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?

Yes.

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.

Andy,
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.”

http://www.icenews.is/index.php/2012/04/23/former-icelandic-prime-minister-geir-h-haarde-found-not-guilty/

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

http://www.icenews.is/index.php/2011/06/29/iceland-bank-fraud-suspects-found-not-guilty/

http://www.icenews.is/index.php/2011/07/07/not-guilty-corruption-verdict-appealed-to-supreme-court-of-iceland/

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?

Newleaf,
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.

Newleaf,
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.

Newleaf,
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.