The State Board of Administration met earlier Thursday and voted to immediately freeze withdrawals, spokesman Michael McCauley said. Over $10 billion had been pulled from Florida's Local Government Investment Pool. According to the Marketwatch article, the fund "is a money-market fund that's supposed to invest in ultrasafe assets to provide participants with a secure place to stash spare cash."
Not exactly.
Looking under the hood, the fund had a tremendous amount invested in SIVs, or Structured Investment Vehicles, to the tune of almost $2 billion. These funds borrow short term monies and invest them into longer term investments and make money off the spread. The structured products, the results of these types of investment, are in turn sold to some (ie Florida's) money market funds.
Money market funds mandates are supposed to be cash or close to cash with tremendous liquidity. Most mutual fund money is put into short-term corporate paper. In the search for more yield, money market funds expanded their purview into SIVs.
The hens are definitely coming home to roost. Go Dolphins?
Not exactly.
Looking under the hood, the fund had a tremendous amount invested in SIVs, or Structured Investment Vehicles, to the tune of almost $2 billion. These funds borrow short term monies and invest them into longer term investments and make money off the spread. The structured products, the results of these types of investment, are in turn sold to some (ie Florida's) money market funds.
Money market funds mandates are supposed to be cash or close to cash with tremendous liquidity. Most mutual fund money is put into short-term corporate paper. In the search for more yield, money market funds expanded their purview into SIVs.
The hens are definitely coming home to roost. Go Dolphins?
Is Ford running on empty?
Cramer on BloggingStocks: How to play the end of the ethanol mandate
Before the bell: AMZN, F, DOW, DAI, QCOM, MMM, LLY, COST ...
Reader Comments (Page 1 of 1)
12-01-2007 @ 10:27AM
Elliott said...
Well Folks:
It looks like Humpty Dumpty has fallen off the wall! All the kings horses ,and all the Kings men can't put Humpty together again!
12-01-2007 @ 12:29PM
hopflcd said...
Who are the members of the Florida State Board? How are they picked and who picks them? How are they compensated? What are their qualifications? Strange that there is no information about the above and yet they control billions of dollars. Interesting that they are shielded from responsibility by the cloak put around them. Hope there is some type of investigation. Charles Hopfl