CalPERS and Unions Win Again – Taxpayers and Bondholders Lose

By Mike Shedlock
In bankruptcy, the federal courts have ruled that cities can reduce pension obligations. They can, but they don’t have to. In Detroit, bondholders were sacrificed to maintain police and fire pensions with minimal haircuts. On Monday, U.S. Bankruptcy Judge Meredith Jury ruled against bondholders in favor of Calpers in the San Bernardino bankruptcy. She acknowledged...

TAGS: CalPERS, Pension Obligation Bonds, San Bernardino bankruptcy, Stockton bankruptcy

The Glass Jaw of Pension Funds is Asset Bubbles

By Edward Ring
“Calpers argued that the California constitution’s guarantee of contracts shielded pensions from cuts in bankruptcy. The fund also asserted sovereign immunity and police powers as an ‘arm of the state,’ including a lien on municipal assets.” –  Wall Street Journal Editorial, “Calpers Gets Schooled,” February 8, 2015 If you want powerful evidence of crony capitalism...

TAGS: California City Pension Burdens, CalPERS, CalSTRS, Stockton bankruptcy

Federal Judge Smacks CalPERS on Sanctity of Pensions

By Mike Shedlock
Exceptionally good news from California today: A federal judge ruled Calpers claim of “Sanctity of Pensions” is invalid. Today’s ruling went even further than the bankrupt city of Stockton originally sought in court. For details, please consider the New York Times article In Ruling on California Town’s Bankruptcy, Judge Challenges Sanctity of Pensions.  A federal bankruptcy...

TAGS: CalPERS, defined benefit pensions, Stockton bankruptcy

Pension Battle Shifts to San Jose, San Bernardino, Stockton

By Mike Shedlock
Now that a federal judge in Michigan has properly ruled pension obligations are not sacrosanct (see Lesson for Union Dinosaurs) the spotlight is once again on union dinosaurs in California. Bankrupt San Bernardino foolishly did not attempt to shed pension obligations in bankruptcy, but perhaps it can now reconsider. What about Stockton and Vallejo? On April...

TAGS: defined benefit pensions, Public sector pensions, San Bernardino bankruptcy, San Jose pension reform, Stockton bankruptcy, Vallejo bankruptcy

Vallejo Faces 2nd Bankruptcy Because They Didn’t Restructure Pensions

By Mike Shedlock
Editor’s Note:  An article published today in the Stockton Record’s reports “Deis: City won’t tackle pension reform.” Bob Deis is Stockton’s city manager. Apparently he doesn’t want Stockton to be the first to fall. As soon as one city restructures their pensions, every city and county in California will follow, because the alternative is a...

TAGS: Stockton bankruptcy, Vallejo bankruptcy

CalPERS Pension System in the Crosshairs of Stockton Bankruptcy Dispute

By Mike Shedlock
A few days ago a federal judge sided with the city of Stockton, validating its bankruptcy. See Judge Rules Stockton CA Bankruptcy is Valid, City Acted in Good Faith. Bondholders screamed, but the ruling made sense. What did not make sense (except from the point of view of politicians protecting their own undeserved pensions), was...

TAGS: Stockton bankruptcy

California’s Public Employment Relations Board Thwarts Pension Reform

By Jon Coupal
When it comes to state government, most people think of the governor and the members of the Legislature, those who are elected by the voters and do their business under the Capitol dome. However, there is an entire class of faceless, unelected appointees to the state’s hundreds of boards and commission who determine whether or...

TAGS: pension reform, San Bernardino bankruptcy, Stockton bankruptcy, Vallejo bankruptcy

To the Public Sector Unions, California is now the model for America

By Steven Greenhut
Ever since California’s voters approved the Prop. 30 sales-and income-tax increase on the November ballot, liberal commentators have been gloating about the resurgence of the Golden State after many years of predicted doom and gloom. Their evidence: Higher taxes seem to have cleared up the state’s budget deficits. As New York Times columnist Paul Krugman wrote recently,...

TAGS: California high speed rail, Stockton bankruptcy

Judge Rules Stockton CA Bankruptcy is Valid, City Acted in Good Faith

By Mike Shedlock
Today a judge ruled that the city of Stockton California is indeed bankrupt and that the city acted in good faith. Creditors asked the judge to void the bankruptcy, saying the city could raise taxes instead. I have been watching this story for a while. Here is some background on the Stockton bankruptcy as reported by Arizona Central....

TAGS: Stockton bankruptcy

Union Greed Drives California to Bankruptcy

By Steven Greenhut
Few non-local people pay much attention to the goings-on in Stockton, a hard-pressed Gold-Rush-era industrial city of 300,000 that sits in the agriculturally rich San Joaquin Valley at the eastern edge of the California Delta. But bondholders, taxpayers and government officials throughout the country will be listening to U.S. Bankruptcy Judge Christopher Klein’s expected ruling...

TAGS: California Public Employees Retirement System, San Joaquin Valley, Stockton, Stockton bankruptcy