http://tinyurl.com/2hbocn
"Nov. 14 (Bloomberg) -- The Florida agency that manages about $50 billion of short-term investments for the state, school districts and local governments holds $2.2 billion of debt cut to junk status...."
Replies
70
Beach FanaticAuthor
SoWal Insider
Florida has been "Ground Zero" for feckless investulators, spurred on by subprime mortgages, who helped inflate the state's real estate bubble....isn't it ironic that the state ends up mired it the remnants of its own toxic waste.
The article quotes one school district rube: ``We don't have the time or staff for professional money management. They have lots of investment advisers. It's risk free and easy.''
:roll:
I bet he's glad that it was only the Florida taxpayers' money he pizzed away.
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The article quotes one school district rube: ``We don't have the time or staff for professional money management. They have lots of investment advisers. It's risk free and easy.''
:roll:
I bet he's glad that it was only the Florida taxpayers' money he pizzed away.
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Edited
Beach FanaticAuthor
"...It's risk free and easy....''
Well;
At least it was easy.
Well;
At least it was easy.
SoWal Insider
"...It's risk free and easy....''
Well;
At least it was easy.
I'm willing to bet this guy has a preconstruction contract for a Florida condo--or two.
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Beach FanaticAuthor
I would have expected more of the "locals" to jump in on
this post.
After all, it's their school money that's being discussed.
I guess they won't mind making it up with higher taxes.
this post.
After all, it's their school money that's being discussed.
I guess they won't mind making it up with higher taxes.
SoWal Expert
I would have expected more of the "locals" to jump in onI'm not sure why you expect locals to jump in on this post.
this post.
After all, it's their school money that's being discussed.
I guess they won't mind making it up with higher taxes.
What do you want us to do, raise hell because of the particular investments the State made? When you leave investments up to the State, the only people who will win will be the friends of the elected officials, who are getting to invest the money. Nothing new there. Just wait until the gov't takes over social security, oh wait a minute... never mind about that one. I mean, wait until the gov't takes over health care. It seems the politicians already have their friends in the drug business, locked in and pumping out pills. Yep, nothing new here with a touch of the investments chosen being downgraded to junk. It's poliTRICKS.SoWal Insider
I would have expected more of the "locals" to jump in on
this post.
After all, it's their school money that's being discussed.
I guess they won't mind making it up with higher taxes.
Quite frankly, there is nothing we can do except pay what they tell us to pay--or end up buying back our own house on the courthouse steps.
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Beach FanaticAuthor
Just wait until the gov't takes over social security, oh wait a minute... never mind about that one. I mean, wait until the gov't takes over health care. .
Yes, it is much preferable to have a private company manage the
money rather than the governement.
Might I suggest Citigroup or perhaps Merril Lynch (Pierce, Fenner & Smith)?
The markets are showing confidence in these company's money
management skills:
http://tinyurl.com/35ukkb
Pehaps GE has a desire to manage the money?
Certainly these businesses know how to manage investments.
Anyway, I have no skin in this game so it really doesn't matter to me.
Edited
SoWal Expert
Yes, it is much preferable to have a private company manage theThose are some of the very friends of politicians to whom I referred as being the only winners. It is my personal opinion that all tax money which the gov't collects should be placed in secured investments only, until used.
money rather than the governement.
Might I suggest Citigroup or perhaps Merril Lynch (Pierce, Fenner & Smith)?
The markets are showing confidence in these company's money
management skills:
http://tinyurl.com/35ukkb
Pehaps GE has a desire to manage the money?
Certainly these businesses know how to manage investments.
Anyway, I have no skin in this game so it really doesn't matter to me.
Edited
Beach Fanatic
There is that part in the article that says:
So there is no immediate fiscal crisis, just a very large investor trying to manage a graceful exit, and they've got a chance to pull it off without harm to the taxpayers.
And for all the inconsistencies in Florida state government, their investment pools have actually done a decent job over the years. It's the only state in the country where the state/local public employee pension fund is adequately funded according to current pension guidelines.
The Florida State Board of Administration said none of its clients have lost money and it has negotiated to recoup its investments. Even so, the board, known as the SBA, said it is decreasing its investments in asset-backed commercial paper by reinvesting elsewhere.
So there is no immediate fiscal crisis, just a very large investor trying to manage a graceful exit, and they've got a chance to pull it off without harm to the taxpayers.
