In the finest Scarlett O'Hara tradition, I need to think about this tomorrow, not today.
"Financial Innovations" aka "The Financial Sector's New Ways To Steal"
Wall St is pouring massive funds into GOP, Karl Rove's shadown RNC, and US CoC, not because of the extremely weak, permeable financial reforms, but because they think the Dems and MN have demonized Wall St. Their little black hearts are hurt.
^ get well bud.
+10. Friggin relax, Evay!
Here, let me snag you a beer.
http://dailycaller.com/2011/11/10/al...in-us-history/When negotiations with creditors broke down Wednesday, Jefferson County, Ala. filed for the biggest municipal bankruptcy in U.S. history.
After two days of closed-door meetings, county commissioners voted 4–1 to declare bankruptcy after a last-ditch effort to restructure the county’s debt failed, the Birmingham News reports.
The county was facing $4.23 billion in debts. The next largest municipal bankruptcy was the 1994 filing by Orange County, Calif., at $1.7 billion.
and of course, another vampire squid fraudster was on the scene
Predatory JP Morgan Swap Deal Pushes Alabama County Into Largest Municipal Bankruptcy In U.S. History
http://thinkprogress.org/economy/201...tcy-jp-morgan/
Jefferson County, Alabama - Screwed by Wall Street - Files for Bankruptcy
http://www.rollingstone.com/politics...uptcy-20111110
JPMorgan was already fined/"settled" for several $100M for this bull . Nobody goes to jail.
I guess Jefferson County didn't get the memo that taking on a bunch of debt would stimulate the economy. "Grow your way out of debt", or so said someone to me earlier today.............
JC's people and consultants were pretty corrupt, and JPMorgan was there to oblige (and pay the fees to enablers).
JC can't print money, but the US govt can.
...and what happens when all the residents of Jefferson County move?
I know I would. The county is going to raise every single municipal service and tax by a whole uva lot. What are the banks going to do when no one resides there to foot the bill?
Going to have to go after the state, right? What if the State cant pay? Go after the Fed?
Yeah, good luck with that.
The banks lose because they're certainly not going to get dollar for dollar out of a bankruptcy settlement. Residents lose because their service fees and taxes are going to go up. The county loses because they won't be able to borrow money for the immediate future and will have to pay higher interest rates after that. Everybody involved loses.
Finally a Rollingstone article that I can read. Thanks for posting, rollingstone.com is blocked in my locale.
I actually feel the same way. My parents got me a one year subscription to rolling stone when I was 18 or so and I thought it was pretty cool....
For whatever reason, my parents did the same when I was 29 (I remember thinking "what am I going to do with this?"), so I read it. Every serious article was dotted with " ers" and "pussies", etc. and I just couldn't take it seriously. I realize that they are just words, but it would seem that they could find better and more descriptive words. It kinda made me think of a teenager screaming "LOUD NOISES".
Edit: Oh and on topic, this sucks. I am in a finance MBA and no layperson at this point would have any idea how these things work and therefore when it is hoisted upon the people, they have no clue about it. Not only do they have no clue about it, but they don't know enough to know the questions they should be asking.
Last edited by Drachen; 11-10-2011 at 09:42 PM.
Finally, a Judge Stands Up to Wall Street
Federal judge Jed Rakoff, a former prosecutor with the U.S. Attorney’s office here in New York, is fast becoming a sort of legal hero of our time. He showed that again yesterday when he shat all over the SEC’s latest dirty settlement with serial fraud offender Citigroup, refusing to let the captured regulatory agency sweep yet another case of high-level criminal malfeasance under the rug.
The SEC had brought an action against Citigroup for misleading investors about the way a certain package of mortgage-backed assets had been chosen. The case is very similar to the notorious Abacus case involving Goldman Sachs, in which Goldman allowed short-selling billionaire John Paulson (who was betting against the package) to pick the assets, then told a pair of European banks that the “designed to fail” package they were buying had been put together independently.
This case was similar, but worse. Here, Citi similarly told investors a package of mortgages had been chosen independently, when in fact Citi itself had chosen the stuff and was betting against the whole pile.
This whole transaction actually combined a number of Goldman-style misdeeds, since the bank both lied to investors and also bet against its own product and its own customers. In the deal, Citi made a $160 million profit, while its customers lost $700 million.
Goldman, in the Abacus case, got fined $550 million. In this worse case, the SEC was trying to settle with Citi for just $285 million. Judge Rakoff balked at the settlement and particularly balked at the SEC’s decision to allow Citi off without any admission of wrongdoing. He also mocked the SEC’s decision to describe the crime as “negligence” instead of intentional fraud, taking the entirely rational position that there’s no way a bank making $160 million ripping off its customers can conceivably be described as an accident.
“Why should the court impose a judgment in a case in which the SEC alleges a serious securities fraud but the defendant neither admits nor denies wrongdoing?” And this: “How can a securities fraud of this nature and magnitude be the result simply of negligence?”
So to recap: a unit of Citigroup, having repeatedly violated the same laws and having repeatedly violated the SEC’s own cease-and-desist orders and injunctions, is dragged into court one more time for committing a massive fraud.
