W.C. Varones

12.17.2008

Why I buy SUVs

...for those crazy Vegas ski trips.
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CalPERS implodes, just as predicted here

Bernie Madoff had a very short reign as the biggest investment fund fraud in the world. He's just been surpassed by CalPERS, America's largest pension fund. The WSJ explains the collapse:

At the height of the property bubble, California's giant pension fund, Calpers, made a fateful decision: It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America.

[...]

Calpers in recent weeks said it expects to report paper losses of 103% on its housing investments in the fiscal year ended June 30. That's because Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed.

And just as some saw Madoff as an obvious fraud, some saw CalPERS as an obvious fraud, too. As we wrote in July:

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.

Will he go to prison and live up to his name?

The Financial Times:

No plea bargain has been agreed, and Mr Dikshit, one of India’s richest businessmen, risks a jail sentence of two years. He hopes the DoJ will recommend to Judge Jed Rakoff that, having gone voluntarily to the DoJ, he should not go to jail.

California is CUTTING TAXES!!!

Yippee, finally someone gets it. Finally someone understands that we can't raise taxes so much that it kills spending. Here is the report from the SF Chronicle:

The plan eliminates the current 18-cent-a-gallon excise tax on gasoline as well as the sales tax on gasoline, funds that are typically set aside for transportation projects. Instead, the state's sales tax for all other goods would be raised by half cent, bringing in more revenue for the general fund.

The state would establish a new gas fee - 39 cents a gallon - to pay for transportation projects that previously had been paid for by taxes on gasoline.

The legislative source said all of the proposals would require a simple majority vote because the proponents believe "when you reduce tax in one area, you can raise tax in another area" without requiring two-thirds majority by the Legislature.

WAIT A SEC!?!? They are eliminating a tax but creating a new FEE!??!? Oh but they are reducing taxes so it is working. I'm much happier now. When is American Idol on again? I can't wait.

12.16.2008

Denial

You can't say you weren't warned. Peter Schiff and Ron Paul warned you.

Greenspan's Body Count: Tom Brisch

In today's episode of Greenspan's Body Count, Sherry Brisch returned home to a gruesome sight:

Brisch and her husband Tom had been together for 27 years, married for 20, had a lovely home in Wauwatosa and two great kids. They called themselves the Wally World family.

“You know go to Disney every year, just have two kids, a boy and a girl, and a retarded golden retriever, and we're just a regular family,” she said.

But things changed in 2008. In February Sherry lost her job as a radio ad sales executive, and Tom was struggling too. He sold Fords, and with gas over $4 a gallon, cars weren't moving.

“He was a commission-only salesperson, so the economic picture with a kid going to college, another one starting high school ... it was pretty grim and we were struggling,” Birsch said.

Then one morning she returned home from coffee with a friend and found Tom's car still in the driveway. She combed the house, and found Tom hanging by a dog leash from the attic trap door. The family was devastated and dumbstruck.

“The kids had no idea. We have two beautiful children, I had no idea, we had been on a camping trip the weekend before it happened,” Birsch said. “He seemed pretty normal.”

The medical examiner's report outlines details still too raw for Sherry to talk about. Tom left a suicide note in his shirt pocket. In it, he asked for forgiveness and wrote that he could not get it together to provide for them. He wrote to his children that they were wonderful and to his wife he wrote I love you. He told the family in the letter not to blame yourself for this.

Alan Greenspan, you destroyed another family, you sick bastard.

This case comes to light only because the courageous Sherry Brisch came forward to accuse Greenspan. Untold hundreds or thousands of Greenspan victims go unnamed because the details of their deaths are not made public. As the Milwaukee TV stationo reported,

WISN 12 News reviewed the medical examiner’s records for every suicide this year in Milwaukee County.

There have been 108. That's nearly 20 percent more than the number in each of the last three years.

While most who died had histories of depression or mental illness, at least a quarter of those who took their lives this year were struggling financially.