The Illinois Teacher's Pension Issues More Answers to Its Media Critics, I Add in my 22 cents (2 cents levered 11x)

For those who have followed the Tyler Durden vs. Illinois Teacher’s
Retirement Association (teacher’s pension fund) back and forth on
whether they are in a death spiral or not (see The Illinois Pension System Seems Touchy Regarding Blog Statements – Do They Have A Right To Be?), there has been a new development. A concerned citizen (most likely a TRA employee) forwarded a link to the TRA’s response
to the negative press they have been getting. I would like to take the
time to parse through the various responses and offer my feedback:

Sale of TRS Assets

Claim: The Chicago Tribune, the Daily Herald in suburban Chicago and Pensions & Investments
magazine are reporting that TRS could sell a much as $3 billion in
assets in order to fulfill pension obligations. The story also has
aired on WBBM-AM in Chicago, a main news-talk radio station.

Truth: TRS
is selling assets in order to meet its obligations to retired
teachers and benefit recipients. But the sale of assets is not an
immediate concern for retired teachers and is not an indication that
the System is going bankrupt. Retired teachers will continue to get
their checks and the checks will be good.

TRS has $33 billion in assets, so selling $3 billion is about 10
percent of all TRS assets. And during fiscal year 2010 which ended in
June, preliminary reports indicate that the TRS portfolio generated
more than $4 billion in investment income. TRS expects to pay out $4.1
billion in pensions and benefits during fiscal year 2011, so there is
enough money on hand to cover all obligations.

I am going to play devil’s advocate here. The fund generated “more
than $4 billion of income”, but there are no indications of net capital
losses or gains – realized or unrealized. If capital losses came close
to or exceeded income, then asset sales are not only necessary but
contribute to a materially smaller asset base upon which to draw income
from in future periods, incentivizing the fund and its managers to take
greater risk to fill the void. As illustrated in “When It Comes to Wall Street Real Estate Funds, the House Always Wins – Even When Investors Get Slaughtered”
certain fund structures have perverse incentives to take undue risk due
to implicit call options underwritten by the limited partners, in this
case TRS. I have reached out to several funds who have had their head
handed to them in terms of losses and none have them showed any desire
for guidance. The link above actually includes a downloadable model that
illustrates exactly how much risk is being offloaded to the limited
partner to subsidize general partner compensation. Thus, while selling these assets may not be an “immediate concern for retired teachers“,
it damn sure is a concern for anybody looking to get paid income off of
the asset base left over this time next year. Will I be hearing from
TRS for asset management or consulting assistance? I somehow doubt so.

TRS
is selling assets only because the state does not have the money on
hand to make its annual, required contribution to TRS and five other
state pension systems. The Comptroller’s Office is authorized to
contribute $2.35 billion to TRS during fiscal year 2011, but because of
the state’s budget problems, the Comptroller doesn’t have the money
to make its normal monthly payment to the System.

For every month that we do not receive the state payment, TRS plans
to sell approximately $250 million per month, for a potential total of
$3 billion for the entire fiscal year.

This makes plenty of sense. Of course, the state’s funding problem is
not going to end in the very near future, so this may very well be a
recurring theme for some time. If so, then asset sales may become more
the norm than the exception, at least in the near term. My question is,
and unless I have my timing off or I don’t understand the explanation
above, if the TRS has “more than $4 billion of income” and $4.1 of
obligations, then why are they selling $3.3 billion of assets in lieu of
$10 million? This also raises another question that I will expand upon
further down in this missive, and that is…. “more than $4 billion” is an
awful rich income stream off of a $33 billion base considering the
current ZIRP environment. It equates to somewhere around 12%, with 10
year treasuries yielding around 2.6%. Soooooo…. Exactly what the hell
are these guys doing to get roughly 5x the (not so) risk free rate with
qualified pension monies which are supposed to be conservative in
nature??? Remember, this return was classified as income, not total
returns or gains. We have heard some rumors, which we believe have been
addressed below. Of course, that income number could have been derived
off of a larger asset base, but if so that asset based was somehow
diminished, either by losses (as touched on above) or asset sales, both
of which (as we just stated) reduces future earning power and works to
discredit the assertion that there is no “immediate concern for retired teachers”
unless, of course, immediate is defined as this year and this year
only. That is not indicative of the longer term perspective I would want
one to take with my retirement monies.

