I've been waiting for a week to get information about the toxic mortgage-backed securities held by the $17 billion Kentucky Retirement Systems (KRS).
I specifically asked for the cost-basis of the mortgage-backed securities they hold and their current market value. This morning, after I asked again, I was told that the information is not available.
Poor investment returns combined with fiscal mismanagement by the General Assembly for more than 25 years have combined to create a $28 billion actuarial deficit in the state public employee benefits accounts.
Tuesday, October 28, 2008
Monday, October 27, 2008
Kentucky Club rocks
If you aren't reading the Kentucky Club for Growth web site, you should be. On Monday, Andy Hightower hit the high notes on three different races:
McConnell vs. Lunsford
Flood vs. Ward (Kathy Stein's old seat)
Moore vs. Weaver (House 26)
And if you want to look up details on any of the bills Andy mentions, go to Kentucky Votes.
McConnell vs. Lunsford
Flood vs. Ward (Kathy Stein's old seat)
Moore vs. Weaver (House 26)
And if you want to look up details on any of the bills Andy mentions, go to Kentucky Votes.
"Call in sick for Obama?"
The Barack Obama campaign has a new commercial out encouraging their supporters with jobs to call in sick.
Now that's an economic plan!
Now that's an economic plan!
"What's your socialism exit strategy?"
Sen. John McCain said today in Ohio that "the government will get out of the banking business fast."
How fast, John?
Same question for Sen. Barack Obama. Now that both of you have voted us into the quagmire of a socialistic banking system, exactly when are you going to get us out?
How fast, John?
Same question for Sen. Barack Obama. Now that both of you have voted us into the quagmire of a socialistic banking system, exactly when are you going to get us out?
No more bailouts!
The National Taxpayers Union has an online petition to generate support for the idea that we don't need government bailouts when the free market can clean things up. Of course, we are going to have to get past the silly notion some have that free markets caused our current problems.
The overwhelming sense that the nation has given up this battle to the wealth redistributors can't lessen the resolve to set things right.
Interesting to see the difference between the people on the federal level who are just cranking up the printing press to get through the moment and what may be happening in Frankfort. In Kentucky we can print up bonds and create a similar effect, but reality may be closing in on that strategy.
The overwhelming sense that the nation has given up this battle to the wealth redistributors can't lessen the resolve to set things right.
Interesting to see the difference between the people on the federal level who are just cranking up the printing press to get through the moment and what may be happening in Frankfort. In Kentucky we can print up bonds and create a similar effect, but reality may be closing in on that strategy.
Sunday, October 26, 2008
Attack of Joe the Storm Trooper
At a Lexington political event Saturday, a local citizen was handing out brochures expressing opposition to the federal banking bailout when he was approached by two Lexington police officers. The entire event was caught on tape by a camera the young Republican was carrying. The officers asked him if he had any weapons, frisked him and, after finding nothing, one of the officers proceeded to rant about "jacking around" and then threatened to "take your head off your shoulders."
The audio makes clear that the young citizen did nothing to provoke the outburst and terroristic threat from the police officer.
Unfortunately, a small group of Mitch McConnell supporters then picked right up with the intimidation where the rogue police officer left off. Not good.
UPDATE: An anti-McConnell version of the video is also up on YouTube.
The audio makes clear that the young citizen did nothing to provoke the outburst and terroristic threat from the police officer.
Unfortunately, a small group of Mitch McConnell supporters then picked right up with the intimidation where the rogue police officer left off. Not good.
UPDATE: An anti-McConnell version of the video is also up on YouTube.
Saturday, October 25, 2008
Thus spake Obamamessiah
A major key to Sen. Barack Obama's electoral success so far has been a remarkable ability to state something that is completely untrue -- illogical, even -- and to portray his statement as some kind of prophesy.
Take, for example, Social Security. This unsustainable program provides negative returns for taxpayers. As our years of drawing surpluses into the Social Security Trust Fund draw to a close, we have nothing to show for them. We are headed unavoidably to the time that taxpayers who know they will never see any of their money back will have to pay higher taxes to support the older generations. Everyone knows this to be true.
One way out is to allow people to choose personal accounts. And yes, that will certainly damage further the unsustainable Social Security. But the program is already headed toward utter ruination. At some point we are going to have to take a hit to get off our present course toward disaster. Taking that hit will be cheaper now that it will be in five years. It would have been cheaper still three years ago.
There is an odd "spreading the wealth" book going around called "Obamanomics: How Bottom-Up Economic Prosperity Will Replace Trickle-Down Economics."
