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Illinois Teachers' Retirement System Enters The Death Spiral: AIG Wannabe's Go-For-Broke Strategy Fails As Pension Fund Begins Liquidations
Two few months ago we disclosed how the Illinois Teachers' Retirement System (TRS) was doing all it can to become the next AIG. In addition to, or maybe precisely due to, its deplorable fundamental condition, which can be summarized as being 61% underfunded on its $33.7 billion in assets, with a performance record of down $4.4 billion in 2009 and 5% in 2008, the fund, courtesy of a detailed analysis by Alexandra Harris of the Medill Journalism school at Northwestern, was found to be on its way to trying to become a veritable self-made TBTF: as was described then, "TRS is largely on the risky side of the contracts, selling and writing OTC derivatives, including credit default swaps, insurance-like contracts that guarantee payment in the event of a default." In other words, TRS was selling substantial amounts of derivatives, which held the fund's other assets as hostage in case the collateral calls started coming in, as should the market broadly decline, the value of the downside derivatives would "increase" and the seller (in this case TRS) would need to pledge ever more collateral against these wrong way bets. Not only that, but the Fund is currently getting annihilated on its curve exposure: "TRS appears to be betting that long-term Treasury yields will greatly increase" we wrote back then. So as a result of i) its massive underfunded fundamentals and ii) a bet that the market would turn bullish, i.e., spreads would drop (they are rising), and treasuries would plunge (we all know where they are today), which was supposed to happen by now but isn't as the economy is now officially double dipping, the fund has basically thrown in the towel and is proceeding with liquidations. The problem there is that due to its derivative exposure, liquidations now become self-reinforcing, as more cash needs to be pledged as collateral in a declining market, and the AIG death spiral we all know and love, follows. The only thing missing is for Goldman to raise its overnight variation margin requirements and it's game over, as we get a brand new AIG on our hands. And since Goldman is among the 60 or so asset managers that actually decide how the fund invests its meager assets, it is fully aware of its precarious position, and it is a sure bet that Goldman is currently deciding when to pull the plug on the TRS life support.
All this is direct consequence of the disclosure in Crain's Chicago earlier that "Illinois Teachers' Retirement System, Springfield, plans to sell $3
billion in investments, or about 10% of its $33.1 billion in assets, in
the current fiscal year to pay pension benefits, according to Dave
Urbanek, public information officer."
More on the start of the TRS (not to be confused with Total Return Swap, an instrument, ironically, which we are sure the TRS is actively (ab)using to lever up its UST exposure by up to 50:1) toxic spiral:
Illinois State Universities Retirement System, Champaign, expects to sell $1.2 billion in investments from its $12.2 billion defined benefit fund this fiscal year to raise liquidity to pay benefits to participants.
The Illinois State Board of Investment, Chicago, could sell $840 million investments from its $9.9 billion fund to pay benefits of the Illinois State Employees' Retirement System, Illinois Judges' Retirement System and Illinois General Assembly Retirement System. ISBI oversees the investments of the three systems.
The liquidity stress from the investment sales at the five plans could force each of them to restructure their strategic asset allocations, terminate investment managers and search for new managers.
Illinois Teachers sold $290 million in investments so far this month and $200 million last month because of a lack of state contributions.
“Without the monthly state contribution, TRS estimates sales of roughly $3 billion for the entire fiscal year, or approximately $250 million every month,” Mr. Urbanek said in a statement in response to an inquiry.
There is, of course, the obligatory spin:
So far, TRS has accomplished the investment liquidation through “appropriate rebalancing,” Mr. Urbanek said in the statement. “As the year progresses, this approach will no longer be sufficient to cover the total amount of benefit payments and more targeted asset sales will need to be considered.
“TRS staff continues to study the impacts of the current liquidity situation on the total portfolio and recommendations will be made as necessary to adjust targets. These changes could include revisions to the system's target asset allocation and termination of investment manager relationships as 10% or more of the portfolio is liquidated to pay benefits this fiscal year,” he said.
The only question one has is whether as part of this "appropriate rebalancing" the TRS has covered its increasingly out of the money derivatives? And since the answer is most likely "no", as that would be the painful but prudent thing to do, and has likely only sold off instruments which are now losing more and more value with each passing day, each day will merely bring more and more P&L losses to the fund. Which means that as the market continues selling off, the derivatives will require that more assets are sold, which will push the market further lower, which will demand furhter margin calls, and so forth ad Chapter 7.
To be sure, the insolvent state of Illinois has not helped:
Since the start of the fiscal year on July 1 through Aug. 20, the system has received only $90 million in contributions from the state. For the current fiscal year, ending June 30, 2011, the system requested $2.35 billion in contributions from the state, Mr. Urbanek said.
