New Orleans levee bonds pulled as MBIA won't insure

[NNN0LHI]

http://www.thejournalnews.com/apps/pbcs.dll/article?AID=/20050910/BUSINESS01/509100348/1066

A $36.3 million bond offering for the New Orleans levee system was canceled after MBIA Inc. terminated its agreement to insure the debt because of damage caused by Hurricane Katrina.

Armonk-based MBIA is the largest bond insurer in the world.

The bonds, underwritten by George K. Baum & Co., were priced last September to refinance debt that was sold to pay for repairs to the levees, embankments, breakwaters and other flood protection facilities surrounding New Orleans. The securities were so-called forward delivery bonds, meaning they are sold and priced in advance and delivered to investors months later.

MBIA wouldn't insure the bonds "due to the material adverse change in the financial and operating condition of the District of Orleans Levee resulting from the devastating damage caused by Hurricane Katrina," the company said in a statement e-mailed by spokesman Michael Ballinger. "It was a condition to MBIA's commitment to issue the policy that no material adverse change occur."

[merwin]

1. There needs to be federal laws enacted NOW to stop things like this.

[AX10]

2. Oh, BULLSHIT! If you or I sign an agreement,

we better abide by it or ELSE. But when Wall Street sees it's interests at risk, oh, then it's A-OK to pull out of the contract WITHOUT any penalty.

It's called FACSISM!

[Trillo]

3. It wouldn't surprise me if they had an "act of God" termination clause.

I agree, though, that when little people have "acts of God" in their lives, especially bad financial circumstances that are essentially "out of their control" (act of God), they are held accountable to and responsible for agreements they've made. Whereas Wall Street has the lawyers and connections to conveniently dismiss agreements they've made for circumstances that are similarly "out of their control."

It's one hypocritical mechanism, of many, that has led to the American citizen being enslaved by the Corporatists.

And so begins the economic crisis for the bigger entities that will drag all the rest of us along.

[high density]

4. Yet another dirtbag company shows itself

I think this one is even worse than all of the assholes who are sending our jobs overseas.

[KamaAina]

5. This is just the beginning

Big Insurance, mostly Bush**co supporters, can basically dictate what gets rebuilt, how, and by whom.

N.O. and La. have to find a way to self-insure. After Hurricane 'Iniki hit Kaua'i (on Sept. 11, 1992!), all the private insurers pulled out of the Hawai'i market, forcing us to set up a Hurricane Relief Fund.

After the private insurers came back to Hawai'i a few years later, the fund became a giant political boondoggle, sort of a legislative slush fund, but that's another story...

edit: speling

[IndyJones]

6. Who negotiated that BS deal in the first place? They obviously had

an "out" to pull their backing in certain circumstances. Whoever negotiated that deal was an idiot. Of course they will pull it if they are allowed to...that's after they took a big fee for signing in the first place, no doubt.

[Wordie]

7. I am a financial naif...what does this mean to NO? n/t

[SoCalDem]

8. It means that a lot of property will be "condemned" and

the recent SCOTUS decision on eminent domain will be going full bore in NOLA, as soon as the water recedes enough..

The FEDERAL govt will step in to fix the levees & flood walls (our tax money)...and to "re-coup" some losses, "certain" developers (Think Stepford meets Disney Vegas) will be buying up parcels of land for pennies on the dollar (problems with insurance, ya know??wink-wink)..

They will build up their ticky-tacky condos, chain restaurants, casinos, hotels, townhouses, and once done, they will suddenly "find" people ready to insure them..

The "missing element" in New² Orleans? ...Poor folks..

Employees for the "new" businesses will come form the pool of newly poor folks...the ones who will now inhabit cracker-box apartments at the edges of the New² Orleans..These are the ones who lost their homes, and got diddley squat from FEMA..maxxed out their plastic while evacuated.. They will be the new "server" class..

The rich heritage of people who used to live poor in NOLA, will be so thoroughly scattered across the US, that they will have adapted to their new surroundings..Most will never come back.. Even if they did, they could not afford to live in New² Orleans

[Wordie]

9. Oh jeez...that's just what I was afraid of...is there any congressperson

who is trying to prevent this from happening? Who will stand up? Could they? Is there anything anyone could do???