School District Owes $1 Billion On $100 Million Loan

NPR: All Things Considered ^ | Dec 7, 2012 | Richard Gonzales

[KoRn]

What the hell?

Did they go to one of those ‘Payday Loan’ places for the loan? ROFL! I bet each and every one of their classrooms has one of those expensive/fancy ‘smartboard’ things, and every student has an iPad for their “studies”.....

Those idiot politicians, and the morons that voted for them obviously deserve whatever they get. I hope they have to go bankrupt! (they probably already ARE, just not on paper quite yet)

[EternalVigilance]

It’s way past time to separate school and state.

[E. Pluribus Unum]

This is what happens when Eric Holder’s people get to run things just because they’re Eric Holder’s people.

[Nervous Tick]

Ramsey says it was a good deal, because his district is getting a brand-new $25 million school. "You'd take that any day," he says. "Why would you leave $25 million on the table? You would never leave $25 million on the table."

Charles Ramsey, Affirmative Action school board member, says: "Math is HARD!"

[Nervous Tick]

>> Did they go to one of those ‘Payday Loan’ places for the loan? ROFL!... Those idiot politicians

That would be bad enough.

It *could* just be sheer stupidity... but it has the stench of corruption to me.

My guess is, a portion of that $30+-million interest payment ends up in Ramsey’s personal bank account.

[bgill]

Woohoo! I have a checkbook full of blank checks so I can spend until it’s empty, wheeeee!

[EDINVA]

Lockyer is the one condemning the CAB practice; others are defending it.

[Revel]

Probably these instruments were designed by Goldman Sachs if the truth be known.

[Lancey Howard]

I wouldn't say Lockyer is "condemning" the CAB practice, exactly.

Back in the '90s, the state of Michigan banned capital appreciation bonds altogether. But Lockyer says California needn't go that far. He supports a series of reforms such as capping the payback of debt to four times the amount borrowed.

Lockyer sounds more like your typical scumbag Soviet Democrat.

[Ditto]

I call BS on these numbers. Unless there were derivatives involved I can’t see how these could compound so much.

Read the article again.

Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.

They made no payments for years on either interest or principle, so the interest just begins compounding on itself as well as on the principle. In essence, they not only didn't make any payments for whatever the term was, but also borrowed the interest on that principle every month at the same interest rate.

They were idiots to take out those kind of loans, and what ever oversight agency they might have were idiots to allow them to do that.

[Ditto]

"We'd be foolish not to take advantage of getting $25 million" when the district had to spend just $2.5 million to get it, Ramsey says.

ROTFLMAO. There is a sucker born every minute, and Ramsey was one of them.

[RetiredTexasVet]

The clue is that they refer to themselves as “educators”, a sure sign that they are not teachers or educated.

[itsahoot]

Of course they blame the terms of the bonds, they can’t admit they were blithering stupid.

Yes they are and I would think that the lenders would have boards that would wonder about the wisdom of making such loans.

I suspect maybe they know they can stick the taxpayer either way. The lender and borrower both are pretty stupid, or maybe they are just corrupt? Naw, couldn’t be.

[GeronL]

or maybe they didn’t care because it’s not their money?

[KoRn]

"it has the stench of corruption to me."

Without a doubt. Has the same feel as the Jefferson County Alabama case, where something very similar went down with their new sewer system.(obviously the very best over a billion dollars could buy lol). If you aren't familiar with it, please Google it for some additional entertainment. When crooked politicians meet crooked bankers, very bad things tend to happen for the tax payers.

[blueunicorn6]

I wonder who Ramsey voted for this last election?

[poobear]

“Now, when I used that excuse, my mom bitchslapped me.”

Yep! Followed by a lashing with whatever was within her reach ;D!

[trebb]

The sad thing is that these school districts are where the kids learn things like “economics” and other ways to screw yourself and your neighbors by increasing the amount of taxes it takes to support their sorry a$$e$..