In the last fiscal year, the system sold $1.3 billion in assets to pay pension benefits; it received $170.4 million in employer contributions and $899 million in member contributions, while requesting $2.08 billion in employer contributions alone.
Alas, at this point it is too late: for TRS, and likely for many, many other comparable pension funds, which had hoped that the Fed would by now inflate the economy, and fix their massively incorrect investment exposure, the jig may be up. As liquidations have already commenced, the fund is beyond the point where it can "extend and pretend", and absent the market staging a dramatic rally, government bonds plunging, and risk spreads on CDS collapsing, the fund is likely doomed to a slow at first, then ever faster death. Then one day, Goldman's risk officers will call the TRS back office, and advise them that due to its "suddenly riskier profile" established in no small part courtesy of Goldman's investment allocation advice, the collateral requirements have gone up by 50%. The next step is either Maiden Lane 4... or not. For the sake of the 355,000 full-time, part-time and substitute public school teachers and administrators working outside the city of Chicago, we hope that the TRS has now been inducted into the hall of the Too Big To Fail, as otherwise roughly $34 billion in (underfunded) pensions are about to disappear.
h/t Ed
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It's so exciting when dominoes start falling.
just what I was thinking! interesting times we live in! *pulls glock closer to me*
I think to myself as I'm cleaning the 1911: 'things seem to be getting worse'
Funny that. I think the same when I clean my AK and my Beretta.
Great minds think alike!
Why is it that the only decent weapons are over 50 year old designs (except for the Barrett .50 caliber)?
I don't know, my HK P7M8 is very nice
A design that is nearly 40 years old now...
My M+P .40 is always clean and ready
Agreed that the best platforms are the older ones for now. I think there hasn't been much small arms innovation in the last couple decades because there has been no major conventional war and the Cold War ended as well.
Sharks, alligators and snapping turtles have not changed in millions of years.
Why tamper with perfection? Why bother changing the 1911?
Why bother trying to make Chicago honest? We have Al Obama, the Ill messiah, he gonna take away the guns and fix da problem. Yes, and I have a bridge in AZ for sale.
What is a matter with wheel guns, they have been around a long time too? Wyatt Earp didn't do so bad.
It certainly does appear that this will all end badly.
My .45 Glock is a "new" design in that it's half-polymer with few moving parts, designed in 1984 I believe. I love that gun.....especially the feeling of it on my hip as I type.
Ah, How I love Saturdays in the small arms locker and the armory !
My Czech-Made AK is in great shape, wood stock lovingly polished to a fare-thee-well, the M1Garand is ready to go, as is the M-14 (best US postwar long rifle, IMHO), and my prive possession the Remington 870 12 ga magnum pump, with 00 buck close at hand.
As I consider... is full choke or improved cylinder the best setting for "street sweeping" at <10 meters? Such pleasant thoughts.
And then my attention is fixed on my Genuine MG 43 ... best crew-served weapon ever made, with 10,000 rounds of belted 7.62 at the ready.
Would love to acquire a 0.50 cal Stoner Weapons System or Barrett for long-rage point defense, though ..
Slash
"interesting times we live in!"
Frank: Do you mind my asking: you're writing a book, yet you don't believe any of the prophecies?
Jose: At the start of the nineties, they predicted major breakthroughs for the neurosciences: the 'Decade of the Brain'. Instead, it was the decade of ... body-piercing. Now why should the millennium predictions be more accurate?"
Frank: "The religious component. Do you not believe in God either?
Jose: Oh, there are times when I've been a devout believer. And there are some times I have been a staunch atheist, and there've been times when I've been both ... during the same course of the same sexual act.
Frank: Don't be dark. Personally, I think this is a very significant time in mankind's history.
Jose: But that's what every man throughout history has said about his time. [
If a man doesn't see his time on this earth as being significant then how could he possibly see his own life as being such? Certainly we tend to view ourselves as the center of all existence, but that is only because we are the centers to our own perceptions. And anyone who does not understand that point of view will never understand the value to his own place in the world.
your a blowie, me thinks†
oh oh oh - like that scene in "V for Vendetta"? So who picks up the last domino?
Anyone?
Bueller?
Chinese gangs?
[eyes 12-gauge in corner]
Personally, I think it's sad. Very, very sad. For all of the hard working people this is going to hurt.
Don't be sad, Obama will bail us out & saddle your kids with the debt.
Exactly. I wouldn't doubt the pension plan along with GS arranging failure and TBTF status intentionally; more gravy that way for those at the top now AND when the bailout money rolls in.
exactly! nothing can go bankrupt except the future!!! and that never comes!! keep kicking the can forever!!
Of course that will be tried. I've stated similar things for the various States in the past. If you think this is going to be successful, IMO you're mistaken. The most that might happen is to kick the can down the road a little, which is a familiar pattern.
The end of the road is clearly in sight. And it's not pleasant.
