There are a few policies advanced yesterday we will bring forward today still remaining on the taxation of corporate property. I often shout that these global corporate campuses in Baltimore will be miles in diameter. When global Wall Street and global corporations moved over to create International Economic Zones in Asia they built them as massive economic centers. The idea was controlled economic development tied only to global corporations leaving the rest of China, India etc undeveloped. Above we see the size----1000 hectares which is that 3 miles figure I often quote. We can be assured the plan for US cities as International Economic Zones will START with these 3 mile-size dimensions because the goal is to kill all other economic activity in these US zones. Baltimore has done a great job these few decades doing just that in creating the decline and decay needed to build these global corporate campuses. This is what we need to think about as we think where will our city and state revenue come if the entire greater Baltimore and greater Prince George's County has land attached to these global corporate campuses paying no taxes.
THE ANSWER IS OF COURSE THAT ALL PEOPLE ATTACHED TO JOBS WITH ONE OR THE OTHER CORPORATE CAMPUS WILL BE FORCED TO LIVE ON CAMPUS IN CORPORATE HOUSING AND TO SOLVE THE PROBLEM OF MISSING TAXATION GLOBAL CORPORATIONS WILL SIMPLY REDUCE US CITIZENS' WAGES TO $3 A DAY OR $20-30 A DAY SAYING THE REST WILL BE USED FOR GLOBAL CORPORATE CAMPUS SOCIALISM/MARXISM.
As we read, the global 1% and their 2% are the ones to live on these affluent global corporate headquarter campuses and the rest of people will be attached to global corporate dormitory living----which almost always looks like Industrial Stalinist USSR----bleak concrete for miles. Now global corporations say DON'T WORRY ABOUT TAXES because we will simply use what used to be salaries and wages to support infrastructure, fire and police, roads and sidewalks and since we will own all property with housing there will be no property taxes for the 99%......ISN'T ALL THAT MARXISM?
YES, FAR-RIGHT, AUTHORITARIAN, MILITARISTIC LIBERTARIAN CORPORATE MARXISM/SOCIALISM.
The next tax policy issue is WHY ARE THEY ATTACHING TIFs TO MUNICIPAL BONDS? My friends can look towards Baltimore for the most repressive ONE WORLD policies because we have a captured election only allowing establishment candidates full participation with election ballot rigging.
Below you see last year's TIF bonanza again tied to municipal bonds as was our $1 billion dollar school building bonds. Municipal bond deals are ALWAYS tied to taxation of the 99%.
Finance Board approves big influx of TIF bonds for Harbor Point
Above: Keenan Rice (foreground), the city’s financial advisor, is about to address members of the Finance Board today. (Mark Reutter)
Reassured that developer Michael Beatty is not earning excessive profits, the Board of Finance today approved $39 million of tax increment (TIF) bonds for the second stage of infrastructure building at Harbor Point.
The amount is nearly three times the original $14 million in Phase 2 bonding for the waterfront development.
The Baltimore Development Corp., which oversees the project, upped the costs of various infrastructure that the city will pay in Phase 2, including $7 million more for a central plaza fronting the Exelon Tower and $3 million for a sewage pumping station that was not planned when the city agreed to support Beatty’s project in 2013.
Comptroller Joan M. Pratt, who sits on the board, abstained from approving the bond issuance because she said the Finance Department did not give her enough time to review the material.
“My concern is that our last meeting was on May the 9th, and I wasn’t given the information on the ‘but-for’ test and reallocation of funds until Wednesday evening, which isn’t enough time for I and my staff to review it,” she said.
Walter Horton, an aide to Pratt, expressed worry that city resident are “going to lose the public benefits” of a waterfront promenade and park at Harbor Point because of the Phase 2 cost overruns.
Budget figures show that the promenade and Point Park are slated to receive about $20 million fewer TIF funds than originally promised when the project was approved by the City Council in 2013.
Public vs. Private Statements
City officials told the board that won’t happen.
“We believe we can absolutely do that [keep the park and promenade intact] with the way the project has been phased and redesigned,” said Steve Kraus, deputy director of finance.
Dan Taylor, project manager for BDC, explained it another way.
“The differences in the park costs in Phase 3 are not going to be seen when you are walking along the parks. There will still be the same fixtures and the same furnishings, the grass and the trees,” he said.
That’s because, Taylor said, “the engineering required to build those parks has gone down. As we’ve gotten into the site, what we’ve found is there is less structure to be put in place to support things like the promenade and Point Park.”
For example, most of the promenade can be built on land, Taylor said, compared to the original plan of building much of the structure over the water, which “is many times more expensive.”
Taylor’s optimistic words were contrary to what Colin Tarbert, deputy mayor for development, told the BDC in closed meetings in March whose minutes were released after The Brew, Baltimore Business Journal and Baltimore Sun protested the closed sessions to the Maryland Open Meetings Compliance Board.
Tarbert described Harbor Point as a prime example of the risks of not having enough TIF capacity, which will require the city eventually “to dip into the general funds in order to complete the project.”
Looking at Port Covington
Tarbert used Harbor Point as a warning that the city must have enough TIF capacity to bankroll the infrastructure of Port Covington for Under Armour CEO Kevin Plank.
