Wake-up Call

Resist the Corporate State

Posts Tagged ‘Looting the public

More Looting of Taxpayers: Wall Street Collects $4 Billion as Swaps Backfire

with 6 comments

Bloomberg.com Nov 9, 2010

The subprime mortgage crisis isn’t the only calamity Wall Street created that’s upending the finances of U.S. states and cities.

….

Wall Street banks and insurers peddled financial derivatives known as interest-rate swaps to governments and nonprofits that bet they could lower the cost of borrowing. There were as much as $500 billion of the deals done in the $2.8 trillion municipal bond market before the credit crisis, according to a report by Randall Dodd, a senior researcher on the Financial Crisis Inquiry Commission, published by the International Monetary Fund in June.

Borrowers from New York to California are now paying to get out of agreements. Altogether, they have made more than $4 billion of termination payments to firms including New York- based Citigroup Inc., New York-based JPMorgan Chase & Co. and Charlotte, North Carolina-based Bank of America Corp. since the beginning of 2008, according to a review of hundreds of bond documents and credit-rating reports by Bloomberg News.

In contrast to the subprime crisis, few taxpayers know anything about the cost of untangling municipal swaps. The only disclosure of payments to Wall Street often is buried in documents borrowers have to give investors when they sell bonds.

In many cases, firms getting payments aren’t explicitly identified and government officials often don’t call attention to payments made to cancel contracts. Many of the telephone calls and e-mails from Bloomberg News to dozens of government and nonprofit officials over the last eight months seeking comment on derivative transactions went unanswered…….

read entire article

Bill Moyers: “Welcome to the Plutocracy!”

with one comment

You would think the rich might care, if not from empathy, then from reading history. Ultimately gross inequality can be fatal to civilization…. Pulitzer Prize-winning anthropologist Jared Diamond writes about how governing elites throughout history isolate and delude themselves until it is too late.

Wednesday 03 November 2010            t r u t h o u t

The first Howard Zinn Memorial Lecture was delivered by veteran journalist, Bill Moyers, Friday, October 29,  2010, at Boston University .

.              Howard Zinn (b. Aug. 24, 1922, in Brooklyn, N.Y.; d. Jan. 27, 2010, in Santa Monica, Calif.) was a professor of Political Science at Boston University from 1964 to 1988, historian, playwright, activist, and author of more than 20 books, including  A PEOPLE’S HSTORY OF THE UNITED STATES:  1492 – PRESENT (1980), revised (1995)(1998)(1999)(2003).

*   *   *   *   *

I was honored when you asked me to join in celebrating Howard Zinn’s life and legacy. I was also surprised. I am a journalist, not a historian. The difference between a journalist and an historian is that the historian knows the difference. George Bernard Shaw once complained that journalists are seemingly unable to discriminate between a bicycle accident and the collapse of civilization. In fact, some epic history can start out as a minor incident. A young man named Paris ran off with a beautiful woman who was married to someone else, and the civilization of Troy began to unwind. A middle-aged black seamstress, riding in a Montgomery bus, had tired feet, and an ugly social order began to collapse. A night guard at an office complex in Washington D.C. found masking tape on a doorjamb, and the presidency of Richard Nixon began to unwind. What journalist, writing on deadline, could have imagined the walloping kick that Rosa Park’s tired feet would give to Jim Crow? What pundit could have fantasized that a third-rate burglary on a dark night could change the course of politics? The historian’s work is to help us disentangle the wreck of the Schwinn from cataclysm. Howard famously helped us see how big change can start with small acts.

We honor his memory. We honor him, for Howard championed grassroots social change and famously chronicled its story as played out over the course of our nation’s history. More, those stirring sagas have inspired and continue to inspire countless people to go out and make a difference. The last time we met, I told him that the stories in A People’s History of the United States remind me of the fellow who turned the corner just as a big fight broke out down the block. Rushing up to an onlooker he shouted, “Is this a private fight, or can anyone get in it?” For Howard, democracy was one big public fight and everyone should plunge into it. That’s the only way, he said, for everyday folks to get justice – by fighting for it.

I have in my desk at home a copy of the commencement address Howard gave at Spelman College in 2005. He was chairman of the history department there when he was fired in 1963 over his involvement in civil rights. He had not been back for 43 years, and he seemed delighted to return for commencement. He spoke poignantly of his friendship with one of his former students, Alice Walker, the daughter of tenant farmers in Georgia who made her way to Spelman and went on to become the famous writer. Howard delighted in quoting one of her first published poems that had touched his own life:

It is true
I’ve always loved
the daring ones
like the black young man
who tried to crash
all barriers
at once,
wanted to swim
at a white beach (in Alabama)
Nude.

That was Howard Zinn; he loved the daring ones, and was daring himself.

