If the Fed Knows Banks Are Too Big, Why Doesn’t It Make Them Smaller?

By James Kwak

The Federal Reserve is serious—about something.

On May 2, The Wall Street Journal reported that regulators were pushing to require “very large banks to hold higher levels of capital,” including minimum levels of unsecured long-term debt, as part of an effort “to force banks to shrink voluntarily by making it expensive and onerous to be big and complex.” The article quoted Fed Governor Jeremy Stein, who said, “If after some time it has not delivered much of a change in the size and complexity of the largest of banks, one might conclude that the implicit tax was too small, and should be ratcheted up” (emphasis added). 

A few days later, Fed Governor Daniel Tarullo said roughly the same thing (emphasis added):

“‘The important question is not whether capital requirements for large banking firms need to be stronger than those included in Basel III and the agreement on capital surcharges, but how to make them so,’ said Mr. Tarullo, adding later that even with those measures in place it ‘would leave more too-big-to-fail risk than I think is prudent.‘”

Tarullo recommended higher capital requirements and long-term debt requirements for systemically risky financial institutions.

Last week, Governor of Governors Ben Bernanke quoted from the same talking points (emphasis added):

“Mr. Bernanke said the Fed could push banks to maintain a higher leverage ratio, hold certain types of debt favored by regulators, or other steps to give the largest firms a ‘strong incentive to reduce their size, complexity, interconnectedness.’

“The Fed chairman acknowledged growing concerns that some financial companies remain so big and complex the government would have to step in to prevent their collapse and said more needs to be done to eliminate that risk.”

It’s important to note exactly what Stein, Tarullo, and Bernanke are all saying.

  • Here’s what they’re not saying: Too-big-to-fail banks enjoy implicit subsidies and impose externalities on the rest of us; therefore those subsidies and externalities should be priced; and then those banks can decide whether they want to absorb those costs or make themselves smaller. 
  • Here’s what they are saying: Too-big-to-fail banks are too big and complex and pose a systemic risk to all of us; therefore they need to become smaller and less complex; and the Fed will tweak the regulations until they become smaller and less complex.

What’s remarkable about this? These three men—probably the three most important on the Board of Governors when it comes to systemic risk regulation (as opposed to monetary policy, for example)—all say that they know that the megabanks are too big and complex. They all say that accurate pricing of subsidies and externalities is not an end in itself.* They all say that the goal is smaller, less complex banks.

But here’s what baffles me: If the goal is smaller, less complex banks, why not just mandate smaller, less complex banks? Why beat around the bush with capital requirements and minimum long-term debt levels? Those tools might be appropriate if you think huge, complex banks should exist but you want to make them safer. But if you’ve already concluded that banks need to be smaller and less complex, then they’re just a waste of time.

They also betray a frightening naivete regarding corporate governance. The theory is that higher capital requirements, for example, will lower banks’ profits, which will upset shareholders, who will eventually force the board of directors to eventually convince the CEO to break up his empire. This scenario, unfortunately, depends on the premise that American corporations are run for the benefit of their shareholders, which is only roughly true, and even that often requires long, expensive, and messy shareholder activist campaigns.

Instead, there’s an obvious solution: rules that limit the size and scope of financial institutions. But Bernanke has ruled out “arbitrary” size caps in favor of his cute regulatory dial-tweaking.

Again, Bernanke’s position might be defensible if he wasn’t already sure that today’s banks are too big and complex. Then it might make sense to tweak the incentives and see how the market reacts. But if he knows they are too big and complex, he should eliminate that risk in the simplest, most direct way possible. If he’s not sure how much smaller and simpler banks need to be, he can do it in steps: set one set of size and scope limits, see what he thinks about the outcome, and then set another set of limits if he’s still unhappy.

To use a crude analogy, let’s say we’re concerned about guns on airplanes. Ben Bernanke thinks, like I do, that guns on planes present an unacceptable risk to the safety of air travel. But his approach is to charge a $100 fee for anyone who wants to bring a gun onto a plane. If people keep bringing guns on board, he’ll raise the fee to $200, then $300, and so on until people stop. The sensible, obvious solution is to just ban guns on planes. But that would be “arbitrary.”

* It is theoretically plausible that one should simply price the subsidies and externalities and then let the market determine whether big banks provide enough societal benefit to offset the costs they impose on the rest of us. But that is not what Stein, Tarullo, and Bernanke are saying.

