By Simon Johnson
Two diametrically opposed views of Wall Street and the dangers posed by global megabanks came more clearly into focus last week. On the one hand, William B. Harrison, Jr. – former chairman of JP Morgan Chase – argued in the New York Times that today’s massive banks are an essential part of a well-functioning market economy, and not at all helped by implicit government subsidies.
On the other hand, there is a new powerful voice who knows how big banks really work and who is willing to tell the truth in great and convincing detail. Jeff Connaughton – a former senior political adviser who has worked both for and against powerful Wall Street interests over the years – has just published a page-turning memoir that is also a damning critique of how Wall Street operates, the political capture of Washington, and our collective failure to reform finance in the past four years. “The Payoff: Why Wall Street Always Wins,” is the perfect antidote to disinformation put about by global megabanks and their friends.
Specifically, Mr. Harrison makes six related arguments regarding why we should not break up our largest banks. Each of these is clearly and directly refuted by Mr. Connaughton’s experience and the evidence he presents.
First, Mr. Harrison claims that megabanks are the natural outgrowth of requests from customers, rather than the result of extraordinary resources spent on lobbying over the past 30 years. Mr. Connaughton’s book contains all you need to know – and more than you can stomach – about the realities of how the influence industry has worked diligently to build and defend megabanks. The people who really wanted the banks to become bigger were the executives in charge of those organizations – like Mr. Harrison. They spent a lot of money to make this happen.
Second, Mr. Harrison takes the view that global megabanks at their current scale provide some special services that cannot be otherwise provided by smaller financial institutions.
As Mr. Connaughton points out – including in a new blog post – there are no economies of scale or scope in banks with over $100 billion of total assets. Our largest banks, properly measured, now have balance sheets between $2 trillion and $4 trillion. Plenty of people have attempted to show megabanks produce some magic for broader economy-wide productivity or multinational nonfinancial firms, but there is simply no evidence. Again, read Mr. Connaughton’s book for more detail – or look at my book with James Kwak on this topic, “13 Bankers”.
Third, Mr. Harrison claims “large global institutions have often proved more resilient than others because their diversified business model ensures that losses in one part of the enterprise can be cushioned by revenues in other parts.”
Mr. Connaughton’s book reminds us, with some eloquence, that Citigroup and Bank of America – the largest U.S. financial institutions in 2008 – would have failed if it were not for the government bailouts that they received. As a matter of simple historical fact, the “more resilient” in Mr. Harrison’s version of history is exactly the same as observing that those banks were seen by officials as “too big to fail.” Their resilience came solely from support provided by the government and the Federal Reserve.
Fourth, Mr. Harrison denies that very large banks receive any implicit government subsidies. To support this view, Mr. Harrison suggests we should compare borrowing costs across financial and nonfinancial firms that share a similar bond rating (e.g., AA); he points out that the interest rate paid by financial firms in this comparison is higher. But the interest rate at which a company borrows depends not just on the risk of default, but also on the “recovery value” in the case of default (i.e., how much do creditors end up with after the company has been wound down). If you think you will recover less when I default, you should charge me a higher risk premium – and thus a higher interest rate.
Mr. Harrison compares apples (finance) with oranges (nonfinance) – and fails to mention that the recovery rate in the latter case is much higher. How much will investors recover in the case of Lehman, for example – perhaps 25 cents after more than four years? For most nonfinancial companies, default does not by itself result in a big reduction in value (the deadweight costs for bankruptcy of such firms in the US are quite small); large financial firms are quite different (the deadweight bankruptcy costs are typically huge). Mr. Harrison’s proposed comparison is simply uninformative – you need to look at comparisons within the financial sector.
The right comparison is the funding cost of financial firms with and without implicit government support. The funding advantage for those perceived as Too Big To Fail is estimated to be between 25 and 75 basis points; most people close to the issue think it is at least 50 basis points. The idea that megabanks do not get huge, implicit subsides is simply priceless – again, read Mr. Connaughton’s account to see the lengths to which the banks will go to ensure these subsidies are kept in place.
