Comments on: CalPERS lost $1 billion on blind purchase http://calpensions.com/2009/11/25/calpers-lost-1-billion-on-blind-purchase/ CalPERS, CalSTRS and other government pensions Sat, 04 Feb 2012 10:27:25 +0000 hourly 1 http://wordpress.com/ By: Chriss W. Street http://calpensions.com/2009/11/25/calpers-lost-1-billion-on-blind-purchase/#comment-3307 Wed, 25 Nov 2009 21:48:32 +0000 http://calpensions.com/?p=2133#comment-3307 It is highly dubious to pretend that CALPERS did not know what they were buying. These securities had interest rates that differentiated better AAA from dicey AAA.

The market for SIVs started in 1986 with Sigma. By 2006, there were over a trillion dollars of outstanding SIV medium term notes in the market. The Credit Crisis of 2008 was the equivalent of Katrina. People knew it could happen, but the odds were considered infintesimal. It happened!

CALPERS has had wipe-outs in real estate, SIVs, Private Equity and securities lending. The rating agencies were not perfect by any measure, but CALPERS was the most aggressive player in the game.

]]>