-- Posted Thursday, 25 September 2008 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Thursday, September 25, 2008
“Phenomenally accurate forecasts”
We didn’t think we knew anyone affected by the bankruptcy filing of Lehman Bros. last week, but it turns out that it’s likely to be felt by everyone in our neighborhood in some small way. That’s because Boulder County, where I live, had $36.5 million parked in a state-regulated fund called Colorado Diversified Trust, $601,000 of which was in Lehman commercial paper. The bearer of these bad tidings was county Treasurer Bob Hullinghorst, speaking at a county commission meeting Tuesday night. He said he thought Boulder County might be able to recover between a third and two-thirds of the cash, but that it was doubtful the county could get it all back.
Colorado Diversified is used by local governments to pool their money for short-term investments, so Boulder County is not likely to be the only loser in the state. In fact, according to Hullinghorst, Larimer County may be out $640,000, and the Poudre Valley School district stands to lose as much as $1.3 million. Multiply that by many hundreds of cities and counties across the U.S. and you begin to see how the damages could pile up. Hullinghorst said Boulder County’s portfolio was “as safe as we can make it,” but noted that even certificates of deposit (CDs) are cause for concern in today’s economy.
Boulder County evidently will be able to offset its Lehman-related losses with investment income from other sources that exceeded expectations. But it’s hard to imagine that there will not be other losses in the future from investments that until very recently were considered nearly riskless. Will the trickle of red ink turn into a torrent as the scope of the banking system’s troubles expands to encompass every city, town and county in the U.S.?
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 25 September 2008 | Digg This Article | Source: GoldSeek.com
