Structure Investment Vehicle In Which County Has $80 Million Invested In Big Trouble
Posted by: Jubal | 02/20/2008 3:06 PM
Treasurer-Tax Collector Chriss Street's roller-coaster ride continues.The County of Orange has $80 million in a structured investment vehicle called Whistlejacket Capital.
Unfortunately, Whistlejacket is in trouble.
According to today's Times of London:
One upshot is the county was receive the interest payment it is due next month, because Whistlejacket has suspended payments of principal and interest. Click here for the Treasurer-Tax Collector's "Investment Inventory (as of January 31, 2008). Whistlejacket is on pages 4 and 5.Standard Chartered has dropped attempts to rescue its $7.1 billion (£3.6 billion) structured investment vehicle (SIV), Whistlejacket, a week after it went into receivership.
Standard Chartered said that it had pulled its offers, which included taking all of Whistlejacket's assets on to its balance sheet, because of the "pact of continuing deterioration in the market for certain asset classes and the impracticality of completing any proposal within the confines of the receivership".
Deloitte, the receiver appointed to Whistlejacket, said that it was now seeking other solutions, including talks with other banks that might like to buy the vehicle.
Whistlejacket went into receivership last week because the value of its assets dropped to less than half the value of the start-up capital.
Looks like Treasurer Street is going to have some 'splainin to do at the next Board of Supervisors meeting.
Here are some past articles on the troubles of Whistlejacket from last week and December 2007
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The Perils of Chriss Street
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Man, we just talked about this the other night Matt. My crystal ball has been very clear these days w/respect to our financial system house of cards. These SIV investments are toxic. There is no market for them. We can't sell them because there are no buyers right now for this junk. If you had to "mark it to market" like any normal investment, you might get 20 cents on the dollar right now. As Yogi Berra would say..."this is deja vu all over again".
We will hear that the County won't lose any money and we are just fine. The board will say this is only a small problem that will soon pass. The board will stop for a moment and take a collective yawn and Moorlach will call the next item on the Agenda. Street will leave the board room and nothing will change. Oh I forgot the board will point to the audit that was just completed which indicated everything was okey-dokey;then join hands and sing "Cumbya". You know, its easy to sing when its not your own money at risk.
Here's another fine mess Moorlach has gotten us into!