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Genesis Posts: 71435 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1538-A....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-23 10:09:34
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Raingod Posts: 1067 Incept: 2008-08-29 
Tastes Like Chicken
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I think the state would have a case for canceling the swap payments, since the freezing of the ARS market was a game-changer. Not to mention that, if I understand how the two were paired, GS would have owed the state money if the state had kept the ARS bonds going (since they'd reset to the "default" rate, and the swap should have been set up to protect the state against that). In effect, GS is double-dipping now. Unless the contract acknowledged that the situation could occur, spelling it out to the state, I'd call it an unconscionable result. ---------- I have even intermittenter access than I did over the summer. No idea when I can check in.
2009-10-23 10:30:37
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Randy123 Posts: 2006 Incept: 2008-09-24 New Jersey
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Yep, my state and the same idiots invested hundreds of millions from our pension fund into Lehman in June of 2008....if that isn't criminal I don't know what is....but no one loses their jobs so.
---------- Mliu is my hero. Captain melamine.
2009-10-23 10:32:07
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Burtoby Posts: 521 Incept: 2007-10-28 
Arlington,Tx
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As long as these firms promise to hire their gov't counterpart (with a wink and a nod),this kind of stuff will never stop. Money is a game changer. Greed is a sin. There are no honest men in authority anymore, because they've all been repulsed by the process.
---------- Tryin' to turn 6 figures into 7.
2009-10-23 10:34:05
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Genesis Posts: 71435 Incept: 2007-06-26
KD^2
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Raingod: Sounds like the two transactions were unlinked, as many hedges are. That's dangerous, but of course you can bet Goldman didn't bother telling the state that. They, however, also knew it - that you can also bet on. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-23 10:55:34
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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So the State of Missouri has the right to tell Citigroup to **** off and we will not allow anymore of our citizens to do business with you? Let me know your opinion on this because I will call my State Rep today to initiate this action over the credit card mess.
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-10-23 10:59:58
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Mondocondo Posts: 3143 Incept: 2007-12-03
Miami
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I've been a municipal finance lawyer for 30 years. I HATE derivatives for any governmental issuer. It amazes me that since the Orange County, California derivative debacle in the late 1980's, governmental issuers still get involved in these things. There is a standard 30 page swap contract that is put out by the ISDA that everybody uses and nobody, and I mean nobody, understands. The document is virtually unreadable. The guts of the deal--the part that actually spells out what is being swapped, the term of the contract and the interest rates--is a page and a half "confirmation". When clients ask me to explain what's in the document, all I can tell them is how it works generally (e.g., they are agreeing to pay the variable rate on the bonds for you in return for your paying a fixed rate to them), but in terms of how that happens, who has what rights or remedies, I tell them that it's a "trust me" document. All you can do is trust that it works the way the slick derivative salesmen tell you it will, because I can't decipher the documents. Nice, huh? The governments go ahead and do it anyway. And then you hear stories like this...
2009-10-23 11:03:21
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Genesis Posts: 71435 Incept: 2007-06-26
KD^2
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Quote:So the State of Missouri has the right to tell Citigroup to **** off and we will not allow anymore of our citizens to do business with you? Let me know your opinion on this because I will call my State Rep today to initiate this action over the credit card mess. No, but the state does have the right to revoke their corporate charter in their state, which would prohibit them from having a business presence there (e.g. physical offices, etc) It also has the right to insist that STATE MONEY only go to firms that have a lawful foreign corporate registration. ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-23 11:05:41
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Themortgagedude Posts: 3930 Incept: 2007-12-17
saint louis
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Therein lies the rub. My reps district contains the Mortgage Operations for Citimortgage and even now that is a few thousand jobs, including my next door neighbor. Its hard to tell them to **** off and leave when we need them more than they need us.
---------- "These are interesting times. We don't trust the government, we don't trust the legal system, we don't trust the media, and we don't trust each other! We've undermined all authority, and with it, the basis for replacing it! It's like a six-year-old's dream come true!"
2009-10-23 11:13:33
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Genesis Posts: 71435 Incept: 2007-06-26
KD^2
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I didn't say it was easy....  ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-23 11:15:00
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Stemmit Posts: 2035 Incept: 2007-09-07
NYS
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Corzine signed this agreement, he understood it and knew he was risking NJ giving GS a nice revenue stream. Corzine also, persumably, knew the people at GS who signed for them. My take on this is that Corzine knowingly 'risked' NJ taxpayers giving GS tax $'s. ---------- The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men. Blessed is he who in the name of charity and goodwill shepherds the weak through the valley of darkness, for he is truly his brother's keeper and the finder of lost children. And I will execute great v Last modified:
2009-10-23 11:45:26 by stemmit
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Knobcreek Posts: 940 Incept: 2009-02-06
Near TN & VA, but not SC
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Sure Corzine did....the GS oath of loyalty is never shed.
2009-10-23 11:48:13
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Tat668 Posts: 1700 Incept: 2007-09-09
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Quote:Sure Corzine did....the GS oath of loyalty is never shed. Wonder how much GS stock is he holding! ---------- "Patience grasshoppers.... but your time to eat the bugs is coming......."- KD 9-1-2009 "This marks the beginning of the end."- Barack Obama 2-26-09
2009-10-23 11:49:42
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Pabloescobar Posts: 5325 Incept: 2008-04-23
Pacific Northwest
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The real issue, as Gen points out in his headline, is Asymmetry in our information between the two parties. Caveat Emptor works fine when all information is available and presented. However, capitalism's success is dependent on a good deal between buyer and seller. Once it became OK to not have disclose all risks, and once there became no moral obligation of the seller to ensure that the buyer gets a "fair" deal, then the jump down the slippery slope began.... We've been playing a game of prisoners dilemma, and someone ratted.... ---------- “Science is built up with facts, as a house is with stones. But a collection of facts is no more a science than a heap of stones is a house.” - Jules Henri Poincare
2009-10-23 13:05:26
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Etz3l Posts: 9103 Incept: 2007-06-26
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Is there any scam inh which the Goldman thieves are not involved?
---------- Treating the symptoms of financial corruption isn’t the same as removing the causes.
2009-10-23 13:12:25
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Burtoby Posts: 521 Incept: 2007-10-28
Arlington,Tx
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No
---------- Tryin' to turn 6 figures into 7.
2009-10-23 15:07:03
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Raingod Posts: 1067 Incept: 2008-08-29
Tastes Like Chicken
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Maybe the badger game.
---------- I have even intermittenter access than I did over the summer. No idea when I can check in.
2009-10-23 15:09:32
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Snowman Posts: 1040 Incept: 2009-03-09
avoiding yellow snow
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FOlks, NJ isn't exactly blameless. See minutes from a very improtant meeting NJ had with Goldman last fall, http://www.state.nj.us/ttfa/about/pdf/05.... btw, Vivian Altman was the chief advisor working with NJ on financing. From her newsletter Sept 06 where she is chairman of the New Jersey Educational Facilities Authority: "Last fall, NJEFA adopted a Swap and Derivative Policy to promote the careful and informed use of derivatives by the Authority and our clients. To our knowledge, it was the first derivatives policy adopted by a conduit issuer anywhere in the country." And, by the way, during this time she was VP in charge of North East public finance at JPMChase. She now works for Janney (boutique muni finance shop).
2009-10-24 07:15:30
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