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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (61349)	1/3/2007 3:30:18 PM
From: mishedlo	Respond to of 116555

Here is more stuff on CalPERS that someone just sent me. Most law enforcement (CHP, prison guards, LAPD, and a vast majority of local municipalities) are CalPers with a 3% at 50 clause: meaning at retirement you receive 3% of your best year salary times the number of years worked. So after your typical 30 years on the job, you get 90% of your best years salary with COLA for life! CalPers takes about 9% of the salary now for payment later. NO WAY, NO WAY can they afford this. They do this off old-school actuaries where cops who smoke their whole life set the expectancy at 10 years of retiremtent. Well, cops now adays aint the cops of yesterday. Life expectancy is gonna be much higher than they plan. Imagine paying a cop 30 years for work, then paying him another 30 years not to based upon his higherst year salary and up with inflation.. Calpers knows it has to do somehting because traditional returns aint gonna do it. I did not confirm that but it sounds about right. CalPERS seems to be on a real estate binge too. Check this out. nysun.com A few months ago, BlackRock and Calpers purchased the 115-unit rental apartment building the Wellington at 200 E. 62nd St. for $173 million.

To: mishedlo who wrote (61349)	1/3/2007 3:42:14 PM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 116555

For those TA inclined how should today market action interpreted as it is not exactly an evening star - ar are we going to a "swirling top"?

To: mishedlo who wrote (61349)	1/3/2007 4:03:22 PM
From: Crimson Ghost	Respond to of 116555

Mish The low bond yields which you claim reflect a fear of deflation actually are a key factor behind the extremely narrow credit spreads we see today. Many pension funds must earn a certain rate of return if they are to be able to meet their obligations when they come do. If rates are so low that they cannot get this return from high quality bonds they are forced to reach for lower quality assets. The result -- a surge in demand for "junk" that these funds never would have considered if rates were more reasonable. Something to think about!