Politics, Government and Business in Southern California's Inland Empire
February 3rd, 2012, 5:00 am
Posted by Tony Saavedra, Register investigative reporter
The Orange County Employee’s Retirement System ended 2011 with an investment return of 0.74 percent — that’s 7 percent less than projected.
But OCERS officials, though concerned, say it is too early to panic. For one thing, says CEO Steve Delaney, the 20-year average is 7.9 percent on investments, right where the system needs to be.
By Dale Kasler
dkasler@sacbee.com
Published: Friday, Feb. 3, 2012 – 12:00 am | Page 6B
By lowering its investment forecast by another quarter point, CalSTRS made a bow toward economic reality – but also may have complicated efforts to shore up its finances.
The teachers’ retirement board agreed Thursday to reduce CalSTRS’ official investment forecast to 7.5 percent, down from 7.75 percent. It was the second cut in 14 months, after the $144 billion fund left the forecast untouched for 15 years.
In a volatile investment climate, following a year in which CalSTRS’ portfolio earned just 2.3 percent, board members took their consultants’ advice and went with the lower number.
“I think it’s best that we be conservative,” said Terry McGuire, representing board member and state Controller John Chiang.
The board of the California State Teachers’ Retirement System voted 9-1 to reduce the forecast. The lone dissent came from Pedro Reyes of the Department of Finance. The higher forecast “is not unreasonable,” he argued. “Let’s stay where we are right now, (and) visit this in another year.”
By cutting investment projections, the board instantly ballooned CalSTRS’ funding gap – the estimated shortfall of assets available to meet the pension fund’s long-term needs. The gap will grow by nearly $6 billion, or roughly 10 percent.
That could create problems in the Legislature, which must OK changes in how CalSTRS is funded.
CalSTRS gets around $5.6 billion a year from the state, school districts and teachers. The pension fund had already calculated that it needed another $4 billion a year to eventually get healthy. With the lower investment forecast, those needs grow by another $500 million a year.
While CalSTRS is pushing for more money, many Republicans want to erase funding shortfalls for public pensions by reducing benefits. Democratic Gov. Jerry Brown wants to give newly hired employees a combination traditional pension and a 401(k)-style program.
Read more here: http://www.sacbee.com/2012/02/03/4235828/calstrs-gap-rises-as-return-forecast.html#mi_rss=Business#storylink=cpy
By Dale Kasler
dkasler@sacbee.com
Published: Wednesday, Feb. 1, 2012 – 12:00 am | Page 6B
CalSTRS is thinking of cutting its investment forecast for the second time in barely a year, a move that acknowledges the increased financial strain on the pension fund.
The teachers’ retirement board on Thursday will consider a recommendation from its actuarial consultant to cut the forecast by a quarter point, to 7.5 percent.
Monday, January 30, 2012
By Ed Mendel
The nation’s two largest public pension funds last week reported slim annual investment earnings, CalPERS 1.1 percent and CalSTRS 2.3 percent, as experts continue to say hitting their long-term earnings target, 7.75 percent, will be difficult.
While CalPERS reported weak earnings in 2011, a prominent private-sector investment manager, Robert Arnott of Research Affiliates, told the board last week he thinks the most they can expect from stocks and bonds next decade is 4 percent.
By Jim Steinberg Staff Writer
Posted: 01/24/2012 08:43:11 PM PST
The Fontana and Rialto city councils scrambled on Tuesday night to approve measures paving the way for a Feb. 1 deadline for the dissolution of their redevelopment agencies.
Meanwhile, because of the complexity of what needs to be accomplished in a short time frame, two bond-rating agencies have taken negative actions toward billions of dollars in California bonds secured by redevelopment tax increment revenue.
It falls short of the 7.75% average that actuaries say CalPERS needs to meet obligations. Calendar-year results are just indicators — the public pension fund’s fiscal year ends in June.
By Marc Lifsher, Los Angeles Times
January 24, 2012
Reporting from Sacramento— The nation’s largest public pension fund, the California Public Employees’ Retirement System, posted a 1.1% return on its investment portfolio in 2011, Chief Investment Officer Joseph Dear told his board.