42 thoughts on “If the Fed Knows Banks Are Too Big, Why Doesn’t It Make Them Smaller?”

  2. I’m reading “The Bankers’ New Clothes.” I actually understand what you’re saying!

  3. Does Dodd-Frank actually allow for the direct approach James advocates?

    It could be that these Stein, Tarullo, and Bernanke have an implicit “political reality” filter and they are pursuing the only course of action available to them (“cute regulatory dial-tweaking”) even though it may not be the most effective course.

    Kind of like how Bernanke won’t come right out and say “we need stimulus now” but instead says things like “the Fed is working against a fiscal headwind”.

  4. “The theory is that higher capital requirements, for example, will lower banks’ profits…”. Modigliani and Miller demolished that idea, didn’t they?

    Another solution to TBTF is full reserve banking. Under the latter system, any depositor who wants their bank to lend on or invest their money has to bear the risk involved in such investment or lending. In effect, all depositors become shareholders.

    That system already operates with British mutual building societies, and the latter compete very effectively with banks. As Mervyn King said recently in respect of depositors at those building societies, “in a mutual organisation they are, in effect, the shareholders.”

  6. Because the socalled Fed is in fact the Alison of the predatorclass banks to the socalled government. The Fed, the TBTF banks, and their purchased and owned spaniels in the socalled government are tentacles in the giant “squid” that is the predatorclass. These monsters operate and manage criminal enterprises that rob and pillage poor and middleclass Americans, to feed the superrich, the predatorclass! They conduct their nefarious and systemic criminal activities untouched by theruleoflaw, or any semblance of ethics or moral consideration in broad daylight knowing full well that they will never be held to the same laws and rules and regulations that are ruthlessly imposed on the people. They are immune from prosecution for a festering litany of wanton crimes and abuses. They are ToBigToProsecute, so their manifold crimes, and systemic criminal enterprises continue unadulterated and untouched by the hand of justice!!!

    The predatorclass operates above and beyond the law, while the people are subjected to ruthless prosecution and punishments for minor infractions.

    Effectively there exist in Amerika two distinctly different sets of law. One that is harsh and brutal where the people are involved -,and another that is soft, leni
    ent, and unprosecutable where the predatorclass is involved. So in practical reality – there are no laws! And in a world where there are no laws – there are no laws for anyone predatorclass biiiiiaaaatches!!!

  8. THE UNIVERSITY OF IOWA CENTER FOR INTERNATIONAL FINANCE AND DEVELOPMENT

    http://blogs.law.uiowa.edu/ebook/issues/globalization/reading-table/environment
    “….unregulated development will foster international competition among emerging markets in developing nations. In order to come out on top, developing nations will deregulate as much as possible so as to demonstrate their willingness to accommodate new business and investment. This causes a “race to the bottom” — a race that environmentalists state we are in danger of winning with the prize being a complete exhaustion of the earth’s resources and an alteration of the earth’s climate.”

    “A Race to the Bottom: Creating Risk, Generating Debt and Guaranteeing Environmental Destruction, March 1999, A Report by Berne Declaration, Switzerland; Bioforum, Indonesia; Center for International Environmental Law, U.S.; Environmental Defense, U.S.; Eurodad, Belgium; Friends of the Earth, U.S.; Pacific Environment and Resources Center, U.S.; Urgewald, Germany available at http://www.environmentaldefense.org/pdf.cfm?contentid=480&filename=ecareport%2Epdf The report focuses on publicly owned bilateral export credit agencies (ECAs) and investment insurance agencies , and their growing role in privately owned project ventures abroad. In a series of case studies, the report provides insight into the impact these ECA ventures have on the surrounding environment and society. Written by a conglomeration of prominent environmental activist organizations, the report argues that OECD country-supported bilateral aid agencies and multilateral development banks, such as the World Bank, circumvent environmental standards through the ECAs, which have no detailed social or environmental procedures for their lending.”

  9. This is a good post and agree with the intentions and idea to limit the size of banks. However, it’s not going to happen. And I would go so far as to say it will NEVER happen in my lifetime (I’m in the middle age range).

