Friday, July 15, 2016

Watchdog: Another tough year for CalPERS as retirement fund loses billions

Mod: As you probably know, when CalPERS doesn't hit its numbers, there is only one place they can go to make up the shortfall. And that is you. Just in case you're wondering where much of that Measure UUT money is really going. This despite what much of this city's so-called leadership told you last April. As noted CalPERS critic Stephen Frank puts it, "...the Stock Market lost 2.2% of its value in 2015. So, CalPERS losing 2% looks good—except to the taxpayers that will have to make up the difference between the 7.5% return on investment and the 2% loss. The 9.5% difference adds to the unfunded liability of CalPERS-which is already over $600 billion, when using Federal criteria—or under $200 billion when you use the CalPERS money counting system." Right now Sierra Madre is already $9 million dollars in the hole to CalPERS. That hole has just gotten another couple of miles deeper. Start digging.

Watchdog: Another tough year for CalPERS as retirement fund loses billions - Public workers are pumping more money into retirement funds. Public agencies are pumping more money into retirement funds. Yet the market seems distinctly unimpressed.

The California Public Employees Retirement System – the nation’s largest – lost about 2 percent of its market value in the fiscal year that just ended, according to unofficial numbers published last week on the CalPERS website. This came despite doubled-down efforts to beef up its bottom line.

The value of CalPERS investments was $293.7 billion on June 30, down from $301.9 billion one year earlier, according to CalPERS’ daily valuation report. That number accounts for daily movement of some assets but not others, which are updated quarterly.

Challenges are expected to continue for years, even as the wave of graying baby boomers heads into retirement.

CalPERS is slated to release its official 2015-16 numbers next week, and declined to discuss details with the Register beforehand (though officials noted that the fund’s July 7 value was nearly $295.7 billion.) But last month, Ted Eliopoulos, CalPERS’ chief investment officer, tried to prepare officials for a bumpy ride going forward.

“Last fiscal year, our return was 2.4 percent,” Eliopoulos said during a committee meeting. “And this fiscal year, as we head into July, we’re likely to be flat, which is a nice way of saying zero.”

The next three to five years are shaping up to be “a challenging market environment, not just for CalPERS, but for all investors,” Eliopoulos added. “It’s going to test us.”

Projections from independent third parties are “materially lower” than what CalPERS forecast just two years ago, he said. With its current mix of investments, CalPERS can expect a total return of just 6.4 percent over the next decade.

It has assumed a return of 7.5 percent.

That difference is of great import, because investment income is the bulk of public pension payments. And since pension payments are guaranteed, any shortfall would have to be made up by taxpayers.

For the rest of this O.C. Register article click here.

Gem Coins Update!
(Mod: The always informative Behind MLM site has an update on how the prosecution of Arcadia's GemCoins crime gang is going. Apparently the folks investigating these characters just keep uncovering more money, and there is more being found all of the time. Here's some of the details.

USFIA Ponzi fraud balloons out to $164 million - On July 7th the USFIA Receiver filed his third report and recommendations. Spanning the first quarter of 2016, the Receiver’s report covers the scope of USFIA’s business operations, the legitimacy of USFIA, seized real-estate, Steve Chen’s lawyer funds, USFIA investor funds spent on Chen’s family and a Mercedes S550 belonging to Chen.

The scope of USFIA’s business operations
Unfortunately the precise scope of the USFIA Ponzi scheme has yet to be determined.

Owing to ‘the volume of electronic data and disorganized manner in which it was kept by‘ USFIA, the Receiver has yet to put together a complete picture of the business.

This includes the total number of investors and funds invested into USFIA.

What we do know is so far is that the Receiver has ‘identified approximately 65,000 unique email addresses‘ in the USFIA investor database.

No doubt many of them belong to the same investor, with the Receiver set to send an email out to each of the addresses to establish ownership of the accounts they are attached to.

The SEC’s initially estimated USFIA to be a $32 million dollar Ponzi scheme back in October 2015. This figure appears to have been vastly understated, with the Receiver now estimating some $164 million was deposited into the scheme.

