Another day, another group of American taxpayers forced to cough up tens of millions of dollars to Wall Street over a little-noticed provision in a “swap” contract gone sour. Last week we brought you the parallel tales of sudden budgetary meltdown in Tennessee, Alabama, Illinois, New Mexico and Philadelphia that in part prompted the credit rating agency Moody’s to issue a blanket negative credit outlook on all bonds issued by American cities and towns. Today it’s the Indianapolis Water Authority being screwed in a swap deal that might force the utility — and by extension, its customers — to cough up a collateral call of as much as $100 million.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=143871