Federal aid sought for 5 Wis. school districts
MILWAUKEE (AP) — Five Wisconsin school districts are seeking federal assistance after losing millions of dollars in bad investments.
The Kenosha, Kimberly, Waukesha, West Allis-West Milwaukee and Whitefish Bay school districts bought $200 million worth of collateralize debt obligations in 2006.
Those are the same kind of investments that the Federal Reserve Bank of New York took off the books of American International Group Inc. last year.
Kenosha Education Association executive director Joseph Kiriaki says he thinks the school districts deserve the same kind of federal help as AIG and other investors.
At Kiriaki's urging, U.S. Rep. Paul Ryan and Sen. Russ Feingold have asked the federal government to buy the schools' investments.
Ryan says he can't guarantee the aid will come through but he's hoping to help because many in southern Wisconsin have been hurt by the recession.
Feb 9, 2009 at 10:43 p.m.
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Thanks for the link to the other source for the story. I can't help but wonder what the financial institutions that lent them these millions of dollars were thinking. Why wouldn't they invest in the synthetic CDO instead of lending out the money to the schools? They would have made more money for themselves. If there were rules that prevented them from doing so, I'm sure that they would have found a way around them. Money for nothin'. What about the chicks for free?
Feb 9, 2009 at 7:50 p.m.
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If you could borrow money and invest it at no risk for a larger return, everyone would be doing it and everyone would be making money.
Feb 9, 2009 at 7:03 p.m.
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Hmmm, sounds odd that the school districts took a gamble with educating children... the future of our country. Something just doesn't add up.
Feb 9, 2009 at 1:17 p.m.
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This was the key to the mortgage scandal. Dump a bunch of subprime mortgages together in a tranche, then declare the entire thing a much less risky investment -- because historically only a small number of these mortgages failed. But that was before they were given out freely. Now that you've got a toxic asset all wrapped up in ribbons and bows, attract investors.
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The polite word is "theft".
Feb 9, 2009 at 12:17 p.m.
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This would be a good time to "just say NO".
Feb 9, 2009 at 11:36 a.m.
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They were told it was a very safe investment.
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Back in 2006, a group of five school districts in Wisconsin invested some $200 million on Wall Street. The school board members say they believed the money was going into safe corporate bonds.
http://www.npr.org/templates/story/story...
Feb 9, 2009 at 11:12 a.m.
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Investments are a gamble. If the risk was too great for the school districts, they should not have been involved in this type of investment.
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