Wall Street Predators Wage Secret War on American Retirements

[xchrom]

http://www.alternet.org/hard-times-usa/wall-street-and-retirement



Lips are smacking on Wall Street. Today’s tasty treat? The pensions of hard-working people across America. Financial hustlers have been working overtime to convince the population that we are in the midst of an “unfunded liability crisis” in which states and cities can no longer afford to pay pensions to public workers. Here’s the truth: Wall Street predators have had their hands in the pension cookie jar for decades, and now they’re poised to gobble up the retirements of teachers and firefighters in yet another orgy of greed.

Unknown to much of the public, Wall Street has been soaking state and municipal coffers with derivatives schemes and various frauds for years. As Alexander Arapoglou and Jerri-Lynn Scofield have explained, not only have Wall Street banks screwed public finances with fancy credit default swaps and other "innovative" financial products that blow up in the faces of cities and states, they have also been engaged in widespread frauds that squeeze pension yields. This happened in the LIBOR rate-rigging scandal, in which big banks were found to be manipulating interest rates, which has resulted in lower returns on pension fund investments and has caused shortfalls in pension plans. The lack of actions from authorities means this kind of hustling will surely continue.

Rolling Stone’s Matt Taibbi has just published an article outlining how this gigantic heist is going down. While Wall Street has been on its scam-a-licious rampage, no-good politicians have been taking taxpayer money meant for pensions and spending it on whatever they wanted, depleting funds. (This is actually securities fraud, but the nearly toothless SEC has barely lifted a finger to address it.) Even so, pensions were still in fairly decent shape when the crash of 2008 came and wrecked budgets across America. The Wall Street-driven financial crisis crushed state and local revenues, and the financiers decided this was the perfect moment to dive in for yet another helping of public money by seizing control of public pensions.

In Taibbi’s colorful words: “This is the third act in an improbable triple-fucking of ordinary people that Wall Street is seeking to pull off as a shocker epilogue to the crisis era.”

[Skittles]

1. I certainly would not be counting on that pension

[sendero]

2. While I agre with the general tenor..

... of this article let's don't forget to lay blame where it is due, on the idiots in state/local government that BOUGHT these ridiculous "products" in the first place. Nobody put a gun to anyone's head and made them invest in bullshit they did not understand.

[Laelth]

3. k&r for exposure. n/t

-Laelth

[marmar]

4. K&R

[Octafish]

5. Banksters have stolen, er, invested everything else.

May as well get all of it.