November 29, 2007 (LPAC)--The State of Florida ordered a suspension of withdrawals from a State investment pool, after 44% of the funds were withdrawn by frightened cities and school boards who learned the fund was heavily invested in sub-prime mortgage-backed securities, structured investment vehicles (SIVs, or conduits) and tainted asset-backed commercial paper (ABC paper). Over $12 billion of the $27 billion fund, run by the State Board of Administration, has been withdrawn this month. The fund had announced at the beginning of the month that it held $2 billion in such junk, with $1.5 billion officially downgraded to junk status by the rating agencies, setting off the run.

Governor Charlie Crist (R) ordered the suspension after $3 billion was withdrawn today alone, saying "We have to protect what is there in the interim. There is no liquidity out there, there are no bids (for the junk-grade securities)."

So, as also seen in the inability of cities to raise funds on the municipal bond market (see related slug), the failure of the US Congress to pass LaRouche's HBPA is rapidly bankrupting the local city and state governments of the nation.