Gambling Towns

The Jesi MeetUp and the derivatives that the town has invested in

Italian towns have something in common: 35 billion euro of investments in funds, bonds, derivatives, and other types of paper that have become trash. The debts of the Italian towns make Parmalat blanche and someone will have to pay. In recent years, towns have become financial speculators. They have used the taxes of the citizens to play on the Stock Market. The results are astounding.
The financial crisis has transformed the investments into debts. The towns had benefits at the start with advances obtained from the banks on the forecast of consistent gains and they find that they have money to pay back and the initial capital that has been wiped out. As far as I know the town functionaries are not financial experts and not even the citizen body has assigned them the facility of using their money to buy shares in Lehman Brothers or the Bank of Scotland. Basically our mayors have suddenly taken on the role of bankers and they have lost everything.
In 2008, Taranto, Catania, and Rome went bust and were saved by the State coffers. They are in the front ranks. The financial operations often have picturesque names with a clear reference to the town. In Venice there are some current investments called "Canaletto" and "Rialto". Certain towns have decided to take the banks to court. Milan has taken legal action against Deutsche Bank, JP Morgan Chase, UBS and Hypo Real Estate’s DEPFA. Basically they are accused of having deceived the town. Thus this is a shining example of “abuse of the vulnerable”
Moratti’s legal action could open up the way for a class action by all Italian savers who have lost their shirt in 2008 and who will lose their underpants in 2009. If the town has been swindled, so have all Italian investors. What’s true is that 35 billion is missing from the coffers of the towns. Who watches over the Gambling Towns?
The financial operations are usually started off by the mayors who don’t have to be accountable for that because , the paying out period for the investments and thus the potential (usually certain) for loss falls on the following administration. For example, Moratti ‘s financial debts are the offspring of the Albertini administration. Up until today, there has been a precarious equilibrium with ever riskier investments that covered the previous losses. Now the cork has popped with the world economic crisis.
We are left with the question: “Who watches over the Gambling Towns? The mayors cannot expose their towns to going bust by playing roulette with tax payers’ money. The strategy of the towns is to take the banks to court. The strategy of the citizens should be to take the mayors to court. Crikey. The debt of the towns is bigger than that of Parmalat and no one is saying anything. No one is worried.
They will never give up (but is it in their interests?). Neither will we.

Posted by Beppe Grillo at 08:10 PM in | Comments (7)
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The quote from Joseph Heller is from the novel Catch 22, not Clause 22. Its confusing at first, but the reference would be much clearer if it were changed to read "Catch 22".

Posted by: Samantha Skolnik | January 24, 2009 03:39 AM

After the political cleansing of "many pulite", or "clean hands" in the nineties, and the founding of the Second Republic, I foolishly thought that corruption and political moral degradation in Italy had ended. I thought the cancer had been excised and the roots scraped off. I should have known better.
Corruption and moral degradation is thriving in Italy, I have to sadly say.

I got an eyefull of what I'm talking about at AnnoZero: one of the few investigative shows still permitted to do serious journalism in Italy and forever under attack by the powers that be. Last night the show was about a powerful entrepreneur and his connections with the Neopolitan political elite of all persuasions. Taped phone conversations revealed the submissinives of politicians before money.

It revealed cryptic phone conversations about rigged bids for juicy city contracts, revealed the extent of nepotism practiced in Naples, revealed how politicians extorts votes from the citizen by transforming their entitlements into a favors; it revealed how prosecutors, well-intentioned politicians and committed journalists fighting systemic corruption and organized crime at all levels are accused of zealotry, self-righteousness, and of being fanatical moralists.

An investigative prosecutor, De Magistris, was stopped from investigating further into the the billions of euros for the construction of water purifiers in Calabria, when his investigation involved " highly reputable" political personalities and organized crime.

Ninety per cent of Italian media, from television to print take their cues from the politcal establishment now in power.

Case in point: Mr. Vulpio, a journalist from Corriere della Sera, (a national paper owned by the Italian Prime Minister) was taken off an investigative article.

