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Californicated: From Facebook To Stockton And San Bernardino: How CalPERS Became A Golden State Worrier

Tyler Durden's picture




 

The last few weeks have not been fun for California. Facebook's face-plant removed a large part of the unbelievably 'expected' tax revenues for the state, Stockton BK'd, and now we find out that San Bernadino - the latest and greatest city to file for municipal bankruptcy (after a $46 million shortfall in its budget was irreconcilable). The reason it's a big deal - unfortunately the state's retirement fund - CalPERS - is the city's largest creditor by far with a wonderful $143.3 million exposure. This is more than half the entire debt load of $281.4 million of the Top 20 creditors alone! The deadline for creditors to challenge bankruptcy eligibility is September 21st and we suspect that until then, the comptrollers should be renamed the Golden State Worriers? What is ironic is the same unions that we suppose are fighting the city over cuts and forcing it to take such drastic action are likely to be entirely beholden to their pension benefits from the very same CalPERS which is about to take a sizable haircut.

 

 

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Fri, 08/10/2012 - 13:20 | 2694510 govttrader
govttrader's picture

Dude...Calpers...let me manage ur money...seriously....heck...let my grandma manage ur money

http://govttrader.blogspot.com/

Fri, 08/10/2012 - 13:34 | 2694554 knukles
knukles's picture

Lousy results generated by misguided people focusing on considerations other than returns, politically influenced, socially active, inordinately irresponsible in the investment of monies with no regard to correlation of cause and effect/cross correlation of assets and liabilities.

Up until a very short time ago, those approaching retirement could purchase additional years service at discount rates far removed from those to be earned by the fund.  Pure arbitrage.  Furthermore, the fund was loaning money at preferential rates to permit such!  Losses by design!

Let alone the lack of marking to market many bad investments still being carried as category/level imaginary hope 3.

A clusterfuck galore.

An entire shadow entitlement enrichment to the public sector without prior approval of the electorate.  This has been built without the knowledge of the taxpayers and is going to be a source of the yet to come political crucifixions along the Apian Way so to speak.

Fri, 08/10/2012 - 13:36 | 2694575 malikai
malikai's picture

Piss off the public unions enough and you get problems.

They're probably banking on that.

Fri, 08/10/2012 - 13:40 | 2694593 surf0766
surf0766's picture

Who cares about them

Fri, 08/10/2012 - 13:49 | 2694638 malikai
malikai's picture

You will when the power is out, the garbage has been piling up for months and there are no police, fire, etc. Unless you're out and prepared.

See: Argentina.

Fri, 08/10/2012 - 13:54 | 2694661 surf0766
surf0766's picture

You mean the ones who support the communist takeover of the country. Stop that nonsense argument. It hasn't worked for years.

 

Fri, 08/10/2012 - 13:57 | 2694674 strannick
strannick's picture

Meredeth Whitney bitchez

Fri, 08/10/2012 - 14:01 | 2694693 surf0766
surf0766's picture

Will she be 100% vindicated in the end? Time will tell.

Fri, 08/10/2012 - 14:10 | 2694739 mick_richfield
mick_richfield's picture

I'm thinking more like 400%.

Fri, 08/10/2012 - 15:26 | 2695007 Buckaroo Banzai
Buckaroo Banzai's picture

In the meantime, the poor thing has put on like 50 pounds, almost certainly from the stress she's had to endure for the crime of being right.

Fri, 08/10/2012 - 15:55 | 2695126 Carl Spackler
Carl Spackler's picture

Her timing was grossly off.

And as we all know in the finance world, timing is the most important consideration...whether to buy, sell, or continue to hold.

Fri, 08/10/2012 - 16:07 | 2695162 Buckaroo Banzai
Buckaroo Banzai's picture

Really? That's the best argument you can make? If I'm someone who sold munis several years ago on her advice, I'm going to be thrilled in 2014 when munis are selling at 50 cents on the dollar.

Being off by a few years on a call like this means nothing, when the asset in question is eventually headed to zero.

Fri, 08/10/2012 - 18:35 | 2695624 Nadaclue
Nadaclue's picture

Actually she has said a few times that they pushed her for a time and she was reluctant. They kept pushing her. I haven't watched the full two hours of the taping but I don't doubt the MSM asshats edited out some context.

In the end, it doesn't matter to me as I had no bonds but a buttload of folks dumped em. Sad really.

Fri, 08/10/2012 - 16:00 | 2695140 smlbizman
smlbizman's picture

im in baltimore county md.....the county has just borrowed 25mil from the county public pension fund at call it 7.5%....the pension funds  has just lowered its goals from like 7.75% to 7.5 %...and the are taking a bow for this dynamic move...it only cost the county(taxpayer) 15mil for this adjustment...now this money is to be used to build an all in one recycling facility..we all ready have all in one collection...our fearless leader says it will be profitable by 2015....so i am trying to figure out who is bailing out whom?

Fri, 08/10/2012 - 14:11 | 2694741 Rainman
Rainman's picture

CA gubmint retirees won't get stiffed....the bondholders will though.

http://www.bloomberg.com/news/2012-08-09/california-bankruptcies-shield-retirees-not-bondholders.html

 

Fri, 08/10/2012 - 14:34 | 2694832 ParkAveFlasher
ParkAveFlasher's picture

You don't have to pay off the entire force, just the higher ranks. 

