Subject: CNBC.com Article: US Cities Face Half a Trillion Dollars of Pension Deficits
From: "Neil Callahan" <[email-masked]>
To: "'Devon Archer'" <[email-masked]>, "'Hunter Biden'" <[email-masked]>, "'Eric Schwerin'" <[email-masked]>
Date: Tue, 12 Oct 2010 12:43:20 -0400

On one hand, seems like Public plans getting into Hedge Funds has no
downside risk if there are likely on a default path, so no one would fault
them for trying to save the day.  So could be a boon for that side of the
business.

On the other hand - if we had RSA focused on City Councils and County and
State Officials and the risk was whether muni bonds would be pair vs paying
pensioners, we could play the muni options market for particular bonds
(i.e., short Philadelphia, long Cleveland) and put those trades on early.
Obviously the reputation of the firm could be challenged by such a trade,
but it could be a very profitable one.

I will try and track down the study from Northwestern.

US Cities Face Half a Trillion Dollars of Pension Deficits 
Big US cities could be squeezed by unfunded public pensions as they and
counties face a $574 billion funding gap, a study to be released on Tuesday
shows. The Financial Times reports.

http://www.cnbc.com/id/39626759/