Brazen big banks, swap mania and the fallout

ch. 1 What Is This Book All About?
Introduction
Changes in Financing Strategies of Nonprofits
A Critical Contract Design Feature
Creating Values "on Paper"
How does it Work? An Example: A Swap Contract from the NY MTA Portfolio
Paying Enormous Termination (Fees) Penalties
Are Nonprofit Officials Equipped to Deal with Swaps?
An Illustrative Case: The Midway Airport Swap
The Impetus for the Exponential Growth of Derivatives and Swaps
The Orbit of ISDA: The Inside Shop
Look Who is Guarding the Henhouse!
The Means of Persuasion that Big Banks had Adopted
a.Persuasion: Promising Mirage Benefits
b.Persuasion: Providing Near-Term Quick Cash
c.Persuasion: Buying Swaps as Seen by a Grand Jury
d.Persuasion: Using Economic Dependence: The Glaring Example of the City of Atlanta
Why was it difficult to Meet with the Actors?
a.Concern for Pending Litigation
Contents note continued: b.Novelty and Complexity of Interest Rate Swaps
c.Lack of Knowledge
d.Deception and Incomplete Disclosure of Facts and Risks
e.Key Decision Makers are in Jail
f.Staff Turnover
ch. 2 Carol Loomis Described Four Derivatives' Sins: Lies, Leverage, Ignorance, and Arrogance
a.Lies and Ignorance
- Michael Lissack and Dade County, Florida (A Case of Big Banks' Deceitful Sales Tactics)
b.Arrogance, Lies, and Leverage
- Procter &​ Gamble versus Bankers Trust of New York (Another Case of Big Banks' Deceitful Sales Tactics)
Cases In Wealth Transfer From Local Government Agencies To Big Banks
ch. 3 The Saga of Jefferson County, Alabama, &​ JPMorgan Chase
The Visible Shocks
It All Started with the Sewer
New Contracts and Deception
Sharing the Loot
The Aftermath
ch. 4 Big Banks Took Nearly $900 million from Detroit for Terminating Swaps &​ Gave back Nothing
Yet, That Was Not All!
Contents note continued: The Real Human and Social Cost of Swaps
The United Nations Coming to Detroit
Lessons Learned
Lessons Not Learned
ch. 5 The City of Brotherly Love Drowned in the Eastern Swap Sinkhole
The Illusion of Lowering the Cost of Borrowing
Covering up the Mess
Evidence of Cover Up
In Summary
ch. 6 The Heart of America and Windy City Handed Its Compass to the Banking Cartel
The Big Picture
Falling for the Weekly Auction Rate
Obsession with Swaps
ch. 7 Tales of Two Small Cities
a.The City of Gainesville, Florida: Pays for Swaps and Raises Electricity Rates
b.The City of Oakland: Got Stuck with Goldman Sachs and is Getting Nothing
CASES IN WEALTH TRANSFER FROM STATE GOVERNMENT ENTITIES TO BIG BANKS: ALL THE FOUR SINS OF DERIVATIVES DESCRIBED BY LOOMIS WERE AT PLAY HERE
ch. 8 The State of Illinois and Other Swap Gorillas
Contents note continued: ch. 9 The State of New Jersey: The Pandora's Box of Interest Rate Swaps Cost Nearly $1.5 Billion
Changing the Landscape
Accelerating Losses
More to the Story
ch. 10 The Empire State Doctored Interest Rate Swap Gains Artfully
Beating Own Drums
The Shrinking Present Value
Mark-to-Market Discussion
More about the State of New York Swap Contracts
The Irony
CASES IN WEALTH TRANSFER FROM PUBLIC SCHOOLS TO BIG BANKS
ch. 11 Jack Wagner's Mission to Rescue Pennsylvania from the $17.4 Billion Derivatives Mess
ch. 12 The School District of Philadelphia Dismissed Staff to Save Money to Pay for Swaps
ch. 13 Two Other Special Cases in Pennsylvania Schools
a.Erie City School District
b.State College Area School District
ch. 14 Chicago Public Schools Dismissed Staff and Borrowed at High Interest Rates to Pay for Interest-Rate Swaps
The Infeasibility of Attaining Synthetic Fixed Rates
Contents note continued: ch. 15 Denver Public Schools: Paid High Price for the Advice of Unwitting Experts
CASES IN WEALTH TRANSFER FROM COLLEGES AND UNIVERSITIES TO BIG BANKS: PAYING BIG BANKS HUGE SUMS OF MONEY FOR ILL-ADVISED INTEREST-RATE-EXCHANGE CONTRACTS
ch. 16 The Flagship of the Tar Heel State Kept Dipping into the Same Losing Swap Well
