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Only In California: School Owes $1 Billion On $100 Million 'PayDay' Loan
These three letters - C.A.B. - might just be the Dis-Humor story of the day. NPR reports that more than 200 schools across California are coming to the shocking realization that the upfront cash they needed so badly came at quite a price. These 'Capital Appreciation Bonds' are unlike normal bonds (requiring regular coupon payments and principal repayment); instead they provide the 'lent' money upfront and defer all interest and repayment to some magical faery land time in the future (by which time the interest accrued has grown exponentially as the interest accrues on the rising 'principal plus previously accrued interest'). Brilliant - as the Guinness chaps might say. So California schools are now undertaking PayDay or loan-shark style loans defending the idiocy of super-short-term thinking with such statements as "Why would you leave $25 million on the table?" referring to the upfront cash that one Treasurer was able to get his hands on - with clearly no comprehension of the financial instrument's massive convexity. California State Treasurer Bill Lockyer said "It's the school district equivalent of a payday loan or a balloon payment that you might obligate yourself for, so you don't pay for, maybe, 20 years - and suddenly you have a spike... It's so irresponsible."
There has to be some lesson in here - some philosophical reflection on our society's complete and utter inability to see beyond the next cashflow need... Simply mind-blowing...
Via NPR:
More than 200 school districts across California are taking a second look at the high price of the debt they've taken on using risky financial arrangements. Collectively, the districts have borrowed billions in loans that defer payments for years — leaving many districts owing far more than they borrowed.
In 2010, officials at the West Contra Costa School District, just east of San Francisco, were in a bind. The district needed $2.5 million to help secure a federally subsidized $25 million loan to build a badly needed elementary school.
Charles Ramsey, president of the school board, says he needed that $2.5 million upfront, but the district didn't have it.
"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.
'The School District Equivalent Of A Payday Loan'
Ramsey says it was a good deal, because his district is getting a brand-new $25 million school. "You'd take that any day," he says. "Why would you leave $25 million on the table? You would never leave $25 million on the table."
But that doesn't make the arrangement a good deal, says California State Treasurer Bill Lockyer. "It's the school district equivalent of a payday loan or a balloon payment that you might obligate yourself for," Lockyer says. "So you don't pay for, maybe, 20 years — and suddenly you have a spike in interest rates that's extraordinary."
Lockyer is poring through a database collected by the Los Angeles Times of school districts that have recently used capital appreciation bonds. In total, districts have borrowed about $3 billion to finance new school construction, maintenance and educational materials. But the actual payback on those loans will exceed $16 billion.
Some of the bonds can be refinanced, but most cannot, Lockyer says.
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."
A Statewide Problem
The superintendent of the Poway School District, John Collins, wasn't available for comment. But he recently defended his district's use of capital appreciation bonds in an interview with San Diego's KPBS Investigative Newsource.
"Poway has done nothing different than every other district in the state of California," Collins told the program.
And he's right. In some cases, districts are on the hook to pay back anywhere between 10 and even 20 times the amount they borrowed.
But Lockyer says it distresses him to hear school officials defend these bonds.
"It's so irresponsible, that if I were on a school board — which I was, 40 years ago — I would get rid of that superintendent," Lockyer says.
Back in the '90s, the state of Michigan banned capital appreciation bonds altogether. But Lockyer says California needn't go that far. He supports a series of reforms such as capping the payback of debt to four times the amount borrowed. Otherwise, says Lockyer, these bonds will be paid well into the future, by the children of today's students.
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Why do they keep ruining the state I want to move to?
Don't... It sucks here.. for all the reasons soon to populate this thread.. California was cool back in the 80s..
Go to Texas.. It's the new CA.
Switzerland.
Tyler what the fuck? It's just a 20 year zero coupon with a YTM of ~12%. A zero with 20 years maturity is hardly a pay-day loan. 12% doesn't sound excessive when we're speaking of California.
(1 000 000 000/1 000 000)^(1/20) - 1 = 12.2% or so.
No, yeah, 12.2% is totally reasonable.
I wonder if California judges will let the banks foreclose on the schools as readily as they do the homes. I hope CalPERS isn't as larded with school bonds as it is with Mortgage Backed Securities, or else our kids will soon be attending class in cardboard boxes underneath freeway overpasses. Though truth be told, in some cases that might be an improvement.
