Payday Loans in California: School Districts Owe $1 Billion on $100 Million Borrowed

This story here, as much as any I have ever read, perfectly exemplifies the complete parasitic, ponzi and entirely unsustainably criminal carcass of an economy that remains in the United States today. This is devastatingly frightening reading. The state of California is completely finished. From NPR:

Collectively, the districts have borrowed billions in loans that defer payments for years — leaving many districts owing far more than they borrowed.

“We’d be foolish not to take advantage of getting $25 million” when the district had to spend just $2.5 million to get it, Ramsey says. “The only way we could do it was with a [capital appreciation bond].”

Those bonds, known as CABs, are unlike typical bonds, where a school district is required to make immediate and regular payments. Instead, CABs allow districts to defer payments well into the future — by which time lots of interest has accrued.

In the West Contra Costa Schools’ case, that $2.5 million bond will cost the district a whopping $34 million to repay.

Perhaps the best example of the CAB issue is suburban San Diego’s Poway Unified School District, which borrowed a little more than $100 million. But “debt service will be almost $1 billion,” Lockyer says. “So, over nine times amount of the borrowing. There are worse ones, but that’s pretty bad.”

In some cases, districts are on the hook to pay back anywhere between 10 and even 20 times the amount they borrowed.

Merry Christmas from the Banksters.  Thanks for the bailout!

Full article here.

In Liberty,
Mike

10 Comments

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  1. Follow the Money… Who profited from making the deal? (kick back…)

  2. “Looks good to me, folks.” ~ Anonymous Loan Shark.

  3. http://publicsociology.berkeley.edu/publications/swapping/index.php
    See above for a report on how Wall Street is also ripping off the UC system. Also details how such profit seeking activities such as Hospitals and fancy dorm facilities for foreign students.

    http://keepcaliforniaspromise.org/383/they-pledged-your-tuition
    See above about how tuition and fee increases in the UC system have been about maintaining the UC’s bond rating as collateral for debt issuance.

  4. YOU paid the head school officals millions,YES there paychecks were in the millions at a lot of the colleges and universities and then the teachers were paid 60-100,000 per year,the students were treated like crap,cause the school officals made so much money they stopped caring if the kids learned anything,plus they lied about everything,and the schools approved big loans to the students from the banks after a few kickbacks to the school boards and deans of the universities,and then when america’s wars used up most of the tax money, they started borrowing money to keep their big paychecks coming,and then the whole credit thing really got out of control,and still no one said anything,now the education system is in total failure and the police protect the criminals, who ripped everyone off and the tax payers are crying about it?????stupid and lazy and cowardice, won’t save you in a system designed to screw you out of everything you own….the best part of all this is the women made their fagot girlymen husbands give up their weapons to the police,now they really can’t fix anything,hahaha,yea the losers in california really screwed their kids good………………..

  5. Just about everyone can feel evil when it gets near them,they start to get the weird hebe,gebes,then cold shivers run up and down their backs as the evil gets closer to them,most people who have this ability don’t understand what their feeling when it happens, ITS A REAL HONEST TO GOD DEMON APPROCHING YOU,and if you reconize what it is, you know your in danger, when I went to california to a concert in the mountains with an old sixies band,it happened to me,as I turned to see what was causing it I realized it was a california highway patrolman,coming right up behind us,after we moved to a different area it went away,hahaha,no wonder GOD is going to destroy california,its filled with this kind of evil everywhere we went there,glad we left…………..

  6. Who were then public officials when these deals were made. They should be annulled.

  7. What I find amusing is the public is swiftly dividing and self conquering over those blasted unions… Where a ten to one payoff to the tune of a billion dollars to creditors floating interest free leveraged cash from the Fed draws fringe blog coverage on occasion (no offense).

    It’s awesome really. The public is so malleable it is unthinkable what they might fall for when their backs are against the wall.

  8. I used them a time to two… I took a $500 loan that I kept open for 7 days. Things happened and I came up short for bills. This $500 loan cost me $65 interest in 7 days. But… Saved me from 5 ifs fees from my bank $32 each. So $65 was better than $160 in bank fees. Plus I did not miss any payments. Don’t lecture me on money management. Stuff happens. This loan saved me when I ad no other recourse. I won’t call mommy and daddy or Obama for a bailout.
    http://speedyloansearch.com/payday-loans/

  9. I have a question regarding these capital appreciation bonds, and the “donor investors”, are the bulk of donor investors collecting interest annually from their “CAB investments”? Or are they all “parked” waiting for a massive payout 20-30 years from now?

    If so, where are the bond interest payment revenues coming from? (Other investors?) If the “other investors” are paying the interest to CAB lenders do their claims against property and revenues take precedence in bankruptcy over the original CAB funders?

    Or is there a huge pool of “investor donors” willing to make massive long term bets with no security and no interest for 20-30 years?

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