When Lehman Brothers went bankrupt short-term lending markets froze up. Depfa, leading provider of financial services to the public sector, was cited by rating agencies for affordable rate borrowing difficulties.
DEPFA held contracts that required higher-than-average interest rates on the MTA’s $3.75 billion variable-rate debt causing a $12 million a year balloon.
Basically New Yorkers have a $900 million shortfall on the broken and rotten vegetable truck they barely hangon to each day. Its like when you rent the typical skank New York City apartment that will cause you to die if you live in it and for the next two years you must pay its rent in addition to the other apartment you escaped to while your landlord takes possession of the now empty skank apartment.
“The M.T.A. had lost hundreds of millions because tax receipts — which finance part of its budget — were falling. The transportation authority has already announced it will raise subway and train fares next year because of various fiscal problems, and may be forced to shrink the work force and reduce some bus routes. Some analysts say fares will probably rise again in 2010.”
Quote for the day from MTA finance person:
“… But what’s happening today is a total lack of marketplace rationality.”–“The Reckoning“