ColoradoPols.com - Recent Comments

I agree

Tazistan Jen — Fri, 12 Mar 2010 19:54:40 GMT

And being the wonkish sort I've read a lot of it. I am just so tired of the lack (in most of the media) of even any pretense of caring about effects on people instead of just on elections. What use are they? As Jon Stewart would put it, they are hurting America.

Amazon already bills sales tax for every state

RedGreen — Fri, 12 Mar 2010 19:51:37 GMT

for Target transactions, which it handles on its site. And it started collecting tax on Amazon sales for New York state two years ago after New York passed a law requiring it to. It's not a matter of whether Amazon can "figure it out," it's something different than that.

reminds me

BICora — Fri, 12 Mar 2010 19:51:13 GMT

Which worthless poc would that be?

And it's the "reminds" part that has me thinking that this is a politically motivated cry of fire. It sounds potentially horrible. How could the Board be so shortsighted? Even Board members who voted yes are saying they just don't understand. Who did what when and why?

See, I'm no bond trader but the politics smell fishy.

Answer

cscottrun4it — Fri, 12 Mar 2010 19:49:06 GMT

I am that Christopher Scott, and you give me more credit than I deserve -- I lost 20% to 80%. After the election, I went back to doing what I was doing before running for office -- working with a metro-wide organization of parents (DEAN) to improve our public schools. If you'd like to contact me or get involved, my e-mail is made public through the site.

analysis of actual impact of legislation

BICora — Fri, 12 Mar 2010 19:46:09 GMT

Is out there.
It's boring and makes terrrible suod bites- no dealth panels, no federally funded health care for illegal immigrants, etc.

It's much more exciting to spout of on the crazy stuff.

As usual all politics, no policy

Tazistan Jen — Fri, 12 Mar 2010 19:39:06 GMT

I am getting so tired of reading endless analyses of how passing or not passing this bill will affect the elections, while seeing practically no discussion of whether the bill will help people or not. I know, how naive, but isn't there supposed to be some small amount of interest in what legislation does for constituents, and not just for electoral prospects?

Oh, let's just say it reminds me of the recent use of a

The realist — Fri, 12 Mar 2010 19:38:35 GMT

worthless piece of crap in the financial industry that brought the US to its knees. Please note that I didn't say it was the same or similar - it just REMINDS of that experience. And we still haven't adequately dealt with that disaster in federal regulations.

echo, echo,

BICora — Fri, 12 Mar 2010 19:38:35 GMT

I agree.

I guess we'll just have to wait until August

Gray in the mountains — Fri, 12 Mar 2010 19:37:11 GMT

to see the result. Imagine how many polls will be released during that time and we'll get nuances analyzed from each and every one. After the primary we'll revisit the most recent and analyze which were the closest.

I wish there were not a primary. I support Bennet and I am working to try to assure his selection by Dems. But, if Andrew wins the primary he'll have my support.

Too wonky

Tazistan Jen — Fri, 12 Mar 2010 19:34:22 GMT

I predict no one will pay any attention to this because it is way too wonky and hard to follow. I bet not one person brings it up at my caucus.

DPS is $1.6 billion in debt and $654 million upside down

BICora — Fri, 12 Mar 2010 19:33:00 GMT

Are you saying this is because of this interest rate transaction?

DPS swapped a fixed interest rate (4.859%) for a variable rate tied to the 1-month LIBOR

BICora — Fri, 12 Mar 2010 19:30:51 GMT

I don't follow.
Was DPS paying only 4.859% on their debt before the swap?

What is the Den Post talking about when they wrote

The transaction allowed the district to pay off a $400 million pension shortfall and refinance about $300 million of debt at a lower interest rate than its original 8.5 percent.
...
That meant the district's interest rate stays at just under 6 percent over 30 years.

Is the "just under 6%" the 4.859% yuo are referring to?

Correction

cscottrun4it — Fri, 12 Mar 2010 19:28:38 GMT

DPS is $1.6 billion in debt.

thanks.

Jersey Transplant — Fri, 12 Mar 2010 19:23:45 GMT

i figured i was a little bit behind the curve on this, and the 6.8 mil debt for the Dems still puts them ahead of the GOP by about 10 mil, which makes me a little more comfy; i just worry about the whole "whom do they serve" thing, because i KNOW there isn't as big a small-online-donor situation going on right now for the Dems.

