Madison AP Local restraints have withdrawn at least $25 million from the $67 billion State Investment store in response to market losse from speculative investments.

Madison AP Local restraints have withdrawn at least $25 million from the $67 billion State Investment store in response to market losse from speculative investments, officials said Friday.

The investment losse could charge the state $130 million, officials have said.

Marathon shire said it removed its entire $22 million stake from the supply on Thursday and reinvested it elsewhere. Wausau Mayor John Hess said he withdrew $3 million of the city's $12 million in the store because of the losses.

The Investment foundation is used by about 1060 local commands in Wisconsin and operates similar to a riches market account. About half the circulating medium comes from municipalities, which are seeking earnings from their idle cash. The remainder is split between state operating cash and pension stock cash. It is separate from $30 billion of assets in the state pension store that is managed by Wisconsin's Investment Board.

State Auditor Dale Cattanach said, "There's no question about liquidity and protection of the principle" for those remaining in the fund

Byron Karow, Marathon County's finance director, complained he had been trying without succes since January to achieve information about the risks of the fund's investments in derivatives.

"They wouldn't exactly answer the question or break down their investments. Instead, they sent us guidelines saying by what mode they are protected from losse from derivatives," Karow said Friday.

Derivatives are financial contracts based onward or derived from, underlying securities or commodities, including stocks and bonds

"I still think it's frugal to invest in the foundation but, as mayor, I had to display we were concerned about this," Hess said.

With interest, Wisconsin officials estimate, the los will sumptuousness the state $130 million because it plans to pay it against by reducing the payout to permanent fund participants by about 0.25% from one side of to the other five to 10 years.

Other municipalities also have made modern withdrawals, but neither the fund's executive secretary nor its investment director turn backed telephone messages seeking specific information.

Keith Johnson the board's assistant legal caution said he didn't know for what reason many had pulled out, further "we're confident that after things have quieted down that municipalities will become more confident in the loch and start coming back."

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