Florida Retirement System
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For all of you living out there in the sticks, the forgotten lands called Anywhere in The US Except New York City…..you’ll be pleased to know that The Recession is OVER! In fact, in many ways, The Great Recession never even impacted Good Ole Gotham. The international center of finance and banking is doing just fine, thank you very much…..hotels are full, salaries on Wall Street are raging and the banks are all doing very, very well…..again, thank you all very much.
And really you all must be thanked because this city is dependent upon you and millions of Americans from Florida to California and everywhere in between. You all need to continue paying your mortgages and student loans and car payments….because all of those payments are what keeps the lights on for the banks and in fact for this entire island that doesn’t produce anything tangible, but which acts very much like a black hole that sucks billions of dollars into its vortex every single month. Oh sure, things may suck for you out there in the hinter lands, you may be suffering dramatic underemployment or under employment. But that’s just too bad…things are Great in Gotham!
And all you cities and counties and states out there that are bankrupt or who will be there soon…yeah it really sucks for you….but that’s your problem. Oh sure, a big part of the reason you’re in the state you’re in is the exotic and fraudulent complex financial products that were sold to you by Wall Street…like Pick A Pay Mortgages, but so much worse. Just like financially illiterate families that were aggressively marketed the subprime mortgages, unsophisticated local governments were pounced on, then sold complex financial packages that their taxpayers can never repay.
Oh, sure the local governments are guilty too…they didn’t have nearly enough money to build that high school or that gleaming new sewage plant and they certainly didn’t have the money to militarize the local police forces with sophisticated (and expensive) paramilitary gear…but never to worry, Wall Street steps in with a platinum credit card….at 24% interest. It’s not just that we’re all being suckered by these bad, bad bets….Wall Street is cheating and committing fraud as well….but they’re continuing to get away with the con that they’ve run for years.
The fact is, the banks worked their scams in such a way as to bankrupt cities. Matt Taibbi compares them to the Mafia, but I have far more respect for the Mafia:
In fact, stripped of all the camouflaging financial verbiage, the crimes the defendants and their co-conspirators committed were virtually indistinguishable from the kind of thuggery practiced for decades by the Mafia, which has long made manipulation of public bids for things like garbage collection and construction contracts a cornerstone of its business. What’s more, in the manner of old mob trials, Wall Street’s secret machinations were revealed during the Carollo trial through crackling wiretap recordings and the lurid testimony of cooperating witnesses, who came into court with bowed heads, pointing fingers at their accomplices. The new-age gangsters even invented an elaborate code to hide their crimes. Like Elizabethan highway robbers who spoke in thieves’ cant, or Italian mobsters who talked about “getting a button man to clip the capo,” on tape after tape these Wall Street crooks coughed up phrases like “pull a nickel out” or “get to the right level” or “you’re hanging out there” – all code words used to manipulate the interest rates on municipal bonds. The only thing that made this trial different from a typical mob trial was the scale of the crime.
But it doesn’t stop there. Think about the school teachers and firefighters and cops….the people that worked for 30 years serving their communities….and depositing part of every paycheck into the retirement accounts that they have been promised will be there for them. Where does all that money go? Wall Street of course. And what does it pay for? All the big buildings and the salaries of the vipers that slither around on Wall Street. They’re not holding on to all your retirement money for free you know. So what are they doing?
Well, let’s take one of my favorites, the Florida Retirement System. The black hole/ponzi scheme that tens of thousands of state employees have dumped a portion of each paycheck into. Just last year, the FRS was claiming a WHOPPING RETURN OF 22% ON INVESTMENT! Fast forward a year and they’re all in a panic because they’re not going to hit their estimates. Well, I think that even their most pessimistic projections are delusional. Why? Because so much of the investment is held in Mortgage Backed Securities….or as we in the foreclosure business like to call them, Nothing Backed Securities.
Whatever you call them, here’s how it works: The paychecks of Floridians are bundled up, delivered to Wall Street who works their black magic then turns around and invests that money in the mortgages of Florida homes….for sizable fees of course. Right now, today, and for the last several years, they’ve all been furiously pumping the spread sheets to show that the principle balances in the mortgage trusts still bear some relationship to the (over) inflated value of the real estate. Well, despite the recent reports of a healthy real estate market, it’s just not real. Just take a look in any courtroom or any neighborhood..step away from the spreadsheet Clifford.
But the larger point is this….all across this country cities and counties and municipalities and individuals are sending billions of dollars up into the black hole that is the Wall Street Ponzi Scheme. In our cities, we’re laying off cops and teachers and people are suffering like never before…..but Wall Street is doing just fine.
It’s all a monster crime spree and massive Ponzi that is completely supported and defended by the governments…local, state, federal, that are supposed to be representing the interests of people but which are instead working for the banks and the other criminal cartels that run the game….
Buckle up folks….this will not end well.
How does the state retirement system publish a 22% return on retirement funds for the $128 billion (allegedly) held in the retirement accounts of our state’s teachers, cops, judges and teachers?
Why are foreclosure sales not being held? Why are cases stalled out in foreclosure and plaintiffs not moving cases through foreclosure? Look at this video….
Do you still live in that absurd fantasy world where you think the money in your bank account, retirement account, investment account is real? Maybe you were too distracted by the Kardashians or Dancing With The Stars and don’t know what MF means. Maybe you missed the Bloomberg reports about Paulson, Bernake and Geithner sending trillions of dollars shooting across the globe. But let’s play a little game here……
Let’s say you’re an elected Florida judge who is fully invested in the Florida Retirement System. You log on every morning to the Florida Retirement System website . You grab a cup of coffee, and you read the headline (full report here) from your retirement portfolio manager:
Florida Retirement Pension Plan Exceeds Returns of 22%!