Fri, 08/10/2012 - 14:37 | 2694842 mick_richfield
mick_richfield's picture

"Vote for Cthulhu, and You Will Be Eaten Last"

In the end -- the government retirees will get their share of the action.

They have sowed the wind.

Fri, 08/10/2012 - 14:29 | 2694811 malikai
malikai's picture

It may be nonsense economically, but it is very real politically.

Fri, 08/10/2012 - 14:07 | 2694718 piceridu
piceridu's picture

You mean a return to community based "public service? Volunteer fire departments, smaller localized police hired directly by small communities? You live where you work will be the new normal...where communities hire their own teachers, garbage collectors, public caretakers that recycle their earnings back into the community where they work. The sooner we break the backs of the monstrous public unions and their thieving pension funds, the sooner we get back to fiscal responsibility. Localized food, labor and trading with like minded neighbors (or neighboring cities and towns) is (back to) the future.

Fri, 08/10/2012 - 14:56 | 2694895 AustriAnnie
AustriAnnie's picture

Don't hold your breath.

More likely the state services will become Federal-based services taken over by central Federal authority "for the interest of the people".

It will become futher centralized, then later when the inefficiencies of greater and greater centralization forces people to fend for themselves, maybe THEN you will see community-based systems emerge.  But the central Federal authority will crack down on community-based resources as "a threat to public safety" or whatever other excuse they can come up with to maintain their control.

Power will concentrate much much further in the hands of the State before this whole thing is over.

Wars and the rationing that accompanies them usually serves as a perfect excuse to increase control over and ration goods/services/utilities. 

What you call "community-based cooperation", they will call "the black market", and anyone who dares partake will end up behind bars.

Fri, 08/10/2012 - 15:20 | 2694987 piceridu
piceridu's picture

Simple math will prevail...the religion of exponential growth might fail first and when it does, every man for himself...

Fri, 08/10/2012 - 15:26 | 2695010 AustriAnnie
AustriAnnie's picture

Every man for himself.....

...except the police state will crack down on those who try to help themselves.  The length of time for a brutal totalitarian regime to fall is long. 

Its wishful thinking to believe you will simply be left alone, and that the gov't entitites will slowly die without a fight to take every last thing you have.  And they will have a mob of fearful sheeple behind them.

 

Fri, 08/10/2012 - 16:14 | 2695187 piceridu
piceridu's picture

...and who will be paying for that police state? The military is the power and they have families (mothers and sisters) in small communities...Police vs. The Armed Forces...I'll take Army, Navy, Air Force and Marines over NYPD, LAPD any day of the week.

 

Fri, 08/10/2012 - 16:32 | 2695257 malikai
malikai's picture

That is always the key element in a revolution.

Fri, 08/10/2012 - 17:30 | 2695434 AustriAnnie
AustriAnnie's picture

There is an increasing trend of militarization of police forces.  Greater cooperation between local law enforcement and federal agencies along with military.

When more and more unemployed youth with wives and kids who are already dependent on the state get recruited for military and local law enforcement, don't count on them to bite the hand that feeds them (and their mothers and sisters in small communities).  They won't turn against the machine until the bitter end. 

Veterans who speak out against the police state are already being propagandized as traitors and PTSD-driven lunatics.  TPTB know that the military has to be on their side, and they are careful to squash dissent among the ranks.  The military will not stop getting paid.  Even if the currency collapses, its the military who have access to food and the power to loot/steal with gov't issued firepower.  And hungry troops with hungry families will have a choice: which side of the gun do they want to be on?

They can do a lot of damage before the military paychecks stop flowing.  

 

Fri, 08/10/2012 - 18:51 | 2695657 rufusbird
rufusbird's picture

I am glad you wrote that. The most rewarding thing for me this summer has been the gratitude of the people, ( more famlies this year) who stop and get the excess vegetables from my back yard garden. I hang them on my front fence in grocery bags with a small sign, "free vegetables".

Yesterday evening, a family on bicycles, with a daughter about my youngest grandsons age (7), stopped and got the vegetables and thanked me for them. It is like I am seeing a deeper side to my neighborhood than I have ever experencied in my life. One thing is certain, there are a lot more people who a living on the edge, and using bicycles as their main transportation, than I have ever seen in my life.

 

 

Sat, 08/11/2012 - 01:43 | 2696476 Skateboarder
Skateboarder's picture

Where do you live man? It sounds like utopia!

Sat, 08/11/2012 - 05:42 | 2696616 MisterMousePotato
MisterMousePotato's picture

rubi ... are you aware that you are violating federal law (passed last year)? Yer goin' to Leavenworth for your kindness.

Fri, 08/10/2012 - 19:00 | 2695680 BooMushroom
BooMushroom's picture

Volunteer?  You mean do it NOT for money?  How are moochers supposed to mooch if they aren't even getting paid? [/sarc]

Seriously, though, we would have to call off all the wars in the United States in order for all that to work.  No more War on Drugs, no more War on Poverty, homelessness, obesity, whatever.

Any politician calling for the end of the War on Drugs will be called soft on crime, etc, etc, etc.  Never gonna happen without upheavals.

The problem with good, honest, community-based solutions is not that they won't work, the problem is that there is not enough room for graft.  Sometimes I think I would be okay with the politicians and their cronies skimming a few billion dollars off the top just to go in their pockets, if they would just drop all these fake "wars" and let the states fix their own problems.

