Monday, June 14, 2010

"Enron-Esque Accounting" Still Rampant......

"Austerity" New York Style........For more on this topic you should read Payback Time : State Debt Woes Grow Too Big to Camouflage & Seven State Pension Plans Out of Money by 2020 or just visit the Madoff, Ponzi links on Wikipedia..... ;-)

In Sachen Buchführung sehen im Vergleich mit den Amis selbst die Griechen alt aus....Mehr zum Thema entweder Payback Time : State Debt Woes Grow Too Big to Camouflage & Seven State Pension Plans Out of Money by 2020 oder direkt unter Wikipedia nach Madoff oder Ponzi suchen.... ;-)

State Plan Makes Fund Both Borrower and Lender NYT
ALBANY — Gov. David A. Paterson and legislative leaders have tentatively agreed to allow the state and municipalities to borrow nearly $6 billion to help them make their required annual payments to the state pension fund.

And, in classic budgetary sleight-of-hand, they will borrow the money to make the payments to the pension fund — from the same pension fund.

As word of the plan spread, some denounced it as a shell game and a blatant effort by state leaders to avoid making difficult decisions, like cutting government spending or reducing pension benefits.

Under the plan, the state and municipalities would borrow the money to reduce their pension contributions for the next three years, in exchange for higher payments over the following decade. They would begin repaying what they borrowed, with interest, in 2013.
No wonder the "In Fiat Money We Do Not Trust Camp" is getting more popular, but when considering the following headline Households Bust $1 Trillion Muni Mark it should be clear that the term "crowded" could be used for other asset classes than GOLD....;-) Thanks to the World Cup posting will be very light during the next few weeks.....

Bei solch absurden Geschichten muß man sich nicht wundern wenn das "In Fiat Money We Do Not Trust Camp" merklich an Popularität gewinnt....Und wenn man sich die nachfolgende Zahl Households Bust $1 Trillion Muni Mark ansieht sollte sich auch die angestiegende Beliebtheit von GOLD relativieren....Da momentan auch bei mir das WM Fieber grassiert wird in Sachen Blog die nächsten Wochen eher wenig passieren...


61% Underfunded Illinois Teachers Pension Fund Goes For Broke, Becomes Next AIG-In-Waiting By Selling Billions In CDS ZH

“If you were to have faxed me this balance sheet and asked me to guess who it belonged to, I would have guessed, Citadel, Magnetar or even a proprietary trading desk at a bank.” So begins a story by Alexandra Harris of the Medill Journalism school at Northwestern, which, however, does not focus on some exotic product-specialized hedge fund, or some discount window (taxpayer capital) backed prop desk (hedge fund) at a TBTF bank, but instead at the 61% underfunded, $33.7 billion Illinois Teachers Retirement System (TRS), which just happened to lose $4.4 billion in 2009 (a year when, courtesy of America's conversion from capitalism to socialism, the market rose 60%), and 5% in2008.

Yet underperformance can be explained. What can not, is that the TRS has now become a shadow AIG. As Harris notes "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, that were blamed in part for the 2008 collapse of Lehman Bros. and bailout of insurance giant American International Group Inc., or AIG."

Suddenly NY pension plan isn´t looking as bad....... ;-)

Plötzlich sieht selbst die NY Pensionskasse ganz passabel aus..... ;-)

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