OT – CALPERS to Sue Ratings Agencies

[Huckleberry]

http://www.ritholtz.com/blog/2009/07/calpers-rating-agencies-to-blame-for-huge-losses/

FTFA:

– Conflicts of interest by the rating agencies are rife. They are paid by the companies issuing the securities — an arrangement that prevents the agencies from issuing negative ratings;

– Structured investment vehicles generated lucrative fees for rating agencies, above and beyond normal fees. They were paid as consultants who helped structure the deals — not as neutral 3rd parties. The fees ranged from $300,000 to $500,000 and up to $1 million for each deal;

-These fees were in addition to revenue generated by the agencies for their more traditional work of issuing credit ratings;

-By actively creating these instruments, CALPERS owed a different duty of care as an underwriter, not merely a 3rd party firm protected by 1st Amendment Free Speech;

-By then rating them AAA, what the Ratings Agencies did amounted to Fraud.

[barnaby33]

Why is this off-topic? Calpers will probably fail. The pay for play system is not new. Calpers is supposed to be an expert and as naked capitalism pointed out, this will just end up being a boon for lawyers.
Josh

[barnaby33]

Why is this off-topic? Calpers will probably fail. The pay for play system is not new. Calpers is supposed to be an expert and as naked capitalism pointed out, this will just end up being a boon for lawyers.
Josh

[barnaby33]

Why is this off-topic? Calpers will probably fail. The pay for play system is not new. Calpers is supposed to be an expert and as naked capitalism pointed out, this will just end up being a boon for lawyers.
Josh

[barnaby33]

Why is this off-topic? Calpers will probably fail. The pay for play system is not new. Calpers is supposed to be an expert and as naked capitalism pointed out, this will just end up being a boon for lawyers.
Josh

[barnaby33]

Why is this off-topic? Calpers will probably fail. The pay for play system is not new. Calpers is supposed to be an expert and as naked capitalism pointed out, this will just end up being a boon for lawyers.
Josh

[waiting hawk]

I was calling Calpers stupid in 2007. Nobody listend. Oh well happy reading.
.
.
.

Tuesday, June 10, 2008 4:05 PM
Thanks, John. That’s interesting. In fairness to Calpers, I don’t think they’re saying the potential loss from the Newhall investment is meaningless, but that it’d be fairly small in the context of a fund with over $240 billion in assets.
In any event, thanks again for writing.
—–Original Message—–
From: XXXX
Sent: Tuesday, June 10, 2008 2:12 PM
To: Kasler, Dale – Sacramento
Subject: CalPERS Story

Howdy, I’d like to add to this story. I find that losing that much money that is small to them even though it’s others money, but it sure is a funny story.
A quote by CalPERS, “‘No one knew that the credit crunch and the housing crisis would get to what it was,’ she said.” At time time CalPERS investment was 90% less. I guess they are that cluessless with others money. They knew because at the time I brought this joke investment up to them in July 19th 2007, they came back stating what an idiot I was. I guess that John Wayne rings true right?
“”Life’s tough, it’s even tougher if you’re stupid.” -John Wayne”

Below email if communication with CalPERS from July 19th 2007 and my response to them sent yesterday.
Take care,
John

From: XXX Sent: Mon 6/9/2008 7:43 PM
To: [email protected]; [email protected]
Cc: [email protected]
Subject: RE: CalPERS Response from July 19, 2007– Ask CalPERS #

This email is in response to Calpers response from 7-19-2007. Let me point out first that this was easy to foresee by anyone with common sense. First the Bloomberg article from David Evans comes out June 1st, 2007 stating how Calpers was engaging in these types of high risk of investments. Fast foreword 11 months later from the Wall Street Journal quoted as saying, “The bankruptcy filing in federal court in Delaware means Calpers could lose much of its $970 million investment in the venture, which it made through an investment vehicle in February 2007, only months before land values plunged.”
http://online.wsj.com/article/SB121298363815456607.html

A quote from Calpers response to me from 11 months ago, “At least one article suggested that banks who sold these securities to CalPERS were trying to put something over on us.”. Interesting statement looking back now. What about looking back 2 years from now would it be better or worse?

