The short side paid in September. Rather nicely, as a matter of fact. This time I hope to do a better job of hanging on to the gains. Of course, we’ll see.

Relative performance is based on Fidelity Magellan, FMAGX. Inception refers to reporting on the blog, and is based on the close of 2005.

9/30 portfolio.

I’ve been fulminating about out-of-control compensation in the public sector in California. But this from New York takes the cake. More crooks.

Take the case of Edward J. Koerber.

On a spring evening in 2004, Mr. Koerber reported for his overnight shift as a train engineer at the Jamaica Storage Yard. By the end of his eight-hour shift, Mr. Koerber would earn four days’ pay for one day’s work, transportation authority records show.

Assigned to the railyard that night, Koerber was instead sent to passenger service. Under union rules, this change entitled him to an extra day’s pay. Over the next few hours, he ended up operating both an electric engine and a diesel engine. These dual duties earned him a second day’s pay.

Around 2 a.m., Mr. Koerber took an engine in for maintenance. With that came another day’s pay.

These three contract violations resulted in penalty payments that totaled $718. He also earned, among other things, $157 for a few hours of overtime and $15 for not getting to eat during his normal lunch break. The L.I.R.R. was supposed to pay him $247 for his work that day. Instead, he ended up with $1,177.

Shifts like this were not that unusual. Mr. Koerber pulled off seven others like it that year.

Nor was he alone: L.I.R.R. engineers were paid four days’ wages for a single day of work on 30 occasions in 2004. These cases were documented in a 2006 report by the transportation authority’s inspector general, who also found more than 500 examples of engineers making three days’ wages in one day and nearly 150 examples of conductors doing the same.

That year, Mr. Koerber earned $211,586, according to payroll data. But his compensation the next year was even more remarkable: $276,456. Only the president of the railroad earned more: $287,658.

Soon after, Mr. Koerber retired from the L.I.R.R., and he ultimately took with him more than just a pension. In 2006, records show, he began receiving disability payments from the Railroad Retirement Board. In all, his retiree income is about $170,000 a year, according to estimates based on public records.

Mr. Koerber, who is now 60, declined to comment.

Some of the saddest anecdotes that I have read relate elderly people being evicted as a result of foreclosure, even though they have lived in the house for many, many years. Of course, the problem is refinancing. Elderly parents seem to have often allowed their children to borrow money, using the parents’ house as collateral. And then the child defaults, for one reason or another, and the elders cannot afford the payments.

The City of Vallejo is reported to be on the verge of bankruptcy. Over the last few decades politicians have granted excessive wage and benefit increases in exchange for election support from city employee unions. Pensions and medical benefits are incredibly generous, even before accounting for schemes such as DROPs (Deferred Retirement Option Plans), which allow city employees to retire with six or seven digit lump sums in addition to their pension and medical benefits. Vallejo is simply the first city to hit the wall, as declining revenues meet increasing expenses, not counting San Diego which seems to have been malfeasance as much as anything else.

For the thousandth entry, I repost #1, my introduction from August 17th., 2004.

A blog of thoughts about financial and economic issues, in the hope that someone might find them useful. Or at least give me a record of my attempts to understand the world around me. I’m an independent investor whose only source of income is the investment returns on my assets. As a result, I care about truth and reality, not the smoke screens put up by the self-interest of the investment industry and the government. That doesn’t mean I won’t trade along with a lie, but it does mean I want to know that I am doing so.

There is a famous saying from George Soros, the well-known hedge fund operator:“Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.”

Words to heed. This blog will contain my thoughts on what’s fact and what’s fiction along with editorial asides and rants that will no doubt have a decidedly libertarian and Austrian (economics) bent. Nothing in this blog should be taken as investment advice of any kind.

I think I have done OK on recognizing the false premise, but I’ve stepped off way too early. A learning experience. I would also like to extend my thanks to those who have come across my blog and posted comments. Truth comes out best from argument and discussion, and I welcome your views, whether we agree or not.