"The accounting is ongoing and the Receiver’s goal for completion is September 30, 2016."

The Receivership had $26.9 million held as of March 31st, 2016.

No legitimate business in USFIA
In his second filed report, the Receiver established that he couldn’t find any legitimate business within USFIA. This included GemCoin and USFIA’s fabled amber mine operations.

Three months later that is still the case.

"At this point, there is no indication there was any legitimate Gemcoin or other viable business operated by the Receivership Entities.

Aside from some income generated by the hotel and rental properties, the Receivership Entities had no significant source of income other than money raised from investors."

As to USFIA’s infamous amber mines;

"The Receiver has verified that virtually none of the assets described in online and written marketing materials actually exist.

Instead of mines located around the world, millions of dollars in precious gems, and houses and cars available to be awarded to investors, the Receiver has found only costume jewelry, boxes of rocks, and bins filled with tens of thousands of little rings of nominal value.

As for the amber mine in the Dominican Republic the Defendant professed to own, no mine has been discovered.

The Receiver has learned that the address of the purported mine is a residential address of a house purchased by Ammine, S.R.L.

The house is located in a residential area and there are no mines adjacent to it.

Moreover, the Receiver has learned that Ammine, S.R.L. is not registered to operate a mine."

What little assets there are to seize in the Dominican Republic, the Receiver is in the process of obtaining through a domesticated preliminary injunction order.

Mod: To date there has been little information available about the legal fate of John Wuo, the former Arcadia Mayor who advocated loudly for investing in GemCoins. We will be keeping an eye out. For the rest of the above story click here.


  1. So when will the economy of California completely collapse? My guess is within the next three years to five years when the rest of the boomers retire and begin to collect all their retirement largess.

  2. GemCoin backed by Amber mine. Really.

  3. I still can't figure out how Chen was able to pull off so massive a fraud in the City of Arcadia, and with the assistance of an actual City Councilmember who was also a former Mayor, and nobody in an official capacity caught on. I hope the FBI is looking into this. Steve Chen could not have done any of this without official assistance.

  4. Fixing Sierra Madre's 9 mil plus problem is easy.

    Parcel tax, 12% uut, parking meters, etc.

    1. Couldn't we get a few true lovers of Sierra Madre to sign their homes over to the city?

    2. Sierra Madre needs to keep doing what it's doing, state's highest UUT on the most utilities, crappy part-time police, yellow water, etc, etc. More and more people will sell out and leave which means tons more property tax.

      never mind if the mountain village is changed forever. How proud this city council must be.

    3. Sorry, no matter how much they get, it will never be enough. Sad but true.

  5. Sounds like 7:06 is in favor of government looking into local enterprises to ensure that they're legit. I agree. More government oversight, more regulations to ensure that people don't get ripped off, more prosecutions of wrongdoers. Thank you 7:06 for being brave enough here to be in favor of bigger government.

    Gurgle ...Cough ... Gaak -- the sounds of 7:06 choking on his egg mcmuffin upon realizing that he actually hearts more government.

    1. It was a criminal enterprise, 8:24. Government has been looking into those for quite some time. I think the real reason Arcadia turned a blind eye to Chen and Wuo was because the city was benefiting financially. Just like Sacramento small city governments are easily bought off.

    2. 8:24, kinda like how massive government laws against illegal drugs has eliminated them? Oh, wait.

    3. It wasn't until the GemCoin victims stood up and, with the assistance of the press, exposed Chen and Wuo for the crooks they are that government acted.

    4. There are plenty of Ponzi, pyramid, and other schemes out there. The principals of some to many are prosecuted.

      But maybe you should stop feeling sorry for the victims. I'm not talking about the unsophisticated, but those who know its too good to be true. They invest anyway because they think that as early investors they'll get paid off, not caring that subsequent investors will lose. They, too, should be prosecuted as part of the scheme.

      Of course that would take more government resources, something folks here eschew.

