Should Detroit's municipal retirees lose their pensions?

[g5000]

Do you fools think Detroit is the only bankrupt city?

Do you think only Democrats increased the gifts showered on public employees around the country during the Wall Street derivatives boom?

I strongly suggest you investigate the derivative schemes your own local metropolis is all wound up in. You might find your hair falling out.

You're the one talking out of his ass.

You back up what you're saying or shut up and keep playing with yourself

I love it when an ignoramus sets themselves up to have their ass handed to them.

You clearly have not been paying attention.

Let's start with the crooked derivative swaps that brought down Jefferson County, AL.

The Securities and Exchange Commission today charged J.P. Morgan Securities Inc. and two of its former managing directors for their roles in an unlawful payment scheme that enabled them to win business involving municipal bond offerings and swap agreement transactions with Jefferson County, Ala. This is the SEC's second enforcement action arising from Jefferson County's bond offerings and swap transactions.

I carry a poster sized copy of this chart in my trunk for public speeches. Take a gander at it. I predict a similar scheme will be found behind Detroit's fiasco.


Stockton and the Politics of Austerity

The “Interest-Rate Swaps” Scam

The issue turns on the “credit default swaps” that the banks tricked cities into taking. This is another financial weapon of mass destruction, like sub-prime mortgage loans. Cities issue bonds to get cash for projects, thus they must make regular payments on the bonds. Wall Street is the aggressive party here, not the cities. The financial boys try to sell the cities a form of insurance called an “interest-rate swap”. The deal is that if interest rates stay high, the bank will pay them extra as insurance, but if the rates stay low, then the cities pay the bankers.

Somehow the Banksters were eerily prescient: since 2008, the Fed has kept interest rates at zero “to stimulate the economy”. Now cities, school districts and water boards pay the banks millions of dollars a month. But the kindly bankers do permit cities to pay exorbitant termination fees. Between 2006 and 2008, banks collected at least $28 billion from cities on top of the swap payments. (3)



The Office of the Comptroller of the Currency reported in 2012 that U.S. banks held $183.7 trillion in interest rate contracts. Only four firms represent 93% of total derivative holdings: JPMorgan Chase, Citibank, Bank of America and Goldman Sachs. (4) They are the bedrock of the derivative market.



“Interest rate swaps are today the single largest type of derivative in existence, making up more than 80% of the value of all derivative contracts signed by U.S. commercial banks. Measured by their notional amounts (the “notional” of a swap is a fictive sum of money corresponding to an actual principle on real debt), U.S. banks have an outstanding $202 trillion in interest rate derivative contracts. In other words, U.S. banks are using swaps to transform interest rate payments on $202 trillion in debt, owed by corporations, governments, and other banks, so that these entities can switch from variable rates to fixed, or vice versa, and so that they can peg their debt payments to any number of global rates.

The Auditor General of Pennsylvania:
Philadelphia Derivatives Show Danger of Failure to Rein in Wall Street

The true extent of potential losses to taxpayers remains unknown, but could be catastrophic. For example, all Pennsylvania taxpayers are exposed to enormous liabilities from swaps entered into by public entities in Philadelphia alone, according to recent financial reports:

City of Philadelphia – 6 active swaps with a net “negative fair value” (the cost if the swaps were terminated as of the date of the financial report) of $122.6 million; swaps related to $1.25 billion in total debt

School District of Philadelphia – 12 active swaps with a net negative fair value of $124.7 million; swaps related to $682.6 million in debt

SEPTA – 3 active swaps with a net negative fair value of $52.4 million; swaps related to $345.5 million in debt

Philadelphia Authority for Industrial Development – 3 active swaps with a net negative fair value of $27.7 million; swaps related to $588.2 million in debt

Philadelphia Intergovernmental Cooperation Authority – 4 active swaps with a net negative fair value of $45.3 million; swaps related to $253.1 million in debt

Wagner has sounded the alarm about swaps for months. A 2009 special investigation conducted by the Department of the Auditor General found that 107 school districts and 86 local governments had financed $14.9 billion in debt tied to interest-rate swaps. This debt equals an amount that is more than half of the commonwealth's budget.

