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April 07th, 2014

4/7/2014

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As I showed last blog on private sector pensions, most pension portfolios had pension investments in the bond market because previously the bond market was stable and a safe investment.  You can see from this snippet from an article that a deliberate move of private sector pensions in this massive Pension Benefit Guaranty Corp happened as the stock markets crashed in 2008. 

THIS WAS DELIBERATE AND PUBLIC MALFEASANCE WITH 1/2 OF PENSION VALUE LOST FROM THE FRAUD AND LOSS OF GAINS FROM THE BULL MARKET THAT FOLLOWED.




Pension Benefit Guaranty Corp.

'The PBGC regularly updates its investment strategy. In 2004, it chose to invest heavily in bonds.[6] Under new leadership, the agency in 2008 shifted a substantial portion of its assets into stocks.[7] Because of the market decline, PBGC's equity investments lost 23% during the year ending September 30, 2008.[8]'

Today we want to look at public pensions and know that the same thing happened at state and local level as these public pensions also were thrown into a crashing market in 2007.  So, it was Bush/Obama who made sure Federal pensions were used as fodder and in Maryland it was Baltimore City and Maryland public agency heads that made sure they hit the stock market as the crash was occurring.  THIS IS FACT.  When we hear corporate NPR/APM tell us that all of American savings and retirements were lost and now they have nothing going into their old age and have to work until they drop-------THEY ARE LYING TO YOU.

DO YOU HEAR YOUR INCUMBENT SHOUTING TO BRING PENSION FRAUD BACK TO FEDERAL, STATE, AND LOCAL PUBLIC PENSION FUNDS?  EVERYONE OF THEM KNOWS THIS HAPPENED! 

As I have said before pensions were underfunded for decades with the idea that they would be eliminated.  This move in 2007-2008 was designed to cripple pension funds and to buoy the Wall Street banks that were crashing.  Throwing the American people's pensions into bank stocks allowed these investment firms to earn billions of dollars more.  I want to emphasize that the same is about to happen this year as pensions are now being used in a sovereign/municipal bond fraud as this market is now ready to implode.  EVERYONE KNOWS THIS!

It was not only the losses to these pensions at the time of the collapse, it involves all of the gains those pensions would have had in the following BULL market.  You heard about Wall Street making great gains these few years----pension gains worked with 1/2 the value and they will again lose most value with this next collapse.  The rich are moving their investments out of US stocks while pensions are used to buoy the economies overseas and state and city credit bond schemes.



YOUR UNION LEADERS AT STATE AND NATIONAL LEVEL SHOULD BE TAKING THIS TO COURTS AND IF WE HAD A FUNCTIONING PUBLIC JUSTICE ERIC HOLDER AND DOUG GANSLER WOULD BE FIGHTING FOR PENSION JUSTICE.  THEY ONLY WORK FOR SHAREHOLDER LOSSES AND WE KNOW SHAREHOLDERS PROFIT ON PENSION LOSSES.

WHAT KIND OF PUBLIC ADMINISTRATION GOES BACK TO THE SAME PEOPLE WHO DEFRAUDED THE AMERICAN PEOPLE TO MANAGE RETIREMENT SAVINGS?




May 28 2013 | 12:10pm ET  FIN Alternatives


A Maryland public pension fund has a new hedge fund consultant and a pair of new private equity managers.


****************************

ORGANIZATIONAL STRUCTURE STATE RETIREMENT & PENSION SYSTEM

BOARD OF TRUSTEES Nancy K. Kopp, State Treasurer, Chair (chosen by Board in June, 1-year term)
Peter V. R. Franchot, Comptroller of Maryland, Vice-Chair (chosen by Board in June, 1-year term)
Appointed by Governor with Senate advice & consent to 4-year terms: Robert R. Hagans, Jr., 2015; Harold Zirkin, 2015; Thurman W. Zollicoffer, Jr., Esq., 2015; David S. Blitzstein, 2016; Linda A. Herman, 2017; F. Patrick Hughes, 2017.



_________________________________________
As we know Governor O'Malley was central in all public pension losses first at the level of city and then state.  We know as well he is a great big Wall Street pol who based his entire political career moving the public's wealth to the top earners.  While states handle these shortfalls in pensions victimized by massive fraud and corruption by cutting what the people receive.......O'Malley/Brown pulls their regular routine of saying one thing and doing another.  Pension contributions were cut from what the article below suggests.  Remember, this coming economic crash will gut all these pensions again especially how they are currently invested.  Above you see the State of Maryland went immediately to the Wall Street investment firms who fleeced the public in 2007/2008 to hand our pensions for investment again.  O'Malley/Brown doubled-down on Wall Street financial instruments right after this crash from massive Wall Street fraud acting as nothing had happened.  SEE WHY BROWN IS THE DARLING OF MARYLAND 1%?

The LIBOR frauds, stock transaction frauds, and illegal stock management fees all took lots of money from the people's pensions, both public and private and has yet to get justice.  A governor would be shouting this if he/she worked for the public and not wealth and profit. 

DO YOU HEAR ANY OF THE CANDIDATES FOR GOVERNOR SHOUTING AS CINDY WALSH FOR GOVERNOR OF MARYLAND HAS FOR YEARS?


Governor Martin O'Malley Announces Plans to Put Pension System on Path to Sustainability


ANNAPOLIS, MD (January 21, 2010) –
Governor Martin O’Malley outlined plans today to address Maryland’s unfunded pension and retirement liabilities and begin to put the public system on a path of sustainability.  In introducing the FY 2012 budget proposal today, Governor O’Malley committed approximately $1.5 billion to the pension system next year, nearly $1 billion more than in FY 2003.

“Some of the toughest choices we face in this legislative session are the choices we make to fix our pension system,” said Governor O’Malley.  “We owe it to our police officers, teachers and other hardworking state employees and we also owe it to our children and our taxpayers, to find a sustainable way forward that protects our commitments and maintains fiscal responsibility.  This is a bill that we have to pay and all of us have a vested interest in finding the most fair and equitable way to keep our pension commitments.”

Governor O’Malley has outlined the basic principles on which pension reform is based:

  1. Continue to maintain a public system as a critical component of recruiting and retaining the best teachers.
  2. Improve the funding level in the State and Teacher retirement system.
  3. Reduce the pension and retirement liability, and therefore, we must ask current and future members of the system to contribute more to strengthen the system and preserve benefits.
  4. Identify certain milestones so as our economic circumstances change, we can revisit some of these reforms.
Find the Governor’s full pension reform presentation here.

In each of his first four years, Governor O’Malley has submitted budgets that fully funded the State’s required pension contribution.  But despite rapid increases in this contribution, the funded status of the pension system has dropped from 95% ten years ago to a project 59% next year. 

The Governor’s proposed reforms will allow the state to reinvest more than $1 billion into the retirement system over the next six years.  These reforms will achieve 80% funding of the pension system by FY 2023 and require bi-annuals reports assessing the financial health of the pension system, including recommendation for adjustments to state funding and/or future benefits.

Current employees and retirees The Governor’s proposed pension reform has no impact on current retirees and no impact on benefits already earned by active or former employees and teachers.

For benefits earned for service in FY 2012 and future years, active employees and teachers are offered a one-time choice between:

  1. Continue to pay 5% of salary towards retirement with adjusted benefit (1.5% benefit multiplier for each future year of service rather than current 1.8% benefit multiplier).
  2. Increase contribution to retirement from 5% to 7% of pay and continue to earn benefits at the current level (1.8% benefit multiplier for each future year of service).
Future employees and teachers New employees will automatically be required to contribute 7% of salary and receive a 1.5% benefit multiplier.  In addition, year of benefit vesting will move from the current five years of service to ten years.  Early retirement age will increase from the current 55 to 60, and the benefit will be calculated on the highest five years of salary rather than the highest three years.  Finally, cost of living adjustments will be based on investment benchmarks.

In addition, the Governor announced plans to direct the appropriate Compensation Commissions to review pensions for elected officials for sustainability and fairness.

Health benefits Almost half of the unfunded liability associated with retiree health benefits relates to Maryland’s prescription drug benefit.  For current retirees, the proposes reform plan establishes a state-run Medicare Part D-like plan that mirrors the federal program but fills the current coverage gap.  In 2020, the plan transitions these retirees to Medicare Part D coverage in 2020 when the coverage gap is phased out. 

For active employees, the proposed plan aligns co-pays with national trends and raises out-of-pocket caps from $700 to $1,000 for individuals and $1,500 for couples.

The current unfunded liability of retiree health insurance stands at $16 billion.  After the proposed reforms, that figure drops by almost 50%.



____________
The articles below show that states actually having public justice and unions working for their membership are exposing massive statewide fraud and demanding justice.  The same conditions here in Maryland have silence from both politicians and union leaders.

I bet if a governor was elected who shouted out for justice-----labor and justice would shout as well. 

STOP ALLOWING SYSTEMIC FRAUD AND CORRUPTION END DEMOCRACY IN MARYLAND AND AMERICA!

Take a look below at the other raging Wall Street pol thinking of running for President in 2016 with O'Malley.  Now, the State of New York Attorney General was the one responsible for holding Wall Street banks accountable and as we all know------CUOMO LET THEM ALL KEEP THE LOOT. 

Below you see Cuomo feeling the pain of the people he was elected to protect but didn't.  WHAT, FRAUD IN THE PUBLIC PENSION SYSTEM?

Cuomo declared his candidacy for the Democratic nomination for New York State Attorney General in 2006
He won the general election against the Republican nominee, former Westchester District attorney, Jeanine Pirro on November 7, 2006, winning 58% of the vote.



NEEDLESS TO SAY ALL OF THE BRAVADO IN THE ARTICLE BELOW USED TO GET HIM ELECTED GOVERNOR NEVER MATERIALIZED IN CONVICTIONS OR RECOVERING FRAUD.  IT WAS AN ELECTION YEAR SCAM JUST AS THE CONGRESSIONAL FINANCIAL REFORM BILL HAS TURNED OUT TO BE.


Hedge Fund Donor List Raises Question: Is Cuomo "Governor 1% ...www.wnyc.org/blogs/empire/2012 Between June 1, 2007 and December 21, 2011, hedge fund employees, founders and their families have given Cuomo more than ...

WHY DO YOU NOT HEAR ABOUT MARYLAND'S PENSION FRAUD THAT WERE AS BAD AS NEW YORK AND CALIFORNIA?  DOES MARYLAND HAVE A PUBLIC MEDIA?  NO!



Systemic Fraud at Public Pension Funds?

New York's Attorney General Andrew M. Cuomo said on Friday that his office was issuing more than 100 new subpoenas to investment firms and intermediaries who brokered deals with public pension funds, in the latest expansion of his corruption investigation:

Mr. Cuomo said a preliminary review by his office found that as many as half of the intermediaries in pension fund transactions in New York State and New York City were not properly licensed and registered with a broker-dealer, as required by federal securities laws. Failing to register could violate both federal securities laws and the Martin Act, a sweeping state securities law.

“The troubling pattern of unlicensed agents highlights yet another systemic weakness in New York’s pension fund, creating a situation which is fraught with peril and prone to abuse,” Mr. Cuomo said in a statement.

He also conferred with the offices of 35 other attorneys general Friday afternoon by teleconference. The pension corruption inquiry has raised questions about public investment practices in other states, in particular New Mexico and California.

Afterward, Mr. Cuomo said the group had “decided to create a multistate task force to explore pension fund abuse.”

Mr. Cuomo’s office has been working with the Securities and Exchange Commission, which is conducting a parallel investigation. Federal investigators are also reviewing public investment transactions in New Mexico, and the S.E.C. is reviewing pension transactions in California.


Among the firms being scrutinized in the latest round of Mr. Cuomo’s inquiry is Wetherly Capital Group, according to people with knowledge of the inquiry. Investigators are scrutinizing whether employees of Wetherly and other firms were properly licensed when they arranged deals with pension funds in New York.

Wetherly is a Los Angeles-based placement agent firm run by Dan Weinstein, a prominent Democratic fund-raiser. In a statement, Wetherly said it was fully registered with the Financial Industry Regulatory Authority and the S.E.C.

Wetherly has come under scrutiny in California for paying a firm affiliated with Hank Morris, a top aide to Alan G. Hevesi, the former New York State comptroller, as part of an investment deal it brokered for Calpers, the giant California pension fund.

Another California firm being scrutinized in the latest round of the investigation is Gold Bridge Capital, which has acted as a placement agent on at least one deal involving the New York State pension fund.

The inquiries by Mr. Cuomo and the S.E.C., under way for two years, have focused on the millions of dollars that friends, relatives and aides of Mr. Hevesi’s gained by selling access to the $122 billion New York State pension fund. Mr. Morris and David Loglisci, another former top aide to Mr. Hevesi, have been indicted on a variety of corruption-related fraud charges, and Raymond B. Harding, the former head of the state Liberal Party, has also been charged in the case. All three have pleaded not guilty. Mr. Hevesi has not been charged.

The inquiries took on more national relevance on Thursday when Mr. Cuomo charged a top consultant to pension funds around the country, Saul Meyer, with a fraud-related felony. Mr. Meyer and his firm, Aldus Equity, which is based in Dallas, were also charged in a civil complaint by the S.E.C. Both Mr. Meyer and Aldus denied wrongdoing.

The new phase of the inquiry focuses on lobbyists, political consultants and others who brokered deals between investment firms and the New York pension funds but were not properly registered to do so.

In a preliminary investigation, Mr. Cuomo’s office found that from 2003 to 2006 — the period when Mr. Hevesi was comptroller — 22 of the 45 intermediaries used in deals at the state pension fund were not registered. In the New York City pension funds, 17 of 41 intermediaries were unregistered in deals from 2003 to this year, a review found.

While acknowledging that there could be exceptions, Mr. Cuomo said during a separate teleconference with reporters on Friday, “If you’re brokering a security, you need to be regulated.”

Thomas P. DiNapoli, the New York State comptroller, and William C. Thompson Jr., the New York City comptroller, both said this week that they would move to ban placement agents from deals with their pension funds.


Mr. Cuomo also highlighted a shortcoming in state lobbying rules, which do not require lobbyists to register with the state’s Commission on Public Integrity when they appear before the state comptroller.

The increased scrutiny on placement agents in recent years has led to concerns that lobbyists and political consultants are trying to find ways to perform similar services without registering as placement agents.

In 2007, Mr. DiNapoli met with the chief partner of the private equity firm InterMedia Partners, Leo J. Hindery Jr., and Roberto Ramirez, a lobbyist and former colleague of Mr. DiNapoli’s from the Assembly. The goal for the meeting was to convince the state comptroller’s office to increase its investment with InterMedia, which it later did. A spokesman for Mr. Ramirez has said he was not paid by InterMedia and appeared only as a friend of Mr. Hindery’s.

Mr. Cuomo would not say which lobbyists or consultants were being scrutinized, but said the intersection of unregistered agents and the pension fund was potentially “the Wild West of government relations.”Mr. Cuomo also said that pension kickbacks are a national problem:


New York state's criminal probe of kickbacks paid by companies eager to manage its $122 billion state pension fund has exposed "a national network of actors" whose schemes are ongoing, state Attorney General Andrew Cuomo said on Thursday. "This is all across the nation, and it's continuing today," the Democratic attorney general said on a conference call.

The probe, which began two years ago, has fixed the spotlight on the use of placement agents hired by investment firms to open the doors of the New York State Common Retirement Fund. Cuomo said he is also is scrutinizing lawyers and lobbyists.

The investigation is another effort to stamp out graft and the practice of "pay to play," which involves giving gifts or campaign donations to win public contracts. So far the probe has looked into the web of relationships and business contracts involving money managers, politicians and pension officials spanning the country from New York City and the state capital, Albany, to Texas, New Mexico and California.

On Thursday, the U.S. Securities and Exchange Commission, which is working with Cuomo, charged that Dallas-based Aldus Equity Partners won New York pension business because of "its willingness to illegally line the pockets of others."

The state pension fund had aimed to hire more women and minority-owned investment firms and had begun talks with one. But Aldus was chosen, Cuomo said, when the minority-owned firm "allegedly refused to pay kickbacks to Morris and another associate."

Aldus, a private equity firm, says it manages over $5 billion, and the probe already has cost Aldus clients in New Mexico and New York. Cuomo said Aldus also is active in Louisiana, Oklahoma, Texas, California, and New York City.

ANOTHER VIEW OF GIVE AND TAKE

Both Cuomo and the SEC charged that Saul Meyer, an Aldus founder, paid about $320,000 to a shell company owned by Henry Morris, a top fund-raiser for New York's former state comptroller. This led the New York state pension fund's then-chief investment officer, David Loglisci, to invest $375 million with Aldus from 2004 to 2006.

Demonstrating the power that Morris wielded over pension investments, Cuomo said Morris told a Meyer intermediary: "Tell that little peanut of a man that I can take business away as easily as I provided (it)."

Lawyers for Morris and Loglisci, who were indicted in March, say they are innocent.

On Thursday, Meyer was charged with a state securities felony and released on $200,000 bail. His lawyer Paul Shechtman said: "Time and evidence will show that Saul Meyer did nothing wrong."

Aldus knew that Morris was "working both sides of the deal," Cuomo said, by marketing funds for investments in the Aldus/NY Emerging Fund in which Morris had a 35 percent stake.

Aldus Equity lawyer Matthew Orwig faulted the SEC for acting before finishing its probe, calling the threatened legal action "appalling and careless with the law and with people's reputations." Aldus partners said they were disappointed by the "unexpected legal developments."

Aldus could face more legal peril. The New York state pension fund is weighing legal remedies against Aldus and Meyer after ending its investment with the firm. New York City pensions could cut ties with the firm, while New Mexico's governor called on the state Education Board to drop its contract with Aldus a day after ordering the state investment officer to do so.

Cuomo said that while Meyer was seeking more business with New York's pension fund, he helped Daniel Hevesi, a son of Alan Hevesi, the former state comptroller whose oversight of the state pension fund is being probed, earn a $250,000 fee on a New Mexico pension deal.