I'm honestly surprised, i really thought the GOP would have more net COH at this point. maybe the message is controlled, but the constituency isn't ready/willing/able to cough up what counts. the bucks.

guaranteed returns

BICora — Fri, 12 Mar 2010 19:22:52 GMT

The DenPost article says DPS refinanced some existing debt into a lower interest rate. Seems like a good move.

didn't draw one comment

BICora — Fri, 12 Mar 2010 19:20:13 GMT

It would have drawn all kinds of comment if either elected legislator subsequently put out a press release claiming that either bill was somehow contributing to impropriety on the part of the Speaker of the House, current or former.

By all means, the Board should be informed. Absolutely, Superintendent Boasberg should provide whatever information the Direcotors are requesting so that they can understand it. And if he's not, then a press release fromt he directos might make more sense.

And now you're also adding the claim that whatever this "complicated financial device" was, it was inadequately regulated or monitored? Why do you think that?

wow.

BICora — Fri, 12 Mar 2010 19:14:50 GMT

Of course, AR would have refused any support (donations) from outside Colorado.

I hadn't been thinking that this could have been Big Ed's vetting AR to see if it was like Lincoln/Halter and worthy of Ed's support and promotion. This is kind of big news.

I saw AR last night on MSNBC with Chuck Todd. He looked and sounded tired, especially sat the beginning. Chuck asked him the same question twice, AR tried to pivot, but Todd rephrased the question and then sort of gave up and moved on.

or a sign of our decline

Barron X — Fri, 12 Mar 2010 19:14:19 GMT

What if...

BICora — Fri, 12 Mar 2010 19:08:46 GMT

any new adjustment applied only to those who haven't paid FICA yet?

Say, SS is amended to have an actuarial table included that could be used to adjust the magic age as the life expectancy changes.

I'm with you on the income cap, but I think that's going to have to be in increments. And there are other issues- people who canshift their income to dividends and the self employed who can avoid FICA. But you're right.

Reply to MADCO

cscottrun4it — Fri, 12 Mar 2010 19:07:49 GMT

Sorry for not citing sources better.

Can you provide more explanation or a source that describes what you call the "best practice"? -- I had to use a few sources for this. They include --

Understanding interest rate swaps By Mary S. Ludwig

Synthetic Fixed Rate - Interest Rate Swap by George K Baum & Company

Negotiating Synthetic Fixed Rate Loans, Derivatives White Paper, FEBRUARY 2010, Number 7, by Porter White and Company

There are many other sources available if you search Google using the search term "synthetic fixed rate swap." These are just the three I found most helpful.

Is DPS the only CO school district participating or that uses swaps? -- I'm not sure, but what I am sure of is that DPS is $1.6 billion in debt and $654 million upside down on its balance sheet according to its 2009 Comprehensive Annual Financial Report, or CAFR. The link to this document on DPS' web site is currently broken so I have loaded it here: 2008/2009 CAFR. Check page 36 of the PDF.

We checked the balance sheets of other school districts in Colorado. JeffCo is $587 million in the black. Douglas County schools are $114 million in the black. Adams 50 is $29 million in the black. DPS is even worse off the Detroit Public Schools, which is $486 million in the red.

(To verify these numbers, check the CAFRs for each of these districts.)

What was the DPS instrument that was swapped from? Ie, was it an interest bearing instrument paying DPS? If so, what was it? Or was it debt DPS was paying- and if so what was it? -- Swaps are all about an exchange of interest rates rather than the principal or debt associated with the interest rates.

So, DPS swapped a fixed interest rate (4.859%) for a variable rate tied to the 1-month LIBOR (at 0.2291% for February 2010).

Under the swap, DPS and its swap counterparties exchange checks each month. The amounts of these checks are based on the interest on the principal amount of the bonds, in this case $750 million.

So, for February 2010, DPS wrote a check to its swap counterparties for $3 million [($750 million * 4.859%)/12] and received a check back from the counterparties (JP Morgan/Bank of America/Royal Bank of Canada) for $288,000 [($750 million * 0.2291%)/12].

The swap was not trading debt or the principal raised by the bonds. It is purely about trading money based on interest rates. As stated above, it was a gamble. DPS thought it would outsmart JP Morgan and company on the market.