The 2011 performance was well below the estimated average annual return of 7.75% that the fund’s actuaries say is needed to meet current and future obligations to its members.
January 19, 2012 12:43 PM
Brooke Edwards Staggs, City Editor
VICTORVILLE • A recent default on debt payments triggered one of the top credit rating agencies to downgrade $51 million in Southern California Logistics Airport Authority bonds another two notches, with Moody’s Investor Services predicting the airport won’t catch up on debt payments until 2029.
Bank company rakes in $81.7M
Andrew Edwards, Staff Writer
Posted: 01/19/2012 09:00:39 PM PST
ONTARIO – CVB Financial, parent company of Citizens Business Bank, earned its largest ever reported profit in 2011 – $81.7 million.
The amount signifies an increase from the $62.9 million profit earned in 2010.
Published: Tuesday, 17 Jan 2012 | 7:06 AM ET
By: Reuters
Rating agency Fitch said on Tuesday that Greece would default on its debt, although it said that such a default was likely to take place in an orderly manner.
January 17, 2012 – 6:38 p.m.
By David Oakley
Portugal is trading in default territory after investors offloaded the country’s bonds this week amid rising fears of contagion. Worries are mounting that the private sector and Greece will fail to agree a restructuring package for Athens’ debt.
Published: Tuesday, 17 Jan 2012 | 1:05 PM ET
By: AP
The largest banks must show how they would break up their assets if they were in danger of failing, under a rule approved Tuesday.
The Federal Deposit Insurance Corp voted to require banks with $50 billion or more in assets to submit so-called living wills. Seven banks with more than $250 billion in assets will have to show their plans by July. The other 30 affected by the rule have until 2013.
By Ed Mendel
Monday,January 16, 2012
Mitt Romney’s presidential campaign is putting the spotlight on private equity, which public pension funds such as CalPERS and CalSTRS helped flourish and now need for better-than-average earnings.
Romney became wealthy while leading Bain Capital, a private equity firm he said created “tens of thousands of jobs” by buying and then selling troubled or stagnant companies after making them efficient, better managed and able to grow and prosper.
By Anthony York, Los Angeles Times
January 15, 2012, 9:42 p.m.
Reporting from Sacramento— The future of California’s public schools, universities and health programs could be linked partly to the fictional town of FarmVille.
The popular virtual world is the creation of Zynga, a San Francisco online game company that raised $1 billion in an initial public stock offering last year. Because California receives much of its income from capital gains taxes, such moves by businesses like Zynga can mean hundreds of millions of dollars for state coffers.
By Keith Jenkins and Anchalee Worrachate – Jan 3, 2012 2:22 AM PT
Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.
Led by Japan’s $3 trillion and the U.S.’s $2.8 trillion, the amount coming due for the Group of Seven nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.
By E. Scott Reckard, Los Angeles Times
January 3, 2012
Bank of America Corp., under pressure to raise capital and cut risks, is severing lines of credit to some small-business owners who have used them to stay afloat.
Andrew Edwards, Staff Writer
Posted: 01/01/2012 06:03:33 AM PST
ONTARIO – CVB Financial Corp., the parent company of Citizens Business Bank, ended 2011 on positive notes, appearing to have recovered from much of the tumult that hit the Inland Empire’s largest locally based financial institution the previous year.
A technical payment mistake hits the city and the Southern California Logistics Airport
BY KIMBERLY PIERCEALL
STAFF WRITER
kpierceall@pe.com
Published: 28 December 2011 08:29 PM
Victorville has defaulted on two of several municipal bonds used to make improvements to the Southern California Logistics Airport, according to letters from the Bank of New York Mellon.
December 27, 2011 6:15 PM
Brooke Edwards Staggs, City Editor
VICTORVILLE • The city has defaulted on two bonds after trying to use restricted funds for a $535,000 payment due Dec. 1, according to a notice from the Bank of New York Mellon.
As a result, if a majority of bondholders agree, the bank notice states they could demand full and immediate payment of the outstanding balance on $173 million in bonds taken out in 2007 and 2008 for improvements at Southern California Logistics Airport.