    The Fed is largely composed of bank CEOs (example Jamie Dimon). The Fed has in essence become a “self-regulatory” body (a contradiction in terms if there was ever one that existed). It really has become a branch or extension of the ABA (American Bankers Association) but unfortunately most people are too dumb to see it. The OCC (Office of The Comptroller of the Currency) is by far the most captured of any of the regulatory institutions with John Dugan and then John Walsh having had their olfactory organ jammed up TBTF bankers’ A$$.

    Here is the man who enjoys taking golden showers from the TBTF bankers’ himself (notice Dugan’s trademark sh*t-eating grin:

    If you see Dugan in public or your local eating establishment, be sure to spit a large lugee in his face and tell him “That was from the American taxpayer”. And as you leave the scene be sure to tell his wife “Mam, I’m very sorry you married a d*ckhead. My deepest sympathies to your children’s genes.”
    http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052603150.html

    http://www.ritholtz.com/blog/2009/06/sheila-bair-vs-john-dugan/

    http://www.dmnews.com/occ-ruling-relieves-credit-card-marketers/article/78737/

    http://www.highbeam.com/doc/1G1-18894030.html

  10. (some interesting dynamics):
    1. THREE DYNAMICS OF REGULATORY COMPETITION

    2. INTERNATIONAL COOPERATION IN CAPITAL MARKET REGULATION

    2.1 A Case of Success: Standardising Capital Adequacy Requirements in International Banking

    part 6. A TYPOLOGY OF REGULATORY COMPETITION

    http://www.mpifg.de/pu/workpap/wp97-4/wp97-4.html
    MPIfG Working Paper 97/4, April 1997
    Regulatory Competition and International Cooperation
    by Philipp Genschel and Thomas Plümper[1]

  11. Revealed – the capitalist network that runs the world
    Updated 13:15 24 October 2011 by Andy Coghlan and Debora MacKenzie
    http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html
    “AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters’ worst fears. An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

    The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

    The idea that a few bankers control a large chunk of the global economy might not seem like news to New York’s Occupy Wall Street movement and protesters elsewhere (see photo: @LINK). But the study, by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich, is the first to go beyond ideology to empirically identify such a network of power. It combines the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world’s transnational corporations (TNCs).
    http://www.newscientist.com/article/mg21228354.500-revealed–the-capitalist-network-that-runs-the-world.html

  12. http://andrewgavinmarshall.com/2012/10/28/the-global-banking-super-entity-drug-cartel-the-free-market-of-finance-capital/
    [PICTURE]: HSBC bankers testifying before U.S. Senate on laundering billions in drug money (photo courtesy of The Economist, 21 July 2012)…
    The Global Banking ‘Super-Entity’ Drug Cartel: The “Free Market” of Finance Capital
    By: Andrew Gavin Marshall
    (INTRODUCTION)
    “I would like to introduce you, the reader, to some realities of our global banking system, resting on the rhetoric of free markets, but functioning, in actuality, as a global cartel, a “super-entity” in which the world’s major banks all own each other and own the controlling shares in the world’s largest multinational corporations, influence governments and policy with politicians in their back pockets, routinely engaging in fraud and bribery, and launder hundreds of billions of dollars in drug money, not to mention arms dealing and terrorist financing. These are the “too big to fail” and “too big to jail” banks, the centre of our global economy, what we call a “free market,” implying that the global banks – and corporations – have “free reign” to do anything they please, engage in blatantly criminal activities, steal trillions in wealth which is hidden offshore, and never get more than a slap on the wrist. This is the real “free market,” a highly profitable global banking cartel, functioning as a worldwide financial Mafia.”
    (CONTINUE READING)…
    http://andrewgavinmarshall.com/2012/10/28/the-global-banking-super-entity-drug-cartel-the-free-market-of-finance-capital/

  13. http://www.commondreams.org/headline/2013/05/14-5
    Sen. Warren Continues Campaign Against ‘Too Big To Jail’ Banks
    http://www.commondreams.org/headline/2013/05/14-5
    BY- Jon Queally, staff writer
    Published on Tuesday, May 14, 2013 by Common Dreams
    Sen. Warren Continues Campaign Against ‘Too Big To Jail’ Banks
    Letter to heads of SEC, Federal Reserve, and Justice Dept. demands to know if and when “public interest” trumps protecting big banks

