I haven't read when Indiana made their investment. If they did buy the debt at a deep discount (in order to get a higher yield), they maay have been anticipating a bankruptcy, but with the protections provided by their loan and security agreements, maybe they didn't anticipate a discount to the face vaue of the notes that was forced on them by the government.

Were they blameless? To the degree that they found that they couldn't rely on their contractual rights, they were blameless. To the degree that they chose to make an investment that represented more risk than should be assumed by a pension fund, they can be blamed for not fully anticipating the risk they were taking.

It's doubtful that the state treasurer will lose his job over this investment. It's probab;y a very small percentage of the total funds he has fiduciary responsibility for investing. It's pretty common for fiduciaries like him to invest a small portion of funds in higher risk investments like troubled debt, junk bonds or leveraged buyout funds in order to achieve a higher yield on the funds invested.

Question for Steve...it has been my understanding that SCOTUS has the option to hear or not hear cases appealed to them from the lower appeals courts. But it's been my understanding that they weren't required to take all cases where it was apparent that the lower court judge erred, or where there was an inconsistency between how similar cases were adjudicated in different appeals courts. My understanding is that they can still decline to hear a case, even though judicial error or inconsistency is apparent--probably because the issue was not of a level of legal importance to justify the involvement of SCOTUS. Am I right or wrong?