Friday, November 30, 2012

Critical Mass Effect

Three weeks ago when I restarted Exurban Nation I had no expectations.  I wasn't sure I could post enough interesting content.  I wasn't sure I could attract cogent posters.  Well it looks like EN is back.  People are interested.  People are contributing.  Thanks to all.

Use the comments to make criticisms, suggestions and propose ideas for future content. 
Why?  Just because. 

EDIT:  For "wagga" a good place to lose a cow from this summer.

Extraconstitutional Arrogance

Can you believe Obama's "opening bid?"  Somebody needs to tell him the executive is 1/3rd of the government and the other two have made it clear that the House controls the purse strings. Denniger did the math for us:
  • $100 billion in immediate tax increases by expiring "the rich's" tax cuts.
  • $60 billion more in tax increases by removing deductions from "the rich."
  • $50 billion in additional spending (over 2012 levels) on infrastructure for 2013.
  • $240 billion in continued deficit spending by continuing the payroll tax cut.
  • $30+ billion in continued deficit spending by continuing EUC 2008 (extended unemployment.)
  • $40 billion in promised, unspecified but suspended for one year changes in Medicare and Medicaid.
  • A permanent revocation of Congressional oversight of Treasury debt.
 Dude pushed to hard.  The push back might surprise him.  Given the number of new faces come January he needs to do the deal now and instead plays this stupid bluff. 

Liars, Damn Liars and Realtors

In that order.  Check out this gem: 1480 Twin Lakes Rd
So?  Tiny little mountain cabin.  Here's the listing:

Home for sale in Wrightwood, CA 180,000 USD

Most recent information provided by Platinum Realty West via Point2 on 11/29/2012 10:06 PM:
  • Price: $180,000
  • Status: For Sale
  • MLS/Source ID: 422162
  • 4 Bedrooms
  • 3 Bathrooms
  • 2,080 sqft
  • Single-Family Home
  • Built In 1980
  • Zip: 92397
  • Parking: None None
Official property, sales, and tax information from county (public) records as of 08/2012:
  • Single Family Residential
  • 2 Bedrooms
  • 1 Bathroom
  • 1,040 sqft
  • Lot Size: 5,100 sqft
  • Built In 1980
  • Stories: 1 story with basement
  • Heating: Central
  • Roof: Composition Shingle
  • 4 Rooms
  • Construction: Frame
  • Basement: Basement (not specified)
  • Fireplace
  • County: San Bernardino
  • Tax Rate Code Area: 101-033
 See a discrepancy?  Basements and Attics are not square feet of living space!  Oh and ALL CAPS is lame.  

Government Motors Gives It Another Try

 Design News:

Unveiled at the Los Angeles Auto Show, the 2014 Chevrolet Spark EV uses a GM-designed, coaxial drive unit and electric motor that deliver 130 hp (110 kW) and 400 lb-ft (542 N-m) of torque. 
(Source: GM)

The new five-door electric car will employ a 20-kWh lithium-ion battery from A123 Systems Inc. that will give the Spark "one of the best EV battery ranges in its segment," GM said. With its 130-hp permanent magnet motor, it will go from zero-to-60-mph in eight seconds and will be the first vehicle to employ the new DC fast-charging standard from the Society of Automotive Engineers (SAE), which will enable it to reach an 80 percent battery charge in 20 minutes.

Inside, the vehicle will employ two high-resolution, seven-inch, color LCD screens; a MyLink radio for infotainment; and apps for navigation and global Internet radio.

That 20 minute 80% charge is key.  

Thursday, November 29, 2012

Hail Mary Play

California will offer Powerball lottery next year

Gambling is illegal and immoral.  Try to do it and you get arrested.

Massive Fail

Since the Oct. 26 launch of Windows 8, consumer notebook and desktop sales in the U.S. have fallen 21% compared to the same period last year, said Baker. Laptop sales were down even more -- 24% year-over-year -- while desktop numbers were off considerably less, just 9%.
Article here.  