Oh Please, so politcal. Bush bailed out GS, AIG, JPM, MS, LM, C, (the Muslim Saudis, who he kissed), because he was
saving us from a Greater than the Great Depression. To the tune of 23.7 Trillion Dollars, and you were probably worried about Health Care Reform too. Godman Shafts would be so proud. Mission Accomplished.
And just in case you might think otherwise, Obama SUCKS too. It's just about who SUCKS more. The GS squid did a
great job fooling most of the Sheepies, with a little help from the disinformation machine. The Media.
I share your sentiment, but the political theatre is going to be epic. Obama either tries for another bailout against an increasingly bailout weary congress and populace, or he stiffs his home state's teachers after driving the gravy train straight through lower manhattan. Fireworks bitches.
No worries, no need to go to the public trough for approval, TRS will just go to the PBGC (who cares if it's not eligible), funded by...ultimately....the public trough.
TRS in this thugocracy is TBT effin F. Wait for Calpers to implode.
I agree, Eternal. It's easy to troll these posts and make wisecracks about how hopeless this situation is, but when you actually know people who are part of this system, it is heartbreaking to wonder where they go from here.
@MsCreant
In some sick way, while witnessing these events unravel, I often feel an eager anticipation of the coming events, and satisfaction as and when they arrive. I think this quote describes it well.
Alfred Pennyworth:"Because he thought it was good sport. Because some men aren't looking for anything logical, like money. They can't be bought, bullied, reasoned or negotiated with. Some men just want to watch the world burn."
On the other hand, how do you fully bring to justice, or punish, or re-level the playing field, against those who have brought us to this situation?!
Bruce Wayne:"The Bandit, in the forest in Burma, did you catch him."
Alfred Pennyworth:"Yes."
Bruce Wayne:"How?"
Alfred Pennyworth:"We burned the forest down."
First Woman: Burma!
Second Woman: Why did you say Burma?
First Woman: I panicked.
A very obscure Monty Python reference!
What's that penguin doing on the tele?
I loved that scene almost as much as the one where the Joker burns his "half" of the Mob's money. :-)
I also start to get giddy w/ excitement as I watch the events of Project Mayhem unfold. The director does need to do some serious editing of "our" flick though because the film's length is running WAY too long to keep the audience entertained.
MsCreant,
Yes,UNLESS those are your Domino's.
Not so exciting huh?.
I couldn't care less about my money, my house, my material objects. What matters most is what the world will look like during our kids generation.
"The Dominos" are merely creases in the Origami paper; what creature will be left after the last crease and fold is what matters...a Black Swan, or a White Crane?
I spent 11 years looking through the sights of a rifle scope; I'm going to make sure my kids don't.
All I want is justice.... delivered cold and unforgiving by the natural order.
And I want to live long enough to see it. It will be a good lesson for my children to learn as well.
Well said!
All our dominoes. I am sick of the lying, sick of the illness living in the center of all of us, existing this way. Cut it out, cauterize it, turn that rock over, shine the light on it, leave it out in the sun to bake and bleach and wither away. Purification. Streamlined simplification. Elegance.
Not 2000 page bills signed by senators who never read them.
Not complex unresolvable politics that make people rich by killing others.
Not fragile centralized distribution systems that kill us all if any one part fails.
Not Mc Food, Mc Mansion, Mc Jobs, Mc TV, Mc Medicine, and Mc Life.
I am willing to have a shorter lifespan if that means having a meaningful life that I invented, not a prefabricated template life that was built for me so that others could pacify me and control me for the sake of making a profit off me.
I strongly suspect I will never see any retirement money that has been taken from me. I understand now I abdicated a lot of my own responsibility for my future because I conformed to the prefabricated lifeshape that was cut for me. Will the dominoes falling hurt me and those I love? Yes.
I had severe 3rd degree burns on my leg and foot as a teen. It was not healing well, they were telling me the foot may have to go. The nurses hated cleaning my leg and foot twice every day, some even cried with me when I cried out. Got a tough gay male nurse one day. He was fem and mean, a real damn battle ax. He scrubbed that wound hard and would not hold back. I cried so loudly, thought he was so insensitive, cussed at him. Then he dressed the wound his way (so air could get to it, but it was protected). The next day a new nurse undid the dressing for the cleaning. I had new skin started where there was pus an goo before. I asked for my male nurse back. We became friends. He taught me a huge lesson. Sometimes pain is good and necessary and the only way to it, is through it.
This economy is a festering wound. I hope when I feel it burn, I will remember that it has to hurt in order to heal. There is no getting around it.
Bring it.
Thanks for sharing, only thing I can think of is "trial by fire". Reconnecting with our true selves will actually be a glorious event.
MsCreant
"He taught me a huge lesson. Sometimes pain is good and necessary and the only way to it, is through it."