Alan Hevesi's lawyer Bradley Simon has said the former comptroller "has not been charged with any misconduct with respect to mismanagement of the New York state pension fund."

Bloomberg reports that L.A. pension is baffled by fees paid to firm in probe:


Los Angeles retirement plan managers say they’re baffled over fees paid by Quadrangle Group LLC to a key player named in New York’s pension fund kickback probe for helping the private equity firm land work in California. Quadrangle paid Searle & Co. $150,000 in connection with the Los Angeles Department of Fire and Police Pensions fund’s $10 million investment with the New York firm, which was co- founded by Steven Rattner before President Barack Obama appointed him to oversee the auto industry rescue.

Searle employed Hank Morris, a political adviser accused by New York State Attorney General Andrew Cuomo and the U.S. Securities and Exchange Commission of using the Greenwich, Connecticut, brokerage to collect “sham” placement fees from firms that manage New York pension plan money.

After the SEC this month said Quadrangle paid Morris a “finders fee” related to a New York pension fund investment, Quadrangle told the Los Angeles fund that it also had paid placement fees to him for work there. The Los Angeles fund publicly disclosed the fee April 24.

“We don’t know how or why a placement fee related to our investment in Quadrangle was made,” Michael Perez, the general manager of the Los Angeles pension, said in written responses to questions from Bloomberg News.

‘Shocked’ at News

Perez said the fund’s investment in Quadrangle was arranged through Pension Consulting Alliance Inc., which evaluates investments on its behalf. Allan Emkin, that company’s founder and managing director of its Los Angeles office, said it didn’t have any contact with Searle or Morris and worked directly with Quadrangle. Emkin said he had been unaware that Searle was paid a fee in connection with the deal.

“We were shocked when we heard about it,” Emkin said in a telephone interview.

Morris, who faces a civil SEC complaint and criminal charges by Cuomo, has denied wrongdoing. Quadrangle and Rattner haven’t been charged. Adam Miller, a spokesman for Quadrangle, declined to comment. Searle referred calls to Peter Anderson, an attorney, who didn’t respond to requests for comment.

The SEC has asked the Los Angeles fund and two of its board members for information about investment decisions and firms tied to the New York probe.

Cuomo said today that New York was formalizing agreements to coordinate its investigation with authorities in California, as well as with Connecticut, Illinois and New Mexico.

Los Angeles Connection

“We are disclosing a national network of actors, who often acted in concert,” Cuomo said. “They collaborated, they often partnered and victimized states and taxpayers all across the country.”

The SEC and Cuomo today charged Saul Meyer, the managing partner of one of the firms in the New York probe, Aldus Equity Partners, with paying Morris to secure investment business with New York. Aldus has served for more than a year as a private equity consultant to the Los Angeles pension fund. Meyer met with the fund’s board at least once, city records show.

Morris, the one-time chief fundraiser and political adviser to former New York City Comptroller Alan Hevesi, has been charged by the SEC with collecting $15 million in kickbacks from money managers doing business with New York’s pension fund. The SEC says the kickbacks were masked as placement fees and that he “rarely, if ever” provided legitimate services.

Quadrangle hired Morris as a placement agent before winning a $100 million investment from New York, the SEC said in an April 15 complaint. The firm paid Searle $1.125 million, and 95 percent of that went to Morris, the SEC said.

The Los Angeles pension approved investments in 10 private equity funds linked to the New York investigation, according to an April 2 memo to the board. Two of the investments were later canceled. Aldus Equity Partners, which was drawn into the New York probe, also advised the fund on private equity investments.

I have already written about the Mother of all stealth scams. Nothing like a huge financial crisis to bring out all the cockroaches. This hardly surprises me and remember my dire warning: Madoff was the tip of the iceberg. There will be many more fraudsters that will get nabbed in the next few years.

Just how systemic is fraud in the financial industry and at public pension funds? We don't know, but when you mix greedy placement agents with public pension fund managers who control billions, the potential for kickbacks is huge.

What can pension funds do to stop abuse before it happens? First, they should segregate duties so the person(s) making the investment has to pass through several checks, including an internal auditor, before the decision is cleared. Importantly, there should also be clear segregation of duties between those making the investment decisions and the finance professionals valuing them.

Second, pension funds need to beef their whistleblower policies so people are encouraged to report abuse. This is one of the most effective ways to stop fraud. Maybe there should be a direct link between public pension fund employees and the state's Attorney General's office or the provincial or federal Auditor General's office.

Third, have your fraud procedures verified by a certified fraud examiner (read more on CFEs by clicking here). This should include someone who scrutinizes travel/meal/entertainment expenses to make sure there is no abuse going on when some hedge fund or private equity manager is trying to woo a pension fund manager to invest with them.

Fourth, there should be tight rules governing the relationships between investment managers and the funds they invest with. If you are investing billions with Fund Z, then you should not be allowed to go work for them for a period of five years after you leave a public pension fund. This is just common sense, but you'd be surprised how common sense often falls by the wayside.

Fifth, all board decisions should be made public so they are open to scrutiny. Several of the large U.S. state plans already do this. For example, Alaska's Permanent Fund publishes its board schedule, their minutes and their consultants on their website.

Finally, on the legal front, I would ban all placement agents and place tight rules on pension consultants who recommend funds to pension funds. Do not underestimate the abusive practices of pension consultants and the potential for fraud with them. They are the gatekeepers at most U.S. pension plans.

It truly is the Wild West out there, but I am glad to see the Attorney General of New York is pursuing the pension probe and trying to clean up public pension funds.


_________________________________________


Corrupting public officials is a crime so as the public officials who we know were involved in these frauds are exposed we know these investment firms buying favor committed these crimes too.  You have yet to hear of these private equity people charged and prosecuted because that takes public justice.  Whether it is blowing up the Federal Housing Agency with fraud, the Federal Student Loan Agency with fraud----we are being told by Moody's and S and P -----the rating agencies that were ground zero for all of this fraud-----that public and private pensions
are just not viable anymore.

OH REALLY????????


If your incumbent politician goes after the people's pensions as the problem------if your incumbent is silent about all of this, they are neo-liberals working for wealth and profit.  These pensions are not a burden on the public-----all fraud recovery comes from these corporations.


I listened to a Governor's Forum on Education (to which I was not invited obviously) where Heather Mizeur says that the way to fund school building in Maryland is to have public employees give back some of their pensions.  THIS IS THE PHONY PROGRESSIVE IN THIS GOVERNOR'S RACE!



Monday, March 14, 2011

Corruption at CalPERS?

Marc Lifsher and Stuart Pfeifer of the Los Angeles Times report,


Scathing report alleges corruption at CalPERS
:
In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms.

A 17-month investigation also found that Federico Buenrostro Jr. — along with former pension fund board members Charles Valdes and Kurato Shimada — strong-armed a benefits firm to pay more than $4 million in fees to consultant Alfred J.R. Villalobos, who later hired Buenrostro.

The report, prepared for the California Public Employees' Retirement System by Washington law firm Steptoe & Johnson, comes amid widening attacks on public employee pension funds in California, Wisconsin, Iowa and other states for providing lavish benefits that cash-strapped governments can no longer afford.

The findings of insider dealings at CalPERS could provide fresh ammunition to Republican lawmakers here who want Democratic Gov. Jerry Brown to convert traditional pensions with guaranteed payments for life into 401(k)-type plans that rely heavily on employees' own contributions.

"Fixing California's pension problem is difficult enough without the stench of corruption and collusion that saps public confidence and gives taxpayers a reason to withhold support," said Dan Pellissier, president of Californians for Pension Reform, a group that is pushing a 2012 ballot initiative that would diminish state employee pension benefits.

Shimada, Buenrostro, Valdes and Villalobos either declined to comment or did not return calls.

Buenrostro served as CalPERS chief executive for six years, leaving in August 2008. The day after quitting, he went to work for Villalobos — a former CalPERS board member and deputy Los Angeles mayor who acted as an agent for investment firms seeking CalPERS money. The report said Villalobos hired Buenrostro with a $300,000 annual salary and gave him a Lake Tahoe condominium.

While at CalPERS, Buenrostro repeatedly "inserted himself in the investment process in a manner inconsistent with prior practice at CalPERS, pressing its investment staff to pursue particular investments without evident regard for their financial merits," the report said.

It said Buenrostro intervened with staff on behalf of Aurora Capital Group of Los Angeles to obtain investment money. Buenrostro told subordinates that Aurora was politically powerful, and that Aurora principal Gerald Parsky served on a state commission dealing with public employee benefits, the report said.

Aurora was a Villalobos client, and Buenrostro told CalPERS staffers that he would represent it once he went to work with Villalobos, the report said.


The report also noted that Buenrostro often intervened on behalf of favored private equity funds that staff called "friends of Fred."


Staffers ultimately complained about Buenrostro to the board, and those complaints "became a basis for the board's efforts to replace him as CEO," the report said.

CalPERS is the nation's largest public pension fund, with $228 billion in assets, providing benefits to about 1.6 million state and local government employees, retirees, spouses, children and other beneficiaries.

In May 2010, the California attorney general sued Villalobos and Buenrostro, accusing them of scheming to enrich themselves through self-dealing and other misconduct in seeking CalPERS investment money on behalf of clients.

According to the report, one of those investment funds — Apollo Global Management — asked Buenrostro to sign documents acknowledging that CalPERS was aware of so-called placement agent fees it was paying to Villalobos.

Several CalPERS investment officers refused to sign the disclosures, the report said — but Buenrostro did, using pasted-on letterhead to make them look more official.

Buenrostro made "representations regarding placement agent fees and related deal documents that are either demonstrably false or sufficiently suspect," the report said.

The report, citing Buenrostro's ex-wife and an unnamed girlfriend, described Buenrostro as "a puppet" of Villalobos, who the report said earned more than $50million in placement agent fees.

During his six years as head of CalPERS, Buenrostro received many valuable gifts from people and firms with financial interests in doing business with CalPERS, the report said.

When he was married in 2004, he allowed Villalobos to host the wedding at his Zephyr Cove, Nev., home. Buenrostro also traveled with Villalobos and Valdes to the Middle East and Asia — with Villalobos picking up much of the costs, the report said.

"Buenrostro does not appear to have ever disclosed these gifts or recused himself from any CalPERS matters based on any of these apparent relationships," the report said.

Valdes also pressured CalPERS investment staff to do business with Villalobos' firm, Arvco Capital Research, the report said.

In September 2000, Valdes was close to being ruled out of order for raising his voice in support of a Los Angeles real estate investment firm, CIM Group, the report said. CalPERS staff had recommended a smaller investment than originally proposed. Arvco and Villalobos received a $9-million commission on the investment transaction.

CIM also provided Academy Awards tickets to Valdes and other CalPERS people, the report said. Valdes attended in 2005 and 2006 but did not report the gifts on state financial disclosure documents.

The report also provided new details about CalPERS dealings with Medco Health Solutions Inc. before the firm was awarded a $26-million contract to provide drug benefits to members.

In May 2004, Villalobos hosted a meeting at his Lake Tahoe home with Medco CEO David Snow. Buenrostro attended.

"Soon after the May 2004 meeting at the Villalobos home, Medco agreed to retain Villalobos as a consultant and pay him $4 million," the report said.

Villalobos received a final check for $1 million immediately after the CalPERS board approved the contract, according to the report, and also received a $20,000-a-month retainer until sometime in 2009.


Last year Villalobos filed for personal bankruptcy protection, citing nearly $5million in debts to Nevada casinos. It was his second personal bankruptcy.

The report recommended that CalPERS improve accountability and reduce the risk of future abuses, including providing additional training to board members so that board business is not conducted in clandestine meetings with managers, and prohibiting the release of sensitive CalPERS information outside the organization.


This is a perfect example of serious governance gaps leaving a fund vulnerable to fraud. There is absolutely no accountability when this type of abuse goes on at the highest level. And trust me, it's not hard for a couple of guys at the top to collude and award sweet contracts to some consultant, hedge fund manager or private equity manager in return for "future favors". When you're in charge of billions, power gets to your head and you start thinking you're invincible.


This type of fraud makes me sick to my stomach. It's not common but it's going on a lot more often than people want to admit. How do I know? Let's just say I've seen things that made my skin crawl. It doesn't matter whether the investment officer has a CFA, FRM, PhD, etc., if they're crooked, they're crooked and they'll do whatever it takes to profit by abusing the power they have within a pension fund. And it's not just the large funds; in fact, some of the worst abuses happen in dinky city pension plans where corruption is rampant.

That's why I believe you have to properly compensate senior pension officers to deter this type of corruption. But that's not enough because some people are so sleazy, so greedy, they'll look to game the system and will stop at nothing to profit by abusing their power. One of the best ways to root out corruption is simply to segregate duties and implement iron clad whistleblower policies where employees can anonymously inform board members or better yet, the FBI or RCMP. That should make these idiots think twice before they abuse their power at a public pension fund.

Finally, this is a particular case that in no way reflects what's going on at CalPERS now. I think it's disgusting that some would use this report as "ammunition" to break up CalPERS or to dissolve other public pension funds. Get the governance right and you can root out corruption at most public and private pension funds.
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March 24th, 2014

3/24/2014

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THIS 2014 ELECTION FOR GOVERNOR AND 2016 ELECTION FOR PRESIDENT ARE CRITICAL. IF WE DO NOT HAVE A PEOPLE'S PERSON IN OFFICE RATHER THAN THE NEO-LIBERALS WE HAVE NOW, ALL THAT IS PUBLIC WILL GO TO THE RICH AND ANY WEALTH WE HAVE WILL DISAPPEAR. 

SHAKE THE BUGS FROM THE RUG AND GET RID OF CORPORATE NEO-LIBERALS!


Gansler, Brown, and Mizeur are all ready to protect wealth and profit.  DO YOU HEAR THEM SHOUTING EVER???


People always doubt when I give them the 35-45% unemployment number, but think to yourself, if over 175,000 new jobs must be created every month just to stay even.....the US has had very few of these weeks in years....each month unemployment numbers grow even as people fall off unemployment payments.  This is huge.  The FED gives the US Federal agencies these rates of 6.7%.

Remember, a third world country must impoverish 90% of people in order to control the population.  You see massive poverty with politicians promising hand-outs of basic human needs to get elected.  SOUND FAMILIAR? 

CONGRESS AND OBAMA IS BLEEDING THE PUBLIC DRY OF WEALTH WHILE PRETENDING TO ADVANCE SURVIVAL POLICY.  RULE OF LAW WOULD PAY THE NATIONAL DEBT WITH RECOVERY OF CORPORATE FRAUD MAKING FLUSH ALL PUBLIC TRUSTS AND GOVERNMENT COFFERS!

I spoke last time of Yellen and the FED policy meant to super-size wealth and keep unemployment high with the intent to bankrupt the public sector entirely with leveraged government debt and continuous fleecing of billions from government coffers.  All of this advances the neo-liberal goal of third world conditions here in America.  I use the leveraging of Baltimore City schools as an example, but all public projects in Maryland are leveraged and tied to Wall Street financial deals that will have the public sector fleeced just as people were of their homes and students were of their education/careers.

STILL, ALL YOU CAN HEAR ON MARYLAND MEDIA ARE 3 NEO-LIBERALS ALL SHOUTING TO LEVERAGE MORE, GIVE MORE TAX CREDITS, AND MARYLAND'S ECONOMY IS DOING FINE!


'The ultimate kicker is how closely the U.S. stock market is mirroring the market in 1929 (right before the Great Depression)'.


Actual U.S. unemployment is 37.2%, not "6.7%", record number of households on food stamps in 2013
RT
Wed, 22 Jan 2014 12:04 CST © Andrew Burton/Getty Images/AFP


A girl pays for her mother's groceries using Electronic Benefits Transfer (EBT) tokens, more commonly known as Food Stamps, at the GrowNYC Greenmarket in Union Square on September 18, 2013 in New York City. As the White House proclaims a recovery is occurring, and the stock market has a head of steam, millions of Americans and their dependents are being left out of the recovery, according to a set of economic indicators.

Perhaps the most worrying yet least reported aspect of the so-called US recovery involves the national labor picture. Although the official US unemployment rate is 6.7 percent, this figure obscures the reality, according to an influential Wall Street adviser.

In a leaked memo to clients, David John Marotta calculates the actual unemployment rate of Americans out of work at an astronomic 37.2 percent, as opposed to the 6.7 percent claimed by the Federal Reserve.

"The unemployment rate only describes people who are currently working or looking for work," he said.

"Unemployment in its truest definition, meaning the portion of people who do not have any job, is 37.2 percent. This number obviously includes some people who are not or never plan to seek employment. But it does describe how many people are not able to, do not want to or cannot find a way to work," he and colleague Megan Russell reveal in their client report, which was leaked to the Washington Examiner.

Contrary to expectations, a drop in the unemployment rate, Marotta argues, is presently a sign that the unemployed are simply dropping out of the job market.

The "officially-reported unemployment numbers decrease when enough time passes to discourage the unemployed from looking for work," said Marotta andRussel. "A decrease is not necessarily beneficial; an increase is clearly detrimental."

The authors then take aim at the so-called Misery Index, which provides something of a pulse rate of American prosperity, based on unemployment and inflation. The Wall Street adviser said the Index, which he maintains is actually over 14, as opposed to the 8 advertised by Washington, fails to address how the US economy is being hugely subsidized by various schemes, including monthly bond purchases by the Federal Reserve.

"Today, the Misery Index would be 7.54 using official numbers," the two analysts wrote. However, taking into consideration the full unemployment picture, including workers who have given up the job search, which is 10.2 percent, together with the historical method of calculating inflation, which is now 4.5 percent, 'the current misery index is closer to 14.7."

© Reuters/Jonathan Ernst
Protesters hold replicas of food stamps during a rally in support of higher pay for low-wage earners outside the National Air and Space Museum in Washington, December 5, 2013.In food stamps we trust

Marotta's findings, which put the actual US unemployment rate at over 37 percent, seem more credible when viewed alongside other indicators, including the number of Americans who now rely on government assistance to make ends meet.

It has just been reported that a record 20 percent of American households were receiving food stamps in 2013, according to data from the US Department of Agriculture (USDA).

