ORANGE COUNTY IN BANKRUPTCY : EDITORIAL COMMENTARY ACROSS THE NATION

The nation’s newspapers have had plenty to say about Orange County’s plight:

Orange County’s high-flying plunge into financial disaster should be a cautionary tale for local governments and public agencies all over the country, including Maryland. By investing heavily in derivatives, the latest Wall Street sucker bait for big-risk, low-knowledge speculators, the affluent California subdivision has already lost $1.5 billion in taxpayers’ money, a sum that may double before the catastrophe subsides.

BALTIMORE SUN, DEC. 10

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Discretion shouldn’t be granted local officials tempted to take chances. The sort of borrowing and speculation on interest-rate trends that Orange County’s Robert Citron specialized in...should be outlawed for good. State Sen. Quentin Kopp, I-San Francisco / San Mateo, says he will introduce a bill to this effect. Better late than never.

SAN FRANCISCO EXAMINER, DEC. 11

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But because his (Robert L. Citron) returns were so good for so long, everyone pretended that merry-go-rounds never stop. The behavior of Merrill Lynch, Citron’s primary investment advisor over the past year or so, is even more disgraceful. By all accounts, Merrill rang up huge investment fees by feeding Citron’s recklessness like a bartender pushing drinks on a drunk driver.

HOUSTON CHRONICLE, DEC. 14

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Pressures on investment managers to produce spectacular results are enormous. Orange County’s fiasco should remind everyone that municipal agencies cannot be gamblers.

ST. PETERSBURG TIMES, DEC. 11

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As far back as the 1970s, urban experts were predicting that the bankruptcy ax would strike many financially strapped cities as declining tax revenue made it difficult for them to meet their fiscal obligations... Oddly, however, the ax has just fallen on the neck of California’s Orange County. That one the nation’s most affluent counties is experiencing one of urban America’s worst fiscal nightmares has nothing to do with being financially strapped.

WASHINGTON POST, DEC. 10