Now lets review a couple of “facts” sent to me from Calpers from 11 months ago.

“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.”
Thumbs up!

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

Ratings worked well for all the subprime pools right?

”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. “

So what was the % total for $970 million that you were willing to risk of others money?

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

Great news I am so glad to hear it.

Next time you fell like throwing millions upon millions away PLEASE don’t forget that I have a connection in Nigeria that needs to exchange money orders for cash. We would be looking at 50% return on investment. Please stop throwing away money.
Fell free to read and comment on the email below sent almost 11 months ago.
John/
forsakencraft

PS.. I did email this statement to David Evans same day I received on July 19th 2007.

——————————————————————————–
From: McKinley, Clark [mailto:[email protected]]
Sent: Thu 7/19/2007 11:38 AM
To: XXX
Cc: TalkBack, PAOF1
Subject: RE: – CalPERS On-Line Web Site – Ask CalPERS # 259016

Mr. XXX:

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

–

Respond By: Email
E-Mail Address:
Date Sent: 2007-07-18
Time Sent: 15:14:20

Subject: Press Information/Public Affairs (35)

http://insider.calpers.ca.gov:82/online/askcalpers/subject-owners.asp

Street:
City:
State:
Zip Code:

Organization:

In an article from Bloomberg on June 1st
that stated, “The California Public Employees` Retirement System, the
nation`s largest public pension fund, has invested $140 million in such
unrated CDO portions, according to data Calpers provided in response to
a public records request. Citigroup Inc., the largest U.S. bank, sold
the tranches to Calpers.” The article opened up about Bear Stearns
trying to find any greater fools to buy their falling CDO`s.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=n
ews

My question is:
Now we go to 48 days later and see that these 2 Bear Stearns funds are
“worthless” according to Wall Street Journal. Are these the same funds
or overlap into them? If they are not could you provide detail which
funds they are in since they will soon face the same demise? Thanks,
John

http://insider.calpers.ca.gov:82/online/askcalpers/talkback-locate.asp?T
alkBackID=259016

Web Browser: Microsoft Internet Explorer 4.0 (compatible; MSIE 6.0;
Windows NT 5.1; SV1)

[waiting hawk]

I was calling Calpers stupid in 2007. Nobody listend. Oh well happy reading.
.
.
.

Tuesday, June 10, 2008 4:05 PM
Thanks, John. That’s interesting. In fairness to Calpers, I don’t think they’re saying the potential loss from the Newhall investment is meaningless, but that it’d be fairly small in the context of a fund with over $240 billion in assets.
In any event, thanks again for writing.
—–Original Message—–
From: XXXX
Sent: Tuesday, June 10, 2008 2:12 PM
To: Kasler, Dale – Sacramento
Subject: CalPERS Story

Howdy, I’d like to add to this story. I find that losing that much money that is small to them even though it’s others money, but it sure is a funny story.
A quote by CalPERS, “‘No one knew that the credit crunch and the housing crisis would get to what it was,’ she said.” At time time CalPERS investment was 90% less. I guess they are that cluessless with others money. They knew because at the time I brought this joke investment up to them in July 19th 2007, they came back stating what an idiot I was. I guess that John Wayne rings true right?
“”Life’s tough, it’s even tougher if you’re stupid.” -John Wayne”

Below email if communication with CalPERS from July 19th 2007 and my response to them sent yesterday.
Take care,
John

From: XXX Sent: Mon 6/9/2008 7:43 PM
To: [email protected]; [email protected]
Cc: [email protected]
Subject: RE: CalPERS Response from July 19, 2007– Ask CalPERS #