    BY- Jon Queally, staff writer

    As a laudatory article by TruthDig columnist Robert Scheer this week acknowledges:
    “How astonishing to have a public servant who actually cares to inform the public about the inner workings of the system of crony capitalism that has wedded big government with big business. This comes at the expense of the free market that corporate lobbyists delight in invoking as an ideal while they subvert it as a reality.”
    http://www.commondreams.org/headline/2013/05/14-5

  14. The Bank Holding Company Act used to be used by the Fed to control bank expansion and complexity. All acquisitions and reorganisations had to be approved by the Fed. The Fed could condition approval with restrictions. This sort of unfashionable “activism” controlled risk and scale in TBTF banks for 50 years until abandoned under Greenspan in favour of unrestrained expansion and scale in all business lines. We just need to go back to what works. The law is already on the books.

  15. Being beholden to your drug dealer is no way to run a country.. And that’s what WE have today in a complete and utter way. And for some reason (and i’ll find out shortly) I want to believe this stretches to the Judges in courts. There is no second chances when dealing w/ law firms who won’t help citizens because of arrogance, greed, and hypocrisy.

    And anyone following Moses lead of assaulting people in public, can get arrested for it.
    I can see more clearly now how unwitting folks are mislead and simply give their money away believing the trustee, or the advisor will do the right thing after they have gone to their reward. They don’t people, if you don’t personally have them sign up, the money is transferred to like minded individuals (of the dry powder variety usually) and not the ones who should lawfully or rightfully obtain it. And yes Pat, I have proof.

  17. Principle shareholders vote in favor of splitting the position of CEO and Chairperson; Investors and Shareholders wanted Jaime Dimon to take that whale-of-a-story a lot more seriously than he had. May 21, 2013. Promise to eat crow if Jaime Dimon keeps his dual roles by next Tuesday May 21, 2013; bookmark, and watch me (not) eat a lot of crow that day: “All three money managers have sided with J.P. Morgan Chase management in shareholder votes in the past. Last year, BlackRock, the largest institutional investor, with 248 million shares across its funds, voted against a similar proposal, as did Fidelity and Vanguard…..Although the vote is nonbinding, directors could face pressure to act if more than half of shareholders want the positions divided.” “A similar proposal received 40% approval from shareholders in 2012, the highest percentage on such an advisory proposal for J.P. Morgan Chase since at least 2005. Proponents are predicting the measure will get greater support in the wake of the losses by a group led by a trader known as the “London whale” for his large positions”. With those apparent changes, others focused areas unfold: http://tr.im/42nt5 ……reading at the library: http://tr.im/42nt2

  18. @Tony F – they use NIHILISM against every other structure and process that is *commerce* in the REAL world in order to exist as an untouchable *absolute* themselves – Too big to fail, prosecute. legislate….

    I think we have all used some manner of physical force in our lives to contain the outburst of rank savagery that the psychotic and sociopath exhibit when you clearly prove their insane claims to “MINE MINE MINE”.

    Locked down Boston for a manhunt, spent BILLIONS for goons to stalk *feminists* all day long in Homeland Insecurity enclaves – you do the math. All the FASCISM forces BELIEVE that it is a good thing to rob Peter to pay Paul (themselves).

    So much for a bright and sparkly plan to beat the swords back into ploughshares.

    Yeah, they sure did *fail* 40 million USA citizens in order to deliver the cash suitcases to Karzai….the blood will NEVER stop boiling when 40 million KNOW their whole lives of HONEST WORK was stolen and delivered to a Karzai somewhere in the world.

    The biggest danger in USA-Russian relations? That, in the USA, the wrong group of “we” , if “we” joined forces, could SUCCESSFULLY take out EVERY *emerging market* war/drug/slave lord “we” wanted. That level of global filthy deliverance-boyz gene pool has no place in a world with 7 billion and counting…

    Their *safe room* bank vaults won’t protect them forever….

  19. Is the pressing issue that some banks are individually too big, or is it some other form of systemic exposure or asymmetry? Was Lehman Brothers too big at ~$650 Bn? What if it was under $500 Bn, or even $100 Bn? Would it then not have sparked the collapse of an overexposed and insolvent financial system, and wouldn’t/shouldn’t the bubble have burst anyway?

    I’m soundly unconvinced by the TBTF argument. Banks are “too big” if individual bank management appears to have too much bargaining power, or if the random non-systemic failure of banks appears to bring higher expected losses the larger the banks get (i.e. doesn’t get rarer with size, or becomes uninsurable). I don’t know if these are true concerns, and if they are I doubt they’re a most pressing issue.