If the state borrows money to make the contribution, TRS will have no need to sell any more assets.

A bill authorizing the sale of bonds to make this year’s pension
contribution is pending in the General Assembly. It was approved by
the House this spring but is stalled in the Senate. The earliest action
could be taken on the bill is in November after the general election.

In selling assets, TRS is repeating steps that were taken last year
when the state initially did not have the money to pay TRS and the
other retirement systems. Last year TRS sold $1.3 billion in assets
until the state sold bonds to pay the pension systems.

Yet, isn’t TRS underfunded to the tune of 50%? This is actually a
serious question, and not an accusation. There appears to be a serious
asset/liability mismatch and imbalance here, but I am far from an
actuary or pension expert, yet I am curious.

TRS is not alone in selling assets. The State Universities Retirement
System could sell $1.2 billion and the State Board of Investment
could sell $960 million because the state has yet to make its
contribution.

How is this relevant? If selling assets is the wrong thing to do, it
is highly irrelevant that you can point fingers at other entities that
are doing it as well.

---

“Risky” Investments

Claim: A
Northwestern University study from March, 2010 concludes TRS has the
“fourth riskiest” pension system in the country, with 81.5 percent of
investments classified as “risky.”

Truth:
The “study” is misleading. It merely totals the assets that TRS and 24
other pension systems have that are not held in cash or invested in
fixed income securities, and labels these investments as “risky.” No
valuation is assigned to any of the thousands of individual investments
held by TRS, so the study does not rank how risky the TRS portfolio is
compared to any other system. TRS is required to maximize the
resources available for retired teachers. All investments carry some
element of risk. Without its investment portfolio, TRS could not keep
pace with the resources needed for pension and benefit checks.
Forty-nine percent of a TRS pension check comes from investment income.
Check out the “study” at www.npr.org/templates/story/story.php?storyId=125059110.

Okay, in taking the advice of the author of this article, checked out
the study and do see the point that the author is making. You cannot
judge if TRS is the 4th riskiest pension system simply by its asset
allocation as listed in the report, see below:

Teachers’ Retirement System of the State of Illinois Springfield, Ill.	81.5%
Total assets (as of Sept. 30, 2008) $31.3 billion “Risky” share 81.5% Domestic stock 33.2% International stock 20.7% Real estate equity 10.6% Private equity 7.7% Other (Real return) 9.3% International fixed income 18.3% Cash and equivalents 0.2%

On the other hand, TRS cannot deny the fact that International stocks
are riskier than treasuries, and international fixed income and real
estate are riskier than cash and cash equivalents and so on. For
instance, considering they see themselves potentially having to sell off
10% of their holdings this year (or over the next 12 months) while at
the same time over 10% of their holdings are in highly illiquid real
estate equity, which is still trending down and in a down cycle, they
are significantly increasing the risk profile of the fund assuming they
chose to sell their more liquid holdings (publicly traded stocks and
bonds), or they probably accepting some nasty capital losses if they
attempted to liquidate their real estate and/or private equity. Again,
reference “When It Comes to Wall Street Real Estate Funds, the House Always Wins – Even When Investors Get Slaughtered”
where I step through this extreme “loss scenario” in detail. Now, let’s
assume they sold off their liquid holdings to generate the $3.3
billion, now their illiquid holdings are that much more a share of the
total fund, at time where the fundamentals and macro outlook is still
quite negative, at least in terms of European FI and residential and
commercial real estate. In addition, this stuff is still quite liquid
and most likely quite prone to some nasty haircuts. This is truly the
case in owning the bonds of the PIIGS, see  The Pan-European Sovereign Debt Crisis series for more on this, and our haircut analysis in particular as an example of where I am coming from – A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina.  Mayhap this is what the author of the study was referring to when they used the term, “risky”.

---

“Mismanagement”

Claim:
TRS is endangering teacher pensions by seeking to make a fast buck
through “risky” trades in derivatives – attempting to recoup $4.4
billion in investments that were lost during fiscal year 2009.

Truth:
TRS did lose $4.4 billion during 2008-2009, but almost every investor
lost money. The losses stemmed from a worldwide economic downturn in
stocks, bonds and real estate, not because of mismanagement or trading
in derivatives. This year TRS has not made any substantial changes in
its investment philosophy, and the overall $33.7 billion portfolio is
on track for a positive rate of return that exceeds 19 percent. The
target rate of return for TRS is 8.5 percent.