Muhammad Ali Hasan

RedGreen — Fri, 12 Mar 2010 19:05:27 GMT

That's a remarkably honest (or at least honest sounding) and complex answer, and I salute you for it.

I think the chances the Personhood debate is going to lead to meaningful and useful dialogue, however, are slim.

One thing that is clear the last 18 months

Ray Springfield — Fri, 12 Mar 2010 19:03:18 GMT

One thing that is clear the last 18 months is that there are no guarantees in the financial markets.

Contrary to the general backlash, I don't fault either the Bush Administration nor the Obama Admnsitration for keeping BOA, CHASE, and CITI open. I'm sure the majority of the public likes to think that they can trust they can cash their paychecks.

In my opinion, the fault lies in lack of regulation of derivatives, and no oversight of the rating agencies.

Dude

BICora — Fri, 12 Mar 2010 19:02:05 GMT

you are my kind of political analyst.

This makes sense - and it's why we're in a dog fight for the seat, though apparently most of us don't know it yet.

The reenergized Colorado R's are feeling confident and, well, energized. We're red again is how one neighbor described it. The D's are jerking around in a primary arguing over... endorsements and donations.

Hey Wade, in keeping with your ethics on this,

Middle of the Road — Fri, 12 Mar 2010 19:00:30 GMT

there are a couple other brand new shiny users today that you might also want to pose that question to. I did your homework for you on one of them.

I see you signed this as Christopher Scott.

Middle of the Road — Fri, 12 Mar 2010 18:58:15 GMT

Are you the same Christopher Scott that ran for the DPS Board in 2009 and lost to Mary Seawall, 29.5% to 70%? I believe you ran on an anti-Bennet campaign, no?

Like Wade, I get suspicious when someone opens an account here. I guess Wade and I are just two old cynics that can't help but wonder if there's an agenda involved.

I was surprised

BICora — Fri, 12 Mar 2010 18:52:19 GMT

by all the people pledging their energetic support and then claiming that Maes was a virtual lock.

I was driving or I would have called to see if Maes could put some explanation to his budget ~~fantasies~~ ideas.

- O&G regs (killed production)
- 4000 state employees terminated (which,why)
- CO state employees are amongst the highest paid public employees in the country
- zero based budgeting (how does he think this will help)

Months ago
when he made these and other unsubstantiated claims he said he would get specific that it was too early, "months before caucuses".

Yes, I think this is an issue that needs discussion and clarification

redstateblues — Fri, 12 Mar 2010 18:48:30 GMT

It's very complicated. I'm not sure I understand it fully myself.

And to be clear, I was saying that the driveby here is coming from Kaplan and Jimenez--the people on the board who voted for the interest rate swap. It would have been shockingly bad blogging if this story hadn't been posted.

"Except why did she vote for it if she didn't understand it?"

The realist — Fri, 12 Mar 2010 18:46:42 GMT

People make mistakes in voting all the time - and this story of a voting mistake didn't draw one comment earlier this week: http://www.chieftain.com/artic...

So, we shouldn't get sidetracked too far in motivations, or lack of them, for this current story. If DPS or any other governmental entity is suffering financially due to a complicated financial instrument that few could be expected to understand, then the history of how the decision was made, who made the decisions, and was DPS (or any other government entity) taken advantage of, should be researched and told. If we don't figure out that such complicated financial devices need to be better monitored and regulated, then we'll just continue to repeat our mistakes.

Bad timing/ drive by tarring

Joseph David — Fri, 12 Mar 2010 18:44:49 GMT

I do have to think that the timing of this discussion is perhaps unfortunate. However, I really think this needs to be explored further. The practice of investing retirement or public funds in anything other than guaranteed returns has always seemed a poor one to me.
I heard Ms Merida on Mario's show. I thought she did a stand up job, including herself in culpability when apparently she hadn't been elected to the DPS board when these decisions where made. I liked that.

There is simply no reason to believe

BlueCat — Fri, 12 Mar 2010 18:38:26 GMT

that AR didn't know exactly what Caddell was about when he first brought him into his campaign. There is nothing Caddell could possibly say or do that ought to surprise anyone who has been involved in politics for the past decade. AR deserves whatever problems this toxic association brings him. Did he think no one would notice? I honestly think AR is a small pond big shot not ready for the big show.