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Town Square

Bank and Fed Shenanigans

Original post made by GX, Another Pleasanton neighborhood, on Oct 24, 2011

Make sure you read Hussman’s piece this morning (key section below). This should give you a better sense why the Fed is partner-in-crime with the banks. It is a shame that this news can’t be delivered in a way so the average person realizes the crimes that are being perpetrated against them. It is just amazing the moves the TBTF banks are making and that the Fed is letting them do it.

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Comments

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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Oct 24, 2011 at 10:13 am

Stacey is a registered user.

GX,

I think you may need to summarize better on why the Fed is partner-in-crime.


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Posted by GX
a resident of Another Pleasanton neighborhood
on Oct 24, 2011 at 10:38 am

The Fed is allowing BofA to shift exposure of $53 Trillion on derivatives on to the backs of its depositors (you, me and all the other innocents out there). This is in direct violation of Section 23A of the Federal Reserve Act.

What happens if these derivatives go bad? The government (FDIC) will be forced to bailout BofA once again.

This is just one more of a long list of examples where the Fed is bending/changing rules to benefit the bondholders of TBTF banks.

People are complaining a lot these days about how government's actions benefit the top 1%. Well, here is a very clear example.


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Posted by Patriot
a resident of Another Pleasanton neighborhood
on Oct 24, 2011 at 10:18 pm

Great post. This really hits the nail on the head.

No surprise though that this it isn't getting much in the way of comments. Democrats and Republicans both seem to have not much problem with the way the Fed and the Treasury are bailing out wealthy Wall Street types on the backs of the rest of us.

"From my perspective, weak regulation of bank leverage, inadequate capital requirements, and the need for prompt, streamlined restructuring for insolvent banks are among the most urgent problems that the global economy faces."

I agree. These problems are more urgent than dealing high levels of government debt, unfunded state and local government liabilities, excessive regulation, inadequate social safety nets, or any of the other problems the two sides talk about.

People like to join teams and take sides. The trouble is in this case, both sides are wrong. Both parties have given their tacit or actual support for bailing out too big to fail financial institutions. Both parties continue to steer the country in a reckless direction. Clinton had it wrong. Bush had it wrong. Obama has it wrong. Romney has it wrong. Cain has it wrong. As a society we need to face facts and do something about to really fix this mess.


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Posted by GX
a resident of Another Pleasanton neighborhood
on Oct 25, 2011 at 7:50 am

Yes, the fact that most people want to continue with the useless left/right squabbles and not engage in a substantial manner with our most pressing issues is disappointing.

We are getting the government we deserve which likely means that we will lurch from one crisis to another.


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Posted by Patriot
a resident of Another Pleasanton neighborhood
on Oct 25, 2011 at 9:43 am

Here is another interesting perspective.

Web Link=

"Isn't it these bankers and their "let them eat cake" attitude that's fueling the ire of the masses? Maybe, but blaming a banker for being greedy is like blaming a dog for barking; it's simply the nature of the beast."

"To get to the people at the root of the financial dysfunction it's necessary to "follow the money," to borrow a term from the Watergate era. The overpaid bank execs want keep their jobs by maximizing profits. To do so they hire lobbyists to push for bank-friendly laws. "


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Posted by GX
a resident of Another Pleasanton neighborhood
on Oct 25, 2011 at 10:10 am

You may find the following effort interesting:

Get Money Out
Web Link

It is a non-partisan organization focused on getting corrupting, special-interest money out of elections.

One of the challenges I see with finding the key middle ground in this country is that there are two fundamentally opposing undercurrents in this country. One is the "big government take care of me" crowd and all the redistribution of income/wealth that goes with that. And the other is "big government is problematic, leave me alone" crowd.

I wonder what core issues, if any, will bring these two groups together.