If the article http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ay5LDbjbjy6c by Martin Braun and William Selway published by Bloomberg is a valid indication, no American citizen is safe from intentional government-sanctioned financial destruction.
Everyone should assume all major investment banks are intentional players in sophisticated scams that epitomize American-style predatory capitalism, and that smaller local banks have been fleeced. Logic dictates smaller banks have been successfully targeted for infestation with financial weapons of mass destruction early on. They present plumper pickings as compared to leaner small school districts in poor communities in Pennsylvania.
Logic also dictates that credit unions, 401K plans, corporate pension plans and even money-market funds all have been infested and are at risk of major loss of value.
Bluntly, no one is safe from America's government-sanctioned financial terrorists.
One form of deadly infestation is called an interest-rate swap, the most prevalent form of financial derivative, by which two parties agree to swap payments for as long as 30 years. One party agrees to pay a fixed interest rate. The other party agrees to pay a variable rate. Derivatives have been glowingly hailed as an improvement to the financial markets as a way to "reduce risk". As Alan Greenspan, then Chairman of the Federal Reserve explained in a 1998 speech to the Securities Industries Association:
"All the new financial products... financial derivatives being in the forefront... contribute economic value by unbundling risks and reallocating them in a highly calibrated manner."
Meaning savvy sharks and predators could greedily keep the opportunities for gain to themselves while "unbundling" the contra-party risks of loss by foisting them onto unsuspecting citizens who strive diligently to improve their communities but lack specialized financial acumen found only on Wall Street.
Trusting, well-intentioned citizens who are intentionally and disdainfully played for saps and suckers, with government support.
The Sickening Case of Erie, Pennsylvania.
Erie, Pennsylvania is a 100,000-population city with a long-decimated manufacturing base and a population that's declined by 30 percent since 1970. Widespread poverty is starkly reflected by a single statistic: About 76 percent of school students are eligible for free or reduced-price lunches.
In 2001 the Erie school system prepared to make urgently need repairs to deteriorating buildings, including Roosevelt Middle School. The school board issued $38.7 million in bonds that were locked into a fixed interest rate for the next 10 years.
By 2003, the Erie school system desperately needed money for operating costs and purchase of new textbooks. The school board determined residents couldn't afford a tax increase.
Within a few days of enactment of a new state law, JPMorgan Chase and Co. "came to Erie's rescue". In September 2003 the school board was told all they had to do was "sign some papers" and they would benefit at some time in the future, if interest rates increased.
Meaning JPMorgan Chase purchased the right to force Erie schools to make good on an interest rate swap if rates instead declined, at any time before 2029.
The board "signed some papers" and was paid $785,000. The board wasn't told the obligation they sold for $785,000 was actually worth about $2 million, or that JPMorgan Chase's profit on the deal would be over $1 million.
Perversely, interest rates declined. In July 2006 the already cash-strapped Erie school board paid $2.9 million to JPMorgan Chase to get out of the deal.
The author is a retired professional civil and structural engineer, reformed attorney, fierce Progressive, policy junkie, vociferous reader, lifelong learner, aspiring writer and author of the crime-thriller "The Geronimo Manifesto".
He is also a law-abiding but avid proponent of progressing America back to its earlier ideals of freedom, fairness, justice and opportunity for all.
That's the title of my commentary on the same subject at GreatRedDragon.com
I prefer the label "sociopaths" as described in Dr. Hare's book "Snakes In Suits." These people have no empathy nor conscience. They use their knowledge of finance to lie to and steal from others. It's no different than learning marital arts, pretending it's for self-defense, then becoming the biggest bully in the area. Actually it's worse, because you can see the bully coming. These are people who have pilfered most of the baby boomer's hard-earned pensions and replaced them with phony paper. It's going to be a very rude awakening, and they are going to be very angry. THAT's why Homeland Security exists! It's not for your protection, but the thieves.
by
Edward Ulysses Cate (0 articles, 0 quicklinks, 0 diaries, 221 comments)
on Tuesday, February 12, 2008 at 6:51:58 PM
On a theoretical level, Libertarians favor unfettered markets under an unfettering governmental system of people who believe in fairness for all.
This does not equate to stripping the people of all their defenses and requiring them to surrender to monsters and thugs, a voluntary commission of suicide.
American society has proven beyond doubt these monsters and thugs exist. The issue is how to develop a governing system that minimizes intrusion upon personal liberties while preventing rather than encouraging these people, who view lack of governmental controls as a license to steal, from to rising to positions of power.
azchuck
by
Chuck Simpson (10 articles, 0 quicklinks, 0 diaries, 15 comments)
on Wednesday, February 13, 2008 at 8:23:00 AM
3 comments
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