We forget we only learn from failure.
Only the mediocre are always at their best.
Jean Giraudoux
Screw that. don't be a masochist.
This situation here is like GS and the elites are the nurse AND the person who lit you afire.
If pain comes of its own accord, then fine. But we've had our assholes ripped open by these rapists and now they want to dump a full container of Morton's onto it.
Let THEM suffer.
We have too many "austerians" who nothing more than misanthropes. NONE of this is necessary. Sure, we need to adjust, but we do not need to have a trial by fire.
trav,
You know this is bigger than GS (who I love to hate) or Demofats or Repulsicans, etc. The system was always going to do this. I have read you and cheered you on preaching about how interest takes from the money pie/supply and unless we grow it to produce the interest and still preserve the principle (endless growth, not sustainable), it will have to contract. That isn't any of these people, that is the system we live in that we, as a collective, don't understand and repeat over and over.
There are rules, and no one will enforce them, that is just true.
They know it will blow up and they are using the fear to profit from the blow up (steal from us), also just true.
Should there be some old fashioned justice to leave a bloody mark in the history books for the future? OH YES there should be. But the contraction was always going to happen. If this is the system we use, then you know damn well IT HAD TO BE THIS WAY. They know it and they are using us. We are so fucking slow.
I want justice too, but putting off the hurt that has to happen to let this unwind makes it worse later. I know you know this.
Even soldiers fighting a "just" war get hurt in training and hurt on the battle field.
They should not be allowed to do what they are doing. But the system was going to contract with or without them screwing us. The contraction brings pain. The elites are pumping it for all it is worth.
Short reading list:
"Survival+" by Charles Hugh Smith
"Starve the Monkeys" by Tom Baugh
"Atlas Shrugged"
Those will tell you where we are and basically how we got here. Toss in "The Creature from Jekyll Island" if you like.
Once you're good and focused (and depressed) by those, I would suggest adding for good measure "The Long Descent" by John Michael Greer, or for those with a shorter attention span, "The Long Emergency" by James Kunstler.
If you want to be utterly despondent and don't have a closed mind, I would further add "Storms of My Grandchildren" by James Hansen.
Long emergency is a good, if a little sensational (guys gotta sell books), read.
I look at oil and oil based products so differently after reading that. It's incredible how completely underpriced oil actually is and how people are generally just totally oblivious.
Wow, I'm really impressed MsCreant...
Yes. Everything must be this way. It is the hardest truth one must come to accept. Thousands of years of greed, religious division, empire building, wealth accumulation, globalization etc. Has shaped the world into what it is today and spawned our greatest achievments in scientific knowledge, technology and the arts but this time things really are different.
For the first and only time, mankind will have a small window of opportunity in which we will decide our collective fate. The monetary systems that provided wealth through ever increasing consumption of finite resources (waste) have nothing left to offer 7 billion people. Capitalism was never the final road to equality and wealth for all, it was simply the last monetary profit system and final road towards a global energy credit system (and once we have global energy abundance, no credit system at all). Will we choose a future of global peace, equality, resource abundance and unlimited human potential? Maybe the outcome of the NY mosque "debate" will be a great leading indicator of what is to come? Who knows, but whatever choice we make, it is certainly an amazing time to be alive ;-)
Hugs & kisses Ms.
Pain tells one they are still alive. Being alive, you will always have a chance to win and you can never really lose until you quit trying as there is no clock on this, it's generational.
Never quit baby!
I agree...this monetary system needs to go.
But we do not have to suffer 3rd degree burns or the apocalypse as a result.
USians could cut our oil consumption in half and still live very well. There are many of us here who were alive in the 70s and don't recall grinding poverty or austerity.
The problem is that consumption per capita of energy is pretty much the arbiter of wealth for a society. And ours has gone UP, way up.
Justice!
+1,000,000,000,000
Awesome lesson. Agree 100%.
Thought provoking and well written MC...
"I understand now I abdicated a lot of my own responsibility for my future because I conformed to the prefabricated lifeshape that was cut for me. Will the dominoes falling hurt me and those I love? Yes."
Taking personal responsibility is the major first step we all must take, to the degree that we have lived for years as Sheeple before awakening. For instance, I have 90% of my savings in a 401K, with limited investment options.. and I can't free that money unless I QUIT MY JOB... which is not a good move right now.. so... I borrow against it and buy Gold and Silver.. do the best I can do. Downsize, payoff debt, get sustainable, teach my kids that which I never learned about our monetary system until I was in my 40's... and warn others what is coming.
Bring it. Bless you Patriot.
Yeah, I'm sure that faggot nurse knows all about pain from taking it up the ass. Great story...lol.
oh don't try and pretend that you've never done it. puhleeze, i can spot a closet queen a mile away.
;-)
"Sometimes pain is good and necessary and the only way to it, is through it."
