Transcript with animation and video - Cancel Detroit`s Debt To The Banks!

ReFund Our Communities!
MAKE
BANKS/CORPORATIONS
PAY!
EXPOSING PREDATORY PUBLIC DEBT TO GO
ON OFFENSE AND REBUILD OUR
COMMUNITIES
Who’s Really In Control
Can’t Win If We Fight The
Wrong Target
Can’t Win If We Hit The Right Target
in The Wrong Place
Who Does Corporate Elite Want Us to
Blame For Economic Crisis?
• Big government?
• Overpaid union workers?
• Social Security and Medicare?
• What else????
THE TRUTH???
As Corporate Taxes Go Down, Government
Borrowing Going Up!
(Outstanding municipal bonds in billions)
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
1980
1984
1988
1992
1996
2000
2004
2008
2012
Workers Keep Production Going Up:
Corporations Stagnate Wages
People Earning less, Borrowing More
Consumer Debt Exploding Since 1970’s
(Total Consumer debt in $tr)
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
Wall Street’s Secret Plan
21st Century Serfdom
Forcing People and Communities Into Debt and Dependency
$8 trillion in Housing Debt
$1 trillion in Education Debt
$1 trillion in Credit Card Debt
-----------------------$11 trillion in Household debt
- Auto, Credit cards, student loans, mortgages, other revolving debt.
+
$4 trillion Municipal Bond Debt
1800
Corporate Profits Have Skyrocketed
Since Mid-70’s
(Corporate Profits in billions)
1500
Total Corporate Profits
1200
900
600
300
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1953
1950
1947
1944
1941
1938
1935
1932
1929
0
Wall Street Made a Killing
Financial Sector Profits
(in billions)
$500
$400
$300
$200
$100
$0
1943 1949 1955 1961 1967 1973 1979 1985 1991 1997 2003 2009
Economic Reality Since
the Mid 1970’s
•
•
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•
They Pay Less,
We Borrow More,
They Get Rich,
We Get Poor!
Roaring ‘20s
Unprecedented
Wealth Inequality
Militant
Organizing Led
to New Deal
The Reagan Revolution
“Big Government, Big
Labor is the Problem”
The People
vs
The Banksters
2013
?
$2 Trillion Dollars in Corporate Reserves
Not Including Financial Institutions
Chase, Wells, BofA, Citi, Goldman Have Over
$8.5 Trillion in Assets
Equal to 56% of US Economy
Walton Family Wealth equals Combined Wealth
of Bottom 42% of the Population
147 Million People
Forbes 400 Wealthiest Americans
Net Worth $2 Trillion Dollars
Up $300 Billion From 2012
Bankruptcy Acts of 1933 and 1934
Frazier-Lemke Farm Bankruptcy Act of 1934
Farm Mortgage Moratorium Act of 1935
Commodity Exchange Act of 1936
Chandler Act of 1938
Bank Holding Company Act of 1956
restrictions on interstate banking
State caps on credit card interest rates
S&L lending standards
Interest rate caps on S&L deposit accounts
SEC’s net capital ratio
Glass-Steagall Act of 1933
Big Banks Re-Take Control
Bank Consolidation 1990 - 2010
Bankruptcy Acts of 1933 and 1934
Frazier-Lemke Farm Bankruptcy Act of 1934
Farm Mortgage Moratorium Act of 1935
Commodity Exchange Act of 1936
….And The Banks Got Those
Laws Rolled Back…
Chandler Act of 1938
Bank Holding Company Act of 1956
restrictions on interstate banking
State caps on credit card interest rates
S&L lending standards
Interest rate caps on S&L deposit accounts
SEC’s net capital ratio
Glass-Steagall Act of 1933
As Unit Pleads Guilty, R.B.S. Pays $612 Million Over Rate Rigging, 2/6/13
San Francisco Lawmaker Demands Inquiry in Bank Fraud Losses, 1/30/13
California Cities Sue Banks Over Libor Rates, Law Firm Says, 1/9/13
As Unit Pleads Guilty, UBS Pays $1.5 Billion Over Rate Rigging, 12/19/12
But They’ve Still Been
Breaking The Laws That
Remain
Libor arrests signal switch to individuals, 12/11/12
HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering, 12/10/12
BofA, U.S, Bancorp Must Face Mortgage Trustee Lawsuit, 12/7/12
2 Banks to Settle Case for $417 Million, 11/16/12
Federal Prosecutors Sue Bank of America Over Mortgage Program, 10/24/12
A.C.L.U. Sues Morgan Stanley Over Mortgage Loans, 10/15/12
Annie Bell Adams, Foreclosure Victim, Sues Big Banks Over Libor Manipulation, 10/15/12
U.S. Sues Wells Fargo, Accusing It of Lying About Mortgages, 10/9/12
JPMorgan Unit Is Sued Over Mortgage Securities Pools, 10/1/12
