Tom Curtis to Jerry Martin: Breakdown of STRS investments

April 24, 2006

Hello Jerry,

The STRS Investment Dept. made their report during last Thursday's board meeting. They are placing more money into fixed income, but I am sure that it is not as much as you might like them to do. Here is the breakdown of our investments as of March 31st:

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Liquidity Reserves......................... 2.9%

Fixed Income..................................20%

Equities

,,,Domestic...................................40.8%

...International...............................26.4%

Total Equities...............................67.2%

Real Estate.....................................7.3%

Alternative Inv.................................2.6%

Total..............................................100%

Fiscal 2006 Year to date return

Total Fund......................................15%+

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Mitchell did indicate they would be pulling more into fixed income, how much I have no idea.

The newspaper article you sent me (attached) about the big 7 countries being concerned about the value of the American dollar states exactly what my feeling has been for sometime. Our national deficit is going to break us all sometime soon.

Dave Speas tells me that every great culture/grouping of people back through history went through the same cycle the USA seems to be going through.

They start as manufacturing economies and heavily involved in the development of the country and knowledgeable about the politics of the day. Then when the economy booms and everyone is enjoying all of the fruits of their forefathers' labor and wisdom, they move to a service economy, complacency and finally to their downfall. That seems to be the same scenario we are following in the US and at the STRS.

Just what makes our leadership in this country, at the STRS and us as individuals, ignore history?

I guess it really comes down to the entire population being to well off and not willing to take matters into their own reference of concern. The 'let someone else do it' attitude becomes prevalent. Therefore, someone else does do it, but garners a feeling of entitlement for doing such, gets greedy and begins taking more then they deserve and justify such in their own minds.

The problems at the STRS are so identical to what is happening at the national level. When times were good, no one wanted to be bothered being concerned about how things were operated. They simply took the approach that others will take care of it and do things correctly. That attitude, by probably the largest group of employees in this country (outside of the US Government), which also has the greatest amount of education, is so naive in thinking others will not abuse their power and funds.

For the most part, I find the only people that have been highly concerned about the problems at the STRS are those greatly affected financially. Those not heavily burdened by the gross misspending and gross reduction in healthcare benefits and costs could really care less. Further, it totally amazes me that many educators are simply willing to believe in the OEA. The OEA leadership is so responsible for the situation we find ourselves in today.

This does not speak well for the highly educated people in the education field. In my opinion, they are critically ignorant about their retirement and health care situation. Why are they so willing to allow someone else to take care of it, when so many will desperately need both once they retire? Being ignorant of what was going on in the past is one thing, continuing to choose to be ignorant about what has happened and is still happening is ludicrous.

Take care,

Tom Curtis

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From: Jerry Martin, Sunday, April 23, 2006

Subject: Investments

Tom, With inflation rising (whether the gov. admits it or not), the economy tailspinning, the deficit out of control, the dollar tanking, don't you think that the Bd. should focus on the secuity of the STRS investments?

Jerry Martin