Fri, 08/10/2012 - 14:17 | 2694758 rlouis
rlouis's picture

The power companies are not state owned - only [mis]regulated.  Same with garbage.  Public employement reflects a corruption of entitlement expressed by that catchy phrase from the 80s said to the UC Berkely graduating class by a Wall St. crook/fraud/pathetic excuse for a human (who for attention and validation (?) rode around in a pink Rolls Royce,) remember that POS, Ivan Boesky, "Greed is good"?  Greed is not good and needs to be looked at, in the extreme, as a sickness - DSM sick - psychopath level.  Self interest is not greed and takes into account the wealth of the entire community. After the public employees have bankrupted their communities I expect they'll say they didn't know, they were only taking what was offered and are now mad as hell because they're entitled "they earned it."

Fri, 08/10/2012 - 14:38 | 2694844 Sofa King
Sofa King's picture

So what will these critical public employees do when they leave their jobs and plunge the state into chaos?

Nothing , because they are public employees that do not understand what hard work is. Sorry, if the truth stings but it's time we started facing up to facts. Bastards are not worth their Salt.

Fri, 08/10/2012 - 14:55 | 2694887 Gringo Viejo
Gringo Viejo's picture

When seconds count, the police/firemen are only minutes away. As a Californian, I would be in favor of volunteer fire departments and neighborhood watchmen. Unfortunately, it's a socialist state with draconian laws as regards fire arms and one's right to defend life and property. (Which is why criminality runs rampant in CA.)

Fri, 08/10/2012 - 15:54 | 2695118 Totentänzerlied
Totentänzerlied's picture

Please think about what you've written for 0.5 seconds: If the government had not created an enforced legal monopoly on provision of these services, there would be no issue of their availability when the government finally succumbs to its own incompetence.

You think there aren't people who would satisfy the demand for these services if the government would let them? HAHAhahaha.

Instead, when the government fails to provide these services, you get to deal with price-gouging as the least risk-averse show up to fill the supply gap for these supposedly sacrosanct services - while demand is artificially increased and before competition has been established. And you blame them for knowing the true market value of their labor.

Go on believing that only the sacred public unions with their government monopoly can do anything better than the market. You will not realize that you are paying the price, so all is fine.

Fri, 08/10/2012 - 20:58 | 2695902 ljag
ljag's picture

ot ot

Did anyone else hear about a Haarp generated tsunami coming this weekend. Just askin.

Fri, 08/10/2012 - 13:38 | 2694585 Hype Alert
Hype Alert's picture

Amputate before the cancer spreads.

Fri, 08/10/2012 - 16:47 | 2695229 greyghost
greyghost's picture

more nonsense by someone that doen't know shit about anything. the city of san bernardino has pissed this chump change down the rabbit hole called san bernardino regional airport [the late norton air force base]. 30 miles down interstate 10 is ontario international airport and yes it may close soon....no passengers! may i point out item ten.....ada restroom renovations "lease". yes, that's right they are paying 4 million a year to lease their own "restrooms"????? talk to us about pensions when the thief is in you face daily like item three: kohl's department stores for 29.5 million or how about they call up mark bush at new world systems corp. and ask for their money back on the enterprise resource "planning" system listed in line #8???? and we need not go into the shit for brains ex-mayor that pissed 10 of millions away on some wacko idea to build canals[think venice] throughout the city. you see they have a problem with very very high ground water, the city sits on a large under ground lake! now everyone in the area thought that if you need to lower the water table....well you just might sell the water for cash...right? can't wait for the fox report on the bankrupt cities in the u.s. tonight...something tells me they won't talk about these idiotic white elephants!!!!! 

Sat, 08/11/2012 - 05:54 | 2696619 MisterMousePotato
MisterMousePotato's picture

I have a bad habit. (Well, several actually.) Among them, I drink and then write some really stupid shit on the internets.

But, Grey? Hey. That was spectacularly incoherent. Epic, really.

Wanna come over and drink a few bottles of Wild Turkey with me, and then we can post shit together on ZH?

Last time I made this offer (35 years ago), I fell drunk into Camden harbor.

Nearly drowned.

Once fell asleep in a snowbank in the back yard zero degrees in Camden, too. From washing dishes at a restaurant, the front of my pants were frozen stiff. There was frost on the outside of my hat, too.

Maine is a bitch in the winter.

Fri, 08/10/2012 - 17:16 | 2695402 davey
davey's picture

Public unions will get what they deserve. Years of gaming the system, inflating there last year with sick days and vacation days from previous years. You reap what your greedy fat ass sows.

Fri, 08/10/2012 - 13:39 | 2694588 ArrestBobRubin
ArrestBobRubin's picture

Calpers, just buy physical silver, kick back w/ some fine Northern CA herb, and wait. Now how easy is that?

Fri, 08/10/2012 - 13:54 | 2694658 slewie the pi-rat
slewie the pi-rat's picture

well not quite that easy...

but close! 

<: don't forget the fuk_uWinesbyAnnCoulter :>

Fri, 08/10/2012 - 16:11 | 2695168 True.North
True.North's picture

Calpers should buy gold and sell herb (to finance buying more gold). $500+ billion in unfunded pension liabilities will not be fixed with 1% annualized returns.

Sat, 08/11/2012 - 01:40 | 2696474 mqg25
mqg25's picture

Now your talkin mon.