Bank of America Reaches Settlement I Merrill Lynch Acquisition-Related Class Action
Litigation, 9/28/12
Banks Face Suits as States Weigh Libor Losses, 9/4/12
Public Pension Funds Named to Lead ‘London Whale’ Lawsuit, 8/22/12
Bay Area toll agency accepts settlement, 8/22/13
Wall St Looting Main St
Predatory Public Finance
UNETHICAL PRACTICES
•
•
•
•
•
•
•
•
•
Interest rate arbitrage
Exorbitant fees & interest rates
Discriminatory pricing
Prepayment penalties
Accelerated payment clauses
Misrepresentation of risk
Churning (unnecessary refis)
Requiring unnecessary add-ons
Negotiated bond sales
Illegal Practices
• Bid-rigging
• Interest rate manipulation
• Securitization fraud
Examples of predatory deals
•
•
•
•
•
Interest rate swaps
Most credit enhancements
Capital appreciation bonds
Continuous refinancing bonds
Pension obligation bonds
Toxic Swaps Banks Gouging Taxpayers For
Hundreds of Millions of Dollars
Swapping Detroit’s Future
• Detroit paid $547 million in penalties in FY 2012 to
terminate swaps with several banks, including BofA,
Chase, Morgan Stanley, and Goldman.
• The city had to take out new bonds to pay these
penalties, and paid an additional $9 million in fees to
banks like Chase and Morgan Stanley.
• BofA and UBS are now demanding that the city pay an
additional $255 million in penalties to terminate the
remaining swaps.
Swapping Detroit’s Future
• Prior to 2012, Detroit was
losing $54 million each year on
these swaps.
• Unless the city gets a better
deal from BofA and UBS,
Detroit taxpayers will have lost
more than $1 billion since 2008
as a result of these toxic deals!
Toxic Swap Deals – The Tip of The Iceberg
The LIBOR Fraud Scandal
Why Should We Care About LIBOR
• Cities, Counties, Pension Funds, School Districts,
States, Transit Districts, Utility Districts,
Universities …
… basically all taxpayer funded public entities
Have Huge Investments Linked to LIBOR
• As a result of big banks manipulating LIBOR
nearly every public entity was illegally cheated
out of revenue.
LIBOR Scandal Illegal Rate Manipulation
• 16 Banks Illegally manipulated LIBOR Rates to
Enrich Themselves by Reducing What They Had
To Pay Our Communities
LIBOR Fraud Cost Detroit Millions
• The City of Detroit and its pension funds had
billions of dollars invested instruments that may
have been tied to LIBOR.
• Ten of the city’s toxic swap were also tied to LIBOR.
• The city may have lost as much as $34 million as a
result of LIBOR fraud.
The Bottom Line
• Our Economy is Broken Because of Out of
Control Wealth Inequality Driven by Greed
and Recklessness of the 1%
• To Fix the Economy We Must Re-Balance
Wealth
The Bottom Line
To Rebalance Wealth We Must Create a Crisis that
Forces the 1% to:
– Agree to Quality Jobs with Real Living Wages and Full
Benefits through Organizing
– Pay The Taxes They Should to Fully Fund Public
Services , Education, Health Care Etc
– Fix the Housing/Mortgage Crisis by Resetting
Mortgages to Market Value
What the Corporate Elite Wants Us To Believe
Government
Public Sector Workers
The Public
Teachers, City/County
Workers, Transit
Workers, Health Care
Workers, Etc
Parents, Students,
Seniors, Public Health
Recipients, Commuters,
Public Assistance
Recipients
VS
The Reality
Wall Street, Big Corporations and the .01%
Government
Public Workers
United With
Teachers, City/County
Workers, Transit Workers,
Health Care Workers,
Fire Fighters, Police Officers etc
The Public
Parents, Students, Seniors,
Public Health Recipients,
Commuters,
Public Assistance Recipients
Going On Offense
Home Owners
Investors
Wall Street and
The 1%
Public
Relations
Pension Funds
Elected Officials.
Regulatory
Enforcement
Consumers
Government Entities
Public Treasuries
Our Families and Our
Communities With Us
Us Alone
Who Is Going to Pay?
Students, Seniors, Workers and The
Disabled
The Current Debate:
Cut Workers or Cut Services to
Or
People?
The Banksters & the Corporate Elite
The Debate We Need …
Making The Plan To Go On Offense
Outside Actions
Inside Actions
Steps
Public actions that bring the
fightwe can take to move this with
our public agencies
to our targets.
? ?