Our Pal Fletch: Here is a good story. Joe Mysak from Bloomberg News writes: “New Jerseyans can't blame Governor Jon Corzine for coming up with a big deal. That's what Wall Street guys do. On Jan. 8, Corzine, the ex-Goldman Sachs banker who is in the third year of his first term, announced his long-awaited plan to fix the state's finances. Now he has to convince New Jerseyans that selling a whole bunch of bonds to pay off another whole bunch of bonds makes sense. The key feature of the plan is for the state to sell the toll roads, except not to some foreign engineering firm, as the city of Chicago and the state of Indiana have -- but to itself.
Eric: AM I JUST NOT TOO BRIGHT OR DOES JERSEY JUST TAKE THE GENERAL OBLIGATION BONDS AND CONVERT THEM TO REVENUE BONDS..WHICH I ASSUME ARE HARDER TO RATE AND HENCE A HIGHER YIELD...unless OF COURSE NJ RAISES THE TOLLS ON THE TPK AND GS PARKWAY TO MAKE RATING AGENCIES AND BOND HOLDERS HAPPY....WHICH IS JUST great FOR COMMUTERS NOW WITH GASOLINE AT $3.65 A GALLON.
Our Pal Fletch: Read yesterday's NY Post on the toll hikes he envisions. NJ to become Liechtenstein (in the way in isolation). I'd be better off (more cost effective) as a driver to build my own road around NJ than to drive thru it.
Eric: So besides The Street doing their usual fee fest and swap gouge on the state, who the hell benefits from this?
Our Pal Fletch: Well, this is why you guys (Monkeybusinessblog.com) are doing this. The average person, no matter how well educated..if they didn’t work on the Street, probably wouldn’t have a clue where all the money went and exactly why his tolls and taxes went up. He just gets pissed off…and then pays his higher tolls and taxes.
Eric: Can you imagine if just one or two or three people felt empowered enough to walk into a town board meeting or a state legislature meeting and just started asking simple questions like, “show me the cost benefit of this ‘refinancing’….oh and you disclose the fees we are paying our dear friends who are underwriting the bonds…oh and while your at it, make sure you include the bid/offer on all the interest rate swaps you put on with the dealers…I assume you checked away to get the best level. And on that point, with all the fees we are paying shouldn’t we get done at least at MID??”