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Borrowing billions to lower Chicago's pension debt? Emanuel's finance team is considering it
Chicago Tribune ^ | 8/03/18 | Hal Dardick

Posted on 08/04/2018 10:01:48 AM PDT by Libloather

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To: Libloather
In case anyone has forgotten, Chicago did a deal back in 2008 wherein it sold the rights to the stream of revenue from parking meters within the city — for a period of 75 years — to Morgan Stanley; in return, Morgan Stanley paid Chicago $1.16 Billion.

The city of Chicago proceeded to spend that money in (if memory serves) about six months.

In the years since, Chicago has attempted to do various "tweaks" to the (already completed) deal; as you might guess, these "tweaks" are not helpful to the people who loaned Chicago the $1.16B back in 2008. In order to increase the incentives to "settle," the city had done things like close large stretches of street parking zones for "maintenance," thereby halting the flow of revenue from the meters in those zones.

41 posted on 08/04/2018 11:30:08 AM PDT by Steely Tom ([Seth Rich] == [the Democrat's John Dean])
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To: Steely Tom

Yeo I remember the parking meter deal. It’s hard to believe they spent an advance on 75 years of revenue in just a few months.

I think Chicago and other cities will eventually seek a federal bailout. This pension idea , if implemented, is only a stopgap, just as the parking meter this g was just a stopgap. They still.need to make fundamental financial decisions. And those decisions will be painful.

I’m.happy the good Democrats such as Emmanuel have this headache. They can’t blame Republicans or Trump for this one.


42 posted on 08/04/2018 11:38:45 AM PDT by Dilbert San Diego
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To: Steely Tom

In substance this bond deal would be nothing more than shifting the increasing risk of insolvency from public employees to bond holders.


43 posted on 08/04/2018 11:42:31 AM PDT by p. henry
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To: Dilbert San Diego
Well, the good news is that they only have 65 years to go.

I would imagine one fringe benefit of this deal for Chicago was that they could dump the city employees who maintained the meters, although one would have expected their union to make a fuss about it.

Then again, it's Chicago, so maybe a few union officials got nice Christmas presents, and the problem was made to go away.

44 posted on 08/04/2018 11:43:20 AM PDT by Steely Tom ([Seth Rich] == [the Democrat's John Dean])
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To: p. henry
In substance this bond deal would be nothing more than shifting the increasing risk of insolvency from public employees to bond holders.

As long as there's an endless supply of suckers to buy the bonds, everything is hunky-dory. I don't see any changes in that dynamic.

45 posted on 08/04/2018 11:44:28 AM PDT by Steely Tom ([Seth Rich] == [the Democrat's John Dean])
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To: Dilbert San Diego
I think Chicago and other cities will eventually seek a federal bailout.

"Trump To Chicago: Drop Dead."

One sequel I'll enjoy.

46 posted on 08/04/2018 11:46:17 AM PDT by Steely Tom ([Seth Rich] == [the Democrat's John Dean])
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To: Moonman62

You dodged the question, Its OK, you haven’t really considered it.

The answer is - there’s enough now.

“Informed citizenry holding politicians accountable.” Good luck with that, when “politicians” control money creation, the government, and everything in between.


47 posted on 08/04/2018 11:51:40 AM PDT by PGR88
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To: Libloather

What idiot would loan it to ‘em? They’d NEVER pay it back.


48 posted on 08/04/2018 12:00:14 PM PDT by Jack Hammer
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To: Libloather

Who would loan money for that?


49 posted on 08/04/2018 12:01:39 PM PDT by mulligan (EeThe)
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To: Libloather

“The idea is to issue bonds at relatively low interest rates and use the money to reduce the city’s $28 billion in pension debt. The pension funds would invest the bond proceeds and ideally earn returns that outpace the interest the city would have to pay on the bond debt.”

So, people are going to buy these low-interest bonds from a basically insolvent local government instead of investing in something that will earn greater returns.

Egads, how much of a tax break on these bonds do you get to make them even a little attractive?


50 posted on 08/04/2018 12:03:51 PM PDT by VanShuyten ("...that all the donkeys were dead. I know nothing as to the fate of the less valuable animals.")
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To: Libloather

What could possibly go wrong?

Who in their right mind would buy such bonds?


51 posted on 08/04/2018 12:05:32 PM PDT by Robert357 ( Dan Rather was discharged as "medically unfit" on May 11, 1954.)
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To: PGR88

The answer is - there’s enough now.

...

As I said, there’s enough now provided that its use is temporary and the politicians agree to be honest while it’s in use.

But it won’t do any good if the politicians are still crooked. I gave you an example of a well known failure (Bretton Woods) and you ignored it.


