What you see with the Maryland and Baltimore Parking Authority issue is how broad the funneling of public revenue into these bond schemes is and its intent is to starve government coffers and any ability to use future public revenue in any other way than what these bond deals propose. So, when the economy crashes and we again have a recession and no money in government coffers-----we will default on most of these bond deals and the money invested will be lost. Neo-liberals are working with Wall Street to plan these situations----it is not a surprise or greed----it is public malfeasance and fraud. Having all public money go into future developments that do not have to be done is what has created our crumbling infrastructure in Maryland. Rather than spend the money collected on the needs of communities, revenue has been placed in these development deals for two decades that are simply building global corporate infrastructure with little value for you and me. Then, O'Malley and neo-liberals-----and yes, Erhlich and neo-cons.......tell us we must pay for road and bridge construction with tolls and fees. We have already paid for these public projects through decades of taxes - but we are going to do it again because all that money was placed in leveraged bond deals that did nothing for the Maryland economy. Brown, Gansler, and Mizeur were all ready to double-down on this because the bond market crash is coming next year.
Bond Bills
Bond bills in Maryland are a convoluted subject.
From the Department of Legislative Services:
Legislative initiatives are used to fund individual bond bill requests. They are bond authorization bills filed by members of the General Assembly to support specific local or non-State-owned capital projects. These projects include, but are not limited to, health facilities, historic preservation projects, museums, and sports and recreational facilities. Legislative initiatives are not submitted as part of the Governor’s Capital Budget. However, as they have an impact on State finances, the Department of Legislative Services reviews them in accordance with procedures established by the Governor and the General Assembly.
There is no uniformity among county delegations in how they handle bond bills. Some counties’ Delegates meet as a delegation and vote to give the, “thumbs up” for each bill. More often than not, the delegation does not meet, leaving it to the sponsors.
Bond bills do not get a vote in the House or Senate. Rather, they are included in the capital budget; the projects are funded through a pot of money set aside. The pot of money doesn’t change, no matter how many projects are submitted. You may read each year’s bond bill funding from 2008 – 2013.
I wanted to use this one bond deal as a local example but you need to check the millions of dollars tied each year to these deals and look who is behind them. Mind you------floating bonds has been happening for decades-----the problem is that since the 2008 crash there is too much debt and a crash coming. ONLY PUBLIC MALFEASANCE ALLOWS FOR THIS POLICY OF FEEDING PUBLIC WEALTH TO WALL STREET. Bill Ferguson and Baltimore's pols are one of the frequent flyers of these deals. Not surprisingly the Michelle Rhee Johns Hopkins led the connection of Baltimore Public Schools to these credit bonds------
Look at the debt---this is just 2013-2014 bond bills for about a million and these 2014 bills are happening just as the bond market collapse comes. Did the city need to be involved in this renovation now? Of course not.....but the building will default into the hands of these private investors. Think about O'Malley's and Baltimore City Hall's push for the city's partnership with the Hilton as everyone was shouting THE ECONOMY IS A HOUSE OF CARDS FROM A CRIMINAL HOUSING MARKET! This is why you see Rawlings-Blake handing public assets off for no reason.
Purpose of Bill
10. Description and Purpose of Grantee Organization (Limit
Authorizing the creation of a State Debt not to exceed $500,000, the proceeds to be used as a grant
to the Board of Trustees of the Chesapeake Shakespeare Company for the acquisition, planning,
design, construction, repair, renovation, reconstruction, and capital equipping of the Chesapeake
Shakespeare Company's Downtown Theatre.
