California Dreaming, or As Goes California, So Goes the Nation No it is not the Beach Boys hit tune, but more nonsense coming out of CalPERS, a California Retirement Investment fund and system that promised eternal high returns from equities investments and has had to pull back when reality set in. Every budding trader intern knows these markets have cycles, but the Ph.D. economists who run CalPERS knew otherwise. The “dot” crash luffed their sails a bit, but they were soon back on the unreal tack they were sailing and the Barney Frank/Chris Dodd property lending bubble burst that cost so many of us so much, including a million of my Dollars in scheduled business. I do have lots of company, but that is not the worst of it. Mendocino County, in the northern California Pot Triangle that supplies much of the weed for America is on notice it has to give CalPERS 25% more money, going from $14 to $18 million this year because CalPERS is not even making it in a market inflated by Bernanke Bucks per the theories of John Maynard Keynes (pro. Kaynes) The kicker is that Bernanke Bucks will soon end as reality is dawning at the FED. The day of reckoning is coming. Nobody wants our bonds any more and that “shelf” is getting very full of ominous paper. All with no more than a 100 course in Econ know well the story of 1923 Germany. It is hard to imagine Janet Yellin sleeping well at night. The driver in the California pension disaster was the trick of getting elected to the Board of Supervisors, the best job in a small county with a six figure salary and all you can grab, has been to meet with the county employee union head and pledge you will push for a county employee raise in benefits if elected. Now county employees expect to get 100% of salary pensions for their retirements. That has to change and a lot of these geezers carried guns when in the state employ! The outcome is that summing all wages, benefits and pensions for county workers gives a figure that is three times that for comparable compensation in the private sector. Hence, competition for county jobs is intense and it is always interesting to see who gets them. When Janet pulls the string on “QE” the poo-poo hits the propeller and math analysis says the DOW will not stop falling until it hits something like 5500. The FED has been putting one trillion baseless Dollars into the market every year Mr. Obama has been in the White House. This will vanish along with an equal amount of private money attracted by what “QE” did to the DOW. While that corrects QE it kills private investors, pension funds and foreign investors. Looks like 1929! Democrats will invent a story that short sellers caused the crash, which is not possible, as it is short transactions that keep the market from going to zero as they create a staircase instead of a free fall. The people should understand this, but thanks to slack media they have been kept as ignorant of the functioning of equities markets much as they were uninformed of the Democrat nominee in 2008 and how county governments work, so they are California Dreamin’. Adrian Vance
Posted on: Sun, 28 Dec 2014 15:26:22 +0000
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