Unfortunately your browser does not support IFrames.
People around the world are shocked to see images flooded NY subway system. After all, how can such a critical infrastructure not be retrofit properly to be protected from floods?
The answer turns out to be ‘interest rate swaps’. The topic was covered here in the context of Cold Spring Harbor Lab with detailed analysis of balance sheet.
Can Cold Spring Harbor Lab’s Tumor Turn Malignant?
A Quick Note on CSHL’s Derivative Losses
We do not have time to go through the financial numbers of New York transit authority (MTA), but we doubt the situation is any different. Here is a report on the extent of losses –
We got wind of the report, “Riding the Gravy Train – How Wall Street is Bankrupting our Public Transit Agencies,” through WNYC, which ran a story on how the deal has caused the New York Metropolitan Transportation Authority (N.Y. MTA) to lose almost $114 million a year and how the agency will likely continue to lose money on the deals for the next 30 years.
Massive swap-based losses are hollowing out public infrastructures in all parts of USA. Remember strikes by public schoolteachers in Chicago few weeks back? Swap losses were there too.
Last week, the Chicago Teachers Union launched a campaign for the Chicago Public School system to renegotiate costly interest rate swaps with four major banks: Bank of America Corp., Goldman Sachs Group Inc., Royal Bank of Canada and Loop Capital LLC. The union claims the interest rate swaps cost the Chicago Public School System $35.9 million in the last year and that the deals with the banks have produced a $120.7 million net loss for the school system since 2003.