This email is in response to Calpers response from 7-19-2007. Let me point out first that this was easy to foresee by anyone with common sense. First the Bloomberg article from David Evans comes out June 1st, 2007 stating how Calpers was engaging in these types of high risk of investments. Fast foreword 11 months later from the Wall Street Journal quoted as saying, “The bankruptcy filing in federal court in Delaware means Calpers could lose much of its $970 million investment in the venture, which it made through an investment vehicle in February 2007, only months before land values plunged.”
http://online.wsj.com/article/SB121298363815456607.html

A quote from Calpers response to me from 11 months ago, “At least one article suggested that banks who sold these securities to CalPERS were trying to put something over on us.”. Interesting statement looking back now. What about looking back 2 years from now would it be better or worse?

Now lets review a couple of “facts” sent to me from Calpers from 11 months ago.

“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.”
Thumbs up!

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

Ratings worked well for all the subprime pools right?

”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. “

So what was the % total for $970 million that you were willing to risk of others money?

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

Great news I am so glad to hear it.

Next time you fell like throwing millions upon millions away PLEASE don’t forget that I have a connection in Nigeria that needs to exchange money orders for cash. We would be looking at 50% return on investment. Please stop throwing away money.
Fell free to read and comment on the email below sent almost 11 months ago.
John/
forsakencraft

PS.. I did email this statement to David Evans same day I received on July 19th 2007.

——————————————————————————–
From: McKinley, Clark [mailto:[email protected]]
Sent: Thu 7/19/2007 11:38 AM
To: XXX
Cc: TalkBack, PAOF1
Subject: RE: – CalPERS On-Line Web Site – Ask CalPERS # 259016

Mr. XXX:

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

–

Respond By: Email
E-Mail Address:
Date Sent: 2007-07-18
Time Sent: 15:14:20

Subject: Press Information/Public Affairs (35)

http://insider.calpers.ca.gov:82/online/askcalpers/subject-owners.asp

Street:
City:
State:
Zip Code:

Organization:

In an article from Bloomberg on June 1st
that stated, “The California Public Employees` Retirement System, the
nation`s largest public pension fund, has invested $140 million in such
unrated CDO portions, according to data Calpers provided in response to
a public records request. Citigroup Inc., the largest U.S. bank, sold
the tranches to Calpers.” The article opened up about Bear Stearns
trying to find any greater fools to buy their falling CDO`s.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=n
ews

My question is:
Now we go to 48 days later and see that these 2 Bear Stearns funds are
“worthless” according to Wall Street Journal. Are these the same funds
or overlap into them? If they are not could you provide detail which
funds they are in since they will soon face the same demise? Thanks,
John

http://insider.calpers.ca.gov:82/online/askcalpers/talkback-locate.asp?T
alkBackID=259016

Web Browser: Microsoft Internet Explorer 4.0 (compatible; MSIE 6.0;
Windows NT 5.1; SV1)

[waiting hawk]

I was calling Calpers stupid in 2007. Nobody listend. Oh well happy reading.
.
.
.

Tuesday, June 10, 2008 4:05 PM
Thanks, John. That’s interesting. In fairness to Calpers, I don’t think they’re saying the potential loss from the Newhall investment is meaningless, but that it’d be fairly small in the context of a fund with over $240 billion in assets.
In any event, thanks again for writing.
—–Original Message—–
From: XXXX
Sent: Tuesday, June 10, 2008 2:12 PM
To: Kasler, Dale – Sacramento
Subject: CalPERS Story

Howdy, I’d like to add to this story. I find that losing that much money that is small to them even though it’s others money, but it sure is a funny story.
A quote by CalPERS, “‘No one knew that the credit crunch and the housing crisis would get to what it was,’ she said.” At time time CalPERS investment was 90% less. I guess they are that cluessless with others money. They knew because at the time I brought this joke investment up to them in July 19th 2007, they came back stating what an idiot I was. I guess that John Wayne rings true right?
“”Life’s tough, it’s even tougher if you’re stupid.” -John Wayne”

