Thanks to the report in the L.A. Times, I've now fully jumped into the bonds bandwagon. Suffice to say, it's not fun.
A recap: an L.A. Times report rang alarm bells on Capital Appreciation Bonds, which accrue enormous amount of interest and could sock the taxpayers with huge repayments for funds borrowed through bonds to build schools, etc. I blogged about it last week.
The issue, as usual, is a lot more complicated than that. No wonder sometimes experts hate us journalists for being overly simplistic.
Don't take my word for it. Take a look at the documents that spell out the obligations that both buyers and sellers get into when trading bonds. Series D of Hartnell bonds, sold in 2009, can be found here. The most recent issue of MPUSD bonds can be found here.
Naturally, I don't expect anybody to read them. That's my job. So by the end of the week, expect a full report. In the meantime, pass the aspirin.