    5. By 8:43's "logic" since the drug war is a colossal failure, nothing should be prosecuted.

      Do you really believe that criminal laws eliminate certain behaviors 8:43? I think most adults recognize that criminal laws can only reduce certain unwanted behaviors through fear of criminal consequences for some and for those with less fear of the consequences, segregating them from society.

    6. Herbal Life. $200 million fine today for a Pontiac scheam.

    7. Congrats, 9:30, you just made the argument as to why the war on drugs & gun control is a failure.

      Criminals will still use and sell illegal drugs.

      Criminals will still use guns, law-abiding citizens will have them taken away. What could go wrong?

    8. No, the Pontiac scheme was Government Motors.

    9. Gun control hasn't been tried.

      Tell us why you need a 30 round magazine on your semi 10:04. Do you need that many to take down Banbi or the imaginary phantom at your window?

      If you're that bad a shot, I'll be your neighbors would prefer you be limited to the muzzleloader contemplated by the 18th Century slave owners who drafted the 2nd Amendment.

    10. OK, dumb ass, if you want to go the muzzle loader route, I'll listen to your free speech as long as it's hand written with a quill pen. You really aren't that stupid, are you?

    11. Gun control is tried by the left all the time.

      If someone kicks in your front door at 2 AM, you're going to either grab a gun...or call someone who does (police)...and hope they get there in time.

      Good luck.

    12. Just what we need, a guy obsessed with guns calling a total stranger a dumbass over a simple conversation. AND yet another paranoid guy who sleeps with his gun under his pillow just in case someone one day might 'kick in' his door at 2am. Y'all need to breathe deep.

    13. Thanks 5:50. You can't reason with someone like 3:51 who equates the progression of writing instruments from the quill to the fountain pen to ball point to pixels with the major advances in killing power.

      Here's an anecdote, though it's more than an anecdote because I saw it many times. Groups of 2nd Amendment proponents, typically hunters, would sometimes show up at a paintball field where we occasionally played. They'd be tough talking about what good shots they are and even scoffing because it's paintball and isn't real, so they'd really kick some butt because they know what to do in the "real" situations they played in their heads.

      Invariably and even though they knew we were coming, we'd make short work of it, peppering them and moving on.

      But that wasn't even the fun part. The fun part was watching them tripping and stumbling with the first shots, trying to hide, fumbling with and even dropping their weapons, and bumping into each other.

      The little stories they played in their heads about their home defense acumen did nothing to salve the welts they invariably received from 300 ft/sec projectiles.

      For me, though, the most fun of all was creeping through the woods, silently circling around behind the survivors, forcing them to surrender without firing a shot.

      That 3:51 and 5:15 think they can thwart a 3 am home invasion is almost as laughable as thinking it could happen to them in Mayberry.

    14. Ok, dumb ass. How good of a shot do you have to be with a 12 gauge as the intruder rushes you?

      Your stupid level is amazing, even for someone who claims to understand the Constitution.

  6. From the response of the overwhelming voters supporting UUT increase with no sunset, or translated as 10% forever. The council surely feels empowered to tax more. Sierra Madre's own Gem coin created by those on Council for the good of the town.

    1. Actually the city council needs to levy more taxes in order to honor all the promises made when they were campaigning for Measure UUT.

    2. Isn't that the way? They're always one tax hike behind.

  7. No help, 8:46, no help!

  8. Truck control hasn't been tried. Oh; too soon?
    Thanks to the 2nd admendment, just don't come through my window un invited.
    As to the enslaving stemming from outside the New Colonies; that was either indentured or transactions made from angered groups of neighbors on opposite sides of doing business overseas. Slavery didn't start here, check back more than a few hundred years ago; before the iron age when sticks and stones were used to hurl insults.

    1. 5:15 not soon.. The time for that is never

      Lame with a capital lame.

    2. 5:52, there are stranger things happening all around us.

    3. I don't know what %:15 thinks he read, but no one said slavery started here. How does that make it OK, 5:15? Scary.