    If, as many suspect, the core issue is systemic exposure and risk asymmetry in the banking/state system then TBTF is a red herring. It doesn’t matter for systemic fragility if the banks are large or small. Systemic insolvency would travel through either a fine-grained or a coarse-grained system, albeit differently. You can’t say simply that a fine-grained system would be systemically more robust.

    In light of this I think TBTF is a convenient way to avoid talking about radical reforms, such as full-reserve banking, radically lower insured deposit limits, converting bank balance sheets to trust funds, changing the M0/M1 mix, and other big changes that might really be needed to bring the monetary and financial system to health.

  20. There are three major problems with your plan to ban guns on airplanes: (1) it’s kind of unfair to summarily execute law-abiding citizens who boarded airplanes with guns (which had been legal at the time) by ejecting them mid-air. (2) The people with guns on airplanes, faced with certain death, are very likely to do whatever it is you’re worried about.

    Now, the obvious thing is to prohibit people from bringing guns onto airplanes, and not do anything about the people who are already there, which works because people on airplanes get off and are replaced with other people. But banks don’t generally stop being banks and get replaced with other companies that weren’t banks, so you have to do something to convince them that they’d be better off undergoing an orderly restructuring.

  21. There is an old say among bankers, e.g., “The best way to rob a bank is to own one!”

    Nuff said??

  23. This is an interesting post. Without knowing a great deal about the history of this specific debate, it seems that outlined here is an example of negotiating an understanding of socially acceptable risk. Capital is a proxy for risk. Hmm systemic risk perhaps? I imagine the reason that the Fed does not just make things smaller and less complex is because size and complexity exist on a continuum so what appears to be a good risk for the Fed (ie. the public) is not so good for someone else. After all, risk is a marketable product. Perhaps sudden changes in size/complexity would also have sudden impacts on public interest (eg. retirements or whatever).

    Much like the frustration shown here about reframing the debate as one over capital, I believe a danger lurks in turning the debate into a nonsensical battle over capital. Of course, a good capital amount is arbitrary, as is a good size and a good level of complexity. Though I am nearly certain that the real underlying issue is not capital, I’m not quite sure what it is. For argument sake, I’ll go out on a limb and guess it is some sort of moral dilemma about how the US would like to foster its economic future. While the nation has long been a leader in banking and turning risk into a socially profitable endeavor, in recent years the tradition has demonstrated some undesirable consequences.

    Thanks for the discussion here. Good stuff!

  24. James, needless to say, you are beating a drum which is now severely scarred from about four years of steady rhythm. We must call into question the wisdom and determination of both Ben and the FED Board when the QE programs have pumped many trillions into these behemoths over the last couple of years, and yet, all that has done is gone to their asset pool and enabled them to dramatically increase their levels of derivative issuance, program trading, etc., while having virtually no positive impact on the general economy and, in fact, very possibly suppressing really useful activity and leading to some unwanted negatives. Employment has not been the FED’s focus, although it is supposed to be. It hasn’t exercised other powers which could be far more useful and the QE crap programs. And now he’s just not fighting very hard to bring pressure on the absurd austerians trying hard to make us resemble the PIIGS in Europe, by suppressing economic activity, while Ben twiddles his thumbs and occasionally appears on Capitol Hill to object in some hearing or other, while Congress totally ignores his advice and complains about what he does that they can’t control.

    The criminal Bankster TBTF’s are strangling us and will bring it all down soon, if they aren’t stopped. No prosecutions, no control over derivatives or high speed trading. No special taxation of absurd bonuses. Nothing is being done.

    They own Washington, and the FED is just paying lip service, because its biggest members are those travesties on Wall Street.

  26. Always enjoy your commentary Bayard Waterbury. We all know the core problems, perverse incentives, systemic criminality, select immunities, and predatorclass psychopathology that defines the current global financial system. We all know the socalled government and regulatory agencies are purchased spaniels advancing and shielding the untoward bidding and unfathomable profits of the predatorclass. We all know these fiends are driving the nation and the citizenry to the precipice of another financial collapse that will make 2008 look like a Disney movie. We all know the predatorclass den of vipers and thieves are above and beyond the law and unaccountable for wanton and systemic crimes and abuses. We all know there are no Andrew Jackson’s to stand up to them.