Fri, 08/10/2012 - 18:26 | 2695606 Nadaclue
Nadaclue's picture

Lol, right.

You do know that Calpers was one of the few pension angencies who made a point and a half in profit this year,right?

On 220 billion? You fricken know how hard it is to deploy much less make money on that kind of wad? That's after the fees paid to the hedgies.

I think you should probably just stick to what you're doing. lol

You are good comic releif though so I threw ya a green bone.

Fri, 08/10/2012 - 13:20 | 2694511 spartan117
spartan117's picture

Who cares.  We got Dwight Howard.  Go Lakers!

Fri, 08/10/2012 - 13:31 | 2694558 Temporalist
Temporalist's picture

Yea Howard will just buy San Bernadino and all will be fine.

Fri, 08/10/2012 - 18:21 | 2695586 oddjob
oddjob's picture

It's great when a sport showcases rapists and felons. Anyhow, Hoop is for mindless goons like Obama.

Fri, 08/10/2012 - 13:24 | 2694514 Cognitive Dissonance
Cognitive Dissonance's picture

"The reason it's a big deal - unfortunately the state's retirement fund - CalPERS - is the city's largest creditor by far with a wonderful $143.3 million exposure."

The cancer is intertwined, interdependant, spreading and malignant. Either we begin to cut out the dead tissue NOW or we can expect a long wasting illness to eventually consume us.

Scalpel please. Who has the whiskey and biting stick?

Fri, 08/10/2012 - 13:36 | 2694577 machineh
machineh's picture

This is not much of a cash flow issue for Calpers, one would think.

After all, its liability (pension benefits) is payable over the next few decades. 

Meanwhile San Bernardino will be suspending its contributions for however long it takes to sort out the bankruptcy -- a few months, probably.

$143.3 million sounds scary, but it is the net present value of a large future obligation.

Fri, 08/10/2012 - 13:49 | 2694635 A Nanny Moose
A Nanny Moose's picture

How many other soon to be BK cities are in debt to this political slush fund?

Fri, 08/10/2012 - 13:41 | 2694601 FreedomGuy
FreedomGuy's picture

Personally, I love the irony of the whole thing.

Fri, 08/10/2012 - 13:49 | 2694633 lesterbegood
lesterbegood's picture

in my opinion, the patient is already dead of terminal fraud; just need the doc to pronounce it.

Dr. Lesterbegood hereby pronounces that the FED and all it's subentities are dead of terminal fraud!

And before the AMA frauds start howling, my doctorate is in common sense.

Next page?

Fri, 08/10/2012 - 14:07 | 2694726 holdbuysell
holdbuysell's picture

FWIW,

Catherine Fitts, Assistant Secretary of Housing and Federal Housing[1] Commissioner at the United States Department of Housing and Urban Development in the first Bush Administration, in an interview discussed how the banks who created the housing debt, etc., packaged it up and sold it right back to the taxpayers into their pensions, funds, etc.

She further goes on in that interview to say the money the banks made free and clear from selling those 'shitty deals' was then transferred East to begin the process all over again in other countries.

If that's really what happened...talk about ugly.

Fri, 08/10/2012 - 15:45 | 2695074 lesterbegood
lesterbegood's picture

I heard that back in 2008, the Chinese discovered that the mortgages backing the MBS that they were buying in $30 mil bundles had been sold and resold as many as 20 times over. They pulled the plug and the rest is history.

Fri, 08/10/2012 - 13:24 | 2694521 Hulk
Hulk's picture

Let the lawsuits begin.

I'm suing a turnip because I am unable to get blood out of it...

Fri, 08/10/2012 - 13:49 | 2694637 Sofa King Confused
Sofa King Confused's picture

Knowing full well this will stir up a lot of shit I say " fuck all public employees and their pensions. "  Why should I have to pay for my retirement, and through taxes, pay for public workers also?  Let them save for themselves like most Americans do!

Fri, 08/10/2012 - 14:53 | 2694889 mick_richfield
mick_richfield's picture

If you want to fuck their pensions, you gonna have to stand in line.

Fri, 08/10/2012 - 13:51 | 2694644 Unbezahlbar
Unbezahlbar's picture

$46 million is peanuts. Check out Orange County retirement system:

Stanford: O.C. retirement system $10 billion in the hole

 

The Orange County Employees Retirement System – which has assets valued at some $10 billion — also happens to be about $10 billion shy of what it needs to fulfill its pension promises to workers, according to a study of California’s largest independent pension systems by researchers at Stanford University.

Put another way, OCERS is only 53.5 percent funded, they said. Stanford suggests that a healthy system must be at least 80 percent funded (but others say that even 80 percent is way too low).

 

http://taxdollars.ocregister.com/2012/03/09/stanford-o-c-retirement-syst...

So what's next?

 

 

Fri, 08/10/2012 - 14:02 | 2694699 walküre
walküre's picture

How liquid are those "assets" valued at 10 billion?

Promised to pay by someone on paper. Promises, promises ...

Fri, 08/10/2012 - 14:36 | 2694837 JohnKozac
JohnKozac's picture

That ZH "Rathole" article may be applied here also. I wonder how many underfunded plans Cali has? What servies will get cut first?..... Usually education is the first to go. Who needs an education anyway, right ?

Fri, 08/10/2012 - 13:24 | 2694523 Midas
Midas's picture

Like a snake eating its tail while taking a shit....

