… and start behaving crazy!

Here’s the pattern: Many public pension funds were mismatched on funds (not enough) and liabilities (lots and lots).  Then came the fiscal crisis, market downturn, real estate crash, etc. and they were so far behind that, had they been private entities, they would have been put into receivership.

Now they’re trying to get theirs back.  By being straight-out gamblers!!

States and companies have started investing very differently when it comes to the billions of dollars they are safeguarding for workers’ retirement.

Companies are quietly and gradually moving their pension funds out of stocks. They want to reduce their investment risk and are buying more long-term bonds.

But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. Higher returns come with more risk.

“In effect, they’re going to Las Vegas,” said Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, which oversees public plans in that state. “Double up to catch up.”

Though they generally say that their strategies are aimed at diversification and are not riskier, public pension funds are trying a wide range of investments: commodity futures, junk bonds, foreign stocks, deeply discounted mortgage-backed securities and margin investing. And some states that previously shunned hedge funds are trying them now.

Public Pension Funds Are Adding Risk to Raise Returns, New York Times, 3/8/10

Let’s put our money  — make that other people’s money! — into hedge funds!  Smart move.

And if we lose it all, well, that’s life!

That’s life, that’s what all the people say.
You’re riding high in April,shot down in May
But I know I’m gonna change that tune,
When I’m back on top, back on top in June.
– “That’s Life” (Dean Kay and Kelly Gordon), Frank Sinatra, 1966