And for all the inconsistencies in Florida state government, their investment pools have actually done a decent job over the years. It's the only state in the country where the state/local public employee pension fund is adequately funded according to current pension guidelines.
Beach FanaticAuthor
Those are some of the very friends of politicians to whom I referred as being the only winners. It is my personal opinion that all tax money which the gov't collects should be placed in secured investments only, until used.
The question today is exactly what is a "secured investment?"
People used to think real estate was one.
SoWal Expert
The question today is exactly what is a "secured investment?"guaranteed deposits insured by the FDIC, but you make a good point, as our Fed Gov't could collapse, but then we wouldn't need any money for gov't schools, would we?
People used to think real estate was one.
SoWal Insider
It's the only state in the country where the state/local public employee pension fund is adequately funded according to current pension guidelines.
Mouse, are you keeping the books?
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Beach FanaticAuthor
http://tinyurl.com/yw62ee
``Knowing other people were pulling out, and that word was spreading, we looked at the potential for a run on the pool,'' said Orange County's Moye. .."
``Knowing other people were pulling out, and that word was spreading, we looked at the potential for a run on the pool,'' said Orange County's Moye. .."
Edited
SoWal Insider
SandLs, Enron, Sivs, the sky is falling......again
Beach Fanatic
Florida Halts Withdrawals From Investment Pool
By THE ASSOCIATED PRESS
TALLAHASSEE, Fla., Nov. 29 (AP) ? Florida officials suspended withdrawals from a state-operated investment pool today, abruptly halting a run by local governments spooked over the downgrade of its mortgage-related holdings.
The State Board of Administration, whose chairman is Gov. Charlie Crist, acted during an emergency meeting after local governments had taken out nearly $10 billion, or 40 percent of the pool?s assets, in the last two weeks. That included $3.5 billion this morning.
The investment pool is similar to a private money market fund. Cities, counties, school districts and other local entities invest money on a short-term basis in the fund and withdraw cash when needed to make payrolls and pay other operating costs.
The suspension will remain in effect at least until Tuesday, when the board will meet again to consider proposals for shoring up and restoring confidence in the pool.
The pool had nearly $25 billion in assets when the run began after more than $700 million in asset-backed commercial paper had been downgraded below purchase credit rating guidelines.
?Participants are scared to death,? said Coleman Stipanovich, the board?s executive director. ?If we don?t do something quickly, we?re not going to have an investment pool.?
Mr. Stipanovich attributed the run to a news report that characterized the downgrading as a default, which he disputed. At least one local government ? Leon County ? withdrew its money before the article was published after learning about the downgrade.
?No matter what?s motivating it, whether it?s factual or not factual, it?s almost irrelevant at this point,? Mr. Crist said.
Wayne Blanton, executive director of the Florida School Boards Association, said districts have other assets and lines of credit they can use until Tuesday.
?We can make payroll, but the fact is the purpose of that system is to help us move our money in and out and at any given time ? 24 hours a day,? Mr. Blanton said. ?Right now they have frozen that ability.?
Mr. Crist and the other board members, the chief financial officer, Alex Sink, and the attorney general, Bill McCollum, were worried that without suspending withdrawals, the pool would run out of money because of the downgraded assets. That would leave the last local governments in the pool with nothing.
Mr. McCollum took part by telephone from Utah, where he is attending a meeting of the National Association of Attorneys General.
Mr. Stipanovich proposed using the state?s $137 billion pension fund to secure the downgraded paper, but board members were cool to that idea. They voted, instead, to seek advice from outside financial experts before considering the proposal again Tuesday.
?It?s something that, speaking for myself, I?m not excited about,? Ms. Sink said.
Mr. Crist agreed. He said he did not want to do anything to harm the pension plan and state and local government employees who depend upon it.
Mr. Stipanovich said there would be little risk to the pension plan because the downgraded paper was backed by highly rated mortgages that continue to return millions of dollars in premiums and interest to investors.
Their market value, though, has plummeted because investors are shunning all mortgage-related securities due to losses on subprime mortgages.
Even if they do default, the pension fund would receive the mortgages as collateral and they would continue to pay off, Mr. Stipanovich said. He said they also should regain their market value, although that could take years.
That is no problem for the pension fund, which invests for the long term, but it is for the local government pool because it needs to keep its assets liquid.
