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(Rolling Stone)   That's a nice municipal bond you got there...it'd be a shame if something happened to it   (rollingstone.com) divider line 39
    More: Scary, municipal bonds  
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5129 clicks; posted to Business » on 25 Jun 2012 at 11:08 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-06-25 11:23:25 AM  
Things burn, Colonel.
 
2012-06-25 11:24:24 AM  
I dont know if its sad or awesome that Rolling Stone continues to have the best journalism in the United States.
 
2012-06-25 11:25:29 AM  
Can we just elect Matt Taibbi President already? You'd have a hard time convincing me he's any less qualified than anyone we've had in the office for at least the past 20 years.
 
2012-06-25 11:30:10 AM  

jayhawk88: Can we just elect Matt Taibbi President already? You'd have a hard time convincing me he's any less qualified than anyone we've had in the office for at least the past 20 years.


My cat is more qualified that most of our elected officials.
 
2012-06-25 11:30:20 AM  
Surely it is well known (and easy to prove) stuff like this is happening - if you look at bond insurance rates and default rates of private and public bonds, private bonds can be insured statistically significantly cheaper than than you would expect (or public bonds are more expensive than they should be, whichever way you want to look at it).

This is one of the things that was being used to try and get the ratings agencies reformed/replaced/investigated before the 2007 banking collapse, where it became even more obvious they are either colluding with, or being totally duped by, the major Wall Street players. (The old Reagan defense strikes again - either criminal, or incredibly stupid and negligent)
 
2012-06-25 11:30:41 AM  

jayhawk88: Can we just elect Matt Taibbi President already? You'd have a hard time convincing me he's any less qualified than anyone we've had in the office for at least the past 20 years.


He's a little over-emotional to be president, but that makes him one hell of a good journalist. That he routinely does the legwork to untangle banking stories that Bloomberg and FT can't even be bothered with makes him extraordinary. I don't think there's a single other journalistic outfit that even attempts to describe what the banks did or do it as accurately as he does.

The big guns - NY Times, WSJ, or the Washington Post - would do well just to reprint some of his articles verbatim. It's not like those papers are delivering stories with anything close to the same amount of depth.
 
2012-06-25 11:37:13 AM  
FTA: "Get caught rigging interest rates in 50 states, and the government goes right on handing you billions of dollars in public contracts."

And that's what really pisses me off.

Apparently, government needs money more than justice.
 
2012-06-25 11:41:34 AM  

ivelostfaithinhumanity: My cat is more qualified that most of our elected officials.


Cats would make terrible Presidents. They'd get distracted by the laser pointer during the morning intel PowerPoint brief and all press conferences would begin two hours late after the President woke up, and even then he'd spend the first ten minutes of the press conference with a leg thrown over his head while he licks his own ass. Not very Presidential behavior if you ask me.
 
2012-06-25 11:55:24 AM  
Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.
 
2012-06-25 11:56:17 AM  
Great article. I did not like how she attributed the bid rigging as the direct cause of 17 hospitals in poor New Jersey neighborhoods closing though.
 
2012-06-25 11:56:52 AM  
This is Taibbi's followup to the larger article. It links to some source documents that are interesting.
 
2012-06-25 12:06:38 PM  

Prank Call of Cthulhu: ivelostfaithinhumanity: My cat is more qualified that most of our elected officials.

Cats would make terrible Presidents. They'd get distracted by the laser pointer during the morning intel PowerPoint brief and all press conferences would begin two hours late after the President woke up, and even then he'd spend the first ten minutes of the press conference with a leg thrown over his head while he licks his own ass. Not very Presidential behavior if you ask me.


I don't know... that sounds exactly like some recent presidentail beahvior:..

"They'd get distracted by the laser pointer during the morning intel PowerPoint brief " George W Bush

"even then he'd spend the first ten minutes of the press conference with a leg thrown over his head while he licks his own ass" Wm Clinton.
 
2012-06-25 12:09:20 PM  

ivelostfaithinhumanity: jayhawk88: Can we just elect Matt Taibbi President already? You'd have a hard time convincing me he's any less qualified than anyone we've had in the office for at least the past 20 years.

My cat is more qualified that most of our elected officials.


Well, does he/she catch mice?
 
2012-06-25 12:09:44 PM  

xria: Surely it is well known (and easy to prove) stuff like this is happening - if you look at bond insurance rates and default rates of private and public bonds, private bonds can be insured statistically significantly cheaper than than you would expect (or public bonds are more expensive than they should be, whichever way you want to look at it).