The USDA data shows there were 23,052,388 households on food stamps in an average month of fiscal 2013, a jump of 722,675 from fiscal year 2012, when there were 22,329,713 households on food stamps per month on average.

Last year, according to data from the Census Bureau, there were 115,013,000 households. With 23,052,388 households - or 20 percent of the total number of households - now dependent on food stamps.

In just half a decade, the number of American households on food stamps has significantly increased. In fiscal year 2009, for example, the number of households receiving the government assistance program was 15,232,115. Five years later, in 2013, that number had surged by 51.3 percent to hit 23,052,388 households.

Meanwhile, the monthly average for individuals on food stamps hit an all-time-high of 47,636,084, according to the USDA. This is an increase of 1,027,012 over the 46,609,072 people who were getting food stamps in 2012.

In 2009, the number of individuals relying on the government program stood at 33,489,975. In 2013, the number was 47,636,084, an increase of 42.2 percent.

It should come as no surprise that spending on the US government's food stamp program, officially known as the Supplemental Nutrition Assistance Program (SNAP), has reached an all-time high.

Last year, SNAP cost $79,641,880,000 - a 164 percent increase over the past decade.

During the last five years, the SNAP program exploded by 36.8 percent, from $58,223,790,000 in 2009 to $79,641,880,000 in 2013.


_________________________________________
Your media pundit and politicians, labor and justice leaders will say they never saw this coming.....but they did.  I have shouted it for years and it is obvious to all.  So, all of O'Malley/Brown's credit bond leveraging and TIFs were designed to suck all public wealth and leave governments controlled by corporations.  That is what O'Malley's terms have been about and indeed, all governors across the country have been getting ready for this next collapse.  Sadly for you and me neo-liberals control most state and city executive offices like O'Malley and Rawlings-Blake in Maryland.  The City and State are so mortaged and taxes so high on the working and middle class now, that when the crash comes there will be nothing to tap.  There will be great defaults.

Now, if you elect for
Governor of Maryland  someone who will work to make the corporations and rich pay down these debts.....we the people will be OK.  If you elect a neo-liberal like Gansler, Brown, and Mizeur......everything will go the the rich.




Safety First: Strapping on Your Seat Belt Before the Coming Economic Crash

February 23rd, 2014   Investment Watch


It has been a while since the Global Economic Crisis has been the headline in the news. That doesn’t mean that it has ended. In fact, the world is moving further into a Global Economic Crisis daily, but people’s senses are dulled by the other new headlines such as Justin Beiber’s recent arrest and the Winter Olympics. Although it may seem irrelevant right now, global economic problems are brewing to levels that we have never seen before. These problems will begin to affect the U.S. soon.

Part of the problem is the federal reserves reckless money printing. This money was being used to fuel emerging markets and economies and to keep other economies afloat:

The Fed essentially is printing $85 Billion per month, out of thin air, using that digital money to buy bonds up, and trade them out with cash reserves or ultra-short term notes. Banks and hedge funds that owned the original bonds are then supposed to pump that money into the economy, creating a virtuous cycle.

Now, that they have slowed this process. Investors are taking this as a cue that the fun is over. They are beginning to pull their money from the markets:

Emerging market stocks, bonds and currencies—long coveted by investors attracted by the prospects of faster economic growth and access to young consumers—had a rocky start to 2013 as expectations of reduced U.S. monetary stimulus spurred capital outflows. Economic activity in many regions has slowed and faster inflation has eaten into savings.

This is causing massive financial instability in markets all over the globe.

In the past when nations were having trouble they could turn to financial powerhouses like

China for help. This will not be an option this time around with problems in Europe and Asia continuing to grow. XI Jinping of China has decided to stop letting the market run wild and has a plan for deflation. Deflation would be horrible for many economies because:

-Price deflation results in a real increase in the value of debt and a nominal decline in asset values. Debt can no longer be serviced.

-Price deflation would lead to massive tax revenue declines for the government due to a declining taxable base.

-Deflation would have fatal consequences for large parts of the banking system.

-Central banks also have the mandate to ensure ‘financial market stability‘

With unemployment statistics hitting all time highs in Greece and France and businesses failing at an alarming rate it is easy to see why the people there are in a state of unrest. In developing countries like Venezuela it has gotten so bad that armed military groups roam the streets. Topping this list of economic woes is Ghana who is on the cusp of economic collapse with a prominent economist from the country predicting that the country’s financial market will collapse by June if something is not done.

What messes everyone up is that these crises are not isolated incidents. When these crises strike one nation they affect everyone because all nations are connected. Although popular media would like you to believe that all nations are against each other, it is not that clear cut. All nations are connected through investments they’ve made in each other. So, when one fails all nations feel a little pain that they would like to avoid, so in most cases they band together to help whoever is struggling. This can easily be seen in the relationship between the US and China. The two nations compete in many subjects from sports, education systems, and even in their economies. However, when the US was having some major economic problems China was there to bail the US out. This came with some benefits for China, but it also made China even more invested in the well-being of the US since it has put more assets into the US’s economy. Investment Officer Alexander Friedman explains it perfectly:

The twenty-first-century economy has thus far been shaped by capital flows from China to the United States – a pattern that has suppressed global interest rates, helped to reflate the developed world’s leverage bubble, and, through its impact on the currency market, fueled China’s meteoric rise. But these were no ordinary capital flows. Rather than being driven by direct or portfolio investment, they came primarily from the People’s Bank of China (PBOC), as it amassed $3.US Treasury securities…But selling off US Treasury securities, it was argued, was not in China’s interest, given that it would drive up the renminbi’s exchange rate against the dollar, diminishing the domestic value of China’s reserves and undermining the export sector’s competitiveness

A wise man once said that, “those who don’t learn from the mistakes of the past are doomed to repeat them in the present. This statement rings very true. Especially, since all of these problems are being caused because the problems from the financial crisis of 2008 were never fixed. This is true everywhere considering the economist from Ghana was touching on the same principle when predicting why Ghana’s economy would crash:

The government is facing liquidity problems and if we don’t get the appropriate remedies to address the issues at hand the situation may worsen and by June the economy may crash…I said if they don’t address the fundamental problems facing the economy, by June the country’s economy will crash because the government has not even paid University Lecturers since last year among other pressing issues which needs to be address

The ultimate kicker is how closely the U.S. stock market is mirroring the market in 1929 (right before the Great Depression).

Remember Von Mises’s wise words:

There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved

The first step in preparing for any crisis is awareness, so at least the readers of this article will know to hold on and to buckle their seat belts before this economic crash.

_____________________________________

Obama, neo-liberals in Congress, and the FED have spent these years since the economic collapse in 2008 making sure those richest had all the money they could to expand overseas.  Global corporations getting bigger and global markets expanding into developing worlds.  They need to build another middle-class to consume now that they fleeced Americans of all their wealth.

All those trillions of dollars in corporate tax breaks, job stimulus money, and all of the tens of trillions of dollars in corporate fraud never recovered have gone to these developing world markets.  Over $600 trillion in derivatives leverage just as in 2007.  All of this done knowing this massive collapse would come and all done so that those at the top would be shielded.  This is why Yellen comforted everyone with the idea that the US global banks will not be harmed by this next crash.



So, WYPR exposed you and I to corporate NPR/APM and Basu telling us that nothing was wrong with policies, that the economy was growing, that jobs were being created AND NONE OF IT WAS TRUE AND THEY KNEW IT!


 6 Signs That 2014 Will Be The Year Of The Super Crash

6 Signs That 2014 Will Be The Year Of The Super Crash Gold Silver Worlds | January 30, 2014

As we have finally arrived in the magic year 2014, in which almost every economic and business cycle is trending down, it seems that things are perfectly lining up for a melt down. If it would have been true that the debt crisis was contained (like our political leaders try to make us believe), then there is a huge divergence with recent trends.

Are we pessimistic? No. Are we optimistic? We do our best. Above all, we aim to be unbiased and neutral. In any case, this article is not an attempt to predict prices or to time any market. That is useless and serves only marketing purposes. This article looks at six different trends which are lining up for an historic sell off in the markets. As readers observe, we stay as factual as possible.

Trend 1:


Market distortions because of QE appearing in emerging markets Up until now, the vast majority of economic and financial pundits have been praising the Western central banks for their monetary miracles. The last two weeks, however, were extremely important as we got evidence of the direct destructive effects of monetary easing. In particular, the carnage in emerging markets and their respective currencies revealed that things can get out of hand and have the ability to spiral out of control (much faster than governments can intervene).

Bloomberg says this is the worst selloff in emerging-market currencies in five years, revealing the impact from the Federal Reserve’s tapering of monetary stimulus. “Investors are losing confidence in some of the biggest developing nations, extending the currency-market rout triggered last year when the Fed first signaled it would scale back stimulus. While Brazil, Russia, India, China and South Africa were the engines of global growth following the financial crisis in 2008, emerging markets now pose a threat to world financial stability.”

Once the destructive power of this monetary experiment starts manifesting itself, it is likely to see spill over effects to all markets. Monetary easing could still look like innocent and constructive, but the side effects are unknown at present, as this is the first monetary experiment at this scale. The most concerning fact is that nodoby has an idea about how exactly the markets will react on each slice of tapering, and the precise timing of all effects (including the unintended consequences).

Trend 2:


There are almost no buyers left in equities Equity markets have shown exceptional yields in 2013. In a world with no yields, investors are chasing assets which yield more than nothing.

It has been thought that quantitative easing would create bubbles, but as it looks now it is resulting in bubbles in specific asset classes, as Marc Faber correctly predicted a while ago. The problem is that sentiment in the stock market has become far too optimistic. It’s not surprising, nor are investors or traders to blame, in a zero-yield world. The first chart shows the extreme optimism based on a bull/bear ratio.



 Another red flag is related to margin debt, see next chart. It shows the level of leverage in the equity market. We are well past the previous peaks.



However, there are reasons to believe that a crash is not imminent. Equities have surged but the margin debt to equities growth ratio is not as extreme as in the 2000 and 2007 peaks. This metric suggests there is some room for more upside.



We all know what happens when there is nobody left to buy. That point could be very close.


Trend 3:


 Manipulation is entering the public debate Currency markets, LIBOR, base metals, energy, … almost every single market has been manipulated. That is no news, of course, but the fact that it has become widely accepted is an important trend. Consider these headlines in the last few weeks:

  • Federal Reserve Said to Probe Banks Over Forex Fixing (Bloomberg)
  • Deutsche, Citi feel the heat of widening FX investigation (Reuters)
  • HSBC, Citi suspend traders as FX probe deepens (Reuters)
Even the precious metals manipulation debate is going mainstream. Up until now it remained in the “dark corners” of the internet, in the “blogosphere” and “gold bull” sites. Now it is the German financial regulator Bafin who says that “Metals, Currency Rigging Is Worse Than Libor” (via Bloomberg).

The key is that it has the potential to undermine trust. As readers know by now, trust is the pillar on which the current financial system is built. Once there was a tangible asset backing up the monetary and financial system; it was called gold. Not so anymore. A large scale loss in trust will have disastrous effects.

Trend 4:


Banks are once again reporting losses Several mega banks have been reporting losses in the last weeks. Is this a repeat of the 2008 scenario?

Consider Royal Bank of Scotland, who faces £8bn in full year losses. BBC writes: “RBS may face full-year losses of up to £8bn, after the bank said it needed another £3.1bn for claims relating to the financial crisis. RBS boss Ross McEwan said: “The scale of the bad decisions during that period [the financial crisis] means that some problems are still just emerging.”

Another giant, Deutsche Bank, posted EU1.2 billion losses in the fourth quarter. Via Bloomberg: “Deutsche Bank AG, Germany’s biggest bank, said this year will be challenging after a surge in legal costs and lower debt trading revenue spurred a surprise fourth-quarter loss. The shares slumped. Depressed interest rates in Europe and declining demand for banking services are also among the headwinds the bank is confronting in 2014, Co-Chief Executive Officer Anshu Jain said on a conference call with analysts from Frankfurt today.”

Wait a minute. The central banks of this world have injected close to $10 trillions in the banking system since March 2009, in order to prevent a melt down. They have reported happily that, by doing so, they not only saved the world but also generated economic growth. But at the time of victory, mega banks are reporting losses. Something does not add up here.

Trend 5:


The alarms of financial repression are deafening It is getting really ugly with financial repression.

Reuters reported this week that Germany’s Bundesbank publicly commented that countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help. The Bundesbank’s tough stance comes after years of euro zone crisis that saw five government bailouts. There have also bond market interventions by the European Central Bank in, for example, Italy where households’ average net wealth is higher than in Germany.

“(A capital levy) corresponds to the principle of national responsibility, according to which tax payers are responsible for their government’s obligations before solidarity of other states is required,” the Bundesbank said in its monthly report. It warned that such a levy carried significant risks and its implementation would not be easy, adding it should only be considered in absolute exceptional cases, for example to avert a looming sovereign insolvency.”

The annoying part here is that the bail-ins debate is becoming mainstream. So it was no mistake from Dijselbloem a year ago when he said bail-ins will become the template for the future.

Moreover, some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it. The BBC writes: “Listeners have told Radio 4′s Money Box they were stopped from withdrawing amounts ranging from £5,000 to £10,000. HSBC admitted it has not informed customers of the change in policy, which was implemented in November. The bank says it has now changed its guidance to staff.”

Over to Russia, where, according to Zerohedge, the bank Lender has introduced complete ban on cash withdrawals until end of week, news agency reports, citing unidentified person in call center.

The subject is also going mainstream in the literature. A recent IMF working paper from Reinhart and Rogoff says: “The endgame to the global financial crisis is likely to require some combination of financial repression (an opaque tax on savers), outright restructuring of public and private debt, conversions, somewhat higher inflation, and a variety of capital controls under the umbrella of macroprudential regulation. Although austerity in varying degrees is necessary, in many cases it is not sufficient to cope with the sheer magnitude of public and private debt overhangs.”

The annoying part is that the financial repression story is intensifying. It is being accepted in the literature, among politicians and now we see an increasing number of initiatives being rolled out. Not good.

Trend 6:


Complexity theory points to a collapse Jim Rickards recently suggested that the world has become so interconnected that it has the looks of an extremely complex system. His research points out that complexity theory can be useful as an analogy to determine what comes next. Prior experiments in complexity theory suggest there is a point of no return: when things become too complex and interconnected, they can only come down.

Rickards sees a similar situation in the markets today. In fact, he saw something similar in 2006 and 2007. We all know what happened afterwards.

But what has the central bank noticed? Apparently nothing, as evidenced by their systemic risk model on the next chart. It is at an all-time high.



Should we be concerned when there is nothing to be concerned?

A valid question to ask is why Jim Rickars can detect things that the central bankers cannot. Rickards himself explains it in a very simple and short way: the Fed is using the wrong economic models. Their models could be fine theoretically, but they do not reflect reality.

Protect yourself Are six red flags enough to start protecting yourself? When things get out of hand, our world will become very selfish. The most likely outcome is that everything will come down initially, comparable to what happened in 2008. Chances are high that precious metals will recover fast.

The point in all this is that asset prices will be of secondary importance. Avoiding a total catastrophe could be far more important. There really is a reason why we advocate holding physical precious metals outside the banking system or open an offshore bank account with a debit card in gold or silver at a reserve bank.

_________________________________________

THIS IS WHY IT IS IMPORTANT TO HAVE ELECTED OFFICIALS IN TOP OFFICES THAT WILL LOOK OUT FOR THE PEOPLE AND NOT CORPORATIONS AND PROFITS.  BERNIE SANDERS MAY BE THAT PERSON FOR PRESIDENT AND CINDY WALSH IS THAT PERSON HERE IN MARYLAND!

'He believes that the next financial crash will result in society realizing that “modern financial institutions cannot in general be trusted with either individuals’ money or the provision of financial services to viable economies”
'


2014: Renewed Economic Growth or Financial Crash? DEVELOPMENT & SOCIETY : Business, Economics, Energy, Risk 2014•01•17 Brendan Barrett United Nations University

Your instincts may be telling you otherwise, but the global economy will be strengthening in 2014, according to two major reports released in recent weeks.

In an improvement over 2013’s global economic growth of 2.1 percent, we will see a 3 percent rise this year and a bump up to 3.3 percent in 2015, predicts the United Nations’ World Economic Situation and Prospects 2014 report.

This positive news is echoed in the slightly more optimistic Global Economic Prospects report issued by the World Bank this week that states:

“Global GDP is projected to grow from 2.4 percent in 2013 to 3.2 percent this year, stabilizing at 3.4 percent and 3.5 percent in 2015 and 2016, respectively, with much of the initial acceleration reflecting a pick-up in high-income economies.”

At the same time, the World Bank projects that developing country growth will rise above 5 percent in 2014, with China’s economy growing by 7.7 percent, India’s by 6.2 percent, Mexico’s 3.4 and Brazil’s 2.4 percent.

Global economy: the patient shows signs of recovery The UN report reads very much like the medical examination results for a sick patient who has had to take some pretty strong medicine, but while still looking rather pale and tired, is showing some signs of recovery.

Inflation (like high blood pressure) remains benign worldwide, the report states. It has decelerated in the United States and euro-zone, dropping to 2 percent in the former, and 1 percent in the latter. This is causing concerns from the International Monetary Fund that we could be entering a period of deflation (overly low blood pressure) and that could undermine the global recovery.

In the developing world, inflation rates are above “10 percent in only about a dozen countries scattered throughout different regions”, according to the UN report, and that is arguably a good thing.

High unemployment is part of the explanation for the lower inflation figures and unemployment rates remain a serious challenge, particularly for the euro zone where they reached record levels at 12.2 percent in 2013, but as high as 27 percent in Greece and Spain. Renewed GDP growth in 2014 is projected to bring reductions in these rates in both Europe and the US, with the latter dropping below 7 percent. Again, a very good development, if it happens.

There are, however, major concerns for developing and emerging economies highlighted in the UN report. First, there has been a measurable decline in private capital inflows to “emerging markets, a sub-group of developing countries”. Second, volatility in these markets has increased with equity market sell-offs and local currency depreciation.

