Smoking Some Bad Debt Dope?

All week, I've been watching the circus and clowns in Washington make fools out of themselves. The "debt ceiling drama" is annoying me. More smoke & mirrors to scare retail investors away while the big guns load up on risk assets. Let me go over a few key points to convince you to keep buying the dips hard and ignore the debt boogeyman which permeates our mass media every day.First, take the time to read Peter Coy's article which appears on yahoo Finance (provided by Bloomberg Businessweek), Why the Debt Crisis Is Even Worse Than You Think. I quote the following:The language we use is part of the problem. Every would-be budget balancer in Washington should read "On the General Relativity of Fiscal Language," a brilliant 2006 paper by...

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Oklahoma's AG Launches Pensions Investigation

Michael McNutt reports in NewsOK, Oklahoma AG launches investigation into pension investments:An investigation was launched Thursday into whether financial institutions are properly handling state pension funds, state Attorney General Scott Pruitt said. Pruitt said he sent letters to several banks holding pension funds seeking information on investment transactions, including those involving foreign currency exchanges. The pensions include those for state employees, teachers, police officers, firefighters and judges.The investigation does not involve any Oklahoma bank, a spokeswoman for the attorney general's office said.Pruitt said he has no evidence of wrongdoing.“Our investigators in the AG's office will collect that...

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Backstopping PSPIB?

Amy Minsky of Postmedia News reports in the Ottawa Citizen, Public-service pension fund's strong profits don't deter critics:It was one of the most profitable Canadian pension funds in 2010-11, but critics are unwavering that the public service pension fund is unsustainable, going so far as to brand it one of the "biggest drivers of deficit."The Public Sector Pension Investment Board — which watches over about $58 billion in assets, making it the third-largest pension fund in the country — posted a 14.5 per cent return in 2010-11, resulting in a $7-billion gain after expenses, the board said in an annual report it tabled last week.But the successful year isn't reassuring for some who still argue the public service pension system is...

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Private Equity Panacea?

Martin Z. Braun of Bloomberg reports, States Miss Pension Targets by 50% Even With Private Equity (HT: Donald):In the last decade, as a wave of baby boomers began retiring, America’s biggest state pension systems earned less than half what they needed to keep up with promises made to millions of graying civil servants. The state of Washington’s 3.92 percent return for the 10 years through June 30, 2010, after fees, was the best in a Bloomberg survey of state pensions with more than $20 billion in assets. That was nowhere close to the average yearly gains of as much as 8 percent that fund managers and public officials count on for meeting obligations to retirees. “To assume that the median plan will reach 8 percent given this environment,...

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Special Examination or Special Sham?

This is a follow-up comment to the last one on PSP Investments' FY 2011 results. I wanted to go through the Special Examination conducted by the Auditor General of Canada and Deloitte & Touch. The key findings reported on PSP's website are:What is a Special Examination?Special examinations are a form of performance audit of federal Crown corporations. Under the Financial Administration Act, federal Crown corporations are subject to a special examination at least once every 10 years. In special examinations, examiners provides an opinion on the management of the Crown corporation as a whole. More specifically, they examine whether a Crown corporation's systems and practices provide reasonable assurance that assets are safeguarded, resources...

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PSP Investments Up 14.5% in FY 2011

CNW reports, PSP Investments Reports Fiscal Year 2011 Result: The Public Sector Pension Investment Board (PSP Investments) announced today that it recorded an investment return of 14.5% for the fiscal year ended March 31, 2011 (fiscal year 2011). The robust overall performance for fiscal year 2011 was driven primarily by strong results in Public Market Equity portfolios as well as in Private Equity and in Real Estate, and follows on the heels of the 21.5% total return recorded in fiscal 2010. The fiscal year 2011 investment return exceeds the Policy Portfolio return of 12.7% by 1.8%. Consolidated net assets increased by $11.7 billion, or 25%, to a record level of $58.0 billion. During fiscal year 2011, PSP Investments generated...

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Are You Putting Yourself First?

Woke up early this morning. Absolutely beautiful, crisp, sunny day here in Montreal. The excessive heat dissipated and I took advantage to head over to my favorite cafe on Bernard for breakfast, read the paper and just relax and enjoy this awesome weather. I also read my horoscope on my Blackberry:When you wake up this morning, or as you go about your day, you hold in your grasp the chance to make it whatever you want it to be. Will it be positive and uplifting, with many happy thoughts, pleasant exchanges with the people you meet, and the positive pursuit of your goals? Or, will you anticipate an unhappy ambience, conflicts at home or at work, and a failure or two? It's up to you. But here's a hint: If you wish to have a really great...

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