Banking assets equaling the U.S. GDP, scary thought. According to Bloomberg, 50% of these assets are off balance-sheet and are compromised of derivatives (bets) and other risky loans. With banking officials not being accountable to the same laws as the U.S. citizenry and this amount of ownership in Dollar assets, will not end well.
The math is starting to paint a bleak picture and we are seeing precedent that is backing up much of the dissenters message on these subjects. Too Big to Fail, Too Big to Jail, what does that mean? It sounds like we have a financial super-structure that is considered untouchable by the people who we elect and or expect to be upholding the rule of law in the name of Justice.
Think about it.
Bloomberg - That label, like a similar one on automobile side-view mirrors, might be required of the four largest U.S. lenders if Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., has his way. Applying stricter accounting standards for derivatives and off-balance-sheet assets would make the banks twice as big as they say they are — or about the size of the U.S. economy — according to data compiled by Bloomberg.
Yeah, in the face of cheap money with no lending standards of worth, the public scapegoated the banks, by taking their financing. The top-major banks all lowered their lending standards to allow many unqualified borrowers to get vast amounts of credit extended to them, and it is their fault.
This really just shows the detachment from people in positions of power, from actually reality and this thing called “cause and effect”. You basically give credit away for a signature and it might be prudent to assume people are going to take advantage of it.
Did the public scapegoat the banks when they made billions on billions in bonuses off of all the short-term performance goals that were part of their benefits and bonus package? Do bankers need a pat on the back as well for DOING THEIR JOB, it is like they forgot what banks are actually for and just use them as their own personal casino and then go threaten our government with the Great Depression 2.0 when their bets go bad. This will stop.
Did the public scapegoat you when they extended trillions in secret loans to all the commercial banks and accept your “toxic” paper in exchange for good paper? Is this how we scapegoated you? Lesser attitudes than these have started revolts, they better not start drinking their own Kool-aid or the forecast will be cloudy with a chance of lightning.
Common Dream - Amid calls for stricter regulations of the banking industry, JP Morgan CEO Jamie Dimon came under fire Wednesday after telling corporate and political leaders at the World Economic Forum that banks had been wrongly “scapegoated” as the cause of the global economic crisis, and resisted calls for increased regulation of the financial industry.
“The banks will not get this country in trouble, I guarantee it,” – Buffett, chairman and chief executive officer of Berkshire Hathaway Inc.
Maybe he knows something we don’t, likely. I guess the hundreds of trillions of derivatives, home equity lines of credit on underwater mortgages and other off-balance sheet assets are just fine. What I decode this message as truly saying that no matter what happens, the U.S Treasury in partnership with the Federal Reserve, will bailout and issue what ever amount of credit is needed so that none of our too big too fail banks,…fail.
Mr. Buffett, sir, our country is already in trouble, even in your own words, everyday we are mortgaging off a little bit of our country every day (Charlie Rose Interview). We are backing bad money and bad debt and according to Gresham’s Law, bad money chases good money out of the market. At the same time we have reduced interest rates to zero so we are burning anyone who has saved their money and instead, forcing them to speculate on riskier assets. Too top it off, we have codified a two-tier legal system for influential people like yourself and everyone else, like myself.
Maybe you are right, banks do not pose any threat to the U.S.
Bloomberg - Warren Buffett, the billionaire investor who oversees stakes in some of the largest U.S. banks, said the nation’s lenders have rebuilt capital to the point where they no longer pose a threat to the economy.
I really took time to think about what I waited to say. I want to start with that, the rule of law has failed in the United States. With the HSBC settlement we have effective codified “two” sets of laws in America. One with influence & power and another for the common citizen.
This bank the operates on sovereign American soil committed crimes are in defiance of all the major criminal activities we shed so much blood and sweat for, terrorism, drug cartels and trading with the enemy. This wasn’t small sums of money or just a single incident. This was systematic over a decade involving reports of up to $60 TRILLION DOLLARS. Just take a second and let the set in.
The reasoning the Justice Department (what Justice?) gave was that HSBC:
Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.
I want to start my dialogue with this quote:
“We’re at the dawn of a revolution in central banking, in which the likes of the Bank of Canada, the U.S. Federal Reserve Board, and eventually the European Central Bank (ECB) will exert more influence over the global economy than government, business or consumers. ”
That is really a scary thought but still a true statement and is becoming more of a reality by the day. Central banking does sit at the apex of our economy and through their different programs and levers, that affect basically every person on the planet.
The problem I have is that was not the deal we made in America when we were fed up with Monarchical rule from England and decide to revolt against the foreign ruler. Now we have another entity trying to sit on the throne and because our representatives can not make the hard choices and risk being unelected, they give that new throne more power by the day. What I mean is by us giving more and more entitlements to our people without the means to pay for them, we RELY on outside financing to fill the gap by issuing IOUs (Treasuries). This gives them a claim and that give power and influence to exert polices choices that may not be our own.
You may counter that the Federal Reserve and other central banking institutions are part of the government but the continual claim of needed independence allows them to make decisions on their own without the influence of the people. This can not be discounted and popular rule is not such a bad thing with the proper checks & balances.
At the end of the day, the people you elect go along with this system so until you will take time out of your day to go something that may not have a direct effect on your daily life, our representatives with continue to think they have the support and a mandate of the people. Democracy is not easy and need participation to work effectively. Somewhere we have missed this crucial point. Enjoy the rest of the article.
The Star - It’s a quiet revolution. And it’s the inevitable consequence of our currently difficult times. If not for the near-collapse of the world financial system in 2008-09, and the seemingly intractable financial crisis in Europe, central bankers would have remained the unseen players who for decades devoted themselves mostly to controlling inflation.