Getting Deeper into the Swap Mania
ch. 17 The MSU Spartans Kept On Swapping Their Money for Nothing
Obsession with Swap Contracts
ch. 18 Interest-Rate Swaps Cost Harvard More Than $1.47 Billion
ch. 19 The University of Texas System: A Large State-Run Hedge-Fund-Like in Austin
Obsession with Swaps and Other Derivatives
CASES IN WEALTH TRANSFER FROM HEALTH-CARE ORGANIZATIONS TO BIG BANKS
ch. 20 Indiana University Health: A Case of Derivatives Abuse from the Midwest
Obsessed with Swaps
ch. 21 The University of California Health System: A Case of Derivatives Abuse from the West
Contents note continued: ch. 22 Johns Hopkins Health System Corporation: A Case of Derivatives Abuse from the East
ch. 23 The University of Florida Shands Hospital: A Case of Derivatives Abuse from the South
Losses and Collateral: Idle Cash
ch. 24 The Sisters of Charity of Leavenworth Health System
ch. 25 Dignity Health Holds A Bigger Bag of IOUs to the Banking Cartel
ch. 26 Texas Methodist Hospitals Did Not Escape Big Banks' Vise
CASES IN WEALTH TRANSFER FROM TRANSIT AUTHORITIES TO BIG BANKS: INCREASING FARES TO PAY BIG BANKS FOR SWAP CONTRACTS
ch. 27 With Swaps, Riding the Gravy Train Is Expensive
ch. 28 The New York Metropolitan Transportation Authority Fell into the Eastern Swap Sinkhole
Transparency Questioned
ch. 29 The Bay Area Toll Authority (BATA) Fell into the Western Swap Sinkhole
ch. 30 The Massachusetts Bay Transportation Authority Joined the Eastern Swap Sinkhole
Interpretation
Contents note continued: ch. 31 A Couple of Other Port Authorities
a.The Port Authority of New York and New Jersey Paid Big Banks $242 Million to Exit Swaps
b.Pennsylvania Turnpike Authority Confounds the Financing
THE LIBOR SCANDAL: BIG BANKS' COLLUDED &​ CONSPIRED TO SIPHON MORE MONEY FROM THE PUBLIC SERVICE SECTOR &​ EVERYONE ELSE
ch. 32 The London Connection: London Average Interest Rate (LIBOR)
ch. 33 The Discovery of Cheating
a.Litigating LIBOR Manipulation
b.Cheating Chats and Why Manipulating LIBOR Matters
c.Evidence from the Files of the Financial Services Authority UK and the FBI (USA)
d.Collusion and Conspiracy at UBS AG: The Rain Man &​ Company
e.The Rain Man's Long Reach to RBS (from the FBI Files)
f.Deutsche Bank's High Cost of Denial
UNCONSCIONABILITY: DANCING WITH THE "SNAKES" OF MODERN TIMES
ch. 34 Are Interest Rate Swaps with Nonprofit Entities Unconscionable Contracts?
Criterion 1 Presumed Equality of Values
Contents note continued: Criterion 2 Ignoring Transaction Cost
ch. 35 Epilogue.

For nearly two decades, countless non-profits in the U.S. were forced to pay big banks enormous sums of money to settle or terminate bilateral contracts known as Interest Rate Swaps (IRSs). Officials at non-profits had entered into these costly contracts unaware that each contract has only one winner, and that big banks did not intend to be the losers.
The effects of such monetary transfers have been catastrophic. Money-strapped non-profits had to dismiss schoolteachers, shut off water supply to thousands of poor households, and downsize many other essential public services. Local and state governments, public school districts, universities, hospitals and transit authorities from New York to Los Angeles have been among the largest hit.
This book presents selected cases and highlights the lack of evidence that decision makers at non-profits had fully understood the terms and complexities of IRSs. The evident unequal bargaining power thus gives rise to the high likelihood of unconscionable contracting. Additionally, for terminating these contracts, big banks collected huge sums of money for services that had not been, and will never be, rendered. Accordingly, questions arise as to whether these termination payments are tantamount to unjust enrichment.

https://www.worldscientific.com/worldscibooks/10.1142/11136