Street: “The County will get all its money back.” REALLY?

In a sad sort of way it’s kind of funny that other news sweeps us up and we forget about things that were so important a little more than a month ago.

I was wondering what the latest intel was on the failed Structured Investment Vehicle (SIV) Whistlejacket Capital, LLC.  This is the one that Treasurer/Tax Collector Chriss Street dumped $80 million into and is now in receivership.

Back on March 14th I wrote about the potential for the County to lose big on these investments. Quoting from a report by the OCRegister’s Ron Campbell…

Orange County will probably lose some of the $80 million it sank into a defaulted investment, financial experts say.

It’s “very unlikely” that Orange County will get repaid in full when its investments in Whistlejacket Capital mature next January, said Joseph Mason, a finance professor at Drexel University in Philadelphia. “Next January is almost an eternity in terms of how quickly these structures are crumbling.”

In that same story Campbell quoted Chriss Street telling us “I still think the county will get all its money back.”

Well on April 16th this short blurb from Christian Berthelsen appeared in the LATimes:

ORANGE COUNTY
Investment fund loses value

The Orange County treasurer’s office has taken an $11-million write-down on the value of an $80-million investment in a complex fund, a decrease of nearly 14%, according to a county treasury report issued Tuesday.

The fund, a structured investment vehicle called Whistlejacket LLC, went into default in February and has been forced into receivership. County treasury officials said the lower pricing on the investment is a conservative estimate of what the securities would currently fetch on the market in a distress sale, but that they expect eventually to recover the full value of their investment, which is scheduled to mature in January.

The Whistlejacket investment was part of Treasurer Chriss Street’s expanded foray into structured investment vehicles, which have run into trouble on Wall Street in recent months as investors turned away from certain types of debt securities.

I wonder if Chriss still thinks we’ll get all of our money back?

  2 comments for “Street: “The County will get all its money back.” REALLY?

  1. Sworn to uphold the Constitution
    April 27, 2008 at 2:49 pm

    Chriss Street will get all of our money back, but he has his own definition of “all” and “money”.

    I’m still absoultely furious that the county would invest in any investment that could not be marked to market on a daily basis, with complete liquidity and safety. Didn’t these guys learn anything from the previous folly that we are still paying for?

    Rules for investing public money stress safety and liquidity, but all of a sudden we have Easy Street Republicans chasing higher yields instead.

    Every Supervisor who approved an investment policy that included Structured Investment Vehicles should resign out of shame, starting with Moorlach and Street,

  2. cook
    April 27, 2008 at 6:13 pm

    Street is not worth 14 million.

    He should be stripped of treasurer authority pending recall.

    The investment bank that sold the county this pile, should be called in on the carpet and told to buy it back at par plus promised earning.

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