Mumbo Jumbo Public Finance
Magic, Mumbo-Jumbo Were Used to Sell Muniland Swaps
and kind of related to that. But you would think that with 253 legislators in Harrisburg all looking for something to do at least one of them would take up a cause similar to what New York State is making progress on. If anything this is needed here more than in New York. See this news from late yesterday: NY strikes deal to reform public authorities. Maybe Joe or someone would be interested in a story on our Stadium Authority without a stadium anymore? You could say it was all mumbo jumbo debt issued by mumbo jumbo governments in Pennsylvania.
and I pointed this out recently, it does look like the PWSA is out from under the gun on some of it's own swaps induced public finance miasma. Yet you have to wonder what they had to pay JP Morgan for that privilege. When you add up the original cost of that debt and all the subsequent costs to get out of it.... not a small number. and as best I can tell, the current deal is just a temporary measure effective to 2011 or so. So the story is not over with. If I were bond counsel it's like the debt that keeps on giving.
I do have one really serious suggestion for our friends in Harrisburg. The problem with all the small governments in Pennsylvania that got caught up with all these ill-advised debt structures is that they really don't have the wherewithal to negotiate their ways out of the deals... even in cases where they were clearly bamboozled (that is a technical financial term) by the banks. The state, like maybe even the auditor general even?, really ought to collectively take on the task of negotiating some form of restitution and relief. That comes to mind because that is exactly what is in the news today over a lot of Auction rate debt and a deal negotiated between states and Wells Fargo.