By Ed Mendel
Monday, December 19, 2011
Over the last 10 years CalPERS investment earnings are below the median among institutional investors. Are money managers being paid for poor performance?
In a feisty farewell last week, an outgoing CalPERS board member, Lou Moret, called attention to the below-median earnings as Wilshire consultants delivered a quarterly earnings report.
By Daniel Borenstein
Staff columnist
California taxpayers should ask themselves, in the words of Clint Eastwood’s famous movie character, “Do I feel lucky?”
We’re not staring down the barrel of “Dirty Harry” Callahan’s gun wondering whether there’s a bullet in the chamber. Instead, we’re gambling our financial future on whether public pension fund investments will surpass reasonable expectations.
By David Glovin and Joshua Gallu
December 16, 2011 9:58 AM PT
Daniel Mudd, the former chief executive officer of Fannie Mae, and Richard Syron, ex-CEO of Freddie Mac, were sued by the U.S. Securities and Exchange Commission for understating by hundreds of billions of dollars the subprime loans held by the firms.
The State Worker
Chronicling civil-service life for California state workers
December 13, 2011
California’s three largest pension systems have promised $500 billion beyond their current ability to make those payments to retirees, according to a study released to today by Stanford University Professor and former Democratic Assemblyman Joe Nation and a student researcher.
The Stanford Institute for Economic Policy Research issued the report, documenting what it claims is the state’s deepening pension crisis. California Common Sense, an organization dedicated to engaging the public in “data-driven discourse” is also behind the report.
PolitiCal
On politics in the Golden State
December 13, 2011 | 3:27 pm
The debate over pension reform in California reached a boiling point Tuesday.
State Treasurer Bill Lockyer resigned from a pension advisory panel to protest a study it was affiliated with that called for reducing retirement benefits for current public employees and overhauling the boards that oversee the public pension systems.
By Dale Kasler
dkasler@sacbee.com
Published: Wednesday, Dec. 14, 2011 – 12:00 am | Page 6B
CalPERS reported a $695 million profit from one of its investments Tuesday.
The California Public Employees’ Retirement System said it earned the money from an investment fund that closed down after a 10-year run that ended when it sold its last asset.
Thursday, December 1, 2011 – 10:00 a.m.
All the misplaced euphoria over the recent drop in weekly first-time unemployment numbers, along with the Fed loaning the European Union (EU) some $600 billion, seems a little suspect.
The Fed is doing nothing more than manipulating markets in the short-term, with money it really doesn’t have.
November 30, 2011 | 4:57 pm
Gov. Jerry Brown’s proposal to overhaul public pensions in California may face legal hurdles and create some new costs, according to officials with the state’s two largest public retirement systems.
Thursday, December 1, 1011
By Ed Mendel
Gov. Brown yesterday appointed two CalSTRS board members with decades of experience in law and financial firms, a first step toward an ambitious pension reform plan he issued in October to end abuses and cut costs.
Wednesday, November 30, 2011
Wall Street enjoyed a big jump Wednesday morning, after a coordinated action by central banks around the world to provide more liquidity to the global financial system.
The U.S. Federal Reserve, after a similar effort in September, will “lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements by 50 basis points so that the new rate will be the U.S. dollar overnight index swap (OIS) rate plus 50 basis points.”
Wednesday, November 30, 2011 – 02:00 p.m.
The Dow Jones Industrial Average climbed nearly 500 points on Wednesday on news the U.S. Federal Reserve will drop the rate foreign banks pay it to exchange the euro for the U.S. Dollar.
In other words, a promise to artificially print more money by doing nothing more than pushing buttons on a computer.
The move up, once again, brings stocks to the unchanged level for the year.
Tuesday, November 29, 2011
By David Henry
NEW YORK (Reuters) – Standard & Poor’s reduced its credit ratings on 15 big banking companies, mostly in the Europe and the United States, on Tuesday as the result of a sweeping overhaul of its ratings criteria.
Tuesday, November 29, 2011 – 01:55 p.m.
AMR Corp., parent of American Airlines filed for chapter 11 bankruptcy protection Tuesday.