Fifth, Mr. Harrison says that “complexity can be an antidote to risk, rather than a cause of it”. On the contrary, the evidence suggests that management has consistently lost control over financial institutions with hundreds of thousands of employees in 50-100 countries. Think about the scandals of this summer: Barclays and Libor; HSBC or Standard Chartered and money laundering; and the severe breakdown of risk management at JP Morgan Chase. In each case, executives claim they did not know what was going on. The very largest banks have become too big to manage.
Sixth, Mr. Harrison claims regulators are not cowed by banks. “The Payoff” is all about how lobbying really works – and how legislators and regulators are brought to heel. Money brings influence and influence is used to make more money. It is not about “cowing” anyone; it is about persuading them that you are right and should be allowed to do exactly what you want to do, even though your arguments are completely specious. Mr. Harrison’s op ed is a nice example of the genre.
Some regulators have started to stand up to big banks on some issues, and this should be encouraged. But overall, Wall Street prevails on all the major issues, and most top officials at Treasury and the Federal Reserve are only too happy to cooperate.
Mr. Harrison makes strong claims. All of his arguments are demonstrably false. If you think Mr. Harrison and the other defenders of megabanks have even the slightest veneer of plausibility, you must read Jeff Connaughton’s book.
The Baseline Scenario 
Any studies on how the underground economy factors into these claims?
worth adding to this critical assessment: (mentioned before by Simon but worth a reminder)
Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street
The real problem to be solved is money. What is money, and how does money get its job accomplished in a fair and equitable way? Mastering the wisdom in the double-entry bookkeeping is to understand ‘value’ versus the ‘rights’ to value’s ownership. In place of that understanding, we have an endless parade of valueless Ponzi Schemes.
Double-entry bookkeeping is not in use today. It was abandoned when paper-driven systems where halfheartedly programmed into software by programmers who have not a clue as to how the bookkeeper maintains a valid proof. Ironically, the computer has the potential to keep a nation’s monetary system free of Ponzi Schemes.
It would be nice if even one powerful voice in Our Nation’s high-powered “financial industry” took the time to review the history of the double-entry bookkeeper’s fundamental solution to money’s proof of validity. The time is way overdue to end today’s parade of senseless Ponzi Schemes.
The discussion here misses completely the point that the largest subsidy large global financial institutions get, is not so much a lower cost of funds, but the fact that the financial business they normally pursue, is subject to extraordinarily low capital requirements… which allows the bank to leverage their equity much more…take these less than the basic capital requirement away, and banks would find it so much harder to become, or remain, a too big to fail.
The subsidies that a too big to fail bank receives, while an ongoing business, are paid, directly, with higher interest or less access to bank credit, by those perceived as risky and who do therefore generate larger capital requirements for the banks. Of course if the bank fails to remain an ongoing business, then all of us will pay. (By the way I find that whole dead-weight argument quite weak)
What I find most objectionable about the discourse of Mr. Harrison, and that of similar big bankers, is that he blithely ignores how much the regulations they lobby for, discriminate against some of their client.
If Simon Johnson can refer to Jeff Connaughton in terms of “One man against the Wall Street Lobby” then perhaps I am “One man against the regulatory establishment”… that Establishment I am now trying to challenge to come out of their intellectual silo
Per, we want Unforgivable Sin to pay, its getting way to easy to step in between one persons wishes and all the corruption and interference that goes with the demands and mandates of the upper class. People don’t understand the economy because they first must understand the con. Which in the eyes of “us” they will and can never do. It’s and us or them, dog eat dog mentality world today where everything that can be done to thwart the opposition has been tried and accomplished, for now, at a great expense later I might add.. Bad regulations are worse than no regulation at all. Once you pollute the body and then mandate laws to maintain that standard, you cheapen the lives of many others to protect the few, and there is no challenging that, its their way or the highway.
@filbt “Bad regulations are worse than no regulation at all. Once you pollute the body and then mandate laws to maintain that standard, you cheapen the lives of many others to protect the few”
Absolutely!
