Florida Junk

Been to CA. lately.....

But CA has the "Governator"....and we've only got :roll: "Sorry Charlie."


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Evidently the sky WAS falling.

they'll get their money out of the General Fund.

shelly & capricious shouldn't you both go stick your money in a mattress somewhere and be quiet. i recommend you both hibernate for the next 72 years, since these horrible & unbearable circumstances are sure to last for all of eternity. your continuous negativity & innate ability to state the obvious is both boring & galling.

you act is if florida is the only place this is happening. from florida to germany to norway; many have succumbed to the advice of financial planners & have unfortunately lost some money.

but hey its just money & the sky is not falling; perhaps we will have a recession, but millions of americans have a christmas tree with presents, plenty of food in the cupboard, & a number of parties to attend - so all in all things are not so bad, actually pretty durn good.

but hey its just money & the sky is not falling; perhaps we will have a recession, but millions of americans have a christmas tree with presents, plenty of food in the cupboard, & a number of parties to attend - so all in all things are not so bad, actually pretty durn good.

And our poor have cars, indoor toilets, televisions, and air conditioning. Being poor in America is certainly a step up from the rest of the world.

http://www.washingtonpost.com/wp-dyn/content/article/2007/12/03/AR2007120302217.html?hpid=topnews


"In the Monday conference call with Florida's local governments and schools, BlackRock explained that of the $14 billion left in the fund, $12 billion -- or 86 percent -- was in "high-quality" assets. The rest were either securities in default or under stress because of credit issues. The team proposed breaking the fund into two, with one holding the "clean" assets and the other holding the distressed. If a school district had $100 million invested, $86 million would go into the clean fund under this scenario."


--As if Florida isn't already having problems with property taxes and Citizen's Insurance.

--POOF! $2 BILLION dollars goes to Money Heaven (A tightly-packed stack of new $1,000 bills totaling $2 billion would be 126 miles high. In comparison, jet planes fly at 30,000 - 40,000 feet (5.7 - 7.7 miles high).

The irony in the above example is that probably the $120M the State of Florida set aside for the new airport is probably sitting in this fund too.



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Just when you think things could not get worse...

http://tinyurl.com/2353eq


"Dec. 4 (Bloomberg) -- Florida's pension fund owns more than $1 billion of the same downgraded and defaulted debt that sparked a run on a state investment pool for local governments and forced officials to freeze withdrawals...."

"Like the local government pool, the pension fund owns debt of a defaulted SIV called Axon Financial, whose credit rating was cut to D from C by Standard & Poor's last week. .."

``These were highly inappropriate investments for taxpayers' money,'' said Joseph Mason, a finance professor at Drexel University in Philadelphia. .."

"Citizens Property Insurance Corp., an insurer created by the state five years ago to provide hurricane coverage to residents in high-risk areas, has half its $10 billion of assets managed by the state board..."




Gradually it will become known that other states are in the same
situation.

Florida is just the first.

Just when you think things could not get worse...

http://tinyurl.com/2353eq


"Dec. 4 (Bloomberg) -- Florida's pension fund owns more than $1 billion of the same downgraded and defaulted debt that sparked a run on a state investment pool for local governments and forced officials to freeze withdrawals...."

"Like the local government pool, the pension fund owns debt of a defaulted SIV called Axon Financial, whose credit rating was cut to D from C by Standard & Poor's last week. .."

``These were highly inappropriate investments for taxpayers' money,'' said Joseph Mason, a finance professor at Drexel University in Philadelphia. .."

"Citizens Property Insurance Corp., an insurer created by the state five years ago to provide hurricane coverage to residents in high-risk areas, has half its $10 billion of assets managed by the state board..."




Gradually it will become known that other states are in the same
situation.

Florida is just the first.

Greed is an inherent fault of mankind. As we can see, even those in charge are human.

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.

Hal Wilson was interviewed on NPR this morning. Wants the "state government" (i.e. taxpayers) to make-up any losses.


Which is, of course, what will ultimately happen.

Hal Wilson was interviewed on NPR this morning. Wants the "state government" (i.e. taxpayers) to make-up any losses.


Which is, of course, what will ultimately happen.

Of course he does. Because it is his head that people in Jefferson County are going to want if they lose money. People seem to have forgotten that investing is risky by definition.

http://tinyurl.com/2e54cg


"Dec. 4 (Bloomberg) -- Florida officials led by Governor Charlie Crist approved a plan by BlackRock Inc. to split in two a $14 billion investment fund for local governments, isolating more than $1.5 billion of downgraded and defaulted holdings, as it sought to reopen the pool for limited withdrawals..."

"...Under the BlackRock plan, local governments would be able to take out the greater of 15 percent of their holdings or $2 million without penalty. BlackRock executives estimated the fund, called the Local Government Investment Pool, could reopen as soon as Dec. 6. ..."

http://tinyurl.com/2e54cg


"Dec. 4 (Bloomberg) -- Florida officials led by Governor Charlie Crist approved a plan by BlackRock Inc. to split in two a $14 billion investment fund for local governments, isolating more than $1.5 billion of downgraded and defaulted holdings, as it sought to reopen the pool for limited withdrawals..."

"...Under the BlackRock plan, local governments would be able to take out the greater of 15 percent of their holdings or $2 million without penalty. BlackRock executives estimated the fund, called the Local Government Investment Pool, could reopen as soon as Dec. 6. ..."

Walton County BCC had about 2.4 million in the fund. They will be taking out 2 million leaving a very small amount in the A fund and about 350K in the B fund. I think they did a pretty good job in this situation. I have always been impressed with Martha Ingle and her employees when it comes to financial matters. I have not heard from the school district as to how much money they had, if any, in the fund.

In June...in a ballroom...in Las Vegas (and no one saw this coming?):

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=news


"At a sales presentation of the bank's CDOs to 50 public pension fund managers in a Las Vegas hotel ballroom, Jean Fleischhacker, Bear Stearns senior managing director, tells fund managers they can get a 20 percent annual return from the bottom level of a CDO. "



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In June...in a ballroom...in Las Vegas (and no one saw this coming?):

http://www.bloomberg.com/apps/news?pid=20601109&sid=aW5vEJn3LpVw&refer=news


"At a sales presentation of the bank's CDOs to 50 public pension fund managers in a Las Vegas hotel ballroom, Jean Fleischhacker, Bear Stearns senior managing director, tells fund managers they can get a 20 percent annual return from the bottom level of a CDO. "



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But they had really good snacks

But they had really good snacks

Touche'


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From WZEP News:

Some of the local governments possibly affected are:
Walton County Board of Commissioners with $2.3 million
Walton School Board with $14.3 million
Freeport with $106,160.65
Holmes County Board of Commissioners with $49,618.50
Holmes County School Board with $5.3 million
Washington County Board of Commissioners with $597,833.16
Washington County School Board with $11.3 million
Okaloosa County with $62.5million
Okaloosa County School Board with $57.8 million
Okaloosa-Walton College with $9.9 million
Several parts of the Bay County Government, Okaloosa Island Fire and the Cities of Chipley, Bonifay and Crestview. Bonifay has $130,577.32 in the fund, Crestview has $1.6 million.


Walton School District Financial Officer Jim McCall tells First News they have known about the situation for about two weeks and after consulting with other finance officers, accountants and others, the district decided to not withdraw funds. McCall says, with the current tax dollars coming in, they do not need to use the money right away and based on the investment account?s past record, the decision was made to continue with the money in the account, but not deposit anymore until the matter is resolved. According to McCall, the district has been using the investment account for many years and he feels the type of investments will be turned over in a matter of months. McCall also says the money is not tied to the current school building projects or any other financial need where the money has to be accessed right away.

"..Walton School District Financial Officer Jim McCall tells First News they have known about the situation for about two weeks and after consulting with other finance officers, accountants and others, the district decided to not withdraw funds.."



Give them boys a Gold Star for brillance.

Walton School District Financial Officer Jim McCall tells First News they have known about the situation for about two weeks and after consulting with other finance officers, accountants and others, the district decided to not withdraw funds. McCall says, with the current tax dollars coming in, they do not need to use the money right away and based on the investment account?s past record, the decision was made to continue with the money in the account, but not deposit anymore until the matter is resolved. According to McCall, the district has been using the investment account for many years and he feels the type of investments will be turned over in a matter of months. McCall also says the money is not tied to the current school building projects or any other financial need where the money has to be accessed right away.

Well, as long as we don't need the money right now. :roll: It's not like it could be earning guaranteed interest elsewhere or anything.

Well, as long as we don't need the money right now. :roll: It's not like it could be earning guaranteed interest elsewhere or anything.

I sat in on a couple of school district budget hearings and this sudden lack of a need for my money is news to me. They made several arguments about just how badly they needed the money and more a few weeks ago. My how things change once it is in the bank.

According to McCall, the district has been using the investment account for many years and he feels the type of investments will be turned over in a matter of months. McCall also says the money is not tied to the current school building projects or any other financial need where the money has to be accessed right away.

....i.e., Jim McCall's salary or pension. :roll:

Jim will get a 'Gold Star' from Charlie.


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"...Nobody will buy that paper...''



http://tinyurl.com/22p9on

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Jim McCall is a moron if he leaves our tax dollars in this cesspool of toxic waste.

I hope he reads this and does the right thing by getting every penny of the school's money out before more evaporates.


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We need not forget that Mr. McCall acts only through the authority of those elected to the School Board and the Supt. of Education. It would appear that they have no issue with his decision to leave 14.3 million at "very high risk".
Let me put a name on those titles:

Carlene Anderson - Supt. - Will Stand for re-election in '08
Mark Davis - Will Stand for re-election in '08
Darrell Barnhill
Bill Laird
Sharon Roberts
Mildred Wilkerson - Will Stand for re-election in '08

Light bulbs come in many wattages - some are "bright" and some are very "dim".

Why should they worry anyway ? They will suffer no consequences for their failure to excercise their due dilligence responsibility.

They have almost 7 times the risk that Walton County has and our Clerk of Courts got all she could get back Monday. We will see what happens with the rest, but at least she acted prudently.

We need not forget that Mr. McCall acts only through the authority of those elected to the School Board and the Supt. of Education. It would appear that they have no issue with his decision to leave 14.3 million at "very high risk".
Let me put a name on those titles:

Carlene Anderson - Supt. - Will Stand for re-election in '08
Mark Davis - Will Stand for re-election in '08
Darrell Barnhill
Bill Laird
Sharon Roberts
Mildred Wilkerson - Will Stand for re-election in '08

Light bulbs come in many wattages - some are "bright" and some are very "dim".

Why should they worry anyway ? They will suffer no consequences for their failure to excercise their due dilligence responsibility.

They have almost 7 times the risk that Walton County has and our Clerk of Courts got all she could get back Monday. We will see what happens with the rest, but at least she acted prudently.

Well then, might I be so bold as to ask Mr McCall and his little uninformed cabal to tear themselves away from debating useless piffle (i.e., the school play Harvey) and learn a bit about something that REALLY matters:

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From the Washington Post

It's Not 1929, but It's the Biggest Mess Since

By Steven Pearlstein
Wednesday, December 5, 2007

It was Charles Mackay, the 19th-century Scottish journalist, who observed that men go mad in herds but only come to their senses one by one.

We are only at the beginning of the financial world coming to its senses after the bursting of the biggest credit bubble the world has seen. Everyone seems to acknowledge now that there will be lots of mortgage foreclosures and that house prices will fall nationally for the first time since the Great Depression. Some lenders and hedge funds have failed, while some banks have taken painful write-offs and fired executives. There's even a growing recognition that a recession is over the horizon.

But let me assure you, you ain't seen nothing, yet.

What's important to understand is that, contrary to what you heard from President Bush yesterday, this isn't just a mortgage or housing crisis. The financial giants that originated, packaged, rated and insured all those subprime mortgages were the same ones, run by the same executives, with the same fee incentives, using the same financial technologies and risk-management systems, who originated, packaged, rated and insured home-equity loans, commercial real estate loans, credit card loans and loans to finance corporate buyouts.

It is highly unlikely that these organizations did a significantly better job with those other lines of business than they did with mortgages. But the extent of those misjudgments will be revealed only once the economy has slowed, as it surely will.

At the center of this still-unfolding disaster is the Collateralized Debt Obligation, or CDO. CDOs are not new -- they were at the center of a boom and bust in manufacturing housing loans in the early 2000s. But in the past several years, the CDO market has exploded, fueling not only a mortgage boom but expansion of all manner of credit. By one estimate, the face value of outstanding CDOs is nearly $2 trillion.