. Senate Bill Sponsors
Bill Ferguson
. Jurisdiction (County or Baltimore City)
Baltimore City
1. Description and Purpose of Project (Limit Length to Visible area)
ur $5.7 million plan to transform the 15,000 square foot Mercantile building into a modern Globe
theater
Acquisition Design Construction Equipment/Total
Total
$1,337,443
$366,000
$3,845,033
$205,000
$5,753,476
13. Proposed Funding Sources – (List all funding sources and amounts.)
Source Amount
2014 Maryland State Bond Bill
$500,000
Foundation Grants Secured
$3,645,000
Private Funding - secured
$875,000
Private Funding - pursuing
$408,476
2013 Maryland State Bond Bill
$125,000
2014 Baltimore City Bond Bill
$200,000
________________________________________
It's no coincidence that Obama and Congressional neo-liberals are preparing for a huge infrastructure bill that relies heavily on municipal bonds-----right before the bond market crash. That is what they did in Greece and Spain-----loaded those countries up with sovereign/municipal debt just before the subprime mortgage crash. The article below was written in 2009 and shows how right after the crash cities across the US started pumping their economies with bond debt. This was deliberate. As this author states-----all this debt will end with state and local government default.
Think as well what will happen when interest rates soar because the FED will no longer be able to manipulate interest rates......most of these state bonds are tied to offering interest rate payments with these bonds. The people buying bonds that do not use credit default swaps to insure against bond losses with be wiped out......and that is the pension funds and small investors that are buying bonds like people were using subprime mortgage loans. The big investors partnered to these bond deals on the other hand ARE insured by CDS for bonds and they will not only lose nothing in a bond collapse----but gain that part of the municipal default.
ALL STATE AND CONGRESSIONAL POLS KNOW THIS IS GOING TO HAPPEN. THEY WILL VOTE FOR THESE BOND DEALS AS THE MARKET GETS READY TO COLLAPSE KNOWING FEDERAL, STATE, AND LOCAL GOVERNMENTS WILL BE SWAMPED WITH DEBT, PENSION FUNDS WIPED OUT, AND THEIR CONSTITUENTS AGAIN LOSE THEIR SAVINGS FROM THIS COLLAPSE.
All of Maryland's pols are neo-liberals and neo-cons and they are doing this because they want to. This binge in bonds started in 2009 because Obama and neo-liberals passed laws that made bonds look as attractive as 0% credit cards----lure them in and then blow them up. This is what your neo-liberal/neo-con leaders are doing to the American people.
BUILD AMERICA BONDS-----BLOW UP AMERICA BONDS.
Municipal Bond Yields Rise as Week’s Sales Reach 4-Month High
By Jeremy R. Cooke Wall Street Pit October 2009
Oct. 30 (Bloomberg) — State and local governments led by California sold $11.8 billion of fixed-rate bonds this week, the most in more than four months, pushing 20-year benchmark tax- exempt yields to their highest level since late August.
The most populous U.S. state refinanced voter-approved debt to patch budget deficits with a $3.5 billion deal. Connecticut, Florida, Kentucky, Missouri and New York City also raised money for infrastructure projects through the Build America Bonds program, which provides 35 percent interest rebates from the federal government for selling taxable debt in lieu of borrowing tax-free.
Municipal issuers sold $7.8 billion in tax-exempt issues and $4 billion in taxable debt, based on revised data compiled by Bloomberg. The Bond Buyer newspaper’s weekly yield index of general obligation bonds due in 20 years rose 8 basis points, or 0.08 percentage point, to 4.39 percent, the highest since 4.53 percent at the end of August.
Issuance in October exceeded $40 billion even as investors’ appetite for yields below 4 percent waned, forcing borrowers to pay more on new issues. The Merrill Lynch Municipal Master Index, which measures the total-return of state and local debt, fell almost 2.5 percent through yesterday, the biggest monthly decline since a 5.1 percent drop in September 2008.
This week’s sales sent the amount of Build America Bonds sold since the Obama administration’s economic stimulus created the program this year to $47.4 billion, Bloomberg figures show.
Municipal bonds advanced today, sending yields on 10-year general obligation debt lower by 1 basis point to 3.17 percent, according to a daily survey by Municipal Market Advisors of Concord, Massachusetts. The index is 21 basis points higher than at the end of September.
