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<<Yup....I'll bet business was good and the pension funds probably well funded! But the new fund custodians probably didn't use this form of investment strategy.


The pension fund investments in Las Vegas were primarily loans to build casinos. They paid off according to the terms of the mortgages. They proved to be good investments for the pension fund.

The Department of Justice warred with the Teamsters Union and pension funds for many years, and eventually won control of them from the union. The DOJ then used Wall Street investment advisers to invest those funds, and they proved to be more expensive and less successful than the casino loans.

One of life's little ironies.

As I understand it, it was very difficult to get funding to build casinos through the legitimate capital markets, and therefore the pension fund loans were attractive because they supplied capitol to build casinos at a time when that was a great business in Las Vegas.

So the attraction of the loans was getting the funding to build, not to rep off the pension funds.

\When Wall Street got the funds though, the motivation apparently changed and a lot more effort was put into pillaging the pension fund money.

The basic problem with pension funds is that they are big pots of money that are poorly watched, by and large, and all too easy to rip off. That's true whether they are managed by businesses, unions or the Department of Justice.

Seattle Pioneer
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