On Social Security it says:
In essence, what Obama is doing is turning Social Security into Fannie Mae in reverse. In the mortgage meltdown, the government made extremely risky investments look risk-free. Why would you hesitate to loan money to ACORN voters if you knew you could take large profits on the front end and make a fortune before the music stopped? The more corrupt players gobbled up their competitors and then became "too big to fail." Social Security is now "too big to fail." Opponents of changing Social Security depend on convincing people that any deviation from the current money-losing plan involves catastrophic risk. I think we have had enough mispricing of risk in the last decade to last us for a long time. We need to get Social Security right. Allowing people to enhance their Social Security accounts by contributing less into the system and placing the difference in a personal account replaces a sure loser -- the current system -- with one in which better long-term returns would be so easy as to be a certainty for almost everyone.
The rhetoric about "losing it all" in the stock market has no place in a civilized discussion because it is so ridiculous. In fact, if you like FDR, you may be interested in a blue ribbon commission he put together back in 1934. It essentially unlocked the secret to investing in the stock market: buy a diversified collection of quality investments, the commission said, hold them for the long-term, and re-invest regularly. Ask Warren Buffet how well that approach worked for him.
Besides, if you don't like stocks, buy corporate bonds. A high quality corporate bond paying 8% will double your money in nine years. You could pour money into Social Security for a century and not do that.
The key, again, is understanding the risks associated with our actions. Voters who elevate a President Barack Obama to Harry Reid and Nancy Pelosi to run the national government are showing an inability to learn lessons even from recent history.
Take, for example, Social Security. This unsustainable program provides negative returns for taxpayers. As our years of drawing surpluses into the Social Security Trust Fund draw to a close, we have nothing to show for them. We are headed unavoidably to the time that taxpayers who know they will never see any of their money back will have to pay higher taxes to support the older generations. Everyone knows this to be true.
One way out is to allow people to choose personal accounts. And yes, that will certainly damage further the unsustainable Social Security. But the program is already headed toward utter ruination. At some point we are going to have to take a hit to get off our present course toward disaster. Taking that hit will be cheaper now that it will be in five years. It would have been cheaper still three years ago.
There is an odd "spreading the wealth" book going around called "Obamanomics: How Bottom-Up Economic Prosperity Will Replace Trickle-Down Economics."
On Social Security it says:
"If we allow people to invest in riskier assets in the stock market, we will just have more losers who end up gambling with their retirment money and end up with nothing at retirement and under Bush's plan, with no one to care for them. This is an example of Obama's greatest strength, the wisdom to see the underlying fundamental causes of our problems, so that we might structure real solutions that will be effective."
In essence, what Obama is doing is turning Social Security into Fannie Mae in reverse. In the mortgage meltdown, the government made extremely risky investments look risk-free. Why would you hesitate to loan money to ACORN voters if you knew you could take large profits on the front end and make a fortune before the music stopped? The more corrupt players gobbled up their competitors and then became "too big to fail." Social Security is now "too big to fail." Opponents of changing Social Security depend on convincing people that any deviation from the current money-losing plan involves catastrophic risk. I think we have had enough mispricing of risk in the last decade to last us for a long time. We need to get Social Security right. Allowing people to enhance their Social Security accounts by contributing less into the system and placing the difference in a personal account replaces a sure loser -- the current system -- with one in which better long-term returns would be so easy as to be a certainty for almost everyone.
The rhetoric about "losing it all" in the stock market has no place in a civilized discussion because it is so ridiculous. In fact, if you like FDR, you may be interested in a blue ribbon commission he put together back in 1934. It essentially unlocked the secret to investing in the stock market: buy a diversified collection of quality investments, the commission said, hold them for the long-term, and re-invest regularly. Ask Warren Buffet how well that approach worked for him.
Besides, if you don't like stocks, buy corporate bonds. A high quality corporate bond paying 8% will double your money in nine years. You could pour money into Social Security for a century and not do that.
The key, again, is understanding the risks associated with our actions. Voters who elevate a President Barack Obama to Harry Reid and Nancy Pelosi to run the national government are showing an inability to learn lessons even from recent history.
Friday, October 24, 2008
Trey Grayson speaks out against abortion
Heading down to the University of Kentucky Student Center this afternoon to see Secretary of State Trey Grayson talk to students about his opposition to abortion.
UPDATE: Grayson noted that Barack Obama didn't mention abortion in his Democratic Party convention speech and suggested that was because Obama knows his position is way out the mainstream. He said Obama would work to codify Roe v. Wade, possibly as his first act as President. Grayson also criticized Obama's opposition to the Born Alive Infant Protection Act. He said that position exemplifies how extreme Obama is on the subject.
