Boulder County treasurer Bob Hullinghorst reported yesterday that the Boulder County could lose as much as $601 thousand due to investments the County made with the Colorado Diversified Trust.
The rapid ripple effect of this week’s collapse of a major Wall Street banking firm has tied up $601,591 in Boulder County government funds invested in that firm’s commercial paper.
County Treasurer Bob Hullinghorst said Friday, however, that he hopes Boulder County eventually can recover between 35 percent and 85 percent of that $601,591, which was part of a $5 million amount that a pool of local Colorado government investors had spent on commercial paper from Lehman Brothers.
Hullinghorst defended his investment selections…
But Hullinghorst, who will make a presentation about the situation to the Board of County Commissioners on Tuesday, added: “Believe me, this was a risk that some of the largest investment houses on Wall Street did not anticipate.”
I don’t know that I can fault investing in the Colorado Diversified Trust, although a similar default situation occurred in Florida I believe, which should have raised warning flags. That said, I can’t swallow his statement that this was an unanticipated risk. That’s like investing in IBM because it’s the largest company and therefore is a “safe” investment. There was plenty of warning that all was not well.
Well over a year ago, the company I worked for had a 401K option called a Stable Value Fund, which was meant to be a money market fund equivalent. I have little doubt that particular option would be in very deep trouble at the moment if it weren’t for the government bailout. At the time, they did not even offer a money market fund. I questioned that this was a breech of their fidicuary duty. They laughed. I bet they aren’t laughing now and thanking Uncle Sam and the taxpayers.
Also, why is this reported in the Longmont Times Call but not a word in the Boulder Daily Camera?
