LEWISBURG, Tenn. — Five years ago, this small factory town was struggling to pay the interest on a bond for new sewers. Bob Phillips, Lewisburg’s part-time mayor and full-time pharmacist, was urged by the town’s financial adviser, an investment bank named Morgan Keegan & Company, to engage in a complex financial transaction to lower interest rates.
Mr. Philips was urged by an investment bank to engage in a complex financial transaction to lower interest rates…And when Lewisburg decided to go ahead with the transaction, who was there to make the
deal? Morgan Keegan.
In January, local officials were shocked to discover that annual interest payments on the bond had quadrupled to $1 million.
It appears that Morgan Keegan was also active in the subprime mortgage market:
Morgan Keegan is owned by Regions Bank:
The US Treasury, through the TARP bailout program, is the largest named potential shareholder of Regions Bank, which means that each American citizen is indirectly a shareholder. I looked at Regions Bank about a year ago. Their largest investor at that time was Deutsch Bank.
As described in its annual proxy, Regions next annual meeting of shareholders is in Birmingham on April 16th, the day after most of us file our taxes. Region’s slogans promote “going green” and community service.
Since this is all happening in the “bible belt,” I invite the pastors of all participants involved and everyone impacted by state and local financial support of Wall Street high finance, which includes most Christian congregations in Tennessee, to begin a discussion about why mortgage fraud, illegal drugs and marketing derivatives to municipalities are common in our state.
Step one may be for the municipalities in Tennessee to determine whether a proper application of disclosure laws and the theory of fraudulent inducement is a basis for successful abrogation of any and all swap contracts. Step two may be inviting Morgan Keegan and Regions Bank to leave. Step three may be cleansing state and local pension funds and reserves of providing fees and financing to Wall Street.
This Sunday we gather to celebrate our Lord’s crucifiction and resurrection. The resurrection is a reminder that anything is possible — even the miracle that we might integrate the commandment “love thy neighbor” with the practices we use to make and invest our money.
Your prayers are invited.
(Continued in Liquidating Thy Neighbor – Part II)