I received an interesting Email this morning from Peter in Whitehorse, Yukon. The issue...

I received an interesting Email this morning from Peter in Whitehorse, Yukon. The issue was asset backed commercial paper. Here goes: BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? I received an interesting Email this morning from Peter in Whitehorse, Yukon. The issue was asset backed commercial paper. Here goes: I live in Yukon, Canada and regularly read your blog. I was away from the Yukon for a month and came back to news headlines that the Yukon's surplus of $36.5M that had been invested in a 'low risk, low return' scheme was overdue. Smelled like asset-backed commercial paper. Sure enough as this link shows: Of course the government is in damage control and telling everyone that will listen that the money is safe a will be returned!! Me thinks the money is likely gone. The real question is what was the Yukon Government doing investing taxpayer money in commercial paper when it should have been buying government bonds or something that is relatively safe? They got in way over their heads. The Yukon has a population of about 30,000. This surplus represents a lot of money that will now not be available. We are likely back to zero or worse. Incredible!! In the grand scheme of things, the Yukon money involved is insignificant (but not to those in Whitehorse). Instead of an apology, Yukon's top finance official said he's confident the money is secure, and the uncertainty will have no impact on the territory's cash flow. 'Naturally, we would have wanted our money back when we expected it to get back, but you know, the paper we bought was the highest-rated investment paper one could buy'. Although the amount in the Yukon is small, there is $40 billion frozen elsewhere in Canada. That is not peanuts. I talked about the plight of frozen asset backed commercial paper in Canada back on September 28, in Purdy Crawford, a lawyer and financial adviser hired to negotiate a settlement, said he is now hoping to have an agreement by the end of this year. That deal is expected to convert the short-term investment into longer-term notes, with the government being paid back over five or 10 years. The fact that this problem stretched all the way to Whitehorse, Yukon shows you just how pervasive the fraud in mortgage backed securities became. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.