Denver Loses Big on Wall Street
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  • Anthony

    “By their own admission district board members didn’t know anything about the bond market” or where to seek credible counsel. That just about sums it up WRM (100s of million dollars loss later). Best option would be to understand Municipal finance and Bonding intricateness.

  • Just wait till the results of all those Californians flooding into Colorado in search of cheaper housing and better business climate come in. Their generosity with Colorado taxpayers’ money will make this pension story look like a comic strip.

  • Steven Walser

    I do not know the details of the Denver swap position that they recently, so expensively, unwound but they would not be the first and certainly won’t be the last group of board members to guess wrong on the future direction of interest rates.

    It sounds like these people had to make a decision, one way or another, on what direction they thought bond prices would go from 2008 onward. Many others would also have erred in thinking they would go higher so it is no big surprise that they would have tried to insulate themselves from this possibility and now seek to unwind a position that proved wrong. How many who read these pages would, in 2008, have predicted the current nearly record low interest rates courtesy of “The Bernanke”?
    To now unwind a losing position is probably wise, at this point.

  • Aren’t there fiduciary responsibilities here that prevent Wall St. even doing deals like this? I mean it should be illegal for public officials to gamble with the public’s money, and, ipso facto, it should be illegal for Wall Street to accept such bets.

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