Last week:
San Bernardino Seeks Ruling on Chapter 9 Bankruptcy Eligibility

The city sought bankruptcy on Aug. 1, claiming a cash crisis prevented it from negotiating with creditors first, which is a requirement under California law. The California Public Employees’ Retirement System and the San Bernardino Public Employees’ Association have challenged the legality of the filing.

Adelanto declares fiscal emergency

The Adelanto City Council unanimously declared a fiscal emergency this week, opening the door to a potential tax increase to help shore up a $2.5 million deficit, Mayor Cari Thomas said.
Tax revenues of $4.5 million are not enough to cover the city's $7 million police and fire budget and other essential services to residents, and the city's current cash reserves are expected to be depleted by mid to late 2014, according to a report prepared for the Council by City Manager D. James Hart.

City Council in Harrisburg Files Petition of Bankruptcy

The City Council of Harrisburg, Pennsylvania’s financially troubled capital, filed for bankruptcy on Wednesday, a surprise move that was immediately opposed by the mayor and Gov. Tom Corbett, who argued that the filing was illegal under state law.

The filing — which listed debts in excess of $400 million, largely associated with a failed trash incinerator — pitched the city into political confusion.

Dogfight Ahead in Stockton, CA Bankruptcy

On Monday, U.S. Bankruptcy Judge Christopher Klein ruled that the city of Stockton, CA, will be allowed to enter bankruptcy.

The biggest part of Stockton’s debt is the $900 million it owes to the California Public Employees Retirement System (CalPERS).

Stockton and the Politics of Austerity

The “Interest-Rate Swaps” Scam

The issue turns on the “credit default swaps” that the banks tricked cities into taking. This is another financial weapon of mass destruction, like sub-prime mortgage loans. Cities issue bonds to get cash for projects, thus they must make regular payments on the bonds. Wall Street is the aggressive party here, not the cities. The financial boys try to sell the cities a form of insurance called an “interest-rate swap”. The deal is that if interest rates stay high, the bank will pay them extra as insurance, but if the rates stay low, then the cities pay the bankers.

Somehow the Banksters were eerily prescient: since 2008, the Fed has kept interest rates at zero “to stimulate the economy”. Now cities, school districts and water boards pay the banks millions of dollars a month. But the kindly bankers do permit cities to pay exorbitant termination fees. Between 2006 and 2008, banks collected at least $28 billion from cities on top of the swap payments. (3)



The Office of the Comptroller of the Currency reported in 2012 that U.S. banks held $183.7 trillion in interest rate contracts. Only four firms represent 93% of total derivative holdings: JPMorgan Chase, Citibank, Bank of America and Goldman Sachs. (4) They are the bedrock of the derivative market.



“Interest rate swaps are today the single largest type of derivative in existence, making up more than 80% of the value of all derivative contracts signed by U.S. commercial banks. Measured by their notional amounts (the “notional” of a swap is a fictive sum of money corresponding to an actual principle on real debt), U.S. banks have an outstanding $202 trillion in interest rate derivative contracts. In other words, U.S. banks are using swaps to transform interest rate payments on $202 trillion in debt, owed by corporations, governments, and other banks, so that these entities can switch from variable rates to fixed, or vice versa, and so that they can peg their debt payments to any number of global rates.

Yes, Detroit is chock full of negroes who asked for more than they could afford. Sure. Go right ahead. That, too, is a large part of the problem. But you can't get into too much debt unless someone loans it to you.

 

[Crackerjaxon]

They worked for them and deserve the pensions. Financial realities may force a smaller amount on them, but they should be paid. Maybe the city can float a bond or something after it gets on its feet. Maybe a penny or two rise in sales tax.

No, I don't think it is right that they won't be paid. The city contracted with them and should live up to its promises.

"After it gets on its feet"....????

Yeah, it's called an idiom. You can look it up.

 

[thanatos144]

If you rob a bank, how much of it do you get to keep when the Law finally catches up to you?