Again, just because everybody else did it doesn’t excuse you doing
it. With that being said, these were some very tough investment times.
Not all investors lost money though. I made money, and so did many of my
subscribers. It was not rocket science. It was a function of being
observant and not sticking obscene criteria such as “long only”  or
“always being invested” or worse of all, “everybody else is doing it”.

For the record, the losses incurred could  have been profits – or at
the very least could have been avoided in large part if big funds such
as TRS would follow smaller talent such as my operation. To wit, for
those of you who don’t follow my blog, we could have saved TRS losses in
:

1. Residential real estate and related debt instruments emanating from
   the Housing Market Crash starting in 2007 (as it turns out, I was
   actually overoptimistic – and to think that some call me a bear!): Correction, and further thoughts on the topic and How Far Will US Home Prices Drop?
2. Bear Stearns and ALL of the related investment banks in January 2008
   (I warned explicitly 2 months before they popped, while trading in the
   $180s and still had buy ratings and investment grade AA or better from
   the ratings agencies, may I add): Is this the Breaking of the Bear?
   This  was also about the time I got into it with GGP’s CFO for calling
   out their insolvency. He called me names, and then they filed for
   bankruptcy. Of course, they had an investment grade and buy ratings from
   the ratings agencies and the sell side: BoomBustBlog.com’s answer to GGP’s latest press release and Another GGP update coming… (among
   over 700 pages of analysis, review the January 2008 archives or search
   for “GGP” for more research). I gave the warning on commercial real
   estate in general in September of 2007 and individual CRE companies in
   November of 2007.
3. My views on Ireland, austerity, and the disguised sink hole of debt and non-performing assets that is the Irish banking system:
   I Suggest Those That Dislike Hearing “I Told You So” Divest from
   Western and Southern European Debt, It’ll Get Worse Before It Get’s
   Better! The warnings of Spanish real estate and related banking woes started in January of 2009, and I warned of the entire Pan-European Sovereign Debt Crisis starting in January of 2010. I can go on for some time,
   but hopefully, I have driven the point home. As a matter of fact, I am
   warning you as of now that the bad things are not over. It would be
   unfortunate for the TRS management to ignore these warnings now and then
   state two years from now that everybody else was doing it and there was
   no way to foresee what was to happen. There is a way, subscribe to
   independent analysis that is not tied to transaction fees, commissions
   or management fees. Try BoomBustBlog first, of course! :-0  It’s a lot cheaper than those massive double digit losses!!!
   

---

Derivatives

Claim:
TRS is needlessly risking members’ assets in the last year on
derivative investments in order to make a lot of money quickly. The
media point a negative finger at TRS for trading in derivatives because
many financial commentators blame derivative trading for sparking the
2008-2009 economic downturn.

Truth:
TRS has been successfully trading in derivatives since 1986 without
harming pensions. In the last year, TRS saw those derivative
investments return $173 million. That is not a lot in a $33 billion
portfolio and certainly not enough to cover the $4.4 billion losses of
the previous year. In reality, for institutional investors like TRS,
derivatives serve another purpose. They are never used to make quick
profits, but to reduce risk in a large portfolio and to make some
investments available at a lower cost. Despite the negative image, all
large pension funds and institutional investors trade in derivatives.
Derivatives comprise the largest investment market in the world, valued
at $650 trillion. Derivatives are investment contracts whose value is
based on the performance of a bundled group of financial assets, almost
like a mutual fund. At TRS, a derivative investment is only made in
conjunction with an investment in an asset that is included in the
derivative package. The value of a particular investment, on its own,
may vary over a period of time. But coupled with other investments, the
average value of the package does not vary as wildly because the
combined investments buffer each other – as one falls, another rises.