The opened BDC minutes revealed that Plank’s real estate company had originally proposed $400 million in TIF bonds, but the BDC and Rawlings-Blake administration called for $535 million – or 33% more – to cover contingencies and unexpected costs.
In the case of Harbor Point, a major cause of its increased needs for more bond money for Phase 2 is to cover unanticipated costs of building the Exelon Tower over the capped portion of the site.
In discussing the profits going to Harbor Point’s developer, Keenan Rice, the city’s financial advisor, said it was nearly impossible to say how much Michael Beatty earned upon selling the Morgan Stanley Building at Harbor Point in late 2013 because of various loans and land transactions tied up in the deal.
Rice said it was probably fair to say the investors got back their principal and an interest in three other real estate projects, and that Beatty and his backers made a profit but “not an extraordinary profit.”
BEATTY WAS ALLOWED TO BUY THE BONDS ON HIS OWN DEAL SO HIS PROFITS ARE COMING.
The Point Apartment Building is rising at Harbor Point next to the Thames Wharf building occupied by Morgan Stanley. (Mark Reutter)
Minority Hiring Above Goal
In terms of minority hiring, Harbor Point has so far exceeded the city’s goals, Taylor said. A total of 8,166 workers have been “on payroll at the site” over the years, and 2,335, or 29%, were city residents. That figure exceeded the city’s goal of 20%.
There has been a total of 341 new hires by companies working on the project, of which 195, or 57%, are listed as city residents.
“That is quite impressive,” said board member Dana Moulden before she and three other members (Larry I. Silverstein, Frederick Meier Jr., and Kaliope Parthemos representing Mayor Stephanie Rawlings-Blake) voted to authorize the Phase 2 TIF allocation.
Pratt said after the meeting that when BDC said there would be a reduction in costs in Phase 3 because of better engineering, “I was wondering why isn’t there a reduction in the need for the TIF? That was one of the things I am concerned about.”
I've talked at length about the $1 billion school building bond and how this coming bond market collapse will end with Wall Street investment firms tied to these bonds owning all real estate tied to these bonds as city and state pols will say---SORRY, THE ECONOMIC CRASH MEANS WE DO NOT HAVE ANY REVENUE. This is all a plan, deliberate, willful, and with malice all things needed to call this fraud, government corruption---the very things that will all WE THE PEOPLE to reverse and end these deals.
ALL THESE DEALS ARE BEING DONE ILLEGALLY AND CAN BE REVERSED SO NONE OF THIS IS INEVITABLE.
Below we see the same policies tied to the same mechanisms here in Massachusetts and yes, the supposedly POPULIST Elizabeth Warren promotes them as good for labor and justice. When they say minority labor gets these jobs they are now talking about a global labor workforce moving worker's from national all over the world---and yes, they are considered minorities in our US cities/counties. So, these workers will displace even long-term Latino immigrants. Again, we support our immigrant families we do not want this massive influx of rotating global labor workforce model even worse tied to global corporate campus models.
Yes, these exact development policies are unrolling in all global International Economic Zones. Authoritarian dictator's in Singapore and China are hawking these same progressive posing labor and justice KILLING policies.
District Improvement Financing (DIF)/
Tax Increment Financing (TIF)
In Brief: District Improvement Financing (DIF) and Tax Increment Financing (TIF) are economic tools that promote redevelopment by use of public/private partnerships. TIF offers tax breaks to developers, while DIF channels tax dollars into targeted redevelopment districts.
The Problem Many municipalities in Massachusetts are faced with blighted, distressed, or simply underutilized areas. Many of these sites contain abandoned or contaminated facilities, while others are characterized by dilapidated infrastructure and commercial operations that simply are not economically viable. These areas often see a decrease in assessed property values with a corresponding decrease in municipal revenue. At the same time, they pose a drain upon municipal services. Often, it is difficult to attract private investment to these areas.
Both DIF and TIF provide municipalities with innovative tools to target districts or specific projects for redevelopment. The use of tax increments is the centerpiece of both tools. A tax increment is the difference between the beginning assessed value of the targeted property in its dilapidated state and the assessed value going forward in time, as the planned improvements take shape. The tax increment, calculated by the local Assessor, is the tax on the added value of new construction, rehabilitation or new equipment or machinery. Determining the value of the tax increment is essentially the same for both DIF and TIF. How the tax increment is used as an incentive, however, is very different. Using DIF, municipalities can pledge all or a portion of tax increments to fund district improvements over time. With TIF, municipalities may grant property tax exemptions to landowners of up to 100% of the tax increment for a fixed period.
Introduction to DIF/TIF
DIF is authorized by M.G.L.c. 40Q and its implementing regulations 402 CMR 3.00 et seq. New to Massachusetts, DIF has been implemented in other states with considerable success. A city or town wishing to utilize DIF must first designate a development district and a corresponding development program. The district and program must then be certified by the State Economic Assistance Coordinating Council ("EACC"). A development district may be as small as one parcel or may comprise up to 25% of a town or city's land. A district can be in effect for a maximum of 30 years. Each district must have a unique development program. The development program spells out the goals of the district and the means to achieve them. The program will identify the following:
- Existing uses and current zoning,
- Proposed uses and any needed zoning changes,
- Any planned construction or rennovations,
- Current and planned infrastructure,
- A financial plan.
