Early alerts on longer-term business, economic and public policy issues. Successor to the web site www.cityeconomist.com. Maintained by John Tepper Marlin.
Showing posts with label Orange County. Show all posts
Showing posts with label Orange County. Show all posts
Wednesday, April 30, 2008
4/30/2008 Orange County Again, Bloomberg (Jonathan Weil). U.S. Representative Gary Miller, a real-estate developer from Orange County, California last week succeeded in getting a rider attached to a bill seeking to help homeowners refinance their mortgages. It would require the Fed to study the FASB's mark-to-market accounting rules and report back to Congress. What Miller means is: "Dear Ben, tell us how we can gut the rules.'' Comment: Orange County was the home base for Countrywide Financial and New Century Financial, the two largest subprime mortgage lenders, and three of the next eight largest. The county itself went broke investing in derivatives and the treasurer and assistant treasurer were indicted. Now the new treasurer is being investigated and the sheriff was indicted last year. It all gives Mickey Mouse a bad name.
I write about the biographical and economic threads in history. Special interests include symbols of family, such as coats of arms, and the behavior of families in a crisis.
Thursday, September 20, 2007
CONGESTION | LA and NYC - Huffington Post
"The Los Angeles and New York City areas have suffered the highest total annual costs from traffic delays since 1982. And the delays are getting worse. It's no surprise that the LA-Orange County area ranks worst... The NYC metro area does much better but is deteriorating. The big surprise is that snarls at the report are not for rating LA and OC worst again, but for understating the magnitude of the local problem. ..." Read more.
I write about the biographical and economic threads in history. Special interests include symbols of family, such as coats of arms, and the behavior of families in a crisis.
Tuesday, September 4, 2007
Orange County's Batman and Robin Break Up
(Posted on Huffington Post September 4. See comments posted there.)
As campaigners against waste and fraud, John Moorlach and Chriss Street rode to fame as the fiscal Batman and Robin of Orange County, Calif.
The duo worried publicly that Orange County’s longtime Treasurer, the memorably named Bob Citron, had put County-managed funds (a total of about $20 billion, including funds from other jurisdictions in a pool) at great risk through investments in leveraged derivatives such as repos and floating rate notes. The County lost big time on Citron’s bets when the Fed’s open market committee raised the target fed funds rate from 3.25 percent in February 1994 to 5.5 percent in November 1994. As interest rates rose, the value of the securities fell and the County lost about $2 billion.
Moorlach ran against Citron for the Treasurer post in June 1994 and lost. In December, Credit Suisse First Boston required more collateral from the County, which filed for a Chapter 9 bankruptcy. Moorlach was appointed to succeed Citron as Treasurer, and was subsequently elected through 2006. In that year, Moorlach gave his friend Street a leg up to the Treasurer job by appointing him to the civil service post of Assistant Treasurer after posting the job for just one day.
Street was elected to the Treasurer post in June 2006, his ballot statement unabashedly tied to Moorlach’s coattails: “Orange County Treasurer John Moorlach trusts Chriss Street to replace him…” His bio reports that “Chriss Street has been among John [Moorlach]’s closest advisors.”
Moorlach was at the same time elected one of Orange County’s five supervisors. Upon taking office in December 2006, he called for more accountability for the deputy sheriffs’ funds. Orange County has an estimated unfunded pension liability of more than $2 billion, of which a big piece is for law-enforcement pension benefits. Union leaders responded that Moorlach’s interest stemmed improperly from their opposition to his campaign for supervisor.
What a difference a few months make! The Dynamic Duo has broken up. Moorlach has disowned his protégé Street in the wake of a growing series of investigations of Street’s actions before and since taking office. The Justice Department is investigating Street's previous work as a bankruptcy trustee for Fruehauf Trucking Corp. So is the Department of Labor and Pension Benefit Guaranty Corp. The Orange County District Attorney joined the investigating troops in August. Moorlach became aware of Street’s having falsified data and privately asked Street to resign. Moorlach was rebuffed and has publicly called for Street’s resignation. Street has defended himself in a videotaped press conference.
