Thursday, December 22, 2005


Noe: Another $2 million missing

Actually, he and his lawyers didn't say that exactly, but that appears to be one of the implications of the "facts" that came out in the newser his lawyers staged on Wednesday.

First, for us, it's hard to separate this news conference from the meeting his lawyers had with prosecutors several days ago. The fact that his mouthpieces felt the need to have this news conference suggests that the private meetings didn't go so well.

Anyway, as The Blade and others report, the thrust of Noe's attorneys' comments were, "Hey, what's the big deal, the coin fund still made an $11.8 million profit."

As far as we can tell, there was not a lot of dispute over whether a "profit" was made. Back in May, we posted at length about a previous lowering of the level of the "profits" from $15 million and had this from the Blade:
The bureau told The Blade for weeks that Mr. Noe had turned over $13.3 million in investment returns since 1998. But they acknowledged two weeks ago that Mr. Noe was allowed to reinvest $5.4 million of the state's share of the reported returns, expanding Ohio's investment in the Noe coin funds to $55.4 million.
So, we went from $15 million to $13.3 million, and now there seems to be another drop of $1.5 million in "profits" not to mention the fact that the $5.4 million is still unaccounted for.

As we noted in another May post, these returns - at best - were nothing to brag about and would have gotten any other investment manager fired. The point then, and now, is that on a risk-adjusted basis, whatever return Noe got sucked compared to investment returns if the money could have been invested in a venture similarly risky. Remember, also, that investment managers at the state's pension funds were expecting investment returns on the order of 10 percent a year.

Today's story also points to another place where the numbers still don't add up. This new story states:
According to the second coin-fund's general ledger, coin sales only generated a 3 percent return.
Obviously, we haven't been given access to the ledger, so we don't know what this is based on. But, based on the numbers that had been made public in April and May, both ourselves and the Blade staff put the returns in the 4-5 percent level for the first fund and 6-7 percent for the second fund.

In other words, the info in the ledger now suggests that the reported returns on the second fund were roughly double of what they really were. So, what numbers are we working with now? We wish the Blade reporters could be a little more forthcoming about these differences.

Either way, we don't see any way that this news conference ultimately helps Noe.


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