By THE ASSOCIATED PRESS
TALLAHASSEE, Fla., Nov. 29 (AP) ? Florida officials suspended withdrawals from a state-operated investment pool today, abruptly halting a run by local governments spooked over the downgrade of its mortgage-related holdings.
The State Board of Administration, whose chairman is Gov. Charlie Crist, acted during an emergency meeting after local governments had taken out nearly $10 billion, or 40 percent of the pool?s assets, in the last two weeks. That included $3.5 billion this morning.
The investment pool is similar to a private money market fund. Cities, counties, school districts and other local entities invest money on a short-term basis in the fund and withdraw cash when needed to make payrolls and pay other operating costs.
The suspension will remain in effect at least until Tuesday, when the board will meet again to consider proposals for shoring up and restoring confidence in the pool.
The pool had nearly $25 billion in assets when the run began after more than $700 million in asset-backed commercial paper had been downgraded below purchase credit rating guidelines.
?Participants are scared to death,? said Coleman Stipanovich, the board?s executive director. ?If we don?t do something quickly, we?re not going to have an investment pool.?
Mr. Stipanovich attributed the run to a news report that characterized the downgrading as a default, which he disputed. At least one local government ? Leon County ? withdrew its money before the article was published after learning about the downgrade.
?No matter what?s motivating it, whether it?s factual or not factual, it?s almost irrelevant at this point,? Mr. Crist said.
Wayne Blanton, executive director of the Florida School Boards Association, said districts have other assets and lines of credit they can use until Tuesday.
?We can make payroll, but the fact is the purpose of that system is to help us move our money in and out and at any given time ? 24 hours a day,? Mr. Blanton said. ?Right now they have frozen that ability.?
Mr. Crist and the other board members, the chief financial officer, Alex Sink, and the attorney general, Bill McCollum, were worried that without suspending withdrawals, the pool would run out of money because of the downgraded assets. That would leave the last local governments in the pool with nothing.
Mr. McCollum took part by telephone from Utah, where he is attending a meeting of the National Association of Attorneys General.
Mr. Stipanovich proposed using the state?s $137 billion pension fund to secure the downgraded paper, but board members were cool to that idea. They voted, instead, to seek advice from outside financial experts before considering the proposal again Tuesday.
?It?s something that, speaking for myself, I?m not excited about,? Ms. Sink said.
Mr. Crist agreed. He said he did not want to do anything to harm the pension plan and state and local government employees who depend upon it.
Mr. Stipanovich said there would be little risk to the pension plan because the downgraded paper was backed by highly rated mortgages that continue to return millions of dollars in premiums and interest to investors.
Their market value, though, has plummeted because investors are shunning all mortgage-related securities due to losses on subprime mortgages.
Even if they do default, the pension fund would receive the mortgages as collateral and they would continue to pay off, Mr. Stipanovich said. He said they also should regain their market value, although that could take years.
That is no problem for the pension fund, which invests for the long term, but it is for the local government pool because it needs to keep its assets liquid.
SoWal Insider
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Florida Halts Withdrawals From Investment Pool
“No matter what’s motivating it, whether it’s factual or not factual, it’s almost irrelevant at this point,” Mr. Crist said. (So are you Chuck.)
Mr. Stipanovich said there would be little risk to the pension plan because the downgraded paper was backed by highly rated mortgages that continue to return millions of dollars in premiums and interest to investors.
(Mr "little risk" Stipanovich was the same dolt that was at the helm and stood watch while the pension fund bought Enron shares at as high as $80 and continued buying as the stock rode down from $43 to 28-cents...then sold all 7.5 million shares at 28-cents a few days before Enron filed for bankruptcy.)
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Florida Halts Withdrawals From Investment Pool
ORANGE COUNTY: 1
OTHER COUNTIES: Screwed
“No matter what’s motivating it, whether it’s factual or not factual, it’s almost irrelevant at this point,” Mr. Crist said. (So are you Chuck.)
Mr. Stipanovich said there would be little risk to the pension plan because the downgraded paper was backed by highly rated mortgages that continue to return millions of dollars in premiums and interest to investors.
(Mr "little risk" Stipanovich was the same dolt that was at the helm and stood watch while the pension fund bought Enron shares at as high as $80 and continued buying as the stock rode down from $43 to 28-cents...then sold all 7.5 million shares at 28-cents a few days before Enron filed for bankruptcy.)