This is one of the things that was being used to try and get the ratings agencies reformed/replaced/investigated before the 2007 banking collapse, where it became even more obvious they are either colluding with, or being totally duped by, the major Wall Street players. (The old Reagan defense strikes again - either criminal, or incredibly stupid and negligent)


It may well be known and easy to prove but who is going to do anything about it?

America created WallStreet to make it a World power, now it's leaching off itself in a very destructive manner.
 
2012-06-25 12:14:58 PM  
Weird, not a lot of political talk in the thread... I wonder if it has to do with the part where Obama squashed an investigation against Bill Richardson, or that the investigation took place during the Bush years.
 
2012-06-25 12:15:44 PM  
7 pages? Matt Taibbi can go fark hiimself...
 
2012-06-25 12:20:28 PM  

MugzyBrown: Weird, not a lot of political talk in the thread... I wonder if it has to do with the part where Obama squashed an investigation against Bill Richardson, or that the investigation took place during the Bush years.


Well, it's also a repeat of a thread from two days ago.
 
2012-06-25 12:22:30 PM  

jayhawk88: Can we just elect Matt Taibbi President already? You'd have a hard time convincing me he's any less qualified than anyone we've had in the office for at least the past 20 years.


Except he's economically and financially illiterate and makes his misinformed readers dumber with each unforgivably biased column he writes.
 
2012-06-25 12:25:16 PM  

Debeo Summa Credo: jayhawk88: Can we just elect Matt Taibbi President already? You'd have a hard time convincing me he's any less qualified than anyone we've had in the office for at least the past 20 years.

Except he's economically and financially illiterate and makes his misinformed readers dumber with each unforgivably biased column he writes.


He's not that bad.. he's a blowhard though. This article and scandal didn't need 7-8 pages. It really wasn't that complex.

Just tell the story, you don't need to BS surrounding it.
 
2012-06-25 12:45:38 PM  
Okay, I'm to the end of the third paragraph... They colluded to keep municipal bond rates low, which somehow hurt these various municipalities who were able to borrow at a lower rater which benefited the people in those communities.

Oh god, it goes on for seven pages?

I'm guessing the complaint is on the other side, the various institutions who are obligated to keep endowments in safe rides like muni-bonds. Yes, the barely inflation level interest rates have been tough on safety minded investors, but the money kept being there. One side kept buying muni's at lower and lower rates, the other side kept supplying them. You're going to have to summarize the problem in less than 1500 words to explain yourself on the internet.
 
2012-06-25 12:46:51 PM  
hiker9999


Smartest
Funniest

2012-06-25 12:06:38 PM

Prank Call of Cthulhu: ivelostfaithinhumanity: My cat is more qualified that most of our elected officials.

Cats would make terrible Presidents. They'd get distracted by the laser pointer during the morning intel PowerPoint brief and all press conferences would begin two hours late after the President woke up, and even then he'd spend the first ten minutes of the press conference with a leg thrown over his head while he licks his own ass. Not very Presidential behavior if you ask me.

I don't know... that sounds exactly like some recent presidentail beahvior:..

"They'd get distracted by the laser pointer during the morning intel PowerPoint brief " George W Bush

"even then he'd spend the first ten minutes of the press conference with a leg thrown over his head while he licks his own ass" Wm Clinton.


all press conferences would begin two hours late after the President woke up

Ronald Wilson Reagan
 
2012-06-25 01:17:31 PM  

wildcardjack: Okay, I'm to the end of the third paragraph... They colluded to keep municipal bond rates low, which somehow hurt these various municipalities who were able to borrow at a lower rater which benefited the people in those communities.

Oh god, it goes on for seven pages?

I'm guessing the complaint is on the other side, the various institutions who are obligated to keep endowments in safe rides like muni-bonds. Yes, the barely inflation level interest rates have been tough on safety minded investors, but the money kept being there. One side kept buying muni's at lower and lower rates, the other side kept supplying them. You're going to have to summarize the problem in less than 1500 words to explain yourself on the internet.


Uh, no, you basically got it totally backwards. As Taibbi pointed out (somewhere), municipal bonds aren't spent all at once but rather over several years. So *after* they borrow, say, $1billion to build a bridge or whatever, they then take that money and put it in an interest bearing account so that they can somewhat offset the interest costs. In theory, this is supposed to be a "blind" auction - so Bank A might offer them 3%, Bank B 3.25%, and so on. What was *actually* happening (if Taibbi is correct) is that the banks collaborated to split up the loans (so they'd all get some of the action), *then* the people running the auction would tell the winning bank what the absolute minimum rate they'd need to offer would be. So, instead of offering 3.25, they could bump it down to 3.05 and save themselves some money (and screw the municipality out of some money).
 