Below email if communication with CalPERS from July 19th 2007 and my response to them sent yesterday.
Take care,
John

From: XXX Sent: Mon 6/9/2008 7:43 PM
To: [email protected]; [email protected]
Cc: [email protected]
Subject: RE: CalPERS Response from July 19, 2007– Ask CalPERS #

This email is in response to Calpers response from 7-19-2007. Let me point out first that this was easy to foresee by anyone with common sense. First the Bloomberg article from David Evans comes out June 1st, 2007 stating how Calpers was engaging in these types of high risk of investments. Fast foreword 11 months later from the Wall Street Journal quoted as saying, “The bankruptcy filing in federal court in Delaware means Calpers could lose much of its $970 million investment in the venture, which it made through an investment vehicle in February 2007, only months before land values plunged.”
http://online.wsj.com/article/SB121298363815456607.html

A quote from Calpers response to me from 11 months ago, “At least one article suggested that banks who sold these securities to CalPERS were trying to put something over on us.”. Interesting statement looking back now. What about looking back 2 years from now would it be better or worse?

Now lets review a couple of “facts” sent to me from Calpers from 11 months ago.

“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.”
Thumbs up!

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

Ratings worked well for all the subprime pools right?

”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. “

So what was the % total for $970 million that you were willing to risk of others money?

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

Great news I am so glad to hear it.

Next time you fell like throwing millions upon millions away PLEASE don’t forget that I have a connection in Nigeria that needs to exchange money orders for cash. We would be looking at 50% return on investment. Please stop throwing away money.
Fell free to read and comment on the email below sent almost 11 months ago.
John/
forsakencraft

PS.. I did email this statement to David Evans same day I received on July 19th 2007.

——————————————————————————–
From: McKinley, Clark [mailto:[email protected]]
Sent: Thu 7/19/2007 11:38 AM
To: XXX
Cc: TalkBack, PAOF1
Subject: RE: – CalPERS On-Line Web Site – Ask CalPERS # 259016

Mr. XXX:

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

–

Respond By: Email
E-Mail Address:
Date Sent: 2007-07-18
Time Sent: 15:14:20

Subject: Press Information/Public Affairs (35)

http://insider.calpers.ca.gov:82/online/askcalpers/subject-owners.asp

Street:
City:
State:
Zip Code:

Organization:

In an article from Bloomberg on June 1st
that stated, “The California Public Employees` Retirement System, the
nation`s largest public pension fund, has invested $140 million in such
unrated CDO portions, according to data Calpers provided in response to
a public records request. Citigroup Inc., the largest U.S. bank, sold
the tranches to Calpers.” The article opened up about Bear Stearns
trying to find any greater fools to buy their falling CDO`s.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=n
ews

My question is:
Now we go to 48 days later and see that these 2 Bear Stearns funds are
“worthless” according to Wall Street Journal. Are these the same funds
or overlap into them? If they are not could you provide detail which
funds they are in since they will soon face the same demise? Thanks,
John

http://insider.calpers.ca.gov:82/online/askcalpers/talkback-locate.asp?T
alkBackID=259016

Web Browser: Microsoft Internet Explorer 4.0 (compatible; MSIE 6.0;
Windows NT 5.1; SV1)

[waiting hawk]

I was calling Calpers stupid in 2007. Nobody listend. Oh well happy reading.
.
.
.