.
Edited
SoWal Insider
And then there's this:
"Cities and counties across the state have pulled out of the investment fund in the wake of reports showing that it had invested in companies that could be hurt by the credit crunch and mortgage problems, such as Countrywide. Bloomberg News reported Thursday that most of the investments had been sold to the state by Lehman Brothers, the massive investment firm that recently announced that former Gov. Bush had joined its private equity board."
(
The Ghost of Floriduh Past)
.
"Cities and counties across the state have pulled out of the investment fund in the wake of reports showing that it had invested in companies that could be hurt by the credit crunch and mortgage problems, such as Countrywide. Bloomberg News reported Thursday that most of the investments had been sold to the state by Lehman Brothers, the massive investment firm that recently announced that former Gov. Bush had joined its private equity board."
(
The Ghost of Floriduh Past).
Edited
SoWal Insider
...But wait !!!!! There's more!!!!!
"To protect the remaining $15 billion in the investment pool, including $2 billion from Citizens Property Insurance - the largest single account left in the fund :shock: - the Florida State Board of Administration halted further withdrawals until at least Tuesday."
If the pace of recent withdrawals had continued, the state board could have been forced to sell the pool's troubled securities at a deep discount and left some governments with the losses.
"What happens to the participants who have the last $2 billion in the pool?" <:scratch: hmmmm, $2 billion....where have I seen that number before
> Sink said. "They get zero." :shock:
.
"To protect the remaining $15 billion in the investment pool, including $2 billion from Citizens Property Insurance - the largest single account left in the fund :shock: - the Florida State Board of Administration halted further withdrawals until at least Tuesday."
If the pace of recent withdrawals had continued, the state board could have been forced to sell the pool's troubled securities at a deep discount and left some governments with the losses.
"What happens to the participants who have the last $2 billion in the pool?" <:scratch: hmmmm, $2 billion....where have I seen that number before
> Sink said. "They get zero." :shock:.
Edited
Beach FanaticAuthor
SandLs, Enron, Sivs, the sky is falling......again
Evidently the sky WAS falling.
Beach FanaticAuthor
Beach FanaticAuthor
That was then:
"Nov. 15 (Bloomberg) -- Hal Wilson smiles at the blue numbers on his desktop screen. His money is yielding 5.77 percent. For the chief financial officer of Florida's Jefferson County school board, that means the $2.7 million of taxpayer funds he's placed in the state's Local Government Investment Pool is earning more on this October day than it would get in a money market fund. And Wilson says he knows the Florida officials who manage the funds of the 1,559-student district have invested them wisely..."
This is now;
Nov 30 ``The unthinkable and the unimaginable have just happened here in Florida,'' said Hal Wilson, chief financial officer of the Jefferson County school district, located 30 miles (48 kilometers) east of the state capital Tallahassee. ``What we just experienced here is a classic run-on-the bank meltdown.''
"Wilson at Jefferson County said he plans to withdraw the school district's money from the pool as soon as he can, and won't consider investing there again. "
``They won't have to worry about little Jefferson County any more,'' Wilson said.
"Nov. 15 (Bloomberg) -- Hal Wilson smiles at the blue numbers on his desktop screen. His money is yielding 5.77 percent. For the chief financial officer of Florida's Jefferson County school board, that means the $2.7 million of taxpayer funds he's placed in the state's Local Government Investment Pool is earning more on this October day than it would get in a money market fund. And Wilson says he knows the Florida officials who manage the funds of the 1,559-student district have invested them wisely..."
This is now;
Nov 30 ``The unthinkable and the unimaginable have just happened here in Florida,'' said Hal Wilson, chief financial officer of the Jefferson County school district, located 30 miles (48 kilometers) east of the state capital Tallahassee. ``What we just experienced here is a classic run-on-the bank meltdown.''
"Wilson at Jefferson County said he plans to withdraw the school district's money from the pool as soon as he can, and won't consider investing there again. "
``They won't have to worry about little Jefferson County any more,'' Wilson said.
SoWal Insider
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Florida is so screwed.
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Florida is so screwed.
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Beach Fanatic
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Florida is so screwed.
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Been to CA. lately.....
Beach FanaticAuthor
Been to CA. lately.....
I expect this to hit many states.
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