Some Municipal Governments Bailing Out Of Subprime Investments

(revised 11-30-07)
In Florida, the South Florida Sun-Sentinel reports:

• The nation's subprime mortgage crisis is prompting Florida cities, counties and agencies ... to pull billions of dollars out of a state-run investment fund. The local governments are worried because a state agency has invested their money, plus billions of additional dollars, in funds that are backed by subprime mortgages, the risky loans that have triggered an international credit crunch.

***

• [An Orange County, Florida official] said his office took its money out because the state was evasive when questioned about how much was invested in subprime funds and how stable those funds were: "One of the problems is transparency. We haven't been satisfied with the answers we've been given."

For more, see Sub-prime mortgage meltdown causes run on state-managed investment fund (Agencies pull out of state-run fund) (if link expires, try here).

See also, Orlando, Orange County yank millions from state fund (Orlando Sentinel): Reportedly, the Seminole County, Florida school system is so spooked about the subprime junk holdings held by Florida's state-run investment fund that it yanked almost its entire amount on deposit (about $100 million) with the fund. It left $1,000 in the account just to keep it open (if link expires, try here).

Observation: It sounds like those Florida municipalities slow to pull their cash out from this fund may be left "holding the bag."

For story update, see State freezes 'run on the bank' at investment fund (added 11-30-07) (if link expires, try here).

For a related story from Bloomberg, see Public School Funds Hit by SIV Debts Hidden in Investment Pools (11-15-07).