This appears to be a dangerous statement. I would never be against
the use of derivatives, but I am against the use of complex derivatives
by pension funds who truly do not understand how to value, market or
trade them – particularly in the reach for higher yield in a low yield
ZIRP environment that we are currently experiencing. It is also
dangerous to use these contracts if you do no truly have a firm grasp of
the fundamentals of the underlying. Now, I don’t know if the guys
running TRS fit into any of the camps mentioned above, but if I were a
betting man I would place my chips on their not necessarily being
experts in real estate and sovereign finances. If my bet were accurate, a
glimpse at their holdings doesn’t look positive since it shows a) poor
performance, and even more pertinent, b) the possibility of TRS writing
naked instruments. The fact that they claim to have 12% income in a ZIRP
environment means they are doing something besides investing in plain
vanilla FI. Writing credit and other derivative risk is the wrong way to
pick up that yield in the face of nearly guaranteed European defaults
and/or restructurings and the return of the high yield bubble. Like I
said in my previous missive, they may be picking up pennies in front of a freight train. Referencing the TRS asset holdings:

Even if TRS wasn’t writing naked instruments, the risk profile of
writing swaps on difficult to gauge assets is far from what I would
consider suitable for the shepherd of public retirement monies. Leave
that level of speculation to the AIG Financial Product desk or better
yet the GS prop desk, guys who have a coterie of sheep to lead to the
slaughter.

No matter which way you look at it, TRS was a net writer of credit
risk, which meant they were economically playing insurer against default
with public retirement monies. This should be, in my oh so humble
opinion, a very big No No! I am  sure that I can get to the root of this
if I dug in further, alas I just don’t have the time. If any entity is
looking foot the bill for the time spend in the research, I will
entertain it.

---

Underfunding

Claim:
TRS, like many other pension systems throughout the United States, is
“underfunded” over the long term and does not have sufficient resources
to meet all its obligations to retired teachers in the future.

Truth:
Unfortunately, TRS is underfunded in the long term. During the last
fiscal year, the System’s unfunded liability, as measured under state
law, stood at $35 billion, leaving a funded ratio of 52 percent. In
other words, if all obligations were called due today, the System could
not meet 48 percent of the outstanding pensions and benefits. That
won’t happen because not all teachers will retire at once. This
underfunding problem is several decades old, and has been caused
primarily by state elected officials not contributing enough money to
the System to meet its projected long-term needs. Evidence exists that
an unfunded liability problem existed as far back as the 1950s.

How do we know this won’t happen, if the fund takes big losses and
then goes on to accept such risks as writing credit protection,
potentially naked? All the while in an environment where the state lacks
the funds to contribute regularly? If things blow up again, and there
is a strong chance that they may with all of the central bank and
federal government bubble blowing, TRA’s underfunded status will get
worse, not better. As teacher’s inevitably get laid off, who is to say
they will not be forced to lay early claims on some funds and benefits,
if allowable? There are just too many variables involved.

---

Teacher Pensions are too “Generous”

Claim: The
guaranteed benefits of retired teachers and other government workers
are too high and are out of synch with retirement benefits found in the
private sector. The rising costs of maintaining these pensions should
be scaled back in order to avoid tax increases and cuts in other public
services.

Truth:
The average annual retirement benefit for an Illinois teacher is a
little more than $43,000. When you consider that Illinois educators do
not qualify for Social Security during their teaching years, this
benefit cannot qualify as “too generous.” Not only are these benefits
the sole monetary lifeline for retired teachers, but they stimulate the
economy: The pensions and benefits paid annually to retired teachers
living in Illinois create more than $4 billion in economic activity,
including more than 30,000 full-time jobs that mean $2.3 billion in
wages for non-teachers.

The author failed to make a direct comparison to the private sector,
which is the basis of the claim. He may, or may not, be correct – but he
failed to address the claim as was stated.

---

Reduce Pension Benefits for Current TRS Members

Claim:
Because of Illinois’ financial trouble, benefits to existing teachers
and government employees should not be guaranteed, but lowered to save
the state billions of dollars every year. One argument is that pension
credits for existing teachers should be left intact for service they
have performed but reduced for future service they have not yet
performed.

Truth:
Pension benefits for existing teachers and government employees are
guaranteed by Article XIII, Paragraph 5 of the Illinois Constitution
and cannot be “diminished” in any way. Since 1972, at least seven court
cases have affirmed the meaning of this clause. It is highly unlikely
that the General Assembly will challenge this well-established legal
precedent. There is no language in the Constitution that remotely comes
close to allowing pension benefits to be changed prospectively for
service that has not yet been performed.

Out of my realm of expertise, but it makes sense. Then again, their
is also no precedence for the state of Illinois current fiscal situation
either. Things do change, as they must.

If my readers find this of interest, I will have someone look into this further. Let me know your thoughts.

Comments

[tony bonn]

must be nice that the teachers' mob can coerce the illinois taxpayers to pay for their fat lardass retirements...