Yep, some of us are masters at enduring pain, and without pain none of us would learn a damn thing... Let's hope that those that voted for Obama learned their lesson, and pray they aren't all masochists.
That was some shit there. Safuckinglute!
" the only way to it is thru it" Pain is an informing system designed to awaken the sleeping. Asleep for a moment or chronically. Our society's solutions revolve around not feeling pain, thus maintaining the slumber. Pain always conveys an important message. Embrace it and see! Or wait until you hit bottom and have little choice.
MsCreant
on Tue, 08/24/2010 - 21:15
#542086
"I strongly suspect I will never see any retirement money that has been taken from me."
For some strange reason I started thinking that when I first entered the workforce years ago. I always viewed the payroll deductions as just another tax that was not going to end as planned. How could it...
I like the thoughts that you post here Ms. What I extract from them often becomes part of my 'gold' reserves.
I'm sorry that I insulted your cats.
Amen MsCreant, amen.....
Just to remain consistent, here is my take elsewhere, on the show I do, with my hunch and I stand by it:
I think Obama WANTS it to happen. As I said on my show tonight, the Dems know they are going to get smoked. So what do they do? Let the economy, markets, everything go into massive tankage. By Q4 the Republicans will win BUT if markets are down 50% the Republican victory will get the blame.
In turn, during the Lame Duck session, the pension funds, 401Ks, IRAs, Unions, etc. will all get BAILED OUT and new GSEs or GSE type corporations created to "manage" the pensions for the United States to prevent the "retirees" from being injured by those evil Wall Street types and their Republican allies.
Obama becomes a hero by guaranteeing a fair rate of return, the Pubs can't undo the legislation due to the lack of ability to over ride vetoes, Obama has his de facto Socialist utopia, and Dow 4xxxx becomes all the vogue.
johngaltfla
You assume that a "party" is in charge. PPT has run through all administrations. Corporations write bills for both parties. and donate the same way.
Politicians are only the face, the puppets, the Max Headrooms so we the people have something to identify with.
Cloud William: Freedom?
[shouts]
Cloud William: *Freedom*?
Captain James T. Kirk: Spock.
Mr. Spock: Yes, I heard, Captain.
Cloud William: That is a worship word, Yang worship. You will not *speak* it!
We'll see. That scenario could play out. The problem with hubris is that it is possible to overshoot.
His behavior is one of immense confidence that all is going as planned. And George Soros - the wizard behind the curtain - is ready to take the reigns of the world in the lame duck session. Go all in with Ace-King.
States' power. Second Amendment. Aces. Smells like a prelude to civil war. Don't think it can't happen. It may not be how many envision what civil war looks like. The folks in Congress have homes and families.
Are they willing to throw THEIR children's future down the toilet too? I wouldn't want to live in their shoes if they did jam all of that crap down our throats in a Lame Duck.
IF the Dow is anywhere near 5500 by December that will be large enough of a crisis for the sheeple to cry for action. And thus they will act.
Besides most retirees in Florida have already been Madoffed so they are saying those two important words their financial advisers taught them as they notified them they lost 95% of their retirement:
"Paper or Plastic?"
I'm not worried about this at all...last time the teachers threatened to strike in Illinois they said very clearly "it is all about the children" I am happy to take that point of view now-- give all the teachers 35% haircuts and 401k with a reduced value in their unfunded pension accounts or let 'em walk...or I mean go to work for another district paying 3% more!
I junked you because many, if not most of those teachers paid into the pension system for years and were prohibited from contributing to Social Security. That's right, most will have zero SS benefits if the pension collapses. So please be so kind as to explain what you propose for those teachers who did their jobs as promised, and are now expected to take a '35%' cut. I'm curious about your solution for retirees.
I junked you because the teachers are responsible for not teaching children the real history of this country. And I mean, for example, the Black Founding Fathers, the bigotry of Woodrow Wilson, etc. They are getting exactly what they deserve!
this isnt tic tac toe? Will the circuit breakers hold up on the money printer? Millions want to know
So, when my local bank/grocer starts questioning me about my interest in buying CDS's, I WILL OFFICIALLY be on the other side of the looking glass!
I'm sorry, but I thought that when writing a CDS the whole point was to back it with almost no capital, so as to rake in premiums for as long as the scheme can last.
Why on earth would you collateralize up these contracts with valuable assets, particularly when you ultimately are supposed to be providing pension money to people?
Why on earth would anyone purchase a CDS from a counterparty who would pledge almost no capital?
I thought it was done all the time? Not "no" capital, but very limited capital. The CDS market functions like an unregulated insurance market does it not?
Once purchased, the CDS insurance goes on the accounting ledgers in such a way that the buyers can claim to have hedged risks without having to worry about whether the CDS can pay out if the insured risk materializes. So CDS contracts functions like liquidity in the marketplace. Everyone collects premiums and levers up and no one gets hurt, for a while at least...