You celebrate a 70 year old woman who spent her life working as a secretary for the city of Detroit losing her pension?

How would you react if you were that woman?

1) Yes.

2) No way I could be that woman.

There ain't enough money to make me work in Dee-Troit.

Not gonna happen.

Besides, down here on Planet Earth, nobody is going to lose ALL their pensions and/or Health Benefits.

But they will take it in the ear.

All those year they were stealing and, yes.... They were flat-out fucking STEALING, they're lucky to get anything fr Dee-Troit.

It is THEIR fault Dee-Troit failed.

They have far, far, FAR more workers as a percent-to-taxpayers than almost any other City besides ultra-rich Cities like Sang Frang and one or two others.

They did it to themselves. Completely.

Let them suffer.

Bad

You must be young cause Detroit wasn't always like it is.... It is this way now because of progressive rot and union thievery.

 

[Edgetho]

Found it...

Detroit overstaffed compared to other cities | The Detroit News

Think about that.

Twice as many employees as the VERY affluent and VERY well-run Indianapolis.

More than any other City on the Chart except for the uber-rich, VERY tourist-oriented Sang Frang.

No, I'm NOT going to feel sorry for workers losing something they were stealing in the first place

 

[Katzndogz]

Work 35 years and have your pension pulled

Republican version of the American Dream

If you rob a bank, how much of it do you get to keep when the Law finally catches up to you?

You celebrate a 70 year old woman who spent her life working as a secretary for the city of Detroit losing her pension?

How would you react if you were that woman?

How about a 70 year old woman who sank everything she had into Detroit's municipal bonds. Should she lose everything? How would you react if you were that woman?

The Detroit pensioners are secured creditors just like every other secured creditor.

 

[g5000]

Let's go to New Jersey:

It was perhaps the most reckless political giveaway in New Jersey political history. You're paying for it and your grandchildren will probably pay for it, too.

Nine years ago, the Legislature approved Gov. Donald T. DiFrancesco's plan to boost public employee pension payouts by 9 percent. It was the first significant change to the basic pension formula in 44 years.

There was one small problem: The state never had the money to pay for it. It was, as the federal Securities and Exchange Commission said last month, part of a "fraud" protected and perpetuated by accounting tricks that would make Bernie Madoff stand up in his jail cell and cheer.

Donald T. DiFrancesco is a Republican. And when he was Senate President in 1994, he was able to stop a plan to end state subsidies to public employee pensions that would have helped balance the state budget.

 

[syrenn]

If it was your mothers pension getting yanked? Are we now punishing the retired for the deals made by crooked politicians and even more crooked Union thugs?

I guess my mom would have to move in with us. The Federal Government shouldn't bail out any city. They don't have the $$$$.

No we should honor our debts. I am also not talking about a bail out. I am talking about selling off assets to honor their debts. Even still they will get pennies on the dollar. If this was you or me this is how it would go down.

and any pensions paid should also get pennies on the dollar.... if that at all.

 

[thanatos144]

Found it...

Detroit overstaffed compared to other cities | The Detroit News

Think about that.

Twice as many employees as the VERY affluent and VERY well-run Indianapolis.

More than any other City on the Chart except for the uber-rich, VERY tourist-oriented Sang Frang.

No, I'm NOT going to feel sorry for workers losing something they were stealing in the first place

What has that to do with those retired? Those idiots are still working and have made their bed they can fucking sleep in it. They are still young enough to get a new job.

 

[Katzndogz]

Detroit probably could have afforded a boost in pension payouts if the city had not continued to grow as it was reducing population.

 

[freedombecki]

Work 35 years and have your pension pulled

Republican version of the American Dream

The situation sounds irresponsible to me, too, rightwinger. Were funds set aside out of paychecks, or was it a wink-wink shenanigan between corrupt politicians and union bosses aglow with taking other people's money for funds they did not wish to avail to the employees, thinking they'd be dead and gone before anyone knew of their graft of popularity based on greedy promises?

If, however, the workers actually set aside from their pay money voluntarily, it's their money, and the question is, who made off with their money or frittered it away on funding other priorities as they went?

