Detail, east Portland photo, courtesy Miles Hochstein / Portland Ground.

For old times' sake
The bojack bumper sticker -- only $1.50!

To order, click here.

Excellent tunes -- free! And on your browser right now. Just click on Radio Bojack!

E-mail us here.


This page contains a single entry from the blog posted on May 9, 2012 3:45 PM. The previous post in this blog was Why deny the obvious, child?. The next post in this blog is Google don't lie. Many more can be found on the main index page or by looking through the archives.



Law and Taxation
How Appealing
TaxProf Blog
Mauled Again
Tax Appellate Blog
A Taxing Matter
Josh Marquis
Native America, Discovered and Conquered
The Yin Blog
Ernie the Attorney
Above the Law
The Volokh Conspiracy
Going Concern
Bag and Baggage
Wealth Strategies Journal
Jim Hamilton's World of Securities Regulation
World of Work
The Faculty Lounge
Lowering the Bar
OrCon Law

Hap'nin' Guys
Tony Pierce
Parkway Rest Stop
Along the Gradyent
Dwight Jaynes
Bob Borden
Dingleberry Gazette
The Red Electric
Iced Borscht
Jeremy Blachman
Dean's Rhetorical Flourish
Straight White Guy
As Time Goes By
Dave Wagner
Jeff Selis
Alas, a Blog
Scott Hendison
The View Through the Windshield
Appliance Blog
The Bleat

Hap'nin' Gals
My Whim is Law
Lelo in Nopo
Attorney at Large
Linda Kruschke
The Non-Consumer Advocate
10 Steps to Finding Your Happy Place
A Pig of Success
Attorney at Large
Margaret and Helen
Kimberlee Jaynes
Cornelia Seigneur
And Sew It Goes
Mile 73
Rainy Day Thoughts
That Black Girl
Posie Gets Cozy
Cat Eyes
Rhi in Pink
Ragwaters, Bitters, and Blue Ruin
Rose City Journal
Type Like the Wind

Portland and Oregon
Isaac Laquedem
Rantings of a [Censored] Bus Driver
Jeff Mapes
Vintage Portland
The Portlander
South Waterfront
Amanda Fritz
O City Hall Reporters
Guilty Carnivore
Old Town by Larry Norton
The Alaunt
Bend Blogs
Lost Oregon
Cafe Unknown
Tin Zeroes
David's Oregon Picayune
Mark Nelsen's Weather Blog
Travel Oregon Blog
Portland Daily Photo
Portland Building Ads
Portland Food and
Dave Knows Portland
Idaho's Portugal
Alameda Old House History
MLK in Motion

Retired from Blogging
Various Observations...
The Daily E-Mail
Saving James
Portland Freelancer
Furious Nads (b!X)
Izzle Pfaff
The Grich
Kevin Allman
AboutItAll - Oregon
Lost in the Details
Worldwide Pablo
Tales from the Stump
Whitman Boys
Two Pennies
This Stony Planet
1221 SW 4th
I am a Fish
Here Today
What If...?
Superinky Fixations
The Rural Bus Route
Another Blogger
Mikeyman's Computer Treehouse
Portland Housing Blog

Wonderfully Wacky
Dave Barry
Borowitz Report
Stuff White People Like
Worst of the Web

Valuable Time-Wasters
My Gallery of Jacks
Litterbox, On the Prowl
Litterbox, Bag of Bones
Litterbox, Scratch
Ride That Donkey
Singin' Horses
Rally Monkey
Simon Swears
Strong Bad's E-mail

Oregon News
The Oregonian
Portland Tribune
Willamette Week
The Sentinel
Southeast Examiner
Northwest Examiner
Sellwood Bee
Mid-County Memo
Vancouver Voice
Eugene Register-Guard
OPB - Portland
Salem Statesman-Journal
Oregon Capitol News
Portland Business Journal
Daily Journal of Commerce
Oregon Business
Portland Info Net
McMinnville News Register
Lake Oswego Review
The Daily Astorian
Bend Bulletin
Corvallis Gazette-Times
Roseburg News-Review
Medford Mail-Tribune
Ashland Daily Tidings
Newport News-Times
Albany Democrat-Herald
The Eugene Weekly
Portland IndyMedia
The Columbian

The Beatles
Bruce Springsteen
Joni Mitchell
Ella Fitzgerald
Steve Earle
Joe Ely
Stevie Wonder
Lou Rawls

E-mail, Feeds, 'n' Stuff

Wednesday, May 9, 2012

City of Portland debt picture worsens

The City of Portland's new IOUs for $69.8 million of "urban renewal" play money in the Convention Center area sold yesterday. The interest rates range from 3.623% for an eight-year loan to 4.323% for a 13-year loan. Our discussion of where the money has been, and will be, blown is here.

