Daily Archives: July 15, 2016

Puerto Rico’s Payday Loans: The Shocking Story Behind Wall Street’s Role in Debt Crisis

On June 30, President Obama signed into law thePROMESA bill, which will establish a federally appointed control board with sweeping powers to run Puerto Rico’s economy. While the legislation’s supporters say the bill will help the island cope with its debt crisis by allowing an orderly restructuring of its $72 billion in bond debt, critics say it is a reversion to old-style colonialism that removes democratic control from the people of Puerto Rico. But does Puerto Rico really owe $72 billion in bond debt—and to whom? A stunning new report by ReFund America Project reveals nearly half the debt owed by Puerto Rico is not actually money that the island borrowed, but instead interest owed to investors on bonds underwritten by Wall Street firms including Goldman Sachs, Citigroup, Merrill Lynch and Morgan Stanley. While the Puerto Rican people are facing massive austerity cuts, bondholders are set to make mind-boggling profits in what has been compared to a payday lending scheme. For more, we speak in San Juan, Puerto Rico, with Carlos Gallisá, an attorney, politician and independence movement leader. And in New York, we speak with Saqib Bhatti, director of the ReFund America Project and a fellow at the Roosevelt Institute. He is co-author of the new report, “Puerto Rico’s Payday Loans.”

Read on.

Can Wall Street be fixed? Ex-banker’s memoir examines a broken system

In his memoir For the Love Of Money, due out next week, Sam Polk suggests Wall Street would not be so bad if its workers were contributing to society

Can Wall Street be fixed? Sam Polk, a former investment banker who walked away from millions as a hedge fund investment manager, isn’t entirely sure.

“High-achieving, successful kids get jobs on Wall Street and quickly become part of the system,” he says. “There’s this incredibly strong pressure that distorts their perception of reality, and makes them feel poor when they’re earning hundreds of thousands of dollars.”

In a far-ranging discussion, as in his memoir For the Love Of Money, due out next week, Polk suggested it would not be so bad if such kids were contributing to society as well as to their personal bottom lines. Or even, perhaps, if they were using financial tools to help solve economic problems, which is after all Wall Street’s raison d’être.

Instead, the relationship between Main Street and Wall Street – or between businesses and the financial sector, if you prefer – is broken.

It’s a phenomenon often referred to as “financialization”: the growth in size, rate of growth and overall profitability of Wall Street (and finance in general) as a proportion of our economy. Between 1980 and 2006, GDP increased fivefold. Profits at financial firms increased 16 times, while those at their non-financial counterparts rose sevenfold. Prior to 1980, the rate of growth in the two groups had been roughly equal.

People like Polk were there to witness it all, as Wall Street morphed into a self-dealing monster.

Read on.

The Best Reporting on Mike Pence Through the Years: Propublica

Indiana Gov. Mike Pence served five terms in Congress and worked his way up to a leadership role in the House. Since he has sealed his Congressional records until December 2022, we’ve done what we can to dig up the best reporting on Donald Trump’s would-be vice president.

Pence describes himself as “a Christian, a conservative and a Republican, in that order.” He may be best known outside his state for his defense of Indiana’s religious freedom restoration law, which allowed businesses to deny service to gays and lesbians.

He started his political career as a Democrat who keptclippings of John F. Kennedy in his Indiana home as a boy. But in law school, his views shifted to the right. By 1988, at the age of 29, he ran as a Republican to try to unseat the Democratic incumbent in Indiana’s 2nd district and lost. He lost to the same candidate in 1990 after an ugly race that featured an ad with an actor dressed to look Arab thanking his opponent for foreign oil support. Pence’s campaign paid for his car payment and golf fees. (A year later, he wrote an essay called “Confessions of a Negative Campaigner” and repudiated his own style.)

Pence found his niche in talk radio in 1992 with “The Mike Pence Show,” which was syndicated across the state two years later. From 1995 to 1999, he hosted an Indianapolis political talk show on television. In 2000, he re-entered the political arena and finally won his seat to Congress (later redrawn as Indiana’s 6th district). An envelope with traces ofanthrax welcomed Pence to the Capitol during the 2001 scare.

