Make no mistake, this school building funding plan is all about imploding municipalities with debt. Think about the teacher's pensions sent down to local levels......think of all public pensions. The state and city's ability to pay entitlements and social programs are all tied with municipal health. Look at Spain, Italy, and Greece as their politicians loaded the governments with debt. THIS IS WHAT IS HAPPENING IN MARYLAND AND IT IS BEING ALLOWED TO HAPPEN, NOT OUT OF NECESSITY, IT IS HAPPENING TO ACHIEVE A GOAL.
In Baltimore, we have a public media outlet....WYPR that is a mouthpiece for all of these shenanigans. Fraser Smith has been emboldened by the re-election of all incumbents to simply tell 80% of Marylander's to JUST GET OVER IT if you don't like what comes out of Annapolis......they have the power after all. We even have Marketplace on NPR state publicly that Congress is working on policy for the shareholder (the 5%) interest, saying capital gains and dividends will be protected from much increase. Remember, to reverse wealth inequity we need progressive taxation. Keeping these two tax levels at 20% means wealth inequity is protected. As we see below all tax policy is now very obviously protecting wealth to a startling degree. I thing 95% of the general public can manage to simply VOTE THEIR INCUMBENT OUT OF OFFICE!!!!!
There will come a time when these fraudsters won't even try to hide the fraud with these 'complex financial instruments'. If left unchecked, they will simply take it.
Public education is the cornerstone of democracy. If we do not shout loudly and strongly to protect this and I dare say health care from Wall Street profit, we will be positioned closer to the Egyptians in our ability to turn this autocracy around.
SHOUT LOUDLY AND STRONGLY AND MAKE 'DEMOCRACY NOW' YOUR HOBBY!
DON'T THINK YOUR CITY COUNCIL MEMBER OR MAYOR RAWLINGS-BLAKE DOESN'T UNDERSTAND THIS. DON'T THINK YOUR STATE ASSEMBLY MEMBER AND GOVERNOR O'MALLEY DOESN'T UNDERSTAND THIS.
Maryland is a mini-California. All of its wealth is concentrated around the beltway and all other outward areas are being impoverished by policy that lavishes all revenue streams towards the beltway. Where are all the companies doing business in Baltimore connected? THAT'S RIGHT....THE BELTWAY.
Municipal Bond Credit Is Imploding NOV. 7, 2011
By CHRISS STREET Cal Watchdog
Moody’s Credit Rating Service just announced the ominous trend that credit quality in the municipal bond market is falling at the fastest rate since the collapse of Lehman Brothers in 2008. Data released showed that 5.3 times as many municipal bonds were credit downgraded over the three last months than were upgraded.
“Downgrades dominated rating revisions across all public finance sectors except for healthcare,” said Assistant Vice President-Analyst Dan Steed, author of the Moody’s report. “A rapid deterioration in credit metrics led to a higher-than-average 14 multi-notch downgrades.”
Often sold to individuals as “conservative investments with tax-free income”, munis in such states as California, Illinois, New Jersey and Pennsylvania are increasingly looking like high-risk rolls of the dice.
This credit implosion comes after a sustained period when muni bonds were performing much better than corporate bonds. During the credit crisis, corporate bonds prices dropped by 30 percent, while muni bonds suffered modest losses.
The main reason for this stability was bailout money showered on state and local governments by the Obama Administration. But federal money has dried up and property reassessments are falling for the first time since the 1970s.
Strains on core operating expenses and revenue sources will likely persist, according to Moody’s. “This will be mostly due to economic stagnation, high unemployment, declining home values, and low consumer confidence,” said Steed. “We expect downgrades to continue exceeding upgrades in upcoming quarters.” This is polite ratings speak for: “duck and cover.”
State revenues fell by $14.3 billion, even as the national economy has seemed to stabilize. The quarter ending September 30 saw 163 ratings reductions, the second highest 90-day total in history. Over 100 of those downgrades were cities and school districts where falling property-tax collections are playing catch-up on the downside to the 30 percent fall in real estate values.
John Dillon, chief municipal-bond strategist at Morgan Stanley, said after a downgrade, “Usually management snaps to attention.”
Costs and Revenues To stay solvent, states and localities have tried to cut costs and raise revenues. Most have delayed infrastructure projects, increased garbage collection fees and even closed parks. But raising property taxes awakens taxpayer vengeance and threats of recalling local politicians.
Anne Van Praagh, managing director at Moody’s, said fiscal conditions of some local governments can deteriorate more quickly now than in previous recessions. Moody’s recently cut seven states or localities by three grades or more.