I am Chumbawamba.
12% compounded....
If it was a 4% simple interest loan these schools would still be sitting here right now scratching their heads. They grabbed the money and did not give a rats ass about what they signed.
schools always need money because politicians know people will vote "money for children"
so in the general fund, they spend school money on corporate subsidies, then turn around and ask for more "money for children"
also "money for children" includes 30% going to paying off interest, 30% to their construction buddies to build luxury public buildings in the ghetto (and surprise the politicians' relatives all hold apartment building ownership in a freaking ghetto they know will get subsidied construction project near by), so less than half actually goes to kids.
US spends a lot of money per pupil because the money goes to fancy buildings instead of educators or improving the system.
but on the ballot, it is all "money for children"
how many people vote? how many people read the fine print?
Did sally mea cause all that wreckage??
Nope. Just reckless district finance managers with the help of bond issuers such as JPM and Citi.
"The way this works is it does eventually get paid through property taxes, and the thing is that there is a certain levy on property taxes that goes towards paying off all of the school district's debt. And the hope is that the property values will rise by so much, that come 2031, when this debt has to stop being paid off, the levies that there are right now will be so much bigger and that they'll have so much more money coming in. That can happen in the next 20 years; nobody knows what will happen, but if that doesn't happen, that means that property taxes will spike in order to make up the difference."
Mortgaging the future to pay for the present. Sounds familiar! No worries though, at the rate we are going these districts will be able to pay off these bonds with one crisp, new $1,000,000,000 dollar bill which most of our grand kids will be walking around in their pockets with for chump change.
The bonds will never be repaid. OR, maybe in Zimibabwe money.
Everyone wants theirs now...every deal is to good to pass up...cheap debt is the answer. If you believe that then look out your windw and watch the pigs flying by. Gotta have new schools because we didn't take care of the old ones. I am so sick of this mentality.
Schools are awash in money...no benefit.
If you want one of those "good schools" that you always hear about, pack it with whites and asians.
A school with the opposite will never be considered good no matter how much money you throw at it
Stop beating around the bush. Say it Trav.
"Nigger"
We all know you're thinking it.
The sad thing is Akak, the Poway school district is filled with whites and Asians. One of the best districts in San diego if not all Cali. Not meaning to give Trav any ammo... Just sayin.
Miffed:-)
It's amusing, and ironic, how many downarrows I have received here on ZeroHedge for merely putting into Trav's hate-filled and bigoted mouth the word "nigger" which we all know is what he is thinking and driving at, even when (and especially when) I do NOT agree with his racist sentiments in any way.
Apparently, even here, one can be condemned for mere words rather than the entire thoughts and comments in which they are used.
Akak, I didn't down arrow you if that's directed at me. I know what you are saying and I agree. I did though thought it fair to point out the fact there are mostly Asians and whites in the district. I used to live there. Now regarding their " superiority"? I'll leave the fact they owe 1 billion on their bond speak for itself :-)
Miffed:-)
Sorry, MM --- my last comment was neither explicitly nor implicitly directed at you.
No worries. I just don't want to foster any misunderstandings . Now with Trav back, I assume it will become more volatile on the threads.
Miffed:-)
how do you know he didn't mean the hispanic population? or jewish? or all women? or all men? you cant prove a negative? and your putting words into someone mouth? both down voteable.
also, be careful. someone might smite your smug ass comment with hard statistical data and thne you have to resort to name calling. like saying people are racist. ... oh wait. you already went there implicitly. K thanks BYE.
i just wrote this to see how narrow the reply will go
damn
that
is
pretty
narrow
Look, trav is a nigger. Why do you invest so much emotional energy battling him all the time? Have you ever considered that if you just left his comments to stand as the monuments to stupidity that they inherently are that he'd simply be appropriately ignored?
I am Chumbawamba.
Good point, however we all have our issues ( joos, anAnonomous....even uteri! )that just seem to evoke such fervor we just can't help but jump into the discussion and throw some monkey shit. Sometimes it can be quite comical but sometimes too predictable. I'm guilty as well.
Miffed:-)
only the bond holders 20 years from now.
bond holders today get paid.
actually california needs to do more of this.
just sink the credit rating, declare bankruptcy, get bailed out and face reality now than later.
but then where would PIMCO get their pension funds to play with and CA bonds to invest in?
