Friday, March 13, 2009

Friday: Getting It Done*

"Rome is burning, and we just wasted a week," he said, shortly after showing video of a blazing couch on Semple Street. "One idiot that decides to place an accelerant on the wood of that porch, and that whole row of houses could go up." (P-G, Rich Lord)

Alright, I never considered that couches, when sitting outside, pose an intolerable threat that someone will light them on fire.

We as public officials can't allow dangerous situations to continue. Good that Councilman Kraus is so adamant about protecting us.

District Attorney Stephen A. Zappala Jr. said today that toxicology results from the Medical Examiner's office showed that Mr. Pettway had cocaine in his system but also chemicals from a solvent typically used to clean VCRs. The club sold the solvent -- advertised under the brand "Maximum Impact" -- to patrons, who would use them to get high. (P-G, Daniel Malloy)

Do you suppose the fact that Club Pittsburgh operates without a proper adult-entertainment permit -- and its owners are repeatedly assured by City officials that inspectors and law enforcement will look the other way -- contributes to an atmosphere in which people feel liberated to huff chemicals, snort blow or sell both? As long as they have discovered a lawless and "under-the-radar" hole in the universe, might as well enjoy, right?

I guess people who put couches on their porch, by and large, aren't known for having a generous spirit.

Mr. Zappala said that his office would not charge the club with involuntary manslaughter because the death was more likely caused by the cocaine than the solvent. (P-G, ibid)

At least we can take solace in the fact that Club Pittsburgh was cleared of wrongdoing by a District Attorney that is part of a tradition of public service and a legacy of legal excellence.

##

The Pittsburgh Water and Sewer Authority board today turned back city Councilman Patrick Dowd's call for an audit of a complex $414 million debt deal it entered into last year. (P-G, Rich Lord)

Shocker.

[City Finance director / Water Authority chairman Scott Kunka] said Mr. Dowd never expressed concerns until after he began running for mayor. (P-G, ibid)

Patrick Dowd has only been on the Water Authority board for about three months. It probably took him that long to unravel this horrendous scam.

Now. Which firm, do we remember from Sexy Slide #6, was most deeply ingrained in the swaptions scheme?

J.P. Morgan Chase.

Prosecutors have informed at least five former JPMorgan derivative bankers that they're targets in an investigation of whether banks conspired to overcharge local governments, according to the Financial Industry Regulatory Authority, or Finra, the largest self-regulator for securities firms doing business in the U.S. (Bloomberg, Selway & Braun)

Gulp.

I'll add right now that a lot of these problematic JPMorgan deals seem to have taken place across the state of Pennsylvania. Continuing...

JPMorgan lured municipalities into derivative deals by offering upfront cash payments in exchange for a pledge by the local government to agree to enter interest-rate swaps with the bank at a future date.

In these deals, which were rarely put out for public competitive bidding, the bank said its clients would come out ahead if intrest rates increased in the future.

JPMorgan and competitors routinely didn't disclose their fees for these contracts, public records show. In some cases, the bank made more money than it paid out. In Erie, Pennsylvania, JPMorgan gave the school district $755,000 upfront and collected $1.2 million in fees. (Bloomberg, ibid)

See, if I were a television news reporter, I'd go barreling into JP Morgan Chase's local offices at 301 Grant Street unannounced with a camera and the slideshow, and demand of them how they can justify putting water bill ratepayers at such extraordinary risk, and ask them how much in total they've made through transaction fees off of us over the past year alone.

Just as lenders that offered subprime mortgages relied on an army of local brokers to sign up less-than-creditworthy borrowers, JPMorgan developed ties with local municipal bond firms, advisers and lawyers to land deals.

JPMorgan gave these firms work in return for promoting the bank to elected officials, Charles LeCroy, JPMorgan's top revenue producer in public finance, told an outside lawyer for the bank in 2004, according to court filings in Philadelphia. (Bloomberg, ibid)

*-UPDATE: Um. Heh heh. Oh boy. An alert Comet reader suggested that I read that article carefully all the way through to the end. There are some familiar names. More on this will be amassing in the comments section I am sure.

Adding insult to injury, it appears that the Pittsburgh Water Authority was one of the very last targets of JP Morgan's little municipal bond-swap milking process, h/t Null Space.

Matt Zames, the head of rates, foreign exchange and municipal bonds at JPMorgan, said Tuesday in a memo to employees, "The risk/return profile of this business is such that the returns no longer justify the level of resources we have allocated to it."

What he means by that is, too many of the governments that are our customers are going bankrupt before they can pay us back. Pittsburgh was essentially our last big score.

I'm telling you, I would sink your teeth into this story while it's still on the ground floor. Do you think the latest bizarre manifestation of the all-consuming greed of Wall Street can't break out here? It always happens here.

5 comments:

  1. Great post Bram.

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  2. Matt H clearly has something to do with all of those stories.

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  3. Matt H has no idea what he is supporting.

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  4. If you look at his blog you can clearly see what and who he supports.

    He never hides that and he should be credited for it.

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  5. He never hides? He was exposed on this blog???

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