Unemployment Hits 10.3% in New York City (NYT)

Focuses on Wall Street layoffs. "Still-shrinking financial sector ... has essentially been declared to be in a state of emergency." On down the food chain, college kids aren't quite as eager to become financiers, says the WSJ in "As Riches Fade, So does Finance's Allure."

---

Bill Upends System for College Loans (WSJ)

Major move for the next generation of college kids. Private lenders would be removed from the system, saving taxpayers billions by ending the ridiculous payment of fees by the government to private lenders. Why the same principle — universal college-funding help — shouldn't be applied to health care (and thus remove the influence of the insurance industry middlemen in health care) is not mentioned in this story.

---

Why Didn't The Major Bank CEOs Show Up On Monday? (Baseline Scenario, Simon Johnson)

Obama's Wall Street reform plans "look lame," and not one major bank CEO even showed up to listen to him. After all the money we gave them, they didn't even show up to hear Obama's weak-ass reform plans?

---

Google Aims to Wrest Display Ads From Yahoo (NYT)

Today, it unveils its own ad exchange, like a stock market but for advertisers and publishers to buy and sell ads. Search giant's credo, "Don't be evil," doesn't apply to Yahoo.

---

Household Wealth Advances by 3.9% (WSJ)

An increase for the first time in two years, but U.S. households "have a long way to go to recover what they've lost in the downturn." No shit. See "Fed: Household Net Worth Off $12.2 Trillion From Peak."

MORE HEADLINES FOLLOW

Big money's big institutional investors are in open revolt — finally. After years of pension funds and other big pots of money being manipulated as limited partners in skeezy schemes with outrageous terms by big money's general partners, the pension funds and other big investors are fighting back.

Somewhat humorously, though not anybody on either side of this LBO war, the institutional investors are trying to get private equity firms' general partners to agree to something called "Private Equity Principles." Pushing for this is the Institutional Limited Partners Association, the industry group consisting of many of the biggest public pension funds and other huge institutional investors. VC Circle's Shrija Agrawal writes:

The LPs are the pots of money; the GPs are the people who move those pots around. So the LPs took a shellacking during the meltdown when they agreed to be limited partners in ventures recklessly run into the ground by private-equity general partners. You don't have to be a Harvard or Yale grad whose endowment has plummeted as a result of bad investments by GPs to realize that there's something wrong here. (See "Harvard, Yale Are Big Losers in 'The Game' of Investing.")

There wouldn't be nearly as many huge deals if pension funds weren't willing to be used and abused by ventures' general partners.

Will the GPs ever agree to these "principles"? They may want to consider it, because all of this is voluntary. Someday, perhaps never but maybe someday, the LBO boys may even face government regulation if they don't at least act as if they're cleaning up their act.

Beneath the color of the pay-to-play chicanery of the ever-growing pension fund scandal — check out my colleague Tom Robbins's "Thompson's Pension Pals: A Wound Waiting to be Re-Opened" — is that the New York pension funds aren't doing a good job growing.

Up north, on the other hand, a big pension fund is playing with the big boys. The Canada Pension Plan is a major member of the consortium that just bought Skype from eBay. It's not always a good idea for pension funds to pour money into private-equity ventures, as figures from this recent Bloomberg story indicate.

But in this case, the Canada Pension Plan isn't buying into a big real estate deal — like the disastrous move into NYC real estate that just cost the Florida pension fund $250 million. The Skype deal, led by the VC firm Silver Lake, is risky, but it's big time. Canada's other partners include browser pioneer Marc Andreessen, and the numbers are potentially staggering. Skype, which has begun producing revenue even before its founders have figured out exactly how to do so, has 480 million registered users of its Internet-based phone service. Unless this is an AOL redux situation, and eBay suckered the buyers after itself paying too much for Skype just four years ago, Canada's pension fund made a good bet.

Here in New York, meanwhile, our pension fund news is dominated by one little murky deal after another. Or, as the Times recently noted, as the city's pension funds lagged, campaign contributions to Comptroller Bill Thompson grew.

All sorts of curious maneuverings are revolving around the naming of the nine fund managers for the PPIP (toxic-assets) deal. As always, perception and appearances — not substance — are everything. Which means that the long-ago announcement that the PPIP was coming was necessary to assure people and get the market unstuck. But actually carrying out this program to help banks get rid of toxic assets may not even be necessary. And it's certainly not generating nearly as much interest as it did in more-panicky days.

"What Happened to the PPIP?" Karl Denninger asks, now that we know the thing is drastically scaled down. Then he answers:

Well, not exactly nothing. One of my favorite parts of this is the circular nature of the thing. The taxpayers are going to subsidize the nine fund managers, who will recruit pension funds — which have already been burned by their investments in banks that swallowed too many toxic assets — to invest in the purchase of toxic assets directly from those banks. Is that what you would call a double-dip of poison?

While figures finally show that China has sped ahead of the U.S. as the world's biggest automaker, GM's failed CEO Rick Wagoner is still hanging onto a job (raking in his full benefits, plus a token $1 salary), waiting for the government to figure out his pension plan.

