Thursday, May 31, 2012

Wells Fargo Seizes Stockton, California City Hall

The Stockton City Council announced Wednesday that they will look at bankruptcy contingency plans after Wells Fargo seized the new city hall building.

The city paid $35 million to buy the 8-story building, but was not able to move in because of its money problems, and recently stopped making debt payments all together. This is the fourth building that was repossessed by Wells Fargo; the bank seized three city parking garages for the same reason.

Just wait to financial problems start to put a squeeze on state governments. California and Illinois are high up on the list. They might be able to scrape by for another year or two, but that's it.

(htJohnFrahm)

21 comments:

  1. As long as politicians can make promises and buy votes from unions with other peoples money, this will continue to happen. We will all be bailing out CA and IL, if those two states don't follow Wisconsin's example.

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    1. Yep. CEO pay is up 750% since the 70's, yours is up 5%, but you're right, it's all the unions' fault. Idiot.

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    2. That's an interesting argument. With a union (and I am in one), my pay is up 5%. With no union, CEO pay is up 750%. Hmmmm...

      Not that I'm supportive of CEO's not rewarding the worker bees more appropriately, but you're comparing apples and oranges.

      Pension plans and benefit packages as currently constituted are unsustainable. That will be corrected one way or another.

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    3. Anon 2:59, we are talking about public sector unions. If you are in a private sector job that is unionized, you have zilch in common with your counterparts in the public sector. For one, you are limited by the economics of your employer, they are limited only by the willingness of their political leaders to fleece the taxpayer.

      I don't understand the CEO pay logic either. What the CEO makes is irrelevant to what those below him make. Are you arguing that someone is stupid enough in a free market to work at a place where they are being underpaid? If they are, then they are probably making what they should. I am an employer myself and I sure wish I could get away with paying my employees below market rates, but I know if I do, I lose the good ones to my competition and the crap is what I am left with. You learn that usually after your 2nd or 3rd year in business when you're constantly pulling your hair out because of stupid crap your lowly paid lousy employees do.

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    4. Anon 7:09, You are spot on. Nail meets hammer, Bingo etc.
      Public sector unions are a huge financial problem.

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  2. Invoke imminent domain on them buildings and take them back. The government does it to ordinary citizens.

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    1. How naive! Banks are not ordinary citizens that governments can easily bankrupt if they fight them in court. Ordinary citizens will bend over backwards and afterwards, scream for more.

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    2. You cannot do imminent domain in this case; domain requires the taker (the city) to pay the holder (bank) "fair market value". Stockton is broke. Where they gonna get 35mil to pay for the building?

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  3. Maybe they should look into some of the assets that exist within their Comprehensive Annual Financial Reports?

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  4. WAKE UP AMERICA!
    QUIT PAYING TAXES! GET THE CROOKS, ELITE, LAWYERS, POLITICANS ETC OUT OF OFFICE! IMMINENT DOMAIN IS USED BY COMMUNIST AND SOCIALIST TO DESTROY AMERICAN CITIZENS RIGHTS!!!!!!!!!!!

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    1. ...But, isn't that what "We" the American people gave them the right to do? Who are the "idiots?" Americans that think we can have a democracy without involvement are the idiots! A true democracy requires participation; other then that, we have no democracy. Keep up the work (or lack of it) people :) Don't vote, don't say anything. That's what the "haves" want from us-the "have-nots."

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  5. I guess now instead of the building being a cost to the city the bank will have to pay taxes to them so the city wins and the bureuacrats and politicians will have to do their business in a regular building not the palace they were hoping for...

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    1. That's one way to look at it, but the credibility of the city is trashed and it can forget issuing bonds in the future. There also may be state and federal funds involved which may end up being clawed back.

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    2. Not buying government bonds is one of the smartest things Americans can do. Gary North writes about this. Let's beat 'em back locally folks. Then the federal government won't matter as much.

      Loaning the government money is at best, throwing it down a rat hole. At worst, it is empowering government to do evil and destructive things to us.

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  6. I'm laughing so hard, it's a wonder I didn't die when I read this.

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  7. Too bad the States and Cities can't print money out of thin air like the Feds do.

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  8. I'm sure that building is gonna be a real "seller"...lol

    The dynamic should get interesting in terms of property taxes....

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  9. Can the city simply steal the building back by charging obscene property taxes to the new owners (the bank)?

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  10. Well now maybe the city officials will lay off on arresting everyone and fining all the residents to try and save the stupid building. They wonder why everyone is losing their home, well its hard to get a job as it is. Try getting one with a DUI that was undeserving. These greedy officials / cops don't see the long-term effects.

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  11. My "favorite" Bank, Wells Fargo, doing what they do best. At least it shows the Government where it stands with it's "Pet" Bankers.

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  12. Who is really to blame here are the bond selling companies such as Cantor Fitzgerald that persuade governments to issue bond packages left and right. For city hall, police departments, fire houses, schools, roads, bridges, with little care in the world towards fiscal conservatism. These bonding companies drive the economy...in the same way insurance companies do...and federal agencies (funded by bond company payments through Treasury!).

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