Orange County Becomes a Polish Joke

"'Evil' Currency Options Give Poland Its Orange County Moment" is today's headline over a Futures and Options Intelligence report on a Polish public backlash against risky derivatives.

Derivatives, of course, are the financial instruments nobody quite understands that were partly responsible for OC's 1994 bankruptcy, the largest municipal financial free-fall in history up to that time. Other culprits for the multi-billion-dollar fiasco included a wacked-out-of-his-noggin county treasurer, a country-club lax Orange County Board of Supervisors and bad astrological advice.

Jacek Maliszewski tells FOI that the Polish market will have to do the homework its American counterpart did through the 1990s, citing Orange County as an example of how severly a treasury team can lose money by misusing derivatives.

The Polish people are apparently adamant that their government not follow the burned-paper trail Orange County blazed.

The public debate is thick with sensational language about "Satanic contracts." The president of the Polish Business Roundtable, Zbigniew Jakubas, fulminated: "It is a product from hell."

Jakubas later discovered a manager in his own railway engineering company had staked a buttload on a currency hedge--and lost badly.

So that's where Bob Citron landed.