I was kind of wondering about that. Are the schools betting not only on higher revenues from property taxes (yeesh, if you can't raise a few million now, how are you going to raise that much more with compounded interest in the future?) but also on (hyper)inflation? Take the example of the school that issued these bonds to get $2.5 million in order to get $25 million; they'll be repaying $34 million, but they may be betting that $27.5 million now is roughly equivalent to or less than $34 million (nearly double) in ~20 years. For comparison, $27.5 in 1991 dollars is $44.7 in 2011 dollars. They may simply be assuming that loans taken now against not even a Zimbabwean future but just the normal progression of American wealth destruction are, in effect, free money.
Of course, I also wonder if CDS are available on these school systems.
Let's see. They can borrow $2.5 million to get a free grant of $25 million to build a school. But the $2.5 million will cost them $34 million in 20 years.
But by that time, the $34 million will only be worth $8 million but the school building will be worth $100 million. Except it will be worn out, so then they build a new school and take out a $1 billion dollar mortgage on it, and use part of the money to pay off the old loan.
They will then have until 2052 to figure out what to do about the $1 billion dollar loan, which by that time will have grown to $13.6 billion.
well come 2031 citi won't exist so what do they care?
Seems to me that a bunch of someones OD'd on Delusionol™!
.
Yeah, well, it wouldn't go over all that well if they told the truth and called it "debt for children".
If those kids only knew that they (and their kids) are the ones expected to pay it back in twenty years...
They used to teach compound interest in school back in the 80's when i was a kid. Maybe they shouldn't have dropped that part of the curriculum??
"Compound interest is the most powerful force in the universe." Albert Einstein
come on...einstein knows that nukes he helped to create are the most powerful force in the universe right now.
they are not trying to prevent Iran from teaching compound interest. They are trying to prevent nukes from being built.
nuke = seat at the table.
China is trying to get compound interest from US and US said fuck you we have nukes, we own aerospace, so you get to compound ZIRP for years.
Einstein had little to do with the creation of atomic bombs.
http://upload.wikimedia.org/wikipedia/commons/b/bf/Einstein-Roosevelt-le...
he didn't make them himself, but he pointed at fingers at Germany and said we need to beat them.
I'll point my finger at Bernanke and say we need to beat him. Remember to give me credit!
politicians are pointing at Japanese Central Bank and telling Bernanke, we need to beat them with lower rates than 0.01%!
Sort of makes you wonder - should we be placing sanctions on Iran or Goldman Sachs???
Chosen people are above the law.
Laws are for common dogs like you and I.
The school board members went to college and majored in math with Maxine Watters...none of them ever learned how to use their calculators either.
You do realize that these districts are ripe for default? No one in their right mind would lend to them at the same rates as a municipality in New Hampshire for example.
So they default on the bonds and no one will lend to them again.
Genius business model.
At that point, they'll really put the lockhold on the property tax payers...until they finally say NO again. (Prop 13 redux).
Americans live in a Union correct? In the end you will be paying to bail out California.
Californians know this. YOU are the enabler.
but with 1 out of every 10 americans living in California, which politician wants to anger that state?
also reason why kids don't study is because education don't pay. fix that and you will see parents making their kids study hard instead of them trying out sports and singing contests.
The pols not getting elected or funded from there?
FORWARD!
Allowing the governments to take over education was the first genious move.
This is what you get people. This is what you fucking get.
Save the gov't the trouble and just bash your child's skull with a rock.
Yes, with interest rates that high, the lenders will hope to get all of the money they lent back, and then hope for some extra before the school system goes bankrupt. They'll have made their money and just won't lend out again. I see everyone home schooling in the near future. In fact, I wouldn't be surprised if we go back to the days where you wake the kids up in the morning, take them over to the next door neighbour on the street where you'll see all the other kids from the street. The basement will have been turned into a quasi classroom and one of the parents will be teaching Monday Tuesday, then someone else will Do Thursday Friday and so on........................
Going to be interesting having parents teach children. Most adults barely have above a grade school understanding of the world. This includes college graduates.
I just got my new credit card with 24.99% interest rate, if you fail to pay 26.99% penalty rate. I have sterling credit and always pay credit cards off monthly.