The airlines stock is trading at just 26 cents per share this evening.
By Bob Ivry, Bradley Keoun and Phil Kuntz – Nov 27, 2011 4:01 PM PT
Bloomberg Markets Magazine
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
Money & Company
Tracking the market and economic trends that shape your finances.
November 27, 2011 | 9:43 pm
Throwing more logs on the Eurozone fire, Moody’s Investors Service said early Monday that the continent’s debt crisis now is “threatening the credit standing of all European sovereigns.”
Published: Friday, 25 Nov 2011 | 1:10 PM ET
By: JeeYeon Park
CNBC.com Writer
Stocks closed in negative territory in thin, shortened trading Friday as investors were reluctant to go long ahead of the weekend and amid ongoing worries over the euro zone.
The Dow and S&P posted their worst Thanksgiving week since the Great Depression on a percentage basis.
Friday, November 25, 2011 – 11:45 a.m.
U.S. stocks ended lower for the seventh trading session in row on Friday,
While investment analysts cry that “Stocks are cheap.”, “It’s a buying opportunity.”, “I like stocks here.”, and “Investors shouldn’t panic.”, the markets continue to recede.
Even the recent trading range doesn’t look too warm and fuzzy.
BY DARRELL R. SANTSCHI
STAFF WRITER
dsantschi@pe.com
Published: 23 November 2011 06:25 PM
The Yucaipa City Council has agreed to refinance bonds that paid for flood control improvements in the Chapman Heights housing and commercial development.
November 23, 2011 6:17 PM
Brooke Edwards Staggs
VICTORVILLE • The city is $7.5 million short to make its annual debt payment due Dec. 1 — a shortfall that could trigger default and further downgrades on the already precarious bonds.
November 22, 2011 | 5:02 pm
California’s giant public pension fund and 15 other large investors settled lawsuits accusing former mortgage goliath Countrywide Financial Corp. of costing them billions of dollars in stock losses by failing to disclose the severity of the risks posed by the easy-money loans the Calabasas lender handed out during the housing boom.
Monday, November 20, 2011 – 11:15 a.m.
As expected, the so-called debt-reduction supercommittee, officially known as the Joint Select Committee on Deficit Reduction, ended with a loud thud this morning.
Monday, November 20, 2011 – 11:00 a.m.
One things for certain.
The sluggish stock market and record low interest rates has been and will continue to be a bad recipe for California government pension funds.
By Dakin Campbell – Nov 17, 2011 4:30 AM PT
U.S. banks face a “serious risk” that their creditworthiness will deteriorate if Europe’s debt crisis deepens and spreads beyond the five most-troubled nations, Fitch Ratings said.
By Alejandro Lazo and Jim Puzzanghera, Los Angeles Times
November 16, 2011, 6:27 p.m.
Reporting from L.A. and Washington— Investigators with the California attorney general’s office have subpoenaed information from mortgage titans Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state.
By Terence P. Jeffrey
November 16, 2011
Subscribe to Terence P. Jeffrey’s posts
(CNSNews.com) – At the close of business on Tuesday, the debt of the federal government exceeded $15 trillion for the first time–with the largest single owner of the publicly held portion of that debt being the Federal Reserve.
Wednesday, November 16, 2011 – 01:50 p.m.
Rumors have started circulating on Wall Street this afternoon surrounding the solvency of investment banks Jeffries & Co. and Morgan Stanley.
The stock of the two companies was pounded today after a report from Fitch Ratings stated that U.S. financial institutions may be exposed to problems impacting European Unions banks.
Wednesday, November 16, 2011 – 01:45 p.m.
Members of the United States Congress trade stock and stock options based on inside information.
Reports say that those members who engage in the unethical practice beat the market by 12%.
Wednesday, November 16, 2011 – 09:50 a.m.
The price of crude oil blew past the $100 per barrel mark Wednesday morning.
A renewed damper on an already anemic economy.
Tuesday, November 15, 2011 – 01:00 p.m.
The head in the sand mentality continues.
The collapse of Greece rocked financial markets. Then the markets recovered.
The approaching collapse of Italy is realized and the markets dip. Then the markets recovered.
