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Strategies & Market Trends : Classic TA Workplace

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To: yard_man who wrote (66705)	2/18/2003 6:25:33 PM
From: reaper	Read Replies (1) of 209892

yeah, i saw this earlier. what farking morons. they're going to insure $5 billion in debt for fees of $17.5mm annually. that is a whopping return of 35 bps on the capital they are putting at risk. they say municipalities "rarely" default. how much 'rarely' do you need to wipe out your fee income? does nobody see the conflict of interest here? Calpers provides benefits for CA state employees. those employees are faced with losing their jobs due to state and local budget cuts. so in comes Calpers to insure bonds, so that credit ratings are more attractive, so that those state employees don't lose their jobs. look, after what happened in CA with workers comp this idea is (i) doomed from the start; and (ii) is REALLY bad news for MBI, ABK, RDN and others who provide insurance to municipalities. Calpers getting into this market is going to f8ck up pricing even worse than it already is; the last thing MBI, ABK et al need right now is stupid, irrational competition from a bunch of conflicted bureaucrats. f8ck, Californians are sooooooo stupid. Cheers

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