Well, for one Calpers could use tis considerable power to argue very publicly that the Fed should not be in the business of supporting high house prices and Goldman Sach’s bottom line with ultra-low interest rates.
Second, Calpers should not be nearly 60% exposed to equity, which will absolutely sink the fund should the expected, normalized returns (that John Hussman writes about so eloquently) of the next ten years be negative for equities.
Here’s a recent snapshot of Calpers’ portfolio:
Calpers’ entire strategy now rests on the Fed never losing control of the equity markets and that asset prices only ever rise faster than the economy for at least the next 15 to 20 years.
Otherwise their portfolio becomes the combined predicament of the retirees and taxpayers of CA. Same as pretty much everywhere else too.