    What we sadly do NOT know are the solutions or remedies to this horrorshow. No one provides any real suggestions or pathways to right these horrible wrongs. So the horror continues unabated and the predatorclass obdurate and insular in their opulent palaces pillages even more wealth and resources, while the people are ruthlessly oppressed, and exponentially deprived of wealth resources, freedoms, rights, and protections.

    This nation was born of revolution.

    I’m of the burn it all down – and reset crowd!

    It’s our only hope!

  27. The suggestions and solutions have been offered, but once discovered not in their best interests, the ruling classes turn cheek and head for the denial door as fast as they can. When forced to talk about it, they cover their ears and start banging their heads against the wall until you change the subject. And that’s on 2 glasses of wine, after 3 they can’t even understand what they say. But at that point it doesn’t matter anymore cause the day is about done and now they have think about the pain of waking the next morning from the horrendous nightmare that has become their daily routine. Hang in there Tone, the reset, she is a comin.

  29. @Jessica, “… For argument sake, I’ll go out on a limb and guess it is some sort of moral dilemma about how the US would like to foster its economic future. While the nation has long been a leader in banking and turning risk into a socially profitable endeavor, in recent years the tradition has demonstrated some undesirable consequences….”

    Having SCOTUS put a big fat greedy thumb on the scales of “justice” that removed any restraint of economic justice on a “self-radicalized against the Middle Class” 1% (ie. 480 USA citizens being worth a collective total of 2.08 TRILLION) through the Citizen’s United ruling, and then following that big bowl of crazy by giving the IRS even more of a henchman role to play collecting back FIAT $$$$ distributed through a fractional reserve banking system by saying that they can levy fines against people who do NOT buy private, for-profit health insurance started the core meltdown in the radioactive global economy that too-big-to-prosecute banksters built with WAR/Drugs/Slaves.

    At least now we know why its “dysfunctional”.

    Here’s a cartoon for u’all – place your bets for how long Uncle Sam, wearing a cowboy hat with a logo that looks like D.elusional C.ity, will stay on the rodeo bull called “The American People” with that band tied too tight around the bull’s gonads that he’s gonna want to buck off as soon as the gate opens….3, 2, 1….

  30. Ah, the only heartening aspect of the galactic-scale, on auto-pilot theft of value from value-creators, the dying geese, is reading comments in various articles and finding that the host is waking up and many are a lot smarter than I. Reset, yes, it is coming. I was hoping otherwise but I am reminded daily that the problem is sociopathic parasites…

  31. Back when there were far fewer of them, and when news was actually news, even back then Grandpa called the talking heads on TV – “Yappers”.

    You have to be *D E L U S I O N A L* to act all surprised about millions of people abusing each other under the news rules of the game established by The Patriot Act, Citizen’s United and IRS FINING you for not buying private, for profit health insurance from people who do NOTHING to actually PROVIDE health care – “they are an independent” agency.

    You want to talk about “intimidation” NOW!!??

    Can’t get to the “bottom of it”….????

    At the BOTTOM OF IT are millions of people who chose WISELY with the freedom they had to make their lives less miserable through HONEST WORK.

    Here’s paperwork of *intimidation* from the *bottom* of it all – WE ALL HAVE THE PAPERWORK.

  32. He’s down – send in the clowns….

    People have a limit on how much they can take out of their own money per day, why? Because the rest of their savings are leveraged out as cash to be delivered to Karzai or some other important persona to the “security of the United States”…because, obviously, the citizens of USA are not important to USA security. We’re just the first layer to be fed to the billions hungry before they get to the 1%ers sacred protected temple area?

    Like I said, *D E L U S I O N A L*.

    No can do leaving *security* up to them, eh? Who are these people? I don’t believe they are arguing about something to do with religion for 1000 years….that would be nuts.

    So if it is nuts, only something even nuttier might work? That’s the plan?

    There are no adults in D.C. Just gadgets with commands, ideas, suggestions – TO DO WHAT? Keep this game going where you get to stay in your place in the game….everything else and everybody else is to be used both as the means and as the enemy for you to stay right where you are – your power spot? Yeah, that’s REALLY stupid considering how the web of life really IS – galactic light years away in being infinitely more interesting than the predictable sociopath’s game.

