Now, I’ll be the first to admit I’m no Charles Schwab, but I have a enough sense not to put my money in a company the parent company is considering giving the boot. It just doesn’t make sense. Take a look and you tell me if I’m missing something.
A couple of days ago we posted about Edison Mission Group’s “deteriorating financial conditions.” In it, we noted that the CEO of EMG’s parent, Edison International, all but told their subsidy to shape up or ship out.
You might recall our surprise that – with all the bluster about how wind is the future of energy and the low cost/high yield promotional hype tossed at taxpayers, consumers and investors – it didn’t seem Edison International was looking to its wind segment to save the day. Rather, according to the statement in the article, the “development pipeline of potential wind projects has been reduced to 1,300 megawatts from 3,800 megawatts.” For the purpose of what follows, it’s worth noting that Edison’s decision to reduce commitment to wind came “as a result of capital resource constraints and limited market opportunities.”
According to an article at (Caspar, Wyoming) Trib.com, that little speed bump doesn’t seem to bother a firm that manages teacher retirement accounts. That investment firm is plopping down some $240 million to partner up with Edison Mission Energy, a subsidiary of the troubled Edison Mission Group, a subsidiary of Edison International. (Talk about being low on the corporate food chain!)
Seeming to ignore the Edison statement that they’re reducing their wind development pipeline “as a result of as a result of capital resource constraints and limited market opportunities,” the teacher pension investment fund managing director makes this statement, “these investments match TIAA-CREF’s long-term investment focus on infrastructure and energy projects that meet a growing need for energy and that we expect to deliver durable returns.” HUH?
The result of this (what the hell am I missing) logic is that the Edison Mission Group has found a new revenue stream – Teacher’s pensions. I find it incredible when I think that a parent company would put its subsidiary on financial life support and an investment firm would expect Teacher’s future financial well-being to serve as the breathing tube.
Maybe it’s different where you’re from, but my teacher friends never made a ton of money. The security of good benefits, including their retirement, was what helped compensate for the often meager salary.
I sure wouldn’t want my pension dependent on an industry which cannot survive without taxpayer dollars and legislation demanding its use. Makes you wonder if the Teachers know the condition of Edison Mission Group. Seems to me the Teachers might want to ask their investment advisors how secure the $240 million investment from their pension will be, should Edison Mission Group’s parent finally kick them out of the house.