"That's a position that would even make John Kerry and Al Gore uncomfortable," Grayson said.
UPDATE: Grayson noted that Barack Obama didn't mention abortion in his Democratic Party convention speech and suggested that was because Obama knows his position is way out the mainstream. He said Obama would work to codify Roe v. Wade, possibly as his first act as President. Grayson also criticized Obama's opposition to the Born Alive Infant Protection Act. He said that position exemplifies how extreme Obama is on the subject.
"That's a position that would even make John Kerry and Al Gore uncomfortable," Grayson said.
Spreading it around in Argentina
Who could have imagined even three months ago that the Wall Street Journal could write a brief story like the one below about Argentina, draw parallels to the United States, and no one would bat an eye? (click the image below to read it)
Thursday, October 23, 2008
I can't hear you!
Ho hum.
Another day, another Kentucky newspaper backing up what the Bluegrass Institute has been saying for years about public education.
If you know someone who is newly-inspired to improve public schools in Kentucky, show him/her this.
UPDATE: Apparently, it gets even better as the feds are paying attention too.
Another day, another Kentucky newspaper backing up what the Bluegrass Institute has been saying for years about public education.
If you know someone who is newly-inspired to improve public schools in Kentucky, show him/her this.
UPDATE: Apparently, it gets even better as the feds are paying attention too.
Slow down, fellas: Obama case not finished
Some legal beagle has put out a blog post overnight sure to shock the world, or at least that part that isn't much into details.
Barack Obama has NOT yet been found to be ineligible to run for president.
The blog post claims -- and even offers court document evidence -- that a judge found against Obama in the first case to have him removed from the ballot for faking his U.S. birth certificate, Berg vs. Obama.
What the legal beagle missed is that the order is not signed. It is merely a proposed order filed by Philip Berg. If Judge Barclay Surrick signs it, then Obama is in trouble.
But we are not there yet. Here, by the way, is the incorrect blog post:
Barack Obama has NOT yet been found to be ineligible to run for president.
The blog post claims -- and even offers court document evidence -- that a judge found against Obama in the first case to have him removed from the ballot for faking his U.S. birth certificate, Berg vs. Obama.
What the legal beagle missed is that the order is not signed. It is merely a proposed order filed by Philip Berg. If Judge Barclay Surrick signs it, then Obama is in trouble.
But we are not there yet. Here, by the way, is the incorrect blog post:
Wednesday, October 22, 2008
Where the guilty go free
No official information is available tonight about the Fayette jail officer Shannon Raglin was caught shaking down inmates for cash almost exactly a year ago.
The case against him has been dropped and he has moved out of the state. Amazing how local authorities don't seem to be able to tie up loose ends at the Fayette County Detention Center.
The case against him has been dropped and he has moved out of the state. Amazing how local authorities don't seem to be able to tie up loose ends at the Fayette County Detention Center.
Ain't too proud to beg
Can't help thinking this morning that if we were going to start a country or a state from scratch we probably wouldn't base it on an unsustainable system of unemployment benefits, retirement benefits, health benefits, cash stimulus payments, corporate welfare, and bank bailouts.
Nor would we write laws to give exorbitant powers to nameless, faceless, unelected, or possibly even nonexistent bureaucrats.
Rep. Mary Lou Marzian has filed a bill giving serious control of private business practices to the Executive Director of Kentucky's Office of Workplace Standards. After several phone calls this morning, I still can't find out who holds that office.
Nor would we write laws to give exorbitant powers to nameless, faceless, unelected, or possibly even nonexistent bureaucrats.
Rep. Mary Lou Marzian has filed a bill giving serious control of private business practices to the Executive Director of Kentucky's Office of Workplace Standards. After several phone calls this morning, I still can't find out who holds that office.
Tuesday, October 21, 2008
Boone County's tax increase boondoggle
A microcosm of the national struggle for the heart and soul of the Republican party is happening right now in Boone County over a tax increase proposal that will be on the ballot.
The ballot language does seem a little vague:
It's not hard to imagine the "need" to raise more revenues for all those things might suddenly materialize.
The battle lines have been drawn.
The ballot language does seem a little vague:
The creation of a dedicated natural areas and parks fund (Park Fund) for the purposes of the purchase and maintenance of public parks, to improve water quality, to preserve forests and wildlife habitat, as well as to provide active parks and recreation services, in Boone County, Kentucky through an ad valorem (property) tax not to exceed two point two cents ($.022) on each one hundred dollars ($100.00) assessed valuation of all taxable property within the limits of Boone County?
It's not hard to imagine the "need" to raise more revenues for all those things might suddenly materialize.
The battle lines have been drawn.