The article named the politicians involved in the disappearance of billions of euros granted by the European Union to build water purifying plants in Calabria.

Or, mainstream media simply hears no evil, sees no evil, says no evil as in the case of an important trial underway in Sicily involving heads of secret services and organized crime.

Posted by: louis pacella | January 23, 2009 06:21 PM

... i would like to put at all italian's attention that the new president of united states due to the economy situation has freezed all Public salaries !!!!!!!!!!!!!!!!!

Posted by: orfeo smania | January 23, 2009 10:46 AM

The reality of the whole financial debacle that has hit the whole wide world stems from bankers and financiers who have manipulated the financial markets into a roulette type of financial lottery. Just like the Great Crash of 1929 everyone was sucked into the frenzy of quick wealth and instant gain until someone pulled the rug from under their feet and as a consequence they lost everything.
The whole financial system was rotten to the core and the first real signals appeared towards the end of 1997. Subsequently the rot was made clearer by the collapse of the Enrons and Worldcoms of the world. Meanwhile in the frenzy to access more funds and savings Banks and other financial institutions kept pedling their new glossy products (same shit with fancy new names). What they offered was always the same worthless product with the sole intention of sucking in as much individual savings from naive investors into their system. That such a PYRAMID SCHEEME would be unsustainable should have been pretty clear to most. Unfortunately greed won over common sense and individuals and other institutions (pedling their client's savings) lost it all.
Basically the Wall St high flyers and financial high flyers around the world have recked the Capitalist Free Enterprise system for good. Whatever system will emerge from the ashes will never be the same.
All that remains to do now is to gear up whatever new system as soon as possible. Get up, pick up the pieces, dust ourselves off and start all over again. Meanwhile I suggest that all those suckers who have lost their savings go after the personal assets and wealth accumulated by the varios bankers and people like the Maddoxes of the world who have been responsible for the scams.
What is at present very clear is that no one has any idea of the true extent of all losses, how long the depression will last and when and if it will end.

Posted by: Maurizio Odello | January 23, 2009 10:43 AM

You may (or may not) be pleased to know that there are municipal deep in trouble from the same thing all around the world.
My concern over the whole financial crisis has been the long established practice of selling credit based on receipts of credit from other sources.
It's all ephemeral.È una fantasma.
There is nothing actually there. Non c'è niente attuale.
Consequently it takes only a very small "hiccup" to destabilise the whole process.
And, here we are! Ecco noi.

Posted by: Rolly Wheeler | January 23, 2009 05:04 AM

And another thing: shouldn't all those mayors and their councils be investigated? They were reckless and careless with taxpayers' money. Isn't anybody ever accountable in Italy? Again and again taxpayers are ripped off and yet no one dares look into what happens to all that money. And when somebody tries to do something they're called, "giustizialisti" and made to feel as if they're the criminals. Only in Italy.

Posted by: louis pacella | January 23, 2009 01:26 AM

The other night, on Ballaro', it was as though Casini and the lady from Confindustria, had their cavities probed a bit too deep when they literally jumped up from their chairs, and both snarled at the gentleman from the union, for daring to suggest the free-market had screwed up.

Casini blamed delinquents (capitalists?) for the big economic screw-up and disdainfully asked the "union guy" if he preferred state-owned enterprises? While the "lady from Confindustria" accused him of being a nostalgic, retrograde. The verbal fury was impressive, but a bit pathetic. How can both guests imply all is well with the free-market when she had argued for the state to finance small businesses and entrepreneurs -if that's not socialism for capital, I don't know what is.

And when Casini says deliquents caused the downfall of the economy he should tell us who they are and where they are hiding. The reality is that the free-market is in such a mess no one knows for sure what happened and how bad it is, hence no sure cure.

As far as Italian towns having been ripped-off by the system, one can only wonder if the mayors had rocks in their heads. They might as well have taken taxpayers' money, gone to Montecarlo and played blackjack: the odds would have been better. And talk about politicians without ethics!

Posted by: louis pacella | January 23, 2009 01:09 AM

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