Fresno, California’s fifth most populous city, two weeks ago had $477 million of its debt “super-downgraded” three levels by Moody’s and is under a “negative” outlook for the risk of further downgrades. Moody’s emphasized the city’s budget gap is so large due to a “weak economic base, with unfavorable demographic and economic trends,” and the city lacks the “ability to absorb additional budgetary pressure…. Like all California cities, Fresno’s ability to raise revenues is highly constrained; its primary budget balancing option is cost reduction.” This is ratings speak for: property collection may fall 20 percentand the city must fire police and firemen.
Stockton Could Default The neighboring city of Stockton looks even worse. Following a Securities and Exchange Commission filing, the city admitted it will probably be the first in California to default on redevelopment agency bonds.
Long criticized as crony capitalist honey-buckets, developers lavished huge donations across the state to gain access to the tax-free city financing of mega-projects with no-money-down. After the agency debt was downgrade to “junk,” Stockton optimistically stated they only expect a 3.17 percent drop in property values for 2012. Good luck on that number!
With muni bonds generally in the hands of older citizens, there has not been the panic-selling by institutions when bonds are downgraded. But many individuals have their entire life savings in municipal bonds.
When defaults become a reality, the press will run endless stories of tearful traumatized seniors and cringing corrupted politicians. Then there will be panic!
Chriss Street’s latest book, “The Third Way,” is now available on Amazon. If you would like to order a signed copy, contact The Forum Press at: www.theforumpress.com.
The public can now see the pattern of market/wealth protection by our Third Way corporate democrats. Where we elected our officials and then thought they were working for us, we now know they are working for the shareholders....the 5%. Here is yet another sign of where the next massive fraud will be......remember, developers are basically Wall Street now as they are pouring all those trillions in fraudulent gains into urban development. Once blighted property to become a world-class city with real estate values having record prices.......what profits will be had.
So, your Third Way Democratic incumbent is laying the groundwork for this scheme. Tax-free profits from bonds....allows yet another wealth money source to go untaxed. So as Wall Street floods cities with all kinds of municipal bond debt, they will be protected when the market collapses and they will have all those gains tax free. This is even better than the subprime mortgage fraud.
Build America Bonds Wikileaks
Build America Bonds are a taxable municipal bond created under the American Recovery and Reinvestment Act of 2009 that carry special tax credits and federal subsidies for either the bond holder or the bond issuer. Many issuers have taken advantage of the Build America Bond provision to secure financing at a lower cost than issuing traditional tax-exempt bonds. The Build America Bond provision is open to governmental agencies issuing capital expenditure bonds before January 1, 2011.
If your plan is to blow up municipal governments with high levels of leveraged debt you will need a credit default swap (CDS) to protect you against any loses from these bad financial tools. Think CDS and AIG......nationalized and all insurance bets paid in full by taxpayers.....you and I.
Below you see this new kind of credit default swap designed for this new municipal bond implosion......municipal bond insurance. THINK IT IS A GOOD SIGN WHEN AN INDUSTRY IS CREATED JUST TO INSURE AGAINST DEFAULT?????? THAT'S RIGHT.......IT IS A SETUP!!!!
WHEN YOUR INCUMBENT TELLS YOU THAT BONDHOLDERS TAKE ALL THE RISK IF THERE IS A DEFAULT........THEY ARE TELLING YOU THAT TAXPAYERS WILL YET AGAIN TAKE ALL THE RISK. WHO WILL END UP WITH HIGHLY-LEVERAGED SCHOOLS WHEN THE PUBLIC IS YET AGAIN SOAKED WITH ALL OF THE DEBT FROM THIS LATEST FRAUD.......AND IT IS FRAUD BECAUSE IT IS BEING CONSTRUCTED WITH THE INTENT TO HARM.....
U.S. Public Finance Assured Guaranty is the leading provider of municipal bond insurance in the United States.
Our municipal credit enhancement products include:
- Municipal bond insurance policies covering principal and interest, for both new issues and those already trading in the secondary market
- Surety policies that take the place of cash-funded reserves in municipal bond transactions
- Specialized financial guaranty policies, such as swap sureties guaranteeing a municipal issuer’s obligations under a swap agreement with a broker-dealer
While we have two platforms – AGM, a municipal-only bond insurer, and AGC, a diversified provider -- we are one team, applying a uniform underwriting standard and dedicated to the highest level of customer service. In addition to our large municipal bond insurance department in our New York headquarters, we maintain a fully staffed western regional office in San Francisco.
Additionally, through our Sure-Bid program, we simplify administrative procedures for qualified bidders in the competitive-bid market for both insured and uninsured municipal bonds.
Follow the links below for information on recent insured municipal bonds guaranteed by AGM or AGC.