If you were a citizen in Miami who tried to complain or to stop a development during the building boom, to protect your neighborhood or an aquifer, a bay or a stream, you know the sensation of being steamrollered by a public process in which corporations and lobbyists dominate.
It was all about leverage, and by that term, I don't mean the leverage that County Hall insiders have against common citizens in ways that essentially deform representative democracy.
I mean debt. But not just the debt that individuals accepted in buying a house, or too much of a house, through assumption of a mortgage. By leveraged debt, I mean the Ponzi scheme that allowed Wall Street to fabricate assets twenty or thirty times the value of that mortgage, creating toxic confections in the trillions of dollars, blessed by bond rating agencies and the lily-white foundation for a blizzard of fees, compensation packages, and corruption that spread billions across the US Monopoly Board.
During the boom, it happened in the riskiest possible ways with the collusion of Wall Street financiers and the whole supply chain of the development industry-- especially the kind that manifested in South Florida with platted subdivisions in farmland, far from places of work. "It is what the market wants," they said-- sniping at objectors as "elitist" or worse. Steve Shiver, the former mayor of Homestead now running an amusement park in North Carolina, called them "terrorists" and was slapped on the back for saying so, by local bankers.
Today the FBI announced it had arrested about 300 real estate industry players since March, including dozens over the last two days "in its crackdown on incidents of mortgage fraud that have contributed to the country's housing crisis." (AP report, June 19th, "Charges at Bear Stearns linked to subprime debacle.")
The photos of former hedge fund managers lead away in handcuffs are only the first of executives who will be charged criminally in the wake of the subprime market debacle.
And it is not just Bear Stearns. I suspect that there are many sinking ships, including Lehman Brothers, where employees and consultants may have piled out of investments even as they were touting housing mortgage debt to investors. The reason I cite Lehman Brothers, is that the firm was a major salesman to the Florida Administration Board that supervises billions of dollars in assets as fiduciary for a host of municipalities and agencies.
Nearly ten billion in debt, much of it sold by Lehman Brothers, has been "quarantined" in Tallahassee, whatever that means. The mainstream media ought to find out.
To me, it means that the insider political dealing on bonding infrastructure is being hidden from view. No surprise there, until the obligation of fiduciary responsibility shatters in a thousand pieces. The personal accounts of those insiders, including former Governor Jeb Bush who is a consultant to Lehman Brothers, should be checked to be sure that there was no selling going on, even as Floridians hard earned money was being sucked down the drain, such as practices which landed the former Bear Stearns managers in handcuffs.
2 comments:
Don't expect the Miami Herald to cover this. Hear no elvil, see no evil, report no evil.
There are supposed to be at least 300 more indictments in the next few days, of lesser players in the local real estate markets of Chicago, Miami ,Atlanta, and suburban Maryland.
Let's hope they are not the last. There are many hundreds of Wall St principals who played a knowing and decisive role in setting up their firms and investors to take murderous hits from which many institutions will never recover.
This is the worst financial debacle in the history of the world, and never have so many "ordinary folks" been swept up in the speculative hysteria.
I really don't believe this country will recover from this in my lifetime.
Post a Comment