Fri, 08/10/2012 - 13:27 | 2694527 EvlTheCat
EvlTheCat's picture

It's Friday and I have a whole bottle of Irish Whiskey.  Poor California....

Fri, 08/10/2012 - 13:30 | 2694545 LeisureSmith
LeisureSmith's picture

Poor me, i just got boose envy.

Fri, 08/10/2012 - 14:54 | 2694896 mick_richfield
mick_richfield's picture

Excellent.  I got bourbon. 

It's Happy Hour on ZH.

Fri, 08/10/2012 - 13:32 | 2694563 Dr. Engali
Dr. Engali's picture

These people are complete clowns. What about ..there is no money don't they understand?

Fri, 08/10/2012 - 17:10 | 2695386 FreedomGuy
FreedomGuy's picture

Good point, but this is a government entity. As long as YOU have money left, they have money. Unlike Walmart, they can use government force to make you pay their benefits.

Fri, 08/10/2012 - 13:35 | 2694565 TaxSlave
TaxSlave's picture

What is ironic is the same unions that we suppose are fighting the city over cuts and forcing it to take such drastic action are likely to be entirely beholden to their pension benefits from the very same CalPERS which is about to take a sizable haircut.

1. Draw gun.

2. Shoot self in foot.  With gusto!

 

Atlas doesn't have to shrug, he's been driven out of town.  Let them live off each other and see how that works out.

Fri, 08/10/2012 - 13:34 | 2694567 Headbanger
Headbanger's picture

Black Swan???

Fri, 08/10/2012 - 13:35 | 2694570 blunderdog
blunderdog's picture

What's the big deal?  Retirees will still get Social Security and Medicare.  They're set.

Fri, 08/10/2012 - 14:18 | 2694761 slewie the pi-rat
slewie the pi-rat's picture

nope

goobermint employees don't pay into SS in general b/c the fedGoobermint can't "tax" states &tc for their "half" (or the military branches and public "serving us b4U" employers either)  they are "exempt" as you can be also, if you opt out for reasons of conscience (i think)

so they use calPers et al and billGross gets paid either way, apparently

these vast funds are very difficult to "invest" correctly/wisely and calPers is not a bankster holdingCompany and also must "conform to the boiulerplate" which as we know is written by the bankster's and corpo-fascits' lawyers who also run the goobermnints b/c we thePeople are smart enuf to "elect" them  L0L!!!

Fri, 08/10/2012 - 14:28 | 2694807 blunderdog
blunderdog's picture

noopies, section 218 agreements and such as not gootten chainged whilesagoback so moost'em probally okies

Fri, 08/10/2012 - 13:35 | 2694571 ArrestBobRubin
ArrestBobRubin's picture

Someone named Charles blabbing from Sausalito should definitely chip in to fill the gap

Fri, 08/10/2012 - 13:36 | 2694573 Rainman
Rainman's picture

Just for giggles, consider neighboring Riverside County owes CalPers $ 600 million at last count. CalPers is holding a bunch of IOUs from municipalities they count as money good....not much different from the SSTF .

Fri, 08/10/2012 - 13:37 | 2694579 Dr. Engali
Dr. Engali's picture

 

 

 

I went to lunch and the S&P was at 1400. One hour later I came back from lunch and the S&P was at 1400. Did I miss anything?.zzzzzzzzzzzzzzzzzz

Fri, 08/10/2012 - 13:47 | 2694630 EvlTheCat
EvlTheCat's picture

If you care, I started drinking about noon EST.

Fri, 08/10/2012 - 13:38 | 2694584 TrumpXVI
TrumpXVI's picture

Hey, maybe we're all wrong.  Maybe the correct answer IS to simply be stupid and crazy.

Fri, 08/10/2012 - 13:38 | 2694587 Fourth Horseman...
Fourth Horseman of the Apocalypse's picture

It does not matter because it is the taxpayer that is going to fund the retiree's pensions regardless of how poorly CALPERS performs.  That's the name of the game.  

Fri, 08/10/2012 - 13:51 | 2694646 pd45
pd45's picture

I'm one of them CA tax payers.  But you are right, it doesn't matter. We'll simply vote in few more bond measures, you know, the free money. It's not a tax, it's FREE MONEY.

 

 

Fri, 08/10/2012 - 14:09 | 2694728 Whoahthere
Whoahthere's picture

Public employees should never be allowed to unionize.  Their benefits and "protections" are already part of federal law.  Who is sitting at the bargaining table representing the fucked-over taxpayer?  NO ONE!  Like everything else, the game is rigged.  What if 95% of union dues went to promote a conservative or libertarian agenda, rather than the communist agenda, they would make public employee unions illegal. 

Fri, 08/10/2012 - 13:39 | 2694590 Josh Randall
Josh Randall's picture

Parasites -- want to see what happens when your host dies ?

Fri, 08/10/2012 - 13:41 | 2694595 Global Hunter
Global Hunter's picture

They couldn't have built a system that so closely resembled a house of cards if they tried.

Fri, 08/10/2012 - 13:40 | 2694596 A Lunatic
A Lunatic's picture

This would all be funny if it were not so catastrophically unfunny.

Fri, 08/10/2012 - 13:59 | 2694682 TheFourthStooge-ing
TheFourthStooge-ing's picture

CalPERS did it for the lulz! (At least I hope they did, because that's all they'll be getting.)

