Friday, June 19, 2009

‘Impossible to Understand’ Swap Burns 290-Person Italian Hamlet -

"If your friends jumped off a cliff, would you?"

‘Impossible to Understand’ Swap Burns 290-Person Italian Hamlet -
"Ortenzio Matteucci points to towns down the wooded Nerina valley in Italy’s Umbria region and blames peer pressure for his decision to let Polino, population 290, buy a U.S.-inspired financial swap he didn’t understand.

A retired steelworker with wavy gray hair, Polino’s Mayor Matteucci says he agreed to the interest-rate swap because Milan...and local towns Arrone and Stroncone all bought derivatives to try to save money....Derivatives have burned towns from Polino to Milan to Erie, Pennsylvania. Jefferson County, Alabama, said it might need to declare bankruptcy because of costs associated with the contracts. Responsibility for the expenses in Italy’s second- biggest city and in Umbria’s smallest village sits with elected officials who agreed to financial instruments they didn’t fully grasp"

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