America; God I should have worked for the Gov....
Folks this cannot end pretty!
Being a Fireman or Lifeguard would pay riches; who would have thought!
This in follow up to yesterday in that Washington DC now pays better than Silicon Valley; I say FUCK America as it stands and end this insanity!
This is not what America is about; this is our worst nightmare; and I tell you it ends in my Armstrong Collapse I showed you all yesterday!!!!!
Is that bad? To end this outright crap of what we have now; I think not.
You see in Greece this week; they are now saying FUCK YOU and not paying their taxes!
Soon to come to America as well; pay taxes to fund these insane pensions; FUCK THEM!
West
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The Next Shoe to Drop
By Steve Christ | Tuesday, October 18th, 2011
Forget about those greedy corporate executives...
Outside the targets of the Occupy Wall Street (OWS) protests, the real con men are the public sector millionaires holding a gun to your head to fund their lottery-style pensions.
From lifeguards who can retire at age 50 and receive $108,000 for the rest of their lives to double-dipping police officers, these public sector fat cats have turned the idea of civil service on its head.
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One of these scoundrels is Liberato "Al" Naimoli.
According to the Chicago Tribune, ol' Al will receive a whopping $9 million in pension benefits from the taxpayers if he makes it to the end of his expected lifespan.
Naimoli is what's known in the pension world as a “triple-dipper.” The President of Cement Workers Local 76, Naimoli is already receiving $160,000 a year from his Chicago pension and is now eligible for $60,000 a year from the Laborers’ Pension Fund — and another $220,000 a year from a national union fund.
That's a pretty nice haul for a guy who retired more than 25 years ago from a $15,000-a-year job with the city of Chicago...
What's more, according the Tribune, thanks to an obscure change to Illinois state law 20 years ago, Naimoli is just one of 23 retired Chicago union officials that stand to walk off with a total of $56 million in city pensions.
Zombie Municipal Governments
Naimoli and his pals are one of the reasons the state of Illinois is broke and teetering on the edge of a financial abyss.
Overwhelmed by figures that will never add up, zombie state governments like Illinois are the next fiscal wave about to wash over the markets.
And while this may be news to most Americans, the brewing municipal pension crisis is about to take another bite out of their pitifully equipped wallets...
No More Cash
Nationwide, state and local governments have racked up so much debt funding generous benefit plans that a pension crisis is inevitable — along with big tax increases to help close the budget gaps.
For taxpayers, this means looking forward to dramatically fewer services while at the same time being asked to pay more.
Unlike their Uncle Sam, these governments just can't simply print their way out of trouble. Which means numerous state and local governments will undoubtedly go belly-up without another federal bailout.
Avoid These Bonds
Maybe that's why famed short-seller James Chanos has added municipal bonds to his list of investments to avoid.
"State and local municipal finances are a mess and going to get worse,” says Chanos, “the cracking of state and local municipalities is coming."
So how did we get ourselves into this mess?
It's pretty simple, actually.
We have made promises to public sector unions that we cannot keep — just like General Motors did, but on a grander scale. (And we all know how things ended for GM.)
Things have gotten so bad that, according to a study by Joshua D. Rauh, associate professor of finance at Northwestern University’s Kellogg School of Management, taxpayers are now on the hook for $1 trillion — even if states uniformly eliminate generous early retirement deals and raised the retirement age to 74.
Rauh's study of 116 U.S. retirement plans for teachers and government workers showed that as of June 30, 2009, they had just $1.89 trillion in assets to cover $3.15 trillion in liabilities.
That's a gap of $1.26 trillion — more than double the shortfall of a year earlier, according to a study by the Pew Center on the States.
Two years later, that figure has only grown. According to Rauh: “Assuming states don’t start defaulting on their bonds and other debts, it seems that taxpayers will be footing most of the multi-trillion dollar bill for the pension promises that states have already made to workers.”
Making Up for Lost Time
To make matters worse, in a last-gasp effort to make up for these shortfalls, state and local governments have moved further and further out along the risk curve.
"In effect, they're going to Las Vegas," said Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, which oversees public plans in that state.
"Double up to catch up."
That includes riskier investments in commodity futures, junk bonds, foreign stocks, deeply-discounted mortgage-backed securities, along with some investments in hedge funds.
And here's the dirty little secret that is quickly becoming the elephant in the room: Most in these funds have been assuming their investments will pay an average 8 percent a year over the long term. That wishful thinking could mean crisis is likely to be even bigger than promised, since below-average returns would blow up these funding models over time.
Take, for instance, the $30 billion Colorado state pension fund...
Using an 8.5% future return, the fund is already projecting a $17.9 billion shortfall. However, if the fund only manages to bring 8%, that shortfall jumps to $21.4 billion in the blink of an eye.
The truth: In the real world, all of these funds are going to be hard-pressed to make even 7% in the current environment.
How to Profit from This Disaster
The recent Harrisburg, Pennsylvania bankruptcy filing is likely a warm-up act for a disaster that Meredith Whitney predicted a year ago would lead to “50 to 100 sizable defaults.”
I've uncovered a little-known way for you to make money while the union money-grabbers and their political cronies drive your town into bankruptcy.
And this Friday, I'm giving my readers the full report on how to profit on this muni-bankruptcy play...
Every time a town like Harrisburg, Pennsylvania, or Vallejo, California, heads to Chapter 11, this investment goes up a bit more.
And if there is one trend that is inevitable, it's the one where cities and towns can't meet their pension obligations.
After all, guys like Liberato "Al" Naimoli are just the tip of the municipal iceberg. |