    Seriously, get yourselves off the grid, pronto…grow a tomato, see how that helps your relationship with food and hunger. Take notes and write a book about it – being famous and/or infamous is easy living, ain’t it?

    “…my, that grows fast in its season, how come it does the growth spurt when I’m not looking at it? How do I interpret the existence of a tomato (what’s in it for me?) since I did not have anything to do with that tomato existing…?”

    NJ weather gets deeply gray and heavy with ocean moisture for a long stretch in every season, sometimes….no matter, it’s all good for the tomato

    LOL

  33. It seems the tomato can remain solvent longer than Annie can remain sane. Which translates to: Your face is a mess. But who didn’t already know that? The trick to growing plants fast, roto tilling and cow manure. See that was easy, I fixed it for ya.

  34. @anon – You have never seen my face, you delusional cretin, or if you had, then it is because you are a PREDATOR.

    buzz off, flea…

  35. Breaking up the banks is a red herring. Canada is dominated by a few large banks and had no meltdown. In 1998 the Wall Street was almost brought down by a small hedge fund failure. The real issue is regulation, or to be more precise, the lack of it. This points to our corrupt campaign finance system that lets Wall Street own Washington. As Gore Vidal said, there is only one party, the Money Party, with a Republican and Democratic branch.

  36. While it will never happen, it seems the right thing is to have a periodic and complete government overseen audit of banks to determine their real size, in a manner where they can’t appear smaller by temporary moving assets overseas. Then, once a bank’s valuation rises, even if temporarily, above a trip point related to the nations GDP, the bank should be given 12 months to split up into multiple parts, with the minimum split allowed be a bifurcation. We all know that 12 months is plenty of time for such things, given how quickly deals are done when the banks want them done. If the bank does not split up within that twelve months, then the government should be required to bifurcate the bank withing one quarter regardless to the claims of damage such a bifurcation might entail. In the case of a bifurcation, voluntary or government created, the split has to be roughly equal but no worse than 40%-60%.

  37. You drive me crazy Annie, you win no matter who picks on you, like it’s always rigged in your favor some how.
    If I could only suffer like that I might even pump some iron at the gym, or wrestle down some tomboy for the fun of it. But I can’t right now cause the tensions are to great to bear, check back with me later, when I am my more, graceful self.

  38. Casual Conversations (plural)

    It doesn’t matter what I say
    You never listen anyway
    Just don’t know what you’re looking for

    Imagination’s all I have
    But eveN then you say it’s bad
    Just can’t see why we disagree

    AND Casual conversations how they bore me
    YEAH, they go on and on endlessly
    No matter what I say
    You’LL ignore me anyway
    I might as well talk in my sleep (YEAH, I could weep)

    You try to make me feel so small
    Until there’s nothing left at all
    Why go on, just hoping that we’ll get along?

    There’s no communication left between us
    But is it me or you who’s to blame?
    There’s nothing I can do, yes you’re fading out of view
    Don’t know if I feel joy or pain (AND IT’S SUCH A SHAME)

    And now it SEEMS IT’S all been said
    If you must leave then go ahead
    Should feel sad
    But I really believe that I’m glad
    Yes I really believe that I’m glad
    I REALLY BELIEVE THAT I’M GLAD

  39. I’m old enough to recall the Savings and Loan Crisis in the 1990’s when small banks were the culprit. Regulators and politicians told us that larger, more responsible, and better diversified banks were the key to avoiding systemic financial crisis. Policy decisions rewarded ever larger banks and over decades, we accomplished this objective of larger, easier to regulate banks.

    When will we learn to leave all lending decisions in the hands of wise government officials? Wait. We have. (Fannie, Freddie, FHA, Farm Loan, Frank Dodge)

    Problem Solved! Nothing but safe prosperity on the horizon now.

  40. Not well documented who the first guys/girlz were to wrap that rubber band around the bull’s gonads….but it’s a tradition and a business now!

  41. Hi there! This post couldn’t be written any better! Reading this post reminds me of my good old room mate! He always kept talking about this. I will forward this write-up to him. Fairly certain he will have a good read. Thanks for sharing!

  42. I was suggested this blog by my cousin. I am not sure whether or not this post is written by him as no one else know this kind of detailed about my problems. You are fantastic! Thanks! your article about Very best Regards Shane

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