The Run on Florida’s Local Government Investment Pool
On Nov 15th David Evans at Bloomberg wrote: Public School Funds Hit by SIV Debts Hidden in Investment Pools
What … municipal finance managers … across the country still haven’t been told — is that state-run pools have parked taxpayers’ money in some of the most confusing, opaque and illiquid debt investments ever devised.
These include so-called structured investment vehicles, or SIVs, which are among the subprime mortgage debt-filled contrivances that have blown up at the biggest banks in the world.
This story led to a run on the fund, and Evans wrote today: Florida Halts Withdrawals From Local Investment Fund
Florida officials voted to suspend withdrawals from an investment fund for schools and local governments after redemptions sparked by downgrades of debt held in the portfolio reduced assets by 44 percent.
Before the run, the fund had $27 Billion in assets, and the fund was frozen today with $15 Billion […]
