FBN’s Elizabeth MacDonald just broke some Wall Street developments. She is basically reporting that due to their $440 billion budget shortfall, states and towns across the country were hoping to swap out interest rates to get lower costs on bond offerings, but the interest rates never rose as promised by the banks. States are charging Wall Street with deceiving them into buying bad derivatives – “bid rigging” – and the cases are piling up.
Alabama, Delaware, Detroit, LA, West Virginia and more are all in major fights with banks who made these derivatives deals. California is saying it is just walking away from the deals all together.