Once a district and program have been certified, the city or town has the ability to use various tools to implement the program. These include acquiring land, constructing or reconstructing improvements (such as buildings, roads, schools and parks), incurring indebtedness and pledging tax increments and other project revenues for repayment of these debts. Initial funding for these activities is usually accessed through the posting of a bond by the city or town. DIF also allows for public/private development partnerships.
TIF is authorized by M.G.L.c. 40§59 and its implementing regulations 760 CMR 22.01. Under this legislation, landowners may be granted property tax exemptions of up to 100% of the tax increment. A municipality may enter into a TIF Agreement with a landowner for a maximum term of 20 years. M.G.L.c. 40§60 also authorizes TIFs for housing in urban centers. A city or town must initiate a TIF by a vote of its governing body approving the TIF Plan, which must include:
- Designation of the area that will be the TIF zone;
- Description in detail, including plans and specifications where appropriate, of all construction and construction related activity;
- Projection of public and private costs and a betterment schedule for the defrayal of public costs;
- Authorization of a tax increment exemption from property taxes;
- Establishment of a maximum percentage of costs of public construction that can be recovered through betterments or special assessments against any parcel in the TIF zone eligible for exemptions;
- Identification of property owners in the TIF Zone;
- Executed Agreements between the city or town and each owner of property within the TIF zone;
- Delegation of authority to enter into development agreements to one municipal agency, board or officer;
- Data demonstrating that the TIF Zone is located so as to maximize the likelihood of a net economic benefit to the municipality, such as land use information, proximity of mass transit services and tenants within the zone.
DIF and TIF provide opportunities to redevelop areas in ways which can lead to increased property values, increased tax revenue, improved infrastructure, enhanced transportation services, increased housing supply, new jobs and an overall improvement in quality of life for the inhabitants of the city or town.
Success is tied to careful planning which identifies the needs of the district and combination of uses most likely to succeed. While TIF focuses on job creation, DIF allows significant flexibility in planning for the district's housing and commercial needs. The role of private partners can be crucial to achieving the desired effects. In both cases, public/ private agreements provide details and guidelines.
DIF and TIF programs, depending on their design, will satisfy many of the Commonwealth's Sustainable Development Principles including:
• Concentrate Development and Mix Uses: Both DIF and TIF concentrate development in areas in or adjacent to existing downtowns. In doing they make use of existing infrastructure and mass transit. The use of DIF and TIF encourages redevelopment of existing dilapidated sites, urban infill and revitalization.
• Advance Equity: DIF and TIF provide economic incentives to developers and encourage true economic partnerships between developers and municipalities. By virtue of their focus on vacant and underutilized properties in urban centers DIF and TIF often create environmental justice benefits.
• Expand Housing Opportunities: DIF allows the use of tax increments to fund both affordable and market priced housing projects. TIF can be used as an incentive for housing development in urban centers.
• Increase Job and Business Opportunities: By virtue of their economic objectives, TIF and DIF Agreements are directly tied to the creation of new jobs.
• Plan Regionally: DIF and TIF can be used to satisfy regional needs for industry, consumer services, health care, and employment.
Financial ConsiderationsBoth DIF and TIF provide funding mechanisms for development in targeted districts. Considerable planning is required up front, but the payoff in both increased future revenues and benefits to the public can be great. Successful projects will result in increased tax revenue to the municipality.
TIF provides a direct upfront benefit to a Developer in the form of tax relief. The money saved on taxes helps pay the project's construction costs. Depending on the size and location of the project, Developers utilizing TIF benefits can also often access other state financial incentives such as Investment Tax Credits, Abandoned Building Tax Deductions and Research and Development Tax Credits.
DIF provides financial benefits to developers as well, by providing infrastructure and surrounding amenities to support their projects. Early public funding takes the initial burden off the developer and minimizes risk.
If you followed global development and Wall Street you would have watched a global PAY-TO-PLAY that makes our US cities look like Shirley Temple. Global corporations and Wall Street have been using these COMPLEX FINANCIAL INSTRUMENTS for a few decades and it does not matter if or who gets them or if a project is completed---what matters is that financial transaction opened a door for global Wall Street to move its development agenda overseas forward. So, in the US cities as International Economic Zones we will see all kinds of development revenue disappear in this game of GLOBAL TIT-FOR-TAT.
What makes all this more dangerous for WE THE PEOPLE tied to all these tax deals bound tightly to municipal bonds is this: the problem is not only that our city revenue will be tied for 30 years to these corporate campus structures----this problem is super-sized by their ties to MUNICIPAL BONDS. We will lose the global corporate property taxes forever but taxpayers will be victims of a MANIPULATED WALL STREET BOND MARKET that will bring billions of profit to these investment firms HELPING US OUT BY BUYING THIS BOND DEBT.
'Five years after the project began, there’s no clear indication when or if it will be finished.
And the city of Marion has released the developer, Michael Y. An, from repaying any of the debt. According to the city’s development director, “there really never was an expectation for (An) to pay,” Lisa Dominisse wrote in an email to I-Team 8'.