Risk and uncertainties: It could all go very badly wrong While delivering these positive forecasts, the UN and the World Bank devote half of their respective press releases to the risks and uncertainties facing the global economy.

The Chief Economist at the World Bank, Kaushik Basu, suggests that “one does not have to be especially astute to see that there are dangers that lurk beneath the surface”. Over at the UN, Shamshad Akhtar, Assistant Secretary-General for Economic Development, claims that “uncertainties and risk coming from possible policy missteps as well as non-economic factors … could stymie economic growth”. By non-economic factors she is referring to the situation in Syria and the Middle East.

By far the biggest concern is the potential impact of the US Federal Reserve’s exit from the quantitative easing programmes. The aim of these programmes is to “inject money into the economy in order to review nominal spending”. This involves “purchasing financial assets from the private sector” using “new central bank money, in addition to boosting the amount of central bank money held by banks…”.

The problem is one of weaning the economy off these programmes with one danger being that the medicine itself could become a form of poison for the global economy. Rather than using the term weaning, the Federal Reserve talks about “tapering”, with the goal being to reduce the monthly amount of quantitative easing in the US, to gradually wind it down and to conclude their programme at the end of 2014.

The authors of the UN report are concerned, however, that tapering could lead to “a sell-off in global equity markets, a sharp decline in capital inflows to emerging economies and a spike in the risk premium for external financing in emerging economies”.

Andrew Burns at the World Bank argues that this decline in capital inflows to developing countries could fall by as much as 50 percent for several months “provoking a crisis in some of the more vulnerable economies”, specifically Brazil, Turkey, India and Indonesia.

Meanwhile, the UN report points to other risks including “fragility in the banking system and the real economy in the euro area and the continued political wrangling in the US on the debt ceiling and the budget”.

Neither the World Bank nor the UN consider that a crisis is inevitable but they do call for strengthened international policy coordination, renewed reform of the financial system and in some instances the tightening of fiscal policies.

Déjà vu – Feels like 2007/8 all over again Reading these reports, I am reminded of the situation back in 2007/8 when we first began work on the Our World magazine. At that time, I became aware of signals among noise about the state of the global economy when the era of cheap energy is over and decided that the magazine should focus on some of the major issues facing the world. One of those issues was the peaking of global conventional oil production.

So in 2007 we began working on the magazine and successfully launched at the beginning of July 2008, just before oil prices peaked at around US$147 per barrel. At the same time, the financial system was just beginning to unravel and a serious collapse looked imminent. Fortunately for us, the global leaders managed to rally around the problem and prevent the world from slipping into depression.

Now, I have that 2007/8 feeling all over again and you probably share it. Particularly, I am struck by a number of signals from financial commentators like Peter Schiff, author of The Real Crash, and Robert Wiedemer, author of Aftershock, who are warning that a second financial crash is just around the corner for the US.

They made similar predictions before the 2008 financial crash and you could argue that they are in the “economic collapse prediction business”, since they also offer their services as investment advisors. Their basic message is that you should try to save yourself and your money in difficult economic times, and if you buy their books you will know what to invest in and what to avoid.

It would be all too easy to dismiss these pundits were it not for the fact that the UN and World Bank reports mentioned above appear so cautious about their growth projections and about the fragile nature of the economic recovery. It is almost as if they are covering their options so that they can say, if things go wrong, “we did try to warn you about the risks we are currently facing”.

The question is whether our leaders are aware of these risks or blind to them.

Risk Blindness and the Road to Renaissance Coincidentally, I have just finished reading the most recent book from Jeremy Leggett – The Energy of Nations: Risk Blindness and the Road to Renaissance. Leggett describes himself as a “social entrepreneur” and is the founder of a renewable energy company, SolarCentury. He maintains a blog called the Triple Crunch Log that covers the interaction between energy, climate and the financial crisis.

Using the log, which tracks events as far back as 2006, Leggett’s book presents a blow-by-blow chronological account of how these three factors have played out in the past seven years.

In the United Kingdom he appears to be viewed by politicians, government officials and the major energy companies as the acceptable face of the environment, climate and/or peak oil community. As he puts it, he is a pinstripe suited, Financial Times carrying, climate change and peak oil concerned capitalist.

In his book, he describes numerous meetings where he interacts with the British government and Big Energy, often behind closed doors. In some instances, his accounts of those interactions read like episodes from Armando Iannucci’s dark political comedy, The Thick of It shown on the BBC.

Here is one example. A group of concerned business leaders representing the UK Industry Taskforce on Peak Oil and Energy Security (that Leggett helped set up) meet with the Secretary of State for Energy and Climate Change. Together they agree on a proposal for the government to work with the Taskforce to develop an oil shock emergency response plan. Subsequently, the business leaders issue a press release to announce the collaboration, only to find limited media coverage. They then discover that the civil servants in the Ministry had been informing the press that no such agreement was ever made. It would be a hilarious episode of The Thick of It, were it not actually true (check it out in the book).

What Leggett describes in his dealings with our leaders in government and the energy sector is a tendency towards “risk blindness” around climate, energy and the financial concerns. He suggests that this tendency will push us towards a financial collapse in the next few years. On the energy front, he sticks to his earlier prediction of an energy crash by 2015.

Leggett points out that many financial commentators believe a second financial crash is imminent. “The weight of debt that we have allowed to accumulate around the world will prove just too heavy for the financial system,” he writes in his book. “As things stand, a seemingly small event holds the potential to trigger the mass failure of banks.”

One such event could be the private equity decline mentioned in the above reports. We have to acknowledge the important role the UN and the World Bank are playing in outlining the risks so clearly and can only hope that the leaders of the world are not blind to them. Leggett, however, suggests that the problems are more profound than even the UN and World Bank officials are willing to admit.

He believes that the next financial crash will result in society realizing that “modern financial institutions cannot in general be trusted with either individuals’ money or the provision of financial services to viable economies”
. He further argues that “light touch regulation” of the financial system no longer works. To get us through the next crisis, we are going to need, he explains, a critical mass of “presidents and prime ministers keen to sit constructively in a multilateral emergency room”.

But Leggett is an optimist. With crisis comes opportunity and Leggett would like to see that the road forward takes us to a renaissance based on people power, community interests and the explosive growth of clean energy. In this context, The Energy of Nations is essential reading for those concerned with the interaction of the pressing global issues of today.

If the caution expressed in the UN and World Bank reports is correct then we find ourselves in a time of great risks and uncertainty. If the financial pundits are right then an economic catastrophe lies just ahead. If risk aware business leaders like Jeremy Leggett are making reliable observations then we have “arrived irredeemably in a time of consequences”.




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March 08th, 2014

3/8/2014

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IF YOU WANT TO KNOW WHY CRIME AND VIOLENCE IS SO HIGH IN BALTIMORE-----LOOK BELOW AT HOW BAD PUBLIC POLICY IMPOVERISHES JUST TO ENRICH A FEW!

ALL OF OUR PUBLIC ASSETS ARE BEING HANDED TO RICH DEVELOPERS FOR NEXT TO NOTHING IN AREAS SLATED TO HAVE HIGH PROPERTY VALUE.  IF KEPT PUBLIC PROPERTY------THAT WOULD BE PUBLIC WEALTH.  EVERYONE SHOULD BE CONCERNED BECAUSE THIS IS NOT ONLY ABOUT GETTING THE WORKING CLASS OUT OF CITY CENTERS....

WOMEN AND CHILDREN ARE THE VICTIMS.

IT IS ABOUT TAKING PUBLIC LAND AND ASSETS THAT MIDDLE-CLASS TAXPAYERS BUILT.


The Obama Administration is privatizing all that is public faster than Bush and that includes the Housing Urban Development agency  HUD.  Federal policy sends all kinds of taxpayer money to dismantle public housing and projects with the idea that these are bad for the poor and communities.  This is likely true------concentrated poverty in these projects is not a good idea.  The problem is that there is no intention of providing any other opportunity and in fact, the policies are leaving even more people homeless and impoverished AND THE MONEY IS BEING FUNNELED INTO THESE CORPORATE DEVELOPMENT PROJECTS.

Below is a good article giving a long view of public housing policy. I include just the Obama years because we need to look at again, a neo-liberal saying they are going to do something progressive and not doing it.  So, with public housing like with fraud,......supposedly we cannot easily seek justice because the definitions are left vague.  OBAMA HAS LEFT PUBLIC HOUSING DISCRIMINATION VAGUE AS HE HAS IGNORED FRAUD. 

What I want to emphasize is that tons of Federal money is coming for public housing and being funneled into projects that are making the rich richer and doing nothing for the people paying the taxes.  Here in Baltimore, consolidation of real estate into the hands of a few is indeed aided by these funds and it is all illegal.  So, the low-income lose and the taxpayers lose. 

ALL GOES TO THE PEOPLE AT THE TOP.  WE NEED THAT MONEY BACK.  IT IS THE PUBLIC'S MONEY.

Living Apart: How the Government Betrayed a
Landmark Civil Rights Law

 
 
by
Nikole Hannah-Jones
ProPublica,  Oct. 28,
2012, 11 p.m.




A 2009 internal HUD study found that many communities were not even bothering to complete the required fair housing paperwork when they applied for block grants.
In a sample of 70 applicants, 35 had not provided an "analysis of impediments" to fair housing, prompting HUD to conclude that they were "apparently not performed at all." Nearly all of the reports received were considered substandard, the review found.  A year later, investigators from the Government Accountability Office confirmed what civil rights advocates had long known:
HUD's system for ensuring compliance with the fair housing law was a sham.
GAO officials reviewed documents filed by 441 recipients of
block grants, a step HUD officials do not routinely take.


They found that about one-third of the fair housing materials were out of date. More than one in 10 hadn't been updated since the '90s. Communities in the Midwest and Northeast — the most-segregated regions of the country — performed
the worst.

The GAO dismissed the analyses of impediments to fair housing that some communities provided as worthless because of their "brevity and lack of content." Most did not offer time frames for when the communities would
eliminate barriers to integration or include the required signatures of the relevant elected officials.



Investigators noted that 25 recipients of block grants had filed no analysis, "raising questions about whether some jurisdictions may be receiving federal funds without preparing the documents required to demonstrate that they have taken steps to affirmatively further fair housing."


According to the GAO, HUD staffers in seven regions had read the key documents for just 17 of 275 block grant recipients. Efforts to ensure "the integrity of the AI process...were not common," the report said.

The GAO made a number of recommendations. But HUD didn't even adopt the simplest one: to require that grantees submit their analysis of impediments for HUD to review.
In interviews, many HUD officials acknowledged they have no idea how to enforce the provision for affirmatively furthering fair housing. Already overstretched, they focus on what is clear: the disability accommodations provision of the Fair Housing Act. It's simple, they say, to check off whether
an apartment door is wide enough for a wheelchair or if a parking lot has enough handicapped spots.


But compliance officers stumble when it comes to race and segregation.  One said she received little training on how to apply the 1968 act to block grant recipients. "The one week of training I was sent to, you focus on the civil rights law as a whole," she said. "You're not focused per se on
segregation." The official said she did not review broader issues such as the impact of discriminatory zoning "because I don't even know what they are."


Rolando Alvarado supervised fair housing enforcement for HUD in New Jersey for more than a decade. When asked to define "affirmatively furthering fair housing," he exhaled and then paused. Ten seconds passed.  "That is tricky. There is no exact regulation, it's a gray area," said Alvarado, who retired in 2009. "I've never seen anything that clearly defines
that in my time at HUD."


Alvarado said he relied on his staff to ensure enforcement of the mandate. But how could his subordinates enforce something he himself could not explain?
"You are right. I don't know," he said. "It was reliance on if staff had conducted enough investigations and compliance reviews they would have an inkling of what to look for."


Alvarado said he could not recall a single instance in which he challenged a community's assertions about its efforts to further fair housing. When it comes to these issues, he said, "You are basically taking them at their word."  After the Westchester settlement, in which the judge criticized the
department for failing to enforce the law, the word came down from HUD leaders that there should not be a recurrence. Officials say that directive was not accompanied by any training, additional staff or instructions on what practices
should be examined.


"The message is that we need to be more aggressive but absent the new rule, there is very little guidance as to what would constitute a failure to affirmatively further fair housing," said a senior fair housing official. "There's a car here and nobody knows how to drive it."



Trasvina promised Congress in January 2010 that by the end of the year the agency would release a rule requiring communities that receive money from the
agency to "promote integration." More than two years later, those regulations have not been issued. HUD has declined to say when they might appear or give a reason for the delay.



The focus of HUD's civil rights work appears to have veered away from race.  In March, the department issued a rule banning discrimination against gay and transgender people in HUD-assisted housing and by lenders receiving guarantees
from the Federal Housing Authority.

Asked what they are doing to fulfill the Fair Housing Act's mandates, HUD officials pointed to Joliet, Ill., where HUD has withheld block grant funds over the city's attempt to demolish a mostly black federally subsidized apartment complex. HUD also has withheld block grant money from Westchester County, which the Justice Department says has failed to live up to the terms of its settlement agreement.


Brian Sullivan, a spokesman for the housing agency, said in an email that HUD "very nearly" cut off block grant money for Galveston, Texas, and threatened to do so in Delaware's Sussex County.  But other communities with serious questions about fair housing continue to receive federal housing dollars, and fair housing officials say the agency still
brushes civil rights concerns aside. One senior housing official pointed to New Orleans, which hasn't lost its block grant despite the Department of Justice lawsuit. "If that's not enough to reject a grantees' funding," he said. "Any finding from the fair housing office will not ever be sufficient."


Another example is Waukesha County, Wisc. HUD launched an investigation of the 90 percent-white county last year following a complaint from a fair housing group. The group accused the county of allowing its nearly all-white communities to block rental housing to keep out African Americans and Latinos from neighboring Milwaukee. African Americans and Latinos account for 57 percent of
the city's population.  Yet the agency treats Waukesha County no differently from racially integrated Montgomery County, which has a 30-year track record of placing affordable
housing in its most prosperous neighborhoods. Waukesha still receives its automatic influx of HUD dollars.


"It is fair to say, it is accurate to say, that the only situation in which HUD is doing anything effectively to affirmatively further fair housing are situations where there has been litigation," said Florence Wagman Roisman, a law professor at Indiana University. "Then it does as little as possible, as
grudgingly as possible."

Prospects for substantial change appear dim.



Obama administration officials say that if the president is re-elected, they will complete work on the long-delayed rules defining what it means to "affirmatively further fair housing."


At a private fundraising event in Florida in April, Mitt Romney said he would consider closing down HUD if he wins the election."I'm going to take a lot of departments in Washington, and agencies, and combine them," he said. "Things like Housing and Urban Development, which my dad
was head of, that might not be around later."


Have you experienced discrimination under the Fair Housing Act?
Share your story with us.



ProPublica's Kirsten Berg contributed to this story.



_________________________________________-

NEO-LIBERALS HATE ALL WAR ON POVERTY AND NEW DEAL POLICY AS MUCH AS REPUBLICANS.  SO LABOR AND JUSTICE ARE BEING ATTACKED BY NEO-LIBERALS.  DO NOT BELIEVE THE TOKEN PROGRESSIVE BONES BEING THROWN.

What to do with public housing and the people they support.  Well, logic has it that you can demolish the high-rises with the Federal money and invest in low-income housing within all Enterprise Zones.  That is what should be happening.  All of those public housing are on property in the city centers that will become valuable as development continues so keeping them public.......a park, public community/recreation centers, etc are what public interest requires.  Yet, in Baltimore, all of this public land is going to developers.....again in large parcels to control all of how the community will be developed. MARKET-RATE IS THE THEME!!!


Below you see exactly what they intend to do in Baltimore and Maryland-----what this does is eliminate any future use of that property for the public AND IT KEEPS THE PRIVATE CORPORATION FROM PAYING PROPERTY TAXES ON THIS DEVELOPMENT.  In Baltimore, they will even get deferment on all other taxes and they will get tax breaks for remodeling the building.  It's like placing public garages under private buildings to have public subsidized private parking.  Remember, all of this public housing property will become high-end as development continues saving tons of money in property taxes.

EVEN IF YOU WANT TO BE RID OF LOW-INCOME PUBLIC HOUSING....THINK OF THE PUBLIC LAND INVESTMENT AND WHERE THESE PEOPLE GO----IT ALL CREATES THE ENVIRONMENT OF CRIME AND VIOLENCE AS PEOPLE LOSE JOBS AND HOMES.



New York Public Housing Land To Be Leased For Pricey Apartments

By MEGHAN BARR and JENNIFER PELTZ 
03/08/13 03:17 AM ET EST                                        
 
NEW YORK -- New Yorkers pay dearly for the privilege of living in one of the world's great cities. But would they shell out top dollar for an apartment on the grounds of a public housing project?


That scenario could play out across Manhattan under an unprecedented proposal by the city housing authority to lease out public housing land and allow developers to build market-rate apartment buildings – intended for much wealthier residents – on areas currently occupied by basketball courts, parking lots and outdoor plazas.



City Council Moves to Stall Land Leases at Public Housing
By 
MIREYA
NAVARRO

Published: October 10, 2013    
 
    
The New York City Council and a group of tenants sued
the
Bloomberg administration on Thursday over plans
to lease land in public housing developments for the creation of market-rate apartments.
  
   
 
The lawsuit, filed in State Supreme Court in
Manhattan, stems from a long-running controversy over the
New York City Housing Authority’s proposal to
raise revenue for repairs and capital projects by allowing private developers to build on the grounds of eight public housing projects in Manhattan.
     
  


Housing officials have given developers a Nov. 18
deadline for proposing ideas — so-called expressions of interest — but it was unclear whether they would be able to select construction projects before the change in administration that will follow the November mayoral election.        

Lawyers for the plaintiffs say the lawsuit is intended
to forestall any deals with developers before Mayor Michael R. Bloomberg’s term is over. “The city has the ability to designate a developer and tie the hands of the incoming administration,” said Steven Banks, attorney-in-chief of the Legal Aid Society, which is representing the tenants. “The new administration would be without remedy.”       


