Because They’re So Good With Money
R. Neal of Facing South reports the very predictable story: Local governments make run on Florida investment fund.
Why are local governments trying to get their money out of the State investment fund? Well, let’s guess – it is run by Republicans and what is the worse thing to be invested in at the moment? Got it in one, they have a big chunk of the fund in sub-prime mortgage paper. It was another Ponzi scheme that promised absurd payoffs, so of course they used the State Employees Pension fund and the Local Governments operating capital to buy into them.
Just like the derivatives mess all over again.
Local governments are already tightening belts because of the changes in the property tax rules, and the drop off in sales tax revenues, so they are a little panicked to find out that their big deposits are in a fund that has invested the sub-prime mortgage mess.
Local governments get a big chunk of their revenue when the property taxes are paid, and they invest it to earn some interest until they need to spend it. The state created this investment fund to increase the amount that could be made, but it is not supposed to be taking risks on iffy investments.
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