Leverage on the product is one thing. Pledging 1:1 capital for every dollar of being out of the money is another, and is the nightly variation margin sweep that every prime broker/risk back office does with its OTC/CDS/etc counterparties. Doesn't matter if they put $1 or $1,000,000 at position inception. If they lost $1,000,000 today, they have to pledge $1,000,001
stoical, Tyler.
N O T for G O L D I L O X. Arch-anti-Stoic Goldman be, no?
you talk in split tongue, i forget is that how
M E TARZAN , talked?
it was meant as a compliment, tarzan†
6 junks, well i don't really care any more. i don't junk, much any more.
Interesting way to play the game...
Here's hoping that this blows up around election day in Obama's face. As it stands, the Fund won't make it even that far. He could always alter the PBGC rules to accomodate..
But the reality is that all of these wheels were set in motion long before Obama was even known. He's merely the patsy, running around aimlessly putting as many fires out as he can...possibly, just possibly, he may well be doing the best job he, or anyone, can do.
There are no Thomas Jefferson's waiting in line to become the next US President, none. That's because the entire elective system is as rigged and the economic ponzi.
There are no Thomas Jefferson's waiting in line to become the next US President, none.
Ron Paul 2012.
+1000!
i don't know if paul's a jefferson (nor how much of a compliment that really would be) but as an obama canvasser and contributor, i think ron paul looks like much the best of an otherwise bad lot.
Thanks for commenting. An open mind is a wonderful thing.
I was a Democrat, even won a seat on the local Democratic Committee which I resigned in 2008 so that I could register Republican and vote for Dr. Paul in the primary. He's the only politician I have any faith in whatsoever. I guarantee you that If Dr. Paul had become President the wars would be over by now and our troops would be coming home from Germany, Japan and Korea as well.
Dr. Paul wants to make Social Security and other such programs voluntary but he would not simply cut them off. He says that folks have become dependent on these programs and they should be funded for those who are dependent for decades if necessary until our free market economy can rebound to the level it had previously attained. He would finance these programs by cutting the military budget.
"Just come home." -- Ron Paul on Iraq and Afghanistan, 2008.
"Freedom is popular." -- Ron Paul on his campaign fund raising successes, 2008
CrockettAlmanac.com
We all have a dream, sadly the reality never lives up to it.
Hamlet:
Swear by my sword
Never to speak of this that you have heard.
Ghost:
[Beneath] Swear by his sword.
Hamlet:
Well said, old mole, canst work i' th' earth so fast?
A worthy pioner! Once more remove, good friends.
Horatio:
O day and night, but this is wondrous strange!
Hamlet:
And therefore as a stranger give it welcome.
There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.
We all have a dream, sadly the reality never lives up to it.
As Shakespeare said in the quote you cited, reality exceeds one's dreams:
There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.
Dr. Paul wants each American to have the chance to discover his own reality rather than to be drowned in the noxious dreams of the Pelosis and Palins of this world who would smother us in swaddling and mother us to death.
i love U
"Putting out fires..." please elaborate!
Quelling the people.
"Putting out fires..." please elaborate!
Obama's down to just a half pack per day.
i started but now down to three (3) cigarettes, a day. but, i didn't inhale.
ROFL
the central bankers would have "thomas jefferson" shot from the nearest library well be fore he could save us...
Gasoline is a terrible way to put out fires .
Gasoline fire is a terrible way to die but alot of fun if you are the one doing the dowsing.
that is not a good thought pattern, tarzan. indication and desire to abuse.
G O A W A Y†
"He's merely the patsy, running around aimlessly putting as many fires out as he can..."
Are you kidding....We have never had a president as arrogant, ignorant, and full of contempt as Obama.....That popping, and crackling sound Americans are hearing isn't popcorn in the microwave, it's the sound of their 401k's, stocks, pensions, social security, Insurance etc....going up in flames. You can be rest assured that this human torch, and his fire bug administration, and most politicians in either party will loot every cent it can from the American people. What's disturbing is the American people are letting them do it.
Election day? May not make it that far. We appear to be one strong panic away from a complete system implosion.
There are plenty of these pension calamities to come. Many have been papered over with the market tearing from 666 lows. Clearly that has ended. Hilarity shall ensue.
Yup. In big states and small. It's one reason why so much taxpayer money is still being poured into the stock market (look at today's action). But the situation is grave. All the garbage CDOs that Wall Street cranked out were marketed and aimed right at pension/retirement funds chasing "yield". They're all stuffed chock full of these hopeless underwater mortgage backed assets. Housing will continue to tank and drag them further down as banks are forced to foreclose. It's a vicious cycle that Wall Street has created: even if real estate buyers materialize (which they won't), nobody wants to make loans since securitization is dead. There no rubes left to sell to.