Weekly issuance was last this high in the period ended June 12, when governments sold $11.9 billion, according to Bloomberg data. The busiest week this year, the one ended April 24, produced $15.4 billion in sales, the figures show. (emphasis added)
Note that yields fell yesterday as money moved out of equities, but that in the past 4 months yields (rates) have been rising, thus sending the price lower.
If we’re beginning the C wave down in Equities, I think it’s likely that bonds will do okay as money flows out of stocks, but I think eventually that tide will turn. It may be 2 years, it may be 6 months, or it may be tomorrow, but at some point interest rates are going to go higher, and again, there is now a serious risk of default as municipalities spend far more than they are taking in. Yes, they do have the power of taxation (blood out of a turnip?) but they do not have the power of the press. That said, I can see the Federal Government stepping in with their printing press to rescue failing municipalities, but now we’re getting into playing favorites and politics, the area were revolts are bred.
I’m just saying, don’t wait until that market is gone, gone, gone…
_______________________________________________
I attended a Baltimore Development Corporation gathering that had a couple laughing about the LIBOR banking scandal of which Baltimore was of course in deep and taking hundreds of millions of dollars in losses. LIBOR was happening at the same time as the subprime loan fraud and here in Baltimore it was O'Malley and Baltimore City Hall leading the way in using these Wall Street investment instruments. Remember, we knew in 2005 the banking system was systemically criminal and here are the neo-liberals and neo-cons tying Maryland government and citizens to soaring amounts of this debt.
Fast-forward and now O'Malley and Maryland Assembly and now Rawlings Blake and Baltimore City Hall are doing the same. With tens of trillions of dollars in unrecovered corporate fraud from last decade-----they are loading Maryland and Baltimore with bond debt as this market collapses.
This is not a Democrat/Republican issue as Republican states are doing the same----all are controlled by neo-liberals and neo-cons.
The wealthy think this is all too funny as they think the people cannot regain control of government----which is why Maryland had systemic election rigging in this race for Governor of Maryland. They had to make sure a neo-liberal and neo-con were in the Maryland General Election to handle the coming bond collapse in Wall Street's favor!
'The banks had been accused by a diverse body of plaintiffs, as varied as bondholders and the City of Baltimore, of conspiring to manipulate Libor, a benchmark at the heart of more than $550 trillion in financial products'.
It's not a coincidence that Baltimore was first out of the gate in this lawsuit-----pols loaded Maryland and Baltimore with these financial instruments.
Baltimore city is among many suing big banks over allegations of rate-rigging
For small investors, this could be the scandal that finally breaks their trust
July 09, 2012|By Eileen Ambrose, The Baltimore Sun
You're likely part of the largest financial scandal in the world today if you have an adjustable-rate mortgage or a private student loan.
Or live in Baltimore.
The city is suing more than a dozen major banks, claiming the institutions conspired to manipulate the London Interbank Offered Rate, or Libor. This is a benchmark used to set interest rates on variable-rate credit cards and mortgages plus trillions of dollars' worth of financial instruments, including some purchased by the city of Baltimore.
Barclays is one of the banks being sued by Baltimore. Late last month, the bank agreed to pay more than $450 million to settle charges by American and British regulators that it attempted to rig Libor over several years. Its CEO and chief operating officer resigned. Now other big banks are under investigation by a who's who list of regulators and law enforcement agencies around the world.
Usually in financial scandals, consumers get burned. But if allegations in this one are true, the rate-rigging actually worked in their favor. That's because banks are being accused of manipulating Libor so it would be lower than it should have been, which means borrowers would end up paying less in interest.
But consumers may be hurt in other ways. If, say, Baltimore and other municipalities earned less on their investments than they should have, the cities might be forced to raise taxes or cut services to make up the difference.
And if this scandal turns out to be another case of banks behaving badly, it also could be enough to kill what little trust small investors still have in the markets.
"People are so cynical about financial markets," says Yuval Bar-Or, an adjunct professor at the Johns Hopkins Carey Business School and author of "Play to Prosper: The Small Investor's Survival Guide." "There is yet another huge scandal that's rocking the highest echelons. … It only makes [investors] have less and less faith in the financial markets."
