http://www.tulsaworld.com/news/article.aspx?articleID=20080430_12_OKLAH04125
Senator says bonds are bad funding choice
By Associated Press
4/30/2008 3:19 PM
OKLAHOMA CITY -- An Enid senator has sent a letter to his colleagues warning that a proposed bond issue of up to $500 million for a variety of projects would be a poor financial decision because of the current bond market.
In the letter, Sen. Patrick Anderson, a Republican, says a business associate who is an expert on bonds has told him now is "a terrible time" for Oklahoma to be issuing new bonds.
Anderson said just last week, the state had to refinance $400 million in student loan bonds because of the downgrading of several of the nation's bond insurance companies.
According to the senator, the state has been forced to pay bond holders interest up to 16 percent on some of the student loan bonds.
Anderson urged senators to resist making a political decision on bond projects. He said the same conditions that caused a nationwide student loan crisis still exist, making it poor financial planning to issue bonds at this time.
By Associated Press
A bond is not a bond..... the problems in the student loan market should have minimal impact on general obligation bonds sold by creditworthy issuers.
For the senator to point to an auction rate security as evidence of it being a bad time to issue any kind of bond financing indicates a serious lack of understanding of the subject matter of which they are speaking.
Of course, in FB's world, any public project is only undertaken to enrich the local elitist and as such should never be undertaken... regardless of the financing.
I wondered about that, which is why I posted it...I was just told that Bonds were not a bad idea, at least to look at by a municipal financial adviser.
I will grant you that since I think municipal bonds offer a particularly attractive opportunity from an "investor" standpoint that it is not the best time to be an "issuer" of bonds.... but, that does not mean that municipalities should shelve every plan to invest in local infrastructure.
Again, every project should stand on its' own merit and not be painted with the broad brush stroke of the esteemed senator.
The problem is LACK OF CONFIDENCE!
The mortgage debacle resulting from fraud and lack of government regulation is going to be painful for several more years. The consumer credit crunch to follow will be hiddeous.
But the State Of Oklahoma should be credit worthy reading all the pundits posts here saying things are terrific.
It will take years to regain the assurances necessary to get our economy back on track. If McCain wins, it may take 50 to 100 years.
quote:
Originally posted by FOTD
The problem is LACK OF CONFIDENCE!
The mortgage debacle resulting from fraud and lack of government regulation is going to be painful for several more years. The consumer credit crunch to follow will be hiddeous.
But the State Of Oklahoma should be credit worthy reading all the pundits posts here saying things are terrific.
It will take years to regain the assurances necessary to get our economy back on track. If McCain wins, it may take 50 to 100 years.
I'll say it again.. you are not helping. Without downplaying the risk of a consumer that is pinched, to say that a "hideous" consumer credit is coming is nothing more than an opinion..... not a foregone conclusion.
Before you go off on some tirade about how the mortgage crunch is going irrepairibly damage all states and municipalities finances, show me you know a little bit about how the bond market works and tell me what it would take for Oklahoma to become "non-creditworthy".
You don't recall the days of being "red lined".
I only know what I read.
I support bond issues for our city.
Get off my back.
quote:
Originally posted by FOTD
You don't recall the days of being "red lined".
I only know what I read.
I support bond issues for our city.
Get off my back.
Dude, you waded into this thread.
And yeah, I remember the days of being "red lined". In fact, the very roots of the entire subprime mortgage issue can be traced back to the well intentioned push to end that practice. The whole "community reinvestment act" or CRA is what morphed into the monster we have now.
If you want to discuss issues from a basis of fact and knowledge then bring it.... if you want to come by a thread and throw down some flaming bag of turds and then cry foul when asked to provide some basis for your assertion then then you might want to recheck who is posting on the subject... cool?
Dude? Ha. Times are changing.