But let's begin with the mortgage-backed CDO.

By now, almost everyone knows that most mortgages are no longer held by banks until they are paid off: They are packaged with other mortgages and sold to investors much like a bond.

In the simple version, each investor owned a small percentage of the entire package and got the same yield as all the other investors. Then someone figured out that you could do a bigger business by selling them off in tranches corresponding to different levels of credit risk. Under this arrangement, if any of the mortgages in the pool defaulted, the riskiest tranche would absorb all the losses until its entire investment was wiped out, followed by the next riskiest and the next.

With these tranches, mortgage debt could be divided among classes of investors. The riskiest tranches -- those with the lowest credit ratings -- were sold to hedge funds and junk bond funds whose investors wanted the higher yields that went with the higher risk. The safest ones, offering lower yields and Treasury-like AAA ratings, were snapped up by risk-averse pension funds and money market funds. The least sought-after tranches were those in the middle, the "mezzanine" tranches, which offered middling yields for supposedly moderate risks.

Stick with me now, because this is where it gets interesting. For it is at this point that the banks got the bright idea of buying up a bunch of mezzanine tranches from various pools. Then, using fancy computer models, they convinced themselves and the rating agencies that by repeating the same "tranching" process, they could use these mezzanine-rated assets to create a new set of securities -- some of them junk, some mezzanine, but the bulk of them with the AAA ratings more investors desired.

It was a marvelous piece of financial alchemy, one that made Wall Street banks and the ratings agencies billions of dollars in fees. And because so much borrowed money was used -- in buying the original mortgages, buying the tranches for the CDOs and then in buying the tranches of the CDOs -- the whole thing was so highly leveraged that the returns, at least on paper, were very attractive. No wonder they were snatched up by British hedge funds, German savings banks, oil-rich Norwegian villages and Florida pension funds.

What we know now, of course, is that the investment banks and ratings agencies underestimated the risk that mortgage defaults would rise so dramatically that even AAA investments could lose their value.

One analysis, by Eidesis Capital, a fund specializing in CDOs, estimates that, of the CDOs issued during the peak years of 2006 and 2007, investors in all but the AAA tranches will lose all their money, and even those will suffer losses of 6 to 31 percent.

And looking across the sector, J.P. Morgan's CDO analysts estimate that there will be at least $300 billion in eventual credit losses, the bulk of which is still hidden from public view. That includes at least $30 billion in additional write-downs at major banks and investment houses, and much more at hedge funds that, for the most part, remain in a state of denial.

As part of the unwinding process, the rating agencies are in the midst of a massive and embarrassing downgrading process that will force many banks, pension funds and money market funds to sell their CDO holdings into a market so bereft of buyers that, in one recent transaction, a desperate E-Trade was able to get only 27 cents on the dollar for its highly rated portfolio.

Meanwhile, banks that are forced to hold on to their CDO assets will be required to set aside much more of their own capital as a financial cushion. That will sharply reduce the money they have available for making new loans.

And it doesn't stop there. CDO losses now threaten the AAA ratings of a number of insurance companies that bought CDO paper or insured against CDO losses. And because some of those insurers also have provided insurance to investors in tax-exempt bonds, states and municipalities have decided to pull back on new bond offerings because investors have become skittish.

If all this sounds like a financial house of cards, that's because it is. And it is about to come crashing down, with serious consequences not only for banks and investors but for the economy as a whole.

That's not just my opinion. It's why banks are husbanding their cash and why the outstanding stock of bank loans and commercial paper is shrinking dramatically.

It is why Treasury officials are working overtime on schemes to stem the tide of mortgage foreclosures and provide a new vehicle to buy up CDO assets.

It's why state and federal budget officials are anticipating sharp decreases in tax revenue next year.

And it is why the Federal Reserve is now willing to toss aside concerns about inflation, the dollar and bailing out Wall Street, and move aggressively to cut interest rates and pump additional funds directly into the banking system.

This may not be 1929. But it's a good bet that it's way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of the tech bubble in 2001.

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This is the type of toxic waste investment that is eating up our tax dollars we've entrusted to you all.


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http://tinyurl.com/yt859y


"Dec. 6 (Bloomberg) -- Schools and towns in a Florida fund that lost half its assets to withdrawals last month say their finances may be squeezed by proposed limits on how much money they can access...."