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Where Borrowing $105 Million Will Cost $1 Billion: Poway
Schools - (www.voiceofsandiego.com)
Last year the Poway Unified School District
made a deal: It borrowed $105 million from investors to fund a final push in
its decade-long effort to revamp aging schools. In many ways, the deal was
unspectacular. Some of the money was used to pay off previous debts from
delayed and over-budget construction projects. The rest went towards finishing
upgrades that Poway taxpayers had been promised as far back as 2002. To a
casual observer, it was just another school bond. But Poway Unified’s deal was
far from normal. In 2008, voters had given the district permission to borrow
more money to finish its modernization, and they had received a big promise
from the elected school board in return: No tax increases.
A storm is brewing and will strike when market participants least expect it. - (www.marketwatch.com) It has been all quiet on the Wall Street front. Too quiet for Nicholas Colas. Stock market volatility is near its low points of the past three years, as measured by the CBOE Volatility Index, or VIX. To Colas, ConvergEx Group chief market strategist, a storm is brewing and will strike when market participants least expect it. The challenge then will be to stay standing. “Be mentally prepared for volatility,” Colas said. “Traders know that if something happens to the market that really scares you, you weren’t prepared and positioned for it.” Besides being troubled by investors' complacency, Colas said the U.S. market doesn’t seem healthy. “U.S. stocks got a pass in the first half of the year because Europe was so sloppy,” he said. Going forward, investors’ scrutiny is going to circle back to the U.S., and they might not like what they see.
An entire generation of investors hasn’t made a buck. - (www.nytimes.com) Let’s stop with the excuses. You’ve no doubt been reading a
lot about a “crisis of confidence” on Wall Street in recent days after software
problems at a big trading firm sent the stock market, briefly, into a tizzy.
Everyone is hyperventilating at the errant trades at the Knight Capital Group — suggesting, in the words ofArthur
Levitt, that these malfunctions “have scared the hell out of investors.” The
problems at the firm were immediately lumped together with Facebook’s
glitch-filled initial public offering, the flash crash of 2010 and the
rescinded public offering of BATS Global Markets, among others. Apparently — if
the experts are to be believed — these computer errors are the reason “investors are fleeing the markets like never before,”
Dennis Kelleher, president of Better Markets, told The Los Angeles Times.
Dozens of articles about the trading blunder included some form of that
contention, using statistics showing that $130 billion or more had been
withdrawn from mutual funds over the last year or so.
As Libor Fault-Finding Grows, It Is Now Every Bank for Itself
- (www.nytimes.com) Major banks, which often band together when facing
government scrutiny, are now turning on one another as an international
investigation into the manipulation of interest rates gains momentum. With
billions of dollars and their reputations on the line, financial institutions
have been spreading the blame in recent meetings with authorities, according to
government and bank officials with knowledge of the matter. While acknowledging
their own wrongdoing, institutions are pointing out actions at other banks that
they believe are worse — and in some cases, extend to top executives. One
official involved in the case said that banks are emphasizing that “we’re not
as bad as the next guy.”
Why the 'long, painful correction’ is nowhere near over - (www.telegraph.co.uk) Where were you when the global financial crisis began five
years ago this month? I remember the start of the credit crunch in August 2007
as if it were yesterday, ironically because I nearly missed it altogether. When
we headed off to our friends’ log cabin for our summer holiday in the New
England woods all was well. When we emerged a couple of weeks later all hell
had broken loose and the journey to today’s income-hungry world had begun. The
events of which we were blissfully unaware as we enjoyed our Thoreau at Walden
Pond moment added up to the first full-blown panic of a crisis that had been
quietly brewing for the six months since HSBC blamed US sub-prime loans
(whatever they were!) for its first ever profits warning.
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