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Looting the Pension Funds
All across America, Wall Street is grabbing money meant for public workers
By MATT TAIBBI
September 26, 2013 7:00 AM ET
In the final months of 2011, almost two years before the city of Detroit would shock America by declaring bankruptcy in the face of what it claimed were insurmountable pension costs, the state of Rhode Island took bold action to avert what it called its own looming pension crisis. Led by its newly elected treasurer, Gina Raimondo ? an ostentatiously ambitious 42-year-old Rhodes scholar and former venture capitalist ? the state declared war on public pensions, ramming through an ingenious new law slashing benefits of state employees with a speed and ferocity seldom before seen by any local government.
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Nor did anyone know that part of Raimondo's strategy for saving money involved handing more than $1 billion ? 14 percent of the state fund ? to hedge funds, including a trio of well-known New York-based funds: Dan Loeb's Third Point Capital was given $66 million, Ken Garschina's Mason Capital got $64 million and $70 million went to Paul Singer's Elliott Management. The funds now stood collectively to be paid tens of millions in fees every single year by the already overburdened taxpayers of her ostensibly flat-broke state.
more....
Read more: http://www.rollingstone.com/politics...#ixzz2g1go4xVN
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Interview of Matt Taibbi about this piece:
snip
AMY GOODMAN: Matt, you had a piece earlier, 16 major firms may have received early data from Thompson Reuters.
MATT TAIBBI: Yeah. That story came out actually earlier this year. There was a whistleblower who worked at Thompson Reuters. There was a key economic indicator that Thompson Reuters is contracted with the University of Michigan to release. It affects the fed?s projections and some of the fed?s moves. If you have early access to that data you definitely have a trading advantage and it has subsequently come out that some firms, 16 of the biggest banks and hedge funds in the world, have been getting that data up to an hour early.
All across America, Wall Street is grabbing money meant for public workers
By MATT TAIBBI
September 26, 2013 7:00 AM ET
In the final months of 2011, almost two years before the city of Detroit would shock America by declaring bankruptcy in the face of what it claimed were insurmountable pension costs, the state of Rhode Island took bold action to avert what it called its own looming pension crisis. Led by its newly elected treasurer, Gina Raimondo ? an ostentatiously ambitious 42-year-old Rhodes scholar and former venture capitalist ? the state declared war on public pensions, ramming through an ingenious new law slashing benefits of state employees with a speed and ferocity seldom before seen by any local government.
snip
Nor did anyone know that part of Raimondo's strategy for saving money involved handing more than $1 billion ? 14 percent of the state fund ? to hedge funds, including a trio of well-known New York-based funds: Dan Loeb's Third Point Capital was given $66 million, Ken Garschina's Mason Capital got $64 million and $70 million went to Paul Singer's Elliott Management. The funds now stood collectively to be paid tens of millions in fees every single year by the already overburdened taxpayers of her ostensibly flat-broke state.
more....
Read more: http://www.rollingstone.com/politics...#ixzz2g1go4xVN
------------------------------
Interview of Matt Taibbi about this piece:
snip
AMY GOODMAN: Matt, you had a piece earlier, 16 major firms may have received early data from Thompson Reuters.
MATT TAIBBI: Yeah. That story came out actually earlier this year. There was a whistleblower who worked at Thompson Reuters. There was a key economic indicator that Thompson Reuters is contracted with the University of Michigan to release. It affects the fed?s projections and some of the fed?s moves. If you have early access to that data you definitely have a trading advantage and it has subsequently come out that some firms, 16 of the biggest banks and hedge funds in the world, have been getting that data up to an hour early.