2012-06-25 01:24:25 PM  
Uh, no, you basically got it totally backwards. As Taibbi pointed out (somewhere), municipal bonds aren't spent all at once but rather over several years. So *after* they borrow, say, $1billion to build a bridge or whatever, they then take that money and put it in an interest bearing account so that they can somewhat offset the interest costs. In theory, this is supposed to be a "blind" auction - so Bank A might offer them 3%, Bank B 3.25%, and so on. What was *actually* happening (if Taibbi is correct) is that the banks collaborated to split up the loans (so they'd all get some of the action), *then* the people running the auction would tell the winning bank what the absolute minimum rate they'd need to offer would be. So, instead of offering 3.25, they could bump it down to 3.05 and save themselves some money (and screw the municipality out of some money).

Most likely both sides were playing the game.

Governments using influence for obtaining lower borrowing rates, while the banks played games with the 'savings' rate for the money on account.
 
2012-06-25 01:41:49 PM  
It costs darn near nothing (an investment manager, an accountant, and a receptionist) to set up a state treasury operation (you could share a single office across each state or region for smaller states), and it would provide a few stable, high paying jobs within the state. Less if you fold it into the highly likely to already be existing pension fund's treasury office. I have a hard time working up much pity for groups who outsource their comparison shopping of wall st to wall st.
 
2012-06-25 02:14:36 PM  

MugzyBrown: Uh, no, you basically got it totally backwards. As Taibbi pointed out (somewhere), municipal bonds aren't spent all at once but rather over several years. So *after* they borrow, say, $1billion to build a bridge or whatever, they then take that money and put it in an interest bearing account so that they can somewhat offset the interest costs. In theory, this is supposed to be a "blind" auction - so Bank A might offer them 3%, Bank B 3.25%, and so on. What was *actually* happening (if Taibbi is correct) is that the banks collaborated to split up the loans (so they'd all get some of the action), *then* the people running the auction would tell the winning bank what the absolute minimum rate they'd need to offer would be. So, instead of offering 3.25, they could bump it down to 3.05 and save themselves some money (and screw the municipality out of some money).

Most likely both sides were playing the game.

Governments using influence for obtaining lower borrowing rates, while the banks played games with the 'savings' rate for the money on account.


Except a large customer using the leverage of being a large customer is legal.

Competitors colluding on pricing is not.
 
2012-06-25 02:15:42 PM  

nelsonal: It costs darn near nothing (an investment manager, an accountant, and a receptionist) to set up a state treasury operation (you could share a single office across each state or region for smaller states), and it would provide a few stable, high paying jobs within the state. Less if you fold it into the highly likely to already be existing pension fund's treasury office. I have a hard time working up much pity for groups who outsource their comparison shopping of wall st to wall st.


I have pity for people who think a state treasury operation wouldn't be just as filled with cronyism, fraud, and abuse.
 
2012-06-25 02:17:32 PM  

SharkTrager: Except a large customer using the leverage of being a large customer is legal.


A government isn't using being large as leverage, it's using being powerful. The ability to make or not make your life miserable
 
2012-06-25 03:23:44 PM  

Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.


I'm not sure you're understanding the general thrust of this case. This isn't about the munis selling bonds, this is about them investing the funds they receive after the bonds are sold. The scam was that the cities had sold a bond and were now sitting on $100M or whatever that needed to be invested until it was used up. They hired a broker to run an auction and find them the best rate of return on their bond proceeds. The broker then rigged the auction with the various banks, letting them know how much they could shave off their rate of return in exchange for kickbacks. So, instead of the city getting the highest rate of return that the market would offer, they were getting gamed by the banks and brokers colluding to fix the prices.

The "non sequitur" about the NJ hospital closures actually wasn't - he might make his point clumsily, but the bottom line was that Jersey had sold bonds to pay for hospitals. The return from the sale of those bonds was invested at a lower rate because of this fraud. So Jersey didn't have enough money to keep hospitals open. Seems pretty straightforward to me, and perfectly relevant to highlight how this corruption harmed people. Now, the reason that the hospitals closed probably isn't that straightforward, but this fraud certainly didn't help the situation.

And how is his entire premise on interest rates inverted? I think you just misunderstood the kind of fraud occurring. In his followup piece, he does talk about how muni bonds were rated lower than corporate bonds up front, and how there's now congressional oversight into muni bond ratings. He also talks about muni bond sales being rigged as part of an industry-wide stink that's starting to blow about fixing interest rates on all sorts of transactions, by manipulating interbank loan rates.
 