Remeber too that these funds were chasing yield because the Greenspan Fed kept rates artificially low with their "Goldilocks" monetary policy
I've been saying for a while now...they didn't slip so much as they were pushed. These funds had analysts and managers...who were all in Wall Street's big game. They all knew how toxic the paper was. Heck lots of the deals were made AFTER Bear Stearns collapsed and subprime was a household dirty word.
+10
MEANING:noun: One who does useless work.
R U in child's pose?
We'll be seeing much more of this in the next couple of years. It's gonna get ugly.
Soon to be seen outside of the Illinois TRS offices...except probably this time with rocks and Moltov cocktails..
http://www.youtube.com/watch?v=OdREEcx0-Qc
"where is da moneeee, we needs da cash!" LOL
Like little Suzy asked: "Mrs. Smythe? How do you make it last so long???" - Ned
"Why on earth would you collateralize up these contracts with valuable assets, particularly when you ultimately are supposed to be providing pension money to people?"
Because the pension fund was already badly underfunded because of bad stock market bets. Why not throw the dice, double down and see if you can make up the loss ? Besides, the Big O has their backs.. he could'nt very well allow the pensions of public employees in his home state to go under.. unless there's gridlock in DC (tee-hee)
The Big O junked up the Indiana Teacher Retirement Fund with a billion FRNs worth of worthless chrysler bonds.
Need a math degree to post?
you know, there is a company named Big O . automobile tires and all. headquarter in Colorado?
Need a math degree to post?
i know tyler and marla have me in mind with that solution, i am sure of it.
Great day to live in IL. The state was pressuring the CPS to merge their pension into the states. At the time CPS said "hell no" CPS has actually done pretty well I've heard. Warning to anyone traveling in IL.... If you win the lottery here take that shit in cash!!!!
It IS a "Great day to live in IL." Why? Because, IMO, the days of "extend and pretend" are numbered. This nation has been in an economic decline for about 3 years and have you noticed any structural changes yet? I haven't. CPS refused to consider giving back their 4% raise in order to avoid lots of teacher layoffs and when the $10B was approved in DC the head of the union said something like "see, we did the right thing!"
Of course nothing bailed out the CTA and when they were earlier asked to do the same thing - or see 1,000 layoffs - they said "nope" and so the 1,000 layoffs occurred.
The mentality of the senior members of the union is typically - "you're getting nothing from me because the layoffs won't touch me" and so the newer municipal union employees are let go.
I live in Cook County and I know that in order to save the state we have to first destroy it. The D's and their special interest supporters will do nothing until it's too late. And "too late" is good news for the residents of the state and can't come soon enough!
The economic decline began in earnest in 2000 when the tech/dot com/nasdaq bubble burst. For a while the decline was well hidden by furious paper shuffling, but that all ended a few years ago... and everyone could see the reality.
Check out these charts from BI. It's eerie how the post-2000 market mirrors the post-1929 charts.
http://www.businessinsider.com/were-underperforming-the-great-depression...
No swim suits as far as the eye can see...
If GS manages to destroy the pension system, it might actually be doing "God's work" even without intending it as such. I realize that it would be my tax dollars (current and future) that will be used to fund the shortfall and any fees to GS. But if by some miracle the pension system gets completely anihilated then - when our kids gorw up, it would save them from paying for the pension for overpaid Govt workers.
"TRS is largely on the risky side of the contracts, selling and writing OTC derivatives, including credit default swaps, insurance-like contracts that guarantee payment in the event of a default."
Hmmm, sounds very familiar. Only difference is that TRS is going for broke and has to pay benefits now. This is a scandal that needs to be investigated, but don't hold your breath. And let me share some insight with you, there are plenty of other "TBTF" pension funds that will follow Illinois TRS. Just track the daily news on Jack Dean's excellent site, Pension Tsunami.
Put Fitzgerald on the case: he's a) unemployed, b) the world's greatest prosecutor, and c) understands Chicago and Springfield. We'll get all kinds of contortions, pretzel logic. So, he's bringing the pretzels, I'll bring the popcorn. We can watch it while the fires consume the subjects.
- Ned
[Ed. gerund]
Yeah. Just as soon as he's done wiping the egg off his face from the Blago trial.
Teflon face I'm afraid, kinda nice to think about salmonella eggs for that.
- Ned
Double dip... Bah!
We knew all along that we never came out of the recession in the first place.
What the F*&k is a pension fund shorting long treasuries for - to shorten the duration of their book?!, gawd what a clusterfuk.
Exactly, you'd think they're running a hedge fund. It's a pension fund, not a hedge fund! But it's easy to take stupid risks with people's retirement money and then blame the financial crisis for your investment blunders. What a total disgrace.
When you say it like that, it almost sounds like you think it was all an accident.