The Hoosier quickly became known in Congress as a small-government, small-budget purist, fighting against many of then-president George W. Bush’s initiatives. He derided the No Child Left Behind education reform as “more red tape.” He opposed Bush’s push to extend Medicare Part D and subsidize senior citizens’ prescription drugs. As the Great Recession began, he vehemently opposed the 2008 bailouts.

Pence waded into the immigration battle in 2006 with a proposed compromise that would focus first on border security and, once that was accomplished, incentivize undocumented immigrants to “self-deport” and reapply to be guest workers. The proposal quickly brought the scorn of the right. Pence’s proposal failed, and he ultimately opposed the 2007 deal that never passed.

Unlike his counterpart at the top of the ticket, Pence has repeatedly backed protections for the press, introducing and reintroducing a federal shield law that would protect reporters’ confidential sources, with exceptions including national security. “Without the free flow of information from sources to reporters, the public is ill-equipped to make informed decisions,” he said in 2011.

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US Government Releases Redacted “28 Pages” Missing From 9/11 Report

The missing 28 pages from the 9/11 report begins as follows:

“While in the United States, some of the September 11 hijackers were in contact with, and received support from, individuals who may be connected to the Saudi Government…”

 

Class Slams Detroit on Tax-Foreclosure Crisis

DETROIT (CN) — Going to bat for thousands of distressed homeowners, most of them black, the American Civil Liberties Union claims in court that Wayne County’s foreclosure crisis is worst Michigan has seen since the Great Depression.
County treasurer Eric Sabree is going after homeowners for unpaid property taxes, but the ACLU says those tax rates are woefully out of date.
“The city of Detroit has failed to conduct properly the legally mandated property tax assessments for at least two decades,” the complaint states, filed Wednesday in Wayne County Circuit Court.
“Further, after the values of homes began to drop precipitously in 2008, the city of Detroit failed to reduce the assessed values of the homes to match the actual true cash values, a fact which city officials have acknowledged,” the complaint continues. “As a result homeowners, including plaintiffs, were taxed as if their homes were worth many times their actual true cash value.”
The ACLU brought the suit as a class action, with the Morningside Community Organization as lead plaintiff.
That nonprofit is joined by seven individual homeowners and three other community groups.

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Ex-Goldman VP loses suit against bank over $7M in legal fees

A Delaware court ruled on Wednesday that Sergey Aleynikov will have to pay his own $7 million-plus legal bill in his fight against Goldman Sachs, which has sued him for allegedly stealing the bank’s code.

Aleynikov, 46, claimed that his former employer is obligated to pay his legal fees because, as a VP, he was an officer.

But Delaware Chancery Court Judge Travis Laster ruled instead that VPs at Goldman don’t clear that bar.

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Ex-Aide’s Attorney Says Donald Trump May be Running Secret Shadow Operation

Law Newz:

Upon further investigation, Nunberg’s attorneys realized Trump 2012 PCA didn’t appear to be registered in New York.  In fact, attorneys for Nunberg told LawNewz.com they couldn’t find it existing anywhere. In addition, Nunberg’s mother, Rebecca Nunberg, confirms toLawNewz.com that her son received at least two paychecks fromTrump 2016 PCA, which also doesn’t appear to be registered with the Secretary of State’s Office. She confirmed that Nunberg never received any IRS 1099 forms, which are usually issued by companies who hire contract workers like Nunberg. LawNewz could also not find the company registered in New York or with the FEC.

“If you are an independent contractor and you are paid more than $600 you are required by the IRS, if you pay someone, that entity is obligated to issue a 1099 to the person they are paying,” Rebecca Nunberg told LawNewz.com. Nunberg is a corporate attorney herself.

Here is a copy of the confidentiality agreement. You can see Donald Trump signed off on it. 

Read on.