Carolyn Lochhead, Chronicle Washington Bureau
Tuesday, November 15, 2011
Washington — House Minority Leader Nancy Pelosi’s office accused the news program “60 Minutes” of omitting key information from its report Sunday on how members of Congress use privileged information to profit from stock trades.
By ERIC DASH
Published: November 13, 2011
Even as Bank of America and other major lenders back away from charging customers to use their debit cards, many banks have been quietly imposing other new fees.
By Ryan Teague Beckwith
Roll Call Staff
Nov. 13, 2011, 8:49 p.m.
Updated: 10:30 p.m.
Members of Congress may be personally profiting from insider information they gather while legislating, according to a “60 Minutes” report that aired tonight.
By Loretta Kalb and Phillip Reese
lkalb@sacbee.com
Published: Sunday, Nov. 13, 2011 – 12:00 am | Page 1A
Last Modified: Sunday, Nov. 13, 2011 – 12:14 am
Targeted for extinction and running out of time, California’s redevelopment agencies earlier this year embarked on a wave of costly borrowing unequaled in their history.
When the dust settled, the agencies with a mission of helping economically galvanize California’s urban areas had incurred a record $1.2 billion in new bonded indebtedness secured by property tax growth, according to a Bee analysis of records from the California State Treasurer’s Office.
The money didn’t come cheap.
Debra J. Saunders
Thursday, November 10, 2011
The collapse of MF Global Holdings gives Americans yet another reason not to trust Wall Street. The firm filed for bankruptcy as federal regulators were looking for $600 million missing from customer accounts. Its CEO, former Democratic New Jersey Gov. Jon Corzine, had bet that European leaders would bail out smallish countries that were too big to fail. His bet did not pay off.
Wednesday, November 9, 2011 – 09:00 a.m
Wells Fargo Bank, Bank of America, JPMorgan Chase and other institutions, who have resisted helping struggling homeowners, dumped billions in bad mortgages on the government-owned Federal National Mortgage Association (Fannie Mae) in the 3rd quarter of 2011.
A practice which has been ongoing for years now.
Fannie Mae recorded a loss of $7.8 billion for the period ending September 30.
Monday, November 7, 2011 – 01:00 p.m.
The price of crude oil and gold bullion have continued their resurgence in recent weeks, with oil once again in the mid-$90 range, and gold approaching a new all-time high.
By Rick Rothacker
Tue Nov 1, 2011 12:11pm EDT
(Reuters) – Bank of America Corp is dropping plans to charge a $5 monthly fee for debit card use, the bank said in a statement on Tuesday.
Tuesday, November 1, 2011 – 09:00 a.m.
The party on Wall Street appears to be over this morning.
Yes, all that misplaced euphoria has evaporated once again.
Monday, October 31, 2011 – 03:30 p.m.
As predicted the U.S. Department of Justice has a task force examining the financial situation of Victorville, California.
Money & Company
Tracking the market and economic trends that shape your finances.
October 31, 2011 | 8:16 am
The Wall Street firm run by former Goldman Sachs Chairman and New Jersey Gov. Jon Corzine filed for bankruptcy Monday morning, making it the first big American casualty of the European debt crisis.
By EILEEN AJ CONNELLY
AP Personal Finance Writer
Published: Friday, Oct. 28, 2011 – 3:39 pm
Last Modified: Saturday, Oct. 29, 2011 – 5:41 pm
NEW YORK — Chase and Wells Fargo are joining the list of banks that won’t be charging customers to use their debit cards, as the backlash over Bank of America’s planned $5 monthly fee continues.
By Ronald D. White, Los Angeles Times
October 28, 2011
With energy prices high, most oil companies are once again seeing profits rise like an old-style gusher.
Occidental Petroleum Corp., Exxon Mobil Corp. and Royal Dutch Shell on Thursday reported healthy gains in earnings and revenue despite production problems in Libya and other oil-rich areas.
By Erik Wasson – 10/24/11 09:05 PM ET
Wall Street is growing nervous about the congressional supercommittee amid warnings from major banks that failure to reach a deal could lead to another downgrade of U.S. debt.
