ReFund Our Communities!

EXPOSING PREDATORY PUBLIC DEBT TO GO ON OFFENSE AND REBUILD OUR COMMUNITIES

MAKEBANKS/CORPORATIONS

PAY!

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)

19801982

19841986

19881990

19921994

19961998

20002002

20042006

20082010

2012$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Workers Keep Production Going Up: Corporations Stagnate Wages

People Earning less, Borrowing More Consumer Debt Exploding Since 1970’s

(Total Consumer debt in $tr)

1943 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008$0.0

$500,000.0

$1,000,000.0

$1,500,000.0

$2,000,000.0

$2,500,000.0

$3,000,000.0

$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

Wall Street’s Secret Plan21st Century Serfdom

Forcing People and Communities Into Debt and Dependency

Corporate Profits Have Skyrocketed Since Mid-70’s

(Corporate Profits in billions)

19291932

19351938

19411944

19471950

19531956

19591962

19651968

19711974

19771980

19831986

19891992

19951998

20012004

20070

300

600

900

1200

1500

1800

Total Corporate Profits

Wall Street Made a Killing Financial Sector Profits

(in billions)

19431946

19491952

19551958

19611964

19671970

19731976

19791982

19851988

19911994

19972000

20032006

20092012

$0

$100

$200

$300

$400

$500

Economic Reality Since the Mid 1970’s

• 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

?

Chase, Wells, BofA, Citi, Goldman Have Over $8.5 Trillion in Assets

Equal to 56% of US Economy

$2 Trillion Dollars in Corporate ReservesNot Including Financial Institutions

Walton Family Wealth equals Combined Wealth of Bottom 42% of the Population

147 Million People

Forbes 400 Wealthiest AmericansNet Worth $2 Trillion DollarsUp $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

After Great Depression Bank Regulations Were

Dramatically Strengthened…

Big Banks Re-Take ControlBank 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

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

….And The Banks Got Those

Laws Rolled Back…

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

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

Banks Balk at Request for Details on Litigation Costs, 8/4/12

UBS Execs Allegedly Deceived U.S. Cities, Steered Contracts To Friends, 7/30/12

Berkshire Bank Sues Barclays, Citigroup Over Libor, 7/30/12

Wells Fargo Will Settle Mortgage Bias Charges, 7/12/12

SEPTA union files suit against Bank of America, 6/28/12

Barclays Pays $450M to Settle Interest Rate Rigging Probe, 6/27/12

Citizens Bank Profited Off Customer Math Errors, Class Action Lawsuit Alleges, 5/9/12

SEC Accuses Wells of Ignoring Subpoenas in MBS Probe, 3/23/12

OCC Probing JPMorgan Chase Credit Card Collections, 3/12/12

New York Reaches $25M Settlement Over MERS Actions, 3/14/12

Settlement reached in veterans mortgage fraud suit, 3/12/12

Gregory Mackler, Whistleblower, Says Bank of America Defrauded HAMP, 3/7/12

US Conducting Criminal Libor Probe: Source, 2/29/12

Consumer watchdog launches overdraft inquiry, 2/22/12

States Negotiate $26 Billion Agreement for Homeowners, 2/8/12

Schneiderman sues BofA, JPMorgan, Wells Fargo and MERS for foreclosure fraud through MERS, 2/3/12

Big Banks Face Inquiry Over Home Insurance, 1/10/12

GE Will Pay $70.4 Million to Settle U.S. Probe Into Muni-Bond Bid Rigging, 12/23/11

BofA to pay $335m over discrimination claims, 12/21/11

Goldman faces lawsuits over $158 bln in mortgages, 11/9/11

Wells Fargo, Municipalities Settle Bid-Rigging Suit, 11/8/11

Court Hits Wells Over Mortgages, 11/3/11

Delaware AG Sues MERS, 10/27/11

FHFA Lawsuits: Price Tag Could Reach as High as $60 Billion, 9/7/11

Federal Reserve Board announces a formal enforcement action against the Goldman Sachs Group, Inc. and Goldman Sachs Bank USA, 9/1/11

BofA Sued By Homeowners To Block $8.5 Billion Mortgage Settlement, 8/30/11

AIG Files Suit Against BofA While Opposition to Settlement Continues, 8/8/11

Wells Fargo To Settle Class-Action Investor Lawsuit For $590 Million, 8/5/11

B of A Signs HUD Pact Over Mortgage Abuse, 8/4/11

Massachusetts Attorney General Launches Probe of MERS, 7/25/11

California may join probe of Wall Street's role in mortgage meltdown, 7/15/11

J.P. Morgan Settles Muni-Bid Case, 7/8/11

J.P. Morgan Chase to Pay $92 Million for Bid-Rigging Municipal Investment Contracts, 7/7/11

Wells Fargo Target Of Justice Department Probe; Agency Alleges Discriminatory Lending, 7/6/11

Register of Deeds John O’Brien Releases Forensic Study, Finds Mass Fraud in Foreclosure Docs, 6/30/11

J.P. Morgan to pay $153.6M in fraud case, 6/21/11

Bank Of America Faces New Probe; New York Attorney General Launches Investigation Into Mortgage Securitization, 6/13/11

Foreclosure Fraud Price Tag: $20 Billion, 6/6/11

Mortgage Companies Settle Suits on Military Foreclosures, 5/26/11

BofA to Pay $410 Million to Settle Overdraft Suit, 5/23/11

Goldman Braces for Federal Subpoenas, 5/20/11

Conspiracy of Banks Rigging States Came With Crash, 5/18/11

New York Investigates Banks’ Role in Financial Crisis, 5/17/11

Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers, 5/16/11

SEC Subpoenas JPMorgan Over Failed Mortgages, 5/6/11

Goldman, JPMorgan Among Banks Targeted in Swaps Probe, 4/29/11

Wells Fargo in settlement with SEC, 4/6/11

Wachovia Targeted Over Sale Of CDOs, 4/4/11

Five banks in Libor probe: source, 3/17/11

Big Banks Face Fines on Role of Servicers, 2/17/11

BofA's Countrywide Accused of ‘Massive’ Mortgage Fraud by TIAA, N.Y. Life, 1/25/11

Two States Sue Bank of America Over Mortgages, 12/17/10

Trustee Sues J.P. Morgan for $6 Billion, 12/3/10

But They’ve Still Been Breaking The Laws That

Remain

Wall St Looting Main St

Predatory Public FinanceUNETHICAL 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

Swaps

Capital

Appreciation Bonds

LIBOR Fraud Letters of

Credit

Dual Credit Rating

Bond Bid Rigging

Derivative Bid Rigging

Securitization

FraudFee Gouging

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 entitiesHave 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 LineTo 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

Government

The PublicParents, Students,

Seniors, Public Health Recipients, Commuters,

Public Assistance Recipients

Public Sector WorkersTeachers, City/County

Workers, Transit Workers, Health Care

Workers, Etc

VS

What the Corporate Elite Wants Us To Believe

Wall Street, Big Corporations and the .01%

Government

Public Workers

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

The Reality

United With

Wall Street andThe 1%

Going On Offense

Us Alone

Government Entities

Elected Officials.

Home Owners

Investors

PublicRelations

Pension Funds

Consumers

Regulatory Enforcement

Public TreasuriesOur Families and Our Communities With Us

Who Is Going to Pay?

Or

The Banksters & the Corporate Elite

Students, Seniors, Workers and The Disabled

The Current Debate:

Cut Workers or Cut Services to People?

The Debate We Need …

Making The Plan To Go On OffenseInside Actions

Steps we can take to move this with our public agencies

?Outside Actions

Public actions that bring the fight to our targets.

?