A touchy subject, a "delicate issue," that pension plan. But the two big bankrupt U.S. automakers, GM and Chrysler, are both still saddled with bigger pension problems: having to fund them for thousands and thousands of other employees. CNN Money has good background here on the pension plights of GM's workers and the company itself.

Spreading faster (so far) than swine flu, the New York pension-fund kickback scandal "has exposed a national network of actors whose schemes are ongoing," Reuters says today.

In N.Y. Attorney General Andy Cuomo's words, "We've uncovered corruption in New York, our government and our retirement accounts — and now we see the scheme reaching companies, individuals and pension funds nationwide."

He's not just blowing smoke: Today, Cuomo announced the arrest of Saul Meyer, from down Texas way. Meyer, a founding partner of Aldus Equity in Dallas, is charged with securities fraud for allegedly paying illegal kickbacks to Hank Morris, the longtime aide to former NY State Comptroller Alan Hevesi.

And he's just talking about scams/schemes/scandals revolving around the state pension fund. The NYC pension fund is a separate deal, and trouble's belching out of that fund, too.

Just about the only New York bigwig who has reason to treat himself to one of those great Yankee seats that cost up to $2,600 a game is Andy Cuomo.

These are great times for the state's attorney general.

He doesn't have to do any politicking, because he's too busy shooting fish in the rotten barrel that is Wall Street.

There's the pension-fund thing. There's the Bank of America/Merrill thing. Last month there was the AIG thing. So many things. So many straightforward and obvious investigations with lots of squealers.

Usually pols — especially AGs and other investigators — have to be careful when they step onto Wall Street lest they get too much shit on their shoes and stain the haughty execs' carpets. Not now.

Several years too late, the New York state Comptroller's Office has banned "placement agents" from sucking at the teat of the huge state pension fund.

The burgeoning scandal of pay-for-play during the previous administration of Alan Hevesi ("Murdoch smells a Rattner," "Hedge-fund thief of public pension money pleads guilty") has prompted his fellow Democrat and successor Tom DiNapoli to take this action.

And now N.Y Attorney General Andy Cuomo, already wallowing in an embarrassment of riches that will surely propel him to higher office, is extending his probe to investments by New York City's pension funds.

However, in this new probe, the city's comptroller, Bill Thompson, is no Alan Hevesi — or not that we know of. Thompson has asked Cuomo to investigate. (As if Cuomo wouldn't have knocked on his intraparty rival Thompson's door at some point anyway.)

Just today, Thompson is calling for a ban on the use of placement agents with the city's pension funds.

Cuomo's office released a statement saying "we applaud" Thompson. Cuomo then crossed off fellow Democrat Thompson from his list of investigation targets.

As the few surviving Democratic officials not involved in current scandals are congratulating one another, they're closing barn doors all over the place. But there's still a bad smell emanating from these makeshift vaults of public money.

Once again this week, my colleague Tom Robbins plunges into the widening scandal. This time he's focusing on "The Torch," former Jersey senator Bob Torricelli, one of the more notorious members of the Democratic Party.

Yes, Torricelli's name is surfacing in the pension-fund scandal. Hold on a minute: No charges, so don't get all excited.

In all these cases, except for some minor players, all suspects are expected to seek pricey legal advice and maintain their innocence until they're proven guilty and then probably afterward, on advice from those lawyers.

Rupert Murdoch's two big NYC papers, the Wall Street Journal and New York Post, really trumpeted the news this morning that Steven Rattner, head of Barack Obama's auto task force, is linked to the probe of the state pension-fund scandal.

Despite the breathlessness of this morning's scoop-sounding stories (Post's is here; WSJ's here), Rattner's link to the probe of former comptroller Alan Hevesi's mess was reported nearly a month ago by Ken Lovett in the Daily News.

But oh, what an opportunity this is for Murdoch to skewer his mortal enemy the Times — Rattner is a former Times reporter turned investment banker and is a close adviser to Times publisher Arthur Sulzberger Jr. and a big macher in the paper's dealings with the city that resulted in its new midtown HQ.

Lovett reported on March 25 ("Low-rent film Chooch tied to Albany pension fund scandal") Rattner's link to the probe of the scandal. The financier's Quadrangle group, which he left to head Obama's task force on the auto industry, was already being mentioned in the same breath as Hevesi pal Hank Morris, a key figure in the pension-fund probe.

Steven Rattner, head of Barack Obama's auto task force, has been probed in connection with the scandal swirling around pension fund "finder's fees" during the administration of former N.Y. state comptroller Alan Hevesi. That's what the Wall Street Journal is reporting.

The investment-firm muckamuck was the "senior executive" named in an SEC complaint about dealings in the alleged kickback scheme. Rattner or his firm, Quadrangle, haven't been accused of wrongdoing.

As I previously noted, see my colleague Tom Robbins for other coverage of the Hevesi scandal.

It's obvious that the scope of the scandal revolving around veteran Democratic pol Hevesi will only widen in the coming days. From the WSJ piece: