YEP YOU READ THE HEADLINES RIGHT.I GUESS ITS A CASE OF FAT CATS HELPING FAT CATS UNTIL OUTRAGE REACHES A PEAK?…….AND THIS IS TAKING PLACE WHILE THEY CONTINUE TO SUFFER BUDGET GAPS AND SERVICES AND PAY CONTINUES TO GET REDUCED.BUT THAT REALLY DOESN’T MATTER BECAUSE…..THEY CAN ALWAYS FIND A LITTLE CHANGE IN THE COUCH FOR GOLDMAN SACHS!
Goldman Sachs Still Paid for Swaps on Redeemed Bonds (Update2)
By Dunstan McNichol
Oct. 23 (Bloomberg) — New Jersey taxpayers are sending almost $1 million a month to a partnership run by Goldman Sachs Group Inc. for protection against rising interest costs on bonds that the state redeemed more than a year ago.
The most-densely populated U.S. state is making the payments under an agreement made during the administration of former Governor James E. McGreevey in 2003, when New Jersey’s Transportation Trust Fund Authority sold $345 million in auction-rate bonds whose yields fluctuated with short-term interest costs. The agency finances road and rail projects.
“This vividly shows the risk of entering into interest- rate swap agreements,” said Christopher Taylor, former executive director of the Municipal Securities Rulemaking Board in Alexandria, Virginia. “The world’s got to see what stupidity even the sophisticated investors like the transportation fund can get into.”
While New Jersey replaced the debt with fixed-rate securities in 2008 after the $330 billion auction-rate bond market froze, the swap — in which two parties typically exchange fixed payments for ones based on floating interest rates — isn’t scheduled to expire until 2019. Continue reading