This shit should be illegal and so should letting aherns run the funding at school districts.
no, it shouldn't be illegal to give retards who worship rappers but hate math get raped with usury.
invest in a credit card company instead
If you pay for your groceries in cash, why do you give a flying fuck what the store charges in interest. Or are you just full of chit when you claim to pay your balance off every month.
Oh never mind.
They will learn more here than they will listening to some State appointed authority figure, teaching them how to take a bubble test, where the answers are always provided.
Fluffybunny: "It's just a 20 year zero coupon with a YTM of ~12%."
Whatever you want to say about 12% compounded interest (Rule of 72 says that that's a 6 year doubling), it's clear entity after entity in Kalifornea - cities, school districts, and of course the state itself - are becoming more and more desperate for cash flow. Do you suppose when it's time to pay this off, they'll be in a sound position to do so? Who wrote these bonds up for them?
What a casino it all is...
The payday loans I've seen run in the 400-700% range. 12.2% seems completely fair for a public entity with questionable ability to repay.
Actually we don't know if it's 20 years. The guy was giving an example, and maybe a bad one.
Remember they're talking about loans from 2010 causing problems, and it's late 2012. Not 2030.
Detroit
Trav has a condo you can use
Switzerland's increasing their Social Security (AHV) payouts...because they can afford to ;)
Also hilarious how some people freaked out about their unemployment rate of...wait for it...3.1%!! Last time the US achieved that we were in the 50s.
That's what you get when the people actually vote directly about issues instead of paid sock puppets...direct democracy ftw! Also helps if you have 10+ parties instead of just 2...mostly because the world isn't black or white and having only 2 options forces you to be partisan instead of focusing on the real issues on hand.
Trinidad - Tobago. Irresponsible, mindless spending is the Progressive's hallmark move.
FORWARD SOVIET!
Ditto, I escaped from L.A. in '87. Mexifornia is becoming Greecifornia.
I just scored the Escape From L.A. soundtrack......music to APOCALYPSE by..
Some cool pics of Snake sportin' his eyepatch.
Kurt Russell trivia - it's been a long time since The Computer Wore Tennis Shoes...in many respects...
http://en.wikipedia.org/wiki/The_Computer_Wore_Tennis_Shoes
Thanks for that SeattleBruce.
Name that Kurt Russel movie.
Tango and Cash
Seeing the CA real estate shills here earlier today on the Charles Hugh Smith thread was almost too much to take.
The state is falling apart everywhere you look yet they say "housing is back"? Wtf is that all about?
Financial geniuses. They probably get $299k per yr retirement too
The land and scenery in California are fucking beautiful. Seriously it doesn't get much more amazing than the redwoods, yosemite, shelter cove (or a thousand other places).
It's the people that make california a horrible place. And they make it their full time job to make it horrible. They take that shit seriously.
+10
Yup. CA is a gorgeous place due to God, Gaia, or whatever. The people there make it hell on earth. Mianly lefty unions. See Miami Beach and other places too like Connecticut. Beautiful places - nasty vile people.
same every where in the world.
good weather = stupid people (no penalty for not saving), bad government (latin countries, greece, etc.)
bad weather, harsh environment = smart people (dumb ones who don't save in the summer died off in the winter), small government (they have to be good to keep people living there especially now we have AC to cool off hot weather lands)
Europe: England, Germany, Paris, Sweden, VS Greece, Italy, Spain, etc.
even in china, smarts, univerisities, governemnt is in cold Beijing, southern areas are farmers and gambling towns.
Asia: Korea, Japan, Beijing VS philipines, indonesia, vietname, etc.
Polynesian Paralysis.
I love your list:
"England, Germany, Paris, Sweden, VS Greece, Italy, Spain"
England isn't a country, Paris isn't either.
England is indeed a country, and I assume he is referring to northern France rather than all of it.
How is Texas the new California? I find it difficult to find a parallel to Los Angeles or Venice Beach. Austin might be a little like Portland, but that is in Oregon.
[walks away shaking my head after junking you.. ]
I meant to say "Bay Area or Venice Beach." Texas is still lynching people, I'm pretty sure.
Austin is Sodom or Gomorrah, infested with freaks,fags,commies & panhandlers not to mention Tx.Gov. I hate it when I have to go there, The burbs are cool but Austin is the poster child for the fucked up mindset that is killing liberty, Also it is a testing lab for Agenda 21 and the nwo..