Bar-Or worries that if small investors conclude that the whole system is rigged, they might avoid the stock market. And if that happens, he says, their nest eggs won't be able to keep up with inflation.
Until now, most people likely never gave Libor a thought. According to the U.S. Commodity Futures Trading Commission, Libor is tied to more than $900 trillion worth of loans, swaps and futures contracts.
Amazingly, as critical as Libor is to the world markets, it's basically generated using the honor system. A panel of banks report daily to the British Bankers Association — a trade group, not a regulator — what rate they would expect to pay if they borrowed from another bank. Some of the highest and lowest rates are thrown out, and the rest are averaged. The resulting rate is published daily.
Baltimore's lawsuit involves the city's purchase of hundreds of millions of dollars in interest-rate swaps — an instrument used to protect the buyer from fluctuating rates — linked to Libor.
The city sued the banks last year in federal court in New York, and its lawsuit was consolidated with those filed by others, including pensions funds and Charles Schwab & Co. The banks named in the suit include such familiar names as Bank of America, JP Morgan Chase, Citibank, HSBC Bank, Deutsche Bank and Credit Suisse.
___________________________________________
Below you see Republicans in Maryland just as mad with their neo-cons as Democrats are with neo-liberals. We both are trying to save the US and democracy while global corporate pols are simply working to hand all public wealth to the rich.
Conservative Republicans and Labor and Justice Democrats need to stand together in shaking these global corporate pols out of politics at all level.....then we can fight one another on domestic issues.
Little did this author know that credit bond debt would soar over the next few years. Wait until they tie all that infrastructure work to these bond deals-----IT'S ALL ABOUT JOBS!
Tuesday, January 25, 2011
Saying One Thing Doing Another on Bond Bills
According to Delegate Michael Smigiel’s Facebook page, on January 18th the Maryland House Republican Caucus voted to send a letter to House leadership that they were not in favor of any bond bills.
However, several Republicans, including members of the caucus leadership Jeannie Haddaway-Riccio, Adelaide Eckardt, along with their Senate colleague Richard Colburn have already filed over $3 million worth of bond bills.
Haddaway-Riccio is Minority Whip, and Eckardt is chair of the party caucus. Since 2007 the pair has proposed over $10 million in bond bills.
It’s not that these bond bills represent a huge chunk of the state’s structural deficit—they don’t—but like federal earmarks they are a gateway drug to the big ticket items that fuel Maryland’s tax and spend addiction.
This hypocrisy just reiterates to the legislature’s Democratic majority that Republicans are so dysfunctional they can’t even present a unified front. Until this keystone cops routine ends, Speaker of the House Michael Busch and President of the Senate, Thomas V. “Mike” Miller will continue pick off feckless Republicans with bond bills and other treats, like former Delegate Page Elmore, who in 2008, sold his votes on the tech tax and the budget in return for getting the Smith Island cake named Maryland’s official dessert.
Time for the Republicans to stop playing enabler and put up a real fight.
Here is a list of the Republican filed bond bills, the amount, the recipient, and their Republican sponsors. You can view a list of all filed bond bills here.
HB21/SB26: $300,000 for Construct Replica Choptank River Lighthouse. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB30/SB28: $250,000 for Chesapeake Bay Maritime Museum Bulkhead Replacement. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB56/SB29: $250,000 for Talbot Hospice Expansion. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB95/SB27: $75,000 for Dorchester Center for the Arts - Atrium Entrance. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB29: $125,000 for Construction/renovation of Carroll Field Puglise Stadium Field Lights. Sponsors: Tony McConkey
SB34/HB106: $500,000 for Blandair Regional Park. Sponsors: Allan Kittleman
SB35: $200,000 for Mount Pleasant Farm Buildings. Sponsors: Allan Kittleman
SB36/HB107: $144,000 for The Arc of Howard County, Graeloch Home Renovation. Sponsors: Allan Kittleman
SB37: $500,000 for Troy Regional Park. Sponsors: Allan Kittleman
SB38: $450,000 for Former Ellicott City Post Office. Sponsors: Allan Kittleman
SB106: $400,000 for Hospice of Queen Anne's. Sponsors: EJ Pipkin, Richard Colburn
Bond Bills
Bond bills in Maryland are a convoluted subject.
