School funds leaking like SIV
Bob Morris @ Nov 23rd 2007 00:12 - Category: Credit crisis
Schools have been parking funds in supposedly safe pools that got slightly higher rates than money market funds. Trouble is, the pools were goosing the yield with highly risky SIVs - and many of them have now defaulted, something which could have disastrous consequences for the schools.
Most SIVs currently can’t even be priced, so the pools couldn’t sell them even if they wanted to.
Expect massive lawsuits from municipalities against investment banks for leading them down this toxic road.
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