Editorials & Other Articles

Kire

(11,087 posts) Sat Jun 13, 2015, 01:29 PM Jun 2015

New Jersey, You Should've Built That Tunnel

There are always many reasons for weak economic performance. In New Jersey, transportation is vital. The state sends almost half a million people out of state for jobs, the most in the nation. The majority go to New York.

It should come as no surprise, then, that the state has lost the confidence of investors. While Colorado provided an 8.9 percent return since 2010, beating the national average of 4.95 percent, New Jersey's equivalent bonds gained 1.01 percent, the worst performance after Puerto Rico and Arkansas,

Source: http://www.bloombergview.com/articles/2015-06-12/new-jersey-you-should-ve-built-that-tunnel

4 replies

= new reply since forum marked as read

Highlight:

New Jersey, You Should've Built That Tunnel (Original Post) Kire Jun 2015 OP

New Jersey Mike_SMO Jun 2015 #1

that's some weird spin Mosby Jun 2015 #2

It`s the risk, not the view Mike_SMO Jun 2015 #3

I agree with you Mosby Jun 2015 #4

Mike_SMO

(13 posts)

1. New Jersey

Reply to Kire (Original post)

Sat Jun 13, 2015, 05:55 PM

Jun 2015

As I understand the material in the link, New Jersey can borrow at a low rate (~1%) while Colorado has to pay ~8.9%. The Colorado rate is good for those renting their money to the state but it means that the Colorado taxpayers are carrying a heavier burden.

New Jersey certainly has economic problems and "interesting" politics, but the investors feel safe loaning New Jersey money since there is low risk of failure. The 8.9% rate on Colorado loans means that the investors are suspicious about project completion, project management, and/or eventual pay-back. Colorado just has more risk.

By way of explanation, would you rather be paying off a home mortgage with a 1% rate or one with a 8.9% rate? Get me in at 1% anyday.

High returns are only good for the "other guy". What is wrong with the lovely state of Colorado?

Mosby

(16,319 posts)

2. that's some weird spin

Reply to Kire (Original post)

Sat Jun 13, 2015, 11:41 PM

Jun 2015

Mike_SMO

(13 posts)

3. It`s the risk, not the view

Reply to Mosby (Reply #2)

Sun Jun 14, 2015, 01:20 AM

Jun 2015

Not really. The debtor pays for perceived risk. There is no credit for good looks or the Rocky Mountain High.

Still, what is the concern with Colorado? Something has got the money renters attention. The only significant thing that I have heard is a question about the use of the MJ tax proceeds.

Mosby

(16,319 posts)

4. I agree with you

Reply to Mike_SMO (Reply #3)

Sun Jun 14, 2015, 11:35 AM

Jun 2015

My previous comment was directed at the OP.

Why would he describe the bonds rating backwards, especially on bloomberg, a financial website?

The author has some sort of agenda.

Reply to this discussion