There is absolutely nothing the tax payer can do to stop these past errors in judgments nor can they do anything about this situation now. Why—-because the County does not have the moxie to sue the bank for out right deception and misrepresentation, look these types of deals happen across the country to almost every municipality and school district in the country. The deal involves some type of swap or derivative scheme which bordered on nothing more then the house dealing the cards and the player (the tax payer) loosing something——in the case of Northampton County it was——- according to the paper—- $6.8—$25 million——pick a number—you the tax payer will loose something.
Quoted from the article:
Northampton County Council President John Cusick compared the swaption to a polyester suit—it looked good at one time, sick but doesn’t today. “I don’t think that at the time they realized what they did,” Cusick said of the 2004 council.
If they didn’t understand the Multimillion dollar deal they were signing, why in heaven name did they sign it? Who knows—we have most school district in the area in the same boat and I don’t think you have heard the last of these types of problems.
Along with not hearing the last of this——I believe the screws are being tightened down as I write. I believe all banks still holding any paper $ involving Swaps and Derivative are looking at their positions with the eye to put themselves in first place in the food chain of being paid or at least on even par with any other banks involved in the transaction thereby maximizing possibilities of getting a piece of the action $$$ should the house of cards fall—–and I believe it is close to just that—-Falling—BUT what do I know.
If you are involved with your local government and they have debt (which one doesn’t) you should ask how the bonds are financed—-is it a fixed rate/timed bond or is it a Swap/Derivative type deal with viable rate floating % with heavy duty penalties $ to get out. FIND OUT—Northampton County did—so did— Bethlehem Area School District and in both cases it will cost the tax payer dearly.
We Shall See—–how this is to shake out—-don’t you think?