Democrat Bill de Blasio, the leading candidate for
mayor, has not ruled out developing land owned by the housing authority, but he has said he favors building affordable housing, not market-rate units. The public housing system has more than 400,000 residents and $6 billion in unmet capital needs.       


The Council objected to being left out of the
decision-making regarding the plan to build on public housing grounds. In their lawsuit, the plaintiffs seek to have the city rescind the request for expressions of interest. They argue that under state law, housing officials have no authority to lease public housing land for high-income residents and that
they must submit their plan to the Council for approval
.       

“There’s still a need for more low- and middle-income
housing, and that should be the city’s priority,” said Rosie Mendez, who heads the Council’s committee on public housing.
       


In response to the lawsuit, the housing authority
issued a statement saying that it “has heard significant interest from developers and looks forward to receiving their proposals next month.”        

“It’s unfortunate that the City Council is attempting
to block a proposal that would generate significant revenue for the New York City Housing Authority — money that would go directly into developments and repairs for residents,” the statement said.




FEDERAL MONEY YET AGAIN FUNNELED TO THE SAME INVESTMENT FIRMS/DEVELOPERS GETTING TAX BREAKS FOR DEVELOPING IN UNDERSERVED COMMUNITIES AND ALL THE PEOPLE LIVING IN THESE COMMUNITIES WILL BE DISPLACED.


What Rawlings-Blake and O'Malley with City Hall
are doing is privatizing all that is public.  Public employee unions are busted and pay is lowered to poverty.  This is what happened as MTA is privatized with VEOLA and it is what is being tried with longshoreman unions at the Port of Baltimore.  It is all union-busting and impoverishing of labor.  So, why are unions backing all of Maryland's neo-liberals every election rather than running labor and justice?



 The US Constitution protects equal opportunity and access in housing and education.  What Baltimore is doing is illegal because they not only ignore equal access, they try to pass laws that say 'we will accept Federal funding for development but not honor equal access and opportunity laws'.  They pretend they can do this and they cannot.  It is public malfeasance.

Below is  a good analysis of Baltimore's situation.  It is too long to copy but check it out.  I would just like to emphasize throughout is the disregard of real data and deliberate disregard to Rule of Law and adherence to Federal requirements.  This is important in getting the public's wealth back and hopefully helping those displaced with justice.  Breaking these laws is not only public malfeasance but fraud on the part of the developers knowingly failing to meet terms of Federal and State contracts.


September
2007
Volume 20, Number 4


What we think about, and what we’d like you to think
about

THE ABELL REPORT
Published as a community service by The Abell Foundation


Erroneous reporting leads to a
lack of public concern



“Baltimore Housing currently serves
over 40,000 residents in more than
14,000 housing units.” This statement
appears (as this study is being written) on
the city’s public housing website. HUD
also reports a similar number — 14,446.
But the true numbers of public housing
units being used in Baltimore are far
lower and can be found in the Housing
Authority’s most recent annual plan, as well
as City Hall’s Citistat Reports.
Nevertheless, the Housing Authority and
HUD continued to use these outdated
numbers in 2007. The HUD official
who oversees Baltimore’s housing
authority appeared unaware that as of
spring 2007, Baltimore only had 10,748
available units in its inventory (with
1,123 of them vacant).
The absence of accurate and consistent
reporting and the lack of analysis of
the loss of public housing has served as
a convenience in a political climate
where even a suggestion of building a
small number of public housing units
can cause a neighborhood uproar.

A lack of public
participation



Housing advocates have complained
of a lack of public input in the demolition
plans, despite federal law requiring
a housing authority to “conduct reasonable
outreach activities to encourage
broad public participation” in its annual
public housing plan.  At a sparsely
attended April 17, 2007 hearing on the
future of Baltimore’s public housing,
several advocates protested that they
found no public notice of the event, and
questioned why it wasn’t posted on the
agency’s website.

Housing officials said sufficient
notice was given when they advertised
in The Baltimore Sun and the Afro-
American in March and at the Enoch
Pratt Free Library. The Baltimore Sun
notice, however, was a tiny, one inch by
three- and three-quarter-inch ad buried
in the classified ads that ran for three
days, a month before the hearing.  During
the hearing, no copies of the 100-
page plan were available (though an
electronic copy was on HABC’s website),
and housing officials gave no
overview or public explanation for their
decision to demolish projects.  One
advocate accused housing officials of
trying to “circle its wagons” against
public participation and called the plan
“a roadmap for the continued decline of
public housing.”  Each of the eight
people testifying was given two minutes to speak. The hearing was over in a half hour.


__________________________________________



 Equally important for citizens of Baltimore is the
fact that Baltimore HUD is probably the most corrupt of all corrupt agencies in Baltimore and as such all kinds of red flags will go up with these public properties.  Keeping this property in city central that will become valuable as
development occurs is the only thing to do in public interest.  We could build multi-income housing, parks, public community centers with this public
land.  Since Baltimore HUD is corrupt, they will hand it off undeveloped for cheap to a connected investor who will make tons of money on this property when development of this area is finished.  See why it is public malfeasance.

The second part to this is the workers who represent a
dying middle-class in Baltimore with the attack of middle-class jobs and leaving Baltimore families desperate and poor.  Extended families depend on these strong
jobs and it is this policy of killing Living Wage jobs that give us Baltimore's high crime and violence culture as people turn to drug dealing et al to survive. All for no good reason.

The City of Baltimore loses billions of dollars
to fraud and corruption and rebuilding public justice in the city would fill the  city's coffers and allow for a healthy public sector.  Handing all that is public to private ownership or public private partnerships is what fuels all the fraud and corruption.  We will need to investigate these sales to assure this is not yet another example of public malfeasance.  You see, these residents know the history of these promises to the underserved....the Federal money is used but none of the requirements to help the low-income are carried through.

Workers nervous about layoffs as Baltimore Housing Authority sells off  buildings Residents say they want protections from private developers in writing

Below you see the other side of what this privatization brings-----more public sector jobs
lost with the prospect of private jobs paying nothing.


The Lakeview Towers
  on Druid Park Lake Drive are among the first of 22 housing complexes to be 
offered for sale under a plan by the housing authority.
   

 
                      
(Kim  Hairston, Baltimore Sun / August 10, 2005)            
                                                               
 
Union officials warned Thursday that as many as 200 maintenance workers and  building monitors at Baltimore's public housing properties could lose  their jobs under a plan intended to infuse the buildings with private money.


Employees such as maintenance mechanic Lucky Crosby Sr., who has worked for  the
Housing  Authority of Baltimore City for a decade, say they took the jobs with the  understanding that the pay was relatively low, but the work was secure.


"By working for the Housing Authority, we joined the credit union so we could buy homes that we have to finance," said Crosby, 46, of Sandtown-Winchester.  "We  bought cars that we have to finance."


Housing Commissioner Paul T. Graziano acknowledged that some jobs might be  lost as 22 of the agency's 28 properties are sold to developers over the next 
two years. He said the Housing Authority is keeping some positions vacant and  filling others with temporary workers to reduce the potential number of 
layoffs.  Graziano said the agency is encouraging the developers to hire some of the  workers, and to keep them apprised of the latest information as soon as it's 
available.


"This is a very large change, a massive change in the way we're doing  business, and I understand change does create anxiety," Graziano said. "We're  trying to provide whatever assurances we can." 
The Housing Authority has identified 11 developers to buy the buildings.  Several of them declined to comment Thursday.


The federal government is offering tax credits to developers who buy and renovate public housing.
Officials say the effort is intended to improve the lives of low-income  Americans. But in the case of the maintenance workers, Anthony Coates said, it's 
doing just the opposite.


Coates, president of AFSCME Local  647, said members who lose their jobs could lose their homes.


"We're the working poor," he said. The maintenance workers, who earn between about $15 and $20 an hour under  their most recent contract, want the Housing Authority to tell them how many  workers face layoffs, Coates said.

He said knowing the scope of the layoffs is especially important for the  older maintenance workers on staff, who may find it harder to get new jobs.

Coates accused the agency of stalling contract negotiations. Senior housing 
officials rejected the accusation, and said a meeting is scheduled for next  week. They said inclement weather forced them to postpone some meetings.


Anthony Scott, executive director of the Housing Authority, said the federal 
program has unfolded rapidly. The Housing Authority began preparing its 
application to the
U.S.  Department of Housing and Urban Development over the summer, submitted it in  October and found out it had been approved in
December.

"We informed our employees as quickly as we could," Scott said. Graziano said the agency already has a "significant number of vacancies," but declined to say how many.

It's "a moving target," he said.

On top of that, he said, at least 10 percent turnover is expected each  year.  He said Housing Authority workers would be attractive employees for the 
developers

______________________________________________
 Neo-liberals are working for control of all real estate by a few.  The good news is that most of the wealth lost to the middle-class is through fraud and needs to come back.  Think of the tens of millions of homes caught in the subprime loan fraud and foreclosed....many families need these homes replaced.  So, the middle-class is still the middle-class.....just waiting for justice!

If you notice the list below include the same financial and investment firms that created and profited from the massive subprime mortgage frauds and indeed, they all still owe trillions in total fraud.  We can rebuild all public housing by simply recovering the fraud.  Yet, the plan was to steal the homes through fraud and then hand all the city center property to those same people and that is what these Enterprise Zone and Public Housing deals do......with taxpayer subsidy as the cherry on top!

THE LOW-INCOME LOSE, THE TAXPAYERS LOSE, AND THE MIDDLE/WORKING CLASS LOSE ALL TO NEO-LIBERALS WORKING FOR WEALTH AND PROFIT.



10 Largest Private Equity Real Estate Firms               
         by
Andy
Macalaster
 • February
21, 2010    
 

The PERE 30 (from Private Equity Real Estate Magazine) revealed that the top 30 real estate private equity firms raised $211.9 billion over the past five years, up from $190 billion as calculated by last year’s ranking. Listed are the
top 10 largest real estate private equity firms.


As a note: the top two largest firms raised $25.6 billion and $20.15 billion respectively in dedicated real estate funds between January 2004 and April,
2009. Together the pair raised a fifth of all the direct-investment capital secured by the world’s 30 largest real estate private equity firms.



10. Westbrook Capital Partners
Westbrook has raised and invested $10 billion of equity in over $35 billion of real estate transactions in major markets throughout the world. Westbrook’s investment equity is
committed by a broad base of institutional investors, which includes public and private pension funds, endowments, foundations, and financial institutions.


9. The Carlyle Group
The Carlyle Group is one of the world’s largest private equity firms, with more than $87.9 billion under management with funds across four investment disciplines (buyouts, growth
capital, real estate and leveraged finance). Carlyle has committed more than $3.6 billion of its own capital to its funds.

8. Tishman Speyer
Tishman Speyer has acquired, developed and operated over 325 projects totaling over approximately 116 million square feet and more than 92,000 residential units,
and a property portfolio of US$50.2 billion internationally.


7. LaSalle Investment Management
LaSalle Investment manages approximately $39.9 billion (as at Q3 2009) of private and public property equity investments. Their client base includes public and private
pension funds, insurance companies, governments, endowments and private individuals from across the globe.


6. Lehman Brothers Real Estate Partners
Lehman Brothers Real Estate Partners has raised over $10 billion in capital over the last five years with a total of $44 billion in transactions among 1,150 properties.


5. Beacon Capital Partners
Since its inception in 1998, Beacon Capital Partners has sponsored six investment vehicles representing over
$8.5 billion aggregate equity capital from various endowments, foundations and pension funds. Beacon Capital Partners was established after the predecessor public company, Beacon Properties Corporation (a New York Stock Exchange listed
company), merged with Equity Office Properties Trust in a transaction valued at $4 billion.


4. Colony Capital
Colony Capital is a private, international investment firm based in Los Angeles, California. The company focuses on real estate opportunities around the world either on its own, through funds run by the company, or in joint ventures. The company is run by billionaire Tom Barrack.


3. Goldman Sachs Real Estate Principal Investment Area

The Real Estate Principal Investment Area (REPIA) manages a series of global opportunistic real estate funds, known as the Whitehall Funds, and other niche products. REPIA, through the Whitehall Funds, offers Goldman clients the opportunity to co-invest in real estate and real estate related assets
worldwide.


2. Morgan Stanley Real Estate Investing
Morgan Stanley Real Estate has the longest uninterrupted real estate industry presence of any Wall Street firm. MSREI has raised over $20 billion in capital in the last five years and has completed over $58 billion in transactions.



1. The Blackstone Group
Blackstone’s real estate fee earning assets under management totaled $23.7 billion as of September 30, 2009.
Assets include office, hotel, healthcare, retail and multi-family properties around the world.  Blackstone has the world’s leading hotel portfolio, as well as one of the largest portfolios of office buildings in the United States.
Blackstone’s real estate group currently has over $12 billion of equity capital available for investment, the largest pool of capital for real estate investments available today.


For a full list of the top 30 real estate private equity firms with an executive summary click
here.

_________________________________________

Below you see reverse mortgages as a tool to make sure homeownership does not go beyond this generation for most of the middle/working class.  Land ownership is for the gentry you know!  Reverse mortgages are not always bad.  We had our mother's retirement supplemented by reverse mortgage.  The problem these least several years is that people are not having the money for retirement because it was stolen and not because they did not save.  These are the people being forced into reverse mortgage now. 

THESE HOMES SHOULD NOT BE LOST TO FAMILIES AS FRAUD AND DAMAGES HAVE NOT BEEN RECOVERED TO THE PUBLIC. 

Remember as well, Obama's Administration is deliberately allowing a manipulated inflation rate of near zero lower all of the public's COLAs by hundreds of dollars.  So seniors and vets owning homes are losing hundreds of dollars in monthly payments because of what is a 'manipulated' inflation rate.  Never in the history of public programs has the COLAs not been 3-5% as inflation never has been lower.  Please look at my blogs on faulty inflation data if you cannot see that what you are buying at the store is costing much more.

Low-income people are being hit from every direction in fraud and corruption making sure they do not have what they need for retirement and neo-liberals are in office to see this happens.  It is not only republicans.....it is neo-liberals running as democrats!


Sun Aug 18, 2013 at 06:45 PM PDT


Reverse mortgages: The final blow killing middle class
wealth

byEgberto WilliesFollow forDaily Kos


 Many fellow Americans that have worked their entire lives, weathered several
recessions and depressions, put their children through school, helped many in
need, and faithfully paid their mortgages for decades are now being taken advantage of once again. Most have followed all the rules necessary to be considered fiscally responsible, yet because of "legal fraud" by the financial sector and policies effected by purchased politicians, their years in retirement
will be compromised.


The Plutocracy, the one percent has walked away with a large percentage of their 401Ks, their SEPs, and to some extent their financial security. Because of stagnant or falling real wages, much of the working middle class
have maxed out on their credit in the attempt to maintain their standard of living. For a Plutocracy that feeds on perpetual growth, from where will it feed now? An old and well-crafted financial instrument known as the reverse mortgage is being marketed on steroids to a baby boomer population.


Before any reader of this article that may have already taken out a reverse mortgage gets upset, please note that it is understood that for many this is the
only option left. That said, every American should be fighting for a system that allows all the ability to build a nest egg that can be transferred to the next generation.

 Back in 2010, Sen. Fred Thompson was a spokesman for AAG and was pushing their government back reverse mortgages. I was writing
my book when the
commercial came on and I wrote the following in a chapter right then.
While taking a short coffee break from writing this book I saw former Republican Senator Fred Thompson, an AAG spokesman hawking reverse mortgages. He
says:
“Hi folks, I am Fred Thompson. Now like me you probably heard a lot about
reverse mortgages but weren’t quite sure how they worked or whether they would
be the right financial solution for you. Well take my word for it and hundreds
of thousands of other Americans who have used the Government Insured reverse
mortgage as a safe effective financial tool. If you are 62 year or older and own
your own home, give AAG a call and find out how a reverse mortgage can help you.
I am extremely proud to be associated with AAG, a national reverse mortgage
lender that is helping seniors overcome their financial worries and live the
lives they’ve dreamed. Why don’t you find out more by calling AAG today? Find
out how much call you may qualify for today.”



My first thought was how could a former Senator, a senior, a person who likes to tout morality be so callous to entice the elderly to splurge their wealth away. Most Americans have a large portion of their wealth in their homes. Having
some wealth to transfer to one’s offspring helps the next generation to the next financial level.


Unfortunately, yet another financial instrument designed to use the ignorance of the average American citizen’s knowledge of our economic system to donate
their money up the wealth tree to the rich. At the end of the reverse mortgage’s term, the elderly is left without an asset to transfer to their offspring at the time of their death.


Ironically as this piece is being written Fred Thompson is back on with the 2013 version of his "working middle class pilfering" commercial.  The most deceptive part of the ad is stating that the owner of the house retains ownership of the home. You cannot own something that you cannot give to
someone free and clear. Even more ironic is that Thompson, a professed small government conservative, is pushing a product that depends on the good faith and
capital of the United States government.


Most Americans amass most of their wealth within their homes. Each generation in a responsible family is better off when the previous generation wills their assets forward. Reverse mortgages are yet another financial instrument that
stunts the growth of the middle class by encouraging home owners to extract the capital out of their homes and use it as a supplement to their retirement or to simply splurge. Inasmuch as most reverse mortgages are federally regulated,
their upfront costs are very high. These costs amount to free cash for the bank and mortgage insurance companies, your money transferred to them for a marginal service.


The big dirty secret is that reverse mortgages, like student loans pre-Obama, are nothing but a no-risk gift to the bankers, a wealth transfer engine from the masses to a select few. When the "owner" of the home dies, the government pays
the bank any difference between the amount owed (interest plus principal) less the sale price of the home. If the heirs want to keep the home, they must pay the loan off in full. If the amount owed is more than the value of the home, the
heirs must pay 95 percent of what is owed to the bank with the government paying
the rest. What is the reason for the bank being in the transaction? It is there simply to extract from the government and the homeowner. They have absolutely nothing at risk for the profits they make.

Reverse mortgages mask a systemic problem that affects the American worker, a backward and inhumane retirement system. Every American worker makes a vibrant
economy possible by providing 40, 50 or more years of work, taxes, and spending. It is appalling that a worker is incapable of having Social Security capable of providing a decent living. No one should have to deplete all of their assets to
survive.