KRS to me: go screw yourself
The expensive investment gurus at Kentucky Retirement Systems -- the people whose investment mistakes are now the taxpayers' problem -- are used to getting kid glove treatment in the media. That all changed this weekend when the Courier Journal's Stephenie Steitzer gave them a much-deserved butt kicking, that I followed up on here.
The evident incompetence brought up one simple question: how did these people we are trusting with billions of our dollars do in the recent mortgage-backed securities meltdown?
So I asked.
Rather than provide any kind of insight into what they have been doing with themselves -- and our money -- over the last year and a half, though, I got this waste-of-time response (click the image below to read):
3:39 pm UPDATE: Got another email from KRS stating that they would provide me with information but that a report may have to be generated. I'd be very surprised and disappointed if, with all the hulabaloo, no one has stopped to see just how bad our mortgage losses are.
The evident incompetence brought up one simple question: how did these people we are trusting with billions of our dollars do in the recent mortgage-backed securities meltdown?
So I asked.
Rather than provide any kind of insight into what they have been doing with themselves -- and our money -- over the last year and a half, though, I got this waste-of-time response (click the image below to read):
3:39 pm UPDATE: Got another email from KRS stating that they would provide me with information but that a report may have to be generated. I'd be very surprised and disappointed if, with all the hulabaloo, no one has stopped to see just how bad our mortgage losses are.
Get Skippy off our money, now
Finance and Administration Cabinet Secretary Jonathan "Skippy" Miller's disastrous foray into higher education finance is rolling Kentucky into another river of red ink.
The 2008 actuarial report you have only read about here is out today and the news is as bad as predicted by your humble correspondent years ago.
Bluegrass Institute readers already knew about the new $35.7 actuarial deficit taxpayers will have to make up for Skippy's ponzi scheme. What's really remarkable, though, is how much worse the news is going to get for us.
From the report are future projected losses for this ridiculous money-loser:
Readers will note that the program runs out of money in 2019, leaving taxpayers with an $81 million bill.
Expect Gov. Beshear and Skippy to start pushing for re-opening KAPT to new contract sales very, very soon. As with all ponzi schemes, bringing in more suckers and kicking the losses down the road is the big-government way to deal with such problems. Sort of like what we did with Social Security, Medicare, and our state public employee benefits system.
The 2008 actuarial report you have only read about here is out today and the news is as bad as predicted by your humble correspondent years ago.
Bluegrass Institute readers already knew about the new $35.7 actuarial deficit taxpayers will have to make up for Skippy's ponzi scheme. What's really remarkable, though, is how much worse the news is going to get for us.
From the report are future projected losses for this ridiculous money-loser:
Readers will note that the program runs out of money in 2019, leaving taxpayers with an $81 million bill.
Expect Gov. Beshear and Skippy to start pushing for re-opening KAPT to new contract sales very, very soon. As with all ponzi schemes, bringing in more suckers and kicking the losses down the road is the big-government way to deal with such problems. Sort of like what we did with Social Security, Medicare, and our state public employee benefits system.
Monday, October 20, 2008
Serious gun grabber alert
The Kentucky FOP Lodge 4 endorsements included mostly Democratic candidates, as usual. What's interesting is that while they endorsed Kathy Stein for the 13th Senate district, they went against the Democrat running to replace her in the House, Kelly Flood. Turns out Flood is as far to the left on guns as anyone I've seen running for office in Kentucky.
The FOP endorsed Kimberly Ward in the 75th House district. Flood's positions on guns include licensing citizens who wish to carry handguns and prohibiting citizens from carrying concealed weapons. Not even Kathy Stein, who wants to put serial numbers on individual bullets, holds such extreme positions.
Obviously, Flood's risk to public safety is too much for the FOP to stomach.
The FOP endorsed Kimberly Ward in the 75th House district. Flood's positions on guns include licensing citizens who wish to carry handguns and prohibiting citizens from carrying concealed weapons. Not even Kathy Stein, who wants to put serial numbers on individual bullets, holds such extreme positions.
Obviously, Flood's risk to public safety is too much for the FOP to stomach.
What part of bubble didn't they understand?
I'm not expecting Kentucky Retirement Systems to answer my questions any time soon about how much money they have in toxic mortgage securities, but data from their 2007 annual report suggests they were busy buying them at exactly the wrong time.
The chart below shows that the KRS held $845 million in mortgage securities on June 30, 2006 and that by June 30, 2007 that number had nearly doubled to $1.47 billion.
The chart below shows that the KRS held $845 million in mortgage securities on June 30, 2006 and that by June 30, 2007 that number had nearly doubled to $1.47 billion.
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