From the Department of Legislative Services:
Legislative initiatives are used to fund individual bond bill requests. They are bond authorization bills filed by members of the General Assembly to support specific local or non-State-owned capital projects. These projects include, but are not limited to, health facilities, historic preservation projects, museums, and sports and recreational facilities. Legislative initiatives are not submitted as part of the Governor’s Capital Budget. However, as they have an impact on State finances, the Department of Legislative Services reviews them in accordance with procedures established by the Governor and the General Assembly.
There is no uniformity among county delegations in how they handle bond bills. Some counties’ Delegates meet as a delegation and vote to give the, “thumbs up” for each bill. More often than not, the delegation does not meet, leaving it to the sponsors.
Bond bills do not get a vote in the House or Senate. Rather, they are included in the capital budget; the projects are funded through a pot of money set aside. The pot of money doesn’t change, no matter how many projects are submitted. You may read each year’s bond bill funding from 2008 – 2013.
I wanted to use this one bond deal as a local example but you need to check the millions of dollars tied each year to these deals and look who is behind them. Mind you------floating bonds has been happening for decades-----the problem is that since the 2008 crash there is too much debt and a crash coming. ONLY PUBLIC MALFEASANCE ALLOWS FOR THIS POLICY OF FEEDING PUBLIC WEALTH TO WALL STREET. Bill Ferguson and Baltimore's pols are one of the frequent flyers of these deals. Not surprisingly the Michelle Rhee Johns Hopkins led the connection of Baltimore Public Schools to these credit bonds------
- Bill Ferguson | LinkedInwww.linkedin.com/in/billfergusonBill Ferguson. Director, Reform Initiatives at Johns Hopkins University School of Education Location Baltimore, Maryland Area Industry Education Management
Look at the debt---this is just 2013-2014 bond bills for about a million and these 2014 bills are happening just as the bond market collapse comes. Did the city need to be involved in this renovation now? Of course not.....but the building will default into the hands of these private investors. Think about O'Malley's and Baltimore City Hall's push for the city's partnership with the Hilton as everyone was shouting THE ECONOMY IS A HOUSE OF CARDS FROM A CRIMINAL HOUSING MARKET! This is why you see Rawlings-Blake handing public assets off for no reason.
Purpose of Bill
10. Description and Purpose of Grantee Organization (Limit
Authorizing the creation of a State Debt not to exceed $500,000, the proceeds to be used as a grant
to the Board of Trustees of the Chesapeake Shakespeare Company for the acquisition, planning,
design, construction, repair, renovation, reconstruction, and capital equipping of the Chesapeake
Shakespeare Company's Downtown Theatre.
. Senate Bill Sponsors
Bill Ferguson
. Jurisdiction (County or Baltimore City)
Baltimore City
1. Description and Purpose of Project (Limit Length to Visible area)
ur $5.7 million plan to transform the 15,000 square foot Mercantile building into a modern Globe
theater
Acquisition Design Construction Equipment/Total
Total
$1,337,443
$366,000
$3,845,033
$205,000
$5,753,476
13. Proposed Funding Sources – (List all funding sources and amounts.)
Source Amount
2014 Maryland State Bond Bill
$500,000
Foundation Grants Secured
$3,645,000
Private Funding - secured
$875,000
Private Funding - pursuing
$408,476
2013 Maryland State Bond Bill
$125,000
2014 Baltimore City Bond Bill
$200,000
________________________________________
It's no coincidence that Obama and Congressional neo-liberals are preparing for a huge infrastructure bill that relies heavily on municipal bonds-----right before the bond market crash. That is what they did in Greece and Spain-----loaded those countries up with sovereign/municipal debt just before the subprime mortgage crash. The article below was written in 2009 and shows how right after the crash cities across the US started pumping their economies with bond debt. This was deliberate. As this author states-----all this debt will end with state and local government default.