The trajectory in this country has been that the wealth and income of the very few at the top grows faster than the growth of the economy as a whole. This means that some of that growth is directly coming out of the pockets of the
working middle class in the form of lower wages, extractions from the government (tax dollars, interest payments, etc.), reverse mortgages, higher tuitions as states lower taxes, commercial student loans, etc.
This is an unsustainable path
and it is leading to a country where the vast majority of citizens will have no assets.
They will be functionally indentured servants. They will be nothing but a commodity, a unit of work and service.


Wake up America. Taking this country back from the Plutocracy will require education, resolve and action.
Taking this country back will entail taking back what was stolen through well designed redistribution mechanism that foments a vibrant working middle class.



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February 28th, 2014

2/28/2014

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FOLKS, WHAT IS HAPPENING BELOW WILL NOT STOP....IT WILL GET WORSE.  AS ALL GOVERNMENT REVENUE IS LOST MORE AND MORE PUBLIC ASSETS WILL GO.  I SPOKE OF WATER AND SEWAGE BEING NEXT....TRANSPORTATION IS GOING AND THE VERY PUBLIC SCHOOL BUILDINGS ARE BEING PLACED IN WALL STREET INSTRUMENTS.  THESE POLS INTEND ALL OF THESE PARTNERSHIPS TO TRANSFER TO PRIVATE HANDS AS THE NEXT ECONOMIC CRASH COMES!!!!

STOP ELECTING THE SAME CRONY POLS....RUN AND VOTE FOR LABOR AND JUSTICE IN ALL PRIMARIES TO RETAKE THE DEMOCRATIC PARTY!!!




Regarding Baltimore Development Corporation vs citizens of Baltimore:

THE MAYOR AND GOVERNOR ARE PUBLIC SERVANTS.....THEY WORK FOR THE PUBLIC INTEREST. DEALS MADE WITH CORPORATIONS IN DEVELOPMENT THAT ARE NOT IN THE PUBLIC INTEREST ARE ILLEGAL.....PUBLIC MALFEASANCE AND OFTEN INCLUDE FRAUD AND CORRUPTION. WE CAN REVERSE THESE CONTRACTS THAT MORTGAGE OUR FUTURE TO SHIELDING CORPORATIONS TO MAXIMIZE PROFITS.

Let's begin by reminding ourselves, the reason Federal, state, and local coffers are empty is massive corporate fraud of tens of trillions of dollars...hundreds of billions here in MD. So, there is not shortage of funding for development, we simply need to recover fraud. Last decade was all about creating public debt so corporations could come in to capture all that is public. Now, they are using the money stolen from government coffers to build as they want and hold the public captive with development schemes. The same politicians helping to allow this massive fraud to occur are now in office to see that those enriched get what they want.

THIS IS HAPPENING IN CITIES ACROSS AMERICA. IN BALTIMORE, IT IS ON STEROIDS JUST AS DETROIT....ALL PUBLIC COFFERS ARE BEING STARVED OF REVENUE BY DEALS NOT IN THE PUBLIC'S INTEREST.

We can see what led to Detroit's bankrupcty is indeed what is happening in Baltimore and Maryland today. Loaded with credit bond debt and all corporate and wealth revenues mortgaged....long-term public debt makes for corporate control.

Let's look at some development issues in Baltimore....


Detroit’s bankruptcy, the tip of the iceberg

States, cities hand out billions in tax abatements


By Nancy Hanover
27 January 2014

To some, it may come as a surprise that the bankrupt City of Detroit and the hard-hit State of Michigan are subsidizing the Big Three automakers, the pharmaceutical industry, energy companies and virtually every large Michigan business. But a massive giveaway—“corporate welfare,” both locally and nationally—is bankrupting municipalities everywhere as shown by reports from Demos (“The Detroit Bankruptcy”), the New York Times (“United States of Subsidies”) and Good Jobs First (“Megadeals”).

While making the political decision to use the bankruptcy court to destroy pensions, jobs, city services and public institutions like the Detroit Institute of Arts, the government has been nothing but generous to Fortune 500 CEOs asking for a handout.

In a city where citizens routinely wait for up to three hours for public transportation and tens of thousands suffer from utility shutoffs in the dead of winter, more than $20 million a year has been awarded to companies including Comerica Bank, Rock Ventures/Garbsman, the Farbman Group, Quicken Loans, the Detroit Medical Center and multibillion-dollar conglomerate DTE Energy.

Wallace C. Turbeville’s report on the bankruptcy for Demos calls these “extensive subsidies” and suggests the emergency manager “reclaim tax subsidies and other expenditures to incentivize investment in the downtown area” and treat them similarly to the rest of the city’s debt. Of course Emergency Manager Kevyn Orr, a Democrat, has been placed into his dictatorial position not to penalize his corporate masters but to ensure their interests and lay the basis for their dramatic increase in profit-taking.

Tax boondoggles in the city include a whopping $285 million to billionaire Mike Ilitch for a 45-block entertainment district and $100 million in tax abatements for Compuware, also a billion-dollar company.

Smaller gifts were available as well, including $27 million in tax incentives awarded to the Meridian Health Plan building to be built in the central business district. Owners David, Sherry, Jon, Sean and Michael Cotton are real estate developers whose core business is a series of health care businesses in Michigan, Illinois, Iowa and several other states. The Cottons believe they can boost that number to $35 million in public financing through additional credits, according to Crain’s Detroit Business.

Another recipient of the city’s munificence is Whole Foods Market, a wildly profitable firm paying out $500 million last year in stock dividends, which is receiving $4.2 million, but hopes to get more from so-called brownfield (“blighted” areas requiring “revitalization”) incentives.


Detroit has been saddled with 16 “renaissance zones” that were virtually tax-free for business and forgave millions of dollars in taxes. At the same time, Detroit homeowners have the highest property taxes among the nation’s 50 largest cities, and paid twice the national average in tax.

Last September, a frenzy of downtown Detroit developers spurred the first-ever Novogradac Historic Tax Credit Conference. It brought them together with hundreds of assorted accountants and tax attorneys looking to parlay the Federal Historic Preservation Tax Incentive program into millions of dollars. The possibility of funding 20 percent of rehabilitation costs with federal dollars has whetted the appetites of the gentrifiers/developers who are in the process of evicting hundreds of elderly and disabled Section 8 renters living in downtown buildings.

But it was not just Detroit and federal agencies that contributed to the corporate coffers. The role of the State of Michigan was pivotal to the Detroit bankruptcy on multiple levels. It was Governor Rick Snyder who conspired with law firm Jones Day and Kevyn Orr to declare the city in “financial emergency” and appoint Orr with the prearranged plan to impose bankruptcy, void contracts and loot the city’s assets.

Not as well publicized was the fact that the “tipping point” in Detroit’s cash flow crisis was reached when Michigan’s annual state revenue sharing was cut by $67 million per year. Author of the Demos report, Walter Turbeville, explains the mechanics in “The Detroit Bankruptcy.” It was in two stages, and part of the cut followed declining populations, but “$42.8 millions (64 percent of the total state cuts) were at the discretion of the state legislature.

“By cutting revenue-sharing with the city, the state effectively reduced its own budget challenges on the backs of the taxpayers of Detroit (and other cities). These cuts account for nearly a third of the city’s revenue losses between FY 2011 and FY 2012.” Turbeville, a former Goldman Sachs accountant, concludes, “Thus, the state was an active player in the events leading to the cash flow crisis.”

Put more bluntly, Governor Rick Snyder and the state legislature—with the full support of both Republicans and Democrats—pulled the plug on Detroit, suffering in the aftershock of the Great Recession of 2008.

Yet while depriving Detroit, as well as other Michigan municipalities, of desperately needed revenues, the State of Michigan was spending—as it has done annually—a staggering $6.65 billion on business incentives.
Michigan: More megadeals than any other state


According to the Good Jobs First report, Michigan—possibly the hardest hit state of the “Rust Belt”—has offered more large government-funded subsidies to corporations than any other in the nation. It identifies 29 megadeals involving awards higher than $75 million.

The New York Times series “United States of Subsidies” by Louise Story points out that 30 cents out of every dollar in Michigan’s budget goes to this type of “corporate welfare” at the direct expense of support to education, infrastructure and municipalities.

The lion’s share of these gifts went to the Big Three automakers, now expecting to post all-time record profits in 2013, above the already banner year of 2012 at $12.3 billion. General Motors (whose government bailout is now estimated to have cost taxpayers $10 billion) was the top beneficiary receiving $3.3 billion in aid, according to the Center for Automotive Research. The New York Times puts Ford at $1.58 billion and Chrysler at $1.4 billion. Overall national incentives for automakers since 1985 are pegged at an astronomical $13.9 billion. It should be noted that whether Democrats or Republicans were in power, the process escalated.

Among others, Story conducted more than two dozen in-depth interviews with former GM officials and tax consultants to prepare “United States of Subsidies.” She pointed to the role of Argonaut Realty, the automaker’s real estate division, in conducting the shakedown of local governments across the US. GM enlisted their tax managers, charities’ accountants and union representatives alongside plant managers and executives in a combination of threats and negotiations to rein in the biggest tax boondoggles. “For towns, it became a game of survival,” notes Story.

The procedure is classic: cities and states are pitted against each other in a reverse auction. Often even the scenario presented was a fraud, perpetrated by the transnational company seeking higher profits. One example in the GM saga was the company’s demand for tax cuts in Moraine, Ohio. GM told the city that Moraine was competing with Shreveport, Louisiana and Linden, New Jersey to maintain an auto plant. After the Moraine school board caved and accepted the property tax cuts to education funding, it was discovered that the other towns had not been in discussion with GM.

This is a national scourge. As the stakes for jobs has intensified, states are creating more and more incentives. In 2010 alone, 40 new types of tax credits were created or expanded. Oklahoma and West Virginia give up amounts equal to about one-third of their budgets, Maine about one-fifth. Texas awards $19 billion a year and Alaska, West Virginia and Nebraska give up the most per resident, according to the Times.

Because no national database of corporate incentives exists, Story and Good Jobs First had to conduct months-long investigations to uncover the myriad layers of giveaways by thousands of government agencies and officials.
$80 billion annually funneled to big business

The Times uncovered a staggering $80 billion annually donated by states, counties and cities to business. And it cautioned that the actual cost of awards is certainly far higher. The report points to the wide range of corporate entities receiving money, including many among the world’s most profitable firms: Exxon Mobil, Royal Dutch Shell, Boeing, Airbus, Citigroup, Goldman Sachs, Walt Disney, ESPN, Sears, General Electric, Dow Chemical, Amazon, Apple, Intel and Samsung. Sixteen of the Fortune 50 are represented.

Dozens of officials at large corporations who were questioned by Louise Story justified the whipsawing of communities as “owing it to the shareholders to maximize profits,” she reported. Hallmark CEO Donald Hall Jr. said, “this use of incentives is really transferring money from education to businesses.”


It is also no accident how difficult it was assembling these statistics; the government accounting standards board has failed to regulate the accounting of tax-based economic development expenditures. There is, furthermore, very little oversight once grants are issued. For the most part, no one tracks the “effectiveness” of job retention as a result of giveaways.

A poignant Metro Detroit example is the famed Ford Willow Run plant in Ypsilanti, Michigan, designed by Albert Kahn and used to build bombers in World War II. After the war, it became Kaiser Motors and then was taken over by General Motors, which expanded the facility into a complex. Over the years, the small outlying town of Ypsilanti granted more than $200 million in incentives to the facility.

Doug Winters, the city’s attorney, explained to the Times reporter, “They had put basically a stranglehold on the entire state of Michigan and other places across the country by just grabbing these tax abatements by the billions. They were doing it with a very thinly disguised threat that if you don’t give us these tax abatements, then we’ll have to go somewhere else.”

After the company closed the first plant, the city sued, but was unsuccessful. The judge said that a company’s job assurances “cannot be evidence of a promise.” In 2010 the company closed the remaining factory and Winters sued again. The claim has now been relegated to the corporate books of the defunct “bad GM.”

Referring to General Motors, Winters told Story, “We’re their own private ATM. When they need money, they come begging, but when they don’t want oversight, they say ‘get out of the way.’”

Like payoffs to the Mafia consigliere, there is no respite for states, counties, school districts or municipalities. Ford and GM are now slated to receive federal tax credits for making more fuel-efficient vehicles… worth $50 million, an event celebrated by Michigan Democratic Senators Carl Levin and Debbie Stabenow. Republican Governor of Michigan Rick Snyder recently announced a state grant of $2.5 million for infrastructure improvements for Hyundai’s Superior Township technical center in Metro Detroit. The GM plant in the small enclave of Detroit, Hamtramck, is asking for $1.8 million in order to make critical investments in their operations.

It goes on and on. The substantial New York Times exposé demonstrates the proliferation of this “beggar-thy-neighbor” policy in the false hope of local officials maintaining economically viable communities. As a result, hundreds of school districts are in financial emergency, teachers and staffs are subjected to pay cuts and layoffs, recreation centers are closed and city infrastructure is allowed to rot.
Municipalities are systematically being bankrupted as a greater and greater portion of social wealth is diverted to the profits of their resident corporations.

The extent of corporate blackmail nationally demonstrates that the looting of Detroit is just the beginning. Here is a glimpse of the national picture:

*Walmart, the world’s most profitable corporation, receives $1.2 billion in taxpayer assistance.

*Alcoa receives a 30-year discounted electricity deal worth $5.6 billion.

*Sasol natural gas could receive as much as $21 billion on investment subsidies.

*Boeing’s tax breaks and subsidies are estimated at $3.2 billion.

*Nike’s 30-year single sales factor tax commitment nets it $2.02 billion.

*Intel’s property tax abatement for a computer chip plant means $2 billion in benefits.

*Cheniere Energy of Louisiana will retain $1.69 billion in earnings due to subsidies for the Sabine Pass natural gas liquefaction plant.

*Google’s North Carolina deal received $254,700,000 (for 210 jobs).

*Apple’s North Carolina negotiations yielded $320,700,000 (for 50 jobs).

*Goldman Sachs moved operations from Manhattan to Jersey City, New Jersey and netted $164 million in tax incentives.

What was once considered extortion or bribery has become a normal business model. The blood and sweat of the working class demands nationalization of the ill-gotten gains of the parasitic financial elite and the establishment of a society where jobs, housing, education, pensions, and culture are considered basic rights for all of society.

To counter the government/corporate conspiracy being prepared and to fight back, the Socialist Equality Party has organized a Workers Inquiry into the Bankruptcy of Detroit. We call on all workers, pensioners, students and youth to attend this important event February 15.


________________________________________

Let's look at what the citizens have working against them on this issue. First, we have an EPA under Obama that is worse than Bush in working for corporations and profit and against actual science and public interest. Across the country Obama's EPA is granting passes on projects with the worst of records. So, getting EPA approval under Obama is a joke.

Then, let's look at the fact that citizens in Baltimore found that the monitoring of toxic exposure by the developer was faulty....it was not operating correctly from the start. WHAT KIND OF RED FLAG IS THAT? We already know we cannot trust the data being given us on the safety of this project. Next, we look at the fact that sea level is going to rise over 12 inches in 20 years and we see that sea walls will be needed and even that will not guarantee wash of contaminents into surrounding water.

MD has some of the worst environmental conditions from neglected oversight of former corporate tenents and we are now being told----relax, we will have the best oversight-----OH, REALLY?

Lastly, we have yet to go to court over racketeering charges on the tax break for Exelon. Since this is indeed illegal and should stop that anchor business....why would any other actions in the project be legally done?


**********

Harbor Point a model for brownfield revitalization [Commentary]
Despite community concerns, the approach to the Baltimore site has been among the best in the nation


By Evans Paull

3:28 p.m. EST, February 27, 2014 Baltimore Sun

Cities around the world are working to revitalize brownfield sites — areas where redevelopment or reuse may be complicated by some kind of contaminant — particularly in former waterfront industrial zones, where there is often the greatest opportunity to remake the city's image. Just as Baltimore has succeeded in redeveloping industrial sites from Canton to the Inner Harbor to Locust Point, decades of experience across America have created a base of knowledge that is allowing many such projects to move ahead safely, attracting residents and business back to our urban core.

Those of us who have been in the brownfields trenches for 15 or more years see the Harbor Point redevelopment as an example of the best brownfields and smart growth practices, developed through the carefully prescribed progression of site assessments, cleanup and redevelopment construction methods that eliminate exposure pathways. The cleanup objective was always to get beyond a fenced­off lot and redevelop the site as a prominent and extraordinary asset to the city and the neighborhood.

The community will gain many advantages from redevelopment, but one worth emphasizing in the context of protecting public health is "site cap redundancy." The current cap is fully protective to residents, business occupants and neighbors; the new buildings and garages will be added over the top of the cap, in effect, providing an extra layer of protection.

As to the other benefits of redevelopment, let us recount: a mixed-use walkable community, reinforcing state and regional smart growth objectives; 9.5 acres of public open space including a new 5-acre waterfront park; continuation of Baltimore's No. 1 amenity, its waterfront promenade; and a jewel of a site to market to out-of-town businesses that might be looking for that one site that combines water views, a cool creative community, and walking distance to the East Coast's most complete set of urban amenities. With Exelon, a leading national energy company, as its core tenant, Harbor Point will undoubtedly gain national recognition as a model for redevelopment and reuse.

For perspective, many urban waterfronts are impacted by more heavily-contaminated sites than the former Allied site. Waterfronts and ports in Portland, Tacoma, Glen Cove (New York), Brooklyn, Queens, Seattle, Buffalo, Toledo and right here in Maryland on the Anacostia, are all dealing with Superfund sites that need to be remediated. Impacted sites often sit idle for decades while EPA battles multiple responsible parties and tries to come up with acceptable cleanup and funding plans.

