NORTH ANDOVER — The battle of the boards over energy saving continues.
While the Finance Committee did not take a formal vote on the issue Tuesday night, the advisory board is moving toward recommending that contracts of more than three years be approved by Town Meeting. The committee is particularly concerned about a proposed $4.3 million contract with Ameresco, a Framingham energy services firm,
Ameresco has said it will reduce the town's energy consumption and costs by making a host of improvements to buildings, including boiler replacements and more efficient lighting. The town would pay back the $4.3 million over 15 years and that bothers Finance Committee members.
The selectmen and School Committee, as well as Town Manager Andrew Maylor and Assistant Town Manager Raymond Santilli, support a pact with Ameresco.
Article 3 on the warrant for the June 12 Town Meeting authorizes the town manager and superintendent of schools to award contracts for more than three years if four selectmen or four School Committee members approve.
Finance Committee member Peter Besen proposed amending the article to require that such contracts be approved by Town Meeting.
"We don't want it to happen administratively," his colleague, Benjamin Osgood, said about the possibility of a contract with Ameresco being approved without voters' approval.
Thomas Dugan, presiding in the absence of Chairman Alan LeBovidge, said board members need to agree on the language of an amendment before moving forward with it.
"We don't have to make a decision tonight," Dugan said. The board invited Ameresco to send a representative to its meeting last night, but the company declined to do so, according to Dugan.
Dugan, Osgood, Matthew Remis and other Finance Committee members have said the board has not been given sufficient information about Ameresco to make an informed decision.
Out of the Mouths of Babes: Twelve-Year-Old Money Reformer Tops a Million Views - HoweStreet.com
The youtube video of 12 year old Victoria Grant speaking at the Public Banking in America conference in April has gone viral, topping a million views on various websites.
Monetary reform—the contention that governments, not banks, should create and lend a nation’s money—has rarely even made the news, so this is a first. Either the times they are a’changin’, or Victoria managed to frame the message in a way that was so simple and clear that even a child could understand it.
Basically, her message is that banks create money “out of thin air” and lend it to people and governments at interest. If governments borrowed from their own banks, they could keep the interest and save a lot of money for the taxpayers.
She said her own country of Canada actually did this, from 1939 to 1974. During that time, the government’s debt was low and sustainable, and it funded all sorts of remarkable things. Only when the government switched to borrowing privately did it acquire a crippling national debt.
Borrowing privately means selling bonds at market rates of interest (which in Canada quickly shot up to 22%), and the money for these bonds is ultimately created by private banks. For the latter point, Victoria quoted Graham Towers, head of the Bank of Canada for the first twenty years of its history. He said:
Each and every time a bank makes a loan, new bank credit is created — new deposits — brand new money. Broadly speaking, all new money comes out of a Bank in the form of loans. As loans are debts, then under the present system all money is debt.
Towers was asked, “Will you tell me why a government with power to create money, should give that power away to a private monopoly, and then borrow that which parliament can create itself, back at interest, to the point of national bankruptcy?” He replied, “If Parliament wants to change the form of operating the banking system, then certainly that is within the power of Parliament.”
In other words, said Victoria, “If the Canadian government needs money, they can borrow it directly from the Bank of Canada. The people would then pay fair taxes to repay the Bank of Canada. This tax money would in turn get injected back into the economic infrastructure and the debt would be wiped out. Canadians would again prosper with real money as the foundation of our economic structure and not debt money. Regarding the debt money owed to the private banks such as the Royal Bank, we would simply have the Bank of Canada print the money owing, hand it over to the private banks, and then clear the debt to the Bank of Canada.”
Problem solved; case closed.
But critics said, “Not so fast.” Victoria might be charming, but she was naïve.
One critic was William Watson, writing in the Canadian newspaper The National Post in an article titled “No, Victoria, There Is No Money Monster.” Interestingly, he did not deny Victoria’s contention that “When you take out a mortgage, the bank creates the money by clicking on a key and generating ‘fake money out of thin air.’” Watson acknowledged:
Well, yes, that’s true of any “fractional-reserve” banking system. Even before they were regulated, even before there was a Bank of Canada, banks understood they didn’t have to keep reserves equal to the total amount of money they’d lent out: They could count on most depositors most of the time not showing up to take out their money all at once. Which means, as any introduction to monetary economics will tell you, banks can indeed “create” money.
What he disputed was that the Canadian government’s monster debt was the result of paying high interest rates to banks. Rather, he said:
We have a big public debt because, starting in the early 1970s and continuing for three full decades, our governments spent more on all sorts of things, including interest, than they collected in taxes. . . . The problem was the idea, still widely popular, from the Greek parliament to the streets of Montreal, that governments needn’t pay their bills.
That contention is countered, however, by the Canadian government’s own Auditor General (the nation’s top accountant, who reviews the government’s books). In 1993, the Auditor General noted in his annual report:
[The] cost of borrowing and its compounding effect have a significant impact on Canada’s annual deficits. From Confederation up to 1991-92, the federal government accumulated a net debt of $423 billion. Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.
In other words, 91% of the debt consists of compounded interest charges. Subtract those and the government would have a debt of only C$37 billion, very low and sustainable, just as it was before 1974.
Mr. Watson’s final argument was that borrowing from the government’s own bank would be inflationary. He wrote:
Victoria’s solution is that instead of paying market rates the government should borrow directly from the Bank of Canada and pay only token rates of interest. Because the government owns the bank, the tax revenues it raises in order to pay that interest would then somehow be injected directly back into the economy. In other words, money literally printed to cover the government’s deficit would be put into circulation. But how is that not inflationary?
Let’s see. The government can borrow money that ultimately comes from private banks, which admittedly create it out of thin air, and soak the taxpayers for a whopping interest bill; or it can borrow from its own bank, which also creates the money out of thin air, and avoid the interest.
Even a 12 year old can see how this argument is going to come out.
Canadian Finance Minister confirms no bailout for RIM - Examiner
Slideshow: Clint Eastwood is blowing out 82 candles today.
See the star through the years
Money market fund assets rise to $2.572 trillion - Yahoo Finance
NEW YORK (AP) -- Total U.S. money market mutual fund assets rose by $7.87 billion to $2.572 trillion for the week that ended Wednesday, the Investment Company Institute said Thursday.
Assets of the nation's retail money market mutual funds fell by $4.27 billion to $887.46 billion, the Washington-based mutual fund trade group said. Assets of taxable money market funds in the retail category fell $2.93 billion to $701.97 billion. Tax-exempt retail fund assets fell $1.33 billion to $185.49 billion.
Meanwhile, assets of institutional money market funds rose $12.13 billion to $1.685 trillion. Among institutional funds, taxable money market fund assets rose $12.73 billion to $1.599 trillion; assets of tax-exempt funds fell $600 million to $86.37 billion.
The seven-day average yield on money market mutual funds was 0.03 percent in the week that ended Tuesday, unchanged from the previous week, said Money Fund Report, a service of iMoneyNet Inc. in Westborough, Mass.
The 30-day average yield was also unchanged from last week at 0.03 percent. The seven-day compounded yield was flat at 0.03 percent. The 30-day compounded yield was unchanged at 0.03 percent, Money Fund Report said.
The average maturity of portfolios held by money market mutual funds fell to 45 day from 46 days in the previous week.
The online service Bankrate.com said its survey of 100 leading commercial banks, savings and loan associations and savings banks in the nation's 10 largest markets showed the annual percentage yield available on money market accounts was unchanged from last week at 0.13 percent.
The North Palm Beach, Fla.-based unit of Bankrate Inc. said the annual percentage yield available on interest-bearing checking accounts was unchanged from the week before at 0.06 percent.
Bankrate.com said the annual percentage yield on six-month certificates of deposit was also unchanged at 21 percent from the previous week. The yield on one-year CDs was unchanged at 0.33 percent. It fell to 0.52 from 0.53 percent on two-and-a-half-year CDs. It was flat at 1.12 percent on five-year CDs.
Panic in Spain as money flies out of country and head of European bank says Eurozone is 'unsustainable' - Daily Mail
By Hugo Duncan
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Senior European officials last night issued a grave warning that the very survival of the euro is at risk as the crisis in Spain threatens to tear the region apart.
Politicians and central bankers said the situation in the eurozone was unsustainable and drastic action was needed to prevent the ‘disintegration’ of the single currency.
They spoke out as European leaders scrambled to stop the financial crisis in Spain spiralling out of control and infecting other countries such as Italy.
Mario Draghi, President of the European Central Bank (ECB), called for Eurozone leaders to come up with a plan for the future to keep the single currency afloat
One analyst warned of ‘a perfect storm’ in Spain as the country’s deputy prime minister held crunch talks in Washington with US Treasury Secretary Tim Geithner and the head of the International Monetary Fund, Christine Lagarde.
It is thought the IMF is drawing up contingency plans for Spain to prevent a cataclysmic financial meltdown.
The euro crashed to a 23-month low against the US dollar at $1.2335 but was up slightly against sterling having recovered from its lowest level since late 2008. Last night, 1 was worth 1.2460 euros.
Mario Draghi, president of the European Central Bank, said the eurozone was unsustainable in its current form. In his sharpest criticism yet of eurozone leaders’ handling of the crisis, he said the ECB could not ‘fill the vacuum’ left by governments in terms of economic growth or structural reforms.
The head of the European Central Bank called on EU leaders including David Cameron and German Chancellor Angela Merkel, to come up with a long-term plan for the euro
And he called for overwhelming force to be used to shore up Europe’s battered banks to restore confidence in the financial system.
Ignazio Visco, governor of the Bank of Italy and a senior ECB member, said political inertia and bad economic decisions have put ‘the entire European edifice’ at risk. ‘There are growing doubts among international investors about governments’ ability to ensure the survival of the single currency,’ he said.
Olli Rehn, EU economic and monetary affairs commissioner, said bold action was required ‘if we want to avoid a disintegration of the eurozone’.
The apocalyptic tone from usually measured EU officials betrayed the spreading sense of panic.
Irish voters are likely to approve a European treaty on budget discipline in yesterday’s referendum – securing continued aid. The result will be announced later today.
But the outcome of a second Greek election on June 17 – seen as crucial for the country’s future in the eurozone – is too close to call.
And fears are mounting that Spain, the fourth biggest economy in the eurozone, will be the fourth country to need a bailout.
City commentator David Buik, of financial betting firm BGC Partners, said: ‘There is an uncomfortable feeling out there. Whilst EU politicians and bureaucrats continue to waffle and the army of intellectual egg-heads proffer their useless economic advice, sentiment will continue to be negative.’
Investment bank JP Morgan warned that Spain would need 280billion to keep it afloat, with UK taxpayers potentially forced to stump up billions through the IMF.
The Spanish banking system has been crippled by nearly 150billion of toxic loans to homeowners and developers. One in four Spaniards are now out of work.
Bankia, one of the country’s biggest lenders, has asked the government for a 15billion lifeline, triggering concerns about the scale of the losses at other Spanish banks.
With Spain’s regions also in trouble, international investors are betting that the Spanish government will not be able to foot the bill for it all. Edward Thomas of investment firm Quantum Global Wealth Management declared: ‘It’s a perfect storm for Spain.’
EU finance ministers haggle over bank rules - Yahoo Finance
BRUSSELS (AP) -- European Union finance ministers are to meet in in Brussels Tuesday to hammer out an agreement over how high banks should build their defenses against future financial shocks, with the U.K. running the risk of being isolated over who should set the height.
The EU's 27 members agree on the need to increase capital reserves of banks, following an international agreement called Basel III, which was negotiated by the world's largest economies to avoid another financial meltdown such as the one brought on by the collapse of U.S. investment bank Lehman Brothers in 2008.
But the U.K. wants national regulators to be able to set requirements significantly higher than those of the EU — a position opposed by almost all other EU members, who fear investors might then prefer UK banks and flee from those in other countries.
On his way into the meeting Tuesday morning, George Osborne, the British chancellor of the exchequer, was non-committal about the possibility of reaching an agreement.
"This is a time of considerable uncertainty in the eurozone economies," he said, referring to the 17 countries — the U.K. not among them — that use the euro currency. "And that uncertainty is undermining the entire European recovery. And I think we're reaching a point where we've got to make a decision to see the eurozone stand behind their currency. A very important part of that, of course, is strengthening the entire European banking system. And that is what we intend to do today."
Once enacted, Basel III would require lenders to increase their highest-quality capital — such as equity and cash reserves — gradually from 2 percent of the risky assets they hold to 7 percent by 2019. An additional 2.5 percent would have to be built up during good times. All members of the G-20 have agreed to implement Basel III; if the European Union succeeds, it would become the first entity to institute the new requirements.
The U.K. is arguing that, because national taxpayers have to bail out banks when they fail, national authorities should be able to set more stringent requirements to guard against such failures. A compromise proposal offered by the Danes, who hold the rotating presidency of the European Union, would allow national authorities some leeway to increase requirements beyond those called for in the Basel III agreement. That proposal has broad support — except, so far, from the U.K.
The finance ministers can approve the compromise proposal without British support, through what is known as qualified majority voting, in which member countries have different numbers of votes according to their populations. However, there is a tradition in the EU that changes that would affect an industry in a particular country — such as the banking sector in the U.K. — are not forced into effect over the objections of that country, and consensus is sought.
"I think there should be a unanimous decision on such an important issue," Swedish Finance Minister Anders Borg said on his way into the meeting.
Home Finance of America Announces Refinances are Closing in 30 Days - Houston Chronicle
Smiley N. Pool, Houston Chronicle
Even without stars, Valencia shows up Dynamo in Charities Cup
The Dynamo were missing U.S. national team center back Geoff Cameron, Canadian national team defender Andre Hainault, Jamaican nationa...
Barclays plc appoints Head of Asset Finance, Corporate Banking - Director of Finance online
Barclays plc (LON:BARC) has appointment Dennis Watson as its new Head of Asset Finance within the Corporate Bank.Watson is already responsible for the bank’s real estate, project finance and mezzanine debt origination teams and will assume control of the Asset Finance business, taking over from Alex Brown who has moved across to spearhead Barclays representation in the education, local authority and social housing sectors.
The change of leadership comes as Barclays reshapes the way asset finance is delivered to its corporate banking clients.
Dennis Watson explains: “We are not changing our appetite for asset finance, far from it, but what we are doing is bringing asset finance alongside our other asset backed and working capital debt propositions, enhancing the client experience by identifying needs earlier and supporting them with the right capital structure from a wider range of products.
"In today’s uncertain world it is important that a client’s debt needs are viewed in the round rather than on a single asset or transaction basis.
"Alex ran the asset finance business with great success in recent years, putting the business on a solid footing for the future and it is only through the efforts of him and his team that asset finance has become such an important instrument in the debt toolbox for Barclays”.
This is beginning to have the inevitability of the Berlin Wall coming down. The creators will be denying it till the end, but historical imperatives mean it will happen and the European experiment go the same way as communism. It's going to be painful and it will cost us as ordinary people, but we'll recover.
- Naaman, London, UK, 01/6/2012 03:31
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