RR Phantom
Location : Wasted Space Job/hobbies : Cayman Islands Actuary
| Subject: OZschwitz: 100 agencies facing $2b black hole Fri Aug 15, 2008 7:04 pm | |
| MORE than 100 councils, charities, churches, hospitals and nursing homes across Australia are sitting on a $2 billion black hole after buying subprime investments that were structured by Wall Street banks during the bull market but are now potentially worthless.
BusinessDay has identified more than 150 government, private and charitable institutions that purchased complex financial instruments such as collateralised debt obligations (CDOs).
There have been few buyers for CDOs and similar structured finance products since the subprime meltdown began this time last year, sending global financial markets into a tailspin.
These toxic investments will decimate the finances of many local government and charitable organisations for years. Twenty-three local councils are preparing a class action lawsuit against Wall Street bank Lehman Brothers to recover their losses.
Among those who bought the products are four universities, dozens of superannuation funds, ambulance services, the St Vincent De Paul Society, the Starlight Children's Foundation, the Boystown charity for underprivileged children, and the Anglican, Baptist, Uniting and Catholic churches.
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