Think as well what will happen when interest rates soar because the FED will no longer be able to manipulate interest rates......most of these state bonds are tied to offering interest rate payments with these bonds. The people buying bonds that do not use credit default swaps to insure against bond losses with be wiped out......and that is the pension funds and small investors that are buying bonds like people were using subprime mortgage loans. The big investors partnered to these bond deals on the other hand ARE insured by CDS for bonds and they will not only lose nothing in a bond collapse----but gain that part of the municipal default.
ALL STATE AND CONGRESSIONAL POLS KNOW THIS IS GOING TO HAPPEN. THEY WILL VOTE FOR THESE BOND DEALS AS THE MARKET GETS READY TO COLLAPSE KNOWING FEDERAL, STATE, AND LOCAL GOVERNMENTS WILL BE SWAMPED WITH DEBT, PENSION FUNDS WIPED OUT, AND THEIR CONSTITUENTS AGAIN LOSE THEIR SAVINGS FROM THIS COLLAPSE.
All of Maryland's pols are neo-liberals and neo-cons and they are doing this because they want to. This binge in bonds started in 2009 because Obama and neo-liberals passed laws that made bonds look as attractive as 0% credit cards----lure them in and then blow them up. This is what your neo-liberal/neo-con leaders are doing to the American people.
BUILD AMERICA BONDS-----BLOW UP AMERICA BONDS.
Municipal Bond Yields Rise as Week’s Sales Reach 4-Month High
By Jeremy R. Cooke Wall Street Pit October 2009
Oct. 30 (Bloomberg) — State and local governments led by California sold $11.8 billion of fixed-rate bonds this week, the most in more than four months, pushing 20-year benchmark tax- exempt yields to their highest level since late August.
The most populous U.S. state refinanced voter-approved debt to patch budget deficits with a $3.5 billion deal. Connecticut, Florida, Kentucky, Missouri and New York City also raised money for infrastructure projects through the Build America Bonds program, which provides 35 percent interest rebates from the federal government for selling taxable debt in lieu of borrowing tax-free.
Municipal issuers sold $7.8 billion in tax-exempt issues and $4 billion in taxable debt, based on revised data compiled by Bloomberg. The Bond Buyer newspaper’s weekly yield index of general obligation bonds due in 20 years rose 8 basis points, or 0.08 percentage point, to 4.39 percent, the highest since 4.53 percent at the end of August.
Issuance in October exceeded $40 billion even as investors’ appetite for yields below 4 percent waned, forcing borrowers to pay more on new issues. The Merrill Lynch Municipal Master Index, which measures the total-return of state and local debt, fell almost 2.5 percent through yesterday, the biggest monthly decline since a 5.1 percent drop in September 2008.
This week’s sales sent the amount of Build America Bonds sold since the Obama administration’s economic stimulus created the program this year to $47.4 billion, Bloomberg figures show.
Municipal bonds advanced today, sending yields on 10-year general obligation debt lower by 1 basis point to 3.17 percent, according to a daily survey by Municipal Market Advisors of Concord, Massachusetts. The index is 21 basis points higher than at the end of September.
Weekly issuance was last this high in the period ended June 12, when governments sold $11.9 billion, according to Bloomberg data. The busiest week this year, the one ended April 24, produced $15.4 billion in sales, the figures show. (emphasis added)
Note that yields fell yesterday as money moved out of equities, but that in the past 4 months yields (rates) have been rising, thus sending the price lower.
