Matthew Lesko's infomercials became infamous in the 1990s because he offered something seemingly impossible - a free source of income that could be tapped by even the stupidest person. In pop culture he's now basically synonymous with fishy scams and dangerous financial schemes (even though his shtick was simply to point out various government grants and assistance programs).
Lesko's basic sales pitch - "FREE MONEY!" - was pretty effective when used by bankers on public officials and civil servants in local governments across the US over the last decade and a half. Cities, counties, and local agencies staked huge sums of public revenue on the idea that they could generate free money by entering into complex financial deals called interest rate swaps with Wall Street. It was supposed to be a win-win game. Instead the deals have gone toxic for local governments.
I've been writing about IR swaps lately for some local publications in the Bay Area. The gist of it is that, as bloomberg reporters pointed out recently, local governments across America have been drained of upwards of $20 billion in revenues by Wall Street's titans. Meanwhile the Obama administration, Congress, and federal regulators in the Federal Reserve Bank and US Comptroller's Office sit idly by, offering no plans to bail out local communities.
Oakland's Toxic Deal With Wall Street - How Goldman Sachs is Taking Millions from Oakland Taxpayers While the City Guts Services
The Losing Bets - San Francisco and Bay Area Public Agencies Are on the Hook for Millions in IR Swap Payments to JP Morgan, Morgan Stanley, Wells Fargo, Goldman Sachs, and other Wall Street Titans.
No comments:
Post a Comment