BUSINESS
06/05/2010 05:12 am ET Updated May 25, 2011

Matt Taibbi: The Derivatives That Wall Street Used To Scam Local Governments

The destruction of Jefferson County reveals the basic battle plan of these modern barbarians, the way that banks like JP Morgan and Goldman Sachs have systematically set out to pillage towns and cities from Pittsburgh to Athens. These guys aren't number-crunching whizzes making smart investments; what they do is find suckers in some municipal-finance department, corner them in complex lose-lose deals and flay them alive. In a complete subversion of free-market principles, they take no risk, score deals based on political influence rather than competition, keep consumers in the dark -- and walk away with big money.

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