One month before his death he finished his last book, The Bomb. Once again he was wrestling with his experience as a B-17 bombardier during World War II, especially his last mission in 1945 on a raid to take out German garrisons in the French town of Royan. For the first time the Eighth Air Force used napalm, which burst into liquid fire on the ground, killing hundreds of civilians. He wrote, “I remember distinctly seeing the bombs explode in the town, flaring like matches struck in the fog. I was completely unaware of the human chaos below.” Twenty years later he returned to Royan to study the effects of the raid and concluded there had been no military necessity for the bombing; everyone knew the war was almost over (it ended three weeks later) and this attack did nothing to affect the outcome. His grief over having been a cog in a deadly machine no doubt confirmed his belief in small acts of rebellion, which mean, as Howard writes in the final words of the book, “acting on what we feel and think, here, now, for human flesh and sense, against the abstractions of duty and obedience.”

His friend and long-time colleague writes in the foreword that “Shifting historical focus from the wealthy and powerful to the ordinary person was perhaps his greatest act of rebellion and incitement.” It seems he never forget the experience of growing up in a working class neighborhood in New York. In that spirit, let’s begin with some everyday people.

Read the rest of this entry »

Banks Bailed Out By American Taxpayers- Paying Us Back By Shorting Our States and Cities

leave a comment »

by Washington’s Blog Global Research, April 29, 2010

Americans bailed out the giant banks. So how do the too big to fails re-pay the American taxpayers?

By betting that American states and cities will fail.

As the Wall Street Journal notes:

As U.S. cities and towns wrestle with financial problems, investors are finding a new way to profit on their misery: by buying derivatives that essentially bet municipalities will default.

These so-called credit default swaps are basically insurance contracts that have long been available to protect holders of corporate bonds against default. They became available a few years ago for municipal debt, allowing investors to short sell—or bet against—countless cities, towns and bridges, and more than a dozen states, including California, Michigan and New York.

The derivatives are still thinly traded, but their existence has the potential to make investors skittish.

Commenting on the story, Huffington Post points out:

Offered by banks like JP Morgan, Bank of America, and Citigroup, the so-called municipal credit default swaps can be used by investors to bet that insurance contracts protecting holders of municipal bonds will default.

Some states say the derivatives not only scare away potential buyers of municipal bonds by creating a perception of risk, but ultimately drive up states’ borrowing costs. Others contend that the instruments are traded too thinly to affect municipal bond markets or a state’s credit rating.

The California treasurer is just one of a number of state treasurers that have launched a probe into the sale of these derivatives and the sale of municipal bonds by big Wall Street firms that might reveal “speculative abuse of CDS in the muni market,” says one regulator.

Of course, if states or cities go bust, Uncle Sugar will need to bail them out.

So by letting the bailed out gamblers on Wall Street run amok, Summers, Geithner, Bernanke and the gang are increasing the odds that the states and cities of America – you know, the actual constituent parts which make up the United States – will need to be bailed out.

Of course, bailing out the states and cities in the first place would have given more bang for the buck than throwing money at the giant banks, especially given that the Federal Reserve has intentionally created incentives to ensure that banks will not loan out money back into the economy.

Hawks eyeing wrong prey

leave a comment »

Boston Globe

By Robert Kuttner March 12, 2010

PRESIDENT OBAMA has bowed to pressure from deficit hawks in Congress and on Wall Street by agreeing to their longtime pet project, a commission charged with reining in the federal budget.

The concept behind the creation of the National Commission on Fiscal Responsibility and Reform was invented on Wall Street. For more than two decades, private-equity billionaire Peter G. Peterson and an array of Peterson-affiliated groups such as the Concord Coalition and the Committee for a Responsible Federal Budget have been warning that deficits and “unfunded liabilities’’ would crash the economy. Funny thing, though, when the actual crash came it had nothing to do with projected public deficits and everything to do with excesses in private financial markets.

Read the rest of this entry »

Wall Street Took Your House and Your Retirement, Now They’re After Your Social Security

leave a comment »

AFL-CIO / Creative Commons
Photo Credit: Flickr Creative Commons

AlterNet

Wall Street tycoon Pete Peterson wants to bring IMF-style economic insanity to the U.S. The scary part? He might get away with it.

March 5, 2010 |   By Ellen Hodgson Brown

In addition to mandatory private health insurance premiums, we may soon be hit with a “mandatory savings” tax and other belt-tightening measures urged by the president’s new budget task force. These radical austerity measures are not only unnecessary, but will actually make matters worse. The push for “fiscal responsibility” is based on bad economics.

When billionaires pledge a billion dollars to educate people to the evils of something, it is always good to peer closely at what they are up to. Hedge fund magnate Peter G. Peterson was formerly chairman of the Council on Foreign Relations and head of the New York Federal Reserve. He is now senior chairman of Blackstone Group, which is in charge of dispersing government funds in the controversial AIG bailout, widely criticized as a government giveaway to banks. Peterson is also founder of the Peter Peterson Foundation, which has adopted the cause of imposing “fiscal responsibility” on Congress. He hired David M. Walker, former head of the Government Accounting Office, to spearhead a massive campaign to reduce the runaway federal debt, which the Peterson/Walker team blames on reckless government and consumer spending. The Foundation funded the movie “I.O.USA.” to amass popular support for their cause, which largely revolves around dismantling Social Security and Medicare benefits as a way to cut costs and return to “fiscal responsibility.”

Read the rest of this entry »