[lbo-talk] Is Goldman Sachs Buying LA?

c b cb31450 at gmail.com
Fri Jun 17 10:33:07 PDT 2011


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.

Doug

^^^^^ CB: I'm trying to think what "privatized" means here. Municipal and state bonds have always been with Wall Street, I thought. Normally, there isn't much risk of default because the revenue streams are taxes. I don't know if the big deficits of big states like California and Illinois might increase that risk. Anyway, even if they were bundled, etc. would there be much risk that they would go bad like the predatory mortgages ?



More information about the lbo-talk mailing list