The interest charge on the first year of the bonds is, by our calculations, about $2.8 million. That's just the interest. But hey, we'll be planning the eco-district and the industry clusters -- whatever they are.

And the latest borrowing spree has just begun. Here's another $23.1 million in red ink that the city is loading on -- bonds that will be sold next week to finance the police training facility and donut center out by the airport. Unlike the "urban renewal" bonds, these will have the "full faith and credit" of the city behind them. And they'll represent only a 10-year loan. That will mean lower interest rates, but it should be noted that the Moody's rating for this debt is Aa1 -- one cut below a top rating.

It doesn't stop there. The city's planning to borrow a whopping $162 million in July, for more "urban renewal" malarkey and construction pork for the water bureau. And there'll be sewer bonds, too, in August. By the time the Sam Rands leave office, the city's bonded debt will be approaching the $4 billion range. Stunning when you think about it. But the City Council never does -- so why should you?

Comments (16)

Hey, they've gotta steer this baby all the way into the ditch before bailing out.

The evil bankers are forcing us to go into debt! Maybe if we smash a few windows downtown the bankers will get scared and the debt will go away. After all, the debt isn't our fault, it is the evil bankers that made us do it.

Well, that's the problem with selling your future earnings, Sam gets to spend it today and someone else 5-10 years down the road gets to pay for it.

The high rise condos planned for the existing Lincoln High school campus seem like the only taxable value (and a risky engineering one at that) in the whole new "educational" urban renewal area. PSU and Portland Public Schools pay very little in property taxes, and so, it seems much more risky to invest in such bond issuance than the rating implied by Moodys.

P.S. I care about this continued borrowing binge as the future risk of getting tagged with some form of new tax to meet these obligations becomes increasingly obvious. Hopefully, I escape the lunacy of Portlandia before the "music" stops.

The evil bankers are forcing us to go into debt!

Who is forcing our city council to keep spending and why?

Inept, corrupt or insane?


Can't Portland refinance this debt with Countrywide or WaMu before it matures?

That's what my mortgage broker said I can do when the balloon is due.

Snards: That reminds me of an old joke that can be transmogrified as such: I want to go quietly into my retirement like Randy and Sam; not like the taxpayers in this city who are screaming as they are about to hit the wall of debt.

To try and use Sam and Randy's spending habits to exonerate the role of bankers in the economic meltdown, is either based on catastrophic ignorance of the situation, or a willful attempt to deceive with some very weak propaganda.

As obnoxious as Sam and Randy have become, and as much as they threaten the future of Portland, they are chump change compared to the insane financial exposure the "too big to fail" banking crowd has managed to get the planet into with derivatives. And this applies to all government spending. Derivatives dwarf everything. The current number is something like...wait for it....700 trillion. That's right, TRILLION.

Either you know that or you're just regurgitating some drivel one of the corporate-owned talking radio heads has programmed into your mind.

I'll throw one number at you just from Goldman Sachs: 44 trillion dollars of financial exposure. That means big trouble if these security swaps, or financial gambles, continue to unravel, and judging from Spain, they are.

Yes, government spending represents a threat, but blind ignorance about the role of the bankers or a deliberate attempt to deflect from it, represents a much bigger threat to our future.

By the way, the people of Iceland addressed their version of the meltdown by putting the bankers who caused the financial fraud in prison, and focusing their anger on their government. It worked and Iceland's economy has rebounded and is thriving.

Meanwhile, under President Obama, prosecutions for financial fraud are at a 20 year low. Here's how it worked:

When a grandmother on social security gave Candidate Obama 5 dollars in 2008, it was a campaign contribution.