2012-06-25 04:13:48 PM  

MugzyBrown: nelsonal: It costs darn near nothing (an investment manager, an accountant, and a receptionist) to set up a state treasury operation (you could share a single office across each state or region for smaller states), and it would provide a few stable, high paying jobs within the state. Less if you fold it into the highly likely to already be existing pension fund's treasury office. I have a hard time working up much pity for groups who outsource their comparison shopping of wall st to wall st.

I have pity for people who think a state treasury operation wouldn't be just as filled with cronyism, fraud, and abuse.


Of course it would, but since they're your employees they're far easier to monitor. Treasury operations are dead simple to audit, brokered auctions are much, much harder to check consistantly. Trust but verify. There's a reason corporate bonds don't have this same problem (corporations issue many more bonds than municipalities, and are generally much smaller than states, but find it worthwhile to roll their own treasury management).
 
2012-06-25 05:51:44 PM  

Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.


The article is pretty clear on the bid rigging. A fair auction is also a secret one, so no party knows what the other parties are bidding. These guys were telling their favorite bidders what the other guys were bidding so they could go only one basis point higher (as opposed to the ten or twenty they were actually willing to pay). This was outright theft of taxpayers' money, money that could have been used to keep said hospitals open if the banks hadn't stole it.
 
2012-06-25 05:57:33 PM  

YoungLochinvar: ***snip*** put it in an interest bearing account so that they can somewhat offset the interest costs. In theory, this is supposed to be a "blind" auction - so Bank A might offer them 3%, Bank B 3.25%, and so on. What was *actually* happening (if Taibbi is correct) is that the banks collaborated to split up the loans (so they'd all get some of the action), *then* the people running the auction would tell the winning bank what the absolute minimum rate they'd need to offer would be. So, instead of offering 3.25, they could bump it down to 3.05 and save themselves some money (and screw the municipality out of some money).


Not to be snarky, but they WERE found guilty with several hours of audio tapes and several corroborating witnesses, so I think we can just assume that his assertion that this was happening is correct.

We could also likely rely on his assertion that these 3 were the sacrificial lambs for the industry and this corruption will continue for the next few years until someone doesn't get their cut on time again.
 
2012-06-25 06:09:54 PM  

MugzyBrown: SharkTrager: Except a large customer using the leverage of being a large customer is legal.

A government isn't using being large as leverage, it's using being powerful. The ability to make or not make your life miserable


We're talking municipal governments. To a bank they are no different than any other customer. They have little they can do to a bank.

/former banker
 
2012-06-25 07:05:33 PM  

Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.


Shall we also ignore the fact that the bidding was rigged?
 
2012-06-25 07:35:19 PM  

BarkingUnicorn: Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.

Shall we also ignore the fact that the bidding was rigged?


I didn't read TFA but I think his point was that the hospitals' closing was not caused by a couple basis points shaved off, but Taibbi includes that to give a populist slant to the article and make his idiot readers think that the hospitals would be in terrific shape if it werent for the evil banks.

You watch, at some point there will be a thread on hospitals or other govt agencies going bankrupt due to overspending, mismanagement, corruption, or other factors and some idiot will post a link to this article claiming it was the banks fault.
 
2012-06-25 10:13:08 PM  

Debeo Summa Credo: BarkingUnicorn: Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.

Shall we also ignore the fact that the bidding was rigged?

I didn't read TFA but I think his point was that the hospitals' closing was not caused by a couple basis points shaved off, but Taibbi includes that to give a populist slant to the article and make his idiot readers think that the hospitals would be in terrific shape if it werent for the evil banks.

You watch, at some point there will be a thread on hospitals or other govt agencies going bankrupt due to overspending, mismanagement, corruption, or other factors and some idiot will post a link to this article claiming it was the banks fault.


Wouldn't this technically cover corruption?? (Ok, ok, snark off...)

Your point is absolutely valid, of course - but it's really hard to judge since we don't really know how much money the municipalities lost in the first place, nor we do know what factors actually drove those hospitals under. That said, given the current state of city & state gov't budgets thanks to the recession... well, shiat like this isn't gonna help.
 
2012-06-25 10:13:08 PM  

Debeo Summa Credo: BarkingUnicorn: Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.

Shall we also ignore the fact that the bidding was rigged?

I didn't read TFA but I think his point was that the hospitals' closing was not caused by a couple basis points shaved off, but Taibbi includes that to give a populist slant to the article and make his idiot readers think that the hospitals would be in terrific shape if it werent for the evil banks.

You watch, at some point there will be a thread on hospitals or other govt agencies going bankrupt due to overspending, mismanagement, corruption, or other factors and some idiot will post a link to this article claiming it was the banks fault.


