PIIGS In America: Is Illinois Preparing To Request A Federal Bailout?
by Tyler Durden
Moments ago we saw the following amusing headline crossing the BBG:
ILLINOIS TEACHERS’ PENSION FUND CUTS RATE OF RETURN TO 8% FROM 8.5%
t’s amusing because these are the same teachers who were demanding, and received, higher pay – 17% higher over four years in fact – following a several day strike. It is even more amusing considering that in a fiscal year in which we saw QE2, Operation Twist 1 and 2, and LTRO 1 and 2, the nation’s largest pension fund, Calpers, managed to eek out a measly 1% gain (and this is including the end of June surge following the then announced European bailout which turned out to be yet another dud). It is, however sadly, most amusing, because it may be a harbinger of something truly sad: the advent of the “PIIG bailout” to America, when a US state demands a Federal bailout. We have seen how eager Europe has been to bailout its insolvent nations. We are next about to see just how “united” the US is when its own solidarity is tested as state after state repeat the European bailout experience. But hey: at least we have the dollar so all should be well.