When Wall Street gave Candidate Obama 16 million dollars back in 2008, it was protection money. That was unfortunate.

But the overriding problem is the derivatives, marketed with fraudulent Triple-A ratings. It was a crime. So don't try and pretend the bankers weren't at fault here. By doing that, you're letting down all previous and future generations of Americans and giving into the forces of ignorance.

We need everybody to grock this together - only then can we fix it, if it's not too late already.

By the way, the people of Iceland addressed their version of the meltdown by putting the bankers who caused the financial fraud in prison, and focusing their anger on their government. It worked and Iceland's economy has rebounded and is thriving.

Former Iceland PM found guilty only of “not meeting with his cabinet” and “will not be punished.” He naturally dismisses the charges “as a farce.”

As for some real Icelandic bankers, “bank fraud suspects found not guilty,” but prosecutors appeal to Icelandic Supreme Court.

Political show trials and double jeopardy – with all respect, is that what you are looking for Mr. McDonald? How would those actions, if undertaken in America, square with the US Constitution? And do your ACLU friends approve?

All your stories are from one news site. What if that's the FOX News of Iceland?

But I love your notion that holding leaders accountable to the Rule of Law would somehow not "square with the US Constitution."

Your example that the Prime Minister was only found guilty of one count at his trial, still sends a much different message than we sent to our leaders. Do you recall Bush or Cheney being put on trial? Or Henry Paulson?

And people complain that nothing has changed in authoritarian executive rule.

One thing that did change since 2008 when we basically jumped in to allow Wall Street to continue doing what got us into trouble: Back then the derivatives exposure was 600 trillion. By cracking down, and holding Wall Street accountable, we've managed to get the derivatives number to 700 trillion.

Look, I don't know the intricacies of Iceland's economy anymore than you do. We both read articles. Here's a paragraph from the British paper, the Independent back in 2011. It sounds different from our approach to the banking meltdown:

"Iceland's special prosecutor, Olaf Hauksson, has named more than 200 suspects in his criminal investigation into the country's financial crisis.

So far, those convicted in connection with the country's big banks – Landsbanki, Kaupthing and Glitnir – include former Kaupthing brokers who got six months in jail for manipulating bond deals and Baldur Gudlaugsson, a former permanent secretary at the finance ministry, who received two years for insider trading of Landsbanki shares. Haukur Thor Haraldsson, a former managing director with Landsbanki, was sentenced to two years in July for embezzlement.

With the full criminal investigation set to run until 2014, there may well be bigger fish to fry."

Our people not only were not prosecuted. They were rewarded. That's quite a difference.

I believe all that debt has an A-HOLE rating.

Mr. McDonald,

I know and know of plenty of people who lost their ordinary or high brow financial sector jobs in the meltdown and haven't recovered. That's hardly a reward.

Actually, I watch Fox Business, CNBC and Bloomberg, among others. Surely, you follow multiple outlets as well, and have noticed how Fox Business is hiring away some of CNBC’s best reporters.

Miscreants are convicted or face hefty civil penalties in the US for insider trading and embezzlement all the time. For example, in 2011, hedge fund manager Raj Rajaratnam, linked to the Goldman Sachs BoD, was handed down an 11-year sentence and a $10 million fine for insider trading.

To be convicted of insider trading or embezzlement, one actually has to commit a crime, not merely make a bad investment, underwrite bad loans or lose money for shareholders. We live in a country and under a constitution where people are punished for bad acts, not unfortunate outcomes. Tunnel vision, herd mentality, and being blinded by self interest are not crimes.

Selling something with a triple-A rating that is junk, is fraud, just as if you bought premium gas at the gas station and it turned out to be water.
Fox Business blames Europe's troubles on socialism. They conveniently leave out Goldman Sachs role in the fall of Greece. Henry Paulson was in charge then.

How do you explain the report that financial fraud investigations are at a 20-year low? Did Wall Street just happen to police itself so much better these last few years?

I'm sorry if this is a little disjointed but I really can't believe your position. I thought it was pretty well accepted that Wall Street committed the biggest fraud in the history of the world, so it's tough to find a place to start if you don't believe that.