Sir have you been to Castro in San Francisco?
Also , sort of expect it in a city that is a state capital.
No sir, have not had the plesure to visit Ca. & I forgot the brainwashed, drunkard UT snot nosed brats..
In short: Austin's the place where the cool non-bigot people hang out...got it :D
Also hilarious how you mention "killing liberty" just after dissing the liberty of entire groups of your fellow citizens. The irony is strong in your post ;)
I suggest you stop listening to Alex Jones and Glenn Beck...well...at least if you're interested in real information instead of comedy gold...
Well for one, all the CA jobs are moving to Texas due to our ridiculous regulations including anti business tax policies and a new Cap-N-Trade program that will raise costs on everyone.
I'm moving my one year old start up from my beloved native golden state to Texas...The freakshow is here and it's chasing us natives away. People don't give a shit anymore...they aren't engaged in iiving, they have their faces buried in their smartphones or Ipads. Sad, California is a beautiful place.
Be sure to close all yer banking accts, in order to keep CA Govt's slimy fingers off yer FRNs.
Uh, we're talking about an economics parallel between the old California, and the present day Texas.
Austin and Bakersfield were switched at birth.
Ten Texas high schools now have stadiums with 16,000 or more seats. More than 100 have video scoreboards and more than 500 have artificial turf fields, according to Robert McSpadden, who maintains a database of more than 1,200 gridirons.
The Allen Eagles now play in the state’s most expensive high school stadium, a $60 million facility with a high-tech scoreboard, Wi-Fi, and 18,000 seats.
Educators and debt hawks have criticized the spending spree, especially since state legislators last year slashed $5.4 billion from the two-year schools budget.
http://www.businessweek.com/articles/2012-09-27/high-school-stadiums-pac...
Fucking unbelievable!
No shit, right up there with using corn for fuel while people starve.
they don't need illegal aliens to compete with Bush for Yale spots.
they do need next generation of gladiators to entertain them.
also nice school buildings keep illegals happy that they live in America, althought lessons are in Spanish, teachers are bottom dwellers.
meanwhile, American imports smart people via H1B program from China and India where school buildings are decrepit and student teacher ratio is 100 to 1.
18,000 tickets even @ $5 each = $900,000 per game. Should be able to service a $60 million dollar note.
Thats not the point, it's wasted money & resources on bread & circus while they teach our children the founders were terroist. And the good ol' boys argue about a fucking game. the damn field we played on had sandburs & the coach would tell us quick to man up & quit bitchin. It is also about a 100* + when 2 a days starts here im suprised they did'nt enclose the damn thing.
Why is the money wasted if its working? It built a stadium where a team plays in front of 18,000 people from their community and the bills are paid thanks to the program. What do you have against good old boys? If the field is new it's probably momentum turf and their aren't any sandburrs in momentum turf. Every kid who plays footbaall experiences two a days in the heat. So tell me, why are yo whining?
Because I used to be able to go see the football game for fucking free and sit on the bleachers my goddam tax dollars helped pay for. Now I've got to shovel out $5 for a ticket and $6 for a fucking hot dog and my taxes are higher than ever. You call that progress? When they start selling the stadium naming rights and then the school naming rights then what? Your kid graduates from Coke High and played for the Schlitz Malt Liquor Bulls and you're shelling out $30 for a ticket and $10 for parking? STOP THE FUCKING MADNESS...
Whats wrong with the good ol'boys? They dont fuckin get it..Fuck momtem turf lets raise another generation of everyone gets a trophy pussies. my good ol'boy friend..
CORRECTION: 18,000 tickets even @ $5 each = $90,000 per game.
The irony in there just blows your fucking mind...
h_h said:
...and that's assuming a sell-out crowd. Imagine a few seasons with shitty teams:
3,000 tickets @ $5 each = $15,000 per game.
BINGO... happens often..
Oops, Foreclose on that fucker!
He was just hedging his revenue X10... everybody does that so why not?
if your post contains a calculation unless its vector calc be sure you get the fucking right answer........whats 18,000 times 5? I understand anyone can make a mistake but fucking multiply right people.
