Calpers has new CEO

Anne Stausboll, who had been the fund's acting chief investment officer, gets the unenviable job of turning around the nation's largest public pension fund. Calpers declines are running about 24 percent since July, and cities and counties have been warned about the possibility of higher contribution rates because of the shortfalls. Taking big hits in this kind of climate is not unusual, of course, but Calpers compounded the mess by moving aggressively into – argh!!!- real estate. The WSJ details the various miscues:

Calpers in recent weeks said it expects to report paper losses of 103% on its housing investments in the fiscal year ended June 30. That's because Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed. In the latest wrinkle: To generate sorely needed cash, a troubled Calpers venture known as LandSource recently started the process of selling land during the worst property market in a generation. Calpers could potentially lose nearly $1 billion on LandSource, a $2.5 billion deal completed early last year, and one of the priciest U.S. residential-land transactions ever. LandSource is now under bankruptcy-court protection.

LandSource's assets include 15,000 acres of undeveloped land in the Santa Clarita Valley.