Yesterday LIBOR (see “Makers v. Fakers” below), today the Tribune Corporation. Just how many high-priced accountants and attorneys did it take to craft an impregnable income tax shield for this teetering corporation–which went bankrupt anyway. And in bankruptcy, how many more attorney/accountants did it take to wipe the corporation’s debt slate clean, largely at the expense of the “owner workers,” whose role from the get-go seemed more about exploiting tax loopholes than running the show? And finally, after the bankruptcy, how many more lawyers and CPAs did it take to come up with a sale structured to avoid and/or defer for years any taxes on the capital gains realized by the key investors who apparently did run the show? Shell games, indeed, though it looks as if the IRS is ready to pounce–but, of course, the attorneys and accountants stand ready to bill more high-priced hours fighting back.
School test cheating scandals are often uncovered when investigators follow-up on statistically implausible results. Well, the FBI is apparently batting a thousand, by its own calculation, in the justifiability of agent-involved shootings. And, consistent with the self-protective institutionalization the FBI has so often demonstrated (see FBI Labs, Ruby Ridge, Sentinel), the agency offers several self-congratulatory reasons for its perfect batting average. We’ll see but methinks warts are hidden in that perfect profile. .
So this fellow, and others like him, allegedly found ways to fudge the London Interbank Offered Rate, one of many widgets in the global financial system. LIBOR, however, acts as a base rate for such a multitude of financial products that its manipulation could inflate a bank’s profit at the expense of its lenders, as the bank passed on illusory “increased borrowing costs.” Such illusions are enabled by the financial sector’s thick web of extremely complex financial instruments whose hidden, often unintended, levers await discovery and manipulation by ambitious functionaries looking to make a name, and a bonus, for themselves. There was less room for this when we had our economy centered on making things.
An Energy Department official fast-tracked three of his children into internships and then sent two to a high-level training course where they took up seats intended for career employees, not interns. The IG put a stop to this unfair favoritism. Read the details here. Or delve into the actual report linked at the bottom of the linked page.
Municipal and county money pits are becoming a theme. Detroit’s fiscal hole is so deep–as much as 17 billion and counting–that the state-appointed emergency manager proposes a 90% haircut for bondholders and other investors. If they demur, bankruptcy court looms, a likely seismic event for municipal bond markets.
More on the flirtation with bankruptcy by Jefferson County, Alabama (which includes the state capital, Birmingham). Officials there had bedazzled bond-buying investors for years with rosy financial projections of the county’s water/sewer operations; Wall Street firms, in turn, bedazzled county officials with prospects of lower interest rates achieved though interconnected financial instruments of almost unfathomable complexity, instead of the straightforward long term bonds the county had been issuing. Knowingly or not, everyone dove right in to what appeared to be fine water, now turned into a sludge-filled money pit.
Goodness. Much of the command staff of the Boston Fire Department threatening litigation–against each other! Read: Boston fire chief threatens to sue command staff if they continue “defamatory” attacks. And, for an update, look:http://bcove.me/ei86h0uu