And you think to yourself, “Man, this is great, a few more years on the bench and then the wife and I will retire out in the country. I’m going to really get my fly fishing down and stare out my window watching all the grand kids running around catching butterflies and jumping in the lake while I sit on my laptop writing that legal thriller I’ve been outlining in my head after all these years sitting on the bench.”
It’s such a beautiful picture. The sun shining, the birds chirping, beloved dog staring up with worshiping eyes. You switch off the computer, don the robe and begin another day, a judge in a judicial system that is abused by the legislative and executive branches of Florida’s government funded as it is with .07% of the state’s budget.
Your day starts as it always does…walking into chaos. It’s not yet 9:00 am but your judicial assistant is already about to blow her stack. When she arrived at court, the voice mail had 100 messages and she had 200 emails. The fax machine spewed 200 pages of URGENT faxes all over the floor….before it ran out of paper and shut down. And this was just the start of an average day for the poor woman who has been with you…and worked for the State of Florida…for 30 years. You’re quite fond of her and know you’d be totally lost if this amazing woman finally got fed up and walked out. But you know she can’t. Despite decades of dedicated service to you and to the people of the State of Florida, her pay and benefits have been reduced over the last several years. But what’s really got her set off today is the headline in today’s paper:
Rick Scott says court employees are paid too much, recommends 5% pay cut!
You know she’s right to be furious. She’s the backbone of your courtroom and she’s getting kicked and punched everywhere she turns. Both she and you take some solace in the fact that she is likewise invested in the same retirement system that you are invested in. She has her own piece of the $128 billion dollar portfolio of the FRS Pension Plan. You both know that if you can hold out for a few more years, you can both count on your share of the proceeds….for the rest of your lives. And after 30 years of this, you know that you’ve both earned it…..just a few more years…..
The big baritone voice of the Sheriff rings out announcing that court is in session and you have entered the courtroom. (he’s invested in the FRS as well) This morning’s 9:00 am docket is jammed full with nearly 100 foreclosure cases. The courtroom is filled with plaintiff and defense attorneys and packed with homeowners. Scanning down the docket you see the same familiar names you’ve been seeing for years, Bank of New York Mellon and Deutsche Bank. As you start calling the cases, it’s like Ground Hog Day and deja vu all over again. Not a single piece of paper in the file is in order. The Plaintiffs are trying their best but they can’t answer a single question clearly. Where is the promissory note? Why is this Affidavit of Amounts Due and Owing so screwed up? Why did this foreclosure start off called Wells Fargo and now it’s called Bank of New York Mellon? Why are you asking me to cancel 15 foreclosure sales in cases that were filed five years ago where no homeowner even bothered to defend? All these questions and you haven’t even had a single defense attorney or consumer say a word yet.
And then a homeowner is comes to the podium. “Uh, Oh” you think…another one of them. You’ve started to see more and more of them. He’s wheeling in one of those carts and the wife’s here with him. He’s got a suit on and it’s obvious this suit only comes out for the occasional funeral or church service. You can tell by his hands and face that this guy works with his body and has for years. The story he tells you is one you’ve heard way, way too many times before. He’s mailed in reams of paperwork. Tax returns, bank statements, letters, birth certificates, death certificates. He doesn’t know why, but he mailed in his high school diploma. He explains that he and his wife have been trying to pay their mortgage for years now, but the bank won’t take their money. Now in years past, you would have listened to a story like this quite skeptically. But you see the wife sitting right there with all those files. After every statement, she puts her hand on the next colored file folder. The guy says,
“Your honor, lookie here at all these checks, we was sending them into Bank of New York just like we were ‘sposed to but they sent them back and we can’t figure out why. Me and my wife are good honest people and we want to pay our mortgage and keep our home, why are they sending our checks back? Why won’t they work with us?”
You don’t need to hear a word from the wife whose sitting there with every check and every fax and every piece of paper…you know that every single word of what they’re saying is true. You’re steaming now because it’s a question you ask over and over many, many times a day. More and more times a day you’re asking the very same question. You don’t even bother turning to the plaintiffs attorney, they have no answer at all. They have no idea who Deutsche Bank is or who Bank of New York Mellon is. Their only connection and the closest they can come to providing any answers is the same place the defendant standing in front of you can turn to…a black hole of an 800 number that rings somewhere over in India.
And the reality of all this chaos and insanity sinks deep into the pit of your stomach. These damn banks can’t get a single thing straight in the hundreds of thousands of foreclosure cases pending in courtrooms all across this state and it scares the hell out of me. Why? Well, part of it comes from a statement released by the Florida Retirement System:
BNY Mellon and Deutsche provide custody and/or banking services to the Florida State Board of Administration.
That’s right. The same gang that can’t shoot straight in foreclosure courtroom is in control of the retirement system that’s holding the $128 billion of retirement money for judges and sheriffs and judicial assistants and everyone else whose invested in Florida’s retirement system. And so you wonder…
“If they can’t get foreclosures right should I have any confidence that they’ve gotten my retirement right?”
(And just one more parting shot here……read the press release….a 22% return! Huh? Did I miss something? How was this even possible in 2011? That’s an extraordinary increase….but then, what do I know…)
One more thought…..what if we took some of that $128 billion, removed it from the Yankee banks and bought real, fixed, solid assets that weren’t going to evaporate when the stock market and banking system collapses? What if Florida took a few billion dollars, purchased a few million homes (I hear prices are kinda low now) then turned around and gave mortgages on them to the retirees and those that are invested in the FRS? Bet the JA’s and Sheriffs would take damn good care of a solid home when they were making a mortgage payment that fed into their own retirement plan…..but that’s just crazy talk right….I mean after all, I’m sure we can all trust the Wall Street Wizards with all their charts and graphs and high rates of return….can’t we?