We recently came across two criminally overlooked stories from Bloomberg that cover some very impressive ground.
In a report from March, Bloomberg tells the story of the Chicago Transit Authority and its dangerously underfunded pension plan. The CTA, in case you were wondering, oversees the second-largest transportation system in the world. According to Bloomberg, the CTA didn't have enough money in its pension plan to pay its members after 2013.
The larger point here, which certainly isn't getting enough attention, is that there is a looming public pension crisis in America. Bloomberg writes:
"The misleading numbers posted by retirement fund administrators help mask this reality: Public pensions in the U.S. had total liabilities of $2.9 trillion as of Dec. 16, according to the Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion.
With stock market losses this year, public pensions in the U.S. are now underfunded by more than $1 trillion."
In another - though, completely different - story from May, Bloomberg told the saga of Chicago's Sentinel Management Group, which managed to lose some $950 million in client money by the summer of 2007. Though Sentinel claimed its downfall was caused by the deteriorating market, the SEC employed Frederick Grede, a federally appointed bankruptcy trustee, to get the real story.
These type of financial experts are in high demand now that another financial scandal seems to happen every week. In Sentinel's case, their head trader had "an alleged fondness for boozy lap dances, limousine rides and, according to additional lawsuits filed by Grede against outside brokers, bribes." And, they allegedly paid for this with client money.
Read Bloomberg's full story on Sentinel Management Group here.