municipalities still swaps betting

Nov 26: Deutsche Bank Swap Lures County as Budgets Crumble
http://www.bloomberg.com/apps/news?pid=20601109&sid=aUYLG7W1nGpM&refer=exclusive

'The interest-rate swaps, which involve $42 million of fixed-rate debt, guarantees
Dauphin County $816,000 the first year and then wagers taxpayers’ money that
short-term interest rates beginning in September 2009 won’t exceed 7 percent.
Those rates are 2.2 percent now.'

“If everything works perfectly, it might be an OK idea. But usually, everything
doesn’t work perfectly.”

'A review of Pennsylvania Department of Community and Economic Development
records shows that at least 185 school districts, towns and counties in the state
have entered into derivatives deals with Wall Street since 2003, when state law
was changed to explicitly allow the trades.'

'At least 31 states and District of Columbia face a combined budget shortfall of
$24B this fiscal year, the Center on Budget and Policy Priorities in Washington
said Nov. 12. The estimate on Oct. 10 was $8.9B.'

'About 30 banks, brokers and insurance companies have been subpoenaed in
the two-year probe, and at least nine individuals have disclosed they’re targets
of the investigation.'