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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (371677)	2/22/2008 6:52:00 PM
From: TimF	Read Replies (1) \| Respond to of 1573325

Can you precisely categorize the problem in your own words in a sentence, or two? Is it that some organizations put out bonds that they now can't pay? Well investments come with risks. Why should that justify a bailout (whether from government funds, or from banks pressured by the government) The municipalities that issued bonds, got a break on the interest through using the insurer, if the insurer took unjustified risks 1 - That's not the banks fault, 2 - Bailing them out increases the chance that they or someone in a similar position will again take unjustified risks. If the municipalities have to pay higher interest in the future, well 1 - They chose to work with these insurance companies, and 2 - They enjoyed the lower interest rates then their own fiscal situation would warrant while the insurance lasted. They also got another break by issuing variable rate bonds, if that comes back and hits them now its because they assumed risk when they didn't fix the rate. If the bond insurance companies aren't bailed out maybe states and municipalities will be more careful about the bonds they issue and the organizations (if any) they have insure them. But instead Spitzer wants to use New York's power as a regulator to force someone else to pay for the problem.