Rather than admit that they are as screwed as the rest of California CalPERS has decided to go the full Clinton and dribble the bad news out until we die of boredom. Here is today's tidbit:This $3.2 billion reduction represents a 35 percent decline in market value of the CalPERS housing portfolio.
Now the "housing portfolio" was less than 5 percent of the entire asset base but come on, 35%?
21 comments:
1% or 5% or 35% -- what does it matter as long as you're first?
What's wrong with that? Many REIT indexes as well as many broad stock market indexes are down 40-50%.
So taxpayers will make up the difference. Big deal. I also hear that Washington will come to the rescue.
It's vital that California's 50-year-old retired state workers get their benefits.
Only the tip of the iceberg Rob. Today's Chron: UC Endowments lost a billion last year.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/13/BA781436M4.DTL&tsp=1
That's not the worst part though, the UC Retirement program (separate from CALPERS, but similar in structure) lost almost 10 billion in that time frame - from 46.5 billion in assets down to 37 billion.
It's going to hit all segements before this is over.
And don't forget the teachers:
http://www.calstrs.com/Investments/Invport.asp
Real Estate 14.4% of portfolio. Yikes!
Hey, we have losers in Texas, too!
Yesterday, at a Dallas Employee Retirement Fund board meeting, they looked at their statement. It wasn't pretty.
The ERF is down $1 billion in 12 months. Ouch.
http://cityhallblog.dallasnews.com/archives/2008/11/dallas-employees-reitremnet-fu.html
Looks like the pull between 8800 and 820 that 8200 is winning. Where it goes from here is the scary part. There might be an orgasmic end of year portfolio fluff but a 7 handle is in the bag.
We have only just begun to hear the impact this will have on endowment funds. Colleges will get hit with major losses in endowments just as students have a hard time meeting tuition payments with far fewer student loan providers available. Non-profits will have less money available even as charitable donations dry up (although in many cases that will simply mean that radical progressives will have less money to waste on their private agendas, so not entirely a loss.)
On the previous topic, I'm still amazed that Casey saw $100,000 come and go; utterly amazing. If I had made a $60,000 investment and seen it more than double, I would have cashed out at some point--probably not the top, but somewhere reasonably close--and considered myself extremely lucky. I would have either banked it or took a year vacation; Casey didn't bank it, but took the year vacation even without the money. Just amazing.
Another off-topic, but a great comment from a meeting this morning:
"I realize this is a once-in-a-hundred-years event, but it's happened five times this year already."
Just went below 8000 midday today ... around 7990 or so for a few minutes. S&P could be heading into 700s.
Yeah, the concept of once in a hundred years events is one of my favorite mathematical myths. Rare events except in pure mathematics are NEVER smoothly dispersed. I deliberately avoid using the term of art; distributed. Things like failed models are guaranteed to clump rare events in close proximity.
a 7 handle is in the bag. - 9:39 AM
Scratches self behind ears, wags tail.
"Many REIT indexes as well as many broad stock market indexes are down 40-50%."
That 35% is based on a _March_ 2008 appraisal, according to the Wall Street Journal's article today.
@peripheral visionary:
May be a good excuse for the universities to cut back spending stupid amounts of money on sports programs "because that's what all universities we aspire to be like are doing." Especially the midsized public universities who are "aspiring" to be like the largest public school in their state.
I am all in favor of sports scholarships. I am deeply opposed to athletics programs. "Scholar Athlete" is an awesome leveler of inequities. Unfortunately it has been perverted into athletics as a substitute for academics.
I did read in the WSJ that the assessment was in March. That's pretty bad because the first and second quarters of 2008 were actually pretty good for REIT's. It wasn't until this most recent crap (September October) that they started taking their most recent downturn.
Mr. Outspoken,
Correct. In fact my best estimate is that far more than half of the loses are in the last half of September. Acceleration writ large.
For the last 6 weeks; far worse. They do have until mid-January to come clean.
"Scholar athletes" are indeed the ideal, but other than a few preppy East Coast schools who take the concept seriously, it's just lip service. The reality is that athletic programs have become thinly-disguised minor league professional teams that (theoretically) make money for the university.
Of course universities claim that athletic programs more than pay for themselves, but that's only through creative accounting whereby large alumni donations are attributed to being associated with the athletics program, whether they are or not. That conveniently allows funds from alumni donations to be segregated and directed into management's pet projects--massive athletic facilities and other construction projects--while sticking the costs of running the university to the students by way of tuition and fees. All the while, the endowment grows (or did, until recently) while management defends their not spending any of it.
I have not idea what the future of university finances is, other than that they are going to face the same cash flow crunches that everybody else is having to deal with. If there's one difference, it's that university management does not fully realize it.
The laugh of the day:
CROX
The shorts were 100% right; and the ones who held tight for the long, hard ride have been laughing all the way to the bank.
8800 wins the battle against 8200--at least for today.
Is CROX the market ticker for pet rocks?
Honestly, I never bothered to look until you bring it up. It was a zero at 50, 30, 10, 5 and now 1. Can we geta tradeable pop by gtting Casey interested?
hat about the frakin' marketd? 8800 still attracts for absolutely no good reason. I can put my dawg bawz on the line and say every Dow 30 short will be in the money within a week. Careful, that requires timing.
Oh. In case you are investing real money, understand we need to rob all the boomers of all their last 0 years of profits. Still investing? Not me, I'll pick through the wreckage.
Casey's burning both ends of the candle: Putting Mom on the hook for a $60,000 loan, plus he and people like him have jeopardized her sweeet state pension.
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