Orange County Register

Supervisor John Moorlach’s predictive abilities are pretty darn good, at least when it comes to municipal financial matters. He predicted the OC bankruptcy, was rebuffed by the board, and then appointed and elected as treasurer. He has been pointing to financial problems related to government employee retirement systems, and now we see that CalPERS hit the wall with its highly speculative and leveraged investments. These union-dominated retirement systems have the incentive to take high risks because if the risks payoff they get more money for union members, but if they fail then taxpayers have to pay the difference.

Here is a Bloomberg report where Moorlach predicts perhaps 10 more U.S. municipal bankruptcies beyond Vallejo, which squandered two-thirds of its budget on police and firefighters: “As many as four cities in the Golden State and six others nationwide may seek court protection from creditors next year under Chapter 9 of the bankruptcy code, the section devoted to municipal governments, Moorlach said in an interview.”

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