Someone wasn't looking out for the workers or for the city of Detroit which is now undergoing bankruptcy.

I don't like this one bit.

 

[Freemason9]

Lots of talk about doing that and i say go for it. These were all affirmative action hires and didn't deserve the job in the first place.

Absolutely. This is an important battle in the War Against American Workers. The GOP can win a key victory here.

 

[Edgetho]

You celebrate a 70 year old woman who spent her life working as a secretary for the city of Detroit losing her pension?

How would you react if you were that woman?

1) Yes.

2) No way I could be that woman.

There ain't enough money to make me work in Dee-Troit.

Not gonna happen.

Besides, down here on Planet Earth, nobody is going to lose ALL their pensions and/or Health Benefits.

But they will take it in the ear.

All those year they were stealing and, yes.... They were flat-out fucking STEALING, they're lucky to get anything fr Dee-Troit.

It is THEIR fault Dee-Troit failed.

They have far, far, FAR more workers as a percent-to-taxpayers than almost any other City besides ultra-rich Cities like Sang Frang and one or two others.

They did it to themselves. Completely.

Let them suffer.

Bad

You must be young cause Detroit wasn't always like it is.... It is this way now because of progressive rot and union thievery.

I'm 65.

I lived in Cleveland for a while and visited Dee-Troit a few times.

They changed. They became aggressively stupid. Aggressively dimocrap. Aggressively in-your-face, we're-gonna-do-whatever-the-fuck-we-feel-like.

I saw it when I was in Cleveland. Cleveland was almost as bad and that's why I left in 1977.

All those Rust Belt Cities got that way when they were taken over by dimocrap scum.

With one exception being Pigsburg. And even though they were run by dimocraps, the population around Pittsburgh was pretty Conservative and the dimocraps had to tread lightly.

Pittsburgh made the transition with no real troubles.

And NO place got hit harder than they did. The Steel Industry?!!? Yikes! Did they ever get hammered.

But they made it by using their brains.

Dee-Troit, Cleveland and their surrounding areas.... They kept electing stupid dimocrap scumabgs that kept doing the same shit and kept spending money they didn't have and kept hiring people they couldn't afford to pay and getting elected and re-elected for it.

That's all dimocrap scum care about... Elections. They don't care about the people they're supposed to be taking care of. They only care about stealing shit.

 

[syrenn]

If you rob a bank, how much of it do you get to keep when the Law finally catches up to you?

You celebrate a 70 year old woman who spent her life working as a secretary for the city of Detroit losing her pension?

How would you react if you were that woman?

How about a 70 year old woman who sank everything she had into Detroit's municipal bonds. Should she lose everything? How would you react if you were that woman?

The Detroit pensioners are secured creditors just like every other secured creditor.

all investments carry risks...


it sucks... but it is what it is.

 

[thanatos144]

I guess my mom would have to move in with us. The Federal Government shouldn't bail out any city. They don't have the $$$$.

No we should honor our debts. I am also not talking about a bail out. I am talking about selling off assets to honor their debts. Even still they will get pennies on the dollar. If this was you or me this is how it would go down.

and any pensions paid should also get pennies on the dollar.... if that at all.

Why? all pensions according to Michigan constitution should have already been paid for. If not and they get pennies on the dollar it means WE the people have committed fraud. It will be a sad day... It is gong to happen I know but it is a sad day.

 

[ScreamingEagle]

what happens here is going to probably be the template for what happens in many cities across the country....and those government people should have seen it coming....they had 50 years warning in Detroit....

inflated government pensions and limosine healthcare plans are going to evaporate or be cut to the bone....the money is just not there....

but since they are Dimocraps i'm sure they will be just fine with food stamps and welfare plus paying for their own Obammycare like all the many other underpaid/underemployed/jobless people in this country..

 

[g5000]

If you rob a bank, how much of it do you get to keep when the Law finally catches up to you?

You celebrate a 70 year old woman who spent her life working as a secretary for the city of Detroit losing her pension?

How would you react if you were that woman?