Many of these other cities have long-term visions that have yet to be realized. In Tacoma, Wash., cleaning up the Thea Foss Waterway was such an important objective that the city participated in a $106 million cleanup agreement that included a $56 million contribution from the city's Surface Water Tax. By comparison, the cleanup of the Honeywell site in Baltimore was much more cooperative, straightforward, and certain. Throughout the process, Allied and then Honeywell cooperated with regulators as the sole responsible party; there have been no lawsuits holding up cleanup and no public funding.

Finally, the questions that have been raised in relation to protection of public health boil down to this: is there any reason to believe that the regulators are not doing their jobs? Certainly, most people who attended Baltimore City Councilman James Kraft's public meeting last fall came away with a favorable impression that the regulators are fully in charge and acting in the best interest of the public. They have every motivation to get this right: They are bound by law to protect public health and the environment. Their worst mistake would be to ignore a public health risk that might come back to haunt them, especially on a site with this kind of prominence.

Regulators tend to practice the brownfields version of defensive medicine — let's order one more test, just to make sure. This is an extra expense to developers but one they willingly accept because they, too, do not want to cut any corners in an environment where successful marketing of the property depends on complete confidence in the measures taken to protect public health.

Harbor Point is on the verge of completing the long process needed to move forward and transform this barren former manufacturing facility into Baltimore's newest live-work-play waterfront gem.

___________________________________________________

Do you know that property tax is about the only tax left corporations pay and that MD has a structural budget deficit created from all of these corporate tax breaks and corporate tax evasion? MD and Baltimore especially has mortgaged the future of the public for decades all under the guise of development when all that is public is given for global corporations moving into the city.

We do not want an economy driven by global corporations! They take control of all that is public policy----SOUND FAMILIAR?----they suck all public revenue to their own profits-----SOUND FAMILIAR?-----and they seek to impoverish and eliminate all labor and justice law on the books. STOP THE JOBS MANTRA WHEN JOBS DO NOT APPEAR AND WHEN THE WORK IS IMPOVERISHING.

The question is why did the companies creating the environmental damage not pay for the cleanup? Who did that and let's go after them now to do it. We saw a deal with Sparrow's Point Steel Mill that shows just that same thing....tons of environmental damage and a bankruptcy that will let the damage stay with the public. THIS IS PUBLIC POLICY BACKED BY NEO-LIBERALS. DEMOCRATS WOULD NOT DO THIS.

As Rawlings-Blake knows the Amazon Warehouse will become one of the most highly automated warehouses in the country. The number of jobs will fall dramatically in just years. So, we will have a huge business paying almost no taxes using tons of city services.

I am not against the Amazon warehouse coming to Baltimore. I am against making yet another corporate welfare case.....and all involved with O'Malley and Rawlings-Blake are corporate welfare. THIS IS WHY BALTIMORE/MARYLAND CITIZENS ARE SOAKED IN TAXES, FEES, AND FINED UP THE YING-YANG!


IF YOU WANT TO GIVE PEOPLE JOBS O'MALLEY AND RAWLINGS-BLAKE.......REBUILD PUBLIC JUSTICE AND OVERSIGHT AGENCIES AND DECLARE A WAR ON CORPORATE FRAUD AND GOVERNMENT CORRUPTION.


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Bigger tax breaks sought for industrial sites in Southeast Baltimore
Rawlings-Blake administration to propose legislation Monday

By Natalie Sherman and Luke Broadwater, The Baltimore Sun

11:30 p.m. EST, February 27, 2014

The Rawlings-Blake administration plans to propose bigger property tax breaks for industrial properties in Southeast Baltimore — including the site of a new Amazon warehouse — to bring more jobs to the area.

A new "focus area," which must be approved by the state, would give property owners a 10-year 80 percent property tax credit on value added by physical improvements. It also boosts the credits granted for wages paid to new employees and offers breaks for investments in "personal property," such as machinery.

Mayor Stephanie Rawlings-Blake said the legislation is intended to spur development of the "many industrial properties that continue to remain underdeveloped and underutilized."

"I don't think a week goes by where someone doesn't say to us, 'I need help with getting a job,'" Rawlings-Blake said. "We're using economic development tools when we need them to get the results we need."

The proposed focus area contains properties already located in the city's 14,000-acre Enterprise Zone, where they are eligible for some degree of tax relief. The city already operates three focus areas, including properties in Station North and the site of the new Horseshoe Baltimore Casino.

The properties in the new targeted area include the location of the future Amazon warehouse and two operations that are set to close: the Sun Products plant and Mars distribution center.

The resolution to create the new area will be introduced at Monday's City Council meeting, officials said. The city must submit its application to the state by April 15. Baltimore Development Corp. President Brenda McKenzie said the city does not have an estimate for what the program could cost the city in lost tax revenue.

"We won't know until the investment has been done," she said.

The new credits are designed to enhance what is offered in Enterprise Zones. Under that program, the property tax credit phases out over 10 years, falling from 80 percent in the first five years to 30 percent in the last year. The Enterprise Zone also includes one or three-year credits for wages paid to new employees, usually a one-time credit of $1,000 per worker that would jump to $1,500 in the focus area.

Jon Laria, a managing partner at the Baltimore office of law firm Ballard Spahr who chairs the Maryland Sustainable Growth Commission, said creating "creative and aggressive" tax incentive programs are essential to helping Baltimore attract business, given the city's high property tax rate.

"Credits that lower the tax burden for a period of time really make a difference in terms of our ability to attract business and compete," he said. "Everybody wins when these things happen. We bring residents or we bring businesses or we bring economic investment."

Amazon, which was already due to receive more than $43 million in state and city incentives for its new distribution center, did not respond to requests for comment.

Gregory Hummel, a Chicago-based partner at the Bryan Cave law firm who spoke in November at a session on tax incentives organized by the Baltimore Efficiency and Economy Foundation, said creating a focus area around the Amazon site could be an effort to jump-start creation of a "supplier campus" that would feed off the new center.

"I've seen that work," he said. "It's rarely city-wide because in order to achieve clustering you need some density of development."

Greg LeRoy of the Washington-based research center Good Jobs First, said property taxes can often be a company's largest tax.

"If the city feels like that's the meaningful variable and those reductions would improve the [return on investment] and reduce the risk perception of an investor, it could be meaningful," he said. "The tension there obviously is: Are you paying a company to do something they would have done otherwise?"

Many of the properties have been underutilized for years. In 2011, the Pulaski Limited Partnership, of which Willard Hackerman was the principal, proposed a big-box store, warehouses or a combination of the two for the Pulaski Incinerator site. The BDC sought development for the former Ainsworth paint plant at 3200 E. Biddle St. before demolishing the plant in 2012.

City Councilman Brandon Scott, whose district encompasses much of the proposed new focus area, said he believes the incentives are needed.

"This is great because this is an example of focusing on old-school Baltimore, old-school industrial areas. It's focusing on the areas that have blue-collar jobs," he said. "It's supporting industries that typically don't get that kind of support."

The properties involved, many of them clustered around rail lines rather than highways, have been tough to develop, with obstacles that in some cases go beyond high property taxes, said Chris Ryer, director of the Southeast Community Development Corp.

Still, he said, it could help.

"These are very difficult sites," he said. "It couldn't hurt."


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Below you see a community that has been the strongest activist group for their community yet. We thank these committed community activists for shouting out against what will be a horrible corporate big box blow to the community. This group has been after this for years and each time City Hall moves with WalMart in making this development work.

Small businesses will be killed and choice gone with these development decisions. Baltimore development is completely geared to big business and they write the public policy. WE THE PEOPLE NEED TO BE SURE THAT THE NEXT ELECTION FOR MAYOR AND CITY HALL IS ABOUT RUNNING AND VOTING FOR LABOR AND JUSTICE AND SHAKE THESE NEO-LIBERALS OUT OF THE RUG!


After developer fails to post notice, 25th St. Station meeting rescheduled

Wal-Mart-anchored project runs into timeline trouble

Fern Shen February 19, 2014 at 10:29 pm Story Link 12

The Board of Municipal Zoning Appeals had been scheduled Tuesday to consider a request by the developer of 25th Street Station for an extension of the deadline for submitting a detailed time schedule for the project.

But during the past few days, residents who live near the proposed North Baltimore shopping center peppered BMZA executive director David C. Tanner with emails asking why notice of the meeting had not been posted at the site, as required by city charter, 21 days before the meeting.

Today, Tanner told The Brew that the matter will now be heard a month later – at the March 25th meeting – and that the proper notice will be posted.

“We are not in agreement that it is necessary for this on-going matter, but the developer has agreed voluntarily to comply and to post this,” Tanner told The Brew by phone.

Some matters to be discussed on Mar. 11

Attorney Jon M. Laria, who represents the development team, had been furious at the November Planning Commission meeting, when a lawyer representing the Remington Neighborhood Alliance rose to say the developers had missed the deadline in 2012.

If that were the case, attorney J. Carroll Holzer had argued, the Planning Commission’s approval at that meeting of the Planned Unit Development for the project would be invalid.

Laria had disagreed about having missed the deadline, but since then has submitted a written request to the Board to grant an extension.

Tanner said the BMZA had also been scheduled on Tuesday to discuss other matters involving the 25th St. Station project.

Residents have appealed the Planning Commission’s decision to approve design revisions to the project’s Planned Unit Development as a “minor amendment.” They have also objected to the Planning Department’s handling of subdivision plan filings.

“The Board has to determine whether or not it has jurisdiction over these actions,” Tanner said, noting that the question now will be taken up at the BMZA’s Mar. 11 meeting.

UPDATED with this from Jon Laria:

“We were really disappointed by the mischaracterizations in your 2/19 piece. It’s just factually wrong to say “After developer fails to post…”. We were never advised of a February 25 hearing date so there was no “failure” to do anything. While we don’t agree that posting is required under the law for this type of BMZA action, we nonetheless volunteered to post the property because we have come to expect the ultra-litigious in the community to raise this and any other issue they can think of to obstruct progress without regard to merits. So, we pre-emptively agreed to post 21 days in advance of the Board’s hearing, as if this were a conventional zoning appeal, and that necessarily takes us to the March 25 hearing.

Perhaps those who have filed a negative appeal to the BMZA should be required to post the property at their expense, so the hundreds of community members who support the project and greater City shopping options would have adequate notice of these ongoing obstructionist actions by their neighbors?”


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Below you see that development from the wealthy business parks in Enterprise Zones to all of what Baltimore HUD is doing all works against the people it pretends to help. The middle/working class are being shafted by having to be the source of all revenue as corporations pay nothing.....the same group are having to fight to have their communities developed as they want and ignored, and as this article shows.....the poor are getting the biggest shaft of all. The working class and poor are being zoned right out of the city.

Maryland Governor Martin O'Malley plans to run for President in 2016 with a history of building this system of fraud and corruption.

The problem is systemic collapse of all oversight and accountability not only in Baltimore, but in Maryland. This fraud and corruption is state-wide and it happens because public justice has been dismantled and regulatory and oversight agencies are packed with people told to look the other way.

We have organizations and people dedicated to helping people and using funds wisely, but we know that much of the money funneled through these programs are lost to fraud and corruption and that places the good guys in unwanted spotlight. We can be sure given the number of times fraud and corruption has been exposed in Baltimore that this case will prove more of the same.

Maryland is one of the richest states in the country so this is not a problem with funding....it is a problem of Rule of Law and holding government and corporations accountable.....something the rich do not want. WE CAN CHANGE THIS BUT WE HAVE TO STOP ALLOWING CRONY POLITICAL MACHINES SEND IN THE SAME KINDS OF PEOPLE. RUN AND VOTE FOR LABOR AND JUSTICE IN ALL PRIMARIES.....REPUBLICAN AND DEMOCRAT!


Cindy Walsh is running as the labor and justice candidate for Governor of Maryland.....see my website Citizens Oversight Maryland.com




Baltimore BrewBaltimore Brew - News and Views in Baltimore

Mayor and homeless providers praise grants faulted by HUD
Rawlings-Blake mounts defense of city's use of federal homeless funds, saying no fraud or abuse was uncovered


Mark Reutter February 26, 2014 at 8:53 pm Story Link 5
cicely franklin

“I’m proud of the work that we’ve accomplished with these funds,” Mayor Stephanie Rawlings-Blake said today, introducing three homeless providers and two formerly homeless people who praised the embattled city program required to return nearly $4 million in federal funds.

At a City Hall press conference, the mayor framed the issue as a matter of not having “proper documentation” for $9.5 million in federal stimulus grants awarded to the city in 2009 to help the homeless.

Yesterday, it was disclosed by The Sun and The Brew that the U.S. Department of Housing and Urban Development (HUD) is requiring the city to reimburse $3.76 million in grant money.

The Brew has obtained a copy of HUD’s order. So far, neither HUD nor the mayor’s office has released the document, which details the city’s failure to keep track of expenses by homeless providers and to vouch for the eligibility of clients.

“HUD is not alleging any fraud or abuse,” the mayor said at the media event. “Nor are they questioning our commitment for serving our homeless individuals.”

The mayor insisted that the city “did spend these funds helping the homeless,” but “we found it difficult to provide the proper guidance to our allies,” meaning the groups who handed out the funds.

The HUD investigation reported a complete absence of documentation of $393,000 by the now-defunct Prisoner’s Aid Association and $336,000 by the Public Justice Center.
Mayor Rawlings-Blake said she was proud of the work accomplished with the federal stimulus funds. (Photo by Mark Reutter)

Mayor Rawlings-Blake said she was proud of the work accomplished with the stimulus funds. (Photo by Mark Reutter)

The agency faulted eight other providers with deficiencies in record-keeping, which the providers argued resulted from the city’s failure to tell them what documentation was needed.

The mayor today conceded that point by saying, “We found it difficult to provide the proper guidance to our allies [the providers].”

She went on to criticize the federal government for dispensing the stimulus funds far too quickly, calling the process “like building an airplane while you were flying.”

Grantees Praise Their Work

Three homeless providers said the program was of great help to the homeless. John Schiavone, president and CEO of St. Vincent de Paul, said the federal funds helped his group find housing for over 115 families.

Cecily Franklin was presented as one of the recipients. “Programs like this take place and really help you,” she said. “I had to come to the shelter to stay for six months. I wasn’t working. Thankfully, I have since attained employment and am still at that same job and it’s been two years.

“My children are fine and in school. They helped me pay for my home for six months, which was great and it helped me to get on my feet.”

Of the $980,409 in stimulus funds awarded to St. Vincent de Paul, the HUD report says it will require repayment of $466,912 for undocumented financial assistance to homeless clients, $33,242 for an ineligible cost billed under “services,” and $23,075 for not properly documented administrative costs.

Spokesmen for two other homeless providers spoke of the benefits of the program today – Adam Schneider of Health Care for the Homeless and Bill McCarthy, executive director of Associated Catholic Charities.

Both groups were reviewed by HUD and were given a clean bill of health.

Asking for Repayment is “Atrocious”

Without his organization’s stimulus grant of $1,042,000, McCarthy said that some 116 homeless families would probably not have been housed during the Great Recession.

“Remember that we were in crisis – a crisis in humanity and a crisis in our economy at the time these dollars were issued to be deployed,” he said.

“The fact that in hindsight, through an audit, that documentation wasn’t in place for some of the families and individuals that were housed really misses the point. And the fact that the city would be asked to repay $3.7 million of funds that were properly deployed to house homeless people is just atrocious.

“This money,” McCarthy continued, “could be used to continue the great work that the mayor and my colleagues and partners are doing in order to end homelessness in Baltimore.”
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December 02nd, 2013

12/2/2013

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I want to emphasize that I am not trying to embarrass Maryland citizens or disgrace the state of Maryland in pointing out that there is too much corporate and government fraud and corruption-----I'M TRYING TO REBUILD A HEALTHY ECONOMY AND SOCIETY!  Maryland ranks at the top in what is pervasive fraud in all states in the US so we are not unique, we are just one of the best at lying, cheating, and stealing.

Below you see why O'Malley and Rawlings-Blake allow their administrations to be full of lying, cheating, and stealing-----rankings for this and that.  Maryland is the wealthiest in the nation------except that much of that wealth is massive corporate fraud that needs to come back.  Maryland is number one in education except that in every category measured we hear time and again that fraud in data is involved.  Below you see the skewing of data by making sure low achieving students aren't in school on test day-----this included underserved students as well as special needs.  Principals are pressured to make O'Malley look good on paper and they give him what he needs.  O'Malley did the same with policing in Baltimore as all crime stats were skewed while he was Mayor of Baltimore.  Police were told to meet a goal and they made it all up to reach that goal.  Maryland has no oversight and accountability so no one checks the data.

DO YOU KNOW THAT WHEN THE MARYLAND ASSEMBLY AUDITS FOR THE LITTLE OVERSIGHT WE SUPPOSEDLY HAVE THAT ALL THEY DO IS CHECK TO SEE IF FORMS ARE COMPLETED AND DO NOT CHECK THE DATA ON THE FORMS?  I want to emphasize that the people charged with this corrupt process are the Maryland Assembly people running now for Maryland Attorney General----Frisch and Frosh.

  That is how it makes the ranking below in this list of WELL-RUN STATES.......LOL!!!!!!

Remember, this headline was created so O'Malley can use it in running for higher office!  THE ENTIRE MEDIA PROCESS IS GEARED TOWARDS PROVIDING PROPAGANDA FOR GLOBAL CORPORATE POLS!

We know the crime and education stats are bogus so let's look at the other categories.  I love this one......perfect credit.
This is O'Malley's recipe for perfect credit......take a $1 billion mortgage fraud settlement for people defrauded by banks and put most of it in the state coffers.  Refuse to pay almost a billion in state court approved settlements for underfunded Baltimore City schools......cut Medicaid even more than the Federal government and pretend health care for the lower-class was never better.  Send teacher's pensions to the localities at a time when the state knows localities cannot handle this debt-----but it's off the state record now isn't it?  O'Malley is the one who underfunded all Baltimore City pensions for the few decades at City Hall and was in office when pensions were used as fodder by Wall Street in a move that sent state and city pensions from the safety of then bonds to the imploding stock market-----public malfeasance and fraud.