@filbt “and there is no challenging that, its their way or the highway”
But I will at least do my best to shame the regulators for what they have done, and for what they are doing to the Western world, imposing “L’economia castrata!”
There is an additional issue with comparing bank debt based on NRSRO ratings. The rating agencies specifically account for the implicit subsidy in granting their ratings. They say so in their reports. So, in addition to the lower recovery rates, the market also prices in some risk that the subsidy will be withdrawn (as it was from Lehman). Direct comparisons of like-rated issues are impossible, and nothing about the existence or lack thereof of implicit subsidies can be inferred from yields.
Being “too big to manage” is the same as providing “plausible deniability.
The refutation of the second point doesn’t line up with the point as you state it. Mr. Harrison claims that megabanks provide services that smaller banks can’t provide. Various people have established that there are no economies of scale, i.e., megabanks are not more cost-effective at providing the services banks of various sizes provide, but that does not mean that megabanks don’t provide additional services that are simply impossible for regular banks to provide. Of course, Mr. Harrison does not seem interested in specifying what these services are, so it’s hard to refute. In any case, I think it’s actually entirely true: nobody but a megabank is able to offer (at any price) reliable interest-rate manipulation or large-scale money laundering; if you want securities specially created for you to short-sell, a regular bank isn’t going to be able to generate the necessary demand. Now, these services are illegal, unethical, and dangerous to the economy, but you’d have a hard time arguing that megabanks don’t provide them, or that ordinary banks could provide them.
Okay Per, that makes two of us.
@Daniel B, re-tooled the economy for a perpetual “protection” racket in the Middle East…so what’s wrong with that?
“In any case, I think it’s actually entirely true: nobody but a megabank is able to offer (at any price) reliable interest-rate manipulation or large-scale money laundering; if you want securities specially created for you to short-sell, a regular bank isn’t going to be able to generate the necessary demand. Now, these services are illegal, unethical, and dangerous to the economy, but you’d have a hard time arguing that megabanks don’t provide them, or that ordinary banks could provide them.”
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While applaud and cherish the great work of Mr. Connaughton, and Mr. Kwak, and Mr. Johnson, and a few others to alert and detail for the American public how corrupt the current system has grown – it’s not enough. People must stand up to abuses and abusers, or the people will be ruthlessly abused.
Alter and abolish the entire system. Burn it all down!!! Reset! The future couldn’t be worse for the 99%!!!
‘Alter and abolish the entire system. Burn it all down!!! Reset! The future couldn’t be worse for the 99%!!!’
You mean Saint Barack hasn’t fixed everything for us?
http://economix.blogs.nytimes.com/2012/08/23/big-income-losses-for-those-near-retirement/
‘The typical household income for people age 55 to 64 years old is almost 10 percent less in today’s dollars than it was when the recovery officially began three years ago, according to a new report from Sentier Research, a data analysis company that specializes in demographic and income data.
‘Across the country, in almost every demographic, Americans earn less today than they did in June 2009, when the recovery technically started. As of June, the median household income for all Americans was $50,964, or 4.8 percent lower than its level three years earlier….’
Come on, don’t complain, you will still going to remember these as the Happy Days! Just you wait 10 years down the line, when either your dollars are worthless… or you’ve been earning 1 percent or less on your savings for 10 years
Per, indeed. If it keeps on rainin, levy going to break, I said, if it keeps on a rainin, levy going to break. And if the levy breaks,…you got NO place to stay, oohh AA, oohhAA.
Turn down the volume on this one, and you’ll be just fine.
Squared.
No saint in my mind. Though tragically I did campaign for Obama when I lived in NYC, – I’m no fan now – since all the promises of change and virtually every progressive policy he advanced running for president have been betrayed as president. Most glaring is his shameless bowing and cowtowing to the den of vipers and thieves in the finance oligarchs. He’s carried most of putrid policies advanced the fascists in the bushgov with no constraint and no regard for the best interests poor and middleclass Americans. Obama is proof positive just how corrupt, and unfixable the system had grown. All politicians with the exception of two or three are kleptocrats undermining the people’s best interests and shielding and advancing the interests of one or another oligarch exclusively. The people have no voice and no representation in this socalled government and the larger system. There is no justice. There is no fairness and no ruleoflaw in the financial system, or rather there are two systems – one that favors and shield the predatorclass and another that ruthlessly oppresses the people.