Here's a few snippets from a description of the film, "Inside Job". Perhaps they'll help with what I meant by saying the people doing it were rewarded:

"During the housing boom, the ratio of money borrowed by an investment bank versus the bank's own assets reached unprecedented levels. The credit default swap (CDS), was akin to an insurance policy. Speculators could buy CDSs to bet against CDOs they did not own. Numerous CDOs were backed by subprime mortgages. Goldman-Sachs sold more than $3 billion worth of CDOs in the first half of 2006. Goldman also bet against the low-value CDOs, telling investors they were high-quality.

Part IV: Accountability
Top executives of the insolvent companies walked away with their personal fortunes intact. The executives had hand-picked their boards of directors, which handed out billions in bonuses after the government bailout. The major banks grew in power and doubled anti-reform efforts."

Selling something with a triple-A rating that is junk, is fraud

Hard as it might be to believe, the accountants who work for the rating agencies are mostly dopes who can't see beyond the nose in front of their faces. They totally bought into the theory that diversification cures all ills, bundling large numbers, along with the government backed security of the US real estate and mortgage markets, would protect investors from loss. They were fools and anyone who paid attention to their ratings are fools as well.

Bankers are middle men -- that's what they do. It's inherent they are on both sides of transactions where each party thinks it is operating to the advantage of the other. It often turns out that one party is right and the other is wrong. That isn't criminal, it's the nature of a financial transactions business.

As for Goldman's supposed conflict of interest, the counter party in the most oft cited transaction was ABN Anro, a massive sophisticated, global Dutch investment bank. Goldman thought the mortgage market was heading south (as did I at the time, saying the resulting deleveraging was going to be the biggest economic shock of our lifetimes), while ABN Anro thought the mortgage market would hold up (as did at the time, for example, the Board of Governors of the Federal Reserve).

I was right. Goldman was right. So if you continue to want to convict and punish, put Ben Bernanke behind bars, hold him accountable for his repeated assurances throughout 2007 that the housing sector would not melt down and pull the economy to the bottom with it. Is a mere accountant supposed to contradict helicopter Ben? For none of this would have happened if it had not been for the false sense of security permeating the financial system via the Fed, Fannie and Freddie.

I'm okay with putting Ben Bernanke on trial, but how about ending the Federal Reserve altogether and returning control of our currency to the American People - as is mandated in the Constitution?

It sounds like you know a lot of financial people hurt by this crisis, but you didn't challenge the part where the big shots were rewarded.

Maybe if we had handled this differently, we would be past the crisis, and your friends would be getting back to work. Along with the millions of Americans the financial sector also put out of work with their reckless schemes.

Instead the derivatives sweater continues to unravel. 100 billion more for Spain. JPMorgan talking big loses. The too big to fail banks are now bigger. JP Morgan's financial exposure is something like 70 trillion. So the Fed keeps pulling money from thin air to keep the charade going. It seems like we are just stealing from the future to delay the inevitable here.

Then the same big shots who caused it will sweep in and acquire the broken pieces of America. That's what I'm seeing.


As a lawyer/blogger, I get
to be a member of:

