retirees or taxes will skyrocket to make up the losses. ====================================================== [92% land investment loss] Arizona Lands sells for 8 percent of peak price From Bloomberg: Arizona Land Sells for 8% of Price Calpers Group Paid at Peak (ht Justin) A 10,200-acre desert site in Arizona sold for $32.5 million this week, five years after a group with investors including the California Public Employees’ Retirement System paid $400 million for the land. ... The site ... had been planned for a 42,000-home community by the Calpers- financed group when it was purchased in 2006. This was one of those crazy deals that happened right at the peak. I suppose paying under $10,000 per lot sounded good to someone in 2005, but the new owners are more realistic: “This won’t be developed in my lifetime.” said Kent Kleinman, a spokesman for the buyer ... www.calculatedriskblog.com/
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Post by waltc on May 29, 2011 16:46:32 GMT -6
Eventually we're going to see retired State workers rioting and going apeshit in the streets like their compatriots in Greece when the system unravels. Hell the teachers here in CA are already acting like that anytime there is even talk of a layoff of the miscreants.
So it's just a matter of time before they're burning cars, smashing windows and throwing rocks at riot police. Just image the outcry when their pensions go from $10,000 a month to say $4000 a month. Ohh the sheer agony...
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Post by unlawflcombatnt on May 29, 2011 23:10:53 GMT -6
Teachers gave away salary increases in exchange for pensions. Now that California's state pension managers have screwed up and invested stupidly, it's the teachers' fault--"because their pensions were too high to begin with."
I'm not buying that at all. If you give away wage increases in the present to get higher pensions in the future, you should get the pensions you were promised.
If there isn't enough money, take over the banks and confiscate all the wealth of miscreant CEO's like Lloyd Blankfein, Anthony Mozillo, Dick Fuld, Jamie Dimon and their ilk.
Let them sleep on park benches like the people they've screwed may have to do.
The Corporatists always wax poetically about how "we are obligated to pay our debtors" when it comes to rich investors. But, amazingly, they show no such conviction when it comes to workers to whom we owe money--in this case teachers.
To the Corporatists way of thinking, debts owed to non-affluent workers are just "technicalities."
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Post by waltc on May 30, 2011 0:03:42 GMT -6
State workers should have negotiated pension cuts out of the gate because that's where we are bleeding to death. Even at the best of times there was no way we'd could guarantee them a %8 return on investment for infinity.
They know that and don't care. I've never seen such a greedy pack of scumbags in my life.
And please, why in the hell does a teacher, administrator, cop or prison guard deserve a six figure retirement(at 55)check and usually on disability so they don't have to pay any state taxes on it? They don't but the Democrats promised these greedy pigs a cadillac pay and pension system they knew that they couldn't deliver on in the future should the economy tank.
As it stands the retired and soon to be retired state workers can stand a 50% reduction in payments and not feel it. Even then they have it better than most private sector workers ever will. Most of us will either die in harness or end up sick and crippled.
They get no love from me for the fact they never once stuck their necks for workers in the private sector. We were just sheep for them to shear at tax time. And today we're treated to a bunch of bleating, whining school teachers who think they are entitled to a lifetime job and don't think anything on protesting during school hours.
BTW you should have seen the fuckers out there during Prop 187, they were out there leading illegal alien students in massive protests against the Prop.
Let'em rot. Maybe their precious illegals will take care of them.
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Post by unlawflcombatnt on May 30, 2011 9:48:24 GMT -6
State workers should have negotiated pension cuts out of the gate because that's where we are bleeding to death. State workers were promised pension increases to be paid in the future, instead of larger pay raises to be paid in the present. This reduced budget expenditures at the time, allowing the state to keep taxes lower and reported budget deficits lower. In other words, it was cheaper at the time. Now the state is being asked to pay for the pensions it promised, instead of the pay raises it did not give at the time. The state is having to pay more now in exchange for paying less in the past. So now after years of working for lower salaries than might otherwise have been negotiated, teachers are being told their previously agreed-upon pensions were "too generous," and the state can't afford to pay them. Whose fault is that? It's certainly not the fault of the teachers or the teachers' union. It's the fault of state negotiators and pension managers. It was the state's negotiators and pension managers--and the state government that hired them--who "should have known better." I don't expect teachers to be financial analysts or experts. But I do expect government-hired negotiators and pension managers to have expertise on financial planning--including what a reasonable return on investment will be. It's these negotiators and managers that screwed up, not the teachers. The state should have offered higher salaries originally--instead of more generous, but unobtainable pensions. I agree with most of that. But few teachers are getting 6-figure pensions. But administrators, cops, and prison guards are another story altogether. Cops are getting workman's comp for heart attacks--because they're successfully claiming that it was the "stress" of the job that caused them. (Apparently their untreated high cholesterol and high blood pressure had nothing to do with it. ) Again, I agree that pensions that cops, prison guards, and administrators (like U of Cal regents) receive ARE ridiculous.
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Post by jeffolie on May 30, 2011 11:13:37 GMT -6
Government is political. Government run pensions are political. The investments in government run pensions resulted in grossly political under funding of public employees pensions.
Government pensions face tough outcomes. Higher Taxes by all levels of governments to fund additional funding of the underfunded government pensions in many states will not happen in 2011 and 2012 voluntarily in some governments but will happen in a few.
Governments will 'pretend and extend', 'kick the can down the road' to not raise taxes to make additional funding of California's under funded pensions. Some conservative governments such as Costa Mesa have fired 50% of their public employees and hire private contractors. Costa Mesa and others like Costa Mesa probably will have corruption, poor services and additional contractor costs from contract amendments and change orders...but they will have less future pension exposures. Costa Mesa and conservative governments tend to have secret graft, payoffs and eventually scandals of robbing the taxpayers with debts to pay high contracts and secret retirement agreements for the rulers/public officials and elected council members/Mayors, etc. There is no free lunch going the private, conservative route over civil service workers with pensions. Each side can pick out and show examples of the bad apples in private contracting or civil service workers to campaign for controlling government.
Underfunded public pension will end up in courts and this will delay outcomes as cases climb up the legal court appeals route for years.
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Post by graybeard on Jun 2, 2011 22:26:23 GMT -6
It's not that govt workers overall have been given too much; it's that the private sector has been beaten down.
GB
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