Time to alter and abolish this festering putrid kleptocracy! There is no other option.
Burn it all down! Reset!!!
Sent from my iPhone
I did not post the Youtube above for ” Pink Cadillac” and I have no idea how it did get posted under my name.
While I am here, check “this” out:
http://www.deepcapture.com/about-deep-capture/
“Public choice theory describes a phenomenon whereby industries take control of, or “capture”, regulators who are supposed to oversee them. The claim of this website is that powerful actors have been able to influence or take control of not just the regulators, but also law enforcement, elected officials, national media, and the intellectual establishment.
It is our mission to expose this “deep capture.”
http://www.huffingtonpost.com/2012/08/29/congo-violence-civilians-massacred_n_1839178.html
cut and pasted from the article:
“…The U.N. force, known as MONUSCO, focuses on protecting civilians but has been forced to divert resources to tackle the fallout from fighting between the Congolese army and M23.
That conflict has displaced nearly half a million people since the mutiny in April led to the formation of the rebel group that accuses Kinshasa of violating a 2009 peace accord….”
Half a million people “displaced” in the Congo due to mutiny. This SAVAGE economy has “displaced” far more people among the Middle Class in the USA in order to keep perpetual war going in the Middle East.
more cut and past:
“….U.N. High Commissioner for Human Rights Navi Pillay said allegations of hundreds of killings were still being verified, but preliminary investigations suggested that a large number of people, mainly women and children, had been slaughtered.
“The sheer viciousness of these murders is beyond comprehension,” she said….”
Gen X at work around the world. In one way or another, they’re SAVAGE. Hedonistic, nihilistic, greedy. Feeling the pressure of 7 billion people and the response in both cases is TAKE IT from the producers.
Yeah, let’s argue how there’s a difference in the end justifying the means. Targeted economic genocide for no SANE reason in the civilization of moon walkers (we built it) v. just using a dull sword. Why target women and children in both cases?
I’d reconsider wishing USA people to be in worse shape in 10 years, Per. Your global slave labor ain’t all that….so “displacing” jobs needs a re-visit, eh?
Basel IV for Congo? Guns for labor…?
Tip of the hat to Bruce for another off the charts link. It does seem a bit overwhelming to manage though, I had just recently checked in on Wikipedia [which I had great admiration and respect for, and still do to some extent] to learn more about the facility which caught fire in Venezuela when I saw a footnote less than 24 hrs after the fire placing blame on that country’s leaders for poor safety violations. Now I know people take short cuts in the name of monetary independence (gulf spill for one), but to start the blame game so early, and for what intention, I saw as an aggressive maneuver to replace the leadership of one country by another. And which country has a reputation of doing just that all around the world, yes,its usa, the worlds policemen. So that gets me back to all the things your group would like to raise awareness of, and the ability to enforce such a broad range of agendas. There was no way for me to inform Wiki at that moment, not being a member, but I did notice exactly what your link described, and feel that if anyone could provide some resistance to that type of activity, it would be you.
As for the ends justifying the means, lets look at the ladder of structural failure for Annie’s planet. The first ones to fail you Annie, and everyone, was the public education system (and they did a great job of doing so). The second ones to fail you Annie, were your parents. (That was going to be to easy to do, a little fairy dust, some sex and games, and that’s a done dealeo). Just get um through high school, keep delaying, 4 more years of college and lets see what happens. Your 3rd chance at failure comes with your spouse, the need to control is underlying factor here. And finally Annie, the 4th and final person to fail you, is you yourself. Its when you read all the books, but still can’t find the answers, or know the meaning of all the words, but yet are still somehow controlled by them. Or you filled all the holes, but still feel hollow inside. It shows here every time you have a beef with yourself or others, and must also show on the outside too. I also know that some planets still need some studying, unfortunately just not yours at this time in history. Beef on, study on, you have a long way to go tonight, Annie.
