{"id":18168,"date":"2014-09-13T10:58:24","date_gmt":"2014-09-13T14:58:24","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=18168"},"modified":"2014-09-13T11:23:41","modified_gmt":"2014-09-13T15:23:41","slug":"is-new-jersey-fudging-its-pension-fund-results-to-deflect-a-christie-scandal","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2014\/09\/13\/is-new-jersey-fudging-its-pension-fund-results-to-deflect-a-christie-scandal\/","title":{"rendered":"Is New Jersey Fudging Its Pension Fund Results to Deflect a Christie Scandal?"},"content":{"rendered":"

Naked Capitalism<\/em> has the article Is New Jersey Fudging Its Pension Fund Results to Deflect a Christie Scandal?<\/a> The article quotes from the article Gov. Christie Shifted Pension Cash to Wall Street, Costing New Jersey Taxpayers $3.8 Billion<\/a> written by David Sirota and published in the International Business Times<\/em>.<\/p>\n

\u00a0\u00a0\u00a0 Gov. Chris Christie\u2019s administration openly acknowledged that more New Jersey taxpayer dollars were going to land in the coffers of major financial institutions. It was 2010, and Christie had just installed a longtime private equity executive, Robert Grady, to manage the state\u2019s pension money. Grady promoted a plan to put more of those funds into riskier investments managed by Wall Street firms. Though this would entail higher fees, Grady said the strategy would \u201cmaximize returns while appropriately managing risk.\u201d<\/p>\n

Four years later, New Jersey has secured only half the promised results. The state has sent more pension money to big-name Wall Street firms like Blackstone, Third Point, Omega Advisors, Elliott Associates and Grady\u2019s old firm, The Carlyle Group. Additionally, the amount of fees the state pays financial managers has more than tripled since Christie assumed office. New Jersey is now one of America\u2019s largest investors in hedge funds.<\/p>\n

The \u201cmaximized returns\u201d have yet to materialize\u2026 Had New Jersey\u2019s pension system simply matched the median rate of return, the state would have reaped roughly $3.8 billion more than it did between fiscal years 2011 and 2014, says pension consultant Chris Tobe.<\/p><\/blockquote>\n

What strikes me about this article is how wrong I have been in some of my assumptions about hedge funds.\u00a0 I have read that hedge funds over charge their customers and under-perform the markets.\u00a0 I have also read that hedge funds are investments only for wealthy, sophisticated investors.\u00a0 So, putting two and two together to come up with three, I thought, so who cares if these wealthy, so-called sophisticated\u00a0 investors are being taken for a ride.<\/p>\n

If there are sophisticated investors putting money into these things, I was wrong to assume that they were putting their own money into them.\u00a0 They were using OPM (other people’s money), and raking off commissions and political donations.<\/p>\n

The people who are being taken for a ride are the taxpayers and pension beneficiaries.\u00a0 It is almost a tenable position to assume that the non-wealthy are the losers in any scheme, and then go about finding out how this fact is hidden in the details.<\/p>\n

Let’s all do some research and find out what has been reported about Massachusetts pension fund investments.\u00a0 Has Steve Grossman really done as good a\u00a0 job as I have been assuming?\u00a0 Will Deb Goldberg do a good job in the future?<\/p>\n

\n

See my subsequent post Mass. pension fund posts 15.2% gain for \u201913<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Naked Capitalism has the article Is New Jersey Fudging Its Pension Fund Results to Deflect a Christie Scandal? The article quotes from the article Gov. Christie Shifted Pension Cash to Wall Street, Costing New Jersey Taxpayers $3.8 Billion written by David Sirota and published in the International Business Times. \u00a0\u00a0\u00a0 Gov. Chris Christie\u2019s administration openly […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-18168","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/18168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=18168"}],"version-history":[{"count":4,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/18168\/revisions"}],"predecessor-version":[{"id":18175,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/18168\/revisions\/18175"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=18168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=18168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=18168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}