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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRahm Emanuel Is Trying to Pay Wall Street Banks Even More for Chicago's Bad Financial Deals
http://readersupportednews.org/opinion2/277-75/34660-rahm-emanuel-is-trying-to-pay-wall-street-banks-even-more-for-chicagos-bad-financial-dealsn an unprecedented move on Wednesday, the Chicago City Council rebuked Mayor Rahm Emanuels plan to voluntarily pay banks $106 million in penalties to terminate the citys remaining interest rate swap agreements. In another unprecedented move, I attempted to explain to my mother what had happened.
I told her, in a mix of English and our native Urdu, that the city had entered into these bad deals that had cost taxpayers millions of dollars, and that a group of us have been calling on the mayor to sue the banks to get the money back. I also told her that, instead of suing the banks, the mayor was trying to pay them all of the future payments for the next 15 years right now in order to get out of the deals.
My mother was shocked. So instead of paying what he would over the next 15 years, hes just paying them now? she asked. I nodded. Thats just more money for the banks, she replied. Why would he do that?
Emanuel claims that voluntarily paying the banks would have helped the city reduce risk. However, the biggest risk with these swaps is that if the city is forced to terminate them in the future, it could be forced to pay up to $106 million in penalties. By voluntarily paying those penalties now, the city wouldnt have reduced risk; it would have realized it.
In a press conference on Tuesday, Alderman Carlos Rosa said, Its like claiming that youve lowered the risk of your car getting stolen tomorrow by handing your car keys to a thief today.
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Rahm Emanuel Is Trying to Pay Wall Street Banks Even More for Chicago's Bad Financial Deals (Original Post)
eridani
Jan 2016
OP
Proserpina
(2,352 posts)1. Because he's a crook
Rahm gives crooks a bad name, actually.
merrily
(45,251 posts)2. RESIGN.
Human101948
(3,457 posts)3. Not to worry, because Rahm is the thief!
Part of that well known group of gangsters known as Wall Street--
The city of Chicago and its public school system could recoup potentially billions of dollars in overpayments from complicated, unjust deals inked with Wall Street banks, if they pursued legal action or demanded enforcement from federal regulators. But Rahm Emanuel, the current mayor, has refused to chase this opportunity, despite the citys drastic fiscal outlook and the effect on citizens. By contrast, his opponent in the April 7 mayoral run-off election, Jesus Chuy Garcia, appears far more likely to take action against a powerful financial sector Emanuel has relied on for campaign contributions.
Beginning over a decade ago, Wall Street banks sold municipalities, school districts, water systems and public hospitals across the country on obscure financial instruments, pitching them as a way to borrow more cheaply than plain-vanilla municipal bonds. But just as homeowners were swindled into loans they couldnt afford during the housing bubble, local governments suffered a similar fate.
For example, cities issued variable-rate bonds called auction-rate securities, which reset interest rates, sometimes on a weekly basis, based on the lowest rate investors accept for the bonds at auction. After the financial crisis, these municipal debt auctions collapsed, triggering penalty interest rates as high as 20 percent. Though many borrowers had insurance, the crisis wiped out the bond insurers as well, offering no relief.
http://www.salon.com/2015/03/17/not_true_and_they_knew_it%E2%80%9D_what_rahm_emanuels_wall_street_craze_cost_chicago/
SamKnause
(13,110 posts)4. Our current president employed and then
campaigned for this man.
Hillary supports this man as well.