Here is the email they sent me after my very negative email sent to them:

“In response to media reports about risky collateralized debt obligations
(CDOs), or packages of securities backed by bonds, mortgages and other
loans. There have been related news stories about borrowers defaulting
on loans to put these investments at risk. At least one article
suggested that banks who sold these securities to CalPERS were trying to
put something over on us.

Here is our response:

CalPERS owns $140 million in CDOs. The facts are:

1. None of these CalPERS investments are tied to the sub-prime market
that is having problems.

2. These investments are top-rated bank loans that are doing extremely
well.

3. Our CDO investment represents less than .1 % of CalPERS assets. There
are plans to expand our investment in this area in about 1-2 years. It
requires a big quantitative effort which we hope to build over the next
few years. We have purposely kept this program small until we get those
capabilities. We are collecting data and will forward information as it
is completed.

4. We are well protected and not at risk. We are not exposed to the Bear
Stearns meltdown.

Clark McKinley
Information Officer
CalPERS Office of Public Affairs
916/795-4196; fax: 916/795-3507”