Tuesday, June 10, 2008 4:05 PM
Thanks, John. That’s interesting. In fairness to Calpers, I don’t think they’re saying the potential loss from the Newhall investment is meaningless, but that it’d be fairly small in the context of a fund with over $240 billion in assets.
In any event, thanks again for writing.
—–Original Message—–
From: XXXX
Sent: Tuesday, June 10, 2008 2:12 PM
To: Kasler, Dale – Sacramento
Subject: CalPERS Story

Howdy, I’d like to add to this story. I find that losing that much money that is small to them even though it’s others money, but it sure is a funny story.
A quote by CalPERS, “‘No one knew that the credit crunch and the housing crisis would get to what it was,’ she said.” At time time CalPERS investment was 90% less. I guess they are that cluessless with others money. They knew because at the time I brought this joke investment up to them in July 19th 2007, they came back stating what an idiot I was. I guess that John Wayne rings true right?
“”Life’s tough, it’s even tougher if you’re stupid.” -John Wayne”

Below email if communication with CalPERS from July 19th 2007 and my response to them sent yesterday.
Take care,
John

From: XXX Sent: Mon 6/9/2008 7:43 PM
To: [email protected]; [email protected]
Cc: [email protected]
Subject: RE: CalPERS Response from July 19, 2007– Ask CalPERS #

This email is in response to Calpers response from 7-19-2007. Let me point out first that this was easy to foresee by anyone with common sense. First the Bloomberg article from David Evans comes out June 1st, 2007 stating how Calpers was engaging in these types of high risk of investments. Fast foreword 11 months later from the Wall Street Journal quoted as saying, “The bankruptcy filing in federal court in Delaware means Calpers could lose much of its $970 million investment in the venture, which it made through an investment vehicle in February 2007, only months before land values plunged.”
http://online.wsj.com/article/SB121298363815456607.html

A quote from Calpers response to me from 11 months ago, “At least one article suggested that banks who sold these securities to CalPERS were trying to put something over on us.”. Interesting statement looking back now. What about looking back 2 years from now would it be better or worse?

Now lets review a couple of “facts” sent to me from Calpers from 11 months ago.

“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.”
Thumbs up!

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

Ratings worked well for all the subprime pools right?

”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. “

So what was the % total for $970 million that you were willing to risk of others money?

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

Great news I am so glad to hear it.

Next time you fell like throwing millions upon millions away PLEASE don’t forget that I have a connection in Nigeria that needs to exchange money orders for cash. We would be looking at 50% return on investment. Please stop throwing away money.
Fell free to read and comment on the email below sent almost 11 months ago.
John/
forsakencraft

PS.. I did email this statement to David Evans same day I received on July 19th 2007.

——————————————————————————–
From: McKinley, Clark [mailto:[email protected]]
Sent: Thu 7/19/2007 11:38 AM
To: XXX
Cc: TalkBack, PAOF1
Subject: RE: – CalPERS On-Line Web Site – Ask CalPERS # 259016

Mr. XXX:

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

–

Respond By: Email
E-Mail Address:
Date Sent: 2007-07-18
Time Sent: 15:14:20

Subject: Press Information/Public Affairs (35)

http://insider.calpers.ca.gov:82/online/askcalpers/subject-owners.asp

Street:
City:
State:
Zip Code:

Organization:

In an article from Bloomberg on June 1st
that stated, “The California Public Employees` Retirement System, the
nation`s largest public pension fund, has invested $140 million in such
unrated CDO portions, according to data Calpers provided in response to
a public records request. Citigroup Inc., the largest U.S. bank, sold
the tranches to Calpers.” The article opened up about Bear Stearns
trying to find any greater fools to buy their falling CDO`s.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=n
ews

My question is:
Now we go to 48 days later and see that these 2 Bear Stearns funds are
“worthless” according to Wall Street Journal. Are these the same funds
or overlap into them? If they are not could you provide detail which
funds they are in since they will soon face the same demise? Thanks,
John

http://insider.calpers.ca.gov:82/online/askcalpers/talkback-locate.asp?T
alkBackID=259016

Web Browser: Microsoft Internet Explorer 4.0 (compatible; MSIE 6.0;
Windows NT 5.1; SV1)

[waiting hawk]

I was calling Calpers stupid in 2007. Nobody listend. Oh well happy reading.
.
.
.

