WC Varones

Don't lend your hand to raise no flag atop no ship of fools

CalPERS' magical performance numbers

Clever liars give details, but the cleverest don't.

CalPERS reports 2008 performance numbers:
While the value of Calpers' stock portfolio fell nearly 11 percent, its private equity holdings gained 19.6 percent for the 12 months through March 31 and its inflation-linked assets returned 22.9 percent over nine months.

Global fixed-income assets returned 7.7 percent for the year and real estate gained 8.1 percent for the 12 months through March 31.

What a coincidence. While things that have easily observable market prices (i.e. stocks) went down, everything that is valued subjectively went up! Private equity? It does great during a credit crunch when stocks are crashing! Just ask noted private equity players Blackstone Group or Babcock & Brown. And real estate? Well, whose real estate portfolio is not up at least 8% this year?

Nice numbers, CalPERS! Especially considering your investment in toxic waste CDOs at the beginning of the mortgage crisis, and your $1 billion dollar investment in the now-bankrupt LandSource at the peak of the real estate bubble.

Mark my words: CalPERS is lying about its performance, and there will be serious consequences for California retirees and taxpayers.

UPDATE 12/18: Welcome Instapundit, Patrick.net, and Kedrosky readers! Updated and related thoughts here.

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