"Windows 8 isn't any good."  How hard is that to say?  

Shopping Interlude

Shopping has been a breeze.  Plenty of stock, short lines.  Probably because prices aren't that great and the "recovery" is overhyped.  So, what have I bought?  A few DVDs for $1.88.  A few more for $2.25.  Big items?  Only two; an HP Laserjet 400 for $349 and a Samsung WB150F camera for $89.  No LED lights, no doorbusters.  I did go to Fry's for their Black Thursday deals with rebates.  $19 for a 600w power supply for the upcoming supermegahackintosh build, 8Gb RAM for the hacklaptop an nVidia 1Gb video card.  Little stuff.  Yesterday I also got a 1Tb laptop HD for $59.

The stores are empty of customers.  I don't know if it is local but it is palpable. 

Wednesday, November 28, 2012

Harvest the Grapes and Hold On

California Reservoir Conditions
The new "Water Year" started October 1st.  It is interesting to watch the real time evolution of California's water supply condition.  A few years ago the state water agency killed hundreds of thousand of acres in the Central Valley with extreme restrictions on supply.  Not "crops" but orchards and vineyards.  It wasn't necessary except as a lever to exert political will.  A show of force.  You can drive the lesser used roads Bakersfield to Sacramento and see thousands of signs; "CA killed this land."

This year is already on track to be a very good year.  The phrase "Atmospheric River" may be unfamiliar but "Pineapple Express" is not.  Seven, fifteen, even twenty inches of precipitation may be dumped by a trio of low pressure systems pulling moisture from the Pacific Ocean near Hawaii.  Thus the "Pineapple" nomenclature.

We should consider buying Tom Stone a poncho to keep his chartreuse print aloha shirt from bleeding out and staining his argyle socks and Birkenstocks sandals all over the client's imported Italian oak laminate.

A Billion Here A Billion There...

Air Force scraps massive ERP project after racking up $1 billion in costs

IDG News Service (Boston Bureau) — The U.S. Air Force has decided to scrap a major ERP (enterprise resource planning) software project after spending US$1 billion, concluding that finishing it would cost far too much more money for too little gain.
Dubbed the Expeditionary Combat Support System (ECSS), the project has racked up $1.03 billion in costs since 2005, "and has not yielded any significant military capability," an Air Force spokesman said in an emailed statement Wednesday. "We estimate it would require an additional $1.1B for about a quarter of the original scope to continue and fielding would not be until 2020. The Air Force has concluded the ECSS program is no longer a viable option for meeting the FY17 Financial Improvement and Audit Readiness (FIAR) statutory requirement. Therefore, we are cancelling the program and moving forward with other options in order to meet both requirements."
Read more at the link above.  Who ever thought after it went past the $100m level that we should keep trying until we wasted a billion?  

Location Discriminatory Mortgages Redux

First what I wrote. OMG more than 8 years ago:

Tuesday, July 06, 2004
 Location Discriminatory Mortgages
I once thought "Location Efficient Mortgages" (LEMs could address the problem of exurban development patterns (e.g. living in Riverside and working in LA) but then my brain started working again. I call location efficient mortgages transit apartheid. "Location efficient mortgage" is like "smart growth." Who would want a location -inefficient- mortgage or who would support dumb growth. Meaningless catch phrases, nothing more. Location Discriminatory Mortgages are the exactly descriptive phrase. Funny how the old VA loan policies that inadvertently used to favor new suburban housing, and jumpstarted the exurban nation trend, were struck down as unfair by the very same people advocating this new version of redlining. (Red Line as in Los Angeles and Boston, etc.) I'm surprised at the willingness of people who claim to want fairness to resort to unequal treatment (LEMs, density bonuses, transit subsidies, tax breaks) as a first step when they agree with the agenda. I'm also concerned about the unintended consequences that always appear. We both know that govt with good intentions ALWAYS results in unanticipated problems. In the case of LEMs; people will buy near transit, use more transit, pay less taxes to local govt and eventually get cars. Result, normal traffic overloading local roads while burdened by higher transit subsidies. In case you haven't noticed I'm describing LEMs in terms of transit but we were talking about POV commute patterns and Prop 13. That's because of two things. First LEMs have been hijacked by transit advocates despite there being no connection. Second, lenders already do a little of this when you apply for a mortgage. They take into account your living costs including travel budgets when determining lending limits.