[phat tails]

I love your analysis, Reggie! You are the bee's knees:)

[minus dog]

The TRS responses are tailored for a specific audience - the teachers expecting to retire soon.  And "don't worry, we'll keep writing checks in the near future" is all they really want to hear.  

Everyone I know who has a stake in such a system only cares about one thing - getting their money when they retire in a year or three.  None of them gives a flying fuck about anyone else, or what happens later.

[tom]

"Things do change, as they must."

Good one, Reggie.

[Superdrol]

Better than analyst expected leveraged of x23 cents= 26 cents.  Time to rally.

[Hal n back]

and I believe the teachers for example are stil retiring with the full benefit plan.

Limited choices here-

really cannot raise taxes

can't create more assets

could get funds from the feds (makes gold and silver rather attractive)

could cut back voluntarily (not likely)

could default (might be likely)

In any event the current retirees  expect to receive benefits for 20-30 years out into the future--and the reductions made by th eillinois legislator do not really affect current employees like themselves (including health care benefits.

But until the plans actually run out of money nobody is motivated to do anything-just kick the can down the road. SOP for govt.

[hooligan2009]

I think you are on the right track with the view that income will be reduced in future years by the $3bn reduction in assets (for whatever political reason).

You are also right that $4bn in income from $33bn of assets is a mistake. There are no assets paying income of 12%.

The income numbers simply have to have been mirepresented. The correct income will be equal to the dividend yield from stocks of 4% (x 80% invested) + 3% from bonds (x 20% invested = 3.8% or $1.25bn

The asset sales of $3bn then make up the required amount to meet the drawdown rate of $4bn p.a.

I have a few other points.

What is not shown is the risk mis-match between liabilities and these assets. A shortfall of c.50% means the liabilities have a PV of $67bn. 

From: http://teacherportal.com/salary/Illinois-teacher-salary

There were c.130,000 teachers with an average salary of c.$60,000 in 2006. (16 students per teacher...wtf!, i think teachers took 5 different classes of 30 each per day when I was a kid!)

The liabilities of $67 billion are roughly equal to the present value at 5% per annum of $4bn per annum in years going out to 2060. The $67bn is also roughly consistent with an average teacher age of 40, a retirement age of 65 and death at 80 for these 130,000 currently employed. The rest will be other adjustments to do with retaining a constant number of teachers as other teachers retire.

The bad news is, that if the drawdown of $4bn is true, then the scheme is exhausted in 20 years, assuming a 5% interest rate. I note the symmetry of this with a drawdown rate of 5% (20 x 5% = 100%).

What this means is that no-one will receive any benefit at all in twenty years, pensioners, deferred pensioners and those still contributing into a defaulted scheme. I think we will see the first signs of people simply demanding to invest in another scheme, rather than one that is defaulting; in much the same way that mortgagees simply walk away from paying off a mortgage that is 25% under water.

The liabilities can be hedged against interest rate or inflation risk using swaps. I don't know if the teachers pension scheme is inflation linked, but I would assume it was.

These swaps could be "leveraged" up to four times by providing collateral for only 25% of the notional of the swaps/liabilities. There is no sign of derivatives being used in this way, so rather than hedging with certainty (barring collateral risk) the scheme is choosing not to hedge and instead hold 80% in growth assets and 20% in income assets.

The expected return from equities should be equal to something like long term real GDP growth + 2% and the income assets the same as long term real growth. Of course the financial crisis of 2003 (date of bubble creation) and now ZIRP has prevented the economy from functioning correctly. Growth is borrowed from the future and interest rates are rigger at zero. This is not Illinois Teachers fault, other than the state education board has chosen to educate children to live beyond their means by graduating with incorrect skills.

The expected long term return from 80% of assets in an economy that has completely stalled (US = Japan on this one I'm afaid) is zero real growth (and inflation) is ZERO. Bleh.

So not only does Illinois have to fund $4bn per annum, by selling down $3bn of assets per annum, the discount rate assumed in calculating the present value of liabilities is not 5% but is probably closer to 2% and in that scenario, liabilities are $112bn. The scheme could buy into rosier assumptions with its assets, but has instead chosen to invest in "risky" assets which unfortunately for the scheme is unnecessary given the high real yields available fro TIIPS. That is, the scheme is not hedged against inflation or zero real growth for a few decades.

