Buffett Forms Bond Insurance Company

AP:

Town governments, school districts and other municipalities looking to borrow money got a new option Friday when trying to insure their bonds: billionaire investor Warren Buffett.

Buffett's formation of a bond insurance company provided some validation to an industry that has been battered by fears of collapse in recent weeks.

Read the whole story: AP

Comments

[themodernleader]

Robinhood. In our own public schools and universities, the same despicable public looting is taking place, backed wholeheartedly by corrupt public unions. Mr. Buffett woild be wise to heed the same advice for much of Illinois. I am speaking as a former Public School Board Member. The public unions by Sovietizing the school board selection process, corrupted the mission of the local school boards as all available funds went for salaries and benefits at the expense of materials and tools of teaching and learning. My tax bill has a separate line item for retirement benefits for once public servants---who have now become masters of the public.

[robinhood1]

Mr. Buffett may regret going into the municipal bond insurance business as the costs of covering promised pension benefits to state and local government workers soar. It's one thing to pay a retired government worker $20,000 or $30,000, especially if she isn't covered by social security. But a lot of employees, especially public safety types, have learned how to game the system: rack up lots of overtime in your final year of service, have your benefits based on final year compensation (which includes overtime) and qualify for a 90% pension after 30 years of service and age 50. This is how it works in Vallejo, CA, where pensions of $200,000+ are possible in the fire department. Mr. Buffett, stay away from California bonds. They will only bring you or your successor grief. Watch for municipal bankruptcies coming soon to a state near you.

[themodernleader]

Mr. Buffett: Stepping in to insure governmental bonds fills a vacuum left by apparent fraud, deception and greed.
Now will you expend the remaining years of your life advising our emerging leadership about sound economic policy that encourages a new renaissance in American manufacturing and technology? Such a renaissance must steer away from the rocks of selfishness and all consuming self-interest towards the public interest and revitalization of our faltering Republic.
Your efforts will be applauded and acclaimed. Your efforts will be emulated by others in your rank. Our ship of state will yet shine upon a darken sea.