Wall Street cashing in on taxpayer money for billions more ... again

Isn't it interesting to see how bad financial engineering has worked out for everyone besides Wall Street? To them, there's no such thing as a win-win. Why is this legal and who keeps allowing this to happen? Once again Wall Street proves that they believe in wealth re-distribution as long as it's a one way street, to their own pockets. If nobody is going to fight back and stand up for the rest of the country, it's not realistic to expect different results. It's pathetic to see that neither party shows any interest in real reform. The repugicans are cashing in on the Wall Street money and the Democrats are afraid that they will be labeled socialists.

Oh the profiles in courage that are our defenders of democracy.

For more than a decade, banks and insurance companies convinced governments and nonprofits that financial engineering would lower interest rates on bonds sold for public projects such as roads, bridges and schools. That failed promise has cost more than $4 billion, according to data compiled by Bloomberg, as hundreds of borrowers from the Bay Area Toll Authority in Oakland, California, to Cornell University in Ithaca, New York, quietly paid Wall Street to end agreements since 2008.

California’s water resources department this year spent $305 million unwinding interest-rate bets that backfired, handing over the money to banks led by New York-based Morgan Stanley. North Carolina paid $59.8 million in August, enough to cover the annual salaries of about 1,400 full-time state employees. Reading, Pennsylvania, which sought protection in the state’s fiscally distressed communities program, got caught on the wrong end of the deals, costing it $21 million, equal to more than a year’s worth of real-estate taxes.

“It was brilliant, and it all blew up on me,” said Brian Mayhew, chief financial officer of the Bay Area Toll Authority, the state agency that gave Ambac Financial Group Inc., the New York-based bond insurer that filed for bankruptcy this week, $105 million to end $1.1 billion of interest-rate agreements. The payments equal more than two months of revenue on seven bridges the authority oversees around San Francisco.