How about a 70 year old woman who sank everything she had into Detroit's municipal bonds. Should she lose everything? How would you react if you were that woman?

The Detroit pensioners are secured creditors just like every other secured creditor.

A bond is not a 100 percent guarantee. It is a risk, and you cannot allow risk takers to be constantly bailied out. That undermines our entire system. It causes greater and greater risks to be taken by the people managing our money.

That's how we got in this mess, and why it continues.

If you really care about the emotionally appealing old lady, then start demanding financial reform from our politicians. I am getting really tired of hearing apologists for Wall Street who are completely ignorant of the fact their own pockets are being robbed.

 

[rightwinger]

If you rob a bank, how much of it do you get to keep when the Law finally catches up to you?

You celebrate a 70 year old woman who spent her life working as a secretary for the city of Detroit losing her pension?

How would you react if you were that woman?

1) Yes.

2) No way I could be that woman.

There ain't enough money to make me work in Dee-Troit.

Not gonna happen.

Besides, down here on Planet Earth, nobody is going to lose ALL their pensions and/or Health Benefits.

But they will take it in the ear.

All those year they were stealing and, yes.... They were flat-out fucking STEALING, they're lucky to get anything fr Dee-Troit.

It is THEIR fault Dee-Troit failed.

They have far, far, FAR more workers as a percent-to-taxpayers than almost any other City besides ultra-rich Cities like Sang Frang and one or two others.

They did it to themselves. Completely.

Let them suffer.

Bad

Thank you....it clarifies your character

As long as you are not taking the hit, it is fuck you, what do I care?

 

[Edgetho]

Lots of talk about doing that and i say go for it. These were all affirmative action hires and didn't deserve the job in the first place.

Absolutely. This is an important battle in the War Against American Workers. The GOP can win a key victory here.

I wouldn't call them "Affirmative Action" hires.

"Political Hires"? Hell yeah.

But I wouldn't introduce race into the equation.

These were political hires.

You hire people that will work for the same thing you're working for -- Getting re-elected.

Because if you don't get re-elected, all the people you hired might very well get layed off.

Couldn't have that.

I wouldn't go so far as to introduce race, it's dimocrap scum being dimocrap scum. That they happened to be mostly Black is a coincidence.

Know much about Boston Politics?

Same thing, except they're not Black.

dimocraps are scumbag, thieving, lying, robbing, corrupt motherfuckers no matter what color they are. No matter where they are.

 

[Edgetho]

You celebrate a 70 year old woman who spent her life working as a secretary for the city of Detroit losing her pension?

How would you react if you were that woman?

1) Yes.

2) No way I could be that woman.

There ain't enough money to make me work in Dee-Troit.

Not gonna happen.

Besides, down here on Planet Earth, nobody is going to lose ALL their pensions and/or Health Benefits.

But they will take it in the ear.

All those year they were stealing and, yes.... They were flat-out fucking STEALING, they're lucky to get anything fr Dee-Troit.

It is THEIR fault Dee-Troit failed.

They have far, far, FAR more workers as a percent-to-taxpayers than almost any other City besides ultra-rich Cities like Sang Frang and one or two others.

They did it to themselves. Completely.

Let them suffer.

Bad

Thank you....it clarifies your character

As long as you are not taking the hit, it is fuck you, what do I care?

Only if it's a libtard

 

[syrenn]

No we should honor our debts. I am also not talking about a bail out. I am talking about selling off assets to honor their debts. Even still they will get pennies on the dollar. If this was you or me this is how it would go down.

and any pensions paid should also get pennies on the dollar.... if that at all.

Why? all pensions according to Michigan constitution should have already been paid for. If not and they get pennies on the dollar it means WE the people have committed fraud. It will be a sad day... It is gong to happen I know but it is a sad day.

really.... you think they are paid for???





they are funded with investments.... they are not "paid" for. How does one pay for something that is open ended? You get someone who works for 20 years and retires.... and then collects a pension for another 30+ years? Do tell.... how do you pay for that up front?

sorry... the unions screwed the pooch on this one.