If there are any accountants out there, please tell me I am interpreting this incorrectly…

So I was looking into how bad this Foreclosure Crisis is and decided to take a look at one of the local County’s financial records and now I wished I didn’t…

According to the Palm Beach County’s 2009 Comprehensive Annual Financial Report, it appears that they have well over half of their $2.5 billion investment portfolio invested in GSE’s, ( Government Sponsored Enterprises) MBS’, (Mortgage Backed Securities) and CMO’s (Collateralized Mortgage Obligations)?

Highlights from the report…

As of September 30, 2009, the primary government had the following investments,
subject to interest rate risk using the segmented-time distribution method:

Credit Risk
Credit risk is the risk that an issuer will not fulfill its obligations.

Concentration Risk
Concentration of credit risk is the risk of loss attributed to the magnitude of an
investment in a single issuer.

How many other counties are in a similar financial position?

I bet most.

What does this mean?

I think everyone is in much more trouble than we think…

Feel free to dissect the report below in the comments…

My head hurts…




Palm Beach County’s 2009 Comprehensive Annual Financial Report