Part the curtains over there and I wager you'll find more hedge fund managers and their groupies than you can shake a stick at.
Gambling with other peoples' money. It built this economy for 20 years while ever last shred of productive activity was shipped overseas. Everyone was gambling in the end, because it was the last and only game left to play.
+ 1 Quadrillion
S mails, your curious, you have been a member for 1 week. your quite authoritative, what is your background, if you don't mind me asking?
I was on the old zero hedge blog the first few months.
I have never been in the financial industry,graphic arts/marketing for 15 years thats it for me.
I read, thats about it.
Not much tv for me.
F U C K u
I thought the answer was nice. Why the F U C K u? Mind you, I don't think it hurts the person, but I worry you misunderstand. A few folks have said mean things (they are entitled to how they feel). Not everyone though. There are times Kathy, I feel you falsely accuse.
Cathy needs a friend thats not in the bottle.
As we entertain thoughts of the future many suffer. there is a tendency on my part to see the suffering of the tent dwellers, unemployed and such, but the folks who had wineries and large land developments lost big and may be suffering more because they had so much.
I never had shit , so i am not much bothered personally. The weight of owing, or losing what one has must be heavy. My sympathies to you Velobabe.
oh i luv U too, harry.
it's kathy with a K, not C. can't you at least read.
i really like your genie idea. i could do my nose like her, back in the day. my herione. oops
I think that she considers it funny. I knew a guy that flipped people off instead of waving hi, he thought it was the funniest thing in the world. I always thought of it as a power play. Like when a group of sorority girls walk by and "help" the custodial staff clean up a mess that some other of their ilk left behind. They do it so they can feel more important than the rest of the world.
Velo: You are in the middle of ruining your own life. I doubt that you could even stay clean for 2 days the way you are right now. If you can, then look at the cost of your actions. Time that you should have been joining together the things that you have left, you instead spent doing things that you can't even remember. But tomorrow can be different. Tomorrow can mean something. But only if you work to make it mean something. Your hardships will always control you unless you control them. You can do it. May God Bless your efforts
double fuck U.
So Velobabe, why the name change?
hi marla and me, i read about you some where, oh yeah
F O U G H T C L U B II
Did you strain your 3 brain cells to formulate that ignorant response? What's your problem? Do you really want to come off as a complete prick on this website?
Heres the problem, allow me to direct you here:
http://en.wikipedia.org/wiki/Troll_%28Internet%29
And we may need to remind those around us:
DNFFT!
I think we all get internet identity disorder. Quote from someone else that gave me a good chuckle.
Men are men,
Women are men,
Childrens are FBIs.
Wake up, it's the Internet, nobody can argue with this fact.
Oooo... freefloating, aimless hostility! Yow!
Kathy I really really want to like you. But you just keep coming off as that chick on the train that keeps looking for the best baseball player so you can kill him in that movie the natural.
I only say that because I'm guessing you were disappointed that he was a graphics/artist.
no, you have it A L L wrong. i don't like baseball or the player's. i don't remember seeing the natural. probably not cause i am not a baseball fan. you don't have to like, heph, most people don't. use to it, a lot. wondering how you pronouce your name?
kind of like hef face steus.
Rhymes with orange juice?
These funds must have a set of rules about risk and regular auditing one would think...
YOU would think, I would think, the fund managers -- not so much!
Yes, It's a total disgrace, but it's probably also illegal. There are federal and state laws as to how pensions can invest. I've never heard of one being able to take on leverage, let alone increasing leverage if the thing goes the wrong way and additional collateral is required. And, if this is legal in the state of Illinois, its a big story as to why the law was passed to allow this.
When panic sets in, mistakes are made.
There are a series of fiduciary statutes that require trustees to take proper advice and to operate within what a "prudent man" would consider to be reasonable courses of action, which in recent years has included the use of swaps of many flavours along with the use of leverage. In other words, TRS might have done what we in hindsight think is foolish and imprudent, but by the standard of the times they were following generally accepted principles of pension fund investing.
Long moral hazard, esp/Our Dear President. Culture, like Shore Bank, where its prez is the prez of the acquiring entity.
Shore Bank=Sure Hope Obama Rescues Everyone.
- Ned
Are the people getting paid to make all the decisions getting paid for prudent financial management, or short term results?
They're probably getting paid regardless of either, but I'm pretty sure there's not many of them that give a flying f#$k about whether or not the pension fund will exist in 20 years.
Why don't they just buy shit loads of gold futures and stand for delivery. This starts the scramble for physical and implosion of derivatives - they'll even come out well on the Treasury bet that way too. Who is going to be first to blow up the Crimex? You don't want to be late to that party!
+ $55,000 / oz bad!
Someone's going to bust the Comex, might as well be the IL TRS! Why not? They might get back to even...