Now what the New york Times (of course) is pushing:

Factoring in Commuting Costs

MORTGAGE lenders do not figure in a household’s likely commuting costs when weighing loan applications, but a recent study suggests that borrowers of moderate means would be smart to calculate these costs themselves before buying.

The study, published in October by the Center for Housing Policy and the Center for Neighborhood Technology, looked at transportation and housing costs in the 25 largest metropolitan areas. It found that transportation costs rose faster than incomes in every area over the last decade.

That has added to the financial burden shouldered by moderate-income homeowners, defined as households earning 50 to 100 percent of a metropolitan area’s median income. Transportation consumes 30 percent of their income, on average. Add housing costs to that and the combined cost burden rises to 72 percent.
The study also found that some metropolitan areas generally considered more affordable than New York become less so after transportation is figured in. For example in Houston, where housing development is more sprawling, transportation consumes 32 percent of income, compared with 22 percent in New York, which has a more robust transit system.
Scott Bernstein, the president of the Center for Neighborhood Technology in Chicago, argues that transportation costs are quantifiable enough that they ought to be factored into underwriting. And they were, during the first half of the last decade, in an experiment the center conducted jointly with Fannie Mae. Called a “Location-Efficient Mortgage,” the product was a contrasting proposition to the “drive till you qualify” strategy of finding an affordable home. The mortgage compensated borrowers applying to buy in areas with lots of transportation choices, and close to jobs and amenities.
Tested in a handful of markets before 2007, the mortgages were issued to about 2,000 borrowers and, based on the center’s evaluation of a representative sample, showed a very low default rate. But the experiment ended with the mortgage market collapse.
The national calculator could be ready by year’s end. Another calculator developed by the center, called Abogo (, lets people plug in an address and find out what a typical household in that area spends on transportation.


Unfuggingbelievable. Let's start at the top and tackle other bits in later posts. "For example in Houston, where housing development is more sprawling, transportation consumes 32 percent of income, compared with 22 percent in New York, which has a more robust transit system." Texas income tax 0%. New York State 6.85%, New York City ~3%. Idiots with calculators and agendas are dangerous.

Tuesday, November 27, 2012

Is it getting cold in here?

What causes ice-ages?

... There are three major components of the Earth's orbit about the sun that contribute to changes in our climate. First, the Earth's spin on its axis is wobbly, much like a spinning top that starts to wobble after it slows down. This wobble amounts to a variation of up to 23.5 degrees to either side of the axis. The amount of tilt in the Earth's rotation affects the amount of sunlight striking the different parts of the globe. The greater the tilt, the stronger the difference in seasons (i.e., more tilt equals sharper differences between summer and winter temperatures). The range of motion in the tilt (from left-of-center to right-of-center and back again) takes place over a period of 41,000 years. As a result of a wobble in the Earth's spin, the position of the Earth on its elliptical path changes, relative to the time of year. This phenomenon is called the precession of equinoxes. The cycle of equinox precession takes 23,000 years to complete.
Read more at this excellent one page explanation.

Hip, Hip, Hooray?

Obamacare and the law of intended consequences.  Starting Jan 1st the 2.3% "medical devices" tax arrives.  So much for containing costs.