In Vino Veritas

Louis Jadot, Pouilly-Fuissé 2011
Trader Joe's, Grower's Reserve Pinot Noir 2012
Zenato, Lugana San Benedetto 2012
Vintjs, Cabernet 2010
14 Hands, Hot to Trot White 2012
Rainstorm, Oregon Pinot Gris 2012
Silver Palm, North Coast Cabernet 2011
Andrew Rich, Gewurtztraminer 2008
Rodney Strong, Charlotte's Home Sauvignon Blanc 2012
Canoe Ridge, Pinot Gris, Expedition 2012
Edmunds St. John, Bone-Jolly Gamay Noir Rose 2012
Dark Horse, Big Red Blend No. 01A
Elk Cove, Pinot Noir Rose 2012
Fletcher, Shiraz 2010
Picollo, Gavi 2011
Domaine Eugene Carrel, Jongieux 2012
Eyrie, Pinot Blanc 2010
Atticus, Pinot Noir 2010
Walter Scott, Pinot Noir, Holstein 2011
Shingleback, Cabernet, Davey Estate 2010
Coppola, Sofia Rose 2012
Joel Gott, 851 Cabernet 2010
Pol Roget Reserve Sparkling Wine
Mount Eden Chardonnay, Santa Cruz Mountains 2009
Rombauer Chardonnay, Napa Valley 2011
Beringer, Chardonnay, Napa Reserve 2011
Kim Crawford, Sauvignon Blanc 2011
Schloss Vollrads, Spaetlese Rheingau 2010
Belle Glos, Pinot Noir, Clark & Telephone 2010
WillaKenzie, Pinot Noir, Estate Cuvee 2010
Blackbird Vineyards, Arise, Red 2010
Chauteau de Beaucastel, Chateauneuf-du-Pape 2005
Northstar, Merlot 2008
Feather, Cabernet 2007
Silver Oak, Cabernet, Alexander Valley 2002
Silver Oak, Cabernet, Napa Valley 2002
Trader Joe's, Chardonnay, Grower's Reserve 2012
Silver Palm, Cabernet, North Coast 2010
Shingleback, Cabernet, Davey Estate 2010
E. Guigal, Cotes du Rhone 2009
Santa Margherita, Pinot Grigio 2011
Alamos, Cabernet 2011
Cousino Macul, Cabernet, Anitguas Reservas 2009
Dreaming Tree Cabernet 2010
1967, Toscana 2009
Charamba, Douro 2008
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Horse Heaven Hills, Cabernet 2010
Lorelle, Horse Heaven Hills Pinot Grigio 2011
Avignonesi, Montepulciano 2004
Lorelle, Willamette Valley Pinot Noir 2011
Villa Antinori, Toscana 2007
Mercedes Eguren, Cabernet Sauvignon 2009
Lorelle, Columbia Valley Cabernet 2011
Purple Moon, Merlot 2011
Purple Moon, Chardonnnay 2011
Abacela, Vintner's Blend No. 12
Opula Red Blend 2010
Liberte, Pinot Noir 2010
Chateau Ste. Michelle, Indian Wells Red Blend 2010
Woodbridge, Chardonnay 2011
King Estate, Pinot Noir 2011
Famille Perrin, Cotes du Rhone Villages 2010
Columbia Crest, Les Chevaux Red 2010
14 Hands, Hot to Trot White Blend
Familia Bianchi, Malbec 2009
Terrapin Cellars, Pinot Gris 2011
Columbia Crest, Walter Clore Private Reserve 2009
Campo Viejo, Rioja, Termpranillo 2010
Ravenswood, Cabernet Sauvignon 2009
Quinta das Amoras, Vinho Tinto 2010
Waterbrook, Reserve Merlot 2009
Lorelle, Horse Heaven Hills, Pinot Grigio 2011
Tarantas, Rose
Chateau Lajarre, Bordeaux 2009
La Vielle Ferme, Rose 2011
Benvolio, Pinot Grigio 2011
Nobilo Icon, Pinot Noir 2009
Lello, Douro Tinto 2009
Quinson Fils, Cotes de Provence Rose 2011
Anindor, Pinot Gris 2010
Buenas Ondas, Syrah Rose 2010
Les Fiefs d'Anglars, Malbec 2009
14 Hands, Pinot Gris 2011
Conundrum 2012
Condes de Albarei, Albariño 2011
Columbia Crest, Walter Clore Private Reserve 2007
Penelope Sanchez, Garnacha Syrah 2010
Canoe Ridge, Merlot 2007
Atalaya do Mar, Godello 2010
Vega Montan, Mencia
Benvolio, Pinot Grigio
Nobilo Icon, Pinot Noir, Marlborough 2009

The Occasional Book

Maria Dermoȗt - The Ten Thousand Things
William Faulkner - As I Lay Dying
Markus Zusak - The Book Thief
Christopher Buckley - Thank You for Smoking
William Shakespeare - Othello
Joseph Conrad - Heart of Darkness
Bill Bryson - A Short History of Nearly Everything
Cheryl Strayed - Tiny Beautiful Things
Sara Varon - Bake Sale
Stephen King - 11/22/63
Paul Goldstein - Errors and Omissions
Mark Twain - A Connecticut Yankee in King Arthur's Court
Steve Martin - Born Standing Up: A Comic's Life
Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 119
At this date last year: 21
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269

Clicky Web Analytics