> On Jun 17, 2011, at 12:13 PM, Ferenc Molnar wrote:
>
>> Not sure if I understand this but I find this terrifying. Are the banks planning on bundling and securitizing these "infrastructure funds", privatized municipal and state bonds, in the same way as they did mortgages?
>
> To some degree, but I don't think that's the major appeal. As the prospectus said, these are monopoly assets with stable income streams usually backstopped by governments. So low risk, decent return. Capital has been lusting after privatized infrastructure since at least the 1980s.
I'm not an economist, but I don't find this response even remotely reassuring. Given what we've just witnessed in the mortgage market, shouldn't we default toward the gravest alarm at essentially *any* prospect of the same thing happening to municipal infrastructure? Aren't we obligated to assume that *even if* their motives are as "benignly greedy" as Doug's position seems to entail, they will *still* drive the fucking thing off the cliff?
Which is to say nothing about whose pockets the phrase "usually backstopped by governments" actually ends up in.
What am I missing?