And what does the SEC do? It doesn’t even bring up Citi’s history of ignoring the SEC’s own order, slaps the bank with a fractional fine, refuses to target any individuals, allows the bank to walk away without an admission of wrongdoing, and puts a cherry on the top by describing the $160 million heist not as a crime, but as unintentional negligence.
http://www.rollingstone.com/politics...treet-20111110
What do they mean "finally" hasn't this guy been doing this for a few years now?
Nevermind.Finally, a Judge Stands Up to Wall Street
Federal judge Jed Rakoff, a former prosecutor with the U.S. Attorney’s office here in New York, is fast becoming a sort of legal hero of our time. He showed that again yesterday when he shat all over the SEC’s latest dirty settlement with serial fraud offender Citigroup, refusing to let the captured regulatory agency sweep yet another case of high-level criminal malfeasance under the rug.
The SEC had brought an action against Citigroup for misleading investors about the way a certain package of mortgage-backed assets had been chosen. The case is very similar to the notorious Abacus case involving Goldman Sachs, in which Goldman allowed short-selling billionaire John Paulson (who was betting against the package) to pick the assets, then told a pair of European banks that the “designed to fail” package they were buying had been put together independently.
This case was similar, but worse. Here, Citi similarly told investors a package of mortgages had been chosen independently, when in fact Citi itself had chosen the stuff and was betting against the whole pile.
This whole transaction actually combined a number of Goldman-style misdeeds, since the bank both lied to investors and also bet against its own product and its own customers. In the deal, Citi made a $160 million profit, while its customers lost $700 million.
Goldman, in the Abacus case, got fined $550 million. In this worse case, the SEC was trying to settle with Citi for just $285 million. Judge Rakoff balked at the settlement and particularly balked at the SEC’s decision to allow Citi off without any admission of wrongdoing. He also mocked the SEC’s decision to describe the crime as “negligence” instead of intentional fraud, taking the entirely rational position that there’s no way a bank making $160 million ripping off its customers can conceivably be described as an accident.
“Why should the court impose a judgment in a case in which the SEC alleges a serious securities fraud but the defendant neither admits nor denies wrongdoing?” And this: “How can a securities fraud of this nature and magnitude be the result simply of negligence?”
So to recap: a unit of Citigroup, having repeatedly violated the same laws and having repeatedly violated the SEC’s own cease-and-desist orders and injunctions, is dragged into court one more time for committing a massive fraud.
And what does the SEC do? It doesn’t even bring up Citi’s history of ignoring the SEC’s own order, slaps the bank with a fractional fine, refuses to target any individuals, allows the bank to walk away without an admission of wrongdoing, and puts a cherry on the top by describing the $160 million heist not as a crime, but as unintentional negligence.
http://www.rollingstone.com/politics...treet-20111110
I would normally agree with sec3 but how else do you describe the people that pull off this crap?
If there was any justice in this world, they would lock Blont and the other scam artists in the sewer system and allow each citizen to take a dump on their face.
Bankruptcy Rarely Offers Easy Answer for Counties
Municipal bankruptcies remain extremely rare, and each of these cases can be viewed as unique, a one-off: Jefferson County was undone by a major sewer project marred by corruption, Harrisburg by borrowing more than it could repay for a disastrous incinerator project, Central Falls by pension problems, and Hamtramck by the woes of the auto industry. Viewed another way, though, they show how the downturn has left the nation’s most distressed cities with few options for papering over huge problems, and left some desperate elected officials placing their hopes in bankruptcy judges.
Their desire for simple solutions may be in vain, though: for cons utional reasons, the part of the federal bankruptcy code that municipalities use, Chapter 9, sharply limits the power of bankruptcy judges to intervene in local governance.
http://www.nytimes.com/2011/11/11/us...unties.html?hp
So taking on more debt than you can repay makes your life difficult. Who knew?
If it were that simple, why did SEC hit JPMorgan with $100Ms in fines?
Y'all always blaming the borrower, NEVER the much more sophisticated, often fraudulent, predatory lender.
I blame both. Unfortunately, in municipal cases, the people binding the municipalities are not personally at risk for damn near anything - except losing reelection. If the payoff from the fraud is greater (exponentially) than their middling salary, then, if they are no more moral than the charlatans peddling the snake oil, a perfect storm of corruption, greed and ability is formed.
People need to go to jail; lots of people. The ONLY way this crap is going to stop. As long as there is such a great upside, and almost NO downside? We get what we pay for.
Both parties are culpable here. JPM is getting what they deserve. In addition to the fines they're having to pay, they're going to lose even more in the bankruptcy because they're not going to get full value on their bonds. Still, JPM's actions don't absolve JC from their responsibility to look out for their own finances. Two sides made a bad decision, two sides are paying a price.
Thanks, WH. You have been very faithful in following up this story. So if I read this somewhat brief decree accurately, Jefferson County Alabama has just been allowed to declare Chapter 9 Bankruptcy over the protest of the Bank of New York?
Right?
Jefferson County is where Birmingham is. Imagine what those property values look like now.
That's what the headlines say. Thanks for the verification.
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