You suck at writing, filth. So I took the liberty of correcting your diatribe:
As for the ends justifying the means, lets look at the ladder of structural failure for FILTH’S planet. The first ones to fail you FILTH, and everyone, was the public education system (and they did a great job of doing so). The second ones to fail you FILTH, were your parents. (That was going to be to easy to do, a little fairy dust, some sex and games, and that’s a done dealeo). Just get um through high school, keep delaying, 4 more years of college and lets see what happens. Your 3rd chance at failure comes with your spouse, the need to control is underlying factor here. And finally FILTH, the 4th and final person to fail you, is you yourself. Its when you read all the books, but still can’t find the answers, or know the meaning of all the words, but yet are still somehow controlled by them. Or you filled all the holes, but still feel hollow inside. It shows here every time you have a beef with yourself or others, and must also show on the outside too. I also know that some planets still need some studying, unfortunately just not yours at this time in history. Beef on, study on, you have a long way to go tonight, FILTH.”
You have to be delusional, or worse, to not know what psychological “projection” is. As Irish Prez Higgens said, the difference between my REAL story and this Rush-wannabe hurl of hate from Filth is ENORMOUS. Bigger deeper and wider than the Grand Canyon and I’m not interested in getting to your ledge of delusion, Dude.
Now say what you want about me – heck I know I’m not perfect :-)) – but don’t ever disparage my parents again. Your CONGOLESE SAVAGE mind was not blessed with the intelligence God grants good people. Who else but devil spawn would know that unless they rape women and keep them locked up until they birth, their gene pool will no doubt be extinct in a generation?
The MASTER is always in the lessor position in my God’s eyes than the clean-hearted Slave.
Every human being has the right to make their lives less miserable through honest work.
No one gave Filth the right to STEAL it like a congolese savage.
http://www.telegraph.co.uk/comment/columnists/borisjohnson/9385743/Stop-bashing-the-bankers-we-have-no-future-without-them.html
Hey Bruce – thanks for the link. And the capture just got even deeper with Justice Roberts blessing the involvement of the IRS in garnishing pennies form the poor to feed for-profit health insurance. Won’t comment right now on what kind of “culture” managed to engineer the flow of currency based on an algorithm that PREVENTS health care from reaching a human being, or any other life form.
cut and pasted from the bottom of the Dendreon article:
“…..But we must ask: How many other small biotech companies have been victimized in less obvious ways? How many companies were like the babies of our morbid metaphor — snuffed out before they could demonstrate their potential; killed by criminal naked short sellers and their accomplices (captured journalists, regulators, doctors) who successfully pled innocence, saying the companies died because they were sick or weak? And how many of those murdered companies, weak or not, had medicines that could have saved lives?
Our morbid metaphor, you see, is not entirely metaphor. Real people have died.
In answer to the question of how many people have died, we know only from the data that abusive and illegal short selling has affected many hundreds of small biotech companies with all manner of medicines. We know that the vast majority of those companies are now gone, and that some number of them, if left to the rigors of the market (but not to the whims of criminal short sellers), would have one day delivered their medicines to patients.
But, of course, we do not know who the criminal short sellers are. According to the Securities and Exchange Commission, that is a big secret – “proprietary trading strategies.”
Damn those UPPITY slave labor scientists messing with our “banks” by finding cures!
I love it when the dead come back to exact justice!
@filth – even better is when you people baptize the dead.
Send them to hell retroactively?
Well if that was your standard protocol, I see no need for you to change direction now. And I don’t think you really know how God works, how close you came to sleeping on the ground during civil war times. No, you orbit an evil planet like Saturn or Uranus. I wish I could entertain you more to relieve your symptoms of pain, but I feel like a snuffed out candle right now, like the storm having taken away my thunder. I only respond to the natural clock and the resistance to it. It’s either that or send Rollie and Bruno over there to help you and your parents find your checkbook.
Plus I wish I could blend these two songs together.
Night all, and a happy blue to you too,
Wall Street wins: money talks and bullshit walks.
