What Is OC's Risk With Mortgage Debt Investments???

I got to thinking after reading about the ongoing investigation of County Treasurer Chriss Street. He's under investigation by the Feds for his previous work as a bankruptcy trustee for Fruehauf Trucking Corp. This is troubling as well as him spending lavishly to appoint his office like Gordon Gecko of Wall Street fame would. I just wonder if Mr. Street or his predecessor John Moorlach has the county invested in any mortgage backed securities. This stuff is toxic right now. The secondary market has all but evaporated for this junk. There is a problem of marking these investments to the market because they are not liquid/and or they're not trading hardly at all. This could have huge consequences for OC. This has the potential to be 1994 all over again. I'm not accusing Mr. Street or Mr. Moorlach at this point of anything, but maybe an audit by the BOS to make sure there is none of this stuff on our books is in order. I would sure like to know. Here's an essay by Warren Buffett on the looming problem with this:

Marking To Myth

by: Warren Buffett

Many institutions that publicly report precise market values for their holdings or CDOs and CMOs are in truth reporting fiction. They are marking to model rather than marking to market. The recent meltdown in much of the debt market, moreover, has transformed this process into marking to myth.

Because many of these institutions are highly leveraged, the difference between "model" and "market" could deliver a huge whack to shareholders' equity. Indeed, for a few institutions, the difference in valuations is the difference between what purports to be robust health and insolvency. For these institutions, pinning down market values would not be difficult: They should simply sell 5% of all the large positions they hold. That kind of sale would establish a true value, though one still higher, no doubt, than would be realized for 100% of an oversized and illiquid holding.

In one way, I'm sympathetic to the institutional reluctance to face the music. I'd give a lot to mark my weight to "model" rather than to "market."