Next you use credit bond leveraging and selling of public assets to hide debt as with moving public offices to rental properties that expense by the year and hand the Port of Baltimore to a private corporation to expense costs to an annual renter's fee.  So, he is changing long-term cost to annual cost creating a false look at expenditure and lost public value.  Is it public interest to hand the Port over to business losing a few billion in revenue each year in exchange for a few hundred million in Port rent?  Public private partnerships that place the public in the position of paying all costs of operation of public services while private businesses reap tons in profit by just operating the public service.......REALLY?  Of course not, but O'Malley is using this to make it look like there is perfect credit and low debt. 

IT IS ALL MIRRORS AND O'MALLEY HAS ACTUALLY POSITIONED MARYLAND FOR A HARD FALL AS THE NEXT ECONOMIC CRASH FROM AN IMPLODING BOND MARKET HITS AND WE ARE WITHOUT ASSETS AND LEVERAGED TO THE EYEBALLS!  Remember, it is easy to have perfect credit by leveraging your debt with all kinds of financial instruments until you cannot anymore.  Think of an individual who gets one credit card after another to keep current on credit bills until he reaches the maximum-------IT'S THE SAME.  THIS IS WHAT O'MALLEY IS DOING.  When a pol uses skewed data to the max one can only expect this deception to sink the ship of state government!

THIS IS WALL STREET'S PLAN FOR TAKING OVER ALL THAT IS PUBLIC------LEVERAGING MUNICIPALITIES JUST LIKE THEY DID HOMEOWNERS DURING THE SUBPRIME MORTGAGE FRAUD!  AN ECONOMIC CRASH WILL MEAN MUNICIPAL DEFAULT.

But we have to leverage because states and localities are poor you say!!!!  We are not poor, we simply have suspended Rule of Law and have tens of billions coming back to Maryland from massive corporate fraud!


WE LACK JUSTICE, NOT REVENUE!



Maryland: Low Poverty, Perfect Credit, Debt and High Crime

Find out where Maryland ranks in list of best- and worst-run states.
Posted by Deb Belt (Editor) , November 26, 2013 at 08:50 AM
patch


How well run is the state of Maryland, and how does it rank among the 50 states?


Maryland falls in the middle of the national rankings at No. 24.

Maryland


Debt per capita: $4,348 (13th highest)
Budget deficit: 9.5% (28th largest)
Unemployment: 6.8% (tied-17th lowest)
Median household income: $71,122 (the highest)
Pct. below poverty line: 10.3% (3rd lowest)

Here is how 24/7 Wall St. describes the state:

Maryland’s population is the wealthiest in the country. The state had a median household income of $71,122 last year, nearly $20,000 higher than the U.S. median. Also, just 10.3% of the population lived below the poverty line. The state had a relatively large amount of debt, at approximately 60% of annual revenue as of fiscal 2011, compared to 50% nationwide. Still, Maryland maintains a perfect credit rating from both Moody’s and Standard & Poor’s. Moody’s credited the wealthy tax base as a factor for its rating, as well as the state’s “history of strong financial management.” One negative factor is the state’s high violent crime rate, which was one of the highest in the country last year.

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I wanted to include this education piece just to show how data in Maryland is so skewed as to mean nothing in looking at rankings or stable government.

I will talk more on education reform another time.

George calls for hearing on school ranking


November 26, 2013|By Michael Dresser

Republican gubernatorial candidate Ron George has called for a General Assembly hearing into whether Maryland's exclusion of a high percentage of special education students from standardized testing artificially inflated the score of the state's schools in national rankings.

George, a state delegate from Anne Arundel County, issued a statement Tuesday in which he called for answers on what he called the O'Malley administration's "reading test cheating scandal."


The Sun reported last week that Maryland may have achieved its No. 1 ranking on Education Week's ranking of state school systems in part by excluding a higher percentage of special education students from reading testings than any other state. By excluding special ed students at such a high rate, the state appears to have gained 5 points in eighth grade reading score and 7 in fourth grade.

George, ranking member of the House Ways & Means education subcommittee, accused the administration of cheating its way to No. 1 -- a ranking Gov. Martin O'Malley and legislative leaders frequently boast about.

"I am demanding answers about who in the administration was involved in this cheating scandal, what exactly they knew and when they knew it. I am calling on the leaders in the General Assembly to convene hearings to get to the bottom of this matter," George said. "We tell our students cheating is wrong and hold them accountable when they make a mistake. What message are we sending them now when corrupt politicians abuse the education system to advance their own political agendas?"

A spokeswoman for House Speaker Michael E. Busch said no hearings have been scheduled on the topic.

George is seeking the GOP nomination in a race against Harford County Executive David R. Craig, Charles County business executive Charles Lollar and former Ehrlich administration appointments secretary Larry Hogan.

On the Democratic side of the race, Attorney Douglas F. Gansler also weighed in on the controversy.

"The parents of Maryland deserve honest and transparent testing – and a more thorough explanation of how they were misled by a system that appears to have put a blind desire to pump up scores ahead of the needs of Maryland families," he said in a statement released by his campaign. "Let's not shy away from challenges, let's take them on with a commitment to early education programs, afterschool and summer learning bridge initiatives, getting our children the tools they need to succeed."

Gansler is running against Lt. Gov. Anthony G. Brown and Montgomery County Del. Heather R. Mizeur for the Democratic nomination.

In a statement, O'Malley press secretary defended the state's record and downplayed the significance of the test scores in the Education Week ranking system that bestowed the No. 1 ranking on Maryland. The publication also considers school funding levels and other factors.

"Some people are so desperate to score political points, that they're willing to question the achievements our students and educators have earned for five consecutive years," Press Secretary Nina Smith said.

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 Now, O'Malley will pretend to have leveraged to the gills to protect Maryland workers and unions and indeed, this is why labor supports O'Malley even as he kills them with other labor policy issues.  HE COULD HAVE CUT JOBS BUT HE USED BOND AND LEVERAGE TO SAVE JOBS.  THAT'S THE STORY AND LABOR WILL STICK TO IT.  It is why labor comes to O'Malley's defense over the Baltimore Hilton debacle that used taxpayers to advance the Baltimore Development Corporation's vision of city growth.  LABOR WAS RIGHT THERE TELLING MEDIA THE HILTON WAS GOOD FOR THEM.

Well, if labor understood O'Malley's end game they hopefully would not be allowing this neo-liberal to garner their support.  First, it is the billions of dollars in corporate fraud that goes without recovery that has Maryland's budget strained and just collecting that would end the need for all this leveraging and guess what? 

IT IS BETTER TO USE RULE OF LAW AGAINST CRIME THEN TO USE BOND LEVERAGE KILLING THE STATE'S FUTURE TO BALANCE A BUDGET.  Make no mistake.....O'Malley is deliberately loading the state and Baltimore with debt because he wants to hand all that is public to Wall Street when this next economic crash occurs!  HOW IS THAT GOOD FOR FAMILIES?




O’Malley, Md. lawmakers use debt to lube state’s path through recession

By Aaron C. Davis,March 22, 2011  Washington Post

Stacked into the budget that Maryland’s House of Delegates will debate Wednesday is a grim look at the state’s fiscal future:

To cover mounting debt, Maryland will have to raise property taxes after next year or begin eating into operating funds for schools, social services and public safety.

By 2014 — Gov. Martin O’Malley’s last full year in office — the state will have to curtail spending even further to begin repaying money used to close budget shortfalls during his first term. And by 2017, the state is projected to break through one of its debt ceilings.

Maryland’s debt costs are trending toward 30-year highs, even without factoring in billions in unfunded retiree health-care and pension costs. Maryland is far from alone. Almost every state has ramped up borrowing and gone deeper in debt to try to spur job growth while balancing expenses during the recession.

But in Maryland, O’Malley (D) has sought to use bonds and other borrowing to continue to fund initiatives that have been gutted by this point in the downturn by politicians in most states.

Once again in this year’s budget, and backed by lawmakers, O’Malley has spread out over several years the cost of tens of millions of dollars in open-space land purchases and has sought to issue bonds for efforts to clean up the Chesapeake Bay.

The governor and his budget team have cast the borrowing as a bridge to get the state to better economic times without throwing aside wholesale O’Malley’s environmental agenda and other state initiatives he sees as important.

But the state’s fiscal trajectory has also begun to splinter Maryland Democrats, with more conservative ones arguing that the state has gone too far in leveraging its future.

“We’re basically spending every cent we have and maxing out the state’s credit cards to the nth degree,” said state Comptroller Peter Franchot, a Montgomery County Democrat. “If something goes wrong in the economy again, we could be very vulnerable. We have no reserve capacity.”

But compared with the way worries about debt have paralyzed budget discussions in a split Congress in Washington and in many state capitals, O’Malley and the legislature’s Democratic leadership remain largely on the same page and comfortable with pushing Maryland’s debt load to the max long after their current terms end.


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This is just one example of leverage beyond what the state will be able to sustain when the next economic crash comes.  What projects do you think these transportation funds will address?  We know that the Port of Baltimore and the high-speed rail are tops on the agenda and neither is vital for Maryland's economy.  The Red Line is not a bad project but if the state defaults-----it belongs to private investors backing this deal as are the state's roads.  If we have a crash next year as big as financial analysts are calling---do you think the Red Line will move forward?  The high-speed rail and Port will.

What this makes clear is that these leveraged deals hand all of the states future tax revenue to these bond holders just as Baltimore City uses TIFs to hand decades of tax revenue to corporations both starving public coffers and soaking the middle/working class with taxes and fees to make up the difference.



I WANT TO EMPHASIZE THAT THIS IS ONLY ONE  OF MANY CREDIT BOND DEALS O'MALLEY AND RAWLINGS-BLAKE HAS TIED TO PUBLIC PROJECTS AND THEY WILL BRING US TO DEFAULT AS GOVERNMENT WILL NOT HAVE THE RESOURCES TO WEATHER ANOTHER ECONOMIC COLLAPSE!

Fitch Affirms Maryland Transportation Auth's GARVEE Bonds at 'AA'; Outlook Stable

October 15, 2013 03:49 PM Eastern Daylight Time CHICAGO--(BUSINESS WIRE)--Fitch Ratings affirms the 'AA' rating on the Maryland Transportation Authority's (MDTA) $479.035 million outstanding grant and revenue anticipation (GARVEE) bonds. The Rating Outlook remains Stable.

KEY RATING DRIVERS:

PRESENCE OF BACKUP PLEDGE MITIGATES FEDERAL CONCERN: MDTA bonds are secured by the first lien on Maryland's federal highway funds and the legislatively mandated subordinate lien on certain pledged Maryland Transportation Trust Fund (TTF) tax revenues, which helps offset reauthorization risk. The back-up pledge of tax receipts is subject to appropriation by the state's legislature.

UNCERTAINTY OF THE FEDERAL PROGRAM: The federal program, which was once a formula-driven program funded on a multiyear basis, has now morphed into a program where future policy is less certain. This means funding levels are less predictable and the program is more dependent on frequent action to extend authorization and on general fund transfers that will likely need to be continued indefinitely barring an increase in the federal gas-tax or a significant reduction in spending.

STRONG COVENANTS AND TIMING MECHANISMS: Additional leverage is limited by a strong additional bonds test of 3.0 times (x) maximum annual debt service (MADS). A debt service reserve fund equivalent to the maximum semi-annual interest payment provides debt service support. The eight-year maturity of the bonds is short relative to other federal reimbursement bonds and exposes bondholders to a lower level of uncertainty surrounding the highway trust fund (HTF) but this is more than offset by the back-up pledge.

ADDITIONAL LEVERAGE NOT ANTICIPATED: The authority has reached a statutory cap on GARVEE issuance and additional bonds are not expected in the medium term.

RATING SENSITIVITIES:

-- Increased leveraging of the TTF or a significant change in the basket of state highway revenues that weakens the secondary pledge;

-- Failure by the state to appropriate state highway revenues if needed to cover a shortfall in federal funds.

SECURITY:

The GARVEE bonds are secured by a pledge of the trust estate, consisting of annual allocations of federal aid and a subordinate pledge of certain TTF tax sources.

CREDIT UPDATE:

HTF's expenditures have been exceeding revenues over the past several years. The most recent authorization, Moving Ahead for Progress in the 21st Century (MAP-21), provides funding certainty for the next two years but it does not address longer-term issues regarding the sustainability of the federal program or solvency of the HTF and relies on a total of $18.8 billion general fund transfers in 2013 and 2014. Funding levels have become less certain and difficult to predict beyond current authorization. In addition, the increase in corporate fuel economy standards approved in August 2012 would adversely impact gas tax revenues which support the HTF. In Fitch's view, the unsustainable trajectory of the HTF may lead to policy changes that could affect bondholders.

The pledge of subordinate TTF funds provides an important offset to this reauthorization risk and supports the current rating level. The TTF tax sources include a portion of motor fuel taxes, titling excise tax on vehicles, sales and use tax on vehicle rentals and corporate income tax. The GARVEE bonds have a pledge of these revenues that is subordinate to the department's consolidated transportation bonds (rated 'AA+' by Fitch). Total TTF revenues equaled $1.39 billion in fiscal 2012 (state fiscal year ending on June 30). Fiscal 2012 debt service coverage remained strong at 6.4x with federal revenues alone and 18.7x including state revenues.

The TTF's distribution of the state's corporation income tax after certain General Fund deductions is currently at 9.5%. For fiscal 2014 through 2016, the distribution will be 19.5%, and for fiscal 2017 and fiscal years thereafter the distribution will be 17.2%.

MDTA is responsible for coordinating, planning and implementation of the GARVEE program in consultation with SHA. SHA is the recipient of all Maryland Federal Highway Funds; GARVEE debt service paid directly to the trustee. SHA is also responsible for letting contracts and management and delivery of the ICC project.


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The rosy future given by Moody's ranking of Maryland as AAA tempered by Maryland's ties with the Federal government for jobs and revenue give you a glimpse as to what will happen as the next economic crash occurs.  Because the Federal government has not recovered tens of trillions of dollars in corporate fraud it is leaving the national debt so high that it will not be able to send help to states like it do in 2008 and will be forced to cut more government agencies and assets-----which is the goal of Wall Street and its dismantling of US government sector.  Keep the high debt by suspending Rule of Law and implode the economy with yet another bubble---this time the bond market.

Remember, it was Moody and S & P that gave us the AAA subprime mortgage loan fraud and they didn't feel any justice for that!  IS THEIR NEXT RATINGS FRAUD WITH STATE RANKINGS?  YOU BETCHA!!!


Maryland's cloudy credit horizonOur view: Moody's promise to drop the state's AAA-status if it downgrades the federal government is frustrating but may not mean much

February 18, 2013  Baltimore Sun


It would be ironic if Maryland, for the first time in the history of municipal bond ratings, lost its AAA status now. Thanks to a combination of spending restraint, tax increases and other reforms, Maryland's balance sheet is stronger that it has been in more than a decade. Gov. Martin O'Malley's budget proposal leaves nearly $1 billion in various reserve accounts, and the legislature stands poised to change the way it funds employee pensions to make the system more solvent.

But thanks to the dysfunction in Washington, that's just what may happen
. Moody's Investors Service, one of the big three bond rating agencies, issued a report this month about which AAA-rated state and local governments would face downgrades if the federal government is downgraded. On the list: Maryland and Virginia, along with Missouri and New Mexico. More that a dozen local governments in Maryland and Northern Virginia are also in line to be whacked, including Montgomery, Prince George's, Harford, Howard and Baltimore counties.

Other publications from Moody's suggest that a federal downgrade isn't necessarily imminent, and the agency hasn't said whether any particular event — like a failure to raise the debt ceiling or to address the sequestration cuts due on March 1 — would trigger action. Rather, Moody's is concerned about the medium and long-term trends in the ratio of federal debt to gross domestic product. "If the upward trend in projected debt ratios and interest costs continues, and further measures to stabilize and ultimately reverse them are not put into place, the rating could eventually move down," Moody's said in a Feb. 8 report.

Moody's has not changed its assessment of the strengths that have prompted it to give Maryland its highest possible rating — a history of responsible fiscal management, a strong economy and a highly skilled work force, among other things. But the agency has a rule that if a "sub-sovereign" entity — i.e., a state or local government — has particularly strong linkage to the sovereign government, its rating cannot exceed the national rating. The agency looks at five factors to determine such linkage, and both Maryland and Virginia are rated as outliers on two of them: federal employment as a percentage of total employment, and federal procurement contracts as a percentage of gross domestic product.


Moody's observation about the linkage between the state's economy and the federal government is bound to become subject to tsk tsking by the Maryland-is-bad-for-business crowd. They are right that the state needs to explore ways to diversify its economy and that, given the likelihood of federal cuts, Maryland can't count on the federal government for economic growth. But it's not like a radical change in the political climate in Annapolis could solve our current predicament. In order to grow its way out of being considered by Moody's to be strongly linked to the federal government, Maryland would need to increase its GDP by 73 percent and its workforce by 77 percent without getting another dime in federal contracts or a single additional federal job.


What would happen if Moody's did downgrade Maryland's bond ratings? That's entirely unclear. Theoretically, it would lead to higher borrowing costs. But neither of the other two major ratings agencies, Standard & Poor's and Fitch, has said it will automatically downgrade any state or local governments based solely on the federal rating. Indeed, S&P did downgrade the federal government after the debt limit standoff of 2011 without taking corresponding action against Maryland. Moreover, S&P's federal downgrade didn't significantly increase borrowing costs, and it's altogether unclear that bond buyers would look at Maryland much differently if it had merely two out of three possible AAA ratings.

In the end, what we're talking about here may be little more than a matter of Maryland pride. Governors like to brag about Maryland's AAA bond rating, and saying we are top-rated as a credit risk by two of the three major agencies doesn't quite have the same cachet as having always been triple-AAA.

Treasurer Nancy K. Kopp has argued Maryland's case to Moody's, to no avail. Rules, it seems, are rules, and it is the arbitrariness that she and other state officials find so frustrating. But there is at least one consolation: Virginia, our rival and political mirror image across the Potomac, is in exactly the same boat.
_____________________________________________





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    Cindy Walsh is a lifelong political activist and academic living in Baltimore, Maryland.

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