The Hangover Continues for San Mateo County.
It’s hard to believe that it was nearly a year and half ago when Lehman Brothers stunned the world by announcing they were filing for bankruptcy, an event that essentially began the downward spiral of the financial markets in September of 2008. Hundreds of millions of dollars of investments and pension funds vaporized overnight, leaving an indelible black mark on many communities — especially those in California. It also exposed the critically flawed investment strategies of many our “experts” that foolishly decided to place a huge percentage of their portfolio with one firm.
While many communities suffered significant losses when Lehman bellied up, they couldn’t hold a candle to the damage done to San Mateo County. And while many of these other communities have been able to patch up the damage and move on, San Mateo County is still suffering the effects of this catastrophe.
San Mateo County Bore the Brunt.
There’s an absolutely outstanding article from the Wall Street Journal that I have included at the bottom of this post that summarizes the effect of the Lehman Brothers collapse on San Mateo County — I highly recommend reading this. No other municipality in the nation lost anywhere near the $155M of County of San Mateo funds that evaporated; consequently the impact was felt much deeper here, particularly in the education sector. Consider the following:
- San Mateo County’s loss of $155M was nearly 4 times greater than any other municipality.
- Education accounted for $63M, or 41% of the total loss.
- The public school system was the single biggest loser, at 25% of the total loss.
- San Carlos School District lost an estimated $630,000.
As we read about how San Carlos and surrounding communities (such as Burlingame) and their respective school districts that are struggling to stay afloat, it’s important to remember how the hole got so big in the first place. Here’s the article from the Wall Street Journal: Lehman’s Ghost Haunts California.
(special thanks to blog reader Kelly for the tip on this article.)
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