(Bumped. This is important. - promoted by Charley on the MTA)
The details are mind-numbingly complicated, but it turns out that, due to a brewing perfect storm of factors, the Turnpike Authority may soon find itself on the hook for a loan payment of nearly $400 million. Needless to say, it doesn't have that kind of cash lying around, so the question of whether the state needs to step in to guarantee the Pike's massive debt (thereby hopefully staving off the giant payout) was discussed at a Senate hearing yesterday.
The deal involves mysterious instruments called "swaptions," as well as a bond insurer called Ambac whose share price is currently under a dollar, our bankrupt friends at Lehman Brothers, and the notorious UBS. A true morass. There's some detail on the transactions here and here, for the truly adventurous.
Perhaps the most depressing aspect of the whole story is this, from the first story linked above:
Despite a light legislative schedule, most Senate committee members did not attend Thursday's hearing.
Great. Not that this is a pressing issue or anything. (For the record: the members of the Senate Bonding, Capital Expenditures and State Assets Committee are Chairman Montigny, who was there, and Senators Creem, Hart, Donnelly, Michael Moore, and Knapik. Don't know who was there other than Montigny. A source reports that Chairman Montigny and Senator Donnelly were present. Shame on Senators Creem, Hart, Moore, and Knapik for missing a hearing of this importance.) |