If we’re beginning the C wave down in Equities, I think it’s likely that bonds will do okay as money flows out of stocks, but I think eventually that tide will turn. It may be 2 years, it may be 6 months, or it may be tomorrow, but at some point interest rates are going to go higher, and again, there is now a serious risk of default as municipalities spend far more than they are taking in. Yes, they do have the power of taxation (blood out of a turnip?) but they do not have the power of the press. That said, I can see the Federal Government stepping in with their printing press to rescue failing municipalities, but now we’re getting into playing favorites and politics, the area were revolts are bred.
I’m just saying, don’t wait until that market is gone, gone, gone…
_______________________________________________
I attended a Baltimore Development Corporation gathering that had a couple laughing about the LIBOR banking scandal of which Baltimore was of course in deep and taking hundreds of millions of dollars in losses. LIBOR was happening at the same time as the subprime loan fraud and here in Baltimore it was O'Malley and Baltimore City Hall leading the way in using these Wall Street investment instruments. Remember, we knew in 2005 the banking system was systemically criminal and here are the neo-liberals and neo-cons tying Maryland government and citizens to soaring amounts of this debt.
Fast-forward and now O'Malley and Maryland Assembly and now Rawlings Blake and Baltimore City Hall are doing the same. With tens of trillions of dollars in unrecovered corporate fraud from last decade-----they are loading Maryland and Baltimore with bond debt as this market collapses.
This is not a Democrat/Republican issue as Republican states are doing the same----all are controlled by neo-liberals and neo-cons.
The wealthy think this is all too funny as they think the people cannot regain control of government----which is why Maryland had systemic election rigging in this race for Governor of Maryland. They had to make sure a neo-liberal and neo-con were in the Maryland General Election to handle the coming bond collapse in Wall Street's favor!
'The banks had been accused by a diverse body of plaintiffs, as varied as bondholders and the City of Baltimore, of conspiring to manipulate Libor, a benchmark at the heart of more than $550 trillion in financial products'.
It's not a coincidence that Baltimore was first out of the gate in this lawsuit-----pols loaded Maryland and Baltimore with these financial instruments.
Baltimore city is among many suing big banks over allegations of rate-rigging
For small investors, this could be the scandal that finally breaks their trust
July 09, 2012|By Eileen Ambrose, The Baltimore Sun
You're likely part of the largest financial scandal in the world today if you have an adjustable-rate mortgage or a private student loan.
Or live in Baltimore.
The city is suing more than a dozen major banks, claiming the institutions conspired to manipulate the London Interbank Offered Rate, or Libor. This is a benchmark used to set interest rates on variable-rate credit cards and mortgages plus trillions of dollars' worth of financial instruments, including some purchased by the city of Baltimore.
Barclays is one of the banks being sued by Baltimore. Late last month, the bank agreed to pay more than $450 million to settle charges by American and British regulators that it attempted to rig Libor over several years. Its CEO and chief operating officer resigned. Now other big banks are under investigation by a who's who list of regulators and law enforcement agencies around the world.
Usually in financial scandals, consumers get burned. But if allegations in this one are true, the rate-rigging actually worked in their favor. That's because banks are being accused of manipulating Libor so it would be lower than it should have been, which means borrowers would end up paying less in interest.
But consumers may be hurt in other ways. If, say, Baltimore and other municipalities earned less on their investments than they should have, the cities might be forced to raise taxes or cut services to make up the difference.
And if this scandal turns out to be another case of banks behaving badly, it also could be enough to kill what little trust small investors still have in the markets.
"People are so cynical about financial markets," says Yuval Bar-Or, an adjunct professor at the Johns Hopkins Carey Business School and author of "Play to Prosper: The Small Investor's Survival Guide." "There is yet another huge scandal that's rocking the highest echelons. … It only makes [investors] have less and less faith in the financial markets."
Bar-Or worries that if small investors conclude that the whole system is rigged, they might avoid the stock market. And if that happens, he says, their nest eggs won't be able to keep up with inflation.
Until now, most people likely never gave Libor a thought. According to the U.S. Commodity Futures Trading Commission, Libor is tied to more than $900 trillion worth of loans, swaps and futures contracts.