MASSDEVICE ON CALL — The U.S. Internal Revenue Service should have its hands full in dealing with implementation of the new taxes and rules contained in the Affordable Care Act.
The federal agency must handle more than 40 changes to the tax code as well as make sure appropriate recipients get new tax credits and individuals and businesses pay penalties for any non-compliance.
Included among those new laws is the 2.3% medical device sales tax slated to take effect January 1, 2013, which industry stakeholders are actively lobbying against.
The IRS has said its ready to tackle the new laws, but some are concerned that the agency isn't prepared to manage the potentially gargantuan task.
"They're going to be very strained," former IRS commissioner Mark Everson told Politico. "The main thing is the vast amount of information required for the IRS to collect and dispense. (...) There's a lot of complexity to it."
The link also includes another link to the "doc fix" dilemna. In short Medicare reimbursement has been scheduled for years to drop but apparently even FedGov is powerless in the dace of market forces in this case. The rates are too low to provide services and the savings keep getting delayed.

Edit:  Added a sexier hip picture to keep down my disreputation and hopefully get skk to start reading.  ;-)

Return to Company Towns?

Blackstone buys hundreds of homes to rent out

... The bulk purchases are a result of mass volumes of vacant properties due to foreclosures that are offered at ‘fire-sale prices.’ Blackstone’s purchases of the single-family homes are expected to boost home prices by clearing out distressed properties to create rental housing.

However, there is a risk that the bulk purchases could pose a challenge to first-time buyers as well as shift neighborhoods once occupied by homeowners rather than renters.
We've talked about this before but I just thought of something.  Lots of CUPs and HOAs prohibit either commercial renting or multiple ownership or both.  Wait until Blackstone starts running afoul of those rules.  

San Berdoodoo II

Bloomberg - San Bernardino, the second-largest U.S. city to seek bankruptcy protection, will put off paying $13 million to California’s retirement system and $3.4 million for pension bonds issued in 2005, in a provisional spending plan.

For those of you who don't speak out the sides of your mouth; that last bit is called a municipal bond default.  

Recall the previous San Berdoodoo post.  In it I explained that the 2005 bond was used to pay arrears to CalPERS.  CalPERS needed/expected 8% compounded returns so they couldn't just make payments.  It was cheaper to issue a bond at a lower rate.  Funny thing, CalPERS has managed nothing close to the returns the San Bernardino bondholders WERE getting.  Everybody loses.  

San Bernardino is by no means alone in this boat.  With the cash flow scheme called Redevelopment Agencies winding down there are going to be a lot of California cities caught swimming naked.  

Monday, November 26, 2012

Euro zone, IMF reach deal on long-term Greek debt

Bullshit.  Plain old down on the farm bullshit.  What is being proposed is a Greek debt expansion.  There is no deal.  There are no willing participants.  The IMF wants nothing to do with a basket case lacking resources to disburse and the EU knows Greece is a black hole.

Reuters says:

To reduce the debt pile, the ministers agreed to cut the interest rate on loans to Greece and return 11 billion euros to Athens in profits from European Central Bank purchases of Greek government bonds on the secondary market.

They also agreed to help Greece to buy back its own bonds from private investors at an expected cost of around 35 cents in the euro, officials said.


I don't even know how to respond.  The ouzo isn't near enough to make sense of this.  

D-O-D: Decade-OMG-Decade Edition

The previous post showed why Case-Shiller wasn't a useful metric on their own terms. I did not even go to the myriad reasons why "same pair" is totally broken as a baseline.

Now it is time to push the idea beyond speculation to investment time frames. 10 years. Okay, that's lame. I should use 8 years as the typical residency or refinance period. I could also go shorter with recent trends of the same. 10 years is nice and round. Okay, pie are round. [rimshot] 10 years is easy. Feel free to do something harder.

Ten year C-S valuations 2002-2012:
C-S Composite 10  116%
C-S Composite 20  111%

Since 2002 houses have lagged inflation.  There's no chance they will beat inflation for at least another 10 years.  

