Monday, June 29, 2015

Let's not have this be Greensboro or North Carolina; "Puerto Rico governor says debts 'not payable'"; Greece in America, with some John 'financially illiterate' Hammer

A great deal of intelligence can be invested in ignorance
when the need for illusion is deep

Saul Bellow

"Puerto Rico Gov. Alejandro García Padilla said that the commonwealth cannot pay its roughly $72 billion in debts, the New York Times reported Sunday.

"The debt is not payable," it quoted the governor as saying in an interview. "There is no other option. I would love to have an easier option. This is not politics, this is math." The report said Puerto Rico would "probably seek significant concessions from as many as all of the island's creditors," including up to five years of deferred payments."
"from: Richardson, Betsey
to: George Hartzman, Justin Outling, "Phillips, Tom", "Picarelli, Michael",
"Bachmann, Anita cc: "Westmoreland, Jim", "Vigue, Mary"
date: Mon, Jun 15, 2015 at 11:26 AM
subject: answers

"Below please find the answers to Mr. Hartzman’s questions regarding the budget.

Based on the information provided here is the answer to Mr. Hartzman’s questions:

Please provide a total of the city's debt financed at short term variable rates.

It is $102,665,000."

Betsey Richardson, CMC, NCCMC
City Clerk
City Clerk's Office
City of Greensboro
"Hartzman claims to be a financial advisor,
so perhaps the Finance Department should hire Hartzman
to consult on the city’s investments.

He once spoke against a loan the city took out
at an interest rate of 0.01 percent
because it was a variable and not a fixed rate.

How much more would/will it cost to lock in a good long term rates
on more than $100,000,000 in short term variable debt,
if/after Greece and Puerto Rico default
and Greensboro gets stuck with much higher rates 
by having kept short term debt payments low
so the City could borrow even more under the debt payment cap
all of which may now likely be locked in at higher long term rates, 
costing City taxpayers much more over time?

And that rate is not a typo,
the city borrowed money at one-hundredth of one percent
and Hartzman found fault with that."

John 'financially illiterate' Hammer

So Mr. Hammer, now we have more than $100,000,000
financed with short term interest rates which can rise precipitously
instead of locked in long term low interest rates.

The City needs to refinance ASAP.

John Hammer sold his readers and the City
snake oil.

Meaning Roy Carroll may be highly indebted
in a great deal of short term variable debt, 
which may become unsustainable if rates rise to the point
where debt payments exceed Carroll's income.
Greece Monday; Some Recent Hartzman Economic and Financial Market Links

The Central Bank Emperors with no clothes; Greece Edition

"The world is defenceless against the next financial crisis"