Tuesday, June 10, 2008 4:05 PM
Thanks, John. That’s interesting. In fairness to Calpers, I don’t think they’re saying the potential loss from the Newhall investment is meaningless, but that it’d be fairly small in the context of a fund with over $240 billion in assets.
In any event, thanks again for writing.
—–Original Message—–
From: XXXX
Sent: Tuesday, June 10, 2008 2:12 PM
To: Kasler, Dale – Sacramento
Subject: CalPERS Story

Howdy, I’d like to add to this story. I find that losing that much money that is small to them even though it’s others money, but it sure is a funny story.
A quote by CalPERS, “‘No one knew that the credit crunch and the housing crisis would get to what it was,’ she said.” At time time CalPERS investment was 90% less. I guess they are that cluessless with others money. They knew because at the time I brought this joke investment up to them in July 19th 2007, they came back stating what an idiot I was. I guess that John Wayne rings true right?
“”Life’s tough, it’s even tougher if you’re stupid.” -John Wayne”

Below email if communication with CalPERS from July 19th 2007 and my response to them sent yesterday.
Take care,
John

From: XXX Sent: Mon 6/9/2008 7:43 PM
To: [email protected]; [email protected]
Cc: [email protected]
Subject: RE: CalPERS Response from July 19, 2007– Ask CalPERS #

This email is in response to Calpers response from 7-19-2007. Let me point out first that this was easy to foresee by anyone with common sense. First the Bloomberg article from David Evans comes out June 1st, 2007 stating how Calpers was engaging in these types of high risk of investments. Fast foreword 11 months later from the Wall Street Journal quoted as saying, “The bankruptcy filing in federal court in Delaware means Calpers could lose much of its $970 million investment in the venture, which it made through an investment vehicle in February 2007, only months before land values plunged.”
http://online.wsj.com/article/SB121298363815456607.html

A quote from Calpers response to me from 11 months ago, “At least one article suggested that banks who sold these securities to CalPERS were trying to put something over on us.”. Interesting statement looking back now. What about looking back 2 years from now would it be better or worse?

Now lets review a couple of “facts” sent to me from Calpers from 11 months ago.

“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.”
Thumbs up!

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

Ratings worked well for all the subprime pools right?

”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. “

So what was the % total for $970 million that you were willing to risk of others money?

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

Great news I am so glad to hear it.

Next time you fell like throwing millions upon millions away PLEASE don’t forget that I have a connection in Nigeria that needs to exchange money orders for cash. We would be looking at 50% return on investment. Please stop throwing away money.
Fell free to read and comment on the email below sent almost 11 months ago.
John/
forsakencraft

PS.. I did email this statement to David Evans same day I received on July 19th 2007.

——————————————————————————–
From: McKinley, Clark [mailto:[email protected]]
Sent: Thu 7/19/2007 11:38 AM
To: XXX
Cc: TalkBack, PAOF1
Subject: RE: – CalPERS On-Line Web Site – Ask CalPERS # 259016

Mr. XXX:

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

–

Respond By: Email
E-Mail Address:
Date Sent: 2007-07-18
Time Sent: 15:14:20

Subject: Press Information/Public Affairs (35)

http://insider.calpers.ca.gov:82/online/askcalpers/subject-owners.asp

Street:
City:
State:
Zip Code:

Organization:

In an article from Bloomberg on June 1st
that stated, “The California Public Employees` Retirement System, the
nation`s largest public pension fund, has invested $140 million in such
unrated CDO portions, according to data Calpers provided in response to
a public records request. Citigroup Inc., the largest U.S. bank, sold
the tranches to Calpers.” The article opened up about Bear Stearns
trying to find any greater fools to buy their falling CDO`s.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=n
ews

My question is:
Now we go to 48 days later and see that these 2 Bear Stearns funds are
“worthless” according to Wall Street Journal. Are these the same funds
or overlap into them? If they are not could you provide detail which
funds they are in since they will soon face the same demise? Thanks,
John

http://insider.calpers.ca.gov:82/online/askcalpers/talkback-locate.asp?T
alkBackID=259016

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