The greater fool

Are you a teacher or other public employee?

Look what your masters are doing with your pension money. They lost a bunch of it buying tech stocks in the tech bubble, so now they're trying to make up for it by buying the worst mortgage securities:
Banks Sell 'Toxic Waste' CDOs to Calpers, Texas Teachers Fund

By David Evans

June 1 (Bloomberg) -- Bear Stearns Cos., the fifth-largest U.S. securities firm, is hawking the riskiest portions of collateralized debt obligations to public pension funds.

At a sales presentation of the bank's CDOs to 50 public pension fund managers in a Las Vegas hotel ballroom, Jean Fleischhacker, Bear Stearns senior managing director, tells fund managers they can get a 20 percent annual return from the bottom level of a CDO.

...

"I have trouble understanding public pension funds' delving into equity tranches, unless they know something the market doesn't know," says Edward Altman, director of the Fixed Income and Credit Markets program at New York University's Salomon Center for the Study of Financial Institutions.

"That's obviously a very risky play," he says. "If there's a meltdown, which I expect, it will hit those tranches first."

Calpers spokesman Clark McKinley declined to comment.

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