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View Diary: Wall Street is Doing it Again: The Looting of America Continues (128 comments)

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  •  Um, no. (8+ / 0-)

    If the agreement requires repayment of 9.4x principal, it's prima facie a bad deal. Even if repayment begins 30 years down the road. The payoff had to be excessively huge to account for investorvrisknin the intervening years, but that only makes it a worse deal for communities entering the deals. If they're cash-strapped now, just wait until repayment begins. Privatization on steroids is the likely result.

    The road to Hell is paved with pragmatism.

    by TheOrchid on Fri Feb 01, 2013 at 06:16:52 AM PST

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    •  Rates on these range from 6 - 8% or so. (2+ / 0-)
      Recommended by:
      Sparhawk, nextstep

      In the case of Alvord, the interest rates on their cap appreciation bonds are the same as the rates on their standard bonds.

      They're just deferring the interest payments on it.

      •  You can't just focus on rate... (2+ / 0-)
        Recommended by:
        elwior, CA wildwoman

        ...to establish fairness.  You're ignoring the rest of the deal, which is structured precisely so that (1) consequences occur long after approving civil servants have retired or died, and (2) it is practically impossible to pay off without massive privatization.

        By your logic, the "negative amortization" loans popular around 2005 were great deals because of their low rates.  But they ended up blowing up pretty badly.

        If you focus only on the apparent rate, no one will take you seriously.

        The road to Hell is paved with pragmatism.

        by TheOrchid on Fri Feb 01, 2013 at 08:17:06 AM PST

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        •  Re (0+ / 0-)
          You're ignoring the rest of the deal, which is structured precisely so that (1) consequences occur long after approving civil servants have retired or died, and (2) it is practically impossible to pay off without massive privatization.
          So I imagine that you oppose public pensions, then, for the same reasons?

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Fri Feb 01, 2013 at 08:57:20 AM PST

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        •  johnny wurster is likely (1+ / 0-)
          Recommended by:
          TheOrchid

          heavily invested in these types of bonds.

          The banks have a stranglehold on the political process. Mike Whitney

          by dfarrah on Fri Feb 01, 2013 at 09:11:01 AM PST

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