Putting this is context, USC doesn't even have it's own football stadium. My local university, has no football program, mostly because of title IX. It's all bread and circuses anyway.
Meat has it right. My family is leaving after 30 years for Texas in two weeks and we can't leave fast enough. Each day I become more amazed at the sheer level of stupidly that is proudly on display from the "Golden State".
proposition 13 limits real estate tax hikes
while Texas real estate is close to 3%.
also Texas has tons of illegals too.
they get you one way or the other.
Yes, but a $500,000 house in Texas would be $2.0m in CA...and with no state income tax, thats a fair trade.
Thanks for reminding me we pay 11% state CA tax. I really need to get out of this state. I keep hoping it will eventually return to its glorious hay day in the 70 s and 80s. With all of you leaving that's going to leave just me paying the bills.
Miffed:-)
plus 8%+ in "temporary" sales taxes to pay for the Northridge, and Loma Prieta EQs
Got to love those "temporary" taxes! Wasn't the federal income tax created as a temporary tax to fund the war? I guess the word temporary is relative. I just wasn't thinking on the proper scale.
Miffed:-)
and when all the whites leave, the big question will be on which Gangs land you live and to who you pay up.
Red or Blue bitch!
It will ultimately provide you with the opportunity of a lifetime in Real Estate if you time it correctly, and have cash.
But it still will not be the California of 50 years ago. Major metro areas become increasingly disgusting as the years go by.
The reason you perceive it to be a state worth moving to has a lot to do with the artificial wealth-effects that went along with it being ruined.
The weather and almost-legal marijuana in California are unmatched elsewhere. Washington & Colorado have snow. ;)
Tahoe?
becareful
marijuana = soma
we failed to educate you, develop you, so here take a pill, turn on a TV and be "happy" making tacos with illegal aliens who will soon own the truck.
and please, never protest the systematic corrupt in public. It makes the status quo look bad.
The problem with this theory is that marijuana tends to make it easier to see the corruption of the system and tends to make people more anti-establishment.
This story gives me so much pleasure.
God bless California. And God bless America.
Debt, swebt.
It's only money.
http://www.angrysinner.blogspot.kr/2012/12/yesterday-i-walked-ten-miles-through.html
Not a chance in the world that loan gets repaid;
The money is for "the children", so the dumb hick administrators who cut the deal for the school district will retire with full pensions while the bank that lent the money will get a bailout from the taxpayers.
Welcome to the new capitalism
Now that's disgusting - rewarding malfeasance more and more ways to sundown.
why pay when you can print.
funny how rich chinese think chasing real assets with US dollar pegged currency is to buy a house in California.
ZIRP is reserved for the assholes of the world...i guess Cali doesn't quite match the "asshole scale" that Wall Street does
The money was used to finance education infrastructure yet it was accepted by individuals who clearly are mathematically inept. These mathletes are probably getting blazed on their morgages too. The linearity is profound.
Math, Bitchez!
Math was on the kill list. Executive order. Mandate.
Change the "a" to "y".
Myth.
DRONED.
Also, whomever downticked "Math, Bitchez" must be .gov.
State will do the math for you.
you just smoke some marijuana, watch hollywierdo fake reality on TV, take out your anger in a video game, sit your ass down in an overpriced ugly house, and just vote for the same ole douchebag.
These idiots have failed every math class since 3rd grade. They couldn't balance a personal checking account.
Is that why they were pushing that "new" math so many years ago?
According to the spoonfed economic pablum/dogma, it's not necessary to balance anything...that dogma is about to be tested severely.
Funny you mention math. Had my final in finance 101 from CSU Sacramento today. same test was given to the whole finance 101 student body as a way to equally compare everyone. teacher apologized about the test and how easy it was, stated that he way over taught us or this test. 62 multiple choice problems. 59 of them where a,b,c,d. of the three that had an E. all three where E. 12 math problems that where solved with pv,i,pmt,n,fv keys. 3 math problems solved with the CFo, CFn, IRR, and NPV keys. and only TWO problems involving a two step math problem. and the two step problem-- D[0] to D[1] on growth of dividend effecting the price of a stock. 30 gimme question involving the most basic definition of what an annuity it. questions like: "given the choice of 20,000 now or 2,000 every year for 10 years, assuming positive interest , what is the better value? " that is almost word for word one of the problems. i shit you not. or worse reread the same problem and the question is, what type a problem is this? ;
a) an Annuity requiring you to calculate the net present value of a series of payment
b) a perpituity requiring you to calculate the net present value of one lump sum payment in the future.
c) a Annuity requiring you to calculate the net present value of one lump sum payment.
d) a perpituity requiring you to calculate interest on a bond.
if if any problem was even moderately hard the answer was B. what your taught to guess in a test if you don't know the answer in a A,B,C,D test.
oh and this is an aacsb-accredited school.
