Rahm Emanuel Is Trying To Pay Wall Street Banks Even More for Chicago’s Bad Financial Deals
By Saqib Bhatti
Posted March 6, 2016
In an unprecedented move on Wednesday, the Chicago City Council rebuked Mayor Rahm Emanuel’s plan to voluntarily pay banks $106 million in penalties to terminate the city’s remaining interest rate swap agreements. In another unprecedented move, I attempted to explain to my mother what had happened.
I told her, in a mix of English and our native Urdu, that the city had entered into these bad deals that had cost taxpayers millions of dollars, and that a group of us have been calling on the mayor to sue the banks to get the money back. I also told her that, instead of suing the banks, the mayor was trying to pay them all of the future payments for the next 15 years right now in order to get out of the deals.
My mother was shocked. “So instead of paying what he would over the next 15 years, he’s just paying them now?” she asked. I nodded. “That’s just more money for the banks,” she replied. “Why would he do that?” More…
Is Wall Street Making a Killing off Cities’ Debt?
by Susie Cagle
Posted March 3, 2016
Passions often run high at city council meetings in Oakland, California. But July 3, 2012 was something special. One after another, people stepped up to the microphone to plead with the council to stop paying its bills — and, for the most part, the council agreed. Those bills were from Goldman Sachs.
The meeting came after months of public discussion about how to exit a 1998 deal — a fixed-rate swap agreement tied to debt issued to finance pensions — that wasn’t working out the way the city had envisioned.
The 5.6 percent fixed rate would be a good deal, the city figured, if interest rates rose to 8 or 9 percent in good fiscal times. But they didn’t. The market crashed. Interest rates hit the floor. The swap deal soured. Oakland was stuck paying $4 million in annual interest to Goldman Sachs. By that year, the swap had a negative market value of approximately $15.5 million, the city treasurer informed the council in the lead-up to the July hearing. More…
Ten Common Sense Economic Truths
by David Korten
Posted February 22, 2016
The more closely I look, the more obvious it is that the Old Economy fails because it is based on false values, assumptions, and logic. Those who are working to create a New Economy from the bottom-up intuitively recognize and act on 10 common sense truths foundational to a sound economy.
A proper money system roots the power to create and allocate money in people and communities in order to facilitate the creation of livelihoods and ecologically balanced community wealth. Money properly serves life, not the reverse. Wall Street uses money to consolidate its power to expropriate the real wealth of the rest of the society. Main Street uses money to connect underutilized resources with unmet needs. Public policy properly favors Main Street. More…
When Cash Is Outlawed… Only Outlaws Will Have Cash
by Bill Bonner
Posted February 20, 2016
Harvard economist Larry Summers is a reliable source of claptrap. And a frequent spokesman for the Deep State. “It’s time to kill the $100 bill,” he wrote in the Washington Post.
And now, Mr. Summers wants us to bring our cash to the town square. Instead of $100 bills, he wants to force us to use electronic notations faithfully recorded in a federally regulated bank. Have you ever seen one of these “electronic dollars,” dear reader?
The Deep State wants you to use money it can easily control, tax, and confiscate. And paper currency is getting in its way. More…
Why would ANYONE listen to a man who was a key proponent for the deregulating of financial institutions and risky derivatives, who did not forsee the 2008 crash that was the inevitable result even after whistle blowers (whom he ridiculed) provided warnings, and who then went on to micro-manage and lose $1.8 BILLION of Harvard University’s endownment funds to a risky mix of stocks, bonds, hedge funds, and private equity?
Central Banks Are Trojan Horses, Looting Their Host Nations
By Washington’s Blog
Posted February 15, 2016
Economics professor Richard Werner – who created the concept of quantitative easing – has documented that central banks intentionally impoverish their host countries to justify economic and legal changes which allow looting by foreign interests.
The Fed’s main program for dealing with the financial crisis – quantitative easing – benefits the rich and hurts the little guy, as confirmed by former high-level Fed officials, the architect of Japan’s quantitative easing program and several academic economists. Indeed, a high-level Federal Reserve official says quantitative easing is “the greatest backdoor Wall Street bailout of all time”. Some economists called the bank bailouts which the Fed helped engineer the greatest redistribution of wealth in history. More…
Financial Oligarchy vs. Feudal Aristocracy
by Ismael Hossein-Zadeh – Anthony A. Gabb
Posted February 14, 2016
Under the feudal mode of production, peasants were often allowed to cultivate plots of land for themselves on a rental basis. However, those tenant farmers rarely succeeded in becoming landowners in their own rights because a major share of what they harvested was taken away by landlords as rent, often leaving them with a bare subsistence amount of what they produced. When the harvest was poor, they incurred debt. If peasants were unable to pay off their debts, they could find themselves reduced to the condition of serfs or slaves.
Today, under conditions of market dominance by parasitic finance capital, a similar relationship can be detected between the powerful financial oligarchs (as feudal lords of our time), on the one hand, and the public at large (as peasant population of today), on the other. In the same manner as the landed aristocracy of times past extracted rent by virtue of monopolistic ownership of land, so today the financial oligarchy extracts interest and other financial charges by virtue of having concentrated the major bulk of national resources in their hands in the form of finance capital. More…
How State Banks Bring the Money Home
by Stacy Mitchell
Posted February 9, 2016
One of the most significant, but least noticed, consequences of the rapid and dramatic consolidation of the banking industry over the last decade is how much it has hindered the U.S. economy’s ability to create jobs.
To begin to understand this, take a look at each end of the banking spectrum. On one end are the nation’s 6,900 small, locally owned, community banks. These institutions control $1.4 trillion in assets. That’s 11 percent of all bank assets. They currently have $257 billion in loans to small businesses and farms on their books.
On the other end, four giant banks—JP Morgan Chase, Bank of America, Citibank, and Wells Fargo—now command $5.4 trillion in assets, or 40 percent of the total. Given that they are nearly four times as large as all local banks combined, one might expect that they would have made four times the small-business loans, or about $1 trillion. In fact, these banks have a mere $85 billion in small-business and farm loans on their balance sheets. More…
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