Notice how YMCA/YWCA are tied to all recreation facilities ----they have become a global corporation and are replacing all public recreation/athletic facilities bringing their own guidelines to communities. It is no longer attached to the Methodist Church.
'The World Young Women's Christian Association (World YWCA) is a global movement working for the empowerment, leadership and rights of women, young women and girls in more than 120 countries.Our members and supporters include women from many different faiths, ages, backgrounds, beliefs and cultures. We are all working toward the common goal that “by 2035, 100 million young women and girls will transform power structures to create justice, gender equality and a world without violence and war'
Marion can’t explain how $2.5 million loan was spent
By Bennett Haeberle Published: May 1, 2014, 11:15 pm Updated: June 26, 2014, 10:36 amMARION, Ind. (WISH) –
Concrete around the former YMCA in Marion is crumbling.
Windows are boarded up. A new electrical system remains shut off. Wires for new lights hang from the ceiling.
Construction work that would have revamped the former YMCA into a hotel and retail shops stopped more than a year ago with little explanation.
City officials also cannot explain why there are very few financial documents detailing how the money from a $2.5 million bond issuance was spent.
Five years after the project began, there’s no clear indication when or if it will be finished.
And the city of Marion has released the developer, Michael Y. An, from repaying any of the debt. According to the city’s development director, “there really never was an expectation for (An) to pay,” Lisa Dominisse wrote in an email to I-Team 8.
Instead, two sources of taxpayer money – both Tax Increment Financing (TIF) and Community Redevelopment Enhancement Districts (CREED) – are being used to repay the debt.
This project represents a growing concern among elected leaders and citizens interviewed by I-Team 8. They’re worried that public money is too often used to help fund private projects through the use of TIF. TIF allows local governments to use a portion of property tax revenues gathered from designated areas to pay for projects. It’s been popular among local leaders for decades as a way to build infrastructure or pay for job creation projects.
TIF projects are often seen as politically safe because they rarely require a vote from elected leaders or consent from taxpayers. It’s usually touted as a job creation tool and helps bolster the stats of elected leaders.
There are more than 600 TIF districts spread out among 81 counties in Indiana, according to the most recent state numbers available from November 2013.
Through our investigation, I-Team 8 discovered that the state of Indiana doesn’t track specific TIF projects; meaning if they fail, there’s no oversight and no one is held accountable. And usually, that leaves taxpayers on the hook.
The windows are still boarded up at the old YMCA building in Marion. Click here for more pictures.LOAN, FEW RECEIPTS
In 2009, the city of Marion took out the $2.5 million TIF bond – essentially a tax-backed loan – for the purpose of revamping the YMCA. After the bonds were sold, city records obtained by I-Team 8 show the proceeds were given to California developer Michael Y. An.
An’s company, Global Investment Consulting, was supposed to turn the YMCA into a hotel and retail shops with the understanding it would create 80 to 90 jobs and bring in an annual payroll of $1.2 million to $2 million, according to the original contract and bond agreement signed by Marion Mayor Wayne Seybold.
But the receipts detailing how that $2.5 million loan was spent are sparse.
After I-Team 8 filed an open records request asking for all the financial records, the city provided the 200-page original bond agreement along with 16 pages of documents that supposedly account for the $2.5 million. But all of those records come back to An’s companies: Global Investment Consulting or World Enterprises Group.
Before An could get money for the project, he was supposed to submit “distribution requests” in writing to First Farmers Bank and Trust, the trustee the city hired to manage the bonds.
Five distribution requests were included in the reply to I-Team 8’s open records requests. One is for $481,000 for a “construction fee.” The others include expenses like $250,000 for an HVAC system, $95,000 for an elevator and $305,000 on plumbing. But none of the documents explains what vendor did that work, when it was done, or if it was completed.
Noticeably absent are bank statements, receipts, invoices or any details of how the money was taken out of the bank, how often and for what purpose.
I-Team 8 took those concerns to Mayor Seybold, who during a lengthy interview this spring defended the project, An and his administration’s use of TIF.
When asked about the $2.5 million loan and the public concern that it isn’t unclear how the money was spent, Seybold said: “That’s not true. The information that the trustee has given the city is that there was $2.5 million and $2.5 million dollars worth of bills paid out.”
Later, when pressed about whether the city was satisfied with the amount of documentation provided, Seybold said: “No we’re not. We’ve talked to the trustee to find out if there is more to this pile of paper than what they presented to us.”
Seybold also could not provide answers as to why he didn’t know more about the project or why more receipts were not available given that at one time his brother, Chad Seybold, was working for An’s company World Enterprise Group, according to his LinkedIn profile.
“You’d have to talk to him, and to Michael An, and you’d have to talk to the trustee,” Seybold said.
An has been difficult to reach. Over the course of two and half months, I-Team 8 has made several attempts to reach him through phone calls, voice mails and texts. We even asked those who know him to have him get back with us. He has not.
When An did speak with I-Team 8 briefly in March, he hurried the reporter off the phone saying he was in the hospital and couldn’t talk. Additional attempts to reach him were unsuccessful. Stephen Wilson, the general counsel for First Farmers Bank in Converse refused to provide additional financial documents, stating in an email that they “couldn’t respond to our inquiry” because An didn’t agree to it.
“I would say there’s been a lot of disappointment that it just simply stalled.”— Phillip Drake, Marion business ownerDuring I-Team 8’s interview with Mayor Seybold, he said the city doesn’t put taxpayer money at risk when backing TIF projects.
“The projects are backed simply by the TIF that’s coming into that TIF district or by the company doing it – if it’s a single purpose TIF,” Seybold said.
TIF money was supposed to be used to pay off the debt for the original $2.5 million bond. And the borrower, An, was supposed to repay any debt when TIF revenue wasn’t sufficient, according to the original bond agreement. But two years later in 2011, all of that changed. City records show the city paid $871,210 in debt service on the original $2.5 million bond.
In order to pay off the remaining $2.4 million, the city took out another $5.8 million loan backed by property taxes as part of a massive plan to refinance several bonds – including the YMCA project.
That’s according to records provided by the city’s development director, Lisa Dominisse.
Under the new structure, An is not obligating to pay back any of the $2.5 million loan. Instead, tax revenues from a Community Revitalization Enhancement District (CREeD) and TIF revenues are the only two sources being used for repayment.
The city has until 2021 to pay off that debt. The building has sat vacant for more than five years.
“I would say there’s been a lot of disappointment that it just simply stalled,” said Phillip Drake, who runs the barber shop across the street.
Steve Stewart, a retired Marion police officer, bought the tax warrants on the adjacent parking lot to the YMCA. Those parcels were owned by Michael An, but county records show he didn’t pay property taxes on those and allowed to be sold in a sheriff’s sale.
“It’s sat here empty for so long and nobody has really done anything,” Stewart said.
The city of Marion has approximately 16 TIF districts, according to the Grant County Auditor Roger Bainbridge. That number may vary because the way the state calculates TIF districts often involves counting taxing districts that overlap.
Still, it’s not the number of districts, but the amount of money tied to TIF that makes Marion, which is in Grant County, stand out. Marion has more than $52 million in principal debt, according to records provided by the state’s Department of Local Government Finance. Of that debt, $36 million is supposed to be repaid through TIF revenues.
That heavy reliance on TIF is what helps Grant County outpace more than 75 other Indiana counties that use TIF.
When asked if Marion has relied too much on TIF deals, Seybold said: “No not at all. Marion is a hard sell. A lot of places outside the doughnut (counties of Indianapolis) are hard sells. And if you are not offering incentives, you are just not in the game.”
Seybold said TIF has been a successful job creation tool, adding facilities like the General Motors stamping plant, CVS Pharmacy and the Dollar General distribution facility near the interstate.
But Bainbridge argues that Marion’s heavy use of TIF is forcing the county to hit state-mandated property tax caps – causing the county to lose out on more than $2 million this year in tax revenue that can’t be collected because of the caps.
“The more TIFs you have, the greater the likelihood that you are going to have financial disasters on TIFs that fail,” said Bainbridge, the county auditor.
NEW STATE LAW
A state law will create more oversight with regard to TIFs. Senate Bill 118 was signed into law this spring with little news coverage.
The law, co-authored by Sen. Pete Miller and others, will require elected leaders to approve new TIF districts instead of political appointees on redevelopment commissions. The law also retires older TIF districts and sets new parameters for creating new ones.
For example, it will also require redevelopment commissions to inform the state by July 1 of both completed and proposed TIF projects. By this fall, the state’s Department of Local Government Finance is expected to complete a report making it easier to track TIF projects. Currently, the state has no way to track specific TIF projects, relying solely on local governments to be the stewards of these tax-funded projects.
“It’s sat here empty for so long and nobody has really done anything.”— Steve Stewart, Retired Marion police officerAn is currently being sued by Erma’s Home Improvement, a former YMCA contractor owned by City Building Commissioner Larry Oradat.
Oradat’s attorney, Evan Hammond, told I-Team 8 An owes Oradat’s company $30,000 for work done on the YMCA.
I-Team 8 has also learned An owes more than $30,000 in back taxes on his other Marion properties. After An failed to pay the back taxes on the YMCA building last fall, it was placed in a sheriff’s sale where no one bought it.
The building was kept out of a commissioner’s sale this spring after roughly $5,000 in back taxes were paid on the building, the county treasurer’s office told I-Team 8.
Seybold claims An has not abandoned the project even though a Boston man has emerged with claims he has a contract with An to buy the building. Dominisse said this week that the city has not seen that contract but believes it has expired.
When asked what guarantees the city had from An that the project would be complete, the mayor said: “We have no guarantees.”
WISH-TV has created a TIF database to see if your county has bond-funded development.
The database shows the TIF related assets in your county and then examines what percent of the total county those assets account for.
Alan Greenspan orchestrated the massive, global subprime mortgage fraud and allowed it to soar even after the FBI and 50 states' attorneys shouted the entire mortgage market was fraudulent. He did not have that power as FED regulator----Congress, Bush and Obama gives that power to the FED to ignore and promote financial instruments filled with fraud. Citizens' Oversight Maryland was shouting in 2010 about this bond fraud as we were able to see the policies Congress and Obama were allowing and KNOWING these US Treasury and municipal bond subpriming would bring a US bond market collapse. So, here is Greenspan warning us JUST BEFORE THIS BOND MARKET COLLAPSE HITS. Is this an intelligent man---or is he just another cartel. All of these complex financial instruments are used by global gun runners and drug dealers to hide their money movement----SAME THING.
Global pols like O'Malley, Maryland Assembly, Rawlings-Blake and Baltimore City Hall have pushed hard these few years to install this bond debt. We saw with the amazing Sagamore/UnderArmour TIF and bond debt of over $500 million with another $500 million coming from Federal taxes a fast-tracking to get these deals signed and passed. This is because the bond market crash is at hand. Why would a Wall Street investment firm and global corporations want to tie to a collapsing bond market?
Know what happens when this national US Treasury and municipal bond market occurs? It brings all government revenue to those bond investors who of course have plenty of CREDIT DEFAULT SWAP INSURANCE. As well, the bond market will be at the very bottom of BULL MARKET for bonds after all this debt is secured from taxpayers and our government assets. It goes from BEAR TO BULL these next few years. $500 million TIF tied to bonds will have whatever investment corporation allowed to partner in this deal ----to reap billions of dollars from rising bond market value AND CRAZY INTEREST RATES AND INFLATION. This will be manipulated by Wall Street so WE THE PEOPLE are held to such extreme bond debt for decades that everything public will go to global corporations as well as our personal wealth as WALL STREET GLOBAL POLS keep raising taxes, fees, and fines to cover this mess.
See why citizens are shouting ARE YOU CRAZY? NO ONE BELIEVES THESE TIF/BOND DEALS DO NOT TAKE PUBLIC MONEY!
It's because all this is so crazy that we know it is public malfeasance and fraud---and these deals can be simply NEGATED. JUST GET RID OF THE GLOBAL WALL STREET POLS.
Bond Market: Alan Greenspan Warns of a 2016 Market Crash
Ultra low interest rates have inflated financial bubbles and could spark a stock market crash in 2016.
At least, that’s the warning from former Fed chairman Alan Greenspan.
In an interview on FOX Business Network’s The Intelligence Report with Trish Regan earlier this week, Greenspan warned that the U.S. economy is stagnating. (Source: Fox Business, August 19, 2015.)
“The basic problem is that we are not getting any capital investment that significantly adds to the growth of output per hour,” he stated.
In a healthy economy, capital investment would create economic growth when the interest rate is low. Despite the very low interest rate, capital investment has not contributed to the growth of the U.S. economy.
Greenspan blamed the rising cost of entailments that caused low productivity and lack of capital investment.
“Entitlements have been growing under the administrations of Republicans and Democrats close to 10% a year for a half century,” he noted. “We’re finally at a point where it is, essentially, crowding out.”
The Federal Reserve is expected to hike the interest rate most likely in September. When that happens, Greenspan believes that in this environment, a rising interest rate could have severe implication on both equity and bond markets.
“One is the equity premium which, actually, is a little out of line now, but not been materially so. Plus, the level of riskless interest rates. It’s there that the basic problem arises, because, for whatever reason, whether it’s the Fed moving or the market moving itself, bond prices fall, you begin to get very significant downward pressure on stock prices,” Greenspan explained.
“There’s where the real problem lies as far as equities are concerned, is that it cannot be dissociated from the fact that interest rates are historically too low and will have to move higher eventually.”
“We tend to think of stock market bubbles as very substantial price earnings ratios. Well, if you turn the bond market around and you look at the price of bonds relative to the interest received by those bonds, that looks very much like the usual spread which would concern us if it were equities, and we should be concerned.”
What happens to municipal bonds as they go from a BEAR MARKET to a BULL MARKET?
When we talked of deliberate CORPORATE BOND debt and the fact it will bring many large US corporations and community banks into bankruptcy----what we also saw was a government agency pushing our US Treasury and state municipal bonds into more and more risky investments seeking they say better returns. THEY SHOULD NOT HAVE BEEN IN THIS BOND MARKET---THAT WAS THE BEST WAY TO GET RETURNS.
Bond Market Segments to Avoid When Stocks Fall
In the event of a stock bear market, the bond market segments most exposed to credit risk – as opposed to interest rate risk – are those that are most in jeopardy of price declines. These include – in the order they are most likely to suffer, from least to most – investment-grade corporate bonds (particularly lower-quality issues), high yield bonds, and emerging market bonds.
Once investors become sensitive to risk, funds invested in these categories will almost assuredly suffer declining principal value. As a result, investors in these areas need to be fully alert to the possibly damaging effects of a bear market in stocks.
This article does a great job in describing what is likely to happen and indeed the same type of frauds occurred in bringing the GREAT DEPRESSION. We will see Congress and our state and local pols PRETENDING they are in economic crises as the resolution lingers on for about three years. This same thing occurred in 2008. This is when a Baltimore City Hall will make all kinds of cuts to any public service, sell public infrastructure like our water/waste/transportation systems----while all that Federal, state, and local funding continues to flow to global corporate campus building. Those investors in that $500 million TIF/bond at UnderArmour for example have insurance that will cause them no harm----but the rise from bottom BEAR to what will be a long BULL MARKET after collapse will have those bonds bringing all kinds of profits to those investment firms. Meanwhile WE THE PEOPLE of Baltimore will be dealing with fees, fines, and growing inflation and possible FED interest rate hikes making all that bond debt cost a tremendous amount more. This was the same Wall Street financial instrument cycle in place these few decades where we read in news there was fraud in this Wall Street deal and fraud in that Wall Street deal with our cities, states losing billions and our Federal government losing trillions.
'The market has swollen to a head-spinning US$76 trillion in that time, and any fallout could blow up other assets as well, with shares and property right in the firing line'.
The size of the bond bubble alone should be enough to give pause.
However, when you consider that these bonds are pledged as collateral for other securities (usually over-the-counter derivatives) the full impact of the bond bubble explodes higher to $555 TRILLION.
To put this into perspective, the Credit Default Swap (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion).
Google this article to see great graphs. The problem for WE THE PEOPLE is having pols in office that do not want to protect our municipal bonds from losses---they want to send that money to Wall Street and pin what will be billions of dollars in added debt to taxpayers.
The Fuse on the Global Debt Bomb Has Been Lit
-- Published: Monday, 14 December 2015
By Graham Summers
The global bond bubble has begun bursting.
This process will not be fast by any means.
Central Banks and the political elite will fight tooth and nail to maintain the status quo, even if this means breaking the law (freezing bank accounts or funds to stop withdrawals) or closing down the markets (the Dow was closed for four and a half months during World War 1).
There will be Crashes and sharp drops in asset prices (20%-30%) here and there. However, history has shown us that when a financial system goes down, the overall process takes take several years, if not longer.
By way of example let us consider the details surrounding the Tech Bubble: the single largest stock market bubble of the last 100 years. In this case, the Bubble pertained to just one asset class (stocks). In fact, the bubble was relatively isolated to one specific sector, Tech Stocks.
And to top if off, it was absolutely obvious to anyone that it was a Bubble: note that the Cyclical Adjusted Price to Earnings or CAPE ratio for the Tech Bubble dwarfed all other bubbles dating back to 1890.
Stocks were so obviously overvalued that it was truly absurd.
And yet, despite the fact that this bubble was absolutely obvious and involved only one asset class, it still took investors well over six months after the initial 20% crash to realize that the top was in and the bubble had burst.
Let that sink in for a moment. Stocks were clearly in a bubble. Indeed, it was literally THE stock bubble of the last 100 years. And yet, when it burst, there was no clear consensus as to where the market was heading.
My point with all of this is that even when the bubble was both very specific AND obvious, the collapse was neither quick nor clean. There were several large 20%+ crashes, but overall, it was a roller coaster with jarring rallies than gradually wore its way down.
And when you extend the collapse from peak to bottom, the whole collapse took nearly three years.
To return to my initial point: the coming collapse in the financial markets will take its time. This is particularly true this time around because the bubble pertains to bonds: the senior-most asset class in the financial system.
By way of explanation, let’s consider how the current monetary system works…
The current global monetary system is based on debt. Governments issue sovereign bonds, which a select group of large banks and financial institutions (e.g. Primary Dealers in the US) buy/sell/ and control via auctions.
These financial institutions list the bonds on their balance sheets as “assets,” indeed, the senior-most assets that the banks own.
The banks then issue their own debt-based money via inter-bank loans, mortgages, credit cards, auto loans, and the like into the system. Thus, “money” enters the economy through loans or debt. In this sense, money is not actually capital but legal debt contracts.
Because of this, the system is inherently leveraged (uses borrowed money).
Consider the following:
- Total currency (actual cash in the form of bills and coins) in the US financial system is little over $1.2 trillion.
- If you want to include money sitting in short-term accounts and long-term accounts the amount of “Money” in the system is about $10 trillion.
- In contrast, the US bond market is well over $38 trillion.
- If you include derivatives based on these bonds, the financial system is north of $191 trillion.
Bear in mind, this is just for the US.
Again, debt is money. And at the top of the debt pyramid are sovereign bonds: US Treasuries, German Bunds, Japanese Government Bonds, etc. These are the senior most assets used as collateral for interbank loans and derivative trades. THEY ARE THE CRÈME DE LA CRÈME of our current financial system.
So, this time around, when the bubble bursts, it won’t simply affect a particular sector or asset class or country… it will affect the entire system.
So.... the process will take considerable time. Remember from the earlier pages, it took three years for the Tech Bubble to finally clear itself through the system. This time it will likely take as long if not longer because:
- The bubble is not confined to one country (globally, the bond bubble is over $100 trillion in size).
- The bubble is not confined to one asset class (all “risk” assets are priced based on the perceived “risk free” valuation of sovereign bonds… so every asset class will have to adjust when bonds finally implode).
- The Central Banks will do everything they can to stop this from happening (think of what the ECB has been doing in Europe for the last three years)
- When the bubble bursts, there will very serious political consequences for both the political elites and voters as the system is rearranged.
The size of the bond bubble alone should be enough to give pause.
However, when you consider that these bonds are pledged as collateral for other securities (usually over-the-counter derivatives) the full impact of the bond bubble explodes higher to $555 TRILLION.
To put this into perspective, the Credit Default Swap (CDS) market that nearly took down the financial system in 2008 was only a tenth of this ($50-$60 trillion).
On that note, we should point that the fuse is already lit on the global debt bomb. Emerging Market bonds taking out their bull market trendline.
Junk bonds are also in the process of ending their mutli-year bull market.
The bursting of the bond bubble has begun. This process will take months to unfold and it will culminate in a stock market crash.
Smart investors are preparing now.
Chief Market Strategist
Letters to editor
Taxpayers: Beware of bonds
By Letter to the Editor From page A11 | October 07, 2015
It’s time to recollect what is Mello Roos because the Fairfield Planning Commission just approved a new housing development to create 675 homes that will be included, and taxed, in Mello Roos Community Facilities District No. 5.
Under Community Facilities District No. 5, the developer fees and the new schools construction costs are paid with money generated by the issuance of new bonds from and refinancing of the existing community facilities district bonds. Those bonds are repaid by the homeowners in that specific district as a special tax that is really a property lien.
Be aware that Fairfield-Suisun School District is planning to float another general obligation bond measure to the voters in 2016 or 2018 for funding facility improvements that would result in yet another general obligation bond tax on our property tax bill.
Existing homeowners and the new development homeowners in Community Facilities District No. 5 will be shocked to find out the amount of school bonds debt they are saddled with and have to pay in perpetuity. If your home is located in a Mello Roos community facilities district, caveat emptor.
We talked before about much of this subpriming of our US Treasury and state municipal bond debt was markets overseas. This was the same for the subprime mortgage fraud and it leads to that tremendous amount of $700 trillion in derivatives. We know Maryland sold its municipal bond debt overseas so when this economic crash comes Wall Street global pols will say----WELL, WE OWE THIS CHINESE CORPORATION FOR THIS BOND DEBT AND WE OWE THIS DUBAI CORPORATION FOR THIS BOND DEBT SO WE WILL SIMPLY GIVE THEM REAL ESTATE FOR THEIR FOREIGN GLOBAL CORPORATION in US cities deemed International Economic Zones. This means here in Baltimore, citizens will be paying on all these bond deals---super-sized by BEAR TO BULL bottoming of bond market---and on top of that some of greater Baltimore will go to foreign corporations as payment for bad municipal bond debt.
You can see why Maryland wanted a Catherine Push or a Larry Hogan in office as Mayor of Baltimore and Gov of Maryland and this is what MOVING BALTIMORE FORWARD TO ONE BALTIMORE ONE WORLD looks like.
Wed Jun 15, 2016 8:57pm EDT
Foreign selling of U.S. Treasuries in April was most since 1978: data
United States one dollar bills are seen on a light table at the Bureau of Engraving and Printing in Washington November 14, 2014. REUTERS/
By Gertrude Chavez-Dreyfuss | NEW YORK
Foreign investors sold a record amount of U.S. Treasury bonds and notes for the month of April, according to U.S. Treasury Department data on Wednesday, as investors priced in a few more rate increases by the Federal Reserve this year.
Foreigners sold $74.6 billion in U.S. Treasury debt in the month, after purchases of $23.6 billion in March. April's outflow was the largest since the U.S. Treasury Department started recording Treasury debt transactions in January 1978.
Private offshore investors sold $59.1 billion in U.S. government bonds, while foreign official institutions, which include central banks, sold $12.3 billion.
U.S. economic data in April included a decent non-farm payrolls report for March, along with strong manufacturing as measured by the Institute for Supply Management. That prompted investors to sell Treasuries in April, as did an upswing in risk appetite, with buoyant global stocks and rebounding oil prices.
Yields on U.S. 10-year Treasury notes at the beginning of April were 1.7910 percent, and they hit a high of 1.9410 late in the month.
China remained the largest foreign holder of U.S. government debt, although its holdings in April declined to $1.2443 trillion, from $1.245 trillion in March. U.S. Treasury holdings of the world's second largest economy declined for a second straight month.
Japan, the No. 2 foreign U.S. Treasury debt holder, posted higher U.S. government debt holdings of $1.143 trillion from $1.137 trillion in March. Japan raised its U.S. Treasury holdings for a fourth straight month.
The report also showed for a second consecutive month U.S. Treasury holdings of Saudi Arabia and other oil-producing countries. Saudi Arabia has the largest Treasury holdings among the Gulf oil exporters with $113.0 billion, down from $116.8 billion the previous month.
Overall, foreign central bank holdings of U.S. Treasuries contracted to $6.239 trillion in April, from $6.287 trillion in March.
Data also showed that foreigners sold long-term U.S. securities in April after buying them for the previous two months.
Offshore investors unloaded $79.6 billion in long-term U.S. assets, after purchasing $78.1 billion the previous month. Including shorter-dated securities, however, overseas investors bought $80.4 billion in April after selling $98.1 billion in March.
U.S. stocks, meanwhile, showed outflows for a third straight month, with foreigners selling $2.8 billion in April from $16.5 billion in March. Foreigners have sold U.S. equities in eight of the last nine months.