This news is from Chicago.
The local transit authority (CTA) had as small( ? ) as US $ 1.5 billion. As things stood, this 62% funding gap left the CTA unable to pay retirees as soon as 2013.
CTA thought to borrow to fill the hole. The recent crash has been a lesson as to where excess leverage can leave a person, fund, state or even a country. Since the beginning of 2008, the CTA has been paying out more to bondholders than they are earning on the borrowed funds, further exacerbating the authority's funding gap.
This is not a local problem. It is learnt that numerous state pension funds around the country are coming up short in a similar fashion.
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The local transit authority (CTA) had as small( ? ) as US $ 1.5 billion. As things stood, this 62% funding gap left the CTA unable to pay retirees as soon as 2013.
CTA thought to borrow to fill the hole. The recent crash has been a lesson as to where excess leverage can leave a person, fund, state or even a country. Since the beginning of 2008, the CTA has been paying out more to bondholders than they are earning on the borrowed funds, further exacerbating the authority's funding gap.
This is not a local problem. It is learnt that numerous state pension funds around the country are coming up short in a similar fashion.
If firms in India are following the same strategy to fill the hole, think of situations in near future. USA Government have given loans to companies in trouble. That means the companies are paying interest in a tough situation. If recession is not recovered in short period, their hole will grow bigger and recession will be more deeper.
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