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  #51  
Old 06-18-2014, 09:48 AM
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Jeez, and I had to look up only a couple posts (#45)
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Old 06-18-2014, 10:52 AM
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The city of Detroit also bet that interest rates would rise, and lost that bet. They probably thought of the bet as a cash flow hedge, but on a market value basis, it was a huge speculative gamble.
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Old 06-19-2014, 07:43 PM
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Actually, it wasn't Summers' fault, but idiotic decision-making by the people after he left. I thought we hashed it out in this thread, but I guess I did it elsewhere
You no doubt think that Lloyd Blankfein is doing God's work.
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Old 06-19-2014, 07:50 PM
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No, I prefer to assign blame appropriately.

RE: GS, I was not amused by their bailout, which was characterized as a bailout of AIG et al
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Old 06-20-2014, 12:39 PM
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And more glory:
http://www.bloomberg.com/apps/news?p...d=aHQ2Xh55jI.Q
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The school said last week they will suspend work on the building early next year.
Why wait until "next year" to suspend the work? Why not suspend it immediately?
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Old 06-20-2014, 04:20 PM
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Why wait until "next year" to suspend the work? Why not suspend it immediately?
Perhaps it's at a stage of construction where still exposed to the elements and what they have would not survive the winter?
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Old 06-20-2014, 04:21 PM
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Well, that was 5 years ago.

Maybe somebody can see if there was any followup on the story.
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Old 06-20-2014, 04:23 PM
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Why wait until "next year" to suspend the work? Why not suspend it immediately?
Also, you are posting a five-year-old article that was written in December. Ignore my previous post.
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Old 06-20-2014, 04:26 PM
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Well, that was 5 years ago.

Maybe somebody can see if there was any followup on the story.
fwiw, I wasn't being snide here. My interest is not in the construction project per se.

I was just interested in the derivatives decision. (or, rather, non-decision)

So if you want to know why they had a delay, you're going to have to do some digging yourself.
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Old 07-01-2014, 02:24 PM
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LOS ANGELES

look who else wants to get out of a swap

http://www.latimes.com/local/lanow/l...html?track=rss

Quote:
Council committee wants to pressure banks to lower rates on bond deal
SOUMYA KARLAMANGLA

-Paul Koretz says renegotiating bank deals is in the "moral, ethical and operational interest of our city."
-Report said, despite paying higher interest rates, city has saved $21.7 million so far.
-Banks 'unfairly benefited in this swap deal at our expense,' Councilman Bob Blumenfield said.
I think banks should rethink being counterparty to anything where a governmental entity is the other party.

Not unlike being someone who foolishly lent money to kings from, oh, 1200 - 1600, and the king would just confiscate your stuff (and/or kill you) when the debt got to be too bad.

Quote:
Los Angeles officials moved Monday to get out of two Wall Street bank contracts that they say soured after the economic crash of 2008.

In 2006, the city entered into an interest rate swap deal with Bank of New York Mellon and Dexia, a Franco-Belgian institution, for its Wastewater System Revenue Bond issued in 1988. The rate swap was done to take advantage of what were at the time historically low interest rates.

But rates dropped even lower when the economy crashed. This left the city paying more than the market rate, while the banks paid variable rates that were kept low by the Federal Reserve. The 2006 deal had locked in the city's interest rate for 22 years.

On Monday, the City Council's budget and finance committee unanimously voted to push the banks to renegotiate or terminate their contracts at no cost. Otherwise, the city would consider ceasing all business with the banks. The motion was introduced in May by Councilman Paul Koretz.
.....
But, Lisa Cody, a research policy analyst with the Fix L.A. Coalition -- which is pushing for renegotiation -- said the banks preyed on municipalities locked into high rates during the financial crisis, and need to be punished.

“The too-big-to-fail and the too-big-to-jail mentalities in this country have allowed financial institutions to run wild,” Cody said.

Koretz’s original motion recommended that if the banks refuse to renegotiate or terminate the deals at no cost, the city should stop doing business with the banks altogether.

.....
Instead of recommending that the city cease all business with the banks if they won't renegotiate at no cost, the committee approved an amended motion Monday that said if the banks refuse to renegotiate or terminate at no cost, the issue will return to the city administrative officer, which will analyze the risks and benefits of termination.

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