Fri, 08/10/2012 - 13:42 | 2694602 QuantumCat
QuantumCat's picture

No worries, California... live it up!  Spend, Spend, Spend.  Texas will foot the bill for you... compliments of the US Government's redistribution bailout plan.  It's working for Rajoy and Monti with Germany... it can work for you too.  The banks are on your side.

Fri, 08/10/2012 - 16:37 | 2695268 Duffy Moon
Duffy Moon's picture

I wonder how much Cali pays in Fed taxes vs. how much they take in Fed receipts?  I would think Cali takes more than it gives back. But how much more?

Fri, 08/10/2012 - 17:05 | 2695363 Nadaclue
Nadaclue's picture

Actually, the number is 78-81 cents federal monies returned for each 1 dollar submitted in Calif so I would say your thinking is wrong. The red states trump the blue states in Fed dollars recieved. My position is the typical Libertarian position so I won't go on.

This one is 2004

http://taxprof.typepad.com/taxprof_blog/2004/09/red_states_feed.html

This one is 2010

http://visualeconomics.creditloan.com/united-states-federal-tax-dollars/

This one is 2011

http://stonesoup.wordpress.com/2011/06/07/federal-funding-received-by-st...

 

Fri, 08/10/2012 - 20:26 | 2695836 Duffy Moon
Duffy Moon's picture

Thx NDC. Good stuff.

Fri, 08/10/2012 - 13:57 | 2694604 Whoahthere
Whoahthere's picture

Let's give them all 25%, 50%, no . . . 100% raises every year so this thing can hurry up and implode.  THEN NO ONE WILL GET ANYTHING.  Crooked pimps, hookers and whores. 

Fri, 08/10/2012 - 13:43 | 2694605 govttrader
govttrader's picture

Its almost time for the VWAP smasher....

http://govttrader.blogspot.com/

Fri, 08/10/2012 - 13:46 | 2694626 krispkritter
krispkritter's picture

There are some serious brain-dead dumbfucks running things in CA. Look at these geniuses, they're hocking their tax base to loan sharks:

http://www.voiceofsandiego.org/education/article_3f780860-e0b7-11e1-821b-001a4bcf887a.html

Fri, 08/10/2012 - 14:05 | 2694720 divide_by_zero
divide_by_zero's picture

I was just about to post that article, the only buzz around here is on talk radio, the Progressive MSM ignores it. Gotta admit though it's a nice long kick of the can down the road.

Fri, 08/10/2012 - 18:15 | 2695571 smiler03
smiler03's picture

This is disturbingly like the Private Finance Initiative (PFI) bought in by the UK Fascist, Ooops, Labour Party. 

Steal from the future at no cost today.

Fri, 08/10/2012 - 13:58 | 2694677 daveeemc2
daveeemc2's picture

this is hilarious

 

Fri, 08/10/2012 - 14:14 | 2694751 Whoahthere
Whoahthere's picture

Burn, Baby, Burn! Gov. Moonbeam initiated Cali's decline 30 years ago, so it is ironically fitting that he should turn out the lights on his way out. I just love reality!

Fri, 08/10/2012 - 14:13 | 2694705 pd45
pd45's picture

San Berdu was just a tiny tremor . The Big One is just around the corner.

http://www.calwatchdog.com/2012/04/30/los-angeles-teeters-on-the-brink-of-bankruptcy/#

 

 

 

 

Fri, 08/10/2012 - 14:05 | 2694715 polizeros
polizeros's picture

If CalPERS has a shortfalll, by law it can force other entities including the state of Califiornia, to make up the difference. The State cannot refuse.

Fri, 08/10/2012 - 14:16 | 2694756 bob_dabolina
bob_dabolina's picture

And where does the state get the money?

CA IS BROKE BITCHEZ

Fri, 08/10/2012 - 15:13 | 2694960 AustriAnnie
AustriAnnie's picture

They don't need to get MORE money, they just need to transfer money from taxpayers to the public employees.

They do this in a variety of ways other than outright taxation.  You can bet that the unions will get paid.  The paychecks will keep flowing to them, but the cuts will be made in the actual services to the taxpayer.

The CalTrans workers will get paid, but there will be potholes in the highways.

Administrative workers will get paid, but you'll walk into an office to file paperwork and they'll charge you a "this fee" and a "that fee" and then they'll tell you that they can't staple the paper for you because they stopped buying staples due to budget cuts.

Teachers will get paid, but kids will have to bring everything to school and share books and equipment.  (When I was in CA in grade school we had 3 kids to each textbook and spanish and english classes were combined so students had to listen to everything in two languages, cutting the material covered in half.  They wouldn't run the A/C when it was hot and shut the lights off due to "budget cuts" to save power.   But the teachers got paid).

Its not about getting more funds, its about a transfer of funds.

Fri, 08/10/2012 - 14:06 | 2694723 Yen Cross
Yen Cross's picture

 Pretty tough to fund anything @ NIRP/ZIRP! Now the public sector gets a taste of wealth destruction through ZIRP/ inflation.

 Calpers can BTFD, just like everyone else<> /sarc

Fri, 08/10/2012 - 14:13 | 2694750 QuantumWampum
QuantumWampum's picture

Nobody is looking at the Comprehensive Annual Financial Reports (CAFR) for these allegedly bankrupt cities.  Stockton delayed their 2011 CAFR until after the bankruptcy decision.  Timely reporting would probably have shown hundreds of  millions in liquid assets not shown on the publicly disclosed financial report.

http://www.youtube.com/watch?v=-Pvr-eN7Eu8

This widespread cover-up of trillions in financial assets held by federal, state, county and municipality investment funds appears to be part of the plan to bankrupt the populace while taking over the corporations and banks —  Soviet-style communism through the back door.

Fri, 08/10/2012 - 14:30 | 2694760 Whoahthere
Whoahthere's picture

Like the state's parks dept. hiding $54 million while closing parks across the state and increasing parking and use fees. Nice! 

Or the director of the state's park dept. resigning and the deputy director being fired after it was discovered that dozens of parks dept employees were selling their unused vacation back to the state (illegal, but so what).  Someone suggested an audit - duh!

 

Fri, 08/10/2012 - 14:27 | 2694798 apberusdisvet
apberusdisvet's picture

TO THE TENS OF 1000S OF CALIFORNIA PUBLIC SERVANTS WHO CAN RETIRE PRIOR TO AGE 60 AND RECEIVE $MILLIONS IN PENSIONS AND BENEFITS, I Say:

 

Karma is a bitch

Fri, 08/10/2012 - 15:21 | 2694983 AustriAnnie
AustriAnnie's picture

Before you gloat realize this:   YOU are in line behind THEM.   THEY will get paid before YOU.  Whatever THEY lose, they will ensure that YOU lose more. 

The collective power of public employees and unions is far greater than you realize, and they will use everything in their power (which is unfortunately the police force and ultimately the military) to force you to pay them.

They might not recieve millions in pensions if the money is not there, but you can bet they will receive half of what you have saved for your retirement.

And keep in mind, the money-printing that will ensue to make these payouts will hit you harder than it will hit them.  Inflation is not uniform.  The people who get paid first suffer the least.  And you can bet payments will flow through gov't first.

Fri, 08/10/2012 - 14:33 | 2694825 markar
markar's picture

not to worry. High speed rail will fix everything. Wisking people from bankrupt city to bankrupt city at 200mph has to be a good thing? Isn't it?

Fri, 08/10/2012 - 18:20 | 2695589 smiler03
smiler03's picture

I thought it is to be from nowhere to nowhere?

Fri, 08/10/2012 - 14:43 | 2694866 bourbondave
bourbondave's picture

Does anyone think the feds will allow CalPERS to go down?  We will all pay for these idiots in California.

Fri, 08/10/2012 - 17:13 | 2695391 Nadaclue
Nadaclue's picture

CalPERS can only go down if Calif goes down. Maintaining funding of CalPERS is in the state constitution. The States of the US cannot BK but they can be compelled to sell assets to meet their funding needs.

Anyone want to buy a nice old domed building in the heart of Sacramento? Current multi million remodel less than 10 years ago, lots of marble, excellent shape, cheap...Owners may carry with sizable down. If interested, just howl at the moon and the moonbeam himself will call you tomorrow.

lol

Fri, 08/10/2012 - 15:35 | 2695037 TahoeBilly2012
TahoeBilly2012's picture

As an FYI the term "Californicate" started with bumper stickers in Oregon back in the 70's...not the Red Hot Chile Pepper's as they would like you to believe.

Fri, 08/10/2012 - 15:52 | 2695109 malek
malek's picture

Nice find, Tyler!

Fri, 08/10/2012 - 16:13 | 2695186 Dareconomics
Dareconomics's picture

All of these municipalities with budget problems will eventually have to cut benefits for state workers or raise taxes drastically. The same delusions that led to European crisis are exactly the same that will lead to the California/Illinois/New Jersey crisis. 

 

http://dareconomics.wordpress.com/

Fri, 08/10/2012 - 16:52 | 2695322 SmittyinLA
SmittyinLA's picture

The people that run the unions and CALPERS have separate private pensions, they have no liability or stake In a failure, their primary concern is staying in power to extend their own personal looting.

Fri, 08/10/2012 - 18:01 | 2695533 Whoahthere
Whoahthere's picture

The people who run the unions and CALPERS are the D- students who fried their brains in the 60's and live in an alternate cosmic realm.  Mandatory Random Drug Testing for EVERY public office holder.  As their employer, I have a right to know!  Nancy Pelosi now says that the spirit of Susan B Anthony spoke to her.  Urine sample please, Nancy.  And by the way Nancy, who the hell did that to your face?  She could be a poster child for so many causes on so many levels. 

Fri, 08/10/2012 - 20:11 | 2695810 sandhillexit
sandhillexit's picture

NY - nice city, sucky weather.  Chicago is more beautiful, Austin - clever.  But LA is  NY in 1910.  When the recessions come, people go right on working. Its a cash economy.  Every artist is his own small business.  He does his own taxes.  Shows up at the PTA. You'd be surprised how financially savvy your basic Dead Head is.  House paid off, taxes scored from 1985.  Knows the farmers, the vintner, the mechanic.  Wires his own system with parts picked up on the sound stage. Zen and the Art of Motorcycle Maintenance.  The roads are busy, that means the economy is fine.  Live and let live. 

The Pacific century is just getting started.  Ever notice how the Brits just fly over NYC and land in LA?  Cause NY is just a late London. And London does it all better.  

 

San Bernardino?  is a desert village.  When they need a steel mill on the West Coast again they just have to water it and the workers will come back.  There are only two possible outcomes for us...China starts spending those Dollars on us while you'all watch, OR the Dollar drops and import substitution revives the factories.  Either way the ports will be busy enough.  

 

Our POLs are afraid, very afraid, since Prop13.  They take statewide conservatives out at the knees, and early, because well, once that engine gets going there is no stopping it.  Reagan, heard of him?  Pelosi and Co love having the Southern White Bread Party on the national stage, "give Sarah P a bigger mic." its keeping the DEMs in office here.  Clueless Anti-science, preachers in the bedroom, all the ranting against hard-working immigrants.  Her honest take is, 'Keep it coming bozos."  

GOP 'f'ed' their own voters in CAL by allowing the NY banks to over-lever the homeowners in the outer suburbs.  Outer-ring suburbs, esp. San Bernardino are still dark. You might even say BHO doesn't want to help the other guy's kinfolk.  Unregulated banking sucks, but once construction restarts, So Cal will be fine, again, as always.   Whtiman spent $30 mln of her own money but no one was buying, she sounded more like the problem than the solution.  But that doesn't mean that a social liberal/fiscal conservative won't show up when needed. The crisis maketh the man. 

The downside of educating the middle class is that they won't sit still for BS. Our growth plan is to draw in all your best graduates. Grow the new economy.  JPL, Tesla zero-to-sixty in 4.1 seconds, feels like the top of the roller coaster.   They aren't turning off the sunshine.  We have plenty of oil, its in the ground and when the price is high enough we'll think about selling it to ya, but that will be a while.  Enron tried to game us, look where they are now.   

Here's how Texas manages its economy.  Good luck with that when we stop paying net Federal...(why are Conaway's voters/clients particularly fat?)

http://www.austinfoodbank.org/hunger-is-unacceptable/congressional-map.html

Fri, 08/10/2012 - 20:11 | 2695813 sandhillexit
sandhillexit's picture

NY - nice city, sucky weather.  Chicago is more beautiful, Austin - clever.  But LA is  NY in 1910.  When the recessions come, people go right on working. Its a cash economy.  Every artist is his own small business.  He does his own taxes.  Shows up at the PTA. You'd be surprised how financially savvy your basic Dead Head is.  House paid off, taxes scored from 1985.  Knows the farmers, the vintner, the mechanic.  Wires his own system with parts picked up on the sound stage. Zen and the Art of Motorcycle Maintenance.  The roads are busy, that means the economy is fine.  Live and let live. 

The Pacific century is just getting started.  Ever notice how the Brits just fly over NYC and land in LA?  Cause NY is just a late London. And London does it all better.  

 

San Bernardino?  is a desert village.  When they need a steel mill on the West Coast again they just have to water it and the workers will come back.  There are only two possible outcomes for us...China starts spending those Dollars on us while you'all watch, OR the Dollar drops and import substitution revives the factories.  Either way the ports will be busy enough.  

 

Our POLs are afraid, very afraid, since Prop13.  They take statewide conservatives out at the knees, and early, because well, once that engine gets going there is no stopping it.  Reagan, heard of him?  Pelosi and Co love having the Southern White Bread Party on the national stage, "give Sarah P a bigger mic." its keeping the DEMs in office here.  Clueless Anti-science, preachers in the bedroom, all the ranting against hard-working immigrants.  Her honest take is, 'Keep it coming bozos."  

GOP 'f'ed' their own voters in CAL by allowing the NY banks to over-lever the homeowners in the outer suburbs.  Outer-ring suburbs, esp. San Bernardino are still dark. You might even say BHO doesn't want to help the other guy's kinfolk.  Unregulated banking sucks, but once construction restarts, So Cal will be fine, again, as always.   Whtiman spent $30 mln of her own money but no one was buying, she sounded more like the problem than the solution.  But that doesn't mean that a social liberal/fiscal conservative won't show up when needed. The crisis maketh the man. 

The downside of educating the middle class is that they won't sit still for BS. Our growth plan is to draw in all your best graduates. Grow the new economy.  JPL, Tesla zero-to-sixty in 4.1 seconds, feels like the top of the roller coaster.   They aren't turning off the sunshine.  We have plenty of oil, its in the ground and when the price is high enough we'll think about selling it to ya, but that will be a while.  Enron tried to game us, look where they are now.   

Here's how Texas manages its economy.  Good luck with that when we stop paying net Federal...(why are Conaway's voters/clients particularly fat?)

http://www.austinfoodbank.org/hunger-is-unacceptable/congressional-map.html

Fri, 08/10/2012 - 20:56 | 2695898 monad
monad's picture

Hypothecate your CalPERS for GS buckadingdongs before its too late!

Fri, 08/10/2012 - 23:50 | 2696319 dunce
dunce's picture

What is happening is the penalty of political incest of the public employees unions, and  the politicians.

Sat, 08/11/2012 - 00:27 | 2696357 newengland
newengland's picture

California is a failed state, hoping someone anyone will bail it out of its dystopia; its failed politics, its economy based on an arrogant belief that words are equal to deeds.

Put the Frankenstein out of its misery.

It has debt, not wealth. Don't give it a penny more from the rest of the U.S. Let its demise be a warning to any other PC prat who talks big, and does little.

Yes, Congress: that's you.

Princess Pelosi will feast at the famine, as per usual.

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