If only the rich would pay their fair share!
rich pay their share after they move out of california.....
Nevada, Texas, Florida
The only reason any sane person would take such a loan is if they have no intention whatsoever of ever paying it back lol.
Its the only logical reason.
"The only reason any sane person would take such a loan..."
Maybe they are INsane!
Maybe the person that made the "arrangement" was in business with the loan sharks?
Maybe they would have been better off dealing with the local "leg-breaker" down the street whose name ends in a vowel?
Do they still have lamp posts in CA?
... or if they know they would never be held accountable for their bad decisions. I'm sick of this shit.
Bingo- that's why the half-life of school superintendents is getting shorter every day- and of course, they ALWAYS get more money at their next gig......
Or they're leveraged into more money allocated by the state to their school district. They're betting the school system is Too Big To Fail. It's the new bureaucratic double down
Who loaned it to them knowing that in reality it would never be paid back?
They will be gone when the bills come due. Meanwhile, they get to spend their careers in an opulent education palace instead of a dreary, normal old school building.
have no intention whatsoever of ever paying it back
Maybe govenor Moonbeam will make the loan illegal and claim the lenders took advantage of the illiterate members of the school board, and their attorneys and accountants. Unless, of course, the lenders were big contributors to the Progressive Party, then the oan gets paid.... in 20 years... with another loan. BRahahahaha!
An intelligent man is sometimes forced to be drunk to spend time with his fools.
Ernest Hemingway
It may well be that all of these school superintendents are secret Austrian economists who know full well that they'll be paying the bonds back with dollars worth pennies.
Alternately they could just be a bunch of corrupt dumbfucks who know they won't be around when the bill becomes due.
It's easy for irresponsible liberal morons when they are spending other people's childrens future earnings to pimp their gigs.
Math was never a strong point in public schools. Let’s see, if you borrow one hundred million, defer payments for ten years, and pay five per cent interest compounded quarterly, how much do you owe?
A–I don’t owe anything, the taxpayers do.
B–I will just do what the government does, borrow more to pay the debt.
C–I don’t know, but that isn’t important anyway.
D–It is not really money, just pieces of paper, like the Constitution.
E–One Billion, Huh?
The greatest National Security risks are gullibility and ignorance.
F. It's worth the price when you see how smart our students are.
Ahh yes that's so funny it made me laugh out loud.
Terms like that... follow the money. Someone got paid well, one way another, to make that loan happen.
Pass me a banana please.
A billion dollars is a lot of money to pay a baby sitter.
i thought sure jpm would be in the final paragraph but alas, no mention of the lenders
I somehow just assumed it was Tony I-break-your-legs-if-money-isn't-ready-by-monthend but then again he has higher morals and his M.O. is actually somewhat moar fairer.
That is what I want to know. Who wrote this thing? Damn. Brass balls for sure.
That's the coolest thing I ever heard.
I am truly proud to be an American.
Peace.
http://www.angrysinner.blogspot.kr/2012/12/yesterday-i-walked-ten-miles-through.html
Spot the six day old spammer.
I've got an idea, let the tax payer's vote on a school bond and if they want to pay for and need a new elementary school then the community will come up with the money and there will be no need for such folly. Don't they have the ability to finance through General Obligation Bonds? I don't understand this process at all. Why would the federal government dangle a 25M inducement in front of a school but require 2.5M.
Wouldn't have been smarter to go to the tax payer and raise 2.5 Million. I cannot believe that somewhere in California there wasn't a better way to get 2.5M. All those limosine liberals in San Fran didn't find it in their hearts to donate the 2.5M. Pelosi and her husband could've foot the bill on that by using just one of her insider trading schemes as a high ranking member of congress.
This is a prime example of how important the Dept of Education is. (sarc)