The Detroit Bail-In Template: Fleecing Pensioners To Save The Banks

GlobalResearch August 5 2013

Bank of AmericaThe Detroit bankruptcy is looking suspiciously like the bail-in template originated by the G20’s Financial Stability Board in 2011, which exploded on the scene in Cyprus in 2013 and is now becoming the model globally. In Cyprus, the depositors were “bailed in” (stripped of a major portion of their deposits) to re-capitalize the banks. In Detroit, it is the municipal workers who are being bailed in, stripped of a major portion of their pensions to save the banks.

Bank of America Corp. and UBS AG have been given priority over other bankruptcy claimants, meaning chiefly the pensioners, for payments due on interest rate swaps they entered into with the city. Interest rate swaps – the exchange of interest rate payments between counterparties – are sold by Wall Street banks as a form of insurance, something municipal governments “should” do to protect their loans from an unanticipated increase in rates. Unlike ordinary insurance, however, swaps are actually just bets; and if the municipality loses the bet, it can owe the house, and owe big. The swap casino is almost entirely unregulated, and it is a rigged game that the house virtually always wins. Interest rate swaps are based on the LIBOR rate, which has now been proven to be manipulated by the rate-setting banks; and they were a major contributor to Detroit’s bankruptcy.

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The Largest U.S. Cities Are Becoming Cesspools Of Filth, Decay And Wretchedness

Once upon a time, the largest U.S. cities were the envy of the entire world. Sadly, that is no longer the case.

Sure, there are areas of New York City, Boston, Washington and Los Angeles that are still absolutely beautiful but for the most part our major cities are rapidly rotting and decaying.

Cities such as Detroit, Cleveland, Baltimore, Memphis, New Orleans, St. Louis and Oakland were all once places where middle class American workers thrived and raised their families.

Today, all of those cities are rapidly being transformed into cesspools of filth, decay and wretchedness. Millions of good jobs have left our major cities in recent decades and poverty has absolutely exploded.

Basically, you can turn out the lights because the party is over. In fact, some major U.S. cities are literally turning out the lights. In Detroit, about 40 percent of the streetlights are already broken and the city cannot afford to repair them.

So Mayor Bing has come up with a plan to cut the number of operating streetlights almost in half and leave vast sections of the city totally in the dark at night.

I wonder what that will do to the crime rate in the city. But don’t look down on Detroit too much, because what is happening in Detroit will be happening where you live soon enough.

A recent Bloomberg article described Mayor Bing’s plan to eliminate nearly half of Detroit’s streetlights….

Detroit, whose 139 square miles contain 60 percent fewer residents than in 1950, will try to nudge them into a smaller living space by eliminating almost half its streetlights.

As it is, 40 percent of the 88,000 streetlights are broken and the city, whose finances are to be overseen by an appointed board, can’t afford to fix them. Mayor Dave Bing’s plan would create an authority to borrow $160 million to upgrade and reduce the number of streetlights to 46,000. Maintenance would be contracted out, saving the city $10 million a year.

What this means is that there are going to be a lot of neighborhoods that will have the lights turned off permanently.

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