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"SIV 's" US State /Local Governments going broke.

 
D-Day is close.
User ID: 339026
Australia
12/12/2007 08:19 AM
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"SIV 's" US State /Local Governments going broke.
Not long now, garbage will start to collect on the streets. No money to pay for it.

"Jefferson County school district, which has $4.1 million in the state's frozen fund, said that he had to stop payment on checks of $500,000 to vendors last week so that teachers could be paid. Meanwhile, a whopping 95% of the Clay County Utility Authority's cash is invested in the Florida-run investment fund. "


Sounds impossible, think again.


PRESS RELEASE

State and Local Governments Turn `SIV Positive'

Dec. 5, 2007 (EIRNS)—The listing of state and local governments that have revealed themselves to be "SIV Positive" — that is, have used their investment fund monies to buy toxic and failing Structured Investment Vehicle (SIVs) financial paper — is growing. This infectious state may imperil these governments' financial survival, and engender, as the case of Florida shows, the slashing of vital services.

We quickly review those states with the most advanced symptoms of the disease.

* Orange County, Calif — the fifth most populous county in the United States — revealed that the County's Extended Fund had invested $460 million, or 20%, of the Fund's total $2.3 billion investment, into SIVs. But beyond the Extended Fund, the County has another $837 million invested in radioactive SIVs.

John Moorlach, who is a former Orange County Treasurer, and is now a County Supervisor, uttered the lethal words, "We'll find out real quick, if we have a problem."

It should be recalled that in 1994, Orange County became the first County in 60 years to go bankrupt, when its portfolio of derivatives exploded, losing $1.6 billion. It shut down critical services across the board. This may soon be in the offing again.

* The Dec. 5 Boston Globe, in an article "Volatile Holdings Part of State Fund", reported that the Massachusetts Municipal Depository Trust, which holds total assets of $5.6 billion, had invested $134 million "in volatile 'structured investment vehicles.' " The MMDT fund is an investment pool meant as a place for state and municipal entities to place their monies until they need it to pay bills.

* The Dec 5 The Day, published in Connecticut, reports that officials overseeing Connecticut's $5 billion Short-Term Investment Fund (STIF), "might soon have to dip into their reserves for the first time in the fund's 35-year history to keep cities and towns from losing their money." The STIF had invested $100 million in the London-headquartered Cheyne SIV (pronounced Che-ney), which has gone spectacularly bust.

* In Florida, indispensable services are on the verge of being closed. As reported, the state's Local Government Investment Pool had invested billions of dollars into SIVs, and the fund had been frozen since last Thursday, after it suffered a run on its funds that cut the $27 billion pool almost in half, to $14 billion. The Dec. 5 Wall Street Journal reported the chief financial officer for the Jefferson County school district, which has $4.1 million in the state's frozen fund, said that he had to stop payment on checks of $500,000 to vendors last week so that teachers could be paid. Meanwhile, a whopping 95% of the Clay County Utility Authority's cash is invested in the Florida-run investment fund. "We're very concerned about the possibility of defaulting on some contracts that are already in place," said the chief operating officer. This could cause curtailment of electricity supply.

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G. House

User ID: 337313
United States
12/12/2007 08:28 AM

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Re: "SIV 's" US State /Local Governments going broke.
It should be recalled that in 1994, Orange County became the first County in 60 years to go bankrupt, when its portfolio of derivatives exploded, losing $1.6 billion. It shut down critical services across the board. This may soon be in the offing again.

 Quoting: D-Day is close. 339026


Yet the county is still operating and collecting garbage, 13 years later.

Don't you think the article is really a bunch of fear-mongering?

Don't you realize that due to the recent realestate bubble that on the average counties are flush with increased tax money, and are in a better position then they have been in years?
"Everybody lies."

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