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2014-01-13 08:58 by Karl Denninger
in Corruption , 156 references Ignore this thread
Janet Asks....

... Did banks dump structured financial products in your pension fund?

What percentage of New Jersey’s pension fund shortfall is due to factors outside of employees’ control: corruption, predation, and/or mismanagement?

Oh, that's easy -- a bunch of it.  Like here in Detroit:

DETROIT – The city could recover over $2.8 billion from the banks involved in the mammoth “Pension Obligation Certificates” (COPS) deal of 2005-06, and more on a related swaps deal, if it pursued litigation challenging what Detroit Emergency Manager Kevyn Orr admitted Jan. 3 were likely unlawful and fraudulent transactions.

Likely unlawful and fraudulent transactions eh?

Yeah, that.

So tell me this, folks -- why do you sit for this?

No, not all of the pension shortfalls are due to outright fraud.  A big part of it is simply making promises that can't be kept.  8% long-term returns?  Impossible.  Growth in excess of GDP expansion on a long-term basis?  Impossible, unless someone is losing in equal (and continual) amounts.  How long do you think you can keep fleecing someone before they get up from the table and leave?  Does it matter, when the premise is that you can do it forever, and that's definitely not going to happen?

So then having made an impossible promise a shyster comes to with an "attractive deal", which turns out to be utter crap.  But boy, it sounds good, and if it is good it would allow you meet the (bogus) promises you made.

So you do it, and wink-wink-nod-nod you ignore arithmetic.

Right up until you get skullfucked, and then you whine and complain that you need a bailout.

Well, from whom do you get the bailout?  The citizen, ultimately, right?  And who just got it in both eye sockets?  That same citizen.  With what is he supposed to bail you out?

Oh, you didn't think about that part, did you?