According to the Miami Herald, Florida counties testified in Congress; asking that federal "stimulus" money be used to patch up investment accounts badly damaged by investments in toxic assets sold by Lehman Brothers. "The collapse of Lehman Brothers Holdings has pinched Florida, forcing Sarasota County to slice library and transit budgets and forgo new parks and a fire station, the county's comptroller Tuesday told a House committee looking at providing federal assistance to similarly strapped state and local governments."
How's this for an idea for Congress: I want federal stimulus money to patch up unrealized losses in my personal account for blue chip American companies, rated AAA, like GE and Berkshire Hathaway whose corporate executives played bets on derivatives that were impossible to understand through 10K's and other required reports to the SEC?
OK. Here's a more realistic request: a detailed list of investments by the State of Florida through Lehman before it disappeared down a black hole of its own making. Disclose a full inventory, details and covenants of bonds purchased through Lehman and other dealers so the public, including investors who are Republican, can know; what is in the Lehman trash compared to other bonds owned by the State? What percentage of bond business did Lehman get from the State Administration Board while it was run by a Bush insider? What was the rate of increase in bonds sold to the state by Lehman, month to month, as a percentage of total during the time that Jeb Bush was governor and, then, afterwards when he was a paid consultant to Lehman Brothers? What did Jeb Bush do when he was a consultant to Lehman Brothers?
These are fair questions that have either not been asked or published by the mainstream press. They are bound to irritate the former Governor, but since he has tapped himself to help revive his party based on conservative values; let's hear more about those values as they were expressed through solid gold investments in Lehman Brothers that are not worth the paper they are printed on.
Posted on Wed, May. 06, 2009
Local governments that suffered Lehman losses ask Congress for help
BY LESLEY CLARK
lclark@MiamiHerald.com
The collapse of Lehman Brothers Holdings has pinched Florida, forcing Sarasota County to slice library and transit budgets and forgo new parks and a fire station, the county's comptroller Tuesday told a House committee looking at providing federal assistance to similarly strapped state and local governments.
Karen Rushing told the House Financial Services Committee that Florida held over $300 million in Lehman investments when the company fell into bankruptcy last fall; Sarasota was holding about $40 million. An economic analysis, she said, estimates that for every $10 million in losses, the local economy lost 95 jobs.
She and several other local government officials from across the country testified in support of a House bill that would require the Treasury Department to cover the losses with money from the Troubled Asset Relief Program, the $700 billion federal bailout for troubled institutions.
''The decision to treat Lehman Brothers financial situation differently than other failing financial institutions resulted in devastating consequences on state and local governments,'' Rushing said.
She said the county has taken an ''unrealized loss'' in its accounting books, but has yet to sell the Lehman bonds.
''We're holding them now, trying to determine what to do next,'' she said of the bonds that represented less than 5 percent of the county's investment pool.
Rep. Anna Eshoo, D-Calif., a co-sponsor of the legislation requiring Treasury to purchase government-owned Lehman assets, said in prepared testimony that no TARP dollars have been spent to assist local governments, though governments in California, Florida, Colorado, Michigan, Missouri and Arizona have been affected.
''It's been said that some banks are too big to fail,'' she said. ``It can also be said that counties, school districts and cities are too small to be noticed.
''To date,'' she said, ``Lehman Brothers is the only financial institution that was allowed to collapse and our schools, public safety, and social services will suffer if we don't return these dollars back to our local governments.''
Not every lawmaker was sympathetic. ''You guys were chasing yield,'' Rep. John Campbell, R-Calif., said after noting that the governments could have invested in safer ways. ``There's nothing wrong with that, but with that comes risk.''
And he argued that the TARP bailout was aimed at stemming systemic failure, preventing the banks from failing.
© 2009 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com
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