President Obama's casino gamble

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Investments in the profitable bond company PIMCO run by Bill Gross will be cut in half by the California Public Employees' System (CalPERS) in spite of turning a profit for them, if approved at the Nov.16 CalPERS Board meeting. Bill Gross is known as the "Bond King" and cites his blackjack card counting experience to guide his business decisions for PIMCO. He turned $200 into $10,000 one summer in the 60's after reading the book "Beat The Dealer" while racked up in a hospital after an accident. The man knows risk management and made a profit during the financial meltdown while pension funds around the country took a bath. CalPERS decided it was smart to allocate more into the risky private equity funds.

State pension funds are “dumb” clients according to State Street Bank's whistleblowers in a suit filed by California's Attorney General Jerry Brown. CalPERS and CalSTRS (California State Teachers' Retirement System) were skimmed $56.6 million in currency exchanges and want it back. CalPERS also was allegedly hoodwinked by Alfred Villalobos, a former board member who took $60 million in kickbacks from Leon Black's Apollo Management , Black's brother-in-law's CIM Group in Los Angeles, and Arvco Financial Ventures/Arvco Capital Research owned by Villalobos. This is small potatoes compared to the billions already lost from the $200 billion CalPERS and $120 billion CalSTRS.

Gross contends investments in casinos will take a nosedive in the near future, not good news to the risk managers who chose to chase good money after bad money. CalPERS is in at least $4 billion with Apollo Management who owns struggling Harrah's with TPG and minority partner Blackstone Group. United States Senator Harry Reid claims that he saved 31,000 jobs at Harrah's properties in a provision in the stimulus bill signed by President Obama this year. Harrah's was allowed to kick the can down the road by restructuring debt. Obama's signature allowed Harrah's to deleverage close to $4 billion in debt and keep the company above water at the expense of California's taxpayers, if CalPERS/CalSTRS goes belly up. If California is forced into bankruptcy, the United States government is obligated to pay, and guess who is stuck with the bill?

Article published with links at http://www.examiner.com/x-18051-San...er~y2009m11d12-President-Obamas-casino-gamble
 
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