Posted on 03/01/2009 7:55:53 PM PST by Jet Jaguar
MAYVILLE — The county’s investment portfolio remains strong in spite of havoc throughout the U.S. financial sector. As of December, the county earned $4.6 million off its investments in 2008, money that offsets property taxes. That was an $866,000 increase over the previous month as the county’s investment portfolio remains relatively shielded from the financial turmoil that has left so many investors with huge losses following Wall Street’s meltdown. The county’s investment insulation is largely thanks to a decision made years ago to invest in a certain type of security, according to Darin Schulz, county finance director. ‘‘One thing that’s unique about how we invest is we invest in a lot of mortgage-backed securities ... that are backed by the federal government,’’ Schulz said. ‘‘Our portfolio did extremely well because of that.’’ As of December, the county owned more than $43 million in securities through the Government National Mortgage Association, or Ginnie Mae, a public corporation run by the U.S. Department of Housing and Urban Development. Unlike investments in Fannie Mae and Freddie Mac, Ginnie Mae securities were backed by the full faith and credit of the federal government amidst the nation’s housing and mortgage crisis. The decision to invest mostly in Ginnie Mae securities — which are stable, safe and earn a high interest rate — was made by Schulz’s predecessor, former county finance director Robert Beckman, in the early 1990s. It was a policy that wasn’t abandoned. ‘‘It significantly put us ahead of the ballgame,’’ Schulz said. ‘‘What it does is it gives us a significant rate of return on our money.’’ The more money the county has on hand, the more money it has to invest. In December, the county’s investment portfolio was $56.8 million, though that number rises and falls as the county generates revenue from sources such as property taxes and pays its bills, like payroll obligations. The county’s portfolio is expected to remain strong, though there are factors that could affect it in 2009. Schulz worries the enormous level of spending authorized by President Obama’s $787 billion economic stimulus package will cause inflation, prompting the Federal Reserve will jack up interest rates. Since bond values travel inversely with national interest rates, bond values could fall and the county could lose a lot of money if it sells its Ginnie Mae securities. ‘‘The only way we wouldn’t be insulated is if we had to sell,’’ Schulz said. ‘‘You don’t lose a dime until you sell.’’
Which county? Which state?
Jamestown New York
Among one of the next shoes to fall - State/Local funds. Along with Credit Cards and Commercial Real Estate.
These Localities have been even more irresponsible than the Feds for so many years. I expect this is where the Taxpayer Revolts will take hold when Owners are told they must continue to pay Property Taxes based on values established at the height of the Bubble.
Fannie Mae and Freddie Mac were run buy dems.
Ginnie Mae is run by a Republican.
Or so I read. That is why I posted the article. I would like to learn more.
You have to love that comment. Only a goverment official would say something like that.
Where the H is Mayville?
Battered investors seek haven in Ginnie Mae funds
http://www.courierpostonline.com/article/20090203/BUSINESS01/902030323/1003/BUSINESS
Cannot post due to copyright complaint.
Dunno, just trying to learn about ginnie mae.
Commentary: Fannie, Freddie and Ginnie Explained
http://www.wbir.com/money/story.aspx?storyid=77581&catid=92
Cannot post due to copyright complaint.
All Ginnie Mae securities are backed by FHA and VA loans. My guess is Bawney Fwank and No-VIP Dodd amongst others, were unable, uninterested or unwilling to turn the screws on GNMA. Hence, Ginnie Mae maintained underwriting standards throughout the "no deadbeat left behind" frenzy of CRA.
Right between Aprilberg and Junetown.
Sheesh.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.