I love how after the goddamn banksters colluded for over ten years to systematically defraud from every county in America an amount that's likely in the tens of billions of dollars - that were supposed to be spent on We The People - you have nothing to say except how mean Taibbi is for not blaming what happened to the hospitals on the Evil Gubmint.

Sometimes I kind of understand why the Republicans and banksters act like they do... If I could do whatever the hell I wanted and still have tools like you defend me and vote to let me keep stealing with impunity, I can't say I wouldn't be a little tempted. Just remember what people do with tools when they no longer have a use for them... tool.
 
2012-06-25 10:15:31 PM  

YoungLochinvar: Debeo Summa Credo: BarkingUnicorn: Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.

Shall we also ignore the fact that the bidding was rigged?

I didn't read TFA but I think his point was that the hospitals' closing was not caused by a couple basis points shaved off, but Taibbi includes that to give a populist slant to the article and make his idiot readers think that the hospitals would be in terrific shape if it werent for the evil banks.

You watch, at some point there will be a thread on hospitals or other govt agencies going bankrupt due to overspending, mismanagement, corruption, or other factors and some idiot will post a link to this article claiming it was the banks fault.

Wouldn't this technically cover corruption?? (Ok, ok, snark off...)

Your point is absolutely valid, of course - but it's really hard to judge since we don't really know how much money the municipalities lost in the first place, nor we do know what factors actually drove those hospitals under. That said, given the current state of city & state gov't budgets thanks to the recession... well, shiat like this isn't gonna help.


Just a *bit* harsh, don't you think? Debeo is right - Taibbi never really *defends* his point with any evidence - he just throws it in there with an implied "Coincidence?? YOU decide (insert snarkily raised eyebrow here...)"

That, of course, in no way mitigates what these bankers/brokers did...
 
2012-06-26 05:29:00 AM  
FTA: "More interesting, though, were the stories about political payoffs. In 2001, CDR hired a consultant named Ron White, a Philadelphia bond attorney who happened to be the chief fundraiser for then-mayor John Street. CDR gave White two tickets to the 2003 Super Bowl in San Diego plus a limo - a gift worth $10,000. As his "guest," White took Corey Kemp, the city treasurer for Philadelphia, who, 16 days later, awarded CDR a $150,000 contract to advise the city on swap deals. But that wasn't the end of the gravy train: CDR doled out those swap deals to selected banks, who in return kicked back $515,000 to CDR for steering city business their way.

So a mere $10,000 bribe to a politician - a couple of Super Bowl tickets and a limo - scored CDR a total of $665,000 of the public's money. If you want to know why Wall Street has been enjoying record profits, here's your answer: Corruption is a business model that brings in $66 for every dollar you invest."


Could have cut a few pages of wordy BS out. And, why wait till page 5 to introduce the (surprise, surprise) government involvement.
 
2012-06-26 08:11:11 AM  

Debeo Summa Credo: BarkingUnicorn: Quiefenburger: Taibbi makes too many generalizations about a business he clearly doesn't understand, while spicing up an otherwise dull subject with histrionics. Amusingly, his entire premise on the interest rates involved in a bidding process is inverted, which demonstrates just how clueless he is about his subject matter. And loved this non sequitor, "more than a dozen New Jersey hospitals have closed, mostly in poor neighborhoods" because these crooks shaved a few basis points off a winning bid. Also, lets ignore the fact that these negotiated bond issues have to actually be sold after the banks place their bid. Of course that doesn't resonate with his Occupy Wall Street target audience. I wouldn't dare call this objective or informed journalism.

Shall we also ignore the fact that the bidding was rigged?

I didn't read TFA but I think his point was that the hospitals' closing was not caused by a couple basis points shaved off, but Taibbi includes that to give a populist slant to the article and make his idiot readers think that the hospitals would be in terrific shape if it werent for the evil banks.

You watch, at some point there will be a thread on hospitals or other govt agencies going bankrupt due to overspending, mismanagement, corruption, or other factors and some idiot will post a link to this article claiming it was the banks fault.


Actually, Quiefenburger's point was that Taibbi didn't understand what was going on (note the piece I've bolded for you). Problem with that point is that anybody who paid attention or was involved in this case can tell you Taibbi explained it just fine. You may not care for the populist bits he drops in (and the article is a bit long), but that's a distraction from the point of the article -- that the banks were rigging bids and costing state and local governments enormous sums of money. $100k a local government doesn't get is $100k they have to come up with to close the gap on their borrowing costs, which means more layoffs and fewer services. It's theft of public money and quite damaging given the scale.

Does that mean it was responsible for hospitals getting shut down? No. His point there was merely that we've allowed this theft to go on and continued pandering to these scumbags while gutting public services for people who need them, which is disgraceful.
 
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