52 posted on 08/04/2018 12:24:21 PM PDT by Moonman62 (Give a man a fish and he'll be a Democrat. Teach a man to fish and he'll be a responsible citizen.)
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To: Libloather

SOP for Chicago

Richard J. Daley (1955-76)

45.Richard M. Daley 1989 til Emanuel

Totally corrupt Chicago Machine family.


53 posted on 08/04/2018 12:44:52 PM PDT by Syncro (Facts is Facts)
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To: Libloather

Puttin the Chicago taxpayer on the hook for even more billions making them slaves to the city. Next thing you know they’ll make it illegal to move out.


54 posted on 08/04/2018 1:08:35 PM PDT by fella ("As it was before Noah so shall it be again,")
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To: Moonman62

EXACTLY!! If we want to get money out of politics, we need to get politics out of the money.


55 posted on 08/04/2018 1:43:39 PM PDT by Dapper 26
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To: Moonman62

Your argument is a circular one: you can’t use gold, because politicians are crooked

Are they more, or less crooked with completely printed money?

So for you, the ideal monetary system depends on having honest politicians.

Again, good luck with that.


56 posted on 08/04/2018 1:51:20 PM PDT by PGR88
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To: Libloather

.
How can borrowing reduce debt???
.


57 posted on 08/04/2018 1:59:34 PM PDT by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: Governor Dinwiddie

.
They used to call it “debt consolidation.”

The clown that consolidated the debts gor a nice fee, and your debt level increased.

Next?


58 posted on 08/04/2018 2:02:36 PM PDT by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: editor-surveyor

“””How can borrowing reduce debt???”””


Because the smart politicians who created this huge pension debt think they can borrow money at 5% and then invest the money in stocks and other investments and make 10%.

That is why they are smart politicians because a whole lot of Chicago people will believe they can do it. Plus these smart politicians do not care if they eventually go bankrupt and screw the bond holders.


59 posted on 08/04/2018 2:04:38 PM PDT by Presbyterian Reporter
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To: All
Earlier, a muni-bond expert exposed Chicago's bond financing scheme as a house of cards. An examination of the city's bond documents uncovered taxpayers paying billions for greedy politicians shady financial legerdemain, including:

<><>(1) using long-term financing to cover day-to-day expenses,

<><>(2) using bond proceeds to pay pension obligations, and,

<><> (3) misappropriating returns from the interest rate swap portfolio (a sub rosa ATM for paying the citys day to day expenses).

The stench from Chicago's poplitical sleaze is permeating the putrid city hall air... starting w/ Obama's ex-COS Chi/Mayor Rahm Emanuel. ....and remember, these kingpins of Chicago criminal politics moved into DC with Chicago kingpin Barack Obama.

=================================================

ANALYSIS Bonding is eternal taxation----the insider deals bonding companies made w/ shady pols to get bonding business would tell a tale of greedy pols accumulating riches through massive govt corruption.If these bonding deals were effectuated by way of referendum at the ballot box----and misled investors into buying tax-fee muni bonds----the SEC would be interested.

EMAIL enforcement@sec.gov

Massive govt corruption might include forgery, falsification of official records, fraudulent state budget entries, tax evasion, illegal wire-transfers, misuse of public office.

Tax-exempt municipal bond investors (including public education bond investors)-- have legal grounds to sue if they were deceived about deceptive bond offerings. In many cases, bond issues are approved by voters---at the ballot box--so that voters may have also been misled WRT uses of fraudulent bond offerings.

Also culpable are:

<><> bonding companies underwriting possible fraudulent bond issues;

<><> banks holding possibly fraudulent bond proceeds;

<><> State/city's modus operandi in allocating tax-exempt bond proceeds,

<><> the sub rosa acceptance of bond proceeds.

<><> state/city vendors accepting possible fraudulent bond proceeds.

<><> publicly-funded state/city agencies advocating the uses of fraudulent bond proceeds.

===========================================

The SEC, FBI, banking overight agencies, and the IRS, would be interested in the activities of state/city entities WRT bonding.

EMAIL---FBI TIPS PAGE https://tips.fbi.gov

EMAIL--enforcement@SEC.gov

Contact the IRS Fraud Unit

EMAIL Banking oversight agencies

============================================

Taxpayers should find out which Chicago banks are facilitating this.
<><> Which banks are designated the official repositories of municipal tax dollars.
<><> Which banks are dispensing the ill-gotten proceeds....and to whom.

60 posted on 08/04/2018 2:19:12 PM PDT by Liz ( Our side has 8 trillion bullets; the other side doesn't know which bathroom to use.sap-happy)
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