That needs an explanation.  Within five years house prices would need to exceed peak 2006 prices ande then continue to pace inflation.  Not_going_to_happen.  

Y-O-Y: Why-Oh-Why Edition

Tomorrow we get the Case-Shiller HPI. Consensus is for flat to slightly down month-over-month and up 2.6% to 3.0% year over year. Seeing as C-S is a rolling three month datum and significantly delayed there is little chance of a surprise. I'd even say the high end is more likely.

Of course this is good news. Remember we are always told not to look at short term variations. Well then, why are we looking at year over year then? The Great Recession ended in December 2009. How has housing done from the bottom?

August 2009 to August 2012 C-S HPI
AZ-Phoenix 110%
CA-Los Angeles 104%
CA-San Diego 103%
CA-San Francisco 107%
CO-Denver 103%
DC-Washington 108%
FL-Miami 101%
FL-Tampa 94%
GA-Atlanta 86%
IL-Chicago 90%
MA-Boston 101%
MI-Detroit 111%
MN-Minneapolis 101%
NC-Charlotte 97%
NV-Las Vegas 91%
NY-New York 95%
OH-Cleveland 96%
OR-Portland 94%
TX-Dallas 100%
WA-Seattle 95%
Composite-10 100%
Composite-20 100%

And recall.  there were still years of declines after August 2009.  Year over year may appear to be doing better but that's only for the minisucle number who bought last year.  Thought experiment.  What do you think the decade over decade return looks like?  What will it look like in 2016?  

Sunday, November 25, 2012

No Burn Zone

Even I didn't realize this was in the works.

From the LATimes:

The first-ever no-burn alert comes with a $50 fine for first-time residential violators and applies to the downtown area, West Hollywood, Burbank and much of the eastern San Fernando Valley.
Residents can enter their ZIP Code at to see if they live in an area affected by the alert. They can also sign up for daily air-quality reports at
Alerts are called whenever fine particulate levels are expected to rise to levels unhealthful for sensitive groups such as those with respiratory illnesses, Atwood said.
In addition to paying the first-time fine of $50, violators could be required to attend a wood-smoke awareness session. Fines rise for each repeat violation up to $500. To report a suspected violation, call (800) CUT-SMOG.
Yes, indoor fireplaces and yes mandatory reeducation classes.  

Thursday, November 22, 2012

T-Day Humor

Lord, my soul is ripped with riot
Incited by my wicked diet.

"We are what we eat," said a wise old man,
Lord, if that's true, I'm a garbage can.
To rise on Judgment Day, it's plain,
With my present weight, I'll need a crane.

So grant me strength that I may not fall,
Into the clutches of cholesterol.
May my flesh with carrot-curls be dated,
That my soul may be polyunsaturated

And show me the light that I may bear witness,
To the President's Council on Physical Fitness.
And at oleomargarine I'll never mutter,
For the road to Hell is paved with butter.

And cream is cursed; and cake is awful;
And Satan is hiding in every waffle.
Mephistopheles lurks in pepperoni,
The Devil himself in each slice of bologna.

Beelzebub is a chocolate drop,
And Lucifer is a lollipop.
Give me this day my daily slice,
Cut it thin and toast it twice.

I beg upon my dimpled knees,
Deliver me from jujube's.
And when my days of trial are done,
And my war with malted milk balls won,

Let me stand with Heavenly throng,
In a shining robe -- size 30 long.
I can do it Lord, if you'll show to me,
The virtues of lettuce and celery.

Teach me the evil of mayonnaise,
And of pasta a la Milanese.
And crisp-fried chicken from the South,
Lord, if you love me, shut my mouth!


Wednesday, November 21, 2012

Oh Deere

Deer hunting?  Jesus! No, Deere hunting:

• Deere is using cash flow from record results to reinvest in new products and in factories in China, India and Brazil, with a "disciplined approach to cost."

Great.  More disinvestment in the US.  

Chop Chop

Tis the season.  The season to gut the productive class and for public policy makers to deny they are in any way culpable.  Today from both coasts:

She said the positions affected were in administration, sales and marketing, customer service and engineering. The company also is consolidating accounts payable to its manufacturing site in Hillsboro, Ore. Two of the Camarillo employees were offered jobs in Oregon, she said.
In Hillsboro, 37 nonproduction workers lost their jobs, and 12 of them were offered other positions, Cichoski said. The company has reduced manufacturing through attrition, not layoffs, she said.
While the latest cuts will leave 50 to 60 people in Camarillo, the office will remain open because the company wants a presence in California, Cichoski said.
Read more: 


ATKINS, Va. (AP) -- Cabinet maker Merillat is laying off 280 employees at two manufacturing plants in southwest Virginia.
Officials for parent company Masco Cabinetry confirmed on Tuesday that it plans to close two facilities that make doors and panels for cabinets in Atkins in mid-January.
The company had filed a WARN Act notice with Virginia officials last Thursday to alert them of the planned closure.
Officials say the door manufacturing plant opened in 1977 and employs 16 salaried workers and 200 hourly workers. The panel factory opened in 1991 and has three salaried employees and about 60 hourly workers. They are being provided severance packages and outplacement assistance.
Read more: Cabinet Maker...
Happy Thanksgiving to these several hundred former employables.  

Tuesday, November 20, 2012

FaceBook is Your Friend

Remember When Facebook Wanted Your Phone Number? It's Using It To Sell Ads

Earlier this year, Facebook began asking every user for a phone number for "security" purposes. Here's what Facebook says about that:
Those numbers, it turns out, are NOT being sold to advertisers.*
Rather, Facebook also collects users' phone numbers when they are entered in other parts of  a users' account information. Those numbers are then made available to advertisers as part of its newCustom Audience targeting product. "Audiences can be defined by either user email address, Facebook UIDs, or user phone numbers," the product states.


Caveat empire.  

What Passes for a Deal Locally

Camarillo real estate is a misnomer as there is little "real" about it even today.  In fact the unreal has come back with a vengance as all the "lower" priced properties are being snapped up by extreme flippers and remarketed much later due to the the amount of work involved and called new resales by the idiot likes of Case-Shiller.

Only one of those is "for sale."  The others are foreclosure notices.  These would rent for between $2500 and $3000 meaning none of them cash flow or even make sense after tax benefits.  Besides (or is it because) anyone who can lease for $3000 can buy for less in their position.

Look at all those lots.  One house for sale.  7 in pre/foreclosure.  Look at the prices.  The foreclourses are still looking at $250/sf.

Monday, November 19, 2012

Carrying a Charge

 Good news in the field of RTSC (room temperature superconductivity).  The progress has been like all young sciences; fits, starts and blind alleys.  A new piece of the puzzle has been dropped.  Materials that lose SC properties at lowered temperatures.
You may ask so?  Not so.  Commercial RTSC or near room temperature even, bodes well for world changing technology.  Right now Less than a third of the primary source energy used in making electricity ever makes it to the end use.  When that end use is a plug in electric vehicle less than 10% is ultimately useful work.  The mere discovery of viable RTSC would end any thought of an energy crisis and would lift the entire world economy overnight.  

Here's a quicky article.

Sorry the promised CA financial analysis is delayed.  Very complex work and besides RealWorld™ keeps intruding.

Friday, November 16, 2012

Big Bad Choo-Choo

The voice of people in the path of progress:

"In this case - forgive me - we don't really care what goes on statewide. We're very concerned about what's happening in our county, and what's happening in our county is very real and it's happening every day," said Anja Raudabaugh, executive director of the Madera County Farm Bureau, one of the parties to the lawsuit. "My guys can't get operating loans to plant trees next year. My guys can't get operating loans to buy equipment for expanding their operations because they're in the footprint of the alignment."