That is why.
@Bond Man – the rest of the $$$$ poem is:
and the rockets red glare, the bombs bursting in air…
http://www.timesofisrael.com/us-and-israel-plan-largest-ever-military-exercise/
Why bond holders can’t, and shouldn’t, be paid. It’s true folks, cities are renting wall street things like parking meters and highways for 75 or 100 years so they can profit once more off the lower classes.
http://www.counterpunch.org/2012/08/31/wall-streets-war-on-the-cities/
The only answer is to default on these bonds and start anew, oh yea, and change the crony laws first so you can legally default.
http://www.huffingtonpost.com/2012/08/31/ex-ubs-bankers-guilty_n_1847501.html?utm_hp_ref=business
congolese savagery – this headline should read “….children be-headed, metaphorically speaking”…
http://www.reuters.com/article/2012/09/02/us-usa-fed-politics-idUSBRE88109Q20120902
I think we could a 100 year make over, abolish the fed, default on bondys. And start with the new American dollar, back by not etf gold, or empty warehouse gold, but the real McCoy, silver and black gold coinage. Erase all the past evils of the past 100 years. Or is that too simple for ya all?
“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
Abraham Lincoln
Even finding a cure for the common cold would not provide the “lower” Middle Class entrepreneur who did this kind of HONEST WORK with a financial security to hold one’s own against the predatory GLOBAL War/Drug/Slave Lords and their “fiat” $$$$….
Annie: work your way around these (with comments very worthwhile)
Regards: Bruce
==========================
Taibbi’s article link: Rolling Stone:
http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829
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http://www.alternet.org/election-2012/matt-taibbi-reveals-how-romney-made-his-fortune-it-aint-pretty-and-he-shouldnt-be?paging=off
Democracy Now! / By Amy Goodman, Matt Taibbi
195 COMMENTS
Matt Taibbi Reveals How Romney Made His Fortune — It Ain’t Pretty, and He Shouldn’t Be Proud of It
“Earned” is a very generous way to put it.
http://www.alternet.org/election-2012/matt-taibbi-reveals-how-romney-made-his-fortune-it-aint-pretty-and-he-shouldnt-be?paging=off
=======================================================
195 COMMENTS direct link:
http://www.alternet.org/comments/election-2012/matt-taibbi-reveals-how-romney-made-his-fortune-it-aint-pretty-and-he-shouldnt-be#disqus_thread
@Per: Oh, my, Clint Eastwood has created another urban cliche. Made my day.
True that filbt,
Bruce, the theory behind leveraged takeovers has some merit. In theory, if a company finds themselves in say bankruptcy for some reason, they can either go out of business and the assets are liquidated or sold off, or another company acquires the assets and control of the company, and they then rearrange it in some way to bring it back to life and resell it to another. Bain may be one of those company’s, but Mitt had no roll in that end. He probably would have been one of those who over saw that the new company entered the phase of human competition for each position. If somebody works harder or faster to make you or the company more money, they climb the ladder of success faster [that is if you don’t get dizzy or lose your balance and fall off while climbing that ladder]. No Mitt always was/is a big spender, you see politicians or friends only grant the right to see that States or company’s receive certain amount of funds, which are then spent by someone. And that’s who Mitt Romney is, a big spender, a tool to be used by the ones who know him, and yes, its the upper class once again, only with a different pack of cards. The arrogance which orbits his country is of the worst variety, and definitely more akin to the problem rather than any part of a sound solution. Unfortunately you have to live this life, or live with this life, to even know about it, sort of play both ends as a double agent, until its not so logical conclusion. It’s easy to do, like taking candy from a baby really, and pretty much getting the same response. I think it true that these type of people, as they age, become more like the infant from which they came. Having everything, yet still so young in the mind, makes one go crazy with nightmares that then have to reckoned with by day. Usually by exerting their dominance over their offspring as the financial wizard they are. Because among their peers they are looked upon as nothing, and that, added to the nightmare from the night before can take its toll on his sanity each day, and he needs to balance that effect or go nuts.
http://2012thebigpicture.wordpress.com/2012/09/04/first-audit-results-in-federal-reserves-near-100-year-history-posted-today-startling/
The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows…
Citigroup: $2.5 Trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 Trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 Trillion ($1,949,000,000,000)
Bank of America: $1.344 Trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
… and many many more including banks in Belgium of all places
View the 266-page GAO audit of the Federal Reserve (July 21st, 2011):
Read the rest of the article…
Chilliing link Bruce E. Woych. Divide $16trillion by the total number of US taxpayers and image if all that illgotten booting had been dished out to taxpayers (as opposed to a few predatorclass oligarchs) – we would all be prosperous and the economy would be roaring! But no – robbing from the poor and middleclass to feed the predatorclass, the superrich is the evil work of our socalled government!
“Alter and abolish it!”. Burn it all down, reset!
There are no other options!
TonyForesta: Hay Brother!
Yeah…and can you imagine that with all this REAL short money being
thrown around to save TBTF ideologues lifestyles, we are hearing about deficits IN THE FAR FUTURE with Medicaid and Social Security that make it compelling for us to crash these life support systems ASAP.
One Nation, indivisible…with liberty and justice for …(w)ALL (street).
@filbt:
“…, the theory behind leveraged takeovers has some merit. In theory, if a company finds themselves in say bankruptcy for some reason, they can either go out of business and the assets are liquidated or sold off, or another company acquires the assets and control of the company, and they then rearrange it in some way to bring it back to life and resell it to another.”
==============================================
And so say the “SHORT SELLERS” on the market…
…and has it ever occurred to you that this entire bailout is equivalent to short stealing…eh…I mean selling on the stock market…where the short sellers don’t save anything…they wreck good corporations and scavenge the real investment flow from ever gaining ground.
…the only difference is that these guys are borrowing stock (money) [that doesn’t really exist..].to make deals that are “risk free” [CCPP};
and that instead of building or restoring businesses/….they are “BETTING against them AND stealing the assets for resale of small town America’s infrastructure…{privatizing these into rentier fiefdoms}…and . of course, the banksters pull their original money out and returning the “bailout” as if they were all honorable and worked their way out of their troubled Asses fun.
And of course that included a new round of steep bonuses as well for a job well done! We are not being swindled, we are being raped!
What they learned on Wall Street is being played out in deep pocket behind the curtain scenarios….against whole countries and domestic economies. You and I are being played…and we didn’t have a say or choice in the matter.
The COUNTRY is being short sold and sold out! Own up to it !
http://topdocumentaryfilms.com/power-principle/
@Bruce E. Woych | “…the only difference is that these guys are borrowing stock (money) [that doesn’t really exist..].to make deals that are “risk free” [CCPP}; and that instead of building or restoring businesses/….they are “BETTING against them AND stealing the assets for resale of small town America’s infrastructure…{privatizing these into rentier fiefdoms}…and . of course, the banksters pull their original money out and returning the “bailout” as if they were all honorable and worked their way out of their troubled Asses fun.”
Thank you, Bruce, for the links to these important facts. I listened to the Bernanke session where he takes questions from educators in High Schools and Colleges all across America. Bernanke does not have a clue as to what double-entry bookkeeping is, nor how its method of proving the validity of economic statements of facts is performed.
A number of educators asked Bernanke how one might teach young students the value of understanding legitimate economic facts. The word “bookkeeping” was not used once by the educators, nor by Bernanke, in this very long session. Bookkeeping proves the validity of economic statements in the same pattern that theorems prove the validity of mathematical axioms.
If Bernanke understands bookkeeping, surely he would have advised the educators to design High School and College courses where students keep their own books in the double-entry pattern documented by Pacioli in 1494. The experience of constructing bookkeeping’s proof is the only way to learn the power and the completeness of its pattern language. But, unfortunately, this well intended and intelligent man does not know the fundamental proof upon which his own profession stands.
If our precious planet is to be saved, it is up to you and me to take grassroots action that will restore the knowledge that has been lost.
they wreck good corporations and scavenge the real investment flow from ever gaining ground.
Well I agree with you here Bruce, and it was an unfortunate thing renting something to the same people who’s money bought the property in the first place. It will eventually be reversed.
But I can’t agree with you here,[of course, the banksters pull their original money out and returning the “bailout” as if they were all honorable and worked their way out of their troubled Asses fun.] You can’t get money out, and work physically at the same time. You are either diggin in and workin, or TRYING to get out of danger. Perhaps a consultant of some kind could provide the illusion of such an event, but pitfalls remain in either case.
Bob spreads rumors on the internet highway, just for exercise.
Too big to jail, but I caution anyone attempting theft at a department store of a sweater or raincoat….you WILL BE JAILED, count on it.
http://www.huffingtonpost.com/2012/09/08/criminal-charges-wall-street_n_1857926.html
Matt Taibbi: Mitt Romney Has ‘Casual Relationship With The Truth And Reality’ (VIDEO)
Posted: 09/07/2012 3:50 pm Updated: 09/07/2012 5:13 pm
http://www.huffingtonpost.com/2012/09/07/matt-taibbi-mitt-romney-h_n_1865708.html?ref=topbar
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“Vain Capital” is simply the Corporate Veil over a sophisticated “investment” strategy based upon “short selling” American Corporate infrastructure; which has devolved into a political economic version of (bailout/ bust-out/ looting…) naked shorting of America through control fraud among money makers, market makers and political shakers.
(1) http://en.wikipedia.org/wiki/Short_%28finance%29
(2) http://en.wikipedia.org/wiki/Naked_short_selling
(3) http://en.wikipedia.org/wiki/Category:Market_failure
(4) http://en.wikipedia.org/wiki/Category:Finance_fraud
Compare the processes. Quantitative Easing can be considered borrowing “shares” that finance does not own…to do what?
Buy out and sell out America…cash in; and capture assets that create a command economy in the name of “investor” rights/ and the demands of “shareholders” (which of course are the hidden Board of Directorates in the end game scenario).
They changed the name but not the game…it is still the Hostile takeover of America.
…enemies from within…and well hidden enemies from outside under the deceptive Corporate Veil of disconnect between truth and fundamental social reality.
Bankruptcy for Profit has corrupted into “creative destruction” and market failure has been rendered as a salvage capital redeemer’s formula for investing into divesting and moving in for the kill under legal ownership and the new “Charter Nation” of America…responsible only to the surviving “shareholders” …and stakeholders are simply disgruntled “useless mouths.
“CCPP” The Commonize Costs–Privatize Profits Game (or CC–PP Game) is a moral hazard process at its foundation; and is an intrinsically “corrupt” business practice (legitimated by regulatory capture which technically makes it legal…theft);
which promotes a perverted incentive as a “capitalist model” that maximizes “profiteering” under the stated claim that it is only returning value to investors and stock holders. This is equivocation at its most tyrannical best…twisting destructive reality into a set of validities that construct a perception of truth that has socially sanctioned barriers to being challenged.
Politics has become salesmanship and American salesmanship has long promoted the fact that what is advertized is not subject to “absolute” truth and has a license to evade facts as well.
Making money is sacred, therefore Romeney’s private equity raids were sacred ground. Don’t question it because VAIN CAPITAL is anti-communist and true blue American maximization of profit; hence the very heart of capitalism itself.
CONTROL FRAUD ! EXECUTIVE CAPTURE !
NO COMPROMISE….PURE LIES ….
JUST PART OF THE AMERICAN BUSINESS ETHIC SEEKING POLITICAL CONTROL OVER THE AMERICAN PEOPLE FOR PROFIT.
If you think of the abomination Romney was at Bain, now imagine him as POTUS, a putrid thought.
Burn the Patriot Act.
It was ALWAYS to be used to wipe out INDIVIDUALS, financially. Can’t believe the SILENCE surrounding this ABUSE of “technology”!
Katyn Massacre x 1,000,000 – same kind of people doing the herding and for the same reasons – wipe out the population who would NEVER buy into your LIES and your crap!