can't pay - won't pay

The city of Oakland, California, is fighting back against Goldman Sachs by refusing to pay a penalty for getting out of an interest rate swap contract that is to Goldman's advantage. Goldman and the city of Oakland entered into a deal to protect variable interest rate bonds issued by the city in 1997. Oakland was given a fixed rate of under 6 percent to protect against inflation on those bonds. But if the interest rates declined, Oakland was to pay Goldman Sachs millions of dollars in tribute, or almost as many millions of dollars to get out of the deal. With the LIBOR scandal pushing down lending rates and with the Fed depressing interest rates artificially, this is like stealing. It was a scam even without LIBOR. The scam was that the banks knew what the central banks were going to do with regard to interest rates. The handwriting of financial weakness was on the wall in 1997, when these contracts were set up. The banks knew which way the winds were blowing, and the governments were not privy to that information. LIBOR and the UK financial system seems far away, but in fact, it is an integral part of the scam. Globalization was understood by these bankers, but not by government. Government remembered the 1970's and inflation. But that was then and this is now. It was a massive bank fraud so there no legal requirement to pay. It isn't the unions, but the banks eating away at local government.