The fix is in.  There's nothing going to stop this dumb idea from riding the state into bankruptcy.  Not that it won't go "tango uniform" regardless but this will get us there faster.  

RThe fix ead more here:

San Berdoodoo

The City of San Bernardino has always repulsed me on a personal level while not being able to look away.

From suburb to basket case: How California city traveled the road to ruin

SAN BERNARDINO, Calif. -- When this sun-drenched exurb east of Los Angeles filed for bankruptcy protection in August, the city attorney suggested fraudulent accounting was the root of the problem.


The mayor blamed a dysfunctional city council and greedy police and fire unions. 


The unions blamed the mayor. 

False.  The mayor is "their guy."  They are blaming themselves.  

Even now, there is little agreement on how the city got into this crisis or how it can extricate itself.
"It's total political chaos," said John Husing, a former San Bernardino resident and regional economist. "There is no solution. They'll never fix anything."
Yet on close examination, the city's decades-long journey from prosperous, middle-class community to bankrupt, crime-ridden, foreclosure-blighted basket case is straightforward — and alarmingly similar to the path traveled by many municipalities around America's largest state. 

True and scary.  More on this in a follow up post.  

San Bernardino succumbed to a vicious circle of self-interests among city workers, local politicians and state pension overseers.
Little by little, over many years, the salaries and retirement benefits of San Bernardino's city workers — and especially its police and firemen — grew richer and richer, even as the city lost its major employers and gradually got poorer and poorer.

True.  Notice how the connection is not drawn however.  

Unions poured money into City Council elections, and the City Council poured money into union pay and pensions. The California Public Employees' Retirement System (Calpers), which manages pension plans for San Bernardino and many other cities, encouraged ever-sweeter benefits.

True.  CalPERS is not without blame here.  Neither is the insane practice of compensation comparisons which induces a wage spiral as all lower bound wages are brought higher thus shifting the bound ever upward.  

Investment bankers sold clever bond deals to pay for them. 

False.  IBs facilitated the transactions and collected the fees but never actually were sellers.  That said, the fees charged are beyond usurious.  

Meanwhile, state law made it impossible to raise local property taxes and difficult to boost any other kind.

False.  It is not in any way shape or form impossible to raise property taxes.  It happens all the time all over the State and usually passes even when supermajorities are required.  

No single deal or decision involving benefits and wages over the years killed the city. But cumulatively, they built a pension-fueled financial time-bomb that finally exploded.
In bankrupt San Bernardino, a third of the city's 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension. Forty-six retired city employees receive over $100,000 a year in pensions.

Almost 75 percent of the city's general fund is now spent solely on the police and fire departments, according to a Reuters analysis of city bankruptcy documents -- most of that on wages and pension costs.

In the dark
San Bernardino's biggest creditor, by far, is Calpers, the public-employee pension fund. The city says it owes Calpers $143 million; using a different calculation, Calpers says the city would have to pay $320 million if it left the plan immediately.
Second on the city's list of creditors are holders of $46 million worth of pension bonds -- money borrowed in 2005 to pay off Calpers. The total pension-related debts are more than double the $92 million owed to the city's next 18 largest creditors combined.

Got that?  San Berdo took out a loan to pay off a pension funding arrears.  Why not just work out the same terms with CalPERS?  Glad you asked.  CalPERS expects 7.5% return.  The bond was significantly less than that.  Does everyone see the fatal flaw in this debt shuffle?  

Complicating matters were obscure budgeting procedures that left residents in the dark. The word "pension" doesn't appear once in the most recent 642-page budget, and retiree costs are buried in detailed departmental line items.
"I've been asking for years for the pension costs," said Tobin Brinker, a former council member and pension-reform advocate, who lost his seat last year to a challenger backed by nearly $100,000 in contributions from the fire and police unions. "I still don't know the number."....

The article goes on with more and is worth reading.