Daily Archives: August 28, 2015

Common Ground denies ‘quid pro quo’ between $30M Nationstar deal and change in stance on arena

Leaders of Common Ground — the community group most critical of public funding for a new Milwaukee Bucks arena — said Friday they will change their position on arena funding after news that they prevailed in a separate campaign involving a company chaired by Bucks co-owner Wes Edens.

Nationstar Mortgage, a Dallas company chaired by Edens, will contribute $30 million to address residential foreclosure problems in the city.

Common Ground has held protests in recent months with a list of demands for Edens-chaired Nationstar Mortgage to provide addresses of foreclosed and vacant houses to the city of Milwaukee, invest money in a fire-damaged house on the city’s west side and donate other properties to nonprofits.

Common Ground also has made demands for more than a year that if the public is going to help pay for a new downtown arena, then $150 million of public funds should go to repairing or replacing playgrounds and school athletic facilities in Milwaukee County. The campaign is called Fair Play.

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As for whether there was a connection between Common Ground reconsidering its position on public funding for an arena and the Nationstar agreement, Connolly said not really.

“They are linked but we weren’t bought off,” Connolly said. “This wasn’t aquid pro quo arrangement. There are relationships though — we admit that. And the Nationstar relationship with Wes Edens gave the city the leverage to do this ($30 million deal). We know that even if people don’t talk about it.”

Barrett took exception to the suggestion that there might have been a connection.

Barrett said he and Common Council president Ald. Michael Murphy reached out to Nationstar officials in January, resulting in the agreement. Barrett said city staff worked independently of Common Ground but he thanked Common Ground for pushing the issue with Nationstar.

“Common Ground was not part of this conversation,” Barrett said. “That was purposeful. When I called them yesterday to tell them where we were, I was not certain whether they would be pleased or not.”

Read on.

Prosecutor seeks to summon Rupert Murdoch in Deutsche Bank trial

Munich prosecutors requested that 30 additional witnesses including Rupert Murdoch, publisher Friede Springer and Axel Springer (SPRGn.DE) Chief Executive Mathias Doepfner be summoned in a trial against Deutsche Bank (DBKGn.DE) executives.

Munich prosecutors are pursuing criminal allegations against current and former Deutsche Bank executives in the wake of a civil suit brought by the heirs of deceased media magnate Leo Kirch.

Prosecutors have accused the executives of misleading the court about the bank’s role in connection with the collapse of the Kirch media empire in 2002.

Read on.

S.E.C. Settlement With Citigroup Holds No One Responsible

The big banks are basically paying their way out of jail and their criminal crimes. The government are jailing the small fishes and not the big fishes. But, for the average person that does the same crimes as the banksters did are sent to the jail with no option like the banksters to pay a fine in exchange for a get out of jail card for free.

How can we expect Wall Street’s me-first culture to change when regulators won’t pursue or even identify the me-firsters who are directly involved?

That question came to mind after reading the terms of a settlement struck on Aug. 17 between the Securities and Exchange Commission and two units of Citigroup. It is a deal that holds no one at the bank accountable for behavior that caused investors to lose an estimated $2 billion.

The settlement involved a disastrous municipal bond strategy the bank concocted and peddled to 4,000 wealthy clients from 2002 until early 2008. It was sold to investors as a safe-money option, even though it used considerable leverage, which always brings hazards when assets decline.

Citigroup will pay $180 million in the settlement, most of which will be distributed to wronged investors. The bank neither admitted nor denied the S.E.C.’s allegations. A spokesman said the bank was pleased to have resolved the matter.

Read on.

Bank of America customers appeal dismissal of overdraft lawsuit

Lawyers are asking a federal appeals court to revive a proposed class action accusing Bank of America of collecting unlawfully high interest rates, styled as fees, from customers who let their checking accounts stay overdrawn for several days.

Filed in March on behalf of Bank of America customers nationwide, the lawsuit said the bank is charging annual interest rates as high as several hundred percent when customers’ accounts are overdrawn for five days, violating the National Bank Act’s prohibitions against excessive interest. The customers are represented by lawyers at Kelley Uustal, Hargrove Pierson & Brown and other firms.

Read on.

Pennsylvania Schools Start New Year Broke With “Minus $1 Billion” In Funding

Zerohedge:

While the markets had a brief, if historic, limit-down hiccup earlier this week, even if Black Monday is now long forgotten and stocks are mostly in the green for the week following another epic round of central bank intervention, yesterday the Pennsylvania Association of School Business Officials announced something far more troubling: Pennsylvania schools are starting the year “minus $1 billion” in funds.

The reason, as the association announced, yesterday was “the day that schools should receive more than $1 billion in state subsidy payments for Basic Education Funding, transportation payments and employee benefit reimbursements appropriated in the new state budget. However, the state budget impasse has prevented this state funding from flowing, creating financial uncertainty for school districts across the commonwealth.”

In other words, absent state subsidies, the entire Pennsylvania educational system may collapse. More:

“With a state subsidy payment expected each month, more school districts will incur additional borrowing costs for loans if the budget impasse continues,” said Jay Himes, PASBO executive director. “The $1 billion in state funding that school districts will not receive will be particularly painful for less wealthy school districts, and it will only get worse. Every month of missed state funding will see growing financial pain by school districts, intermediate units and career and technology centers, creating real consequences for students across the state.

It’s Official: China Confirms It Has Begun Liquidating Treasuries, Warns Washington

Here’s Bloomberg:

China has cut its holdings of U.S. Treasuries this month to raise dollars needed to support the yuan in the wake of a shock devaluation two weeks ago, according to people familiar with the matter.

Channels for such transactions include China selling directly, as well as through agents in Belgium and Switzerland, said one of the people, who declined to be identified as the information isn’t public. China has communicated with U.S. authorities about the sales, said another person. They didn’t reveal the size of the disposals.

The latest available Treasury data and estimates by strategists suggest that China controls $1.48 trillion of U.S. government debt, according to data compiled by Bloomberg. That includes about $200 billion held through Belgium, which Nomura Holdings Inc. says is home to Chinese custodial accounts.


The PBOC has sold at least $106 billion of reserve assets in the last two weeks, including Treasuries, according to an estimate from Societe Generale SA. The figure was based on the bank’s calculation of how much liquidity will be added to China’s financial system through Tuesday’s reduction of interest rates and lenders’ reserve-requirement ratios. The assumption is that the central bank aims to replenish the funds it drained when it bought yuan to stabilize the currency.

U.S. Puts Deutsche Bank, UBS, RBS Pension Businesses on Notice

Three global banks are in danger of losing their ability to manage pension funds in the U.S., as the Department of Labor wrestles with how to hold financial institutions accountable for criminal misconduct.

The Labor Department, in mid-July letters reviewed by Bloomberg, told Deutsche Bank AG, UBS Group AG and Royal Bank of Scotland Group Plc that it had tentatively rejected their requests to keep managing U.S. pension money. The banks, which admitted guilt earlier this year over manipulating foreign exchange or benchmark interest rates, were required to seek the department’s permission to maintain their Qualified Professional Asset Manager status.

Read on.