"Looting the Pension Funds" by Matt Taibbi at Rolling Stone

[applegrove]

Last edited Thu Sep 26, 2013, 10:31 PM - Edit history (1)

Looting the Pension Funds

by Matt Taibbi at Rolling Stone

http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926

"SNIP................................



Doughty says the endless system of highly paid middlemen reminds him of old slapstick comedies. "It's like the Three Stooges," he says. "When you ask them what happened, they're all pointing in different directions, like, 'He did it!'"

How Wall Street Is Using the Bailout to Stage a Revolution

Even worse, placement agents are also often paid by the alternative investors. In California, the Apollo private-equity firm paid a former CalPERS board member named Alfred Villalobos a staggering $48 million for help in securing investments from state pensions, and Villalobos delivered, helping Apollo receive $3 billion of CalPERS money. Villalobos got indicted in that affair, but only because he'd lied to Apollo about disclosing his fees to CalPERS. Otherwise, despite the fact that this is in every way basically a crude kickback scheme, there's no law at all against a placement agent taking money from a finance firm. The Government Accountability Office has condemned the practice, but it goes on.

"It's a huge conflict of interest," says Siedle.

So when you invest your pension money in hedge funds, you might be paying a hundred times the cost or more, you might be underperforming the market, you may be supporting political movements against you, and you often have to pay what effectively is a bribe just for the privilege of hiring your crappy overpaid money manager in the first place. What's not to like about that? Who could complain?


...............................SNIP"

[Squinch]

1. Kick

[silvershadow]

2. They're not coming for our guns, they're coming for the pensions. nt

[awoke_in_2003]

4. for most Americans pensions are nonexistent...

they are coming for Social Security next

[cprise]

3. Some historical background on pension funds

...how they became mega-Vultures since the 1980s.

http://archive.org/details/AdamCurtis_TheMayfairSet

Episodes 2 & 3, but the whole series is good.

[pscot]

5. Corruption at every level

[modrepub]

6. PA's Pension Fund

started investing in these about a decade ago. The results, as predicted, were not as good as advertised. The pension fund wouldn't have even done this if it wasn't under pressure to get 8%+/year returns. The whole future funding checks imposed by the legislature have only seemed to worsen the "underfunding" assessments. These assessments aren't worth the paper their printed on and have forced governments in PA to throw more money into the black hole to try and catch up.