NCUA Fiddles While Rome Burns...

Flaming out...

"As the Financial Times reported last week, Rome appears to have entered into interest rate swaps with investment banks in the mid 1990's. These flattered public finance figures through upfront cash payments from the counter parties, by stretching out the governments debt service over a longer period and by hedging against higher borrowing costs."

"It now appears derivatives worth $32 billion were restructured in the first half of 2012.  At current market prices, the restructuring may have cost the Italian Treasury about $8 billion. That is a big loss as a share of the derivative contracts' value...."

Think it is interesting to note that...

... as NCUA rushes headlong toward its self-delusional Kodak Moment with derivatives, that the head of the Italian Treasury at the time these interest rate swaps were purchased was none other than Mario Draghi, the current head of the European Central Bank(ECB).  Even  a highly financially-sophisticated Mr. Draghi can get a simple interest rate swap deal wrong - very wrong!

Do we really believe we have the necessary expertise within credit unions and at the NCUA to monitor and control derivatives - even "low risk interest rate swaps"?

Well, we have bankrupted the NCUSIF once already, guess it won't hurt our reputation to try again... after all who cares, it's your money!