(Japan is just completing its second decade of zero growth, though the distinction between real and nominal growth is blurry with deflation).

[Reggie Middleton]

Good points and thorough thoughts. You should come write some guest pieces for BoomBustBlog! One thing though. TRS (or any other appropriately motivated entity) can indeed generate 12% income off of a narrow base of assets in a ZIRP environment. It is just that they will have to take an inordinate amount of risk to do so. As you stated later in your missive, they could leverage up into high yielding securities (2% yielding equities bought at 10x margin is 20% less expenses, at least until the dividend is cut or the share price tanks). Rampant writing of derivative contracts, of which TRS has shown it is a net seller, options, etc. can also generate significant current income. This is particularly the case if there is no one there to both quantify and limit the economic risks taken. Economically, or shall I say in my opinion, writing naked CDS on PIIGS debt generates negative income once risk is taken into consideration. Of course, nobody asked me, did they? From an accounting perspective, you never know, they may even generate 12%, that is until they don't.

[hooligan2009]

Thanks for the invite, I have been thinking of updating an article on ZH I penned a year ago called "riding the four horseman to the new normal" with the horses called "risk no longer expects a return", "there is no time value of money", "technicals are predictive" and "herd instincts work", or something along those lines, but I cant find the damn thing! heh.. I take the point about the"missive". I still haven't captured the art of using 1 word instead 100, but there ya go.

I can only do macro, big picture views and have to rely on the experts like yourself for detailed analysis. But happy to send some (anonymous) stuff through. I can tell you I have market experience of the buy side, interbank sell side in capital markets plus pension and central bank consulting etc at what I would describe as mid-level. I only have a Masters :)

Oh and your point on risk is spot on..and as I said a year ago, within this environment, risk no longer expects a return!

I think TRS only came back at LIBOR +1 to 2%, so thats (for the sake of argument 3% risk. As you say, the risk to get to 12% is 6-12 times that. Currency funds trade off Sharpes of 0.5 with 30-40% risk, so much better, in theory. And the markets are much bigger with cheaper spreads. Sure as hell there is no factoring of 6-12 times dealing costs in leveraged solutions tho!

[Reggie Middleton]

I remember it. Good piece. You can probably find it with a Google search.

[hooligan2009]

i haven't used google search inside ZH web site..i guess ZH will need a better engine as it turns into a larger and larger repository. But..right again! http://188.126.66.68/forum/new-normal-or-reality-bites

[TheClub55]

Benefits will be reduced... the IL constitution will be ingnored or changed just like the US one!  Their all already briefs being written that make a case only current funded dollars cannot be “diminished”, meaning the state is under NO obligation to make up the 52% shortfall.  

[imapedestrian]

I can see getting around 12% in income. 

Example:  TSI

If it was purchased in mid-2009, around $3.50-$3.75 and it has been paying 33 cents a year in income, while actually earning much more, they are definitely sitting pretty (currently). 

TSI is now at $5.25!  It is expected to bump the dividend to 39 cents, plus a possible "special" payment because the sub-prime mortgages they bought for pennies on the dollar are doing excellent (no, really they are!).

Basically, my point is that while this whole situation does worry me, this does not appear to be a valid concern.  If and when the whole financial sytems comes unglued, then there will be a problem... for every single person that is not a member of TPTB... so why worry too much?

[apberusdisvet]

Reggie:  you are now the "greatest seeker of truth in the financial media"  Many thanks.

My one caveat to your "expose" is that all union pension funds (not just this one) are assuming a taxpayer bailout.  Watch the insidious add-ons in all new legislation.  I can also connect the dots with Rahmbo seeking to position himself in Illinois politics; the current Administration can't let any poster children for the "entitlement society" fail.

[doolittlegeorge]

Great article but can't we just look at the suden surge in for profit schools as representative of the actual FINANCIAL failure of government run education systems?  It is true once the DOE moved in many of the stocks got annihilated--but they were moving higher for a good (or bad--i went to a public school and got a great education and made great life long friends there) reason to begin with.  in short "this regime has done the worst job in American history at keeping the private sector dogs at bay."  And I consider myself a capitalist no less!

[Vampyroteuthis ...]

I was wondering how long can these fraudulent pension funds keep going without significant amounts of money flowing in? This on top of major underfunding and asset liquidation?

Good article Reggie.