Thread by @adamscrabble

1/ not gonna do a thread, but some quick angry notes: Pensions = an interest of mine for 15+ years. NYS and NYC Controllers have all been friends, we've discussed. Each state/city has own particulars.
Shadiness at Cali/CalPERs has been chronicled by @nakedcapitalism for years.

https://twitter.com/jposhaughnessy/status/1204942939300007937

CalPERs paid almost 4b as performance fee for a 12b return, only disclosed after years of lawsuits. They also used vehicles to circumvent cap rules.
They are one of many that have bid up VC 'unicorns', many of which have gone thru repricings at Fidelity Blue Chip(i advise them)

In NYC even though funds have met highwater mark for years, it couldn't satisfy the obligations that politicians put on it, example is Pataki/Giuliani who used it as leverage for union votes. (Side note, Google 'Giuliani' and 'DC37', crazy)
NYC/NYS allocated thru placement agent

And those fees were huge, most of which was self dealing and went to Ramius Capital and just a few others, for simple intros rather then rely on 'gatekeepers'.
Another limitation...

Is that some states such as NJ did not permit John McCormick (the controller at a crucial time) to allocate to 'alternative investments' such as Newark Real Estate or PE.

Illinois not only had all these issues but also some rather unique patronage issues, ditto CT.

The problem becomes critical as these states have seen wealth migration needed to provide current funding obligations. States have skirted disaster in clever, unstable ways (general funds/block grants/making paper commitments for future funding)

My concern for years is that these become vulnerable to vulture capital, as what happened in Puerto Rico with the PROMESA bill 🤬
If you tick rates up, it's a nuclear bomb

New problem economies have = gig economy workers, impossible for city/state to reliably forecast revenue (makes them easy prey for large W2 employers = AMZN) and makes debt service / pension shortfalls of pensions the La Brea tarpits.
My rant is over
(I feel better now)