Amazingly, as critical as Libor is to the world markets, it's basically generated using the honor system. A panel of banks report daily to the British Bankers Association — a trade group, not a regulator — what rate they would expect to pay if they borrowed from another bank. Some of the highest and lowest rates are thrown out, and the rest are averaged. The resulting rate is published daily.
Baltimore's lawsuit involves the city's purchase of hundreds of millions of dollars in interest-rate swaps — an instrument used to protect the buyer from fluctuating rates — linked to Libor.
The city sued the banks last year in federal court in New York, and its lawsuit was consolidated with those filed by others, including pensions funds and Charles Schwab & Co. The banks named in the suit include such familiar names as Bank of America, JP Morgan Chase, Citibank, HSBC Bank, Deutsche Bank and Credit Suisse.
___________________________________________
Below you see Republicans in Maryland just as mad with their neo-cons as Democrats are with neo-liberals. We both are trying to save the US and democracy while global corporate pols are simply working to hand all public wealth to the rich.
Conservative Republicans and Labor and Justice Democrats need to stand together in shaking these global corporate pols out of politics at all level.....then we can fight one another on domestic issues.
Little did this author know that credit bond debt would soar over the next few years. Wait until they tie all that infrastructure work to these bond deals-----IT'S ALL ABOUT JOBS!
Tuesday, January 25, 2011
Saying One Thing Doing Another on Bond Bills
According to Delegate Michael Smigiel’s Facebook page, on January 18th the Maryland House Republican Caucus voted to send a letter to House leadership that they were not in favor of any bond bills.
However, several Republicans, including members of the caucus leadership Jeannie Haddaway-Riccio, Adelaide Eckardt, along with their Senate colleague Richard Colburn have already filed over $3 million worth of bond bills.
Haddaway-Riccio is Minority Whip, and Eckardt is chair of the party caucus. Since 2007 the pair has proposed over $10 million in bond bills.
It’s not that these bond bills represent a huge chunk of the state’s structural deficit—they don’t—but like federal earmarks they are a gateway drug to the big ticket items that fuel Maryland’s tax and spend addiction.
This hypocrisy just reiterates to the legislature’s Democratic majority that Republicans are so dysfunctional they can’t even present a unified front. Until this keystone cops routine ends, Speaker of the House Michael Busch and President of the Senate, Thomas V. “Mike” Miller will continue pick off feckless Republicans with bond bills and other treats, like former Delegate Page Elmore, who in 2008, sold his votes on the tech tax and the budget in return for getting the Smith Island cake named Maryland’s official dessert.
Time for the Republicans to stop playing enabler and put up a real fight.
Here is a list of the Republican filed bond bills, the amount, the recipient, and their Republican sponsors. You can view a list of all filed bond bills here.
HB21/SB26: $300,000 for Construct Replica Choptank River Lighthouse. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB30/SB28: $250,000 for Chesapeake Bay Maritime Museum Bulkhead Replacement. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB56/SB29: $250,000 for Talbot Hospice Expansion. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB95/SB27: $75,000 for Dorchester Center for the Arts - Atrium Entrance. Sponsors: Adelaide Eckardt, Jeannie Haddaway-Riccio, Richard Colburn
HB29: $125,000 for Construction/renovation of Carroll Field Puglise Stadium Field Lights. Sponsors: Tony McConkey
SB34/HB106: $500,000 for Blandair Regional Park. Sponsors: Allan Kittleman
SB35: $200,000 for Mount Pleasant Farm Buildings. Sponsors: Allan Kittleman
SB36/HB107: $144,000 for The Arc of Howard County, Graeloch Home Renovation. Sponsors: Allan Kittleman
SB37: $500,000 for Troy Regional Park. Sponsors: Allan Kittleman
SB38: $450,000 for Former Ellicott City Post Office. Sponsors: Allan Kittleman
SB106: $400,000 for Hospice of Queen Anne's. Sponsors: EJ Pipkin, Richard Colburn
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