Sunday, October 23, 2011 – 02:15 p.m.
Hooray! We’re all saved.
The economy is recovering, unemployment is is improving and the Dow is going to hit 15,000 by Christmas.
What the hell.
California is trying to determine whether BofA and its Countrywide Financial subsidiary sold investments backed by risky mortgages to investors in California under false pretenses, a source says.
By Alejandro Lazo and E. Scott Reckard, Los Angeles Times
October 20, 2011
Investigators with the state attorney general’s office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.
Money & Company
Tracking the market and economic trends that shape your finances.
October 19, 2011 | 4:29 pm
California was forced to boost interest rates on a sale of $1.8 billion in tax-free muni bonds Wednesday, as institutional investors demanded higher yields to close the deal.
Tuesday, October 18, 2011 – 10:45 a.m.
Wall Street seem to be cheering the increase in consumer debt last month as a sign that there’s no double-dip recession.
What the hell!
By Dale Kasler
dkasler@sacbee.com
Published: Tuesday, Oct. 18, 2011 – 12:00 am | Page 1A
Last Modified: Tuesday, Oct. 18, 2011 – 7:55 am
California’s big public pension funds are already short tens of billions of dollars. An organization of accountants is about to make the picture look even worse.
Money & Company
Tracking the market and economic trends that shape your finances.
October 17, 2011 | 5:25 pm
Individual investors on Monday placed orders for about 14% of a $1.8-billion sale of tax-free bonds by California, a relatively low turnout for a state debt sale.
Sunday, October 16, 2011 – 07:25 p.m.
Wells Fargo dumping bad mortgages on U.S. taxpayers?
Say it isn’t so.
In London and other European capitals, in Australia and Tokyo and Seoul, and in New York, where the protests began last month, and other U.S. cities, fed-up citizens march against the financial system.
By Janet Stobart and John M. Glionna, Los Angeles Times
October 15, 2011, 5:10 p.m.
Reporting from London and Seoul— The protests against corporate greed born last month on New York’s Wall Street spread across the world Saturday, with fed-up demonstrators staging marches in Europe and the Asia-Pacific region.
October 14, 2011 | 7:43 pm
The nation’s largest public pension fund said it would vote against the reelection of media mogul Rupert Murdoch and his sons, James and Lachlan, to News Corp.’s board of directors.
Money & Company
Tracking the market and economic trends that shape your finances.
October 13, 2011 | 3:20 pm
California will sell $2 billion in bonds next week, and the state probably will have to pay significantly more to borrow than it did three weeks ago.
That may lure more yield-hungry individual investors to the securities.
By Dale Kasler
dkasler@sacbee.com
Published: Friday, Oct. 14, 2011 – 12:00 am | Page 6B
CalPERS expected to harvest a fortune from lush fields of chardonnay, cabernet sauvignon and pinot noir.
But like many of the pension fund’s big-time real estate deals of the past decade, the pension fund’s investment in the wine industry turned sour.
Investors worry stocks will get crushed in a recession; Here’s how they did in past downturns
Bernard Condon, AP Business Writer, On Sunday October 9, 2011, 12:36 pm EDT
NEW YORK (AP) — Are investors overreacting to the prospect of a recession?
The slightly better jobs report on Friday notwithstanding, the odds of a recession appear to be climbing, and that’s bringing back scary memories. Though stocks may look cheap thanks to record corporate profits, that was also true the last time the U.S. was heading into a downturn. Based on recent recessions, profits could fall a third if the economy crumbles.
October 9, 2011 7:58 pm
By Henny Sender in Hong Kong and Michael MacKenzie in New York
Asian and Middle Eastern central banks and sovereign wealth funds are increasingly anxious about the safety of their investments in the debt of Fannie Mae and Freddie Mac , despite the assurances of US government officials.
Money & Company
Tracking the market and economic trends that shape your finances.
October 7, 2011 | 4:24 pm
Top administrators and investment officers at the California Public Employees’ Retirement System, the country’s biggest government pension plan, were awarded $4.5 million in bonuses, averaging 41% of their base salaries for the year that ended June 30.
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