Apart from the specific charges of malfeasance, one worry is that Orange County’s $7 billion funds have again been mismanaged, for example by buying subprime paper. The troubled Countrywide Financial Corp. is the nation’s largest subprime mortgage lender and is based in Los Angeles. New Century Financial was until April the second-largest subprime lender, based in Irvine (Orange County), and has been in Chapter 11 proceedings since April. At the August meeting of the Orange County Republican Central Committee, Moorlach was asked if the County has investments in mortgage debt.
Orange County’s troubles will doubtless one way or another come to the attention of Governor Arnold Schwarzenegger, who played Mr. Freeze in the ill-fated 1997 movie version of the Batman and Robin story.
As campaigners against waste and fraud, John Moorlach and Chriss Street rode to fame as the fiscal Batman and Robin of Orange County, Calif.
The duo worried publicly that Orange County’s longtime Treasurer, the memorably named Bob Citron, had put County-managed funds (a total of about $20 billion, including funds from other jurisdictions in a pool) at great risk through investments in leveraged derivatives such as repos and floating rate notes. The County lost big time on Citron’s bets when the Fed’s open market committee raised the target fed funds rate from 3.25 percent in February 1994 to 5.5 percent in November 1994. As interest rates rose, the value of the securities fell and the County lost about $2 billion.
Moorlach ran against Citron for the Treasurer post in June 1994 and lost. In December, Credit Suisse First Boston required more collateral from the County, which filed for a Chapter 9 bankruptcy. Moorlach was appointed to succeed Citron as Treasurer, and was subsequently elected through 2006. In that year, Moorlach gave his friend Street a leg up to the Treasurer job by appointing him to the civil service post of Assistant Treasurer after posting the job for just one day.
Street was elected to the Treasurer post in June 2006, his ballot statement unabashedly tied to Moorlach’s coattails: “Orange County Treasurer John Moorlach trusts Chriss Street to replace him…” His bio reports that “Chriss Street has been among John [Moorlach]’s closest advisors.”
Moorlach was at the same time elected one of Orange County’s five supervisors. Upon taking office in December 2006, he called for more accountability for the deputy sheriffs’ funds. Orange County has an estimated unfunded pension liability of more than $2 billion, of which a big piece is for law-enforcement pension benefits. Union leaders responded that Moorlach’s interest stemmed improperly from their opposition to his campaign for supervisor.
What a difference a few months make! The Dynamic Duo has broken up. Moorlach has disowned his protégé Street in the wake of a growing series of investigations of Street’s actions before and since taking office. The Justice Department is investigating Street's previous work as a bankruptcy trustee for Fruehauf Trucking Corp. So is the Department of Labor and Pension Benefit Guaranty Corp. The Orange County District Attorney joined the investigating troops in August. Moorlach became aware of Street’s having falsified data and privately asked Street to resign. Moorlach was rebuffed and has publicly called for Street’s resignation. Street has defended himself in a videotaped press conference.
Apart from the specific charges of malfeasance, one worry is that Orange County’s $7 billion funds have again been mismanaged, for example by buying subprime paper. The troubled Countrywide Financial Corp. is the nation’s largest subprime mortgage lender and is based in Los Angeles. New Century Financial was until April the second-largest subprime lender, based in Irvine (Orange County), and has been in Chapter 11 proceedings since April. At the August meeting of the Orange County Republican Central Committee, Moorlach was asked if the County has investments in mortgage debt.
Orange County’s troubles will doubtless one way or another come to the attention of Governor Arnold Schwarzenegger, who played Mr. Freeze in the ill-fated 1997 movie version of the Batman and Robin story.
I write about the biographical and economic threads in history. Special interests include symbols of family, such as coats of arms, and the behavior of families in a crisis.
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