HARRISBURG, PA FILES FOR BANKRUPTCY

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$2.9 TRILLION MUNICIPAL BOND MARKET WEAKENS

Wall Street’s economic death grip continues to have consequences and repercussions — both politically and economically. The Banks’ push on mortgage bonds, derivative securities, and hedge products has resulted in loss of of money, loss of revenue and loss of prospects. The biggest contributor is the housing and mortgage market, with jobs taking up second place. Revenues are shrinking as money needed to restore the economy to a firm foundation is withheld by the megabanks, some of whom (Goldman) are crying poverty.

According to a Wall Street Journal report written by Michael Corkery and Kris Maher, the capital city of Pennsylvania filed for bankruptcy protection in a case that follows other cities, but its sheer size makes it a case to watch.

Harrisburg rejected selling or leasing assets to pay down debt. In Arizona, the government sold the capital buildings in Phoenix and leased them back in what some are calling a sweetheart deal that benefits the buys more than the state or the taxpayers.

It’s the politics that is even more interesting than the economics. The split city council was taken over by members who were tired by being “pushed around,” an echo of the Occupy Wall Street movement. Last month Jefferson County, Alabama used the threat of bankruptcy to squeeze concessions from creditors.

Since 1980 there have been 48 official bankruptcy filings for cities, counties and other governmental units. But that is the tip of the iceberg. Hundreds more have been negotiating, like Jefferson County in Alabama to get relief from creditors. But what they should be doing is prosecuting claims for impact costs and lost revenues from the Banks, who used a variety of means to evade payment of taxes, fees and expenses relating to the false run-up of prices and housing activity over the last 10 years.

Local government, taking their information from the Banks’ were led to believe that their area was growing and that more services and infrastructure was needed, thus committing themselves to huge debt and expenses that could have been paid if the representations and analysis from Wall Street was true. Like the ratings on the “mortgage backed” bonds, the analysis from Wall Street was false and the ratings firms should have known that, just as they should have known that the mortgage bonds were a scam.

So-called experts are being rolled out by the dozen to say that the Harrisburg bankruptcy does not foreshadow more local government bankruptcies. But a quick look at the finances around the country shows clearly that many, if not most cities and counties, are on the verge of a collapse of their financial system. The money they are missing is sitting on Wall Street the titans of which won’t give it back.

Local government is like small and medium sized businesses. It needs the revenue from ordinary consumers to function, provide fire, police and other social services. It needs that revenue to pay off bonds and other debt to pay for new roads or repairing roads, bridges and tunnels.

The consumer class has run out of money and run out of equity. Ordinary people have virtually no equity equity left in their homes or a steep reduction, their 401k is less, and their pension benefits are being eroded by losses from mortgage bond chicanery and creeping inflation as the Federal Reserve engages in its third round of quantitative easing — i.e., printing money — to cover up the $16 Trillion “bailout” of the Banks.

If the federal government and federal reserve spent 1/4 of what turned out to be the Great Bailout of Banks for Nonexistent Losses, this problem would not exist. As taxpayers, we gave Wall Street $16 Trillion. We have nothing to show for it except worthless paper transactions involving worthless securities that were fraudulently issued and fraudulently represented as backed by mortgage loans. None of it was true.

At some point, we are either going to get that money back and put it into a hungry economy or we will give up and simply accept the fact that the Banks run the country, that the government of the people, by the people, for the people no longer exists.

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |