Several seemingly disparate parts of our world my massive brain will now tie-together for you.

  1. Charlotte’s $200m. NASCAR Hall of Fame cannot sell the required number of corporate sponsorships to pay off the $21.5m. loan the city took out to pay for pre-opening expenses. In fact, were this remotely a normal, arms-length loan the city would be in default. The situation we had poked around at the margins for months is now without doubt. Check the rhetorical firewall bankers have built to justify the loan as something other than a kickback to the city:

    The city has the benefit of favorable loan terms from Bank of America and the former Wachovia. The big Charlotte banks will let the city pay only interest – the rate is 4 percent – or get extensions if it is struggling with payments.

    “I feel we are in very good shape,” Cathy Bessant of Bank of America said of the sponsorship and brick sales. “The motivation of the banks to take on what is clearly very favorable financing is based on the importance of the hall economically to the region, and therefore to the vibrancy of our banking businesses. And the entire deal is structured so that taxpayers aren’t at risk.”

    But fundamentally — just like the US National Log Flume Ride which recall had its millions in loans forgiven to great Uptown rejoicing — the NASCAR Hall is essentially Uptown’s gift to itself.

  2. Such public debt gifting also drove the 2004 Athens Olympics. And so far exactly one supposedly “irreverent” sports blog has made the connection between the massive debt — up to $20b. — undertaken by the Greek government for those Olympics and the financial collapse, riots, unrest, etc.

    The one difference is that bankers expect the Greek debt to paid — in this case by the American taxpayer via the IMF.

  3. Another key link in the debt charade — the ratings agencies — might be finally getting some payback. The SEC is poking around Moody’s, a shot across the bow with potentially grave implications. At the same time Moody’s is pointing out that US Treasury could slide to AA territory as early as 2013.

  4. Mary Newsom winds up a revealing column by asserting that the power relationship between city staff and elected officials is tilted in favor of elected officials. That would certainly come as news to anyone who has watched city staff bumble their way through the past seven years without any meaningful penalty. Still, what is important for our purpose today is the conviction among staff that they are somehow put upon or micromanaged by city council.

    This feeling, ladies and gentlemen, constitutes license, the existence of which I had long wondered about. City staff evidently feels that its job is to do what they deem best for the city with as little possible distraction, input, or interference from elected officials and the public at-large. As such, a primary value is placed on secrecy and obfuscation while accountability — let alone any whiff of scandal — is anathema.

Put all of this together and you left with the unescapable conclusion that the city of Charlotte is a fraud, albeit an extremely fortunate one. Because of the trillions of dollars still available to Bank of Fargo — thanks in large part by active and passive subsidy from the federal government and the Federal Reserve — the city has been able to avoid any kind of day of reckoning like that endured by Greece for its profilgate ways. And that is likely to continue — unless two things happen.

One is large scale, namely a complete collapse of the ratings agency matrix and subsequence run-up in public borrowing costs. Possible, but still unlikely. More likely — because it is already underway — is an acceleration of local public corruption involving government dollars flowing to a handful of politically connected players. Among the first generation of big time political crooks only Jim Black was caught. Will the second wave — now so large as to almost blanket local government in ways small and large — be so lucky?

Stay tuned.