• ITVI.USA
    15,909.400
    -330.930
    -2%
  • OTLT.USA
    2.776
    0.014
    0.5%
  • OTRI.USA
    21.610
    -0.170
    -0.8%
  • OTVI.USA
    15,915.300
    -318.010
    -2%
  • TSTOPVRPM.ATLPHL
    3.520
    0.380
    12.1%
  • TSTOPVRPM.CHIATL
    2.960
    -0.660
    -18.2%
  • TSTOPVRPM.DALLAX
    1.610
    0.250
    18.4%
  • TSTOPVRPM.LAXDAL
    3.340
    -0.130
    -3.7%
  • TSTOPVRPM.PHLCHI
    2.100
    -0.250
    -10.6%
  • TSTOPVRPM.LAXSEA
    3.860
    -0.220
    -5.4%
  • WAIT.USA
    126.000
    -2.000
    -1.6%
  • ITVI.USA
    15,909.400
    -330.930
    -2%
  • OTLT.USA
    2.776
    0.014
    0.5%
  • OTRI.USA
    21.610
    -0.170
    -0.8%
  • OTVI.USA
    15,915.300
    -318.010
    -2%
  • TSTOPVRPM.ATLPHL
    3.520
    0.380
    12.1%
  • TSTOPVRPM.CHIATL
    2.960
    -0.660
    -18.2%
  • TSTOPVRPM.DALLAX
    1.610
    0.250
    18.4%
  • TSTOPVRPM.LAXDAL
    3.340
    -0.130
    -3.7%
  • TSTOPVRPM.PHLCHI
    2.100
    -0.250
    -10.6%
  • TSTOPVRPM.LAXSEA
    3.860
    -0.220
    -5.4%
  • WAIT.USA
    126.000
    -2.000
    -1.6%
American Shipper

Spitzer: Ports, cities agencies could see loan costs spike

Spitzer: Ports, cities agencies could see loan costs spike

The nation faces a “financial tsunami that causes substantial damage throughout our economy” if the federal government does not take steps to find a solution to the bond insurance crisis said New York Gov. Eliot Spitzer.

      If nothing is done port authorities, municipalities, and other government agencies could see sharply higher interest costs.

      Spitzer, in testimony on Thursday to the U.S. House of Representatives’ Financial Services Committee’s Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, pointed to a five-fold increase that the Port Authority of New York and New Jersey had to incur this week when it sold short-term auction rate bonds earlier this week and few buyers showed up to lend the money.

      The rate on port authority’s bonds skyrocketed from 4.2 percent to 20 percent, raising interest costs from less than $84,000 to more than $390,000 for a week-long loan on $100 million, according to the Wall Street Journal.

      Spitzer said the port authority is an “extremely solid institution” and “though it is only paying that rate for a very short time, that is a rate that would normally only be paid by a very risky borrower.”

      Rates for auction-rate securities have climbed because some are insured by troubled bond insurers that may have exposure to subprime mortgage debt.

      Some investors are also shunning debt with complex structures and looking to buy treasury securities.

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